Document:

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                                                                    EXHIBIT 10.3

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT dated as of September __, 2000 ("SECURITY
AGREEMENT"), is made by MAI SYSTEMS CORPORATION, a Delaware corporation
("GRANTOR"), in favor of GETRONICSWANG CO. LLC, a Delaware limited liability
company ("SECURED PARTY").

                                    RECITALS

         A. Secured Party, Grantor and Olsy North America, Inc. ("ONA") are
parties to that certain Settlement Agreement dated September __, 2000 (as
amended and in effect, the "Settlement Agreement") pursuant to which Grantor has
certain obligations to Secured Party, including, without limitation, the payment
of up to $2 million in principal (collectively, the "Obligations").

         B. Pursuant to the Settlement Agreement, Grantor has agreed to secure
the Obligations pursuant to the terms hereof.

                                    AGREEMENT

         NOW, THEREFORE, in order to induce Secured Party to enter into the
Settlement Agreement and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and intending to be legally
bound, Grantor hereby represents, warrants, covenants and agrees as follows:

         1. DEFINED TERMS. When used in this Security Agreement the following
terms shall have the following meanings (such meanings being equally applicable
to both the singular and plural forms of the terms defined):

         "COLLATERAL" shall have the meaning assigned to such term in Section 2
of this Security Agreement.

         "CONTRACTS" means all contracts, undertakings, franchise agreements or
other agreements in or under which Grantor now holds or hereafter acquires any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.

         "COPYRIGHT LICENSE" means any written agreement, in which Grantor now
holds or hereafter acquires any interest, granting any right in or to any
Copyright or Copyright registration (whether Grantor is the licensee or the
licensor thereunder) including, without limitation, licenses pursuant to which
Grantor has obtained the exclusive right to use a copyright owned by a third
party.

         "COPYRIGHTS" means all of the following in which Grantor now holds or
hereafter acquires any interest: (a) all copyrights, whether registered or
unregistered, held pursuant to the laws of the United States, any State thereof
or any other country; (b) registrations, applications, recordings and
proceedings in the United States Copyright Office or in any similar office or

                                       1.
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agency of the United States, any State thereof or any other country; (c) any
continuations, renewals or extensions thereof; (d) any registrations to be
issued in any pending applications; (e) prior versions of works covered by
copyright and all works based upon, derived from or incorporating such works;
(f) income, royalties, damages, claims and payments now and hereafter due and/or
payable with respect to copyrights, including, without limitation, damages,
claims and recoveries for past, present or future infringement; (g) rights to
sue for past, present and future infringements of any copyright; and (h) any
other rights corresponding to any of the foregoing rights throughout the world.

         "EVENT OF DEFAULT" means (i) any breach by Grantor of any material
covenant, term or condition set forth herein or, with respect to any monetary
obligation of Grantor hereunder, and (ii) any failure of the Grantor to make any
payment required under the Payment Schedule (as defined in the Settlement
Agreement) when due, or default in any other obligation under the Settlement
Agreement.

         "LICENSE" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Grantor (excluding, however, licenses granted to Grantor by third party
vendors of software for the right to use such software).

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

         "PATENT LICENSE" means any written agreement, in which Grantor now
holds or hereafter acquires any interest, granting any right with respect to any
invention on which a Patent is in existence (whether Grantor is the licensee or
the licensor thereunder).

         "PATENTS" means all of the following in which Grantor now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof and all applications
for letters patent of the United States or any other country, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country; (b)all reissues, divisions,
continuations, renewals, continuations-in-part or extensions thereof; (c) all
petty patents, divisionals and patents of addition; (d) all patents to issue in
any such applications; (e) income, royalties, damages, claims and payments now
and hereafter due and/or payable with respect to patents, including, without
limitation, damages, claims and recoveries for past, present or future
infringement; and (f) rights to sue for past, present and future infringements
of any patent.

         "PERMITTED LIEN" means: (a) any Liens in favor of Coast Business Credit
or CPI Securities LP existing on the date of this Security Agreement and set
forth on Schedule A attached hereto; (b) Liens in favor of the Secured Party;
(c) Liens that are either Permitted Liens or Permitted Encumbrances for purposes
of the security agreements with the senior lenders referenced in clause (a)
above (except for any Liens permitted under clause (d) of the definition of
"Permitted Liens" set forth in that certain Loan and Security Agreement dated as
of April 23, 1998 among theDebtor, Gaming Systems International;, Hotel
Information Systems, Inc. and Coast Business Credit); and (d) Liens incurred in
connection with the extension, renewal or

                                       2.
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refinancing of the indebtedness secured by Liens of the type described in
clauses (a), (b) and (c) 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.

         "SECURED OBLIGATIONS" means (a) the obligation of Grantor to repay
Secured Party all of the Obligations (including any interest and fees that
accrues after the commencement of bankruptcy), (b) the obligation of Grantor to
pay any fees, costs and expenses of the Secured Party under Section 6(b) hereof
and (c) all other indebtedness, liabilities and obligations of Grantor to
Secured Party, whether now existing or hereafter incurred in connection with the
Settlement Agreement or this Security Agreement.

         "TRADEMARK LICENSE" means any written agreement, in which Grantor now
holds or hereafter acquires any interest, granting any right in and to any
Trademark or Trademark registration (whether Grantor is the licensee or the
licensor thereunder).

         "TRADEMARKS" means any of the following in which Grantor now holds or
hereafter acquires any interest: (a) any trademarks, tradenames, corporate
names, company names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof and any applications in connection therewith, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any Sate thereof or any other country (collectively, the "Marks"); (b)
any reissues, extensions or renewals thereof; (c) the goodwill of the business
symbolized by or associated with the Marks; (d) income, royalties, damages,
claims and payments now and hereafter due and/or payable with respect to the
Marks, including, without limitation, damages, claims and recoveries for past,
present or future infringement; and (e) rights to sue for past, present and
future infringements of the Marks.

         "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the Commonwealth of Massachusetts; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Secured Party's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the Commonwealth of Massachusetts, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection of
priority and for purposes of definitions related to such provisions.

         In addition, the following terms shall be defined terms having the
meaning set forth for such terms in the UCC (definition sections of the UCC are
noted parenthetically): "ACCOUNT DEBTOR" (9-105(1)(a)); "ACCOUNTS" (9-106);
"CHATTEL PAPER" (9-105(1)(b)); "DEPOSIT ACCOUNTS" (9-105(e)); "DOCUMENTS"
(9-105(1)(f)); "EQUIPMENT" (9-109(2)); "FINANCIAL ASSETS" (8-102(a)(9));
"FIXTURES" (9-313(1)(a)); "GENERAL INTANGIBLES" (9-106); "INSTRUMENTS"
(9-105(1)(i)); "INVENTORY" (9-109(4)); "INVESTMENT PROPERTY" (9-115(1)(f);
"PROCEEDS" (9-306(1)).

                                       3.
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Each of the foregoing defined terms shall include all of such items now owned,
or hereafter acquired, by Grantor.

         2. GRANT OF SECURITY INTEREST. As collateral security for the prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Secured Obligations and in order to induce
Secured Party to cause the Loans to be made, Grantor hereby mortgages, pledges,
and hypothecates to Secured Party, and hereby grants to Secured Party, a
security interest in all of Grantor's right, title and interest in, to and under
the following, whether now owned or hereafter acquired, (all of which being
collectively referred to herein as the "Collateral"):

                  (a) All Accounts of Grantor;

                  (b) All Chattel Paper of Grantor;

                  (c) All Contracts of Grantor;

                  (d) All Deposit Accounts of Grantor;

                  (e) All Documents of Grantor;

                  (f) All Equipment of Grantor;

                  (g) All Financial Assets of Grantor;

                  (h) All Fixtures of Grantor;

                  (i) All General Intangibles of Grantor, including, without
limitation, all Copyrights, Patents, Trademarks, Licenses, designs, drawings,
technical information, marketing plans, customer lists, trade secrets,
proprietary or confidential information, inventions (whether or not patentable),
procedures, know-how, models and data;

                  (j) All Instruments of Grantor;

                  (k) All Inventory of Grantor;

                  (l) All Investment Property of Grantor;

                  (m) All property of Grantor held by Secured Party, or any
other party for whom Secured Party is acting as agent hereunder, including,
without limitation, all property of every-description now or hereafter in the
possession or custody of or in transit to Secured Party or such other party for
any purpose, including, without limitation, safekeeping, collection or pledge,
for the account of Grantor, or as to which Grantor may have any right or power;

                  (n) All other goods and personal property of Grantor, wherever
located, whether tangible or intangible, and whether now owned or hereafter
acquired, existing, leased or consigned by or to Grantor; and

                                       4.
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                  (o) To the extent not otherwise included, all Proceeds of each
of the foregoing and all accessions to, substitutions and replacements for and
rents, profits and products of each of the foregoing.

         3. COLLECTION OF ACCOUNTS.

                  Secured Party may at any time, upon the occurrence and during
the continuance of any Event of Default, without notifying Grantor of its
intention to do so, notify Account Debtors of Grantor, parties to the Contracts
of Grantor, obligors in respect of Instruments of Grantor and obligors in
respect of Chattel Paper of Grantor that the Accounts and the right, title and
interest of Grantor in and under such Contracts, Instruments and Chattel Paper
have been assigned to Secured Party and that payments shall be made directly to
Secured Party. Upon the request of Secured Party, Grantor shall so notify such
Account Debtors, parties to such Contracts, obligors in respect of such
Instruments and obligors in respect of such Chattel Paper. Upon the occurrence
and during the continuance of any Event of Default, Secured Party may, in its
name or in the name of others, communicate with such Account Debtors, parties to
such Contracts, obligors in respect of such Instruments and obligors in respect
of such Chattel Paper to verify with such parties, to Secured Party's
satisfaction, the existence, amount and terms of any such Accounts, Contracts,
Instruments or Chattel Paper.

         4. REPRESENTATIONS AND WARRANTIES. Grantor hereby represents and
warrants to Secured Party that:

                  (a) Except for the security interest granted to Secured Party
under this Security Agreement and Permitted Liens, Grantor is the sole legal and
equitable owner of each item of the Collateral in which it purports to grant a
security interest hereunder, having good and marketable title thereto, free and
clear of any and all Liens except for Permitted Liens.

                  (b) No effective security agreement, financing statement,
equivalent security or lien instrument or continuation statement covering all or
any part of the Collateral exists, except such as may have been filed by Grantor
in favor of Secured Party pursuant to this Security Agreement and except for
Permitted Liens.
                  (c) This Security Agreement creates a legal and valid security
interest on and in all of the Collateral in which Grantor now has rights. Upon
the filing of appropriate UCC-1 financing statements with the appropriate filing
jurisdictions and the filing of appropriate documentation with the United States
Copyright Office and/or Patent and Trademark Office, as applicable, with respect
to items of intellectual property pledged hereunder, Secured Party will have a
fully perfected first priority security interest in all of the Collateral in
which Grantor now has rights subject only to Permitted Liens. This Security
Agreement will create a legal and valid and fully perfected first priority
security interest in the Collateral in which Grantor later acquires rights, when
Grantor acquires those rights subject only to Permitted Liens and additional
filings to be made with the United States Copyright Office and/or Patent and
Trademark Office as are necessary to perfect Secured Party's security interest
in subsequent ownership rights and interests of Grantor in Copyrights, Patents,
Trademarks and Licenses.

                                       5.
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                  (d) Grantor's chief executive office, principal place of
business and the place where Grantor maintains its records concerning the
Collateral are presently located at the address set forth on the signature page
hereof. The Collateral is presently located at such address and at such
additional addresses set forth on Schedule B attached hereto.

                  (e) All Copyrights (which have been applied for with the
United States Copyright Office), Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses now owned, held or in which Grantor otherwise
has any interest are listed on Schedule C attached hereto.

         5. COVENANTS. Grantor covenants and agrees with Secured Party that from
and after the date of this Security Agreement and until the Secured Obligations
have been performed and paid in full:

                  5.1 DISPOSITION OF COLLATERAL. Grantor shall not sell, lease,
transfer or otherwise dispose of any of the Collateral, or attempt or contract
to do so, other than (a) the sale of Inventory, (b) the granting of
non-exclusive Licenses and (c) the disposal of worn-out or obsolete Equipment,
all in the ordinary course of Grantor's business.

                  5.2 RELOCATION OF BUSINESS OR COLLATERAL. Grantor shall not
relocate its chief executive office, principal place of business or its records,
or allow the relocation of any Collateral (except as allowed pursuant to Section
5.1 immediately above or with respect to moveable equipment which is being used
in the ordinary course of business) from such address(es) provided to Secured
Party pursuant to Section 4(d) above without thirty (30) days prior written
notice to Secured Party.

                  5.3 LIMITATION ON LIENS ON COLLATERAL. Grantor shall not,
directly or indirectly, create, permit or suffer to exist, and shall defend the
Collateral against and take such other action as is necessary to remove, any
Lien on the Collateral, except (a) Permitted Liens and (b) the Lien granted to
Secured Party under this Security Agreement.

                  5.4 INSURANCE. Maintain insurance policies insuring the
Collateral against loss or damage from such risks and in such amounts and forms
and with such companies as are customarily maintained by businesses similar to
Grantor.

                  5.5 TAXES, ASSESSMENTS, ETC. Grantor shall pay promptly when
due all property and other taxes, assessments and government charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Equipment, Fixtures or Inventory, except to the extent
the validity thereof is being contested in good faith and adequate reserves are
being maintained in connection therewith.

                  5.6 NOTIFICATION REGARDING CHANGES IN INTELLECTUAL PROPERTY.
Grantor shall promptly advise Secured Party of any subsequent ownership right or
interest of the Grantor in or to any material Copyright, Patent, Trademark or
License not specified on Schedule C hereto and shall permit Secured Party to
amend such Schedule, as necessary, to reflect any addition or deletion to such
ownership rights.

                                       6.
<PAGE>   7

                  5.8 FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. At any time and
from time to time, upon the written request of Secured Party, and at the sole
expense of Grantor, Grantor shall promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as
Secured Party may reasonably deem necessary or desirable to obtain the full
benefits of this Security Agreement, including, without limitation, facilitating
the filing of UCC-1 Financing Statements in all applicable jurisdictions and
this Security Agreement (and any amendment hereto) with the United States
Copyright Office and/or Patent and Trademark Office, as applicable, and
transferring Collateral to the Secured Party's possession if such Collateral
consists of Chattel Paper, Instruments or if a Lien on such Collateral can be
perfected by possession.

