SPECIALTY CARE NETWORK INC, S-1/A, 1996-12-16

SPECIALTY CARE NETWORK INC
S-1/A, 1996-12-16
OFFICES & CLINICS OF DOCTORS OF MEDICINE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 13, 1996

REGISTRATION NO. 333-17627

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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SPECIALTY CARE NETWORK, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 8011 62-1623449
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

44 UNION BOULEVARD, STE. 600
LAKEWOOD, COLORADO 80228
(303) 716-0041
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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

KERRY R. HICKS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SPECIALTY CARE NETWORK, INC.
44 UNION BOULEVARD, STE. 600
LAKEWOOD, COLORADO 80228
(303) 716-0041
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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

Copies to:

<TABLE>
<S> <C>
ALAN SINGER, ESQUIRE MICHAEL D. NATHAN, ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP SIMPSON THACHER & BARTLETT
2000 ONE LOGAN SQUARE 425 LEXINGTON AVENUE
PHILADELPHIA, PA 19103 NEW YORK, NY 10017
(215) 963-5000 (212) 455-2000
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. / / _______________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / _______________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table set forth fees payable to the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and The Nasdaq
Stock Market and other expenses expected to be incurred in connection with the
issuance and distribution of the securities being registered. All the fees and
expenses will be paid by the Company.

<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......................................... $12,435
National Association of Securities Dealers, Inc. Filing Fee................................. 4,604
The Nasdaq Stock Market Listing Fee......................................................... 50,000
Printing Expenses........................................................................... *
Legal Fees and Expenses..................................................................... *
Accounting Fees and Expenses................................................................ *
Blue Sky Qualification Fees and Expenses (including counsel fees)........................... *
Transfer Agent Fees and Expenses............................................................ *
Miscellaneous Expenses...................................................................... *
---------
Total.................................................................................. *
---------
---------
</TABLE>

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*Estimates

14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102(b)(7) of the Delaware General Corporation Law (the 'DGCL')
permits a corporation, in its certificate of incorporation, to limit or
eliminate, subject to certain statutory limitations, the liability of directors
to the corporation or its stockholders for monetary damages for breaches of
fiduciary duty, except for liability (a) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the DGCL, or (d) for any transaction from which
the director derived an improper personal benefit. Article 7 of the registrant's
Certificate of Incorporation provides that the personal liability of directors
of the registrant is eliminated to the fullest extent permitted by Section
102(b)(7) of the DGCL.

Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorney's
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director or officer acted in accordance
with the applicable standard of conduct set forth in such statutory provision.
Article 6 of the registrant's Bylaws provides that the registrant will indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reasons of the
fact that he is or was a director, officer, employee or agent of the registrant,
or is or was serving at the request of the registrant as a director, officer,
employee or agent of another entity, against certain liabilities, costs and
expenses. Article 6 further permits the agent of the registrant, or is or was
serving at the request of the registrant as a director, officer, employee or
agent of another entity, against any liability asserted against such person and
incurred by such person in any such capacity or arising out of his status as
such, whether or not the registrant would have the power to indemnify such
person against such liability under the DGCL.

II-1
<PAGE>
15. RECENT SALES OF UNREGISTERED SECURITIES

Since December 22, 1995, the date the Company was incorporated, the Company
has issued and sold the following unregistered securities:

1. On December 25, 1995, the Company issued 1,265,000 shares of Common
Stock to private investors for an aggregate price of $1,265 or $.001 per share.
In addition, on December 22, 1995, 500,000 Shares of Common Stock were issued to
an employee of the Company of which 425,000 shares were returned to the Company
in connection with the termination of such employee's employment with the
Company.

2. From January 15, 1996 through July 1, 1996, the Company issued
$1,869,999 of convertible debentures to private investors for an aggregate price
of $1,870,000. The convertible debentures bore interest at 5% per annum and were
converted at a rate of one share of Common Stock for each $1.00 of indebtedness
into 1,920,222 shares of Common Stock on November 12, 1996.

3. On October 1, 1996, the Company issued Debentures to a private investor
for an aggregate price of $300,000. The convertible debentures bore interest a
5% per annum and were converted at a rate of one share of common stock for each
$3.00 of indebtedness, into 100,569 shares of Common Stock on November 12, 1996.

4. On November 4, 1996, the Company issued 100,000 shares of Common Stock
to a private investor for an aggregate price of $300,000.

The Company believes that the transactions described above were exempt from
registration under Section 4(2) of the Act because the subject securities were
sold to a limited group of persons, each of whom was believed to have been a
sophisticated investor or had a pre-existing business or personal relationship
with the Company or its management and was purchasing for investment without a
view to further distribution. Restrictive legends were placed on stock
certificates evidencing the shares and/or agreements relating to the right to
purchase such shares described above.

16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits. The following exhibits are filed as part of this registration
statement.

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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>

1* Form of Underwriting Agreement

3.1 Amended and Restated Certificate of Incorporation

3.2 Amended and Restated Bylaws

5* Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered

10.1 Specialty Care Network, Inc. 1996 Equity Compensation Plan

10.2 Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan

10.3 Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and Kerry
R. Hicks

10.4 Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and
Patrick M. Jaeckle

10.5 Employment Agreement dated as of March 11, 1996 by and between Specialty Care Network, Inc. and
William Behrens

10.6 Employment Agreement dated as of February 22, 1996 by and between Specialty Care Network, Inc. and
Paul Davis
</TABLE>

II-2
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<TABLE>
<S> <C>
10.7 Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and Peter
A. Fatianow

10.8 Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and David
Hicks

10.9 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Reconstructive
Orthopaedic Assocs., Inc.

10.10** Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc.,
Reconstructive Orthopaedic Associates II, P.C. and Richard H. Rothman, M.D., Robert E. Booth, Jr.,
M.D., Richard Balderston, M.D., Arthur R. Bartolozzi, M.D., William J. Hozack, M.D., Michael G.
Ciccotti, M.D., Todd J. Albert, M.D., Alexander R. Vaccaro, M.D. and Peter F. Sharkey, M.D.

10.11* Letter agreement dated October 29, 1996 by and between Arthur R. Bartolozzi, M.D. and Specialty Care
Network, Inc.

10.12* Letter agreement dated October 29, 1996 by and between Robert E. Booth, Jr., M.D. and Specialty Care
Network, Inc.

10.13* Letter agreement dated November 11, 1996 by and between Richard H. Rothman, M.D. and Specialty Care
Network, Inc.

10.14 Stock Exchange Agreement dated October 21, 1996 by and among Specialty Care Network, Inc. and Michael
N. Jolley, M.D., Harvey E. Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E.
Fleming, Jr., M.D., W. Thomas Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D.
and David M. Smith, M.D.

10.15** Service Agreement dated as of November 1, 1996, by and between Specialty Care Network, Inc., SCN of
Princeton, Inc., Princeton Orthopedic Associates II, P.A. and Michael N. Jolley, M.D., Harvey E.
Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E. Fleming, Jr., M.D., W. Thomas
Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D. and David M. Smith, M.D.

10.16 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and TOC Services,
Inc.

10.17** Service Agreement dated as of November 12, 1996 by and between TOC Specialists, P.L., (d/b/a
Tallahassee Orthopedic Clinic) TOC Services, Inc. (f/k/a Tallahassee Orthopedic Clinic, P.A.) and
Greg A. Alexander, M.D., David C. Berg, M.D., Richard E. Blackburn, M.D., Donald Dewey, M.D., Mark E.
Fahey, M.D., Tom C. Haney, M.D., William D. Henderson, Jr., M.D., Steve E. Jordan, M.D., J. Rick
Lyon, M.D., Kris D. Stowers, M.D., Robert L. Thornberry, M.D., Billy C. Weinstein, M.D. and Charles
H. Wingo, M.D.

10.18 Asset Exchange Agreement dated as of November 12, 1996 by and among Specialty Care Network, Inc.,
Greater Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D.,
Paul L. Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew
C. Schon, M.D.

10.19** Service Agreement dated as of November 12, 1996 by and between Speciality Care Network, Inc., Greater
Chesapeake Orthopaedic Associates, L.L.C., Stuart D. Miller, M.D., Leslie S. Matthews, M.D., Paul L.
Asdourian, M.D., Frank R. Ebert, M.D., Mark S. Myerson, M.D., John B. O'Donnell, M.D. and Lew C.
Schon, M.D.

10.20 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Vero
Orthopaedic, Inc.
</TABLE>

II-3
<PAGE>

<TABLE>
<S> <C>
10.21** Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc., Vero
Orthopaedics II, P.A. and James L. Cain, M.D., David W. Griffin, M.D., George K. Nichols, M.D., Peter
G. Wernicki, M.D. and Charlene Wilson, M.D.

10.22* Revolving Loan and Security Agreement dated as of November 1, 1996 among Specialty Care Network,
Inc., SCN of Princeton, Inc., NationsBank of Tennessee N.A. and NationsBank of Tennessee, N.A. as
Agent.

11* Statement re: computation of per share earnings

23.1+ Consent of Ernst & Young LLP

23.2* Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto)

24+ Powers of Attorney (included as part of the signature page hereof)

27+ Financial Data Schedule
</TABLE>

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* To be filed by amendment.

** Portions of this exhibit were omitted and filed separately with the Secretary
of the Commission pursuant to an application for confidential treatment filed
with the Commission pursuant to Rule 406 under the Securities Act.

+ Previously filed.

(b) Financial Statement Schedules

None.

17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the registrant's Articles of Incorporation, its Bylaws,
the Underwriting Agreement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in Lakewood, Colorado, on December 13, 1996.

SPECIALTY CARE NETWORK, INC.

By: _________________*________________
Kerry R. Hicks
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE
APPEARS BELOW IN SO SIGNING ALSO MAKES, CONSTITUTES AND APPOINTS KERRY R. HICKS,
PATRICK M. JAECKLE AND WILLIAM C. BEHRENS, AND EACH OF THEM, HIS TRUE AND LAWFUL
ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO EXECUTE AND CAUSE TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ANY AND ALL AMENDMENTS AND POST-EFFECTIVE AMENDMENTS TO THIS
REGISTRATION STATEMENT AND A RELATED REGISTRATION STATEMENT THAT IS TO BE
EFFECTIVE UPON FILING PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT OF 1933,
AND IN EACH CASE TO FILE THE SAME, WITH ALL EXHIBITS THERETO AND OTHER DOCUMENTS
IN CONNECTION THEREWITH, AND HEREBY RATIFIES AND CONFIRMS ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS OR THEIR SUBSTITUTE OR SUBSTITUTES MAY DO OR CAUSE
TO BE DONE BY VIRTUE HEREOF.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board of December 13, 1996
Richard H. Rothman, M.D., Ph.D. Directors

* Principal Executive Officer December 13, 1996
Kerry R. Hicks and Director

/s/ Patrick M. Jaeckle Principal Financial Officer December 13, 1996
Patrick M. Jaeckle and Director

* Principal Accounting Officer December 13, 1996
D. Paul Davis

* Director December 13, 1996
Robert E. Booth, Jr., M.D.

* Director December 13, 1996
James L. Cain, M.D.

* Director December 13, 1996
Peter H. Cheesbrough

* Director December 13, 1996
Richard E. Fleming, Jr., M.D.

* Director December 13, 1996
Thomas C. Haney, M.D.

* Director December 13, 1996
Leslie S. Matthews, M.D.
</TABLE>

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<TABLE>

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director December 13, 1996
Wiliam C. Behrens

By: /s/ Patrick M. Jaeckle
As Attorney-in-Fact
December 13, 1996
</TABLE>

<PAGE>
EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
1* Form of Underwriting Agreement

3.1 Amended and Restated Certificate of Incorporation

3.2 Amended and Restated Bylaws

5* Opinion of Morgan, Lewis & Bockius LLP regarding legality of securities being registered

10.1 Specialty Care Network, Inc. 1996 Equity Compensation Plan

10.2 Specialty Care Network, Inc. 1996 Incentive and Non-Qualified Stock Option Plan

10.3 Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and Kerry R.
Hicks

10.4 Employment Agreement dated as of April 1, 1996 by and between Specialty Care Network, Inc. and Patrick
M. Jaeckle

10.5 Employment Agreement dated as of March 11, 1996 by and between Specialty Care Network, Inc. and William
Behrens

10.6 Employment Agreement dated as of February 22, 1996 by and between Specialty Care Network, Inc. and Paul
Davis

10.7 Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and Peter A.
Fatianow

10.8 Employment Agreement dated as of March 1, 1996 by and between Specialty Care Network, Inc. and David
Hicks

10.9 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Reconstructive
Orthopaedic Assocs., Inc.

10.10** Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc.,
Reconstructive Orthopaedic Associates II, P.C. and Richard H. Rothman, M.D., Robert E. Booth, Jr., M.D.,
Richard Balderston, M.D., Arthur R. Bartolozzi, M.D., William J. Hozack, M.D., Michael G. Ciccotti,
M.D., Todd J. Albert, M.D., Alexander R. Vaccaro, M.D. and Peter F. Sharkey, M.D.

10.11* Letter agreement dated October 29, 1996 by and between Arthur R. Bartolozzi, M.D. and Specialty Care
Network, Inc.

10.12* Letter agreement dated October 29, 1996 by and between Robert E. Booth, Jr., M.D. and Specialty Care
Network, Inc.

10.13* Letter agreement dated November 11, 1996 by and between Richard H. Rothman, M.D. and Specialty Care
Network, Inc.

10.14 Stock Exchange Agreement dated October 21, 1996 by and among Specialty Care Network, Inc. and Michael N.
Jolley, M.D., Harvey E. Smires, M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E. Fleming,
Jr., M.D., W. Thomas Gutowski, M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D. and David M.
Smith, M.D.
</TABLE>

<PAGE>

EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.15** Service Agreement dated as of November 1, 1996, by and between Specialty Care Network, Inc., SCN of
Princeton, Inc., Princeton Orthopedic Associates II, P.A. and Michael N. Jolley, M.D., Harvey E. Smires,
M.D., Robert N. Dunn, M.D., Jeffrey S. Abrams, M.D., Richard E. Fleming, Jr., M.D., W. Thomas Gutowski,
M.D., Steven R. Gecha, M.D., C. Alexander Moskwa, Jr., M.D. and David M. Smith, M.D.

10.16 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and TOC Services,
Inc.

10.17** Service Agreement dated as of November 12, 1996 by and between TOC Specialists, P.L., (d/b/a Tallahassee
Orthopedic Clinic) TOC Services, Inc. (f/k/a Tallahassee Orthopedic Clinic, P.A.) and Greg A. Alexander,
M.D., David C. Berg, M.D., Richard E. Blackburn, M.D., Donald Dewey, M.D., Mark E. Fahey, M.D., Tom C.
Haney, M.D., William D. Henderson, Jr., M.D., Steve E. Jordan, M.D., J. Rick Lyon, M.D., Kris D.
Stowers, M.D., Robert L. Thornberry, M.D., Billy C. Weinstein, M.D. and Charles H. Wingo, M.D.

10.20 Merger Agreement dated November 12, 1996 by and among Specialty Care Network, Inc. and Vero Orthopaedic,
Inc.

10.21** Service Agreement dated as of November 12, 1996 by and between Specialty Care Network, Inc., Vero
Orthopaedics II, P.A. and James L. Cain, M.D., David W. Griffin, M.D., George K. Nichols, M.D., Peter G.
Wernicki, M.D. and Charlene Wilson, M.D.

10.22* Revolving Loan and Security Agreement dated as of November 1, 1996 among Specialty Care Network, Inc.,
SCN of Princeton, Inc., Nations Bank of Tennessee, N.A. and Nations Bank of Tennessee, N.A., as Agent.

11* Statement re: computation of per share earnings

23.1+ Consent of Ernst & Young LLP

23.2* Consent of Morgan, Lewis & Bockius LLP (included in its opinion filed as Exhibit 5 hereto)

24+ Powers of Attorney (included as part of the signature page hereof)

27+ Financial Data Schedule
</TABLE>

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

* To be filed by amendment.

+ Previously filed.

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF SPECIALTY CARE NETWORK, INC.

Specialty Care Network, Inc., a Delaware corporation, the original
Certificate of Incorporation of which was filed with the Secretary of State of
the State of Delaware on December 22, 1995, HEREBY CERTIFIES that this Amended
and Restated Certificate of Incorporation restating, integrating and amending
its Certificate of Incorporation was duly proposed by its Board of Directors and
adopted by its stockholders in accordance with Sections 242 and 245 of the
General Corporation Law of the State of Delaware, as amended.

1. Corporate Name. The name of the Corporation is Specialty Care Network,
Inc.

2. Registered Office. The registered office of the Corporation is located
at Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, in
the County of New Castle, in the State of Delaware. The name of its registered
agent at that address is The Corporation Trust Company.

3. Corporate Purpose. The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may now or hereafter be organized
under the General Corporation Law of the State of Delaware (the "GCL").

4. Capital Stock.

4.1 Authorized Amount. The Corporation shall be authorized to issue
Fifty-Two Million (52,000,000) shares of capital stock, of which Fifty Million
(50,000,000) shares shall be Common Stock, par value $0.001 per share, and Two
Million (2,000,000) shares shall be Preferred Stock, par value $0.001 per share.

4.2 Authority of Board to Fix Terms of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly authorized at any time and from
time to time to provide for the issuance of all or any shares of the Preferred
Stock in one or more series, and to fix for each such series such voting powers,
full or limited, or no voting powers, and such distinctive designations,
preferences and relative, participating, optional or other special rights and
such qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such series and to the fullest extent as may now
or hereafter be permitted by the GCL, including, without limiting the generality
of the foregoing, the authority to provide that any such series may be (i)
subject to redemption at such time or times and at such price or prices; (ii)
entitled to receive dividends (which may be cumulative or non-cumulative) at
such rates, on such conditions, and at such times, and payable in preference to,
or in such relation to, the dividends payable on any other class or classes or
any other series; (iii) entitled to such rights upon the dissolution of, or upon
any distribution of the assets of, the Corporation; or (iv) convertible into, or

<PAGE>

exchangeable for, shares of any other class or classes of stock, or of any other
series of the same or any other class or classes of stock, or other securities
or property, of the Corporation at such price or prices or at such rates of
exchange and with such adjustments, all as may be stated in such resolution or
resolutions. Unless otherwise provided in such resolution or resolutions, shares
of Preferred Stock of any series which shall be issued and thereafter acquired
by the Corporation through purchase, redemption, exchange, conversion or
otherwise shall return to the status of authorized but unissued Preferred Stock.

5. Board of Directors.

5.1 Number. Subject to the rights of the holders of any series of
Preferred Stock to elect directors under specified circumstances, the number of
directors shall be fixed from time to time exclusively pursuant to a resolution
adopted by a majority of the directors then in office.

5.2 Vacancies. Subject to applicable law and the rights of the holders
of any series of Preferred Stock with respect to such series of Preferred Stock,
and unless the Board of Directors otherwise determines, vacancies resulting from
death, resignation, retirement, disqualification, removal from office or other
cause, and newly created directorships resulting from any increase in the
authorized number of directors, may be filled only by the affirmative vote of a
majority of the remaining directors, though less than a quorum of the Board of
Directors.

5.3 Removal of Directors. Subject to the rights of the holders of any
series of Preferred Stock with respect to such series of Preferred Stock, any
director, or the entire Board of Directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66-2/3) of the voting power of all of
the then-outstanding shares of the Corporation entitled to vote generally in the
election of directors, voting together as a single class. No decrease or
increase in the size of the Board of Directors shall shorten or otherwise affect
the term of any incumbent director.

6. Special Meetings of Stockholders. Subject to the rights of the holders
of any series of Preferred Stock with respect to such series of Preferred Stock,
special meetings of the stockholders may be called only by the Chairman of the
Board, the President or by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors of the Corporation.

7. Liability of Directors. A director of the Corporation shall not be
liable to the Corporation or its stockholders for monetary damages (including,
without limitation, any judgment, amount paid in settlement, fine, penalty,
punitive damages, excise tax assessed with respect to an employee benefit plan,
or expense of any nature, including attorneys' fees) for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) under Section 174 of Title 8 of the GCL; or (iv) for any
transaction from which the director derived an improper personal benefit.

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<PAGE>

If the GCL is amended after the date hereof to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall automatically be eliminated or
limited to the fullest extent permitted by the GCL as so amended. Neither the
amendment nor repeal of this Article 7 nor the adoption of any provision of this
Amended and Restated Certificate of Incorporation inconsistent with this Article
7 shall eliminate or reduce the effect of this Article 7 in respect of any
matter arising or relating to any actions or omissions occurring prior to such
amendment, repeal or adoption of an inconsistent provision.

8. Fundamental Transactions.

8.1 Stockholder Authorization of Fundamental Transaction Recommended by
the Board. Whenever a Fundamental Transaction to be taken by vote of the
stockholders has been recommended by a vote of a majority of the directors then
in office at a meeting at which a quorum is present, the proposed Fundamental
Transaction shall be authorized upon receiving the affirmative vote of the
holders of a majority of the voting power of all of the then-outstanding shares
of the Corporation entitled to vote upon such action, after taking into account
the express terms of any series of Preferred Stock of the Corporation with
respect to such vote.

8.2 Stockholder Authorization of Fundamental Transaction Not
Recommended by the Board. Except as provided in Section 8.1 above, whenever a
Fundamental Transaction is to be taken by vote of the stockholders, the proposed
Fundamental Transaction shall be authorized only upon receiving the affirmative
vote of the holders of sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, and,
in addition, the affirmative vote of the number or proportion of shares of any
series of Preferred Stock of the Corporation, if any, as shall at the time be
required by statute or the express terms of such series of Preferred Stock.

8.3 Fundamental Transaction Defined. For the purposes of this Article
8, the term "Fundamental Transaction" shall mean any of the following, if any
such transaction requires the approval of the stockholders under the Amended and
Restated Certificate of Incorporation of the Corporation as then in effect or
the GCL as then in effect with respect to the Corporation: the sale, lease,
exchange or other disposition of all or substantially all of the assets of the
Corporation; or the merger or consolidation of the Corporation (other than a
merger or consolidation in which holders of outstanding voting securities of the
Corporation will have the ownership of at least a majority of the voting power
of the voting securities of the surviving corporation (which voting power is to
be held in the same proportion as held by stockholders of the Corporation
immediately prior to such merger or consolidation)) or the division,
reorganization, recapitalization, dissolution, liquidation or winding up of the
Corporation.

9. Amendment. Except as otherwise provided in this Article 9, this Amended
and Restated Certificate of Incorporation may be amended in the manner now or
hereafter prescribed by statute; provided, however, that unless such action has
been recommended by a vote of a

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<PAGE>

majority of the directors then in office at a meeting at which a quorum is
present, the provisions set forth in Articles 5, 6 and 8 hereof may not be
repealed or amended in any respect and the provisions set forth in Article 7
hereof may not be amended or repealed in any respect so as to adversely affect
the rights therein conferred upon directors (or such other persons who may be
entitled to the rights provided thereunder) of the Corporation, unless in any of
such cases such action is approved by the affirmative vote of the holders of
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then-outstanding shares of the Corporation entitled to vote generally in the
election of directors, voting together as a single class; provided, however,
that in no event shall the last sentence of Article 7 be amended so as to
adversely affect the rights herein conferred upon directors.

10. Amendment of Bylaws. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is expressly
authorized from time to time to make, adopt, alter, amend, supplement and repeal
the bylaws of the Corporation in any respect, subject to the right of the
stockholders entitled to vote with respect thereto to adopt, alter, amend and
repeal by-laws made by the Board of Directors; provided, however, that by-laws
shall not be made, adopted, altered, amended or repealed by the stockholders of
the Corporation except by the vote of the holders of not less than sixty-six and
two-thirds percent (66-2/3%) of the outstanding shares of stock of each class
and series entitled to vote upon such matter.

11. Arrangements with Creditors. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under Section 291 of Title 8 of the Delaware Code or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
Corporation under Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholder or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.

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IN WITNESS WHEREOF, Specialty Care Network, Inc. has caused this Amended
and Restated Certificate of Incorporation to be signed and acknowledged on this
4th day of December, 1996 in its name by a duly authorized officer.

SPECIALTY CARE NETWORK, INC.

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

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BY-LAWS

SPECIALTY CARE NETWORK, INC.
(a Delaware Corporation)
(effective _________, 1996)

ARTICLE I

Offices, Fiscal Year and Records

1.01. Registered Office. The registered office of the Corporation shall be
in the City of Wilmington, County of New Castle, State of Delaware until
otherwise established by resolution of the Board of Directors and a certificate
certifying the change is filed in the manner provided by statute.

1.02. Other Offices. The Corporation may also have offices at such other
places within or without the State of Delaware as the Board of Directors may
from time to time determine or the business of the Corporation requires.

1.03. Fiscal Year. The fiscal year of the Corporation shall end on the 31st
of December in each year.

1.04. Books and Records. The books and records of the Corporation may be
kept outside the State of Delaware at such place or places as may from time to
time be designated by the Board of Directors. The stockholders and directors of
the Corporation shall have examination rights as specified in Section 7.06 of
these By-Laws.

ARTICLE II

Stockholders

2.01. Annual Meeting. The annual meeting of the stockholders of the
Corporation shall be held on such date and at such place and time as may be
fixed by resolution of the Board of Directors.

2.02. Special Meeting. Subject to the rights of the holders of any series
of stock having a preference over the Common Stock of the Corporation as to
dividends or upon liquidation ("Preferred Stock") with respect to such series of
Preferred Stock, special meetings of the stockholders may be called only by the
Chairman of the Board, the

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<PAGE>

President or by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors then in office.

2.03. Place of Meeting. The Board of Directors or the Chairman of the
Board, as the case may be, may designate the place of meeting for any annual
meeting or for any special meeting of the stockholders called by the Board of
Directors, the President or the Chairman of the Board. If no designation is so
made, the place of meeting shall be the principal office of the Corporation.

2.04. Notice of Meeting. Written or printed notice, stating the place, day
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be delivered by the Corporation not less than 10 days nor more
than 60 days before the date of the meeting, either personally or by mail, to
each stockholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
with postage thereon prepaid, addressed to the stockholder at his address as it
appears on the stock transfer books of the Corporation. Such further notice
shall be given as may be required by law. Only such business shall be conducted
at a special meeting of stockholders as shall have been brought before the
meeting pursuant to the Corporation's notice of meeting. Meetings may be held
without notice if all stockholders entitled to vote are present, or if notice is
waived by those not present in accordance with Section 7.01 of these By-Laws.
Any previously scheduled meeting of the stockholders may be postponed, and
(unless the Certificate of Incorporation otherwise provides) any special meeting
of the stockholders may be cancelled, by resolution of a majority of the total
number of directors then in office upon public notice given prior to the date
previously scheduled for such meeting of stockholders.

2.05. Quorum and Adjournment. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the voting power of
the outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series of stock voting as a
class, the holders of a majority of the shares of such class or series shall
constitute a quorum of such class or series for the transaction of such
business. The Chairman of the meeting or a majority of the shares so represented
may adjourn the meeting from time to time, whether or not there is such a
quorum. No notice of the time and place of adjourned meetings need be given
except as required by law. The stockholders present at a duly called meeting at
which a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

2.06. Proxies. At all meetings of stockholders, a stockholder may vote by
proxy executed in writing (or in such manner prescribed by the General
Corporation Law of the State of Delaware) by the stockholder, or by his duly
authorized attorney in fact.

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<PAGE>

2.07. Notice of Stockholder Business and Nominations.

(a) Annual Meetings of Stockholders.

(1) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (i) pursuant to
the Corporation's notice of meeting, (ii) by or at the direction of the Board of
Directors or (iii) by any stockholder of the Corporation who was a stockholder
of record at the time of giving of notice provided for in this By-Law, who is
entitled to vote at the meeting and who complies with the notice procedures set
forth in this By-Law.

(2) For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1)
of this By-Law, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to such
annual meeting and not later than the close of business on the later of the 60th
day prior to such annual meeting or the l0th day following the day on which
public announcement of the date of such meeting is first made by the
Corporation. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth (i) as to
each person whom the stockholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
14a-11 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (ii) as
to any other business that the stockholder proposes to bring before the meeting,
a brief description of the business desired to be brought before the meeting,
the reasons for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial owner, if any,
on whose behalf the proposal is made; (iii) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (A) the name and address of such stockholder, as they appear on
the Corporation's books, and of such beneficial owner and (B) the class or
series and number of shares of the Corporation which are owned of record and
beneficially by such stockholder

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<PAGE>

and such beneficial owner; and (iv) a description of all arrangements or
understandings among the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder.

(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this By-Law to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Corporation is increased and
there is no public announcement by the Corporation naming all of the nominees
for director or specifying the size of the increased Board of Directors at least
70 days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this By-Law shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the l0th day
following the day on which such public announcement is first made by the
Corporation.

(b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (1) by or at the direction of the Board of
Directors or (2) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this By-Law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this By-Law. In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
may nominate a person or persons (as the case may be), for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (a)(2) of this By-Law shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above.

(1) Only such persons who are nominated in accordance with the
procedures set forth in this By-Law shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before

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<PAGE>

the meeting in accordance with the procedures set forth in this By-Law. Except
as otherwise provided by law, the Certificate of Incorporation, or these
By-Laws, the Chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set
forth in this By-Law and, if any proposed nomination or business is not in
compliance with this By-Law, to declare that such defective proposal or
nomination shall be disregarded.

(2) For purposes of this By-Law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this By-Law, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this By-Law. Nothing in this By-Law shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.

2.08. Procedure for Election of Directors; Required Vote. Election of
directors at all meetings of the stockholders at which directors are to be
elected shall be by ballot, and, subject to the rights of the holders of any
series of Preferred Stock to elect directors under specified circumstances, a
plurality of the votes cast thereat shall elect directors. Except as otherwise
provided by law, the Certificate of Incorporation, or these By-Laws, in all
matters other than the election of directors, the affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the matter shall be the act of the stockholders.

2.09. Inspectors of Elections; Opening and Closing the Polls. The Board of
Directors by resolution shall appoint one or more inspectors, which inspector or
inspectors may include individuals who serve the Corporation in other
capacities, including, without limitation, as officers, employees, agents or
representatives, to act at the meetings of stockholders and make a written
report thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of stockholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before discharging his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by law.

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ARTICLE III

Board of Directors

3.01. General Powers. The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. In addition to the powers
and authorities by these By-Laws expressly conferred upon it, the Board of
Directors may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Certificate of Incorporation or
by these By-Laws required to be exercised or done by the stockholders.

3.02. Regular Meetings. A regular meeting of the Board of Directors shall
be held without other notice than this By-Law immediately after, and at the same
place as, the annual meeting of stockholders, or at such other place or time as
the Board of Directors may determine by resolution and without other notice than
such resolution. The Board of Directors may, by resolution, provide the time and
place for the holding of additional regular meetings without other notice than
such resolution.

3.03. Special Meetings. Special meetings of the Board of Directors shall be
called at the request of the Chairman of the Board, the President or a majority
of the Board of Directors then in office. The person or persons authorized to
call special meetings of the Board of Directors may fix the place and time of
the meetings.

3.04. Notice. Notice of any special meeting of directors shall be given to
each director at his business or residence in writing by first-class or
overnight mail or courier service, telegram or facsimile transmission, orally by
telephone or by hand delivery. If mailed by first class mail, such notice shall
be deemed adequately delivered when deposited in the United States mails so
addressed, with postage thereon prepaid, at least five (5) days before such
meeting. If by telegram, overnight mail or courier service, such notice shall be
deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours prior to the time set for the meeting.
If by telephone or by hand delivery, the notice shall be given at least twelve
(12) hours prior to the time set for the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting, except for
amendments to these By-Laws, as provided under Section 7.09. A meeting may be
held at any time without notice if all the directors are present or if those not
present waive notice of the meeting in accordance with Section 7.01 of these
By-Laws.

3.05. Action by Consent of Board of Directors. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof

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may be taken without a meeting if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.

3.06. Conference Telephone Meetings. Members of the Board of Directors, or
any committee thereof, may participate in a meeting of the Board of Directors or
such committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at such meeting.

3.07. Quorum. Except as otherwise required by the Certificate of
Incorporation, a whole number of directors equal to at least a majority of the
total number of directors then in office shall constitute a quorum for the
transaction of business, but if at any meeting of the Board of Directors there
shall be less than a quorum present, a majority of the directors present may
adjourn the meeting from time to time without further notice. Except as
otherwise required by the Certificate of Incorporation or these By-Laws, the act
of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. The directors present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a quorum.

3.08. Executive and Other Committees. The Board of Directors may designate
an Executive Committee to exercise, subject to applicable provisions of law, all
the powers of the Board in the management of the business and affairs of the
Corporation when the Board is not in session, including without limitation the
power to declare dividends, to authorize the issuance of the Corporation's
capital stock and adopt a certificate of ownership and merger pursuant to
Section 253 of the General Corporation Law of the State of Delaware, and may, by
resolution similarly adopted, designate one or more other committees. The
Executive Committee and each such other committee shall consist of two or more
directors of the Corporation. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. Any such committee, other than the
Executive Committee (the powers of which are expressly provided for herein), may
to the extent permitted by law exercise such powers and shall have such
responsibilities as shall be specified in the designating resolution. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not constituting a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent or
disqualified member.

A majority of any committee may determine its action and fix the time and
place of its meetings, unless the Board shall otherwise provide. Notice of such
meetings shall be given to each member of the committee in the manner provided
for in

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Section 3.04 of these By-Laws. The Board shall have power at any time to fill
vacancies in, to change the membership of, or to dissolve any such committee.
Nothing herein shall be deemed to prevent the Board from appointing one or more
committees consisting in whole or in part of persons who are not directors of
the Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board.

3.09. Compensation of Directors. Unless otherwise restricted by the
Certificate of Incorporation, the Board of Directors shall have the authority to
fix the compensation of directors.

ARTICLE IV

Officers

4.01. Number, Qualifications and Designation. The officers of the
Corporation shall be chosen by the Board of Directors and shall be a President,
one or more Vice Presidents, a Secretary, a Treasurer, and such other officers
as may be elected in accordance with the provisions of Section 4.03 of this
Article. Any number of offices may be held by the same person. Except as
otherwise set forth herein, officers may, but need not, be directors or
stockholders of the Corporation. The Board of Directors may elect from among the
members of the Board a Chairman of the Board and a Vice Chairman of the Board
who may be officers of the Corporation if so designated by the Board. The
Chairman of the Board or the President, as designated from time to time by the
Board of Directors, shall be the chief executive officer of the Corporation. All
officers elected by the Board of Directors shall each have such powers and
duties as generally pertain to their respective offices, subject to the specific
provisions of this Article IV. Such officers shall also have such powers and
duties as from time to time may be conferred by the Board of Directors or by any
committee thereof.

4.02. Election and Term of Office. The officers of the Corporation, except
those elected by delegated authority pursuant to Section 4.03 of this Article,
shall be elected annually by the Board of Directors, and each such officer shall
hold office until the next annual organizational meeting of directors and until
a successor is elected and qualified, or until his or her earlier resignation or
removal.

4.03. Subordinate Officers, Committees and Agents. The Board of Directors
may from time to time elect such other officers and appoint such committees,
employees or other agents as it deems necessary, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as are
provided in these By-Laws, or as the Board of Directors may from time to time
determine. The Board of Directors may delegate to any officer or committee the
power to elect subordinate officers and to retain or appoint

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employees or other agents, or committees thereof, and to prescribe the authority
and duties of such subordinate officers, committees, employees or other agents.

4.04. Removal. Any officer elected, or agent appointed, by the Board of
Directors may be removed by the affirmative vote of a majority of the total
number of directors then in office whenever, in their judgment, the best
interests of the Corporation would be served thereby. Any officer or agent
appointed by another officer by delegated authority pursuant to Section 4.03 may
be removed by him whenever, in his judgment, the best interests of the
Corporation would be served thereby. No elected officer shall have any
contractual rights against the Corporation for compensation by virtue of such
election beyond the date of the election of his successor, his death, his
resignation or his removal, whichever event shall first occur, except as
otherwise provided in an employment contract or under an employee deferred
compensation plan.

4.05. Vacancies. A newly created elected office and a vacancy in any
elected office because of death, resignation, or removal may be filled by the
Board of Directors for the unexpired portion of the term at any meeting of the
Board of Directors. Any vacancy in an office appointed by another officer by
delegated authority pursuant to Section 4.03 because of death, resignation, or
removal may be filled by such other officer.

4.06. The Chairman and Vice Chairman of the Board. The Chairman of the
Board, if there be one, or in the absence of the Chairman, the Vice Chairman of
the Board, if there be one, shall preside at all meetings of the stockholders
and of the Board of Directors, and shall perform such other duties as may from
time to time be assigned to them by the Board of Directors. To be eligible to
serve, the Chairman of the Board and the Vice Chairman must be directors of the
Corporation.

4.07. The President. The President shall have general supervision over the
business, operations and affairs of the Corporation, subject, however, to the
control of the Board of Directors. The President shall, in general, perform all
duties incident to the office of president, and such other duties as from time
to time may be assigned by the Board of Directors and, if the Chairman of the
Board is the chief executive officer, the Chairman of the Board.

4.08. The Vice Presidents. The Vice Presidents shall perform such duties as
may from time to time be assigned to them by the Board of Directors or by the
chief executive officer (either the Chairman of the Board or the President).

4.09. The Secretary. The Secretary, or an Assistant Secretary, shall attend
all meetings of the stockholders and of the Board of Directors and shall record
the proceedings of the stockholders and of the directors and of committees of
the Board in a book or books to be kept for that purpose; shall see that notices
are given and records and reports properly kept and filed by the Corporation as
required by law; shall be the custodian of the seal of the

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Corporation and see that it is affixed to all documents to be executed on behalf
of the Corporation under its seal; and, in general, shall perform all duties
incident to the office of secretary, and such other duties as may from time to
time be assigned by the Board of Directors or the chief executive officer
(either the Chairman of the Board or the President).

4.10. The Treasurer. The Treasurer, or an Assistant Treasurer, shall have
or provide for the custody of the funds or other property of the Corporation;
shall collect and receive or provide for the collection and receipt of moneys
earned by or in any manner due to or received by the Corporation; shall deposit
all funds in his or her custody as treasurer in such banks or other places of
deposit as the Board of Directors may from time to time designate; whenever so
required by the Board of Directors, shall render an account showing his or her
transactions as treasurer and the financial condition of the Corporation; and,
in general, shall discharge such other duties as may from time to time be
assigned by the Board of Directors or the chief executive officer (either the
Chairman of the Board or the President).

4.11. Officers' Bonds. No officer of the Corporation need provide a bond to
guarantee the faithful discharge of the officer's duties unless the Board of
Directors shall by resolution so require a bond in which event such officer
shall give the Corporation a bond (which shall be renewed if and as required) in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of office.

4.12. Salaries. The salaries of the officers and agents of the Corporation
elected by the Board of Directors shall be fixed from time to time by the Board
of Directors.

ARTICLE V

Certificates of Stock, Transfer, Etc.

5.01. Form and Issuance.

(a) Issuance. The shares of the Corporation shall be represented by
certificates unless the Board of Directors shall by resolution provide that some
or all of any class or series of stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until the
certificate is surrendered to the Corporation. Notwithstanding the adoption of
any resolution providing for uncertificated shares, every holder of stock
represented by certificates and upon request every holder of uncertificated
shares shall be entitled to have a certificate signed by, or in the name of the
Corporation by, the Chairman or Vice Chairman of the Board of Directors, or the
President or Vice

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President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, representing the number of shares registered in
certificate form.

(b) Form and Records. Stock certificates of the Corporation shall be in
such form as approved by the Board of Directors. The stock record books and the
blank stock certificate books shall be kept by the Secretary or by any agency
designated by the Board of Directors for that purpose. The stock certificates of
the Corporation shall be numbered and registered in the stock ledger and
transfer books of the Corporation as they are issued.

(c) Signatures. Any of or all the signatures upon the stock
certificates of the Corporation may be a facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon, any stock certificate shall have ceased to be such officer,
transfer agent or registrar, before the certificate is issued, it may be issued
with the same effect as if the signatory were such officer, transfer agent or
registrar at the date of its issue.

5.02. Transfer. Transfers of shares shall be made on the stock register or
transfer books of the Corporation upon surrender of the certificate therefor,
endorsed by the person named in the certificate or by an attorney lawfully
constituted in writing. No transfer shall be made which would be inconsistent
with the provisions of Article 8, Title 6 of the Delaware Uniform Commercial
Code.

5.03. Lost, Stolen, Destroyed or Mutilated Certificates. The Board of
Directors may direct a new certificate of stock or uncertificated shares to be
issued in place of any certificate theretofore issued by the Corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or uncertificated
shares, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or the legal representative of the owner,
to give the Corporation a bond sufficient to indemnify against any claim that
may be made against the Corporation on account of the alleged loss, theft or
destruction of such certificate or the issuance of such new certificate or
uncertificated shares.

5.04. Record Holder of Shares. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends and to vote as such owner. The Corporation shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.

5.05. Determination of Stockholders of Record.

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(a) Meetings of Stockholders. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than 60 nor less than 10 days before the date of such
meeting.

If no record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting unless the Board of
Directors fixes a new record date for the adjourned meeting.

(b) Dividends. In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights of the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than 60 days
prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.

ARTICLE VI

Indemnification of Directors, Officers and
Other Authorized Representatives

6.01. Indemnification of Authorized Representatives in Third Party
Proceedings. The Corporation shall indemnify any person who was or is an
authorized representative of the Corporation, and who was or is a party, or is
threatened to be made a party to any third party proceeding, by reason of the
fact that such person was or is an authorized representative of the Corporation,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such third party
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of the
Corporation and, with respect to any criminal third party proceeding, had no
reasonable cause to believe such conduct was unlawful. The termination of any
third party proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent, shall not of itself create a presumption
that the authorized representative did not act in good faith and

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in a manner which such person reasonably believed to be in or not opposed to,
the best interests of the Corporation, and, with respect to any criminal third
party proceeding, had reasonable cause to believe that such conduct was
unlawful.

6.02. Indemnification of Authorized Representatives in Corporate
Proceedings. The Corporation shall indemnify any person who was or is an
authorized representative of the Corporation and who was or is a party or is
threatened to be made a party to any corporate proceeding, by reason of the fact
that such person was or is an authorized representative of the Corporation,
against expenses actually and reasonably incurred by such person in connection
with the defense or settlement of such corporate proceeding, if such person
acted in good faith and in a manner reasonably believed to be in, or not opposed
to, the best interests of the Corporation; except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the extent
that the Court of Chancery or the court in which such corporate proceeding was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such authorized
representative is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

6.03. Mandatory Indemnification of Authorized Representatives. To the
extent that an authorized representative or other employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
third party or corporate proceeding or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses actually and
reasonably incurred by such person in connection therewith.

6.04. Determination of Entitlement to Indemnification. Any indemnification
under Section 6.01, 6.02 or 6.03 of this Article (unless ordered by a court)
shall be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the authorized representative or other
employee or agent is proper in the circumstances because such person has either
met the applicable standard of conduct set forth in Section 6.01 or 6.02 or has
been successful on the merits or otherwise as set forth in Section 6.03 and that
the amount requested has been actually and reasonably incurred. Such
determination shall be made:

(a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such third party or corporate proceeding;
or

(b) if such a quorum is not obtainable or, even if obtainable, a quorum
of disinterested directors so directs, by independent legal counsel in a written
opinion; or

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6.05. Advancing Expenses. Expenses actually and reasonably incurred in
defending a third party or corporate proceeding shall be paid on behalf of an
authorized representative by the Corporation in advance of the final disposition
of such third party or corporate proceeding upon receipt of an undertaking by or
on behalf of the authorized representative to repay such amount if it shall
ultimately be determined that the authorized representative is not entitled to
be indemnified by the Corporation as authorized in this Article. The financial
ability of any authorized representative to make a repayment contemplated by
this section shall not be a prerequisite to the making of an advance. Expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.

6.06. Certain Terms. For purposes of this Article:

(a) "authorized representative" shall mean any and all directors and
officers of the Corporation and any person designated as an authorized
representative by the Board of Directors of the Corporation (which may, but need
not, include any person serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise);

(b) "corporate proceeding" shall mean any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor or investigative proceeding by the Corporation;

(c) "criminal third party proceeding" shall include any action or
investigation which could or does lead to a third party proceeding that could
result in criminal penalties, and any such proceeding;

(d) "expenses" shall include, but not be limited to, attorneys' fees
and disbursements;

(e) "fines" shall include, but not be limited to, any excise taxes
assessed on a person with respect to an employee benefit plan;

(f) "not opposed to the best interests of the Corporation" shall
include actions taken in good faith and in a manner the authorized
representative reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan;

(g) "other enterprises" shall include employee benefit plans;

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(h) "party" to a proceeding shall include a person who gives testimony
or is similarly involved in such proceeding;

(i) "serving at the request of the Corporation" shall include any
service as a director, officer or employee of the Corporation which imposes
duties on, or involves services by, such director, officer or employee with
respect to an employee benefit plan, its participants, or beneficiaries; and

(j) "third party proceeding" shall mean any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative, other than an action by or in the right of the Corporation.

6.07. Insurance. The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against the
person and incurred by the person in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the power or the
obligation to indemnify such person against such liability under the provisions
of this Article.

6.08. Scope of Article. The indemnification of authorized representatives
and advancement of expenses, as authorized by the preceding provisions of this
Article, shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in another capacity while
holding such office. The indemnification and advancement of expenses provided by
or granted pursuant to this Article shall continue as to a person who has ceased
to be an authorized representative and shall inure to the benefit of the heirs,
executors and administrators of such a person.

6.09. Reliance on Provisions. Each person who shall act as an authorized
representative of the Corporation shall be deemed to be doing so in reliance
upon rights of indemnification provided by this Article.

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ARTICLE VII

General Provisions

7.01. Waiver of Notice. Whenever any notice is required to be given to any
stockholder or director of the Corporation under the provisions of the General
Corporation Law of the State of Delaware or these By-Laws, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at, nor the purpose of, any
annual or special meeting of the stockholders or the Board of Directors or
committee thereof need be specified in any waiver of notice of such meeting.

7.02. Dividends. Subject to the restrictions contained in the General
Corporation Law of the State of Delaware and any restrictions contained in the
Certificate of Incorporation, the Board of Directors may declare and pay
dividends upon the shares of capital stock of the Corporation.

7.03. Contracts. Except as otherwise required by law, the Certificate of
Incorporation, or these By-Laws, any contracts or other instruments may be
executed and delivered in the name and on the behalf of the Corporation by such
officer or officers of the Corporation as the Board of Directors may from time
to time direct. Such authority may be general or confined to specific instances
as the Board may determine. The Chairman of the Board, if an executive officer,
the President or any Vice President may execute bonds, contracts, deeds, leases,
and other instruments to be made or executed for or on behalf of the
Corporation. Subject to any restrictions imposed by the Board of Directors, the
Chairman of the Board, if an executive officer, the President or any Vice
President of the Corporation may delegate contractual powers to others under his
jurisdiction, it being understood, however, that any such delegation of power
shall not relieve such officer of responsibility with respect to the exercise of
such delegated power.

7.04. Corporate Seal. The Corporation shall have a corporate seal, which
shall have inscribed thereon the name of the Corporation, the year of its
organization and the words "Corporate Seal, Delaware". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.

7.05. Deposits. All funds of the Corporation shall be deposited from time
to time to the credit of the Corporation in such banks, trust companies, or
other depositories as the Board of Directors may approve or designate, and all
such funds shall be withdrawn only upon checks signed by such one or more
officers or employees as the Board of Directors shall from time to time
determine.

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7.06. Corporate Records.

(a) Examination by Stockholders. Every stockholder shall, upon written
demand under oath stating the purpose thereof, have a right to examine, in
person or by agent or attorney, during the usual hours for business, for any
proper purpose, the stock ledger, list of stockholders, books or records of
account, and records of the proceedings of the stockholders and directors of the
Corporation, and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a stockholder. In
every instance where an attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other agent
to so act on behalf of the stockholder. The demand under oath shall be directed
to the Corporation at its registered office in Delaware or at its principal
place of business. Where the stockholder seeks to inspect the books and records
of the Corporation, other than its stock ledger or list of stockholders, the
stockholder shall first establish (1) that the stockholder has complied with the
provisions of this section respecting the form and manner of making demand for
inspection of such documents; and (2) that the inspection sought is for a proper
purpose. Where the stockholder seeks to inspect the stock ledger or list of
stockholders of the Corporation and has complied with the provisions of this
section respecting the form and manner of making demand for inspection of such
documents, the burden of proof shall be upon the Corporation to establish that
the inspection sought is for an improper purpose.

(b) Examination by Directors. Any director shall have the right to
examine the Corporation's stock ledger, a list of its stockholders and its other
books and records for a purpose reasonably related to the person's position as a
director.

7.07. Resignations. Any director or any officer, whether elected or
appointed, may resign at any time by giving written notice of such resignation
to the Chairman of the Board, the President, or the Secretary, and such
resignation shall be deemed to be effective as of the close of business on the
date said notice is received by the Chairman of the Board, the President, or the
Secretary, or at such later time as is specified therein. No formal action shall
be required of the Board of Directors or the stockholders to make any such
resignation effective.

7.08. Proxies. Unless otherwise provided by resolution adopted by the Board
of Directors, the Chairman of the Board, the President or any Vice President may
from time to time appoint an attorney or attorneys or agent or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as the holder of stock or other
securities in any other corporation, any of whose stock or other securities may
be held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing, in the name of
the Corporation as such holder, to any action by such other corporation, and may
instruct the

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person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed in the name and on behalf
of the Corporation and under its corporate seal or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises.

7.09. Amendment of By-Laws. These By-Laws may be altered, amended, or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of a meeting of the Board of Directors, in a notice given not
less than two days prior to the meeting; provided, however, that, in the case of
amendments by the Board of Directors, notwithstanding any other provisions of
these By-Laws or any provision of law which might otherwise permit a lesser vote
or no vote, the affirmative vote of a majority of the directors then in office
shall be required to alter, amend or repeal any provision of these By-Laws; and
further provided, that in the case of amendments by stockholders,
notwithstanding any other provisions of these By-Laws or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of the capital
stock of the Corporation required by law, the Certificate of Incorporation or
these By-Laws, the affirmative vote of the holders of at least 66-2/3 percent of
the voting power of all the then outstanding shares of the Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal any
provision of these By-Laws.

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SPECIALTY CARE NETWORK, INC.
1996 EQUITY COMPENSATION PLAN

The purpose of the Specialty Care Network, Inc. 1996 Equity
Compensation Plan (the "Plan") is to provide (i) designated employees (including
employees who are also officers or directors) of Specialty Care Network, Inc.
(the "Company") and its subsidiaries,(ii) certain consultants and advisors to
the Company or its subsidiaries and (iii) non-employee members of the Board of
Directors of the Company (the "Board") with the opportunity to receive grants of
incentive stock options and nonqualified stock options ("Options"). The Company
believes that the Plan will encourage the participants to contribute materially
to the growth of the Company, thereby benefitting the Company's shareholders,
and will align the economic interests of the participants with those of the
shareholders.

1. Administration

(a) The Plan may be administered by the Board or by a committee (the
"Committee") or two or more directors appointed by the Board. If no
administrative committee is appointed, all references in the Plan to the
"Committee" shall be deemed to refer to the Board.

(b) The Committee shall have the sole authority to (i) determine the
individuals to whom Options shall be granted under the Plan, (ii) determine the
type, size and terms of the Options to be granted to each such individual, (iii)
determine the time when the Options will be granted and the duration of any
applicable exercise period, including the criteria for exercisability and the
acceleration of exercisability and (iv) deal with any other matters arising
under the Plan.

(c) The Committee shall have full power and authority to administer and
interpret the Plan, to make factual determinations and to adopt or amend such
rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its

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business as it deems necessary or advisable, in its sole discretion. The
Committee's interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be conclusive and
binding on all persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its sole discretion,
in the best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

2. Options

Options granted under the Plan may be incentive stock options
("Incentive Stock Options") or nonqualified stock options ("Nonqualified Stock
Options") as described in Section 5. All Options shall be subject to the terms
and conditions set forth herein and to such other terms and conditions
consistent with the Plan as the Committee deems appropriate and as are specified
in writing by the Committee to the individual in a grant instrument (the "Grant
Instrument") or an amendment to the Grant Instrument. The Committee shall
approve the form and provisions of each Grant Instrument.

3. Shares Subject to the Plan

(a) Subject to the adjustment specified below, the aggregate number of
shares of common stock of the Company ("Company Stock") that may be issued under
the Plan is 2,000,000 shares. If the Company Stock becomes publicly traded as a
result of a public offering under the Securities Act of 1933, as amended, the
maximum aggregate number of shares of Company Stock that shall be subject to
Options granted under the Plan to any individual during any calendar year shall
be 500,000 shares. The shares may be authorized but unissued shares of Company
Stock or reacquired shares of Company Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered without having been exercised, the shares subject to
such Options shall again be available for purposes of the Plan.

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(b) If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spin off, recapitalization,
stock split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation in which the Company is the surviving
corporation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company's receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company's payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Options, the maximum number of shares of Company Stock for
which any individual participating in the Plan may receive Options in any year,
the number of shares covered by outstanding Options, the kind of shares issued
under the Plan, and the price per share of such Options shall be appropriately
adjusted by the Committee to reflect any increase or decrease in the number of,
or change in the kind or value of, issued shares of Company Stock to preclude,
to the extent practicable, the enlargement or dilution of rights and benefits
under such Options; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.

4. Eligibility for Participation

(a) All employees of the Company and its subsidiaries ("Employees"),
including Employees who are officers or members of the Board, and members of the
Board who are not Employees ("Non-Employee Directors") shall be eligible to
participate in the Plan. Consultants and advisors who perform services to the
Company or any of its subsidiaries ("Key Advisors") shall be eligible to
participate in the Plan if the Key Advisors render bona fide services and such
services are not in connection with the offer or sale of securities in a
capital-raising transaction. The term "Key Advisors" shall include personnel of
medical practices that have entered into and remain subject to management
agreements with the Company or any subsidiary, and the provision of services to
those practices shall be considered the performance of services with respect to
the Company for purposes of the Plan.

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(b) The Committee shall select the Employees, Non-Employee Directors
and Key Advisors to receive Options and shall determine the number of shares of
Company Stock subject to a particular grant in such manner as the Committee
determines. The Board must approve the grant and terms of any Options granted to
Non-Employee Directors and to any other directors who are members of the
Committee. Employees, Key Advisors and Non-Employee Directors who receive
Options under this Plan shall hereinafter be referred to as "Grantees".

5. Granting of Options

(a) Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each grant of Options to
Employees, Non-Employee Directors and Key Advisors, subject to approval of the
Board with respect to Options granted to Non-Employee Directors or members of
the Committee.

(b) Type of Option and Price.

(i) The Committee may grant Incentive Stock Options that are
intended to qualify as "incentive stock options" within the meaning of section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
Nonqualified Stock Options that are not intended so to qualify, or any
combination of Incentive Stock Options and Nonqualified Stock Options, all in
accordance with the terms and conditions set forth herein. Incentive Stock
Options may be granted only to Employees. Nonqualified Stock Options may be
granted to Employees, Non-Employee Directors and Key Advisors.

(ii) The purchase price (the "Exercise Price") of Company
Stock subject to an Option shall be determined by the Committee and may be equal
to, greater than, or less than the Fair Market Value (as defined below) of a
share of such Stock on the date the Option is granted; provided, however, that
(x) the Exercise Price of an Incentive Stock Option shall be equal to, or
greater than, the Fair Market Value of a share of Company Stock on the date the
Incentive Stock Option is granted and (y) an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the

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Company or any parent or subsidiary of the Company, unless the Exercise Price
per share is not less than 110% of the Fair Market Value of Company Stock on the
date of grant.

(iii) If Company Stock is publicly traded, then the Fair
Market Value per share shall be determined as follows: (x) if the principal
trading market for the Company Stock is a national securities exchange or the
Nasdaq National Market, the last reported sale price thereof on the relevant
date or, if there were no trades on that date, the latest preceding date upon
which a sale was reported, or (y) if the Company Stock is not principally traded
on such exchange or market, the mean between the last reported "bid" and "asked"
prices of Company Stock on the relevant date, as reported on Nasdaq or, if not
so reported, as reported by the National Daily Quotation Bureau, Inc. or as
reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if
publicly traded, not subject to reported transactions or "bid" or "asked"
quotations as set forth above, the Fair Market Value per share shall be as
determined by the Committee.

(c) Option Term. The Committee shall determine the term of each Option,
subject to approval of the Board with respect to Options granted to Non-Employee
Directors or members of the Committee. The term of any Option shall not exceed
ten years from the date of grant. However, an Incentive Stock Option that is
granted to an Employee who, at the time of grant, owns stock possessing more
than 10 percent of the total combined voting power of all classes of stock of
the Company, or any parent or subsidiary of the Company, may not have a term
that exceeds five years from the date of grant.

(d) Exercisability of Options. Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument or an
amendment to the Grant Instrument, subject to approval of the Board with respect
to Options granted to Non-Employee Directors or members of the Committee. The
Committee may accelerate the exercisability of any or all outstanding Options at
any time for any reason.

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(e) Termination of Employment, Disability or Death.

(i) Except as provided below, an Option may only be exercised
while the Grantee is employed by, or providing service to, the Company as an
Employee, Key Advisor or member of the Board. In the event that a Grantee ceases
to be employed by, or provide service to, the Company for any reason other than
"disability", death, or "termination for cause", any Option which is otherwise
exercisable by the Grantee shall terminate unless exercised within 90 days of
the date on which the Grantee ceases to be employed by, or provide service to,
the Company (or within such other period of time as may be specified by the
Committee), but in any event no later than the date of expiration of the Option
term. Unless otherwise specified by the Committee, any of the Grantee's Options
that are not otherwise exercisable as of the date on which the Grantee ceases to
be employed by the Company shall terminate as of such date.

(ii) In the event the Grantee ceases to be employed by, or
provide service to, the Company on account of a "termination for cause" by the
Company, any Option held by the Grantee shall terminate as of the date the
Grantee ceases to be employed by, or provide service to, the Company.

(iii) In the event the Grantee ceases to be employed by, or
provide service to, the Company because the Grantee is "disabled", any Option
which is otherwise exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be employed by, or
provide service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Any of the Grantee's Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Company shall terminate as of such date.

(iv) If the Grantee dies while employed by, or providing
service to, the Company or within 90 days after the date on which the Grantee
ceases to be employed, or provide service, on account of a termination of
employment or service specified in Section 5(e)(i) above (or within such other
period of time as may be specified by the Committee), any Option that is
otherwise exercisable by the Grantee shall terminate unless

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<PAGE>

exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Company (or within such other period of
time as may be specified by the Committee), but in any event no later than the
date of expiration of the Option term. Any of the Grantee's Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Company shall terminate as of such date.

(v) For purposes of this Section 5(e):

(A) The term "Company" shall mean the Company and its
parent and subsidiary corporations. With request to personnel employed
by medical practices that have entered into, and remain subject to,
management agreements with the Company or any subsidiary, the term
"Company" shall include any such medical practice, but only so long as
the practice remains subject to such management agreement.

(B) "Employed by, or providing service to, the Company"
shall mean employment as an Employee or the provision of services to
the Company as a Key Advisor or member of the Board (so that, for
purposes of exercising Options, a Grantee shall not be considered to
have terminated employment or ceased to provide services until the
Grantee ceases to be an Employee, Key Advisor and member of the Board).

(D) "Termination for cause" shall mean a finding by the
Committee that the Grantee has breached his or her employment or
service contract with the Company, or has been engaged in disloyalty to
the Company, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or her
employment or service, or has disclosed trade secrets or confidential
information of the Company to persons not entitled to receive such
information. In the event a Grantee's employment or service is
terminated for cause, in addition to the immediate termination of all
Options, the Grantee shall automatically forfeit all shares underlying

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<PAGE>

any exercised portion of an Option for which the Company has not yet
delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Grantee for such shares.

(f) Exercise of Options. A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company with payment of the Exercise Price. The Grantee shall pay the
Exercise Price for an Option (i) in cash, (ii) by delivering shares of Company
Stock owned by the Grantee (including Company Stock acquired in connection with
the exercise of an Option, subject to such restrictions as the Committee deems
appropriate) and having a Fair Market Value on the date of exercise equal to the
Exercise Price or (iii) by such other method as the Committee may approve,
including payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board. Shares of Company Stock used to
exercise an Option shall have been held by the Grantee for the requisite period
of time to avoid adverse accounting consequences to the Company with respect to
the Option. The Grantee shall pay the Exercise Price and the amount of any
withholding tax due (pursuant to Section 6) at the time of exercise. Shares of
Company Stock shall not be issued upon exercise of an Option until the Exercise
Price is fully paid and any required withholding is made.

(g) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Grantee during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified
Stock Option. An Incentive Stock Option shall not be granted to any person who
is not an Employee of the Company or a parent or subsidiary (within the meaning
of section 424(f) of the Code). If and to the extent that an Option designated
as an Incentive Stock Option fails so to qualify under the Code, the Option
shall remain outstanding according to its terms as a Nonqualified Stock Option.

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<PAGE>

6. Withholding of Taxes

(a) Required Withholding. All Options under the Plan shall be granted
subject to any applicable federal (including FICA), state and local tax
withholding requirements. The Company shall have the right to deduct from wages
paid to the Grantee any federal, state or local taxes required by law to be
withheld with respect to Options, or the Company may require the Grantee or
other person receiving such shares to pay to the Company the amount of any such
taxes that the Company is required to withhold.

(b) Election to Withhold Shares. If the Committee so permits, a Grantee
may elect to satisfy the Company's income tax withholding obligation with
respect to an Option by having shares withheld up to an amount that does not
exceed the Grantee's maximum marginal tax rate for federal (including FICA),
state and local tax liabilities. The election must be in a form and manner
prescribed by the Committee and shall be subject to the prior approval of the
Committee.

7. Transferability of Options

(a) Except as provided below, only the Grantee or his or her authorized
representative may exercise rights under an Option. A Grantee may not transfer
those rights except by will or by the laws of descent and distribution or, with
respect to Nonqualified Options, if permitted in any specific case by the
Committee in its sole discretion, pursuant to a qualified domestic relations
order (as defined under the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder). When a Grantee dies,
the representative or other person entitled to succeed to the rights of the
Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee must
furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.

(b) Notwithstanding the foregoing, the Committee may provide, in a
Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to
family members or other persons or entities according to such terms as the
Committee may determine.

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<PAGE>

8. Change of Control of the Company

As used herein, a "Change of Control" shall be deemed to have occurred
if:

(a) After the effective date of the Plan, any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more of the voting
power of the then outstanding securities of the Company, except where the
acquisition is approved by the Board;

(b) The shareholders of the Company approve (or, if shareholder
approval is not required, the Board approves) an agreement providing for (i) the
merger or consolidation of the Company with another corporation where the
shareholders of the Company, immediately prior to the merger or consolidation,
will not beneficially own, immediately after the merger or consolidation, shares
entitling such shareholders to a majority of all votes to which all shareholders
of the surviving corporation would be entitled in the election of directors, or
where the members of the Board, immediately prior to the merger or
consolidation, would not, immediately after the merger or consolidation,
constitute a majority of the board of directors of the surviving corporation,
(ii) a sale or other disposition of all or substantially all of the assets of
the Company, or (iii) a liquidation or dissolution of the Company;

(c) Any person has commenced a tender offer or exchange offer for 35%
or more of the voting power of the then outstanding shares of the Company; or

(d) After this Plan is approved by the shareholders of the Company,
directors are elected such that a majority of the members of the Board shall
have been members of the Board for less than two years, unless the election or
nomination for election of each new director who was not a director at the
beginning of such two-year period was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of
such period.

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<PAGE>

9. Consequences of a Change of Control

(a) Upon a Change of Control, unless the Committee determines
otherwise, (i) the Company shall provide each Grantee with outstanding Options
written notice of such Change of Control and (ii) all outstanding Options shall
automatically accelerate and become fully exercisable.

(b) In addition, upon a Change of Control described in Section 8(b)(i)
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options that are not exercised shall be assumed by, or replaced
with comparable options by, the surviving corporation. Any replacement options
shall entitle the Grantee to receive the same amount and type of securities as
the Grantee would have received as a result of the Change of Control had the
Grantee exercised the Options immediately prior to the Change of Control.

(c) Notwithstanding the foregoing, subject to subsection (d) below, in
the event of a Change of Control, the Committee may require that Grantees
surrender their outstanding Options in exchange for a payment by the Company, in
cash or Company Stock as determined by the Committee, in an amount equal to the
amount by which the then Fair Market Value of the shares of Company Stock
subject to the Grantee's outstanding Options exceeds the Exercise Price of the
Options.

(d) Notwithstanding the foregoing, the Committee making the
determinations under this Section 9 following a Change of Control must be
comprised of the same members as those on the Committee immediately before the
Change of Control. If the Committee members do not meet this requirement, the
automatic provisions of Subsections (a) and (b) shall apply, and the Committee
shall not have discretion to vary them.

(e) Notwithstanding anything in the Plan to the contrary, in the event
of a Change of Control, the Committee shall not have the right to take any
actions described in the Plan (including without limitation actions described in
Subsection (c) above) that would make the Change of Control ineligible for
pooling of interest accounting treatment or that would make the Change of

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<PAGE>

Control ineligible for desired tax treatment if, in the absence of such right,
the Change of Control would qualify for such treatment and the Company intends
to use such treatment with respect to the Change of Control.

10. Amendment and Termination of the Plan

(a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that if the Company Stock becomes publicly traded, the Board
shall not amend the Plan without shareholder approval if such approval is
required by Section 162(m) of the Code and if Section 162(m) is applicable to
the Plan.

(b) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date unless
terminated earlier by the Board or unless extended by the Board with the
approval of the shareholders.

(c) Termination and Amendment of Outstanding Options. A termination or
amendment of the Plan that occurs after an Option is granted shall not
materially impair the rights of a Grantee unless the Grantee consents or unless
the Committee acts under Section 17(b). The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Option. Whether or not the Plan has terminated, an outstanding Option may be
terminated or modified under Sections 9 and 17(b) or may be amended by agreement
of the Company and the Grantee consistent with the Plan.

(d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

11. Funding of the Plan

This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Options under this Plan. In no event shall
interest be paid or accrued on any Options.

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<PAGE>

12. Rights of Participants

Nothing in this Plan shall entitle any Employee, Key Advisor or other
person to any claim or right to be granted an Option under this Plan. Neither
this Plan nor any action taken hereunder shall be construed as giving any
individual any rights to be retained by or in the employ of the Company or any
other employment rights.

13. No Fractional Shares

No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Option. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.

14. Requirements for Issuance of Shares

No Company Stock shall be issued or transferred in connection with any
Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Option granted to any Grantee hereunder on such Grantee's undertaking in
writing to comply with such restrictions on his or her subsequent disposition of
such shares of Company Stock as the Committee shall deem necessary or advisable
as a result of any applicable law, regulation or official interpretation thereof
and certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued under the
Plan will be subject to such stop-transfer orders and other restrictions as may
be applicable under such laws, regulations and interpretations, including any
requirement that a legend or legends be placed thereon.

15. Headings

Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.

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<PAGE>

16. Effective Date of the Plan.

Subject to the approval of the Company's shareholders, this Plan shall
be effective on October ___, 1996.

17. Miscellaneous

(a) Options in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to grant Options under this Plan in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the business or
assets of any corporation, firm or association, including options granted to
employees thereof who become Employees of the Company, or for other proper
corporate purpose, or (ii) limit the right of the Company to grant stock options
or make other awards outside of this Plan. Without limiting the foregoing, the
Committee may grant Options to an employee of another corporation who becomes an
Employee by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company or any of its
subsidiaries in substitution for a stock option or restricted stock grant made
by such corporation. The Committee shall prescribe the provisions of the
substitute Options.

(b) Compliance with Law. The Plan, the grant and exercise of Options,
and the obligations of the Company to issue or transfer shares of Company Stock
under Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. The Committee may revoke
any Grant if it is contrary to law or modify a Grant to bring it into compliance
with any valid and mandatory government regulation. The Committee may also adopt
rules regarding the withholding of taxes on payments to Grantees. The Committee
may, in its sole discretion, agree to limit its authority under this Section.

(c) Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a shareholder with respect to any shares of Company Stock covered by
an Option until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.

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<PAGE>

(d) Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall exclusively
be governed by and determined in accordance with the law of the State of
Delaware.

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SPECIALTY CARE NETWORK, INC.
1996 INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

1. PURPOSE OF PLAN AND EFFECTIVE DATE.

1.1 Purpose. The purpose of this 1996 Incentive and Non-Qualified Stock
Option Plan (hereinafter called the "Plan") is to further the success and
advance the interests of Specialty Care Network, Inc. (the "Company") by making
available Common Stock of the Company for purchase by eligible directors,
officers, advisors, consultants and key employees of the Company and thus to
provide an additional incentive to such personnel to continue to serve the
Company and to give them a greater interest as stockholders in the success of
the Company.

1.2 Awards. The Company intends this Plan to enable the Company to issue,
pursuant hereto, Incentive Stock Options as such term is defined in Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the "Code").
The Company also intends this Plan to enable it to issue similar options which
will not, however, be qualified as Incentive Stock Options (also known as
"Non-Statutory" or "Non-Qualified" stock options).

1.3 Effectiveness. The Plan shall become effective on the date of approval
by the Board of Directors of the Company, which date is January 2, 1996;
provided, however, that the Plan shall be subject to approval and ratification
by stockholders of the Company holding a majority of its voting stock, voting in
person or by proxy, at a meeting of stockholders to be held within twelve months
after January 2, 1996.

2. DEFINITIONS.

2.1 As used in this Plan, the following terms have the following
respective meanings:

"1933 Act" means the Securities Act of 1933, as amended from time to
time. References to any provision of the 1933 Act shall be deemed to
include successor provisions thereto and rules and regulations thereunder.

"Board" means the Board of Directors of the Company.

"Change in Control" means any transaction pursuant to which the
Company (a) closes a registered, underwritten public offering of the
issued and outstanding Common Stock constituting at least twenty-five
percent (25%) of the issued and outstanding Common Stock after accounting
for the publicly offered shares, (b) consummates the sale of substantially
all of the assets of the Company or an amount of stock constituting at
least twenty-five percent (25%) of the issued and outstanding Common Stock
<PAGE>

immediately after such transaction to an unrelated person or entity for
cash and/or Common Stock, or (c) merges with and into another corporation
or entity in a transaction where unrelated persons own at least
twenty-five percent (25%) of the issued and outstanding securities of the
surviving entity after such merger.

"Code" means the Internal Revenue Code of 1986, as amended.
References to any provisions of the Code shall be deemed to include
successor provisions.

"Committee" shall mean a group of two (2) disinterested directors
appointed by the Board to administer the Plan.

"Common Stock" means the common stock, $.001 par value of the
Company.

"Company" means Specialty Care Network, Inc.

"Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code.

"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and rules and
regulations thereunder.

"Fair Market Value" unless otherwise required by an applicable
provision of the Code, as of any date, means the mean between the high and
low sales price of the Common Stock on any exchange upon which the Common
Stock is traded or on the National Market of the Nasdaq Stock Market on
the date the Option is granted or, if there are no sales on said date,
then on the next prior business day on which there was a sale. If no such
sales price is available, then the price per share shall be determined by
the Committee or the Board, as applicable.

"Grant" means the action of the Committee or the Board, as
applicable, at the time of grant of an option.

"Imminent Change in Control" means any offer or announcement, oral
or written, by any person or persons acting as a group, to acquire control
of the Company. The decision of the Committee or the Board, as applicable,
whether an Imminent Change in Control have occurred shall be conclusive
and binding.

"Incentive Stock Option" means any Incentive Stock Option granted
pursuant to this Plan which is intended to be, and designated and
qualifying as, an "incentive stock option" within the meaning of Section
422 of the Code.

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<PAGE>

"Modification" means any change in the terms of an Option which
would constitute a "modification" as defined in Section 424(h)(3) of the
Code, including, without limitation, such a modification to an Option as
effected by a change in the Plan and any other change in the Plan which
would increase the number of shares reserved for Options under the Plan,
materially change the administration of the Plan or that would otherwise

materially increase the benefits accruing to, or available for,
participants in the Plan; provided, however, that registration of Option
Stock under the 1933 Act, as amended, shall not be deemed a Modification.

"Non-Statutory Stock Option" and "Non-Qualified Stock Option" means
any option granted under this Plan other than an Incentive Stock Option.

"Option Agreement" means a written agreement setting forth the terms
of an Option.

"Option" or "Stock Option" means a right granted pursuant to the
Plan to purchase shares of Common Stock, and includes the terms Incentive
Stock Option and Non-Qualified Stock Option.

"Option Price" or "Exercise Price" means the price per share at
which Common Stock may be purchased upon the exercise of an Option.

"Option Stock" means Common Stock subject to an option granted under
this Plan.

"Participant" means any individual to whom an Option has been
granted by the Committee or the Board, as applicable, under the Plan.

"Subsidiary" or "Subsidiaries" means any corporation which is a
"subsidiary corporation" as defined in Section 424(f) of the Code, and the
regulations thereto.

"Retirement" means retirement from active employment under a
retirement plan of the Company or any Subsidiary, or pursuant to an
employment agreement with the Company or any Subsidiary, or termination of
employment at or after age 65 under circumstances which the Committee or
the Board, as applicable, in its sole discretion, deems equivalent to
retirement.

"Termination for Cause" shall have the same meaning as in any
employment agreement between any Participant and the Company or any
Subsidiary, or, in the absence of such employment agreement, shall mean
the termination of employment of a Participant due to (i) any illegal or
dishonest conduct which adversely affects or may adversely affect the
reputation, good will, or business position of the Company or any

3
<PAGE>

Subsidiary or which involves Company or any Subsidiary's funds or assets;
(ii) any intentional or material damage to property or business of the
Company or any Subsidiary; (iii) theft, embezzlement or misappropriation
of the Company's or any Subsidiary's property; or (iv) the willful failure
of the Participant to carry out his or her duties as an employee of the
Company or any Subsidiary.

"10% Stockholder" means a person who owns stock possessing more than
10% of the total combined voting power of all classes of stock of Company

or of any parent or Subsidiary of the Company after giving effect to the
attribution of stock ownership provisions of Section 424(d) of the Code.

2.2 References in these definitions to provisions of the Code shall, when
appropriate to effectuate the purpose of this Plan, be deemed to be references
to such provisions of the Code and regulations promulgated thereunder as the
same may be from time to time amended or to successor provisions to such
provisions. Terms defined elsewhere in this Plan shall have the meanings set
forth in such respective definitions.

3. STOCK SUBJECT TO PLAN.

3.1 Number of Shares. Subject to the provisions of Paragraph 12 hereof,
there shall be reserved for issuance or transfer upon the exercise of the
Options to be granted from time to time under the Plan an aggregate of 5,000,000
shares of Common Stock.

3.2 Excess Shares. Shares of stock which are attributable to Options which
expire or are otherwise terminated, cancelled, surrendered or forfeited, during
a calendar year, are available for issuance or use in connection with future
Options, during the calendar year in which they expire or otherwise become
available.

3.3 Source of Stock. Shares of Common Stock to be issued under the Plan
may be authorized and unissued shares of Common Stock, treasury stock or a
combination thereof.

3.4 Adjustment. In the event of a merger, consolidation, reorganization,
recapitalization, stock split, stock dividend, other extraordinary dividend or
other change in corporate structure or capitalization affecting the Common
Stock, the Committee or the Board, as applicable, may, in its discretion, make
appropriate adjustment in the number or kind of shares subject to Options
granted under the Plan, and/or the exercise price and other terms and conditions
of Options or appropriate adjustment in the maximum number of shares referred to
in Paragraph 3.1 of the Plan, as provided in Paragraph 12 hereof.

4
<PAGE>

4. ADMINISTRATION OF PLAN.

4.1 Administration by Board or Committee. Until such time as the Company
is registered with and required to file periodic reports with the Securities and
Exchange Commission pursuant to the Exchange Act, the Plan shall be administered
by the Board. Thereafter, the Plan shall be administered by a Committee (the
"Committee") of two disinterested persons (as defined by Rule 16b-3 promulgated
under the 1934 Act), each of whom shall be members of the Board, and appointed
by the Board, as constituted from time to time. During the one year prior to
commencement of service on the Committee, the Committee members will not have
participated in, and while serving and for one year after serving on the
Committee, such members shall not be eligible for selection as persons to whom
Option Stock may be allocated or to whom Options may be granted under the Plan
or any other discretionary plan of the Company under which participants are

entitled to acquire stock, stock options or stock appreciation rights of the
Company. Members of the Committee shall serve until they resign or they are
removed by the vote of a majority of the Board.

4.2 Authority of Administrator. The Committee or the Board, as applicable,
shall have the authority to (a) establish such rules and regulations as it deems
necessary for the proper operation and administration of the Plan; (b) select
the persons to receive Options under the Plan; (c) determine the form of an
Option and whether such Option is to operate on a tandem basis and/or in
conjunction with or apart from other awards made by the Company, either within
or outside of this Plan; (d) determine the number of shares of Common Stock to
be covered by each such Option granted hereunder; (e) determine the terms and
conditions, not inconsistent with the terms of this Plan, of any Option granted
hereunder (including, but not limited to, any restriction or limitation on
transfer, any vesting schedule or acceleration thereof, and any forfeiture
provisions or waiver thereof), regarding any Option and the shares of Common
Stock relating thereto, based on such factors as the Committee or the Board, as
applicable, shall determine, in its sole and absolute discretion; and (f) make
any other determination or take any action that the Committee or the Board, as
applicable, deems necessary or desirable for the administration of the Plan.

4.3 Decisions of Administrator Final. All decisions, determinations and
interpretations of the Committee or the Board, as applicable, shall be final and
conclusive on all persons affected thereby.

5. ELIGIBILITY.

Incentive Stock Options under this Plan may be granted only to officers
(who are employees) and to other key employees of the Company. A director of the
Company may receive an Incentive Stock Option under this Plan if such person is
otherwise an employee of the Company. An employee, director or officer of the
Company, may receive a Non-Qualified Stock Option. In addition, employees,
consultants, non-employee directors, and advisors who

5
<PAGE>

the Committee or the Board, as applicable, determines are providing bona fide
services to the Company, whether or not otherwise compensated, may receive a
Non-Qualified Stock Option at the discretion of the Committee or the Board, as
applicable. In determining the persons to whom Options shall be granted and the
number of shares to be covered by each Option, the Committee or the Board, as
applicable, may take into account the nature of the services rendered by, and
the responsibilities borne by, such respective persons, their present and
potential contributions to the Company's success and such other factors as the
Committee or the Board, as applicable, in its discretion shall deem relevant.
Subject to the provisions of Paragraph 7 hereof, Options may be granted to
persons who hold or have held options under previous plans, and a person who has
been granted an Option under the Plan may be granted an additional Option or
Options under the Plan or under any future option plan if the Committee or the
Board, as applicable, shall so determine.

6. AWARDS UNDER THE PLAN.

6.1 Term of Plan. The Committee or the Board, as applicable, may grant
Incentive Stock Options, Non-Qualified Stock Options or both to purchase shares
of Common Stock from the Company to such officers and key employees, in such
amounts and subject to such terms and conditions, as the Committee or the Board,
as applicable, shall determine in its sole discretion, subject to the provisions
of the Plan, provided, however, that in no event may any Stock Option be granted
hereunder after the expiration of 10 years after the date of the Plan. The
automatic or discretionary grant of "reload" Stock Options is specifically
authorized.

6.2 Code Compliance. In the case of Incentive Stock Options, the terms and
conditions of such grants, including the exercise price of the purchase of
Common Stock, shall be subject to and comply with the requirements of Section
422 of the Code, as from time to time amended, and any implementing regulations.

6.3 Exercise Price. The exercise price at which shares of Common Stock may
be purchased pursuant to the grant of an Option shall be fixed by the Committee
or the Board, as applicable, at the time of grant; however, the price of an
Incentive Stock Option must be equal to or greater than the Fair Market Value of
the shares of Common Stock covered thereby. The exercise price of an Incentive
Stock Option granted to any Participant who owns shares of Common Stock
possessing more than 10% of the total combined voting power of all outstanding
shares of Common Stock of the Company must be at least equal to 110% of the fair
market value of the shares of Common Stock on the date of grant. Options granted
under the Plan will not be Incentive Stock Options to the extent that the Fair
Market Value of the shares of Common Stock with respect to which such Options
first become exercisable in any year exceeds $100,000.

6.4 Vesting. Except as set forth in the next sentence, awards of Options
will vest and become non-forfeitable as determined by the Committee or the
Board, as applicable, and set

6
<PAGE>

forth in an option or grant agreement between the Company and the Participant.
Subject to the provisions of Section 422 of the Code, Options shall become
exercisable in accordance with their terms in the event of Death, Disability or
Retirement of a Participant or upon a Change in Control or Imminent Change in
Control.

7. CERTAIN LIMITATIONS ON GRANTING AND EXERCISE OF OPTIONS.

Any other provisions of this Plan to the contrary notwithstanding, the
granting and exercise of Options hereunder shall be subject to the following
limitations (which shall be in addition to the limitations, provisions and
conditions contained elsewhere in this Plan):

(a) The aggregate Fair Market Value (determined at the time the
option is granted) of the Option Stock for which Incentive Stock Options
are exercisable for the first time by any employee during any calendar

year (under all such Plans of the Company and its subsidiaries) shall not
exceed $100,000. Any options granted in excess of this $100,000 threshold
shall be specifically designated Non-Qualified Options.

(b) Options may be granted as soon as practicable after the date of
the adoption of the Plan by the Board and instruments evidencing such
grant(s) may similarly be so issued, but in each case, such Options and
such instruments shall be subject to the approval and ratification of the
Plan by the stockholders of the Company as provided in Paragraph 1, and
notwithstanding anything in the Plan that may be deemed to be to the
contrary, no Option may be exercised unless and until such approval and
ratification is obtained. In the event such approval and ratification
shall not be obtained, the Plan and all Options that may have been granted
pursuant thereto shall be null and void.

8. DURATION OF OPTIONS.

The term of Options granted under the Plan shall be as fixed by the
Committee or the Board, as applicable, at the time of grant; provided, however,
that the term of an Option shall not exceed 10 years from the date of grant. In
the case of 10% Stockholders, the term of an Incentive Stock Option shall not
exceed five (5) years from the date of grant. The terms of options may, however,
be shortened as provided in Paragraph 11 hereof. No Option may be exercised
after expiration of such Option's term.

9. EXERCISE OF OPTIONS.

An Option granted under the Plan shall be exercisable at such time or
times, whether or not in installments, as the Committee or the Board, as
applicable, shall prescribe at the time the Option is granted. An Option which
has become exercisable may be exercised in accordance with its terms as to any
or all full shares purchasable under the provisions of the

7
<PAGE>

Option, but not at any time as to less than 100 shares unless the remaining
shares which have become so purchasable are less than 100 shares. The purchase
price of the shares shall be paid in full, as provided in Paragraph 13 hereof,
upon the exercise of the Option, and the Company shall not be required to
deliver certificates for such shares until such payment has been made. Except as
provided in Paragraph 11, an Incentive Stock Option may not be exercised at any
time unless the holder thereof is then an employee of the Company or any
Subsidiary and shall have been continuously employed by the Company or any
Subsidiary since the date of grant.

10. NONTRANSFERABILITY OF OPTIONS.

Options shall not be assignable or transferable by a Participant except by
will or the laws of descent and distribution and during the Participant's
lifetime, such Options and rights shall be exercisable only by such Participant
or such Participant's duly appointed guardian or legal representative.

11. TERMINATION OF EMPLOYMENT.

11.1 Termination for Cause or Voluntary Termination. In the event of the
Termination for Cause or the voluntary termination of employment of any
Participant to whom an Incentive Stock Option has been granted under the Plan,
such Incentive Stock Options held by him under the Plan, to the extent vested
and not theretofore exercised, shall be null and void. Incentive Stock Options
granted under the Plan shall not be affected by any change of employment so long
as the holder continues in the employ of the Company or any Subsidiaries.
Nothing in the Plan or in any Option granted pursuant to the Plan shall confer
on any individual any right to continue in the employ of the Company or any
Subsidiaries or interfere in any way with the right of the Company or any
Subsidiaries to terminate his or her employment or occupancy of any corporate
office at any time.

11.2 Death of Participant. In the event of the death of a Participant, any
Incentive Stock Options granted to such Participant may be exercised by the
person or persons to whom the Participant's rights under any such Incentive
Stock Options pass by will or by the laws of descent and distribution (including
the Participant's estate during the period of administration) at any time prior
to the earlier of (i) the respective expiration dates of any such Incentive
Stock Options or (ii) the date which is one (1) year after the date of death of
such Participant.

11.3 Disability of Participant. In the event that any Participant's
employment with the Company shall terminate as a result of the Disability of
such Participant, such Participant may exercise any Inventive Stock Options
granted to him pursuant to the Plan at any time prior to the earlier of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is one (1) year after the date of such termination of employment.

8
<PAGE>

11.4 Termination without Cause. In the event of termination without cause
of a person to whom an Incentive Stock Option has been granted under the Plan,
any Incentive Stock Options held by him under the Plan, shall immediately vest
and shall be exercisable for a period of three (3) months following the date of
termination.

11.5 Non-Qualified Options. The terms and conditions of Non-Qualified
Stock Options relating to the effect of the termination of a Participant's
employment, or association with the Company, Disability of a Participant or his
death shall be such terms and conditions as the Committee or the Board, as
applicable, shall, in its sole and absolute discretion, determine at the time of
termination, unless specifically provided for by the terms of the Option
Agreement at the time of grant of the Option.

12. RECAPITALIZATION, MERGER, CONSOLIDATION, CHANGE IN CONTROL
AND SIMILAR TRANSACTIONS.

12.1 Adjustment. Subject to any required action by the stockholders and
Board of the Company, within the sole and absolute discretion of the Committee

or the Board, as applicable, the aggregate number of shares of Common Stock for
which Options may be granted hereunder, the number of shares of Common Stock
covered by each outstanding Option and the exercise price per share of Common
Stock of each such Option, shall all be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or consolidation of shares (whether by reason
of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares, or otherwise) or the payment of a stock dividend (but
only on the Common Stock) or any other increase or decrease in the number of
such shares of Common Stock affected without the receipt of consideration by the
Company (other than shares held by dissenting stockholders).

12.2 Change in Control. All outstanding Options shall automatically vest
and become immediately exercisable in the event of a Change in Control or
Imminent Change in Control of the Company.

12.3 Extraordinary Corporate Action. Subject to any required action by the
stockholders of the Company, in the event of any Change in Control,
recapitalization, merger, consolidation, exchange of shares, spin-off,
reorganization, tender offer, liquidation or other extraordinary corporate
action or event, the Committee or the Board, as applicable, in its sole and
absolute discretion, shall have the power, prior or subsequent to such action
to:

(i) appropriately adjust the number of shares of Common Stock
subject to each Option, the exercise price of per share of Common Stock
and the consideration to be given or received by the Company upon the
exercise of any outstanding Options;

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<PAGE>

(ii) cancel any or all previously granted Options, provided that
appropriate consideration (as described in Paragraph 12.2) is paid to the
Participants in connection therewith; and/or

(iii) make such other adjustments in connection with the Plan as the
Committee or the Board, as applicable, in its sole and absolute
discretion, deems necessary, desirable, appropriate or advisable;
provided, however, that no action shall be taken by the Committee or the
Board, as applicable, which would cause Incentive Stock Options granted
pursuant to this plan and to fail to meet the requirements of Section 422
of the Code.

Except as expressly provided in Paragraphs 12.1, 12.2 and 12.3 hereof, no
Participant shall have any rights by reason of the occurrence of any of the
events described in this Paragraph 12. In the event that the Company becomes a
wholly owned subsidiary of another corporation, the definitive agreement
regarding such transaction shall contain a provision which requires the new
parent company to adopt a plan substantially similar hereto and grant options
substantially similar hereto to each Participant herein as a condition precedent
to the consummation of the transaction.

12.4 Accelerated Vesting. The Committee or the Board, as applicable, shall
at all times have the power to accelerate the exercise date of Options
previously granted under the Plan.

13. PAYMENT OF PURCHASE PRICE, FEDERAL INCOME TAX OR OTHER
WITHHOLDING AMOUNT.

The shares to be purchased upon exercise of any Option shall be paid for
in full, in cash or as hereinafter provided at the time of such exercise. In
addition, in its sole discretion the Committee or the Board, as applicable, may
determine that it is an appropriate method of payment for grantees to pay for
any shares subject to an option by delivering a properly executed exercise
notice together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the amount of sale or loan proceeds to pay the purchase
price. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms. The value of Company
common stock surrendered in payment of the exercise price shall be its fair
market value, determined pursuant to Section 2.1, on the date of exercise. Upon
receipt of such notice of exercise of a stock option and upon payment of the
option price, the Company shall promptly deliver to the grantee a certificate or
certificates for the shares purchased, without charge to him or her for issue or
transfer tax. The Committee or the Board, as applicable, in its sole discretion
may from time to time permit the method of exercising options known as
pyramiding (that is, the automatic application of shares received upon the
exercise of a portion of a stock option to satisfy the exercise price for
additional portions of the option). With respect to Non-Qualified Stock Options
or any

10
<PAGE>

Incentive Stock Options which fail to qualify as such for any reason, any
required federal income tax or other withholding amount shall be paid (in full)
by the Participant to the Company in cash or by certified check at the time of
such exercise. The Company shall not be required to deliver certificates for
such shares until all such payments have been made, and until the Company has
had an opportunity (at its sole option) to obtain verification from the
Participant that all federal income tax or other withholding amounts have been
properly calculated and paid.

