Document:

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                                  EXHIBIT 10.23

                        (FORM OF ARL OPERATING AGREEMENT)

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                              AMENDED AND RESTATED

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                           AMERICAN REIMBURSEMENT, LLC

        This Amended and Restated Limited Liability Company Agreement (this
"Agreement") of American Reimbursement, LLC, a Delaware limited liability
company (the "Company"), dated as of June 27, 2002, is entered into by and
between Med Diversified, Inc. and Richard J. Boudreau & Associates, LLC, a
Massachusetts limited liability company (the "Independent Member" and, together
with Med, the "Members").

                                    RECITALS

        WHEREAS, the Members have formed a limited liability company under and
pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware on
March 27, 2002, and by entering into an Limited Liability Company Agreement,
dated as of March 29, 2002 (the "Original Limited Liability Company Agreement");

        WHEREAS, the Members now desire to amend and restate the Original
Limited Liability Company Agreement in order to effectuate certain changes to
such document.

        NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to amend and restate the Original Limited Liability
Company Agreement for the Company in accordance with the Delaware Limited
Liability Company Act and subject to the terms and provisions set forth in this
Agreement.

                                    AGREEMENT

                                   ARTICLE ONE

                                   DEFINITIONS

        Section 1.01    DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:

        "ACT" means the Delaware Limited Liability Company Act (6 DEL. C.
Section 18-101, ET SEQ.), as amended from time to time.

        "AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such Person. For purposes of the foregoing definition, a Person shall be deemed
to

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be "controlled by" another Person if such other Person possesses, directly or
indirectly, the power (i) to vote five percent (5%) or more of the securities
(on a fully diluted basis) having ordinary voting power for the election of
directors, members or managing partners of such Person or (ii) to direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.

        "ADMINISTRATIVE SERVICES AGREEMENT" means that certain administrative
services agreement by and between the Company and National Premier Financial
Enterprises, dated as of March 29, 2002.

        "AGREEMENT" means this Amended and Restated Limited Liability Company
Agreement of the Company, as it may be further amended, restated or supplemented
from time to time.

        "AMENDED DEBENTURES" means those certain Amended Debentures, dated as of
June 28, 2002, issued by Med in favor of PIBL.

        "AMENDMENT AGREEMENT" means that certain Amendment Agreement, dated as
of June 28, 2002, by and among Med, PIBL, TEGCO Investments, LLC, a Delaware
limited liability company, and each of the Med Subsidiaries (as defined in the
Amendment Agreement) that are a party thereto, pursuant to which the Amended
Debentures are issued.

        "CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.

        "CAPITAL CONTRIBUTIONS" means the amount of all cash (whether in the
form of money, a note payable upon demand or a combination thereof) or the
agreed upon value of other property or services contributed by the Members to
the Company.

        "CERTIFICATE" means the Certificate of Formation of the Company,
including any restatements or amendments, filed with the Delaware Secretary of
State.

        "CODE" means the Internal Revenue Code of 1986, as amended.

        "COLLATERAL" shall have the meaning set forth in Section 3.01(b).

        "CONTROL MANAGER" means the Manager appointed by the Independent Member
in accordance with Section 5.01(a)(1).

        "COVERED PERSON" shall have the meaning set forth in Section 8.03.

        "DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.

        "FISCAL YEAR" means the fiscal year of the holder of the Majority
Interest.

        "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.

        "INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.

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        "INDEPENDENT PERSON" means a Person who is not (i) a director, officer
or employee of any Affiliate of any Member (other than any limited or special
purpose corporation or limited liability company similar to the Company); (ii) a
Person related to any officer or director of any Affiliate of any Member; (iii)
a direct or indirect holder of more than ten percent (10%) of any voting
securities of any Affiliate of any Member; or (iv) a Person related to a direct
or indirect holder of more than ten percent (10%) of any voting securities of
any Affiliate of any Member.

        "MAJORITY DEBENTURE HOLDER" means PIBL, in its capacity as the entity
designated to serve as representative of the majority of holders of the Amended
Debentures.

        "MAJORITY DEBENTURE HOLDER MANAGER" means the Manager appointed by the
Majority Debenture Holder in accordance with Section 5.01(a)(2).

        "MAJORITY INTEREST" means the interest in the Company held by Members
holding more than fifty percent (50%) of the Membership Percentages.

        "MANAGERS" means the Control Manager, the Med Manager and the Majority
Debenture Holder Manager and such other Person(s) that may be designated from
time to time by the relevant Member(s) as managers of the Company to perform
such functions for the Company as may be determined from time to time by the
Members. A Manager shall be deemed to be a "manager" of the Company within the
meaning of Section 18-101 of the Act.

        "MANDATORY DEBENTURE PREPAYMENT" means any mandatory prepayment of the
Amended Debentures that is described in the Amendment Agreement.

        "MED" means Med Diversified, Inc., a Nevada corporation, and its
permitted successors and assigns.

        "MED MANAGER" means the Manager appointed by Med in accordance with
Section 5.01(a)(3).

        "MEMBERS" are the Persons designated as Members of the Company in
EXHIBIT A attached hereto. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
permitted successors in interest.

        "MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in EXHIBIT A.

        "PERSON" means an individual or any corporation, limited liability
company, association, partnership, joint venture, estate, trust or other legal
entity, including any Governmental Authority.

        "PIBL" means Private Investment Bank Limited, Nassau, Bahamas.

        "PROFITS" and "LOSSES" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is

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exempt from federal income tax and not otherwise taken into account in computing
Profits and Losses shall be added to such taxable income or loss.

        "RECEIVABLES" shall have the meaning set forth in Section 3.01(a).

        "RECEIVABLES PURCHASE AGREEMENTS" means those Receivables Purchase
Agreements, each dated as of March 29, 2002, by and between the Company and each
of the Sellers, respectively.

        "SELLERS" means and includes (i) Chartwell Diversified Services, Inc., a
Delaware corporation; (ii) Home Medical of America, Inc., a Delaware
corporation; (iii) Infusion Management Systems, Inc., a Texas corporation; (iv)
Millenium Health Group, Inc., a Delaware corporation; and (v) Tender Loving Care
Health Care Services, Inc., a Delaware corporation.

        "SELLERS' OVERRIDE" shall have the meaning ascribed thereto in Section 1
of the Amendment Agreement.

        "SERVICING COSTS" shall have the meaning ascribed thereto in the
Administrative Services Agreement.

        Section 1.02    OTHER DEFINITIONAL PROVISIONS.

               (a)      For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, (i) terms used
herein include, as appropriate, all genders and the plural as well as the
singular, (ii) references to words such as "herein", "hereof' and the like shall
refer to this Agreement as a whole and not to any particular part, article or
section within this Agreement, (iii) references to a section such as "Section
1.01" and the like shall refer to the applicable section of this Agreement, (iv)
the term "include" and all variations thereof shall mean "include without
limitation" and (v) the term "or" shall include "and/or".

               (b)      As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.

                                   ARTICLE TWO

                             ORGANIZATION OF COMPANY

        Section 2.01    CONTINUATION. The Members agree to continue the Company
as a Delaware limited liability company pursuant to the provisions of the
Delaware Act. In connection therewith, the Control Manager or such other person
designated by the Control

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Manager is hereby authorized to execute, acknowledge and/or verify such other
documents and/or instruments as may be necessary and/or appropriate in order to
continue the existence of the Company in accordance with the provisions of the
Delaware Act and any other jurisdiction in which the Company conducts its
business operations. The Members agree that the rights, duties and liabilities
of the Members and the Managers shall be as provided in the Act, except as
otherwise provided in this Agreement.

        Section 2.02    NAME AND OFFICE. The name of the Company shall be
American Reimbursement, LLC, and its office shall be located at 200 Brickstone
Square, Suite 403, Andover, Massachusetts 01810 or such other place as the
Members may determine from time to time.

        Section 2.03    DURATION. The term of the Company shall commence on the
date the Certificate is filed in the office of the Delaware Secretary of State
and shall continue until March 31, 2032, unless the Company is dissolved before
such date in accordance with the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Act.

        Section 2.04    REGISTERED OFFICE AND REGISTERED AGENT. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and the
name of its initial registered agent at such address shall be The Corporation
Trust Company. The registered office and registered agent may be changed from
time to time in accordance with the Act. If the registered agent shall ever
resign, the Company shall promptly appoint a successor.

                                  ARTICLE THREE

                                    PURPOSES

        Section 3.01    PURPOSES. The purposes for which the Company is formed
are:

               (a)      to acquire, own, hold, service, sell, assign, pledge,
        finance, refinance and otherwise deal with from time to time (i)
        accounts receivable, including any right to payment from a Person,
        whether constituting an account, chattel paper, instrument or general
        intangible, arising out of or relating to medical products, supplies or
        services or related products, supplies or services; (ii) interests in
        any of the foregoing; and (iii) any proceeds or other monies due under
        any of the foregoing, any related fees and charges, security interests
        in the foregoing or other property securing payment thereof and related
        agreements, instruments, documents and rights (collectively, the
        "Receivables");

               (b)      to acquire, own, hold, service, sell, assign, pledge,
        finance, refinance and otherwise deal with Receivables, any collateral
        securing the Receivables, related insurance policies, related agreements
        with affiliates, agreements with originators or servicers of Receivables
        and any proceeds or further rights associated therewith (collectively,
        the "Collateral");

               (c)      to hold, and to enjoy all of the rights and privileges
        as a holder or beneficial owner of any Collateral or other property;

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               (d)      to negotiate, authorize, execute, deliver or assume or
        perform the obligations under any agreement, instrument or document
        relating to the activities set forth in subsections (a) through (c)
        above, including but not limited to any indenture, reimbursement
        agreement, credit support agreement, receivables purchase agreement,
        promissory note, security agreement, assignment, indemnification
        agreement, placement agreement or underwriting agreement; and

               (e)      to engage in any activity and to exercise any powers
        permitted to limited liability companies under the laws of the State of
        Delaware that are related or incidental to the foregoing and necessary,
        convenient or advisable to accomplish the foregoing.

        Section 3.02    POWER AND AUTHORITY. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to accomplish or for the furtherance of the
purposes set forth in Section 3.01.

        Section 3.03    LIMITATIONS ON POWERS. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:

               (a)      engage in any business or activity other than as set
        forth in this Agreement;

               (b)      without the unanimous affirmative vote of the Members,
        (i) dissolve or liquidate, in whole or in part, or institute proceedings
        to be adjudicated bankrupt or insolvent, (ii) consent to the institution
        of bankruptcy or insolvency proceedings against it, (iii) file a
        petition seeking or consent for reorganization or relief under any
        applicable federal or state law relating to bankruptcy, (iv) consent to
        the appointment of a receiver, liquidator, assignee, trustee,
        sequestrator or other similar official of the Company or a substantial
        part of its property, (v) make any assignment for the benefit of
        creditors, (vi) admit in writing its inability to pay its debts
        generally as they become due; (vii) institute or join in any institution
        of any bankruptcy, insolvency, liquidation, reorganization or
        arrangement proceedings or other proceedings under any federal or state
        law, against any entity in which the Company holds an ownership
        interest; or (viii) take any limited liability company action in
        furtherance of the actions set forth in clauses (i) through (vii) above;

               (c)      without the unanimous affirmative vote of the Members,
        take or cause to be taken any of the actions referred to in clauses (i)
        through (vii) of subparagraph (b) above with respect to any entity of
        which the Company is a partner or member.