         6. RIGHTS AND REMEDIES UPON DEFAULT.

                  (a) After any Event of Default shall have occurred and while
such Event of Default is continuing, Secured Party may exercise in addition to
all other rights and remedies granted to it under this Security Agreement, all
rights and remedies of a secured party under the UCC.

                  (b) Grantor also agrees to pay all reasonable fees, costs and
expenses of Secured Party, including, without limitation, reasonable attorneys'
fees, incurred in connection with the enforcement of any of its rights and
remedies hereunder.

                  (c) Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.

                  (d) The Proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be distributed by Secured Party in
the following order of priorities:

                  FIRST, to Secured Party in an amount sufficient to pay in full
the reasonable costs of Secured Party in connection with such sale, disposition
or other realization, including all reasonable fees, costs, expenses,
liabilities and advances incurred or made by Secured Party in connection
therewith, including, without limitation, reasonable attorneys' fees;

                  SECOND, to Secured Party in an amount equal to the then unpaid
Secured Obligations; and

                  FINALLY, upon payment in full of the Secured Obligations, to
Grantor or its representatives, in accordance with the UCC or as a court of
competent jurisdiction may direct.

         7. INDEMNITY. Grantor agrees to defend, indemnify and hold harmless
Secured Party 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 this Security
Agreement and (b) all losses or reasonable expenses in any way suffered,
incurred, or paid by Secured Party as a result of or in any way arising out of,
following or consequential to transactions between Secured Party and Grantor,
under this Security

                                       7.
<PAGE>   8

Agreement or the Note (including without limitation, reasonable attorneys fees
and expenses), except for losses arising from or out of Secured Party's gross
negligence or willful misconduct.

         8. LIMITATION ON SECURED PARTY'S DUTY IN RESPECT OF COLLATERAL. Secured
Party shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it takes such action as Grantor requests
in writing, but failure of Secured Party to comply with any such request shall
not in itself be deemed a failure to act reasonably, and no failure of Secured
Party to do any act not so requested shall be deemed a failure to act
reasonably.

         9. REINSTATEMENT. This Security Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Grantor for liquidation or reorganization, should Grantor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of Grantor's
property and assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the Secured Obligations,
or any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.

         10. MISCELLANEOUS.

                  10.1 NO WAIVER; CUMULATIVE REMEDIES.

                  (a) Secured Party shall not by any act, delay, omission or
otherwise be deemed to have waived any of its respective rights or remedies
hereunder, nor shall any single or partial exercise of any right or remedy
hereunder on any one occasion preclude the further exercise thereof or the
exercise of any other right or remedy.

                  (b) The rights and remedies hereunder provided are cumulative
and may be exercised singly or concurrently, and are not exclusive of any rights
and remedies provided by law.

                  (c) None of the terms or provisions of this Security Agreement
may be waived, altered, modified or amended except by an instrument in writing,
duly executed by Grantor and Secured Party.

                  10.2 TERMINATION OF THIS SECURITY AGREEMENT. Subject to
Section 9 hereof, this Security Agreement shall terminate upon the payment and
performance in full of the Secured Obligations.

                  10.3 SUCCESSOR AND ASSIGNS. This Security Agreement and all
obligations of Grantor hereunder shall be binding upon the successors and
assigns of Grantor, and shall, together with the rights and remedies of Secured
Party hereunder, inure to the benefit of Secured

                                       8.
<PAGE>   9

Party, any future holder of any of the indebtedness and their respective
successors and assigns. No sales of participations, other sales, assignments,
transfers or other dispositions of any agreement governing or instrument
evidencing the Secured Obligations or any portion thereof or interest therein
shall in any manner affect the lien granted to Secured Party hereunder.

                  10.4 GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Security Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Massachusetts applicable to contracts made and performed in such
state, without regard to the principles thereof regarding conflict of laws.

         IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer on the
date first set forth above.

ADDRESS OF GRANTOR                       MAI SYSTEMS CORPORATION

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

                                         Printed Name:
------------------------------------                   -------------------------

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

ACCEPTED AND ACKNOWLEDGED BY:

GETRONICSWANG CO. LLC

By:
    -------------------------------
Printed Name:
              ---------------------
Title:
       ----------------------------

                                       9.
<PAGE>   10

                                   SCHEDULE A

              LIENS EXISTING ON THE DATE OF THIS SECURITY AGREEMENT

                                      A-1.

<PAGE>   11

                                   SCHEDULE B

                             LOCATION OF COLLATERAL

         ENTITY                                                   ADDRESS

                                      B-1.

<PAGE>   12

                                   SCHEDULE C

                              INTELLECTUAL PROPERTY

                                      C-1.<PAGE>   1
EXHIBIT 10.126
US BANK
                         CORPORATE RESOLUTION TO BORROW

<TABLE>
<CAPTION>
   PRINCIPAL     LOAN DATE     MATURITY     LOAN NO     CALL  COLLATERAL     ACCOUNT      OFFICER  INITIALS
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>
================================================================================

I, THE UNDERSIGNED SECRETARY OR ASSISTANT SECRETARY OF OPTIMUMCARE CORPORATION
(THE "CORPORATION"), HEREBY CERTIFY THAT the Corporation is organized and
existing under and by virtue of the laws of the State of Delaware as a
corporation for profit, with its principal office at 30011 IVY GLENN DRIVE,
LAGUNA NIGUEL, CA 92677, and is duly authorized to transact business in the
State of California.

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on July 14, 2000, 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 signature is shown below:

<TABLE>
<CAPTION>
NAME                         POSITION                                   ACTUAL SIGNATURE
----                         --------                                   ----------------
<S>                          <C>                                        <C>
EDWARD A. JOHNSON            CHAIRMAN/CHIEF EXECUTIVE OFFICER           X Edward A. Johnson
                                                                        -------------------
</TABLE>

acting for and on behalf of the Corporation and as its act and deed be, and he
or she hereby is, authorized and empowered:

        BORROW MONEY. To borrow from time to time from U.S. Bank National
        Association ("Lender"), on such terms as may be agreed upon between the
        Corporation and Lender, such sum or sums of money as in his or her
        judgment should be borrowed, without limitation.

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

        GRANT SECURITY. To mortgage, pledge, transfer, endorse, hypothecate, or
        otherwise encumber and deliver to Lender, as security for the payment of
        any loans or credit accommodations so obtained, any promissory notes so
        executed(including any amendments to or modifications, renewals, and
        extensions of such promissory notes), or any other or further
        indebtedness of the Corporation to Lender at any time owing, however the
        same may be evidenced, any property now or hereafter belonging to the
        Corporation or in which the Corporation now or hereafter may have an
        interest, including without limitation all real property and all
        personal property (tangible or intangible) of the Corporation. Such
        property may be mortgaged, pledged, transferred, endorsed, hypothecated,
        or encumbered at the time such loans are obtained or such indebtedness
        is incurred, or at any other time or times, and may be either in
        addition to or in lieu of any property theretofore mortgaged, pledged,
        transferred, endorsed, hypothecated, or encumbered.

        EXECUTE SECURITY DOCUMENTS. To execute and deliver to Lender the forms
        of mortgage, deed of trust, pledge agreement, hypothecation agreement,
        and other security agreements and financing statements which may be
        required by Lender, and which shall evidence the terms and conditions
        under and pursuant to which such liens and encumbrances, or any of them,
        are given; and also to execute and deliver to Lender any other written
        instruments, any chattel paper, or any other collateral, of any kind or
        nature, which Lender may deem necessary or proper in connection with or
        pertaining to the giving of the liens and encumbrances.

        NEGOTIATE ITEMS. To draw, endorse, and discount with Lender 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 Lender, or to cause such other disposition of the proceeds derived
        therefrom as they may deem advisable.

        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 he or she may in his or her
        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 Lender may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Lender. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s), (e)
conversion of the Corporation to a new or different type of business entity, or
(f) change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.

I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; 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. The Corporation has no corporate seal, and therefore, no seal is
affixed to this certificate.

<PAGE>   2

07-14-2000                    CORPORATE RESOLUTION TO BORROW              PAGE 2
LOAN NO 2784-18/26                     (CONTINUED)
================================================================================

IN TESTIMONY WHEREOF, I have hereunto set my hand on July 14, 2000 and attest
that the signatures set opposite the names listed above are their genuine
signatures.

                                                   CERTIFIED TO AND ATTESTED BY:

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

NOTE: in case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second officer or Director of the Corporation.
================================================================================

<PAGE>   3

                         AGREEMENT TO PROVIDE INSURANCE

<TABLE>
<CAPTION>
   PRINCIPAL     LOAN DATE     MATURITY     LOAN NO     CALL  COLLATERAL     ACCOUNT      OFFICER  INITIALS
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>
================================================================================

INSURANCE REQUIREMENTS. OPTIMUMCARE CORPORATION ("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 Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):

COLLATERAL:    ALL INVENTORY AND EQUIPMENT.
                      TYPE.  All risks, including fire, theft and liability.
                      AMOUNT.  Full insurable value.
                      BASIS.  Replacement value.
                      ENDORSEMENTS. Lender's loss payable clause with
                      stipulation that coverage will not be cancelled or
                      diminished without a minimum of ten (10) days' prior
                      written notice to Lender.

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

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, ten (10) days
from the date of this Agreement, evidence of the required insurance as provided
above, with an effective date of July 14, 2000, or earlier. Grantor acknowledges
and agrees that if Grantor fails to provide any required insurance or fails to
continue such insurance in force, Lender may do so at Grantor's expense as
provided in the applicable security document. The cost of any such insurance, at
the option of Lender, shall be payable on demand or shall be added to the
indebtedness as provided in the security document. GRANTOR ACKNOWLEDGES THAT IF
LENDER 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 INT HE 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 Lender to provide to any person (including any insurance agent or
company) all information Lender 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 JULY 14, 2000.

GRANTOR:

OPTIMUMCARE CORPORATION

BY:     EDWARD A. JOHNSON
        ---------------------------
        EDWARD A. JOHNSON, CHAIRMAN/CHIEF EXECUTIVE OFFICER

                               FOR LENDER USE ONLY
DATE:                        INSURANCE VERIFICATION       PHONE:
     -----------------                                          ----------------
AGENT'S NAME:
             -----------------------------------------------------
INSURANCE COMPANY:
                  ------------------------------------------------
POLICY NUMBER:
              ----------------------------------------------------
EFFECTIVE DATES:
                --------------------------------------------------
COMMENTS:
         ---------------------------------------------------------

================================================================================

<PAGE>   4

                          COMMERCIAL SECURITY AGREEMENT

<TABLE>
<CAPTION>
   PRINCIPAL     LOAN DATE     MATURITY     LOAN NO     CALL  COLLATERAL     ACCOUNT      OFFICER  INITIALS
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>
================================================================================

THIS COMMERCIAL SECURITY AGREEMENT is entered into between OPTIMUMCARE
CORPORATION (referred to below as "Grantor"); and U.S. Bank National Association
(referred to below as "Lender"). For valuable consideration, Grantor grants to
Lender a security interest in the Collateral to secure the indebtedness and
agrees that Lender shall have the rights stated in this agreement with respect
to the Collateral, in addition to all other rights which Lender may have by law.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this agreement shall have the
earnings attributed to such terms in the uniform commercial code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

        AGREEMENT. The word "Agreement' means this Commercial Security
        Agreement, as this Commercial Security Agreement may be amended or
        modified from time to time, together with all exhibits and schedules
        attached to this Commercial Security Agreement from time to time.

        COLLATERAL. The word "Collateral" means the following described property
        of Grantor, whether now owned or hereafter acquired, whether now
        existing or hereafter arising, and wherever located:

        ALL INVENTORY, CHATTEL PAPER, ACCOUNT, CONTRACT RIGHTS, EQUIPMENT,
GENERAL INTANGIBLES AND FIXTURES.

In addition, the word "Collateral" includes all the following, whether now owned
or hereafter acquired, whether now existing or hereafter arising, and wherever
located:

(a)     All attachments, accessions, tools, parts, supplies, increases, and
        additions to and all replacements of all substitutions for any property
        described above.

(b)     All products and produce of any of the property described in this
        Collateral section.

(c)     All accounts, general intangibles, instruments, rents, monies, payments,
        and all other rights, arising out of a sale, lease, or other disposition
        of any of the property described in this Collateral section.

(d)     All proceeds (including insurance proceeds) from the sale, destruction,
        loss, or other disposition of any of the property described in this
        Collateral section.

(e)     All records and data relating to any of the property described in this
        Collateral section, whether in the form of a writing, photograph,
        microfilm, microfiche, or electronic media, together with all of
        Grantor's right, title, and interest in and to all computer software
        required to utilize, create, maintain, and process any such records or
        data on electronic media.

EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"Events of Default."

GRANTOR. The word "Grantor" means OPTIMUMCARE CORPORATION, its successors and
assigns.

GUARANTOR. The word "Guarantor" means and includes without limitation each and
all of the guarantors, sureties, and accommodation parties in connection with
the indebtedness.

INDEBTEDNESS. The work "indebtedness" means the indebtedness evidenced by the
Note, including all principal and interest, together with all other indebtedness
and costs and expenses for which Grantor is responsible under this Agreement or
under any of the Related Documents. In addition, the word "Indebtedness"
includes all other obligations, debts and liabilities, plus interest thereon, of
Grantor, or any one or more of them, to Lender, as well as all claims by Lender
against Grantor, or any one or more of them, whether existing now or later;
whether they are voluntary or involuntary, due or not due, direct or indirect,
absolute or contingent, liquidated or unliquidated; whether Grantor may be
liable individually or jointly with others; whether Grantor may be obligated as
guarantor, surety, accommodation party or otherwise; whether recovery upon such
indebtedness may be or hereafter may become barred by any statute of
limitations; and whether such indebtedness may be or hereafter become otherwise
unenforceable.

LENDER. The word "Lender" means U.S. Bank National Association, its successors
and assigns.