14. TERMINATION AND AMENDMENT.

14.1 Termination Date. Unless the Plan shall theretofore have been
terminated as hereinafter provided, it shall terminate on, and no Options shall
be granted hereunder after December 31, 2005. The Plan may be terminated earlier
by the stockholders of the Company or by the Board.

14.2 Amendment. Modifications or other amendments to the Plan may be made
by the stockholders of the Company. The Plan may also be amended by the Board;
provided, however, that no amendment which shall constitute a Modification shall
be effective unless approved by the stockholders of the Company within 12 months
before or after the adoption of the Modification.

14.3 Participant Consent. No termination, Modification, or amendment of
the Plan, may, without the consent of the Participant to whom any Option shall
theretofore have been granted, adversely affect the rights of such Participant
under such Option; nor shall any such Modification or amendment be deemed to
effect a Modification, extension or renewal of any such Option previously
granted except pursuant to an express written agreement to such effect, executed
by the Company and the Participant.

15. TIME OF GRANTING OPTIONS.

Nothing contained in the Plan shall constitute the granting of any Option
hereunder. The granting of an Option pursuant to the Plan shall take place only
upon approval by the Committee or the Board, as applicable, of a resolution
granting an Option under this Plan. Notice of the determination shall be given
to each person to whom an Option is so granted within a reasonable time after
the date of such grant. After the granting of an Option under this Plan, a
written Option Agreement shall be duly executed by or on behalf of the Company.

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<PAGE>

16. FORM AND TERMS OF OPTION AGREEMENT.

Option Agreements evidencing Options granted pursuant to the Plan shall be
in such form and shall contain such terms not inconsistent with the Plan as the
Committee or the Board, as applicable, may approve. Option agreements may
contain such restrictions upon the exercise of Options and upon the transfer of
Common Stock acquired upon exercise of Options (and such provisions for the
enforcement of compliance with the Securities Act of 1933, as amended, and/or
with state "Blue Sky" laws).

17. PARTIAL INVALIDITY.

The invalidity or unenforceability of any particular provision of this
Plan shall not effect the other provisions of this Plan nor affect the validity
or enforceability of the other provisions of Options granted under this Plan,
and this Plan and the Options granted hereunder shall be construed in all
respects as if such invalid or unenforceable provision were omitted.

18. SPECIAL PROVISIONS WITH RESPECT TO INCENTIVE STOCK OPTIONS
UNDER THIS PLAN AND NON-QUALIFIED STOCK OPTIONS.

Paragraph 5 describes the persons eligible to receive Options granted
under this Plan. The Committee or the Board, as applicable, in granting any
Option shall indicate whether it intends the Option to be an Incentive Stock
Option under this Plan or a Non-Qualified Stock Option and shall cause the
Option Agreement with respect thereto to indicate such intention. Should a
person hold both one or more Incentive Stock Options under this Plan and one or
more Non-Qualified Stock Options, all of such Options shall be exercisable in
accordance with their respective terms and limitations, and nothing in this Plan
shall be construed as causing the exercise of any such Option to preclude the
exercise of any such other Option in accordance with its terms.

19. NO OWNERSHIP OR SUBSCRIPTION RIGHTS.

Shares of Common Stock of the Company which are subject to an Option but
which have not yet been purchased or paid for shall have no subscription rights
and no Option holder shall be deemed to be a stockholder of the Corporation for
any purpose.

20. UNFUNDED PLAN.

The Plan is intended to constitute an "unfunded" plan. Unless otherwise
determined by the Board, the Plan shall be unfunded and shall not create (or be
construed to create) a trust or a separate fund or funds.

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<PAGE>

21. GOVERNING LAW.

The validity, construction, and effect of the Plan, any rules and
regulations relating to the Plan and any Option Agreement shall be determined in
accordance with the laws of the State of Colorado and applicable federal law.

Plan Adopted by the Board of Directors on January 2, 1996 to be ratified by the
stockholders no later than December 31, 1996.

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of ________________, 1996, by and between
SPECIALTY CARE NETWORK, INC., a Delaware corporation (the "Company"), and KERRY
R. HICKS (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Company desires to employ the Executive to devote full time
to the business of the Company (including, without limitation, executive
management of the Company) and to serve as the President and Chief Executive
Officer of the Company; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

During the Term of this Employment Agreement, the Executive agrees to
serve as President and Chief Executive Officer of the Company, performing such
duties during the Term of this Agreement for such compensation and subject to
such terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of April 1, 1996, and shall
continue through March 31, 2001. On the fifth and each successive anniversary of
the effective date of this Employment Agreement as set forth in the first
paragraph hereof, the Term of this Employment Agreement shall be extended for an
additional one (1) year period, unless either party gives the other party ninety
(90) days prior written notice of such party's intent not to extend the Term of
this Employment Agreement. Termination of the Executive's employment pursuant to
this Employment Agreement shall be governed by Section 5 of this Employment
Agreement.

<PAGE>

2.2 Duties. The Executive shall devote substantially all of his time and
attention and best efforts during normal business hours to the Company's
affairs. Specifically, the Executive shall have complete senior management
authority and responsibility, commensurate with and customary for the person
holding the office and position to which the Executive has contracted in this
Agreement, with respect to the day to day operations and long term management of
the Company, as well as implementation of the long range growth strategy of the
Company, consistent with directions from the Board of Directors. He shall have

full authority and responsibility, subject to the general direction, approval
and control of the Board of Directors, for formulating policies and
administering the Company in all respects. He shall have the authority to hire
and fire Company personnel, to retain consultants when he deems necessary to
implement the Company policies, to execute contracts on behalf of the Company in
the ordinary course of business and to effect the growth strategy of the Company
at the direction of the Board of Directors.

2.3 Location. The duties of Executive shall be performed at such locations
and places as may be directed by the Board.

SECTION 3
COMPENSATION AND BENEFITS

3.1 Base Compensation. The Company shall pay the Executive an annual base
salary ("Base Salary") of $187,500 for the first year of this Agreement,
$215,000 for the second year of this Agreement and $250,000 for the third year
of this Agreement. The Base Salary for the fourth and fifth years of this
Agreement shall be increased, but not decreased, to take into account increases
in the cost of living from the third to fourth year of this Agreement and the
fourth to fifth year of this Agreement. For purposes of determining such cost of
living increases, the Company shall use the "All Urban Consumers - New Series"
index for the respective years ended December 31, 1997, 1998 and 1999,
respectively, and shall use $250,000 as the base level of compensation which
shall be indexed. Base Salary shall be payable according to the customary
payroll practices of the Company, subject to normal withholding, but in no event
less frequently than once each month.

3.2 Annual Incentive Awards. The Company will pay the Executive annual
incentive compensation of up to 100% of his Base Salary based on performance
targets established annually by the Board of Directors (the "Annual Incentive
Compensation").

3.3 Additional Benefits. The Executive will be entitled to participate in
all compensation or employee benefit plans or programs and receive all benefits
and perquisites to which any salaried employees are eligible under any existing
or future plan or program established by the Company for salaried employees. The
Executive will participate to the extent permissible under the terms and
provisions of such plans or programs in accordance with program provisions.
These may include group hospitalization, health, dental care, life or

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<PAGE>

other insurance, tax qualified pension, car allowance, savings, thrift and
profit sharing plans, termination pay programs, sick leave plans, travel or
accident insurance, disability insurance, and contingent compensation plans
including capital accumulation programs, restricted stock programs, stock
purchase programs and stock option plans. Nothing in this Agreement will
preclude the Company from amending or terminating any of the plans or programs
applicable to salaried or senior executives as long as such amendment or
termination is applicable to all salaried employees or senior executives. The

Executive will be entitled to an annual paid vacation as established by the
Board.

3.4 Business Expenses. The Company will reimburse the Executive for all
reasonable travel and other expenses incurred by the Executive in connection
with the performance of his duties and obligations under this Agreement.

3.5 Withholding. The Company may directly or indirectly withhold from any
payments under this Agreement all federal, state, city or other taxes that shall
be required pursuant to any law or governmental regulation.

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

4.1 Payment in Event of Death. In the event of the death of the Executive
during the Term of this Employment Agreement, the Company's obligation to make
payments under this Agreement shall cease as of the date of death, except for
earned but unpaid Base Salary and incentive compensation which will be paid on a
pro-rated basis for that year. The Executive's designated beneficiary will be
entitled to receive the proceeds of any life or other insurance or other death
benefit programs provided in this Agreement, other than "key man" life insurance
benefits.

4.2 Disability Compensation. In the event of disability of the Executive
during the Term of this Employment Agreement, the Company will continue to pay
the Executive according to the Compensation provisions of this Agreement during
the period of his disability. In the event the disability continues for a period
of three (3) months, the Company may terminate the employment of the Executive.
Following such termination, the Company will continue to pay Executive's Base
Salary for a period of six (6) months. In such case, all other compensation will
cease except for earned but unpaid incentive compensation awards which would be
payable on a pro-rated basis for the year in which the disability occurred,
through the date of termination.

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<PAGE>

and from time to time will make himself available to the Company to undertake
assignments consistent with his prior position with the Company and his physical
and mental health. If the Company fails to make a payment or provide a benefit
required as part of the Agreement, the Executive's obligation to provide
information and assistance will end.

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

4.5 Key-Man Life Insurance. Upon request by the Company, the Executive

agrees to cooperate with the Company in obtaining "key man" life insurance on
the life of the Executive, with death benefits payable to the Company. Such
cooperation shall include the submission by Executive to a medical examination
and medical history.

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

(a) Without a Change in Control. If the Executive suffers a
Termination Without Cause (hereinafter defined) or Constructive Termination
(hereinafter defined) and there has not been a Change in Control (hereinafter
defined) the Company will continue to pay the Executive his Base Salary as in
effect at the time of the Termination Without Cause or Constructive Termination
for the remaining term of this Employment Agreement after such termination.
Earned but unpaid Base Salary and incentive compensation through the date of
termination will be paid in a lump sum at such time. For six (6) months
following such Termination Without Cause or Constructive Termination, the
Company shall reimburse Executive for the cost of the Executive's major medical
health insurance premiums as in effect at the date of termination. The
exercisability of stock options granted to Executive shall be governed by any
applicable stock option agreements and the terms of the respective stock option
plans.

(b) Upon a Change in Control. If Executive suffers a Termination
Without Cause or Constructive Termination upon a Change in Control, the Company
will pay to the Executive in a lump sum upon such termination an amount equal to
300% of Executive's Base Salary as in effect at the time of the termination plus
300% of Executive's prior year Annual Incentive Compensation (the "Change in
Control Severance Amount"), less the aggregate amount of all other payments or
value received by the Executive on account of the Change in Control to the
extent such additional payments or value would be considered in the computation
of "Excess Parachute Payments" pursuant to Section 280G of the Internal Revenue
Code of 1986, as amended, and regulations thereunder. In addition to the
foregoing, earned but unpaid Base Salary and incentive compensation awards
through the date of termination will be paid in a lump sum at the time of such
termination. For six (6) months

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<PAGE>

following such Termination Without Cause or Constructive Termination, the
Company shall reimburse Executive for the cost of the Executive's major medical
health insurance premiums as in effect at the date of termination. The
exercisability of stock options granted to Executive shall be governed by any
applicable stock option agreements and the terms of the respective stock option
plans.

Termination With Cause for a period of sixty (60) days following the date of
such Termination with Cause. No incentive compensation or other benefits will be
paid or provided to the Executive after such Termination With Cause.

5.3 Voluntary Termination. In the event of a Voluntary Termination by the
Executive of his employment, the Company shall have no further obligation for
salary or incentive compensation or benefits hereunder.

5.4 Reimbursement of Excess Payment. In the event that all or any portion
of the Change in Control Severance Amount paid to Executive is disallowed by the
Internal Revenue Service as a deductible expense of the Company on grounds that
it does not constitute a "reasonable allowance," Executive agrees to reimburse
the Company to the extent of the disallowed amount within thirty (30) days after
the Company has notified Executive of the disallowed amount. Any amounts owed to
the Company by Executive pursuant to this Section 5.4 but unpaid after the
aforementioned thirty day period shall bear interest at a rate equal to the
commercial base rate of interest established from time to time by First
Tennessee Bank, N.A., Memphis, Tennessee.

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

(a) "Change in Control" means any transaction pursuant to which (a) the
Company merges with another corporation or other entity and is not the
surviving entity, (b) substantially all of the Company's assets are sold
to persons or entities not affiliated with the Company, (c) shares of
Common Stock of the Company are issued or acquired by persons or entities
not affiliated with the Company, who, acting as a group, have the voting
power to change the composition of the Board of Directors of the Company,
or (d) any other transaction of a similar nature to the foregoing. For
purposes of determining whether or not any termination of the Executive's
employment was upon a Change in Control, it shall be presumed that any
termination within 12 months after consummation of any transaction
described above was "upon a Change in Control."

(b) "Constructive Termination" means termination of the Executive's
employment by the Executive (i) from a declined reassignment of a job that
is not the equivalent of his

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<PAGE>

then current position as set forth herein (in responsibility, compensation
or geographic area of service, or (ii) on account of conduct by the
Company or the Board that constitutes continuous and material interference
by the Company or the Board with the Executive's performance of his duties
as set forth in Section 2 hereof or the intentional or material breach by
the Company of this Agreement. The Executive shall have a period of one
(1) year after termination of his employment to assert against the Company
that he suffered a Constructive Termination, and after the expiration of
such one year period, the Executive shall be deemed to have irrevocable
waived the right to such assertion.

(c) "Termination With Cause" means (a) any illegal or dishonest conduct
which adversely affects or may adversely affect the reputation, goodwill,
or business position of the Company or which involves Company funds or
assets; (b) any intentional or material damage to property or business of
the Company; (c) theft embezzlement or misappropriation of Company
property; or (d) the willful failure of employee to carry out his duties
as an employee of the Company.

(d) "Termination Without Cause" means termination of the Executive's
employment by the Company (a) other than due to resignation by Executive,
death, disability, Termination With Cause or (b) upon expiration of the
Term of this Employment Agreement as a result of the giving of notice by
the Company of its intent not to extend the Term of this Employment
Agreement as provided in Section 2.1.

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

6.1 Additional Information. The Executive will, with reasonable notice
during or after the Term of this Employment Agreement, furnish information as
may be in his possession and cooperate with the Company as may reasonably be
requested in connection with any claims or legal actions in which the Company is
or may become a party.

6.2 Confidentiality. The Executive recognizes and acknowledges that all
information pertaining to the affairs, business, clients, customers or other
relationships of the Company, as hereinafter defined, is confidential and is a
unique and valuable asset of the Company. Access to and knowledge of this
information are essential to the performance of the Executive's duties under
this Agreement. The Executive will not during the Term of this Employment
Agreement or after, except to the extent reasonably necessary in performance of
the duties under this Agreement, give to any person, firm, association,
corporation or governmental agency any information concerning the affairs,
business, clients, customers or other relationships of the Company except as
required by law. The Executive will not make use of this type of information for
his own purposes or for the benefit of any person or

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<PAGE>

organization other than the Company. The Executive will also use his best
efforts to prevent the disclosure of this information by others. All records,
memoranda, etc. relating to the business of the Company whether made by the
Executive or otherwise coming into his possession are confidential and will
remain the property of the Company.

6.3 Noncompetition.

(a) Voluntary Termination; Termination With Cause. In the event the
Executive suffers a Voluntary Termination or a Termination With Cause and there

has not been a Change in Control, the Executive will not Compete (hereinafter
defined) with the Company for a period of time equal to the then remaining Term
of this Employment Agreement (as if this Agreement had not been terminated). If
the Executive suffers a Voluntary Termination or a Termination With Cause and
there has been a Change in Control, the Executive will not Compete with the
Company for a period of one (1) year after the date of such termination.

(b) Termination Without Cause; Constructive Termination. In the
event the Executive suffers a Termination Without Cause or a Constructive
Termination and there has not been a Change in Control, the Executive will not
Compete with the Company for a period of time equal to the remaining Term of
this Employment Agreement (as if this Employment Agreement had not been
terminated). If the Executive suffers a Termination Without Cause or a
Constructive Termination and there has been a Change in Control, then the
provisions in this Section 6 restraining competition shall not apply and the
Executive shall be free to Compete with the Company immediately after such
termination.

(c) Definition of "Compete" with the Company. For the purposes of
this Section 6, the term "Compete with the Company" means action by the
Executive, direct or indirect, for his own account or for the account of others,
either as an officer, director, stockholder, owner, partner, member, promoter,
employee, consultant, advisor, agent, manager, creditor or in any other
capacity, resulting in the Executive having any pecuniary interest, legal or
equitable ownership, or other financial or non-financial interest, in any
corporation, business trust, partnership, limited liability company,
proprietorship or other business or professional enterprise that provides
management services to medical practices within the musculoskeletal specialty or
such other specialties practiced by any medical practice contracted to provide
management services at the time of termination of employment; provided, however,
that the term "Compete with the Company" shall not include ownership (without
any more extensive relationship) of a less than 5% interest in any publicly-held
corporation or other business entity.

- 7 -

<PAGE>

compensable in monetary damages and that the Company shall be entitled, in
addition to all other applicable remedies, to a temporary and permanent
injunction and a decree for specific performance of the terms of Section 6
without being required to prove damages or furnish any bond or other security.

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

Nothing in this Agreement shall preclude the Company from consolidating or

merging into or with, or transferring all or substantially all of its assets to,
another corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a Consolidation, Merger or Sale
of Assets, the term "the Company" as used will mean the other corporation and
this Agreement shall continue in full force and effect. This Section 7 is not
intended to modify or limit the rights of the Executive hereunder.

SECTION 8
MISCELLANEOUS

8.1 Entire Agreement. This Agreement contains the entire understanding
between the Company and the Executive with respect to the subject matter and
supersedes any prior employment or severance agreements between the Company and
its affiliates, and the Executive.

8.2 Amendment; Waiver. This Agreement may not be modified or amended
except in writing signed by the parties. No term or condition of this Agreement
will be deemed to have been waived except in writing by the party charged with
waiver. A waiver shall operate only as to the specific term or condition waived
and will not constitute a waiver for the future or act on anything other than
that which is specifically waived.

8.3 Severability; Modification of Covenant. Should any part of this
Agreement be declared invalid for any reason, such invalidity shall not affect
the validity of any remaining portion hereof and such remaining portion shall
continue in full force and effect as if this Agreement has been originally
executed without including the invalid part. Should any covenant of this
Agreement be unenforceable because of its geographic scope or term, its
geographic scope or term shall be modified to such extent as may be necessary to
render such covenant enforceable.

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

- 8 -

<PAGE>

8.5 Counterpart Execution. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

inadequate and that the other party shall be entitled to specific performance
hereof or injunctive relief or both, by temporary or permanent injunction or
such other appropriate judicial remedy, writ or order as may be decided by a
court of competent jurisdiction in addition to any damages which the complaining
party may be legally entitled to recover together with reasonable expenses of
litigation, including attorney's fees incurred in connection therewith, as may
be approved by such court.

8.7 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return
receipt requested, or when delivered if by hand, overnight delivery service or
confirmed facsimile transmission, to the following:

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

- 9 -

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Patrick M. Jaeckle, Executive Vice
President of Finance/Development

EXECUTIVE:

______________________________________
KERRY R. HICKS

- 10 -

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of ________________, 1996, by and between
SPECIALTY CARE NETWORK, INC., a Delaware corporation (the "Company"), and
PATRICK M. JAECKLE (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Company desires to employ the Executive to devote full time
to the business of the Company (including, without limitation, executive
management of the Company) and to serve as the Executive Vice President of
Development/Finance of the Company; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

During the Term of this Employment Agreement, the Executive agrees to
serve as Executive Vice President of Finance/Development of the Company,
performing such duties during the Term of this Agreement for such compensation
and subject to such terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of March 1, 1996, and shall
continue through February 28, 2001. On the sixth and each successive anniversary
of the effective date of this Employment Agreement as set forth in the first
paragraph hereof, the Term of this Employment Agreement shall be extended for an
additional one (1) year period, unless either party gives the other party ninety
(90) days prior written notice of such party's intent not to extend the Term of
this Employment Agreement. Termination of the Executive's employment pursuant to
this Employment Agreement shall be governed by Section 5 of this Employment
Agreement.

<PAGE>

2.3 Location. The duties of Executive shall be performed at such locations
and places as may be directed by the Board.

SECTION 3
COMPENSATION AND BENEFITS

- 2 -

<PAGE>

termination pay programs, sick leave plans, travel or accident insurance,
disability insurance, and contingent compensation plans including capital
accumulation programs, restricted stock programs, stock purchase programs and
stock option plans. Nothing in this Agreement will preclude the Company from
amending or terminating any of the plans or programs applicable to salaried or
senior executives as long as such amendment or termination is applicable to all

salaried employees or senior executives. The Executive will be entitled to an
annual paid vacation as established by the Board.

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

4.3 Responsibilities in the Event of Disability. During the period the
Executive is receiving the payments described in this Agreement and as long as
he is physically and mentally able to do so, the Executive will furnish
information and assistance to the Company and from time to time will make
himself available to the Company to undertake assignments consistent with his
prior position with the Company and his physical and mental health. If the

- 3 -

<PAGE>

Company fails to make a payment or provide a benefit required as part of the
Agreement, the Executive's obligation to provide information and assistance will
end.

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

4.5 Key-Man Life Insurance. Upon request by the Company, the Executive
agrees to cooperate with the Company in obtaining "key man" life insurance on
the life of the Executive, with death benefits payable to the Company. Such
cooperation shall include the submission by Executive to a medical examination
and medical history.

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

- 4 -

<PAGE>

shall be governed by any applicable stock option agreements and the terms of the
respective stock option plans.

Termination With Cause for a period of sixty (60) days following the date of
such Termination With Cause. No incentive compensation or other benefits will be
paid or provided to the Executive after such Termination With Cause.

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

(b) "Constructive Termination" means termination of the Executive's
employment by the Executive on account of conduct by the Company or the
Board that constitutes continuous and material interference by the Company
or the Board with the Executive's performance of his duties as set forth
in Section 2 hereof or the intentional or material breach by the Company
of this Agreement. The Executive shall have a period of one (1) year after
termination of his employment to assert against the

- 5 -

<PAGE>

Company that he suffered a Constructive Termination, and after the
expiration of such one year period, the Executive shall be deemed to have
irrevocable waived the right to such assertion.

(c) "Termination With Cause" means (a) any illegal or dishonest conduct
which adversely affects or may adversely affect the reputation, goodwill,

or business position of the Company or which involves Company funds or
assets; (b) any intentional or material damage to property or business of
the Company; (c) theft embezzlement or misappropriation of Company
property; or (d) the willful failure of employee to carry out his duties
as an employee of the Company.

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

6.3 Noncompetition.

- 6 -

<PAGE>

(a) Voluntary Termination; Termination With Cause. In the event the
Executive suffers a Voluntary Termination or a Termination With Cause and there
has not been a Change in Control, the Executive will not Compete (hereinafter
defined) with the Company for a period of time equal to the remaining Term of
this Employment Agreement (as if this Employment Agreement had not been
terminated). If the Executive suffers a Voluntary Termination or a Termination
With Cause and there has been a Change in Control, the Executive will not

Compete with the Company for a period of one (1) year after the date of such
termination.

(d) Reasonableness of Scope and Duration; Remedies. The Executive
acknowledges that the covenants contained herein are reasonable as to geographic
and temporal scope. The Executive acknowledges that his breach or threatened or
attempted breach of any provision of Section 6 would cause irreparable harm to
the Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section 6 without being required to prove damages or furnish any bond or other
security.

- 7 -

<PAGE>

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

Nothing in this Agreement shall preclude the Company from consolidating or
merging into or with, or transferring all or substantially all of its assets to,
another corporation which assumes this Agreement and all obligations and
undertakings of the Company hereunder. Upon such a Consolidation, Merger or Sale
of Assets, the term "the Company" as used will mean the other corporation and
this Agreement shall continue in full force and effect. This Section 7 is not

intended to modify or limit the rights of the Executive hereunder.

SECTION 8
MISCELLANEOUS

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

- 8 -

<PAGE>

8.6 Governing Law; Arbitration. This Agreement has been executed and
delivered in the State of Colorado and its validity, interpretation, performance
and enforcement shall be governed by the laws of that state. Any dispute among
the parties hereto shall be settled by arbitration in Denver, Colorado in
accordance with the rules then obtaining of the American Arbitration Association
and judgment upon the award rendered may be entered in any court having
jurisdiction thereof. All provisions hereof are for the protection and are
intended to be for the benefit of the parties hereto and enforceable directly by
and binding upon each party. Each party hereto agrees that the remedy at law of
the other for any actual or threatened breach of this Agreement would be
inadequate and that the other party shall be entitled to specific performance
hereof or injunctive relief or both, by temporary or permanent injunction or
such other appropriate judicial remedy, writ or order as may be decided by a
court of competent jurisdiction in addition to any damages which the complaining
party may be legally entitled to recover together with reasonable expenses of

litigation, including attorney's fees incurred in connection therewith, as may
be approved by such court.

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

- 9 -

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:_____________________________
Kerry R. Hicks, President

EXECUTIVE:

________________________________
PATRICK M. JAECKLE

- 10 -

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into as of this the 11th day of March, 1996, by
and between SPECIALTY CARE NETWORK, INC., a Delaware corporation (the
"Company"), and WILLIAM BEHRENS (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Company desires to employ the Executive to devote full time
to the business of the Company (including, without limitation, executive
management of the Company) and to serve as the Executive Vice President of
Practice Management of the Company beginning on or before July 15, 1996; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

Beginning on or before July 15, 1996, the Executive agrees to serve as
Executive Vice President of Practice Management of the Company, performing such
duties during the Term of this Employment Agreement for such compensation and
subject to such terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of the date upon which the
Executive becomes a full-time employee of the Company in Denver, Colorado, which
shall be no later than July 15, 1996. Subject to the terms herein contained, the
Agreement shall have a term of five (5) years from the date the Executive begins
full-time employment in with the Company in Denver, Colorado. On the fifth and
each successive anniversary of the effective date of this Employment Agreement
as set forth in the first paragraph hereof, the Term of this Employment
Agreement shall be extended for an additional one (1) year period, unless either
party gives the other party ninety (90) days prior written notice of such
party's intent not to extend the Term of this Employment Agreement. Termination
of the Executive's employment pursuant to this Employment Agreement shall be
governed by Section 2.3 and Section 5 of this Employment Agreement.
<PAGE>

2.2 Duties. During the Term of this Employment Agreement, the Executive
shall devote substantially all of his time and attention and best efforts during
normal business hours to the Company's affairs. Specifically, the Executive
shall have complete senior management authority and responsibility, commensurate
with and customary for the person holding the office and position to which the
Executive has contracted in this Agreement, with respect to the day to day

operations and long term management of the Company, as well as implementation of
the long range growth strategy of the Company, consistent with directions from
the Board of Directors. He shall have full authority and responsibility, subject
to the general direction, approval and control of the Board of Directors, for
formulating policies and administering the Company in all respects. He shall
have the authority to hire and fire Company personnel, to retain consultants
when he deems necessary to implement the Company policies, to execute contracts
on behalf of the Company in the ordinary course of business and to effect the
growth strategy of the Company at the direction of the Board of Directors.

2.3 Location. The duties of Executive shall be performed in Denver,
Colorado and at such locations and places as may be directed by the Board.
Notwithstanding the provisions of Section 5, in the event the Executive is not a
full-time employee of the Company and relocated to Denver, Colorado by July 15,
1996, this Agreement shall automatically terminate and neither the Executive nor
the Company shall have any obligations to the other, including any severance pay
obligation which may be set forth in Section 5.

SECTION 3
COMPENSATION AND BENEFITS

3.1 Base Compensation. Upon the beginning of the Executive's full-time
employment by the Company, which shall occur no later than July 15, 1996, the
Company shall pay the Executive an annual base salary ("Base Salary") of
$187,500 for the first year employment, $215,000 for the second year of
employment and $250,000 for the third year of employment. The Base Salary for
the fourth and fifth years of this Agreement shall be increased, but not
decreased, to take into account increases in the cost of living from the third
to fourth year of this Agreement and the fourth to fifth year of this Agreement.
For purposes of determining such cost of living increases, the Company shall use
the "All Urban Consumers - New Series" index for the respective years ended
December 31, 1997, 1998 and 1999, respectively, and shall use $250,000 as the
base level of compensation which shall be indexed. Base Salary shall be payable
according to the customary payroll practices of the Company, subject to normal
withholding, but in no event less frequently than once each month.

- 2 -
<PAGE>

provisions of such plans or programs in accordance with program provisions.
These may include group hospitalization, health, dental care, life or other
insurance, tax qualified pension, car allowance, savings, thrift and profit

sharing plans, termination pay programs, sick leave plans, travel or accident
insurance, disability insurance, and contingent compensation plans including
capital accumulation programs, restricted stock programs, stock purchase
programs and stock option plans. Nothing in this Agreement will preclude the
Company from amending or terminating any of the plans or programs applicable to
salaried or senior executives as long as such amendment or termination is
applicable to all salaried employees or senior executives. The Executive will be
entitled to an annual paid vacation as established by the Board.

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

- 3 -
<PAGE>

benefit required as part of the Agreement, the Executive's obligation to provide
information and assistance will end.

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

- 4 -
<PAGE>

5.2 Termination With Cause. If the Executive suffers a Termination With

Cause, whether or not there has been a Change in Control, the Company will
continue to pay the Executive his Base Salary as in effect at the time of the
Termination With Cause for a period of sixty (60) days following the date of
such Termination With Cause. No incentive compensation or other benefits will be
paid or provided to the Executive after such Termination With Cause.

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

(b) "Constructive Termination" means termination of the Executive's
employment by the Executive (i) from a declined reassignment of a job that
is not the equivalent of his then current position as set forth herein (in
responsibility, compensation or geographic area of service, or (ii) on
account of conduct by the Company or the Board that constitutes continuous
and material interference by the Company or the Board with the Executive's
performance of his duties as set forth in Section 2 hereof or the
intentional or material breach by the Company of this Agreement. The
Executive shall have a period of one (1) year after termination of his
employment to assert against the Company that he suffered a Constructive
Termination, and after the expiration of such one year period, the
Executive shall be deemed to have irrevocable waived the right to such
assertion.

- 5 -
<PAGE>

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

6.3 Noncompetition.

- 6 -
<PAGE>

and there has been a Change in Control, the Executive will not Compete with the
Company for a period of one (1) year after the date of such termination.

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

- 7 -
<PAGE>

SECTION 8
MISCELLANEOUS

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

- 8 -
<PAGE>

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:________________________________
Kerry R. Hicks, President

EXECUTIVE:

___________________________________
WILLIAM BEHRENS

- 9 -

EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of ________________, 1996, by and between
SPECIALTY CARE NETWORK, INC., a Delaware corporation (the "Company"), and PAUL
DAVIS (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Company desires to employ the Executive to devote full time
to the business of the Company (including, without limitation, executive
management of the Company) and to serve as the Vice President of
Finance/Controller of the Company; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

During the Term of this Employment Agreement, the Executive agrees to
serve as Vice President of Finance/Controller of the Company, performing such
duties during the Term of this Agreement for such compensation and subject to
such terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of March 15, 1996, and shall
continue through March 14, 2001. On the fifth and each successive anniversary of
the effective date of this Employment Agreement as set forth in the first
paragraph hereof, the Term of this Employment Agreement shall be extended for an
additional one (1) year period, unless either party gives the other party ninety
(90) days prior written notice of such party's intent not to extend the Term of
this Employment Agreement. Termination of the Executive's employment pursuant to
this Employment Agreement shall be governed by Section 5 of this Employment
Agreement.

<PAGE>

2.3 Location. The duties of Executive shall be performed at such locations
and places as may be directed by the Board.

SECTION 3
COMPENSATION AND BENEFITS

3.1 Base Compensation. The Company shall pay the Executive an annual base
salary ("Base Salary") of $108,000 for the first year of this Agreement,
$125,000 for the second year of this Agreement and $144,000 for the third year
of this Agreement. The Base Salary for the fourth and fifth years of this
Agreement shall be increased, but not decreased, to take into account increases
in the cost of living from the third to fourth year of this agreement and the
fourth to fifth year of this Agreement. For purposes of determining such cost of
living increases, the Company shall use the "All Urban Consumers - New Series"
index for the respective years ended December 31, 1997, 1998, and 1999,
respectively, and shall use $144,000 as the base level of compensation which
shall be indexed. Base Salary shall be payable according to the customary
payroll practices of the Company, subject to normal withholding, but in no event
less frequently than once each month.

3.2 Annual Incentive Awards. The Company will pay the Executive annual
incentive compensation of up to 75% of his Base Salary based on performance
targets established annually by the Board of Directors (the "Annual Incentive
Compensation").

- 2 -

<PAGE>

Executive will be entitled to an annual paid vacation as established by the
Board.

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

- 3 -

<PAGE>

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

4.5 Key-Man Life Insurance. Upon request by the Company, the Executive

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

- 4 -

<PAGE>

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

(b) "Constructive Termination" means termination of the Executive's
employment by the Executive (i) from a declined reassignment of a job that
is not the equivalent of his

- 5 -

<PAGE>

then current position as set forth herein (in responsibility, compensation
or geographic area of service) or (ii) on account of conduct by the
Company or the Board that constitutes continuous and material interference
by the Company or the Board with the Executive's performance of his duties
as set forth in Section 2 hereof or the intentional or material breach by
the Company of this Agreement. The Executive shall have a period of one
(1) year after termination of his employment to assert against the Company
that he suffered a Constructive Termination, and after the expiration of
such one year period, the Executive shall be deemed to have irrevocable
waived the right to such assertion.

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

- 6 -

<PAGE>

6.3 Noncompetition.

(a) Voluntary Termination; Termination With Cause. In the event the
Executive suffers a Voluntary Termination or a Termination With Cause and there

has not been a Change in Control, the Executive will not Compete (hereinafter
defined) with the Company for a period of time equal to the remaining Term of
this Employment Agreement (as if this Employment Agreement had not been
terminated). If the Executive suffers a Voluntary Termination or a Termination
With Cause and there has been a Change in Control, the Executive will not
Compete with the Company for a period of one (1) year after the date of such
termination.

(b) Termination Without Cause; Constructive Termination. In the
event the Executive suffers a Termination Without Cause or a Constructive
Termination and there has not been a Change in Control, the Executive will not
Compete with the Company for a period of time equal to the then remaining Term
of this Employment Agreement (as if this Employment Agreement had not been
terminated). If the Executive suffers a Termination Without Cause or a
Constructive Termination and there has been a Change in Control, then the
provisions in this Section 6 restraining competition shall not apply and the
Executive shall be free to Compete with the Company immediately after such
termination.

- 7 -

<PAGE>

breach of any provision of Section 6 would cause irreparable harm to the Company
not compensable in monetary damages and that the Company shall be entitled, in
addition to all other applicable remedies, to a temporary and permanent
injunction and a decree for specific performance of the terms of Section 6
without being required to prove damages or furnish any bond or other security.

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

SECTION 8
MISCELLANEOUS

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

- 8 -

<PAGE>

jurisdiction thereof. All provisions hereof are for the protection and are
intended to be for the benefit of the parties hereto and enforceable directly by
and binding upon each party. Each party hereto agrees that the remedy at law of
the other for any actual or threatened breach of this Agreement would be
inadequate and that the other party shall be entitled to specific performance
hereof or injunctive relief or both, by temporary or permanent injunction or
such other appropriate judicial remedy, writ or order as may be decided by a
court of competent jurisdiction in addition to any damages which the complaining
party may be legally entitled to recover together with reasonable expenses of
litigation, including attorney's fees incurred in connection therewith, as may
be approved by such court.

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

- 9 -

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Kerry R. Hicks, President

EXECUTIVE:

______________________________________
PAUL DAVIS

- 10 -

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of ________________, 1996, by and between
SPECIALTY CARE NETWORK, INC., a Delaware corporation (the "Company"), and PETER
A. FATIANOW (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

During the Term of this Employment Agreement, the Executive agrees to
serve as Vice President of Development of the Company, performing such duties
during the Term of this Agreement for such compensation and subject to such
terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

<PAGE>

and control of the Board of Directors, for formulating policies and
administering the Company in all respects. He shall have the authority to hire
and fire Company personnel, to retain consultants when he deems necessary to
implement the Company policies, to execute contracts on behalf of the Company in
the ordinary course of business and to effect the growth strategy of the Company
at the direction of the Board of Directors.

2.3 Location. The duties of Executive shall be performed at such locations
and places as may be directed by the Board.

SECTION 3
COMPENSATION AND BENEFITS

3.1 Base Compensation. The Company shall pay the Executive an annual base
salary ("Base Salary") of $108,000 for the first year of this Agreement,
$125,000 for the second year of this Agreement and $144,000 for the third year
of this Agreement. The Base Salary for the fourth and fifth years of this
Agreement shall be increased, but not decreased, to take into account increases
in the cost of living from the third to fourth year of this Agreement and the
fourth to fifth year of this Agreement. For purposes of determining such cost of
living increases, the Company shall use the "All Urban Consumers - New Series"
index for the respective years ended December 31, 1997, 1998 and 1999,
respectively, and shall use $144,000 as the base level of compensation which
shall be indexed. Base Salary shall be payable according to the customary
payroll practices of the Company, subject to normal withholding, but in no event
less frequently than once each month.

- 2 -
<PAGE>

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

- 3 -
<PAGE>

Company fails to make a payment or provide a benefit required as part of the
Agreement, the Executive's obligation to provide information and assistance will
end.

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

and medical history.

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

- 4 -
<PAGE>

shall be governed by any applicable stock option agreements and the terms of the
respective stock option plans.

5.2 Termination With Cause. If the Executive suffers a Termination With
Cause, whether or not there has been a Change in Control, the Company will
continue to pay the Executive his Base Salary as in effect at the time of the
Termination With Cause for a period of sixty (60) days following such
Termination With Cause. No incentive compensation or other benefits will be paid
or provided to the Executive after such Termination With Cause.

5.3 Voluntary Termination. In the event of a Voluntary Termination by the

Executive of his employment, the Company shall have no further obligation for
salary or incentive compensation or benefits hereunder.

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

- 5 -
<PAGE>

one year period, the Executive shall be deemed to have irrevocable waived
the right to such assertion.

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

6.3 Noncompetition.

- 6 -
<PAGE>

this Employment Agreement (as if this Employment Agreement had not been
terminated). If the Executive suffers a Termination Without Cause or a
Constructive Termination and there has been a Change in Control, then the
provisions in this Section 6 restraining competition shall not apply and the
Executive shall be free to Compete with the Company immediately after such
termination.

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<PAGE>

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

SECTION 8
MISCELLANEOUS

its affiliates, and the Executive.

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

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<PAGE>

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:__________________________________
Kerry R. Hicks, President

EXECUTIVE:

_____________________________________
PETER A. FATIANOW

- 9 -

<PAGE>
EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of ________________, 1996, by and between
SPECIALTY CARE NETWORK, INC., a Delaware corporation (the "Company"), and DAVID
HICKS (the "Executive").

WHEREAS, the Company is engaged in the business of managing physician
practices in the musculoskeletal specialty and operating surgery centers serving
that medical specialty; and

WHEREAS, the Company desires to employ the Executive to devote full time
to the business of the Company (including, without limitation, executive
management of the Company) and to serve as the Vice President of Management
Information System of the Company; and

WHEREAS, the Executive desires to be so employed on the terms and subject
to the conditions hereinafter stated.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties hereby agree as follows:

SECTION 1
POSITION AND RESPONSIBILITIES

During the Term of this Employment Agreement, the Executive agrees to
serve as Vice President of Management Information Services of the Company,
performing such duties during the Term of this Agreement for such compensation
and subject to such terms and conditions as are hereinafter set forth.

SECTION 2
TERM AND DUTIES

2.1 Term; Extension. The term of this Employment Agreement (the "Term of
this Employment Agreement") will commence as of March 1, 1996, and shall
continue through February 28, 2001. On the fifth and each successive anniversary
of the effective date of this Employment Agreement as set forth in the first
paragraph hereof, the Term of this Employment Agreement shall be extended for an
additional one (1) year period, unless either party gives the other party ninety
(90) days prior written notice of such party's intent not to extend the Term of
this Employment Agreement. Termination of the Executive's employment pursuant to
this Employment Agreement shall be governed by Section 5 of this Employment
Agreement.

<PAGE>

2.3 Location. The duties of Executive shall be performed at such locations
and places as may be directed by the Board.

SECTION 3
COMPENSATION AND BENEFITS

3.1 Base Compensation. The Company shall pay the Executive an annual base
salary ("Base Salary") of $108,000 for the first year of this Agreement,
$125,000 for the second year of this Agreement and $144,000 for the third year
of this Agreement. The Base Salary for the fourth and fifth years of this
Agreement shall be increased, but not decreased, to take into account increases
in the cost of living from the third to fourth year of this Agreement and the
fourth to fifth year of this Agreement. For purposes of determining such cost of
living increases, the Company shall use the "All Urban Consumers - New Series"
index for the respective years ended December 31, 1997, 1998 and 1999,
respectively, and shall use $144,000 as the base level of compensation which
shall be indexed. Base Salary shall be payable according to the customary
payroll practices of the Company, subject to normal withholding, but in no event
less frequently than once each month.

- 2 -

<PAGE>

Executive will be entitled to an annual paid vacation as established by the
Board.

SECTION 4
DEATH BENEFIT; DISABILITY COMPENSATION; KEY MAN INSURANCE

- 3 -

<PAGE>

4.4 Definition of Disability. The term "disability" will have the standard
meaning as determined in the reasonable discretion of the Board.

4.5 Key-Man Life Insurance. Upon request by the Company, the Executive

SECTION 5
TERMINATION OF EMPLOYMENT

5.1 Termination Without Cause; Constructive Termination.

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<PAGE>

5.5 Definitions. For this Agreement, the following terms have the
following meanings:

(b) "Constructive Termination" means termination of the Executive's
employment by the Executive (i) from a declined reassignment of a job that
is not the equivalent of his

- 5 -

<PAGE>

SECTION 6
OTHER DUTIES OF THE EXECUTIVE DURING
AND AFTER THE TERM OF THIS EMPLOYMENT AGREEMENT

- 6 -

<PAGE>

6.3 Noncompetition.

(a) Voluntary Termination; Termination With Cause. In the event the
Executive suffers a Voluntary Termination or a Termination With Cause and there

- 7 -

<PAGE>

SECTION 7
CONSOLIDATION, MERGER OR SALE OF ASSETS

SECTION 8
MISCELLANEOUS

8.4 Effect of Captions. Titles and captions in no way define, limit,
extend or describe the scope of this Agreement nor the intent of any provision
thereof.

- 8 -

<PAGE>

(i) If to the Company, at its headquarters, or at such other address as
may have been furnished to the Executive by the Company in writing; or

(ii) If to the Executive, at his personal residence, or such other address
as may have been furnished to the Company by the Executive in writing.

8.8 Binding Agreement. This Agreement shall be binding on the parties'
successors, heirs and assigns.

- 9 -

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Kerry R. Hicks, President

EXECUTIVE:

______________________________________
DAVID HICKS

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MERGER AGREEMENT

BY AND AMONG

SPECIALTY CARE NETWORK, INC.

AND

TOC SERVICES, INC.,

November 12, 1996
<PAGE>

TABLE OF CONTENTS

Page
----

1. Definitions........................................................ 1

2. Basic Transaction.................................................. 3
(a) The Merger.................................................. 3
(b) The Closing................................................. 3
(c) Actions at the Closing...................................... 3
(d) Effect of Merger............................................ 3

3. Representations and Warranties of TALL and the TALL Stockholders... 4
(a) Organization, Qualification, and Corporate Power............ 4
(b) Capitalization.............................................. 4
(c) Authorization of Transaction................................ 4
(d) Noncontravention............................................ 5
(e) Subsidiaries and Investments................................ 5
(f) Financial Statement......................................... 5
(g) Undisclosed Liabilities..................................... 5
(h) Brokers' Fees............................................... 5
(i) Material Contracts.......................................... 5
(j) Insurance; Malpractice...................................... 6
(k) No Changes Prior to Closing Date............................ 6
(l) Title; Condition............................................ 7
(m) Litigation.................................................. 7
(n) Permits and Licenses........................................ 7
(o) Tax Matters................................................. 7
(p) Employee Benefit Plans...................................... 7
(q) Third-Party Relations....................................... 9
(r) Compliance with Applicable Laws............................. 9
(s) Employee Compensation....................................... 9
(t) Environmental Matters....................................... 9
(u) Healthcare Compliance....................................... 9
(v) Fraud and Abuse............................................. 10
(w) Practice Compliance......................................... 10
(x) Rates and Reimbursement Policies............................ 10
(y) Accounts Receivable......................................... 10
(z) Guaranties.................................................. 11
(aa) Powers of Attorney.......................................... 11
(ab) Tangible Assets............................................. 11
(ac) Full Disclosure............................................. 11

4. Representations and Warranties of SCN.............................. 11
(a) Organization................................................ 11
(b) Capitalization.............................................. 11
(c) Authorization of Transaction................................ 11
(d) Noncontravention............................................ 11
(e) Brokers' Fees............................................... 12

i
<PAGE>

Page
----

(f) Private Placement Memorandum............................... 12

5. Covenants......................................................... 12
(a) General.................................................... 12
(b) Notices and Consents....................................... 12
(c) Regulatory Matters and Approvals........................... 12
(d) Operation of Business...................................... 13
(e) Full Access................................................ 13
(f) Notice of Developments..................................... 13
(g) Exclusivity................................................ 13
(h) Collection of Accounts Receivable.......................... 14
(i) Payment of Expenses........................................ 14
(j) Completion of Schedules.................................... 14
(k) Loan Agreement............................................. 14

6. Conditions to Obligation to Close................................. 14
(a) Conditions to Obligation of SCN............................ 14
(b) Conditions to Obligation of TALL........................... 16

7. Items to be Delivered at or Prior to Closing...................... 17
(a) By the TALL Stockholders or TALL........................... 17
(b) By SCN..................................................... 17

8. Termination....................................................... 18
(a) Termination of Agreement................................... 18
(b) Effect of Termination...................................... 18

9. Indemnification................................................... 18
(a) Indemnification by the TALL Stockholders................... 19
(b) Notice to the TALL Stockholders; Opportunity to Defend..... 19
(c) General Indemnification by SCN............................. 19
(d) Notice to SCN; Opportunity to Defend....................... 19
(e) Survival................................................... 19
(f) Security for Indemnity..................................... 19

10. Miscellaneous.................................................... 20
(a) No Third-Party Beneficiaries............................... 20
(b) Entire Agreement........................................... 20
(c) Succession and Assignment.................................. 20
(d) Counterparts............................................... 20
(e) Headings................................................... 20
(f) Notices.................................................... 20
(g) Governing Law.............................................. 21
(h) Amendments and Waivers..................................... 21
(i) Severability............................................... 21
(j) Expenses................................................... 21
(k) Construction............................................... 21
(l) Incorporation of Exhibits and Schedules.................... 21

ii
<PAGE>

MERGER AGREEMENT

THIS MERGER AGREEMENT ("Agreement") is entered into this the 12th day of
November, 1996, by and among SPECIALTY CARE NETWORK, INC., a Delaware
corporation ("SCN") and TOC SERVICES, INC., a Florida corporation ("TALL") and
the stockholders of TALL as of the date of this Agreement (the "TALL
Stockholders"). SCN, TALL and the TALL Stockholders are referred to collectively
herein as the "Parties."

W I T N E S S E T H:

WHEREAS, TALL is a Florida corporation which owns the assets which are
used by and/or result from the TALL Stockholders' practice of medicine;

WHEREAS, the TALL Stockholders are medical doctors practicing medicine in
the State of Florida;

WHEREAS, this Agreement contemplates a tax-free merger of TALL with and
into SCN in a reorganization pursuant to Code Section 368(a)(1)(A);

WHEREAS, the TALL Stockholders will receive capital stock in SCN in
exchange for their capital stock in TALL.

WHEREAS, the Parties anticipate that the Merger contemplated by this
Agreement will further certain of their business objectives; and

WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Parties, it is agreed as
follows:

1. Definitions.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"Closing Date" has the meaning set forth in Section 2(b) below.

"Closing" has the meaning set forth in Section 2(b) below.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.

"Delaware Articles of Merger" shall have the meaning set forth in Section
2(c) below.

"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.

"Disclosure Schedule" has the meaning set forth in Section 3 below.
<PAGE>

"Dissenting Share" means any TALL Share which any stockholder who or which
has exercised his or its appraisal rights under the Florida Business Corporation
Act holds of record.

"Effective Time" has the meaning set forth in Section 2(d)(i) below.

"Environmental Laws" means all federal, state, and local laws, rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder and other governmental requirements relating to pollution,
control of chemicals, storage and handling of petroleum products, management of
waste (including biohazardous or biomedical waste), discharges of materials into
the environment, health, safety, natural resources, and the environment,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes into ambient air, surface water, ground water, or
lands or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes.

"Florida Articles of Merger" shall have the meaning set forth in Section
2(c) below.

"Florida Business Corporation Act" means the Business Corporation Act of
the State of Florida, as amended.

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

"Hazardous Materials" has the meaning set forth in Section 3(t) below.

"IRS" means the Internal Revenue Service.

"Knowledge" means actual knowledge after reasonable investigation.

"Merger" has the meaning set forth in Section 2(a) below.

"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.

"Person" means an individual, a partnership, a limited liability company,
a corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).

"Practice Assets" has the meaning set forth in Section 3(l) below.

"Private Placement Memorandum" means the final private placement
memorandum of SCN relating to the offering of the SCN Shares under the
Securities Act.

"Requisite SCN Stockholder Approval" means the affirmative vote of the
holders of a majority of the SCN Shares in favor of this Agreement and the
Merger.

"Requisite TALL Stockholder Approval" means the affirmative vote of the
holders of a majority of the TALL Shares in favor of this Agreement and the
Merger.

"TALL Share" means any share of the Common Stock, $1.00 par value per
share, of TALL.

"TALL Stockholder" means any Person who or which holds any TALL Shares.

- 2 -
<PAGE>

"TALL" has the meaning set forth in the preface above.

"SCN Share" means any share of the Common Stock, $.001 par value per
share, of SCN.

"SCN" has the meaning set forth in the preface above.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Security Interest" means any mortgage, pledge, lien, encumbrance, charge
or other security interest other than (a) mechanic's, materialmen's, and similar
liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.

"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.

"Surviving Corporation" has the meaning set forth in Section 2(a) below.

2. Basic Transaction.

(a) The Merger. On and subject to the terms and conditions of this
Agreement, TALL will merge with and into SCN (the "Merger") at the Effective
Time. SCN shall be the corporation surviving the Merger (the "Surviving
Corporation").

(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Baker, Donelson,
Bearman & Caldwell, First Tennessee Building, Memphis, Tennessee 38103,
commencing at 9:00 A.M. local time on November 12, 1996, or such other date as
the Parties may mutually determine (the "Closing Date").

(c) Actions at the Closing. At the Closing, (i) TALL will deliver to SCN
the various certificates, instruments, and documents referred to in Section 7(a)
below, (ii) SCN will deliver to TALL the various certificates, instruments, and
documents referred to in Section 7(b) below, (iii) SCN and TALL will file with
the Secretary of State of the State of Delaware both Articles of Merger and a
Plan of Merger in substantially the form attached hereto as Exhibit 2(c) (the
"Delaware Articles of Merger"), and (iv) SCN and TALL will file with the
Department of State of the State of Florida both Articles of Merger and a Plan
of Merger in substantially the form attached hereto as Exhibit 2(c)(i) (the
"Florida Articles of Merger").

(d) Effect of Merger.

(i) General. The Merger shall become effective at the time (the
"Effective Time") SCN and TALL file the Delaware Articles of Merger with
the Secretary of State of the State of Delaware and file the Florida
Articles of Merger with the Department of State of the State of Florida.
The Merger shall have the effect set forth in the Delaware General
Corporation Law and the Florida Business Corporation Act. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on
behalf of either SCN or TALL in order to carry out and effectuate the
transactions contemplated by this Agreement.

- 3 -
<PAGE>

(ii) Certificate of Incorporation. The Certificate of Incorporation
of SCN in effect at and as of the Effective Time will remain the
Certificate of Incorporation of the Surviving Corporation without any
modification or amendment in the Merger.

(iii) Bylaws. The Bylaws of SCN in effect at and as of the Effective
Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.

(iv) Directors and Officers. The directors and officers of SCN in
office at and as of the Effective Time will remain the directors and
officers of the Surviving Corporation (retaining their respective
positions and terms of office).

(v) Conversion of TALL Shares. At and as of the Effective Time, each
TALL Share (other than any Dissenting Share) shall be converted into the
right to receive 1,032.02 SCN Shares (the ratio of 1,032.02 SCN Shares to
one TALL Share is referred to herein as the "Conversion Ratio"). Each
Dissenting Share shall be converted into the right to receive payment from
the Surviving Corporation with respect thereto in accordance with the
provisions of the Florida Business Corporation Act. The Conversion Ratio
shall be subject to equitable adjustment in the event of any stock split,
stock dividend, reverse stock split, or other change in the number of TALL
Shares or SCN Shares outstanding. For all purposes, each SCN Share is
agreed to have a value of $6.00 per share.

(vi) SCN Shares. Each SCN Share issued and outstanding at and as of
the Effective Time will remain issued and outstanding.

3. Representations and Warranties of TALL and the TALL Stockholders. TALL
and the TALL Stockholders, severally and with respect to themselves only,
represent and warrant to SCN that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the disclosure schedule (the "Disclosure Schedule"). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3 and will be completed
pursuant to Section 5(j).

(a) Organization, Qualification, and Corporate Power. TALL is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Florida. TALL is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction in which the character or
location of the properties owned or the business conducted by TALL makes such
qualification necessary. TALL has the corporate power and authority to carry on
the business in which it is engaged and to own and use the properties owned and
used by it.

(b) Capitalization. The entire authorized capital stock of TALL consists
of 5,000 TALL Shares, of which 1,039.14 TALL Shares are issued and outstanding
and 0 TALL Shares are held in treasury. All of the issued and outstanding TALL
Shares have been duly authorized and are validly issued, fully paid, and
nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights or
other contracts or commitments that could require TALL to issue, sell or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to TALL.

(c) Authorization of Transaction. TALL has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; provided, however, that TALL cannot consummate the Merger unless and
until it receives the Requisite TALL Stockholder Approval. This Agreement
constitutes the valid and legally binding obligation of TALL, enforceable in
accordance with its terms and conditions.

- 4 -
<PAGE>

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which TALL
is subject or any provision of the charter or bylaws of TALL or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which TALL is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). TALL is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.

(e) Subsidiaries and Investments. TALL does not own, directly or
indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, limited liability
company, trust, joint venture, or other entity.

(f) Financial Statement. TALL has furnished SCN with audited balance
sheets dated December 31, 1994 and 1995, and audited income statements for the
twelve (12) month periods ending December 31, 1995, 1994 and 1993. Such
financial statements, including the notes thereto, except as indicated therein,
were prepared on a basis consistent with past accounting practices of TALL and
fairly present the results of operations for the periods noted therein. The
balance sheets of TALL delivered by TALL to SCN fairly present the financial
condition of TALL at the date thereof, and except as indicated therein, reflect
all claims against and all debts and liabilities of TALL, fixed or contingent,
as of the date thereof.

(g) Undisclosed Liabilities. TALL has no uninsured liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to become due),
including any liability for taxes, except for (i) liabilities set forth on the
face of the balance sheet dated as of December 31, 1995 and (ii) liabilities
which have arisen after December 31, 1995 in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

(h) Brokers' Fees. TALL does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

(i) Material Contracts. Section 3(i) of the Disclosure Schedule lists the
following contracts and other material agreements to which TALL is a party:

(i) any agreement (or group of related agreements) for the lease of
real or personal property to or from any Person;

(ii) any agreement (or group of related agreements) for the purchase
or sale of supplies, products, or other personal property or for the
furnishing or receipt of services;

(iii) any agreement concerning a partnership or joint venture;

(iv) any agreement (or group of related agreements) under which TALL
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation pursuant to which it
has imposed a Security Interest in respect of any of its assets, tangible
or intangible;

(v) any agreement concerning confidentiality or noncompetition;

- 5 -
<PAGE>

(vi) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of TALL's current or former directors,
officers, and employees;

(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;

(viii) any agreement pursuant to which TALL has advanced or loaned
any amount to any of its directors, officers, and employees;

(ix) any agreement pursuant to which the consequences of a default
or termination could have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of TALL; or

(x) any other agreement (or group of related agreements) outside the
ordinary course of TALL's business or operations the performance of which
involves consideration in excess of $15,000.

TALL has delivered or given SCN access to a correct and complete copy of each
written agreement listed in Section 3(i) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in Section 3(i) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) except as set forth in Section
3(i) of the Disclosure Schedule, no notice of this Agreement or consent of any
third party is required in order to execute and deliver this Agreement or to
consummate the transaction contemplated hereby, and, after assignment to SCN at
Closing, the agreement will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms; (C) to TALL's Knowledge, no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) no party has
repudiated any provision of the agreement.

(j) Insurance; Malpractice. Section 3(j) of the Disclosure Schedule
contains a list and brief description of all policies or binders of fire,
liability, product liability, workers compensation, health and other forms of
insurance policies or binders currently in force insuring against risks which
will remain in full force and effect at least through the Closing Date. Section
3(j) of the Disclosure Schedule contains a description of all current
malpractice liability insurance policies of the TALL Stockholders, TALL and
TALL's professional employees and all predecessor policies in effect since
February 1, 1990. Except as set forth on Section 3(j) of the Disclosure Schedule
(a) neither TALL, the TALL Stockholders, nor its professional employees have, in
the last seven (7) years, filed a written application for any insurance coverage
relating to TALL's business or property which has been denied by an insurance
agency or carrier and (b) TALL, TALL's professional employees and the TALL
Stockholders have been continuously insured for professional malpractice claims
during the same period. Section 3(j) of the Disclosure Schedule also sets forth
a list of all claims for any insured loss in excess of Five Thousand Dollars
($5,000.00) per occurrence filed by TALL, TALL's professional employees or the
TALL Stockholders during the three (3) year period immediately preceding the
date hereof, including workers compensation, general liability, environmental
liability and professional malpractice liability claims. None of TALL, TALL's
professional employees nor the TALL Stockholders is in material default with
respect to any provision contained in any such policy and none of them has
failed to give any notice or present any claim under any such policy in due and
timely fashion.

(k) No Changes Prior to Closing Date. Except as set forth in the
Disclosure Schedule and except for the distributions and/or transfer of certain
assets of TALL as described in that certain Unanimous Consent of the Directors
and Shareholders of TALL, dated November 12, 1996, during the period from
December 31, 1995 through the date hereof, TALL has not (i) incurred any
liability or obligation of any nature (whether known or

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<PAGE>

unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due), except in the
Ordinary Course of Business, (ii) written off as uncollectible any notes or
accounts receivable, except write-offs in the Ordinary Course of Business
charged to applicable reserves, none of which individually or in the aggregate
is material to TALL, (iii) conducted its business in such a manner so as to
materially increase its accounts payable or so as to materially decrease its
accounts receivable, (iv) granted any increase in the rate of wages, salaries,
bonuses, or other remunerations of any employee, except in the Ordinary Course
of Business, (v) canceled or waived any claims or rights of substantial value,
(vi) made any change in any method of accounting, (vii) otherwise conducted its
business or entered into any transaction, except in the usual and ordinary
manner and in the Ordinary Course of Business, (viii) agreed, whether or not in
writing, to do any of the foregoing, or (ix) disposed of its assets other than
in the Ordinary Course of Business.

(l) Title; Condition. Section 3(l) of the Disclosure Schedule contains a
complete, true and correct list of those assets which are material to the
business or operations of TALL (the "Practice Assets"). TALL has good and
marketable title to, or leasehold interests in, all of the Practice Assets.
Except as disclosed on Section 3(l) of the Disclosure Schedule, none of the
Practice Assets is subject to a contract or other agreement of sale or subject
to security interests, mortgages, encumbrances, liens (including income,
personal property and other tax liens) or charges of any kind or character. Upon
completion of the merger, SCN shall own or lease the Practice Assets free and
clear of all liens and encumbrances, except as disclosed in Section 3(l) of the
Disclosure Schedule or except as otherwise disclosed elsewhere in this
Agreement.

(m) Litigation. Except as set forth in Section 3(m) of the Disclosure
Schedule, there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding or investigation by any
governmental entity pending, or, to the Knowledge of TALL, threatened against,
or affecting TALL or any of the Practice Assets, or any physician or other
health care professional engaged or employed by TALL, and to the best of TALL
and the TALL Stockholders' Knowledge there is no basis for any of the foregoing.
None of the actions, suits, proceedings, hearings, and investigations set forth
in Section 3(m) of the Disclosure Schedule could result in any material adverse
change in the operations, results of operations, or future prospects of the
business assets to be operated by SCN after the Closing.

(n) Permits and Licenses. TALL and all physicians and other health care
professionals engaged or employed by TALL have all permits and licenses required
by all applicable laws; have made all regulatory filings necessary for the
conduct of TALL's business; and are not in violation of any of said permitting
or licensing requirements.

(o) Tax Matters. Except as set forth in Section 3(o) of the Disclosure
Schedule, TALL has filed or caused to be filed all federal, state and local tax
returns which are required to have been filed by TALL, including all income,
excise, franchise, and payroll tax returns, and TALL has paid or established an
adequate accrual reserve for all taxes accrued through the Effective Time of the
Merger and has otherwise complied with all federal, state, local and other tax
laws applicable to it.

(p) Employee Benefit Plans.

(i) List of Plans. Section 3(p) of the Disclosure Schedule contains
an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or
not any Employee Benefit Plans are otherwise exempt from the provisions of
ERISA, established, maintained or contributed to by TALL (including all
employers (whether or not incorporated) which by reason of common control
are treated together with TALL and/or the TALL Stockholders as a single
employer within the meaning of Section 414 of the Code) since September 2,
1974.

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<PAGE>

(ii) Status of Plans. TALL has never maintained and does not now
maintain or contribute to any Employee Benefit Plan subject to ERISA which
is not in substantial compliance with ERISA, or which has incurred any
accumulated funding deficiency within the meaning of Section 412 or 418B
of the Code, or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section
412 of the Code or which is subject to Title IV of ERISA. TALL has not
incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") in connection with any Employee Benefit Plan covering any
employees of TALL or ceased operations at any facility or withdrawn from
any such Plan in a manner which could subject it to liability under
Section 4062(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any liability of TALL to the PBGC
under Title IV of ERISA which could reasonably be anticipated to result in
any claims being made against the TALL by the PBGC. TALL has not incurred
any withdrawal liability (including any contingent or secondary withdrawal
liability) within the meaning of Sections 4201 and 4202 of ERISA, to any
Employee Benefit Plan which is a Multiemployer Plan (as defined in Section
4001 of ERISA), and no event has occurred, and there exists no condition
or set of circumstances, which represent a material risk of the occurrence
of any withdrawal from or the partition, termination, reorganization or
insolvency of any Multiemployer Plan which would result in any liability
of TALL.

(iii) Contributions. Full payment has been made of all amounts which
TALL is required, under applicable law or under any Employee Benefit Plan
or any agreement relating to any Employee Benefit Plan to which TALL is a
party, to have paid as contributions thereto as of the last day of the
most recent plan year of such Employee Benefit Plan ended prior to the
date hereof. TALL has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under
the terms of any Employee Benefit Plan or related agreements. Benefits
under all Employee Benefit Plans are as represented and have not been
increased subsequent to the date as of which documents have been provided.

(iv) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and, to the Knowledge of TALL,
nothing has occurred since the date of the last such determination which
resulted or is likely to result in the revocation of such determination.

(v) Transactions. TALL has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a material
tax, penalty or liability for prohibited transactions under ERISA or the
Code nor have any of its directors, officers or employees to the extent
they or any of them are fiduciaries with respect to such plans, breached
any of their responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA which would result in any material claim being made
under or by or on behalf of any such plans by any party with standing to
make such claim.

(vi) Other Plans. TALL presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit
plans other than those listed on Section 3(p) of the Disclosure Schedule.

(vii) Documents. TALL has delivered or caused to be delivered to SCN
true and complete copies of (i) all Employee Benefit Plans as in effect,
together with all amendments thereto which will become effective at a
later date, as well as the latest Internal Revenue Service determination
letter obtained with respect to any such Employee Benefit Plan qualified
under Section 401 or 501 of the Code, and (ii) the most recently filed
Form 5500 for each Employee Benefit Plan required to file such form.

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<PAGE>

(q) Third-Party Relations. TALL has not received any notice that any
material patient, supplier, employer or associated physician intends to cease
doing business with TALL.

(r) Compliance with Applicable Laws. Except as set forth in Section 3(r)
of the Disclosure Schedule, to TALL's Knowledge, TALL has operated in compliance
with all federal, state, county and municipal laws, constitutions, ordinances,
statutes, rules, regulations and orders applicable thereto ("Applicable Laws").
No item disclosed in Section 3(r) of the Disclosure Schedule has a material
effect on the operations of TALL. To TALL's Knowledge, neither TALL nor any
physician associated with or employed by TALL has received payment or any
remuneration whatsoever to induce or encourage the referral of patients or the
purchase of goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b),
or otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any
fraud or abuse been alleged within the last five (5) years by any government
agency.

(s) Employee Compensation. TALL has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
physician employees are entitled through the Closing Date, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of TALL's physician employees.

(t) Environmental Matters.

(i) Except as set forth in Section 3(t) of the Disclosure Schedule,
TALL is in material compliance with all applicable Environmental Laws.

(ii) TALL has not authorized or conducted nor does TALL have
Knowledge of the disposal or release, or other handling of any hazardous
substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction thereof), natural gas, liquefied gas, synthetic gas, biohazardous
or biomedical material, or other material defined, regulated controlled or
potentially subject to any remediation requirement under any Environmental
Law (collectively "Hazardous Materials"), on, in, under or affecting any
property owned or leased by TALL.

(iii) TALL has, and is in compliance with, all licenses, permits,
registrations, and government authorizations necessary to operate under
all applicable Environmental Laws. Section 3(t) of the Disclosure Schedule
lists all such licenses, permits, registrations and government
authorizations required by any Environmental Law.

(iv) Except as disclosed in Section 3(t) of the Disclosure Schedule,
TALL has not received any written or oral notice from any governmental
agency or entity or any other Person and there is no pending or threatened
claim, litigation or any administrative agency proceeding that: (a)
alleges a violation of any Environmental Law(s) by TALL or, with respect
to the Practice Assets or any property owned or leased by TALL (b) alleges
that TALL is a liable party or potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq., or any analogous state law, (c) has resulted or
could result in the attachment of an environmental lien on any of the
Practice Assets or property owned or leased by TALL, or (d) alleges that
TALL is liable for any contamination of the environment, contamination of
any property owned or leased by TALL, damage to natural resources,
property damage, or personal injury based on its activities or the
activities of any predecessor or third parties involving Hazardous
Materials, whether arising under the Environmental Laws, common law
principles, or other legal standards.

(u) Healthcare Compliance. TALL is participating in or otherwise
authorized to receive reimbursement from Medicare and Medicaid and is a party to
other third-party payor agreements if any, discussed in

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<PAGE>

Section 3(i) of the Disclosure Schedule. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned, and no condition exists or event has occurred which in itself or with
the giving of notice or the lapse of time or both would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any such
third-party payor program. TALL is in compliance in all material respects with
the requirements of all such third-party payors applicable thereto. TALL, its
Stockholders, and its physician employees do not have any financial relationship
(whether investment interest, compensation interest, or otherwise) with any
entity to which any of the foregoing refer patients, except for such financial
relationships that qualify for exceptions to state and federal laws restricting
physician referrals to entities in which they have a financial interest.

(v) Fraud and Abuse. To TALL's Knowledge, TALL, the TALL Stockholders and
persons and entities providing professional services for TALL have not engaged
in any activities which are prohibited under 42 U.S.C. ss. 1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related state
or local statutes or regulations, or which are prohibited by rules of
professional conduct, including the following: (a) knowingly and willfully
making or causing to be made a false statement or representation of a material
fact in any application for any benefit or payment; (b) knowingly and willfully
making or causing to be made any false statement or representation of a material
fact for use in determining rights to any benefit or payment; (c) failing to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, with intent to fraudulently secure such benefit or payment;
and (d) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay or receive such remuneration (i)
in return for referring an individual to a person for the furnishing or
arranging for the furnishing or any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (ii) in return for
purchasing, leasing, or ordering or arranging for or recommending purchasing,
leasing, or ordering any good, facility, service or item for which payment may
be made in whole or in part by Medicare or Medicaid.

(w) Practice Compliance. TALL is duly licensed as a medical practice and
is lawfully operated in accordance with the requirements of all Applicable Laws
and has all necessary authorizations for the use and operation of a medical
practice, all of which are in full force and effect. There are no outstanding
notices of deficiencies relating to TALL issued by any governmental authority or
third-party payor requiring conformity or compliance with any applicable law or
condition for participation with such governmental authority or third-party
payor, and after reasonable and independent inquiry and due diligence and
investigation, TALL has neither received notice nor has any Knowledge or reason
to believe that such necessary authorizations may be revoked or not renewed in
the Ordinary Course of Business.

(x) Rates and Reimbursement Policies. The jurisdiction in which TALL is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by TALL. TALL
does not have any rate appeal currently pending before any governmental
authority or any administrator of any third-party payor program. TALL has no
Knowledge of any Applicable Law which affects rates or reimbursement procedures
which has been enacted, promulgated or issued within the eighteen (18) months
preceding the date of this Agreement or any such legal requirement proposed or
currently pending in the jurisdiction in which TALL is located, which could have
a material adverse effect on TALL or may result in the imposition of additional
Medicaid, Medicare, charity, free care, welfare, or other discounted or
government assisted patients at TALL or require TALL to obtain any necessary
authorization which TALL does not currently possess.

(y) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
TALL, as being due to TALL, as at the Closing Date have arisen in the Ordinary
Course of Business; and none of such accounts receivable or other debts is or
will at the Closing Date be subject to any counterclaim or set-off except to the
extent of any such provision or reserve. There has

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<PAGE>

been no material adverse change since December 31, 1995 in the amount of
accounts receivable or other debts due TALL, the allowances with respect
thereto, or accounts payable of TALL from that reflected in the Balance Sheet
previously delivered by TALL to SCN.

(z) Guaranties. TALL is not a guarantor and otherwise is not liable for
any liability or obligation (including indebtedness) of any other Person.

(aa) Powers of Attorney. There are no outstanding powers of attorney
executed by TALL, except as may be contained in financing documents or security
agreements listed in Section 3(i) of the Disclosure Schedule.

(ab) Tangible Assets. TALL owns or leases all land, buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted. To TALL's Knowledge, each tangible asset has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear).

(ac) Full Disclosure. No representation or warranty made by TALL in this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.

4. Representations and Warranties of SCN. SCN represents and warrants to
TALL that the statements contained in this Section 4 are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 4.

(a) Organization. SCN is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.

(b) Capitalization. The entire authorized capital stock of the SCN
consists of 50,000,000 SCN Shares, of which 1,365,000 SCN Shares are issued and
outstanding and zero SCN Shares are held in treasury and 2,000,000 shares of
preferred stock, no par value, of which none are issued and outstanding. All of
the SCN Shares to be issued in the Merger have been duly authorized and, upon
consummation of the Merger, will be validly issued, fully paid, and
nonassessable.

(c) Authorization of Transaction. SCN has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement, to issue the SCN Shares and otherwise to perform its obligations
hereunder; provided, however, that SCN cannot consummate the Merger unless and
until it receives the Requisite SCN Stockholder Approval. This Agreement
constitutes the valid and legally binding obligation of SCN, enforceable in
accordance with its terms and conditions.

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which SCN
is subject, or may become subject as a result of the transaction contemplated by
this Agreement, or any provision of the charter or bylaws of SCN or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which SCN is a party or by which it is bound
or to which any of its assets is subject. Other than state and federal filings
required by the Securities Act and similar state statutes, SCN does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any

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<PAGE>

government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.

(e) Brokers' Fees. SCN does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which SCN could become liable or
obligated.

(f) Private Placement Memorandum. The Private Placement Memorandum does
not contain any untrue statement of material fact or omit to state a material
fact necessary to make the statements therein not misleading.

(g) Consistency with Other Transactions. SCN represents that the
representations and warranties of TALL and the extent of the indemnity
referenced in Section 9(a) below are substantially consistent with the
representations and warranties and indemnification obligations of the parties to
the transactions described in Section 6(b)(xii) below.

5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.

(a) General. Each of the Parties will use its and his best efforts to take
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below) to be
satisfied by him or it. This paragraph shall not be construed to obligate any of
its parties to waive any condition precedent to his or its obligations to
perform hereunder.

(b) Notices and Consents. TALL will give any notices to third parties, and
will use its best efforts to obtain any third party consents, that SCN
reasonably may request in connection with the matters referred to in Section
3(i) above.

(c) Regulatory Matters and Approvals. Each of the parties to this
Agreement will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing:

(i) Securities Act, Securities Exchange Act, and State Securities
Laws. SCN will prepare and, if necessary, file with the United States
Securities and Exchange Commission all necessary documents relating to the
offering and issuance of the SCN Shares. SCN will take all actions that
may be necessary under state securities laws in connection with the
offering and issuance of the SCN Shares.

(ii) General Corporation Law. TALL will call a special meeting of
its stockholders (the "Special TALL Meeting") as soon as practicable in
order that the TALL Stockholders may consider and vote upon the adoption
of this Agreement and the approval of the Merger in accordance with the
Florida General Corporation Law. SCN will call a special meeting of its
stockholders (the "Special SCN Meeting") as soon as practicable in order
that the stockholders may consider and vote upon the adoption
of this Agreement and the approval of the Merger in accordance with the
Delaware General Corporation Law.

(iii) Tax Reporting. The Merger is intended to qualify as a
reorganization under Code Section 368(a)(1)(A). Each of the parties agrees
to report this transaction for financial and income tax purposes in
accordance with the foregoing.

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<PAGE>

(d) Operation of Business. From the date of this Agreement through the
Closing Date, TALL will not engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business.
Without limiting the generality of the foregoing:

(i) TALL will not authorize or effect any change in its charter or
bylaws;

(ii) TALL will not grant any options, warrants, or other rights to
purchase or obtain any of its capital stock or issue, sell, or otherwise
dispose of any of its capital stock (except upon the conversion or
exercise of options, warrants, and other rights currently outstanding);

(iii) TALL will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock in either case outside the Ordinary Course of Business without the
consent of SCN, which consent shall not be unreasonably withheld;

(iv) TALL will not issue any note, bond, or other debt security or
create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation outside the Ordinary Course of Business;

(v) TALL will not impose any Security Interest upon any of its
assets outside the Ordinary Course of Business;

(vi) TALL will not make any capital investment in, make any loan to,
or acquire the securities or assets of any other Person outside the
Ordinary Course of Business;

(vii) TALL will not make any change in employment terms for any of
its directors, officers, and employees outside the Ordinary Course of
Business; and

(viii) TALL will not commit to any of the foregoing.

(e) Full Access. Upon three (3) days prior notice, TALL will permit
representatives of SCN to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to TALL during normal business hours. SCN will treat and hold as
such any confidential information it receives from TALL in the course of the
reviews contemplated by this Section 5(e), will not use any of the confidential
information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to TALL all tangible
embodiments (and all copies) thereof which are in its possession.

(f) Notice of Developments. Each Party will give prompt written notice to
the other of any material adverse development causing a breach of any of its own
representations and warranties in Section 3 and Section 4 above. No disclosure
by any Party pursuant to this Section 5(f), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.

(g) Exclusivity. Until the earlier of (i) December 31, 1996, or (ii) the
Effective Time, TALL will not solicit, initiate, or encourage the submission of
any proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of TALL (including any
acquisition structured as a merger, consolidation, or share exchange). TALL
shall notify SCN immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.

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<PAGE>

(h) Collection of Accounts Receivable. The TALL Stockholders agree to
cooperate with SCN in the collection of accounts receivable owned by TALL as of
the Effective Time acquired pursuant to this Agreement. SCN, at its option,
shall have the right to require the collection of said accounts receivable
through a lockbox or bank account sweep arrangement. In connection therewith,
the TALL Stockholders agree to execute the necessary documents and follow the
necessary procedures as described in the Service Agreement between TALL, the
TALL Stockholders and TOC Specialists, P.L. which is attached hereto as Exhibit
7(a)(iv) to accommodate the collection of the accounts receivable in such
manner.

(i) Payment of Expenses. On or before the Effective Time, TALL shall have
paid or discharged any and all liabilities or charges for costs or fees owed as
a result of the transaction contemplated by this Agreement.

(j) Completion of Schedules. The parties hereto acknowledge that this
Agreement is being executed and delivered before the Disclosure Schedule has
been completed and attached hereto. SCN therefore agrees that TALL and the TALL
Stockholders may complete the Disclosure Schedule and that said Disclosure
Schedule may be attached hereto after the execution and delivery of this
Agreement; provided, however, that the Disclosure Schedule shall be in form,
substance and content acceptable to SCN in its sole discretion and shall be
completed and delivered to SCN by TALL and the TALL Stockholders on or prior to
Closing. SCN shall have the right to terminate this Agreement at any time on or
prior to Closing, in its sole discretion, based upon its review of the
Disclosure Schedule furnished by TALL and the TALL Stockholders and the
documents, events, facts or other circumstances referred to therein. In the
event that this Agreement is terminated pursuant to this Section 5(j), neither
party shall be obligated to the other, except as set forth in Section 8(b).

(k) Loan Agreement. Within thirty (30) days after the Effective Time, SCN
agrees to make a line of credit available to the TALL Stockholders up to a
maximum aggregate of $1,397,981 on terms mutually agreed upon by the parties
thereto and ultimately approved by NationsBank of Tennessee, N.A. The line of
credit shall be for a term of two (2) years from the Closing Date; provided,
however, that if Securities and Exchange Commission Rule 144 promulgated under
the Securities Act is amended to shorten the period which stockholders are
required to hold restricted securities before being able to sell them pursuant
to Rule 144, then the term of the line of credit shall be reduced accordingly,
and all borrowings under the line of credit must be repaid within thirty (30)
days after the end of such period.

6. Conditions to Obligation to Close.

(a) Conditions to Obligation of SCN. The obligation of SCN to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) The TALL Stockholders shall have received a copy of the Private
Placement Memorandum, and no less than five (5) days after receipt of the
Private Placement Memorandum, this Agreement and the Merger shall have
received the Requisite TALL Stockholder Approval and the number of
Dissenting Shares shall not exceed five percent (5%) of the number of
outstanding TALL Shares;

(ii) TALL shall have procured all of the third party consents
specified in Section 5(b) above;

(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;

(iv) TALL shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(v) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any

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<PAGE>

arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the former assets or to operate the former business of
the TALL;

(vi) TALL shall have delivered to SCN a certificate to the effect
that each of the conditions specified above in Section 6(a)(i)-(v) is
satisfied in all respects;

(vii) this Agreement and the Merger shall have received the
Requisite SCN Stockholder Approval;

(viii) SCN shall have received from counsel to TALL an opinion in
form and substance as set forth in Exhibit 6(a)(viii) attached hereto,
addressed to SCN, and dated as of the Closing Date;

(ix) SCN shall have received from the TALL Stockholders subscription
documents in form and substance as set forth in Exhibit 6(a)(ix) attached
hereto;

(x) SCN shall have received the resignations, effective as of the
Closing, of each director and officer of TALL other than those whom SCN
shall have specified in writing at least five (5) business days prior to
the Closing;

(xi) all actions to be taken by TALL in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to SCN;

(xii) SCN shall have closed its financing with NationsBank of
Tennessee, N.A. on terms and conditions that are satisfactory to SCN;

(xiii) The issuance of the SCN Shares to TALL or the TALL
Stockholders will not violate federal securities laws or the securities
laws of any state of the United States;

(xiv) SCN and TALL shall have all licenses and permits necessary to
operate their respective businesses;

(xv) all physicians and employees of TALL must be covered by medical
malpractice insurance and, to the extent applicable, medical malpractice
tail insurance to cover prior occurrences;

(xvi) TALL shall have distributed to the TALL Stockholders all of
the assets listed on Exhibit 6(a)(xv), which constitute the entirety of
the assets owned by TALL not being acquired by SCN (the "Excluded
Assets"). Additionally, on or before the Effective Time, TALL shall have
paid or discharged all liabilities or charges for costs or fees owed as a
result of the transactions contemplated by this Agreement. With respect to
Employee Benefit Plans, all Plans shall be transferred to a new entity
controlled by the TALL Stockholders, and the instrument of transfer shall
provide that the new entity assumes all of the liabilities of the Plan,
including, but not limited to, any current or future funding liabilities;

(xvii) TALL shall have established an adequate accrual reserve for
payment of the taxes accrued with respect to the taxable periods or
portion thereof ended as of the Effective Time of the Merger contemplated
herein;

- 15 -
<PAGE>

(xviii) Except for the liabilities being assumed by SCN hereunder,
including accounts payable of TALL, not more than thirty (30) days old,
and arising out of the Ordinary Course of Business, TALL shall have caused
the payoff of all indebtedness owed to banks or other financial
institutions or lenders or the assumption thereof by a new entity
organized by the TALL stockholders; and

(xix) On or before the Closing Date, TALL will satisfy and discharge
any and all liabilities to any employee of TALL for accrued vacation time
in excess of one week and accrued sick time in excess of one week.

SCN may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

(b) Conditions to Obligation of TALL. The obligation of TALL to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) This Agreement and the Merger shall have received the Requisite
SCN Stockholder Approval;

(ii) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the
Closing Date;

(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(C) affect adversely the right of the Surviving Corporation to own the
former assets of TALL;

(v) SCN shall have delivered to TALL a certificate to the effect
that each of the conditions specified above in Section 6(b)(i)-(iv) is
satisfied in all respects;

(vi) TALL shall have received from counsel to SCN an opinion in form
and substance as set forth in Exhibit 6(b)(vi) attached hereto, addressed
to the TALL Stockholders, and dated as of the Closing Date;

(vii) this Agreement and the Merger shall have received the
Requisite TALL Stockholder Approval;

(viii) SCN shall have made all filings required under applicable
federal securities laws and the securities laws of any state of the United
States, and SCN shall have provided the Private Placement Memorandum to
the TALL Stockholders;

(ix) upon review of the Private Placement Memorandum, the TALL
Stockholders shall have elected to close the transaction by delivery to
SCN of completed subscription documents in form and substance as set forth
in Exhibit 6(a)(ix);

- 16 -
<PAGE>

(x) all actions to be taken by SCN in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to TALL;
and

(xi) there shall have been no changes in the Applicable Laws
affecting SCN's proposed operations as described in the Private Placement
Memorandum; and

(xii) On or before the Effective Time, the transactions contemplated
by (i) that certain Merger Agreement between SCN and Vero Orthopaedics,
P.A., (ii) that certain Merger Agreement between SCN and Reconstructive
Orthopaedic Assoc., P.C., (iii) that certain Stock Exchange Agreement
between SCN and the Stockholders of Princeton Orthopaedic Associates,
P.A., and (iv) that certain Asset Exchange Agreement between SCN and
Greater Chesapeake Orthopaedic Associates, P.L.L.C., shall have been
consummated.

TALL may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.

7. Items to be Delivered at or Prior to Closing.

(a) By the TALL Stockholders or TALL. The TALL Stockholders or TALL, as
applicable, shall execute and deliver to TALL, prior to or at the Closing:

(i) Certified resolutions of TALL authorizing the execution of all
documents and the consummation of all transactions contemplated hereby;

(ii) The Florida Articles of Merger which shall be in substantially
the form attached hereto as Exhibit 2(c)(i);

(iii) Stock Certificates representing ownership of all shares of
TALL (other than Dissenting Shares), duly endorsed to SCN;

(iv) The Certificate required by Section 6(a)(vi);

(v) An opinion from TALL's counsel in substantially the form
attached hereto as Exhibit 6(a)(viii);

(vi) Subscription Documents in substantially the form attached
hereto as Exhibit 6(a)(ix);

(vii) A Specialty Care Network, Inc. Stockholder's Agreement;

(viii) Counterpart signature pages to the Specialty Care Network,
Inc. Stockholder's Agreement; and

(ix) Such other instruments as may be reasonably requested by SCN in
order to effect to or carry out the intent of this Agreement.

(b) By SCN. SCN shall deliver to TALL at or prior to the Closing:

(i) Stock Certificates representing the SCN Shares being issued to
each of the TALL Stockholders pursuant to Section 2(d)(v);

(ii) The Delaware Articles of Merger in substantially the form
attached hereto Exhibit 2(c);

- 17 -
<PAGE>

(iii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 6(b)(vi);

(iv) A Certificate, duly executed by the President of SCN, stating
as of the Closing Date, all representations and warranties of SCN are
true, all covenants and agreements contained in the Agreement to be
performed by SCN have been performed or complied with and all conditions
to Closing have been satisfied;

(v) A Specialty Care Network, Inc. Stockholder's Agreement; and

(vi) Such other instruments as may be reasonably requested by the
TALL Stockholders in order to effect to or carry out the intent of this
Agreement.

8. Termination.

(a) Termination of Agreement. Either of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether before
or after stockholder approval) as provided below:

(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;

(ii) SCN may terminate this Agreement by giving written notice to
TALL at any time prior to the Effective Time (A) in the event TALL has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, SCN has notified TALL of the breach,
and the breach has continued without cure for a period of 30 days after
the notice of breach, (B) if the Closing shall not have occurred on or
before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results primarily
from SCN breaching any representation, warranty, or covenant contained in
this Agreement) or (C) in accordance with Section 5(j);

(iii) TALL may terminate this Agreement by giving written notice to
SCN at any time prior to the Effective Time (A) in the event SCN has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, TALL has notified SCN of the breach,
and the breach has continued without cure for a period of 30 days after
the notice of breach or (B) if the Closing shall not have occurred on or
before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results primarily
from TALL breaching any representation, warranty, or covenant contained in
this Agreement);

(iv) any Party may terminate this Agreement by giving written notice
to the other Party at any time in the event this Agreement and the Merger
fail to receive the Requisite TALL Stockholder Approval or the Requisite
SCN Stockholder Approval respectively.

(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any party to any other Party (except for any
liability of any Party then in breach). Notwithstanding the foregoing, in the
event the transaction contemplated by this Agreement does not close and such
failure is not the fault of SCN, then TALL agrees to reimburse SCN for
seventy-five percent of SCN's out of pocket expenses, including but not limited
to professional fees, related to the proposed transaction; provided, however,
TALL's obligation to reimburse SCN shall not exceed fifty-six thousand two
hundred fifty dollars ($56,250).

9. Indemnification.

- 18 -
<PAGE>

(a) Indemnification by the TALL Stockholders. The TALL Stockholders agree
to and shall, severally, and not jointly, defend, indemnify and hold harmless
SCN, its successors and assigns, officers and directors against any and all
losses, liabilities, expenses (including, but without limitation, reasonable
attorneys fees) and damages resulting from or arising out of the breach, untruth
or inaccuracy of any representation, warranty or covenant of TALL or the TALL
Stockholders set forth in this Agreement. The TALL Stockholders shall not be
liable to SCN for any claims against the TALL Stockholders under this Section
9(a) unless and until the aggregate of all claims against the TALL Stockholders
exceeds the sum of $25,000.00, whereupon SCN shall be entitled to recover the
full amount of all claims, including the initial $25,000.00. Notwithstanding the
foregoing provisions, the obligations of any TALL Stockholder executing this
Agreement to indemnify SCN shall not exceed the fair market value (as determined
under the Stockholders Agreement) of the portion of the SCN Shares delivered to
such TALL Stockholder at the time of Closing.

(b) Notice to the TALL Stockholders; Opportunity to Defend. SCN agrees to
give prompt notice to the TALL Stockholders of the assertion of any claim, or
the commencement of any suit, action or proceeding, in respect of which
indemnity may be sought under Section 9(a). The TALL Stockholders may
participate in and at their election, or at the request of SCN, assume the
defense of any such suit, action or proceeding at the TALL Stockholders's
expense. The TALL Stockholders shall not be liable under Section 9(a) for any
settlement effected without their consent of any claim, litigation or proceeding
in respect of which indemnity may be sought under Section 9(a) which consent
shall not be unreasonably withheld.

(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the TALL Stockholders, their heirs and assigns
against any and all losses, liabilities, expenses (including, but without
limitation, reasonable attorneys fees) and damages resulting from the breach,
untruth or inaccuracy of any representation, warranty or covenant of SCN set
forth in this Agreement. SCN shall not be liable to the TALL Stockholders for
any claims against SCN under this Section 9(c) unless and until the aggregate of
all claims against SCN exceeds the sum of $25,000.00, whereupon the TALL
Stockholders shall be entitled to recover the full amount of all claims,
including the initial $25,000.00.

(d) Notice to SCN; Opportunity to Defend. The TALL Stockholders agree to
give prompt notice to SCN of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought under
Section 9(c). SCN may participate in and at its election, or at the request of
the TALL Stockholders, assume the defense of any such suit, action or proceeding
at SCN's expense. SCN shall not be liable under Section 9(c) for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder, which consent shall not be
unreasonably withheld.

(e) Survival. The representations and warranties of the TALL Stockholders,
TALL and SCN contained in this Agreement and the indemnifications contained
herein shall survive the Closing. No claim for indemnification with respect to
any alleged misrepresentation or breach of warranty may be made after two (2)
years following the Closing Date. Any matter to which indemnification pertains
and with respect to which a claim has been asserted or threatened following the
Closing Date shall continue to be subject to the indemnification under this
Agreement until finally terminated, settled, resolved or adjudicated; and all
terms, conditions and stipulations of this Agreement shall likewise continue to
apply.