               (d)      without the unanimous affirmative vote of the Members,
        merge or consolidate with any other corporation, company or entity or
        sell all or substantially all of its assets or acquire all or
        substantially all of the assets or capital stock or other ownership
        interest of any other corporation, company or entity.

        Section 3.04    COMPANY OPPORTUNITY. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other

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business activity, whether or not competitive with, similar to, or within the
scope of the activities conducted by or on behalf of the Company.

                                  ARTICLE FOUR

                        CAPITAL CONTRIBUTIONS; BORROWINGS

        Section 4.01    ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.

               (a)      Each of Med and the Independent Member are admitted as a
Member of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
EXHIBIT A attached hereto.

               (b)      The Members have made, or commenced to make, the Capital
Contributions set forth next to their names in EXHIBIT A subsequent to the
formation of the Company. No interest shall accrue on any Capital Contribution
made to the Company.

        Section 4.02    ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not
be obligated to make additional Capital Contributions except upon the consent of
all Members.

        Section 4.03    WITHDRAWALS. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.

        Section 4.04    BORROWINGS. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; PROVIDED, HOWEVER, that
any such borrowing shall require the prior approval of all the Managers and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by the Control Manager. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company that shall be repaid before any distributions to the
Members.

        Section 4.05    ADDITIONAL MEMBERS. No additional Members shall be
admitted to the Company without the unanimous consent of the Members and each of
the Managers.

                                  ARTICLE FIVE

                                   MANAGEMENT

        Section 5.01    POWERS OF THE MANAGERS; RELATIONS BETWEEN THE MEMBERS.

               (a)      Except as otherwise provided elsewhere in this Agreement
or otherwise required by the Act, the Company shall be managed the following
three (3) Managers:

                        (1)    There shall, at all times during the existence of
the Company, be a Manager (the "Control Manager") appointed in writing by the
Independent Member. In order for the resignation, withdrawal or other
replacement of the Control Manager to become effective, the Independent Member
must appoint a replacement or successor Control Manager in a writing

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provided to all of the Members and the other Managers. The Control Manager must
be an Independent Person; PROVIDED that the Control Manager may be related to
the Independent Member.

                        (2)    There shall, at all times during the existence of
the Company, be a Manager (the "Majority Debenture Holder Manager") appointed in
writing by the Majority Debenture Holder. In order for the resignation,
withdrawal or other replacement of the Majority Debenture Holder Manager to
become effective, the Majority Debenture Holder must appoint a replacement or
successor Majority Debenture Holder Manager in a writing provided to all of the
Members and the other Managers.

                        (3)    There shall, at all times during the existence of
the Company, be a Manager (the "Med Manager") appointed in writing by the Med.
In order for the resignation, withdrawal or other replacement of the Med Manager
to become effective, Med must appoint a replacement or successor Med Manager in
a writing provided to all of the Members and the other Managers.

               (b)      Subject to the other provisions of this Article Five and
Article Six, each Manager, or any party expressly authorized by a Manager for
any specific task(s), shall have the authority, on behalf of the Company, to do
all things that are necessary or appropriate for the accomplishment of the
purposes of the Company, including, but not limited to, (i) acquiring and
selling, assigning and transferring Receivables and other Collateral; (ii)
disbursing Company funds for any permitted Company purposes; (iii) investing and
reinvesting Company funds; (iv) executing contracts and other agreements and
instruments on behalf of the Company; (v) employing attorneys, accountants,
Managers or other agents, which may include Affiliates of the Company; (vi)
paying any and all Company obligations; (vii) performing all ministerial acts
and duties relating to the payment of all indebtedness, taxes and assessments
due, or to become due, with regard to any property of the Company; (viii)
purchasing and maintaining insurance on behalf of the Company against any
liability, expense or claim asserted against or incurred by, or on behalf of,
the Company or its assets; (ix) transacting the Company's business under an
assumed name or name other than its name as set forth in the Certificate; (x)
appointing any Member or other Person as agent for service of process on the
Company as required by the law of any jurisdiction in which the Company
transacts business; (xi) commencing, prosecuting or defending any proceeding in
the Company's name; and (xii) doing such other acts as may facilitate the
Company's exercise of its powers; PROVIDED, HOWEVER, that all such acts shall
fall within the purposes of the Company as set forth in Section 3.01; provided
further, that the Control Manager must provide prior written approval of (i) any
acquisition or disposition of assets (other than actions taken in the ordinary
course of business in connection with collections on any Receivables or other
Collateral); (ii) the entry into, or approval of, any material modification of
any of the Receivables Purchase Agreements between the Company and any of the
Sellers or any material obligations or agreements related thereto (iii) any
decision that could reasonably be viewed to result in a material failure to make
timely and full payment of any Mandatory Debenture Prepayment to PIBL; and (iv)
the determination of the Servicing Costs and Sellers' Override that is to be
paid out of the Lockbox Account.

               (c)      Notwithstanding anything in this Agreement to the
contrary, the Company shall at all times have at least one (1) Independent
Member, and no action of the type described

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in Article Six shall occur without the consent of each Independent Member. The
appointment of a replacement or successor to Richard J. Boudreau & Associates,
LLC, in its capacity as Independent Member, must be approved in writing by the
Majority Debenture Holder before such appointment will become effective.

               (d)      Each Member irrevocably appoints the other Members as
its attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice that
may be required by any rule or law and that may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or that may be necessary or appropriate to correct
any errors or omissions. This power of attorney is coupled with an interest and
shall not be revoked by the act of any Member. This power of attorney shall
survive and not be affected by an assignment by any Member of its limited
liability company interest in the Company; PROVIDED, HOWEVER, that, where a
Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven (7) days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.

               (e)      A copy of the Certificate or amendments to the
Certificate will be provided to each Member upon written request to the Company.

               (f)      Subject to the other provisions of this Article and
Article Six, the Members shall have full power to act for and to bind the
Company to the extent provided by Delaware law. Every contract, note, mortgage,
lease, deed or other instrument or agreement executed by any Member shall be
conclusive evidence that at the time of execution, the Company was then in
existence, that this Agreement had not theretofore been terminated or amended in
any manner and that the execution and delivery of such instrument was duly
authorized by the Members. A Manager may bind the Company only to the extent
authorized by the Members.

        Section 5.02    LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended, decision
made, obligation incurred or power exercised by any Member on behalf of the
Company, without prior written notice to all Members outlining the proposed
action followed by the written consent of the Control Manager with respect to:
(i) any mortgage, grant of security interest, pledge or encumbrance of any asset
of the Company; (ii) any merger of the Company with another entity; (iii) a
transaction involving an actual or potential conflict of interest between a
Member and the Company; (iv) any material change in the character of the
business and affairs of the Company; or (v) any act that would contravene in a
material respect any provision of this Agreement or the Act.

        Section 5.03    SELF DEALING. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable or
affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable

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to the Company or the other Members in respect of any profits directly or
indirectly realized by reason of such contract or other act, and such interested
Member shall be eligible to vote or take any other action as a Member in respect
of such contract or other act as it would be entitled were it or its Affiliate
not interested therein. Notwithstanding the foregoing, (i) any direct or
indirect interest of a Member or an Affiliate thereof in any contract or other
act, other than its interest as a Member, shall be disclosed to all other
Members, (ii) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein, and (iii) the
Members shall not receive or hold any property of the Company as collateral
security in respect of any claim against the Company.

        Section 5.04    STANDARD OF CARE; LIABILITY. Each Member and its
respective directors, officers, stockholders and Affiliates shall discharge its
duties in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company as required by
this Agreement or the Act. A Member shall not be liable for monetary damages to
the Company for any breach of any such duties except for receipt of a financial
benefit to which the Member is not entitled, voting for or assenting to a
distribution to Members in violation of this Agreement or the Act, or a knowing
violation of the law.

        Section 5.05    COMPENSATION. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by a Majority Interest.

        Section 5.06    VOTING; MEETINGS OF MEMBERS. All Members shall be
entitled to vote on any matter submitted to a vote of the Members. Unless a
greater vote is required by the Act or this Agreement, the affirmative vote of a
Majority Interest shall be required. Although it is the express intent of the
Members that there shall not be any required (or regularly scheduled) meetings
of the Company, meetings may be called upon the written request of the Control
Manager. Meetings of Members for the transaction of such business as may
properly come before the Members may be held at such place, on such date and at
such time as a Majority Interest shall determine. The Company shall deliver or
mail written notice stating the date, time, place and purposes of any meeting to
each Member entitled to vote at the meeting. Such notice shall be given not less
than ten (10) nor more than sixty (60) days before the date of the meeting.

        Section 5.07    CONSENT. Any action required or permitted to be taken at
a regular or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.

        Section 5.08    INDEPENDENT MEMBER. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be an Independent
Person.

        Section 5.09    OBLIGATIONS OF MANAGERS. Except as otherwise provided by
the Act:

               (a)      the debts, obligations and liabilities of the Company,
        whether arising in contract, tort or otherwise, shall be solely the
        debts, obligations and liabilities of the

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        Company, and no Manager shall be obligated personally for any such debt,
        obligation, or liability of the Company solely by reason of being a
        Manager of the Company;

               (b)      no Manager shall be required to make any Capital
        Contribution in the form of cash to the Company; and

               (c)      no Manager shall be (i) entitled to receive any Profits
        or (ii) liable for any Losses of the Company.

                                   ARTICLE SIX

             POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS

        Section 6.01    UNANIMOUS VOTE REQUIRED. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (i) the prior written consent of the
Control Manager and (ii) the affirmative vote of one hundred percent (100%) of
the Members of the Company, including all Independent Members, institute
proceedings to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or file a
petition seeking, or consent to, reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or a substantial part of its property, or make any assignment for
the benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any limited liability company action in
furtherance of any such action.

        Section 6.02    VOTING ON BANKRUPTCY OR INSOLVENCY. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of one hundred percent
(100%) of the Members, including each Independent Member, entitled to vote on
such a proposal shall be required for such a proposal to be adopted.

                                  ARTICLE SEVEN

               CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS

        Section 7.01    CAPITAL ACCOUNTS. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.

        Section 7.02    ALLOCATION OF PROFITS AND LOSSES.

        The Profits and Losses of the Company shall be determined as of the end
of each Fiscal Year of the Company and shall be allocated among the Members;
PROVIDED, HOWEVER, that Independent Member will have no interest in the Profits
and Losses of the Company.

                                       11
<Page>

        Section 7.03    DISTRIBUTIONS.

               (a)      The Company shall distribute to the Members such sums as
a Majority Interest determines to be available for distribution and not required
to provide for current or anticipated Company needs. All distributions shall be
made to the Members.

               (b)      No distributions shall be declared and paid unless,
after the distribution is made, the Company would be able to pay its debts as
they become due in the usual course of business and the assets of the Company
are in excess of the sum of (i) the Company's liabilities, plus (ii) the amount
that would be needed to satisfy the preferential rights of other Members upon
dissolution that are superior to the rights of the Members receiving the
distribution.