NOTE. The word "Note" means the note or credit agreement dated July 14, 2000, in
the principal amount of $1,500,000.00 from OPTIMUMCARE CORPORATION to lender,
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for the note or credit agreement.

RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.

RIGHT OF SETOFF. Grantor hereby grants Lender a contractual security interest in
and hereby assigns, conveys, delivers, pledges, and transfers all of Grantor's
right, title and interest in an to Grantor's accounts with Lender (whether
checking, savings, or some other account), including all accounts held jointly
with someone else and all accounts Grantor may open in the future, excluding,
however, all IRA, Keogh accounts, and all trust accounts for which the grant of
a security interest would be prohibited by law. Grantor authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all indebtedness
against any and all such accounts, and, at Lender's option, to administratively
freeze all such accounts to allow Lender to protect Lender's charge and setoff
rights provided in this paragraph.

OBLIGATIONS OF GRANTOR.  Grantor warrants and covenants to Lender as follows:

        PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such
        financing statements and to take whatever other actions are requested by
        Lender to perfect and continue Lender's security interest in the
        Collateral. Upon request of Lender, Grantor will deliver to Lender any
        and all of the documents evidencing or constituting the Collateral, and
        Grantor will note Lender's interest upon any and all chattel paper if
        not delivered to Lender for possession by Lender. granted in this
        Agreement. Lender may at any time, and without further authorization
        from Grantor, file a carbon, photographic or other

<PAGE>   5

reproduction of any financing statement or of this Agreement for use as a
financing statement. Grantor will reimburse Lender for all expenses for the
perfection and the continuation of the perfection of Lender's security interest
in the Collateral. Grantor promptly will notify Lender before any change in
Grantor's name including any change to the assumed business names of Grantor.
THIS IS A CONTINUING SECURITY AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH
ALL OR ANY PART OF THE INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD
OF TIME GRANTOR MAY NOT BE INDEBTED TO LENDER.

        NO VIOLATION. The execution and delivery of this Agreement will not
        violate any law or agreement governing Grantor or to which Grantor is a
        party, and its certificate or articles of incorporation and bylaws do
        not prohibit any term or condition of this Agreement.

        ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
        accounts, chattel paper, or general intangibles, the Collateral is
        enforceable in accordance with its terms, is genuine, and complies with
        applicable laws concerning form, content and manner of preparation and
        execution, and all persons appearing to be obligated on the Collateral
        have authority and capacity to contract and are in fact obligated as
        they appear to be on the Collateral. At the time any account becomes
        subject to a security interest in favor of Lender, the account shall be
        a good and valid account representing an undisputed, bona fide
        indebtedness incurred by the account debtor, for merchandise held
        subject to delivery instructions or theretofore shipped or delivered
        pursuant to a contract of sale, or for services theretofore performed by
        Grantor with or for the account debtor; there shall be no setoffs or
        counterclaims against any such account; and no agreement under which any
        deductions or discounts may be claimed shall have been made with the
        account debtor except those disclosed to Lender in writing.

        LOCATION OF THE COLLATERAL. Grantor, upon request of Lender, will
        delivery to Lender in form satisfactory to Lender a schedule of real
        properties and Collateral locations relating to Grantor's operations,
        including without limitation the following: (a) all real property owned
        or being purchased by Grantor; (b) all real property being rented or
        leased by Grantor; (c) all storage facilities owned, rented, leased, or
        being used by Grantor, and (d) all other properties where Collateral is
        or may be located. Except in the ordinary course of its business,
        Grantor shall not remove the Collateral from its existing locations
        without the prior written consent of Lender.

        REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
        extent the Collateral consists of intangible property such as accounts,
        the records concerning the Collateral) at Grantor's address shown above
        or at such other locations as are acceptable to Lender. Except in the
        ordinary course of its business, including the sales of inventory,
        Grantor shall not remove the Collateral from its existing locations
        without the prior written consent of Lender. To the extent that the
        Collateral consists of vehicles, or other titled property, Grantor shall
        not take or permit any action which would require application for
        certificates of title for the vehicles outside the State of California,
        without prior written consent of Lender.

        TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
        collected in the ordinary course of Grantor's business, Grantor shall
        not sell, offer to sell, or otherwise transfer or dispose of the
        Collateral. While Grantor is not in default under this Agreement,
        Grantor may sell inventory, but only in the ordinary course of its
        business and only to buyers who qualify as a buyer in the ordinary
        course of business. A sale in the ordinary course of Grantor's business
        does not include a transfer in partial or total satisfaction of a debt
        or any bulk sale. Grantor shall not pledge, mortgage, encumber or
        otherwise permit the Collateral to be subject to any lien, security
        interest, encumbrance, or charge, other than security interest provided
        for in this Agreement, without the prior written consent of Lender. This
        includes security interests even if junior in right to the security
        interests granted under this Agreement. Unless waived by Lender, all
        proceeds from any disposition of the Collateral (for whatever reason)
        shall be held in trust for Lender and shall not be commingled with any
        other funds; provided however, this requirement shall not constitute
        consent by Lender to any sale or other disposition. Upon receipt,
        Grantor shall immediately deliver any such proceeds to Lender.

        TITLE. Grantor represents and warrants to Lender that it holds good and
        marketable title to the Collateral, free and clear of all liens and
        encumbrances except for the lien of this Agreement. No financing
        statement concerning any of the Collateral is on file in any public
        office other than those which reflect the security interest created by
        this Agreement or to which Lender has specifically consented. Grantor
        shall defend Lender's rights in the Collateral against the claims and
        demands of all other persons.

        COLLATERAL SCHEDULES AND LOCATIONS. As often as Lender shall require,
        and insofar as the Collateral consists of accounts and general
        intangibles, Grantor shall deliver to Lender schedules of such
        Collateral, including such information as Lender may require, including
        without limitation names and addresses of account debtors and agings of
        accounts and general intangibles. Insofar as the Collateral consists of
        inventory and equipment, Grantor shall deliver to Lender, as often as
        Lender shall require, such lists, descriptions, and designations of such
        Collateral as Lender may require to identify the nature, extent, and
        location of such Collateral. Such information shall be submitted for
        Grantor and each of its subsidiaries or related companies.

        MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all
        tangible Collateral in good condition and repair. Grantor will not
        commit or permit damage to or destruction of the Collateral or any part
        of the Collateral. Lender and its designated representatives and agents
        shall have the right at all reasonable times to examine, inspect, and
        audit the Collateral wherever located. Grantor shall immediately notify
        Lender of all cases involving the return, rejection, repossession, loss
        or damage of or to any Collateral; of any request for credit or
        adjustment or of any other dispute arising with respect to the
        Collateral; and generally of all happenings and events affecting the
        Collateral or the value or the amount of the Collateral.

        TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
        assessments and liens upon the Collateral, its use or operation, upon
        this Agreement, upon any promissory note or notes evidencing the
        Indebtedness, or upon any of the other Related Documents. Grantor may
        withhold any such payment or may elect to contest any lien if Grantor is
        in good faith conducting an appropriate proceeding to contest the
        obligation to pay and so long as Lender's interest in the Collateral is
        not jeopardized in Lender's sole opinion. If the Collateral is subjected
        to a lien which is not discharged within fifteen (15) days, Grantor
        shall deposit with Lender cash, a sufficient corporate surety bond or
        other security satisfactory to Lender in an amount adequate to provide
        for the discharge of the lien plus any interest, costs, attorneys' fees
        or other charges that could accrue as a result of foreclosure or sale of
        the Collateral. In any contest Grantor shall defend itself and Lender
        and shall satisfy any final adverse judgment before enforcement against
        the Collateral. Grantor shall name Lender as an additional obligee under
        any surety bond furnished in the contest proceedings.

        COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
        with all laws, ordinances, rules and regulations of all governmental
        authorities, now or hereafter in effect, applicable to the ownership,
        production, disposition, or use of the Collateral. Grantor may contest
        in good faith any such law, ordinance or regulation and withhold
        compliance during any proceeding, including appropriate appeals, so long
        as Lender's interest in the Collateral, in Lender's opinion, is not
        jeopardized.

        HAZARDOUS SUBSTANCES. Grantor represents and warrants that the
        Collateral never has been, and never will be so long as this Agreement
        remains a lien on the Collateral, used for the generation, manufacture,
        storage, transportation, treatment, disposal, release or threatened
        release of any hazardous waste or substance, as those terms are defined
        in the Comprehensive Environmental Response, Compensation, and Liability
        act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
        Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
        ("SARA") the Hazardous Materials Transportation Act, 49 U.S.C. Section
        1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
        Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the
        California Health and Safety Code, Section 25100, et seq., or other
        applicable state or Federal laws, rules, or regulations adopted pursuant
        to any of the foregoing. The terms "hazardous waste" and "hazardous
        substance" shall also include, without limitation, petroleum and
        petroleum by-products or any fraction thereof and asbestos. The
        representations and warranties contained herein are based on Grantor's
        due diligence in investigating the Collateral for hazardous wastes and
        substances. Grantor hereby (a) releases and waives any future claims
        against Lender for indemnity or contribution in the event Grantor
        becomes liable for cleanup or other costs under any such laws, and (b)
        agrees to indemnify and hold harmless Lender against any and all claims
        and

<PAGE>   6

        losses resulting from a breach of this provision of this Agreement. This
        obligation to indemnify shall survive the payment of the Indebtedness
        and the satisfaction of this Agreement.

        MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain
        all risks insurance, including without limitation fire, theft and
        liability coverage together with such other insurance as Lender may
        require with respect to the Collateral, in form, amounts, coverages and
        basis reasonably acceptable to Lender and issued by a company or
        companies reasonably acceptable to Lender. Grantor, upon request of
        Lender, will deliver to Lender from time to time the policies or
        certificates of insurance in form satisfactory to Lender, including
        stipulations that coverages will not be cancelled or diminished without
        at least ten (10) days' prior written notice to Lender and not including
        any disclaimer of the insurer's liability for failure to give such a
        notice. Each insurance policy also shall include an endorsement
        providing that coverage in favor of Lender will not be impaired in any
        way by any act, omission or default of Grantor or any other person. In
        connection with all policies covering assets in which Lender holds or is
        offered a security interest, grantor will provide Lender with such loss
        payable or other endorsements as Lender may require. If Grantor at any
        time fails to obtain or maintain any insurance as required under this
        Agreement, Lender may (but shall not be obligated to) obtain such
        insurance as Lender deems appropriate, including if it so chooses
        "single interest insurance", which will cover only Lender's interest in
        the Collateral.

        APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender
        of any loss or damage to the Collateral. Lender may make proof of loss
        if Grantor fails to do so within fifteen (15) days of the casualty. All
        proceeds of any insurance on the Collateral, including accrued proceeds
        thereon, shall be held by Lender as part of the Collateral. If Lender
        consents to repair or replacement of the damaged or destroyed
        Collateral, Lender shall, upon satisfactory proof of expenditure, pay or
        reimburse Grantor from the proceeds for the reasonable cost of repair or
        restoration. If Lender does not consent to repair or replacement of the
        Collateral, Lender shall retain a sufficient amount of the proceeds to
        pay all of the Indebtedness, and shall pay the balance to Grantor. Any
        proceeds which have not been disbursed within six (6) months after their
        receipt and which Grantor has not committed to the repair or restoration
        of the Collateral shall be used to prepay the Indebtedness.

        INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
        reserves for payment of insurance premiums, which reserves shall be
        created by monthly payments from Grantor of a sum estimated by Lender to
        be sufficient to produce, at least fifteen (15) days before the premium
        due date, amounts at least equal to the insurance premiums to be paid.
        If fifteen (15) days before payment is due, the reserve funds are
        insufficient, Grantor shall upon demand pay any deficiency to Lender.
        The reserve funds shall be held by Lender as a general deposit and shall
        constitute a non-interest-bearing account which Lender may satisfy by
        payment of the insurance premiums required to be paid by Grantor as they
        become due. Lender does not hold the reserve funds in trust for Grantor,
        and Lender is not the agent of Grantor for payment of the insurance
        premiums required to be paid by Grantor. The responsibility for the
        payment of premiums shall remain Grantor's sole responsibility.

        INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
        Lender reports on each exiting policy of insurance showing such
        information as Lender may reasonably request including the following:
        (a) the name of the insurer; (b) the risks insured; (c) the amount of
        the policy; (d) the property insured; (e) the then current value on the
        basis of which insurance has been obtained and the manner of determining
        that value; and (f) the expiration date of the policy. In addition,
        Grantor shall upon request by Lender (however not more often than
        annually) have an independent appraiser satisfactory to Lender
        determine, as applicable, the cash value or replacement cost of the
        Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the
Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances and other claims, at any time
levied or placed on the Collateral. Lender also may (but shall not be obligated
to) pay all costs for insuring, maintaining and preserving the Collateral. All
such expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses shall become a
part of the indebtedness and, at Lender's option, will (a) be payable on demand,
(b) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining term of the Note, or (c) be
treated as a balloon payment which will be due and payable at the Note's
maturity. This Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon the occurrence of an Event of Default.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

        DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due
        on the Indebtedness.

        OTHER DEFAULTS. Failure of Grantor to comply with or to perform any
        other term, obligation, covenant or condition contained in this
        Agreement or in any of the Related Documents or in any other note,
        security agreement, lease agreement or lease schedule, loan agreement or
        other agreement, whether now existing or hereafter made, between Grantor
        and U.S. Bancorp or any direct or indirect subsidiary of U.S. Bancorp.

        DEFAULT IN FAVOR IF THIRD PARTIES. Should Borrower or any Grantor
        default under any loan, extension of credit, security agreement,
        purchase or sales agreement, or any other agreement, in favor of any
        other creditor or person that may materially affect any of Borrower's
        property or Borrower's or any Grantor's ability to repay the Loans or
        perform their respective obligations under this Agreement or any of the
        Related Documents.

        FALSE STATEMENTS. Any warranty, representation or statement made or
        furnished to Lender by or on behalf of Grantor under this Agreement, the
        Note or the Related Documents is false or misleading in any material
        respect, either now or at the time made or furnished.

        DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
        Documents ceases to be in full force and effect (including failure of
        any collateral documents to create a valid and perfected security
        interest or lien) at any time and for any reason.