(f) Security for Indemnity. The TALL Stockholders hereby agree that in the
event (i) any final judgment is rendered in favor of SCN, (ii) SCN is entitled
to indemnification pursuant to the provisions of this Agreement, and (iii) the
TALL Stockholders do not pay to SCN the amount due hereunder, then SCN shall
have the right to redeem any SCN Share then owned by the TALL Stockholders
pursuant to the terms of the Stockholder's Agreement.

- 19 -
<PAGE>

10. Miscellaneous.

(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.

(b) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the parties and supersedes any
prior understandings, agreements, or representations by or between the parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

(c) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.

(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

(f) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

If to TALL: Copy to:

Larry Lehman, Administrator Thomas W. Lager, Esq.
Tallahassee Orthopedic Clinic 354 Office Plaza
3334 Capital Medical Blvd. Tallahassee, FL 32301
Suite 400 Facsimile: (904) 877-6461
Tallahassee, FL 32317
Facsimile: (904) 877-5635

If to SCN: Copy to:

Kerry R. Hicks, President David T. Popwell, Esq.
Specialty Care Network, Inc. Baker, Donelson, Bearman & Caldwell
44 Union Boulevard, Suite 500 165 Madison Ave, Suite 2100
Lakewood, Colorado 80228 Memphis, Tennessee 38103
Facsimile: (303) 716-1298 Facsimile: (901) 577-2303

Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.

- 20 -
<PAGE>

(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.

(h) Amendments and Waivers. The parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the prior
authorization of their respective boards of directors; provided, however, that
any amendment effected subsequent to stockholder approval will be subject to the
restrictions contained in the Delaware General Corporation Law and the Florida
General Corporation Law. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by both of the parties.
No waiver by any party of any default, misrepresentation, or breach of warranty
or covenant hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.

(i) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

(j) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

(k) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.

(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

* * * * *

- 21 -
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

SPECIALTY CARE NETWORK, INC.

By:__________________________________
Title:_______________________________

TOC SERVICES, INC.

By:__________________________________
Title:_______________________________

- 22 -
<PAGE>

TALL STOCKHOLDERS:

__________________________________________________
Tom C. Haney, M.D., Stockholder

__________________________________________________
William D. Henderson, Jr., M.D., Stockholder

__________________________________________________
Gregg A. Alexander, M.D., Stockholder

__________________________________________________
Richard E. Blackburn, M.D., Stockholder

__________________________________________________
Billy C. Weinstein, M.D., Stockholder

__________________________________________________
Robert L. Thornberry, M.D., Stockholder

__________________________________________________
Charles H. Wingo, M.D., Stockholder

__________________________________________________
Donald Dewey, M.D., Stockholder

__________________________________________________
J. Rick Lyon, M.D., Stockholder

__________________________________________________
Steve E. Jordan, M.D., Stockholder

__________________________________________________
Mark E. Fahey, M.D., Stockholder

__________________________________________________
Kris D. Stowers, M.D., Stockholder

__________________________________________________
David C. Berg, M.D., Stockholder

__________________________________________________
Larry W. Lehman, Stockholder

- 23 -

<PAGE>

SERVICE AGREEMENT

BY AND BETWEEN

SPECIALTY CARE NETWORK, INC.,

RECONSTRUCTIVE ORTHOPAEDIC ASSOCIATES II, P.C.

AND

RICHARD H. ROTHMAN, M.D.
ROBERT E. BOOTH, JR., M.D.
RICHARD A. BALDERSTON, M.D.
ARTHUR R. BARTOLOZZI, M.D.
WILLIAM J. HOZACK, M.D.
MICHAEL G. CICCOTTI, M.D.
TODD J. ALBERT, M.D.
ALEXANDER R. VACCARO, M.D.
PETER F. SHARKEY, M.D.

Dated as of November 12, 1996

<PAGE>

TABLE OF CONTENTS Page
----

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship..................................... - 1 -
1.2. Responsibilities of the Parties.............................. - 2 -
1.3. ROAII Matters................................................ - 2 -
1.4. Patient Referrals............................................ - 2 -
1.5. Professional Judgment........................................ - 2 -

ARTICLE II.

DEFINITIONS

2.1. Definitions.................................................. - 2 -

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

3.1. Practice Offices............................................. - 7 -
3.2. Use of Practice Offices...................................... - 7 -

ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board.................. - 8 -
4.2. Duties and Responsibilities of the Policy Board.............. - 8 -

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions.......................... - 9 -
5.2. Financial Planning and Goals................................. - 9 -
5.3. Audits and Financial Statements............................. - 10 -
5.4. Inventory and Supplies...................................... - 10 -
5.5. Management Services and Administration...................... - 10 -
5.6. Personnel................................................... - 12 -
5.7. Events Excusing Performance................................. - 13 -
5.8. Compliance with Law and Business Standards.................. - 13 -
5.9. Quality Assurance........................................... - 13 -
5.10. New Medical Services and Additional Practice Offices........ - 13 -
5.11. Collection of Certain Patient Receipts and Payment of
Clinic Expenses .......................................... - 14 -
5.12. Other ROAII Accounts........................................ - 14 -

ARTICLE VI.

<PAGE>

Page
----

OBLIGATIONS OF ROAII AND PHYSICIAN OWNERS

6.1. Professional Services....................................... - 14 -
6.2. Medical Practice............................................ - 15 -
6.3. Employment of Physician Employees........................... - 15 -
6.4. Professional Dues and Education Expenses.................... - 15 -
6.5. Professional Insurance Eligibility.......................... - 15 -
6.6. Events Excusing Performance................................. - 15 -
6.7. Fees for Professional Services.............................. - 15 -
6.8. Peer Review................................................. - 15 -
6.9. ROAII Employee Benefit Plans................................ - 16 -

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

7.1. Exclusive Arrangement....................................... - 18 -
7.2. Restrictive Covenants....................................... - 18 -
7.3. Restrictive Covenants By Future Physician Employees......... - 19 -
7.4. Rights of Company........................................... - 19 -
7.5. Enforcement................................................. - 20 -
7.6. Modification of Restrictive Covenants....................... - 20 -

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees................................................ - 20 -
8.2. Payment of Service Fee...................................... - 24 -
8.3. Purchase of Accounts Receivable............................. - 24 -
8.4. Payment of Clinic Expenses.................................. - 25 -

ARTICLE IX.

RECORDS

9.1. Patient Records............................................. - 26 -
9.2. Records Owned by Company.................................... - 26 -
9.3. Access to Records........................................... - 26 -
9.4. Government Access to Records................................ - 26 -

ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by ROAII........................ - 27 -
10.2. Insurance to be Maintained by Company...................... - 27 -
10.3. Additional Insureds........................................ - 27 -

<PAGE>

Page
----

10.4. Indemnification............................................ - 27 -

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement.......................................... - 28 -
11.2. Extended Term.............................................. - 28 -
11.3. Termination by ROAII for Cause............................. - 28 -
11.4. Termination by Company for Cause........................... - 29 -
11.5. Early Termination by ROAII or Company Without Cause Upon
Third (3rd) Anniversary of Agreement..................... - 30 -
11.6. Consequences of ROAII Termination.......................... - 31 -
11.7. Closing of Purchase by ROAII and Effective Date of
Termination ............................................. - 31 -
11.8. Tail Policy................................................ - 32 -
11.9. Restrictions Applicable to Physician Owners................ - 32 -

ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds.................................. - 36 -
12.2. Temporary Space............................................ - 36 -

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF ROAII AND PHYSICIAN OWNERS

13.1. Validity................................................... - 36 -
13.2. Litigation................................................. - 36 -
13.3. Permits.................................................... - 36 -
13.4. Authority.................................................. - 37 -
13.5. Compliance with Applicable Law............................. - 37 -
13.6. Health Care Compliance..................................... - 37 -
13.7. Fraud and Abuse............................................ - 37 -
13.8. ROAII Compliance........................................... - 38 -
13.9. Rates and Reimbursement Policies........................... - 38 -
13.10. Accounts Receivable........................................ - 38 -
13.11. Full Disclosure............................................ - 41 -
13.12. Exhibits................................................... - 41 -

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

14.1. Organization............................................... - 41 -
14.2. Authority.................................................. - 41 -
14.3. Absence of Litigation...................................... - 41 -

iii

<PAGE>

Page

14.4. Transactions with Affiliates............................... - 41 -

ARTICLE XV.

COVENANTS OF ROAII AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements................ - 42 -
15.2. Necessary Authorizations/Assignment of Licenses and Permit.. - 42 -
15.3. Transaction with Affiliates................................. - 42 -
15.4. Compliance with All Laws.................................... - 42 -
15.5. Third-Party Payor Programs.................................. - 42 -
15.6. Change in Business or Credit and Collection Policy.......... - 42 -
15.7. Treatment of Accounts Receivable............................ - 43 -
15.8. Security Interest........................................... - 43 -

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment.................................................. - 44 -
16.2. Whole Agreement; Modification............................... - 44 -
16.3. Notices..................................................... - 45 -
16.4. Binding on Successors....................................... - 45 -
16.5. Waiver of Provisions........................................ - 45 -
16.6. Governing Law............................................... - 45 -
16.7. No Practice of Medicine..................................... - 46 -
16.8. Severability................................................ - 46 -
16.9. Additional Documents........................................ - 46 -
16.10. Attorneys' Fees............................................ - 46 -
16.11. Time is of the Essence..................................... - 46 -
16.12. Confidentiality............................................ - 46 -
16.13. Contract Modifications for Prospective Legal Events........ - 46 -
16.14. Remedies Cumulative........................................ - 47 -
16.15. Language Construction...................................... - 47 -
16.16. No Obligation to Third Parties............................. - 47 -
16.17. Communications............................................. - 48 -

<PAGE>

SERVICE AGREEMENT

THIS SERVICE AGREEMENT ("Agreement") dated as of November 12, 1996, by and
between SPECIALTY CARE NETWORK, INC., a Delaware corporation ("Company"),
RECONSTRUCTIVE ORTHOPAEDIC ASSOCIATES II, P.C., a Pennsylvania professional
corporation, ("ROAII") and RICHARD H. ROTHMAN, M.D., ROBERT E. BOOTH, JR., M.D.,
RICHARD A. BALDERSTON, M.D., ARTHUR R. BARTOLOZZI, M.D., WILLIAM J. HOZACK,
M.D., MICHAEL G. CICCOTTI, M.D., TODD J. ALBERT, M.D., ALEXANDER R. VACCARO,
M.D., and PETER F. SHARKEY, M.D. ("Physician Owner[s]"), citizens and residents
of Pennsylvania.

W I T N E S S E T H:

WHEREAS, Company is in the business of managing medical clinics and
providing support services to and furnishing orthopedic care medical practices
with the necessary equipment, personnel, supplies and support staff; and

WHEREAS, ROAII and Physician Owners desire to obtain the services of
Company in performing such management functions so as to permit ROAII and
Physician Owners to devote ROAII's and Physician Owners' efforts on a
concentrated and continuous basis to the rendering of medical services to
patients.

NOW THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements herein set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed by the parties as follows:

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship. ROAII, Physician Owners and Company intend
to act and perform as independent contractors, and the provisions hereof are not
intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, ROAII, and Physician Owners agree that ROAII and
Physician Owners shall retain all authority to direct the medical, professional,
and ethical aspects of ROAII's and Physician Owners' medical practice including
but not limited to the admission of new patients and providing care to indigent
patients. Each party shall be solely responsible for and shall comply with all
state and federal laws pertaining to employment taxes, income withholding,
unemployment compensation contributions and other employment related statutes
applicable to that party.

1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide ROAII with offices and facilities, equipment,
supplies, certain support personnel, management and financial advisory services.
As more specifically set forth herein, ROAII shall be responsible for the
recruitment and hiring of physicians and all issues related to the professional
practice of medicine, medical practice patterns and documentation thereof.
Notwithstanding anything herein to the contrary, no "designated health service,"

as defined in 42 U.S.C. ss. 1395nn, including any amendments or successors
thereto, shall be provided by Company under this Agreement.

1.3. ROAII Matters. Matters involving the internal agreements and finances
of ROAII, including the disposition of professional fee income, tax planning,
and investment planning (and expenses relating solely to these internal business
matters) shall remain the sole responsibility of ROAII.

1.4. Patient Referrals. The parties agree that the benefits to ROAII and
Physician Owners hereunder do not require, are not payment for, and are not in
any way contingent upon the admission, referral or any other arrangement for the
provision of any item or service offered by Company to any of ROAII's patients
in any facility operated by Company.

<PAGE>

1.5. Professional Judgment. Each of the parties acknowledges and agrees
that the terms and conditions of this Agreement pertain to and control the
business and financial relationship between and among the parties but do not
pertain to and do not control the professional and clinical relationship between
and among ROAII, Physician Employees, ROAII Employees, and ROAII's patients.
Nothing in this Agreement shall be construed to alter or in any way affect the
legal, ethical, and professional relationship between and among ROAII, Physician
Owners, Physician Employees, and ROAII's patients, nor shall anything contained
in this Agreement abrogate any right, privilege, or obligation arising out of or
applicable to the physician-patient relationship.

ARTICLE II.

DEFINITIONS

2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:

"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.

"Accounts Receivable" means, with respect to ROAII, all accounts and any
and all rights to payment of money or other forms of consideration of any kind
now owned or hereafter acquired (whether classified under the Uniform Commercial
Code as accounts, chattel paper, general intangibles or otherwise) for goods
sold or leased or for services rendered by ROAII, including, but not limited to,
accounts receivable, proceeds of any letters of credit naming ROAII as
beneficiary, chattel paper, insurance proceeds, contract rights, notes, drafts,
instruments, documents, acceptances and all other debts, obligations and
liabilities in whatever form from any other Person; provided that, cash, checks
and credit card purchases are not included in the definition of Accounts
Receivable.

to (a) vote ten percent (10%) or more of the securities having ordinary voting
power for the election of directors of such Person, or (b) direct or cause the
direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.

"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations, ordinances and orders of all Governmental
Authorities and all orders and decrees of all courts, tribunals and arbitrators,
and shall include, without limitation, Health Care Law.

"Assigned Lease" shall have the meaning as defined in Section 3.1.

"Base Service Fee" shall
equal[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]per year,
payable in monthly payments of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.

"Change in Control" shall mean any transaction pursuant to which Company
(a) consummates the sale of substantially all of the assets of Company to an
entity which is publicly traded in exchange for voting stock in such publicly
traded entity or (b) merges with a publicly traded corporation, entity or
corporation or entity controlled by a publicly traded corporation or entity in a
transaction where unrelated persons own at least fifty-one percent (51%) of the
issued and outstanding securities of the surviving entity or corporation
controlling the merged entity.

"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

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"Company" shall mean Specialty Care Network, Inc., a Delaware corporation,
together with its successors and assigns.

"Company Expenses" shall have the meaning as defined in Section 8.1.7.

"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.

"Direct Lease" shall have the meaning as defined in Section 3.1.

as may be available under the circumstances, and the Policy Board may reasonably
anticipate that such Physician Employee will remain disabled for at least two
years following the commencement of such disability.

"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.

"Fair Market Value" with respect to Company common stock means (i) the
average closing price for the Company common stock as reported on a securities
exchange or quoted on a national quotation system, if any, upon which the
Company common stock is traded or quoted or (ii) in the event Company's common
stock is not traded on any exchange or quoted on a national quotation system,
the fair market value of the Company common stock shall be determined by an
independent appraiser or investment banker selected by two (2) independent
appraisers or investment bankers (one (1) such firm selected by Company and one
(1) such firm selected by the Physician Owner or the Physician Owners as a group
(as the case may be)). Such valuation may include the consideration of discounts
for marketability, minority ownership and other discounts usual and customary in
the valuation process. Unless otherwise specified herein, the cost of any
appraisal shall be borne equally by Company and the Physician Owner or the
Physician Owners as a group (as the case may be).

"GAAP" shall mean generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity or other practices and procedures as may be
approved by a significant segment of the accounting profession. For purposes of
this Agreement, GAAP shall be applied in a manner consistent with the historic
practices used by Company or ROAII as applicable.

"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, board, body, agency, bureau or entity or any arbitrator with
authority to bind a party at law.

"Governmental Receivables" means an Account Receivable of ROAII which (i)
arises in the ordinary course of business of ROAII, (ii) has as its Third-Party
Payor the United States of America or any state or any agency or instrumentality
of the United States of America or any state which makes any payments with
respect to Medicare or Medicaid or with respect to any other program (including
CHAMPUS) established by federal or state law, and (iii) is required by federal
or state law to be paid or to be made to ROAII as a healthcare provider.
Governmental Receivables shall not, however, refer to amounts payable by private
insurers under contract to provide benefits under the Federal Employee Health
Benefit Program.

"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.

"Health Care Law" means any Applicable Law regulating the acquisition,
construction, operation, maintenance or management of a health care practice,
facility, provider or payor, including without limitation, 42 U.S.C. ss.1395nn
and 42 U.S.C. ss. 1320a-7b.

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<PAGE>

"Lease" shall mean the Assigned Lease, Direct Leases, and the New Leases,
including all amendments thereto, described in Section 3.1 hereof.

"Leased Premises" shall mean the real property described in the Lease.

"Lender" shall have the meaning as defined in Section 7.2.

"Main Office" shall mean the Leased Premises and all equipment and
facilities owned or operated by Company and utilized by ROAII or any of its
employees within said Leased Premises.

"Medicaid" means any state program pursuant to which health care providers
are paid or reimbursed for care given or goods afforded to indigent persons and
administered pursuant to a plan approved by the Health Care Financing
Administration under Title XIX of the Social Security Act.

"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.

"Merger" shall mean the acquisition of Reconstructive Orthopaedic Assocs.,
Inc. ("ROA") pursuant to the Merger Agreement.

"Merger Agreement" means that certain Merger Agreement, dated November 12,
1996 by and between Company, ROA and Physician Owners.

"Merger A/R" means the accounts receivable acquired from ROA by Company
pursuant to the Merger Agreement.

"Necessary Authorizations" means with respect to ROAII, all certificates
of need, authorization, certifications, consents, approvals, permits, licenses,
notices, accreditations and exemptions, filings and registrations, and reports
required by Applicable Law, including, without limitation, Health Care Law,
which are required, necessary or reasonably useful to the lawful ownership and
operation of ROAII's business.

"New Lease" shall have the meaning as defined in Section 3.1.

"Office Locations" shall have the meaning as defined in Section 3.1.

"Person" shall mean an individual, corporation, partnership, association,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof including, without limitation, Third-Party Payors.

"Physician Employees" shall mean the term as defined in Section 8.1.6.

"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.

"Physician Owners" shall mean those Physician Employees who own an
interest, directly or indirectly, in the equity of ROAII.

"Plans" shall have the meaning as defined in Section 6.9.1.

"Policy Board" shall mean a board established pursuant to Section 4.1.

"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.

"Practice Offices" shall mean (i) the Main Office and (ii) all of the
Satellite Offices.

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"Professional Services Revenues" shall mean the term as defined in Section
8.1.2.

"Purchase Price" shall mean the term as defined in Section 8.4.2.

"Purchased A/R" means, with respect to ROAII, the Accounts Receivable
purchased pursuant to Section 8.3 of this Agreement.

"ROAII Operating Account" shall mean that certain operating account
established by ROAII at a bank selected by ROAII in ROAII's sole discretion as
more fully described in Section 5.11.

"ROAII Plan" shall mean the term as defined in Section 6.9.1.

"Satellite Offices" shall mean each location at which one or more of
ROAII's employees provide services as described on Exhibit 2.1 and all equipment
and facilities owned or operated by Company and utilized by any of said persons
at such location.

"Settlement Date" shall mean the term as defined in Section 8.3.3.

"Service Agreement" means this Agreement.

"Subsidiary" means a Person of which an aggregate of 51% or more of the
voting stock of any class or classes or 51% or more of other voting or equity
interests is owned of record or beneficially by another Person, or by one or
more Subsidiaries of such Person.

"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).

"Technical Employees" shall mean the term as defined in Section 8.1.4.

"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.

"Third-Party Payor Programs" means Medicare, Medicaid, CHAMPUS, insurance
provided by Blue Cross and/or Blue Shield, managed care plans, and any other
private health care insurance programs and employee assistance programs as well
as any future similar programs.

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

3.1. Practice Offices. (a) Company has received a leasehold interest in
certain offices and locations which comprise the Practice location ("Main
Office") and/or satellite offices ("Satellite Offices") as identified on Exhibit
3.1 (collectively the "Office Locations") through (i) an assignment of any
existing leases on said Office Locations (the "Assigned Leases") or (ii)
entering into a new lease with respect to one or more of the Office Locations
(the "Direct Leases") with a copy of the Assigned Leases and Direct Leases
attached hereto as Exhibit 3.1.

(b) Company agrees to provide offices and facilities at the Office
Locations (or at comparable facilities on the termination of the Assigned Leases
or Direct Leases) to ROAII. Such facilities shall include all personal property
necessary to operate the facility. If any Assigned Leases or Direct Leases are
terminated by their terms, Company shall enter into a lease of a new facility
comparable to the Office Location whose lease is terminated (the "New Lease")
with the consent of the Policy Board. Company shall not enter into a lease for a
new Main Office or Satellite Office for ROAII without the approval of the Policy
Board.

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<PAGE>

3.2. Use of Practice Offices. ROAII shall not use or occupy the Main
Office or Satellite Offices for any purpose which is prohibited by the Assigned
Leases, Direct Leases or New Leases, by this Agreement or which is directly or
indirectly forbidden by law, ordinance, or governmental or municipal regulation
or order, or which may be dangerous to life, limb or property, or which would
increase the fire and extending coverage insurance rate in any Practice Office
or contents.

ARTICLE IV.

DUTIES OF THE POLICY BOARD

designate, in ROAII's sole discretion, three (3) members of the Policy Board.
Any matter decided by a majority of the members of the Policy Board shall
constitute the decision of the Policy Board with respect to the matter.

4.2. Duties and Responsibilities of the Policy Board. The Policy Board
shall have the following duties and obligations:

4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by ROAII for any renovations, capital improvements, expansions and
new equipment purchases or leases. The Policy Board shall determine whether such
expenditures are appropriate based upon economic feasibility, physician support,
productivity, market conditions, and the annual budget formulated pursuant to
this Agreement. If the Policy Board determines that the acquisition of
additional equipment or facilities is appropriate, then Company shall use its
best efforts to arrange for the financing and acquisition of the property.
Governance issues affecting the Policy Board shall be addressed in accordance
with the rules set forth in Exhibit 4.1.

4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the review of the Policy Board.

4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.

4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with ROAII and Company, to the extent allowed
by Applicable Law, the Policy Board shall review and advise ROAII as to an
appropriate fee schedule for all physician and ancillary services rendered by
ROAII, which fee schedule shall ultimately be determined by ROAII in ROAII's
sole discretion. In addition, the Policy Board shall approve the credit
collection policies of ROAII.

4.2.5. ROAII and Payor Relationships. Decisions regarding the
establishment or maintenance of relationships with institutional health care
providers and payors, or with parties under arrangements for setting up new
Satellite Offices of ROAII in the future, shall be made by the Policy Board in
consultation with ROAII.

4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.

4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.

4.2.8. Restrictive Covenants for Physician. The approval of the Policy
Board shall be required for any variations to the restrictive covenants
prescribed for any physician employment contract as set forth in Article VII or
Exhibit 11 of this Agreement.

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<PAGE>

4.2.9. Grievance Referrals. The Policy Board shall consider and make final
decisions regarding grievances pertaining to matters not specifically addressed
in this Agreement as referred to it by the Physician Employees.

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions. Company shall use its best
efforts to manage the day-to-day operations of the Main Practice Office and any
Satellite Offices in a business-like manner. Company shall provide or arrange
for the services set forth in this Article V, the cost of all of which shall be
included in Clinic Expenses. Company is hereby expressly authorized to perform
its services hereunder in whatever manner it deems reasonably appropriate to
meet the day-to-day requirements of Practice Office operations in accordance
with the general standards approved by the Policy Board and to maintain the
lease agreements for each of the Practice Offices, including, without
limitation, performance of some of the business office functions at locations
other than the Main Practice Office. ROAII will not act in a manner which would
prevent Company from efficiently managing the day-to-day operations of the Main
Practice Office and maintaining the operations of the Satellite Offices in a
business-like manner.

5.2. Financial Planning and Goals. Subject to Section 4.2.2. of this
Agreement, Company shall prepare annual capital and operating budgets reflecting
in reasonable detail anticipated revenues and expenses, and sources and uses of
capital for growth in ROAII's practice and medical services rendered at the
Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board and the Company shall agree upon a budget for the
upcoming fiscal year. The budget, as described in Section 4.2.2., shall be
binding upon Company and ROAII. Company shall consult with ROAII and the Policy
Board in the preparation of all budgets. Company and ROAII acknowledge and agree
that once a budget has been approved, neither Company nor ROAII shall make
expenditures or incur expenses in excess of budgeted amounts without the prior
approval of the Policy Board.

5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of ROAII and, in its sole discretion,
may cause the financial statements to be audited by a certified public
accountant selected by Company. ROAII shall cooperate fully in such audit. The
cost of such audit shall be included in Clinic Expenses. If Company elects to
have the financial statements audited by a certified public accountant with a
big six accounting firm, the resulting audited financial statements shall be
binding on ROAII and Company. If Company elects not to have ROAII's financial
statements so audited, ROAII shall have the option to obtain such an audit, by a
certified public accountant with a mutually acceptable accounting firm. Company
shall fully cooperate in such audit. The cost of such audit shall be included in
Clinic Expenses. In such event, Company and ROAII shall be bound by the
resulting audited financial statements. All parties shall be entitled to copies

of any information provided to or by the auditors by or to any party.
Additionally, Company shall prepare monthly unaudited financial statements
containing a balance sheet and statements of income from Practice Office
operations, which shall be delivered to ROAII within thirty (30) business days
after the close of each calendar month.

5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by ROAII and are
within the budget for the applicable fiscal period. Company shall not purchase
inventory, goods or supplies from any Affiliate of Company without approval of
the Policy Board and after full disclosure of all terms to the Policy Board.

5.5. Management Services and Administration.

5.5.1. ROAII hereby appoints Company as ROAII's sole and exclusive manager
and administrator of all day-to-day business functions. ROAII agrees that the
purpose and intent of this Agreement is to relieve ROAII and Physician Employees
to the maximum extent possible of the administrative, accounting, personnel and
business aspects of their practice, with Company assuming responsibility and
being given all necessary authority to perform these functions. Company agrees
that ROAII and only ROAII will perform the medical functions of ROAII's
practice. Company will have

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no authority, directly or indirectly, to perform, and will not perform, any
medical function. Company may, however, advise ROAII as to the relationship
between ROAII's performance of medical functions and the overall administrative
and business functioning of ROAII's practice. To the extent that a Company
employee assists Physician Employees in performing medical functions, such
employees shall be subject to the professional direction and supervision of
Physician Employees and in the performance of such medical functions shall not
be subject to any direction or control by, or liability to, Company, except as
may be specifically authorized by Company.

5.5.2. Company shall, on behalf of ROAII, bill patients and collect the
professional fees for medical services rendered by ROAII or any Physician
Employee, regardless of when or where such services are rendered. All billings
for Physician Employee's services shall be made in the name of and under the
provider number of ROAII. ROAII hereby appoints Company to be ROAII's true and
lawful attorney-in-fact, for the following purposes: (i) to bill patients in
ROAII's name and on ROAII's behalf; (ii) to collect Accounts Receivable
resulting from such billing in ROAII's name and on ROAII's behalf; (iii) to
receive payments from insurance companies, prepayments from health care plans,
and all other Third-Party Payors; (iv) to take possession of and endorse in the
name of ROAII (and/or in the name of an individual physician, such payment
intended for purpose of payment of a physician's bill) any notes, checks, money
orders, insurance payments and other instruments received in payment of Accounts
Receivable; and (v) to initiate legal proceedings in the name of ROAII to

collect any accounts and monies owed to ROAII or any Physician Employee, to
enforce the rights of ROAII as creditors under any contract or in connection
with the rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from ROAII by Company, Company shall deposit any cash receipts collected on
behalf of ROAII into the ROAII Operating Account described in Section 5.11.

5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of ROAII, including but not limited
to accounting, billing, patient medical records, and collection records. While
the Company shall maintain custody, patient medical records shall at all times
be and remain the property of ROAII and shall be located at the Practice Offices
so that they are readily accessible for patient care. The Physician Employees
shall have the obligation to oversee the preparation and maintenance of patient
medical records, and to provide such medical information as shall be necessary
and appropriate to the records' clinical function and to sustain and ensure the
availability of Third-Party Payor reimbursement for services rendered. The
management of all files and records shall comply with applicable state and
federal statutes. Company shall use its best efforts to preserve the
confidentiality of patient medical records and use information contained in such
records only as permitted by law, to the extent necessary to perform the
services set forth herein.

5.5.4. Company shall supply to ROAII necessary clerical, accounting,
bookkeeping and computer services, printing, postage and duplication services,
medical transcribing services and any other ordinary, necessary or appropriate
service for the operation of the Practice Offices.

5.5.5. Subject to the overall guidance of the Policy Board, Company shall
design and implement an adequate and appropriate public relations program on
behalf of ROAII, with appropriate emphasis on public awareness of the
availability of services at the Practice Offices. The public relations program
shall be conducted in compliance with Applicable Law and regulations governing
advertising by the medical profession and applicable canons of principles of
professional ethics of ROAII and Physician Employees of ROAII.

5.5.6. Company shall provide the data necessary for ROAII to prepare
ROAII's annual income tax returns. Company shall have no responsibility for the
preparation of ROAII's federal or state income tax returns or the payment of
such income taxes. Company shall prepare or cause to be prepared on ROAII's
behalf, necessary employment tax returns. ROAII shall be obligated to pay any
taxes due on such employment tax returns with respect to the Physician Owners.

5.5.7. Company shall assist ROAII in recruiting additional physicians,
carrying out such administrative functions as may be appropriate, such as
advertising for and identifying potential candidates, obtaining credentials, and
arranging interviews; provided, however, ROAII shall interview and make the
ultimate decision as to the suitability of any physician

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to become associated with ROAII. All physicians recruited by Company and
accepted by ROAII shall be the sole employees of ROAII, to the extent such
physicians are hired as employees.

5.5.8. Company shall negotiate managed care contracts on behalf of ROAII
and shall administer all managed care contracts in which ROAII participates.

5.5.9. Company shall arrange for legal and accounting services related to
operations of the Practice Offices and Physician Employee's practice at the
Practice Offices incurred traditionally in the ordinary course of business,
including the cost of enforcing any contract with a Physician Employee
containing restrictive covenants, provided such services shall be approved in
advance by the Policy Board. Notwithstanding the foregoing, ROAII shall have the
authority to arrange for legal and accounting services relating to matters other
than day-to-day management of ROAII; such other matters including but not
limited to issues relating to ROAII governance issues, compensation of Physician
Owners, and issues which arise between ROAII and Company; provided, however,
such fees shall be considered Excluded Expenses.

5.5.10. Company shall provide for the proper cleanliness of the premises,
and maintenance and cleanliness of the equipment, furniture and furnishings
located upon such premises.

5.5.11. Upon receipt of dues, statements or license notices from the
Physician Employees, Company shall make payment for the cost of professional
licensure fees and board certification fees of physicians associated with ROAII.

5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.

5.6. Personnel. Company shall provide Physician Extender Employees and
other non-physician professional support (administrative personnel, clerical,
secretarial, bookkeeping and collection personnel) reasonably necessary for the
conduct of the operations at the Practice Offices. Company shall determine and
cause to be paid the salaries and fringe benefits of all such personnel. Such
personnel shall be employees of Company, with those personnel performing patient
care services subject to the professional direction and supervision of Physician
Employees. If ROAII is dissatisfied with the services of any person, ROAII shall
consult with Company. Company shall in good faith determine whether the
performance of that employee could be brought to acceptable levels through
counsel and assistance, or whether such employee should be terminated. All of
Company's obligations regarding staff shall be governed by the overriding
principle and goal of providing quality medical care. Employee assignments shall
be made to assure consistent and continued rendering of quality medical support
services and to ensure prompt availability and accessibility of individual
medical support staff to physicians in order to develop constant, familiar and
routine working relationships between individual physicians and individual
members of the medical support staff. If ROAII disagrees with an assignment,
ROAII may appeal such assignment to the Policy Board. Company shall maintain
established working relationships wherever possible and Company shall make every
effort consistent with sound business practices to honor the specific requests
of ROAII with regard to the assignment of Company's employees.

5.7. Events Excusing Performance. Company shall not be liable to ROAII or
Physician Owners for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which Company has no control for so long as such
events continue, and for a reasonable period of time thereafter.

5.8. Compliance with Law and Business Standards. Company shall comply with
Applicable Law, including without limitation, Health Care Law, including without
limitation, federal, state, and local laws and regulations affecting billing and
reimbursement, referrals, patient privacy and confidentiality, and management of
hazardous materials and infectious waste. Company shall discharge its
obligations under this Agreement consistent with applicable business and
industry standards and practices.

5.9. Quality Assurance. Company shall assist ROAII in fulfilling ROAII's
obligations to patients to maintain professionally recognized quality of medical
and professional services.

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5.10. New Medical Services and Additional Practice Offices. If ROAII
desires to have a new medical service provided at any of the Practice Offices or
desires to establish a new clinic, a proposal of such service or the
establishment of such new clinic shall be submitted to the Policy Board. Should
the Policy Board approve the expansion of service or the establishment of such
new clinic, Company, at its option, shall have the exclusive right to provide
services necessary to support ROAII in ROAII's delivery of such new medical
services at the Practice Office or new clinic, as applicable; provided, however,
if the type of service is an ancillary service that would be improper under any
rules, regulations or laws for Company to offer to ROAII patients, then Company
shall not have the option to provide such service. Should Company decline to
provide the necessary support service for the new service or new clinic, ROAII
shall be entitled to perform such service at ROAII's own expense and the
revenues therefrom shall not be included in the calculation of Company's service
fees under Article VIII of this Agreement; provided, however, that Company shall
have the option to assume performance of the necessary support services for
providing such new service or new clinic by buying out ROAII's investment in the
service at ROAII's Book Value at anytime within eighteen (18) months of the date
such new service is first provided, which Book Value shall be based on the price
of the assets purchased by ROAII less depreciation accrued to the date of
acquisition of such service by Company, as determined under GAAP.

5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. ROAII agrees to establish and maintain a bank account, which shall be
referred to as the ROAII Operating Account, for the purpose of (a) depositing
proceeds from the sale of ROAII's Accounts Receivable pursuant to Section 8.3
and (b) paying (i) any Service Fees owed pursuant to Article VIII of this
Agreement, (ii) expenses which are solely the obligation of ROAII (Excluded
Expenses), and (iii) compensation or distributions to Physician Owners, and the
distributions shall be made in that order of payment. ROAII shall designate a
Company employee as a signatory on the ROAII Operating Account. After the

payment of any Service Fees owed pursuant to Article VIII of this Agreement, and
expenses which are solely the obligation of ROAII, ROAII may withdraw amounts
for distributions to Physician Owners.

5.12. Other ROAII Accounts. ROAII shall have the right to open or create
bank accounts in addition to the ROAII Operating Account described in Section
5.11 of this Agreement.

ARTICLE VI.

OBLIGATIONS OF ROAII AND PHYSICIAN OWNERS

6.1. Professional Services.

6.1.1. ROAII, its Physician Owners and Physician Employees shall provide
professional services to patients.

6.1.2. ROAII, its Physician Owners and Physician Employees shall provide
the professional services to patients described in Section 6.1.1 above in
compliance at all times with ethical standards, laws and regulations applying to
ROAII's professional practice. ROAII shall also make all reports and inquiries
to the National Practitioners Data Bank and/or any state data bank required by
Applicable Law. ROAII shall use its best efforts to determine that each
Physician Employee and Technical Employee associated with ROAII who provides
medical care to patients of ROAII is licensed by the state or states in which he
or she renders professional services. If any disciplinary or medical malpractice
action is initiated against any such individual, ROAII shall immediately provide
Company with copies of any third-party documents (not otherwise privileged)
served on ROAII or letters delivered to ROAII. Such information shall be deemed
confidential information and shall, notwithstanding such disclosure, remain
subject to all privileges and immunities provided by Applicable Law. Company
shall take all steps reasonably necessary to assure that such privileges and
immunities remain intact. ROAII shall carry out a program to monitor the quality
of medical care practiced at the Practice Offices to promote a high quality of
medical care.

6.2. Medical Practice. ROAII shall use and occupy the Practice Offices
exclusively for the practice of medicine and shall comply with all Applicable
Law and standards of medical care. It is expressly acknowledged by the parties
that the medical practice or practices conducted at the Main Office shall be
conducted solely by physicians or medical practitioner

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associated with ROAII, and no other physician or medical practitioner shall be
permitted to use or occupy the Main Office without the prior written consent of
Company.

6.3. Employment of Physician Employees. ROAII shall have complete control
of and responsibility for the hiring, compensation, supervision, evaluation and
termination of Physician Employees, although at the request of ROAII, Company

shall consult with ROAII respecting such matters. ROAII shall be responsible,
subject to Section 8.4, for the payment of such Physician Employees' salaries
and wages, payroll taxes, Physician Employee benefits and all other taxes and
charges now or hereafter applicable to them. With respect to physicians, ROAII
shall only employ and contract with licensed physicians meeting applicable
credentialing guidelines established by ROAII.

6.4. Professional Dues and Education Expenses. Except to the extent
provided in Section 8.1.3(k), Physician Owners shall be solely responsible for
the cost of membership in professional associations and the cost of continuing
professional education. ROAII shall ensure that each Physician Employee
participates in such continuing medical education as is necessary for such
physician to remain licensed.

6.5. Professional Insurance Eligibility. ROAII shall cooperate in the
obtaining and retaining of professional liability insurance by assuring that all
Physician Employees are insurable and participating in an on-going risk
management program.

6.6. Events Excusing Performance. ROAII and Physician Owners shall not be
liable to Company for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which ROAII has no control for so long as such
events continue, and for a reasonable period of time thereafter.

6.7. Fees for Professional Services. ROAII shall be solely responsible for
legal, accounting and other professional services fees (Excluded Expenses)
incurred by ROAII, except as otherwise determined by the Policy Board.

6.8. Peer Review. ROAII agrees to cooperate with Company in establishing a
system of peer review within and among the provider practices as necessary to
obtain provider contracts. In connection therewith, ROAII agrees to assist in
the formulation of provider guidelines for each treatment or surgical modality,
and agrees to abide by said guidelines, and further agrees to submit to periodic
reviews by a third party to monitor compliance with said guidelines. ROAII
acknowledges that the establishment of provider guidelines may be necessary to
obtain PPO, HMO, IPA and other similar provider contracts, both private and
government funded. To the extent that said provider guidelines must be filed or
registered with any Third-Party Payor, ROAII agrees to cooperate with Company in
making such filings or registrations. It is agreed and acknowledged that all
such peer review guidelines shall be established and monitored by medical
personnel on the staff of ROAII and other practices that are part of the peer
review process, and shall not be promulgated, established or enforced
independently by Company. To the extent possible, all information obtained
through the peer review process shall remain confidential and the parties shall
take all steps reasonably necessary to assure that all privileges and immunities
provided by Applicable Law remain intact.

6.9. ROAII Employee Benefit Plans.

6.9.1. Effective as of the date of the closing under the Merger Agreement,
ROAII shall amend the tax-qualified retirement plan(s) described on Exhibit
6.9.1 (the "ROAII Plan") to provide that employees of Company who are classified
as "leased employees" (as defined in Code Section 414(n)) of ROAII shall be

treated as ROAII employees for purposes described in Code Section 414(n)(3). Not
less often than annually, ROAII and Company shall agree upon and identify in
writing those individuals to be classified as leased employees of ROAII (the
"Designated Leased Employees"). ROAII and Company shall establish mutually
agreeable procedures with respect to the participation of Designated Leased
Employees in the ROAII Plan. Such procedures shall be designed to avoid the tax
disqualification of the ROAII Plan, similar plans of practices similarly
situated, (collectively, the "Plans").

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6.9.2. If the Policy Board determines that the relationship between
Company and ROAII (and other practices similarly situated) constitutes an
"affiliated service group" (as defined in Code Section 414(m)), Company and
ROAII shall take such actions as may be necessary to avoid the tax
disqualification of the Plans. Such actions may include the amendment, freeze,
termination or merger of the ROAII Plan.

6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. ROAII shall not enter into any new "employee benefit plan" (as
defined in Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") without the consent of Company. In addition, ROAII
shall not offer any retirement benefits or make any material retirement payments
other than under the ROAII Plan to any stockholder of ROAII without the express
written consent of Company. Except as otherwise required by law, ROAII shall not
materially amend, freeze, terminate or merge the ROAII Plan without the express
written consent of Company. In the event of either of the foregoing, Company's
consent shall not be withheld if such action would not jeopardize the
qualification of any of the Plans. ROAII agrees to make such changes to the
ROAII Plan, including the amendment freeze, termination or merger of the ROAII
Plan, as may be approved by the Policy Board and Company but only if such
changes are necessary to prevent the disqualification of any of the Plans.

6.9.4. Expenses incurred in connection with the ROAII Plan or other ROAII
employee benefit plans, including, without limitation, the compensation of
counsel, accountants, corporate trustees, and other agents shall be included in
Clinic Expenses.

6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in ROAII's operating budget. ROAII and
Company shall not make employee benefit plan contributions or payments to ROAII
for their respective employees in excess of such budgeted amounts unless
required by law or the terms of the ROAII Plan. Company shall make contributions
or payments with respect to the ROAII Plan or other ROAII employee benefit
plans, as a Clinic Expense, on behalf of eligible Designated Leased Employees,
and other eligible ROAII employees. In the event a ROAII Plan or other ROAII
employee benefit plan is terminated, Company shall be responsible, as a Clinic
Expense, for any funding liabilities related to eligible Designated Leased
Employees; provided, however, Company shall only be responsible for the funding
of any liability accruing after the date of the Merger Agreement.

6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the ROAII
Plan to avoid disqualification of the ROAII Plan, in which case any such action
would be subject to the express prior written consent of the Policy Board.
Company shall have the sole and exclusive authority to appoint the trustee,
custodian and administrator of any such plan.

6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by ROAII must be amended,
terminated, modified or changed as a result of ROAII or Company being deemed to
be a part of an affiliated service group, the Policy Board will replace such
plan or plans with a plan or plans that provides those benefits approved by the
Policy Board. It shall be the goal of the Policy Board in such event to provide
substantially similar or comparable benefits if the same can be provided at a
substantially similar cost to the replaced plan.

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

The parties recognize that the services to be provided by Company shall be
feasible only if ROAII operates an active medical practice to which both ROAII
and the physicians associated with ROAII devote their full time and attention.
To that end:

7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be ROAII's and Physician Owners' sole provider of the management services
described in this Agreement and neither ROAII, Physician Owners nor any of
ROAII's or Physician Owners' employees shall provide such management services
during the term of this Agreement.

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ROAII and the Physician Owners agree that during the term of this Agreement,
neither ROAII nor Physician Owners will enter into any similar agreements with
any physician practice management company or entity. ROAII and the Physician
Owners further agree that during the term of this Agreement, they will not
engage, directly or indirectly, as a principal owner, shareholder (other than a
holder of fewer than 5% of the outstanding shares of a publicly-traded company),
partner, joint venturer, agent, equity owner, or in any other capacity
whatsoever, in any corporation, partnership, joint venture, or other business
association or entity that operates ambulatory surgery centers or provides
management services of the nature provided by Company pursuant to this
Agreement, within Philadelphia County, Pennsylvania or contiguous counties or
any location within seventy-five (75) miles of the Main Clinic or any future
facility that replaces the Main Clinic (wherever located) or any Satellite
Office utilized by ROAII at any time during the term of this Agreement.

7.2. Restrictive Covenants.

7.2.1. By Current Physician Employees. ROAII shall obtain and enforce
formal agreements from current Physician Employees, other than Technical
Employees, pursuant to which the Physician Employees agree not to establish,
operate or provide physician services at any medical office, clinic or
outpatient and/or ambulatory treatment or diagnostic facility providing services
substantially similar to those provided by ROAII, except on ROAII's behalf,
within Philadelphia County, Pennsylvania or contiguous counties or any location
within seventy-five (75) miles during the first five (5) years of the term of
this Agreement or fifty (50) miles thereafter of the Main Office or any future
facility that replaces the Main Office (wherever located at such time) or any
Satellite Office at the time of termination of employment with ROAII and for a
period of twenty-four (24) months after any termination of employment with
ROAII. Such agreements shall be a condition to employment and shall be in a form
satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to Company's lender ("Lender"). This Section 7.2 shall relate solely
to Physician Employees who are not also Physician Owners.

7.2.2. By Current and Future Physician Owners. On the earlier of one
hundred eighty (180) days from the effective date of this Agreement, or on
thirty (30) days after written request by Company, which written request
includes a reasonable explanation or basis for the request, ROAII shall obtain
and enforce formal restrictive covenants with current and future Physician
Owners, the terms of which shall be substantially similar to the provisions of
Exhibit 11. Such agreements shall provide that Company is a third-party
beneficiary to such agreements. ROAII agrees to enforce the restrictive
covenants. The cost and expense of such enforcement shall be a Clinic Expense,
and all damages and other amounts recovered thereby shall be included in
Professional Services Revenue. In the event that after a request by Company,
ROAII does not pursue any remedy that may be available to it by reason of a
breach or default of a restrictive covenant, upon the request of Company, ROAII
shall assign to Company such causes of action and/or other rights it has related
to such breach or default and shall cooperate with and provide reasonable
assistance to Company with respect thereto; in which case, all costs and
expenses incurred in connection therewith shall be borne by Company and shall be
included in Company Expenses, and Company shall be entitled to all damages and
other amounts recovered thereby. The above described restrictive covenants
between ROAII and Physician Owners shall be in addition to and not in place of
the restrictive covenants described in Exhibit 11 between Company and the
Physician Owners.

7.3. Restrictive Covenants By Future Physician Employees. ROAII shall
obtain and enforce formal agreements from each future Physician Employee other
than Technical Employees, hired or contracted, pursuant to which such physicians
agree not to establish, operate or provide physician services at any medical
office, clinic or outpatient and/or ambulatory treatment or diagnostic facility
providing services substantially similar to those provided by ROAII except on
ROAII's behalf, within Philadelphia County, Pennsylvania or contiguous counties
or any location within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of the Main Office
or any future facility that replaces the Main Office (wherever located at such
time) or any Satellite Office at the time of termination of said Physician
Employee's contract with ROAII and for a period of twenty-four (24) months

thereafter. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to any Lender. This Section 7.3 shall relate solely to Physician
Employees who are not also Physician Owners. The terms and conditions of Exhibit
11 shall govern restrictive covenants relating to Physician Owners.

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7.4. Rights of Company. Except as limited below, Company shall at all
times during the term of this Agreement and thereafter have the right to enter
into additional service agreements with other physicians and practices
regardless of where such physicians and/or practices are located providing for
management services and facilities to such physicians and/or practices.
Notwithstanding the foregoing, and except as set forth in Section 11.9.3, in the
event that Company desires to enter into a Service Agreement with another
practice located within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of ROAII's Main
Office or any Satellite Office, then the Policy Board must first approve Company
entering into such agreement. In the event that the individuals representing
Company on the Policy Board can reasonably demonstrate that entering into such
agreement will not have a material adverse effect on ROAII's practice
operations, earnings or cash flow, then the individuals representing ROAII shall
consent to Company entering into such agreement.

7.5. Enforcement. ROAII acknowledges and agrees that since a remedy at law
for any breach or attempted breach of the provisions of this Article VII shall
be inadequate, Company shall be entitled to specific performance and injunctive
or other equitable relief in case of any such breach or attempted breach in
addition to whatever other remedies may exist by law. All parties hereto also
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. If any provision
of Article VII relating to the restrictive period, scope of activity restricted
and/or the territory described therein shall be declared by a court of competent
jurisdiction to exceed the maximum time period, scope of activity restricted or
geographical area such court deems reasonable and enforceable under Applicable
Law, the time period, scope of activity restricted and/or area of restriction
held reasonable and enforceable by the court shall thereafter be the restrictive
period, scope of activity restricted and/or the territory applicable to the
restrictive covenant provisions in this Article VII. In addition, breach of the
provisions of this Article VII may trigger certain rights of Company to redeem a
Physician Owner's Company common stock pursuant to the terms of Article VIII of
that certain stockholders agreement between Company and its stockholders (the
"Stockholders Agreement").

that a modification to the restrictive covenant will not have a material adverse
effect on Company's or ROAII's practice operations, earnings or cash flow, then
the individuals representing Company shall consent to the proposed
modifications.

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to (a) the greater of
(i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]or (ii) the Base Service
Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of the first
thirty-six (36) months of the term of this Agreement, Company shall receive a
service fee equal to [xxxxxxxxxxxxxxxxxxxxxxxxx]of Practice Net Revenue plus the
amount of Clinic Expenses. In the event that a Physician Owner ceases to
practice medicine during the first thirty-six (36) months of the term of this
Agreement, such Physician Owner shall be personally liable for any reduction in
ROAII's service fees payable as further described under Section 11.9.1 of this
Agreement. In the event that a Physician Owner either dies or becomes Disabled
during such thirty-six (36) month period, ROAII, or the applicable Physician
Owner, as the case may be, shall be entitled to satisfy the amount owed by
transferring to Company an amount of Company common stock having a Fair Market
Value equal to the amount owed or paying to Company cash in the amount owed (or
a combination thereof).

8.1.1. "Practice Net Revenue" shall mean Professional Services Revenues,
less Clinic Expenses.

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<PAGE>

and other activities that do not generate a collectible fee) by or on behalf of
ROAII as a result of professional medical services personally furnished to
patients and other fees or income generated in their capacity as Physician
Employees and Technical Employees, and any revenue from the sale of any goods.

8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of ROAII arising hereunder unless expressly provided otherwise,
including, without limitation:

(a) salaries, benefits and other direct costs of all Clinic
employees including Company's employees and Physician Extender Employees
as defined in Section 8.1.5 working at the Practice Offices and salaries,
payroll taxes and employee benefits paid to Physician Employees (other
than Physician Owners) under Section 6.3 and to Technical Employees as

defined in Section 8.1.4,

(b) obligations of Company under Leases provided for herein under
Article III,

(d) personal property and intangible taxes assessed against
Company's assets utilized by ROAII in the Practice Offices from and after
the date of this Agreement,

(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of ROAII, if any, assumed under the Merger
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to ROAII hereunder, or (iii) purchase equipment,

(f) malpractice insurance premiums, disability insurance premiums to
cover accommodations to the Practice Offices under the definition of
"Disabled" or "Disability," and fire, workers compensation and general
liability insurance premiums, and life insurance premiums, during the
first three (3) years of this Agreement, for life insurance on the lives
of Physician Owners, with ROAII as the death beneficiary,

(g) the cost of any goods purchased for resale,

(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used in ROAII's Office Locations
by ROAII to be billed to ROAII on a monthly basis and paid to Company at
the same time Company pays for ROAII's Accounts Receivable pursuant to
Section 8.3,

(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with ROAII or who actually provide
services at or in connection with the Clinic for improved performance,
such as quality assurance, reasonable expenses required for physician
accommodations under the definition of "Disabled" or "Disability,"
materials management, purchasing program, change in coding analysis,
physician recruitment; provided, however, only the portion of expenses
related to such employee or consultant, without mark-up, that is allocable
in a fair and reasonable manner to work approved by the Policy Board which
is performed at or for the benefit of ROAII shall be included in Clinic
Expenses,

(j) expenses related to professional meetings, seminars, dues,
medical books and professional licensing fees for Physician Employees
(other than Physician Owners) provided, however, that such amount shall
not exceed $10,000 during any calendar year for any Physician Employee
(other than Physician Owners). If the cost incurred for such professional
meetings, seminars, dues, medical books and professional licensing fees
exceeds $10,000 during any calendar year, then the Physician Employee
incurring such cost shall be solely liable for the overage;

(k) expenses related to professional meetings, seminars, dues,

medical books and professional licensing fees for Physician Owners;
provided, however, that such amount shall not exceed $10,000 during any
calendar year for any Physician Owner. If the cost incurred for such
professional meetings, seminars, dues, medical books and

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professional licensing fees exceeds $10,000 during any calendar year, then
the Physician Owner incurring such cost shall be solely liable for the
overage; and

(l) any and all other ordinary and necessary expenses incurred by
ROAII or approved by the Policy Board and reasonably incurred by the
Company for the direct benefit of ROAII in carrying out their respective
obligations under this Agreement.

Clinic Expenses shall not include Excluded Expenses or Company Expenses.
Excluded Expenses shall be the sole obligation of ROAII. Company Expenses shall
be the sole obligation of Company.

8.1.4. "Technical Employees" shall mean individuals who provide billable
services on behalf of ROAII and are employees of ROAII.

8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons who are employees of Company, but
excluding any Technical Employees.

8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by ROAII
or are otherwise under contract with ROAII to provide professional services to
patients seen in the Main Office or Satellite Offices and are duly licensed to
provide professional medical services in the state or states in which he or she
renders professional services under this Agreement.

8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:

(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to ROAII or are not directly attributable to ROAII, as
reasonably determined by Company, including, without limitation, salaries
and benefits of executive officers of Company, except as otherwise
provided for in the definition of Clinic Expenses;

(b) Any amortization of any intangible asset resulting from the
Merger;

(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Merger;

(d) Any legal and accounting expenses incurred by Company in

connection with the Merger; and

(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for ROAII,
property taxes on assets used by ROAII and other taxes specifically
included in Clinic Expenses.

8.1.8. "Excluded Expenses" shall be the sole obligation of ROAII and shall
mean, pursuant to GAAP applied on a consistent basis:

(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;

(b) Any federal, state or other taxes associated therewith;

(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and

(d) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).

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8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays ROAII for
the Accounts Receivable previously purchased by Company as described in Section
8.3 below. The amount payable shall be estimated based upon the previous month's
operating results of ROAII. Adjustments to the estimated payments shall be made
to reconcile actual cumulative amounts due under this Article VIII, by the end
of the following month during each calendar year. Upon preparation of annual
financial statements as provided in Section 5.3, final adjustments to the
service fee for the preceding year shall be made and any additional payments
owing to Company or ROAII shall then be made to the party owed the additional
sum of money. The adjustment and any amount owed shall be calculated and paid
within ninety (90) days following the close of Company's fiscal year.

8.3. Purchase of Accounts Receivable.

8.3.1. ROAII hereby agrees to sell and assign to Company and Company
agrees to buy, all of ROAII's Accounts Receivable each month during which this
Agreement is in existence which are owing to ROAII arising out of the delivery
of medical, surgical, diagnostic or other professional medical goods or
services. Accounts Receivable shall not include, and Company shall not purchase,
any cash, checks or receivables created by credit cards. Company shall bear the
risk of collection and any overage or underage resulting from any purchased
Accounts Receivable.

8.3.2. The purchase price for each Accounts Receivable (the "Purchase

Price") will be equal to the face amount of the Accounts Receivable recorded
each month, less any non-allowed contractual adjustments and net of any reserve
for uncollectible Accounts Receivables based on the historical experience of the
practice as determined by the Company. It is the intent of the parties that the
Purchase Price reflect the actual net realizable value of the Accounts
Receivable.

8.3.3. ROAII will sell all Accounts Receivable to Company, such purchase
to be deemed to be made on the fifteenth (15th) day of the month following the
month in which such Accounts Receivable are created. Company shall pay for the
Accounts Receivable not later than the fifteenth (15th) day of each month
following the month in which the Accounts Receivable is created (the "Settlement
Date"). Company shall pay to ROAII for all Accounts Receivable purchased by
check, wire transfer or intrabank transfer to the ROAII Operating Account
described in Section 5.11. The purchase of Accounts Receivable shall be
evidenced by sending Company (i) a copy of each invoice with respect to each
Third-Party Payor on the Accounts Receivable then being purchased; and (ii) any
other information or documentation (including all required Uniform Commercial
Code releases or financing statements) Company may reasonably need to identify
the Accounts Receivable and obtain payment from the Account Debtors; provided
that such failure to send such documents shall not affect the obligation of
ROAII to sell such Accounts Receivable or Company to buy such Accounts
Receivable. As consideration for the purchase of Accounts Receivable by Company
pursuant to this Section 8.3, Company promises to pay and shall be obligated to
pay for such Accounts Receivable at the time and in the manner provided below.
To the extent permissible by Applicable Law, ROAII will be deemed to have sold
to Company all of ROAII's right, title and interest in such Accounts Receivable
and in any proceeds thereof, and Company will be the sole and absolute owner
thereof and will own all of ROAII's rights and remedies represented by such
Accounts Receivable (including, without limitation, rights to payment from the
respective Account Debtors on such Accounts Receivable), and Company will have
obtained all of ROAII's rights under all guarantees, assignments and securities
with respect to each such Accounts Receivable.

8.3.4. Upon expiration or termination of this Agreement for any reason,
(i) all Accounts Receivable purchased by Company shall remain the property of
Company and (ii) all Accounts Receivable purchased and not paid for at such
expiration or termination shall be paid for by the 10th of the following month
but effective as of the effective date of such expiration or termination date,
less the amount of any service fee earned by Company pursuant to Section 8.1 of
this Agreement.

8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, ROAII will execute such financing statements or amendments under the
UCC (naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.

8.3.6. ROAII agrees to cooperate with Company in the collection of the
Accounts Receivable sold by ROAII, transferred pursuant to Section 8.3. At the
option of and upon the request of Company, ROAII shall execute any and all

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documentation necessary for the transfer of amounts constituting Accounts
Receivables and/or the establishment of lockboxes in accordance with the
provisions of Exhibit 8.3.6 attached hereto.

8.3.7. All Accounts Receivable of ROAII purchased by Company ("Purchased
A/R") pursuant to this Section 8.3 hereof will, as such Purchased A/R are
purchased, be treated as Professional Service Revenues for accounting and
financial purposes.

8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless ROAII is required by law to incur such expenses, in
which case Company shall indemnify ROAII against any such expenses. Company
shall pay all Clinic Expenses as they become due; provided, however, that
Company may, in the name and on behalf of ROAII, contest in good faith any
claimed Clinic Expense to which there is any dispute regarding the nature,
existence or validity of such claimed Clinic Expense. Upon receipt of ROAII's
service fee, Company shall be required to deposit into the ROAII Operating
Account described in Section 5.11 an amount of money necessary for ROAII to pay
the compensation and benefits associated with the Technical Employees and
Physician Employees (other than Physician Owners) employed by ROAII.

ARTICLE IX.

RECORDS

9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, ROAII shall retain all patient medical records
maintained by ROAII or Company in the name of ROAII. ROAII shall, at ROAII's
option, be entitled to retain copies of financial and accounting records
relating to all services performed by ROAII. All parties agree to maintain the
confidentiality of patient identifying information and not to disclose such
information except as may be required or permitted by Applicable Law.

9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of ROAII under the
provisions of Section 9.1 above, shall at all times be the property of Company.

9.3. Access to Records. During the term of this Agreement, and thereafter,
ROAII or ROAII's designee shall have reasonable access during normal business
hours to ROAII's and Company's financial records, which relate to the operation
of ROAII including, but not limited to, records of collections, expenses and
disbursements as kept by Company in performing Company's obligations under this
Agreement, and ROAII may copy at ROAII's expense any or all such records.

additional period of four (4) years following the last date services are
furnished under this Agreement. If either party carries out any of its duties
under this Agreement through an agreement between it and an individual or
organization related to it or through a subcontract with an unrelated party,
that party to this Agreement shall require that a clause be included in such
agreement to the effect that until the expiration of four (4) years after the
furnishing of services pursuant to such agreement, the related organization
shall make available, upon request by the United States Department of Health and
Human Services, the Comptroller General of the United States, or any of their
duly authorized representatives, all agreements, books, documents, and records
of such related organization that are necessary to verify the nature and extent
of the costs of services provided under that agreement.

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ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by ROAII. Throughout the term of this
Agreement, ROAII shall maintain comprehensive professional liability and
worker's compensation insurance for ROAII and all employees of ROAII in amounts
approved by the Policy Board. Not in limitation of the foregoing, ROAII shall
maintain excess general liability umbrella coverage with a One Million Dollars
($1,000,000) limit as currently maintained by ROAII (with deductible provisions
not to exceed $25,000 per occurrence), the cost of which shall be paid by
Company as a Clinic Expense. In lieu of the foregoing, Company may provide as a
Clinic Expense group insurance for malpractice and/or worker's compensation
insurance. Notwithstanding the foregoing, in the event that Company procures
such group insurance for malpractice and/or worker's compensation insurance,
ROAII must first approve the amount of coverage, the carrier and the terms of
any such coverage for ROAII.

10.2. Insurance to be Maintained by Company. Throughout the term of this
Agreement, Company shall provide and maintain, as a Clinic Expense,
comprehensive professional liability insurance and worker's compensation
insurance as required by Applicable Law for all professional employees of
Company who work at the Practice Offices with limits as determined reasonable by
Company, comprehensive general liability and property insurance covering the
Practice Offices' premises and operations. The deductible provisions on the
personal liability shall not exceed $25,000 per occurrence and the commercial
general liability insurance shall be in amounts customarily maintained by other
businesses in the same or similar business as Company.

10.3. Additional Insureds. ROAII and Company agree to use their best
efforts to have each other named as an additional insured on the other's
respective professional liability insurance programs at Company's expense.
Further, on any insurance where Company will be named as an additional insured,
ROAII will assist Company to obtain appropriate riders to insure payment of any
party indemnified by Company.

10.4. Indemnification. ROAII shall indemnify, hold harmless and defend
Company, its officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions (other than for any claims for (or in
connection with) malpractice arising from the performance or nonperformance of
medical services) by ROAII and/or ROAII's Physician Owners, agents, employees
and/or subcontractors (other than Company) during the term hereof. Company shall
indemnify, hold harmless and defend ROAII, ROAII's officers, directors and
employees, from and against any and all liability, loss, damage, claim, causes
of action, and expenses (including reasonable attorneys' fees), caused or
asserted to have been caused, directly or indirectly, by or as a result of the
performance of any intentional acts, negligent acts or negligent omissions by
Company and/or its shareholders, agents, employees and/or subcontractors (other
than ROAII) during the term of this Agreement. Neither Company nor ROAII shall
have any obligation to indemnify the other party unless the claim for
indemnification is based upon a liability, loss or damages resulting in the
indemnified party making payments to a third party. Pursuant to the terms of the
Stockholders Agreement, Company may have the right to redeem a Physician Owner's
Company common stock to satisfy a Physician Owner's indemnification obligations.

In the event that either party makes a claim for indemnification under
either the Merger Agreement or this Service Agreement, then the claiming party
shall have the right, to the extent it is owed indemnifications, to pay amounts
owed to the other party under this Agreement into an escrow account (established
pursuant to an escrow agreement to be agreed upon by the parties) to be held by
the escrow agent in an interest bearing account until a determination by either
(i) the parties, (ii) a court of proper jurisdiction or (iii) agreed upon panel
of arbitrators, has been made regarding the claiming party's right to
indemnification. In the event that the claiming party is entitled to
indemnification, then such escrowed funds shall be paid to the claiming party in
partial or complete satisfaction of such indemnification obligation. Any excess
funds remaining in the escrow account after the payment of the indemnification
obligation or any funds held in the escrow account if it is determined that no
indemnification obligation is owed shall be paid to the other party.

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ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement. This Service Agreement shall be effective upon
the closing of the Merger Agreement, and shall expire on October 31, 2036 unless
earlier terminated pursuant to the terms hereof. Notwithstanding the foregoing,
for purposes of computing the Service Fee for the month of November of 1996
only, the Service Agreement shall be effective upon November 1, 1996.

11.2. Extended Term. Unless earlier terminated as provided for in this

Agreement, the term of this Agreement shall be automatically extended for
additional terms of five (5) years each, unless either party delivers to the
other party, not less than one hundred eighty (180) days prior to the expiration
of the preceding term, written notice of such party's intention not to extend
the term of this Agreement.

11.3. Termination by ROAII for Cause. ROAII may terminate this Agreement
without breach as follows:

11.3.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Company, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by Company, except for the filing of a petition in
involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, ROAII may give notice of the immediate termination of this
Agreement.

11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by ROAII; or Company shall fail to remit the payments due
as provided in Article VIII hereof and such failure to remit shall continue for
a period of thirty (30) days after written notice thereof, ROAII may terminate
this Agreement.

11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of ROAII or commit a similar act which cause material
harm to ROAII, ROAII may terminate this Agreement.

11.3.4. In the event that Company shall intentionally or in bad faith
violate Applicable Law resulting in a direct, continuing material adverse effect
on the operations, earnings and cash flow of ROAII, ROAII may terminate this
Agreement.

11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:

11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by ROAII, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by ROAII, except for the filing of a petition in
involuntary bankruptcy against ROAII which is dismissed within thirty (30) days
thereafter, Company may give notice of the immediate termination of this
Agreement.

11.4.2. In the event ROAII shall materially default in the performance of
any duty or obligation imposed upon it by this Agreement, and such default shall
continue for a period of ninety (90) days after written notice thereof has been
given to ROAII by Company, Company may terminate this Agreement.

11.4.3. In the event ROAII's Medicare or Medicaid Number shall be
terminated or suspended as a result of the action or inaction of ROAII or a
Physician Employee, and such termination or suspension shall continue for thirty
(30) days, Company may give notice of the immediate termination of this

Agreement, unless ROAII shall at that time be acting in good faith (and shall
provide reasonable evidence of the action being taken) to reverse such
termination or suspension. Notwithstanding any good faith effort on the part of
ROAII to reverse such termination or suspension, if such termination or
suspension shall not be reversed within ninety (90) days after occurrence,
Company shall have the right to terminate this Agreement immediately.

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11.4.4. In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require ROAII to purchase from Company all assets, both tangible and intangible,
owned by Company and used or made available for ROAII's use for the fair market
value of such assets on a going concern basis, without regard to this Agreement.
In addition thereto, ROAII shall assume all debt (including any balance of any
remaining debt incurred by the Company to acquire the assets under the Merger
Agreement) and all contracts, payables and leases which are obligations of
Company which relate to the Company's obligations which are performed at the
Office Locations under this Agreement. The fair market value of the assets shall
be determined by an independent appraiser selected by two (2) independent
accountants practicing with "big six" accounting firms, one (1) selected by
ROAII and one (1) selected by Company and neither of which is providing or has
for a period of two (2) years provided services to Company or ROAII. In addition
to the payment for the practice assets, in the event Company terminates this
Agreement pursuant to Section 11.4.1, Section 11.4.2 or Section 11.4.3 within
the first five (5) years of the term of this Agreement, then ROAII's Physician
Owners shall (i) pay to Company an amount of money equal to the Fair Market
Value, as of the date of termination, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to
ROAII pursuant to the Merger Agreement or (ii) surrender to Company for
cancellation [xxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to ROAII pursuant to the
Merger Agreement. All expenses of any appraisal shall be paid by ROAII. In the
event that Company terminates this Agreement pursuant to Sections 11.4.1 through
11.4.3, inclusive, and Company requires ROAII to purchase the practice assets,
then upon the closing of the purchase of the assets, ROAII and its Physician
Employees shall be released from the restrictive covenants provided for under
Exhibit 11 of this Agreement. In addition, termination of this Agreement may
trigger certain rights of Company to redeem a Physician Owner's Company common
stock pursuant to the terms of Article VIII of the Stockholders Agreement.

11.5. Early Termination by ROAII or Company Without Cause Upon Third (3rd)
Anniversary of Agreement. Either party may terminate this Agreement without
cause upon written notice delivered to the other party not less than nine (9)
months or more than ten (10) months or more prior to the end of the third (3rd)
anniversary of the date of this Agreement if the Company has not filed a
registration statement with the United States Securities and Exchange
Commission; provided, however, if the Company files a registration statement,
for an underwritten public offering, with the United States Securities and
Exchange Commission before the end of the date of the third (3rd) anniversary of
this Agreement, then such termination shall be ineffective, and this Agreement
shall continue in force unless otherwise terminated pursuant to the other

provisions of Article XI of this Agreement. In the event that such registration
statement is not effective within one hundred twenty (120) days from filing,
then the early termination rights described in the first sentence of this
Section 11.5 shall be again exercisable; provided, further, that if such
registration statement was filed during the above described notice period for
early termination, then such period shall be extended for thirty (30) days from
and after the date such early termination rights again become exercisable.
Notwithstanding any other provision of this Agreement to the contrary, the
termination rights set forth in this Section 11.5 shall immediately terminate
and no longer be effective upon a Change in Control of the Company. Upon a
termination pursuant to this Section 11.5, ROAII shall tender to Company all of
the stock issued to ROAII by Company pursuant to the Merger Agreement, and
Company shall return to ROAII the facilities and all assets, both tangible and
intangible, used or made available for ROAII's use in the Practice Office. ROAII
shall assume all debt (including any balance of any remaining debt incurred by
the Company to acquire the assets under the Merger Agreement) and all contracts,
payables and leases which are obligations of Company and which relate to
Company's obligations which are performed at the Office Locations under this
Agreement. The Company and ROAII shall cooperate to structure any exchange
consummated pursuant to this Section 11.5 in a manner designed to minimize the
aggregate tax consequences to the parties arising from the exchange. Closing of
the exchange pursuant to this Section 11.5 shall occur effective as of the third
(3rd) anniversary of this Agreement.

11.6. Consequences of ROAII Termination. In the event that this Agreement
is terminated by ROAII under the terms of Section 11.3 or is terminated on any
other basis (other than (i) because of the normal expiration of its term set
forth in Section 11.1, (ii) by Company for cause as set forth in Section 11.4 or
(iii) by early termination as set forth in Section 11.5), then upon such
termination, ROAII shall purchase from Company all assets, both tangible and
intangible, owned by Company and used or made available for ROAII's use for the
fair market value of such assets on a going concern basis, without regard to
this Agreement. In addition thereto, ROAII shall assume all debt (including any
balance of any remaining debt incurred by the Company to acquire the assets
under the Merger Agreement) and all contracts, payables and

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leases which are obligations of Company which relate to the Company's
obligations which are performed at the Office Locations under this Agreement.
The fair market value of the assets shall be determined by an independent
appraiser selected by two (2) independent accountants practicing with "big six"
accounting firms, one (1) selected by ROAII and one (1) selected by Company and
neither of which is providing or has for a period of two (2) years provided
services to Company or ROAII. Termination of this Agreement by ROAII or a
Physician Owner may trigger Company's right to redeem all of Company common
stock owned by the Physician Owner as provided for in Section 8.1 (a) of the
Stockholders Agreement.

11.7. Closing of Purchase by ROAII and Effective Date of Termination.
ROAII shall, except as provided below in this Section 11.7, pay cash for the

practice assets purchased pursuant to the provisions of this Section 11. The
amount of the purchase price shall be reduced, but not below zero (0), by the
amount of debt and liabilities of Company assumed by ROAII and shall also be
reduced by any payment Company has failed to make under this Agreement, provided
that such payments or obligations are not otherwise accounted for in the
liabilities assumed by ROAII in connection with the purchase described herein.
The closing date for the purchase shall be determined by ROAII, but shall in no
event occur later than one hundred eighty (180) days from the date of the notice
of termination. The termination of this Agreement shall become effective upon
the closing of the sale of the assets and ROAII and Company shall be released
from the restrictive covenants provided for in Article VII on the closing date.
Company shall give ROAII credit towards the purchase price of the assets for the
Fair Market Value of any Company common stock tendered to the Company in
exchange for such assets. In the event that ROAII terminates this Agreement
pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections 11.5, 11.6 or
11.7, then upon the closing of the purchase of the assets, ROAII and its
Physician Employees shall, except as ROAII may so elect to limit through
separate agreements with Physician Owners and Physician Employees, be released
from the restrictive covenants provided for under Article VII or Exhibit 11 of
this Agreement.

11.8. Tail Policy. ROAII shall obtain continuing liability insurance
coverage under either a "tail policy" or a "prior acts policy" with the same
limits and deductibles as set forth in Section 10.1 upon the termination of this
Agreement, or upon a physician's termination of his or her affiliation with
ROAII.

11.9. Restrictions Applicable to Physician Owners. The Physician Owners
hereby acknowledge that the Merger and the terms and conditions of this
Agreement were determined based upon numerous factors, including the Physician
Owners continuing to practice medicine in the future. In connection therewith,
each Physician Owner agrees as follows:

11.9.1. Early Retirement. If at any time prior to the fifth (5th)
anniversary of this Agreement, a Physician Owner desires to retire from the
practice of medicine, such Physician Owner shall be obligated as follows:

(a) to give Company at least twelve (12) months prior written notice
of the intent to retire; provided, however, that once such retiring
physician has located a replacement physician satisfying the requirements
of Section 11.9.1(b), Company shall waive the remaining months of said
twelve (12) month notice period, and such retirement shall be effective
upon the earlier of twelve (12) months from the date of notice or
commencement of the replacement physician's employment;

(b) to locate a physician or physicians (which may be Physician
Employees), reasonably acceptable to the Policy Board, to replace such
Physician Owner under this Agreement (all costs of locating such
replacement physicians shall be paid by such Physician Owner (the
"Substitute Physician(s)");

calculated on an annualized and prorated basis. For purposes of this
Section 11.9.1(c), the amount of the loss shall be calculated as follows:

(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of ROAII's service fees
during the twelve (12) month period preceding the retiring
Physician Owner's notice of intent to retire.

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(ii) In the event the Substitute Physician(s) were Physician
Employees prior to the date upon which notice of intent to
retire was given pursuant to Section 11.9.1(a), the Policy
Board shall calculate such Physician Employee(s) contribution
to the payment of ROAII's service fees during the twelve month
period preceding the notice of intent to retire.

(iii) On each successive anniversary date of this Agreement (through
the fifth anniversary date) following the effective date of
such retirement, the Policy Board shall determine the amount
of service fees generated by the Substitute Physicians between
either (x) the effective date of retirement or (y) the
immediately preceding anniversary date, as applicable, and
such successive anniversary date.

(iv) If the Substitute Physician(s) were Physician Employees prior
to date upon which the notice of intent to retire was given,
the amount of loss shall equal the difference between (i) the
amount calculated pursuant to Section 11.9.1(c)(i) plus the
amount calculated pursuant to Section 11.9.1(c)(ii) and (ii)
the amount calculated pursuant to Section 11.9.1(c)(iii).

(v) If the Substitute Physician(s) were not Physician Employees
prior to the date upon which the notice of intent to retire
was given, the amount of loss shall equal the difference
between (i) the amount calculated pursuant to Section
11.9.1(c)(i) and (ii) the amount calculated pursuant to
Section 11.9.1(c)(iii).

The Policy Board will provide the amount of the loss to the retiring Physician
Owner within thirty (30) days of the applicable anniversary date of this
Agreement and such amount shall be paid by such retiring Physician Owner to
Company within fifteen (15) days of the date of the delivery of the notice of
the amount of loss;

(d) to (i) pay to Company an amount of money equal to the Fair
Market Value as of the date of retirement, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by the Company to the retiring
Physician Owner pursuant to the Merger Agreement or (ii) surrender to
Company for cancellation [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to

the retiring Physician Owner pursuant to the Merger Agreement. (All
expenses of any appraisal shall be paid by such Physician Owner); and

(e) to honor and comply with the restrictive covenants for a period
of thirty-six (36) months, in accordance with the restrictions contained
in Exhibit 11.

11.9.2. Retirement. If at any time after the fifth (5th) anniversary of
this Agreement, a Physician Owner desires to retire, or assume full-time
teaching responsibilities, such Physician Owner shall notify Company in writing
at least twelve (12) months prior to the effective date of such retirement or
start of teaching position; provided, however, that
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]of the Physician Owners can retire or assume
full time teaching responsibilities within any twelve (12) month period;
provided, further, that if such retiring physician elects to, and has located a
replacement physician, Company shall waive the remaining months of said twelve
(12) month notice period, and such retirement shall be effective upon the
earlier of twelve (12) months from the date of notice or commencement of the
replacement physician's employment. Upon such retirement or start of teaching
position, such Physician Owner shall have no further obligations under this
Agreement; provided, however, the restrictive covenants provided for under
Section 11.9.1(e) shall remain in force. In fulfilling any such full-time
teaching responsibilities, such Physician Owner would be permitted to attend
patients in a manner normal and customary for such faculty position, provided,
however, such services must be incident to the academic/teaching aspects of the
institution, and not incident to the regular examination of patients for a fee
whether billed in the name of the institution or the name of the attending
physician. It is not the intent of the Parties to permit a retired physician to
conduct a medical practice through an academic institution.

11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with ROAII, then the terminating Physician Owner may join or
establish

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another group/practice which has or will enter into a Service Agreement with
Company upon such terminating Physician Owner's affiliation with such new
group/practice. Upon entering into such new Service Agreement, the terminating
Physician Owner shall, except as limited by separate employment agreements
between ROAII and Physician Owners, be released from any obligation under this
Service Agreement. Company shall have the right to enter into such new Service
Agreement without satisfying the requirements of paragraph G of Exhibit 11. In
the event that (i) ROAII consents to the Company entering into the new Service
Agreement, (ii) entering into the new Service Agreement will not adversely
affect the operations and earnings of the Company, and (iii) the new
group/practice can satisfy the representations and warranties set forth in
Article XIII of this Agreement, then Company will not unreasonably withhold or
refrain from entering into a new Service Agreement with the terminating
Physician Owner's new group/practice. In the event that the Physician Owner

affiliates with a new group/practice that is not a party to a Service Agreement
with Company, then Company shall terminate this Agreement with respect to such
Physician Owner, and the terminating Physician Owner shall be obligated as
described in Section 11.9.1 (a) and 11.9.1(e) of this Agreement, provided that
if such terminating Physician Owner elects to, and has located a replacement
physician, Company shall waive the remaining months of the twelve (12) month
notice period described in Section 11.9.1(a), and such termination shall be
effective upon the earlier of twelve (12) months from the date of notice or
commencement of the replacement physician's employment and provided further that
if such termination is within the first five (5) years of the term of this
Agreement, the terminating Physician Owner shall also be obligated as described
in Section 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and 11.9.1(e).

11.9.4. Robert E. Booth, Jr., M.D. and Arthur R. Bartolozzi, M.D. Change
in Practice/Group Affiliation. Notwithstanding Section 11.9.3, in the event that
either Robert E. Booth, Jr., M.D. ("Booth") or Arthur R. Bartolozzi, M.D.
("Bartolozzi") leaves the employment of or terminates his respective affiliation
with ROAII, then Booth or Bartolozzi, as the case may be, may establish a new
practice [either alone or together with other Physician Owners, current
Physician Employees and/or future Physician Employees (collectively, the "Other
Physicians")] within the radius described in paragraph A of Exhibit 11 so long
as said new practice enters into a Service Agreement with Company. Upon such
occurrence, Company agrees to enter into a Service Agreement on terms and
conditions similar to the provisions of this Agreement upon the establishment of
such new practice with such changes as may be mutually agreed upon by the
parties, provided, that (i) the Base Service Fee payable by Booth shall equal
seventeen percent (17%) of ROAII's Base Service Fee and the Base Service Fee
payable by Bartolozzi shall equal ten percent (10%) of ROAII's Base Service Fee
(plus, in either case, if there are additional Physician Owners who are Other
Physicians, such Physician Owners' percentage of the Base Service Fee); (ii)
following the departure of the Other Physicians, the Base Service Fee payable by
ROAII pursuant to Section 8.1 shall be adjusted to reflect the Base Service Fee
attributable to the Other Physicians; (iii) all time periods measured from the
effective date of this Agreement shall, for purposes of that Service Agreement,
be measured from the effective date of this Agreement (e.g. Section 8.1 - Base
Service Fee shall be payable only in respect of the period from the date of said
Service Agreement to the third anniversary of this Agreement and paragraph F of
Exhibit 11 - the five (5) year period shall end on the fifth anniversary of this
Agreement); and (iv) the computation of Professional Service Revenues provided
for in paragraph F of Exhibit 11 shall include Booth's or Bartolozzi's (and any
such additional Physician Owners') proportionate share of all Professional
Service Revenues collected by ROAII during Booth's or Bartolozzi's (or such
other Physician Owners') employment with ROAII. Upon entering into such new
Service Agreement, Booth or Bartolozzi shall be released from any obligation
under this Service Agreement. Company shall have the right to enter into such
new Service Agreement without satisfying the requirements of paragraph G of
Exhibit 11. Except as set forth above, in the event that Booth or Bartolozzi and
any Other Physicians do not enter into a new Service Agreement with Company,
then Company, at its option, may terminate this Agreement solely with respect to
Booth or Bartolozzi and any Other Physicians, and the provisions of Exhibit 11
shall apply. Moreover, Booth or Bartolozzi and any other Physician Owners who
are Other Physicians shall be obligated as described in Section 11.9.1 (a) and
11.9.1(e) of this Agreement; provided, however, if such termination is within
the first five (5) years of the term of this Agreement, Booth or Bartolozzi and

any other Physician Owners who are Other Physicians shall also be obligated as
described in Section 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and 11.9.1(e).

11.9.5. Death or Disability. In the event that a Physician Owner dies or
becomes disabled, then this Agreement shall be terminated with respect to such
Physician Owner; provided, however, in the event of disability, the restrictive
covenants described in Exhibit 11 shall remain in force for a period of
thirty-six (36) months from such termination.

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ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with ROAII, shall review and approve such reconstruction, repair or
replacement.

12.2. Temporary Space. In the event of substantial damage to or the
condemnation of a significant portion of the facilities, Company shall use its
best efforts to provide temporary facilities until such time as the facilities
can be restored or replaced.

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF ROAII AND PHYSICIAN OWNERS

ROAII and Physician Owners represent, warrant, covenant and agree with
Company that:

13.1. Validity. ROAII is a Pennsylvania corporation. ROAII has the full
power and authority to own ROAII's property, to carry on ROAII's business as
presently being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby. Each Physician Owner is an adult citizen and
resident of the State of Pennsylvania. Each Physician Owner has the full power
and authority to own his or her property, carry on his or her business as
presently being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby.

13.2. Litigation. Except as disclosed pursuant to the Merger Agreement,
there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding pending, or threatened against, or
affecting ROAII or any Physician Employee, or to the best of ROAII's and each
Physician Owner's knowledge, any provider or other health care professional
associated with or employed by ROAII as pertains to any claim involving the
providing of health care related services, and to the best of ROAII's and each

Physician Owner's knowledge there is no basis for any of the foregoing.

13.3. Permits. ROAII and all health care professionals associated with or
employed by ROAII have all permits and licenses and other Necessary
Authorizations required by all Applicable Law, except where failure to secure
such licenses, permits and other Necessary Authorizations does not have a
material adverse effect; have made all regulatory filings necessary for the
conduct of ROAII's business; and are not in violation of any of said permitting
or licensing requirements.

13.4. Authority. The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding Agreement of ROAII and each
Physician Owner, enforceable in accordance with its terms. ROAII and each
Physician Owner have obtained all third-party consents necessary to enter into
and consummate the transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor compliance by ROAII or any Physician Owner with any of
the provisions hereof, will:

13.4.1. violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under any license, agreement or other
instrument or obligation to which either ROAII or any Physician Owner is a
party;

13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either ROAII or any Physician Owner.

13.5. Compliance with Applicable Law. To the best of ROAII's and each
Physician Owner's knowledge and belief, ROAII and each Physician Owner has
operated in compliance with all federal, state, county and municipal laws,
ordinances

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<PAGE>

and regulations applicable thereto and neither ROAII nor any provider associated
with or employed by ROAII has received payment or any remuneration whatsoever to
induce or encourage the referral of patients or the purchase of goods and/or
services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or otherwise perpetrated
any Medicare or Medicaid fraud or abuse, nor has any fraud or abuse been alleged
within the last five (5) years by any Governmental Authority, a carrier or a
Third-Party Payor.

13.6. Health Care Compliance. ROAII is presently participating in or
otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
ROAII no event has occurred which in itself or with the giving of notice or the

lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such Third-Party Payor Program. ROAII is in
full compliance with the material requirements of all such Third-Party Payor
Programs applicable thereto.

13.7. Fraud and Abuse. ROAII and persons and entities providing
professional services for ROAII, have not, to the knowledge of ROAII and each
Physician Owner, after due inquiry, engaged in any activities which are
prohibited by or are in violation of the rules, regulations, policies, contracts
or laws pertaining to any Third-Party Payor Program, or which are prohibited by
rules of professional conduct ("Governmental Rules and Regulations"), including
but not limited to the following: (a) knowingly and willfully making or causing
to be made a false statement or representation of a material fact in any
application for any benefit or payment; (b) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment; (c) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on ROAII's own behalf or on behalf of
another, with intent to fraudulently secure such benefit or payment; or (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay or receive such remuneration (i) in return
for referring an individual to a person for the furnishing or arranging for the
furnishing or any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service or item for which payment may be made in whole or in
part by Medicare or Medicaid.

13.8. ROAII Compliance. ROAII has all licenses necessary to operate the
Practice Offices in accordance with the requirements of all Applicable Law and
has all Necessary Authorizations for the use and operation, all of which are in
full force and effect. There are no outstanding notices of deficiencies relating
to ROAII issued by any Governmental Authority or Third-Party Payor requiring
conformity or compliance with any Applicable Law or condition for participation
of such Governmental Authority or Third-Party Payor, and after reasonable and
independent inquiry and due diligence and investigation, ROAII has neither
received notice nor has any knowledge or reason to believe that such Necessary
Authorizations may be revoked or not renewed in the ordinary course.

13.9. Rates and Reimbursement Policies. The jurisdiction in which ROAII is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by ROAII.
ROAII does not have any rate appeal currently pending before any Governmental
Authority or any administrator of any Third-Party Payor Program. ROAII has no
knowledge of any Applicable Law which has been enacted, promulgated or issued
within the eighteen (18) months preceding the date of this Agreement or any such
legal requirement proposed or currently pending in the jurisdiction in which
ROAII is located which could have a material adverse effect on ROAII or may
result in the imposition of additional Medicaid, Medicare, charity, free care,
welfare, or other discounted or government assisted patients at ROAII or require
ROAII to obtain any necessary authorization which ROAII does not currently
possess.

13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:

13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; ROAII has billed the applicable Account Debtor and ROAII has
delivered or caused to be delivered to such Account Debtor all requested
supporting claim documents with respect to such

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<PAGE>

Accounts Receivable; all information set forth in the bill and supporting claim
documents is true and correct, and, if any error has been made, ROAII will
promptly correct the same and, if necessary, rebill or, if requested by Company,
cooperate with Company to rebill such Accounts Receivable.

13.10.2. The Purchased A/R are exclusively owned by ROAII and there is no
security interest or lien in favor of any third party, or the recording or
filing against ROAII, as debtor, covering or purporting to cover any interest of
any kind in any Accounts Receivable, except as has been released by each party
holding such adverse interest in the Accounts Receivable. Upon payment of the
Purchase Price with respect to the Purchased A/R and with respect to
Governmental Receivables, to the extent permissible by law, all right, title and
interest of ROAII with respect thereto shall be vested in Company, free and
clear of any lien, security interest, claim or encumbrance of any kind, and
ROAII agrees to defend the same against the claims of all Persons.

13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by
the Account Debtor identified by ROAII as being obligated to do so, (ii) are
based on an actual and bona fide rendition of services or sale of goods to the
patient by ROAII in the ordinary course of business, (iii) are denominated and
payable only in lawful currency of the United States, and (iv) are accounts or
general intangibles within the meaning of the UCC of the state in which ROAII
has its principal place of business, or are rights to payment under a policy of
insurance or proceeds thereof, and are not evidenced by any instrument or
chattel paper. There are no payors other than the Account Debtor identified by
ROAII as the payor primarily liable on any Purchased A/R.

federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit or creditors, or if a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect to the
Account Debtor, (vii) an account of which the goods giving rise to such Accounts
Receivable have not been shipped and delivered to and accepted by the Account
Debtor or the services giving rise to such Accounts Receivable have not been
performed by ROAII and accepted by the Account Debtor or the Accounts Receivable
otherwise does not represent a final sale, (viii) is evidenced by an instrument
or chattel paper unless such instrument or chattel paper is delivered to Company
with all appropriate endorsements in favor of Company, or (ix) other than a
complete bona fide transaction which requires no further act under any
circumstances on the part of ROAII to make the Accounts Receivable payable by
the Account Debtor.

13.10.5. ROAII does not have any guaranty of, letter of credit providing
credit support for, or collateral security for, the Purchased A/R, other than
any such guaranty, letter of credit or collateral security as has been assigned
to Company, and any such guaranty, letter of credit or collateral security is
not subject to any lien in favor of any other person.

13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of ROAII and the patient
received such goods or services.

13.10.7. The face amount of the Accounts Receivable for the services
constituting the basis for the Purchased A/R are consistent with the usual,
customary and reasonable fees charged by other similar medical service providers
in ROAII's community for the same or similar service.

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governmental bodies, commercial insurance companies and non-profit insurance
companies (such as Blue Cross and Blue Shield entities) issuing health, personal
injury, workers compensation or other types of insurance; (y) employers or
unions which self-insure for employee or member health insurance, prepaid
healthcare organizations, preferred provider organizations, health maintenance
organizations or any other similar person, or (z) a Third-Party Payor of the
type described in the definition of Governmental Receivables.

13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of ROAII. The sale of the Purchased A/R
hereunder is made in good faith and without actual intent to hinder, delay or
defraud present or future creditors of ROAII.

13.10.10. Except with respect to Governmental Receivables, the insurance
policy, contract or other instrument obligating an Account Debtor to make
payment with respect to the Purchased A/R (i) does not contain any provision
prohibiting the transfer of such payment obligation from the patient to ROAII,
or from ROAII to Company, (ii) has been duly authorized by ROAII and to the
knowledge of ROAII has been duly authorized by the Account Debtor and, together,
with the Purchased A/R, constitutes the legal, valid and binding obligation of
the Account Debtor in accordance with its terms, (iii) together with the
applicable Purchased A/R, does not contravene in any material respect any
requirement of law applicable thereto, and (iv) was in full force and effect and
applicable to the patient at the time the services constituting the basis for
the Purchased A/R were performed.