               (c)      The Company shall not be required to make a distribution
to a Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.

                                  ARTICLE EIGHT

                    EXCULPATION OF LIABILITY; INDEMNIFICATION

        Section 8.01    EXCULPATION OF LIABILITY. Except as otherwise provided
by the Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of being
a Member of the Company.

        Section 8.02    INDEMNIFICATION. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of a Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal (other than an action by or in the right of the
Company) by reason of the fact that such Person is or was a Member, employee or
agent of the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such Person in connection with the action, suit or
proceeding.

        Section 8.03    FIDUCIARY DUTY. To the extent that, at law or in equity,
a Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company or
to any Member for its good faith reliance on the provisions of this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Members to replace such other duties and liabilities of such
Covered Person.

                                       12
<Page>

                                  ARTICLE NINE

                                 TERM OF COMPANY

        Section 9.01    COMMENCEMENT. The term of the Company shall commence
upon the filing of the Certificate with the Delaware Secretary of State. The
bankruptcy of a Member or the occurrence of any other event under Section 18-304
of the Act shall not cause a Member to cease to be a Member of the Company and
upon the occurrence of such an event, the business of the Company shall continue
without dissolution.

        Section 9.02    DISSOLUTION. The Company shall be dissolved and its
affairs wound up upon the occurrence of any of the following events: (i) the
sale or other disposition of substantially all of the assets of the Company;
(ii) the written consent thereto of all of the Members; (iii) the retirement,
expulsion or dissolution of a Member; PROVIDED, HOWEVER, that the Company shall
not dissolve and be wound up if within ninety (90) days after such event, all
remaining Members agree in writing to continue the business of the Company and
to admit one or more Members as necessary or desired; or (iv) the entry of a
decree of judicial dissolution pursuant to Section 18-802 of the Act.

                                   ARTICLE TEN

                              APPLICATION OF ASSETS

        Section 10.01   APPLICATION OF ASSETS. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by a Majority Interest. Except when the Company has
rated obligations outstanding, the assets of the Company may be liquidated or
distributed in kind, as determined by a Majority Interest, and the same shall
first be applied to-the payment of, or to a reasonable reserve for the payment
of, the Company's liabilities (including such provision for contingent,
conditional or unmatured liabilities as a Majority Interest shall deem
appropriate) and then to Members (other than Independent Member). If the Company
has rated obligations outstanding, the Company will not liquidate any assets
that are subject to a security interest in favor of the holders of such rated
obligations without the consent of such holders. If the assets of the Company
shall not be sufficient to pay all of the liabilities of the Company, to the
fullest extent permitted by the Act, no assets of the Company may be sold or
disposed of without the written consent of all of the holders of outstanding
securities issued by any trust formed in respect of a transaction to which the
Company is a party. To the extent that Company assets cannot either be sold
without undue loss or readily divided for distribution in kind to the Members,
then the Company may, as determined by a Majority Interest, convey those assets
to a trust or other suitable holding entity established for the benefit of the
Members in order to permit the assets to be sold without undue loss and the
proceeds thereof distributed to the Members at a future date. The legal form of
the holding entity, the identity of the trustee or other fiduciary and the terms
of its governing instrument shall be determined by a Majority Interest.

                                       13
<Page>

        Section 10.02   TERMINATION. The Company shall terminate when all the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article and the Certificate shall
have been cancelled in the manner required by the Act.

        Section 10.03   CLAIMS OF THE MEMBERS. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member.

                                 ARTICLE ELEVEN

                      RESTRICTION ON TRANSFERS OF INTERESTS

        Section 11.01   RESTRICTION ON TRANSFERS OF INTERESTS. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.

                                 ARTICLE TWELVE

                            INVESTMENT REPRESENTATION

        Section 12.01   INVESTMENT REPRESENTATION. The Members represent to each
other and to the Company that they are acquiring their respective interests in
the Company for their own accounts, and without a view to selling or pledging
them.

                                ARTICLE THIRTEEN

                            MISCELLANEOUS PROVISIONS

        Section 13.01   LIMITATIONS ON AMENDMENT. The Company shall not, without
the prior written consent of each nationally recognized rating agency that has
rated any securities issued and outstanding pursuant to any pooling and
servicing agreement, indenture, trust agreement or other similar agreement
entered into by the Company or any Affiliate of the Company, amend, alter,
change or repeal Article Three, Section 5.08, Article Six or this Section 13.01.
Subject to the foregoing limitation, the Company reserves the right to amend,
alter, change or repeal any provision contained in this Agreement in the manner
now or hereafter prescribed by statute or applicable law, and all rights
conferred upon Members herein are granted subject to this reservation.

        Section 13.02   BOOKS OF ACCOUNT: REPORTS.

               (a)      The Company shall keep true and complete books of
account and records of all Company transactions. The books of account and
records shall be kept at the principal office of the Company. The Company shall
maintain at such office (i) a list of names and addresses of all Members; (ii) a
copy of the Certificate; (iii) copies of the Company's federal, state and local
income tax returns and reports for the three (3) most recent years; (iv) copies
of

                                       14
<Page>

this Agreement; and (v) copies of the financial statements of the Company for
the three (3) most recent years. Such Company records shall be available to any
Member or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.

               (b)      The Company will use its best efforts to furnish, or
cause to be furnished, to Members the following items on the date indicated: (i)
annually by June 30, (A) an annual report consisting of an income statement for
the prior year and a balance sheet as of the year ended, and (B) Member
information tax returns (Schedule K-1), and (ii) as required, such other
information concerning the Company and the Property of the Company as may be
appropriate in order to make full and fair disclosure to the Members of the
current financial and operating conditions of the Company.

        Section 13.03   BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by a Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as a Majority
Interest may designate.

        Section 13.04   ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by a Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and a Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.

        Section 13.05   PARTNERSHIP INTENDED SOLELY FOR TAX PURPOSES. The
Members have formed the Company as a Delaware limited liability company under
the Act and do not intend to form a general or limited partnership under
Delaware, Massachusetts or any other state law. The Members do not intend to be
partners to one another or to any third party. The Members intend the Company to
be classified and treated as a partnership solely for federal and state income
taxation purposes. Each Member agrees to act consistently with the foregoing
provisions of this Section 13.05 for all purposes, including, without
limitation, for purposes of reporting the transactions contemplated herein to
the United States Internal Revenue Service and all state and local taxing
authorities. A Majority Interest may rely upon the advice of the accountants
retained by the Company as to the availability and effect of all such elections
for tax purposes.

        Section 13.06   ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.

        Section 13.07   NOTICES. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy

                                       15
<Page>

numbers set forth on Exhibit A hereto, or at such other address or telecopy
number as such party may hereafter specify for the purposes of notice to the
other party hereto. Each such notice or other communication shall be effective
(i) if given by telecopy, upon receipt thereof, (ii) if given by mail, three (3)
business days after the time such communication is deposited in the mails with
first-class postage prepaid or (iii) if given by any other means, when received
at the address specified in this Section 13.07.

        Section 13.08   CONSENT OF MEMBERS. Various provisions of this Agreement
require or permit the consent, agreement, approval or disapproval, written or
otherwise, of the Members or some specified proportion thereof. In any such
case, the Company may give all Members written notice that any Member who does
not indicate its disapproval by written notice to the Company within a specified
period of time (not less than thirty (30) days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.

        Section 13.09   FURTHER EXECUTION. Upon request of the Company from time
to time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing that may be required by any rule or law or
that may be appropriate to the effecting of any action by or on behalf of the
Company or the Members that has been taken in accordance with the provisions of
this Agreement.

        Section 13.10   BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other Person not a party to this Agreement.

        Section 13.11   SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any security or
the rights of the holders thereof.

        Section 13.12   CAPTIONS, HEADINGS AND TITLES. All captions, headings
and title used in this Agreement are for convenience only, do not form a
substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.

        Section 13.13   COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one instrument. The Company shall have custody of the
counterparts executed in the aggregate by all Members.

                                       16
<Page>

        Section 13.14   DELAWARE LAW TO CONTROL. This Agreement shall be
governed by, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with, the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]

                                       17
<Page>

        IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

                                     MED DIVERSIFIED, INC., as a Member

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

                                     RICHARD J. BOUDREAU & ASSOCIATES, LLC,
                                       as Independent Member

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

                                       18
<Page>

                                                                       EXHIBIT A

<Table>
<Caption>
                                                   Capital                       Membership
Member's Name and Address                       Contributions                   Percentages
-------------------------                    -------------------                -----------
<S>                                          <C>                                   <C>
Med Diversified, Inc.
200 Brickstone Square, Suite 403
Andover, Massachusetts 01801                       $1,000                           99%
                                                   ======

Richard J. Boudreau Associates LLC
77 Main Street
Andover, Massachusetts 01810                    Services as                          1%
                                             Independent Member

Total                                                                              100%
                                                                                   ===
</Table>

<Page>

                                                              [DRAFT OF 6/24/02]

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

                           AMERICAN REIMBURSEMENT, LLC

                              AMENDED AND RESTATED
                       LIMITED LIABILITY COMPANY AGREEMENT

                                     Between

                             MED DIVERSIFIED, INC.,

                                       And

                      RICHARD J. BOUDREAU & ASSOCIATES, LLC

                                   as Members

                            Dated as of June 27, 2002

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

        THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, 15 U.S.C. Section 15b ET
SEQ., AS AMENDED (THE "FEDERAL ACT"), IN RELIANCE UPON ONE (1) OR MORE
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE FEDERAL ACT. IN ADDITION,
THE ISSUANCE OF THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED LIMITED
LIABILITY COMPANY AGREEMENT HAVE NOT BEEN QUALIFIED UNDER THE DELAWARE
SECURITIES ACT, THE CALIFORNIA CORPORATE SECURITIES LAW OF 1968 OR ANY OTHER
STATE SECURITIES LAWS (COLLECTIVELY, THE "STATE ACTS"), IN RELIANCE UPON ONE (1)
OR MORE EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF THE STATE ACTS. IT IS
UNLAWFUL TO CONSUMMATE A SALE OR OTHER TRANSFER OF THE SECURITIES REPRESENTED BY
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OR ANY INTEREST
THEREIN TO, OR TO RECEIVE ANY CONSIDERATION THEREFOR FROM, ANY PERSON OR ENTITY
WITHOUT THE OPINION OF COUNSEL FOR THE COMPANY THAT THE PROPOSED SALE OR OTHER
TRANSFER OF THE SECURITIES DO NOT AFFECT THE AVAILABILITY TO THE COMPANY OF SUCH
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION, AND THAT SUCH PROPOSED SALE OR
OTHER TRANSFER IS IN COMPLIANCE WITH ALL APPLICABLE STATE AND FEDERAL SECURITIES
LAWS. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT ARE FURTHER RESTRICTED UNDER THE TERMS OF
THIS AGREEMENT.<Page>

                                  EXHIBIT 10.24

              (FORM OF MANATT, PHELPS & PHILLIPS LLP LEGAL OPINION)

<Page>

[MANATT MANATT | PHELPS | PHILLIPS LETTER HEAD]

August 14, 2002

Private Investment Bank Limited, for itself and
  for the benefit of the holders, from time to time,
  of the Amended Debentures (defined below)
Devonshire House
Queen Street
P.O. Box N-3918
Nassau, Bahamas