        INSOLVENCY. The dissolution or termination of Grantor's existence as a
        going business, the insolvency of Grantor, the appointment of a receiver
        for any part of Grantor's property, any assignment for the benefit of
        creditors, any type of creditor workout, or the commencement of any
        proceeding under any bankruptcy or insolvency laws by or against
        Grantor.

        CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
        forfeiture proceedings, whether by judicial proceeding, self-help,
        repossession or any other method, by any creditor of Grantor or by any
        governmental agency against the Collateral or any other collateral
        securing the Indebtedness. This includes a garnishment of any of
        Grantor's deposit accounts with Lender.

<PAGE>   7

        EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
        respect to any Guarantor of any of the Indebtedness or such Guarantor
        dies or becomes incompetent.

        INSECURITY.  Lender, in good faith, deems itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. In an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the California Uniform Commercial Code. In addition and without
limitation, lender may exercise any one or more of the following rights and
remedies:

        ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
        including any prepayment penalty which Grantor would be required to pay,
        immediately due and payable, without notice.

        ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all
        or any portion of the Collateral and any and all certificates of title
        and other documents relating to the Collateral. Lender may require
        Grantor to assemble the Collateral and make it available to Lender at a
        place to be designated by Lender. Lender also shall have full power to
        enter upon the property of Grantor to take possession of and remove the
        Collateral. If the Collateral contains other goods not covered by this
        Agreement at the time of repossession, Grantor agrees Lender may take
        such other goods, provided that Lender makes reasonable efforts to
        return them to Grantor after repossession.

        SELL THE COLLATERAL. Lender shall have full power to sell, lease,
        transfer, or otherwise deal with the Collateral or proceeds thereof in
        its own name or that of Grantor. Lender may sell the Collateral at
        public auction or private sale. Unless the Collateral threatens to
        decline speedily in value or is of a type customarily sold on a
        recognized market, Lender will give Grantor reasonable notice of the
        time after which any private sale or any other intended disposition of
        the Collateral is to be made. The requirements of reasonable notice
        shall be met if such notice is given at least ten (10) days, or such
        lesser time as required by state law, before the time of the sale or
        disposition. All expenses relating to the disposition of the Collateral,
        including without limitation the expenses of retaking, holding insuring,
        preparing for sales and selling the Collateral, shall become a part of
        the Indebtedness secured by this Agreement and shall be payable on
        demand, with interest at the Note rate from date of expenditure until
        repaid.

        APPOINT RECEIVER. To the extent permitted by applicable law, Lender
        shall have the following rights and remedies regarding the appointment
        of a receiver: (a) Lender may have a receiver appointed as a matter of
        right, (b) the receiver may be an employee of Lender and may serve
        without bond, and (c) all fees of the receiver and his or her attorney
        shall become a part of the Indebtedness secured by this Agreement and
        shall be payable on demand, with interest at the Note rate from date of
        expenditure until repaid.

        COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
        receiver, may collect the payments, rents, income, and revenues from the
        Collateral. Lender may at any time in its discretion transfer any
        Collateral into its own name or that of its nominee and receive the
        payments, rents, income, and revenues therefrom and hold the same as
        security for the Indebtedness or apply it to payment of the Indebtedness
        in such order of preference as Lender may determine. Insofar as the
        Collateral consists of accounts, general intangibles, insurance
        policies, instruments, chattel paper, choses in action, or similar
        property, Lender may demand, collect, receipt for, settle, compromise,
        adjust, sue for, foreclose, or realize on the Collateral as Lender may
        determine, whether or not Indebtedness or Collateral is then due. For
        these purposes, Lender may, on behalf of and in the name of Grantor,
        receive, open and dispose of mail addressed to Grantor; change any
        address to which mail and payments are to be sent; and endorse notes,
        checks, drafts, money orders, documents of title, instruments and items
        pertaining to payment, shipment or storage of any Collateral. To
        facilitate collection, Lender may notify account debtors and obligors on
        any Collateral to make payments directly to Lender.

        OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the
        Collateral, Lender may obtain a judgment against Grantor for any
        deficiency remaining on the Indebtedness due to Lender after application
        of all amounts received from the exercise of the rights provided in this
        Agreement. Grantor shall be liable for a deficiency even if the
        transaction described in this subsection is a sale of accounts or
        chattel paper.

        OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies
        of a secured creditor under the provisions of the Uniform Commercial
        Code, as may be amended from time to time. In addition, Lender shall
        have and may exercise any or all other rights and remedies it may have
        available at law, in equity, or otherwise.

        CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
        evidenced by this Agreement or the Related Documents or by any other
        writing, shall be cumulative and may be exercised singularly or
        concurrently. Election by Lender to pursue any remedy shall not exclude
        pursuit of any other remedy, and an election to make expenditures or to
        take action to perform an obligation of Grantor under this Agreement,
        after Grantor's failure to perform, shall not affect Lender's right to
        declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

        AMENDMENTS. This Agreement, together with any Related Documents,
        constitutes the entire understanding and agreement of the parties as to
        the matters set forth in this Agreement. No alteration of or amendment
        to this Agreement shall be effective unless given in writing and signed
        by the party or parties sought to be charged or bound by the alteration
        or amendment.

        APPLICABLE LAW. This Agreement has been delivered to Lender and accepted
        by Lender in the State of California. If there is a lawsuit, Grantor
        agrees upon Lender's request to submit to the jurisdiction of the courts
        of Sacramento County, the State of California. Subject to the provision
        on arbitration, this Agreement shall be governed by and construed in
        accordance with the laws of the State of California.

        ARBITRATION. LENDER AND GRANTOR AGREE THAT ALL DISPUTES, CLAIMS AND
        CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN
        NATURE, ARISING FROM THIS AGREEMENT OR OTHERWISE, INCLUDING WITHOUT
        LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO
        THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF
        EITHER PARTY. No act to take or dispose of any Collateral shall
        constitute a waiver of this arbitration agreement or be prohibited by
        this arbitration agreement. This includes, without limitation, obtaining
        injunctive relief or a temporary restraining order; invoking a power of
        sale under any deed of trust or mortgage; obtaining a writ of attachment
        or imposition of a receiver; or exercising any rights relating to
        personal property, including taking or disposing of such property with
        or without judicial process pursuant to Article 9 of the Uniform
        Commercial Code. Any disputes, claims, or controversies concerning the
        lawfulness or reasonableness of any act, or exercise of any right,
        concerning any Collateral, including any claim to rescind, reform, or
        otherwise modify any agreement relating to the Collateral, shall also be
        arbitrated, provided however that no arbitrator shall have the right or
        the power to enjoin or restrain any act of any party. Lender and Grantor
        agree that in the event of an action for judicial foreclosure pursuant
        to California Code of Civil Procedure Section 726, or any similar
        provision in any other state, the commencement of such an action will
        not constitute a waiver of the right to arbitrate and the court shall
        refer to arbitration as much of such action, including counterclaims, as
        lawfully may be referred to arbitration. Judgment upon any award shall
        refer to arbitration. Judgment upon any award rendered by an arbitrator
        may be entered in any court having jurisdiction. Nothing in this
        Agreement shall preclude any party from seeking equitable relief from a
        court of competent jurisdiction. The statute of limitations, estoppel,
        waiver, laches, and similar doctrines which would otherwise be
        applicable in an action brought by a party shall be applicable in any
        arbitration proceeding, and the commencement of an arbitration
        proceeding shall be deemed the commencement of an action for these
        purposes. The Federal Arbitration Act shall apply to the construction,
        interpretation, and enforcement of this arbitration provision.

        ATTORNEY'S FEES; EXPENSES. Grantor agrees to pay upon demand all of
        Lender's costs and expenses, including attorney's fees and Lender's
        legal expenses, incurred in connection with the enforcement of this
        Agreement. Lender may pay someone else to help enforce this Agreement,
        and Grantor shall pay the costs and expenses of such enforcement. Costs
        and expenses include Lender's attorney's

<PAGE>   8

        fees and legal expenses whether or not there is a lawsuit, including
        attorneys' fees and legal expenses for bankruptcy proceedings (and
        including efforts to modify or vacate any automatic stay or injunction),
        appeals, and any anticipated post-judgment collection services. Grantor
        also shall pay all court costs and such additional fees as may be
        directed by the court.

        CAPTION HEADINGS. Caption headings in this Agreement are for convenience
        purposes only and are not to be used to interpret or define the
        provisions of this Agreement.

        NOTICES. All notices required to be given under this Agreement shall be
        given in writing, may be sent by telefacsimile (unless otherwise
        required by law), and shall be effective when actually delivered or when
        deposited with a nationally recognized overnight courier or deposited in
        the United States mail, first class, postage prepaid, addressed to the
        party to whom the notice is to be given at the address shown above. Any
        party may change its address for notices under this Agreement by giving
        formal written notice to the other parties, specifying that the purpose
        of the notice is to change the party's address. To the extent permitted
        by applicable law, if there is more than one Grantor, notice to any
        Grantor will constitute notice to all Grantors. For notice purposes,
        Grantor will keep Lender informed at all times of Grantor's current
        address(es).

        POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
        attorney-in-fact, irrevocably, with full power of substitution to do the
        following: (a) to demand, collect, receive, receipt for, sue and recover
        all sums of money or other property which may now or hereafter become
        due, owing or payable from the Collateral; (b) to execute, sign and
        endorse any and all claims, instruments, receipts, checks, drafts or
        warrants issued in payment for the Collateral; (c) to settle or
        compromise any and all claims arising under the Collateral, and, in the
        place and stead of Grantor, to execute and deliver its release and
        settlement for the claim; and (d) to file any claim or claims or to take
        any action or institute or take part in any proceedings, either in its
        own name or in the name of Grantor, or otherwise, which in the
        discretion of Lender may seem to be necessary or advisable. This power
        is given as security forth Indebtedness, and the authority hereby
        conferred is and shall be irrevocable and shall remain in full force and
        effect until renounced by Lender.

        PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
        preference claim in Borrower's bankruptcy will become a part of the
        Indebtedness and, at Lender's option, shall be payable by Borrower as
        provided above in the "EXPENDITURES BY LENDER" paragraph.

        SEVERABILITY. If a court of competent jurisdiction finds any provision
        of this Agreement to be invalid or unenforceable as to any person or
        circumstance, such finding shall not render that provision invalid or
        unenforceable as to any other persons or circumstances. If feasible, any
        such offending provision shall be deemed to be modified to be within the
        limits of enforceability or validity; however, if the offending
        provision cannot be so modified, it shall be stricken and all other
        provisions of this Agreement in all other respects shall remain valid
        and enforceable.

        SUCCESSOR INTERESTS. Subject to the limitations set forth above on
        transfer of the Collateral, this Agreement shall be binding upon and
        inure to the benefit of the parties, their successors and assigns.

        WAIVER. Lender shall not be deemed to have waived any rights under this
        Agreement unless such waiver is given in writing and signed by Lender.
        No delay or omission on the part of Lender in exercising any right shall
        operate as a waiver of such right or any other right. A waiver by Lender
        of a provision of this Agreement shall not prejudice or constitute a
        waiver of Lender's right otherwise to demand strict compliance with that
        provision or any other provision of this Agreement. No prior waiver by
        Lender, nor any course of dealing between Lender and Grantor, shall
        constitute a waiver of any of Lender's rights or of any of Grantor's
        obligations as to any future transactions. Whenever the consent of
        Lender is required under this Agreement, the granting of such consent by
        Lender in any instance shall not constitute continuing consent to
        subsequent instances where such consent is required and in all cases
        such consent may be granted or withheld in the sole discretion of
        Lender.

        WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
        the Indebtedness, Borrower irrevocably waives, disclaims and
        relinquishes all claims against such other person which Borrower has or
        would otherwise have by virtue of payment of the Indebtedness or any
        part thereof, specifically including but not limited to all rights of
        indemnity, contribution or exoneration.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 14,
2000.

GRANTOR:

OPTIMUMCARE CORPORATION

BY:     EDWARD A. JOHNSON
   ---------------------------------
        EDWARD A. JOHNSON, CHAIRMAN/CHIEF EXECUTIVE OFFICER

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY:        RICHARD B. MILLER
   --------------------------------
        AUTHORIZED OFFICER

<PAGE>   9

                     DISBURSEMENT REQUEST AND AUTHORIZATION

<TABLE>
<CAPTION>
   Principal     Loan Date     Maturity     Loan No     Call  Collateral     Account      Officer  Initials
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>

================================================================================

LOAN TYPE. This is a Variable Rate (0.500% over Wall Street Journal Prime Rate.
This is the Prime Rate as published in the West Coast edition of the Wall Street
Journal "Money Rates" column), Revolving Line of Credit Loan to a Corporation
for $1,500,000.00 due on June 4, 2001. This is a secured renewal loan.

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

        [ ]     PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR PERSONAL INVESTMENT.

        [X]     BUSINESS (INCLUDING REAL ESTATE INVESTMENT).

SPECIFIC PURPOSE.  The specific purpose of this loan is: SHORT TERM WORKING
CAPITAL.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $1,500,000.00 as follows:

<TABLE>
<S>                                                <C>
        UNDISBURSED FUNDS:                         $1,500,000.00
                                                   -------------
        NOTE PRINCIPAL:                            $1,500,000.00
</TABLE>

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

<TABLE>
<S>                                                              <C>
        PREPAID FINANCE CHARGES PAID IN CASH:                    $3,750.00
          $3,750.00 LOAN FEES                                    ---------
        TOTAL CHARGES PAID IN CASH:                              $3,750.00
</TABLE>

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER 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 LENDER. THIS
AUTHORIZATION IS DATED JULY 14, 2000.

BORROWER:

OPTIMUMCARE CORPORATION

BY:     EDWARD A. JOHNSON
   ---------------------------------
        EDWARD A. JOHNSON, CHAIRMAN/CHIEF EXECUTIVE OFFICER

<PAGE>   10

US BANK

                                 LOAN AGREEMENT

<TABLE>
   Principal     Loan Date     Maturity     Loan No     Call  Collateral     Account      Officer  Initials
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>

================================================================================

THIS LOAN AGREEMENT BETWEEN OPTIMUMCARE CORPORATION ("BORROWER") AND U.S. BANK
NATIONAL ASSOCIATION ("LENDER") IS MADE AND EXECUTED ON THE FOLLOWING TERMS AND
CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS FROM LENDER OR HAS
APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER FINANCIAL
ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT OR
SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS". BORROWER UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT;
(B)THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL
BE SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS
SHALL BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING GERMS AND CONDITIONS TO THIS
AGREEMENT.