None of the foregoing representations and warranties shall be deemed to
constitute a guaranty by ROAII that the Purchased A/R will be collected by
Company. ROAII shall not be responsible for any damages for any breach of a
representation or warranty under this Section 13.10 until Company has suffered a
loss on the purchase of ROAII's Accounts Receivable. Damages for such breach
shall be limited to the amount of Company's loss on the purchase of such
Accounts Receivable.

13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of ROAII no representation or warranty made
by ROAII in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.

13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by ROAII as though recited in this Article
XIII.

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company represents, warrants, covenants and agrees with ROAII as follows:

14.1. Organization. Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Company
has the full power to own its property, to carry on its business as presently
conducted, to enter into this Agreement and to consummate the transactions
contemplated hereby.

14.2. Authority. Company has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, as well as the
consummation of the transactions contemplated hereby. The execution and delivery
of this Agreement do not, and the consummation of the transactions contemplated
hereby will not, violate any provisions of the charter or the bylaws of Company
or any indenture, mortgage, deed of trust, lien, lease, agreement, arrangement,
contract, instrument, license, order, judgment or decree or result in the
acceleration of any obligation thereunder to which Company is a party or by
which it is bound.

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14.3. Absence of Litigation. No action or proceeding by or before any
court or other Governmental Authority has been instituted or is, to the best of
Company's knowledge, threatened with respect to the transactions contemplated by
this Agreement.

14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of ROAII or Company, other than on terms
and conditions substantially as favorable to Company as would be obtainable by
Company at the time in a comparable arm's-length transaction with a person not
an Affiliate.

ARTICLE XV.

COVENANTS OF ROAII AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements. ROAII shall not
incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up ROAII's affairs or enter into any partnerships,
joint ventures or sale-leaseback transactions or purchase or otherwise acquire
(in one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any other person or entity.

15.2. Necessary Authorizations/Assignment of Licenses and Permits. ROAII
and each Physician Owner shall maintain all licenses, permits, certifications,
or other Necessary Authorizations and shall not assign or transfer any interest
in any license, permit, certificate or other Necessary Authorization granted to
it by any Governmental Authority, nor shall ROAII or any Physician Owner assign,
transfer, or remove or permit any other individual or entity to assign, transfer
or remove any records of ROAII or any Physician Owner, including without
limitation, patient records, medical and clinical records (except for removal of
such patient records as required under any Applicable Law).

15.3. Transaction with Affiliates. Neither ROAII nor any Physician Owner
shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of ROAII or
Company, other than on terms and conditions substantially as favorable to ROAII
or the Physician Owner, as would be obtainable by ROAII or the Physician Owner
at the time in a comparable arms-length transaction with a person not an
Affiliate.

15.4. Compliance with All Laws. ROAII and each Physician Owner shall use
their best efforts to comply with all laws and regulations relating to ROAII's
practice and the operation of any facility, including, but not limited to, all
state, federal and local laws relating to the acquisition or operation of a
health care practice. Furthermore, neither ROAII nor any Physician Owner shall
intentionally violate any Governmental Rules and Regulations.

15.5. Third-Party Payor Programs. ROAII shall maintain ROAII's compliance
with the requirements of all Third- Party Payor Programs in which ROAII is
currently participating or authorized to participate.

15.6. Change in Business or Credit and Collection Policy. ROAII shall not
make any change in the character of ROAII's business or in the credit and
collection policy, which change would, in either case, impair the collectibility
of any Purchased A/R or any Merger A/R or otherwise modify, amend or extend the
terms of any such account other than in the ordinary course of business.

15.7. Treatment of Accounts Receivable. ROAII will (i) treat transfers to
Company of Accounts Receivable hereunder as a sale for all purposes, including
tax and accounting (and shall accurately reflect such sale in its financial
statements), and will advise all persons who inquire about the ownership of such
Accounts Receivable that they have been sold to Company; (ii) not treat any such
Accounts Receivable as an asset on ROAII's books and records; (iii) record in
ROAII's books, records and computer files pertaining thereto that such Accounts
Receivable have been sold to Company; (iv) pay all taxes, if any, relating to
the transfer of such Accounts Receivable after the same have been purchased by
Company; (v) not impede or interfere with Company's collection of such Accounts
Receivable; (vii) not amend, waive or otherwise permit or agree to any deviation
from the terms or conditions of such Accounts Receivable; (viii) use all
reasonable

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efforts to obtain all consents from patients which are required by law in order
for Company, or any servicing entity retained by Company, to secure information
needed to obtain or to expedite payment from the respective Account Debtors; and
(ix) have billed such Accounts Receivable on the same bases and using the same
policies and practices that it has used in the past unless Company has been
advised in writing of a change prior to the purchase of such Accounts
Receivable. Company or its designated representatives from time to time may
verify the Accounts Receivable, inspect, check, take copies or extracts from
ROAII's books, records and files, and ROAII will make the same available to
Company or such representatives at any reasonable time for such purposes.

15.8. Security Interest. If, contrary to the mutual intent of ROAII and
Company, any purchase of Purchased A/R is not characterized as a sale, ROAII
shall, effective as of the date hereof, be deemed to have granted (and ROAII
does hereby grant) to Company a first priority security interest in and to any
and all of the Purchased A/R and the proceeds thereof to secure the repayment of
all amounts advanced to ROAII hereunder with accrued interest thereon, and this
Agreement shall be deemed to be a security agreement. With respect to such grant
of a security interest, Company may at its option exercise from time to time any
and all rights and remedies available to it under the UCC or otherwise. ROAII
agrees that five (5) days shall be reasonable prior notice of the date of any
public or private sale or other disposition of all or part of the Purchased A/R.
ROAII represents and warrants that the location of ROAII's principal place of
business, and all locations where ROAII maintains records with respect to its
accounts are set forth under its name in Section 16.3 hereof. ROAII agrees to

notify Company in writing thirty (30) days prior to any change in any such
location. The exact name of ROAII is as set forth at the beginning of this
Agreement, and except as set forth on the signature page hereof, ROAII has not
changed its name in the last five (5) years, and during such period ROAII did
not use, nor does ROAII now use, any fictitious or trade name. ROAII shall
notify Company in writing thirty (30) days prior to any change in any such name.

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment. Company shall have the right to assign its rights
hereunder to any person, firm or corporation under common control with Company
and to any lending institution from which Company obtains financing, including
but not limiting the restrictive covenants included in Article VII (covenant not
to compete), for security purposes or as collateral. ROAII agrees to, and
acknowledges, Company's right to assign Company's rights under this Agreement to
any Lender and further agrees that upon receipt of written notice from such
Lender, ROAII shall pay to Lender or cause to be paid to Lender all amounts
which are otherwise payable to Company pursuant to the terms of this Agreement,
including, without limitation, all service fees, and other Clinic Expenses and,
until such amounts are delivered to Lender, hold payments in trust for Lender.
Except as set forth above, neither Company nor ROAII shall have the right to
assign their respective rights and obligations hereunder without the written
consent of the other party. Without limiting the foregoing, ROAII acknowledges
that, as collateral for certain obligations, Company has assigned all of its
rights hereunder to NationsBank of Tennessee, N.A. as Agent (the "Agent") for
itself and other banks and institutional lenders from time to time (collectively
the "Banks") and has granted the Agent for the benefit of the Banks a lien and
security interest upon all real and personal property used in the operation of
the Office Locations (the "Pledged Assets"). As an inducement for the Banks to
extend or continue the extension of credit to Company, ROAII (i) acknowledges
that the collateral assignment to the Agent covers all rights of Company
hereunder, including, but not limited to, rights arising from warranties and
representations made by ROAII, rights to enforce covenants made by ROAII, and
rights to receive all payments due Company; (ii) agrees to regard the Agent as
the owner of any or all of the assigned rights upon written notice to ROAII of
this election from the Agent; (iii) agrees that neither the Agent nor any of the
Banks has obligation for the performance of the duties of Company hereunder, and
shall not assume any such duty by the exercise of rights as a secured lender;
(iv) agrees to give the Agent written notice of any material default hereunder
on Company's part at the address of 1 NationsBank Plaza, Nashville, Tennessee
37239, Attn: David Dupuy, and to allow at least thirty (30) days thereafter for
the cure of such default before ROAII terminates this Agreement; (v) agrees that
the rights of ROAII under this Agreement, including, but not limited to, the
right to the use of the Pledged Assets, are and shall be junior to any security
interest that the Agent and the Banks, their successors or assigns may have in
the Pledged Assets at any time; (vi) agrees that the benefits of the above
undertakings in favor of the Agent and Banks shall further extend to all
successors and assigns of the Agent and Banks, provided that any notices given
by ROAII under this Section shall be given to the Agent at the foregoing address
unless ROAII has received written notice of a change

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thereof; and (vii) agrees that this Section may not be modified, and no
provision of this Section may be waived, absent the written approval of the
Agent.

16.2. Whole Agreement; Modification. This Agreement supersedes all prior
agreements between the parties and there are no other agreements or
understandings, written or oral, between the parties regarding this Agreement,
the Exhibits and the Schedules, other than as set forth herein. This Agreement
shall not be modified or amended except by a written document executed by both
parties to this Agreement.

16.3. Notices. All notices required or permitted by this Agreement shall
be in writing and shall be deemed to have been given (i) when received if given
in person, (ii) on the date of acknowledgment of receipt if sent by telex,
facsimile or other wire transmission, (iii) one business day after being sent by
overnight delivery service, or (iv) three days after being deposited in the
United States mail, certified or registered mail, postage prepaid, addressed as
follows:

To Company: Specialty Care Network, Inc.
44 Union Boulevard
Suite 600
Lakewood, Colorado 80228
Attention: Kerry Hicks

With a copy to: Baker, Donelson, Bearman & Caldwell
165 Madison Avenue
Suite 2000
Memphis, Tennessee 38103
Attention: David T. Popwell, Esq.

To ROAII: 800 Spruce Street
Philadelphia, Pennsylvania 19107
Attention: Lauren Albert

With a copy to: Stephen M. Goodman, Esq.
Morgan Lewis & Bockius
2001 Logan Square
Philadelphia, Pennsylvania 19103-3993

or to such other address as either party shall notify the other.

16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.

16.5. Waiver of Provisions. Any waiver of any terms and conditions hereof
must be in writing, and signed by the parties hereto. The waiver of any of the
terms and conditions of this Agreement shall not be construed as a waiver of any
other terms and conditions hereof.

16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Pennsylvania.

16.7. No Practice of Medicine. The parties acknowledge that Company is not
authorized or qualified to engage in any activity which may be construed or
deemed to constitute the practice of medicine. To the extent any act or service
required of Company in this Agreement should be construed or deemed by any
Governmental Authority or court to constitute the practice of medicine, the
performance of said act or service by Company shall be deemed waived and
unenforceable to the minimum extent required to comply with Applicable Law.

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16.8. Severability. The provisions of this Agreement shall be deemed
severable and if any portion shall be held invalid, illegal or unenforceable for
any reason, the remainder of this Agreement shall be effective and binding upon
the parties.

16.9. Additional Documents. Each of the parties hereto agrees to execute
any document or documents that may be requested from time to time by any other
party to implement or complete such party's obligations pursuant to this
Agreement.

16.10. Attorneys' Fees. If legal action is commenced by any party to
enforce or defend its rights under this Agreement, the prevailing party in such
action shall be entitled to recover its costs and reasonable attorneys' fees in
addition to any other relief granted.

16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.

16.12. Confidentiality. No party hereto shall disseminate or release to
any third party any information regarding any provision of this Agreement, or
any financial information regarding the other (past, present or future) that was
obtained by the other in the course of the negotiations of this Agreement or in
the course of the performance of this Agreement, including, but not limited to,
any information relating to the internal operations of ROAII, ROAII fees or the
terms of any of the managed care contracts, without the other party's written
approval; provided, however, the foregoing shall not apply to information which
(i) is generally available to the public other than as a result of a breach of
confidentiality provisions; (ii) becomes available on a non-confidential basis
from a source other than the other party or its affiliates or agents, which
source was not itself bound by a confidentiality agreement; (iii) which is
required to be disclosed by law or pursuant to court order (Company shall
provide ROAII with copies of any information regarding ROAII provided by Company
to any third party); or (iv) except for disclosure to its banks, underwriters or
lenders, or its advisors to the extent required by Section 9.4, or as required
in connection with reports on filings with the SEC or State Departments of
Securities.

16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations,
ROAII and Company shall amend this Agreement as necessary. To the maximum extent
possible, any such amendment shall preserve the underlying economic and
financial arrangements between and among ROAII and Company.

16.14. Remedies Cumulative. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be considered exclusive
of any other remedy available to any party, but the same shall be distinct,
separate and cumulative and may be exercised from time to time as often as
occasion may arise or as may be deemed expedient.

16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to ROAII's fair meaning, and not for
or against either party hereto. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or ROAII under this Agreement
shall in any way or in any manner be deemed to create any obligation of Company
or of ROAII to, or any rights in, any person or entity not a party to this
Agreement.

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16.17. Communications. ROAII and Company agree that good communication
between the parties is essential to the successful performance of this
Agreement, and each pledges to communicate fully and clearly with the other on
matters relating to the successful operation of ROAII's practice at the Practice
Offices.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

COMPANY:

SPECIALTY CARE NETWORK, INC.

By:________________________________________

Title:_____________________________________

ROAII:

RECONSTRUCTIVE ORTHOPAEDIC ASSOCIATES II,
INC.

By:________________________________________

Title:_____________________________________

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PHYSICIAN OWNERS:

___________________________________________
RICHARD H. ROTHMAN, M.D.

___________________________________________
ROBERT E. BOOTH, JR., M.D.

___________________________________________
RICHARD A. BALDERSTON, M.D.

___________________________________________
ARTHUR R. BARTOLOZZI, M.D.

___________________________________________
WILLIAM J. HOZACK, M.D.

___________________________________________
MICHAEL G. CICCOTTI, M.D.

___________________________________________

TODD J. ALBERT, M.D.

___________________________________________
ALEXANDER R. VACCARO, M.D.

___________________________________________
PETER F. SHARKEY, M.D.

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<PAGE>

STOCK EXCHANGE AGREEMENT

BY AND AMONG

SPECIALTY CARE NETWORK, INC.

AND

MICHAEL N. JOLLEY, M.D.
HARVEY E. SMIRES, M.D.
ROBERT N. DUNN, M.D.
JEFFREY S. ABRAMS, M.D.
RICHARD E. FLEMING, JR., M.D.
W. THOMAS GUTOWSKI, M.D.
STEVEN R. GECHA, M.D.
C. ALEXANDER MOSKWA, JR., M.D.
DAVID M. SMITH, M.D.

October 21, 1996

<PAGE>

TABLE OF CONTENTS

Page
----

1. Definitions....................................................... 1

2. Purchase and Sale of Princeton Shares............................ 3
(a) Basic Transaction......................................... 3
(b) Purchase Price............................................ 4
(c) The Closing............................................... 4
(d) Deliveries at the Closing................................. 4

3. Representations and Warranties Concerning the Transaction........ 4
(a) Representations and Warranties of the Princeton
Stockholders ........................................... 4
(b) Representations and Warranties of SCN..................... 6

4. Representations and Warranties Concerning Princeton.............. 7
(a) Organization, Qualification, and Corporate Power.......... 7
(b) Capitalization............................................ 7
(c) Noncontravention.......................................... 8
(d) Subsidiaries and Investments.............................. 8
(e) Financial Statement....................................... 8
(f) Undisclosed Liabilities................................... 8
(g) Brokers' Fees............................................. 9
(h) Material Contracts........................................ 9
(i) Insurance; Malpractice.................................... 10
(j) No Changes Prior to Closing Date.......................... 10
(k) Title; Condition.......................................... 11
(l) Litigation................................................ 11
(m) Permits and Licenses...................................... 11
(n) Tax Matters............................................... 11
(o) Employee Benefit Plans.................................... 12
(p) Third-Party Relations..................................... 14
(q) Compliance with Applicable Laws........................... 14
(r) Employee Compensation..................................... 14
(s) Environmental Matters..................................... 14
(t) Healthcare Compliance..................................... 15
(u) Fraud and Abuse........................................... 15
(v) Practice Compliance....................................... 16
(w) Rates and Reimbursement Policies.......................... 16
(x) Accounts Receivable....................................... 16
(y) Guaranties................................................ 17
(z) Powers of Attorney........................................ 17
(aa) Tangible Assets........................................... 17
(ab) Full Disclosure........................................... 17

5. Covenants........................................................ 17
(a) General................................................... 17
(b) Notices and Consents...................................... 17

<PAGE>

Page
----

(c) Regulatory Matters and Approvals.......................... 17
(d) Operation of Business..................................... 18
(e) Full Access............................................... 19
(f) Notice of Developments.................................... 19
(g) Exclusivity............................................... 19
(h) Collection of Accounts Receivable......................... 19
(i) Payment of Expenses....................................... 20
(j) Completion of Schedules................................... 20

6. Conditions to Obligation to Close................................ 20
(a) Conditions to Obligation of SCN........................... 20
(b) Conditions to Obligation of the Princeton Stockholders.... 22

7. Items to be Delivered at or Prior to Closing..................... 24
(a) By the Princeton Stockholders or Princeton................ 24
(b) By SCN.................................................... 24

8. Indemnification.................................................. 24
(a) Indemnification by the Princeton Stockholders............. 25
(b) Notice to the Princeton Stockholders; Opportunity to
Defend ................................................. 25
(c) General Indemnification by SCN............................ 26
(d) Notice to SCN; Opportunity to Defend...................... 26
(e) Survival.................................................. 26
(f) Security for Indemnity.................................... 26

9. Termination...................................................... 27
(a) Termination of Agreement.................................. 27
(b) Effect of Termination..................................... 27

10. Miscellaneous................................................... 27
(a) No Third-Party Beneficiaries.............................. 28
(b) Entire Agreement.......................................... 28
(c) Succession and Assignment................................. 28
(d) Counterparts.............................................. 28
(e) Headings.................................................. 28
(f) Notices................................................... 28
(g) Governing Law............................................. 29
(h) Amendments and Waivers.................................... 29
(i) Severability.............................................. 29
(j) Expenses.................................................. 30
(k) Construction.............................................. 30
(l) Incorporation of Exhibits and Schedules................... 30

<PAGE>

STOCK EXCHANGE AGREEMENT

THIS STOCK EXCHANGE AGREEMENT entered into this the 21st day of October,
1996, by and among SPECIALTY CARE NETWORK, INC., a Delaware corporation ("SCN"),
and MICHAEL N. JOLLEY, M.D., HARVEY E. SMIRES, M.D., ROBERT N. DUNN, M.D.,
JEFFREY S. ABRAMS, M.D., RICHARD E. FLEMING, JR., M.D., W. THOMAS GUTOWSKI,
M.D., STEVEN R. GECHA, M.D., C. ALEXANDER MOSKWA, JR., M.D. and DAVID M. SMITH,
M.D.(collectively the "Princeton Stockholders"). SCN and the Princeton
Stockholders are referred to collectively herein as the "Parties."

W I T N E S S E T H:

WHEREAS, Princeton Orthopaedic Associates, P.A. ("Princeton") is a New
Jersey corporation which owns the assets which are used by and/or result from
the Princeton Stockholders' practice of medicine;

WHEREAS, the Princeton Stockholders are medical doctors practicing
medicine in the State of New Jersey;

WHEREAS, this Agreement contemplates a tax-free exchange of Princeton
Shares for SCN Shares in a reorganization pursuant to Code Section 368(a)(1)(B);

WHEREAS, the Parties expect that the exchange contemplated by this
Agreement will further certain of their business objectives; and

WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.

NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:

1. Definitions.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"Applicable Laws" has the meaning set forth in Section 4(q) below.

"Closing" has the meaning set forth in Section 2(c) below.

<PAGE>

"Closing Date" has the meaning set forth in Section 2(c) below.

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

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"ERISA" has the meaning set forth in Section 4(o) below.

"Employee Benefit Plan" has the meaning set forth in Section 4(o) below.

"Excluded Assets" has the meaning set forth in Section 6(a)(xv) below.

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

"Hazardous Materials" has the meaning set forth in Section 4(s) below.

"Knowledge" means actual knowledge after reasonable investigation.

"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

"PBGC" has the meaning set forth in Section 4(o) below.

"Party" has the meaning set forth in the preface above.

"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).

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<PAGE>

"Practice Assets" has the meaning set forth in Section 4(k) below.

"Princeton" has the meaning set forth in the recitals of fact above.

"Princeton Share" means any share of the common stock, no par value per
share, of Princeton.

"Princeton Stockholders" has the meaning set forth in the preface above.

"Private Placement Memorandum" means the final Private Placement
Memorandum of SCN relating to the offering of the SCN Shares under the
Securities Act.

"Purchase Price" has the meaning set forth in Section 2(b) below.

"SCN" has the meaning set forth in the preface above.

"SCN Share" means any share of the common stock, par value $.001 per
share, of SCN.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.

2. Purchase and Sale of Princeton Shares.

(a) Basic Transaction. On and subject to the terms and conditions of this
Agreement, SCN agrees to purchase from each of the Princeton Stockholders, and
each of the Princeton Stockholders agrees to sell to SCN, all of his Princeton
Shares for the consideration specified below in this Section 2.

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<PAGE>

(b) Purchase Price. SCN agrees to pay to Princeton Stockholders at the
Closing seven million one hundred eighty thousand seven hundred fifty-eight
($7,180,758) (the "Purchase Price") by delivery of one million one hundred
ninety-six thousand seven hundred ninety-three (1,196,793) SCN Shares in the
aggregate. The Purchase Price shall be allocated among the Princeton
Stockholders in proportion to their respective holdings of Princeton Shares as
set forth in Section 3(a)(v) of the Disclosure Schedule.

(c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Princeton
Orthopaedic Associates, P.A., 325 Princeton Avenue, Princeton, New Jersey 08540,
commencing at 9:00 a.m. local time on the 31st day of October, 1996, or such
other date as SCN and the Princeton Stockholders may mutually determine (the
"Closing Date").

(d) Deliveries at the Closing. At the Closing, (i) the Princeton
Stockholders will deliver to SCN the various certificates, instruments, and
documents referred to in Section 7(a) below, (ii) SCN will deliver to the
Princeton Stockholders the various certificates, instruments, and documents
referred to in Section 7(b) below, (iii) each of the Princeton Stockholders will
deliver to SCN stock certificates representing all of his or its Princeton
Shares, endorsed in blank or accompanied by duly executed assignment documents,
and (iv) SCN will deliver to each of the Princeton Stockholders the
consideration specified in Section 2(b) above.

3. Representations and Warranties Concerning the Transaction.

(a) Representations and Warranties of the Princeton Stockholders. Each of
the Princeton Stockholders, severally and with respect to themselves only,
represents and warrants to SCN that the statements contained in this Section
3(a) are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 3(a)), except as set forth in the disclosure schedule (the "Disclosure
Schedule"). The Disclosure Schedule will be arranged in paragraphs corresponding
to the lettered and numbered paragraphs contained in this Section 3 and further
in Section 4 and will be completed pursuant to Section 5(j).

(i) Authorization of Transaction. Each Princeton Stockholder has the
legal capacity to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of each Princeton Stockholder, enforceable against each
Princeton Stockholder in accordance with its terms and conditions. Each
Princeton Stockholder need not give any notice to, make any filing with,
or obtain any authorization, consent, or

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<PAGE>

approval of any government or governmental agency in order to consummate
the transactions contemplated by this Agreement.

(ii) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which any Princeton
Stockholder is subject or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which any Princeton Stockholder is a party or by
which he or it is bound or to which any of his or its assets is subject.

(iii) Brokers' Fees. No Princeton Stockholder has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which
SCN could become liable or obligated.

(iv) Investment. Each Princeton Stockholder (A) understands that SCN
Shares have not been registered under the Securities Act, or under any
state securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public
offering, (B) is acquiring SCN Shares solely for his own account for
investment purposes, and not with a view to the distribution thereof, (C)
is a sophisticated investor with knowledge and experience in business and
financial matters, (D) has received certain information concerning SCN and
has had the opportunity to obtain additional information as desired in
order to evaluate the merits and the risks inherent in holding SCN Shares,
and (E) is able to bear the economic risk and lack of liquidity inherent
in holding SCN Shares.

(v) Princeton Shares. Each Princeton Stockholder holds of record and
owns beneficially the number of Princeton Shares set forth next to his
name in Section 3(a)(v) of the Disclosure Schedule, free and clear of any
restrictions on transfer (other than restrictions under the Securities Act
and state securities laws), taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands. No
Princeton Stockholder is a party to any option, warrant, purchase right,
or other contract or commitment that could require the Princeton
Stockholder to sell, transfer, or otherwise dispose of any capital stock
of Princeton (other than this Agreement). No Princeton Stockholder is a
party to any voting trust, proxy, or other agreement or understanding with
respect to the voting of any capital stock of Princeton.

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<PAGE>

(b) Representations and Warranties of SCN. SCN represents and warrants to
the Princeton Stockholders that the statements contained in this Section 3(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3(b)).

(i) Organization, Qualification, and Corporate Power. SCN is a
corporation duly incorporated, validly existing, and in good standing
under the laws of the State of Delaware. SCN is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in
which the character or location of the properties owned or the business
conducted by SCN makes such qualification necessary. SCN has full
corporate power and authority to carry on the business in which it is
engaged and to own and use the properties owned and used by it.

(ii) Capitalization. The entire authorized capital stock of SCN
consists of fifty-two million (52,000,000) SCN Shares, of which one
million two hundred sixty-five thousand (1,265,000) SCN Shares are issued
and outstanding and zero (0) SCN Shares are held in treasury. All of the
issued and outstanding SCN Shares have been duly authorized and are
validly issued, fully paid, and nonassessable. Except as set forth in the
Private Placement Memorandum, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights or other contracts or commitments that could
require SCN to issue, sell or otherwise cause to become outstanding any of
its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to SCN.

(iii) Authorization of Transaction. SCN has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement, to issue the SCN Shares and otherwise to perform its
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of SCN, enforceable in accordance with its terms and
conditions.

(iv) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, professional regulatory
organization or court to which SCN is subject, or may become subject as a
result of the transaction contemplated by this Agreement, or any provision
of the charter or bylaws of SCN or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license,
instrument or other

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<PAGE>

arrangement to which SCN is a party or by which it is bound or to which
any of its assets is subject. Other than state and federal filings
required by the Securities Act and similar state statutes, SCN does not
need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions
contemplated by this Agreement.

(v) Brokers' Fees. SCN has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Princeton
Stockholder could become liable or obligated.

(vi) Investment. SCN is acquiring Princeton Shares for investment
and not with a view to or for sale in connection with any distribution
thereof within the meaning of the Securities Act.

(vii) Private Placement Memorandum. The Private Placement Memorandum
does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein not misleading.

4. Representations and Warranties Concerning Princeton. The Princeton
Stockholders represent and warrant to SCN that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
Section 4), except as set forth in the Disclosure Schedule.

(a) Organization, Qualification, and Corporate Power. Princeton is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of New Jersey. Princeton is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in which
the character or location of the properties owned or the business conducted by
Princeton makes such qualification necessary. Princeton has the corporate power
and authority to carry on the business in which it is engaged and to own and use
the properties owned and used by it.

(b) Capitalization. The entire authorized capital stock of Princeton
consists of two thousand five hundred (2,500) Princeton Shares, of which one
thousand one hundred (1,100) Princeton Shares are issued and outstanding and
zero (0) Princeton Shares are held in treasury. All of the issued and
outstanding Princeton Shares have been duly authorized and are validly issued,
fully paid, and nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require

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<PAGE>

Princeton to issue, sell or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to
Princeton.

(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which
Princeton is subject or any provision of the charter or bylaws of Princeton or
(ii) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument or other arrangement to which Princeton is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets). Princeton is not
required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement.

(d) Subsidiaries and Investments. Princeton does not own, directly or
indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, limited liability
company, trust, joint venture, or other entity.

(e) Financial Statement. Princeton has furnished SCN with audited balance
sheets dated December 31, 1994 and 1995, and audited income statements for the
twelve (12) month periods ending December 31, 1995, 1994 and 1993. Such
financial statements, including the notes thereto, except as indicated therein,
were prepared on a basis consistent with past accounting practices of Princeton
and fairly presents the results of operations for the periods noted therein. The
balance sheets of Princeton delivered by Princeton to SCN fairly present the
financial condition of Princeton at the date thereof, and except as indicated
therein, reflect all claims against and all debts and liabilities of Princeton,
fixed or contingent, as of the date thereof.

(f) Undisclosed Liabilities. Princeton has no uninsured liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to become due),
including any liability for taxes, except for (i) liabilities set forth on the
face of the balance sheet dated as of December 31, 1995 and (ii) liabilities
which have arisen after December 31, 1995 in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

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<PAGE>

(g) Brokers' Fees. Princeton does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

(h) Material Contracts. Section 4(h) of the Disclosure Schedule lists the
following contracts and other material agreements to which Princeton is a party:

(i) any agreement (or group of related agreements) for the lease of
real or personal property to or from any Person;

(ii) any agreement (or group of related agreements) for the purchase
or sale of supplies, products, or other personal property or for the
furnishing or receipt of services;

(iii) any agreement concerning a partnership or joint venture;

(iv) any agreement (or group of related agreements) under which
Princeton has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation pursuant to which
it has imposed a Security Interest in respect of any of its assets,
tangible or intangible;

(v) any agreement concerning confidentiality or noncompetition;

(vi) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of Princeton's current or former directors,
officers, and employees;

(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;

(viii) any agreement pursuant to which Princeton has advanced or
loaned any amount to any of its directors, officers, and employees;

(x) any other agreement (or group of related agreements) outside the
ordinary course of Princeton's business or operations the performance of
which involves consideration in excess of $15,000.

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<PAGE>

Princeton has delivered or given SCN access to a correct and complete copy of
each written agreement listed in Section 4(h) of the Disclosure Schedule (as
amended to date) and a written summary setting forth the terms and conditions of
each oral agreement referred to in Section 4(h) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) except as set forth in Section
4(h) of the Disclosure Schedule, no notice of this Agreement or consent of any
third party is required in order to execute and deliver this Agreement or to
consummate the transaction contemplated hereby, and, after Closing, the
agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms; (C) to the Princeton Stockholders'
Knowledge, no party is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default, or permit
termination, modification, or acceleration, under the agreement; and (D) no
party has repudiated any provision of the agreement.

(i) Insurance; Malpractice. Section 4(i) of the Disclosure Schedule
contains a list and brief description of all policies or binders of fire,
liability, product liability, workers compensation, health and other forms of
insurance policies or binders currently in force insuring against risks which
will remain in full force and effect at least through the Closing Date. Section
4(i) of the Disclosure Schedule contains a description of all current
malpractice liability insurance policies of the Princeton Stockholders,
Princeton and Princeton's professional employees and all predecessor policies in
effect since February 1, 1990. Except as set forth on Section 4(i) of the
Disclosure Schedule (a) neither Princeton, the Princeton Stockholders, nor any
of Princeton's professional employees have, in the last seven (7) years, filed a
written application for any insurance coverage relating to Princeton's business
or property which has been denied by an insurance agency or carrier and (b)
Princeton, Princeton's professional employees and the Princeton Stockholders
have been continuously insured for professional malpractice claims during the
same period. Section 4(i) of the Disclosure Schedule also sets forth a list of
all claims for any insured loss in excess of Five Thousand Dollars ($5,000.00)
per occurrence filed by Princeton, Princeton's professional employees or the
Princeton Stockholders during the three (3) year period immediately preceding
the date hereof, including workers compensation, general liability,
environmental liability and professional malpractice liability claims. None of
Princeton, Princeton's professional employees nor the Princeton Stockholders is
in material default with respect to any provision contained in any such policy
and none of them has failed to give any notice or present any claim under any
such policy in due and timely fashion.

(j) No Changes Prior to Closing Date. Except as set forth in Section 4(j)
of the Disclosure Schedule, during the period from December 31, 1995 through the
date hereof, Princeton has not (i) incurred any liability or obligation of any
nature (whether known or unknown, asserted or unasserted, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated and whether due or
to become due), except in the Ordinary

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<PAGE>

Course of Business, or (ii) written off as uncollectible any notes or accounts
receivable, except write-offs in the Ordinary Course of Business charged to
applicable reserves, none of which individually or in the aggregate is material
to Princeton, (iii) conducted its business in such a manner so as to materially
increase its accounts payable or so as to materially decrease its accounts
receivable, (iv) granted any increase in the rate of wages, salaries, bonuses,
or other remunerations of any employee, except in the Ordinary Course of
Business, (v) cancelled or waived any claims or rights of substantial value,
(vi) made any change in any method of accounting, (vii) otherwise conducted its
business or entered into any transaction, except in the usual and ordinary
manner and in the Ordinary Course of Business, (viii) agreed, whether or not in
writing, to do any of the foregoing, or (ix) disposed of its assets other than
in the Ordinary Course of Business.

(k) Title; Condition. Section 4(k) of the Disclosure Schedule contains a
complete, true and correct list of those assets which are material to the
business or operations of Princeton (the "Practice Assets"). Princeton has good
and marketable title to, or leasehold interests in, all of the Practice Assets.
Except as disclosed on Section 4(k) of the Disclosure Schedule, none of the
Practice Assets is subject to a contract or other agreement of sale or subject
to security interests, mortgages, encumbrances, liens (including income,
personal property and other tax liens) or charges of any kind or character. Upon
completion of the Closing, Princeton shall own or lease the Practice Assets free
and clear of all liens and encumbrances except as disclosed in Section 4(k) of
the Disclosure Schedule.

(l) Litigation. Except as set forth in Section 4(l) of the Disclosure
Schedule, there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding or investigation by any
governmental entity pending, or, to the knowledge of the Princeton Stockholders,
threatened against, or affecting Princeton or any of the Practice Assets, or any
physician or other health care professional engaged or employed by Princeton,
and to the best of the Princeton Stockholders' Knowledge there is no basis for
any of the foregoing. None of the actions, suits, proceedings, hearings, and
investigations set forth in Section 4(l) of the Disclosure Schedule could result
in any material adverse change in the operations, results of operations, or
future prospects of the business assets to be operated by Princeton after the
Closing.

(m) Permits and Licenses. Princeton and all physicians and other health
care professionals engaged or employed by Princeton have all permits and
licenses required by all Applicable Laws; have made all regulatory filings
necessary for the conduct of Princeton's business; and are not in violation of
any of said permitting or licensing requirements.

(n) Tax Matters. Except as set forth in Section 4(n) of the Disclosure
Schedule, Princeton has filed or caused to be filed all federal, state and local
tax returns which are

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required to have been filed by Princeton, including all income, excise,
franchise, property and payroll tax returns, and Princeton has paid or
established an adequate accrual reserve for all taxes accrued through the
Closing Date and has otherwise complied with all federal, state, local and other
tax laws applicable to Princeton.

(o) Employee Benefit Plans.

(i) List of Plans. Section 4(o) of the Disclosure Schedule contains
an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or
not any Employee Benefit Plans are otherwise exempt from the provisions of
ERISA, established, maintained or contributed to by Princeton (including
all employers (whether or not incorporated) which by reason of common
control are treated together with Princeton and/or the Princeton
Stockholders as a single employer within the meaning of Section 414 of the
Code) since September 2, 1974.

(ii) Status of Plans. Princeton has never maintained and does not
now maintain or contribute to any Employee Benefit Plan subject to ERISA
which is not in substantial compliance with ERISA, or which has incurred
any accumulated funding deficiency within the meaning of Section 412 or
418B of the Code,or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section
412 of the Code or which is subject to Title IV of ERISA. Princeton has
not incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") in connection with any Employee Benefit Plan covering any
employees of Princeton or ceased operations at any facility or withdrawn
from any such Plan in a manner which could subject it to liability under
Section 4062(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any liability of Princeton to the
PBGC under Title IV of ERISA which could reasonably be anticipated to
result in any claims being made against Princeton by the PBGC. Princeton
has not incurred any withdrawal liability (including any contingent or
secondary withdrawal liability) within the meaning of Sections 4201 and
4202 of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan
(as defined in Section 4001 of ERISA), and no event has occurred, and
there exists no condition or set of circumstances, which represent a
material risk of the occurrence of any withdrawal from or the partition,
termination, reorganization or insolvency of any Multiemployer Plan which
would result in any liability of Princeton.

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<PAGE>

(iii) Contributions. Full payment has been made of all amounts which
Princeton is required, under Applicable Law or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to which
Princeton is a party, to have paid as contributions thereto as of the last
day of the most recent plan year of such Employee Benefit Plan ended prior
to the date hereof. Princeton has made adequate provision for reserves to
meet contributions that have not been made because they are not yet due
under the terms of any Employee Benefit Plan or related agreements.
Benefits under all Employee Benefit Plans are as represented and have not
been increased subsequent to the date as of which documents have been
provided.

(iv) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and, to the Knowledge of the
Princeton Stockholders, nothing has occurred since the date of the last
such determination which resulted or is likely to result in the revocation
of such determination.

(v) Transactions. Princeton has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a material
tax, penalty or liability for prohibited transactions under ERISA or the
Code nor have any of its directors, officers or employees to the extent
they or any of them are fiduciaries with respect to such plans, breached
any of their responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA which would result in any material claim being made
under or by or on behalf of any such plans by any party with standing to
make such claim.

(vi) Other Plans. Princeton presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit
plans other than those listed on Section 4(o) of the Disclosure Schedule.

(vii) Documents. The Princeton Stockholders have delivered or caused
to be delivered to SCN true and complete copies of (i) all Employee
Benefit Plans as in effect, together with all amendments thereto which
will become effective at a later date, as well as the latest Internal
Revenue Service determination letter obtained with respect to any such
Employee Benefit Plan qualified under Section 401 or 501 of the Code, and
(ii) the most recently filed Form 5500 for each Employee Benefit Plan
required to file such form.

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<PAGE>

(p) Third-Party Relations. Princeton has not received any notice that any
material patient, supplier, employee or associated physician intends to cease
doing business with Princeton.

(q) Compliance with Applicable Laws. Except as set forth in Section 4(q)
of the Disclosure Schedule, to the Princeton Stockholders' Knowledge, Princeton
has operated in compliance with all federal, state, county and municipal laws,
constitutions, ordinances, statutes, rules, regulations and orders applicable
thereto ("Applicable Laws"). No item disclosed in Section 4(q) of the Disclosure
Schedule has a material effect on the operations of Princeton. To the Princeton
Stockholders' Knowledge, neither Princeton nor any physician associated with or
employed by Princeton has received payment or any remuneration whatsoever to
induce or encourage the referral of patients or the purchase of goods and/or
services as prohibited under 42 U.S.C. Section 1320a-7b(b), or otherwise
perpetrated any Medicare or Medicaid fraud or abuse nor has any fraud or abuse
been alleged within the last five (5) years by any government agency.

(r) Employee Compensation. Princeton has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
physician employees are entitled through the Closing Date, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of Princeton's physician employees.

(s) Environmental Matters.

(i) Except as set forth in Section 4(s) of the Disclosure Schedule,
Princeton is in material compliance with all applicable Environmental
Laws.

(ii) Princeton has not authorized or conducted nor does Princeton
have Knowledge of the disposal or release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous
constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste (including
crude oil or any fraction thereof), natural gas, liquefied gas, synthetic
gas, biohazardous or biomedical material, or other material defined,
regulated controlled or potentially subject to any remediation requirement
under any Environmental Law (collectively "Hazardous Materials"), on, in,
under or affecting any property owned or leased by Princeton.

(iii) Princeton has, and is in compliance with, all licenses,
permits, registrations, and government authorizations necessary to operate
under all applicable Environmental Laws. Section 4(s) of the Disclosure
Schedule lists all

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<PAGE>

such licenses, permits, registrations and government authorizations
required by any Environmental Law.

(iv) Except as disclosed in Section 4(s) of the Disclosure Schedule,
Princeton has not received any written or oral notice from any
governmental agency or entity or any other Person and there is no pending
or threatened claim, litigation or any administrative agency proceeding
that: (a) alleges a violation of any Environmental Law(s) by Princeton or,
with respect to the Practice Assets or any property owned or leased by
Princeton (b) alleges that Princeton is a liable party or potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., or any
analogous state law, (c) has resulted or could result in the attachment of
an environmental lien on any of the Practice Assets or property owned or
leased by Princeton, or (d) alleges that Princeton is liable for any
contamination of the environment, contamination of any property owned or
leased by Princeton, damage to natural resources, property damage, or
personal injury based on its activities or the activities of any
predecessor or third parties involving Hazardous Materials, whether
arising under the Environmental Laws, common law principles, or other
legal standards.

(t) Healthcare Compliance. Princeton is participating in or otherwise
authorized to receive reimbursement from Medicare and Medicaid and is a party to
other third-party payor agreements if any, discussed in Section 4(h) of the
Disclosure Schedule. All necessary certifications and contracts required for
participation in such programs are in full force and effect and have not been
amended or otherwise modified, rescinded, revoked or assigned, and no condition
exists or event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such third-party payor program. Princeton is in
compliance in all material respects with the requirements of all such
third-party payors applicable thereto. Princeton, its Stockholders, and its
physician employees do not have any financial relationship (whether investment
interest, compensation interest, or otherwise) with any entity to which any of
the foregoing refer patients, except for such financial relationships that
qualify for exceptions to state and federal laws restricting physician referrals
to entities in which they have a financial interest.

(u) Fraud and Abuse. To the Princeton Stockholders' Knowledge, Princeton,
the Princeton Stockholders and persons and entities providing professional
services for Princeton have not engaged in any activities which are prohibited
under 42 U.S.C. Section 1320a-7b, or the regulations promulgated thereunder
pursuant to such statutes, or related state or local statutes or regulations, or
which are prohibited by rules of professional conduct, including the following:
(a) knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any

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<PAGE>

application for any benefit or payment; (b) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment; (c) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to fraudulently secure such benefit or payment; and (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay or receive such remuneration (i) in return
for referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service or item for which payment may be made in whole or in
part by Medicare or Medicaid.

(v) Practice Compliance. Princeton is duly licensed as a medical practice
and is lawfully operated in accordance with the requirements of all Applicable
Law and has all necessary authorizations for use and operation, all of which are
in full force and effect. There are no outstanding notices of deficiencies
relating to Princeton issued by any governmental authority or third-party payor
requiring conformity or compliance with any Applicable Law or condition for
participation of such governmental authority or third-party payor, and after
reasonable and independent inquiry and due diligence and investigation,
Princeton has not received notice nor do the Princeton stockholders have
Knowledge or reason to believe that such necessary authorizations may be revoked
or not renewed in the Ordinary Course of Business.

(w) Rates and Reimbursement Policies. The jurisdiction in which Princeton
is located does not currently impose any restrictions or limitations on rates
which may be charged to private pay patients receiving services provided by
Princeton. Princeton does not have any rate appeal currently pending before any
governmental authority or any administrator of any third-party payor program.
The Princeton Stockholders do not have Knowledge of any Applicable Law which
affects rates or reimbursement procedures which has been enacted, promulgated or
issued within the eighteen (18) months preceding the date of this Agreement or
any such legal requirement proposed or currently pending in the jurisdiction in
which Princeton is located, which could have a material adverse effect on
Princeton or may result in the imposition of additional Medicaid, Medicare,
charity, free care, welfare, or other discounted or government assisted patients
at Princeton or require Princeton to obtain any necessary authorization which
Princeton does not currently possess.

(x) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
Princeton, as being due to Princeton, at the Closing Date have arisen in the
Ordinary Course of

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<PAGE>

Business; and none of such accounts receivable or other debts is or will at the
Closing Date be subject to any counterclaim or set-off except to the extent of
any such provision or reserve. There has been no material adverse change since
December 31, 1995 in the amount of accounts receivable or other debts due
Princeton, the allowances with respect thereto, or accounts payable of Princeton
from that reflected in the balance sheet previously delivered by Princeton to
SCN.

(y) Guaranties. Princeton is not a guarantor or otherwise liable for any
liability or obligation (including indebtedness) of any other Person.

(z) Powers of Attorney. There are no outstanding powers of attorney
executed by Princeton, except as may be contained in financing documents or
security agreements listed in Section 4(h) of the Disclosure Schedule.

(aa) Tangible Assets. Princeton owns or leases all land, buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
business as presently conducted. To the Knowledge of the Princeton Stockholders,
each tangible asset, has been maintained in accordance with normal industry
practice, is in good operating condition and repair (subject to normal wear and
tear).

(ab) Full Disclosure. No representation or warranty made by Princeton in
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.

5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.

(a) General. Each of the Parties will use its and his best efforts to take
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below)to be
satisfied by him or it. This paragraph shall not be construed to obligate any of
the Parties to waive any condition precedent to his or its obligations to
perform hereunder.

(b) Notices and Consents. The Princeton Stockholders will cause Princeton
to give any notices to third parties, and will use their best efforts to obtain
any third party consents, that SCN reasonably may request in connection with the
matters referred to in Section 4(c) above.

(c) Regulatory Matters and Approvals. Each of the parties to this
Agreement will give any notices to, make any filings with, and use its
reasonable best efforts to obtain

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<PAGE>

any authorizations, consents, and approvals of governments and governmental
agencies in connection with the transactions contemplated by this Agreement.
Without limiting the generality of the foregoing:

(i) Securities Act, Securities Exchange Act, and State Securities
Laws. SCN will prepare and, if necessary, file with the U.S. Securities
Exchange Commission all necessary documents relating to the offering and
issuance of the SCN Shares. SCN will take all actions that may be
necessary under state securities laws in connection with the offering and
issuance of the SCN Shares.

(ii) Tax Reporting. The transaction shall constitute a
reorganization under Code Section 368(a)(1)(B). Each of the parties agrees
to report this transaction for financial and income tax purposes in
accordance with the foregoing.

(d) Operation of Business. From the date of this Agreement through the
Closing Date, the Princeton Stockholders will not cause or allow Princeton to
engage in any practice, take any action, or enter into any transaction outside
the Ordinary Course of Business. Without limiting the generality of the
foregoing:

(i) Except as required under Section 6(a)(xiv), Princeton will not
authorize or effect any change in its charter or bylaws;

(ii) Princeton will not grant any options, warrants, or other rights
to purchase or obtain any of its common stock or issue, sell, or otherwise
dispose of any of its common stock (except upon the conversion or exercise
of options, warrants, and other rights currently outstanding);

(iii) Except as described in Section 6(a)(xiii), Princeton will not
declare, set aside, or pay any dividend or distribution with respect to
its common stock (whether in cash or in kind), or redeem, repurchase, or
otherwise acquire any of its common stock in either case outside the
Ordinary Course of Business without the consent of SCN, which consent
shall not be unreasonably withheld;

(iv) Princeton will not issue any note, bond, or other debt security
or create, incur, assume, or guarantee any indebtedness for borrowed money
or capitalized lease obligations outside the Ordinary Course of Business;

(v) Princeton will not impose any Security Interest upon any of its
assets outside the Ordinary Course of Business;

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<PAGE>

(vi) Princeton will not make any capital investment in, make any
loan to, or acquire the securities or assets of any other Person outside
the Ordinary Course of Business;

(vii) Princeton will not make any change in employment terms for any
of its directors, officers, and employees outside the Ordinary Course of
Business; and

(viii) Princeton will not commit to any of the foregoing.

(e) Full Access. Upon three (3) days prior notice, the Princeton
Stockholders will cause Princeton to permit representatives of SCN to have full
access to all premises, properties, personnel, books, records (including tax
records), contracts, and documents of or pertaining to Princeton during normal
business hours. SCN will treat and hold as such any confidential information it
receives from Princeton in the course of the reviews contemplated by this
Section 5(e), will not use any of the confidential information except in
connection with this Agreement, and, if this Agreement is terminated for any
reason whatsoever, agrees to return to Princeton all tangible embodiments (and
all copies) thereof which are in its possession.

(g) Exclusivity. Until the earlier of the Closing Date or December 31,
1996, the Princeton Stockholders will not solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of all or substantially all of the common stock or assets of Princeton
(including any acquisition structured as a merger, consolidation, or share
exchange). The Princeton Stockholders shall notify SCN immediately if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.

(h) Collection of Accounts Receivable. The Princeton Stockholders agree to
cooperate with SCN in the collection of accounts receivable owned by Princeton
as of the Closing Date. SCN, at its option, shall have the right to require the
collection of said accounts receivable through a lockbox or bank account sweep
arrangement. In connection therewith, the Princeton Stockholders agree to
execute the necessary documents and follow the necessary procedures as described
in the Service Agreement between the parties which is attached hereto as Exhibit
7(a)(ii) to accommodate the collection of the accounts receivable in such
manner.

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<PAGE>

(i) Payment of Expenses. On or before the Closing Date, Princeton shall
have paid or discharged any and all liabilities or charges for costs or fees
owed as a result of the transaction contemplated by this Agreement.

(j) Completion of Schedules. The parties hereto acknowledge that this
Agreement is being executed and delivered before the Disclosure Schedule has
been completed and attached hereto. SCN therefore agrees that the Princeton
Stockholders may complete the Disclosure Schedule and that said Disclosure
Schedule may be attached hereto after the execution and delivery of this
Agreement; provided, however, that the Disclosure Schedule shall be in form,
substance and content acceptable to SCN in its sole discretion and shall be
completed and delivered to SCN by the Princeton Stockholders on or prior to
October 25, 1996. SCN shall have the right to terminate this Agreement at any
time on or prior to October 29, 1996, in its sole discretion, based upon its
review of the Disclosure Schedule furnished by the Princeton Stockholders and
the documents, events, facts or other circumstances referred to herein.

6. Conditions to Obligation to Close.

(a) Conditions to Obligation of SCN. The obligation of SCN to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) The Princeton Stockholders shall have received a copy of the
Private Placement Memorandum;

(ii) Princeton shall have procured all of the third party consents
specified in Section 5(b) above;

(iii) The representations and warranties set forth in Sections 3 and
4 above shall be true and correct in all material respects at and as of
the Closing Date;

(iv) The Princeton Stockholders shall have performed and complied
with all of their covenants hereunder in all material respects through the
Closing;

(v) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(C) affect adversely the rights of SCN to operate Princeton after the
Closing Date;

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<PAGE>

(vi) The Princeton Stockholders shall have delivered to SCN a
certificate to the effect that each of the conditions specified above in
Section 6(a)(i)-(v) is satisfied in all respects;

(vii) SCN shall have received from counsel to Princeton an opinion
in form and substance as set forth in Exhibit 6(a)(vii) attached hereto,
addressed to SCN, and dated as of the Closing Date and such other opinions
as may be required by SCN necessary to close its financing with
NationsBank of Tennessee, N.A.;

(viii) SCN shall have received from the Princeton Stockholders
subscription documents in form and substance as set forth in Exhibit
6(a)(viii) attached hereto;

(ix) SCN shall have received the resignations, effective as of the
Closing, of each director and officer of Princeton other than those whom
SCN shall have specified in writing at least five (5) business days prior
to the Closing;

(x) All actions to be taken by the Princeton Stockholders in
connection with consummation of the transactions contemplated hereby and
all certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be satisfactory in form
and substance to SCN;

(xi) SCN shall have closed its financing with NationsBank of
Tennessee, N.A. on terms and conditions that are satisfactory to SCN;

(xii) the issuance of the SCN Shares to the Princeton Stockholders
will not violate federal securities laws or the securities laws of any
state of the United States;

(xiii) SCN and Princeton shall have all licenses and permits
necessary to operate their respective businesses;

(xiv) All physicians and employees of Princeton must be covered by
medical malpractice insurance and, to the extent applicable, medical
malpractice tail insurance to cover prior occurrences;

(xv) Princeton shall have distributed to the Princeton Stockholders
all of the assets listed on Exhibit 6(a)(xv), which constitute the
entirety of the assets owned by Princeton not being acquired by SCN (the
"Excluded Assets"). Additionally, on or before the Closing Date, Princeton
shall have paid or discharged all liabilities or charges for costs or fees
owed as a result of the

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<PAGE>

transactions contemplated by this Agreement. With respect to Employee
Benefit Plans, all Plans shall be transferred to a new entity controlled
by the Princeton Stockholders, and the instrument of transfer shall
provide that the new entity assumes all of the liabilities of the Plans,
including, but not limited to any current or future funding liabilities;

(xvi) The Princeton Stockholders shall have caused the payoff of all
indebtedness owed to banks or other financial institutions or lenders or
the assumption thereof by any new entity organized by the Princeton
Shareholders;

(xvii) The Princeton Stockholders shall have caused the conversion
of Princeton to a New Jersey business corporation;

(xviii) The Princeton Stockholders shall either (A) have substituted
Princeton as the plan sponsor on any Princeton Employee Benefit Plans, or
(B) have terminated any Princeton Employee Benefit Plans;

(xix) Princeton shall have established an adequate accrual reserve
for payment of the taxes accrued with respect to the taxable periods or
portion thereof ended as of the Closing Date;

(xx) On or before the Closing Date, the transactions contemplated by
(i) that certain Merger Agreement between SCN and Reconstructive
Orthopaedic Associates, Inc. dated October 21, 1996 and (ii) that certain
Merger Agreement between SCN and Vero Orthopaedics, P.A. dated October 21,
1996 shall have been consummated; and

(xxi) On or before the Closing Date, Princeton Stockholders will
satisfy any and all liabilities to employees of Princeton for accrued
vacation time in excess of one week.

SCN may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

(b) Conditions to Obligation of the Princeton Stockholders. The obligation
of the Princeton Stockholders to consummate the transactions to be performed by
it in connection with the Closing is subject to satisfaction of the following
conditions:

(i) This Agreement shall have received the requisite SCN Board of
Directors' approval;

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<PAGE>

(ii) The representations and warranties set forth in Section 3 above
shall be true and correct in all material respects at and as of the
Closing Date;

(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(iv) No action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation;

(v) SCN shall have delivered to the Princeton Stockholders a
certificate to the effect that each of the conditions specified above in
Section 6(b)(i)-(iv) is satisfied in all respects;

(vi) The Princeton Stockholders shall have received from counsel to
SCN an opinion in form and substance as set forth in Exhibit 6(b)(vi)
attached hereto, addressed to the Princeton Stockholders, and dated as of
the Closing Date; and

(vii) SCN shall have made all filings required under applicable
federal securities laws and the securities laws of any state of the United
States, and SCN shall have provided the Private Placement Memorandum to
the Princeton Stockholders;

(viii) Upon review of the Private Placement Memorandum, the
Princeton Stockholders shall have elected to close the transaction by
delivery to SCN of completed subscription documents in from and substance
as set forth in Exhibit 6(a)(viii);

(ix) All actions to be taken by SCN in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to the
Princeton Stockholders;

(x) There shall have been no changes in the Applicable Laws
affecting SCN's proposed operations as described in the Private Placement
Memorandum;

(xi) On or before the Closing Date, the transactions contemplated by
(i) that certain Merger Agreement between SCN and Reconstructive
Orthopaedic

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<PAGE>

Associates, Inc. dated October 21, 1996 and (ii) that certain Merger
Agreement between SCN and Vero Orthopaedics, P.A. dated October 21, 1996
shall have been consummated; and

(xii) On or before the Closing Date, all leases to which Princeton
is a party shall be reviewed and revised to take into consideration
additional costs related to debt service obligations incurred by the
Lessor as a result of this Agreement.

The Princeton Stockholders may waive any condition specified in this Section
6(b) if they execute a writing so stating at or prior to the Closing.

7. Items to be Delivered at or Prior to Closing.

(a) By the Princeton Stockholders or Princeton. The Princeton Stockholders
shall execute and deliver to SCN or shall cause Princeton to execute and deliver
to SCN, as the case may be, prior to or at the Closing:

(i) Stock certificates representing ownership of all shares of
Princeton duly endorsed to SCN;

(ii) A Service Agreement in substantially the form attached hereto
as Exhibit 7(a)(ii);

(iii) A Specialty Care Network, Inc. Stockholder's Agreement;

(iv) The Certificate required by Section 6(a)(vi);

(v) An opinion from the Princeton Stockholders' counsel in
substantially the form attached hereto as Exhibit 6(a)(vii);

(vi) Completed Subscription Documents in substantially the form
attached hereto as Exhibit 6(a)(viii); and

(vii) Such other instruments as may be reasonably requested by SCN
in order to effect to or carry out the intent of this Agreement.

(b) By SCN. SCN shall deliver to the Princeton Stockholders at or prior to
the Closing:

(i) Stock certificates representing the SCN Shares being issued to
each of the Princeton Stockholders;

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<PAGE>

(ii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 6(b)(vi);

(iii) The Certificate required by Section 6(b)(v);

(iv) A Specialty Care Network, Inc. Stockholder's Agreement;

(v) The Private Placement Memorandum;

(vi) Subleases between Princeton and the new entity to be organized
by the Princeton Stockholders for use of the facilities and equipment
currently occupied and used by Princeton;

(vii) Such other instruments as may be reasonably requested by the
Princeton Stockholders in order to effect or carry out the intent of this
Agreement; and

(viii) A license agreement pursuant to which SCN will grant the
Princeton Stockholders a royalty-free and perpetual license to use the
name "Princeton Orthopaedics Associates" and all other trade names,
trademarks and service marks owned by Princeton in substantially the form
attached hereto as Exhibit 7(b)(vi).

8. Indemnification.

(a) Indemnification by the Princeton Stockholders. The Princeton
Stockholders agree to and shall jointly and severally defend, indemnify and hold
harmless SCN, its successors and assigns, officers and directors against any and
all losses, liabilities, damages and expenses (including, without limitation,
reasonable attorney's fees) resulting from or arising out of the breach, untruth
or inaccuracy of any representation, warranty or covenant of the Princeton
Stockholders set forth in this Agreement. The Princeton Stockholders shall not
be liable to SCN for any claims against the Princeton Stockholders under this
Section 8(a) unless and until the aggregate of all claims against the Princeton
Stockholders exceeds the sum of $25,000.00, whereupon SCN shall be entitled to
recover the full amount of all claims, including the initial $25,000.00.
Notwithstanding the foregoing provisions, the obligations of any Princeton
Stockholder executing this Agreement to indemnify SCN shall not exceed the value
of the portion of the Purchase Price delivered to such Princeton Stockholder at
the Closing.

(b) Notice to the Princeton Stockholders; Opportunity to Defend. SCN
agrees to give prompt notice to the Princeton Stockholders of the assertion of
any claim, or the commencement of any suit, action or proceeding, in respect of
which indemnity may be sought under Section 8(a). The Princeton Stockholders may
participate in and at their

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<PAGE>

election, or at the request of SCN, assume the defense of any such suit, action
or proceeding at the Princeton Stockholders's expense. The Princeton
Stockholders shall not be liable under Section 8(a) for any settlement effected
without their consent of any claim, litigation or proceeding in respect of which
indemnity may be sought under Section 8(a) which consent shall not be
unreasonably withheld.

(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the Princeton Stockholders, their heirs and assigns
against any and all losses, liabilities, damages and expenses (including,
without limitation, reasonable attorney's fees) resulting from the breach,
untruth or inaccuracy of any representation, warranty or covenant of SCN set
forth in this Agreement. SCN shall not be liable to the Princeton Stockholders
for any claims against SCN under this Section 8(c) unless and until the
aggregate of all claims against SCN exceeds the sum of $25,000.00, whereupon the
Princeton Stockholders shall be entitled to recover the full amount of all
claims, including the initial $25,000.00.

(d) Notice to SCN; Opportunity to Defend. The Princeton Stockholders agree
to give prompt notice to SCN of the assertion of any claim, or the commencement
of any suit, action or proceeding in respect of which indemnity may be sought
under Section 8(c). SCN may participate in and at its election, or at the
request of the Princeton Stockholders, assume the defense of any such suit,
action or proceeding at SCN's expense. SCN shall not be liable under Section
8(c) for any settlement affected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought hereunder, which consent
shall not be unreasonably withheld.

(e) Survival. The representations and warranties of the Princeton
Stockholders and SCN contained in this Agreement and the indemnifications
contained herein shall survive the Closing. No claim for indemnification with
respect to any alleged misrepresentation or breach of warranty may be made after
two (2) years following the Closing Date. Any matter to which indemnification
pertains and with respect to which a claim has been asserted or threatened
following the Closing Date shall continue to be subject to the indemnification
under this Agreement until finally terminated, settled, resolved or adjudicated;
and all terms, conditions and stipulations of this Agreement shall likewise
continue to apply.

(f) Security for Indemnity. The Princeton Stockholders hereby agree that
in the event (i) any final judgement is rendered in favor of SCN, (ii) SCN is
entitled to indemnification pursuant to the provisions of this Agreement and
(iii) the Princeton Stockholders do not pay SCN the amount due hereunder, then
SCN shall have the right to redeem any SCN Share currently owned by the
Princeton Stockholders pursuant to the terms of the Stockholder's Agreement.

- 26 -
<PAGE>

9. Termination.

(a) Termination of Agreement. Either of the Parties may terminate this
Agreement as provided below:

(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing Date;

(ii) SCN may terminate this Agreement by giving written notice to
the Princeton Stockholders at any time prior to the Closing Date (A) in
the event the Princeton Stockholders have breached any representation,
warranty, or covenant contained in this Agreement in any material respect,
SCN has notified the Princeton Stockholders of the breach, and the breach
has continued without cure for a period of 30 days after the notice of
breach (B) if the Closing shall not have occurred on or before December
31, 1996 by reason of the failure of any condition precedent under Section
6(a) hereof (unless the failure results primarily from SCN breaching any
representation, warranty, or covenant contained in this Agreement) or (C)
in accordance with Section 5(j);

(iii) The Princeton Stockholders may terminate this Agreement by
giving written notice to SCN at any time prior to the Closing Date (A) in
the event SCN has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the Princeton
Stockholders have notified SCN of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach or (B) if
the Closing shall not have occurred on or before December 31, 1996 by
reason of the failure of any condition precedent under Section 6(b) hereof
(unless the failure results primarily from the Princeton Stockholders
breaching any representation, warranty, or covenant contained in this
Agreement);

(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 9(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach). Notwithstanding the foregoing, in the
event the transaction contemplated by this Agreement does not close and such
failure is not the fault of SCN, then the Princeton Stockholders agree to
reimburse SCN for seventy-five percent of SCN's out of pocket expenses,
including but not limited to professional fees, related to the proposed
transaction; provided, however, the Princeton Stockholders' obligation to
reimburse SCN shall not exceed fifty-six thousand two hundred fifty dollars
($56,250).

10. Miscellaneous.

- 27 -
<PAGE>

(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

(b) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

(c) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of their
rights, interests, or obligations hereunder without the prior written approval
of the other Party.

(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

If to Princeton: Copy to:

Princeton Orthopaedic Associates, Victor S. Elgort, Esq.
P.A. Norris, McLaughlin & Marcus
325 Princeton Avenue P.O. Box 1018
Princeton, New Jersey 08540 721 Route 202-206
Attention: David M. Smith, M.D. Somerville, New Jersey 08876-1018
Facsimile: (609) 924-8532 Facsimile: (908) 722-0755

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<PAGE>

If to SCN: Copy to:

Kerry R. Hicks, President David T. Popwell, Esq.
Specialty Care Network, Inc. Baker, Donelson, Bearman &
44 Union Boulevard, Suite 600 Caldwell
Lakewood, Colorado 80228 165 Madison Ave, Suite 2100
Facsimile: (303) 716-1298 Memphis, Tennessee 38103
Facsimile: (901) 577-2303

(h) Amendments and Waivers. The parties may mutually amend any provision
of this Agreement at any time prior to the Closing Date. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by all of the parties. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.

- 29 -
<PAGE>

(j) Expenses. Each of the Parties will bear their own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

* * * * *

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<PAGE>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.

SPECIALTY CARE NETWORK, INC.

By:
Title:

_______________________________________
MICHAEL N. JOLLEY, M.D.

_______________________________________
HARVEY E. SMIRES, M.D.

_______________________________________
ROBERT N. DUNN, M.D.

_______________________________________
JEFFREY S. ABRAMS, M.D.

_______________________________________
RICHARD E. FLEMING, JR., M.D.

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<PAGE>

_______________________________________
W. THOMAS GUTOWSKI, M.D.

_______________________________________
STEVEN R. GECHA, M.D.

_______________________________________
C. ALEXANDER MOSKWA, JR., M.D.

_______________________________________
DAVID M. SMITH, M.D.

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<PAGE>

EXHIBIT 6(a)(vii)

Princeton Opinion Letter

See Attached.

6(a)(vii)-1

<PAGE>

EXHIBIT 6(a)(viii)

Subscription Documents

See Attached.

6(a)(viii)-1

<PAGE>

EXHIBIT 6(a)(xv)

Excluded Assets

"Excluded Assets" shall mean (i) employment or noncompete agreements between
Princeton, the Princeton Stockholders, and those licensed medical individuals
under contract with Princeton to provide professional services to patients of
Princeton, and claims arising thereunder; (ii) all patient medical records and
patient lists; (iii) all insurance policies of Princeton and claims arising
thereunder and all prepaid expenses on malpractice insurance premiums; (iv) the
inventories, cash and accounts receivable disposed of, cancelled, expended or
collected, as the case may be, by Princeton after the date hereof and prior to
the Closing in the Ordinary Course of Business and consistent with past
practice; (v) all accounts receivable representing amounts due for the use of
the facility (but excluding professional fees), along with all associated
supplies and equipment, relating to the ambulatory surgery center located at 727
State Road, Princeton Township, New Jersey; (vi) personal property of individual
physicians which is not included on the financial statements of Princeton; (vii)
Princeton's Employee Benefit Plans and all liabilities related thereto; (viii)
Princeton's cash (other than any cash reserved for the payment of any accrued
liabilities) on hand as of the Closing Date, (ix) Princeton's third party
provider agreements; and (x) all drugs owned by Princeton.

6(a)(xv)-1

<PAGE>

EXHIBIT 6(b)(vi)

SCN Opinion Letter

See Attached.

6(b)(vi)-1

<PAGE>

EXHIBIT 7(a)(ii)

Service Agreement

See Attached.

7(a)(ii)-1

<PAGE>
SERVICE AGREEMENT

BY AND BETWEEN

SPECIALTY CARE NETWORK, INC.,

SCN OF PRINCETON, INC.,

PRINCETON ORTHOPEDIC ASSOCIATES II, P.A.

AND

Dated as of November 1, 1996
<PAGE>

TABLE OF CONTENTS Page
----
ARTICLE I.
RELATIONSHIP OF THE PARTIES
1
1.1. Independent Relationship....................................... 1
1.2. Responsibilities of the Parties................................ 2
1.3. Princeton II Matters........................................... 2
1.4. Patient Referrals.............................................. 2
1.5. Professional Judgment.......................................... 2
1.6. Conduct of Professional Medical Practice....................... 2

ARTICLE II.
DEFINITIONS
4
2.1. Definitions.................................................... 4

ARTICLE III.
PRACTICE OFFICES TO BE PROVIDED BY COMPANY
8
3.1. Practice Offices............................................... 8
3.2. Use of Practice Offices........................................ 9

ARTICLE IV.
DUTIES OF THE POLICY BOARD
9
4.1. Formation and Operation of the Policy Board.................... 9
4.2. Duties and Responsibilities of the Policy Board................ 9
4.2.1. Capital Improvements and Expansion..................... 9
4.2.2. Annual Budgets......................................... 9
4.2.3. Marketing.............................................. 9
4.2.4. Patient Fees; Collection Policies...................... 9
4.2.5. Princeton II and Payor Relationships.................. 10
4.2.6. Strategic Planning.................................... 10
4.2.7. Capital Expenditures.................................. 10
4.2.8. Restrictive Covenants for Physician................... 10
4.2.9. Grievance Referrals................................... 10

ARTICLE V.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY
10
5.1. Performance of Management Functions........................... 10

i
<PAGE>

Page
----

5.2. Financial Planning and Goals.................................. 10
5.3. Audits and Financial Statements............................... 11
5.4. Inventory and Supplies........................................ 11
5.5. Management Services and Administration........................ 11
5.6. Personnel..................................................... 14
5.7. Events Excusing Performance................................... 14
5.8. Compliance with Law and Business Standards.................... 15
5.9. Quality Assurance............................................. 15
5.10. New Medical Services and Additional Practice Offices.......... 15
5.11. Collection of Certain Patient Receipts and Payment of
Clinic Expenses............................................. 15
5.12. Other Princeton II Accounts................................... 16

ARTICLE VI.
OBLIGATIONS OF PRINCETON II AND PHYSICIAN OWNERS
16
6.1. Professional Services......................................... 16
6.2. Medical Practice.............................................. 16
6.3. Employment of Physician Employees............................. 16
6.4. Professional Dues and Education Expenses...................... 17
6.5. Professional Insurance Eligibility............................ 17
6.6. Events Excusing Performance................................... 17
6.7. Fees for Professional Services................................ 17
6.8. Peer Review................................................... 17
6.9. Princeton II Employee Benefit Plans........................... 18

ARTICLE VII.
RESTRICTIVE COVENANTS AND ENFORCEMENT
19
7.1. Exclusive Arrangement......................................... 19
7.2. Restrictive Covenants......................................... 20
7.2.1. By Current Physician Employees........................ 20
7.2.2. By Current and Future Physician Owners................ 20
7.2.3. Limitations on Restrictive Covenants.................. 21
7.3. Restrictive Covenants By Future Physician Employees........... 21
7.4. Rights of Company............................................. 21
7.5. Enforcement................................................... 21
7.6. Modification of Restrictive Covenants......................... 22

ii
<PAGE>

Page
----

ARTICLE VIII.
FINANCIAL ARRANGEMENTS
22
8.1. Service Fees.................................................. 22
8.2. Payment of Service Fee........................................ 26
8.3. Purchase of Accounts Receivable............................... 26
8.4. Payment of Clinic Expenses.................................... 27

ARTICLE IX.
RECORDS
28
9.1. Patient Records............................................... 28
9.2. Records Owned by Company...................................... 28
9.3. Access to Records............................................. 28
9.4. Government Access to Records.................................. 28

ARTICLE X.
INSURANCE AND INDEMNITY
29
10.1. Insurance to be Maintained by Princeton II.................... 29
10.2. Insurance to be Maintained by Company......................... 29
10.3. Additional Insureds........................................... 29
10.4. Indemnification............................................... 29

ARTICLE XI.
TERM, TERMINATION AND RETIREMENT
30
11.1. Term of Agreement............................................. 30
11.2. Extended Term................................................. 30
11.3. Termination by Princeton II for Cause......................... 30
11.4. Termination by Company for Cause.............................. 31
11.5. Early Termination by Princeton II or Company Without
Cause Upon Third (3rd) Anniversary of Agreement............. 32
11.6. Consequences of Princeton II Termination...................... 33

11.7. Closing of purchase by Princeton II and Effective Date of
Termination................................................. 33
11.8. Tail Policy................................................... 34
11.9. Restrictions Applicable to Physician Owners................... 34
11.9.1 Early Retirement...................................... 34
11.9.2 Retirement............................................ 36
11.9.3 Physician Owner Change in Practice/Group Affiliation
...................................................... 36

iii
<PAGE>

Page
----

11.9.4 Death or Disability................................... 37

ARTICLE XII.
DAMAGE AND LOSS; CONDEMNATION
37
12.1. Use of Insurance Proceeds.................................... 37
12.2. Temporary Space.............................................. 37

ARTICLE XIII.
REPRESENTATIONS AND WARRANTIES
OF PRINCETON II AND PHYSICIAN OWNERS
37
13.1. Validity..................................................... 37
13.2. Litigation................................................... 38
13.3. Permits...................................................... 38
13.4. Authority.................................................... 38
13.5. Compliance with Applicable Law............................... 38
13.6. Health Care Compliance....................................... 39
13.7. Fraud and Abuse.............................................. 39
13.8. Princeton II Compliance...................................... 39
13.9. Rates and Reimbursement Policies............................. 40
13.10. Accounts Receivable.......................................... 40
13.11. Full Disclosure.............................................. 42
13.12. Exhibits..................................................... 42

ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES OF COMPANY
43
14.1. Organization................................................. 43
14.2. Authority.................................................... 43
14.3. Absence of Litigation........................................ 43
14.4. Transactions with Affiliates................................. 43

ARTICLE XV.
COVENANTS OF PRINCETON II AND PHYSICIAN OWNERS
43
15.1. Merger, Consolidation and Other Arrangements................. 43
15.2. Necessary Authorizations/Assignment of Licenses and Permit... 43

15.3. Transaction with Affiliates.................................. 44
15.4. Compliance with All Laws..................................... 44
15.5. Third-Party Payor Programs................................... 44

iv
<PAGE>

Page
----

15.6. Change in Business or Credit and Collection Policy........... 44
15.7. Treatment of Accounts Receivable............................. 44
15.8. Security Interest............................................ 45

ARTICLE XVI.
GENERAL PROVISIONS
45
16.1. Assignment................................................... 45
16.2. Whole Agreement; Modification................................ 46
16.3. Notices...................................................... 46
16.4. Binding on Successors........................................ 47
16.5. Waiver of Provisions......................................... 47
16.6. Governing Law................................................ 47
16.7. No Practice of Medicine...................................... 47
16.8. Severability................................................. 47
16.9. Additional Documents......................................... 48
16.10. Attorneys' Fees.............................................. 48
16.11. Time is of the Essence....................................... 48
16.12. Confidentiality.............................................. 48
16.13. Contract Modifications for Prospective Legal Events.......... 48
16.14. Remedies Cumulative.......................................... 48
16.15. Language Construction........................................ 48
16.16. No Obligation to Third Parties............................... 49
16.17. Communications............................................... 49

v
<PAGE>

SERVICE AGREEMENT

THIS SERVICE AGREEMENT ("Agreement") dated as of November 8, 1996, by and
between SPECIALTY CARE NETWORK, INC., a Delaware corporation, SCN OF PRINCETON,
INC., a New Jersey corporation, PRINCETON ORTHOPEDIC ASSOCIATES, II, P.A., a New
Jersey professional association ("Princeton II") and MICHAEL N. JOLLEY, M.D.,
HARVEY E. SMIRES, M.D., ROBERT N. DUNN, M.D., JEFFREY S. ABRAMS, M.D., RICHARD

E. FLEMING, JR., M.D., W. THOMAS GUTOWSKI, M.D., STEVEN R. GECHA, M.D., C.
ALEXANDER MOSKWA, JR., M.D., and DAVID M. SMITH, M.D. ("Physician Owner[s]"),
citizens and residents of New Jersey.

W I T N E S S E T H:

WHEREAS, Princeton II and Physician Owners desire to obtain the services
of Company in performing such management functions so as to permit Princeton II
and Physician Owners to devote Princeton II's and Physician Owners' efforts on a
concentrated and continuous basis to the rendering of medical services to
patients.

NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and agreements herein set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, it
is agreed by the parties as follows:

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship. Princeton II, Physician Owners and Company
intend to act and perform as independent contractors, and the provisions hereof
are not intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, Princeton II, and Physician Owners agree that Princeton
II and Physician Owners shall retain all authority to direct the medical,
professional, and ethical aspects of Princeton II's and Physician Owners'
medical practice including but not limited to the admission of new patients and
providing care to indigent patients. Each party shall be solely responsible for
and shall comply with all state and federal laws pertaining to employment taxes,
income withholding, unemployment compensation contributions and other employment
related statutes applicable to that party.

1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide Princeton II with offices and facilities,
equipment, supplies, certain support personnel,
<PAGE>

management and financial advisory services for its medical and physical therapy
practices. As more specifically set forth herein, Princeton II shall be
responsible for the recruitment and hiring of physicians and all issues related
to the professional practice of medicine, medical practice patterns and
documentation thereof. Notwithstanding anything herein to the contrary, no
"designated health service," as defined in 42 U.S.C. ss. 1395nn, including any
amendments or successors thereto, shall be provided by Company under this
Agreement.

1.3. Princeton II Matters. Matters involving the internal agreements and
finances of Princeton II, including the disposition of professional fee income,

tax planning, and investment planning (and expenses relating solely to these
internal business matters) shall remain the sole responsibility of Princeton II.

1.4. Patient Referrals. The parties agree that the benefits to Princeton
II and Physician Owners hereunder do not require, are not payment for, and are
not in any way contingent upon the admission, referral or any other arrangement
for the provision of any item or service offered by Company to any of Princeton
II's patients in any facility operated by Company.

1.5. Professional Judgment. Each of the parties acknowledges and agrees
that the terms and conditions of this Agreement pertain to and control the
business and financial relationship between and among the parties but do not
pertain to and do not control the professional and clinical relationship between
and among Princeton II, Physician Employees, Princeton II Employees, and
Princeton II's patients. Nothing in this Agreement shall be construed to alter
or in any way affect the legal, ethical, and professional relationship between
and among Princeton II, Physician Owners, Physician Employees, and Princeton
II's patients, nor shall anything contained in this Agreement abrogate any
right, privilege, or obligation arising out of or applicable to the
physician-patient relationship.

1.6. Conduct of Professional Medical Practice. Notwithstanding any other
statement contained in this Agreement to the contrary, both Princeton II and
Company understand and agree that:

(1) Princeton II will have complete and exclusive control with respect to
the provision of professional medical services, the supervision of its
Physician Employees and Technical Employees and with respect to all
medical decisions, such as the administration of patient care, and such
other decisions as may be required by Applicable Law;

(2) Princeton II is solely responsible for determining the salaries or
other compensation to be paid to its Physician Employees;

(3) Princeton II, through its physicians, shall be responsible for
assuring that quality control and assurance mechanisms required by
Applicable Law shall be implemented and observed by the practice. These
physicians shall assure that an appropriate licensed health care
professional determines and carries out all of the following services and
medical care policies:

- 2 -
<PAGE>

(a) Review and approval of the hiring of Physician Employees and
timely demand for and verification of current licensing credentials
and any other educational credentials required by Applicable Law;

(b) Medical policies;

(d) Maintenance, registration and inspection of professional

equipment as necessary;

(e) Standards for record keeping as to patient medical records,
billing records and such other records as may be required by law or
rule, including controlled dangerous substance inventories, as
applicable;

(f) Security, including drug storage, prescription pad control,
confidentiality of patient records;

(g) Periodic audit of patient records and of professional services
to assure quality professional care on the premises;

(h) Responsibility for the professional propriety of billing,
including retention of sole discretion regarding establishment of
patient fees and modification or waiver thereof in an individual
case;

(i) Responsibility for the professional propriety of advertising or
other representations including disclosure of financial interest in
health care services offered to the public;

(j) Preparation and maintenance of a written list of current fees
for standard services, which list shall be available to patients on
request; and

(k) Posting a conspicuous notice in the waiting room that
professional fee information is available to patients on request.

ARTICLE II.

DEFINITIONS

2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:

"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.

- 3 -
<PAGE>

"Accounts Receivable" means, with respect to Princeton II, all accounts
and any and all rights to payment of money or other forms of consideration of
any kind now owned or hereafter acquired (whether classified under the Uniform
Commercial Code as accounts, chattel paper, general intangibles or otherwise)
for goods sold or leased or for services rendered by Princeton II, including,
but not limited to, accounts receivable, proceeds of any letters of credit
naming Princeton II as beneficiary, chattel paper, insurance proceeds, contract
rights, notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any other Person; provided
that, cash, checks and credit card purchases are not included in the definition
of Accounts Receivable.

"Affiliate" means, with respect to any Person, any entity which directly
or indirectly controls, is controlled by, or is under common control with, such
Person or any Subsidiary of such Person or any Person who is a director, officer
or partner of such Person or any Subsidiary of such Person. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to (a) vote ten percent (10%) or more of the securities having ordinary voting
power for the election of directors of such Person, or (b) direct or cause the
direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.

"Assigned Lease" shall have the meaning as defined in Section 3.1.

"Base Service Fee" shall equal [xxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxx] per year, payable in monthly payments of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.

"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

- 4 -
<PAGE>

"Company" shall mean collectively Specialty Care Network, Inc., a Delaware
corporation, together with its successors and assigns and its wholly-owned
subsidiary, SCN of Princeton, Inc., together with its successors and assigns.

"Company Expenses" shall have the meaning as defined in Section 8.1.7.

"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.

"Direct Lease" shall have the meaning as defined in Section 3.1.

"Disabled" or "Disability" shall mean that a Physician suffers from a
mental or physical condition resulting in such Physician Employee's inability to
perform the essential functions of his job as required by Section 6.1.1 (and as
may be described with greater specificity in written job descriptions prepared
and maintained by Princeton II and approved by the Policy Board) without
significant risk to the health or safety of others, even with such reasonable
accommodation as may be available under the circumstances, and the Policy Board
may reasonably anticipate that such Physician Employee will remain disabled for
at least two years following the commencement of such disability.

"Exchange" shall mean the acquisition of Princeton Orthopaedic Associates,
P.A. ("Princeton") pursuant to the Exchange Agreement.

"Exchange Agreement" means that certain Stock Exchange Agreement, dated
October 21, 1996 by and between Company and Physician Owners.

"Exchange A/R" means the accounts receivable acquired from Princeton by
Company pursuant to the Exchange Agreement.

"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.

- 5 -
<PAGE>

"Governmental Receivables" means an Account Receivable of Princeton II
which (i) arises in the ordinary course of business of Princeton II, (ii) has as
its Third-Party Payor the United States of America or any state or any agency or
instrumentality of the United States of America or any state which makes any
payments with respect to Medicare or Medicaid or with respect to any other
program (including CHAMPUS) established by federal or state law, and (iii) is
required by federal or state law to be paid or to be made to Princeton II as a
healthcare provider. Governmental Receivables shall not, however, refer to
amounts payable by private insurers under contract to provide benefits under the
Federal Employee Health Benefit Program.

"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.

"Lease" shall mean the Assigned Lease, Direct Leases, and the New Leases,
including all amendments thereto, described in Section 3.1 hereof.

"Leased Premises" shall mean the real property described in the Lease.

"Lender" shall have the meaning as defined in Section 7.2.

"Main Office" shall mean the Leased Premises and all equipment and
facilities owned or operated by Company and utilized by Princeton II or any of
its employees within said Leased Premises.

"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.

"Necessary Authorizations" means with respect to Princeton II, all
certificates of need, authorization, certifications, consents, approvals,
permits, licenses, notices, accreditations and exemptions, filings and
registrations, and reports required by Applicable Law, including, without
limitation, Health Care Law, which are required, necessary or reasonably useful
to the lawful ownership and operation of Princeton II's business.

"New Lease" shall have the meaning as defined in Section 3.1.

"Office Locations" shall have the meaning as defined in Section 3.1.

- 6 -
<PAGE>

"Physician Employees" shall mean the term as defined in Section 8.1.6.

"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.

"Physician Owners" shall mean those Physician Employees who own an
interest, directly or indirectly, in the equity of Princeton II.

"Plans" shall have the meaning as defined in Section 6.9.1.

"Policy Board" shall mean a board established pursuant to Section 4.1.

"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.

"Practice Offices" shall mean (i) the Main Office and (ii) all of the
Satellite Offices.

"Professional Services Revenues" shall mean the term as defined in Section
8.1.2.

"Purchase Price" shall mean the term as defined in Section 8.3.2.

"Purchased A/R" means, with respect to Princeton II, the Accounts
Receivable purchased pursuant to Section 8.3 of this Agreement.

"Princeton II Operating Account" shall mean that certain operating account
established by Princeton II at a bank selected by Princeton II in Princeton II's
sole discretion as more fully described in Section 5.11.

"Princeton II Plan" shall mean the term as defined in Section 6.9.1.

"Satellite Offices" shall mean each location at which one or more of
Princeton II's employees provide services as described on Exhibit 3.1 and all
equipment and facilities owned or operated by Company and utilized by any of
said persons at such location.

"Settlement Date" shall mean the term as defined in Section 8.3.3.

"Service Agreement" means this Agreement.

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"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).

"Technical Employees" shall mean the term as defined in Section 8.1.4.

"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

(b) Company agrees to provide offices and facilities at the Office
Locations (or at comparable facilities on the termination of the Assigned Leases
or Direct Leases) to Princeton II. Such facilities shall include all personal
property necessary to operate the facility. If any Assigned Leases or Direct
Leases are terminated by their terms, Company shall enter into a lease of a new
facility comparable to the Office Location whose lease is terminated (the "New
Lease") with the consent of the Policy Board. Company shall not enter into a
lease for a new Main Office or Satellite Office for Princeton II without the
approval of the Policy Board.

3.2. Use of Practice Offices. Princeton II shall not use or occupy the
Main Office or Satellite Offices for any purpose which is prohibited by the
Assigned Leases, Direct Leases or New Leases, by this Agreement or which is
directly or indirectly forbidden by law, ordinance, or governmental or municipal
regulation or order, or which may be dangerous to life, limb or property, or
which would increase the fire and extending coverage insurance rate in any
Practice Office or contents.

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ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board. The parties shall
establish a Policy Board which shall be responsible for developing management
and administrative policies for the overall operation of any Practice Office.
The Policy Board shall consist of six (6) members. Company shall designate, in
its sole discretion, three (3) members of the Policy Board. Princeton II shall
designate, in Princeton II's sole discretion, three (3) members of the Policy
Board. Any matter decided by a majority of the members of the Policy Board shall
constitute the decision of the Policy Board with respect to the matter.

4.2. Duties and Responsibilities of the Policy Board. The Policy Board
shall have the following duties and obligations:

4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by Princeton II for any renovations, capital improvements,
expansions and new equipment purchases or leases. The Policy Board shall
determine whether such expenditures are appropriate based upon economic
feasibility, physician support, productivity, market conditions, and the annual
budget formulated pursuant to this Agreement. If the Policy Board determines
that the acquisition of additional equipment or facilities is appropriate, then
Company shall use its best efforts to arrange for the financing and acquisition
of the property. Governance issues affecting the Policy Board shall be addressed
in accordance with the rules set forth in Exhibit 4.1.

4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the review of the Policy Board.

4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.

4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with Princeton II and Company, to the extent
allowed by Applicable Law, the Policy Board shall review and advise Princeton II
as to an appropriate fee schedule for all physician and ancillary services
rendered by Princeton II, which fee schedule shall ultimately be determined by
Princeton II in Princeton II's sole discretion. In addition, the Policy Board
shall approve the credit collection policies of Princeton II.

4.2.5. Princeton II and Payor Relationships. Decisions regarding the
establishment or maintenance of relationships with institutional health care
providers and payors, or with parties under arrangements for setting up new
Satellite Offices of Princeton II in the future, shall be made by the Policy
Board in consultation with Princeton II.

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<PAGE>

4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.

4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions. Company shall use its best
efforts to manage the day-to-day operations of the Main Practice Office and any
Satellite Offices in a business-like manner. Company shall provide or arrange
for the services set forth in this Article V, the cost of all of which shall be
included in Clinic Expenses. Subject to Section 1.6, Company is hereby expressly
authorized to perform its services hereunder in whatever manner it deems
reasonably appropriate to meet the day-to-day requirements of Practice Office
operations in accordance with the general standards approved by the Policy Board
and to maintain the lease agreements for each of the Practice Offices,
including, without limitation, performance of some of the business office
functions at locations other than the Main Practice Office. Princeton II will
not act in a manner which would prevent Company from efficiently managing the
day-to-day operations of the Main Practice Office and maintaining the operations
of the Satellite Offices in a business-like manner.

5.2. Financial Planning and Goals. Subject to Section 4.2.2. of this
Agreement, Company shall prepare annual capital and operating budgets reflecting
in reasonable detail anticipated revenues and expenses, and sources and uses of
capital for growth in Princeton II's practice and medical services rendered at
the Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board and the Company shall agree upon a budget for the
upcoming fiscal year. The budget, as described in Section 4.2.2., shall be
binding upon Company and Princeton II. Company shall consult with Princeton II
and the Policy Board in the preparation of all budgets. Company and Princeton II
acknowledge and agree that once a budget has been approved, neither Company nor
Princeton II shall make expenditures or incur expenses in excess of budgeted
amounts without the prior approval of the Policy Board.

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5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of Princeton II and, in its sole
discretion, may cause the financial statements to be audited by a certified
public accountant selected by Company. Princeton II shall cooperate fully in
such audit. The cost of such audit shall be included in Clinic Expenses. If
Company elects to have the financial statements audited by a certified public
accountant with a big six accounting firm, the resulting audited financial
statements shall be binding on Princeton II and Company. If Company elects not
to have Princeton II's financial statements so audited, Princeton II shall have
the option to obtain such an audit, by a certified public accountant with a
mutually acceptable accounting firm. Company shall fully cooperate in such
audit. The cost of such audit shall be included in Clinic Expenses. In such
event, Company and Princeton II shall be bound by the resulting audited
financial statements. All parties shall be entitled to copies of any information
provided to or by the auditors by or to any party. Additionally, Company shall
prepare monthly unaudited financial statements containing a balance sheet and

statements of income from Practice Office operations, which shall be delivered
to Princeton II within thirty (30) business days after the close of each
calendar month.

5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by Princeton II
and are within the budget for the applicable fiscal period. Company shall not
purchase inventory, goods or supplies from any Affiliate of Company without
approval of the Policy Board and after full disclosure of all terms to the
Policy Board.

5.5. Management Services and Administration.

5.5.1. Princeton II hereby appoints Company as Princeton II's sole and
exclusive manager and administrator of all day-to-day business functions.
Princeton II agrees that the purpose and intent of this Agreement is to relieve
Princeton II and Physician Employees to the maximum extent possible of the
administrative, accounting, personnel and business aspects of their practice,
with Company assuming responsibility and being given all necessary authority to
perform these functions. Company agrees that Princeton II and only Princeton II
will perform the medical functions of Princeton II's practice. Company will have
no authority, directly or indirectly, to perform, and will not perform, any
medical function. Company may, however, advise Princeton II as to the
relationship between Princeton II's performance of medical functions and the
overall administrative and business functioning of Princeton II's practice. To
the extent that a Company employee assists Physician Employees in performing
medical functions, such employees shall be subject to the professional direction
and supervision of Physician Employees and in the performance of such medical
functions shall not be subject to any direction or control by, or liability to,
Company, except as may be specifically authorized by Company.