     RE:  PRIVATE INVESTMENT BANK LIMITED DEBENTURE REFINANCING ("REFINANCING")

Ladies and Gentlemen:

     We have acted as counsel to (a) Med Diversified, Inc., a Nevada
corporation, formerly known as e-MedSoft.com ("MED") and (b) American
Reimbursement, LLC, a Delaware limited liability company ("ARL") in connection
with the Refinancing and execution and delivery of the following: (i) that
certain Amendment Agreement, dated as of June 28, 2002 (the "AMENDMENT
AGREEMENT"), by and among Med, ARL, Private Investment Bank Limited, Nassau,
Bahamas ("PIBL"), TEGCO Investments, LLC, a Delaware limited liability company
("TEGCO"), and each of the Med Subsidiaries; (ii) that certain Debenture
Purchase and Subordination Agreement, dated as of June 28, 2002 (the "DEBENTURE
PURCHASE AND SUBORDINATION AGREEMENT"), by and between TEGCO and PIBL, and
acknowledged by Med; (iii) those certain Amended Debentures, dated as of June
28, 2002 (the "AMENDED DEBENTURES"), made by Med in favor of PIBL, in the
aggregate principal amount of $57,500,000; (iv) that certain Transferred
Debenture, dated as of June 28, 2002 (the "TRANSFERRED DEBENTURE"), made by Med
in favor of PIBL, and purchased from PIBL by TEGCO pursuant to the Debenture
Purchase and Subordination Agreement for a purchase price in the amount of
$12,500,000; (v) that certain ARL Guaranty, dated as of June 28, 2002 (the "ARL
GUARANTY") made by ARL in favor of PIBL; (vi) that certain ARL Security
Agreement, dated as of June 28, 2002 (the "ARL SECURITY AGREEMENT"), made by ARL
in favor of PIBL; (vii) that certain Security Agreement, dated as of June 28,
2002 (the "MED SECURITY AGREEMENT"), made by Med in favor of PIBL; (viii) that
certain Med Subsidiaries Pledge and Security Agreement, dated as of June 28,
2002 (the "MED SUBSIDIARIES PLEDGE AND SECURITY AGREEMENT"), made in favor of
PIBL by Med, Chartwell Diversified Services, Inc., a Delaware corporation,
Tender Loving Care Health Care Services, Inc., a Delaware corporation, and each
of the other Med Subsidiaries that after the Closing Date becomes a party to the
Pledge and Security Agreement by executing a Subsidiary Joinder; (ix) that
certain Med Subsidiaries Collateral Agency Agreement, dated August 14, 2002 (the
"MED SUBSIDIARIES COLLATERAL AGENCY AGREEMENT"), by and among Med, the Med
Subsidiaries, PIBL, as agent for the holders of the Amended Debentures, and
Citibank, N.A., a national banking association, as collateral agent (x)

           11355 W. Olympic Boulevard, Los Angeles, California 90064
                   Telephone: 310.312.4000 Fax: 310.312.4224
Los Angeles | Mexico City | Monterrey | Orange County | Palo Alto | Sacramento |
                                Washington, D.C.

<Page>

[MANATT LOGO]

August 14, 2002
Page Two

that certain Med Deposit Account Control Agreement, dated as of August 14, 2002
(the "MED CONTROL AGREEMENT"), by and among Three Rivers Bank & Trust Company
(the "BANK"), Med and PIBL; (xi) that certain ARL Deposit Account Control
Agreement, dated as of August 14, 2002 (the "ARL CONTROL AGREEMENT"), by and
among the Bank, ARL and PIBL; (xii) the Form of UCC-1 Financing Statement for
filing in the State of Delaware against Med, as debtor, in favor of PIBL, as
secured party, a copy of which is attached hereto as EXHIBIT A (the "MED
FINANCING STATEMENT"); (xiii) the Form of UCC-1 Financing Statement for filing
in the State of Delaware against ARL, as debtor, in favor of PIBL, as secured
party, a copy of which is attached hereto as EXHIBIT B (the "ARL FINANCING
STATEMENT"); (xiv) Med Security Interest Assignment Agreement, dated as of June
28, 2002 (the "MED SECURITY INTEREST ASSIGNMENT AGREEMENT"), by and between Med
and PIBL and acknowledged by ARL; (xv) the Form of UCC-3 Financing Statement
Amendment for filing in the State of Delaware by Med, as assignor, against ARL,
as debtor, in favor of PIBL, as assignee and secured party, a copy of which is
attached hereto as EXHIBIT C ("MED FINANCING STATEMENT AMENDMENT"); (xvi) that
certain Acknowledgement and Agreement of Rescission, executed as of June 14,
2002 and effective as of December 28, 2001 (the "RESCISSION AGREEMENT"), by and
between PIBL and Med; (xvii) that certain Forbearance and Tolling Agreement,
dated as of August 14, 2002 and effective as of the date hereof (the "TOLLING
AGREEMENT"), by and among by and among Med, National Century Financial
Enterprises, Inc., an Ohio corporation, and Frank P. Magliochetti, Jr., an
individual, on the one hand, and PIBL, PIB Trust Company Limited, a Bahamian
trust company, and Banque de Patrimoines Prives Geneve BPG SA, a Swiss banking
company, on the other hand; and (xviii) that certain Escrow Agreement, dated as
of June 28, 2002 (the "ESCROW AGREEMENT"), by and between Med, TEGCO and The
Huntington National Bank, a national banking association, as escrow agent. This
opinion letter is delivered to you pursuant to SECTION 11(i) of the Amendment
Agreement. Capitalized terms used herein but not otherwise defined herein shall
have the meaning ascribed to them in the Amendment Agreement.

     1.   DOCUMENTS REVIEWED.

     For purposes of this opinion we have, among other things, reviewed the
following documents, each dated as of June 28, 2002 (unless otherwise noted
herein) to be executed in connection with the Refinancing:

          (a)  REFINANCING DOCUMENTS:

               (i)     Amendment Agreement;

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[MANATT LOGO]

August 14, 2002
Page Three

               (ii)    Debenture Purchase and Subordination Agreement;

               (iii)   Amended Debentures;

               (iv)    Transferred Debentures;

               (v)     ARL Guaranty;

               (vi)    ARL Security Agreement;

               (vii)   Med Security Agreement;

               (viii)  Med Subsidiaries Pledge and Security Agreement;

               (ix)    Med Subsidiaries Collateral Agency Agreement;

               (x)     Med Control Agreement;

               (xi)    ARL Control Agreement;

               (xii)   Med Financing Statement;

               (xiii)  ARL Financing Statement;

               (xiv)   Med Security Interest Assignment Agreement;

               (xv)    Med Financing Statement Amendment;

               (xvi)   Rescission Agreement;

               (xvii)  Tolling Agreement; and

               (xviii) Escrow Agreement.

     The documents set forth in Paragraphs 1(a)(i) through (xviii) above,
inclusive, are referred to collectively as the "REFINANCING DOCUMENTS." The Med
Financing Statement, the ARL Financing Statement, the Med Security Interest
Assignment Agreement and the Med

<Page>

[MANATT LOGO]

August 14, 2002
Page Four

Financing Statement Amendment, inclusive, are referred to collectively as the
"FINANCING DOCUMENTS."

          (b)  MED DOCUMENTS.

               (i)   An officer's certificate of Med (the "MED OFFICER'S
CERTIFICATE") executed by an authorized representative of Med, certifying as to
the status of the governing documents of Med, the incumbency of the officer(s)
authorized to sign relevant documents on behalf of Med, and certain other
factual items upon which we rely in issuing this opinion letter;

               (ii)  Unanimous Written Consent of the Board of Directors of Med,
executed by the Board of Directors of Med, and certified as being true, correct
and complete, and in full force and effect pursuant to the Med Officer's
Certificate;

               (iii) Articles of Incorporation of Med, certified by the office
of the Secretary of State of the State of Nevada (the "NEVADA SECRETARY OF
STATE"), as of August 6, 2002, as being a true and correct copy of such document
as filed with the Nevada Secretary of State, and certified as being true,
correct and complete, and in full force in effect pursuant to the Med Officer's
Certificate;

               (iv)  Bylaws of Med, certified as being true, correct and
complete, and in full force and effect pursuant to the Med Officer's
Certificate;

               (v)   Certificate of Good Standing of Med, issued as of August 9,
2002, by the Nevada Secretary of State; and

               (vi)  Certificate of Good Standing of Med, issued as of August 8,
2002, 2002, by the Secretary of the Commonwealth of Massachusetts.

          (c)  ARL DOCUMENTS.

               (i)   An officer's certificate of ARL (the "ARL OFFICER'S
CERTIFICATE") executed by an authorized representative of ARL, certifying as to
the status of the governing documents of ARL, the incumbency of the officer(s)
authorized to sign relevant documents on behalf of ARL, and certain other
factual items upon which we rely in issuing this opinion letter;

               (ii)  Unanimous Written Consent of ARL, executed by Med and
Richard J. Boudreau & Associates, LLC, as the members of ARL, and certified as
being true, correct and complete, and in full force and effect pursuant to the
ARL Officer's Certificate;

<Page>

[MANATT LOGO]

August 14, 2002
Page Five

               (iii) Certificate of Formation of ARL, certified by the office of
the Secretary of State of the State of Delaware (the "DELAWARE SECRETARY OF
STATE"), as of August 5, 2002, as being a true and correct copy of such document
as filed with the Delaware Secretary of State, and certified as being true,
correct and complete, and in full force in effect pursuant to the ARL Officer's
Certificate;

               (iv)  Amended and Restated Limited Liability Company Agreement of
ARL ("OPERATING AGREEMENT"), certified as being true, correct and complete, and
in full force in effect pursuant to the ARL Officer's Certificate; and

               (v)   Certificate of Good Standing of ARL, issued as of August 9,
2002, by the Delaware Secretary of State.

     In addition, we have made such legal and factual examinations and inquiries
as we have deemed advisable for the purpose of rendering this opinion, and in
the course thereof we have examined, among other things, originals or copies
identified to our satisfaction as being true copies, of those corporate records,
certificates, documents and other instruments, which, in our judgment, we
considered necessary or appropriate to enable us to render the opinion expressed
below. For these purposes, we have relied upon certificates provided by public
officials and by officers of Med and ARL as to certain factual matters; however,
we have not undertaken, and you agree we have no duty to perform, any
independent investigation to determine the accuracy of the factual matters set
forth in such certificates, and any limited inquiry undertaken by us during the
preparation of this opinion should not be regarded as such an investigation.

     We have assumed the correctness of all certifications, the genuineness of
all signatures, the authenticity of all documents submitted to us as originals,
the conformity to the original documents of documents submitted to us as
certified photostatic copies, and the authenticity of the originals from which
the copies were made.