TERM. This Agreement shall be effective as of JULY 14, 2000, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

        AGREEMENT. The word "Agreement" means this Loan Agreement, as this Loan
        Agreement may be amended or modified from time to time, together with
        all exhibits and schedules attached to this Loan Agreement from time to
        time.

        ACCOUNT. The word "Account" means a trade account, account receivable,
        or other right to payment for goods sold or services rendered owing to
        Borrower (or to a third party grantor acceptable to Lender).

        ACCOUNT DEBTOR. The words "Account Debtor" mean the person or entity
        obligated upon an Account.

        ADVANCE. The word "Advance" means a disbursement of Loan funds under
        this Agreement.

        BORROWER. The word "Borrower" means OPTIMUMCARE CORPORATION. The word
        "Borrower" also includes, as applicable, all subsidiaries and affiliates
        of Borrower as provided below in the paragraph titled "Subsidiaries and
        Affiliates".

        BORROWING BASE. The words "Borrowing Base" mean, as determined by Lender
        from time to time, the lesser of (a) $1,500,000.00; or (b) 75.000% of
        the aggregate amount of Eligible Accounts.

        BUSINESS DAY. The words "Business Day" mean a day on which commercial
        banks are open for business in the State of California.

        CERCLA. The word "CERCLA" means the Comprehensive Environmental
        Response, Compensation, and Liability Act of 1980, as amended.

        CASH FLOW. The words "Cash Flow" mean net income after taxes, and
        exclusive of extraordinary gains and income, plus depreciation and
        amortization.

        COLLATERAL. The word "Collateral" means and includes without limitation
        all property and assets granted as collateral security for a Loan,
        whether real or personal property, whether granted directly or
        indirectly, whether granted now or in the future, and whether granted in
        the form of a security interest, mortgage, deed of trust, assignment,
        pledge, chattel mortgage, chattel trust, factor's lien, equipment trust,
        conditional sale, trust receipt, lien, charge, lien or title retention
        contract, lease or consignment intended as a security device, or any
        other security or lien interest whatsoever, whether created by law,
        contract or otherwise. The word "Collateral" includes without limitation
        all collateral described below in the section titled "COLLATERAL."

        DEBT. The word "Debt" means all of Borrower's liabilities excluding
        Subordinated Debt.

        ELIGIBLE ACCOUNTS. The words "Eligible Accounts" mean, at any time, all
        of Borrower's Accounts which contain selling terms and conditions
        acceptable to Lender. The net amount of any Eligible Account against
        which Borrower shall exclude all returns, discounts, credits, and
        offsets of any nature. Unless otherwise agreed to by Lender in writing,
        Eligible Accounts do not include:

                (a) Accounts with respect to which the Account Debtor is an
                officer, an employee or agent of Borrower.

                (b) Accounts with respect to which the Account Debtor is a
                subsidiary of, or affiliated with or related to Borrower or its
                shareholders, officers, or directors.

                (c) Accounts with respect to which goods are placed on
                consignment, guaranteed sale, or other terms by reason of which
                the payment by the Account Debtor may be conditional.

                (d) Accounts with respect to which Borrower is or may become
                liable to the Account Debtor for goods sold or services rendered
                by the Account Debtor to Borrower.

                (e) Accounts which are subject to dispute, counterclaim, or
                setoff.

                (f) Accounts with respect to which the goods have no be shipped
                or delivered, or the services have not been rendered, to the
                Account Debtor.

                (g) Accounts with respect to which Lender, in its sole
                discretion, deems the creditworthiness or financial condition of

<PAGE>   11

                the Account Debtor to be unsatisfactory.

                (h) Accounts of any Account Debtor who has filed or has had
                filed against it a petition in bankruptcy or an application for
                relief under any provision of any state or federal bankruptcy,
                insolvency, or debtor-in-relief acts; or who has had appointed a
                trustee, custodian, or receiver for the assets of such Account
                Debtor; or who has made an assignment for the benefit of
                creditors or has become insolvent or fails generally to pay its
                debts (including its payrolls) as such debts become due.

                (i) Accounts which have not been paid in full within 90 DAYS
                from the invoice date.

ERISA. The word "ERISA" means the Employee Retirement Income Security Act of
1974, as amended.

EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"EVENTS OF DEFAULT".

        GRANTOR. The word "Grantor" means and includes without limitation each
        and all of the persons or entities granting a Security Interest in any
        Collateral for the indebtedness, including without limitation all
        Borrowers granting such a Security Interest.

        GUARANTOR. The word "Guarantor" means and includes without limitation
        each and all of the guarantors, sureties, and accommodations parties in
        connection with any Indebtedness.

        INDEBTEDNESS. The word "Indebtedness" means and includes without
        limitation all Loans, together with all other obligations, debts and
        liabilities of Borrower to Lender, or any one or more of them, as well
        as all claims by Lender against Borrower, or any one or more of them;
        whether now or hereafter existing, voluntary or involuntary, due or not
        due, absolute or contingent, liquidated or unliquidated; whether
        Borrower may be liable individually or jointly with others; whether
        Borrower may be obligated as a guarantor, surety, or otherwise; whether
        recovery upon such Indebtedness may be or hereafter may become barred by
        any statute of limitations; and whether such Indebtedness may be or
        hereafter may become otherwise unenforceable.

        LENDER. The word "Lender" means U.S. Bank National Association, its
        successors and assigns.

        LINE OF CREDIT. The words "Line of Credit" mean the credit facility
        described in the Section titled "LINE OF CREDIT" below.

        LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand
        plus Borrower's readily marketable securities.

        LOAN. The word "Loan" or "Loans" means and includes without limitation
        any and all commercial loans and financial accommodations from Lender to
        Borrower, whether now or hereafter existing, and however evidenced,
        including without limitation those loans and financial accommodations
        described herein or described on any exhibit or schedule attached to
        this Agreement from time to time.

        NOTE. The word "Note" means and includes without limitation Borrower's
        promissory note or notes, if any, evidencing Borrower's Loan obligations
        in favor of Lender, as well as any substitute, replacement or
        refinancing note or notes therefor.

        PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
        security interest securing Indebtedness owed by Borrower to Lender; (b)
        liens for taxes, assessments, or similar charges either not yet due or
        being contested in good faith; (c) liens of materialmen, mechanics,
        warehousemen, or carriers, or other like liens arising in the ordinary
        course of business and securing obligations which are not yet
        delinquent; (d) purchase money liens or purchase money security
        interests upon or in any property acquired or held by Borrower in the
        ordinary course of business to secure indebtedness outstanding on the
        date of this Agreement or permitted to be incurred under the paragraph
        of this Agreement titled "Indebtedness and Liens"; (e) liens and
        security interest which, as of the date of this Agreement, have been
        disclosed to and approved by the Lender in writing; and (f) those liens
        and security interests which in the aggregate constitute an immaterial
        and insignificant monetary amount with respect to the net value of
        Borrower's assets.

        RELATED DOCUMENTS. The words "Related Documents" mean and include
        without limitation all promissory notes, credit agreements, loan
        agreements, environmental agreements, guaranties, security agreements,
        mortgages, deeds of trust, and all other instruments, agreements and
        documents, whether now or hereafter existing, executed in connection
        with the Indebtedness.

        SECURITY AGREEMENT. The words "Security Agreement" mean and include
        without limitation any agreements, promises, covenants, arrangements,
        understandings or other agreements, whether created by law, contract, or
        otherwise, evidencing, governing, representing, or creating a Security
        Interest.

        SECURITY INTEREST. The words "Security Interest" mean and include
        without limitation any type of collateral security, whether in the form
        of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
        mortgage, chattel trust, factor's lien, equipment trust, conditional
        sale, trust receipt, lien or title retention contract, lease or
        consignment intended as a security device, or any other security or lien
        interest whatsoever, whether created by law, contract or otherwise.

        SARA. The word "SARA" means the Superfund Amendments and Reauthorization
        Act of 1986 as now or hereafter amended.

        SUBORDINATED DEBT. The words "Subordinated Debt" means indebtedness and
        liabilities of Borrower which have been subordinated by written
        agreement to indebtedness owed by Borrower to Lender in form and
        substance acceptable to Lender.

        TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's total
        assets excluding all intangible assets (i.e. goodwill, trademarks,
        patents, copyrights, organizational expenses, and similar intangible
        items, but including leaseholds and leasehold improvements) less total
        Debt.

        WORKING CAPITAL. The words "Working Capital" mean Borrower's current
        assets, excluding prepaid expenses, less Borrower's current liabilities.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to time
from the date of this Agreement to the Expiration Date, provided the aggregate
amount of such Advances outstanding at any time does not exceed the Borrowing
Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows.

        CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make any
        Advance to or for the account of Borrower under this Agreement is
        subject to the following conditions precedent, with all documents,
        instruments, opinions, reports, and other items required under this
        Agreement to be in form and substance satisfactory to Lender:

                (a) Lender shall have received evidence that this Agreement and
                all Related Documents have been duly authorized, executed, and
                delivered by Borrower to Lender.

                (b) Lender shall have received such opinions of counsel,
                supplemental opinions, and documents as Lender may request.

                (c) The security interests in the Collateral shall have been
                duly authorized, created, and perfected with first lien priority
                and shall be in full force and effect.

                (d) All guaranties required by Lender for the Line of Credit
                shall have been executed by each Guarantor, delivered to

<PAGE>   12

                Lender, and be in full force and effect.

                (e) Lender, at its option and for its sole benefit, shall have
                conducted an audit of Borrower's Accounts, books, records, and
                operations, and Lender shall be satisfied as to their condition.

                (f) Borrower shall have paid to Lender all fees, costs, and
                expenses specified in this Agreement and the Related Documents
                as are then due and payable.

                (g) There shall not exist at the time of any Advance a condition
                which would constitute an Event of Default under this Agreement,
                and Borrower shall have delivered to Lender the compliance
                certificate called for in the paragraph below titled "Compliance
                Certificate."

        MAKING LOAN ADVANCES. Advances under the Line of Credit may be requested
        either orally or in writing by authorized person. Lender may, but need
        not, require that all oral requests be confirmed in writing. Each
        Advance shall be conclusively deemed to have been made at the request of
        and for the benefit of Borrower (a) when credited to any deposit account
        of Borrower maintained with Lender or (b) when advanced in accordance
        with the instructions of an authorized person. Lender, at its option,
        may set a cutoff time, after which all requests for Advances will be
        treated as having been requested on the next succeeding Business Day.

        MANDATORY LOAN REPAYMENTS. If at any time the aggregate principal amount
        of the outstanding Advances shall exceed the applicable Borrowing Base,
        Borrower, immediately upon written or oral notice from Lender, shall pay
        to Lender an amount equal to the difference between the outstanding
        principal balance of the Advances and the Borrowing Base. On the
        Expiration Date, Borrower shall pay to Lender in full the aggregate
        unpaid principal amount of all Advances then outstanding and all accrued
        unpaid interest, together with all other applicable fees, costs and
        charges, if any, not yet paid.

        LOAN ACCOUNT. Lender shall maintain on its books a record of account in
        which Lender shall make entries for each Advance and such other debits
        and credits and shall be appropriate in connection with the credit
        facility. Lender shall provide Borrower with periodic statements of
        Borrower's account, which statements shall be considered to be correct
        and conclusively binding on Borrower unless Borrower notifies Lender to
        the contrary within thirty (30) days after Borrower's receipt of any
        such statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Line of Credit and performance of all other
Loans, obligations and duties owed by Borrower to Lender, Borrower (and others,
if required) shall grant to Lender Security Interests in such property and
assets as Lender may require (the "Collateral"), including without limitation
Borrower's present and future Accounts and general intangibles. Lender's
Security Interests in the Collateral shall be continuing liens and shall include
the proceeds and products of the Collateral, including without limitation the
proceeds of any insurance. With respect to the Collateral, Borrower agrees and
represents and warrants to Lender:

        PERFECTION OF SECURITY INTEREST. Borrower agrees to execute such
        financing statements and to take whatever other actions are requested by
        Lender to perfect and continue Lender's Security Interests in the
        Collateral. Upon request of Lender, Borrower will deliver to Lender any
        and all part of the documents evidencing or constituting the Collateral,
        and Borrower will note Lender's interest upon any and all chattel paper
        if not delivered to Lender for possession by Lender. Contemporaneous
        with the execution of this Agreement, Borrower will execute one or more
        UCC financing statements and any similar statements as may be required
        by applicable law, and will file such financing statements and all such
        similar statements in the appropriate location or locations. Borrower
        hereby appoints Lender as its irrevocable attorney-in-fact for the
        purpose of executing any documents necessary to perfect or to continue
        any Security Interest. Lender may at any time, and without further
        authorization from Borrower, file a carbon, photograph, facsimile, or
        other reproduction of any financing statement for use as a financing
        statement. Borrower will reimburse Lender for all expenses for the
        perfection, termination, and the continuation of the perfection of
        Lender's security interest in the Collateral. Borrower promptly will
        notify Lender of any change in Borrower's name including any change to
        the assumed business names of Borrower. Borrower also promptly will
        notify Lender of any change in Borrower's Social Security Number or
        Employer Identification Number. Borrower further agrees to notify Lender
        of any change in address or location of Borrower's principal governance
        office or should Borrower merge or consolidate with any other entity.

        COLLATERAL RECORDS. Borrower does now, and at all times hereafter shall,
        keep correct and accurate records of the Collateral, all of which
        records shall be available to Lender or Lender's representative upon
        demand for inspection and copying at any reasonable time. With respect
        to the Accounts, Borrower agrees to keep and maintain such records as
        Lender may require, including without limitation information concerning
        Eligible Accounts and Account balances and aging.