5.5.2. Company shall, on behalf of Princeton II, bill patients and collect
the professional fees for medical services rendered by Princeton II or any
Physician Employee, regardless of when or where such services are rendered. All
billings for Physician Employee's services shall be made in the name of and
under the provider number of Princeton II. Princeton II hereby appoints Company
to

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be Princeton II's true and lawful attorney-in-fact, for the following purposes:
(i) to bill patients in Princeton II's name and on Princeton II's behalf; (ii)
to collect Accounts Receivable resulting from such billing in Princeton II's
name and on Princeton II's behalf; (iii) to receive payments from insurance
companies, prepayments from health care plans, and all other Third-Party Payors;
(iv) to take possession of and endorse in the name of Princeton II (and/or in
the name of an individual physician, such payment intended for purpose of
payment of a physician's bill) any notes, checks, money orders, insurance
payments and other instruments received in payment of Accounts Receivable; and
(v) to initiate legal proceedings in the name of Princeton II to collect any

accounts and monies owed to Princeton II or any Physician Employee, to enforce
the rights of Princeton II as creditors under any contract or in connection with
the rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from Princeton II by Company, Company shall deposit any cash receipts collected
on behalf of Princeton II into the Princeton II Operating Account described in
Section 5.11.

5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of Princeton II, including but not
limited to accounting, billing, patient medical records, and collection records.
While the Company shall maintain custody, patient medical records shall at all
times be and remain the property of Princeton II and shall be located at the
Practice Offices so that they are readily accessible for patient care. The
Physician Employees shall have the obligation to oversee the preparation and
maintenance of patient medical records, and to provide such medical information
as shall be necessary and appropriate to the records' clinical function and to
sustain and ensure the availability of Third-Party Payor reimbursement for
services rendered. The management of all files and records shall comply with
applicable state and federal statutes. Company shall use its best efforts to
preserve the confidentiality of patient medical records and use information
contained in such records only as permitted by law, to the extent necessary to
perform the services set forth herein.

5.5.4. Company shall supply to Princeton II necessary clerical,
accounting, bookkeeping and computer services, printing, postage and duplication
services, medical transcribing services and any other ordinary, necessary or
appropriate service for the operation of the Practice Offices.

5.5.5. Subject to the overall guidance of the Policy Board, Company shall
design and implement an adequate and appropriate public relations program on
behalf of Princeton II, with appropriate emphasis on public awareness of the
availability of services at the Practice Offices. The public relations program
shall be conducted in compliance with Applicable Law and regulations governing
advertising by the medical profession and applicable canons of principles of
professional ethics of Princeton II and Physician Employees of Princeton II.

5.5.6. Company shall provide the data necessary for Princeton II to
prepare Princeton II's annual income tax returns. Company shall have no
responsibility for the preparation of Princeton II's federal or state income tax
returns or the payment of such income taxes. Company shall prepare or cause to
be prepared on Princeton II's behalf, necessary employment tax returns.
Princeton II shall

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be obligated to pay any taxes due on such employment tax returns with respect to
the Physician Owners.

5.5.7. Company shall assist Princeton II in recruiting additional
physicians, carrying out such administrative functions as may be appropriate,

such as advertising for and identifying potential candidates, obtaining
credentials, and arranging interviews; provided, however, Princeton II shall
interview and make the ultimate decision as to the suitability of any physician
to become associated with Princeton II. All physicians recruited by Company and
accepted by Princeton II shall be the sole employees of Princeton II, to the
extent such physicians are hired as employees.

5.5.8. Company shall negotiate managed care contracts on behalf of
Princeton II and shall administer all managed care contracts in which Princeton
II participates.

5.5.9. Company shall arrange for legal and accounting services related to
operations of the Practice Offices and Physician Employee's practice at the
Practice Offices incurred traditionally in the ordinary course of business,
including the cost of enforcing any contract with a Physician Employee
containing restrictive covenants, provided such services shall be approved in
advance by the Policy Board. Notwithstanding the foregoing, Princeton II shall
have the authority to arrange for legal and accounting services relating to
matters other than day-to-day management of Princeton II; such other matters
including but not limited to issues relating to Princeton II governance issues,
compensation of Physician Owners, and issues which arise between Princeton II
and Company.

5.5.10. Company shall provide for the proper cleanliness of the premises,
and maintenance and cleanliness of the equipment, furniture and furnishings
located upon such premises.

5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.

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<PAGE>

and goal of providing quality medical care. Employee assignments shall be made
to assure consistent and continued rendering of quality medical support services
and to ensure prompt availability and accessibility of individual medical
support staff to physicians in order to develop constant, familiar and routine
working relationships between individual physicians and individual members of
the medical support staff. Company shall not unreasonably refrain from making
employee assignments as requested by Princeton II. If Princeton II disagrees
with an assignment, Princeton II may appeal such assignment to the Policy Board.
Company shall maintain established working relationships wherever possible and
Company shall make every effort consistent with sound business practices to
honor the specific requests of Princeton II with regard to the assignment of
Company's employees. Notwithstanding any other provision of this Agreement to
the contrary, Company and Princeton II acknowledge and agree that Company shall
not employ any individual who provides billable procedures.

5.7. Events Excusing Performance. Company shall not be liable to Princeton
II or Physician Owners for failure to perform any of the services required
herein in the event of strikes, lock-outs, calamities, acts of God,
unavailability of supplies or other events over which Company has no control for
so long as such events continue, and for a reasonable period of time thereafter.

5.9. Quality Assurance. Company shall assist Princeton II in fulfilling
Princeton II's obligations to patients to maintain professionally recognized
quality of medical and professional services.

5.10. New Medical Services and Additional Practice Offices. Except as
provided below, if Princeton II desires to have a new medical service provided
at any of the Practice Offices or desires to establish a new clinic, a proposal
of such service or the establishment of such new clinic shall be submitted to
the Policy Board. Should the Policy Board approve the expansion of service or
the establishment of such new clinic, Company, at its option, shall have the
exclusive right to provide services necessary to support Princeton II in
Princeton II's delivery of such new medical services at the Practice Office or
new clinic, as applicable; provided, however, if the type of service is an
ancillary service that would be improper under any rules, regulations or laws
for Company to offer to Princeton II patients, then Company shall not have the
option to provide such service. Should Company decline to provide the necessary
support service for the new service or new clinic, Princeton II shall be
entitled to perform such service at Princeton II's own expense and the revenues
therefrom shall not be included in the calculation of Company's service fees
under Article VIII of this Agreement; provided, however, that Company shall have
the option to assume performance of the necessary support services for providing
such new service or new clinic by buying out Princeton II's

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investment in the service at Princeton II's Book Value at anytime within
eighteen (18) months of the date such new service is first provided, which Book
Value shall be based on the price of the assets purchased by Princeton II less
depreciation accrued to the date of acquisition of such service by Company, as
determined under GAAP. Notwithstanding any other provision of this Agreement to
the contrary, Company and Princeton II acknowledge and agree that Princeton II
or its Affiliates shall have the right to develop, own and operate ambulatory
surgery centers and Company shall not have the right to limit Princeton II's
authority or rights to continue developing, operating or owning such ambulatory
surgery centers.

5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. Princeton II agrees to establish and maintain a bank account, which
shall be referred to as the Princeton II Operating Account, for the purpose of
(a) depositing proceeds from the sale of Princeton II's Accounts Receivable
pursuant to Section 8.3 and (b) paying (i) any Service Fees owed pursuant to
Article VIII of this Agreement, (ii) expenses which are solely the obligation of
Princeton II (Excluded Expenses), and (iii) compensation or distributions to
Physician Owners , and the distributions shall be made in that order of payment.
Princeton II shall designate a Company employee as a signatory on the Princeton
II Operating Account. After the payment of any Service Fees owed pursuant to
Article VIII of this Agreement, and expenses which are solely the obligation of
Princeton II, Princeton II may withdraw amounts for distributions to Physician
Owners.

5.12. Other Princeton II Accounts. Princeton II shall have the right to
open or create bank accounts in addition to the Princeton II Operating Account
described in Section 5.11 of this Agreement.

ARTICLE VI.

OBLIGATIONS OF PRINCETON II AND PHYSICIAN OWNERS

6.1. Professional Services.

6.1.1. Princeton II, its Physician Owners and Physician Employees shall
provide professional services to patients.

6.1.2. Princeton II, its Physician Owners and Physician Employees shall
provide the professional services to patients described in Section 6.1.1 above
in compliance at all times with ethical standards, laws and regulations applying
to Princeton II's professional practice. Princeton II shall also make all
reports and inquiries to the National Practitioners Data Bank and/or any state
data bank required by Applicable Law. Princeton II shall use its best efforts to
ensure that each Physician Employee and Technical Employee associated with
Princeton II who provides medical care to patients of Princeton II is licensed
by the state or states in which he or she renders professional services. If any
disciplinary or medical malpractice action is initiated against any such
individual, Princeton II shall immediately provide Company with copies of any
third-party documents (not otherwise privileged) served on Princeton II or

letters delivered to Princeton II. Such information

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shall be deemed confidential information and shall, notwithstanding such
disclosure, remain subject to all privileges and immunities provided by
Applicable Law. Company shall take all steps reasonably necessary to assure that
such privileges and immunities remain intact. Princeton II shall carry out a
program to monitor the quality of medical care practiced at the Practice Offices
to promote a high quality medical care.

6.2. Medical Practice. Princeton II shall use and occupy the Practice
Offices exclusively for the practice of medicine and shall comply with all
Applicable Law and standards of medical care. It is expressly acknowledged by
the parties that the medical practice or practices conducted at the Main Office
shall be conducted solely by physicians or medical practitioner associated with
Princeton II, and no other physician or medical practitioner shall be permitted
to use or occupy the Main Office without the prior written consent of Company.

6.3. Employment of Physician Employees. Princeton II shall have complete
control of and responsibility for the hiring, compensation, supervision,
evaluation and termination of Physician Employees, although at the request of
Princeton II, Company shall consult with Princeton II respecting such matters.
Princeton II shall be responsible, subject to Section 8.4, for the payment of
such Physician Employees' salaries and wages, payroll taxes, Physician Employee
benefits and all other taxes and charges now or hereafter applicable to them.
With respect to physicians, Princeton II shall only employ and contract with
licensed physicians meeting applicable credentialing guidelines established by
Princeton II.

6.4. Professional Dues and Education Expenses. Except to the extent
provided in Section 8.1.3(k), Physician Owners shall be solely responsible for
the cost of membership in professional associations and the cost of continuing
professional education. Princeton II shall ensure that each Physician Employee
participates in such continuing medical education as is necessary for such
physician to remain licensed.

6.5. Professional Insurance Eligibility. Princeton II shall cooperate in
the obtaining and retaining of professional liability insurance by assuring that
all Physician Employees are insurable and participating in an on-going risk
management program.

6.6. Events Excusing Performance. Princeton II and Physician Owners shall
not be liable to Company for failure to perform any of the services required
herein in the event of strikes, lock-outs, calamities, acts of God,
unavailability of supplies or other events over which Princeton II has no
control for so long as such events continue, and for a reasonable period of time
thereafter.

6.7. Fees for Professional Services. Princeton II shall be solely
responsible for legal, accounting and other professional services fees (Excluded
Expenses) incurred by Princeton II, except as otherwise determined by the Policy

Board.

6.8. Peer Review. Princeton II agrees to cooperate with Company in
establishing a system of peer review within and among the provider practices as
necessary to obtain provider contracts.

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In connection therewith, Princeton II agrees to assist in the formulation of
provider guidelines for each treatment or surgical modality, and agrees to abide
by said guidelines, and further agrees to submit to periodic reviews by a third
party to monitor compliance with said guidelines. Princeton II acknowledges that
the establishment of provider guidelines may be necessary to obtain PPO, HMO,
IPA and other similar provider contracts, both private and government funded. To
the extent that said provider guidelines must be filed or registered with any
Third-Party Payor, Princeton II agrees to cooperate with Company in making such
filings or registrations. It is agreed and acknowledged that all such peer
review guidelines shall be established and monitored by medical personnel on the
staff of Princeton II and other practices that are part of the peer review
process, and shall not be promulgated, established or enforced independently by
Company. To the extent possible, all information obtained through the peer
review process shall remain confidential and the parties shall take all steps
reasonably necessary to assure that all privileges and immunities provided by
Applicable Law remain intact.

6.9. Princeton II Employee Benefit Plans.

6.9.1. Effective as of the date of the closing under the Exchange
Agreement, Princeton II shall amend the tax-qualified retirement plan(s)
described on Exhibit 6.9.1 (the "Princeton II Plan") to provide that employees
of Company who are classified as "leased employees" (as defined in Code Section
414(n)) of Princeton II shall be treated as Princeton II employees for purposes
described in Code Section 414(n)(3). Not less often than annually, Princeton II
and Company shall agree upon and identify in writing those individuals to be
classified as leased employees of Princeton II (the "Designated Leased
Employees"). Princeton II and Company shall establish mutually agreeable
procedures with respect to the participation of Designated Leased Employees in
the Princeton II Plan. Such procedures shall be designed to avoid the tax
disqualification of the Princeton II Plan, similar plans of practices similarly
situated, (collectively, the "Plans").

6.9.2. If the Policy Board determines that the relationship between
Company and Princeton II (and other practices similarly situated) constitutes an
"affiliated service group" (as defined in Code Section 414(m)), Company and
Princeton II shall take such actions as may be necessary to avoid the tax
disqualification of the Plans. Such actions may include the amendment, freeze,
termination or merger of the Princeton II Plan.

6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. Princeton II shall not enter into any new "employee benefit plan"
(as defined in Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") without the consent of Company. In addition,

Princeton II shall not offer any retirement benefits or make any material
retirement payments other than under the Princeton II Plan to any stockholder of
Princeton II without the express written consent of Company. Except as otherwise
required by law, Princeton II shall not materially amend, freeze, terminate or
merge the Princeton II Plan without the express written consent of Company. In
the event of either of the foregoing, Company's consent shall not be withheld if
such action would not jeopardize the qualification of any of the Plans.
Princeton II agrees to make such changes to the Princeton II Plan, including the
amendment freeze, termination or merger of the

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<PAGE>

Princeton II Plan, as may be approved by the Policy Board and Company but only
if such changes are necessary to prevent the disqualification of any of the
Plans.

6.9.4. Expenses incurred in connection with the Princeton II Plan or other
Princeton II employee benefit plans, including, without limitation, the
compensation of counsel, accountants, corporate trustees, and other agents shall
be included in Clinic Expenses.

6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in Princeton II's operating budget. Princeton
II and Company shall not make employee benefit plan contributions or payments to
Princeton II for their respective employees in excess of such budgeted amounts
unless required by law or the terms of the Princeton II Plan. Company shall make
contributions or payments with respect to the Princeton II Plan or other
Princeton II employee benefit plans, as a Clinic Expense, on behalf of eligible
Designated Leased Employees, and other eligible Princeton II employees. In the
event a Princeton II Plan or other Princeton II employee benefit plan is
terminated, Company shall be responsible, as a Clinic Expense, for any funding
liabilities related to eligible Designated Leased Employees; provided, however,
Company shall only be responsible for the funding of any liability accruing
after the date of the Exchange Agreement.

6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the Princeton
II Plan to avoid disqualification of the Princeton II Plan, in which case any
such action would be subject to the express prior written consent of the Policy
Board. Company shall have the sole and exclusive authority to appoint the
trustee, custodian and administrator of any such plan.

6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by Princeton II must be amended,
terminated, modified or changed as a result of Princeton II or Company being
deemed to be a part of an affiliated service group, the Policy Board will
replace such plan or plans with a plan or plans that provides those benefits
approved by the Policy Board. It shall be the goal of the Policy Board in such
event to provide substantially similar or comparable benefits if the same can be
provided at a substantially similar cost to the replaced plan.

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

The parties recognize that the services to be provided by Company shall be
feasible only if Princeton II operates an active medical practice to which both
Princeton II and the physicians associated with Princeton II devote their full
time and attention. To that end:

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7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be Princeton II's and Physician Owners' sole provider of the management
services described in this Agreement and neither Princeton II, Physician Owners
nor any of Princeton II's or Physician Owners' employees shall provide such
management services during the term of this Agreement. Princeton II and the
Physician Owners agree that during the term of this Agreement, neither Princeton
II nor Physician Owners will enter into any similar agreements with any
physician practice management company or entity. The foregoing restriction shall
not prevent the Physician Owners from entering into separate management
agreements for any ambulatory surgery centers in which they own an interest.
Princeton II and the Physician Owners further agree that during the term of this
Agreement, they will not engage, directly or indirectly, as a principal owner,
shareholder (other than a holder of fewer than 5% of the outstanding shares of a
publicly-traded company), partner, joint venturer, agent, equity owner, or in
any other capacity whatsoever, in any corporation, partnership, joint venture,
or other business association or entity that provides management services of the
nature provided by Company pursuant to this Agreement, within Mercer County, New
Jersey or contiguous counties or any location within seventy-five (75) miles of
the Main Office or any future facility that replaces the Main Office (wherever
located) or any Satellite Office utilized by Princeton II at any time during the
term of this Agreement.

7.2. Restrictive Covenants.

7.2.1. By Current Physician Employees. Princeton II shall obtain and
enforce formal agreements from current Physician Employees, other than Technical
Employees, pursuant to which the Physician Employees agree not to establish,
operate or provide physician services at any medical office, clinic or
diagnostic facility providing services substantially similar to those provided
by Princeton II, except on Princeton II's behalf, within Mercer County, New
Jersey or contiguous counties or any location within seventy-five (75) miles
during the first five (5) years of the term of this Agreement or fifty (50)
miles thereafter of the Main Office or any future facility that replaces the
Main Office (wherever located at such time) or any Satellite Office at the time
of termination of employment with Princeton II and for a period of twenty-four
(24) months after any termination of employment with Princeton II. Such
agreements shall be a condition to employment and shall be in a form
satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to Company's lender ("Lender"). This Section 7.2 shall relate solely
to Physician Employees who are not also Physician Owners.

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Professional Services Revenue. In the event that after a request by Company,
Princeton II does not pursue any remedy that may be available to it by reason of
a breach or default of a restrictive covenant, upon the request of Company,
Princeton II shall assign to Company such causes of action and/or other rights
it has related to such breach or default and shall cooperate with and provide
reasonable assistance to Company with respect thereto; in which case, all costs
and expenses incurred in connection therewith shall be borne by Company and
shall be included in Company Expenses, and Company shall be entitled to all
damages and other amounts recovered thereby. The above described restrictive
covenants between Princeton II and Physician Owners shall be in addition to and
not in place of the restrictive covenants described in Exhibit 11 between
Company and the Physician Owners.

7.2.3. Limitations on Restrictive Covenants. The foregoing restrictive
covenants shall not limit or prevent a Physician Employee/Physician Owner from
serving in part-time academic positions, working as an expert witness, or
providing services for the Hospital for Special Services, New York, New York, in
a manner consistent with past practices.

7.3. Restrictive Covenants By Future Physician Employees. Princeton II
shall obtain and enforce formal agreements from each future Physician Employee
other than Technical Employees, hired or contracted, pursuant to which such
physicians agree not to establish, operate or provide physician services at any
medical office, clinic or diagnostic facility providing services substantially
similar to those provided by Princeton II except on Princeton II's behalf,
within Mercer County, New Jersey or contiguous counties or any location within
seventy-five (75) miles during the first five (5) years of the term of this
Agreement or fifty (50) miles thereafter of the Main Office or any future
facility that replaces the Main Office (wherever located at such time) or any
Satellite Office at the time of termination of said Physician Employee's
contract with Princeton II and for a period of twenty-four (24) months
thereafter. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to any Lender. This Section 7.3 shall relate solely to Physician
Employees who are not also Physician Owners. The terms and provisions of Exhibit
11 shall govern restrictive covenants relating to Physician Owners. The

foregoing restrictive covenants shall not limit or prevent a Physician
Employee/Physician Owner from serving in part-time academic positions, working
as an expert witness, or providing services for the Hospital for Special
Services, New York, New York, in a manner consistent with past practices.

7.4. Rights of Company. Except as limited below, Company shall at all
times during the term of this Agreement and thereafter have the right to enter
into additional service agreements with other physicians and practices
regardless of where such physicians and/or practices are located providing for
management services and facilities to such physicians and/or practices.
Notwithstanding the foregoing, and except as set forth in Section 11.9.3, in the
event that Company desires to enter into a Service Agreement with another
practice located within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of Princeton II's
Main Office or any Satellite Office, then the Policy Board must first approve
Company entering into such agreement. In the event that the individuals
representing Company on the Policy Board can reasonably

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demonstrate that entering into such agreement will not have a material adverse
effect on Princeton II's practice operations, earnings or cash flow, then the
individuals representing Princeton II shall consent to Company entering into
such agreement.

7.5. Enforcement. Princeton II acknowledges and agrees that since a remedy
at law for any breach or attempted breach of the provisions of this Article VII
shall be inadequate, Company shall be entitled to specific performance and
injunctive or other equitable relief in case of any such breach or attempted
breach in addition to whatever other remedies may exist by law. All parties
hereto also waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief.
If any provision of Article VII relating to the restrictive period, scope of
activity restricted and/or the territory described therein shall be declared by
a court of competent jurisdiction to exceed the maximum time period, scope of
activity restricted or geographical area such court deems reasonable and
enforceable under Applicable Law, the time period, scope of activity restricted
and/or area of restriction held reasonable and enforceable by the court shall
thereafter be the restrictive period, scope of activity restricted and/or the
territory applicable to the restrictive covenant provisions in this Article VII.

7.6. Modification of Restrictive Covenants. Upon the termination of
employment of a Physician Owner or Physician Employee, the Policy Board shall
have the authority to release or reduce in whole or part the terms of the
restrictive covenants, including but not limited to the mileage radius
limitations set forth above in Sections 7.2 and 7.3. In the event that the
individuals representing Princeton II on the Policy Board can reasonably
demonstrate that a modification to the restrictive covenant will not have a
material adverse effect on Company's or Princeton II's practice operations,
earnings or cash flow, then the individuals representing Company shall consent
to the proposed modifications.

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to the sum of (a) the
greater of (i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]or (ii) the
Base Service Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of
the first thirty-six (36) months of the term of this Agreement, Company shall
receive a service fee equal to [xxxxxxxxxxxxxxxxxxxxxxxx] of Practice Net
Revenue plus the amount of Clinic Expenses. In the event that a Physician Owner
ceases to practice medicine during the first thirty-six (36) months of the term
of this Agreement, such Physician Owner shall be personally liable for any
reduction in Princeton II's service fees payable as further described under
Section 11.9.1 of this Agreement. In the event that a Physician Owner either
dies or becomes Disabled during such thirty-six (36) month period, Princeton II,
or the applicable Physician Owner, as the case may be, shall be entitled to
satisfy the amount owed by transferring to Company an amount of Company common
stock having a fair market value equal to the amount

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owed or pay to Company cash in the amount owed (or a combination thereof). Fair
market value of the Company common stock shall be determined as described below
in Section 11.9.1(d).

8.1.1. "Practice Net Revenue" shall mean Professional Services Revenues,
less Clinic Expenses.

8.1.2. "Professional Services Revenue" shall mean all fees actually
recorded each month (net of any amounts reimbursed to any patients or
Third-Party Payors during the applicable month and net of any adjustments for
contractual allowances, Medicaid, worker's compensation, employee/dependent
health care benefit programs, professional courtesies and other activities that
do not generate a collectible fee) by or on behalf of Princeton II as a result
of professional medical services personally furnished to patients and other fees
or income generated in their capacity as Physician Employees and Technical
Employees, and any revenue from the sale of any goods. Professional Services
Revenue shall not include any ambulatory surgery center facility fees.

8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of Princeton II arising hereunder unless expressly provided otherwise,
including, without limitation:

(b) obligations of Company under Leases provided for herein under
Article III,

(d) personal property and intangible taxes assessed against
Company's assets utilized by Princeton II in the Practice Offices from and
after the date of this Agreement,

(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of Princeton, if any, assumed under the Exchange
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to Princeton II hereunder, or (iii) purchase equipment,

(g) the cost of any goods purchased for resale,

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(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used in Princeton II's Facility
by Princeton II to be billed to Princeton II on a monthly basis and paid
to Company at the same time Company pays for Princeton II's Accounts
Receivable pursuant to Section 8.3,

(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with Princeton II or who actually
provide services at or in connection with the Clinic for improved
performance, such as quality assurance, reasonable expenses required for
physician accommodations under the definition of "Disabled" or
"Disability," materials management, purchasing program, change in coding
analysis, physician recruitment; provided, however, only the portion of
expenses related to such employee or consultant, without mark-up, that is
allocable in a fair and reasonable manner to work approved by the Policy
Board which is performed at or for the benefit of Princeton II shall be
included in Clinic Expenses,

(k) expenses related to professional meetings, seminars, dues,
medical books and professional licensing fees for Physician Owners;
provided, however, that such amount shall not exceed $10,000 during any
calendar year for any Physician Owner. If the cost incurred for such
professional meetings, seminars, dues, medical books and professional
licensing fees exceeds $10,000 during any calendar year, then the
Physician Owner incurring such cost shall be solely liable for the
overage; and

(l) any and all other ordinary and necessary expenses incurred by
Princeton II, or approved by the Policy Board and reasonably incurred by
the Company for the direct benefit of Princeton II in carrying out their
respective obligations under this Agreement.

Clinic Expenses shall not include Excluded Expenses or Company Expenses.
Excluded Expenses shall be the sole obligation of Princeton II. Company Expenses
shall be the sole obligation of Company.

8.1.4. "Technical Employees" shall mean individuals who provide billable
services on behalf of Princeton II and are employees of Princeton II.

8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons who are employees of Company, but
excluding any Technical Employees.

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8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by
Princeton II or are otherwise under contract with Princeton II to provide
professional services to patients seen in the Main Office or Satellite Offices
and are duly licensed to provide professional medical services in the state or
states in which he or she renders professional services under this Agreement.

8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:

(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to Princeton II or are not directly attributable to
Princeton II, as reasonably determined by Company, including, without
limitation, salaries and benefits of executive officers of Company, except
as otherwise provided for in the definition of Clinic Expenses;

(b) Any amortization of any intangible asset resulting from the
Exchange;

(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Exchange;

(d) Any legal and accounting expenses incurred by Company in

connection with the Exchange; and

(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for Princeton II,
property taxes on assets used by Princeton II and other taxes specifically
included in Clinic Expenses.

8.1.8. "Excluded Expenses" shall be the sole obligation of Princeton II
and shall mean, pursuant to GAAP applied on a consistent basis:

(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;

(b) Any federal, state or other taxes associated therewith;

(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and

(d) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).

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8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays Princeton
II for the Accounts Receivable previously purchased by Company as described in
Section 8.3 below. The amount payable shall be estimated based upon the previous
month's operating results of Princeton II. Adjustments to the estimated payments
shall be made to reconcile actual cumulative amounts due under this Article
VIII, by the end of the following month during each calendar year. Upon
preparation of annual financial statements as provided in Section 5.3, final
adjustments to the service fee for the preceding year shall be made and any
additional payments owing to Company or Princeton II shall then be made to the
party owed the additional sum of money. The adjustment and any amount owed shall
be calculated and paid within ninety (90) days following the close of Company's
fiscal year.

8.3. Purchase of Accounts Receivable.

8.3.1. Princeton II hereby agrees to sell and assign to Company and
Company agrees to buy, all of Princeton II's Accounts Receivable each month
during which this Agreement is in existence which are owing to Princeton II
arising out of the delivery of medical, surgical, diagnostic or other
professional medical goods or services. Accounts Receivable shall not include,
and Company shall not purchase, any cash, checks or receivables created by
credit cards. Company shall bear the risk of collection and any overage or
underage resulting from any purchased Accounts Receivable.

8.3.2. The purchase price for each Accounts Receivable (the "Purchase

8.3.3. Princeton II will sell all Accounts Receivable to Company, such
purchase to be deemed to be made on the fifteenth (15th) day of the month
following the month in which such Accounts Receivable are created. Company shall
pay for the Accounts Receivable, not later than the fifteenth (15th) day of each
month following the month in which the Accounts Receivable is created (the
"Settlement Date"). Company shall pay to Princeton II for all Accounts
Receivable purchased by check, wire transfer or intrabank transfer to the
Princeton II Operating Account described in Section 5.11. The purchase of
Accounts Receivable shall be evidenced by sending Company (i) a copy of each
invoice with respect to each Third-Party Payor on the Accounts Receivable then
being purchased; and (ii) any other information or documentation (including all
required Uniform Commercial Code releases or financing statements) Company may
reasonably need to identify the Accounts Receivable and obtain payment from the
Account Debtors; provided that such failure to send such documents shall not
affect the obligation of Princeton II to sell such Accounts Receivable or
Company to buy such Accounts Receivable. As consideration for the purchase of
Accounts Receivable by Company pursuant to this Section 8.3, Company promises to
pay and shall be obligated to pay for such Accounts Receivable at the time and
in the manner provided below. To the extent permissible by Applicable Law,
Princeton II will be deemed to have sold to Company all of Princeton II's right,
title and interest in such Accounts Receivable and in any proceeds thereof, and

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Company will be the sole and absolute owner thereof and will own all of
Princeton II's rights and remedies represented by such Accounts Receivable
(including, without limitation, rights to payment from the respective Account
Debtors on such Accounts Receivable), and Company will have obtained all of
Princeton II's rights under all guarantees, assignments and securities with
respect to each such Accounts Receivable.

8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, Princeton II will execute such financing statements or amendments under
the UCC (naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.

8.3.6. Princeton II agrees to cooperate with Company in the collection of
the Accounts Receivable sold by Princeton II, transferred pursuant to Section
8.3. At the option of and upon the request of Company, Princeton II shall
execute any and all documentation necessary for the transfer of amounts
constituting Accounts Receivables and/or the establishment of lockboxes in
accordance with the provisions of Exhibit 8.3.6 attached hereto.

8.3.7. All Accounts Receivable of Princeton II purchased by Company
("Purchased A/R") pursuant to this Section 8.3 hereof will, as such Purchased
A/R are purchased, be treated as Professional Service Revenues for accounting
and financial purposes.

8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless Princeton II is required by law to incur such
expenses, in which case Company shall indemnify Princeton II against any such
expenses. Company shall pay all Clinic Expenses as they become due; provided,
however, that Company may, in the name and on behalf of Princeton II, contest in
good faith any claimed Clinic Expense to which there is any dispute regarding
the nature, existence or validity of such claimed Clinic Expense. Upon receipt
of Princeton II's service fee, Company shall be required to deposit into the
Princeton II Operating Account described in Section 5.11 an amount of money
necessary for Princeton II to pay the compensation and benefits associated with
the Technical Employees and Physician Employees (other than Physician Owners)
employed by Princeton II.

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ARTICLE IX.

RECORDS

9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, Princeton II shall retain all patient medical records
maintained by Princeton II or Company in the name of Princeton II. Princeton II
shall, at Princeton II's option, be entitled to retain copies of financial and
accounting records relating to all services performed by Princeton II. All
parties agree to maintain the confidentiality of patient identifying information
and not to disclose such information except as may be required or permitted by
Applicable Law.

9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of Princeton II
under the provisions of Section 9.1 above, shall at all times be the property of
Company.

9.3. Access to Records. During the term of this Agreement, and thereafter,
Princeton II or Princeton II's designee shall have reasonable access during
normal business hours to Princeton II's and Company's financial records, which
relate to the operation of Princeton II including, but not limited to, records
of collections, expenses and disbursements as kept by Company in performing
Company's obligations under this Agreement, and Princeton II may copy at
Princeton II's expense any or all such records.

9.4. Government Access to Records. To the extent required by Section
1861(v)(1)(I) of the Social Security Act, each party shall, upon proper request,
allow the United States Department of Health and Human Services, the Comptroller
General of the United States, and their duly authorized representatives access
to this Agreement and to all books, documents, and records necessary to verify
the nature and extent of the costs of services provided by either party under
this Agreement, at any time during the term of this Agreement and for an
additional period of four (4) years following the last date services are
furnished under this Agreement. If either party carries out any of its duties
under this Agreement through an agreement between it and an individual or
organization related to it or through a subcontract with an unrelated party,
that party to this Agreement shall require that a clause be included in such
agreement to the effect that until the expiration of four (4) years after the
furnishing of services pursuant to such agreement, the related organization
shall make available, upon request by the United States Department of Health and
Human Services, the Comptroller General of the United States, or any of their
duly authorized representatives, all agreements, books, documents, and records
of such related organization that are necessary to verify the nature and extent
of the costs of services provided under that agreement.

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ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by Princeton II. Throughout the term of
this Agreement, Princeton II shall maintain comprehensive professional liability
and worker's compensation insurance for Princeton II and all employees of
Princeton II in amounts approved by the Policy Board. Not in limitation of the
foregoing, Princeton II shall maintain excess general liability umbrella
coverage with a One Million Dollars ($1,000,000) limit as currently maintained
by Princeton II (with deductible provisions not to exceed $25,000 per
occurrence), the cost of which shall be paid by Company as a Clinic Expense. In
lieu of the foregoing, Company may provide as a Clinic Expense group insurance
for malpractice and/or worker's compensation insurance. Notwithstanding the
foregoing, in the event that Company procures such group insurance for
malpractice and/or worker's compensation insurance, Princeton II must first
approve the amount of coverage, the carrier and the terms of any such coverage
for Princeton II.

10.3. Additional Insureds. Princeton II and Company agree to use their
best efforts to have each other named as an additional insured on the other's
respective professional liability insurance programs at Company's expense.
Further, on any insurance where Company will be named as an additional insured,
Princeton II will assist Company to obtain appropriate riders to insure payment
of any party indemnified by Company.

10.4. Indemnification. Princeton II shall indemnify, hold harmless and
defend Company, its officers, directors and employees, from and against any and
all liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions (other than for any claims for (or in
connection with) malpractice arising from the performance or nonperformance of
medical services) by Princeton II and/or Princeton II's Physician Owners,
agents, employees and/or subcontractors (other than Company) during the term
hereof. Company shall indemnify, hold harmless and defend Princeton II,
Princeton II's officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions by Company and/or its shareholders,
agents, employees and/or subcontractors (other than

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Princeton II) during the term of this Agreement. Neither Company nor Princeton
II shall have any obligation to indemnify the other party unless the claim for
indemnification is based upon a liability, loss or damage resulting in the
indemnified party making payments to a third party.

In the event that either party makes a claim for indemnification under
either the Exchange Agreement or this Service Agreement, then the claiming party
shall have the right, to the extent it is owed indemnifications, to pay amounts
owed to the other party under this Agreement into an escrow account (established
pursuant to an escrow agreement to be agreed upon by the parties) to be held by
the escrow agent in an interest bearing account until a determination by either
(i) the parties, (ii) a court of proper jurisdiction or (iii) agreed upon panel
of arbitrators, has been made regarding the claiming party's right to
indemnification. In the event that the claiming party is entitled to
indemnification, then such escrowed funds shall be paid to the claiming party in
partial or complete satisfaction of such indemnification obligation. Any excess
funds remaining in the escrow account after the payment of the indemnification
obligation or any funds held in the escrow account if it is determined that no
indemnification obligation is owed shall be paid to the other party.

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement. This Service Agreement shall be effective as of
November 12, 1996, and shall expire on November 11, 2036 unless earlier
terminated pursuant to the terms hereof.

11.2. Extended Term. Unless earlier terminated as provided for in this
Agreement, the term of this Agreement shall be automatically extended for
additional terms of five (5) years each, unless either party delivers to the
other party, not less than one hundred eighty (180) days prior to the expiration
of the preceding term, written notice of such party's intention not to extend
the term of this Agreement.

11.3. Termination by Princeton II for Cause. Princeton II may terminate
this Agreement without breach as follows:

11.3.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Company, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by Company, except for the filing of a petition in
involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, Princeton II may give notice of the immediate termination of
this Agreement.

11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by Princeton II; or Company shall fail to remit the
payments due as provided in Article VIII hereof and such failure to remit shall

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continue for a period of thirty (30) days after written notice thereof,
Princeton II may terminate this Agreement.

11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of Princeton II or commit a similar act which cause
material harm to Princeton II, Princeton II may terminate this Agreement.

11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:

11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Princeton II, or upon other
action taken or suffered, voluntarily or involuntarily, under any federal or

state law for the benefit of debtors by Princeton II, except for the filing of a
petition in involuntary bankruptcy against Princeton II which is dismissed
within thirty (30) days thereafter, Company may give notice of the immediate
termination of this Agreement.

11.4.2. In the event Princeton II shall materially default in the
performance of any duty or obligation imposed upon it by this Agreement, and
such default shall continue for a period of ninety (90) days after written
notice thereof has been given to Princeton II by Company, Company may terminate
this Agreement.

11.4.3. In the event Princeton II's Medicare or Medicaid Number shall be
terminated or suspended as a result of the action or inaction of Princeton II or
a Physician Employee, and such termination or suspension shall continue for
thirty (30) days, Company may give notice of the immediate termination of this
Agreement, unless Princeton II shall at that time be acting in good faith (and
shall provide reasonable evidence of the action being taken) to reverse such
termination or suspension. Notwithstanding any good faith effort on the part of
Princeton II to reverse such termination or suspension, if such termination or
suspension shall not be reversed within ninety (90) days after occurrence,
Company shall have the right to terminate this Agreement immediately.

11.4.4. In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require Princeton II to purchase from Company all assets, both tangible and
intangible (including the stock of any subsidiary of Company which owns any such
assets), owned by Company and used or made available for Princeton II's use for
the fair market value of such assets on a going concern basis, without regard to
this Agreement. In addition thereto, Princeton II shall assume all contracts,
payables and leases which are obligations of Company which relate to the
performance of Company's obligations which are performed at the Practice
Locations under this Agreement. Company shall be required to sell any such
assets (including the stock of any subsidiary of Company which owns any such
assets) free and clear of any

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liens and encumbrances other than any liens or encumbrances being assumed by
Princeton II. The fair market value of the assets and/or stock of any subsidiary
of Company owning such assets shall be determined by an independent appraiser
selected by two (2) independent accountants practicing with "big six" accounting
firms, one (1) selected by Princeton II and one (1) selected by Company and
neither of which is providing or has for a period of two (2) years provided
services to Company or Princeton II. In addition to the payment for the practice
assets, in the event Company terminates this Agreement pursuant to Section
11.4.1, Section 11.4.2 or Section 11.4.3 within the first five (5) years of the
term of this Agreement, then Princeton II's Physician Owners shall (i) pay to
Company an amount of money equal to the fair market value, as of the date of
termination, of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to
Princeton II pursuant to the Exchange Agreement or (ii) surrender to Company for
cancellation [xxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to Princeton II pursuant
to the Exchange Agreement. If there is no public market for the stock, then

Company shall engage an independent appraiser to value Company's stock for
purposes of this Section 11.4.4. All expenses of such appraisal shall be paid by
Princeton II. Such determination of fair market value shall be binding upon
Princeton II's Physician Owners. In the event that Company terminates this
Agreement pursuant to Sections 11.4.1 through 11.4.3, inclusive, and Company
requires Princeton II to purchase the practice assets and/or stock of any
subsidiary of Company owning such assets, then upon the closing of the purchase
of the assets and/or stock of any subsidiary of Company owning such assets,
Princeton II and its Physician Employees shall be released from the restrictive
covenants provided for under Exhibit 11 of this Agreement.

11.5. Early Termination by Princeton II or Company Without Cause Upon
Third (3rd) Anniversary of Agreement. Either party may terminate this Agreement
without cause upon written notice delivered to the other party not less than
nine (9) months or more than ten (10) months or more prior to the end of the
third (3rd) anniversary of the date of this Agreement if the Company has not
filed a registration statement with the United States Securities and Exchange
Commission; provided, however, if the Company files a registration statement,
for an underwritten public offering, with the United States Securities and
Exchange Commission before the end of the date of the third (3rd) anniversary of
this Agreement, then such termination shall be ineffective, and this Agreement
shall continue in force unless otherwise terminated pursuant to the other
provisions of Article XI of this Agreement. In the event that such registration
statement is not effective within one hundred twenty (120) days from filing,
then the early termination rights described in the first sentence of this
Section 11.5 shall be again exercisable; provided, further, that if such
registration statement was filed during the above described notice period for
early termination, then such period shall be extended for thirty (30) days from
and after the date such early termination rights again become exercisable.
Notwithstanding any other provision of this Agreement to the contrary, the
termination rights set forth in this Section 11.5 shall immediately terminate
and no longer be effective upon a Change in Control of the Company. Upon a
termination pursuant to this Section 11.5, Princeton II shall tender to Company
all of the stock issued to Princeton II by Company pursuant to the Exchange
Agreement, and Company shall return to Princeton II the facilities and all
assets, both tangible and intangible (including the stock of any subsidiary of
Company which owns any such assets), used or made available for Princeton II's
use in the Practice Office. Company shall be required to sell any such assets
(including the stock of any subsidiary of Company which owns any such assets)
free and clear of any liens and encumbrances other than any liens or
encumbrances being assumed by Princeton II.

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Princeton II shall assume all contracts, payables and leases which are
obligations of Company and which related to Company's obligations which are
performed at the Office Locations under this Agreement. The Company and
Princeton II shall cooperate to structure any exchange consummated pursuant to
this Section 11.5 in a manner designed to minimize the aggregate tax
consequences to the parties arising from the exchange. Closing of the exchange
pursuant to this Section 11.5 shall occur effective as of the third (3rd)
anniversary of this Agreement.

11.6. Consequences of Princeton II Termination. In the event that this
Agreement is terminated by Princeton II under the terms of Section 11.3 or is
terminated on any other basis (other than (i) because of the normal expiration
of its term set forth in Section 11.1, (ii) by Company for cause as set forth in
Section 11.4 or (iii) by early termination as set forth in Section 11.5), then
upon such termination, Princeton II shall purchase from Company all assets, both
tangible and intangible, owned by Company and used or made available for
Princeton II's use for the fair market value of such assets. Company shall be
required to sell any such assets (including the stock of any subsidiary of
Company which owns any such assets) free and clear of any liens and encumbrances
other than any liens or encumbrances being assumed by Princeton II. In addition
thereto, Princeton II shall assume all contracts, payables and leases which are
obligations of Company which relate to the performance of Company's obligations
which are performed at the Office Locations under this Agreement. The fair
market value of the assets shall be determined by an independent appraiser
selected by two (2) independent accountants practicing with "big six" accounting
firms, one (1) selected by Princeton II and one (1) selected by Company and
neither of which is providing or has for a period of two (2) years provided
services to Company or Princeton II.

11.7. Closing of purchase by Princeton II and Effective Date of
Termination. Princeton II shall pay cash for the practice assets purchased
pursuant to the provisions of this Section 11. The amount of the purchase price
shall be reduced, but not below zero (0), by the amount of debt and liabilities
of Company assumed by Princeton II and shall also be reduced by any payment
Company has failed to make under this Agreement, provided that such payments or
obligations are not otherwise accounted for in the liabilities assumed by
Princeton II in connection with the purchase described herein. The closing date
for the purchase shall be determined by Princeton II, but shall in no event
occur later than one hundred eighty (180) days from the date of the notice of
termination. The termination of this Agreement shall become effective upon the
closing of the sale of the assets and Princeton II and Company shall be released
from the restrictive covenants provided for in Article VII on the closing date.
Company shall give Princeton II credit towards the purchase price of the assets
for the fair market value of any Company common stock tendered to the Company in
exchange for such assets. In the event that Princeton II terminates this
Agreement pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections
11.5, 11.6, or 11.7 then upon the closing of the purchase of the assets,
Princeton II and its Physician Employees shall, except as Princeton II may so
elect to limit through separate agreements with Physician Owners and Physician
Employees, be released from the restrictive covenants provided for under Article
VII and Exhibit 11 of this Agreement.

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11.8. Tail Policy. Princeton II shall obtain continuing liability
insurance coverage under either a "tail policy" or a "prior acts policy" with
the same limits and deductibles as set forth in Section 10.1 upon the
termination of this Agreement, or upon a physician's termination of his or her
affiliation with Princeton II.

11.9. Restrictions Applicable to Physician Owners. The Physician Owners

hereby acknowledge that the Exchange and the terms and conditions of this
Agreement were determined based upon numerous factors, including the Physician
Owners continuing to practice medicine in the future. In connection therewith,
each Physician Owner agrees as follows:

(b) to locate a physician or physicians (which may be Physician
Employees), acceptable to the Policy Board, to replace such Physician
Owner under this Agreement (all costs of locating such replacement
physicians shall be paid by such Physician Owner (the "Substitute
Physician(s)");

(c) to pay to Company any loss of service fees payable under this
Agreement for the remainder of the first five (5) years of this Agreement.
Any loss for any periods of less than twelve (12) months shall be
calculated on an annualized and prorated basis. For purposes of this
Section 11.9.1(c), the amount of the loss shall be calculated as follows:

(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of Princeton II's service
fees during the twelve (12) month period preceding the
retiring Physician Owner's notice of intent to retire.

(ii) In the event the Substitute Physician(s) were Physician
Employees prior to the date upon which notice of intent to
retire was given pursuant to Section 11.9.1(a), the Policy
Board shall calculate such Physician Employee(s) contribution
to the payment of Princeton II's service fees during the
twelve month period preceding the notice of intent to retire.

(iii) On each successive anniversary date of this Agreement (through
the fifth anniversary date) following the effective date of
such retirement, the Policy

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Board shall determine the amount of service fees generated by
the Substitute Physicians between either (x) the effective
date of retirement or (y) the immediately preceding
anniversary date, as applicable, and such successive
anniversary date.

(d) to (i) pay to Company an amount of money equal to the fair
market value, as of the date of retirement, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by the Company to the
retiring Physician Owner pursuant to the Exchange Agreement or (ii)
surrender to Company for cancellation
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to the retiring Physician
Owner pursuant to the Exchange Agreement. (If there is no public market
for Company's stock, then Company shall engage an independent appraiser to
value Company's stock for purposes of this Section 11.9.1(d). All expenses
of such appraisal shall be paid by such Physician Owner. Such
determination of fair market value shall be binding upon such Physician
Owner); and

(e) to honor and comply with the restrictive covenants provided for
under Exhibit 11.

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<PAGE>

teaching position, such Physician Owner shall have no further obligations under
this Agreement; provided, however, the restrictive covenants provided for under
Section 11.9.1(e) shall remain in force. In fulfilling any such full-time
teaching responsibilities, such Physician Owner would be permitted to attend
patients in a manner normal and customary for such faculty position, provided,
however, such services must be incident to the academic/teaching aspects of the
institution, and not incident to the regular examination of patients for a fee
whether billed in the name of the institution or the name of the attending
physician. It is not the intent of the Parties to permit a retired physician to
conduct a medical practice through an academic institution.

11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with Princeton II, then the terminating Physician Owner may join or
establish another group/practice which has or will enter into a Service
Agreement with Company upon such terminating Physician Owner's affiliation with
such new group/practice. Upon entering into such new Service Agreement, the
terminating Physician Owner shall, except as limited by separate employment
agreements between Princeton II and Physician Owners, be released from any
obligation under this Service Agreement. Company shall have the right to enter
into such new Service Agreement without satisfying the requirements of paragraph
G of Exhibit 11. In the event that (i) Princeton consents to the Company
entering into the new Service Agreement, (ii) entering into the new Service
Agreement will not adversely affect the operations and earnings of the Company,
and (iii) the new group/practice can satisfy the representations and warranties
set forth in Article XIII of this Agreement, then Company will not unreasonably
withhold or refrain from entering into a new Service Agreement with the
terminating Physician Owner's new group/practice. In the event that the
Physician Owner affiliates with a new group/practice that is not a party to a
Service Agreement with Company, then Company, at its option, may terminate this
Agreement solely with respect to the terminating Physician Owner, and the
provisions of Exhibit 11 shall apply. In the event that Company does not enter
into a new Service Agreement, then Company shall terminate this Agreement with
respect to such Physician Owner, and the terminating Physician Owner shall be
obligated as described in Sections 11.9.1(a) and 11.9.1(e) of this Agreement;
provided, however, if such termination is within the first five (5) years of the
term of this Agreement, the terminating Physician Owner shall also be obligated
as described in Section 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and
11.9.1(e).

11.9.4. Death or Disability. In the event that a Physician Owner dies or
becomes disabled, then this Agreement shall be terminated with respect to such
Physician Owner shall have no continuing obligations under this Agreement;
provided, however, in the event of disability, the restrictive covenants
described in Exhibit 11 shall remain in force for a period of thirty-six (36)
months from such termination.

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ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with Princeton II, shall review and approve such reconstruction,
repair or replacement.

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES
OF PRINCETON II AND PHYSICIAN OWNERS

Princeton II and Physician Owners represent, warrant, covenant and agree
with Company that:

13.1. Validity. Princeton II is a New Jersey corporation. Princeton II has
the full power and authority to own Princeton II's property, to carry on
Princeton II's business as presently being conducted, to enter into this
Agreement, and to consummate the transactions contemplated hereby. Each
Physician Owner is an adult citizen and resident of the State of New Jersey.
Each Physician Owner has the full power and authority to own his or her
property, carry on his or her business as presently being conducted, to enter
into this Agreement, and to consummate the transactions contemplated hereby.

13.2. Litigation. Except as disclosed pursuant to the Exchange Agreement,
there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding pending, or threatened against, or
affecting Princeton II or any Physician Employee, or to the best of Princeton
II's and each Physician Owner's knowledge, any provider or other health care
professional associated with or employed by Princeton II as pertains to any
claim involving the providing of health care related services, and to the best
of Princeton II's and each Physician Owner's knowledge there is no basis for any
of the foregoing.

13.3. Permits. Princeton II and all health care professionals associated
with or employed by Princeton II have all permits and licenses and other
Necessary Authorizations required by all Applicable Law, except where failure to
secure such licenses, permits and other Necessary Authorizations does not have a
material adverse effect; have made all regulatory filings necessary for

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<PAGE>

the conduct of Princeton II's business; and are not in violation of any of said
permitting or licensing requirements.

13.4. Authority. The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding Agreement of Princeton II and
each Physician Owner, enforceable in accordance with its terms. Princeton II and
each Physician Owner have obtained all third-party consents necessary to enter
into and consummate the transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor compliance by Princeton II or any Physician Owner with
any of the provisions hereof, will:

13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either Princeton II or any Physician Owner.

13.5. Compliance with Applicable Law. To the best of Princeton II's and
each Physician Owner's knowledge and belief, Princeton II and each Physician
Owner has operated in compliance with all federal, state, county and municipal
laws, ordinances and regulations applicable thereto and neither Princeton II nor
any provider associated with or employed by Princeton II has received payment or
any remuneration whatsoever to induce or encourage the referral of patients or
the purchase of goods and/or services as prohibited under 42 U.S.C. ss.
1320a-7b(b), or otherwise perpetrated any Medicare or Medicaid fraud or abuse,
nor has any fraud or abuse been alleged within the last five (5) years by any
Governmental Authority, a carrier or a Third-Party Payor.

13.6. Health Care Compliance. Princeton II is presently participating in
or otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
Princeton II no event has occurred which in itself or with the giving of notice
or the lapse of time or both would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such Third-Party Payor Program.
Princeton II is in full compliance with the material requirements of all such
Third-Party Payor Programs applicable thereto.

13.7. Fraud and Abuse. Princeton II and persons and entities providing
professional services for Princeton II, have not, to the knowledge of Princeton
II and each Physician Owner, after due inquiry, engaged in any activities which
are prohibited by or are in violation of the rules, regulations, policies,
contracts or laws pertaining to any Third-Party Payor Program, or which are
prohibited by rules of professional conduct ("Governmental Rules and
Regulations"), including but not limited to

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<PAGE>

the following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on Princeton II's own behalf or on behalf of another,
with intent to fraudulently secure such benefit or payment; or (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay or receive such remuneration (i) in return for referring
an individual to a person for the furnishing or arranging for the furnishing or
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing, or ordering or
arranging for or recommending purchasing, leasing, or ordering any good,
facility, service or item for which payment may be made in whole or in part by
Medicare or Medicaid.

13.8. Princeton II Compliance. Princeton II has all licenses necessary to
operate the Practice Offices in accordance with the requirements of all
Applicable Law and has all Necessary Authorizations for the use and operation,
all of which are in full force and effect. There are no outstanding notices of
deficiencies relating to Princeton II issued by any Governmental Authority or
Third-Party Payor requiring conformity or compliance with any Applicable Law or
condition for participation of such Governmental Authority or Third-Party Payor,
and after reasonable and independent inquiry and due diligence and
investigation, Princeton II has neither received notice nor has any knowledge or
reason to believe that such Necessary Authorizations may be revoked or not
renewed in the ordinary course.

13.9. Rates and Reimbursement Policies. The jurisdiction in which
Princeton II is located does not currently impose any restrictions or
limitations on rates which may be charged to private pay patients receiving
services provided by Princeton II. Princeton II does not have any rate appeal
currently pending before any Governmental Authority or any administrator of any
Third-Party Payor Program. Princeton II has no knowledge of any Applicable Law
which has been enacted, promulgated or issued within the eighteen (18) months
preceding the date of this Agreement or any such legal requirement proposed or
currently pending in the jurisdiction in which Princeton II is located which
could have a material adverse effect on Princeton II or may result in the
imposition of additional Medicaid, Medicare, charity, free care, welfare, or
other discounted or government assisted patients at Princeton II or require
Princeton II to obtain any necessary authorization which Princeton II does not
currently possess.

13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:

13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; Princeton II has billed the applicable Account Debtor and Princeton

II has delivered or caused to be delivered to such Account Debtor all requested
supporting claim documents with respect to such Accounts Receivable; all
information set forth in the bill and supporting claim documents is true and
correct,

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<PAGE>

and, if any error has been made, Princeton II will promptly correct the same
and, if necessary, rebill or, if requested by Company, cooperate with Company to
rebill such Accounts Receivable.

13.10.2. The Purchased A/R are exclusively owned by Princeton II and there
is no security interest or lien in favor of any third party, or the recording or
filing against Princeton II, as debtor, covering or purporting to cover any
interest of any kind in any Accounts Receivable, except as has been released by
each party holding such adverse interest in the Accounts Receivable. Upon
payment of the Purchase Price with respect to the Purchased A/R and with respect
to Governmental Receivables, to the extent permissible by law, all right, title
and interest of Princeton II with respect thereto shall be vested in Company,
free and clear of any lien, security interest, claim or encumbrance of any kind,
and Princeton II agrees to defend the same against the claims of all Persons.

13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by
the Account Debtor identified by Princeton II as being obligated to do so, (ii)
are based on an actual and bona fide rendition of services or sale of goods to
the patient by Princeton II in the ordinary course of business, (iii) are
denominated and payable only in lawful currency of the United States, and (iv)
are accounts or general intangibles within the meaning of the UCC of the state
in which Princeton II has its principal place of business, or are rights to
payment under a policy of insurance or proceeds thereof, and are not evidenced
by any instrument or chattel paper. There are no payors other than the Account
Debtor identified by Princeton II as the payor primarily liable on any Purchased
A/R.

accepted by the Account Debtor or the services giving rise to such Accounts
Receivable have not been performed by Princeton II and accepted by the Account
Debtor or the Accounts Receivable otherwise does not represent a final sale,
(viii) is evidenced by an instrument or chattel paper unless such instrument or
chattel paper is delivered to Company with all appropriate endorsements in favor
of Company, or (ix) other than a complete bona fide transaction which requires
no further act under any circumstances on the part of Princeton II to make the
Accounts Receivable payable by the Account Debtor.

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<PAGE>

13.10.5. Princeton II does not have any guaranty of, letter of credit
providing credit support for, or collateral security for, the Purchased A/R,
other than any such guaranty, letter of credit or collateral security as has
been assigned to Company, and any such guaranty, letter of credit or collateral
security is not subject to any lien in favor of any other person.

13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of Princeton II and the
patient received such goods or services.

13.10.8. Each Account Debtor with respect to the Purchased A/R (i) is not
currently the subject of any bankruptcy, insolvency or receivership proceeding,
nor is it generally unable to make payments on its obligations when due, (ii) is
located in the United States, and (iii) is one of the following: (x) a party
which in the ordinary course of its business or activities agrees to pay for
healthcare services received by individuals, including, without limitation,
Medicare, Medicaid, governmental bodies, commercial insurance companies and
non-profit insurance companies (such as Blue Cross and Blue Shield entities)
issuing health, personal injury, workers compensation or other types of
insurance; (y) employers or unions which self-insure for employee or member
health insurance, prepaid healthcare organizations, preferred provider
organizations, health maintenance organizations or any other similar person, or
(z) a Third-Party Payor of the type described in the definition of Governmental
Receivables.

13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of Princeton II. The sale of the Purchased
A/R hereunder is made in good faith and without actual intent to hinder, delay
or defraud present or future creditors of Princeton II.

the Account Debtor and, together, with the Purchased A/R, constitutes the legal,
valid and binding obligation of the Account Debtor in accordance with its terms,
(iii) together with the applicable Purchased A/R, does not contravene in any
material respect any requirement of law applicable thereto, and (iv) was in full
force and effect and applicable to the patient at the time the services
constituting the basis for the Purchased A/R were performed.

None of the foregoing representations and warranties shall be deemed to
constitute a guaranty by Princeton II that the Purchased A/R will be collected
by Company. Princeton II shall not be responsible for any damages for any breach
of a representation or warranty under this Section 13.10

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<PAGE>

until Company has suffered a loss on the purchase of Princeton II's Accounts
Receivable. Damages for such breach shall be limited to the amount of Company's
loss on the purchase of such Accounts Receivable.

13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of Princeton II no representation or warranty
made by Princeton II in this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.

13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by Princeton II as though recited in this
Article XIII.

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company represents, warrants, covenants and agrees with Princeton II as
follows:

14.3. Absence of Litigation. No action or proceeding by or before any

court or other Governmental Authority has been instituted or is, to the best of
Company's knowledge, threatened with respect to the transactions contemplated by
this Agreement.

14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of Princeton II or Company, other than on
terms and conditions substantially as favorable to Company as would be
obtainable by Company at the time in a comparable arm's-length transaction with
a person not an Affiliate.

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<PAGE>

ARTICLE XV.

COVENANTS OF PRINCETON II AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements. Princeton II shall not
incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up Princeton II's affairs or enter into any
partnerships, joint ventures or sale-leaseback transactions or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any other person
or entity.

15.2. Necessary Authorizations/Assignment of Licenses and Permits.
Princeton II and each Physician Owner shall maintain all licenses, permits,
certifications, or other Necessary Authorizations and shall not assign or
transfer any interest in any license, permit, certificate or other Necessary
Authorization granted to it by any Governmental Authority, nor shall Princeton
II or any Physician Owner assign, transfer, or remove or permit any other
individual or entity to assign, transfer or remove any records of Princeton II
or any Physician Owner, including without limitation, patient records, medical
and clinical records (except for removal of such patient records as required
under any Applicable Law).

15.3. Transaction with Affiliates. Neither Princeton II nor any Physician
Owner shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of Princeton
II or Company, other than on terms and conditions substantially as favorable to
Princeton II or the Physician Owner, as would be obtainable by Princeton II or
the Physician Owner at the time in a comparable arms-length transaction with a
person not an Affiliate.

15.4. Compliance with All Laws. Princeton II and each Physician Owner
shall comply with all laws and regulations relating to Princeton II's practice
and the operation of any facility, including, but not limited to, all state,
federal and local laws relating to the acquisition or operation of a health care
practice. Furthermore, neither Princeton II nor any Physician Owner shall
violate any Governmental Rules and Regulations.

15.5. Third-Party Payor Programs. Princeton II shall maintain Princeton
II's compliance with the requirements of all Third-Party Payor Programs in which
Princeton II is currently participating or authorized to participate.

15.6. Change in Business or Credit and Collection Policy. Princeton II
shall not make any change in the character of Princeton II's business or in the
credit and collection policy, which change would, in either case, impair the
collectibility of any Purchased A/R or any Exchange A/R or otherwise modify,
amend or extend the terms of any such account other than in the ordinary course
of business.

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15.7. Treatment of Accounts Receivable. Princeton II will (i) treat
transfers to Company of Accounts Receivable hereunder as a sale for all
purposes, including tax and accounting (and shall accurately reflect such sale
in its financial statements), and will advise all persons who inquire about the
ownership of such Accounts Receivable that they have been sold to Company; (ii)
not treat any such Accounts Receivable as an asset on Princeton II's books and
records; (iii) record in Princeton II's books, records and computer files
pertaining thereto that such Accounts Receivable have been sold to Company; (iv)
pay all taxes, if any, relating to the transfer of such Accounts Receivable
after the same have been purchased by Company; (v) not impede or interfere with
Company's collection of such Accounts Receivable; (vii) not amend, waive or
otherwise permit or agree to any deviation from the terms or conditions of such
Accounts Receivable; (viii) use all reasonable efforts to obtain all consents
from patients which are required by law in order for Company, or any servicing
entity retained by Company, to secure information needed to obtain or to
expedite payment from the respective Account Debtors; and (ix) have billed such
Accounts Receivable on the same bases and using the same policies and practices
that it has used in the past unless Company has been advised in writing of a
change prior to the purchase of such Accounts Receivable. Company or its
designated representatives from time to time may verify the Accounts Receivable,
inspect, check, take copies or extracts from Princeton II's books, records and
files, and Princeton II will make the same available to Company or such
representatives at any reasonable time for such purposes.

15.8. Security Interest. If, contrary to the mutual intent of Princeton II
and Company, any purchase of Purchased A/R is not characterized as a sale,
Princeton II shall, effective as of the date hereof, be deemed to have granted
(and Princeton II does hereby grant) to Company a first priority security
interest in and to any and all of the Purchased A/R and the proceeds thereof to
secure the repayment of all amounts advanced to Princeton II hereunder with
accrued interest thereon, and this Agreement shall be deemed to be a security
agreement. With respect to such grant of a security interest, Company may at its
option exercise from time to time any and all rights and remedies available to
it under the UCC or otherwise. Princeton II agrees that five (5) days shall be
reasonable prior notice of the date of any public or private sale or other
disposition of all or part of the Purchased A/R. Princeton II represents and
warrants that the location of Princeton II's principal place of business, and
all locations where Princeton II maintains records with respect to its accounts
are set forth under its name in Section 16.3 hereof. Princeton II agrees to

notify Company in writing thirty (30) days prior to any change in any such
location. The exact name of Princeton II is as set forth at the beginning of
this Agreement, and except as set forth on the signature page hereof, Princeton
II has not changed its name in the last five (5) years, and during such period
Princeton II did not use, nor does Princeton II now use, any fictitious or trade
name. Princeton II shall notify Company in writing thirty (30) days prior to any
change in any such name.

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment. Company shall have the right to assign its rights
hereunder to any person, firm or corporation under common control with Company
and to any lending institution from which

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Company obtains financing, including but not limiting the restrictive covenants
included in Article VII (covenant not to compete), for security purposes or as
collateral. Princeton II agrees to, and acknowledges, Company's right to assign
Company's rights under this Agreement to any Lender and further agrees that upon
receipt of written notice from such Lender, Princeton II shall pay to Lender or
cause to be paid to Lender all amounts which are otherwise payable to Company
pursuant to the terms of this Agreement, including, without limitation, all
service fees, and other Clinic Expenses and, until such amounts are delivered to
Lender, hold payments in trust for Lender. Except as set forth above, neither
Company nor Princeton II shall have the right to assign their respective rights
and obligations hereunder without the written consent of the other party.
Without limiting the foregoing, Princeton II acknowledges that, as collateral
for certain obligations, Company has assigned all of its rights hereunder to
NationsBank of Tennessee, N.A. as Agent (the "Agent") for itself and other banks
and institutional lenders from time to time (collectively the "Banks") and has
granted the Agent for the benefit of the Banks a lien and security interest upon
all real and personal property used in the operation of the Office Locations
(the "Pledged Assets"). As an inducement for the Banks to extend or continue the
extension of credit to Company, Princeton II (i) acknowledges that the
collateral assignment to the Agent covers all rights of Company hereunder,
including, but not limited to, rights arising from warranties and
representations made by Princeton II, rights to enforce covenants made by
Princeton II, and rights to receive all payments due Company; (ii) agrees to
regard the Agent as the owner of any or all of the assigned rights upon written
notice to Princeton II of this election from the Agent; (iii) agrees that
neither the Agent nor any of the Banks has obligation for the performance of the
duties of Company hereunder, and shall not assume any such duty by the exercise
of rights as a secured lender; (iv) agrees to give the Agent written notice of
any material default hereunder on Company's part at the address of 1 NationsBank
Plaza, Nashville, Tennessee 37239, Attn: David Dupuy, and to allow at least
thirty (30) days thereafter for the cure of such default before Princeton II
terminates this Agreement; (v) agrees that the rights of Princeton II under this
Agreement, including, but not limited to, the right to the use of the Pledged
Assets, are and shall be junior to any security interest that the Agent and the

Banks, their successors or assigns may have in the Pledged Assets at any time;
(vi) agrees that the benefits of the above undertakings in favor of the Agent
and Banks shall further extend to all successors and assigns of the Agents and
Banks, provided that any notices given by Princeton II under this Section shall
be given to the Agent at the foregoing address unless Princeton II has received
written notice of a change thereof; and (vii) agrees that this Section may not
be modified, and no provision of this Section may be waived, absent the written
approval of the Agent.

- 44 -
<PAGE>

after being sent by overnight delivery service, or (iv) three days after being
deposited in the United States mail, certified or registered mail, postage
prepaid, addressed as follows:

To Company: Specialty Care Network, Inc.
44 Union Boulevard
Suite 600
Lakewood, Colorado 80228
Attention: Kerry Hicks

With a copy to: Baker, Donelson, Bearman & Caldwell
165 Madison Avenue
Suite 2000
Memphis, Tennessee 38103
Attention: David T. Popwell, Esq.

To Princeton II: Princeton Orthopaedic Associates, II P.A.
325 Princeton Avenue
Princeton, New Jersey 08540
Attention: Robert Simpson

With a copy to: Norris McLaughlin & Marcus
P.O. Box 1018
721 Route 202-206
Somerville, New Jersey 08876-1018
Attention: Victor S. Elgort, Esq.

or to such other address as either party shall notify the other.

16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.

16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey.

- 45 -
<PAGE>

the performance of said act or service by Company shall be deemed waived and
unenforceable to the minimum extent required to comply with Applicable Law.

16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.

non-confidential basis from a source other than the other party or its
affiliates or agents, which source was not itself bound by a confidentiality
agreement; (iii) which is required to be disclosed by law or pursuant to court
order. Company shall provide Princeton II with copies of any information
regarding Princeton II provided by Company to any third party; or (iv) except
for disclosure to its bankers, underwriters or lenders, or its advisors to the
extent required by Section 9.4, or as required in connection with reports on
filings with the SEC or State Departments of Securities.

16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations,
Princeton II and Company shall amend this Agreement as necessary. To the maximum
extent possible, any such amendment shall preserve the underlying economic and
financial arrangements between and among Princeton II and Company.

16.14. Remedies Cumulative. No remedy set forth in this Agreement or
otherwise conferred upon or reserved to any party shall be considered exclusive
of any other remedy available to any

- 46 -
<PAGE>

party, but the same shall be distinct, separate and cumulative and may be
exercised from time to time as often as occasion may arise or as may be deemed
expedient.

16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to Princeton II's fair meaning, and
not for or against either party hereto. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement.

16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or Princeton II under this
Agreement shall in any way or in any manner be deemed to create any obligation
of Company or of Princeton II to, or any rights in, any person or entity not a
party to this Agreement.

16.17. Communications. Princeton II and Company agree that good
communication between the parties is essential to the successful performance of
this Agreement, and each pledges to communicate fully and clearly with the other
on matters relating to the successful operation of Princeton II's practice at
the Practice Offices.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

COMPANY:

SPECIALTY CARE NETWORK, INC.

By:______________________________________________
Title:___________________________________________

SCN OF PRINCETON, INC.

By:______________________________________________
Title:___________________________________________

PRINCETON II:

PRINCETON ORTHOPEDIC ASSOCIATES, II P.A.

By:______________________________________________
Title:___________________________________________

- 47 -
<PAGE>

PHYSICIAN OWNERS:

_________________________________________________
MICHAEL N. JOLLEY, M.D.

_________________________________________________
HARVEY E. SMIRES, M.D.

_________________________________________________
ROBERT N. DUNN, M.D.

_________________________________________________
JEFFREY S. ABRAMS, M.D.

_________________________________________________
RICHARD E. FLEMING, JR., M.D.

_________________________________________________
W. THOMAS GUTOWSKI, M.D.

_________________________________________________
STEVEN R. GECHA, M.D.

_________________________________________________
C. ALEXANDER MOSKWA, JR., M.D.

_________________________________________________
DAVID M. SMITH, M.D.

- 48 -

<PAGE>

MERGER AGREEMENT

BY AND AMONG

SPECIALTY CARE NETWORK, INC.,

AND

RECONSTRUCTIVE ORTHOPAEDIC ASSOCS., INC.

November 12, 1996
<PAGE>

TABLE OF CONTENTS

Page
----

1. Definitions.................................................... - 1 -

2. Basic Transaction.............................................. - 4 -
(a) The Merger.............................................. - 4 -
(b) The Closing............................................. - 4 -
(c) Actions at the Closing.................................. - 4 -
(d) Effect of Merger........................................ - 4 -

3. Representations and Warranties of ROA and the ROA Stockholders. - 5 -
(a) Organization, Qualification, and Corporate Power........ - 6 -
(b) Capitalization.......................................... - 6 -
(c) Authorization of Transaction............................ - 6 -
(d) Noncontravention........................................ - 6 -
(e) Subsidiaries and Investments............................ - 7 -
(f) Financial Statement..................................... - 7 -
(g) Undisclosed Liabilities................................. - 7 -
(h) Brokers' Fees........................................... - 7 -
(i) Material Contracts...................................... - 7 -
(j) Insurance; Malpractice.................................. - 8 -
(k) No Changes Prior to Closing Date........................ - 9 -
(l) Title; Condition........................................ - 9 -
(m) Litigation.............................................. - 9 -
(n) Permits and Licenses.................................... - 10 -
(o) Tax Matters............................................. - 10 -
(p) Employee Benefit Plans.................................. - 10 -
(q) Third-Party Relations................................... - 12 -
(r) Compliance with Applicable Laws......................... - 12 -
(s) Employee Compensation................................... - 12 -
(t) Environmental Matters................................... - 12 -
(u) Healthcare Compliance................................... - 13 -
(v) Fraud and Abuse......................................... - 13 -
(w) Practice Compliance..................................... - 14 -
(x) Rates and Reimbursement Policies........................ - 14 -
(y) Accounts Receivable..................................... - 14 -
(z) Guaranties.............................................. - 15 -
(aa) Powers of Attorney...................................... - 15 -
(ab) Tangible Assets......................................... - 15 -

i
<PAGE>

Page
----

(ac) Full Disclosure......................................... - 15 -

4. Representations and Warranties of SCN......................... - 15 -
(a) Organization........................................... - 15 -
(b) Capitalization......................................... - 15 -
(c) Authorization of Transaction........................... - 15 -
(d) Noncontravention....................................... - 15 -
(e) Brokers' Fees.......................................... - 16 -
(f) Private Placement Memorandum........................... - 16 -

5. Covenants..................................................... - 16 -
(a) General................................................ - 16 -
(b) Notices and Consents................................... - 16 -
(c) Regulatory Matters and Approvals....................... - 16 -
(d) Operation of Business.................................. - 17 -
(e) Full Access............................................ - 18 -
(f) Notice of Developments................................. - 18 -
(g) Exclusivity............................................ - 18 -
(h) Collection of Accounts Receivable...................... - 18 -
(i) Payment of Expenses.................................... - 18 -
(j) Completion of Schedules................................ - 19 -
(k) Eric Hume Employment Contract.......................... - 19 -

6. Conditions to Obligation to Close............................. - 19 -
(a) Conditions to Obligation of SCN........................ - 19 -
(b) Conditions to Obligation of ROA........................ - 21 -

7. Items to be Delivered at or Prior to Closing.................. - 23 -
(a) By the ROA Stockholders or ROA......................... - 23 -
(b) By SCN................................................. - 23 -

8. Termination................................................... - 24 -
(a) Termination of Agreement............................... - 24 -
(b) Effect of Termination.................................. - 25 -

9. Indemnification............................................... - 25 -
(a) Indemnification by the ROA Stockholders................ - 25 -
(b) Notice to the ROA Stockholders; Opportunity to Defend.. - 25 -
(c) General Indemnification by SCN......................... - 26 -
(d) Notice to SCN; Opportunity to Defend................... - 26 -
(e) Survival............................................... - 26 -

ii
<PAGE>

Page
----

(f) Security for Indemnity................................. - 26 -

10. Miscellaneous................................................ - 26 -

(a) No Third-Party Beneficiaries........................... - 26 -
(b) Entire Agreement....................................... - 27 -
(c) Succession and Assignment.............................. - 27 -
(d) Counterparts........................................... - 27 -
(e) Headings............................................... - 27 -
(f) Notices................................................ - 27 -
(g) Governing Law.......................................... - 28 -
(h) Amendments and Waivers................................. - 28 -
(i) Severability........................................... - 28 -
(j) Expenses............................................... - 28 -
(k) Construction........................................... - 28 -
(l) Incorporation of Exhibits and Schedules................ - 29 -

iii
<PAGE>

MERGER AGREEMENT

THIS MERGER AGREEMENT ("Agreement") is entered into this the 12th day of
November, 1996, by and among SPECIALTY CARE NETWORK, INC., a Delaware
corporation ("SCN") and RECONSTRUCTIVE ORTHOPAEDIC ASSOCS., INC., a Pennsylvania
corporation ("ROA") and the stockholders of ROA as of the date of this Agreement
(the "ROA Stockholders"). SCN, ROA and the ROA Stockholders are referred to
collectively herein as the "Parties."

W I T N E S S E T H:

WHEREAS, ROA is a Pennsylvania corporation which owns the assets which are
used by and/or result from the ROA Stockholders' practice of medicine;

WHEREAS, the ROA Stockholders are medical doctors practicing medicine in
the State of Pennsylvania;

WHEREAS, this Agreement contemplates a tax-free merger of ROA with and
into SCN in a reorganization pursuant to Code Section 368(a)(1)(A);

WHEREAS, the ROA Stockholders will receive capital stock in SCN and cash
in exchange for their capital stock in ROA.

WHEREAS, the Parties anticipate that the Merger contemplated by this
Agreement will further certain of their business objectives; and

WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.

1. Definitions.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"Closing Date" has the meaning set forth in Section 2(b) below.

"Closing" has the meaning set forth in Section 2(b) below.
<PAGE>

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.

"Delaware Articles of Merger" shall have the meaning set forth in Section
2(c) below.

"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"Dissenting Share" means any ROA Share which any stockholder who or which
has exercised his or its appraisal rights under the Pennsylvania Business
Corporation Law holds of record.

"Effective Time" has the meaning set forth in Section 2(d)(i) below.

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

"Hazardous Materials" has the meaning set forth in Section 3(t) below.

"IRS" means the Internal Revenue Service.

"Knowledge" means actual knowledge after reasonable investigation.

"Merger" has the meaning set forth in Section 2(a) below.

"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.

- 2 -
<PAGE>

"Pennsylvania Business Corporation Law" means the Business Corporation Law
of the Commonwealth of Pennsylvania, as amended.

"Pennsylvania Articles of Merger" shall have the meaning set forth in
Section 2(c) below.

"Practice Assets" has the meaning set forth in Section 3(l) below.

"Private Placement Memorandum" means the final private placement
memorandum of SCN relating to the of the offering of the SCN Shares under the
Securities Act.

"Requisite SCN Stockholder Approval" means the affirmative vote of the
holders of a majority of the SCN Shares in favor of this Agreement and the
Merger.

"Requisite ROA Stockholder Approval" means the affirmative vote of the
holders of a majority of the ROA Shares in favor of this Agreement and the
Merger.

"ROA Share" means any share, voting and nonvoting alike, of the Common
Stock, One Dollar ($1.00) par value per share, of ROA.

"ROA Stockholder" means any Person who or which holds any ROA Shares.

"ROA" has the meaning set forth in the preface above.

"SCN Share" means any share of the Common Stock, $.001 par value per
share, of SCN.

"SCN" has the meaning set forth in the preface above.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

- 3 -
<PAGE>

"Surviving Corporation" has the meaning set forth in Section 2(a) below.

2. Basic Transaction.

(a) The Merger. On and subject to the terms and conditions of this
Agreement, ROA will merge with and into SCN (the "Merger") at the Effective
Time. SCN shall be the corporation surviving the Merger (the "Surviving
Corporation").

(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Morgan, Lewis &
Bockius, L.L.P., 2000 One Logan Square, Philadelphia, Pennsylvania, commencing
at 9:00 A.M. local time on the 12th day of November, 1996, or such other date as
the Parties may mutually determine (the "Closing Date").

(c) Actions at the Closing. At the Closing, (i) ROA will deliver to SCN
the various certificates, instruments, and documents referred to in Section 7(a)
below, (ii) SCN will deliver to ROA the various certificates, instruments, and
documents referred to in Section 7(b) below, (iii) SCN and ROA will file with
the Secretary of State of the State of Delaware both Articles of Merger and a
Plan of Merger in substantially the form attached hereto as Exhibit 2(c) (the
"Delaware Articles of Merger"), and (iv) SCN and ROA will file with the
Department of State of the Commonwealth of Pennsylvania both Articles of Merger
and a Plan of Merger in substantially the form attached hereto as Exhibit
2(c)(i) (the "Pennsylvania Articles of Merger").

(d) Effect of Merger.

(i) General. The Merger shall become effective at the time (the
"Effective Time") SCN and ROA file the Delaware Articles of Merger with
the Secretary of State of the State of Delaware and file the Pennsylvania
Articles of Merger with the Department of State of the Commonwealth of
Pennsylvania. The Merger shall have the effect set forth in the Delaware
General Corporation Law and the Pennsylvania Business Corporation Law. The
Surviving Corporation may, at any time after the Effective Time, take any
action (including executing and delivering any document) in the name and
on behalf of either SCN or ROA in order to carry out and effectuate the
transactions contemplated by this Agreement.

- 4 -
<PAGE>

(iii) Bylaws. The Bylaws of SCN in effect at and as of the Effective
Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.

(v) Conversion of ROA Shares. At and as of the Effective Time, each
ROA Share (other than any Dissenting Share) shall be converted into the
right to receive consideration equal to Twenty Thousand Four Hundred Three
and 73/100 Dollars ($20,403.73) (the "Conversion Ratio"). The
consideration to be delivered by SCN in connection with the conversion of
the ROA Shares shall consist of a combination of SCN Shares and cash. In
the aggregate, the amount of cash to be delivered at the Effective Time
shall not exceed twenty percent (20%) of the total consideration. The ROA
Stockholders shall deliver to SCN a schedule executed by each ROA
Stockholder setting forth the allocation of SCN Shares and cash to be
delivered to the ROA Stockholders at the Effective Time. Each Dissenting
Share shall be converted into the right to receive payment from the
Surviving Corporation with respect thereto in accordance with the
provisions of the Pennsylvania Business Corporation Law. The Conversion
Ratio shall be subject to equitable adjustment in the event of any stock
split, stock dividend, reverse stock split, or other change in the number
of ROA Shares or SCN Shares outstanding. For all purposes, each SCN Share
is agreed to have a value of Six Dollars ($6.00) per share.

(vi) SCN Shares. Each SCN Share issued and outstanding at and as of
the Effective Time will remain issued and outstanding.

3. Representations and Warranties of ROA and the ROA Stockholders. ROA and
the ROA Stockholders, severally and with respect to themselves only, represent
and warrant to SCN that the statements contained in this Section 3 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 3), except as
set forth in the disclosure schedule (the "Disclosure Schedule"). The Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 3 and will be completed pursuant
to Section 5(j). SCN acknowledges that on the Closing Date ROA shall have ceased
the practice of medicine and shall have converted from a professional
corporation to a business corporation. To the extent that any statements
contained in this Section 3 refer to the practice of medicine, such statements
shall refer to the period during which ROA operated as a professional
corporation.

- 5 -
<PAGE>

(a) Organization, Qualification, and Corporate Power. ROA is a corporation
duly incorporated, validly existing, and in good standing under the laws of the
Commonwealth of Pennsylvania. ROA is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction in which the character or
location of the properties owned or the business conducted by ROA makes such
qualification necessary. ROA has the corporate power and authority to carry on
the business in which it is engaged and to own and use the properties owned and
used by it.

(b) Capitalization. The entire authorized capital stock of ROA consists of
two thousand (2,000) ROA Shares, of which one thousand (1,000) ROA Shares are
issued and outstanding and zero (0) ROA Shares are held in treasury. One
thousand of the total authorized capital stock of ROA consists of Class A voting
ROA Shares, of which five hundred ten (510) are issued and outstanding. The
remaining one thousand of the total authorized capital stock of ROA consists of
Class B nonvoting ROA Shares, of which four hundred ninety (490) are issued and
outstanding. All of the issued and outstanding ROA Shares have been duly
authorized and are validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or commitments
that could require ROA to issue, sell or otherwise cause to become outstanding
any of its capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to ROA.

(c) Authorization of Transaction. ROA has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; provided, however, that ROA cannot consummate the Merger unless and
until it receives the Requisite ROA Stockholder Approval. This Agreement
constitutes the valid and legally binding obligation of ROA, enforceable in
accordance with its terms and conditions.

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which ROA
is subject or any provision of the charter or bylaws of ROA or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which ROA is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). ROA is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.

- 6 -
<PAGE>

(e) Subsidiaries and Investments. ROA does not own, directly or
indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, limited liability
company, trust, joint venture, or other entity.

(f) Financial Statement. ROA has furnished SCN with audited balance sheets
dated December 31, 1994 and 1995, and audited income statements for the twelve
(12) month periods ending December 31, 1995, 1994 and 1993. Such financial
statements, including the notes thereto, except as indicated therein, were
prepared on a basis consistent with past accounting practices of ROA and fairly
presents the results of operations for the periods noted therein. The balance
sheets of ROA delivered by ROA to SCN fairly present the financial condition of
ROA at the date thereof, and except as indicated therein, reflect all claims
against and all debts and liabilities of ROA, fixed or contingent, as of the
date thereof.

(g) Undisclosed Liabilities. ROA has no uninsured liability (whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to become due),
including any liability for taxes, except for (i) liabilities set forth on the
face of the balance sheet dated as of December 31, 1995 and (ii) liabilities
which have arisen after December 31, 1995 in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

(h) Brokers' Fees. ROA does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

(i) Material Contracts. Section 3(i) of the Disclosure Schedule lists the
following contracts and other material agreements to which ROA is a party:

(i) any agreement (or group of related agreements) for the lease of
real or personal property to or from any Person;

(ii) any agreement (or group of related agreements) for the purchase
or sale of supplies, products, or other personal property or for the
furnishing or receipt of services;

(iii) any agreement concerning a partnership or joint venture;

(iv) any agreement (or group of related agreements) under which ROA
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation pursuant to which it
has imposed a Security Interest in respect of any of its assets, tangible
or intangible;

(v) any agreement concerning confidentiality or noncompetition;

- 7 -
<PAGE>

(vi) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of ROA's current or former directors,
officers, and employees;

(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;

(viii) any agreement pursuant to which ROA has advanced or loaned
any amount to any of its directors, officers, and employees;

(x) any other agreement (or group of related agreements) outside the
ordinary course of ROA's business or operations the performance of which
involves consideration in excess of $15,000.

ROA has delivered or given SCN access to a correct and complete copy of each
written agreement listed in Section 3(i) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in Section 3(i) of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) except as set forth in Section
3(i) of the Disclosure Schedule, no notice of this Agreement or consent of any
third party is required in order to execute and deliver this Agreement or to
consummate the transaction contemplated hereby, and, after assignment to SCN at
Closing, the agreement will continue to be legal, valid, binding, enforceable,
and in full force and effect on identical terms; (C) to ROA's Knowledge no party
is in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default, or permit termination, modification,
or acceleration, under the agreement; and (D) no party has repudiated any
provision of the agreement.

- 8 -
<PAGE>

agency or carrier and (b) ROA, ROA's professional employees and the ROA
Stockholders have been continuously insured for professional malpractice claims
during the same period. Section 3(j) of the Disclosure Schedule also sets forth
a list of all claims for any insured loss in excess of Five Thousand Dollars
($5,000.00) per occurrence filed by ROA, ROA's professional employees or the ROA
Stockholders during the three (3) year period immediately preceding the date
hereof, including workers compensation, general liability, environmental
liability and professional malpractice liability claims. None of ROA, ROA's
professional employees nor the ROA Stockholders is in material default with
respect to any provision contained in any such policy and none of them has
failed to give any notice or present any claim under any such policy in due and
timely fashion.

(k) No Changes Prior to Closing Date. During the period from December 31,
1995 through the date hereof, ROA has not (i) incurred any liability or
obligation of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due), except in the Ordinary Course of Business, (ii)
written off as uncollectible any notes or accounts receivable, except write-offs
in the Ordinary Course of Business charged to applicable reserves, none of which
individually or in the aggregate is material to ROA, (iii) conducted its
business in such a manner so as to materially increase its accounts payable or
so as to materially decrease its accounts receivable, (iv) granted any increase
in the rate of wages, salaries, bonuses, or other remunerations of any employee,
except in the Ordinary Course of Business, (v) canceled or waived any claims or
rights of substantial value, (vi) made any change in any method of accounting,
(vii) otherwise conducted its business or entered into any transaction, except
in the usual and ordinary manner and in the Ordinary Course of Business, (viii)
agreed, whether or not in writing, to do any of the foregoing, or (ix) disposed
of its assets other than in the Ordinary Course of Business.

(l) Title; Condition. Section 3(l) of the Disclosure Schedule contains a
complete, true and correct list of those assets which are material to the
business or operations of ROA (the "Practice Assets"). ROA has good and
marketable title to, or leasehold interests in, all of the Practice Assets.
Except as disclosed on Section 3(l) of the Disclosure Schedule, none of the
Practice Assets is subject to a contract or other agreement of sale or subject
to security interests, mortgages, encumbrances, liens (including income,
personal property and other tax liens) or charges of any kind or character. Upon
completion of the merger, ROA shall own or lease the Practice Assets free and
clear of all liens and encumbrances except as disclosed in Section 3(l) of the
Disclosure Schedule.

- 9 -
<PAGE>

actions, suits, proceedings, hearings, and investigations set forth in Section
3(m) of the Disclosure Schedule could result in any material adverse change in
the operations, results of operations, or future prospects of the business
assets to be operated by SCN after the Closing.

(n) Permits and Licenses. ROA and all physicians and other health care
professionals engaged or employed by ROA have all permits and licenses required
by all applicable laws; have made all regulatory filings necessary for the
conduct of ROA's business; and are not in violation of any of said permitting or
licensing requirements.

(o) Tax Matters. Except as set forth in Section 3(o) of the Disclosure
Schedule, ROA has filed or caused to be filed all federal, state and local tax
returns which are required to have been filed by ROA, including all income,
excise, franchise, and payroll tax returns, and ROA has paid or established an
adequate accrual reserve for all taxes accrued through the Effective Time of the
Merger and has otherwise complied with all federal, state, local and other tax
laws applicable to it.

(p) Employee Benefit Plans.

(i) List of Plans. Section 3(p) of the Disclosure Schedule contains
an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or
not any Employee Benefit Plans are otherwise exempt from the provisions of
ERISA, established, maintained or contributed to by ROA (including all
employers (whether or not incorporated) which by reason of common control
are treated together with ROA and/or the ROA Stockholders as a single
employer within the meaning of Section 414 of the Code) since September 2,
1974.

(ii) Status of Plans. ROA has never maintained and does not now
maintain or contribute to any Employee Benefit Plan subject to ERISA which
is not in substantial compliance with ERISA, or which has incurred any
accumulated funding deficiency within the meaning of Section 412 or 418B
of the Code, or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section
412 of the Code or which is subject to Title IV of ERISA. ROA has not
incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") in connection with any Employee Benefit Plan covering any
employees of ROA or ceased operations at any facility or withdrawn from
any such Plan in a manner which could subject it to liability under
Section 4062(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any liability of ROA to the PBGC
under Title IV of ERISA which could reasonably be anticipated to result in
any claims being made against ROA by the PBGC.

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<PAGE>

ROA has not incurred any withdrawal liability (including any contingent or
secondary withdrawal liability) within the meaning of Sections 4201 and
4202 of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan
(as defined in Section 4001 of ERISA), and no event has occurred, and
there exists no condition or set of circumstances, which represent a
material risk of the occurrence of any withdrawal from or the partition,
termination, reorganization or insolvency of any Multiemployer Plan which
would result in any liability of ROA .

(iii) Contributions. Full payment has been made of all amounts which
ROA is required, under applicable law or under any Employee Benefit Plan
or any agreement relating to any Employee Benefit Plan to which ROA is a
party, to have paid as contributions thereto as of the last day of the
most recent plan year of such Employee Benefit Plan ended prior to the
date hereof. ROA has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under
the terms of any Employee Benefit Plan or related agreements. Benefits
under all Employee Benefit Plans are as represented and have not been
increased subsequent to the date as of which documents have been provided.

(iv) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and, to the Knowledge of ROA,
nothing has occurred since the date of the last such determination which
resulted or is likely to result in the revocation of such determination.