     As used herein, the phrases "to the best of our knowledge", "known by us",
"of which we have knowledge" and phrases of similar import mean that we have
relied solely on certificates of officers of Med and ARL and on their respective
representations and warranties set forth in the Refinancing Documents to which
each of them is a party as to factual matters and that, during the course of our
representation of Med and ARL, no information that would give us current actual
knowledge of the inaccuracy of such statement has come to the attention of
Gordon M. Bava, Charles G. Klink, Jennifer L. Sostrin, Francisco Flores, Daniel
M. Forman, and Steven M. Goldberg, those attorneys in this Firm who have
rendered substantial legal services in connection with the representation
described in the introductory paragraph of this opinion. However, we

<Page>

[MANATT LOGO]

August 14, 2002
Page Six

have not undertaken, and you agree we have no duty to perform, any independent
investigation to determine the accuracy of the factual matters set forth in such
certificates, and any limited inquiry undertaken by us during the preparation of
this opinion should not be regarded as such an investigation; no inference as to
our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of Med and ARL.

     Our opinion is limited to the internal laws of the State of California,
without regard to conflicts of laws principles, and applicable federal laws of
the United States, and we assume no responsibility as to the applicability or
the effect of the laws of any other jurisdiction. In that regard, for purposes
of the opinion rendered in Paragraph 2(e) below, we have assumed, with your
permission, that the Refinancing Documents are governed by California law,
notwithstanding the choice of law provisions set forth in such documents. For
purposes of the opinion rendered in Paragraph 2(f) below, we have assumed, with
your permission, that the provisions of the Nevada Uniform Commercial Code (the
"NEVADA UCC") and the provisions of the Delaware Uniform Commercial Code (the
"DELAWARE UCC") are the same as the provisions of the California Uniform
Commercial Code (the "CALIFORNIA UCC"). Moreover, we are not admitted to
practice in the States of Nevada, Delaware, New York or Massachusetts, and, with
your consent, in connection with the opinions expressed in opinions 2(a) through
2(f) below, we have not consulted with counsel in those states.

     2.   OPINIONS. On the basis of the foregoing, and subject to the additional
assumptions, qualifications and limitations set forth herein, we are of the
opinion that:

          (a)  Based solely on the certifications set forth in item 1(b)(v)
above and without further investigation or inquiry of law or fact, Med is a
corporation validly existing and in good standing under the laws of the State of
Nevada. Based solely on the certifications set forth in item 1(b)(vi) above and
without further investigation or inquiry of law or fact, Med is a corporation
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts. Based solely on the certifications set forth in item 1(c)(v)
above and without further investigation or inquiry of law or fact, ARL is a
limited liability company validly existing and in good standing under the laws
of the State of Delaware.

          (b)  Based solely on a review of the documents described in items
1(b)(iii) and 1(c)(iii) above, and without further investigation or inquiry of
law or fact, each of Med and ARL has all requisite corporate (or, in the case of
ARL, limited liability company) power and authority to execute, deliver and
perform its obligations under the Refinancing Documents to which it is a party,
to own, pledge, mortgage and operate its respective properties, to lease the
properties it operates under lease, and to carry on its business as currently
conducted by it.

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Page Seven

          (c)  Based solely on a review of the documents described in items
1(b)(iii), 1(b)(iv), 1(c)(iii) and 1(c)(iv) above, and without further
investigation or inquiry of law or fact, the execution, delivery and performance
by each of Med and ARL of the Refinancing Documents to which it is a party have
been duly authorized by all necessary corporate (or, in the case of ARL, limited
liability company) action on the part of Med and ARL and will not result in any
violation of or be in conflict with or constitute a default under any provision
of Med's Articles of Incorporation or Bylaws or ARL's Certificate of Formation
or Operating Agreement.

          (d)  The execution, delivery and performance by each of Med and ARL of
the Refinancing Documents to which it is a party will not (i) result in any
violation of any provision of or be in conflict with or constitute a default
under any judgment, writ, decree or order known by us to be applicable to Med or
ARL or (ii) result in the creation of any material lien or encumbrance upon any
property owned by Med or ARL pursuant to any agreement between Med or ARL (on
the one hand) and any third party (on the other hand) of which we have
knowledge, other than liens created pursuant to the Refinancing Documents.

          (e)  Based solely on a review of the certifications and consents
identified in items 1(b)(i), 1(b)(ii), 1(c)(i) and 1(c)(ii), above, and without
further investigation or inquiry of law or fact, each of Med and ARL has duly
authorized, executed and delivered the Refinancing Documents, with the exception
of the Med Financing Statement, the ARL Financing Statement and the Med
Financing Statement Amendment, to which it is a party. The Refinancing
Documents, with the exception of the Med Financing Statement, the ARL Financing
Statement and the Med Financing Statement Amendment, are the legal, valid and
binding obligations of Med and ARL, respectively, enforceable against Med and
ARL (as the case may be) in accordance with their respective terms.

          (f)  The provisions of the Med Security Agreement are sufficient to
create a security interest in favor of PIBL in the right, title and interest of
Med in and to the "Med Debenture Collateral" (as such term is defined in the
Amendment Agreement), to the extent that granting of security interests in such
Med Debenture Collateral is governed by the Nevada UCC. The provisions of the
ARL Security Agreement are sufficient to create a security interest in favor of
PIBL in the right, title and interest of ARL in and to the "ARL Debenture
Collateral" (as such term is defined in the Amendment Agreement), to the extent
that granting of security interests in such ARL Debenture Collateral is governed
by the Delaware UCC. The (i) Med Financing Statement is sufficient in form to
perfect the security interests granted by Med pursuant to the Refinancing
Documents to the extent that such security interests may be perfected by duly
filing a financing statement in the office of the Nevada Secretary of State
under the Nevada UCC; (ii) ARL Financing Statement is sufficient in form to
perfect the security interests granted by ARL

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pursuant to the Refinancing Documents to the extent that such security interests
may be perfected by duly filing a financing statement in the office of the
Delaware Secretary of State under the Delaware UCC; and (iii) Med Security
Interest Assignment Agreement and the Med Financing Statement Amendment are
sufficient in form to perfect the security interests granted by ARL pursuant to
the Refinancing Documents to the extent that such security interests may be
perfected by duly filing a financing statement in the office of the Delaware
Secretary of State under the Delaware UCC. Accordingly, such security interests
will have been perfected with respect to that portion of the collateral as to
which a security interest can be perfected under (i) the Nevada UCC by the
proper filing of a financing statement in the State of Nevada when the Med
Financing Statement has been duly filed (together with the payment of all
applicable fees) with the Nevada Secretary of State in accordance with the
Nevada UCC and (ii) the Delaware UCC by the proper filing of a financing
statement in the State of Delaware when the Med Financing Statement Amendment
and the ARL Financing Statement have been duly filed (together with the payment
of all applicable fees) with the Delaware Secretary of State in accordance with
the Delaware UCC.

          (g)  The provisions of the Med Subsidiaries Pledge and Security
Agreement are sufficient to create a security interest in favor of the PIBL in
the right, title and interest of Med, and (assuming, with your permission, the
enforceability of such agreement against such Med Subsidiaries) the Med
Subsidiaries that are parties thereto, in and to the Interests (as such term is
defined in the Med Subsidiaries Pledge and Security Agreement), to the extent
that granting of security interests in such Interests is governed by the Nevada
UCC. Assuming that (a) the Med Subsidiaries Collateral Agent (i) takes and
retains possession of and holds the certificates or other instruments
representing the Interests (to the extent that the Interests are certificated)
in the State of California, in each case together with appropriate undated stock
or instrument powers in blank duly executed by the record owner of such
Interests, and (ii) does not acknowledge that it is holding any such certificate
or instrument evidencing the Interests on behalf of any other person (other than
PIBL or the holders of the Amended Debentures), and (b) the California UCC
exclusively governs the perfection and the effect of perfection of the security
interest in the Interests provided for in the Med Subsidiaries Pledge and
Security Agreement, the Med Subsidiaries Collateral Agent will have a valid and
perfected security interest in the Interests (to the extent that the Interests
are certificated) by means of "control" under Article 8 of the California UCC.

     3.   ASSUMPTIONS, QUALIFICATIONS AND LIMITATIONS. The foregoing opinions
are subject to the following additional assumptions, qualifications and
limitations:

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          (a)  We have assumed (i) PIBL is, and will be at all relevant times,
duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation (and if PIBL is not organized under the laws of the
jurisdiction of its formation, that it is duly qualified to transact business
and in good standing under the laws of the jurisdiction of its formation and
such other jurisdictions where PIBL transacts business), the due authorization,
execution and delivery by PIBL of all documents referred to herein, the
enforceability of such documents against PIBL in accordance with their
respective terms, and that the performance by PIBL of the actions required or
contemplated thereby are within the powers of PIBL and are in compliance with
all laws and regulations to which PIBL is subject, by reason of PIBL engaging in
the transactions contemplated by the Refinancing Documents; (ii) PIBL has and
will continue to have at all relevant times all necessary authorizations and
licenses in the relevant jurisdictions to engage in the transactions
contemplated by the Refinancing Documents; (iii) PIBL has acted and will act in
a commercially reasonable manner and in accordance with PIBL's standards of good
faith and fair dealing; (iv) the parties have not entered into any agreement
providing for the postponement of the attachment of any security interest and
(v) value has been given by PIBL concurrently with the execution and delivery of
the Refinancing Documents and that the security interests purporting to be
perfected by the filing of the Financing Documents (excluding the Med Security
Interest Assignment Agreement) have attached to the collateral described
therein.

          (b)  Our opinions are subject to the constitutionality and continued
validity of all statutes and laws reviewed and relied upon by us in connection
with rendering the opinions set forth herein.

          (c)  We render no opinion with respect to:

               (i)     any provision of any of the Refinancing Documents
providing for the payment of interest or other charges on the basis of a 360-day
as opposed to a 365-day year;

               (ii)    any provision of any of the Refinancing Documents
permitting an increased rate of interest to be collected upon default,
permitting the collection of a late charge, or, in the event a late charge is
collected upon any default, permitting acceleration of the indebtedness as an
additional remedy for such default, or the effect of court decisions of
California or other relevant jurisdictions refusing to strictly enforce certain
covenants in loan documents or allow acceleration of the maturity of notes when
the reviewing court concludes that such enforcement or acceleration would be
unreasonable under the then existing circumstances;

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               (iii)   any provision of any of the Refinancing Documents
purporting to relieve PIBL of liability for its own negligence or willful
misconduct;

               (iv)    any provision of any of the Refinancing Documents
purporting to define what is commercially reasonable behavior or any provision
which is intended to establish any standard in any Financing Document as the
measure of the performance by any party thereto, including without limitation,
any party's obligations of good faith, diligence, reasonableness or care or the
fulfillment of the duties imposed upon PIBL as a lender and secured party with
respect to disposition or redemption of collateral, accounting for surplus
proceeds of collateral or accepting collateral in discharge of liabilities;

               (v)     any provision of any of the Refinancing Documents to the
extent it requires Med or ARL to pay over to PIBL or permits PIBL to collect or
apply to any outstanding indebtedness any funds held by Med or ARL in trust;

               (vi)    the exercise of any rights or remedies that relate to a
non-material default, or are not reasonably necessary for the protection of
PIBL;

               (vii)   the validity or enforceability of the right of PIBL, in
the absence of an enforceable judicial order, to enter upon or take possession
of collateral;

               (viii)  the validity, enforceability or legality of any powers of
attorney, proxies or agency relationships purportedly created by the Refinancing
Documents;