        COLLATERAL SCHEDULES. Concurrently with the execution and delivery of
        this Agreement, Borrower shall execute and deliver to Lender a schedule
        of Accounts and Eligible Accounts, in form and substance satisfactory to
        the Lender. Thereafter Borrower shall execute and deliver to Lender such
        supplemental schedules of Eligible Accounts and such other matters and
        information relating to Borrower's Accounts as Lender may request.
        Supplemental schedules shall be delivered according to the following
        schedule:

        AGINGS OF ACCOUNTS RECEIVABLE. BORROWER COVENANTS AND AGREES WITH LENDER
        THAT, WHILE THIS AGREEMENT IS IN EFFECT, BORROWER SHALL DELIVER TO
        LENDER WITHIN THIRTY (30) DAYS AFTER THE END OF EACH MONTH A DETAILED
        AGING OF BORROWER'S ACCOUNTS AND CONTRACTS RECEIVABLE AS OF THE LAST DAY
        OF THAT MONTH TOGETHER WITH AN EXPLANATION OF ANY ADJUSTMENTS MADE AT
        THE END OF THAT MONTH ALL IN A FORM ACCEPTABLE TO LENDER.

        BORROWING BASE CERTIFICATE. UNLESS WAIVED IN WRITING BY LENDER, BORROWER
        AGREES TO PROVIDE LENDER WITH A BORROWER'S CERTIFICATE WITHIN THIRTY
        (30) DAYS AFTER THE END OF EACH MONTH. EACH BORROWER'S CERTIFICATE SHALL
        BE IN A FORM ACCEPTABLE TO LENDER, DULY EXECUTED BY BORROWER AND
        DETAILING THE STATUS OF THE LINE OF CREDIT AS OF THE DATE THEREON.

        REPRESENTATIONS AND WARRANTIES CONCERNING ACCOUNTS. With respect to the
        Accounts, Borrower represents and warrants to Lender: (a) Each Account
        represented by Borrower to be an Eligible Account for purposes of this
        Agreement conforms to the requirements of the definition of an Eligible
        Account; (b) All Account information listed on schedules delivered to
        Lender will be true and correct, subject to immaterial variance; and (c)
        Lender, its assigns, or agents shall have the right at any time and at
        Borrower's expense to inspect, examine, and audit Borrower's records and
        to confirm with Account Debtors the accuracy of such Accounts.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

        ORGANIZATION. Borrower is a corporation which is duly organized, validly
        existing, and in good standing under the laws of the State of Delaware
        and is validly existing and in good standing in all states in which
        Borrower is doing business. Borrower has the full power and authority to
        own its properties and to transact the businesses in which it is
        presently engaged or presently proposes to engage. Borrower also is duly
        qualified as a foreign corporation and is in good standing in all states
        in which the failure to so qualify would have a material adverse effect
        on its businesses or financial condition.

        AUTHORIZATION. The execution, delivery, and performance of this
        Agreement and all Related Documents by Borrower, to the extent to be
        executed, delivered or performed by Borrower, have been duly authorized
        by all necessary action by Borrower; do not require the consent or
        approval of any other person, regulatory authority or governmental body;
        and do not conflict with, result in a violation of, or constitute a
        default under (a) any provision of its articles of incorporation or
        organization, or bylaws, or any agreement or other instrument binding
        upon Borrower or (b) any law, governmental regulation, court decree, or
        order applicable to Borrower.

<PAGE>   13

        FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
        Lender truly and completely disclosed Borrower's financial condition as
        of the date of the statement, and there has been no material adverse
        change in Borrower's financial condition subsequent to the date of the
        most recent financial statement supplied to Lender. Borrower has no
        material contingent obligations except as disclosed in such financial
        statements.

        LEGAL EFFECT. This Agreement constitutes, and any instrument or
        agreement required hereunder to be given by Borrower when delivered will
        constitute, legal, valid and binding obligations of Borrower enforceable
        against Borrower in accordance with their respective terms.

        PROPERTIES. Except for Permitted Liens, Borrower owns and has good title
        to all of Borrower's properties free and clear of all Security
        Interests, and has not executed any security documents or financing
        statements relating to such properties. All of Borrower's properties are
        titled in Borrower's legal name, and Borrower has not used, or filed a
        financing statement under, any other name for at least the last five (5)
        years.

        HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
        substance," "disposal," "release," and "threatened release," as used in
        this Agreement shall have the same meanings as set forth in the
        "CERCLA", "SARA," the Hazardous Materials Transportation Act, 49 U.S.C.
        Section 1801, et seq., the Resource Conservation and Recovery Act, 42
        U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of
        the California Health and Safety Code, Section 25100, et seq., or other
        applicable state or Federal laws, rules, or regulations adopted pursuant
        to any of the foregoing. Except as disclosed to and acknowledged by
        Lender in writing, Borrower represents and warrants that: (a) During the
        period of Borrower's ownership of the properties, there has been no use,
        generation, manufacture, storage, treatment, disposal, release or
        threatened release of any hazardous waste or substance by any person on,
        under, about or from any of the properties. (b) Borrower has no
        knowledge of, or reason to believe that there has been (i) any use,
        generation, manufacture, storage, treatment, disposal, release, or
        threatened release of any hazardous waste or substance on, under, about
        or from the properties by any prior owners or occupants of any of the
        properties, or (ii) any actual or threatened litigation or claims of any
        kind by any person relating to such matters. (c) Neither Borrower nor
        any tenant, contractor, agent or other authorized user of any of the
        properties shall use, generate, manufacture, store, treat, dispose of,
        or release any hazardous waste or substance on, under, about or from any
        of the properties; and any such activity shall be conducted in
        compliance with all applicable federal, state, and local laws,
        regulations, and ordinances, including without limitation those laws,
        regulations and ordinances described above. Borrower authorizes Lender
        and its agents to enter upon the properties to make such inspections and
        tests as Lender may deem appropriate to determine compliance of the
        properties with this section of the Agreement. Any inspections or tests
        made by Lender shall be at Borrower's expense and for Lender's purposes
        only and shall not be construed to create any responsibility or
        liability on the part of Lender to Borrower or to any other person. The
        representations and warranties contained herein are based on Borrower's
        due diligence in investigating the properties for hazardous waste and
        hazardous substances. Borrower hereby (a) releases and waives any future
        claims against Lender for indemnity or contribution in the event
        Borrower becomes liable for cleanup or other costs under any such laws,
        and (b) agrees to indemnify and hold harmless Lender against any and all
        claims, losses, liabilities, damages, penalties, and expenses which
        Lender may directly or indirectly sustain or suffer resulting from a
        breach of this section of the Agreement or as a consequence of any use,
        generation, manufacture, storage, disposal, release or threatened
        release of a hazardous waste or substance on the properties. The
        provisions of this section of the Agreement, including the obligation to
        indemnify, shall survive the payment of the indebtedness and the
        termination or expiration of this Agreement and shall not be affected by
        Lenders' acquisition of any interest in any of the properties, whether
        by foreclosure or otherwise.

        LITIGATION AND CLAIMS. No litigation, claim, investigation,
        administrative proceeding or similar action (including those for unpaid
        taxes) against Borrower is pending or threatened, and no other event has
        occurred which may materially adversely affect Borrower's financial
        condition or properties, other than litigation, claims or other events,
        if any, that have been disclosed to and acknowledged by Lender in
        writing.

        TAXES. To the best of Borrower's knowledge, all tax returns and reports
        of Borrower that are or were required to be filed, have been filed, and
        all taxes, assessments and other governmental charges have been paid in
        full, except those presently being or to be contested by Borrower in
        good faith in the ordinary course of business and for which adequate
        reserves have been provided.

        LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
        writing, Borrower has not entered into or granted any Security
        Agreements, or permitted the filing or attachment of any Security
        Interests on or affecting any of the Collateral directly or indirectly
        securing repayment of Borrower's Loan and Note, that would be prior or
        that may in any way be superior to Lender's Security Interests and
        rights in and to such Collateral.

        BINDING EFFECT. This Agreement, the Note and all Security Agreements
        directly or indirectly securing repayment of Borrower's Loan and Note
        and all of the Related Documents are binding upon Borrower as well as
        upon Borrower's successors, representatives and assigns, and are legally
        enforceable in accordance with their respective terms.

        COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
        for business or commercial related purposes.

        EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
        may have any liability complies in all material respects with all
        applicable requirements of law and regulations, and (i) no Reportable
        Event nor Prohibited Transaction (as defined in ERISA) has occurred with
        respect to any such plan, (ii) Borrower has not withdrawn from any such
        plan or initiated steps to do so, and (iii) no steps have been taken to
        terminate any such plan, and (iv) there are not unfunded liabilities
        other than those previously disclosed to Lender in writing.

        LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business
        or Borrower's Chief executive office, if Borrower has more than on place
        of business, is located at 30011 IVY GLENN DRIVE, #219, LAGUNA NIGUEL,
        CA 92677. Unless Borrower has designated otherwise in writing this
        location is also the office or offices where Borrower keeps its records
        concerning the Collateral.

        INFORMATION. All information heretofore or contemporaneously herewith
        furnished by Borrower to Lender for the purposes of or in connection
        with this Agreement or any transaction contemplated hereby is, and all
        information hereafter furnished by or on behalf of Borrower to Lender
        will be, true and accurate in every material respect on the date as of
        which such information is dated or certified; and none of such
        information is or will be incomplete by omitting to state any material
        fact necessary to make such information not misleading.

        SURVIVAL OF REPRESENTATION AND WARRANTIES. Borrower understands and
        agrees that Lender, without independent investigation, is relying upon
        the above representations and warranties in extending Loan Advances to
        Borrower. Borrower further agrees that the foregoing representations and
        warranties shall be continuing in nature and shall remain in full force
        and effect until such time as Borrower's Indebtedness shall be paid in
        full, or until this Agreement shall be terminated in the manner provided
        above, whichever is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

        LITIGATION. Promptly inform Lender in writing of (a) all material
        adverse changes in Borrower's financial condition, and (b) all existing
        and all threatened litigation, claims, investigations, administrative
        proceedings or similar actions affecting Borrower or any Guarantor which
        could materially affect the financial condition of Borrower or the
        financial condition of any Guarantor.

        FINANCIAL RECORDS. Maintain its books and records in accordance with
        generally accepted accounting principles, applied on a consistent basis,
        and permit Lender to examine and audit Borrower's books and records at
        all reasonable times.

<PAGE>   14

        FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in
        no event later than one hundred twenty (120) days after the end of each
        fiscal year, Borrower's balance sheet and income statement for the year
        ended, audited by a certified public accountant satisfactory to Lender,
        and, as soon as available, but in no event later than forty-five (45)
        days after the end of each fiscal quarter, Borrower's balance sheet and
        profit and loss statement for the period ended, prepared and certified
        as correct to the best knowledge and belief by Borrower's chief
        financial officer or other officer or person acceptable to Lender. All
        financial reports required to be provided under this Agreement shall be
        prepared in accordance with generally accepted accounting principles,
        applied on a consistent basis, and certified by Borrower as being true
        and correct.

        ADDITIONAL INFORMATION. Furnish such additional information and
        statements, lists of assets and liabilities, aging of receivables and
        payables, inventory schedules, budgets, forecasts, tax returns, and
        other reports with respect to Borrower's financial condition and
        business operations as Lender may request from time to time.

        FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
        ratios:

                TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of not
                less than $2,600,000.00.

                NET WORTH RATIO. Maintain a ratio of Total Liabilities to
                Tangible Net Worth of less than 1.00 to 1.00.

                OTHER RATIO. Maintain a ration of RENT ADJUSTED FIXED CHARGE
                COVERAGE OF 1.25 TO 1.00. (minimum)

        The following provisions shall apply for purposes of determining
        compliance with the foregoing financial covenants and ratios:

        COMPLIANCE WITH ALL COVENANTS AND RATIOS, EXCEPT THE FIXED CHARGE
        COVERAGE RATIO, SHALL BE DETERMINED BY CALCULATING THE RATIOS/AMOUNTS
        AS OF THE END OF EACH QUARTER.

        COMPLIANCE WITH THE FIXED CHARGE COVERAGE RATIO WILL BE CALCULATED ON A
        ROLLING FOUR QUARTER BASIS.

        Except as provided above, all computations made to determine compliance
        with the requirements contained in this paragraph shall be made in
        accordance with generally accepted accounting principles, applied on a
        consistent basis and certified by Borrower as being true and correct.

        INSURANCE. Maintain fire and other risk insurance, public liability
        insurance, and such other insurance as Lender may require with respect
        to Borrower's properties and operations, in form, amounts, coverages,
        and with insurance companies reasonably acceptable to Lender. Borrower,
        upon request of Lender, will deliver to Lender from time to time the
        policies or certificates of insurance in form satisfactory to Lender,
        including stipulations that coverage will not be cancelled or diminished
        without at least ten (10) day's prior written notice to Lender. Each
        insurance policy also shall include an endorsement providing that
        coverage in favor of Lender will not be impaired in any way by any act,
        omission or default of Borrower or any other person. In connection with
        all policies covering assets in which Lender holds or is offered a
        security interest for the Loans, Borrower will provide Lender with such
        loss payable or other endorsements as Lender may require.

        INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
        each existing Insurance policy showing such information as Lender may
        reasonably request, including without limitation the following: (a) the
        name of the insurer; (b) the risks insured; (c) the amount of the
        policy; (d) the properties insured; (e) the then current property values
        on the basis of which insurance has been obtained, and the manner of
        determining those values; and (f) the expiration date of the policy. In
        addition, upon request of Lender (however not more often that annually),
        Borrower will have an independent appraiser satisfactory to Lender
        determine, as applicable, the actual cash value or replacement cost of
        any Collateral. The cost of such appraisal shall be paid by Borrower.

        OTHER AGREEMENTS. Comply with all terms and conditions of all other
        agreements, whether now or hereafter existing, between Borrower and any
        other party and notify Lender immediately in writing of any default in
        connection with any other such agreements.

        LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
        operations, unless specifically consented to the contrary by Lender in
        writing.

        TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
        indebtedness and obligations, including without limitation all
        assessments, taxes, governmental charges, levies and liens, of every
        kind and nature, imposed upon Borrower or its properties, income, or
        profits, prior to the date on which penalties would attach, and all
        lawful claims that, if unpaid, might become a lien or charge upon any of
        Borrower's properties, income, or profits. Provided however, Borrower
        will not be required to pay and discharge any such assessment, tax
        charge, levy, lien or claim so long as (a) the legality of the same
        shall be contested in good faith by appropriate proceedings, and (b)
        Borrower shall have established on its books adequate reserves with
        respect to such contested assessment, tax, charge, levy, lien, or claim
        in accordance with generally accepted accounting practices. Borrower,
        upon demand of Lender, will furnish to Lender evidence of payment of the
        assessments, taxes, charges, levies, liens and claims and will authorize
        the appropriate governmental official to deliver to Lender at any time a
        written statement of any assessments, taxes, charges, levies, liens and
        claims against Borrower's properties, income, or profits.

        PERFORMANCE. Perform and comply with all terms, conditions, and
        provisions set forth in this Agreement and in the Related Documents in a
        timely manner, and promptly notify Lender if Borrower learns of the
        occurrence of any event which constitutes an Even of Default under this
        Agreement or under any of the Related Documents.

        OPERATIONS. Maintain executive and management personnel with
        substantially the same qualifications and experience as the present
        executive and management personnel; provide written notice to Lender of
        any change in executive and management personnel; conduct its business
        affairs in a reasonable and prudent manner and in compliance with all
        applicable federal, state and municipal laws, ordinances, rules and
        regulations respecting its properties, charters, businesses and
        operations, including without limitation, compliance with the Americans
        With Disabilities Act and with all minimum funding standards and other
        requirements of ERISA and other laws applicable to Borrower's employee
        benefit plans.

        INSPECTION. Permit employees or agents of Lender at any reasonable time
        to inspect any and all Collateral for the Loan or Loans and Borrower's
        other properties and to examine or audit Borrower's books, accounts, and
        records and to make copies and memoranda of Borrower's books, accounts
        and records. If Borrower now or at any time hereafter maintains any
        records (including without limitation computer generated records and
        computer software programs for the generation of such records) in the
        possession of a third party, Borrower, upon request of Lender, shall
        notify such party to permit Lender free access to such records at all
        times and to provide Lender with copies of any records it may request,
        all at Borrower's expense.

        COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
        Lender NOT REQUIRED and at the time of each disbursement of Loan
        proceeds with a certificate executed by Borrower's chief financial
        officer, or other officer or person acceptable to Lender, certifying
        that the representations and warranties set forth in this Agreement are
        true and correct as of the date of the certificate and further
        certifying that, as of the date of the certificate, no Event of Default
        exists under this Agreement.

        ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
        respects with all environmental protection federal, state and local
        laws, statutes, regulations and ordinances; not cause or permit to
        exist, as a result of an intentional or unintentional action or omission
        on its part or on the part of any third party, on property owned and/or
        occupied by Borrower, any environmental activity where damage may result
        to the environment, unless such environmental activity is pursuant to
        and in compliance with the conditions of a permit issued by the
        appropriate federal, state or local governmental authorities; shall
        furnish to Lender promptly and in any event within thirty (30) days
        after receipt thereof a copy of any notice, summons, lien, citation,
        directive, letter

<PAGE>   15

        or other communication from any governmental agency or instrumentality
        concerning any intention or unintentional action or omission on
        Borrower's part in connection with any environmental activity whether or
        not there is damage to the environment and/or other natural resources.

        ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
        promissory notes, mortgages, deeds of trust, security agreements,
        financing statements, instruments, documents and other agreements as
        Lender or its attorneys may reasonably request to evidence and secure
        the Loans and to perfect all Security Interests.

RECOVERY OF ADDITIONAL COSTS. If the imposition of or any change in any law,
rule, regulation or guideline, or the interpretation or application of any
thereof by any court or administrative or governmental authority (including any
request or policy not having the force of law) shall impose, modify or make
applicable any taxes (except U.S. federal, state or local income or franchise
taxes imposed on Lender), reserve requirements, capital adequacy requirements or
other obligations which would (a) increase the cost to Lender for extending or
maintaining the credit facilities to which this Agreement relates (b) reduce the
amounts payable to Lender under this Agreement or the Related Documents, or (c)
reduce the rate of return on Lender's capital as a consequence of Lender's
obligations with respect to the credit facilities to which this Agreement
relates, then Borrower agrees to pay Lender such additional amounts as will
compensate Lender therefor, within five (5) days after Lender's written demand
for such payment, which demand shall be accompanied by an explanation of such
imposition or charge and a calculation in reasonable detail of the additional
amounts payable by Borrower, which explanation and calculations shall be
conclusive in the absence of manifest error.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

        CAPITAL EXPENDITURES. Make or contract to make capital expenditures,
        including leasehold improvements, in any fiscal year in excess of
        $50,000.00 or incur liability for rentals or property (including both
        real and personal property) in an amount which, together with capital
        expenditures, shall in any fiscal year exceed such sum.

        INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
        course of business and indebtedness to Lender contemplated by this
        Agreement, create, incur or assume indebtedness for borrowed money,
        including capital leases, (b) except as allowed as a Permitted Lien,
        sell, transfer, mortgage, assign, pledge, lease, grant a security
        interest in, or encumber any of Borrower's assets, or (c) sell with
        recourse any of Borrower's accounts, except to Lender.

        CONTINUITY OF OPERATIONS. (a) Engage in any business activities
        substantially different than those in which Borrower is presently
        engaged, (b) cease operations, liquidate, merge, transfer, acquire or
        consolidate with any other entity, change ownership, change its name,
        dissolve or transfer or sell Collateral out of the ordinary course of
        business, (c) pay any dividends on Borrower's stock (other than
        dividends payable in its stock), provided, however that notwithstanding
        the foregoing, but only so long as no Event of Default has occurred and
        is continuing or would result from the payment of dividends, if Borrower
        is a "Subchapter S Corporation" (as defined in the Internal Revenue Code
        of 1986, as amended), Borrower may pay cash dividends on its stock to
        its shareholders from time to time in amounts necessary to enable the
        shareholders to pay income taxes and make estimated income tax payments
        to satisfy their liabilities under federal and state law which arise
        solely from their status as Shareholders of a Subchapter S Corporation
        because of their ownership of shares of stock of Borrower, or (d)
        purchase or retire any of Borrower's outstanding shares or alter or
        amend Borrower's capital structure.

        LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money
        or assets, (b) purchase, create or acquire any interest in any other
        enterprise or entity, or (c) incur any obligation as surety or guarantor
        other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if :
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing the Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have incurred.

ACCESS LAWS. Without limiting the generality of any provision of this agreement
requiring Borrower to comply with applicable laws, rules, and regulations,
Borrower agrees that it will at all times comply with applicable laws relating
to disabled access including, but not limited to, all applicable titles of the
Americans with Disabilities Act of 1990.

OUT OF DEBT PERIOD. Borrower agrees with Lender that Borrower shall rest the
Line of Credit Facility with no outstanding principal balance for a minimum of
thirty (30) consecutive days during each calendar year.

ADDITIONAL PROVISIONS. Borrower and Lender hereby agree that while this
agreement is in effect: (a) Borrower shall provide to Lender copies of their
annual 10-K and quarterly 10-Q's with the submission of their financial
statements. (b) Shareholder debt is limited to a maximum of $294,000.00.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keough accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

        DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
        due on the Loans.

        OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
        perform when due any other term, obligation, covenant or condition
        contained in this Agreement or in any of the Related Documents, or
        failure of Borrower to comply with or to perform any other term,
        obligation, covenant or condition contained in any other agreement
        between Lender and Borrower.

        DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
        default under any loan, extension of credit, security agreement,
        purchase or sales agreement, or any other agreement, in favor of any
        other creditor or person that may materially affect any of Borrower's
        property or Borrower's or any Grantor's ability to repay the Loans or
        perform their respective obligations under this Agreement or any of the
        Related Documents.

        FALSE STATEMENTS. Any warranty, representation or statement made or
        furnished to Lender by or on behalf of Borrower or any Grantor under
        this Agreement or the Related Documents is false or misleading in any
        material respect at the time made or furnished, or becomes false or
        misleading at any time thereafter.

        DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
        Documents ceases to be in full force and effect (including failure of
        any Security Agreement to create a valid and perfected Security
        Interest) at any time and for any reason.

<PAGE>   16

        INSOLVENCY. The dissolution or termination Borrower's existence as a
        going business, the insolvency of Borrower, the appointment of a
        receiver for any part of Borrower's property, any assignment for the
        benefit of creditors, any type of creditor workout, or the commencement
        of any proceeding under any bankruptcy or insolvency laws by or against
        Borrower.

        CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
        forfeiture proceedings, whether by judicial proceeding, self-help,
        repossession or any other method, by any creditor of Borrower, any
        creditor of any Grantor against any collateral securing the
        Indebtedness, or by any governmental agency. This includes a
        garnishment, attachment, or levy on or of any of Borrower's deposit
        accounts with lender.

        EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
        respect to any Guarantor of any of the Indebtedness or any Guarantor
        dies or becomes incompetent, or revokes or disputes the validity of, or
        liability under, any Guaranty of the indebtedness.

        CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
        (25%) or more of the common stock of Borrower.

        ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
        condition, or Lender believes the prospect of payment of performance of
        the Indebtedness is impaired.

        INSECURITY. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

        AMENDMENTS. This Agreement, together with any Related Documents,
        constitutes the entire understanding and agreement of the parties as to
        the matters set forth in this Agreement. No alteration of or amendment
        to this Agreement shall be effective unless given in writing and signed
        by the party or parties sought to be charged or bound by the alteration
        or amendment.

        APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND ACCEPTED
        BY LENDER IN THE STATE OF CALIFORNIA. IF THERE IS A LAWSUIT, BORROWER
        AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS
        OF SACRAMENTO COUNTY, THE STATE OF CALIFORNIA. SUBJECT TO THE PROVISIONS
        ON ARBITRATION, THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
        ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

        ARBITRATION. LENDER AND BORROWER AGREE THAT ALL DISPUTES, CLAIMS AND
        CONTROVERSIES BETWEEN THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN
        NATURE, ARISING FROM THIS AGREEMENT OR OTHERWISE, INCLUDING WITHOUT
        LIMITATION CONTRACT AND TORT DISPUTES, SHALL BE ARBITRATED PURSUANT TO
        THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION, UPON REQUEST OF
        EITHER PARTY. No act to take or dispose of any Collateral shall
        constitute a waiver of this arbitration agreement or be prohibited by
        this arbitration agreement. This includes, without limitation, obtaining
        injunctive relief or a temporary restraining order; invoking power of
        sale under any deed of trust or mortgage; obtaining a writ of attachment
        or imposition of a receiver; or exercising any rights relating to
        personal property, including taking or disposing of such property with
        or without judicial process pursuant to Article 9 of the Uniform
        Commercial Code. Any disputes, claims, or controversies concerning the
        lawfulness or reasonableness of any act, or exercise of any right,
        concerning any Collateral, including any claim to rescind, reform, or
        otherwise modify any agreement relating to the Collateral, shall also be
        arbitrated, provided however that no arbitrator shall have the right or
        the power to enjoin or restrain any act of any party. Lender and
        Borrower agree that in the event of an action for judicial foreclosure
        pursuant to California Code of Civil Procedure Section 726, or any
        similar provision in other state, the commencement of such an action
        will not constitute a waiver of the right to arbitrate and the court
        shall refer to arbitration as much of such action, including
        counterclaims, as lawfully may be referred to arbitration. Judgment upon
        any award rendered by any arbitrator may be entered in any court having
        jurisdiction. Nothing in the Agreement shall preclude any party from
        seeking equitable relief from a court of competent jurisdiction. The
        statute of limitations, estoppel, waiver, laches, and similar doctrines
        which would otherwise be applicable in an action brought by a party
        shall be applicable in any arbitration proceeding, and the commencement
        of an arbitration proceeding shall be deemed the commencement of an
        action for these purposes. The Federal Arbitration Act shall apply to
        the construction, interpretation, and enforcement of this arbitration
        provision.

        CAPTION HEADINGS. Caption headings in this Agreement are for convenience
        purposes only and are not to be used to interpret or define the
        provisions of this Agreement.

        CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
        sale or transfer, whether now or later, of one or more participation
        interests in the Loans to one or more purchasers, whether related or
        unrelated to Lender. Lender may provide, without any limitation
        whatsoever, to any one or more purchasers, any information or knowledge
        Lender may have about Borrower or about any other matter relating to the
        Loan, and Borrower hereby waives any rights to privacy it may have with
        respect to such matters. Borrower additionally waives any and all
        notices of sale of participation interests, as well as all notices of
        any repurchase of participation interests. Borrower also agrees that the
        purchasers of any such participation interests will be considered as the
        absolute owners of such interests in the Loans and will have all the
        rights granted under the participation agreement or agreements governing
        the sale of such participation interests. Borrower further waives all
        rights of offset or counterclaim that it may have now or later against
        Lender or against any purchaser of such a participation interest and
        unconditionally agrees that either Lender or such purchaser may enforce
        Borrower's obligation under the Loans irrespective of the failure or
        insolvency of any holder of any interest in the Loans. Borrower further
        agrees that the purchaser of any such participation interests may
        enforce its interests irrespective of any personal claims or defenses
        that Borrower may have against Lender.

        COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
        expenses, including without limitation attorneys' fees, incurred in
        connection with the preparation, execution, enforcement modification and
        collection of this Agreement or in connection with the Loans made
        pursuant to this Agreement. Lender may pay someone else to help collect
        the Loans and to enforce this Agreement, and Borrower will pay that
        amount. This includes, subject to any limits under applicable law,
        Lender's attorneys' fees and Lender's legal expenses, whether or not
        there is a lawsuit, including attorney's fees for bankruptcy proceedings
        (including efforts to modify or vacate any automatic stay or
        injunction), appeals, and any anticipated post-judgement collection
        services. Borrower also will pay any court costs, in addition to all
        other sums provided by law.

        NOTICES. All notices required to be given under this Agreement shall be
        given in writing, may be sent by telefacsimile (unless otherwise
        required by law), and shall be effective when actually delivered or when
        deposited with a nationally recognized overnight courier or deposited in
        the United States mail, first class, postage prepaid, addressed to the
        party to whom the notice is to be given at the address shown above. Any
        party may change its address for notices under this Agreement by giving
        formal written notice to the other parties, specifying that the purpose
        of the notice is to change the party's address. To the extent permitted
        by applicable law, if there is more than one Borrower, notice to any
        Borrower will constitute notice to all Borrowers. For notice purposes,
        Borrower will keep Lender informed at all times of Borrower's current
        address(es).