(v) Transactions. ROA has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a material
tax, penalty or liability for prohibited transactions under ERISA or the
Code nor have any of its directors, officers or employees to the extent
they or any of them are fiduciaries with respect to such plans, breached
any of their responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA which would result in any material claim being made
under or by or on behalf of any such plans by any party with standing to
make such claim.

(vi) Other Plans. ROA presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit
plans other than those listed on Section 3(p) of the Disclosure Schedule.

(vii) Documents. ROA has delivered or caused to be delivered to SCN
true and complete copies of (i) all Employee Benefit Plans as in effect,
together with all amendments thereto which will become effective at a
later date, as well as the latest Internal Revenue Service determination
letter obtained with respect

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<PAGE>

to any such Employee Benefit Plan qualified under Section 401 or 501 of
the Code, and (ii) the most recently filed Form 5500 for each Employee
Benefit Plan required to file such form.

(q) Third-Party Relations. ROA has not received notice that any material
patients, supplier, employee or associated physician intends to cease doing
business with ROA.

(r) Compliance with Applicable Laws. Except as set forth in Section 3(r)
of the Disclosure Schedule, to ROA's Knowledge, ROA has operated in compliance
with all federal, state, county and municipal laws, constitutions, ordinances,
statutes, rules, regulations and orders applicable thereto ("Applicable Laws").
No item disclosed in Section 3(r) of the Disclosure Schedule has a material
effect on the operations of ROA. To ROA's Knowledge, neither ROA nor any
physician associated with or employed by ROA has received payment or any
remuneration whatsoever to induce or encourage the referral of patients or the
purchase of goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b),
or otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any
fraud or abuse been alleged within the last five (5) years by any government
agency.

(s) Employee Compensation. ROA has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
physician employees are entitled through the Closing Date, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of ROA's physician employees.

(t) Environmental Matters.

(i) Except as set forth in Section 3(t) of the Disclosure Schedule,
ROA is in material compliance with all applicable Environmental Laws.

(ii) ROA has not authorized or conducted nor does ROA have Knowledge
of the disposal or release, or other handling of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent, toxic
substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction thereof), natural gas, liquefied gas, synthetic gas, biohazardous
or biomedical material, or other material defined, regulated controlled or
potentially subject to any remediation requirement under any Environmental
Law (collectively "Hazardous Materials"), on, in, under or affecting or
any property owned or leased by ROA.

(iii) ROA has, and is in compliance with, all licenses, permits,
registrations, and government authorizations necessary to operate under
all applicable Environmental

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<PAGE>

Laws. Section 3(t) of the Disclosure Schedule lists all such licenses,
permits, registrations and government authorizations required by any
Environmental Law.

(iv) Except as disclosed in Section 3(t) of the Disclosure Schedule,
ROA has not received any written or oral notice from any governmental
agency or entity or any other Person and there is no pending or threatened
claim, litigation or any administrative agency proceeding that: (a)
alleges a violation of any Environmental Law(s) by ROA or, with respect to
the Practice Assets or any property owned or leased by ROA (b) alleges
that ROA is a liable party or potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq., or any analogous state law, (c) has resulted or
could result in the attachment of an environmental lien on any of the
Practice Assets or property owned or leased by ROA, or (d) alleges that
ROA is liable for any contamination of the environment, contamination of
any property owned or leased by ROA, damage to natural resources, property
damage, or personal injury based on its activities or the activities of
any predecessor or third parties involving Hazardous Materials, whether
arising under the Environmental Laws, common law principles, or other
legal standards.

(u) Healthcare Compliance. ROA is participating in or otherwise authorized
to receive reimbursement from Medicare and Medicaid and is a party to other
third-party payor agreements if any, discussed in Section 3(i) of the Disclosure
Schedule. All necessary certifications and contracts required for participation
in such programs are in full force and effect and have not been amended or
otherwise modified, rescinded, revoked or assigned, and no condition exists or
event has occurred which in itself or with the giving of notice or the lapse of
time or both would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such third-party payor program. ROA is in compliance in
all material respects with the requirements of all such third-party payors
applicable thereto. ROA, its Stockholders, and its physician employees do not
have any financial relationship (whether investment interest, compensation
interest, or otherwise) with any entity to which any of the foregoing refer
patients, except for such financial relationships that qualify for exceptions to
state and federal laws restricting physician referrals to entities in which they
have a financial interest.

(v) Fraud and Abuse. To ROA's Knowledge, ROA, the ROA Stockholders and
persons and entities providing professional services for ROA have not engaged in
any activities which are prohibited under 42 U.S.C. ss. 1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related state
or local statutes or regulations, or which are prohibited by rules of
professional conduct, including the following: (a) knowingly and willfully
making or causing to be made a false statement or representation of a material
fact in any application for any benefit or payment; (b) knowingly and willfully
making or causing to be made any false statement or representation of a material
fact for use in determining rights to any benefit or payment; (c) failing to
disclose knowledge by a claimant of the

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<PAGE>

occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another, with intent to
fraudulently secure such benefit or payment; and (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay or receive such remuneration (i) in return for referring an
individual to a person for the furnishing or arranging for the furnishing or any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid, or (ii) in return for purchasing, leasing, or ordering or arranging
for or recommending purchasing, leasing, or ordering any good, facility, service
or item for which payment may be made in whole or in part by Medicare or
Medicaid.

(w) Practice Compliance. ROA is duly licensed as a medical practice and is
lawfully operated in accordance with the requirements of all Applicable Laws and
has all necessary authorizations for the use and operation of a medical
practice, all of which are in full force and effect. There are no outstanding
notices of deficiencies relating to ROA issued by any governmental authority or
third-party payor requiring conformity or compliance with any applicable law or
condition for participation with such governmental authority or third-party
payor, and after reasonable and independent inquiry and due diligence and
investigation, ROA has neither received notice nor has any Knowledge or reason
to believe that such necessary authorizations may be revoked or not renewed in
the Ordinary Course of Business.

(x) Rates and Reimbursement Policies. The jurisdiction in which ROA is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by ROA. ROA
does not have any rate appeal currently pending before any governmental
authority or any administrator of any third-party payor program. ROA has no
Knowledge of any Applicable Law, which affects rates or reimbursement procedures
which has been enacted, promulgated or issued within the eighteen (18) months
preceding the date of this Agreement or any such legal requirement proposed or
currently pending in the jurisdiction in which ROA is located, which could have
a material adverse effect on ROA or may result in the imposition of additional
Medicaid, Medicare, charity, free care, welfare, or other discounted or
government assisted patients at ROA or require ROA to obtain any necessary
authorization which ROA does not currently possess.

(y) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
ROA, as being due to ROA, as at the Closing Date have arisen in the Ordinary
Course of Business; and none of such accounts receivable or other debts is or
will at the Closing Date be subject to any counterclaim or set-off except to the
extent of any such provision or reserve. There has been no material adverse
change since December 31, 1995 in the amount of accounts receivable or other
debts due ROA, the allowances with respect thereto, or accounts payable of ROA
from that reflected in the Balance Sheet previously delivered by ROA to SCN.

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<PAGE>

(z) Guaranties. ROA is not a guarantor and otherwise is not liable for any
liability or obligation (including indebtedness) of any other Person.

(aa) Powers of Attorney. There are no outstanding powers of attorney
executed by ROA, except as may be contained in financing documents or security
agreements listed in Section 3(i) of the Disclosure Schedule.

(ab) Tangible Assets. ROA owns or leases all land, buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted. To ROA's knowledge each tangible asset has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear).

(ac) Full Disclosure. No representation or warranty made by ROA in this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.

4. Representations and Warranties of SCN. SCN represents and warrants to
ROA that the statements contained in this Section 4 are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 4).

(a) Organization. SCN is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.

(b) Capitalization. The entire authorized capital stock of the SCN
consists of fifty million (50,000,000) SCN Shares and two million (2,000,000)
shares of preferred stock, no par value, of which one million three hundred
sixty-five thousand (1,365,000) SCN Shares are issued and outstanding, zero (0)
SCN Shares are held in treasury and zero (0) shares of preferred stock are
issued and outstanding. All of the SCN Shares to be issued in the Merger have
been duly authorized and, upon consummation of the Merger, will be validly
issued, fully paid, and nonassessable.

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<PAGE>

of any government, governmental agency, professional regulatory organization or
court to which SCN is subject or may become subject as a result of the
transaction contemplated by this Agreement, or any provision of the charter or
bylaws of SCN or (ii) conflict with, result in a breach of, constitute a default
under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument or other arrangement to which
SCN is a party or by which it is bound or to which any of its assets is subject.
Other than state and federal filings required by the Securities Act and similar
state statutes, SCN does not need to give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.

5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.

(a) General. Each of the Parties will use its and his best efforts to take
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below) to be
satisfied by him or it. This paragraph shall not be construed to obligate any of
the parties to waive any condition precedent to his or its obligations to
perform hereunder.

(b) Notices and Consents. ROA will give any notices to third parties, and
will use its best efforts to obtain any third party consents, that SCN
reasonably may request in connection with the matters referred to in Section
3(i) above.

(c) Regulatory Matters and Approvals. Each of the Parties to this
Agreement will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing:

(i) Securities Act, Securities Exchange Act, and State Securities
Laws. SCN will prepare and, if necessary, file with the U.S. Securities
and Exchange Commission all necessary documents relating to the offering
and issuance of the SCN Shares. SCN

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<PAGE>

will take all actions that may be necessary under state securities laws in
connection with the offering and issuance of the SCN Shares.

(ii) General Corporation Law. ROA will call a special meeting of its
stockholders (the "Special ROA Meeting") as soon as practicable in order
that the ROA Stockholders may consider and vote upon the adoption of this
Agreement and the approval of the Merger in accordance with the
Pennsylvania Business Corporation Law. SCN will call a special meeting of
its stockholders (the "Special SCN Meeting") as soon as practicable in
order that the stockholders may consider and vote upon the adoption of
this Agreement and the approval of the Merger in accordance with the
Delaware General Corporation Law.

(iii) Tax Reporting. The Merger shall constitute a reorganization
under Code Section 368(a)(1)(A). Each of the parties agrees to report this
transaction for financial and income tax purposes in accordance with the
foregoing.

(d) Operation of Business. From the date of this Agreement through the
Closing Date, ROA will not engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing:

(i) ROA will not authorize or effect any change in its charter or
bylaws;

(ii) ROA will not grant any options, warrants, or other rights to
purchase or obtain any of its capital stock or issue, sell, or otherwise
dispose of any of its capital stock (except upon the conversion or
exercise of options, warrants, and other rights currently outstanding);

(iii) ROA will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock in either case outside the Ordinary Course of Business without the
consent of SCN, which consent shall not be unreasonably withheld;

(iv) ROA will not issue any note, bond, or other debt security or
create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation outside the Ordinary Course of Business;

(v) ROA will not impose any Security Interest upon any of its assets
outside the Ordinary Course of Business;

(vi) ROA will not make any capital investment in, make any loan to,
or acquire the securities or assets of any other Person outside the
Ordinary Course of Business;

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<PAGE>

(vii) ROA will not make any change in employment terms for any of
its directors, officers, and employees outside the Ordinary Course of
Business; and

(viii) ROA will not commit to any of the foregoing.

(e) Full Access. Upon three (3) days prior notice, ROA will permit
representatives of SCN to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to ROA during normal business hours. SCN will treat and hold as
such any confidential information it receives from ROA in the course of the
reviews contemplated by this Section 5(e), will not use any of the confidential
information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to ROA all tangible
embodiments (and all copies) thereof which are in its possession.

(g) Exclusivity. Until the earlier of December 31, 1996 or the Effective
Time, ROA will not solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of ROA (including any
acquisition structured as a merger, consolidation, or share exchange). ROA shall
notify SCN immediately if any Person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.

(h) Collection of Accounts Receivable. The ROA Stockholders agree to
cooperate with SCN in the collection of accounts receivable owned by ROA as of
the Effective Time acquired pursuant to this Agreement. SCN, at its option,
shall have the right to require the collection of said accounts receivable
through a lockbox or bank account sweep arrangement. In connection therewith,
the ROA Stockholders agree to execute the necessary documents and follow the
necessary procedures as described in the Service Agreement between the parties
which is attached hereto as Exhibit 7(a)(iv) to accommodate the collection of
the accounts receivable in such manner.

(i) Payment of Expenses. On or before the Effective Time, ROA shall have
paid or discharged any and all liabilities or charges owed as a result of the
transaction contemplated by this Agreement.

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<PAGE>

(j) Completion of Schedules. The parties hereto acknowledge that this
Agreement is being executed and delivered before the Disclosure Schedule has
been completed and attached hereto. SCN therefore agrees that ROA and the ROA
Stockholders may complete the Disclosure Schedule and that said Disclosure
Schedule may be attached hereto after the execution and delivery of this
Agreement; provided, however, that the Disclosure Schedule shall be in form,
substance and content acceptable to SCN in its sole discretion and shall be
completed and delivered to SCN by ROA and the ROA Stockholders on or prior to
November 8, 1996. SCN shall have the right to terminate this Agreement at any
time on or prior to November 12, 1996, in its sole discretion, based upon its
review of the Disclosure Schedule furnished by ROA and the ROA Stockholders and
the documents, events, facts or other circumstances referred to therein. In the
event this Agreement is terminated pursuant to this Section 5(j), neither party
shall be obligated to the other, except as set forth in Section 8(b).

(k) Eric Hume Employment Contract. SCN acknowledges and agrees that it
shall have the responsibility and obligation for paying the remaining obligation
of ROA under the employment contract with Eric Hume with respect to his accounts
receivable acquired pursuant to the terms of this Agreement.

6. Conditions to Obligation to Close.

(a) Conditions to Obligation of SCN. The obligation of SCN to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) The ROA Stockholders shall have received a copy of the Private
Placement Memorandum, and no less than five (5) days after receipt of the
Private Placement Memorandum, this Agreement and the Merger shall have
received the Requisite ROA Stockholder Approval and the number of
Dissenting Shares shall not exceed five percent (5%) of the number of
outstanding ROA Shares;

(ii) ROA shall have procured all of the third party consents
specified in Section 5(b) above;

(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;

(iv) ROA shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;

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<PAGE>

transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (C) affect adversely the right of the Surviving
Corporation to own the former assets or to operate the former business of
the ROA;

(vi) ROA shall have delivered to SCN a certificate to the effect
that each of the conditions specified above in Section 6(a)(i)-(v) is
satisfied in all respects;

(vii) this Agreement and the Merger shall have received the
Requisite SCN Stockholder Approval;

(viii) SCN shall have received from counsel to ROA an opinion in
form and substance as set forth in Exhibit 6(a)(viii) attached hereto,
addressed to SCN, and dated as of the Closing Date;

(ix) SCN shall have received from the ROA Stockholders subscription
documents in form and substance as set forth in Exhibit 6(a)(ix) attached
hereto;

(x) SCN shall have received the resignations, effective as of the
Closing, of each director and officer of ROA other than those whom SCN
shall have specified in writing at least five (5) business days prior to
the Closing;

(xi) all actions to be taken by ROA in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to SCN;

(xii) SCN shall have closed its financing with NationsBank of
Tennessee, N.A., on terms and conditions that are satisfactory to SCN;

(xiii) the issuance of the SCN Shares to ROA or the ROA Stockholders
will not violate federal securities laws or the securities laws of any
state of the United States;

(xiv) SCN and ROA shall have all licenses and permits necessary to
operate their respective businesses;

(xv) all physicians and employees of ROA must be properly covered by
medical malpractice insurance and, to the extent applicable, medical
malpractice tail insurance to cover prior occurrences;

(xvi) ROA shall have distributed to the ROA Stockholders all of the
assets listed on Exhibit 6(a)(xvi), which constitute the entirety of the
assets owned by ROA

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<PAGE>

not being acquired by SCN (the "Excluded Assets"). Additionally, on or
before the Effective Time, ROA shall have paid or discharged all
liabilities or charges for costs or fees owed as a result of the
transactions contemplated by this Agreement. With respect to Employee
Benefit Plans, all Plans shall be transferred to a new entity controlled
by the ROA Stockholders, and the instrument of transfer shall provide that
the new entity assumes all of the liabilities of the Plans, including but
not limited to any current or future funding liabilities;

(xvii) ROA shall have caused the payoff of all indebtedness owed to
banks or other financial institutions or lenders or the assumption thereof
by a new entity organized by the ROA Stockholders;

(xviii) ROA shall have established an adequate accrual reserve for
payment of the taxes accrued with respect to the taxable periods or
portion thereof ended as of the Effective Time of the Merger contemplated
herein; and

(xix) On or before the Effective Time, the transactions contemplated
by (i) that certain Merger Agreement between SCN and Vero Orthopaedics,
Inc. dated November 12, 1996, and (ii) that certain Stock Purchase
Agreement between SCN and the stockholders of Princeton Orthopaedic
Associates, P.A. dated October 21, 1996, shall have been consummated; and

(xx) on or before the Closing Date, ROA will satisfy and discharge
any and all liabilities to any employee of ROA for accrued vacation time
and accrued sick time in excess of one week.

SCN may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

(b) Conditions to Obligation of ROA. The obligation of ROA to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) this Agreement and the Merger shall have received the Requisite
SCN Stockholder Approval;

(ii) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the
Closing Date;

(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

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<PAGE>

(v) SCN shall have delivered to ROA a certificate to the effect that
each of the conditions specified above in Section 6(b)(i)-(iv) is
satisfied in all respects;

(vi) ROA shall have received from counsel to SCN an opinion in form
and substance as set forth in Exhibit 6(b)(vi) attached hereto, addressed
to the ROA Stockholders, and dated as of the Closing Date;

(vii) this Agreement and the Merger shall have received the
Requisite ROA Stockholder Approval;

(viii) SCN shall have prepared and, if necessary, filed with the
U.S. Securities and Exchange Commission all necessary documents relating
to the offering and issuance of SCN Shares. SCN shall have taken all
actions that were necessary under state securities laws in connection with
the offering and issuance of the SCN Shares. Moreover, SCN shall have
provided the Private Placement Memorandum to the ROA Stockholders;

(ix) upon review of the Private Placement Memorandum, the ROA
Stockholders shall have elected to close the transaction by delivery to
SCN of completed subscription documents in form and substance as set forth
in Exhibit 6(a)(ix);

(xi) there shall have been no changes in the Applicable Laws
affecting SCN's proposed operations as described in the Private Placement
Memorandum; and

(xii) On or before the Effective Time, the transactions contemplated
by (i) that certain Merger Agreement between SCN and Vero Orthopaedics,
Inc. dated November 12, 1996, and (ii) that certain Stock Purchase
Agreement between SCN and the stockholders of Princeton Orthopaedic
Associates, P.A. dated October 21, 1996, shall have been consummated.

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<PAGE>

ROA may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.

7. Items to be Delivered at or Prior to Closing.

(a) By the ROA Stockholders or ROA. The ROA Stockholders or ROA, as
applicable, shall execute and deliver to ROA, prior to or at the Closing:

(i) Certified resolutions of ROA authorizing the execution of all
documents and the consummation of all transactions contemplated hereby;

(ii) The Pennsylvania Articles of Merger which shall be in
substantially the form attached hereto as Exhibit 2(c)(i);

(iii) Stock Certificates representing ownership of all shares of ROA
(other than Dissenting Shares), duly endorsed to SCN;

(iv) A Service Agreement in substantially the form attached hereto
as Exhibit 7(a)(iv);

(v) The Certificate required by Section 6(a)(vi);

(vi) An opinion from ROA's counsel in substantially the form
attached hereto as Exhibit 6(a)(viii);

(vii) Subscription Documents in substantially the form attached
hereto as Exhibit 6(a)(ix);

(viii) The ROA Stockholders Schedule required to be delivered
pursuant to Section 2(d)(v); and

(ix) Such other instruments as may be reasonably requested by SCN in
order to effect to or carry out the intent of this Agreement.

(b) By SCN. SCN shall deliver to ROA at or prior to the Closing:

(i) Cash and Stock Certificates representing the SCN Shares being
issued to each of the ROA Stockholders pursuant to Section 2(d)(v);

(ii) The Delaware Articles of Merger in substantially the form
attached hereto Exhibit 2(c);

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<PAGE>

(iii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 6(b)(vi);

(v) The SCN Stockholder's Agreement attached hereto as Exhibit
7(b)(v); and

(vi) Such other instruments as may be reasonably requested by the
ROA Stockholders in order to effect to or carry out the intent of this
Agreement.

8. Termination.

(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;

(ii) SCN may terminate this Agreement by giving written notice to
ROA at any time prior to the Effective Time (A) in the event ROA has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, SCN has notified ROA of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach, (B) if the Closing shall not have occurred on or before
December 31, 1996 by reason of the failure of any condition precedent
under Section 6(a) hereof (unless the failure results primarily from SCN
breaching any representation, warranty, or covenant contained in this
Agreement) or (C) in accordance with Section 5(j);

(iii) ROA may terminate this Agreement by giving written notice to
SCN at any time prior to the Effective Time (A) in the event SCN has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, ROA has notified SCN of the breach, and
the breach has continued without cure for a period of 30 days after the
notice of breach or (B) if the Closing shall not have occurred on or
before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results primarily
from ROA breaching any representation, warranty, or covenant contained in
this Agreement);

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<PAGE>

(iv) any Party may terminate this Agreement by giving written notice
to the other Party at any time in the event this Agreement and the Merger
fail to receive the Requisite ROA Stockholder Approval or the Requisite
SCN Stockholder Approval respectively.

(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach). Notwithstanding the foregoing, in the
event the transaction contemplated by this Agreement does not close and such
failure is not the fault of SCN, then ROA agrees to reimburse SCN for
seventy-five percent of SCN's out of pocket expenses, including but not limited
to professional fees, related to the proposed transaction; provided, however,
ROA's obligation to reimburse SCN shall not exceed fifty-six thousand two
hundred fifty dollars ($56,250).

9. Indemnification.

(a) Indemnification by the ROA Stockholders. The ROA Stockholders agree to
and shall jointly and severally defend, indemnify and hold harmless SCN, its
successors and assigns, officers and directors against any and all losses,
liabilities, expenses (including without limitation reasonable attorney's fees)
and damages resulting from or arising out of the breach, untruth or inaccuracy
of any representation, warranty or covenant of ROA set forth in this Agreement.
The ROA Stockholders, severally, and not jointly, agree to and shall defend,
indemnify and hold harmless SCN, its successors and assigns, officers and
directors against any and all losses, liabilities, expenses (including without
limitation reasonable attorney's fees) and damages resulting from or arising out
of the breach, untruth or inaccuracy of any individual representation, warranty
or covenant relating to an ROA Stockholder set froth in this Agreement. The ROA
Stockholders shall not be liable to SCN for any claims against the ROA
Stockholders under this Section 9(a) unless and until the aggregate of all
claims against the ROA Stockholders exceeds the sum of $25,000.00, whereupon SCN
shall be entitled to recover the full amount of all claims, including the
initial $25,000.00. Notwithstanding the foregoing provisions, the obligations of
any ROA Stockholder executing this Agreement to indemnify SCN shall not exceed
the value of the portion of the SCN Shares and cash delivered to such ROA
Stockholder at the Closing.

(b) Notice to the ROA Stockholders; Opportunity to Defend. SCN agrees to
give prompt notice to the ROA Stockholders of the assertion of any claim, or the
commencement of any suit, action or proceeding, in respect of which indemnity
may be sought under Section 9(a). The ROA Stockholders may participate in and at
their election, or at the request of SCN, assume the defense of any such suit,
action or proceeding at the ROA Stockholders's expense. The ROA Stockholders
shall not be liable under Section 9(a) for any settlement effected without their
consent of any claim, litigation or proceeding in respect of

- 25 -
<PAGE>

which indemnity may be sought under Section 9(a) which consent shall not be
unreasonably withheld.

(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the ROA Stockholders, their heirs and assigns
against any and all losses, liabilities, expenses (including without limitation
reasonable attorney's fees) and damages resulting from the breach, untruth or
inaccuracy of any representation, warranty or covenant of SCN set forth in this
Agreement. SCN shall not be liable to the ROA Stockholders for any claims
against ROA under this Section 9(c) unless and until the aggregate of all claims
against SCN exceeds the sum of $25,000.00, whereupon the ROA Stockholders shall
be entitled to recover the full amount of all claims, including the initial
$25,000.00.

(d) Notice to SCN; Opportunity to Defend. The ROA Stockholders agree to
give prompt notice to SCN of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought under
Section 9(c). SCN may participate in and at its election, or at the request of
the ROA Stockholders, assume the defense of any such suit, action or proceeding
at SCN's expense. SCN shall not be liable under Section 9(c) for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder, which consent shall not be
unreasonably withheld.

(e) Survival. The representations and warranties of the ROA Stockholders,
ROA and SCN contained in this Agreement and the indemnifications contained
herein shall survive the Closing. No claim for indemnification with respect to
any alleged misrepresentation or breach of warranty may be made after two (2)
years following the Closing Date. Any matter to which indemnification pertains
and with respect to which a claim has been asserted or threatened following the
Closing Date shall continue to be subject to the indemnification under this
Agreement until finally terminated, settled, resolved or adjudicated; and all
terms, conditions and stipulations of this Agreement shall likewise continue to
apply.

(f) Security for Indemnity. The ROA Stockholders hereby agree that in the
event (i) any final judgment is rendered in favor of SCN, (ii) SCN is entitled
to indemnification pursuant to the provisions of this Agreement and (iii) the
ROA Stockholders do not pay to SCN the amount due hereunder, then SCN shall have
the right to redeem any SCN Share then owned by the ROA Stockholders pursuant to
the terms of the Stockholder's Agreement.

10. Miscellaneous.

(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.

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<PAGE>

(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

If to ROA: Copy to:

Richard H. Rothman, M.D., PhD, Stephen M. Goodman, Esq.
President Morgan, Lewis & Bockius, LLP
Reconstructive Orthopaedic 2000 One Logan Square
Assocs., Inc. Philadelphia, Pennsylvania 19103
800 Spruce Street Facsimile: (215) 963-4663
Philadelphia, Pennsylvania 19107

If to SCN: Copy to:

Kerry R. Hicks, President David T. Popwell, Esq.
Specialty Care Network, Inc. Baker, Donelson, Bearman & Caldwell
44 Union Boulevard, Suite 600 165 Madison Ave, Suite 2100
Lakewood, Colorado 80228 Memphis, Tennessee 38103
Facsimile: (303) 716-1298 Facsimile: (901) 577-2303

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<PAGE>

(h) Amendments and Waivers. The parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the prior
authorization of their respective boards of directors; provided, however, that
any amendment effected subsequent to stockholder approval will be subject to the
restrictions contained in the Delaware General Corporation Law and the
Pennsylvania Business Corporation Law. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by both
of the parties. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

(j) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

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<PAGE>

(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

* * * * *

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Title:________________________________

RECONSTRUCTIVE ORTHOPAEDIC
ASSOCIATES, INC.

By:___________________________________
Title:________________________________

______________________________________

ROA STOCKHOLDERS:

______________________________________
RICHARD H. ROTHMAN, M.D.

______________________________________
ROBERT E. BOOTH, JR., M.D.

______________________________________
RICHARD A. BALDERSTON, M.D.

______________________________________
ARTHUR R. BARTOLOZZI, M.D.

______________________________________
WILLIAM J. HOZACK, M.D.

- 29 -
<PAGE>

______________________________________
MICHAEL G. CICCOTTI, M.D.

______________________________________
TODD J. ALBERT, M.D.

______________________________________
ALEXANDER R. VACCARO, M.D.

______________________________________
PETER F. SHARKEY, M.D.

- 30 -

<PAGE>

SERVICE AGREEMENT

BY AND BETWEEN

TOC SPECIALISTS, P.L.,
(d/b/a Tallahassee Orthopedic Clinic)

TOC SERVICES, INC.
(f/k/a Tallahassee Orthopedic Clinic, P.A.)

AND

Greg A. Alexander, M.D.
David C. Berg, M.D.
Richard E. Blackburn, M.D.
Donald Dewey, M.D.
Mark E. Fahey, M.D.
Tom C. Haney, M.D.
William D. Henderson, Jr., M.D.
Steve E. Jordan, M.D.
J. Rick Lyon, M.D.
Kris D. Stowers, M.D.
Robert L. Thornberry, M.D.
Billy C. Weinstein, M.D.
Charles H. Wingo, M.D.

Dated as of November 12, 1996

<PAGE>

TABLE OF CONTENTS Page
----

ARTICLE I.
RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship........................................ 1
1.2. Responsibilities of the Parties................................. 2
1.3. TOC Matters..................................................... 2
1.4. Patient Referrals............................................... 2
1.5. Professional Judgment........................................... 2

ARTICLE II.
DEFINITIONS

2.1. Definitions..................................................... 2

ARTICLE III.
PRACTICE OFFICES FURNISHINGS, EQUIPMENT AND TRADE NAME
TO BE PROVIDED BY COMPANY

3.1. Practice Offices................................................ 7
3.2. Use of Practice Offices......................................... 8
3.3. Furniture, Fixtures and Equipment............................... 8
3.4. Tradename....................................................... 8
4.1. Formation and Operation of the Policy Board..................... 8
4.2. Duties and Responsibilities of the Policy Board................. 8

ARTICLE V.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions............................. 9
5.2. Financial Planning and Goals................................... 10
5.3. Audits and Financial Statements................................ 10
5.4. Inventory and Supplies......................................... 10
5.5. Management Services and Administration......................... 10
5.6. Personnel...................................................... 13
5.7. Events Excusing Performance.................................... 13
5.8. Compliance with Law and Business Standards..................... 13
5.9. Quality Assurance.............................................. 13
5.10. New Medical Services and Additional Practice Offices........... 13
5.11. Collection of Certain Patient Receipts and Payment
of Clinic Expenses ............................................ 14

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Page
----

5.12. Other TOC Accounts............................................. 14

5.13. Discounts...................................................... 14
5.14 MRI Services................................................... 14

ARTICLE VI.
OBLIGATIONS OF TOC AND PHYSICIAN OWNERS

6.1. Professional Services.......................................... 15
6.2. Medical Practice............................................... 15
6.3. Employment of Physician Employees.............................. 15
6.4. Professional Dues and Education Expenses....................... 16
6.5. Professional Insurance Eligibility............................. 16
6.6. Events Excusing Performance.................................... 16
6.7. Fees for Professional Services................................. 16
6.8. Peer Review.................................................... 16
6.9. TOC Employee Benefit Plans..................................... 17
6.10. Credentialing.................................................. 18

ARTICLE VII.
RESTRICTIVE COVENANTS AND ENFORCEMENT

7.1. Exclusive Arrangement.......................................... 19
7.2. Restrictive Covenants.......................................... 19
7.3. Restrictive Covenants By Future Physician Employees............ 20
7.4. Rights of Company.............................................. 21
7.5. Enforcement.................................................... 21
7.6. Modification of Restrictive Covenants.......................... 21

ARTICLE VIII.
FINANCIAL ARRANGEMENTS

8.1. Service Fees................................................... 22
8.2. Payment of Service Fee......................................... 25
8.3. Purchase of Accounts Receivable................................ 26
8.4. Payment of Clinic Expenses..................................... 27

ARTICLE IX.
RECORDS

9.1. Patient Records................................................ 27
9.2. Records Owned by Company....................................... 27

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Page
----

9.3. Access to Records.............................................. 28
9.4. Government Access to Records................................... 28

ARTICLE X.
INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by TOC.............................. 28
10.2. Insurance to be Maintained by Company.......................... 28
10.3. Additional Insureds............................................ 29
10.4. Indemnification................................................ 29

ARTICLE XI.
TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement.............................................. 30
11.2. Extended Term.................................................. 30
11.3. Termination by TOC for Cause................................... 30
11.4. Termination by Company for Cause............................... 31
11.5. Early Termination by TOC or Company Without Cause Upon
Eighteenth (18th) Month Anniversary of Agreement............... 32
11.6. Consequences of TOC Termination................................ 32
11.7. Closing of Purchase by TOC and Effective Date of Termination... 33
11.8. Tail Policy.................................................... 33
11.9. Restrictions Applicable to Physician Owners.................... 33

ARTICLE XII.
DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds...................................... 36
12.2. Temporary Space................................................ 36

ARTICLE XIII.
REPRESENTATIONS AND WARRANTIES OF TOC AND PHYSICIAN OWNERS

13.1. Validity....................................................... 37
13.2. Litigation..................................................... 37
13.3. Permits........................................................ 37
13.4. Authority...................................................... 37
13.5. Compliance with Applicable Law................................. 38
13.6. Health Care Compliance......................................... 38
13.7. Fraud and Abuse................................................ 38

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Page
----

13.8. TOC Compliance................................................. 38
13.9. Rates and Reimbursement Policies............................... 39
13.10.Accounts Receivable............................................ 39
13.11.Full Disclosure................................................ 41
13.12.Exhibits....................................................... 41

ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES OF COMPANY

14.1. Organization................................................... 42
14.2. Authority...................................................... 42

14.3. Absence of Litigation.......................................... 42
14.4. Transactions with Affiliates................................... 42

ARTICLE XV.
COVENANTS OF TOC AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements................... 42
15.2. Necessary Authorizations/Assignment of Licenses and Permit..... 42
15.3. Transaction with Affiliates.................................... 43
15.4. Compliance with All Laws....................................... 43
15.5. Third-Party Payor Programs..................................... 43
15.6. Change in Business or Credit and Collection Policy............. 43
15.7. Treatment of Accounts Receivable............................... 43
15.8. Security Interest.............................................. 44

ARTICLE XVI.
GENERAL PROVISIONS

16.1. Assignment..................................................... 44
16.2. Whole Agreement; Modification.................................. 45
16.3. Notices........................................................ 45
16.4. Binding on Successors.......................................... 46
16.5. Waiver of Provisions........................................... 46
16.6. Governing Law.................................................. 46
16.7. No Practice of Medicine........................................ 46
16.8. Severability................................................... 46
16.9. Additional Documents........................................... 46
16.10.Attorneys' Fees................................................ 46
16.11.Time is of the Essence......................................... 46
16.12.Confidentiality................................................ 46

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Page
----

16.13.Contract Modifications for Prospective Legal Events............ 47
16.14.Remedies Cumulative............................................ 47
16.15.Language Construction.......................................... 47
16.16.No Obligation to Third Parties................................. 47
16.17.Communications................................................. 47

<PAGE>

SERVICE AGREEMENT

THIS SERVICE AGREEMENT ("Agreement") dated as of November 12, 1996, by and
between TOC SERVICES, INC. (f/k/a Tallahassee Orthopedic Clinic, P.A.), a
Florida corporation ("Company"), TOC SPECIALISTS, P.L. (d/b/a Tallahassee
Orthopaedic Clinic), a Florida professional limited liability company, ("TOC")
and GREG A. ALEXANDER, M.D., DAVID C. BERG, M.D., RICHARD E. BLACKBURN, M.D.,
DONALD DEWEY, M.D., MARK E. FAHEY, M.D., TOM C. HANEY, M.D., WILLIAM D.
HENDERSON, JR., M.D., STEVE E. JORDAN, M.D., J. RICK LYON, M.D., KRIS D.
STOWERS, M.D., ROBERT L. THORNBERRY, M.D., BILLY C. WEINSTEIN, M.D. AND CHARLES
H. WINGO, M.D ("Physician Owner[s]"), citizens and residents of Florida.

W I T N E S S E T H:

WHEREAS, Company has been formed to engage in the business of managing
medical clinics and providing support services to and furnishing orthopedic care
medical practices with the necessary equipment, personnel, supplies and support
staff; and

WHEREAS, TOC and Physician Owners desire to obtain the services of Company
in performing such management functions so as to permit TOC and Physician Owners
to devote TOC's and Physician Owners' efforts on a concentrated and continuous
basis to the rendering of medical services to patients.

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship. TOC, Physician Owners and Company intend to
act and perform as independent contractors, and the provisions hereof are not
intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, TOC, and Physician Owners agree that TOC and Physician
Owners shall retain all authority to direct the medical, professional, and
ethical aspects of TOC's and Physician Owners' medical practice including but
not limited to the admission of new patients and providing care to indigent
patients. Each party shall be solely responsible for and shall comply with all
state and federal laws pertaining to employment taxes, income withholding,
unemployment compensation contributions and other employment related statutes
applicable to that party.

<PAGE>

1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide TOC with offices and facilities, equipment,

supplies, certain support personnel, management and financial advisory services.
As more specifically set forth herein, TOC shall be responsible for the
recruitment and hiring of physicians and all issues related to the professional
practice of medicine, medical practice patterns and documentation thereof.
Notwithstanding anything herein to the contrary, no "designated health service,"
as defined in 42 U.S.C. ss. 1395nn, including any amendments or successors
thereto, shall be provided by Company under this Agreement.

1.3. TOC Matters. Matters involving the internal agreements and finances
of TOC, including the disposition of professional fee income, tax planning, and
investment planning (and expenses relating solely to these internal business
matters) shall remain the sole responsibility of TOC.

1.4. Patient Referrals. The parties agree that the benefits to TOC and
Physician Owners hereunder do not require, are not payment for, and are not in
any way contingent upon the admission, referral or any other arrangement for the
provision of any item or service offered by Company to any of TOC's patients in
any facility operated by Company.

1.5. Professional Judgment. Each of the parties acknowledges and agrees
that the terms and conditions of this Agreement pertain to and control the
business and financial relationship between and among the parties but do not
pertain to and do not control the professional and clinical relationship between
and among TOC, Physician Employees, TOC Employees, and TOC's patients. Nothing
in this Agreement shall be construed to alter or in any way affect the legal,
ethical, and professional relationship between and among TOC, Physician Owners,
Physician Employees, and TOC's patients, nor shall anything contained in this
Agreement abrogate any right, privilege, or obligation arising out of or
applicable to the physician-patient relationship.

ARTICLE II.

DEFINITIONS

2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:

"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.

"Accounts Receivable" means, with respect to TOC and except as noted
below, all accounts and any and all rights to payment of money or other forms of
consideration of any kind now owned or hereafter acquired (whether classified
under the Uniform Commercial Code as accounts, chattel paper, general
intangibles or otherwise) for goods sold or leased or for services rendered by
TOC, including, but not limited to, accounts receivable, proceeds of any letters
of credit naming TOC as beneficiary, chattel paper, insurance proceeds, contract
rights, notes, drafts, instruments, documents, acceptances and all other debts,
obligations and liabilities in whatever form from any other Person;

- 2 -
<PAGE>

provided that, cash, checks and credit card purchases are not included in the
definition of Accounts Receivable.

Accounts Receivable do not include any receivables arising from facility
fees earned from the use and operation of TOC's magnetic resonating imaging
facilities. All such receivables shall be referred to as "MRI Receivables", and
all revenue resulting from such activities shall be deemed "MRI Revenue."
Accounts Receivable shall also not include (i) any facility fees arising out of
TOC's direct or indirect ownership interest in Tallahassee Orthopaedic Surgery
Center, (ii) any revenues or fees generated by any Physician Owner for services
provided outside of TOC, including medical directorships, research and
development activities, sports affiliations and literary works, or (iii) any
revenues generated by any new medical service or additional practice office not
acquired by Company pursuant to Section 5.10 below.

"Base Service Fee" shall equal [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxx]per year, payable in monthly payments of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx] in arrears on or before the 15th day of the following month.

"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.

"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

- 3 -
<PAGE>

"Company" shall mean TOC Services, Inc. a Florida corporation, together
with its permitted successors and assigns.

"Company Expenses" shall have the meaning as defined in Section 8.1.7.

"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.

"Disabled" or "Disability" shall mean that a Physician suffers from a
mental or physical condition resulting in such Physician Employee's inability to
perform the essential functions of his job as required by Section 6.1.1 (and as
may be described with greater specificity in written job descriptions prepared
and maintained by TOC and approved by the Policy Board) without significant risk
to the health or safety of others, even with such reasonable accommodation as
may be available under the circumstances, and the Policy Board may reasonably
anticipate that such Physician Employee will remain disabled for at least two
years following the commencement of such disability.

"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.

"Governmental Receivables" means an Account Receivable of TOC which (i)
arises in the ordinary course of business of TOC, (ii) has as its Third-Party
Payor the United States of America

- 4 -
<PAGE>

or any state or any agency or instrumentality of the United States of America or
any state which makes any payments with respect to Medicare or Medicaid or with
respect to any other program (including CHAMPUS) established by federal or state
law, and (iii) is required by federal or state law to be paid or to be made to
TOC as a healthcare provider. Governmental Receivables shall not, however, refer
to amounts payable by private insurers under contract to provide benefits under
the Federal Employee Health Benefit Program.

"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.

"Lease" shall mean the Leases and the New Leases, including all amendments
thereto, described in Section 3.1 hereof.

"Leased Premises" shall mean the real property described in the Lease.

"Lender" shall have the meaning as defined in Section 7.2.1.

"Main Office" shall mean the Leased Premises at 3334 Capital Medical
Blvd., Tallahassee, Florida 32300 and all equipment and facilities owned or
operated by Company and utilized by TOC or any of its employees within said
Leased Premises.

"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.

"Merger" shall mean the acquisition of Company pursuant to the Merger
Agreement.

"Merger Agreement" means that certain Merger Agreement, dated November 12,
1996 by and between Company, Special Care Network, Inc. ("SCN") and Physician
Owners.

"Merger A/R" means the accounts receivable acquired from Company by SCN
pursuant to the Merger Agreement.

"Necessary Authorizations" means with respect to TOC, all certificates of
need, authorization, certifications, consents, approvals, permits, licenses,

notices, accreditations and exemptions, filings and registrations, and reports
required by Applicable Law, including, without limitation, Health Care

- 5 -
<PAGE>

Law, which are required, necessary or reasonably useful to the lawful ownership
and operation of TOC's business.

"New Lease" shall have the meaning as defined in Section 3.1.

"Office Locations" shall have the meaning as defined in Section 3.1.

"Physician Employees" shall mean the term as defined in Section 8.1.6.

"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.

"Physician Owners" shall mean those Physician Employees who own an
interest, directly or indirectly, in the equity of TOC.

"Plans" shall have the meaning as defined in Section 6.9.1.

"Policy Board" shall mean a board established pursuant to Section 4.1.

"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.

"Practice Offices" shall mean (i) the Main Office and (ii) the Satellite
Offices.

"Professional Services Revenue" shall mean the term as defined in Section
8.1.2.

"Purchase Price" shall mean the term as defined in Section 8.4.2.

"Purchased A/R" means, with respect to TOC, the Accounts Receivable
purchased pursuant to Section 8.3 of this Agreement.

"TOC Operating Account" shall mean that certain operating account
established by TOC at a bank selected by TOC in TOC's sole discretion as more
fully described in Section 5.11.

"TOC Plan" shall mean the term as defined in Section 6.9.1.

"Satellite Office" shall mean the location at which one or more of TOC's
employees provide services as described on Exhibit 2.1 and all equipment and
facilities owned or operated by Company and utilized by any of said persons at
such location.

"Settlement Date" shall mean the term as defined in Section 8.3.3.

- 6 -
<PAGE>

"Service Agreement" means this Agreement.

"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).

"Technical Employees" shall mean the term as defined in Section 8.1.4.

"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.

ARTICLE III.

PRACTICE OFFICES FURNISHINGS, EQUIPMENT AND TRADE NAME
TO BE PROVIDED BY COMPANY

3.1. Practice Offices. (a) Company has leasehold interests as lessee
arising out of the leases described on Exhibit 3.1 (the "Leases") and relating
to certain offices and locations which comprise the principal location of TOC's
administrative and medical offices ("Main Office") and a satellite office
("Satellite Office") as identified on Exhibit 3.1 (collectively the "Office
Locations"). Copies of the Leases are attached hereto as Exhibit 3.1.

(b) Company agrees to provide offices and facilities necessary and
suitable for an orthopedic, neurology and family medicine medical practice at
the Office Locations (or at comparable facilities on the termination of the
Leases) to TOC. If any Leases are terminated by their terms, Company shall enter
into a lease of a new facility comparable to the Office Location whose lease is
terminated (the "New Lease") with the consent of the Policy Board. Company shall
not enter into a lease for a new Main Office or Satellite Office for TOC without
the approval of the Policy Board.

3.2. Use of Practice Offices. Neither Company nor TOC shall use or occupy
the Main Office or Satellite Offices for any purpose which is prohibited by the
Leases, by this Agreement or which is directly or indirectly forbidden by law,
ordinance, or governmental or municipal regulation or order, or which may be

dangerous to life, limb or property, or which would increase the fire and
extending coverage insurance rate in any Practice Office or contents.

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3.3. Furniture, Fixtures and Equipment. Company agrees to provide all
furniture, furnishings, fixtures, medical and other equipment necessary and
suitable for an orthopaedic, neurology and family medicine medical practice at
each Office Location.

3.4. Tradename. Company shall license to TOC during the term of this
Agreement the trade name "Tallahassee Orthopaedic Clinic."

ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board. The parties shall
establish a Policy Board which shall be responsible for developing management
and administrative policies for the overall operation of any Practice Office.
The Policy Board shall consist of six (6) members. Company shall designate, in
its sole discretion, three (3) members of the Policy Board. TOC shall designate,
in TOC's sole discretion, three (3) members of the Policy Board. Any matter
decided by a majority of the members of the Policy Board shall constitute the
decision of the Policy Board with respect to the matter. Governance issues
affecting the Policy Board shall be addressed in accordance with the rules set
forth in Exhibit 4.1.

4.2. Duties and Responsibilities of the Policy Board. The Policy Board
shall have the following duties and obligations:

4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by TOC for any renovations, capital improvements, expansions and
new and replacement equipment purchases or leases. The Policy Board shall
determine whether such expenditures are appropriate based upon economic
feasibility, physician support, productivity, market conditions, and the annual
budget formulated pursuant to this Agreement. If the Policy Board determines
that the acquisition of additional or replacement equipment or facilities is
appropriate, then Company shall use its best efforts to arrange for the
financing and acquisition of the property.

4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the prior review and approval of the Policy Board.

4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.

4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with TOC and Company, to the extent allowed by
Applicable Law, the Policy Board shall review and advise TOC as to an

appropriate fee schedule for all physician and ancillary services rendered by
TOC, which fee schedule shall ultimately be determined by TOC in TOC's sole
discretion. In addition, the Policy Board shall approve the credit collection
policies of TOC.

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<PAGE>

4.2.5. TOC and Payor Relationships. Decisions regarding the establishment
or maintenance of relationships with institutional health care providers and
payors, or with parties under arrangements for setting up new Satellite Offices
of TOC in the future, shall be made by the Policy Board in consultation with
TOC.

4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.

4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions. Company shall manage the
day-to-day operations of the Main Practice Office and any Satellite Offices in a
business-like manner. Company shall provide or arrange for the services set
forth in this Article V, the cost of all of which shall be included in Clinic
Expenses. Company is hereby expressly authorized to perform its services
hereunder in whatever manner it deems reasonably appropriate to meet the
day-to-day requirements of Practice Office operations in accordance with the
general standards approved by the Policy Board and to maintain the lease
agreements for each of the Practice Offices, including, without limitation,
performance of some of the business office functions at locations other than the
Main Practice Office. TOC will not act in a manner which would prevent Company
from efficiently managing the day-to-day operations of the Main Practice Office
and maintaining the operations of the Satellite Offices in a business-like
manner.

Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board shall approve a budget for the upcoming fiscal year. The
budget, as described in Section 4.2.2., shall be binding upon Company and TOC.
Company shall consult with TOC and the Policy Board in the preparation of all
budgets.

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<PAGE>

Company and TOC acknowledge and agree that once a budget has been approved,
neither Company nor TOC shall make expenditures or incur expenses in excess of
budgeted amounts without the prior approval of the Policy Board.

5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of TOC and, in its sole discretion, may
cause the financial statements to be audited by a certified public accountant
selected by Company. TOC shall cooperate fully in such audit. The cost of such
audit shall be included in Clinic Expenses. If Company elects to have the
financial statements audited by a certified public accountant with a big six
accounting firm, the resulting audited financial statements shall be binding on
TOC and Company. If Company elects not to have TOC's financial statements so
audited, TOC shall have the option to obtain such an audit, by a certified
public accountant with a mutually acceptable accounting firm. Company shall
fully cooperate in such audit. The cost of such audit shall be included in
Clinic Expenses. In such event, Company and TOC shall be bound by the resulting
audited financial statements. All parties shall be entitled to copies of any
information provided to or by the auditors by or to any party. Additionally,
Company shall prepare monthly unaudited financial statements containing a
balance sheet and statements of income from Practice Office operations, and such
other matters as TOC may reasonably request which shall be delivered to TOC
within thirty (30) business days after the close of each calendar month.

5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by TOC and are
within the budget for the applicable fiscal period. Company shall not purchase
inventory, goods or supplies from any Affiliate of Company without approval of
the Policy Board and after full disclosure of all terms to the Policy Board.

5.5. Management Services and Administration.

5.5.1. TOC hereby appoints Company as TOC's sole and exclusive manager and
administrator of all day-to-day business functions. TOC agrees that the purpose
and intent of this Agreement is to relieve TOC and Physician Employees to the
maximum extent possible of the administrative, accounting, personnel and
business aspects of their practice, with Company assuming responsibility and
being given all necessary authority to perform these functions. Company agrees
that TOC and only TOC will perform the medical functions of TOC's practice.
Company will have no authority, directly or indirectly, to perform, and will not
perform, any medical function. Company may, however, advise TOC as to the

relationship between TOC's performance of medical functions and the overall
administrative and business functioning of TOC's practice. To the extent that a
Company employee assists Physician Employees in performing medical functions,
such employees shall be subject to the professional direction and supervision of
Physician Employees and in the performance of such medical functions shall not
be subject to any direction or control by, or liability to, Company, except as
may be specifically authorized by Company.

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<PAGE>

5.5.2. Subject to the restrictions of any Health Care Law, Company shall,
on behalf of TOC, bill patients and collect the professional fees for medical
services rendered by TOC, any Physician Employee, any Technical Employee and any
Physician Extender Employee, regardless of when or where such services are
rendered. All billings for Physician Employee's services shall be made in the
name of and under the provider number of TOC. TOC hereby appoints Company to be
TOC's true and lawful attorney-in-fact, for the following purposes: (i) to bill
patients, insurers, healthcare plans, and other third-party payors on behalf of
patients in TOC's name and on TOC's behalf; (ii) to collect Accounts Receivable
resulting from such billing in TOC's name and on TOC's behalf; (iii) to receive
payments from insurance companies, prepayments from health care plans, and all
other Third-Party Payors; (iv) to take possession of and endorse in the name of
TOC (and/or in the name of an individual physician, such payment intended for
purpose of payment of a physician's bill) any notes, checks, money orders,
insurance payments and other instruments received in payment of Accounts
Receivable; and (v) to initiate legal proceedings in the name of TOC to collect
any accounts and monies owed to TOC or any Physician Employee, to enforce the
rights of TOC as creditors under any contract or in connection with the
rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from TOC by Company, Company shall deposit any cash receipts collected on behalf
of TOC into the TOC Operating Account described in Section 5.11.

5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of TOC, including but not limited to
accounting, billing, patient medical records (which patient medical records
shall remain the property of TOC), and collection records. While the Company
shall maintain custody, patient medical records shall at all times be and remain
the property of TOC and shall be located at the Practice Offices so that they
are readily accessible for patient care. The Physician Employees shall have the
obligation to oversee the preparation and maintenance of patient medical
records, and to provide such medical information as shall be necessary and
appropriate to the records' clinical function and to sustain and ensure the
availability of Third-Party Payor reimbursement for services rendered. The
management of all files and records shall comply with applicable state and
federal statutes. Company shall preserve the confidentiality of patient medical
records and use information contained in such records only as permitted by law,
to the extent necessary to perform the services set forth herein.

5.5.4. Company shall supply to TOC necessary clerical, accounting,
bookkeeping and computer services, printing, postage and duplication services,

medical transcribing services and any other ordinary, necessary or appropriate
service for the operation of the Practice Offices.

5.5.5. Subject to the approval of the Policy Board, Company shall design
and implement an adequate and appropriate public relations program on behalf of
TOC, with appropriate emphasis on public awareness of the availability of
services at the Practice Offices. The public relations program shall be
conducted in compliance with Applicable Law and regulations governing
advertising by the

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<PAGE>

medical profession and applicable canons of principles of professional ethics of
TOC and Physician Employees of TOC.

5.5.6. Company shall provide the data necessary for TOC to prepare TOC's
annual income tax returns. Company shall have no responsibility for the
preparation of TOC's federal or state income tax returns or the payment of such
income taxes. Company shall prepare or cause to be prepared on TOC's behalf,
necessary employment tax returns. TOC shall be obligated to pay any taxes due on
such employment tax returns with respect to the Physician Owners.

5.5.7. Company shall assist TOC in recruiting additional physicians,
carrying out such administrative functions as may be appropriate, such as
advertising for and identifying potential candidates, obtaining credentials, and
arranging interviews; provided, however, TOC shall interview and make the
ultimate decision as to the suitability of any physician or other professional
clinical employee to become employed and to remain associated with TOC. All
physicians recruited by Company and accepted by TOC shall be the sole employees
of TOC, to the extent such physicians are hired as employees.

5.5.8. Company shall negotiate managed care contracts on behalf of TOC and
shall administer all managed care contracts in which TOC participates. TOC, at
its discretion, shall have the right to enter into or reject such contracts
negotiated by Company.

5.5.9. TOC shall have the authority to arrange for legal and accounting
services relating to matters other than day-to-day management of TOC; such other
matters including but not limited to issues relating to TOC governance issues,
compensation of Physician Owners, and issues which arise between TOC and
Company; provided, however, such fees shall be considered Excluded Expenses.

5.5.10. Company shall provide for the proper cleanliness of the Leased
Premises, and maintenance and cleanliness of the equipment, furniture and
furnishings located upon such Leased Premises.

5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.

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<PAGE>

Company shall determine and cause to be paid the salaries and fringe benefits of
all such personnel. Such personnel shall be employees of Company, with those
personnel performing patient care services subject to the professional direction
and supervision of Physician Employees. If TOC is dissatisfied with the services
of any person, TOC shall consult with Company. Company shall in good faith
determine whether the performance of that employee could be brought to
acceptable levels through counsel and assistance, or whether such employee
should be terminated. All of Company's obligations regarding staff shall be
governed by the overriding principle and goal of providing quality medical care.
Employee assignments shall be made to assure consistent and continued rendering
of quality medical support services and to ensure prompt availability and
accessibility of individual medical support staff to physicians in order to
develop constant, familiar and routine working relationships between individual
physicians and individual members of the medical support staff. If TOC disagrees
with an assignment, TOC may appeal such assignment to the Policy Board. Company
shall maintain established working relationships wherever possible and Company
shall make every effort consistent with sound business practices to honor the
specific requests of TOC with regard to the assignment of Company's employees.

5.7. Events Excusing Performance. Company shall not be liable to TOC or
Physician Owners for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which Company has no control for so long as such
events continue, and for a reasonable period of time thereafter.

5.9. Quality Assurance. Company shall assist TOC in fulfilling TOC's
obligations to patients to maintain professionally recognized quality of medical
and professional services.

5.10. New Medical Services and Additional Practice Offices. If TOC desires
to have a new medical service provided at any of the Practice Offices or desires
to establish a new clinic, a proposal of such service or the establishment of

such new clinic shall be submitted to the Policy Board. Should the Policy Board
approve the expansion of service or the establishment of such new clinic,
Company, at its option, shall have the exclusive right to provide services
necessary to support TOC in TOC's delivery of such new medical services at the
Practice Office or new clinic, as applicable; provided, however, if the type of
service is an ancillary service that would be improper under any rules,
regulations or laws for Company to offer to TOC patients, then Company shall not
have the option to provide such service. Should Company decline to provide the
necessary support service for the new service or new clinic, TOC shall be
entitled to perform such service at TOC's own expense and the revenues therefrom
shall not be included in the calculation of Company's service fees under Article
VIII of this Agreement; provided, however, that Company shall have the option to
assume

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<PAGE>

performance of the necessary support services for providing such new service or
new clinic by buying out TOC's investment in the service, at an amount equal to
the greater of: (i) TOC's Book Value as of the date of such purchase of all of
the assets owned by TOC and used in connection with the operation of such new
service or new clinic, or (ii) an amount equal to TOC's net income from the
investment, based on the twelve (12) months' operations immediately preceding
the date of purchase (and if less than twelve (12) months of operations have
occurred the actual net income from the investment on an annualized basis)
multiplied by five (5). For purposes of this Section 5.10, Book Value and net
income shall be determined on the basis of GAAP.

5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. TOC agrees to establish and maintain a bank account, which shall be
referred to as the TOC Operating Account, for the purpose of (a) depositing
proceeds from the sale of TOC's Accounts Receivable pursuant to Section 8.3 and
(b) paying (i) any Service Fees owed pursuant to Article VIII of this Agreement,
(ii) expenses which are solely the obligation of TOC (Excluded Expenses), and
(iii) compensation or distributions to Physician Owners, and the distributions
shall be made in that order of payment. TOC shall retain control of the account
but shall designate a Company employee as a signatory on the TOC Operating
Account. After the payment of any Service Fees owed pursuant to Article VIII of
this Agreement, and expenses which are solely the obligation of TOC, TOC may
withdraw amounts for distributions to Physician Owners.

5.12. Other TOC Accounts. TOC shall have the right to open or create bank
accounts in addition to the TOC Operating Account described in Section 5.11 of
this Agreement.

5.13. Discounts. All discounts on purchases made by Company on behalf of
TOC shall be passed on to TOC.

5.14 MRI Services. At the request of TOC, Company will bill and collect
the MRI Receivables. All such collections shall be deposited in a separate bank
account of TOC designated as the "MRI Account." Also, at the request of TOC,
Company will provide services to maintain the payroll records and accounting for
all full-time Technical Employees who provide only MRI Services and will pay all

employee related expenses thereto from funds deposited in the MRI Account.
Company shall also furnish to TOC a portion of the Main Office sufficient for
TOC to provide MRI Services. In exchange for these services, TOC will pay to
Company, in arrears, on the 15th day of each month, a fee equal to
[xxxxxxxxxxxxxxxxxxxxxxx] of the prior month's collection of MRI Receivables.
TOC Revenue and fees generated from MRI Services and collections of MRI
Receivables shall be kept separate from, and not commingled with, TOC's other
practice revenues and collections and TOC's Accounts Receivable.

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ARTICLE VI.

OBLIGATIONS OF TOC AND PHYSICIAN OWNERS

6.1. Professional Services.

6.1.1. TOC, its Physician Owners and Physician Employees shall provide
professional services to patients.

6.1.2. TOC, its Physician Owners and Physician Employees shall provide the
professional services to patients in compliance at all times with ethical
standards, laws and regulations applying to TOC's professional practice. TOC
shall also make all reports and inquiries to any state or federal data bank
(including the National Practitioners Data Bank) required by Applicable Law. TOC
shall use its best efforts to determine that each Physician Employee, each
Physician Extender Employee and Technical Employee associated with TOC who
provides medical care to patients of TOC is licensed by the state or states in
which he or she renders professional services. If any disciplinary or medical
malpractice action is initiated against any such individual, TOC shall
immediately provide Company with copies of any third-party documents (not
otherwise privileged) served on TOC or letters delivered to TOC. Such
information shall be deemed confidential information and shall, notwithstanding
such disclosure, remain subject to all privileges and immunities provided by
Applicable Law. Company shall take all steps reasonably necessary to assure that
such privileges and immunities remain intact. TOC shall carry out a program to
monitor the quality of medical care practiced at the Practice Offices to promote
a high quality of medical care.

6.2. Medical Practice. TOC shall use and occupy the Practice Offices
exclusively for the practice of medicine and shall comply with all Applicable
Law and standards of medical care. It is expressly acknowledged by the parties
that the medical practice or practices conducted at the Main Office shall be
conducted solely by physicians or medical practitioner associated with TOC, and
no other physician or medical practitioner shall be permitted to use or occupy
the Main Office without the prior written consent of Company.

6.3. Employment of Physician Employees. TOC shall have complete control of
and responsibility for the hiring, compensation, supervision, evaluation and
termination of Physician Employees, although at the request of TOC, Company
shall consult with TOC respecting such matters. TOC shall be responsible,
subject to Section 8.4, for the payment of such Physician Employees' salaries

and wages, payroll taxes, Physician Employee benefits and all other taxes and
charges now or hereafter applicable to them. With respect to physicians, TOC
shall only employ and contract with licensed physicians meeting applicable
credentialing guidelines established by TOC.

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<PAGE>

each Physician Employee participates in such continuing medical education as is
necessary for such physician to remain licensed.

6.5. Professional Insurance Eligibility. TOC shall cooperate in the
obtaining and retaining of professional liability insurance by assuring that all
Physician Employees are insurable and participating in an on-going risk
management program.

6.6. Events Excusing Performance. TOC and Physician Owners shall not be
liable to Company for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which TOC has no control for so long as such
events continue, and for a reasonable period of time thereafter.

6.7. Fees for Professional Services. TOC shall be solely responsible for
legal, accounting and other professional services fees (Excluded Expenses)
incurred by TOC, except for legal, accounting, and other professional service
fees incurred by TOC in the ordinary course of its business as determined by the
Policy Board.

6.8. Peer Review. TOC agrees to cooperate with Company in establishing a
system of peer review within and among the provider practices as necessary to
obtain provider contracts. In connection therewith, TOC agrees to assist in the
formulation of provider guidelines for each treatment or surgical modality, and
agrees to abide by said guidelines, and further agrees to submit to periodic
reviews by a third party to monitor compliance with said guidelines. TOC
acknowledges that the establishment of provider guidelines may be necessary to
obtain PPO, HMO, IPA and other similar provider contracts, both private and
government funded. To the extent that said provider guidelines must be filed or
registered with any Third-Party Payor, TOC agrees to cooperate with Company in
making such filings or registrations. It is agreed and acknowledged that all
such peer review guidelines shall be established and monitored by medical
personnel on the staff of TOC and other practices that are part of the peer
review process, and shall not be promulgated, established or enforced
independently by Company. To the extent possible, all information obtained
through the peer review process shall remain confidential and the parties shall
take all steps reasonably necessary to assure that all privileges and immunities
provided by Applicable Law remain intact.

6.9. TOC Employee Benefit Plans.

6.9.1. Effective as of the date of the closing under the Merger Agreement,
TOC shall assume the tax-qualified retirement plan(s) described on Exhibit 6.9.1
(the "TOC Plan") and amend the TOC Plan to provide that employees of Company who
are classified as "leased employees" (as defined in Code Section 414(n)) of TOC
shall be treated as TOC employees for purposes described in Code Section
414(n)(3). Not less often than annually, TOC and Company shall agree upon and
identify in writing those individuals to be classified as leased employees of
TOC (the "Designated Leased Employees"). TOC and Company shall establish
mutually agreeable procedures with respect to the participation of Designated
Leased Employees in the TOC Plan. Such procedures shall be designed

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to avoid the tax disqualification of the TOC Plan, similar plans of any other
practices managed by Company similarly situated and any plan adopted by Company
(collectively, the "Plans").

6.9.2. If the Policy Board determines that the relationship between
Company and TOC (and any other practices managed by Company similarly situated)
constitutes an "affiliated service group" (as defined in Code Section 414(m)),
Company and TOC shall take such actions as may be necessary to avoid the tax
disqualification of the Plans. Such actions may include the amendment, freeze,
termination or merger of the TOC Plan. Company and TOC intend that all possible
actions be taken by Company and TOC to retain the TOC Plan, including, but not
limited to, applying applicable tax qualification testing to the TOC Plan as
part of an affiliated service group including Company.

Company and TOC intend that all reasonable actions be taken by Company and
TOC to retain the TOC Plan as an active plan, including, but not limited to,
applying applicable tax qualification testing to the TOC Plan as part of an
affiliated service group including Company. Company agrees to explore such
options as may be suggested by TOC's advisors to retain the TOC Plan as an
active plan. The TOC Plan shall be converted to a non-active plan either by
amendment, freeze, termination or merger, only if no other reasonable option
exists for retaining the TOC Plan as an active plan. In the event Company and
TOC disagree with respect to any proposed action regarding the TOC Plan, the
Policy Board must approve such action before TOC shall be required to take such
action.

6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. TOC shall not enter into any new "employee benefit plan" (as defined
in Section 3(3) of the Employment Retirement Income Security Act of 1974, as
amended ("ERISA") without the consent of Company. In addition, TOC shall not
offer any retirement benefits or make any material retirement payments other
than under the TOC Plan to any stockholder of TOC without the express written
consent of Company. Except as otherwise required by law, TOC shall not
materially amend, freeze, terminate or merge the TOC Plan without the express
written consent of Company. In the event of either of the foregoing, Company's
consent shall not be withheld if such action would not jeopardize the
qualification of any of the Plans. TOC agrees to make such changes to the TOC
Plan, including the amendment freeze, termination or merger of the TOC Plan, as

may be approved by the Policy Board and Company but only if such changes are
necessary to prevent the disqualification of any of the Plans, and only if such
changes comply with Section 6.9.2 if TOC and Company are members of an
affiliated service group.

6.9.4. Expenses incurred in connection with the TOC Plan or other TOC
employee benefit plans, including, without limitation, the compensation of
counsel, accountants, corporate trustees, and other agents shall be included in
Clinic Expenses.

6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in TOC's operating budget. TOC and Company
shall not make employee benefit plan contributions or payments to TOC for their
respective employees in excess of such budgeted amounts unless required by law
or the terms of the TOC Plan. Company shall make contributions or payments with
respect to the TOC Plan or other TOC employee benefit plans, as a Clinic
Expense,

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on behalf of eligible Designated Leased Employees, and other eligible TOC
employees. In the event a TOC Plan or other TOC employee benefit plan is
terminated, Company shall be responsible, as a Clinic Expense, for any funding
liabilities related to eligible Designated Leased Employees; provided, however,
Company shall only be responsible for the funding of any liability accruing
after the date of the Merger Agreement.

6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the TOC Plan
to avoid disqualification of the TOC Plan, in which case any such action would
be subject to the express prior written consent of the Policy Board. Company
shall have the sole and exclusive authority to appoint the trustee, custodian
and administrator of any such plan.

6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by TOC must be amended,
terminated, modified or changed as a result of TOC or Company being deemed to be
a part of an affiliated service group, the Policy Board will replace such plan
or plans with a plan or plans that provides those benefits approved by the
Policy Board. It shall be the goal of the Policy Board in such event to provide
substantially similar or comparable benefits if the same can be provided at a
substantially similar cost to the replaced plan.

6.10. Credentialing. To the extent permitted by applicable law, Company
shall assist TOC in the credentialing of each Physician Employee, each Technical
Employee and each Physician Extender Employee.

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

The parties recognize that the services to be provided by Company shall be
feasible only if TOC operates an active medical practice to which both TOC and
the physicians associated with TOC devote their full time and attention. To that
end:

7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be TOC's and Physician Owners' sole provider of the management services
described in this Agreement and neither TOC, Physician Owners nor any of TOC's
or Physician Owners' employees shall provide such management services during the
term of this Agreement. TOC and the Physician Owners agree that during the term
of this Agreement, neither TOC nor Physician Owners will enter into any similar
agreements with any physician practice management company or entity. TOC and the
Physician Owners further agree that during the term of this Agreement, they will
not engage, directly or indirectly, as a principal owner, shareholder (other
than a holder of fewer than 5% of the outstanding shares of a publicly-traded
company), partner, joint venturer, agent, equity owner, or in any other capacity
whatsoever, in any corporation, partnership, joint venture, or other business
association or

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entity that provides management services of the nature provided by Company
pursuant to this Agreement, within Leon County, Florida or contiguous counties
or any location within seventy-five (75) miles of the Main Clinic or any future
facility that replaces the Main Clinic (wherever located) or any Satellite
Office utilized by TOC at any time during the term of this Agreement.

7.2. Restrictive Covenants.

7.2.1. By Current Physician Employees. TOC shall obtain and enforce formal
agreements from current Physician Employees, other than Physician Extender
Employees and Technical Employees, pursuant to which the Physician Employees
agree not to establish, operate or provide professional medical services at any
medical office, clinic or outpatient and/or ambulatory treatment or diagnostic
facility providing services substantially similar to those provided by TOC,
except on TOC's behalf, within Leon County, Florida or contiguous counties or
any location within seventy-five (75) miles during the first five (5) years of
the term of this Agreement or fifty (50) miles thereafter of the Main Office or
any future facility that replaces the Main Office (wherever located at such
time) or any Satellite Office at the time of termination of employment with TOC
and for a period of twenty-four (24) months after any termination of employment
with TOC. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to Company's lender ("Lender"). This Section 7.2 shall relate solely
to Physician Employees who are not also Physician Owners.

enforce formal restrictive covenants with current and future Physician Owners,
the terms of which shall be substantially similar to the provisions of Exhibit
11. Such agreements shall provide that Company is a third-party beneficiary to
such agreements. TOC agrees to enforce the restrictive covenants. The cost and
expense of such enforcement shall be a Clinic Expense, and all damages and other
amounts recovered thereby shall be included in Professional Services Revenue. In
the event that after a request by Company, TOC does not pursue any remedy that
may be available to it by reason of a breach or default of a restrictive
covenant, upon the request of Company, TOC shall assign to Company such causes
of action and/or other rights it has related to such breach or default and shall
cooperate with and provide reasonable assistance to Company with respect
thereto; in which case, all costs and expenses incurred in connection therewith
shall be borne by Company and shall be included in Company Expenses, and Company
shall be entitled to all damages and other amounts recovered thereby. The above
described restrictive covenants between TOC and Physician Owners shall be in
addition to and not in place of the restrictive covenants described in Exhibit
11 between Company and the Physician Owners.

7.2.3. Limitation on Restrictive Covenants. Neither the foregoing
restrictive covenants nor the restrictive covenants set forth in Exhibit 11
shall limit or prevent Physician Owners or Physician Employees from (i) teaching
at any educational institution and from attending patients as a part of

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Physician Owner's duties as are normal and customary for such faculty position;
provided, however, such services must be incident to the academic/teaching
aspects of the institution and not incident to the regular examination of
patients for a fee whether billed in the name of the institution or the name of
the Physician Owner; (ii) authoring text books, research papers, newspaper,
radio, television, or other medical advice; (iii) engaging in research and
development the material components of which do not constitute medical practice
management; (iv) providing medical services, other than surgery, on behalf of
and as an employee or agent of a qualified I.R.C. ss. 501(c)(3) nonprofit
organization, governmental agency or educational institution (other than a
hospital or health care provider of any type); (v) providing professional
medical services in fields other than neurology or orthopedics, and (vi) serving
as a medical director of any organization offering medical care, but not
providing clinical services involving surgery.

7.3. Restrictive Covenants By Future Physician Employees. TOC shall obtain
and enforce formal agreements from each future Physician Employee other than
Physician Extender Employees and Technical Employees, hired or contracted,
pursuant to which such physicians agree not to establish, operate or provide
professional medical services at any medical office, clinic or outpatient and/or
ambulatory treatment or diagnostic facility providing services substantially
similar to those provided by TOC except on TOC's behalf, within Leon County,
Florida or contiguous counties or any location within seventy-five (75) miles
during the first five (5) years of the term of this Agreement or fifty (50)
miles thereafter of the Main Office or any future facility that replaces the
Main Office (wherever located at such time) or any Satellite Office at the time
of termination of said Physician Employee's contract with TOC and for a period

of twenty-four (24) months thereafter. Such agreements shall be a condition to
employment and shall be in a form satisfactory to Company and shall provide that
Company is a third-party beneficiary to such agreements and that such
third-party beneficiary rights may be assigned to any Lender. This Section 7.3
shall relate solely to Physician Employees who are not also Physician Owners.
The terms and conditions of Exhibit 11 shall govern restrictive covenants
relating to Physician Owners.

7.4. Rights of Company. Except as limited below, Company shall at all
times during the term of this Agreement and thereafter have the right to enter
into additional service agreements with other physicians and practices
regardless of where such physicians and/or practices are located providing for
management services and facilities to such physicians and/or practices.
Notwithstanding the foregoing, and except as set forth in Section 11.9.3, in the
event that Company desires to enter into a Service Agreement with another
practice located within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of TOC's Main
Office or any Satellite Office or any new office established pursuant to Section
5.10 above, or develop, purchase, own or operate a surgery center or MRI
facility or new service established pursuant to Section 5.12 above within such
radius, then the Policy Board must first approve Company entering into such
agreement or developing a surgery center or MRI facility or new service
established pursuant to Section 5.12 above.

7.5. Enforcement. TOC and the Company acknowledge and agree that since a
remedy at law for any breach or attempted breach of the provisions of this
Article VII shall be inadequate, offended

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party shall be entitled to specific performance and injunctive or other
equitable relief in case of any such breach or attempted breach in addition to
whatever other remedies may exist by law. All parties hereto also waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief. If any provision of
Article VII relating to the restrictive period, scope of activity restricted
and/or the territory described therein shall be declared by a court of competent
jurisdiction to exceed the maximum time period, scope of activity restricted or
geographical area such court deems reasonable and enforceable under Applicable
Law, the time period, scope of activity restricted and/or area of restriction
held reasonable and enforceable by the court shall thereafter be the restrictive
period, scope of activity restricted and/or the territory applicable to the
restrictive covenant provisions in this Article VII. In addition, breach of the
provisions of this Article VII may trigger certain rights of Company to redeem a
Physician Owner's Company common stock pursuant to the terms of Article VIII of
that certain stockholders agreement between Company and its stockholders (the
"Stockholders Agreement").

limitations set forth above in Sections 7.2 and 7.3. In the event that the
individuals representing TOC on the Policy Board can reasonably demonstrate that
a modification to the restrictive covenant will not have a material adverse
effect on Company's or TOC's practice operations, earnings or cash flow, then
the individuals representing Company shall consent to the proposed
modifications.

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to the sum of (a) the
greater of (i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]or (ii) the Base
Service Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of the
first thirty-six (36) months of the term of this Agreement, Company shall
receive a service fee equal to [xxxxxxxxxxxxxxxxxxx]of Practice Net Revenue plus
the amount of Clinic Expenses. In the event that a Physician Owner ceases to
practice medicine during the first thirty-six (36) months of the term of this
Agreement, such Physician Owner shall be personally liable for any reduction in
TOC's service fees payable as further described under Section 11.9.1 of this
Agreement. In the event that a Physician Owner either dies or becomes Disabled
during such thirty-six (36) month period, TOC, or the applicable Physician
Owner, as the case may be, shall be entitled to satisfy the amount owed by
transferring to Company an amount of Company common stock having a Fair Market
Value equal to the amount owed or pay to Company cash in the amount owed (or a
combination thereof).

8.1.1. "Practice Net Revenue" shall mean Professional Services Revenue,
less Clinic Expenses.

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<PAGE>

8.1.2. "Professional Services Revenue" shall mean all fees actually
recorded each month (net of any amounts reimbursed to any patients or
Third-Party Payors during the applicable month and net of any adjustments for
contractual allowances, Medicaid, worker's compensation, employee/dependent
health care benefit programs, professional courtesies and other activities that
do not generate a collectible fee) by or on behalf of TOC as a result of
professional medical services personally furnished to patients and other fees or
income generated in their capacity as Physician Employees and Technical
Employees, other than MRI Revenue, and any revenue from the sale of any goods.

8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of TOC arising hereunder unless expressly provided otherwise,
including, without limitation:

defined in Section 8.1.4,

(b) obligations of Company under Leases provided for herein under
Article III,

(d) personal property and intangible taxes assessed against
Company's assets utilized by TOC in the Practice Offices from and after
the date of this Agreement,

(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of TOC, if any, assumed under the Merger
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to TOC hereunder, or (iii) purchase equipment,

(g) the cost of any goods purchased for resale,

(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used in TOC's Facility by TOC to
be billed to TOC on a monthly basis and paid to Company at the same time
Company pays for TOC's Accounts Receivable pursuant to Section 8.3,

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<PAGE>

(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with TOC or who actually provide
services at or in connection with the Clinic for improved performance,
such as quality assurance, reasonable expenses required for physician
accommodations under the definition of "Disabled" or "Disability,"
materials management, purchasing program, change in coding analysis,
physician recruitment; provided, however, only the portion of expenses
related to such employee or consultant, without mark-up, that is allocable
in a fair and reasonable manner to work approved by the Policy Board which
is performed at or for the benefit of TOC shall be included in Clinic
Expenses,

incurring such cost shall be solely liable for the overage;

(l) any health, life, dental and accident premiums paid on behalf of
Physician Employees to the extent deductible under the Code and to the
extent comparable benefits are paid to Physician Extender Employees and
Technical Employees;

(m) the cost of administering retirement plans; and

(n) any and all other ordinary and necessary expenses incurred by
TOC or approved by the Policy Board and reasonably incurred by the Company
for the direct benefit of TOC in carrying out their respective obligations
under this Agreement.

Clinic Expenses shall not include Excluded Expenses or Company Expenses.
Excluded Expenses shall be the sole obligation of TOC. Company Expenses shall be
the sole obligation of Company.

8.1.4. "Technical Employees" shall mean individuals who provide diagnostic
services and who are required by Applicable Law or Third-Party Payors to be
employees of TOC. All Technical Employees shall be employed by TOC.

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<PAGE>

8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons providing services under the
supervision of Physician Employees and who are employees of Company, but
excluding any Technical Employees.

8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by TOC or
are otherwise under contract with TOC to provide professional services to
patients seen in the Main Office or Satellite Offices and are duly licensed to
provide professional medical services in the state or states in which he or she
renders professional services under this Agreement.

8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:

(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to TOC or are not directly attributable to TOC, as
reasonably determined by Company, including, without limitation, salaries

and benefits of executive officers of Company, except as otherwise
provided for in the definition of Clinic Expenses;

(b) Any amortization of any intangible asset resulting from the
Merger;

(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Merger;

(d) Any legal and accounting expenses incurred by Company in
connection with the Merger; and

(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for TOC, property
taxes on assets used by TOC and other taxes specifically included in
Clinic Expenses.

8.1.8. "Excluded Expenses" shall be the sole obligation of TOC and shall
mean, pursuant to GAAP applied on a consistent basis:

(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;

(b) Any federal, state or other taxes associated therewith;

(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and

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<PAGE>

(d) Any expenses directly related to MRI Revenue; and

(e) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).

8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays TOC for the
Accounts Receivable previously purchased by Company as described in Section 8.3
below. The amount payable shall be estimated based upon the previous month's
operating results of TOC. Adjustments to the estimated payments shall be made to
reconcile actual cumulative amounts due under this Article VIII, by the end of
the following month during each calendar year. Upon preparation of annual
financial statements as provided in Section 5.3, final adjustments to the
service fee for the preceding year shall be made and any additional payments
owing to Company or TOC shall then be made to the party owed the additional sum
of money. The adjustment and any amount owed shall be calculated and paid within
ninety (90) days following the close of Company's fiscal year.

8.3. Purchase of Accounts Receivable.

8.3.1. TOC hereby agrees to sell and assign to Company and Company agrees
to buy, all of TOC's Accounts Receivable each month during which this Agreement
is in existence which are owing to TOC arising out of the delivery of medical,
surgical, diagnostic or other professional medical goods or services. Accounts
Receivable shall not include, and Company shall not purchase, any cash, checks
or receivables created by credit cards. Company shall bear the risk of
collection and any overage or underage resulting from any purchased Accounts
Receivable.

8.3.2. The purchase price for each Accounts Receivable (the "Purchase
Price") will be equal to the face amount of the Accounts Receivable recorded
each month, less any non-allowed contractual adjustments and net of any reserve
for uncollectible Accounts Receivables based on the historical experience of the
practice as determined by the Policy Board. It is the intent of the parties that
the Purchase Price reflect the actual net realizable value of the Accounts
Receivable.

8.3.3. TOC will sell all Accounts Receivable to Company, such purchase to
be deemed to be made on the fifteenth (15th) day of the month following the
month in which such Accounts Receivable are created. Company shall pay for the
Accounts Receivable not later than the fifteenth (15th) day of each month
following the month in which the Accounts Receivable is created (the "Settlement
Date"). Company shall pay to TOC for all Accounts Receivable purchased by check,
wire transfer or intrabank transfer to the TOC Operating Account described in
Section 5.11. The purchase of Accounts Receivable shall be evidenced by sending
Company (i) a copy of each invoice with respect to each Third-Party Payor on the
Accounts Receivable then being purchased; and (ii) any other information or
documentation (including all required Uniform Commercial Code releases or
financing statements) Company may reasonably need to identify the Accounts
Receivable and obtain payment from the Account Debtors; provided that such
failure to send such documents shall not affect the obligation of TOC to sell
such Accounts Receivable or Company to buy such Accounts

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<PAGE>

Receivable. As consideration for the purchase of Accounts Receivable by Company
pursuant to this Section 8.3, Company promises to pay and shall be obligated to
pay for such Accounts Receivable at the time and in the manner provided below.
To the extent permissible by Applicable Law, TOC will be deemed to have sold to
Company all of TOC's right, title and interest in such Accounts Receivable and
in any proceeds thereof, and Company will be the sole and absolute owner thereof
and will own all of TOC's rights and remedies represented by such Accounts
Receivable (including, without limitation, rights to payment from the respective
Account Debtors on such Accounts Receivable), and Company will have obtained all
of TOC's rights under all guarantees, assignments and securities with respect to
each such Accounts Receivable.

but effective as of the effective date of such expiration or termination date,
less the amount of any service fee earned by Company pursuant to Section 8.1 of
this Agreement.

8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, TOC will execute such financing statements or amendments under the UCC
(naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.

8.3.6. TOC agrees to cooperate with Company in the collection of the
Accounts Receivable sold by TOC, transferred pursuant to Section 8.3. At the
option of and upon the request of Company, TOC shall execute any and all
documentation necessary for the transfer of amounts constituting Accounts
Receivables and/or the establishment of lockboxes in accordance with the
provisions of Exhibit 8.3.6 attached hereto.

8.3.7. All Accounts Receivable of TOC purchased by Company ("Purchased
A/R") pursuant to this Section 8.3 hereof will, as such Purchased A/R are
purchased, be treated as Professional Service Revenues for accounting and
financial purposes.

8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless TOC is required by law to incur such expenses, in
which case Company shall indemnify TOC against any such expenses. Company shall
pay all Clinic Expenses as they become due; provided, however, that Company may,
in the name and on behalf of TOC, contest in good faith any claimed Clinic
Expense to which there is any dispute regarding the nature, existence or
validity of such claimed Clinic Expense. Upon receipt of TOC's service fee,
Company shall be required to deposit into the TOC Operating Account described in
Section 5.11 an amount of money necessary for TOC to pay the compensation and
benefits associated with the Technical Employees and Physician Employees (other
than Physician Owners) employed by TOC.

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ARTICLE IX.

RECORDS

9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, TOC shall retain all patient medical records
maintained by TOC or Company in the name of TOC. TOC shall, at TOC's option, be
entitled to retain copies of financial and accounting records relating to all
services performed by TOC. All parties agree to maintain the confidentiality of
patient identifying information and not to disclose such information except as
may be required or permitted by Applicable Law.

9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of TOC under the
provisions of Section 9.1 above, shall at all times be the property of Company.

9.3. Access to Records. During the term of this Agreement, and thereafter,
TOC or TOC's designee shall have reasonable access during normal business hours
to TOC's and Company's financial records, which relate to the operation of TOC
including, but not limited to, records of collections, expenses and
disbursements as kept by Company in performing Company's obligations under this
Agreement, and TOC may copy at TOC's expense any or all such records.

ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by TOC. Throughout the term of this
Agreement, TOC shall maintain comprehensive professional liability and worker's
compensation insurance for TOC and

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<PAGE>

all employees of TOC in amounts approved by the Policy Board. Not in limitation
of the foregoing, TOC shall maintain excess general liability umbrella coverage
with a One Million Dollars ($1,000,000) limit as currently maintained by TOC
(with deductible provisions not to exceed $25,000 per occurrence), the cost of
which shall be paid by Company as a Clinic Expense. In lieu of the foregoing,
Company may provide as a Clinic Expense group insurance for malpractice and/or
worker's compensation insurance. Notwithstanding the foregoing, in the event
that Company procures such group insurance for malpractice and/or worker's
compensation insurance, TOC must first approve the amount of coverage, the
carrier and the terms of any such coverage for TOC.

Company who work at the Practice Offices with limits as determined reasonable by
the Policy Board, comprehensive general liability and property insurance
covering the Practice Offices' premises and operations. The deductible
provisions on the personal liability shall not exceed $25,000 per occurrence and
the commercial general liability insurance shall be in amounts customarily
maintained by other businesses in the same or similar business as Company.

10.3. Additional Insureds. TOC and Company agree to use their best efforts
to have each other named as an additional insured on the other's respective
professional liability insurance programs at Company's expense. Further, on any
insurance where Company will be named as an additional insured, TOC will assist
Company to obtain appropriate riders to insure payment of any party indemnified
by Company.

10.4. Indemnification as to Third Party Claims. TOC shall indemnify, hold
harmless and defend Company, its officers, directors and employees, from and
against any and all liability, loss, damage, claim, causes of action, and
expenses (including reasonable attorneys' fees), caused or asserted to have been
caused, directly or indirectly, by or as a result of the performance of any
intentional acts, negligent acts or negligent omissions (other than for any
claims for (or in connection with) malpractice arising from the performance or
nonperformance of medical services) by TOC and/or TOC's Physician Owners,
agents, employees and/or subcontractors (other than Company) during the term
hereof. Company shall indemnify, hold harmless and defend TOC, the Physician
Owners, TOC's officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions by Company and/or its shareholders,
agents, employees and/or subcontractors (other than TOC and the Physician
Owners) during the term of this Agreement. Neither Company nor TOC shall have
any obligation to indemnify the other party unless the claim for indemnification
is based upon a liability, loss or damages resulting in the indemnified party
making payments to a third party. Pursuant to the terms of the Stockholders
Agreement, Company may have the right to redeem a Physician Owner's Company
common stock to satisfy a Physician Owner's indemnification obligations.

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<PAGE>

In the event that either party makes a claim for indemnification under
either the Merger Agreement or this Service Agreement, then the other party
shall have the right to pay the amount claimed under this Agreement into an
escrow account (established pursuant to an escrow agreement to be agreed upon by
the parties) to be held by the escrow agent in an interest bearing account until
a determination by either (i) the parties, (ii) a court of proper jurisdiction
or (iii) agreed upon panel of arbitrators, has been made regarding the claiming
party's right to indemnification. In the event that the claiming party is
entitled to indemnification, then such escrowed funds shall be paid to the
claiming party in partial or complete satisfaction of such indemnification
obligation. Any excess funds remaining in the escrow account after the payment
of the indemnification obligation or any funds held in the escrow account if it
is determined that no indemnification obligation is owed shall be paid to the

other party.

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement. This Service Agreement shall be effective upon
the closing of the Merger Agreement and shall expire on October 31, 2036, unless
earlier terminated pursuant to the terms hereof. Notwithstanding the foregoing,
for purposes of computing the Service Fee for the month of November of 1996
only, the Service Agreement shall be effective upon November 1, 1996.

11.2. Extended Term. Unless earlier terminated as provided for in this
Agreement, the term of this Agreement shall be automatically extended for
additional terms of five (5) years each, unless either party delivers to the
other party, at least one hundred eighty (180) days prior to the expiration of
the preceding term, written notice of such party's intention not to extend the
term of this Agreement.

11.3. Termination by TOC for Cause. TOC may terminate this Agreement
without breach as follows:

11.3.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Company, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by Company, except for the filing of a petition in
involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, TOC may give notice of the immediate termination of this
Agreement.

11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by TOC; or Company shall fail to remit the payments due as
provided in Article VIII hereof and such failure to remit shall continue for a
period of thirty (30) days after written notice thereof, TOC may terminate this
Agreement.

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<PAGE>

11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of TOC or commit a similar act which cause material
harm to TOC, TOC may terminate this Agreement.

11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:

11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by TOC, or upon other action taken
or suffered, voluntarily or involuntarily, under any federal or state law for
the benefit of debtors by TOC, except for the filing of a petition in
involuntary bankruptcy against TOC which is dismissed within thirty (30) days
thereafter, Company may give notice of the immediate termination of this
Agreement.

11.4.2. In the event TOC shall materially default in the performance of
any duty or obligation imposed upon it by this Agreement, and such default shall
continue for a period of ninety (90) days after written notice thereof has been
given to TOC by Company, Company may terminate this Agreement.

11.4.3. In the event TOC's Medicare or Medicaid Number shall be terminated
or suspended as a result of the action or inaction of TOC or a Physician
Employee, and such termination or suspension shall continue for thirty (30)
days, Company may give notice of the immediate termination of this Agreement,
unless TOC shall at that time be acting in good faith (and shall provide
reasonable evidence of the action being taken) to reverse such termination or
suspension. Notwithstanding any good faith effort on the part of TOC to reverse
such termination or suspension, if such termination or suspension shall not be
reversed within ninety (90) days after occurrence, Company shall have the right
to terminate this Agreement immediately.

11.4.4. In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require TOC to purchase from Company all assets, both tangible and intangible,
owned by Company and used or made available for TOC's use for the fair market
value of such assets on a going concern basis, without regard to this Agreement.
In addition thereto, TOC shall assume all debt (including any balance of any
remaining debt incurred by the Company to acquire the assets under the Merger
Agreement) and all contracts, payables and leases which are obligations of
Company which relate to the Company's obligations which are performed at the
Office Locations under this Agreement. The fair market value of the assets shall
be determined by an independent appraiser selected by two (2) independent
accountants practicing with "big six" accounting firms, one (1) selected by TOC
and one (1) selected by Company and neither of which is providing or has for a
period of two (2) years provided services to Company or TOC. In addition to the
payment for the practice assets, in the event Company terminates this Agreement
pursuant to Section 11.4.1, Section 11.4.2 or Section 11.4.3 within the first
five (5) years

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of the term of this Agreement, then TOC's Physician Owners shall (i) pay to
Company an amount of money equal to the Fair Market Value, as of the date of
termination, of [xxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to TOC pursuant to
the Merger Agreement or (ii) surrender to Company for cancellation
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to TOC pursuant to the
Merger Agreement. All expenses of any appraisal shall be paid by TOC. In the
event that Company terminates this Agreement pursuant to Sections 11.4.1 through
11.4.3, inclusive, and Company requires TOC to purchase the practice assets,

then upon the closing of the purchase of the assets, TOC and its Physician
Employees shall be released from the restrictive covenants provided for under
Exhibit 11 of this Agreement. In addition, termination of this Agreement may
trigger certain rights of Company to redeem a Physician Owner's Company common
stock pursuant to the terms of Article VIII of the Stockholders Agreement.