               (ix)    the enforceability of provisions of the Refinancing
Documents waiving vaguely or broadly stated rights or unknown future rights or
of provisions stating that rights or remedies are not exclusive, that every
right or remedy is cumulative and may be exercised in addition to or with any
other right or remedy or that the election of some particular remedy or remedies
does not preclude recourse to one or more others;

               (x)     the validity or enforceability of any provisions in the
Refinancing Documents that allow PIBL to withhold "unreasonably" or in its "sole
discretion" its consent to or approval of any action or proposed action of Med
or ARL, or to determine the propriety or legality of actions taken by Med or
ARL;

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               (xi)    any provision of any of the Refinancing Documents
purporting to provide that PIBL's records shall constitute PRIMA FACIE or
conclusive evidence of the accuracy of the information therein recorded or be
final, binding and conclusive;

               (xii)   any securities laws of the United States or any state;

               (xiii)  any provision of any of the Refinancing Documents
permitting PIBL to apply any payments made by Med or ARL or other proceeds or
property of Med or ARL held by Med or ARL to any indebtedness in the order
determined by PIBL or any provision purporting to waive any right of Med or ARL
to specify the order in which any payments are to be applied;

               (xiv)   any provision of any of the Refinancing Documents
purporting to create a trust for the benefit of PIBL with respect to any
collateral;

               (xv)    any provision of any of the Refinancing Documents
permitting PIBL to exercise greater or different rights with respect to any
collateral other than as permitted under the applicable law;

               (xvi)   waiver by Med or ARL or any guarantor or any pledgor of
any statutes of limitation or right to trial by jury;

               (xvii)  except as expressly provided in paragraphs 2(f) and (g)
above, the perfection and priority of any security interest created by any of
the Refinancing Documents;

               (xviii) the title to, ownership, existence or accuracy of the
description of any collateral described in the Refinancing Documents; the
existence or effect of liens, security interests, charges, encumbrances or
claims of right or ownership with respect to such collateral; whether such
collateral is the property intended to secure the obligations of Med and ARL
under the Refinancing Documents; or the effect of any description of the
collateral such as all other "personal property, whether tangible or intangible"
or the like;

               (xix)   the validity, enforceability or legality of any provision
of the Refinancing Documents requiring Med or ARL to continue to conduct its
respective business as is substantially now conducted by it;

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               (xx)    the enforceability of any provision of the Refinancing
Documents purporting to provide for the grant of a security interest on any
leasehold or other real property interests;

               (xxi)   broadly stated waivers of suretyship defenses,
presentment, protest, demand, notice, appraisement, valuation, stay, extension,
moratorium, redemption or other rights granted by law to the extent such waivers
are held to be against public policy or prohibited by law;

               (xxii)  provisions which purport to create a conclusive
presumption or permit a conclusive or binding determination of any amount
payable under any Refinancing Document or of any other matter;

               (xxiii) provisions of any of the Refinancing Documents that
purport to preserve absolute and unconditional rights of PIBL and obligations of
any of the other parties thereto irrespective of the lack of validity or
enforceability of the Refinancing Documents or of unspecified circumstances that
would otherwise be available as a defense to, or discharge the obligors from any
such obligation;

               (xxiv)  any provision of any Refinancing Document that may be
deemed to provide for the application of monies deposited in any account
maintained with or collected by PIBL notwithstanding that no event of default
shall have occurred and be continuing;

               (xxv)   contractual provisions respecting various self-help or
summary remedies without notice or opportunity for judicial hearing or
correction (including without limitation any purported grants of rights of entry
or rights to take possession of any real property);

               (xxvi)  the enforceability of any indemnity or reimbursement
obligation by the parties to the Refinancing Documents concerning environmental
remediation or the costs of compliance with any environmental protection law;

               (xxvii) the enforceability of provisions of any of the
Refinancing Documents that purport to constitute a consent to jurisdiction, or
waive the right of any party to object to jurisdiction or venue or to assert any
defense based on lack of jurisdiction or venue;

               (xxviii)  the enforceability of provisions of any of the
Refinancing Documents that purport to apply the internal laws of any
jurisdiction; or

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               (xxix)  the enforceability of a security interest in a commercial
tort claim not in existence as of the date hereof.

               (d)      We express no opinion as to the effect of compliance on
the party of any person with any state or federal laws or regulations applicable
to the transactions because of the nature of such person's business.

               (e)      Certain rights, remedies and waivers for the benefit of
PIBL may be subject to the due process clauses of the United States or the
relevant state constitution or both.

               (f)      A California court may in some circumstances admit oral
or written statements to supplement or explain the provisions of the Refinancing
Documents or infer waivers from a course of conduct, despite provisions to the
contrary.

          (g)  We render no opinion with respect to any provision of the
Refinancing Documents which purports or is relied upon to (i) impose liability
upon any party for payment of attorneys' fees and costs in any action or
proceeding which proceeds to judgment, except to the extent that such provision
requires payment of attorneys' fees and costs to the prevailing party in such
action or proceeding, or (ii) provide for the recovery or reimbursement of the
costs or fees of in-house legal counsel. Notwithstanding language to the
contrary in the Refinancing Documents, PIBL may be limited to recovering only
reasonable expenses with respect to the retaking, holding, preparing for sale or
lease, selling, leasing and the like of any collateral and reasonable attorneys'
fees and legal expenses.

          (h)  Any opinion to the effect that any of the Refinancing Documents
constitute a valid and binding obligation, enforceable in accordance with its
terms, does not include an opinion as to the enforceability of indemnification
or contribution provisions to the extent they may be limited by applicable
principles of public policy or to the extent such provisions indemnify PIBL for
its gross negligence or willful misconduct, and does not include an opinion that
specific performance or other equitable relief or remedies will be available in
the event of any breach of any particular provision thereof.

          (i)  Our opinions in Paragraphs 2(e) and 2(f) are further limited by:

               (A)  Applicable bankruptcy, receivership, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other
similar laws affecting the

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enforcement of the rights and remedies of creditors, secured parties and parties
to executory contracts generally; and such duties and standards as are or may be
imposed on creditors, including, without limitation, good faith, materiality,
reasonableness, and fair dealing under Delaware UCC or any other applicable law
or judicial decision.

               (B)  General principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and the
exercise of equitable powers by a court of competent jurisdiction (and no
opinion is given herein as to any specific or equitable relief of any kind or as
to the availability of equitable remedies).

               (C)  Law and public policy governing provisions of any of the
Refinancing Documents providing contribution to a party or indemnifying or
prospectively releasing a party with respect to a liability.

          (j)  We express no opinion regarding the enforceability of any
security interest subject to a financing statement that contains a description
broader than that set forth in the Refinancing Documents.

          (k)  In the event of a dispute between the parties, the interpretation
of the Refinancing Documents may require the presentation of extrinsic evidence
to establish the meaning of their provisions.

          (l)  We also advise you of the effect of any law, rule, regulation or
order such as Section 1670.5 of the California Civil Code that permits a court
to refuse to enforce, or may limit the application of, a contract or any clause
thereof which the court finds as a matter of law to have been unconscionable at
the time it was made.

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     The opinions set forth above are effective as of the date hereof and are
subject to change and qualification by reason of change of law and
circumstances, lapse of time, and other matters. We express no opinion as to
rights, obligations or other matters subsequent to the date hereof, and we
assume no obligation to advise you or any other person or entity of any changes
to our opinion subsequent to the date hereof. This opinion is being furnished to
you solely for your information in connection with the transaction described in
the first paragraph of this opinion and is not to be used, circulated, filed,
quoted from or otherwise referred to or relied upon by any other person or for
any other purpose, except that you may furnish a copy hereof: (a) to your
independent auditors and attorneys; (b) to any governmental authority having
regulatory jurisdiction over you; (c) pursuant to order or legal process of any
court or governmental agency (provided that you give us prior notice of any such
order or legal process and afford to us an opportunity to contest the same); (d)
in connection with any legal action to which you are a party arising out of the
transactions contemplated by the Refinancing Documents; (e) any proposed
participant in or assignee of your interest in the Refinancing Documents; and
(f) the holders, from time to time, of the Amended Debentures, and your, or any
such holder's, successors, assigns and transferees; PROVIDED that the permission
granted by this sentence to furnish a copy of this opinion shall not be
construed to entitle any recipient of such copy to rely thereon other than those
parties referred to in the foregoing clause (f).

                                              Very truly yours,

                                              MANATT, PHELPS & PHILLIPS, LLP

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                                    EXHIBIT A

                             MED FINANCING STATEMENT

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                                    EXHIBIT B

                             ARL FINANCING STATEMENT

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                                    EXHIBIT C

                        MED FINANCING STATEMENT AMENDMENT

<Page>

                        EXHIBIT A TO MANATT LEGAL OPINION

<Page>

[GRAPHIC]

UCC FINANCING STATEMENT

FOLLOW INSTRUCTIONS (front and back) CAREFULLY

A NAME & PHONE OF CONTACT AT FILER [optional]

B. SEND ACKNOWLEDGMENT TO: (Name and Address)

                                   THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name (1a or 1b) - do
   not abbreviate or combine names

    1a. ORGANIZATION'S NAME

    Med Diversified, Inc.

OR

<Table>
<Caption>
    1b. INDIVIDUAL'S LAST NAME                      FIRST NAME                  MIDDLE NAME                 SUFFIX
    <S>                                             <C>                         <C>                         <C>

<Caption>
1c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
<S>                                                 <C>                         <C>        <C>              <C>
200 Brickstone Square, Suite 403                    Andover                     MA         01810            USA

<Caption>
1d. TAX ID# SSN OR EIN      ADD'L INFO RE   1e. TYPE OF ORGANIZATION  1f. JURISDICTION OF ORGANIZATION  1g. ORGANIZATIONAL ID #,
                            ORGANIZATION                                                                     if any
                            DEBTOR
<S>                         <C>             <C>                       <C>                               <C>                 <C>
84-1037630                                  Corporation               Nevada                            C5982-1986          / / NONE
</Table>

2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only one debtor name
   (2a or 2b) - do not abbreviate or combine names

    2a. ORGANIZATION'S NAME

OR

<Table>
<Caption>
   2b. INDIVIDUAL'S LAST NAME                       FIRST NAME                  MIDDLE NAME                 SUFFIX
   <S>                                              <C>                         <C>                         <C>

<Caption>
2c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
<S>                                                 <C>                         <C>        <C>              <C>

<Caption>
2d. TAX ID#: SSN OR EIN     ADD'L INFO RE   2e. TYPE OF ORGANIZATION  2f. JURISDICTION OF ORGANIZATION  2g. ORGANIZATIONAL ID #,
                            ORGANIZATION                                                                    if any
                            DEBTOR
<S>                         <C>             <C>                       <C>                               <C>                <C>
                                                                                                                           / / NONE
</Table>

3. SECURED PARTY'S NAME (or NAME OF TOTAL ASSIGNEE OF ASSIGNOR S/P)-
   Insert only one secured party name (3a or 3b)

    3a. ORGANIZATION'S NAME
    Private Investment Bank Limited

OR

<Table>
<Caption>
    3b. INDIVIDUAL'S LAST NAME                       FIRST NAME                  MIDDLE NAME                 SUFFIX
    <S>                                              <C>                         <C>                         <C>

<Caption>
3c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
      <S>                                           <C>                         <C>        <C>              <C>
           Deyonshire House
      Queen Street P.O. Box N-3918                  Nassau                                                  Bahamas
</Table>

4. This FINANCING STATEMENT covers the following collateral:

See Exhibit A attached hereto and incorporated herein by this reference.