        SEVERABILITY. If a court of competent jurisdiction finds any provision
        of this Agreement to be invalid or unenforceable as to any

<PAGE>   17

        person or circumstance, such finding shall not render that provision
        invalid or unenforceable as to any other persons or circumstances. If
        feasible, any such offending provision shall be deemed to be modified to
        be within the limits of enforceability or validity; however, if the
        offending provision cannot be so modified, it shall be stricken and all
        other provisions of this Agreement in all other respects shall remain
        valid and enforceable.

        SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
        any provisions of this Agreement makes it appropriate, including without
        limitation any representation, warranty or covenant, the word "Borrower"
        as used herein shall include all subsidiaries and affiliates of
        Borrower. Notwithstanding the foregoing however, under no circumstances
        shall this Agreement be construed to require Lender to make any Loan or
        other financial accommodation to any subsidiary or affiliate of
        Borrower.

        SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
        behalf of Borrower shall bind its successors and assigns and shall inure
        to the benefit of Lender, its successors and assigns. Borrower shall
        not, however, have the right to assign its rights under this Agreement
        or any interest therein, without the prior written consent of Lender.

        SURVIVAL. All warranties, representations, and covenants made by
        Borrower in this Agreement or in any certificate or other instrument
        delivered by Borrower to Lender under this Agreement shall be considered
        to have been relied upon by Lender and will survive the making o the
        Loan and delivery to Lender of the Related Documents, regardless of any
        investigation made by Lender or on Lender's behalf.

<PAGE>   18

        TIME IS OF THE ESSENCE. Time is of the essence in the performance of
        this Agreement.

        WAIVER. Lender shall not be deemed to have waived any rights under this
        Agreement unless such waiver is given in writing and signed by Lender.
        No delay or omission on the part of Lender in exercising any right shall
        operate as a waiver of such right or any other right. A waiver by Lender
        of a provision of this Agreement shall not prejudice or constitute a
        waiver of Lender's right otherwise to demand strict compliance with that
        provision or any other provision of this Agreement. No prior waiver by
        Lender, nor any course of dealing between Lender and Borrower, or
        between Lender and any Grantor, shall constitute a waiver of any
        Lender's rights or of any obligations of Borrower of any Grantor as to
        any future transactions. Whenever the consent of Lender is required
        under this Agreement, the granting of such consent by Lender in any
        instance shall not constitute continuing consent in subsequent instances
        where such consent is required, and in all cases such consent may be
        granted or withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF JULY 14, 2000.

BORROWER:

OPTIMUMCARE CORPORATION

BY:     EDWARD A. JOHNSON
   ---------------------------------
        EDWARD A. JOHNSON, CHAIRMAN/CHIEF EXECUTIVE OFFICER

LENDER:

U.S. BANK NATIONAL ASSOCIATION

BY:
   ---------------------------------
        AUTHORIZED OFFICER

<PAGE>   19

US BANK
                                 PROMISSORY NOTE

<TABLE>
   Principal     Loan Date     Maturity     Loan No     Call  Collateral     Account      Officer  Initials
   ---------     ---------     --------     -------     ----  ----------     -------      -------  --------
<S>              <C>          <C>          <C>          <C>   <C>           <C>           <C>      <C>
 $1,500,000.00   07-14-2000   06-04-2001   2784-18/26             070       1105503561     RBM11
</TABLE>

References in the shaded are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.

<TABLE>
<S>            <C>                                 <C>           <C>
BORROWER:      OPTIMUMCARE CORPORATION             LENDER:       U.S. BANK NATIONAL ASSOCIATION
               30011 IVY GLENN DRIVE                             4100 NEWPORT PLACE, SUITE 120
               LAGUNA NIGUEL, CA  92677                          NEWPORT BEACH, CA  92660
</TABLE>

================================================================================

Principal Amount:$1,500,000.00    Date of Note: July 14,2000

PROMISE TO PAY. OptimumCare Corporation ("Borrower") promises to pay to U.S.
Bank National association ("Lender"), or order in lawful money of the United
States of America, the principal amount of One Million five Hundred Thousand &
00/100 Dollars ($1,500,000) or so much as may be outstanding together with
interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on June 4, 2001. In addition, Borrower will pay
regular monthly payments of accrued unpaid interest beginning August 4, 2000,
and all subsequent interest payments are due on the same day of each month after
that. The annual interest rate for this Note is computed on a 365/360 basis;
that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an independent index which is the Wall Street
Journal Prime Rate. This is the prime rate as published in the West Coast
edition of The Wall Street Journal "Money Rates" column (the "Index"). The Index
is not necessarily the lowest rate charged by Lender on its loans. If the Index
becomes unavailable during the term of this loan, Lender may designate a
substitute Index after notice to Borrower. Lender will tell Borrower the current
index rate upon Borrower's request. Borrower understands that Lender may make
loans based on other rates as well. The interest rate change will not occur more
often that each day. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 0.500 percentage points over the
Index. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT: Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law.

Except for the foregoing, Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to continue
to make payments of accrued unpaid interest. Rather, they will reduce the
principal balance due.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due, (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due, any other term, obligation, covenant , or condition contained in this Note
or any agreement related to this Note, or in any other agreement of loan
Borrower has with Lender,(c) Borrower defaults under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement
in favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the related documents, (d) any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished, (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy insolvency laws, (f) Borrower is in
default under any other note, security agreement, lease agreement or lease
schedule, loan agreement or other agreement, whether now existing or hereafter
made, between Borrower and U.S. Bancorp or any direct or indirect subsidiary of
U.S. Bancorp, (g) any creditor tries to take any of Borrower's property on or in
which Lender has a lien or security interest. This includes a garnishment of any
of Borrower's accounts with Lender, (h) any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note, (i) a material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment of performance of the
Indebtedness is impaired, (j) Lender in good faith deems itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable
law, increase the variable interest rate on this Note to 5.500 percentage points
over the Index. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower also will pay lender that amount. This includes,
subject to any limits under applicable law, Lender's attorney's fees and
Lender's legal expenses whether or note there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (including efforts to modify
or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower also will pay any court costs in
addition to all automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Borrower also will pay any court costs in
addition to all other sums provided by law. This note has been delivered to
Lender and accepted by Lender in the state of California. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of Sacramento county, the state of California. Subject to the provisions
on arbitration, this Note shall be governed by and construed in accordance with
the laws of the State of California.

RIGHT OF SETOFF. Borrower grants to lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable laws, to
charge or setoff all sums owing on this Note against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested either orally or in writing

<PAGE>   20

by Borrower or by an authorized person. Lender may, but need not, require that
all oral requests be confirmed in writing. All communications, instructions, or
directions by telephone or otherwise to Lender are to be directed to Lender's
office shown above. Borrower agrees to be liable for all sums either: (a)
advanced in accordance with the instructions of an authorized person or (b)
credited to any of Borrowers accounts with Lender. The unpaid principal balance
owing on this Note at any time may be evidenced by endorsements on this Note or
by Lender's internal records, including daily computer printouts. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this note or
any other loan with Lender,; (d) Borrower has applied funds provided pursuant to
this note for purposes other than those authorized by Lender,; or (e) Lender in
good faith deems itself insecure under this Note or any other agreement between
Lender and Borrower.

ARBITRATION. Lender and Borrower agree that all disputes, claims and
controversies between them whether individual, joint, or class in nature arising
from this Note or otherwise, including without limitation contract and tort
disputes shall be arbitrated pursuant to the rules of the American Arbitration
Association upon request of either party. No act to take or dispose of any
collateral securing this Note shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This includes, without
limitation, obtaining injunctive relief or a temporary restraining order;
invoking a power of sale under any deed of trust or mortgage; obtaining a writ
of attachment of imposition of a reviewer; or exercising any rights relating to
personal property, including taking or disposing of such property with or
without judicial process pursuant to Article 9 of the Uniform Commercial ode.
Any disputes, claims, or controversies concerning the lawfulness or
reasonableness of any act, or exercise of any right, concerning any collateral
securing this Note, including any claim to rescind, reform, or otherwise modify
any agreement relating to the collateral securing this Note, shall also be
arbitrated, provided however that no arbitrator shall have the right or the
power to enjoin or restrain any act of any party. Lender and Borrower agree that
in the event of an action for judicial foreclosure pursuant to California Code
of Civil Procedure Section 726, or any similar provision in any other state, the
commencement of such an action will not constitute a waiver of the right to
arbitrate and the court shall refer to arbitration as much of such action,
including counterclaims, as lawfully may be referred to arbitration. Judgment
upon any award rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this Note shall preclude any party from seeking
equitable relief from a court of competent jurisdiction. The statue of
limitations, estoppel, waiver, laches, and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of an action for these purposes. The Federal
Arbitration Act shall apply to the construction, interpretation, and enforcement
of this arbitration provision.

LATE CHARGE. If a payment is 15 days or more past due, Borrower will be charged
a late charge of 5% of the delinquent payment.

RENEWAL AND EXTENSION. This Note is given in renewal and extension and not in
novation of the following described indebtedness: That certain Promissory Note
dated April 14, 1995, in the amount of $500,000.00 executed by Borrower payable
to Lender. It is further agreed that all liens and security interest securing
said indebtedness are hereby renewed and extended to secure the Note and all
renewals, extensions and modifications thereof.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, protest and
notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that
lender may modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made.

Prior to signing this note, Borrower read and understood all the provisions of
this Note, including the variable interest rate provisions. Borrower agrees to
the terms of the Note and acknowledges receipt of a completed copy of the note.

Borrower:
OPTIMUMCARE CORPORATION

BY:
   ---------------------------------
        EDWARD A. JOHNSON, CHAIRMAN/CHIEF EXECUTIVE OFFICER

LENDER:
U.S. BANK NATIONAL ASSOCIATION

BY:
   ---------------------------------
        AUTHORIZED OFFICER

<PAGE>   21

                 This STATEMENT is presented for filing pursuant
                   to the California Uniform Commercial Code

<TABLE>
<S>                                         <C>
1. FILE NO, OF ORIGINAL FINANCING STATEMENT 1A. DATE OF FILING OR ORIG. FINANCING STATEMENT
9512160198                                  APRIL 27, 1995
</TABLE>

<TABLE>
<S>                                         <C>
1B. DATE OF ORIG. FINANCING STATEMENT       1C. PLACE OF ORIG. FINANCING STATEMENT
APRIL 14, 1995                              SACRAMENTO, CA
</TABLE>

<TABLE>
<S>                                               <C>                                 <C>
2. DEBTOR (LAST NAME FIRST)
OPTIMUMCARE CORPORATION, A DELAWARE CORPORATION
2B. MAILING ADDRESS                               2C. CITY, STATE                     2D. ZIP CODE
30011 IVY GLENN DRIVE #219                        LAGUNA NIGUEL, CA                   92677
</TABLE>

<TABLE>
<S>                                         <C>                                 <C>
3. ADDITIONAL DEBTOR (IF ANY)
3B. MAILING ADDRESS                         3C. CITY, STATE                     3D. ZIP CODE
</TABLE>

<TABLE>
<S>                                                              <C>
4. SECURED PARTY                                                 4A. SOCIAL SECURITY NO./FED. TAX ID
NAME               NATIONAL BANK OF SOUTHERN CALIFORNIA/NEWPORT      OR BANK TRANSIT AND ABA NO.
MAILING ADDRESS    4100 NEWPORT PLACE                                95-3748495
CITY               NEWPORT BEACH    STATE CA                     ZIP CODE 92660
</TABLE>

<TABLE>
<S>                                    <C>                       <C>
5. ASSIGNEE OF SECURED PARTY (IF ANY)                            5A. SOCIAL SECURITY NO./FED. TAX ID
NAME                                                                 OR BANK TRANSIT AND ABA NO.
MAILING ADDRESS
CITY                                   STATE                     ZIP CODE
</TABLE>

6.      A. [ ] CONTINUATION --The original Financing Statement between the
foregoing Debtor and Secured Party bearing the file number and date shown above
is continued. If collateral is crops or timber, check here |_| and insert
description of real property on which growing or to be grown in item 7 below.

        B. [ ] RELEASE --From the collateral described in the Financing
Statement bearing the file number shown above, the Secured Party releases the
collateral described in Item 7 below.

        C. [ ] ASSIGNMENT --The Secured Party certifies that the Secured Party
has assigned to the Assignee above named, all the Secured Party's rights under
the Financing Statement bearing the file number shown above in the collateral
described in Item 7 below.

        D. [ ] TERMINATION --The Secured Party certifies that the Secured Party
no longer claims a security interest under the financing Statement bearing the
file number shown above.

        E. [X] AMENDMENT --The Financing Statement bearing the file number shown
above is amended as set forth in Item 7 below. (Signature of Debtor required on
all amendments)

        F. [ ] OTHER

<TABLE>
<S>     <C>
7.      PLEASE AMEND SECURED PARTY NAME AND ADDRESS TO:
        U.S. BANK NATIONAL ASSOCIATION
        4100 NEWPORT PLACE, SUITE 120
        NEWPORT BEACH, CA 92660
</TABLE>

<TABLE>
<S>     <C>                                     <C>                     <C>
8.                                              (Date) 7/14/2000        9.  This Space for Use of Filing
                                                                        Officer (Date, Time, Filing Office)
        OPTIMUMCARE CORPORATION
        ---------------------------------------------------------

BY:
   --------------------------------------------------------------
        SIGNATURE(S) OF DEBTOR(S)               (TITLE)

BY:     U.S. BANK NATIONAL ASSOCIATION as Successor in interest to National
   --------------------------------------------------------------
        Bank of Southern California
   --------------------------------------------------------------

BY:
   --------------------------------------------------------------
        SIGNATURE(S) OF DEBTOR(S)               (TITLE)

10.      RETURN COPY TO

NAME     U.S. BANK NATIONAL ASSOCIATION
         2784-1105503561
ADDRESS  PO BOX 5308
         PORTLAND, OR 97228
</TABLE>

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