11.5. Early Termination by TOC or Company Without Cause Upon Eighteenth
(18th) Month Anniversary of Agreement. Either party may terminate this Agreement
without cause upon written notice delivered to the other party not less than six
(6) months or more than nine (9) months or more prior to the end of the
eighteenth (18th) month anniversary of the date of this Agreement if the Company
has not filed a registration statement with the United States Securities and
Exchange Commission; provided, however, if the Company files a registration
statement, for an underwritten public offering, with the United States
Securities and Exchange Commission before the end of the date of the eighteenth
(18th) month anniversary of this Agreement, then such termination shall be
ineffective, and this Agreement shall continue in force unless otherwise
terminated pursuant to the other provisions of Article XI of this Agreement. In
the event that such registration statement is not effective within one hundred
twenty (120) days from filing, then the early termination rights described in
the first sentence of this Section 11.5 shall be again exercisable; provided,
further, that if such registration statement was filed during the above
described notice period for early termination, then such period shall be
extended for thirty (30) days from and after the date such early termination
rights again become exercisable. Notwithstanding any other provision of this
Agreement to the contrary, the termination rights set forth in this Section 11.5
shall immediately terminate and no longer be effective upon a Change in Control
of the Company. Upon a termination pursuant to this Section 11.5, TOC shall
tender to Company all of the stock issued to TOC by Company pursuant to the
Merger Agreement, and Company shall return to TOC the facilities and all assets,
both tangible and intangible, used or made available for TOC's use in the
Practice Office or acquired pursuant to the Merger Agreement. TOC shall assume
all debt secured by a purchase money security interest in assets or equipment
located at the TOC Office Locations and all contracts, payables and leases which
are obligations of Company and which relate to Company's obligations which are
performed at the Office Locations under this Agreement. For purposes of this
Section 11.5, the term purchase money security interest shall mean any debt, the
proceeds of which were used to acquire the asset secured by such indebtedness.
The Company and TOC shall cooperate to structure any exchange consummated
pursuant to this Section 11.5 in a manner designed to minimize the aggregate tax
consequences to the parties arising from the exchange. Closing of the exchange
pursuant to this Section 11.5 shall occur effective as of the third (3rd)
anniversary of this Agreement.

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11.6. Consequences of TOC Termination. In the event that this Agreement is
terminated by TOC under the terms of Section 11.3 or is terminated on any other
basis (other than (i) because of the normal expiration of its term set forth in
Section 11.1, (ii) by Company for cause as set forth in Section 11.4 or (iii) by
early termination as set forth in Section 11.5), then upon such termination, TOC
shall purchase from Company all assets, both tangible and intangible, owned by

Company and used or made available for TOC's use for the fair market value of
such assets on a going concern basis, without regard to this Agreement. The
purchase price shall be paid to TOC in cash, or in stock received under the
Merger Agreement, or in both, at the election of TOC. In addition thereto, TOC
shall assume all debt (including any balance of any remaining debt incurred by
the Company to acquire the assets under the Merger Agreement) and all contracts,
payables and leases which are obligations of Company which relate to the
performance of Company's obligations which are performed at the Office Locations
under this Agreement. The fair market value of the assets shall be determined by
an independent appraiser selected by two (2) independent accountants practicing
with "big six" accounting firms, one (1) selected by TOC and one (1) selected by
Company and neither of which is providing or has for a period of two (2) years
provided services to Company or TOC. Termination of this Agreement by TOC or a
Physician Owner may trigger Company's right to redeem all of Company common
stock owned by the Physician Owner as provided for in Section 8.1 (a) of the
Stockholders Agreement.

11.7. Closing of Purchase by TOC and Effective Date of Termination. TOC
shall, except as provided below in this Section 11.7 or in Sections 11.5 or 11.6
above, pay cash for the assets purchased pursuant to the provisions of this
Section 11. The amount of the purchase price shall be reduced, but not below
zero (0), by the amount of debt and liabilities of Company assumed by TOC and
shall also be reduced by any payment Company has failed to make under this
Agreement, provided that such payments or obligations are not otherwise
accounted for in the liabilities assumed by TOC in connection with the purchase
described herein. The closing date for the purchase shall be determined by TOC,
but shall in no event occur later than one hundred eighty (180) days from the
date of the notice of termination. The termination of this Agreement shall
become effective upon the closing of the sale of the assets and TOC and Company
shall be released from the restrictive covenants provided for in Article VII on
the closing date. Company shall give TOC credit towards the purchase price of
the assets for the Fair Market Value of any Company common stock tendered to the
Company in exchange for such assets. In the event that TOC terminates this
Agreement pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections
11.5, 11.6 or 11.7, then upon the closing of the purchase of the assets, TOC and
its Physician Employees shall, except as TOC may so elect to limit through
separate agreements with Physician Owners and Physician Employees, be released
from the restrictive covenants provided for under Article VII or Exhibit 11 of
this Agreement.

11.8. Tail Policy. TOC shall obtain continuing liability insurance
coverage under either a "tail policy" or a "prior acts policy" with the same
limits and deductibles as set forth in Section 10.1 upon the termination of this
Agreement, or upon a physician's termination of his or her affiliation with TOC.

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(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of TOC's service fees
during the twelve (12) month period preceding the retiring
Physician Owner's notice of intent to retire.

(ii) In the event the Substitute Physician(s) were Physician
Employees prior to the date upon which notice of intent to
retire was given pursuant to Section 11.9.1(a), the Policy
Board shall calculate such Physician Employee(s) contribution
to the payment of TOC's service fees during the twelve month
period preceding the notice of intent to retire.

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<PAGE>

the amount calculated pursuant to Section 11.9.1(c)(iii).

(d) to (i) pay to Company an amount of money equal to the Fair
Market Value, as of the date of retirement, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by the Company to the retiring
Physician Owner pursuant to the Merger Agreement or (ii) surrender to
Company for cancellation [xxxxxxxxxxxxxxxxxxxxxxxxx] by Company to the
retiring Physician Owner pursuant to the Merger Agreement. (All expenses
of any appraisal shall be paid by such Physician Owner); and

(e) to honor and comply with the restrictive covenants for a period
of thirty-six (36) months, in accordance with the restrictions contained
in Exhibit 11.

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<PAGE>

the intent of the Parties to permit a retired physician to conduct a medical

practice through an academic institution.

11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with TOC, then the terminating Physician Owner may, but shall not be
obligated to, join or establish another group/practice which has or will enter
into a Service Agreement with Company upon such terminating Physician Owner's
affiliation with such new group/practice. Upon entering into such new Service
Agreement, the terminating Physician Owner shall, except as limited by separate
employment agreements between TOC and Physician Owners, be released from any
obligation under this Service Agreement. Company shall have the right to enter
into such new Service Agreement without satisfying the requirements of paragraph
G of Exhibit 11. In the event that (i) TOC consents to the Company entering into
the new Service Agreement, (ii) entering into the new Service Agreement will not
adversely affect the operations and earnings of the Company, and (iii) the new
group/practice can satisfy the representations and warranties set forth in
Article XIII of this Agreement, then Company will not unreasonably withhold or
refrain from entering into a new Service Agreement with the terminating
Physician Owner's new group/practice. Except as set forth in the event that the
Physician Owner affiliates with a new group/practice that is not a party to a
Service Agreement with Company, then Company, at its option, may terminate this
Agreement solely with respect to the terminating Physician Owner, and the
provisions of Exhibit 11 shall apply. In the event that Company does not enter
into a new Service Agreement, then Company shall terminate this Agreement with
respect to such Physician Owner, and the terminating Physician Owner shall be
obligated as described in Sections 11.9.1 (a) and 11.9.1(e) of this Agreement;
provided, however, if such termination is within the first five (5) years of the
term of this Agreement, the terminating Physician Owner shall also be obligated
as described in Sections 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and
11.9.1(e).

11.9.4. Death or Disability. In the event that a Physician Owner dies or
becomes disabled, then this Agreement shall be terminated with respect to such
Physician Owner; provided, however, in the event of disability, the restrictive
covenants described in Exhibit 11 shall remain in force for a period of
thirty-six (36) months from such termination.

ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with TOC, shall review and approve such reconstruction, repair or
replacement.

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12.2. Temporary Space. In the event of substantial damage to or the

condemnation of a significant portion of the facilities, Company shall use its
best efforts to provide temporary facilities until such time as the facilities
can be restored or replaced.

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF TOC AND PHYSICIAN OWNERS

TOC and Physician Owners represent, warrant, covenant and agree with
Company that:

13.1. Validity. TOC is a Florida corporation. TOC has the full power and
authority to own TOC's property, to carry on TOC's business as presently being
conducted, to enter into this Agreement, and to consummate the transactions
contemplated hereby. Each Physician Owner is an adult citizen and resident of
the State of Florida. Each Physician Owner has the full power and authority to
own his or her property, carry on his or her business as presently being
conducted, to enter into this Agreement, and to consummate the transactions
contemplated hereby.

13.2. Litigation. Except as disclosed pursuant to the Merger Agreement,
there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding pending, or threatened against, or
affecting TOC or any Physician Employee, or to the best of TOC's and each
Physician Owner's knowledge, any provider or other health care professional
associated with or employed by TOC as pertains to any claim involving the
providing of health care related services, and to the best of TOC's and each
Physician Owner's knowledge there is no basis for any of the foregoing.

13.3. Permits. TOC and all health care professionals associated with or
employed by TOC have all permits and licenses and other Necessary Authorizations
required by all Applicable Law, except where failure to secure such licenses,
permits and other Necessary Authorizations does not have a material adverse
effect; have made all regulatory filings necessary for the conduct of TOC's
business; and are not in violation of any of said permitting or licensing
requirements.

13.4. Authority. The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding Agreement of TOC and each
Physician Owner, enforceable in accordance with its terms. TOC and each
Physician Owner have obtained all third-party consents necessary to enter into
and consummate the transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor compliance by TOC or any Physician Owner with any of
the provisions hereof, will:

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<PAGE>

13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either TOC or any Physician Owner.

13.5. Compliance with Applicable Law. To the best of TOC's and each
Physician Owner's knowledge and belief, TOC and each Physician Owner has
operated in compliance with all federal, state, county and municipal laws,
ordinances and regulations applicable thereto and neither TOC nor any provider
associated with or employed by TOC has received payment or any remuneration
whatsoever to induce or encourage the referral of patients or the purchase of
goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or
otherwise perpetrated any Medicare or Medicaid fraud or abuse, nor has any fraud
or abuse been alleged within the last five (5) years by any Governmental
Authority, a carrier or a Third-Party Payor.

13.6. Health Care Compliance. TOC is presently participating in or
otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
TOC no event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such Third-Party Payor Program. TOC is in full
compliance with the material requirements of all such Third-Party Payor Programs
applicable thereto.

13.7. Fraud and Abuse. TOC and persons and entities providing professional
services for TOC, have not, to the knowledge of TOC and each Physician Owner,
after due inquiry, engaged in any activities which are prohibited by or are in
violation of the rules, regulations, policies, contracts or laws pertaining to
any Third-Party Payor Program, or which are prohibited by rules of professional
conduct ("Governmental Rules and Regulations"), including but not limited to the
following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on TOC's own behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment; or (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay or receive such remuneration (i) in return for referring
an individual to a person for the furnishing or arranging for the furnishing or
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing, or ordering or
arranging for or recommending purchasing, leasing, or ordering any good,
facility, service or item for which payment may be made in whole or in part by
Medicare or Medicaid.

13.8. TOC Compliance. TOC has all licenses necessary to operate the
Practice Offices in accordance with the requirements of all Applicable Law and

has all Necessary Authorizations for the

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<PAGE>

use and operation, all of which are in full force and effect. There are no
outstanding notices of deficiencies relating to TOC issued by any Governmental
Authority or Third-Party Payor requiring conformity or compliance with any
Applicable Law or condition for participation of such Governmental Authority or
Third-Party Payor, and after reasonable and independent inquiry and due
diligence and investigation, TOC has neither received notice nor has any
knowledge or reason to believe that such Necessary Authorizations may be revoked
or not renewed in the ordinary course.

13.9. Rates and Reimbursement Policies. The jurisdiction in which TOC is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by TOC. TOC
does not have any rate appeal currently pending before any Governmental
Authority or any administrator of any Third-Party Payor Program. TOC has no
knowledge of any Applicable Law which has been enacted, promulgated or issued
within the eighteen (18) months preceding the date of this Agreement or any such
legal requirement proposed or currently pending in the jurisdiction in which TOC
is located which could have a material adverse effect on TOC or may result in
the imposition of additional Medicaid, Medicare, charity, free care, welfare, or
other discounted or government assisted patients at TOC or require TOC to obtain
any necessary authorization which TOC does not currently possess.

13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:

13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; TOC has billed the applicable Account Debtor and TOC has delivered
or caused to be delivered to such Account Debtor all requested supporting claim
documents with respect to such Accounts Receivable; all information set forth in
the bill and supporting claim documents is true and correct, and, if any error
has been made, TOC will promptly correct the same and, if necessary, rebill or,
if requested by Company, cooperate with Company to rebill such Accounts
Receivable.

13.10.2. The Purchased A/R are exclusively owned by TOC and there is no
security interest or lien in favor of any third party, or the recording or
filing against TOC, as debtor, covering or purporting to cover any interest of
any kind in any Accounts Receivable, except as has been released by each party
holding such adverse interest in the Accounts Receivable. Upon payment of the
Purchase Price with respect to the Purchased A/R and with respect to
Governmental Receivables, to the extent permissible by law, all right, title and
interest of TOC with respect thereto shall be vested in Company, free and clear
of any lien, security interest, claim or encumbrance of any kind, and TOC agrees
to defend the same against the claims of all Persons.

13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by

the Account Debtor identified by TOC as being obligated to do so, (ii) are based
on an actual and bona fide rendition of services or sale of goods to the patient
by TOC in the ordinary course of business, (iii) are denominated and payable
only in lawful currency of the United States, and (iv) are accounts or general
intangibles within the meaning of the UCC of the state in which TOC has its
principal place of business, or are rights to

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<PAGE>

payment under a policy of insurance or proceeds thereof, and are not evidenced
by any instrument or chattel paper. There are no payors other than the Account
Debtor identified by TOC as the payor primarily liable on any Purchased A/R.

13.10.4. The Purchased A/R are not (i) subject to any action, suit,
proceeding or dispute (pending or threatened), set-off, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction or termination by the
Account Debtors other than routine adjustments and disallowances made in the
ordinary course of business, to the extent of such adjustments and
disallowances, (ii) past or within sixty (60) days of, the statutory limit for
collection applicable to the Account Debtor, (iii) subject to an invoice which
provides for payment more than forty-five (45) days from the date of such
invoice, (iv) an account which arises out of a sale or other transaction by or
between TOC to an Affiliate of TOC, (v) from an Account Debtor who is also a
creditor of TOC, (vi) an account in which the Account Debtor has commenced a
voluntary case, or an involuntary proceeding has been instituted, under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit or creditors, or if a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect to the
Account Debtor, (vii) an account of which the goods giving rise to such Accounts
Receivable have not been shipped and delivered to and accepted by the Account
Debtor or the services giving rise to such Accounts Receivable have not been
performed by TOC and accepted by the Account Debtor or the Accounts Receivable
otherwise does not represent a final sale, (viii) is evidenced by an instrument
or chattel paper unless such instrument or chattel paper is delivered to Company
with all appropriate endorsements in favor of Company, or (ix) other than a
complete bona fide transaction which requires no further act under any
circumstances on the part of TOC to make the Accounts Receivable payable by the
Account Debtor.

13.10.5. TOC does not have any guaranty of, letter of credit providing
credit support for, or collateral security for, the Purchased A/R, other than
any such guaranty, letter of credit or collateral security as has been assigned
to Company, and any such guaranty, letter of credit or collateral security is
not subject to any lien in favor of any other person.

13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of TOC and the patient
received such goods or services.

in TOC's community for the same or similar service.

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<PAGE>

types of insurance; (y) employers or unions which self-insure for employee or
member health insurance, prepaid healthcare organizations, preferred provider
organizations, health maintenance organizations or any other similar person, or
(z) a Third-Party Payor of the type described in the definition of Governmental
Receivables.

13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of TOC. The sale of the Purchased A/R
hereunder is made in good faith and without actual intent to hinder, delay or
defraud present or future creditors of TOC.

13.10.10. Except with respect to Governmental Receivables, the insurance
policy, contract or other instrument obligating an Account Debtor to make
payment with respect to the Purchased A/R (i) does not contain any provision
prohibiting the transfer of such payment obligation from the patient to TOC, or
from TOC to Company, (ii) has been duly authorized by TOC and to the knowledge
of TOC has been duly authorized by the Account Debtor and, together, with the
Purchased A/R, constitutes the legal, valid and binding obligation of the
Account Debtor in accordance with its terms, (iii) together with the applicable
Purchased A/R, does not contravene in any material respect any requirement of
law applicable thereto, and (iv) was in full force and effect and applicable to
the patient at the time the services constituting the basis for the Purchased
A/R were performed.

The Purchased A/R are purchased without recourse, except for the
representations, warranties and covenants made by TOC and the Physician Owners
with respect thereto. None of the foregoing representations and warranties with
respect to the Purchased A/R shall be deemed to constitute a guaranty by TOC
that the Purchased A/R will be collected by Company. TOC shall not be
responsible for any damages for any breach of a representation or warranty under
this Section 13.10 until Company has suffered a loss on the purchase of TOC's
Accounts Receivable. Damages for such breach shall be limited to the amount of
Company's loss on the purchase of such Accounts Receivable.

13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of TOC no representation or warranty made by
TOC in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make

the statements contained herein or therein not misleading.

13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by TOC as though recited in this Article
XIII.

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company represents, warrants, covenants and agrees with TOC as follows:

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14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of TOC or Company, other than on terms
and conditions substantially as favorable to Company as would be obtainable by
Company at the time in a comparable arm's-length transaction with a person not
an Affiliate.

ARTICLE XV.

COVENANTS OF TOC AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements. TOC shall not
incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up TOC's affairs or enter into any partnerships,
joint ventures or sale-leaseback transactions or purchase or otherwise acquire
(in one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and

equipment in the ordinary course of business) of any other person or entity.

15.2. Necessary Authorizations/Assignment of Licenses and Permits. TOC and
each Physician Owner shall maintain all licenses, permits, certifications, or
other Necessary Authorizations and shall not assign or transfer any interest in
any license, permit, certificate or other Necessary Authorization granted to it
by any Governmental Authority, nor shall TOC or any Physician Owner assign,
transfer, or remove or permit any other individual or entity to assign, transfer
or remove any records of TOC or any Physician Owner, including without
limitation, patient records, medical and clinical records (except for removal of
such patient records as required under any Applicable Law).

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15.3. Transaction with Affiliates. Neither TOC nor any Physician Owner
shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of TOC or
Company, other than on terms and conditions substantially as favorable to TOC or
the Physician Owner, as would be obtainable by TOC or the Physician Owner at the
time in a comparable arms-length transaction with a person not an Affiliate.

15.4. Compliance with All Laws. TOC and each Physician Owner shall use
their best efforts to comply with all laws and regulations relating to TOC's
practice and the operation of any facility, including, but not limited to, all
state, federal and local laws relating to the acquisition or operation of a
health care practice. Furthermore, neither TOC nor any Physician Owner shall
intentionally violate any Governmental Rules and Regulations.

15.5. Third-Party Payor Programs. TOC shall maintain TOC's compliance with
the requirements of all Third-Party Payor Programs in which TOC is currently
participating or authorized to participate.

15.6. Change in Business or Credit and Collection Policy. TOC shall not
make any change in the character of TOC's business or in the credit and
collection policy, which change would, in either case, impair the collectibility
of any Purchased A/R or any Merger A/R or otherwise modify, amend or extend the
terms of any such account other than in the ordinary course of business.

15.7. Treatment of Accounts Receivable. TOC will (i) treat transfers to
Company of Accounts Receivable hereunder as a sale for all purposes, including
tax and accounting (and shall accurately reflect such sale in its financial
statements), and will advise all persons who inquire about the ownership of such
Accounts Receivable that they have been sold to Company; (ii) not treat any such
Accounts Receivable as an asset on TOC's books and records; (iii) record in
TOC's books, records and computer files pertaining thereto that such Accounts
Receivable have been sold to Company; (iv) pay all taxes, if any, relating to
the transfer of such Accounts Receivable after the same have been purchased by
Company; (v) not impede or interfere with Company's collection of such Accounts
Receivable; (vii) not amend, waive or otherwise permit or agree to any deviation
from the terms or conditions of such purchased Accounts Receivable; (viii) use
all reasonable efforts to obtain all consents from patients which are required
by law in order for Company, or any servicing entity retained by Company, to

secure information needed to obtain or to expedite payment from the respective
Account Debtors; and (ix) have billed such Accounts Receivable on the same bases
and using the same policies and practices that it has used in the past unless
Company has been advised in writing of a change prior to the purchase of such
Accounts Receivable. Company or its designated representatives from time to time
may verify the Accounts Receivable, inspect, check, take copies or extracts from
TOC's books, records and files, and TOC will make the same available to Company
or such representatives at any reasonable time for such purposes.

15.8. Security Interest. If, contrary to the mutual intent of TOC and
Company, any purchase of Purchased A/R is characterized as a loan and not as a
sale, TOC shall, effective as of the date hereof, be deemed to have granted (and
TOC does hereby grant) to Company a first priority security

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interest in and to any and all of the Purchased A/R and the proceeds thereof to
secure the repayment of all amounts advanced to TOC hereunder with accrued
interest thereon, and this Agreement shall be deemed to be a security agreement.
With respect to such grant of a security interest, Company may at its option
exercise from time to time any and all rights and remedies available to it under
the UCC or otherwise. TOC agrees that five (5) days shall be reasonable prior
notice of the date of any public or private sale or other disposition of all or
part of the Purchased A/R. TOC represents and warrants that the location of
TOC's principal place of business, and all locations where TOC maintains records
with respect to its accounts are set forth under its name in Section 16.3
hereof. TOC agrees to notify Company in writing thirty (30) days prior to any
change in any such location. The exact name of TOC is as set forth at the
beginning of this Agreement, and except as set forth on the signature page
hereof, TOC has not changed its name in the last five (5) years, and during such
period TOC did not use, nor does TOC now use, any fictitious or trade name other
than the former name of Company. TOC shall notify Company in writing thirty (30)
days prior to any change in any such name.

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment. Company shall have the right to assign its rights
hereunder to Specialty Care Network, Inc. and to any person, firm or corporation
under common control with Company and to any lending institution from which
Company obtains financing, including but not limiting the restrictive covenants
included in Article VII (covenant not to compete), for security purposes or as
collateral. TOC agrees to, and acknowledges, Company's right to assign Company's
rights under this Agreement to any Lender and further agrees that upon receipt
of written notice from such Lender, TOC shall pay to Lender or cause to be paid
to Lender all amounts which are otherwise payable to Company pursuant to the
terms of this Agreement, including, without limitation, all service fees, and
other Clinic Expenses and, until such amounts are delivered to Lender, hold
payments in trust for Lender. Except as set forth above, neither Company nor TOC
shall have the right to assign their respective rights and obligations hereunder
without the written consent of the other party. Without limiting the foregoing,

TOC acknowledges that, as collateral for certain obligations, Company has
assigned all of its rights hereunder to NationsBank of Tennessee, N.A. as Agent
(the "Agent") for itself and other banks and institutional lenders from time to
time (collectively the "Banks") and has granted the Agent for the benefit of the
Banks a lien and security interest upon all real and personal property used in
the operation of the Office Locations (the "Pledged Assets"). As an inducement
for the Banks to extend or continue the extension of credit to Company, TOC (i)
acknowledges that the collateral assignment to the Agent covers all rights of
Company hereunder, including, but not limited to, rights arising from warranties
and representations made by TOC, rights to enforce covenants made by TOC, and
rights to receive all payments due Company; (ii) agrees to regard the Agent as
the owner of any or all of the assigned rights upon written notice to TOC of
this election from the Agent; (iii) agrees that neither the Agent nor any of the
Banks has obligation for the performance of the duties of Company hereunder, and
shall not assume any such duty by the exercise of rights as a secured lender;
(iv) agrees to give the Agent written notice of any material default hereunder
on

- 43 -
<PAGE>

Company's part at the address of 1 NationsBank Plaza, Nashville, Tennessee
37239, Attn: David Dupuy, and to allow at least thirty (30) days thereafter for
the cure of such default before TOC terminates this Agreement; (v) agrees that
the rights of TOC under this Agreement, including, but not limited to, the right
to the use of the Pledged Assets, are and shall be junior to any security
interest that the Agent and the Banks, their successors or assigns may have in
the Pledged Assets at any time; (vi) agrees that the benefits of the above
undertakings in favor of the Agent and Banks shall further extend to all
successors and assigns of the Agents and Banks, provided that any notices given
by TOC under this Section shall be given to the Agent at the foregoing address
unless TOC has received written notice of a change thereof; and (vii) agrees
that this Section may not be modified, and no provision of this Section may be
waived, absent the written approval of the Agent.

To Company: TOC Services, Inc.
3334 Capital Medical Blvd., Suite 400
Tallahassee, Florida 32300

To TOC: TOC Specialists, L.C.
3334 Capital Medical Blvd., Suite 400
Tallahassee, Florida 32300

or to such other address as either party shall notify the other.

16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.

16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida.

- 44 -
<PAGE>

16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.

the course of the performance of this Agreement, including, but not limited to,
any information relating to the internal operations of TOC, TOC fees or the
terms of any of the managed care contracts, without the other party's written
approval; provided, however, the foregoing shall not apply to information which
(i) is generally available to the public other than as a result of a breach of
confidentiality provisions; (ii) becomes available on a non-confidential basis
from a source other than the other party or its affiliates or agents, which
source was not itself bound by a confidentiality agreement; (iii) which is
required to be disclosed by law or pursuant to court order; or (iv) except for
disclosure to its banks, underwriters or lenders, or its advisors to the extent
required by Section 9.4, or as required in connection with reports on filings
with the SEC or State Departments of Securities. Company shall provide TOC with
copies of any information regarding TOC provided by Company to any third party.

16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations, TOC
and Company shall amend this Agreement as necessary. To the maximum extent
possible, any such

- 45 -
<PAGE>

amendment shall preserve the underlying economic and financial arrangements
between and among TOC and Company.

16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to TOC's fair meaning, and not for
or against either party hereto. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or TOC under this Agreement shall
in any way or in any manner be deemed to create any obligation of Company or of
TOC to, or any rights in, any person or entity not a party to this Agreement.

16.17. Communications. TOC and Company agree that good communication
between the parties is essential to the successful performance of this
Agreement, and each

- 46 -

<PAGE>

pledges to communicate fully and clearly with the other on matters relating to
the successful operation of TOC's practice at the Practice Offices.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

TOC:

TOC SPECIALISTS, P.L.
(d/b/a Tallahassee Orthopedic Clinic)

By:_________________________________________

Title:______________________________________

COMPANY:

TOC SERVICES, INC.
(f/k/a Tallahassee Orthopedic Clinic, P.A.)

By:_________________________________________

Title:______________________________________

- 47 -
<PAGE>

PHYSICIAN OWNERS:

________________________________________
Greg A. Alexander, M.D.

________________________________________
David C. Berg, M.D., M.D.

________________________________________
Richard E. Blackburn, M.D.

________________________________________
Donald Dewey, M.D.

________________________________________
Mark E. Fahey, M.D.

________________________________________
Tom C. Haney, M.D.

________________________________________
William D. Henderson, Jr., M.D.

________________________________________
Steve E. Jordan, M.D.

________________________________________
J. Rick Lyon, M.D.

________________________________________
Kris D. Stowers, M.D.

________________________________________
Robert L. Thornberry, M.D.

________________________________________
Billy C. Weinstein, M.D.

________________________________________
Charles H. Wingo, M.D.

- 48 -

<PAGE>

ASSET EXCHANGE AGREEMENT

By and Among

SPECIALTY CARE NETWORK, INC.,

GREATER CHESAPEAKE ORTHOPAEDIC ASSOCIATES, L.L.C.,

STUART D. MILLER, M.D.

LESLIE S. MATTHEWS, M.D.

PAUL L. ASDOURIAN, M.D.

FRANK R. EBERT, M.D.

MARK S. MYERSON, M.D.

JOHN B. O'DONNELL, M.D.

and

LEW C. SCHON, M.D.

Dated as of November 12, 1996

<PAGE>

TABLE OF CONTENTS

(This Table of Contents is not a part of the Agreement and is only for
convenience of reference.)

1. Definitions.................................................... - 1 -

2. Basic Transaction.............................................. - 4 -
(a) Transfer of Assets...................................... - 4 -
(b) Assumption of Liabilities............................... - 5 -
(c) SCN Shares to be Delivered in Exchange.................. - 5 -
(d) The Closing............................................. - 5 -
(e) Deliveries at Closing................................... - 5 -
(f) Proration............................................... - 5 -
(g) Taxes and Expenses...................................... - 5 -

3. Representations and Warranties of Exchanger and the Exchanger
Members...................................................... - 6 -
(a) Organization, Qualification, and Power.................. - 6 -
(b) Capitalization.......................................... - 6 -
(c) Authorization of Transaction............................ - 6 -
(d) Noncontravention........................................ - 6 -
(e) Subsidiaries and Investments............................ - 7 -
(f) Financial Statements.................................... - 7 -
(g) Undisclosed Liabilities................................. - 7 -
(h) Brokers' Fees........................................... - 7 -
(i) Material Contracts...................................... - 7 -
(j) Insurance; Malpractice.................................. - 8 -
(k) No Changes Prior to Closing Date........................ - 8 -
(l) Title; Condition........................................ - 9 -
(m) Litigation.............................................. - 9 -
(n) Permits and Licenses.................................... - 9 -
(o) Tax Matters............................................. - 9 -
(p) Employee Benefit Plans.................................. - 9 -
(q) Third-Party Relations................................... - 11 -
(r) Compliance with Applicable Laws......................... - 11 -
(s) Employee Compensation................................... - 11 -
(t) Environmental Matters................................... - 11 -
(u) Health care Compliance.................................. - 12 -
(v) Fraud and Abuse......................................... - 12 -
(w) Practice Compliance..................................... - 12 -
(x) Rates and Reimbursement Policies........................ - 13 -
(y) Accounts Receivable..................................... - 13 -
(z) Guaranties.............................................. - 13 -
(aa) Powers of Attorney...................................... - 13 -
(bb) Tangible Assets......................................... - 13 -
(cc) Full Disclosure......................................... - 13 -

4. Representations and Warranties of SCN........................... - 13 -
(a) Organization............................................. - 13 -

- ii -

<PAGE>

Page
----

(b) Capitalization........................................... - 13 -
(c) Authorization of Transaction............................. - 14 -
(d) Noncontravention......................................... - 14 -
(e) Brokers' Fees............................................ - 14 -
(f) Private Placement Memorandum............................. - 14 -
(g) Compliance with Code Section 351......................... - 14 -

5. Covenants....................................................... - 14 -
(a) General.................................................. - 14 -
(b) Notices and Consents..................................... - 14 -
(c) Regulatory Matters and Approvals......................... - 15 -
(d) Operation of Business.................................... - 15 -
(e) Full Access.............................................. - 16 -
(f) Notice of Developments................................... - 16 -
(g) Exclusivity.............................................. - 16 -
(h) Collection of Accounts Receivable........................ - 16 -
(i) Payment of Expenses...................................... - 16 -
(j) Loan Agreement........................................... - 16 -

6. Conditions to Obligation to Close............................... - 17 -
(a) Conditions to Obligation of SCN.......................... - 17 -
(b) Conditions to Obligation of Exchanger.................... - 18 -

7. Items to be Delivered at or Prior to Closing.................... - 19 -
(a) By the Exchanger Members or Exchanger.................... - 19 -
(b) By SCN................................................... - 19 -

8. Termination..................................................... - 20 -
(a) Termination of Agreement................................. - 20 -
(b) Effect of Termination.................................... - 20 -

9. Indemnification................................................. - 20 -
(a) Indemnification by the Exchanger Members................. - 20 -
(b) Notice to the Exchanger Members; Opportunity to Defend... - 21 -
(c) General Indemnification by SCN........................... - 21 -
(d) Notice to SCN; Opportunity to Defend..................... - 21 -
(e) Survival................................................. - 21 -
(f) Security for Indemnity................................... - 21 -

10. Miscellaneous.................................................. - 21 -
(a) No Third-Party Beneficiaries............................. - 21 -
(b) Entire Agreement......................................... - 22 -
(c) Succession and Assignment................................ - 22 -
(d) Counterparts............................................. - 22 -
(e) Headings................................................. - 22 -
(f) Notices.................................................. - 22 -
(g) Governing Law............................................ - 23 -

- iii -

<PAGE>

Page
----

(h) Amendments and Waivers................................... - 23 -
(i) Severability............................................. - 23 -
(j) Expenses................................................. - 23 -
(k) Construction............................................. - 23 -
(l) Submission to Arbitration................................ - 23 -
(m) Incorporation of Exhibits and Schedules.................. - 23 -

SCHEDULE 1(a) REAL PROPERTY.............................. Schedule 1(a)-1
SCHEDULE 1(b) FURNITURE, FIXTURES & EQUIPMENT............ Schedule 1(b)-1
SCHEDULE 1(d) LEASES OF PERSONAL PROPERTY................ Schedule 1(d)-1
EXHIBIT 6(a)(viii) EXCHANGER OPINION LETTER.............. Exhibit 6(a)(viii)-1
EXHIBIT 6(a)(ix) SUBSCRIPTION DOCUMENTS.................. Exhibit 6(a)(ix)-1
EXHIBIT 6(b)(vi) SCN Opinion Letter...................... Exhibit 6(b)(vi)-1
EXHIBIT 7(a)(ii) INSTRUMENT OF EXCHANGE.................. Exhibit 7(a)(ii)-1
EXHIBIT 7(a)(iii) SERVICE AGREEMENT...................... Exhibit 7(a)(iii)-1

- iv -

<PAGE>

ASSET EXCHANGE AGREEMENT

THIS AGREEMENT ("Agreement") is entered into as of November 12, 1996, by
and among GREATER CHESAPEAKE ORTHOPAEDIC ASSOCIATES, L.L.C., a Maryland limited
liability company ("Exchanger"), and STUART D. MILLER, M.D., LESLIE S. MATTHEWS,
M.D., PAUL L. ASDOURIAN, M.D., FRANK R. EBERT, M.D., MARK S. MYERSON, M.D., JOHN
B. O'DONNELL, M.D., and LEW C. SCHON, M.D., all residents of the State of
Maryland (collectively the "Exchanger Members") on the one hand and SPECIALTY
CARE NETWORK, INC., a Delaware corporation ("SCN") on the other hand. SCN,
Exchanger and the Exchanger Members are referred to collectively herein as the
"Parties."

W I T N E S S E T H:

WHEREAS, Exchanger is a Maryland limited liability company which owns the
assets which are used by and/or result from the Exchanger Members' practice of
medicine;

WHEREAS, the Exchanger Members are medical doctors practicing medicine in
the State of Maryland;

WHEREAS, the Parties anticipate that the transaction contemplated by this
Agreement will further certain of their business objectives;

WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated; and

WHEREAS, the Exchanger and the Exchanger Members desire to effect a
contribution of certain of Exchanger's assets to SCN solely in exchange for
common stock of SCN in a transaction qualifying for non-recognition of gain
under Section 351 of the Internal Revenue Code of 1986, as amended (the "Code").

1. Definitions.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"Agreement" has the meaning set forth in the preface above.

"Applicable Laws" shall have the meaning set forth in Section 3(r).

"Assumed Liabilities" means (a) all obligations and liabilities of the
Seller under any agreements, contracts, leases, licenses, and other arrangements
referred to in the definition of Contributed Assets either (i) to furnish goods,
services (other than medical services) or other benefits to another party after
the Closing Date or (ii) to pay for goods, services or other benefits that
another party will furnish to it after the Closing Date and (b) all other
obligations and liabilities expressly assumed by Buyer pursuant to this
Agreement.

<PAGE>

"Closing Date" has the meaning set forth in Section 2(d) below.

"Closing" has the meaning set forth in Section 2(d) below.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Contributed Assets" means all of Exchanger's right, title, and interest
in and to the following assets of Exchanger owned as of the Closing Date:

(a) any and all leaseholds and subleaseholds in real property,
improvements, fixtures, and fittings thereon, and easements, rights-of-way, and
other appurtenances and hereditaments thereto (such as appurtenant rights in and
to public streets), including the assets described on Schedule 1(a) attached
hereto (the "Real Property"),

(b) any and all furniture, fixtures, equipment and other capital assets of
Exchanger, including items described on Schedule 1(b) attached hereto,

(c) any and all inventory of supplies, janitorial and office supplies, and
other disposables and consumables on hand at the Closing Date (excluding drugs),

(d) leases or subleases of equipment or other personal property, and
rights thereunder as described on Schedule 1(d) attached hereto,

(e) any and all Intellectual Property, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein under the laws of all jurisdictions,

(f) agreements, contracts, indentures, mortgages, instruments, Security
Interests, guaranties, other similar arrangements, and rights thereunder,

(g) claims, deposits, prepayments, refunds, causes of action, choses in
action, rights of recovery, rights of set off, and rights of recoupment (except
any such item relating to the payment of Taxes),

(h) franchises, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights obtained from governments and
governmental agencies,

(i) any and all books, records, ledgers, files, documents, correspondence,
lists, plats, architectural plans, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and other
printed or written materials (excluding patient medical records),

(j) any and all accounts receivable (excluding governmental receivables)
of Exchanger as the same exist on the Closing Date and all rights to receive
payments on governmental receivables after payments on such governmental
receivables are received by Exchanger, which accounts receivable shall include
all uncollected patient accounts of Exchanger on the Closing Date.

The term "Contributed Assets" shall not include any specific item included
within the definition of Excluded Assets below.

- 2 -

<PAGE>

"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"Employee Benefit Plans" has the meaning set forth in Section 3(p)(i).

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

"Excluded Assets" means (a) the articles of organization, qualifications
to conduct business as a foreign limited liability company, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, transfer books, and other documents
relating to the organization, maintenance, and existence of Exchanger as a
limited liability company, (b) employment or noncompete agreements between
Exchanger and those licensed medical doctors under contract with Exchanger to
provide medical services to Exchanger patients, (c) all patient records and
patient lists, (d) all insurance policies of Exchanger and all claims arising
thereunder and all prepaid expenses on malpractice insurance premiums, (e) the
inventories, cash, and accounts receivable disposed of, cancelled, expanded or
collected, as the case may be, by Exchanger after the date hereof and prior to
the Closing in the Ordinary Course of Business and consistent with past
practice, (f) personal property of individual Exchanger Members which is not
included on the financial statements of Exchanger, (g) Exchanger's cash on hand
as of the Closing Date, (h) the Exchanger's third party payor agreements, (i)
all drugs owned by Exchanger, and (j) any rights of Exchanger under this
Agreement or any related document or under any other agreement between Exchanger
on the one hand and SCN on the other hand entered into on or after the date of
this Agreement.

"Exchange" has the meaning set forth in Section 2(a) below.

"Exchanger" has the meaning set forth in the preface above.

"Exchanger Members" means all Persons who are members of Exchanger.

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

"Hazardous Materials" has the meaning set forth in Section 3(t) below.

"IRS" means the Internal Revenue Service.

"Knowledge" means actual knowledge after reasonable investigation.

- 3 -

<PAGE>

"Maryland Limited Liability Company Act" means the Limited Liability
Company Act of the State of Maryland, as amended.

"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.

"PBGC" shall have the meaning set forth in Section 3(p)(ii).

"Private Placement Memorandum" means the private placement memorandum of
SCN relating to the of the offering of the SCN Shares in connection with the
transactions contemplated by this Agreement, including all supplements thereto.

"Requisite Exchanger Member Approval" means the affirmative vote of the
holders of a majority of the membership interests of Exchanger in favor of this
Agreement and the Exchange.

"Requisite SCN Stockholder Approval" means the affirmative vote of the
holders of a majority of the SCN Shares in favor of this Agreement and the
Exchange.

"SCN Share" means any share of the common stock, $.001 par value per
share, of SCN.

"SCN" has the meaning set forth in the preface above.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Security Interest" means any mortgage, pledge, lien, encumbrance, charge
or other security interest other than (a) mechanic's, materialmen's or similar
lien, (b) liens for taxes not yet due and payable or for taxes that the taxpayer
is contesting in good faith through appropriate proceedings, (c) purchase money
liens and liens securing rental payments under capital lease arrangements, and
(d) other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.

"Special Exchanger Meeting" has the meaning set forth in Section 5(c).

2. Basic Transaction.

(a) Transfer of Assets. At the Closing, on and subject to the terms and
conditions of this Agreement, Exchanger agrees to transfer, exchange, convey,
and deliver to SCN, and SCN agrees to receive in exchange for the SCN Shares set
forth in Section 2(c), all of the Contributed Assets (the "Exchange").

- 4 -

<PAGE>

(b) Assumption of Liabilities. Except for the Assumed Liabilities, SCN
will not assume or have any responsibility or liability, either expressly or
impliedly, with respect to any obligation or liability of Exchanger of any kind
or nature. SCN hereby assumes all of Exchanger's obligations and
responsibilities resulting from the Assumed Liabilities.

(c) SCN Shares to be Delivered in Exchange. In exchange for the
Contributed Assets, SCN shall issue and deliver to Exchanger One Million Five
Hundred Sixty-Eight Thousand Nine Hundred Twenty-One (1,568,921) SCN Shares (for
purposes of this Agreement, each SCN Share shall be deemed to have a value of
Six Dollars ($6.00) per share.

(d) The Closing. The closing of the Exchange (the "Closing") shall take
place at the offices of Exchanger, 3333 North Calvert Street, Baltimore,
Maryland 21218, commencing at 9:00 a.m. local time on the business day following
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated hereby or such other date as the
Parties may mutually determine (the "Closing Date"); provided, however, that the
Closing Date shall be no later than December 31, 1996. Time is of the essence
for this Agreement.

(e) Deliveries at Closing. At the Closing, (i) SCN will deliver to
Exchanger the various certificates, instruments, and documents referred to in
Section 7(b) below; (ii) Exchanger will deliver to SCN the various certificates,
instruments, and documents referred to in Section 7(a) below.

(f) Proration. The following prorations among the Parties shall be made as
of the Closing Date, with Exchanger remaining liable to the extent such items
relate to any time period up to the Closing Date and the Buyer being liable to
the extent such items relate to periods on and after the Closing Date. To the
extent possible, the net amount of all such prorations will be settled in cash
at the Closing.

(i) Any ad valorem taxes, including, without limitation, personal
property taxes and assessments, and other taxes, if any, on or with
respect to the Contributed Assets.

(ii) Rents, additional rents, taxes and other items payable by
Exchanger under any lease, license, permit, contract or any other
agreement or arrangement to be assigned to or assumed by SCN.

(iii) The amount of rents, taxes, and charges for sewer, water,
fuel, telephone, electricity, and other utilities; provided, that if
practicable, a meter reading shall be taken on the Closing Date and the
respective obligations of the parties determined in accordance with such
readings.

If the actual expense of any of the above items for the billing period in
which the Closing Date falls is not known at the Closing, the proration shall be
made based on the expense incurred in the previous billing cycle, for expenses
billed less often than quarterly, and on the average expense incurred in the
preceding three (3) billing periods, for expense bill quarterly or more often.

(g) Taxes and Expenses. Exchanger shall be responsible for any business,
occupation, withholding or similar tax or taxes of any kind related to
Exchanger's business for any period prior to the Closing Date. All

- 5 -

<PAGE>

applicable sales, use and tangible taxes, documentary stamp taxes, filing and
recording costs and other transfer taxes, costs and fees relating to the
transfer of title to the Contributed Assets, and the consummation of the
transactions described herein, shall be paid by Exchanger.

3. Representations and Warranties of Exchanger and the Exchanger Members.
Exchanger and the Exchanger Members represent and warrant to SCN that the
statements contained in this Section 3 are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 3), except as set forth in the disclosure
schedule (the "Disclosure Schedule"). The Disclosure Schedule will be arranged
in paragraphs corresponding to the numbered and lettered paragraphs contained in
this Section 3. SCN acknowledges that on the Closing Date Exchanger shall have
ceased the practice of medicine and shall have converted from a professional
limited liability company to a business limited liability company. To the extent
that any statements contained in this Section 3 refer to the practice of
medicine, such statements shall refer to the period during which Exchanger
operated as a professional limited liability company.

(a) Organization, Qualification, and Power. Exchanger is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Maryland. Exchanger is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction in which
the character or location of the properties owned or the business conducted by
Exchanger makes such qualification necessary. Exchanger has the power and
authority to carry on the business in which it is engaged and to own and use the
properties owned and used by it.

(b) Capitalization. All of the membership interests in Exchanger have been
duly authorized and validly issued to the Exchanger Members. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights or other contracts or commitments
that could require Exchanger to issue, sell or otherwise cause to be created any
membership interests of Exchanger.

(c) Authorization of Transaction. Exchanger has the power and authority to
execute and deliver this Agreement and to perform its obligations hereunder;
provided, however, that Exchanger cannot consummate the Exchange unless and
until it receives the Requisite Exchanger Member Approval. This Agreement
constitutes the valid and legally binding obligation of Exchanger and the
Exchanger Members, enforceable in accordance with its terms and conditions.

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, professional regulatory organization or court to which
Exchanger is subject or any provision of the articles of organization or
operating agreement of Exchanger or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument or other arrangement
to which Exchanger is a party or by which it is bound or to which any of its
assets is subject (or result in the imposition of any Security Interest upon any
of its assets). Exchanger is not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.

- 6 -

<PAGE>

(e) Subsidiaries and Investments. Exchanger does not own, directly or
indirectly, any capital stock or other equity ownership or proprietary interest
in any other corporation, partnership, association, limited liability company,
trust, joint venture or other entity.

(f) Financial Statements. Exchanger has furnished SCN with audited balance
sheets dated December 31, 1994 and 1995 and audited income statements for the
twelve (12) month periods ending December 31, 1995, 1994 and 1993. Such
financial statements, including the notes thereto, except as indicated therein,
were prepared on a basis consistent with past accounting practices of Exchanger
and fairly presents the results of operations for the periods noted therein. The
balance sheets of Exchanger delivered by Exchanger to SCN fairly present the
financial condition of Exchanger at the date thereof, and except as indicated
therein, reflect all claims against and all debts and liabilities of Exchanger
fixed or contingent, as of the date thereof.

(g) Undisclosed Liabilities. Exchanger has no uninsured liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to become due),
including any liability for taxes, except for (i) liabilities set forth on the
face of the balance sheet dated as of December 31, 1995 and (ii) liabilities
which have arisen after December 31, 1995 in the Ordinary Course of Business
(none of which results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement, or
violation of law).

(h) Brokers' Fees. Exchanger does not have any liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

(i) Material Contracts. Section 3(i) of the Disclosure Schedule lists the
following contracts and other material agreements to which Exchanger is a party:

(i) any agreement (or group of related agreements) for the lease of
real or personal property to or from any Person;

(ii) any agreement (or group of related agreements) for the purchase
or sale of supplies, products, or other personal property or for the
furnishing or receipt of services;

(iii) any agreement concerning a partnership, limited liability
company or joint venture;

(iv) any agreement (or group of related agreements) under which
Exchanger has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation pursuant to which
it has imposed a Security Interest in respect of any of its assets,
tangible or intangible;

(v) any agreement concerning confidentiality or noncompetition;

(vi) any profit sharing, option, deferred compensation, severance,
or other plan or arrangement for the benefit of Exchanger's current or
former members, managers, officers, and/or employees;

(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;

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(viii) any agreement pursuant to which Exchanger has advanced or
loaned any amount to any of its directors, officers, and employees;

(x) any other agreement (or group of related agreements) outside the
ordinary course of Exchanger's business or operations the performance of
which involves consideration in excess of $15,000.

Exchanger has delivered or given SCN access to a correct and complete copy of
each written agreement (as amended to date) listed in Section 3(i) of the
Disclosure Schedule and a written summary setting forth the terms and conditions
of each oral agreement referred to in Section 3(i) of the Disclosure Schedule.
With respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (B) except as set forth in Section
3(i) of the Disclosure Schedule, no notice of this Agreement or consent of any
third party is required in order for Exchanger to execute and deliver this
Agreement or to consummate the transactions contemplated hereby, and, after
assignment to SCN at Closing, the agreement will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms; (C) to
Exchanger's knowledge no party is in breach or default, and no event has
occurred which with notice or lapse of time would constitute a breach or
default, or permit termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of the agreement.

(j) Insurance; Malpractice. Section 3(j) of the Disclosure Schedule
contains a list and brief description of all policies or binders of fire,
liability, product liability, workers compensation, health and other forms of
insurance policies or binders currently in force insuring against risks which
will remain in full force and effect at least through the Closing Date. Section
3(j) of the Disclosure Schedule contains a description of all current
malpractice liability insurance policies of the Exchanger Members, Exchanger and
Exchanger's professional employees and all predecessor policies in effect since
February 1, 1990. Except as set forth on Section 3(j) of the Disclosure Schedule
(a) neither Exchanger, the Exchanger Members, nor Exchanger's professional
employees have, in the last seven (7) years, filed a written application for any
insurance coverage relating to Exchanger's business or property which has been
denied by an insurance agency or carrier and (b) Exchanger, Exchanger's
professional employees and the Exchanger Members have been continuously insured
for professional malpractice claims during the same period. Section 3(j) of the
Disclosure Schedule also sets forth a list of all claims for any insured loss in
excess of Five Thousand Dollars ($5,000.00) per occurrence filed by Exchanger,
Exchanger's professional employees or the Exchanger Members during the three (3)
year period immediately preceding the date hereof, including workers
compensation, general liability, environmental liability and professional
malpractice liability claims. None of Exchanger, Exchanger's professional
employees or the Exchanger Members is in material default with respect to any
provision contained in any such policy and none of them has failed to give any
notice or present any claim under any such policy in due and timely fashion.

(k) No Changes Prior to Closing Date. During the period from December 31,
1995 through the date hereof, Exchanger has not (i) incurred any liability or
obligation of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due), except in the Ordinary Course of Business, (ii)
written off as uncollectible any notes or accounts receivable, except write-offs
in the Ordinary Course of Business charged to applicable reserves, none of which
individually or in the aggregate is material to Exchanger, (iii) conducted its
business in such

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a manner so as to materially increase its accounts payable or so as to
materially decrease its accounts receivable, (iv) granted any increase in the
rate of wages, salaries, bonuses, or other remunerations of any employee, except
in the Ordinary Course of Business, (v) canceled or waived any claims or rights
of substantial value, (vi) made any change in any method of accounting, (vii)
otherwise conducted its business or entered into any transaction, except in the
usual and ordinary manner and in the Ordinary Course of Business, (viii) agreed,
whether or not in writing, to do any of the foregoing, or (ix) disposed of its
assets other than in the Ordinary Course of Business.

(l) Title; Condition. Exchanger has good and marketable title to, or
leasehold interests in, all of the Contributed Assets. Except as disclosed on
Section 3(l) of the Disclosure Schedule, none of the Contributed Assets is
subject to a contract or other agreement of sale or subject to security
interests, mortgages, encumbrances, liens (including income, personal property
and other tax liens) or charges of any kind or character. Upon completion of the
transaction contemplated by this Agreement, Exchanger shall own or lease the
Contributed Assets free and clear of all liens and encumbrances except as
disclosed in Section 3(l) of the Disclosure Schedule.

(m) Litigation. Except as set forth in Section 3(m) of the Disclosure
Schedule, there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding or investigation by any
governmental entity pending, or, to the Knowledge of Exchanger, threatened
against, or affecting Exchanger or any of the Contributed Assets, or any
physician or other health care professional engaged or employed by Exchanger,
and to the best of Exchanger and the Exchanger Members' Knowledge there is no
basis for any of the foregoing. None of the actions, suits, proceedings,
hearings, and investigations set forth in Section 3(m) of the Disclosure
Schedule could result in any material adverse change in the operations, results
of operations, or future prospects of the business assets to be operated by SCN
after the Closing.

(n) Permits and Licenses. Exchanger and all physicians and other health
care professionals engaged or employed by Exchanger have all permits and
licenses required by all applicable laws; have made all regulatory filings
necessary for the conduct of Exchanger's business; and are not in violation of
any of said permitting or licensing requirements.

(o) Tax Matters. Except as set forth in Section 3(o) of the Disclosure
Schedule, Exchanger has filed or caused to be filed all federal, state and local
tax returns which are required to have been filed by Exchanger, including all
informational, income, excise, franchise, and payroll tax returns, and Exchanger
has paid or established an adequate accrual reserve for all taxes accrued
through the Closing Date and has otherwise complied with all federal, state,
local and other tax laws applicable to it.

(p) Employee Benefit Plans.

(i) List of Plans. Section 3(p) of the Disclosure Schedule contains
an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of ERISA, whether or
not any Employee Benefit Plans are otherwise exempt from the provisions of
ERISA, established, maintained or contributed to by Exchanger (including
all employers (whether or not incorporated) which by reason of common
control are treated together with Exchanger and/or the Exchanger Members
as a single employer within the meaning of Section 414 of the Code) since
September 2, 1974.

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(ii) Status of Plans. Exchanger has never maintained and does not
now maintain or contribute to any Employee Benefit Plan subject to ERISA,
which is not in substantial compliance with ERISA or which has incurred
any accumulated funding deficiency within the meaning of Section 412 or
418B of the Code, or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section
412 of the Code or which is subject to Title IV of ERISA. Exchanger has
not incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") in connection with any Employee Benefit Plan covering any
employees of Exchanger or ceased operations at any facility or withdrawn
from any such Plan in a manner which could subject it to liability under
Section 4062(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any liability of Exchanger to the
PBGC under Title IV of ERISA which could reasonably be anticipated to
result in any claims being made against Exchanger by the PBGC. Exchanger
has not incurred any withdrawal liability (including any contingent or
secondary withdrawal liability) within the meaning of Sections 4201 and
4202 of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan
(as defined in Section 4001 of ERISA), and no event has occurred, and
there exists no condition or set of circumstances, which represent a
material risk of the occurrence of any withdrawal from or the partition,
termination, reorganization or insolvency of any Multiemployer Plan which
would result in any liability of Exchanger.

(iii) Contributions. Full payment has been made of all amounts which
Exchanger is required, under applicable law or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to which
Exchanger is a party, to have paid as contributions thereto as of the last
day of the most recent plan year of such Employee Benefit Plan ended prior
to the date hereof. Exchanger has made adequate provision for reserves to
meet contributions that have not been made because they are not yet due
under the terms of any Employee Benefit Plan or related agreements.
Benefits under all Employee Benefit Plans are as represented and have not
been increased subsequent to the date as of which documents have been
provided.

(iv) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and, to the Knowledge of
Exchanger, nothing has occurred since the date of the last such
determination which resulted or is likely to result in the revocation of
such determination.

(v) Transactions. Exchanger has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a material
tax, penalty or liability for prohibited transactions under ERISA or the
Code nor have any of its directors, officers or employees to the extent
they or any of them are fiduciaries with respect to such plans, breached
any of their responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA which would result in any material claim being made
under or by or on behalf of any such plans by any party with standing to
make such claim.

(vi) Other Plans. Exchanger presently does not maintain any Employee
Benefit Plans or any other foreign pension, welfare or retirement benefit
plans other than those listed on Section 3(p) of the Disclosure Schedule.

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<PAGE>

(vii) Documents. Exchanger has delivered or caused to be delivered
to SCN true and complete copies of (i) all Employee Benefit Plans as in
effect, together with all amendments thereto which will become effective
at a later date, as well as the latest IRS determination letter obtained
with respect to any such Employee Benefit Plan qualified under Section 401
or 501 of the Code, and (ii) the most recently filed Form 5500 for each
Employee Benefit Plan required to file such form.

(q) Third-Party Relations. Exchanger has not received notice that any
material patient, supplier, employee or associated physician intends to cease
doing business with Exchanger.

(r) Compliance with Applicable Laws. Except as set forth in Section 3(r)
of the Disclosure Schedule, to the best of Exchanger's Knowledge, Exchanger has
operated in compliance with all federal, state, county and municipal laws,
constitutions, ordinances, statutes, rules, regulations and orders applicable
thereto ("Applicable Laws"). No item disclosed in Section 3(r) of the Disclosure
Schedule could have a material effect on the operations of Exchanger. To the
best of Exchanger's Knowledge, neither Exchanger nor any physician associated
with or employed by Exchanger has received payment or any remuneration
whatsoever to induce or encourage the referral of patients or the purchase of
goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or
otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any fraud
or abuse been alleged within the last five (5) years by any government agency.

(s) Employee Compensation. Exchanger has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
employees, including physician employees, are entitled through the Closing Date,
including but not limited to all salaries, wages, bonuses, incentive
compensation, payroll taxes, hospitalization and medical expenses, deferred
compensation, and vacation and sick pay, as well as any severance pay becoming
due as a result of the termination of certain of Exchanger's physician
employees.

(t) Environmental Matters.

(i) Except as set forth in Section 3(t) of the Disclosure Schedule,
Exchanger is in material compliance with all applicable Environmental
Laws.

(ii) Exchanger has not authorized or conducted nor does Exchanger
have Knowledge of the disposal or release, or other handling of any
hazardous substance, hazardous waste, hazardous material, hazardous
constituent, toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or waste (including
crude oil or any fraction thereof), natural gas, liquefied gas, synthetic
gas, biohazardous or biomedical material, or other material defined,
regulated controlled or potentially subject to any remediation requirement
under any Environmental Law (collectively "Hazardous Materials"), on, in,
under or affecting or any property owned or leased by Exchanger.

(iii) Exchanger has, and is in compliance with, all licenses,
permits, registrations, and government authorizations necessary to operate
under all applicable Environmental Laws. Section 3(t) of the Disclosure
Schedule lists all such licenses, permits, registrations and government
authorizations required by any Environmental Law.

(iv) Except as disclosed in Section 3(t) of the Disclosure Schedule,
Exchanger has not received any written or oral notice from any
governmental agency or entity or any other Person and

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there is no pending or threatened claim, litigation or any administrative
agency proceeding that: (a) alleges a violation of any Environmental
Law(s) by Exchanger or, with respect to the Contributed Assets or any
property owned or leased by Exchanger, (b) alleges that Exchanger is a
liable party or potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss.
9601, et seq., or any analogous state law, (c) has resulted or could
result in the attachment of an environmental lien on any of the
Contributed Assets or property owned or leased by Exchanger or (d) alleges
that Exchanger is liable for any contamination of the environment,
contamination of any property owned or leased by Exchanger, damage to
natural resources, property damage, or personal injury based on its
activities or the activities of any predecessor or third parties involving
Hazardous Materials, whether arising under the Environmental Laws, common
law principles, or other legal standards.

(u) Healthcare Compliance. Exchanger is participating in or otherwise
authorized to receive reimbursement from Medicare and Medicaid and is a party to
other third-party payor agreements set forth on Section 3(i) of the Disclosure
Schedule. All necessary certifications and contracts required for participation
in such programs are in full force and effect and have not been amended or
otherwise modified, rescinded, revoked or assigned, and no condition exists or
event has occurred which in itself or with the giving of notice or the lapse of
time or both would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such third-party payor program. Exchanger is in compliance
in all material respects with the requirements of all such third-party payors.
Exchanger, the Exchanger Members, and its physician employees do not have any
financial relationship (whether investment interest, compensation interest, or
otherwise) with any entity to which any of the foregoing refer patients, except
for such financial relationships that qualify for exceptions to state and
federal laws restricting physician referrals to entities in which they have a
financial interest.

(v) Fraud and Abuse. To best of Exchanger's and the Exchanger Members'
Knowledge, Exchanger, the Exchanger Members, and persons and entities providing
professional services for Exchanger have not engaged in any activities which are
prohibited under 42 U.S.C. ss. 1320a-7b, or the regulations promulgated
thereunder pursuant to such statutes, or related state or local statutes or
regulations, or which are prohibited by rules of professional conduct, including
the following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to fraudulently secure such benefit or payment; or (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay or receive such remuneration (1) in return for referring an
individual to a person for the furnishing or arranging for the furnishing or any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid or (2) in return for purchasing, leasing, or ordering or arranging for
or recommending purchasing, leasing or ordering any good, facility, service or
item for which payment may be made in whole or in part by Medicare or Medicaid.

(w) Practice Compliance. Exchanger is duly licensed as a medical practice
and is lawfully operated in accordance with the requirements of all Applicable
Laws and has all necessary authorizations for the use and operation of a medical
practice, all of which are in full force and effect. There are no outstanding
notices of deficiencies relating to Exchanger issued by any governmental
authority or third-party payor requiring conformity or compliance with any
applicable law or condition for participation with such governmental authority
or third-party payor, and after reasonable and independent inquiry and due
diligence and

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investigation, Exchanger has neither received notice nor has any Knowledge or
reason to believe that such necessary authorizations may be revoked or not
renewed.

(x) Rates and Reimbursement Policies. The jurisdiction in which Exchanger
is located does not currently impose any restrictions or limitations on rates
which may be charged to private pay patients receiving services provided by
Exchanger. Exchanger does not have any rate appeal currently pending before any
governmental authority or any administrator of any third-party payor program.
Exchanger has no Knowledge of any Applicable Law which affects rates or
reimbursement procedures which has been enacted, promulgated or issued within
the eighteen (18) months preceding the date of this Agreement or any such legal
requirement proposed or currently pending in the jurisdiction in which Exchanger
is located, which could have a material adverse effect on Exchanger or may
result in the imposition of additional Medicaid, Medicare, charity, free care,
welfare, or other discounted or government assisted patients at Exchanger or
require Exchanger to obtain any necessary authorization which Exchanger does not
currently possess.

(y) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
Exchanger as being due to Exchanger have arisen in the Ordinary Course of
Business and none of such accounts receivable or other debts is or will at the
Closing Date be subject to any counterclaim or set-off. There has been no
material adverse change since December 31, 1995 in the amount of accounts
receivable or other debts due Exchanger, the allowances with respect thereto, or
accounts payable of Exchanger from that reflected in the Balance Sheet
previously delivered by Exchanger to SCN.

(z) Guaranties. Exchanger is not a guarantor and otherwise is not liable
for any liability or obligation (including indebtedness) of any other Person.

(aa) Powers of Attorney. There are no outstanding powers of attorney
executed by Exchanger, except as may be contained in financing documents or
security agreements listed in Section 3(i) of the Disclosure Schedule.

(bb) Tangible Assets. Exchanger owns or leases all land, buildings,
machinery, equipment, and other tangible assets necessary for the conduct of its
business as presently conducted. To the best of Exchanger's Knowledge each
tangible asset has been maintained in accordance with normal industry practice
and is in good operating condition and repair (subject to normal wear and tear).

(cc) Full Disclosure. No representation or warranty made by Exchanger in
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.

4. Representations and Warranties of SCN. SCN represents and warrants to
Exchanger that the statements contained in this Section 4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4).

(a) Organization. SCN is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.

(b) Capitalization. The entire authorized capital stock of the SCN
consists of fifty million (50,000,000) SCN Shares, of which One Million Three
Hundred Sixty-Five Thousand (1,365,000) SCN Shares

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are issued and outstanding and zero (0) SCN Shares are held in treasury and two
million (2,000,000) shares of preferred stock, none of which is issued or
outstanding. All of the SCN Shares to be issued upon consummation of the
Exchange have been duly authorized and, upon consummation of the Exchange, will
be validly issued, fully paid, and nonassessable.

(c) Authorization of Transaction. SCN has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement, to issue the SCN Shares to be issued in connection with this
Agreement and otherwise to perform its obligations hereunder; provided, however,
that SCN cannot consummate the Exchange unless and until it receives the
Requisite SCN Stockholder Approval. This Agreement constitutes the valid and
legally binding obligation of SCN, enforceable in accordance with its terms and
conditions.

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency, professional regulatory organization or court to which SCN
is subject or may become subject as a result of the transaction contemplated by
this Agreement, or any provision of the charter or bylaws of SCN or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which SCN is a party or by which it is bound
or to which any of its assets is subject. Other than state and federal filings
required by the Securities Act and similar state statutes, SCN does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.

(g) Compliance with Code Section 351. To the best of SCN's knowledge and
understanding, the Exchange will meet the requirements for qualification as a
transaction described in Section 351 of the Code.

5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.

(a) General. Each of the Parties will use its or his best efforts to take
all action and to do all things necessary in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction of the closing conditions set forth in Section 6 below) to be
satisfied by it. This paragraph shall not be construed to obligate any of the
Parties to waive any condition precedent to its obligations to perform
hereunder.

(b) Notices and Consents. Exchanger will give any notices to third
parties, and will use its best efforts to obtain any third party consents,
required to consummate the Exchange or that SCN reasonably may request in
connection with the matters referred to in Section 3(i) above.

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(i) Securities Act and State Securities Laws. SCN will prepare and,
if necessary, file with the United States Securities and Exchange
Commission all necessary documents relating to the offering and issuance
of the SCN Shares pursuant to this Agreement. SCN will take all actions
that may be necessary under state securities laws in connection with the
offering and issuance of the SCN Shares pursuant to this Agreement.

(ii) General Law. Exchanger will call a special meeting of the
Exchanger Members (the "Special Exchanger Meeting") as soon as practicable
after delivery of the Private Placement Memorandum in order that the
Exchanger Members may consider and vote upon the adoption of this
Agreement and the approval of the Exchange in accordance with the Maryland
Limited Liability Company Act. SCN will call a special meeting of its
stockholders (the "Special SCN Meeting") as soon as practicable in order
that the SCN stockholders may consider and vote upon the adoption of this
Agreement and the approval of the Exchange in accordance with the Delaware
General Corporation Law.

(iii) Tax Reporting. The Parties intend that the Exchange shall meet
the requirements for qualification as a transfer of property without
recognition of gain under Code Section 351. Each of the parties agrees to
report this transaction for financial and income tax purposes consistent
with the requirements for reporting transactions meeting the requirements
of Code Section 351. Moreover, SCN shall cooperate with the Exchanger in
structuring and effecting the Exchange in order to meet the requirements
of Section 351 of the Code.

(d) Operation of Business. From the date of this Agreement through the
Closing Date, Exchanger will not engage in any practice, take any action, or
enter into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing:

(i) Exchanger will not authorize or effect any change in its
articles of organization or operating agreement;

(ii) Exchanger will not grant any options, warrants, or other rights
to purchase or obtain any of its membership interests or issue, sell, or
otherwise dispose of any of its membership interests;

(iii) Exchanger will not declare, set aside, or pay any dividend or
distribution with respect to its membership interests (whether in cash or
in kind), or redeem, repurchase, or otherwise acquire any of its
membership interests in either case outside the Ordinary Course of
Business without the consent of SCN, which consent shall not be
unreasonably withheld;

(iv) Exchanger will not issue any note, bond, or other debt security
or create, incur, assume, or guarantee any indebtedness for borrowed money
or capitalized lease obligation outside the Ordinary Course of Business;

(v) Exchanger will not impose any Security Interest upon any of its
assets outside the Ordinary Course of Business;

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(vi) Exchanger will not make any capital investment in, make any
loan to, or acquire the securities or assets of any other Person outside
the Ordinary Course of Business;

(vii) Exchanger will not make any change in employment terms for any
of the Exchanger Members or its managers, officers, and employees outside
the Ordinary Course of Business; and

(viii) Exchanger will not commit to any of the foregoing.

(e) Full Access. Upon three (3) days prior notice, Exchanger will permit
representatives of SCN to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to Exchanger during normal business hours. SCN (i) will treat and
hold as such any confidential information it receives from Exchanger in the
course of the reviews contemplated by this Section 5(e), (ii) will not use any
of the confidential information except in connection with this Agreement, and
(iii) if this Agreement is terminated for any reason whatsoever, agrees to
return to Exchanger all tangible embodiments (and all copies) thereof which are
in its possession.

(f) Notice of Developments. Each Party will give prompt written notice to
the other Party of any material adverse development causing a breach of any of
its own representations and warranties in Section 3 or Section 4 above. No
disclosure by any Party pursuant to this Section 5(f), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant.

(g) Exclusivity. Until the earlier of December 31, 1996 or the Closing
Date, Exchanger will not solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of Exchanger (including any
acquisition structured as a merger, consolidation, or share exchange). Exchanger
shall notify SCN immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.

(h) Collection of Accounts Receivable. The Exchanger Members agree to
cooperate with SCN in the collection of accounts receivable owned by Exchanger
as of the Closing Date acquired pursuant to this Agreement. SCN, at its option,
shall have the right to require the collection of said accounts receivable
through a lockbox or bank account sweep arrangement. In connection therewith,
the Exchanger Members agree to execute the necessary documents and follow the
necessary procedures as described in the Service Agreement between the parties
which is attached hereto as Exhibit 7(a)(iv) to accommodate the collection of
the accounts receivable in such manner.

(i) Payment of Expenses. On or before the Closing Date, Exchanger shall
have paid or discharged any and all liabilities or charges owed as a result of
the transaction contemplated by this Agreement.

(j) Loan Agreement. Within thirty (30) days after the Closing Date, SCN
agrees to make a line of credit available to the Exchanger Members up to a
maximum aggregate of $1,986,825 on terms mutually agreed upon by the Parties and
ultimately approved by NationsBank of Tennessee, N.A. The line of credit shall
be for a term of two (2) years from the Closing Date; provided, however, that if
Securities and Exchange Commission Rule 144 promulgated under the Securities Act
is amended to shorten the period which shareholders are required to hold
restricted securities before being able to sell them pursuant to Rule 144, then
the term of the line of credit shall be reduced accordingly, and all borrowings
under the line of credit must be repaid within thirty (30) days after the end of
such period.

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6. Conditions to Obligation to Close.

(a) Conditions to Obligation of SCN. The obligation of SCN to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) The Exchanger Members shall have received a copy of the Private
Placement Memorandum, and no less than five (5) days after initial receipt
of the Private Placement Memorandum, Exchanger shall have received the
Requisite Exchanger Member Approval of the Exchange and the execution,
delivery and performance of this Agreement;

(ii) Exchanger shall have procured all of the third party consents
specified in Section 5(b) above;

(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;

(iv) Exchanger shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(v) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(C) affect adversely the right of SCN to own the Contributed Assets;

(vi) Exchanger shall have delivered to SCN a certificate to the
effect that each of the conditions specified above in Section 6(a)(i)-(v)
is satisfied in all respects;

(vii) the Exchanger shall have received the Requisite SCN
Stockholder Approval of the Exchange and the execution, delivery and
performance of this Agreement;

(viii) SCN shall have received from counsel to Exchanger an opinion
in form and substance as set forth in Exhibit 6(a)(viii) attached hereto,
addressed to SCN, and dated as of the Closing Date;

(ix) SCN shall have received from the Exchanger Members subscription
documents in form and substance as set forth in Exhibit 6(a)(ix) attached
hereto;

(x) all actions to be taken by Exchanger in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be satisfactory in form and
substance to SCN;

(xi) SCN shall have closed its financing with NationsBank of
Tennessee, N.A., on terms and conditions that are satisfactory to SCN;

(xii) the issuance of the SCN Shares to the Exchanger Members will
not violate federal securities laws or the securities laws of any state of
the United States;

- 17 -

<PAGE>

(xiii) SCN and Exchanger shall have all licenses and permits
necessary to operate their respective businesses; and

(xiv) all physicians and employees of Exchanger shall be duly
covered by medical malpractice insurance policies with limits acceptable
to SCN and, to the extent applicable, medical malpractice tail insurance
policies to cover prior occurrences.

SCN may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

(b) Conditions to Obligation of Exchanger. The obligation of Exchanger to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

(i) SCN shall have received the Requisite SCN Stockholder Approval
of the Exchange and the execution, delivery and performance of this
Agreement;

(ii) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the
Closing Date;

(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(v) SCN shall have delivered to Exchanger a certificate to the
effect that each of the conditions specified above in Section 6(b)(i)-(iv)
is satisfied in all respects;

(vi) Exchanger shall have received from counsel to SCN an opinion in
form and substance as set forth in Exhibit 6(b)(vi) attached hereto,
addressed to the Exchanger Members, and dated as of the Closing Date;

(vii) SCN shall have prepared and, if necessary, filed with the U.S.
Securities and Exchange Commission all necessary documents relating to the
offering and issuance of the SCN Shares. SCN shall have taken all actions
that were necessary under state securities laws in connection with the
offering and issuance of the SCN Shares. Moreover, SCN shall have provided
the Private Placement Memorandum to the Exchanger Members;

(viii) upon review of the Private Placement Memorandum, the
Exchanger Members shall have elected to consummate the transaction
contemplated by this Agreement by delivery to SCN of completed
subscription documents in form and substance as set forth in Exhibit
6(a)(ix);

- 18 -

<PAGE>

(ix) all actions to be taken by SCN in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to
Exchanger; and

(x) there shall have been no changes in the Applicable Laws
affecting SCN's proposed operations as described in the Private Placement
Memorandum.

Exchanger may waive any condition specified in this Section 6(b) if it executes
a writing so stating at or prior to the Closing.

7. Items to be Delivered at or Prior to Closing.

(a) By the Exchanger Members or Exchanger. The Exchanger Members or
Exchanger, as applicable, shall execute and deliver to SCN, prior to or at the
Closing:

(i) Certified resolutions of Exchanger authorizing the execution of
all documents and the consummation of all transactions contemplated
hereby;

(ii) An Instrument of Exchange which shall be in substantially the
form attached hereto as Exhibit 7(a)(ii);

(iii) A Service Agreement in substantially the form attached hereto
as Exhibit 7(a)(iii);

(iv) The Certificate required by Section 6(a)(vi);

(v) An opinion from Exchanger's counsel in substantially the form
attached hereto as Exhibit 6(a)(viii);

(vi) Subscription Documents in substantially the form attached
hereto as Exhibit 6(a)(ix);

(vii) Counterpart signature pages executed by the Exchanger Members
agreeing to the terms of the SCN Stockholder's Agreement attached hereto
as Exhibit 7(b)(v); and

(viii) Such other instruments as may be reasonably requested by SCN
in order to effect to or carry out the intent of this Agreement.

(b) By SCN. SCN shall deliver to Exchanger at or prior to the Closing:

(i) Stock Certificates representing the SCN Shares being issued to
each of the Exchanger Members pursuant to Section 2(c);

(ii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 6(b)(vi);

(iii) A Certificate, duly executed by the President of SCN, stating
as of the Closing Date, all representations and warranties of SCN are
true, all covenants and agreements contained in the Agreement to be
performed by SCN have been performed or complied with and all conditions
to Closing have been satisfied; and

- 19 -

<PAGE>

(iv) Such other instruments as may be reasonably requested by the
Exchanger Members in order to effect to or carry out the intent of this
Agreement.

8. Termination.

(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing Date;

(ii) SCN may terminate this Agreement by giving written notice to
Exchanger at any time prior to the Closing Date (A) in the event Exchanger
has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, SCN has notified Exchanger of the
breach, and the breach has continued without cure for a period of 30 days
after the notice of breach or (B) if the Closing shall not have occurred
on or before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results primarily
from SCN breaching any representation, warranty, or covenant contained in
this Agreement);

(iii) Exchanger may terminate this Agreement by giving written
notice to SCN at any time prior to the Closing Date (A) in the event SCN
has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, Exchanger has notified SCN of the
breach, and the breach has continued without cure for a period of 30 days
after the notice of breach or (B) if the Closing shall not have occurred
on or before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results primarily
from Exchanger breaching any representation, warranty, or covenant
contained in this Agreement);

(iv) any Party may terminate this Agreement by giving written notice
to the other Party at any time in the event this Agreement and the
Exchange fail to receive the Requisite Exchanger Members Approval or the
Requisite SCN Stockholder Approval respectively.

(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any Party to any other Party (except for any
liability of any Party then in breach). Notwithstanding the foregoing, in the
event the transaction contemplated by this Agreement does not close and such
failure is not the fault of SCN, then Exchanger agrees to reimburse SCN for
seventy-five percent of SCN's out of pocket expenses, including but not limited
to professional fees, related to the proposed transaction; provided, however,
Exchanger's obligation to reimburse SCN shall not exceed Fifty-Six Thousand Two
Hundred Fifty Dollars ($56,250.00).

9. Indemnification.

(a) Indemnification by the Exchanger Members. The Exchanger Members agree
to and shall jointly and severally defend, indemnify and hold harmless SCN, its
successors and assigns, officers and directors against any and all losses,
liabilities, expenses (including without limitation reasonable attorney's fees)
and damages resulting from or arising out of the breach, untruth or inaccuracy
of any representation, warranty or covenant of Exchanger set forth in this
Agreement. The Exchanger Members shall not be liable to SCN for any claims
against the Exchanger Members under this Section 9(a) unless and until the
aggregate of all claims against the Exchanger Members exceeds the sum of
$25,000.00, whereupon SCN shall be entitled to recover

- 20 -

<PAGE>

the full amount of all claims, including the initial $25,000.00. Notwithstanding
the foregoing provisions, the obligations of any Exchanger Member executing this
Agreement to indemnify SCN shall not exceed the value of the portion of the SCN
Shares and cash delivered to such Exchanger Member at the Closing.

(b) Notice to the Exchanger Members; Opportunity to Defend. SCN agrees to
give prompt notice to the Exchanger Members of the assertion of any claim, or
the commencement of any suit, action or proceeding, in respect of which
indemnity may be sought under Section 9(a). The Exchanger Members may
participate in and at their election, or at the request of SCN, assume the
defense of any such suit, action or proceeding at the Exchanger Members'
expense. The Exchanger Members shall not be liable under Section 9(a) for any
settlement effected without their consent of any claim, litigation or proceeding
in respect of which indemnity may be sought under Section 9(a) which consent
shall not be unreasonably withheld.

(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the Exchanger Members, their heirs and assigns
against any and all losses, liabilities, expenses (including without limitation
reasonable attorney's fees) and damages resulting from the breach, untruth or
inaccuracy of any representation, warranty or covenant of SCN set forth in this
Agreement. SCN shall not be liable to the Exchanger Members for any claims
against SCN under this Section 9(c) unless and until the aggregate of all claims
against SCN exceeds the sum of $25,000.00, whereupon the Exchanger Members shall
be entitled to recover the full amount of all claims, including the initial
$25,000.00.

(d) Notice to SCN; Opportunity to Defend. The Exchanger Members agree to
give prompt notice to SCN of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought under
Section 9(c). SCN may participate in and at its election, or at the request of
the Exchanger Members, assume the defense of any such suit, action or proceeding
at SCN's expense. SCN shall not be liable under Section 9(c) for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder, which consent shall not be
unreasonably withheld.

(e) Survival. The representations and warranties of the Exchanger Members,
Exchanger and SCN contained in this Agreement and the indemnifications contained
herein shall survive the Closing. No claim for indemnification with respect to
any alleged misrepresentation or breach of warranty may be made after two (2)
years following the Closing Date. Any matter to which indemnification pertains
and with respect to which a claim has been asserted or threatened following the
Closing Date shall continue to be subject to the indemnification under this
Agreement until finally terminated, settled, resolved or adjudicated; and all
terms, conditions and stipulations of this Agreement shall likewise continue to
apply.

(f) Security for Indemnity. The Exchanger Members hereby agree that in the
event (i) any final judgment is rendered in favor of SCN, (ii) SCN is entitled
to indemnification pursuant to the provisions of this Agreement and (iii) the
Exchanger Members do not pay to SCN the amount due hereunder, then SCN shall
have the right to redeem any SCN Share then owned by the Exchanger Members
pursuant to the terms of the Stockholder's Agreement.

10. Miscellaneous.

(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.

- 21 -

<PAGE>

(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

If to Exchanger: Copy to:

Stuart D. Miller, M.D. John W. Michener, Jr.
Leslie S. Matthews, M.D. Michener, Larimore, Swindle,
Paul L. Asdourian, M.D. Whitaker, Flowers, Sawyer,
Frank R. Ebert, M.D. Reynolds & Chalk, L.L.P.
Mark S. Myerson, M.D. 3500 City Center Tower II
John B. O'Donnell, M.D. 301 Commerce Street
Lew C. Schon, M.D. Fort Worth, Texas 76102-4186
3333 North Calvert Street Facsimile: (817) 335-6935
Suite 400
Baltimore, Maryland 21218
Facsimile: (410) 554-2853

If to SCN: Copy to:

Kerry R. Hicks, President John A. Good, Esq.
Specialty Care Network, Inc. Baker, Donelson, Bearman &
44 Union Boulevard, Suite 600 Caldwell
Lakewood, Colorado 80228 165 Madison Ave, Suite 2100
Facsimile: (303) 716-1298 Memphis, Tennessee 38103
Facsimile: (901) 577-2303

- 22 -

<PAGE>

claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other party notice in
the manner herein set forth.

(h) Amendments and Waivers. The parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the prior
authorization of their respective boards of directors; provided, however, that
any amendment effected subsequent to stockholder approval will be subject to the
restrictions contained in the Delaware General Corporation Law and the Maryland
Limited Liability Company Act. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by both of the
parties. No waiver by any party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.

(j) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

(l) Submission to Arbitration. Each of the Parties agrees to submit any
dispute arising out of or relating to the execution, delivery, Closing or
performance of this Agreement to binding arbitration before a panel of three (3)
arbitrators selected from a pool of arbitrators made available by the American
Arbitration Association. Such arbitrators shall be selected by the Parties and
such arbitration shall be conducted pursuant to the rules of the American
Arbitration Association and in a manner consistent with the Uniform Arbitration
Act as adopted by the State of Delaware. Each Party agrees that a final award in
any arbitration so brought shall be conclusive and judgment thereon may be
entered and enforced by any court of competent jurisdiction.

(m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

* * * * *

- 23 -

<PAGE>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Title:________________________________

GREATER CHESAPEAKE ORTHOPAEDIC
ASSOCIATES, L.L.C.

By:___________________________________
Title:________________________________

EXCHANGER MEMBERS:

______________________________________
Stuart D. Miller, M.D.

______________________________________
Leslie S. Matthews, M.D.

______________________________________
Paul L. Asdourian, M.D.

______________________________________
Frank R. Ebert, M.D.

______________________________________
Mark S. Myerson, M.D.

______________________________________
John B. O'Donnell, M.D.

______________________________________
Lew C. Schon, M.D.

- 24 -

SERVICE AGREEMENT

BY AND BETWEEN

SPECIALTY CARE NETWORK, INC.,

GREATER CHESAPEAKE ORTHOPAEDIC ASSOCIATES, L.L.C.,

Stuart D. Miller, M.D.
Leslie S. Matthews, M.D.
Paul L. Asdourian, M.D.
Frank R. Ebert, M.D.
Mark S. Myerson, M.D.
John B. O'Donnell, M.D.

and

Lew C. Schon, M.D.

Dated as of November 12, 1996

<PAGE>

TABLE OF CONTENTS

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship.....................................- 1 -
1.2. Responsibilities of the Parties..............................- 1 -
1.3. GCOA Matters.................................................- 1 -
1.4. Patient Referrals............................................- 2 -
1.5. Professional Judgment........................................- 2 -

ARTICLE II.

DEFINITIONS

2.1. Definitions..................................................- 2 -

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

3.1. Practice Offices.............................................- 6 -
3.2. Use of Practice Offices......................................- 6 -

ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board..................- 6 -
4.2. Duties and Responsibilities of the Policy Board..............- 7 -

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions..........................- 8 -
5.2. Financial Planning and Goals.................................- 8 -
5.3. Audits and Financial Statements..............................- 8 -
5.4. Inventory and Supplies.......................................- 8 -
5.5. Management Services and Administration.......................- 9 -
5.6. Personnel...................................................- 10 -
5.7. Events Excusing Performance.................................- 11 -
5.8. Compliance with Law and Business Standards..................- 11 -
5.9. Quality Assurance...........................................- 11 -
5.10. New Medical Services and Additional Practice Offices........- 11 -
5.11. Collection of Certain Patient Receipts and Payment
of Clinic Expenses........................................- 11 -
5.12. Other GCOA Accounts.........................................- 12 -

ARTICLE VI.

i
<PAGE>

OBLIGATIONS OF GCOA AND PHYSICIAN OWNERS

6.1. Professional Services.......................................- 12 -
6.2. Medical Practice............................................- 12 -
6.3. Employment of Physician Employees...........................- 12 -
6.4. Professional Dues and Education Expenses....................- 13 -
6.5. Professional Insurance Eligibility..........................- 13 -
6.6. Events Excusing Performance.................................- 13 -
6.7. Fees for Professional Services..............................- 13 -
6.8. Peer Review.................................................- 13 -
6.9. GCOA Employee Benefit Plans.................................- 13 -

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

7.1. Exclusive Arrangement.......................................- 15 -
7.2. Restrictive Covenants.......................................- 15 -
7.3. Restrictive Covenants By Future Physician Employees.........- 16 -
7.4. Rights of Company...........................................- 16 -
7.5. Enforcement.................................................- 16 -
7.6. Modification of Restrictive Covenants.......................- 16 -

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees................................................- 17 -
8.2. Payment of Service Fee......................................- 19 -
8.3. Purchase of Accounts Receivable.............................- 19 -
8.4. Payment of Clinic Expenses..................................- 20 -

ARTICLE IX.

RECORDS

9.1. Patient Records.............................................- 21 -
9.2. Records Owned by Company....................................- 21 -
9.3. Access to Records...........................................- 21 -
9.4. Government Access to Records................................- 21 -

ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by GCOA..........................- 21 -
10.2. Insurance to be Maintained by Company.......................- 22 -
10.3. Additional Insureds.........................................- 22 -
10.4. Indemnification.............................................- 22 -

ii
<PAGE>

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement..........................................- 23 -
11.2. Extended Term..............................................- 23 -
11.3. Termination by GCOA for Cause..............................- 23 -
11.4. Termination by Company for Cause...........................- 23 -
11.5. Early Termination by GCOA or Company Without Cause Upon
Third (3rd) Anniversary of Agreement.....................- 24 -
11.6. Consequences of GCOA Termination...........................- 25 -
11.7. Closing of Purchase by GCOA and Effective Date of
Termination..............................................- 25 -
11.8. Tail Policy................................................- 25 -
11.9. Restrictions Applicable to Physician Owners................- 26 -

ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds..................................- 28 -
12.2. Temporary Space............................................- 28 -

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF GCOA AND PHYSICIAN OWNERS

13.1. Validity...................................................- 28 -
13.2. Litigation.................................................- 28 -
13.3. Permits....................................................- 28 -
13.4. Authority..................................................- 28 -
13.5. Compliance with Applicable Law.............................- 29 -
13.6. Health Care Compliance.....................................- 29 -
13.7. Fraud and Abuse............................................- 29 -
13.8. GCOA Compliance............................................- 29 -
13.9. Rates and Reimbursement Policies...........................- 30 -
13.10. Accounts Receivable........................................- 30 -
13.11. Full Disclosure............................................- 32 -
13.12. Exhibits...................................................- 32 -

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

14.1. Organization...............................................- 32 -
14.2. Authority..................................................- 32 -
14.3. Absence of Litigation......................................- 32 -
14.4. Transactions with Affiliates...............................- 32 -

ARTICLE XV.

iii
<PAGE>

COVENANTS OF GCOA AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements...............- 32 -
15.2. Necessary Authorizations/Assignment of Licenses and Permit.- 33 -
15.3. Transaction with Affiliates................................- 33 -
15.4. Compliance with All Laws...................................- 33 -
15.5. Third-Party Payor Programs.................................- 33 -
15.6. Change in Business or Credit and Collection Policy.........- 33 -
15.7. Treatment of Accounts Receivable...........................- 33 -
15.8. Security Interest..........................................- 34 -

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment.................................................- 34 -
16.2. Whole Agreement; Modification..............................- 35 -
16.3. Notices....................................................- 35 -
16.4. Binding on Successors......................................- 35 -
16.5. Waiver of Provisions.......................................- 36 -
16.6. Governing Law..............................................- 36 -
16.7. No Practice of Medicine....................................- 36 -
16.8. Severability...............................................- 36 -
16.9. Additional Documents.......................................- 36 -
16.10. Attorneys' Fees............................................- 36 -
16.11. Time is of the Essence.....................................- 36 -
16.12. Confidentiality............................................- 36 -
16.13. Contract Modifications for Prospective Legal Events........- 36 -
16.14. Remedies Cumulative........................................- 37 -
16.15. Language Construction......................................- 37 -
16.16. No Obligation to Third Parties.............................- 37 -
16.17. Communications.............................................- 37 -
16.18. Arbitration................................................- 37 -

<PAGE>

SERVICE AGREEMENT

THIS SERVICE AGREEMENT ("Agreement") dated as of November 12, 1996, and
effective as of November 1, 1996, by and between SPECIALTY CARE NETWORK, INC., a
Delaware corporation ("Company"), GREATER CHESAPEAKE ORTHOPAEDIC ASSOCIATES,
L.L.C., a Maryland limited liability company, ("GCOA") and STUART D. MILLER,
LESLIE S. MATTHEWS, PAUL L. ASDOURIAN, FRANK R. EBERT, MARK S. MYERSON, JOHN B.
O'DONNELL, and LEW C. SCHON ("Physician Owners"), citizens and residents of
Maryland.