5. ALTERNATIVE  DESIGNATION (if applicable); / / LESSEE/LESSOR
   / / CONSIGNEE/CONSIGNOR  / / BAILEE/BAILOR / / SELLER/BUYER / / AG.LIEN
   / / NON-UCC FILING

6. / / This FINANCING STATEMENT is to be filed (for record) (or recorded) in the
       REAL ESTATE RECORDS. Attach Addendum                      (if applicable)

7. CHECK TO REQUEST SEARCH REPORT(S) on Debtor(s)
   (ADDITIONAL FEE)     (optinal)    / / All Debtors  / / Debtor 1  / / Debtor 2

8. OPTIONAL FILER REFERENCE DATA NV SOS

FILING OFFICE COPY--NATIONAL UCC FINANCING STATEMENT (FORM UCC1)(REV. 07/29/98)

<Page>

                  EXHIBIT A TO UCC-1 FINANCING STATEMENT (MED)

DEBTOR:  MED DIVERSIFIED, INC. ("MED")

SECURED PARTY: PRIVATE INVESTMENT BANK LIMITED ("PIBL")

     Capitalized terms used herein shall have the meanings set forth below:

"AMENDED DEBENTURES" shall mean those certain amended debentures issued pursuant
to the Amended Agreement.

"AMENDMENT AGREEMENT" shall mean that certain Amendment Agreement, dated as of
June 28, 2002, by and among Med, ARL, PIBL, TEGCO and the Med Subsidiaries.

"ASSET SALE" shall mean any offering of securities or other transaction other
than (i) sales of goods or the provision of services in the ordinary course of
business, (ii) the offering or sale of any debt securities unaccompanied by any
equity rights (such as warrants or conversion rights) or (iii) any sale of
accounts receivable under financing arrangements with NCFE and its affiliates.

"DEBENTURE PURCHASE AND SUBORDINATION AGREEMENT" shall mean that certain
Debenture Purchase and Subordination Agreement, dated as of June 28, 2002,
entered into by TEGCO, PIBL and Med, pursuant to which TEGCO is purchasing the
Transferred Debenture from PIBL upon the terms and conditions set forth therein.

"DEPOSITARY BANK" means Three Rivers Bank & Trust Company, or another major U.S.
bank designated as a successor or replacement therefor from time to time by PIBL
(or another agent for the Holders of the Amended Debentures designated by the
Holders in writing to Med from time to time).

"EXCLUDED MED SUBSIDIARY" shall mean any Subsidiary of Med that: (i) has assets
with a value of less than $500,000.00, (ii) has annual gross revenues of less
than $500,000.00 and (iii) is not otherwise material to the business, operations
and income of Med and its consolidated subsidiaries, taken as a whole. "Excluded
Med Subsidiaries" means all such Subsidiaries.

"MED ELIGIBLE ACCOUNTS RECEIVABLE" shall mean private and government medical
accounts of Med or any Med Subsidiaries that have an aging of less than one
hundred and eighty (180) days PROVIDED that Med Eligible Accounts Receivable
shall not include and receivables that have been sole or otherwise transferred
to any purchaser(s) under financing arrangements with NCFE or its affiliates,
regardless of whether such transaction is deemed to be a sale or a secured
financing.

"MED COLLECTION ACCOUNT" shall mean that certain collection account, bearing
account number 3293007751 established by Med at the Depositary Bank.

                                        1
<Page>

"MED SUBSIDIARY" means and includes each present or future, direct or indirect
Subsidiary of Med, other than any Excluded Med Subsidiary and "Med Subsidiaries"
means and includes all such Subsidiaries, other than any Excluded Med
Subsidiaries).

"MODIFICATION DOCUMENTS" shall mean those certain agreements identified as
Modification Documents in the Amended Agreement.

"NCFE" shall mean National Century Enterprises, an Ohio corporation.

"NET ASSET SALE PROCEEDS" shall mean the net proceeds received by Med (net of
the reasonable and customary costs of the relevant Asset Sale), whether directly
or indirectly, via a distribution from any of the Med Subsidiaries, form any
sale or other transfer of any assets or equity securities of Med or any of the
Med Subsidiaries (whether such equity securities are outstanding or
newly-issued) in any Asset Sale; PROVIDED, that Net Asset Sale Proceeds shall
NOT include the proceeds from any Asset Sale relating to any of the Med
Subsidiaries unless and until, and only to the extent that, the proceeds of the
relevant Asset Sale have been, directly or indirectly, distributed or otherwise
paid to, or for the benefit of, Med.

"PERSON" means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or department
thereof, or any other entity, whether acting in an individual, fiduciary or
other capacity.

"SUBSIDIARY" means, as to any person (a) a corporation of which outstanding
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
Board of Directors of such corporation are at the time owned, whether directly
or through one or more intermediaries, or both, by such Person and (b) any
partnership, limited liability company, association, joint venture or other
business entity the controlling interest of which is at the time owned, directly
or through one or more intermediaries, or both, by such entity.

"TEGCO" shall mean TEGCO investments, LLC, a Delaware limited liability company.

"TRANSFERRED DEBENTURE" shall means that certain transferred debenture purchased
pursuant to the Debenture Purchase and Subordination Agreement.

     As security for the payment obligations represented by the Amended
Debentures, Med hereby delivers, pledges and grants a security interest to PIBL
in all of Med's right, title and interest (whether now owned and existing or
hereafter arising or acquired) in and to the following (collectively, the "MED
DEBENTURE COLLATERAL"):

          (a)  any and all rights of Med or any of the Med Subsidiaries to
receive, upon the terms and conditions set forth in the relevant Sale and
Subservicing Agreement(s), $20,000,000 of funds that are currently held in
reserves, in certain accounts identified on SCHEDULE 3(b)(i) attached as an
exhibit to the Amendment Agreement (the rights of Med and the Med Subsidiaries
in such accounts, collectively,

<Page>

the "MED RESERVE ACCOUNT INTERESTS"), for the benefit of NCFE and its affiliates
pursuant to the relevant Sale and Subservicing Agreement(s), with all
distributions from the Med Reserve Account Interests on account of, or in
relation to, the Med Reserve Account Interests being directed to the Med
Collection Account to be used exclusively for payments on the Amended
Debentures;

          (b)  all of the Med Eligible Accounts Receivable; PROVIDED, HOWEVER,
that PIBL's security interest in the Med Eligible Accounts Receivable is subject
to and (A) subordinate to a security interest in favor of the financing
source(s) for the purchase of the Transferred Debenture and (B) subordinate to a
security interest in favor of NCFE or its affiliates as the purchaser(s) of
accounts receivable in various financing transactions, which security interest
collateralizes, among other things, a repurchase right for rejected receivables
under the relevant documents for such financing arrangements;

          (c)  the Net Asset Sale Proceeds, all of which shall be deposited in
the Med Collection Account; PROVIDED, HOWEVER, that nothing in the Amendment
Agreement or in any other Modification Documents shall require Med or any of the
Med Subsidiaries to consummate any Asset Sale, or to sell any equity securities
or other assets for its own account or to cause or make any distribution to be
made in connection with any such Asset Sale; and

          (d)  all other assets that are now or many in the future be acquired
or otherwise held by Med on or after the date of this Agreement (including
without limitation, all accounts, cash, chattel paper, contract rights,
copyrights, deposit accounts, documents, document of title, electronic chattel
paper, equipment, fixtures, furnishings, franchises, general intangibles, goods,
guarantees, intellectual property, inventory, instruments, investment property,
letter of credit rights, licenses, merchandise, patents, payment intangibles,
permits, supporting obligations, trade secrets, trademarks, tradenames, and cash
or non-cash proceeds of any of the foregoing, in each case, as applicable, as
such terms are defined in or understood for the purposes of the Uniform
Commercial Code as in effect in Nevada;

PROVIDED that such security interest in the Med Debenture Collateral (x) shall
not attach or otherwise apply with respect to any Medicaid, Medicare, CHAMPUS
and CHAMPVA receivables and (y) shall cease to attach or otherwise apply to any
receivables that have been sold or otherwise transferred to any purchaser(s)
under financing arrangements with NCFE or its affiliates, regardless of whether
such transaction is deemed to be a sale or a secured financing.

     Terms used in the foregoing definition of Collateral, that are not
otherwise defined herein, shall have the meanings provided in the Uniform
Commercial Code as in effect in the State of Nevada or in the Amendment
Agreement.

<Page>

                        EXHIBIT B TO MANATT LEGAL OPINION

<Page>

[GRAPHIC]

UCC FINANCING STATEMENT

FOLLOW INSTRUCTIONS (front and back) CAREFULLY

A NAME & PHONE OF CONTACT AT FILER [optional]

B. SEND ACKNOWLEDGMENT TO: (Name and Address)

                                   THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

1. DEBTOR'S EXACT FULL LEGAL NAME - Insert only ONE debtor name (1a or 1b) - do
   not abbreviate or combine names

    1a. ORGANIZATION'S NAME
    American Reimbursement, LLC

OR

<Table>
<Caption>
    1b. INDIVIDUAL'S LAST NAME                      FIRST NAME                  MIDDLE NAME                 SUFFIX
    <S>                                             <C>                         <C>                         <C>

<Caption>
1c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
<S>                                                 <C>                         <C>        <C>              <C>
200 Brickstone Square, Suite 403                    Andover                     MA         01810            USA
<Caption>
1d. TAX ID# SSN OR EIN     ADD'L INFO RE   1e. TYPE OF ORGANIZATION  1f. JURISDICTION OF ORGANIZATION  1g. ORGANIZATIONAL ID #,
                            ORGANIZATION                                                                    if any
                            DEBTOR
<S>                         <C>             <C>                       <C>                               <C>                <C>
47-0860058                                  LLC                       Delaware                          3505752            / / NONE
</Table>

2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - Insert only ONE debtor name
   (2a or 2b) - do not abbreviate or combine names

    2a. ORGANIZATION'S NAME

OR

<Table>
<Caption>
    2b. INDIVIDUAL'S LAST NAME                      FIRST NAME                  MIDDLE NAME                 SUFFIX
   <S>                                              <C>                         <C>                         <C>

<Caption>
2c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
<S>                                                 <C>                         <C>        <C>              <C>

<Caption>
2d. TAX ID#: SSN OR EIN     ADD'L INFO RE   1e. TYPE OF ORGANIZATION  1f. JURISDICTION OF ORGANIZATION  1g. ORGANIZATIONAL ID #,
                            ORGANIZATION                                                                    if any
                            DEBTOR
<S>                         <C>             <C>                       <C>                               <C>                <C>
                                                                                                                           / / NONE
</Table>

3. SECURED PARTY'S NAME (or NAME OF TOTAL ASSIGNEE OF ASSIGNOR S/P)-
   insert only ONE secured party name (3a or 3b)

    3a. ORGANIZATION'S NAME
    Private Investment Bank Limited

OR

<Table>
<Caption>
    3b. INDIVIDUAL'S LAST NAME                       FIRST NAME                 MIDDLE NAME                 SUFFIX
    <S>                                              <C>                        <C>                         <C>

<Caption>
3c. MAILING ADDRESS                                  CITY                       STATE      POSTAL CODE      COUNTRY
      <S>                                            <C>                        <C>        <C>              <C>
           Deyonshire House
      Queen Street P.O. Box N-3918                   Nassau                                                 Bahamas
</Table>

4. THIS FINANCING STATEMENT COVERS THE FOLLOWING COLLATERAL:

SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE.

5. ALTERNATIVE  DESIGNATION (IF APPLICABLE); / / LESSEE/LESSOR
   / / CONSIGNEE/CONSIGNOR  / / BAILEE/BAILOR / / SELLER/BUYER / / AG.LIEN
   / / NON-UCC FILING

6. / / This FINANCING STATEMENT is to be filed (for record) (or recorded) in the
       REAL ESTATE RECORDS. Attach Addendum                      (if applicable)

7. CHECK TO REQUEST SEARCH REPORT(S) on Debtor(s)
   (ADDITIONAL FEE)     (optinal)    / / All Debtors  / / Debtor 1  / / Debtor 2

8. OPTIONAL FILER REFERENCE DATA DE SOS

<Page>

                  EXHIBIT A TO UCC-1 FINANCING STATEMENT (ARL)

DEBTOR: AMERICAN REIMBURSEMENT, LLC ("ARL")

SECURED PARTY: PRIVATE INVESTMENT BANK LIMITED ("PIBL")

     Capitalized terms used herein shall have the meanings set forth below:

"AMENDED DEBENTURES" shall mean those certain amended debentures issued pursuant
to the Amended Agreement.

"AMENDMENT AGREEMENT" shall mean that certain Amendment Agreement, dated as of
June 28, 2002, by and among Med, ARL, PIBL, TEGCO and the Med Subsidiaries.

"ARL COLLECTION ACCOUNT" shall mean that certain collection account, bearing
account number 3293007778, established by or on behalf of ARL at the Depositary
Bank.

"DEPOSITARY BANK" means Three Rivers Bank & Trust Company or another major U.S.
bank designated as a successor or replacement therefor from time to time by PIBL
(or another agent for the Holders of the Amended Debentures designated by the
Holders in writing to Med from time to time).

"EXCLUDED MED SUBSIDIARY" shall mean any Subsidiary of Med that: (i) has assets
with a value of less than $500,000.00, (ii) has annual gross revenues of less
than $500,000.00 and (iii) is not otherwise material to the business, operations
and income of Med and its consolidated subsidiaries, taken as a whole. "Excluded
Med Subsidiaries" means all such Subsidiaries.

"HOLDER" shall mean PIBL or any other holder of one or more of the Amended
Debentures, from time to time, and "Holders" means all of such parties taken
together.

"MED" shall mean Med Diversified, Inc., a Nevada corporation.

"MED ELIGIBLE ACCOUNTS RECEIVABLE" shall mean private and government medical
accounts of Med or any Med Subsidiaries that have an aging of less than one
hundred and eighty (180) days PROVIDED that Med Eligible Accounts Receivable
shall not include any receivables that have been sold or otherwise transferred
to any purchaser(s) under financing arrangements with NCFE or its affiliates,
regardless or whether such transaction is deemed to be a sale or a secured
financing.

"MED SUBSIDIARY" means and includes each present or future, direct or indirect
Subsidiary of Med, other than any Excluded Med Subsidiary and "Med Subsidiaries"
means and includes all such Subsidiaries, other than any Excluded Med
Subsidiaries).

"NCFE" shall mean National Century Financial Enterprises, an Ohio corporation.

                                        1
<Page>

"PERSON" means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or department
thereof, or any other entity, whether acting in an individual, fiduciary or
other capacity.

"SELLERS OVERRIDE" shall mean the percentage amount due to the seller that sold
the relevant ARL Accounts to ARL pursuant to one or more receivables purchase
agreements.

"SERVICING COSTS" shall means reasonable and documented servicing and
administrative fees and costs of collection on such accounts, such Servicing
Costs not to exceed in any event: (i) in the case of ARL Accounts, five percent
(5%) of the gross collection proceeds from the relevant ARL Accounts or (ii) in
the case of the Med Eligible Accounts Receivable, one percent (1%) of the gross
collection proceeds from the relevant Med Eligible Accounts Receivable.

"SUBSIDIARY" means, as to any Person (a) a corporation of which outstanding
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
Board of Directors of such corporation are at the time owned, whether directly
or through one or more intermediaries, or both, by such Person and (b) any
controlling interest of which is at the time owned, directly or through one or
more intermediaries, or both, by such Person.

"TEGCO" shall mean TEGCO Investments, LLC, a Delaware limited liability company.

     As security for the payment obligations represented by the Amended
Debentures, ARL hereby delivers, pledges and grants a first priority, perfected
security interest to PIBL in all of ARL's right, title and interest (whether now
owned and existing or hereafter arising or acquired) in all present and future
assets of ARL (collectively, the ("ARL DEBENTURE COLLATERAL"), consisting of:

          (a)  Medical accounts receivable owned by ARL (collectively, the "ARL
ACCOUNTS") having an aggregate face value of not less than $100,000,000, as
identified on an itemized schedule attached as an exhibit to the Amendment
Agreement, with all collections on the ARL Accounts, net of Servicing Costs and
the Sellers Override, being directed to the ARL Collection Account to be used
exclusively for payments on the Amended Debentures;

          (b)  All servicing, collateral, and collection arrangements relating
to the ARL Accounts, with the documentation related thereto specifying that the
Holders or their designated agent shall be the sole beneficiary of such ARL
Accounts; PROVIDED that such security interest shall not apply to the portion of
the Servicing Costs that are payable to NCFE and its affiliates in connection
with the ARL Accounts nor to the servicing, collateral and collection
arrangements with NCFE and its affiliates related thereto; and

          (c)  Any other assets that are now or may in the future be acquired or
otherwise held by ARL on or after the date of the Amendment Agreement (including
without limitation, all accounts, cash chattel paper, contract rights,
copyrights, deposit

                                        2
<Page>

accounts, documents, documents of title, electronic chattel paper, equipment,
fixtures, furnishings, franchises, general intangibles, goods, guarantees,
intellectual property, inventory, instruments, investment property, letter of
credit rights, licenses, merchandise, patents, payment intangibles, permits,
supporting obligations, trade secrets, trademarks, tradenames, and cash or
non-cash proceeds of any of the foregoing, in each case, as applicable, as such
terms are defined in or understood for the purposes of the Uniform Commercial
Code as in effect in Delaware).

     Terms used in the foregoing definition of ARL Debenture Collateral, that
are not otherwise defined therein, shall have the meanings provided in the
Uniform Commercial Code as in effect in the State of Delaware.

<Page>

                        EXHIBIT C TO MANATT LEGAL OPINION

<Page>

[GRAPHIC]

UCC FINANCING STATEMENT AMENDMENT
FOLLOW INSTRUCTIONS (front and back) CAREFULLY

<Table>
<S>                                                    <C>
A. NAME & PHONE OF CONTACT AT FILER [optional]

B. SEND ACKNOWLEDGMENT TO: (Name and Address)

                                                       THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY
</Table>

<Table>
<Caption>
<S>                                                                <C>
1a. INITIAL FINANCING STATEMENT FILE #                             1b. This FINANCING STATEMENT AMENDMENT is
20833834                                                           / / to be filed [for record] (or recorded) in the
                                                                       REAL ESTATE RECORDS.
</Table>

2. / / TERMINATION: Effectiveness of the Financing Statement identified above
       is terminated with respect to security interest(s) of the Secured Party
       authorizing this Termination Statement.

3. / / CONTINUATION: Effectiveness of the Financing Statement identified above
       with respect to security  interest(s) of the Secured Party authorizing
       this Continuation Statement is continued for the additional period
       provided by applicable law.

4. /X/ ASSIGNMENT (full or partial): Give name of assignee in item 7a or 7b and
       address of assignee in item 7c; and also give name of assignor in item 9.

5. AMENDMENT (PARTY INFORMATION): This Amendment affects / / Debtor OR
       / / Secured Party of record. Check only ONE of these two boxes.

   Also check ONE of the following three boxes AND provide appropriate
       information in items 6 and/or 7.

   / / CHANGE name and/or address: Give current record name in item 6a or 6b;
       also give new name (if name change) in item 7a or 7b and/or new address
       (if address changed) in item 7c.

   / / DELETE name: Give record name to be deleted in item 6a or 6b.

   / / ADD name: Complete item 7a or 7b, and also item 7c; also complete items
       7d-7g(if applicable).

6. CURRENT RECORD INFORMATION:

   6a. ORGANIZATION'S NAME

OR

<Table>
<Caption>
   6b. INDIVIDUAL'S NAME                            FIRST NAME                  MIDDLE NAME                 SUFFIX
   <S>                                              <C>                         <C>                         <C>

</Table>

7. CHANGED (NEW) OR ADDED INFORMATION

   7a. ORGANIZATION'S NAME
   Private Investment Bank Limited

OR

<Table>
<Caption>
   7b. INDIVIDUAL'S LAST NAME                       FIRST NAME                  MIDDLE NAME                 SUFFIX
   <S>                                              <C>                         <C>                         <C>

<Caption>
7c. MAILING ADDRESS                                 CITY                        STATE      POSTAL CODE      COUNTRY
     <S>                                            <C>                         <C>        <C>              <C>
         Deyonshire House
     Queen Street         P.O. BOX N-3918           Nassau                                                  Bahamas

<Caption>
7d. TAX ID #: SSN OR EIN    ADD'L INFO RE    7e. TYPE OF ORGANIZATION  7f. JURISDICTION OF ORGANIZATION  7G. ORGANIZATIONAL ID #,
                            ORGANIZATION                                                                      if any
                            DEBTOR
<S>                         <C>              <C>                       <C>                               <C>
                                                                                                                           / / NONE
</Table>

8. AMENDMENT (COLLATERAL CHANGE): check only ONE box.

   Describe collateral  / / deleted or  / / added, or give entire
    / / restated collateral description, or describe collateral / / assigned.

9. NAME OF SECURED PARTY OF RECORD AUTHORIZING THIS AMENDMENT (name of
   assignor, if this is an Assignment). If this is an Amendment authorized by a
   Debtor which adds collateral or adds the authorizing Debtor, or if this is a
   Termination authorized by a Debtor, check here / / and enter name of DEBTOR
   authorizing this Amendment.

   9a. ORGANIZATION'S NAME
   Med Diversified, Inc.

OR

<Table>
<Caption>
   9b. INDIVIDUAL'S LAST NAME                       FIRST NAME                  MIDDLE NAME                 SUFFIX
   <S>                                              <C>                         <C>                         <C>
</Table>

10.OPTIONAL FILER REFERENCE DATA
   DE SOS

FILING OFFICE COPY -- NATIONAL UCC FINANCING STATEMENT AMENDMENT (FORM UCC3)
(REV. 07/29/98)

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