W I T N E S S E T H:

WHEREAS, GCOA and Physician Owners desire to obtain the services of
Company in performing such management functions so as to permit GCOA and
Physician Owners to devote GCOA's and Physician Owners' efforts on a
concentrated and continuous basis to the rendering of medical services to
patients.

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship. GCOA, Physician Owners and Company intend
to act and perform as independent contractors, and the provisions hereof are not
intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, GCOA, and Physician Owners agree that GCOA and
Physician Owners shall retain all authority to direct the medical, professional,
and ethical aspects of GCOA's and Physician Owners' medical practice including
but not limited to the admission of new patients and providing care to indigent
patients. Each party shall be solely responsible for and shall comply with all
state and federal laws pertaining to employment taxes, income withholding,
unemployment compensation contributions and other employment related statutes
applicable to that party.

1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide GCOA with offices and facilities, equipment,
supplies, certain support personnel, management and financial advisory services.
As more specifically set forth herein, GCOA shall be responsible for the
recruitment and hiring of physicians and all issues related to the professional
practice of medicine, medical practice patterns and documentation thereof.
Notwithstanding anything herein to the contrary, no "designated health service,"
as defined in 42 U.S.C. Section 1395nn, including any amendments or successors

thereto, shall be provided by Company under this Agreement.

1.3. GCOA Matters. Matters involving the internal agreements and finances
of GCOA, including the disposition of professional fee income, tax planning, and
investment planning (and expenses relating solely to these internal business
matters) shall remain the sole responsibility of GCOA.

1.4. Patient Referrals. The parties agree that the benefits to GCOA and
Physician Owners hereunder do not require, are not payment for, and are not in
any way contingent upon the admission, referral or any other arrangement for the
provision of any item or service offered by Company to any of GCOA's patients in
any facility operated by Company.
<PAGE>

1.5. Professional Judgment. Each of the parties acknowledges and agrees
that the terms and conditions of this Agreement pertain to and control the
business and financial relationship between and among the parties but do not
pertain to and do not control the professional and clinical relationship between
and among GCOA, Physician Employees, GCOA Employees, and GCOA's patients.
Nothing in this Agreement shall be construed to alter or in any way affect the
legal, ethical, and professional relationship between and among GCOA, Physician
Owners, Physician Employees, and GCOA's patients, nor shall anything contained
in this Agreement abrogate any right, privilege, or obligation arising out of or
applicable to the physician-patient relationship.

ARTICLE II.

DEFINITIONS

2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:

"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.

"Accounts Receivable" means, with respect to GCOA, all accounts and any
and all rights to payment of money or other forms of consideration of any kind
now owned or hereafter acquired (whether classified under the Uniform Commercial
Code as accounts, chattel paper, general intangibles or otherwise) for goods
sold or leased or for services rendered by GCOA, including, but not limited to,
accounts receivable, proceeds of any letters of credit naming GCOA as
beneficiary, chattel paper, insurance proceeds, contract rights, notes, drafts,
instruments, documents, acceptances and all other debts, obligations and
liabilities in whatever form from any other Person; provided that, cash, checks
and credit card purchases are not included in the definition of Accounts
Receivable.

direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.

"Asset Exchange" shall mean the acquisition of certain assets and
assumption of certain liabilities of GCOA pursuant to the Asset Exchange
Agreement.

"Asset Exchange Agreement" means that certain Asset Exchange Agreement,
dated of even date herewith, by and between Company, GCOA and Physician Owners.

"Assigned Lease" shall have the meaning as defined in Section 3.1.

"Base Service Fee" shall equal
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] per year, payable
in monthly payments of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.

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<PAGE>

"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Company" shall mean Specialty Care Network, Inc., a Delaware corporation,
together with its successors and assigns.

"Company Expenses" shall have the meaning as defined in Section 8.1.7.

"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.

"Direct Lease" shall have the meaning as defined in Section 3.1.

"Disabled" or "Disability" shall mean that a Physician suffers from a

mental or physical condition resulting in such Physician Employee's inability to
perform the essential functions of his job as required by Section 6.1.1 (and as
may be described with greater specificity in written job descriptions prepared
and maintained by GCOA and approved by the Policy Board) without significant
risk to the health or safety of others, even with such reasonable accommodation
as may be available under the circumstances, and the Policy Board may reasonably
anticipate that such Physician Employee will remain disabled for at least two
years following the commencement of such disability.

"Exchange A/R" means the accounts receivable acquired from GCOA by Company
pursuant to the Asset Exchange Agreement.

"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.

"Fair Market Value" with respect to Company common stock means (i) the
average closing price for the Company common stock as reported on a securities
exchange or quoted on a national quotation system, if any, upon which the
Company common stock is traded or quoted or (ii) in the event Company common
stock is not traded on any exchange or quoted on a national quotation system,
the fair market value of the Company common stock shall be determined by an
independent appraiser or investment banker selected by two (2) independent
appraisers or investment bankers (one (1) such firm selected by Company and one
(1) such firm selected by the Physician Owner or the Physician Owners as a group
(as the case may be)). Such valuation may include the consideration of discounts
for marketability, minority ownership and other discounts usual and customary in
the valuation process. Unless otherwise specified herein, the cost of any
appraisal shall be borne equally by Company and the Physician Owner or the
Physician Owners as a group (as the case may be).

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<PAGE>

"Governmental Receivables" means an Account Receivable of GCOA which (i)
arises in the ordinary course of business of GCOA, (ii) has as its Third-Party
Payor the United States of America or any state or any agency or instrumentality
of the United States of America or any state which makes any payments with
respect to Medicare or Medicaid or with respect to any other program (including
CHAMPUS) established by federal or state law, and (iii) is required by federal

or state law to be paid or to be made to GCOA as a healthcare provider.
Governmental Receivables shall not, however, refer to amounts payable by private
insurers under contract to provide benefits under the Federal Employee Health
Benefit Program.

"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.

"Lease" shall mean the Assigned Lease, Direct Leases, and the New Leases,
including all amendments thereto, described in Section 3.1 hereof.

"Leased Premises" shall mean the real property described in the Lease.

"Lender" shall have the meaning as defined in Section 7.2.

"Main Office" shall mean the Leased Premises and all equipment and
facilities owned or operated by Company and utilized by GCOA or any of its
employees within said Leased Premises.

"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.

"Necessary Authorizations" means with respect to GCOA, all certificates of
need, authorization, certifications, consents, approvals, permits, licenses,
notices, accreditations and exemptions, filings and registrations, and reports
required by Applicable Law, including, without limitation, Health Care Law,
which are required, necessary or reasonably useful to the lawful ownership and
operation of GCOA's business.

"New Lease" shall have the meaning as defined in Section 3.1.

"Office Locations" shall have the meaning as defined in Section 3.1.

"Physician Employees" shall mean the term as defined in Section 8.1.6.

"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.

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<PAGE>

"Physician Owners" shall mean those Physician Employees who own an
interest, directly or indirectly, in the equity of GCOA.

"Plans" shall have the meaning as defined in Section 6.9.1.

"Policy Board" shall mean a board established pursuant to Section 4.1.

"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.

"Practice Offices" shall mean (i) the Main Office and (ii) all of the
Satellite Offices.

"Professional Services Revenues" shall mean the term as defined in Section
8.1.2.

"Purchase Price" shall mean the term as defined in Section 8.4.2.

"Purchased A/R" means, with respect to GCOA, the Accounts Receivable
purchased pursuant to Section 8.3 of this Agreement.

"GCOA Operating Account" shall mean that certain operating account
established by GCOA at a bank selected by GCOA in GCOA's sole discretion as more
fully described in Section 5.11.

"GCOA Plan" shall mean the term as defined in Section 6.9.1.

"Satellite Offices" shall mean each location at which one or more of
GCOA's employees provide services as described on Exhibit 2.1 and all equipment
and facilities owned or operated by Company and utilized by any of said persons
at such location.

"Settlement Date" shall mean the term as defined in Section 8.3.3.

"Service Agreement" means this Agreement.

"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).

"Technical Employees" shall mean the term as defined in Section 8.1.4.

"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.

"Third-Party Payor Programs" means Medicare, Medicaid, CHAMPUS, insurance
provided by Blue Cross and/or Blue Shield, managed care plans, and any other

private health care insurance programs and employee assistance programs as well
as any future similar programs.

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<PAGE>

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

(b) Company agrees to provide offices and facilities at the Office
Locations (or at comparable facilities on the termination of the Assigned Leases
or Direct Leases) to GCOA. Such facilities shall include all personal property
necessary to operate the facility. If any Assigned Leases or Direct Leases are
terminated by their terms, Company shall enter into a lease of a new facility
comparable to the Office Location whose lease is terminated (the "New Lease")
with the consent of the Policy Board. Company shall not enter into a lease for a
new Main Office or Satellite Office for GCOA without the approval of the Policy
Board.

3.2. Use of Practice Offices. GCOA shall not use or occupy the Main Office
or Satellite Offices for any purpose which is prohibited by the Assigned Leases,
Direct Leases or New Leases, by this Agreement or which is directly or
indirectly forbidden by law, ordinance, or governmental or municipal regulation
or order, or which may be dangerous to life, limb or property, or which would
increase the fire and extending coverage insurance rate in any Practice Office
or contents.

ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board. The parties shall
establish a Policy Board which shall be responsible for developing management
and administrative policies for the overall operation of any Practice Office.
The Policy Board shall consist of six (6) members. Company shall designate, in
its sole discretion, three (3) members of the Policy Board. GCOA shall
designate, in GCOA's sole discretion, three (3) members of the Policy Board. Any
matter decided by a majority of the members of the Policy Board shall constitute
the decision of the Policy Board with respect to the matter. In the event a
majority of the Policy Board does not vote in favor of any proposal presented to

the Policy Board, such proposal shall fail and shall not become a policy or
procedure of GCOA.

4.2. Duties and Responsibilities of the Policy Board. The Policy Board
shall have the following duties and obligations:

4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by GCOA for any renovations, capital improvements, expansions and
new equipment purchases or leases. The Policy Board shall determine whether such
expenditures are appropriate based upon economic feasibility, physician support,
productivity, market conditions, and the annual budget formulated pursuant to
this Agreement. If the Policy Board determines that the acquisition of
additional equipment or facilities is appropriate, then Company shall use its
best efforts to arrange for the financing and acquisition of the property.
Governance issues affecting the Policy Board shall be addressed in accordance
with the rules set forth in Exhibit 4.1.

4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the review of the Policy Board.

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<PAGE>

4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.

4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with GCOA and Company, to the extent allowed by
Applicable Law, the Policy Board shall review and advise GCOA as to an
appropriate fee schedule for all physician and ancillary services rendered by
GCOA, which fee schedule shall ultimately be determined by GCOA in GCOA's sole
discretion. In addition, the Policy Board shall approve the credit collection
policies of GCOA.

4.2.5. GCOA and Payor Relationships. Decisions regarding the establishment
or maintenance of relationships with institutional health care providers and
payors, or with parties under arrangements for setting up new Satellite Offices
of GCOA in the future, shall be made by the Policy Board in consultation with
GCOA.

4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.

4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.

ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions. Company shall use its best
efforts to manage the day-to-day operations of the Main Practice Office and any
Satellite Offices in a business-like manner. Company shall provide or arrange
for the services set forth in this Article V, the cost of all of which shall be
included in Clinic Expenses. Company is hereby expressly authorized to perform
its services hereunder in whatever manner it deems reasonably appropriate to
meet the day-to-day requirements of Practice Office operations in accordance
with the general standards approved by the Policy Board and to maintain the
lease agreements for each of the Practice Offices, including, without
limitation, performance of some of the business office functions at locations
other than the Main Practice Office. GCOA will not act in a manner which would
prevent Company from efficiently managing the day-to-day operations of the Main
Practice Office and maintaining the operations of the Satellite Offices in a
business-like manner.

5.2. Financial Planning and Goals. Subject to Section 4.2.2. of this
Agreement, Company shall prepare annual capital and operating budgets reflecting
in reasonable detail anticipated revenues and expenses, and sources and uses of
capital for growth in GCOA's practice and medical services rendered at the
Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board and Company shall agree upon a budget for the upcoming
fiscal year. The budget, as described in Section 4.2.2., shall be binding upon
Company and GCOA. Company shall consult with GCOA and the Policy Board in the
preparation of all budgets. Company and GCOA acknowledge and agree that once a
budget has been approved, neither Company nor GCOA shall make expenditures or
incur expenses in excess of budgeted amounts without the prior approval of the
Policy Board.

5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of GCOA and, in its sole discretion, may
cause the financial statements to be audited by a certified public accountant
selected

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<PAGE>

by Company. GCOA shall cooperate fully in such audit. The cost of such audit
shall be included in Clinic Expenses. If Company elects to have the financial
statements audited by a certified public accountant with a big six accounting
firm, the resulting audited financial statements shall be binding on GCOA and
Company. If Company elects not to have GCOA's financial statements so audited,
GCOA shall have the option to obtain such an audit, by a certified public

accountant with a mutually acceptable accounting firm. Company shall fully
cooperate in such audit. The cost of such audit shall be included in Clinic
Expenses. In such event, Company and GCOA shall be bound by the resulting
audited financial statements. All parties shall be entitled to copies of any
information provided to or by the auditors by or to any party. Additionally,
Company shall prepare monthly unaudited financial statements containing a
balance sheet and statements of income from Practice Office operations, which
shall be delivered to GCOA within thirty (30) business days after the close of
each calendar month.

5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by GCOA and are
within the budget for the applicable fiscal period. Company shall not purchase
inventory, goods or supplies from any Affiliate of Company without approval of
the Policy Board and after full disclosure of all terms to the Policy Board.

5.5. Management Services and Administration.

5.5.1. GCOA hereby appoints Company as GCOA's sole and exclusive manager
and administrator of all day-to-day business functions. GCOA agrees that the
purpose and intent of this Agreement is to relieve GCOA and Physician Employees
to the maximum extent possible of the administrative, accounting, personnel and
business aspects of their practice, with Company assuming responsibility and
being given all necessary authority to perform these functions. Company agrees
that GCOA and only GCOA will perform the medical functions of GCOA's practice.
Company will have no authority, directly or indirectly, to perform, and will not
perform, any medical function. Company may, however, advise GCOA as to the
relationship between GCOA's performance of medical functions and the overall
administrative and business functioning of GCOA's practice. To the extent that a
Company employee assists Physician Employees in performing medical functions,
such employees shall be subject to the professional direction and supervision of
Physician Employees and in the performance of such medical functions shall not
be subject to any direction or control by, or liability to, Company, except as
may be specifically authorized by Company.

5.5.2. Company shall, on behalf of GCOA, bill patients and collect the
professional fees for medical services rendered by GCOA or any Physician
Employee, regardless of when or where such services are rendered. The parties
acknowledge and agree that the Physician Owners will charge and collect,
individually, fees for services such as medical legal services, depositions,
consulting, teaching, and royalties and that any amounts collected by the
Physician Owners as a result of the provision of the foregoing services shall
not be considered a portion of Practice Net Revenue. Nothing in this Service
Agreement shall be construed to prevent Physician Owners from extending
professional courtesies, performing pro bono service, or providing family
discounts in accordance with the past practice and procedure of GCOA. All
billings for Physician Employee's services shall be made in the name of and
under the provider number of GCOA. GCOA hereby appoints Company to be GCOA's
true and lawful attorney-in-fact, for the following purposes: (i) to bill
patients in GCOA's name and on GCOA's behalf; (ii) to collect Accounts
Receivable resulting from such billing in GCOA's name and on GCOA's behalf;
(iii) to receive payments from insurance companies, prepayments from health care

plans, and all other Third-Party Payors; (iv) to take possession of and endorse
in the name of GCOA (and/or in the name of an individual physician, such payment
intended for purpose of payment of a physician's bill) any notes, checks, money
orders, insurance payments and other instruments received in payment of Accounts
Receivable; and (v) to initiate legal proceedings in the name of GCOA to collect
any accounts and monies owed to GCOA or any Physician Employee, to enforce the
rights of GCOA as creditors under any contract or in connection with the
rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from GCOA by Company, Company shall deposit any cash receipts collected on
behalf of GCOA into the GCOA Operating Account described in Section 5.11.

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<PAGE>

5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of GCOA, including but not limited
to accounting, billing, patient medical records, and collection records. While
Company shall maintain custody, patient medical records shall at all times be
and remain the property of GCOA and shall be located at the Practice Offices so
that they are readily accessible for patient care. The Physician Employees shall
have the obligation to oversee the preparation and maintenance of patient
medical records, and to provide such medical information as shall be necessary
and appropriate to the records' clinical function and to sustain and ensure the
availability of Third-Party Payor reimbursement for services rendered. The
management of all files and records shall comply with applicable state and
federal statutes. Company shall use its best efforts to preserve the
confidentiality of patient medical records and use information contained in such
records only as permitted by law, to the extent necessary to perform the
services set forth herein.

5.5.4. Company shall supply to GCOA necessary clerical, accounting,
bookkeeping and computer services, printing, postage and duplication services,
medical transcribing services and any other ordinary, necessary or appropriate
service for the operation of the Practice Offices.

5.5.5. Subject to the overall guidance of the Policy Board, Company shall
design and implement an adequate and appropriate public relations program on
behalf of GCOA, with appropriate emphasis on public awareness of the
availability of services at the Practice Offices. The public relations program
shall be conducted in compliance with Applicable Law and regulations governing
advertising by the medical profession and applicable canons of principles of
professional ethics of GCOA and Physician Employees of GCOA.

5.5.6. Company shall provide the data necessary for GCOA to prepare GCOA's
annual income tax returns. Company shall have no responsibility for the
preparation of GCOA's federal or state income tax returns or the payment of such
income taxes. Company shall prepare or cause to be prepared on GCOA's behalf,
necessary employment tax returns. GCOA shall be obligated to pay any taxes due
on such employment tax returns with respect to the Physician Owners.

5.5.7. Company shall assist GCOA in recruiting additional physicians,

carrying out such administrative functions as may be appropriate, such as
advertising for and identifying potential candidates, obtaining credentials, and
arranging interviews; provided, however, GCOA shall interview and make the
ultimate decision as to the suitability of any physician to become associated
with GCOA. All physicians recruited by Company and accepted by GCOA shall be the
sole employees of GCOA, to the extent such physicians are hired as employees.

5.5.8. Company shall negotiate managed care contracts on behalf of GCOA
and shall administer all managed care contracts in which GCOA participates.

5.5.9. Company shall arrange for legal and accounting services related to
operations of the Practice Offices and Physician Employee's practice at the
Practice Offices incurred traditionally in the ordinary course of business,
including the cost of enforcing any contract with a Physician Employee
containing restrictive covenants, provided such services shall be approved in
advance by the Policy Board. Notwithstanding the foregoing, GCOA shall have the
authority to arrange for legal and accounting services relating to matters other
than day-to-day management of GCOA; such other matters including but not limited
to issues relating to GCOA governance issues, compensation of Physician Owners,
and issues which arise between GCOA and Company; provided, however, such fees
shall be considered Excluded Expenses.

5.5.10. Company shall provide for the proper cleanliness of the premises,
and maintenance and cleanliness of the equipment, furniture and furnishings
located upon such premises.

5.5.11. Upon receipt of dues, statements or license notices from the
Physician Employees (other than Physician Owners), Company shall make payment
for the cost of professional licensure fees and board certification fees of
physicians associated with GCOA.

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<PAGE>

5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.

5.6. Personnel. Company shall provide Physician Extender Employees and
other non-physician professional support (administrative personnel, clerical,
secretarial, bookkeeping and collection personnel) reasonably necessary for the
conduct of the operations at the Practice Offices. Company shall determine and
cause to be paid the salaries and fringe benefits of all such personnel. Such
personnel shall be employees of Company, with those personnel performing patient
care services subject to the professional direction and supervision of Physician
Employees. If GCOA is dissatisfied with the services of any person, GCOA shall
consult with Company. Company shall in good faith determine whether the
performance of that employee could be brought to acceptable levels through
counsel and assistance, or whether such employee should be terminated. All of
Company's obligations regarding staff shall be governed by the overriding
principle and goal of providing quality medical care. Employee assignments shall
be made to assure consistent and continued rendering of quality medical support
services and to ensure prompt availability and accessibility of individual
medical support staff to physicians in order to develop constant, familiar and

routine working relationships between individual physicians and individual
members of the medical support staff. If GCOA disagrees with an assignment, GCOA
may appeal such assignment to the Policy Board. Company shall maintain
established working relationships wherever possible and Company shall make every
effort consistent with sound business practices to honor the specific requests
of GCOA with regard to the assignment of Company's employees.

5.7. Events Excusing Performance. Company shall not be liable to GCOA or
Physician Owners for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which Company has no control for so long as such
events continue, and for a reasonable period of time thereafter.

5.8. Compliance with Law and Business Standards. Company shall comply with
Applicable Law, including, without limitation, Health Care Law, and federal,
state, and local laws and regulations affecting billing and reimbursement,
referrals, patient privacy and confidentiality, and management of hazardous
materials and infectious waste. Company shall discharge its obligations under
this Agreement consistent with applicable business and industry standards and
practices.

5.9. Quality Assurance. Company shall assist GCOA in fulfilling GCOA's
obligations to patients to maintain professionally recognized quality of medical
and professional services.

5.10. New Medical Services and Additional Practice Offices. If GCOA
desires to have a new medical service provided at any of the Practice Offices or
desires to establish a new clinic, a proposal of such service or the
establishment of such new clinic shall be submitted to the Policy Board. Should
the Policy Board approve the expansion of service or the establishment of such
new clinic, Company, at its option, shall have the exclusive right to provide
services necessary to support GCOA in GCOA's delivery of such new medical
services at the Practice Office or new clinic, as applicable; provided, however,
if the type of service is an ancillary service that would be improper under any
rules, regulations or laws for Company to offer to GCOA patients, then Company
shall not have the option to provide such service. Should Company decline to
provide the necessary support service for the new service or new clinic, GCOA
shall be entitled to perform such service at GCOA's own expense and the revenues
therefrom shall not be included in the calculation of Company's service fees
under Article VIII of this Agreement; provided, however, that Company shall have
the option to assume performance of the necessary support services for providing
such new service or new clinic by buying out GCOA's investment in the service at
GCOA's Book Value at anytime within eighteen (18) months of the date such new
service is first provided, which Book Value shall be based on the price of the
assets purchased by GCOA less depreciation accrued to the date of acquisition of
such service by Company, as determined under GAAP.

5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. GCOA agrees to establish and maintain a bank account, which shall be
referred to as the GCOA Operating Account, for the purpose of (a) depositing
proceeds from the sale of GCOA's Accounts Receivable pursuant to Section 8.3 and
(b) paying (i) any Service

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<PAGE>

Fees owed pursuant to Article VIII of this Agreement, (ii) expenses which are
solely the obligation of GCOA (Excluded Expenses), and (iii) compensation or
distributions to Physician Owners, and the distributions shall be made in that
order of payment. GCOA shall designate a Company employee as a signatory on the
GCOA Operating Account. After the payment of any Service Fees owed pursuant to
Article VIII of this Agreement, and expenses which are solely the obligation of
GCOA, GCOA may withdraw amounts for distributions to Physician Owners.

5.12. Other GCOA Accounts. GCOA shall have the right to open or create
bank accounts in addition to the GCOA Operating Account described in Section
5.11 of this Agreement.

ARTICLE VI.

OBLIGATIONS OF GCOA AND PHYSICIAN OWNERS

6.1. Professional Services.

6.1.1. GCOA, its Physician Owners and Physician Employees shall provide
professional services to patients.

6.1.2. GCOA, its Physician Owners and Physician Employees shall provide
the professional services to patients described in Section 6.1.1 above in
compliance at all times with ethical standards, laws and regulations applying to
GCOA's professional practice. GCOA shall also make all reports and inquiries to
the National Practitioners Data Bank and/or any state data bank required by
Applicable Law. GCOA shall use its best efforts to determine that each Physician
Employee and Technical Employee associated with GCOA who provides medical care
to patients of GCOA is licensed by the state or states in which he or she
renders professional services. If any disciplinary or medical malpractice action
is initiated against any such individual, GCOA shall immediately provide Company
with copies of any third-party documents (not otherwise privileged) served on
GCOA or letters delivered to GCOA. Such information shall be deemed confidential
information and shall, notwithstanding such disclosure, remain subject to all
privileges and immunities provided by Applicable Law. Company shall take all
steps reasonably necessary to assure that such privileges and immunities remain
intact. GCOA shall carry out a program to monitor the quality of medical care
practiced at the Practice Offices to promote a high quality of medical care.

6.2. Medical Practice. GCOA shall use and occupy the Practice Offices
exclusively for the practice of medicine and shall comply with all Applicable
Law and standards of medical care. It is expressly acknowledged by the parties
that the medical practice or practices conducted at the Main Office shall be
conducted solely by physicians or medical practitioner associated with GCOA, and
no other physician or medical practitioner shall be permitted to use or occupy
the Main Office without the prior written consent of Company.

6.3. Employment of Physician Employees. GCOA shall have complete control
of and responsibility for the hiring, compensation, supervision, evaluation and
termination of Physician Employees, although at the request of GCOA, Company
shall consult with GCOA respecting such matters. GCOA shall be responsible,

subject to Section 8.4, for the payment of such Physician Employees' salaries
and wages, payroll taxes, Physician Employee benefits and all other taxes and
charges now or hereafter applicable to them. With respect to physicians, GCOA
shall only employ and contract with licensed physicians meeting applicable
credentialing guidelines established by GCOA.

6.4. Professional Dues and Education Expenses. Except to the extent
provided in Section 8.1.3(k), Physician Owners shall be solely responsible for
the cost of membership in professional associations and the cost of continuing
professional education. GCOA shall ensure that each Physician Employee
participates in such continuing medical education as is necessary for such
physician to remain licensed.

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<PAGE>

6.5. Professional Insurance Eligibility. GCOA shall cooperate in the
obtaining and retaining of professional liability insurance by assuring that all
Physician Employees are insurable and participating in an on-going risk
management program.

6.6. Events Excusing Performance. GCOA and Physician Owners shall not be
liable to Company for failure to perform any of the services required herein in
the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which GCOA has no control for so long as such
events continue, and for a reasonable period of time thereafter.

6.7. Fees for Professional Services. GCOA shall be solely responsible for
legal, accounting and other professional services fees (Excluded Expenses)
incurred by GCOA, except as otherwise determined by the Policy Board.

6.8. Peer Review. GCOA agrees to cooperate with Company in establishing a
system of peer review within and among the provider practices as necessary to
obtain provider contracts. In connection therewith, GCOA agrees to assist in the
formulation of provider guidelines for each treatment or surgical modality, and
agrees to abide by said guidelines, and further agrees to submit to periodic
reviews by a third party to monitor compliance with said guidelines. GCOA
acknowledges that the establishment of provider guidelines may be necessary to
obtain PPO, HMO, IPA and other similar provider contracts, both private and
government funded. To the extent that said provider guidelines must be filed or
registered with any Third-Party Payor, GCOA agrees to cooperate with Company in
making such filings or registrations. It is agreed and acknowledged that all
such peer review guidelines shall be established and monitored by medical
personnel on the staff of GCOA and other practices that are part of the peer
review process, and shall not be promulgated, established or enforced
independently by Company. To the extent possible, all information obtained
through the peer review process shall remain confidential and the parties shall
take all steps reasonably necessary to assure that all privileges and immunities
provided by Applicable Law remain intact.

6.9. GCOA Employee Benefit Plans.

6.9.1. Effective as of the date of the closing under the Asset Exchange

Agreement, GCOA shall amend the tax-qualified retirement plan(s) described on
Exhibit 6.9.1 (the "GCOA Plan") to provide that employees of Company who are
classified as "leased employees" (as defined in Code Section 414(n)) of GCOA
shall be treated as GCOA employees for purposes described in Code Section
414(n)(3). Not less often than annually, GCOA and Company shall agree upon and
identify in writing those individuals to be classified as leased employees of
GCOA (the "Designated Leased Employees"). GCOA and Company shall establish
mutually agreeable procedures with respect to the participation of Designated
Leased Employees in the GCOA Plan. Such procedures shall be designed to avoid
the tax disqualification of the GCOA Plan, similar plans of practices similarly
situated, (collectively, the "Plans").

6.9.2. If the Policy Board determines that the relationship between
Company and GCOA (and other practices similarly situated) constitutes an
"affiliated service group" (as defined in Code Section 414(m)), Company and GCOA
shall take such actions as may be necessary to avoid the tax disqualification of
the Plans. Such actions may include the amendment, freeze, termination or merger
of the GCOA Plan.

6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. GCOA shall not enter into any new "employee benefit plan" (as
defined in Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") without the consent of Company. In addition, GCOA
shall not offer any retirement benefits or make any material retirement payments
other than under the GCOA Plan to any stockholder of GCOA without the express
written consent of Company. Except as otherwise required by law, GCOA shall not
materially amend, freeze, terminate or merge the GCOA Plan without the express
written consent of Company. In the event of either of the foregoing, Company's
consent shall not be withheld if such action would not jeopardize the
qualification of any of the Plans. GCOA agrees to make such changes to the GCOA
Plan, including the amendment freeze, termination or merger of the GCOA Plan, as
may be

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<PAGE>

approved by the Policy Board and Company but only if such changes are necessary
to prevent the disqualification of any of the Plans.

6.9.4. Expenses incurred in connection with the GCOA Plan or other GCOA
employee benefit plans, including, without limitation, the compensation of
counsel, accountants, corporate trustees, and other agents shall be included in
Clinic Expenses.

6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in GCOA's operating budget. GCOA and Company
shall not make employee benefit plan contributions or payments to GCOA for their
respective employees in excess of such budgeted amounts unless required by law
or the terms of the GCOA Plan. Company shall make contributions or payments with
respect to the GCOA Plan or other GCOA employee benefit plans, as a Clinic
Expense, on behalf of eligible Designated Leased Employees, and other eligible
GCOA employees. In the event a GCOA Plan or other GCOA employee benefit plan is
terminated, Company shall be responsible, as a Clinic Expense, for any funding

liabilities related to eligible Designated Leased Employees; provided, however,
Company shall only be responsible for the funding of any liability accruing
after the date of the Asset Exchange Agreement.

6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the GCOA Plan
to avoid disqualification of the GCOA Plan, in which case any such action would
be subject to the express prior written consent of the Policy Board. Company
shall have the sole and exclusive authority to appoint the trustee, custodian
and administrator of any such plan.

6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by GCOA must be amended,
terminated, modified or changed as a result of GCOA or Company being deemed to
be a part of an affiliated service group, the Policy Board will replace such
plan or plans with a plan or plans that provides those benefits approved by the
Policy Board. It shall be the goal of the Policy Board in such event to provide
substantially similar or comparable benefits if the same can be provided at a
substantially similar cost to the replaced plan.

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

The parties recognize that the services to be provided by Company shall be
feasible only if GCOA operates an active medical practice to which both GCOA and
the physicians associated with GCOA devote their full time and attention.
To that end:

7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be GCOA's and Physician Owners' sole provider of the management services
described in this Agreement and neither GCOA, Physician Owners nor any of GCOA's
or Physician Owners' employees shall provide such management services during the
term of this Agreement. GCOA and the Physician Owners agree that during the term
of this Agreement, neither GCOA nor Physician Owners will enter into any similar
agreements with any physician practice management company or entity. GCOA and
the Physician Owners further agree that during the term of this Agreement, they
will not engage, directly or indirectly, as a principal owner, shareholder
(other than a holder of fewer than 5% of the outstanding shares of a
publicly-traded company), partner, joint venturer, agent, equity owner, or in
any other capacity whatsoever, in any corporation, partnership, joint venture,
or other business association or entity that operates ambulatory surgery centers
or provides management services of the nature provided by Company pursuant to
this Agreement, within the City of Baltimore, Maryland or contiguous counties or
any location within seventy-five (75) miles of the Main Clinic or any future
facility that replaces the Main Clinic (wherever located) or any Satellite
Office utilized by GCOA at any time during the term of this Agreement.

7.2. Restrictive Covenants.

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7.2.1. By Current Physician Employees. GCOA shall obtain and enforce
formal agreements from current Physician Employees, other than Technical
Employees, pursuant to which the Physician Employees agree not to establish,
operate or provide physician services at any medical office, clinic or
outpatient and/or ambulatory treatment or diagnostic facility providing services
substantially similar to those provided by GCOA, except on GCOA's behalf, within
the City of Baltimore, Maryland or contiguous counties or any location within
seventy-five (75) miles during the first five (5) years of the term of this
Agreement or fifty (50) miles thereafter of the Main Office or any future
facility that replaces the Main Office (wherever located at such time) or any
Satellite Office at the time of termination of employment with GCOA and for a
period of twenty-four (24) months after any termination of employment with GCOA.
Such agreements shall be a condition to employment and shall be in a form
satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to Company's lender ("Lender"). This Section 7.2 shall relate solely
to Physician Employees who are not also Physician Owners.

7.2.2. By Current and Future Physician Owners. On the earlier of one
hundred eighty (180) days from the effective date of this Agreement, or on
thirty (30) days after written request by Company, which written request
includes a reasonable explanation or basis for the request, GCOA shall obtain
and enforce formal restrictive covenants with current and future Physician
Owners, the terms of which shall be substantially similar to the provisions of
Exhibit 11. Such agreements shall provide that Company is a third-party
beneficiary to such agreements. GCOA agrees to enforce the restrictive
covenants. The cost and expense of such enforcement shall be a Clinic Expense,
and all damages and other amounts recovered thereby shall be included in
Professional Services Revenue. In the event that after a request by Company,
GCOA does not pursue any remedy that may be available to it by reason of a
breach or default of a restrictive covenant, upon the request of Company, GCOA
shall assign to Company such causes of action and/or other rights it has related
to such breach or default and shall cooperate with and provide reasonable
assistance to Company with respect thereto; in which case, all costs and
expenses incurred in connection therewith shall be borne by Company and shall be
included in Company Expenses, and Company shall be entitled to all damages and
other amounts recovered thereby. The above described restrictive covenants
between GCOA and Physician Owners shall be in addition to and not in place of
the restrictive covenants described in Exhibit 11 between Company and the
Physician Owners.

7.2.3. Limitations on Restrictive Covenants. The foregoing restrictive
covenants shall not limit or prevent a Physician Employee or Physician Owner
from serving in part-time academic positions, working as expert witnesses, or
providing pro bono services in a manner consistent with past practices.

7.3. Restrictive Covenants By Future Physician Employees. GCOA shall
obtain and enforce formal agreements from each future Physician Employee other
than Technical Employees, hired or contracted, pursuant to which such physicians
agree not to establish, operate or provide physician services at any medical
office, clinic or outpatient and/or ambulatory treatment or diagnostic facility
providing services substantially similar to those provided by GCOA except on

GCOA's behalf, within the City of Baltimore, Maryland or contiguous counties or
any location within seventy-five (75) miles during the first five (5) years of
the term of this Agreement or fifty (50) miles thereafter of the Main Office or
any future facility that replaces the Main Office (wherever located at such
time) or any Satellite Office at the time of termination of said Physician
Employee's contract with GCOA and for a period of twenty-four (24) months
thereafter. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to any Lender. This Section 7.3 shall relate solely to Physician
Employees who are not also Physician Owners. The terms and conditions of Exhibit
11 shall govern restrictive covenants relating to Physician Owners.

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<PAGE>

Board must first approve Company entering into such agreement. In the event that
the individuals representing Company on the Policy Board can reasonably
demonstrate that entering into such agreement will not have a material adverse
effect on GCOA's practice operations, earnings or cash flow, then the
individuals representing GCOA shall consent to Company entering into such
agreement.

7.5. Enforcement. GCOA acknowledges and agrees that since a remedy at law
for any breach or attempted breach of the provisions of this Article VII shall
be inadequate, Company shall be entitled to specific performance and injunctive
or other equitable relief in case of any such breach or attempted breach in
addition to whatever other remedies may exist by law. All parties hereto also
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. If any provision
of Article VII relating to the restrictive period, scope of activity restricted
and/or the territory described therein shall be declared by a court of competent
jurisdiction to exceed the maximum time period, scope of activity restricted or
geographical area such court deems reasonable and enforceable under Applicable
Law, the time period, scope of activity restricted and/or area of restriction
held reasonable and enforceable by the court shall thereafter be the restrictive
period, scope of activity restricted and/or the territory applicable to the
restrictive covenant provisions in this Article VII. In addition, breach of the
provisions of this Article VII may trigger certain rights of Company to redeem a
Physician Owner's Company common stock pursuant to the terms of Article VIII of
that certain stockholders agreement between Company and its stockholders (the
"Stockholders Agreement").

7.6. Modification of Restrictive Covenants. Upon the termination of
employment of a Physician Owner or Physician Employee, the Policy Board shall
have the authority to release or reduce in whole or in part the terms of the
restrictive covenants, including but not limited to the mileage radius
limitations set forth above in Sections 7.2 and 7.3. In the event that the
individuals representing GCOA on the Policy Board can reasonably demonstrate
that a modification to the restrictive covenant will not have a material adverse
effect on Company's or GCOA's practice operations, earnings or cash flow, then
the individuals representing Company shall consent to the proposed
modifications.

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to (a) the greater of
(i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] or (ii) the Base Service
Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of the first
thirty-six (36) months of the term of this Agreement, Company shall receive a
service fee equal to [xxxxxxxxxxxxxxxxxxxxxxx]of Practice Net Revenue plus the
amount of Clinic Expenses. In the event that a Physician Owner ceases to
practice medicine during the first thirty-six (36) months of the term of this
Agreement, such Physician Owner shall be personally liable for any reduction in
GCOA's service fees payable as further described under Section 11.9.1 of this
Agreement. In the event that a Physician Owner either dies or becomes Disabled
during such thirty-six (36) month period, GCOA or the applicable Physician
Owner, as the case may be, shall be entitled to satisfy the amount owed by
transferring to Company an amount of Company common stock having a Fair Market
Value equal to the amount owed or paying to Company cash in the amount owed (or
a combination thereof).

8.1.1. "Practice Net Revenue" shall mean Professional Services Revenues,
less Clinic Expenses.

8.1.2. "Professional Services Revenue" shall mean all fees actually
recorded each month (net of any amounts reimbursed to any patients or
Third-Party Payors during the applicable month and net of any adjustments for
contractual allowances, Medicaid, worker's compensation, employee/dependent
health care benefit programs, professional courtesies and other activities that
do not generate a collectible fee) by or on behalf of GCOA as a result of
professional medical services personally furnished to patients and other fees or
income generated in their capacity as Physician Employees and Technical
Employees, and any revenue from the sale of any goods.

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<PAGE>

8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of GCOA arising hereunder unless expressly provided otherwise,
including, without limitation:

(b) obligations of Company under Leases provided for herein under
Article III,

(d) personal property and intangible taxes assessed against
Company's assets utilized by GCOA in the Practice Offices from and after
the date of this Agreement,

(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of GCOA, if any, assumed under the Asset Exchange
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to GCOA hereunder, or (iii) purchase equipment,

(f) malpractice insurance premiums and disability insurance premiums
to cover accommodations to the Practice Offices under the definition of
"Disabled" or "Disability," and fire, workers compensation and general
liability insurance premiums, and life insurance premiums, during the
first three (3) years of this Agreement, for life insurance on the lives
of Physician Owners, with GCOA as the death beneficiary,

(g) the cost of any goods purchased for resale,

(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used by GCOA to be billed to
GCOA on a monthly basis and paid to Company at the same time Company pays
for GCOA's Accounts Receivable pursuant to Section 8.3,

(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with GCOA or who actually provide
services at or in connection with the Clinic for improved performance,
such as quality assurance, reasonable expenses required for physician
accommodations under the definition of "Disabled" or "Disability,"
materials management, purchasing program, change in coding analysis,
physician recruitment; provided, however, only the portion of expenses
related to such employee or consultant, without mark-up, that is allocable
in a fair and reasonable manner to work approved by the Policy Board which
is performed at or for the benefit of GCOA shall be included in Clinic
Expenses, and

(j) any and all other ordinary and necessary expenses incurred by
GCOA or approved by the Policy Board and reasonably incurred by Company
for the direct benefit of GCOA in carrying out their respective
obligations under this Agreement.

Clinic Expenses shall not include Excluded Expenses or Company Expenses.

Excluded Expenses shall be the sole obligation of GCOA. Company Expenses shall
be the sole obligation of Company.

8.1.4. "Technical Employees" shall mean individuals who provide billable
services on behalf of GCOA and are employees of GCOA.

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<PAGE>

8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons who are employees of Company, but
excluding any Technical Employees.

8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by GCOA or
are otherwise under contract with GCOA to provide professional services to
patients seen in the Main Office or Satellite Offices and are duly licensed to
provide

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<PAGE>

professional medical services in the state or states in which he or she renders
professional services under this Agreement.

8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:

(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to GCOA or are not directly attributable to GCOA, as
reasonably determined by Company, including, without limitation, salaries
and benefits of executive officers of Company, except as otherwise
provided for in the definition of Clinic Expenses;

(b) Any amortization of any intangible asset resulting from the
Asset Exchange;

(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Asset Exchange;

(d) Any legal and accounting expenses incurred by Company in
connection with the Asset Exchange; and

(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for GCOA,
property taxes on assets used by GCOA and other taxes specifically
included in Clinic Expenses.

8.1.8. "Excluded Expenses" shall be the sole obligation of GCOA and shall
mean, pursuant to GAAP applied on a consistent basis:

(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;

(b) Any federal, state or other taxes associated therewith;

(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and

(d) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).

8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays GCOA for
the Accounts Receivable previously purchased by Company as described in Section
8.3 below. The amount payable shall be estimated based upon the previous month's
operating results of GCOA. Adjustments to the estimated payments shall be made
to reconcile actual cumulative amounts due under this Article VIII, by the end
of the following month during each calendar year. Upon preparation of annual
financial statements as provided in Section 5.3, final adjustments to the
service fee for the preceding year shall be made and any additional payments
owing to Company or GCOA shall then be made to the party owed the additional sum
of money. The adjustment and any amount owed shall be calculated and paid within
ninety (90) days following the close of Company's fiscal year.

8.3. Purchase of Accounts Receivable.

8.3.1. GCOA hereby agrees to sell and assign to Company and Company agrees
to buy, all of GCOA's Accounts Receivable each month during which this Agreement
is in existence which are owing to GCOA arising out of the delivery of medical,
surgical, diagnostic or other professional medical goods or services. Accounts
Receivable shall not include, and Company shall not purchase, any cash, checks
or receivables created by credit cards. Company shall bear the risk of
collection and any overage or underage resulting from any purchased Accounts
Receivable.

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<PAGE>

8.3.2. The purchase price for each Accounts Receivable (the "Purchase
Price") will be equal to the face amount of the Accounts Receivable recorded
each month, less any non-allowed contractual adjustments and net of any reserve
for uncollectible Accounts Receivables based on the historical experience of the
practice as determined by Company. It is the intent of the parties that the
Purchase Price reflect the actual net realizable value of the Accounts
Receivable.

8.3.3. GCOA will sell all Accounts Receivable to Company, such purchase to
be deemed to be made on the fifteenth (15th) day of the month following the
month in which such Accounts Receivable are created. Company shall pay for the
Accounts Receivable not later than the fifteenth (15th) day of each month

following the month in which the Accounts Receivable is created (the "Settlement
Date"). Company shall pay to GCOA for all Accounts Receivable purchased by
check, wire transfer or intrabank transfer to the GCOA Operating Account
described in Section 5.11. The purchase of Accounts Receivable shall be
evidenced by sending Company (i) a copy of each invoice with respect to each
Third-Party Payor on the Accounts Receivable then being purchased; and (ii) any
other information or documentation (including all required Uniform Commercial
Code releases or financing statements) Company may reasonably need to identify
the Accounts Receivable and obtain payment from the Account Debtors; provided
that such failure to send such documents shall not affect the obligation of GCOA
to sell such Accounts Receivable or Company to buy such Accounts Receivable. As
consideration for the purchase of Accounts Receivable by Company pursuant to
this Section 8.3, Company promises to pay and shall be obligated to pay for such
Accounts Receivable at the time and in the manner provided below. To the extent
permissible by Applicable Law, GCOA will be deemed to have sold to Company all
of GCOA's right, title and interest in such Accounts Receivable and in any
proceeds thereof, and Company will be the sole and absolute owner thereof and
will own all of GCOA's rights and remedies represented by such Accounts
Receivable (including, without limitation, rights to payment from the respective
Account Debtors on such Accounts Receivable), and Company will have obtained all
of GCOA's rights under all guarantees, assignments and securities with respect
to each such Accounts Receivable.

8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, GCOA will execute such financing statements or amendments under the UCC
(naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.

8.3.6. GCOA agrees to cooperate with Company in the collection of the
Accounts Receivable sold by GCOA, transferred pursuant to Section 8.3. At the
option of and upon the request of Company, GCOA shall execute any and all
documentation necessary for the transfer of amounts constituting Accounts
Receivables and/or the establishment of lockboxes in accordance with the
provisions of Exhibit 8.3.6 attached hereto.

8.3.7. All Accounts Receivable of GCOA purchased by Company ("Purchased
A/R") pursuant to this Section 8.3 hereof will, as such Purchased A/R are
purchased, be treated as Professional Service Revenues for accounting and
financial purposes.

8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless GCOA is required by law to incur such expenses, in
which case Company shall indemnify GCOA against any such expenses. Company shall
pay all Clinic Expenses as they become due; provided, however, that Company may,
in the name and on behalf of GCOA, contest in good faith any claimed Clinic

Expense to which there is any dispute regarding the nature, existence or
validity of such claimed Clinic Expense. Upon receipt of GCOA's service fee,
Company shall be required to deposit into the GCOA Operating Account described
in Section 5.11 an amount of money necessary for GCOA to pay the compensation
and benefits associated with the Technical Employees and Physician Employees
(other than Physician Owners) employed by GCOA.

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ARTICLE IX.

RECORDS

9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, GCOA shall retain all patient medical records
maintained by GCOA or Company in the name of GCOA. GCOA shall, at GCOA's option,
be entitled to retain copies of financial and accounting records relating to all
services performed by GCOA. All parties agree to maintain the confidentiality of
patient identifying information and not to disclose such information except as
may be required or permitted by Applicable Law.

9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of GCOA under the
provisions of Section 9.1 above, shall at all times be the property of Company.

9.3. Access to Records. During the term of this Agreement, and thereafter,
GCOA or GCOA's designee shall have reasonable access during normal business
hours to GCOA's and Company's financial records, which relate to the operation
of GCOA including, but not limited to, records of collections, expenses and
disbursements as kept by Company in performing Company's obligations under this
Agreement, and GCOA may copy at GCOA's expense any or all such records.

ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by GCOA. Throughout the term of this
Agreement, GCOA shall maintain comprehensive professional liability and worker's
compensation insurance for GCOA and all employees of GCOA in amounts approved by
the Policy Board. Not in limitation of the foregoing, GCOA shall maintain excess
general liability umbrella coverage with a One Million Dollars ($1,000,000)
limit as currently maintained by GCOA (with deductible provisions not to exceed
$25,000 per occurrence), the cost of which shall be paid by Company as a Clinic
Expense. In lieu of the foregoing, Company may provide as a Clinic Expense group
insurance for malpractice and/or worker's compensation insurance.
Notwithstanding the foregoing, in the event that Company procures such group
insurance for malpractice and/or worker's compensation insurance, GCOA must
first approve the amount of coverage, the carrier and the terms of any such
coverage for GCOA.

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<PAGE>

the commercial general liability insurance shall be in amounts customarily
maintained by other businesses in the same or similar business as Company.

10.3. Additional Insureds. GCOA and Company agree to use their best
efforts to have each other named as an additional insured on the other's
respective professional liability insurance programs at Company's expense.
Further, on any insurance where Company will be named as an additional insured,
GCOA will assist Company to obtain appropriate riders to insure payment of any
party indemnified by Company.

10.4. Indemnification. GCOA shall indemnify, hold harmless and defend
Company, its officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions (other than for any claims for (or in
connection with) malpractice arising from the performance or nonperformance of
medical services) by GCOA and/or GCOA's Physician Owners, agents, employees
and/or subcontractors (other than Company) during the term hereof. Company shall
indemnify, hold harmless and defend GCOA, the Physician Owners, GCOA's officers,
directors and employees, from and against any and all liability, loss, damage,
claim, causes of action, and expenses (including reasonable attorneys' fees),
caused or asserted to have been caused, directly or indirectly, by or as a

result of the performance of any intentional acts, negligent acts or negligent
omissions by Company and/or its shareholders, agents, employees and/or
subcontractors (other than GCOA and the Physician Owners) during the term of
this Agreement. Neither Company nor GCOA shall have any obligation to indemnify
the other party unless the claim for indemnification is based upon a liability,
loss or damage resulting in the indemnified party making payments to a third
party. Pursuant to the terms of the Stockholders Agreement, Company may have the
right to redeem a Physician Owner's Company common stock to satisfy a Physician
Owner's indemnification obligations.

In the event that either party makes a claim for indemnification under
either the Asset Exchange Agreement or this Service Agreement, then the claiming
party shall have the right, to the extent it is owed indemnifications, to pay
amounts owed to the other party under this Agreement into an escrow account
(established pursuant to an escrow agreement to be agreed upon by the parties)
to be held by the escrow agent in an interest bearing account until a
determination by either (i) the parties, (ii) a court of proper jurisdiction or
(iii) agreed upon panel of arbitrators, has been made regarding the claiming
party's right to indemnification. In the event that the claiming party is
entitled to indemnification, then such escrowed funds shall be paid to the
claiming party in partial or complete satisfaction of such indemnification
obligation. Any excess funds remaining in the escrow account after the payment
of the indemnification obligation or any funds held in the escrow account if it
is determined that no indemnification obligation is owed shall be paid to the
other party.

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement. This Service Agreement shall be effective upon
the closing of the Asset Exchange Agreement and shall expire on October 31, 2036
unless earlier terminated pursuant to the terms hereof. Notwithstanding the
foregoing, for purposes of computing the Service Fee for the month of November
1996 only, the Service Agreement shall be effective upon November 1, 1996.

11.3. Termination by GCOA for Cause. GCOA may terminate this Agreement
without breach as follows:

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involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, GCOA may give notice of the immediate termination of this
Agreement.

11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by GCOA; or Company shall fail to remit the payments due
as provided in Article VIII hereof and such failure to remit shall continue for
a period of thirty (30) days after written notice thereof, GCOA may terminate
this Agreement.

11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of GCOA or commit a similar act which cause material
harm to GCOA, GCOA may terminate this Agreement.

11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:

11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by GCOA, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by GCOA, except for the filing of a petition in
involuntary bankruptcy against GCOA which is dismissed within thirty (30) days
thereafter, Company may give notice of the immediate termination of this
Agreement.

11.4.2. In the event GCOA shall materially default in the performance of
any duty or obligation imposed upon it by this Agreement, and such default shall
continue for a period of ninety (90) days after written notice thereof has been
given to GCOA by Company, Company may terminate this Agreement.

11.4.3. In the event GCOA's Medicare or Medicaid Number shall be
terminated or suspended as a result of the action or inaction of GCOA or a
Physician Employee, and such termination or suspension shall continue for thirty
(30) days, Company may give notice of the immediate termination of this
Agreement, unless GCOA shall at that time be acting in good faith (and shall
provide reasonable evidence of the action being taken) to reverse such
termination or suspension. Notwithstanding any good faith effort on the part of
GCOA to reverse such termination or suspension, if such termination or
suspension shall not be reversed within ninety (90) days after occurrence,
Company shall have the right to terminate this Agreement immediately.

11.4.4. In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require GCOA to purchase from Company all assets, both tangible and intangible,
owned by Company and used or made available for GCOA's use for the fair market
value of such assets on a going concern basis, without regard to this Agreement.
In addition thereto, GCOA shall assume all debt (including any balance of any

remaining debt incurred by Company to acquire the assets under the Asset
Exchange Agreement) and all contracts, payables and leases which are obligations
of Company which relate to Company's obligations which are performed at the
Office Locations under this Agreement. The fair market value of the assets shall
be determined by an independent appraiser selected by two (2) independent
accountants practicing with "big six" accounting firms, one (1) selected by GCOA
and one (1) selected by Company and neither of which is providing or has for a
period of two (2) years provided services to Company or GCOA. In addition to the
payment for the practice assets, in the event Company terminates this Agreement
pursuant to Section 11.4.1, Section 11.4.2 or Section 11.4.3 within the first
five (5) years of the term of this Agreement, then GCOA's Physician Owners shall
(i) pay to Company an amount of money equal to the Fair Market Value, as of the
date of termination, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to
GCOA pursuant to the Asset Exchange Agreement or (ii) surrender to Company for
cancellation

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<PAGE>

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to GCOA pursuant to
the Asset Exchange Agreement. All expenses of any appraisal shall be paid by
GCOA. In the event that Company terminates this Agreement pursuant to Sections
11.4.1 through 11.4.3, inclusive, and Company requires GCOA to purchase the
practice assets, then upon the closing of the purchase of the assets, GCOA and
its Physician Employees shall be released from the restrictive covenants
provided for under Exhibit 11 of this Agreement. In addition, termination of the
Agreement may trigger certain rights of Company to redeem a Physician Owner's
Company common stock pursuant to the terms of Article VIII of the Stockholders
Agreement.

11.5. Early Termination by GCOA or Company Without Cause Upon Third (3rd)
Anniversary of Agreement. Either party may terminate this Agreement without
cause upon written notice delivered to the other party not less than nine (9)
months or more than ten (10) months or more prior to the end of the third (3rd)
anniversary of the date of this Agreement if Company has not filed a
registration statement with the United States Securities and Exchange
Commission; provided, however, if Company files a registration statement, for an
underwritten public offering, with the United States Securities and Exchange
Commission before the end of the date of the third (3rd) anniversary of this
Agreement, then such termination shall be ineffective, and this Agreement shall
continue in force unless otherwise terminated pursuant to the other provisions
of Article XI of this Agreement. In the event that such registration statement
is not effective within one hundred twenty (120) days from filing, then the
early termination rights described in the first sentence of this Section 11.5
shall be again exercisable; provided, further, that if such registration
statement was filed during the above described notice period for early
termination, then such period shall be extended for thirty (30) days from and
after the date such early termination rights again become exercisable.
Notwithstanding any other provision of this Agreement to the contrary, the
termination rights set forth in this Section 11.5 shall immediately terminate
and no longer be effective upon a Change in Control of Company. Upon a
termination pursuant to this Section 11.5, GCOA shall tender to Company all of

the stock issued to GCOA by Company pursuant to the Asset Exchange Agreement,
and Company shall return to GCOA the facilities and all assets, both tangible
and intangible, used or made available for GCOA's use in the Practice Office.
GCOA shall assume all debt (including any balance of any remaining debt incurred
by Company to acquire the assets under the Asset Exchange Agreement) and all
contracts, payables and leases which are obligations of Company and which relate
to Company's obligations which are performed at the Office Locations under this
Agreement. Company and GCOA shall cooperate to structure any exchange
consummated pursuant to this Section 11.5 in a manner designed to minimize the
aggregate tax consequences to the parties arising from the exchange. Closing of
the exchange pursuant to this Section 11.5 shall occur effective as of the third
(3rd) anniversary of this Agreement.

11.6. Consequences of GCOA Termination. In the event that this Agreement
is terminated by GCOA under the terms of Section 11.3 or is terminated on any
other basis (other than (i) because of the normal expiration of its term set
forth in Section 11.1, (ii) by Company for cause as set forth in Section 11.4 or
(iii) by early termination as set forth in Section 11.5), then upon such
termination, GCOA shall purchase from Company all assets, both tangible and
intangible, owned by Company and used or made available for GCOA's use for the
fair market value of such assets on a going concern basis, without regard to
this Agreement. In addition thereto, GCOA shall assume all debt (including any
balance of any remaining debt incurred by Company to acquire the assets under
the Asset Exchange Agreement) and all contracts, payables and leases which are
obligations of Company which relate to Company's obligations which are performed
at the Office Locations under this Agreement. The fair market value of the
assets shall be determined by an independent appraiser selected by two (2)
independent accountants practicing with "big six" accounting firms, one (1)
selected by GCOA and one (1) selected by Company and neither of which is
providing or has for a period of two (2) years provided services to Company or
GCOA. Termination of this Agreement by GCOA or a Physician Owner may trigger
Company's right to redeem all of Company common stock owned by the Physician
Owner as provided for in Section 8.1 (a) of the Stockholders Agreement.

11.7. Closing of Purchase by GCOA and Effective Date of Termination. GCOA
shall, except as provided below in this Section 11.7, pay cash for the practice
assets purchased pursuant to the provisions of this Section 11. The amount of
the purchase price shall be reduced, but not below zero (0), by the amount of
debt and liabilities of Company assumed by GCOA and shall also be reduced by any
payment Company has failed to make under this Agreement, provided that such
payments or obligations are not otherwise accounted for in the liabilities
assumed by GCOA in connection with the purchase

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<PAGE>

described herein. The closing date for the purchase shall be determined by GCOA,
but shall in no event occur later than one hundred eighty (180) days from the
date of the notice of termination. The termination of this Agreement shall
become effective upon the closing of the sale of the assets and GCOA and Company
shall be released from the restrictive covenants provided for in Article VII on
the closing date. Company shall give GCOA credit towards the purchase price of
the assets for the Fair Market Value of any Company common stock tendered to

Company in exchange for such assets. In the event that GCOA terminates this
Agreement pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections
11.5, 11.6 or 11.7, then upon the closing of the purchase of the assets, GCOA
and its Physician Employees shall, except as GCOA may so elect to limit through
separate agreements with Physician Owners and Physician Employees, be released
from the restrictive covenants provided for under Article VII or Exhibit 11 of
this Agreement.

11.8. Tail Policy. GCOA shall obtain continuing liability insurance
coverage under either a "tail policy" or a "prior acts policy" with the same
limits and deductibles as set forth in Section 10.1 upon the termination of this
Agreement, or upon a physician's termination of his or her affiliation with
GCOA.

11.9. Restrictions Applicable to Physician Owners. The Physician Owners
hereby acknowledge that the Asset Exchange and the terms and conditions of this
Agreement were determined based upon numerous factors, including the Physician
Owners continuing to practice medicine in the future. In connection therewith,
each Physician Owner agrees as follows:

(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of GCOA's service fees
during the twelve (12) month period preceding the retiring
Physician Owner's notice of intent to retire.

period preceding the notice of intent to retire.

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<PAGE>

retirement or (y) the immediately preceding anniversary date,
as applicable, and such successive anniversary date.

(d) to (i) pay to Company an amount of money equal to the Fair
Market Value, as of the date of retirement, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to the retiring
Physician Owner pursuant to the Asset Exchange Agreement or (ii) surrender
to Company for cancellation [xxxxxxxxxxxxxxxxxxxxxxxxx] by Company to the
retiring Physician Owner pursuant to the Asset Exchange Agreement. (All
expenses of any appraisal shall be paid by such Physician Owner.); and

(e) to honor and comply with the restrictive covenants provided for
under Exhibit 11.

replacement physician, Company shall waive the remaining months of said twelve
(12) month notice period, and such retirement shall be effective upon the
earlier of twelve (12) months from the date of notice or commencement of the
replacement physician's employment. Upon such retirement or start of teaching
position, such Physician Owner shall have no further obligations under this
Agreement; provided, however, the restrictive covenants provided for under
Exhibit II shall remain in force. In fulfilling any such full-time teaching
responsibilities, such Physician Owner would be permitted to attend patients in
a manner normal and customary for such faculty position, provided, however, such
services must be incident to the academic/teaching aspects of the institution,
and not incident to the regular examination of patients for a fee whether billed
in the name of the institution or the name of the attending physician. It is not
the intent of the Parties to permit a retired physician to conduct a medical
practice through an academic institution.

11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with GCOA, then the terminating Physician Owner may join or
establish another group/practice which has or will enter into a Service
Agreement with Company upon such terminating Physician Owner's affiliation with
such new group/practice. Upon entering into such new Service Agreement, the
terminating Physician Owner shall, except as limited by separate employment
agreements between GCOA and Physician Owners, be released from any obligation
under this Service Agreement. Company shall have the right to enter into such
new Service Agreement without satisfying the requirements of paragraph G of
Exhibit 11. In the event that (i) GCOA consents to Company entering into the new
Service Agreement, (ii) entering into the new Service Agreement will not
adversely affect the operations and earnings of Company, and (iii) the new
group/practice can satisfy the representations and warranties set forth in
Article XIII of this Agreement, then Company will not unreasonably withhold or
refrain from entering into a new

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<PAGE>

Service Agreement with the terminating Physician Owner's new group/practice.
Except as set forth herein, in the event that the Physician Owner affiliates
with a new group/practice that is not a party to a Service Agreement with
Company, then Company, at its option, may terminate this Agreement solely with
respect to the terminating Physician Owner, and the provisions of Exhibit 11
shall apply. In the event that Company does not enter into a new Service
Agreement, then Company shall terminate this Agreement with respect to such
Physician Owner, and the terminating Physician Owner shall be obligated as
described in Sections 11.9.1 (a) and 11.9.1(e) of this Agreement; provided,
however, if such termination is within the first five (5) years of the term of
this Agreement, the terminating Physician Owner shall also be obligated as
described in Sections 11.9.1.(a), 11.9.1(b), 11.9.1(c), 11.9.1(d) and 11.9.1(e).

11.9.4. Death or Disability. In the event that a Physician Owner dies or
becomes disabled, then the Physician Owner shall have no continuing obligations
under this Agreement; provided, however, in the event of disability, the
restrictive covenants described in Exhibit 11 shall remain in force.

ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with GCOA, shall review and approve such reconstruction, repair or
replacement.

ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF GCOA AND PHYSICIAN OWNERS

GCOA and Physician Owners represent, warrant, covenant and agree with
Company that:

13.1. Validity. GCOA is a Maryland limited liability company. GCOA has the
full power and authority to own GCOA's property, to carry on GCOA's business as
presently being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby. Each Physician Owner is an adult citizen and
resident of the State of Maryland. Each Physician Owner has the full power and
authority to own his or her property, carry on his or her business as presently
being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby.

13.2. Litigation. Except as disclosed pursuant to the Asset Exchange
Agreement, there is no suit, action, proceeding at law or in equity,
arbitration, administrative proceeding or other proceeding pending, or
threatened against, or affecting GCOA or any Physician Employee, or to the best
of GCOA's and each Physician Owner's knowledge, any provider or other health
care professional associated with or employed by GCOA as pertains to any claim
involving the providing of health care related services, and to the best of
GCOA's and each Physician Owner's knowledge there is no basis for any of the
foregoing.

13.3. Permits. GCOA and all health care professionals associated with or
employed by GCOA have all permits and licenses and other Necessary
Authorizations required by all Applicable Law, except where failure to secure
such licenses, permits and other Necessary Authorizations does not have a
material adverse effect; have made all regulatory filings necessary for the
conduct of GCOA's business; and are not in violation of any of said permitting
or licensing requirements.

Physician Owner, enforceable in accordance with its terms. GCOA and each
Physician Owner have obtained all third-party

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<PAGE>

consents necessary to enter into and consummate the transaction contemplated by
this Agreement. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor compliance by GCOA or
any Physician Owner with any of the provisions hereof, will:

13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either GCOA or any Physician Owner.

13.5. Compliance with Applicable Law. To the best of GCOA's and each
Physician Owner's knowledge and belief, GCOA and each Physician Owner has
operated in compliance with all federal, state, county and municipal laws,
ordinances and regulations applicable thereto and neither GCOA nor any provider
associated with or employed by GCOA has received payment or any remuneration
whatsoever to induce or encourage the referral of patients or the purchase of
goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or
otherwise perpetrated any Medicare or Medicaid fraud or abuse, nor has any fraud
or abuse been alleged within the last five (5) years by any Governmental
Authority, a carrier or a Third-Party Payor.

13.6. Health Care Compliance. GCOA is presently participating in or
otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
GCOA no event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such Third-Party Payor Program. GCOA is in full
compliance with the material requirements of all such Third-Party Payor Programs
applicable thereto.

13.7. Fraud and Abuse. GCOA and persons and entities providing
professional services for GCOA, have not, to the knowledge of GCOA and each
Physician Owner, after due inquiry, engaged in any activities which are
prohibited by or are in violation of the rules, regulations, policies, contracts
or laws pertaining to any Third-Party Payor Program, or which are prohibited by
rules of professional conduct ("Governmental Rules and Regulations"), including
but not limited to the following: (a) knowingly and willfully making or causing
to be made a false statement or representation of a material fact in any
application for any benefit or payment; (b) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment; (c) failing to disclose

knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on GCOA's own behalf or on behalf of
another, with intent to fraudulently secure such benefit or payment; or (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay or receive such remuneration (i) in return
for referring an individual to a person for the furnishing or arranging for the
furnishing or any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service or item for which payment may be made in whole or in
part by Medicare or Medicaid.

13.8. GCOA Compliance. GCOA has all licenses necessary to operate the
Practice Offices in accordance with the requirements of all Applicable Law and
has all Necessary Authorizations for the use and operation, all of which are in
full force and effect. There are no outstanding notices of deficiencies relating
to GCOA issued by any Governmental Authority or Third-Party Payor requiring
conformity or compliance with any Applicable Law or condition for participation
of such Governmental Authority or Third-Party Payor, and after reasonable and
independent inquiry and due diligence and investigation, GCOA has neither
received notice nor has any knowledge or reason to believe that such Necessary
Authorizations may be revoked or not renewed in the ordinary course.

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<PAGE>

13.9. Rates and Reimbursement Policies. The jurisdiction in which GCOA is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by GCOA. GCOA
does not have any rate appeal currently pending before any Governmental
Authority or any administrator of any Third-Party Payor Program. GCOA has no
knowledge of any Applicable Law which has been enacted, promulgated or issued
within the eighteen (18) months preceding the date of this Agreement or any such
legal requirement proposed or currently pending in the jurisdiction in which
GCOA is located which could have a material adverse effect on GCOA or may result
in the imposition of additional Medicaid, Medicare, charity, free care, welfare,
or other discounted or government assisted patients at GCOA or require GCOA to
obtain any necessary authorization which GCOA does not currently possess.

13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:

13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; GCOA has billed the applicable Account Debtor and GCOA has
delivered or caused to be delivered to such Account Debtor all requested
supporting claim documents with respect to such Accounts Receivable; all
information set forth in the bill and supporting claim documents is true and
correct, and, if any error has been made, GCOA will promptly correct the same
and, if necessary, rebill or, if requested by Company, cooperate with Company to
rebill such Accounts Receivable.

13.10.2. The Purchased A/R are exclusively owned by GCOA and there is no
security interest or lien in favor of any third party, or the recording or
filing against GCOA, as debtor, covering or purporting to cover any interest of
any kind in any Accounts Receivable, except as has been released by each party
holding such adverse interest in the Accounts Receivable. Upon payment of the
Purchase Price with respect to the Purchased A/R and with respect to
Governmental Receivables, to the extent permissible by law, all right, title and
interest of GCOA with respect thereto shall be vested in Company, free and clear
of any lien, security interest, claim or encumbrance of any kind, and GCOA
agrees to defend the same against the claims of all Persons.

13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by
the Account Debtor identified by GCOA as being obligated to do so, (ii) are
based on an actual and bona fide rendition of services or sale of goods to the
patient by GCOA in the ordinary course of business, (iii) are denominated and
payable only in lawful currency of the United States, and (iv) are accounts or
general intangibles within the meaning of the UCC of the state in which GCOA has
its principal place of business, or are rights to payment under a policy of
insurance or proceeds thereof, and are not evidenced by any instrument or
chattel paper. There are no payors other than the Account Debtor identified by
GCOA as the payor primarily liable on any Purchased A/R.

13.10.4. The Purchased A/R are not (i) subject to any action, suit,
proceeding or dispute (pending or threatened), set-off, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction or termination by the
Account Debtors other than routine adjustments and disallowances made in the
ordinary course of business, to the extent of such adjustments and
disallowances, (ii) past or within sixty (60) days of, the statutory limit for
collection applicable to the Account Debtor, (iii) subject to an invoice which
provides for payment more than forty-five (45) days from the date of such
invoice, (iv) an account which arises out of a sale or other transaction by or
between GCOA to an Affiliate of GCOA, (v) from an Account Debtor who is also a
creditor of GCOA, (vi) an account in which the Account Debtor has commenced a
voluntary case, or an involuntary proceeding has been instituted, under the
federal bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit or creditors, or if a decree or order for relief has
been entered by a court having jurisdiction in the premises in respect to the
Account Debtor, (vii) an account of which the goods giving rise to such Accounts
Receivable have not been shipped and delivered to and accepted by the Account
Debtor or the services giving rise to such Accounts Receivable have not been
performed by GCOA and accepted by the Account Debtor or the Accounts Receivable
otherwise does not represent a final sale, (viii) is evidenced by an instrument
or chattel paper unless such instrument or chattel paper is delivered to Company
with all appropriate endorsements in favor of Company, or (ix) other than a
complete bona fide transaction which requires no further act under any
circumstances on the part of GCOA to make the Accounts Receivable payable by the
Account Debtor.

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<PAGE>

13.10.5. GCOA does not have any guaranty of, letter of credit providing

credit support for, or collateral security for, the Purchased A/R, other than
any such guaranty, letter of credit or collateral security as has been assigned
to Company, and any such guaranty, letter of credit or collateral security is
not subject to any lien in favor of any other person.

13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of GCOA and the patient
received such goods or services.

13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of GCOA. The sale of the Purchased A/R
hereunder is made in good faith and without actual intent to hinder, delay or
defraud present or future creditors of GCOA.

13.10.10. Except with respect to Governmental Receivables, the insurance
policy, contract or other instrument obligating an Account Debtor to make
payment with respect to the Purchased A/R (i) does not contain any provision
prohibiting the transfer of such payment obligation from the patient to GCOA, or
from GCOA to Company, (ii) has been duly authorized by GCOA and to the knowledge
of GCOA has been duly authorized by the Account Debtor and, together, with the
Purchased A/R, constitutes the legal, valid and binding obligation of the
Account Debtor in accordance with its terms, (iii) together with the applicable
Purchased A/R, does not contravene in any material respect any requirement of
law applicable thereto, and (iv) was in full force and effect and applicable to
the patient at the time the services constituting the basis for the Purchased
A/R were performed.

None of the foregoing representations and warranties shall be deemed to
constitute a guaranty by GCOA that the Purchased A/R will be collected by
Company. GCOA shall not be responsible for any damages for any breach of a
representation or warranty under this Section 13.10 until Company has suffered a
loss on the purchase of GCOA's Accounts Receivable. Damages for such breach
shall be limited to the amount of Company's loss on the purchase of such
Accounts Receivable.

13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of GCOA no representation or warranty made by
GCOA in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.

13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by GCOA as though recited in this Article
XIII.

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<PAGE>

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company represents, warrants, covenants and agrees with GCOA as follows:

14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of GCOA or Company, other than on terms
and conditions substantially as favorable to Company as would be obtainable by
Company at the time in a comparable arm's-length transaction with a person not
an Affiliate.

ARTICLE XV.

COVENANTS OF GCOA AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements. GCOA shall not

incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up GCOA's affairs or enter into any partnerships,
joint ventures or sale-leaseback transactions or purchase or otherwise acquire
(in one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any other person or entity.

15.2. Necessary Authorizations/Assignment of Licenses and Permits. GCOA
and each Physician Owner shall maintain all licenses, permits, certifications,
or other Necessary Authorizations and shall not assign or transfer any interest
in any license, permit, certificate or other Necessary Authorization granted to
it by any Governmental Authority, nor shall GCOA or any Physician Owner assign,
transfer, or remove or permit any other individual or entity to assign, transfer
or remove any records of GCOA or any Physician Owner, including without
limitation, patient records, medical and clinical records (except for removal of
such patient records as required under any Applicable Law).

15.3. Transaction with Affiliates. Neither GCOA nor any Physician Owner
shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of GCOA or
Company, other than on terms and conditions substantially as favorable to GCOA
or the Physician Owner, as would be obtainable by GCOA or the Physician Owner at
the time in a comparable arms-length transaction with a person not an Affiliate.

15.4. Compliance with All Laws. GCOA and each Physician Owner shall use
their best efforts to comply with all laws and regulations relating to GCOA's
practice and the operation of any facility, including, but not limited to, all
state,

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<PAGE>

federal and local laws relating to the acquisition or operation of a health care
practice. Furthermore, neither GCOA nor any Physician Owner shall intentionally
violate any Governmental Rules and Regulations.

15.5. Third-Party Payor Programs. GCOA shall maintain GCOA's compliance
with the requirements of all Third- Party Payor Programs in which GCOA is
currently participating or authorized to participate.

15.6. Change in Business or Credit and Collection Policy. GCOA shall not
make any change in the character of GCOA's business or in the credit and
collection policy, which change would, in either case, impair the collectibility
of any Purchased A/R or any Exchange A/R or otherwise modify, amend or extend
the terms of any such account other than in the ordinary course of business.

15.7. Treatment of Accounts Receivable. GCOA will (i) treat transfers to
Company of Accounts Receivable hereunder as a sale for all purposes, including
tax and accounting (and shall accurately reflect such sale in its financial
statements), and will advise all persons who inquire about the ownership of such
Accounts Receivable that they have been sold to Company; (ii) not treat any such
Accounts Receivable as an asset on GCOA's books and records; (iii) record in
GCOA's books, records and computer files pertaining thereto that such Accounts

Receivable have been sold to Company; (iv) pay all taxes, if any, relating to
the transfer of such Accounts Receivable after the same have been purchased by
Company; (v) not impede or interfere with Company's collection of such Accounts
Receivable; (vii) not amend, waive or otherwise permit or agree to any deviation
from the terms or conditions of such Accounts Receivable; (viii) use all
reasonable efforts to obtain all consents from patients which are required by
law in order for Company, or any servicing entity retained by Company, to secure
information needed to obtain or to expedite payment from the respective Account
Debtors; and (ix) have billed such Accounts Receivable on the same bases and
using the same policies and practices that it has used in the past unless
Company has been advised in writing of a change prior to the purchase of such
Accounts Receivable. Company or its designated representatives from time to time
may verify the Accounts Receivable, inspect, check, take copies or extracts from
GCOA's books, records and files, and GCOA will make the same available to
Company or such representatives at any reasonable time for such purposes.

15.8. Security Interest. If, contrary to the mutual intent of GCOA and
Company, any purchase of Purchased A/R is not characterized as a sale, GCOA
shall, effective as of the date hereof, be deemed to have granted (and GCOA does
hereby grant) to Company a first priority security interest in and to any and
all of the Purchased A/R and the proceeds thereof to secure the repayment of all
amounts advanced to GCOA hereunder with accrued interest thereon, and this
Agreement shall be deemed to be a security agreement. With respect to such grant
of a security interest, Company may at its option exercise from time to time any
and all rights and remedies available to it under the UCC or otherwise. GCOA
agrees that five (5) days shall be reasonable prior notice of the date of any
public or private sale or other disposition of all or part of the Purchased A/R.
GCOA represents and warrants that the location of GCOA's principal place of
business, and all locations where GCOA maintains records with respect to its
accounts are set forth under its name in Section 16.3 hereof. GCOA agrees to
notify Company in writing thirty (30) days prior to any change in any such
location. The exact name of GCOA is as set forth at the beginning of this
Agreement, and except as set forth on the signature page hereof, GCOA has not
changed its name in the last five (5) years, and during such period GCOA did not
use, nor does GCOA now use, any fictitious or trade name. GCOA shall notify
Company in writing thirty (30) days prior to any change in any such name.

ARTICLE XVI.

GENERAL PROVISIONS

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<PAGE>

paid to Lender all amounts which are otherwise payable to Company pursuant to
the terms of this Agreement, including, without limitation, all service fees,
and other Clinic Expenses and, until such amounts are delivered to Lender, hold
payments in trust for Lender. Except as set forth above, neither Company nor
GCOA shall have the right to assign their respective rights and obligations
hereunder without the written consent of the other party. Without limiting the
foregoing, GCOA acknowledges that, as collateral for certain obligations,
Company has assigned all of its rights hereunder to NationsBank of Tennessee,
N.A. as Agent (the "Agent") for itself and other banks and institutional lenders
from time to time (collectively the "Banks") and has granted the Agent for the
benefit of the Banks a lien and security interest upon all real and personal
property used in the operation of the Office Locations (the "Pledged Assets").
As an inducement for the Banks to extend or continue the extension of credit to
Company, GCOA (i) acknowledges that the collateral assignment to the Agent
covers all rights of Company hereunder, including, but not limited to, rights
arising from warranties and representations made by GCOA, rights to enforce
covenants made by GCOA, and rights to receive all payments due Company; (ii)
agrees to regard the Agent as the owner of any or all of the assigned rights
upon written notice to GCOA of this election from the Agent; (iii) agrees that
neither the Agent nor any of the Banks has obligation for the performance of the
duties of Company hereunder, and shall not assume any such duty by the exercise
of rights as a secured lender; (iv) agrees to give the Agent written notice of
any material default hereunder on Company's part at the address of 1 NationsBank
Plaza, Nashville, Tennessee 37239, Attn: David Dupuy, and to allow at least
thirty (30) days thereafter for the cure of such default before GCOA terminates
this Agreement; (v) agrees that the rights of GCOA under this Agreement,
including, but not limited to, the right to the use of the Pledged Assets, are
and shall be junior to any security interest that the Agent and the Banks, their
successors or assigns may have in the Pledged Assets at any time; (vi) agrees
that the benefits of the above undertakings in favor of the Agent and Banks
shall further extend to all successors and assigns of the Agent and Banks,
provided that any notices given by GCOA under this Section shall be given to the
Agent at the foregoing address unless GCOA has received written notice of a
change thereof; and (vii) agrees that this Section may not be modified, and no
provision of this Section may be waived, absent the written approval of the
Agent.

To Company: Specialty Care Network, Inc.
44 Union Boulevard

Suite 600
Lakewood, Colorado 80228
Attention: Kerry Hicks

With a copy to: Baker, Donelson, Bearman & Caldwell
165 Madison Avenue
Suite 2000
Memphis, Tennessee 38103
Attention: David T. Popwell, Esq.

To GCOA: Greater Chesapeake Orthopaedic
Associates, L.L.C.
3333 North Calvert Street

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<PAGE>

Suite 400
Baltimore, Maryland 21218
Attention: Leslie Matthews, M.D.

With a copy to: Michener, Larimore, Swindle,
Whitaker, Flowers, Sawyer,
Reynolds & Chalk, L.L.P.
301 Commerce Street
3500 City Tower II
Fort Worth, Texas 76102-4186
Attention: John W. Michener, Jr.

or to such other address as either party shall notify the other.

16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.

16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Maryland.

16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.

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<PAGE>

(ii) becomes available on a non-confidential basis from a source other than the
other party or its affiliates or agents, which source was not itself bound by a
confidentiality agreement; (iii) which is required to be disclosed by law or
pursuant to court order; (Company shall provide GCOA with copies of any
information regarding GCOA provided by Company to any third party); or (iv)
except for disclosure to its banks, underwriters or lenders, or its advisors to
the extent required by Section 9.4, or as required in connection with reports on
filings with the SEC or State Departments of Securities.

16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations,
GCOA and Company shall amend this Agreement as necessary. To the maximum extent
possible, any such amendment shall preserve the underlying economic and
financial arrangements between and among GCOA and Company.

separate and cumulative and may be exercised from time to time as often as
occasion may arise or as may be deemed expedient.

16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to GCOA's fair meaning, and not for
or against either party hereto. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or GCOA under this Agreement shall
in any way or in any manner be deemed to create any obligation of Company or of
GCOA to, or any rights in, any person or entity not a party to this Agreement.

16.17. Communications. GCOA and Company agree that good communication
between the parties is essential to the successful performance of this
Agreement, and each pledges to communicate fully and clearly with the other on
matters relating to the successful operation of GCOA's practice at the Practice
Offices.

16.18. Arbitration. Each of the parties agrees to submit any dispute
arising out of or relating to the execution, delivery or performance of this
Agreement to binding arbitration before a panel of three (3) arbitrators
selected from a pool of arbitrators made available by the American Arbitration
Association. Such arbitrators shall be selected by the parties and such
arbitration shall be conducted pursuant to the rules of the American Arbitration
Association and in a manner consistent with the Uniform Arbitration Act as
adopted by the State of Delaware. Each Party agrees that a final award in any
arbitration so brought shall be conclusive and judgment thereon may be entered
and enforced by any court of competent jurisdiction.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

COMPANY:

SPECIALTY CARE NETWORK, INC.

By:________________________________________
Title:_____________________________________

GCOA:

GREATER CHESAPEAKE ORTHOPAEDIC
ASSOCIATES, L.L.C.

By:________________________________________

Title:_____________________________________

PHYSICIAN OWNERS:

____________________________________________
Stuart D. Miller, M.D.

____________________________________________
Leslie S. Matthews, M.D.

____________________________________________
Paul L. Asdourian, M.D.

____________________________________________
Frank R. Ebert, M.D.

____________________________________________
Mark S. Myerson, M.D.

____________________________________________
John B. O'Donnell, M.D.

____________________________________________
Lew C. Schon, M.D.

- 35 -
<PAGE>

MERGER AGREEMENT

BY AND AMONG

SPECIALTY CARE NETWORK, INC.,

AND

VERO ORTHOPAEDICS, INC.

November 12, 1996
<PAGE>

TABLE OF CONTENTS

Page
----

1. Definitions........................................................ 1

3. Representations and Warranties of VERO and the VERO Stockholders... 4
(a) Organization, Qualification, and Corporate Power............ 5
(b) Capitalization.............................................. 5
(c) Authorization of Transaction................................ 5
(d) Noncontravention............................................ 5
(e) Subsidiaries and Investments................................ 5
(f) Financial Statement......................................... 5
(g) Undisclosed Liabilities..................................... 5
(h) Brokers' Fees............................................... 6
(i) Material Contracts.......................................... 6
(j) Insurance; Malpractice...................................... 7
(k) No Changes Prior to Closing Date............................ 7
(l) Title; Condition............................................ 7
(m) Litigation.................................................. 8
(n) Permits and Licenses........................................ 8
(o) Tax Matters................................................. 8
(p) Employee Benefit Plans...................................... 8
(q) Third-Party Relations....................................... 9
(r) Compliance with Applicable Laws............................. 9
(s) Employee Compensation....................................... 10
(t) Environmental Matters....................................... 10
(u) Healthcare Compliance....................................... 10
(v) Fraud and Abuse............................................. 11
(w) Practice Compliance......................................... 11
(x) Rates and Reimbursement Policies............................ 11
(y) Accounts Receivable......................................... 12
(z) Guaranties.................................................. 12
(aa) Powers of Attorney......................................... 12
(ab) Tangible Assets............................................ 12
(ac) Full Disclosure............................................ 12

4. Representations and Warranties of SCN.............................. 12
(a) Organization................................................ 12

i
<PAGE>

Page
----

(b) Capitalization............................................. 12
(c) Authorization of Transaction............................... 12
(d) Noncontravention........................................... 12
(e) Brokers' Fees.............................................. 13
(f) Private Placement Memorandum............................... 13

5. Covenants......................................................... 13
(a) General.................................................... 13
(b) Notices and Consents....................................... 13
(c) Regulatory Matters and Approvals........................... 13
(d) Operation of Business...................................... 14
(e) Full Access................................................ 14
(f) Notice of Developments..................................... 15
(g) Exclusivity................................................ 15
(h) Collection of Accounts Receivable.......................... 15
(i) Payment of Expenses........................................ 15

6. Conditions to Obligation to Close................................. 16
(a) Conditions to Obligation of SCN............................ 16
(b) Conditions to Obligation of VERO........................... 17

7. Items to be Delivered at or Prior to Closing...................... 18
(a) By the VERO Stockholders or VERO........................... 18
(b) By SCN..................................................... 19

8. Termination....................................................... 19
(a) Termination of Agreement................................... 19
(b) Effect of Termination...................................... 20

9. Indemnification................................................... 20
(a) Indemnification by the VERO Stockholders................... 20
(b) Notice to the VERO Stockholders; Opportunity to Defend..... 20
(c) General Indemnification by SCN............................. 21
(d) Notice to SCN; Opportunity to Defend....................... 21
(e) Survival................................................... 21
(f) Security for Indemnity..................................... 21

10. Miscellaneous.................................................... 21
(a) No Third-Party Beneficiaries............................... 21
(b) Entire Agreement........................................... 21
(c) Succession and Assignment.................................. 21
(d) Counterparts............................................... 21
(e) Headings................................................... 22
(f) Notices.................................................... 22
(g) Governing Law.............................................. 22

ii
<PAGE>

Page
----

(h) Amendments and Waivers..................................... 22
(i) Severability............................................... 23
(j) Expenses................................................... 23
(k) Construction............................................... 23
(l) Incorporation of Exhibits and Schedules.................... 24

iii
<PAGE>

MERGER AGREEMENT

THIS MERGER AGREEMENT ("Agreement") is entered into this the 12th day of
November, 1996, by and among SPECIALTY CARE NETWORK, INC., a Delaware
corporation ("SCN") and VERO ORTHOPAEDICS, INC., a Florida corporation ("VERO")
and the stockholders of VERO as of the date of this Agreement (the "VERO
Stockholders"). SCN, VERO and the VERO Stockholders are referred to collectively
herein as the "Parties."

W I T N E S S E T H:

WHEREAS, VERO is a Florida corporation which owns the assets which are
used by and/or result from the VERO Stockholders' practice of medicine;

WHEREAS, the VERO Stockholders are medical doctors practicing medicine in
the State of Florida;

WHEREAS, this Agreement contemplates a tax-free merger of VERO with and
into SCN in a reorganization pursuant to Code Section 368(a)(1)(A);

WHEREAS, the VERO Stockholders will receive capital stock in SCN and cash
in exchange for their capital stock in VERO;

WHEREAS, the Parties anticipate that the Merger contemplated by this
Agreement will further certain of their business objectives; and

WHEREAS, the Parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.

1. Definitions.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"Closing Date" has the meaning set forth in Section 2(b) below.

"Closing" has the meaning set forth in Section 2(b) below.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Conversion Ratio" has the meaning set forth in Section 2(d)(v) below.

"Delaware Articles of Merger" shall have the meaning set forth in Section
2(c) below.
<PAGE>

"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"Dissenting Share" means any VERO Share which any stockholder who or which
has exercised his or its appraisal rights under the Florida Business Corporation
Act holds of record.

"Effective Time" has the meaning set forth in Section 2(d)(i) below.

"Florida Articles of Merger" shall have the meaning set forth in Section
2(c) below.

"Florida Business Corporation Act" means the Business Corporation Act of
the State of Florida, as amended.

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

"Hazardous Materials" has the meaning set forth in Section 3(t) below.

"IRS" means the Internal Revenue Service.

"Knowledge" means actual knowledge after reasonable investigation.

"Merger" has the meaning set forth in Section 2(a) below.

"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.

"Practice Assets" has the meaning set forth in Section 3(l) below.

"Private Placement Memorandum" means the final private placement
memorandum of SCN relating to the offering of the SCN Shares under the
Securities Act.

- 2 -
<PAGE>

"Requisite SCN Stockholder Approval" means the affirmative vote of the
holders of a majority of the SCN Shares in favor of this Agreement and the
Merger.

"Requisite VERO Stockholder Approval" means the affirmative vote of the
holders of a majority of the VERO Shares in favor of this Agreement and the
Merger.

"VERO Share" means any share of the Common Stock, $10.00 par value per
share, of VERO.

"VERO Stockholder" means any Person who or which holds any VERO Shares.

"VERO" has the meaning set forth in the preface above.

"SCN Share" means any share of the Common Stock, $.001 par value per
share, of SCN.

"SCN" has the meaning set forth in the preface above.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Surviving Corporation" has the meaning set forth in Section 2(a) below.

2. Basic Transaction.

(a) The Merger. On and subject to the terms and conditions of this
Agreement, VERO will merge with and into SCN (the "Merger") at the Effective
Time. SCN shall be the corporation surviving the Merger (the "Surviving
Corporation").

(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Clem, Polackwich,
Vocelle & Taylor, Univest Bldg., Suite 501, 2770 N. Indian River Blvd., Vero
Beach, Florida, commencing at 9:00 A.M. local time on November 12, 1996, or such
other date as the Parties may mutually determine (the "Closing Date").

(c) Actions at the Closing. At the Closing, (i) VERO will deliver to SCN
the various certificates, instruments, and documents referred to in Section 7(a)
below, (ii) SCN will deliver to VERO the various certificates, instruments, and
documents referred to in Section 7(b) below, (iii) SCN and VERO will file with

- 3 -
<PAGE>

the Secretary of State of the State of Delaware both Articles of Merger and a
Plan of Merger in substantially the form attached hereto as Exhibit 2(c) (the
"Delaware Articles of Merger"), and (iv) SCN and VERO will file with the
Department of State of the State of Florida both Articles of Merger and a Plan
of Merger in substantially the form attached hereto as Exhibit 2(c)(i) (the
"Florida Articles of Merger").

(d) Effect of Merger.

(i) General. The Merger shall become effective at the time (the
"Effective Time") SCN and VERO file the Delaware Articles of Merger with
the Secretary of State of the State of Delaware and file the Florida
Articles of Merger with the Department of State of the State of Florida.
The Merger shall have the effect set forth in the Delaware General
Corporation Law and the Florida Business Corporation Act. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on
behalf of either SCN or VERO in order to carry out and effectuate the
transactions contemplated by this Agreement.

(iii) Bylaws. The Bylaws of SCN in effect at and as of the Effective
Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.

(v) Conversion of VERO Shares. At and as of the Effective Time, each
VERO Share (other than any Dissenting Share) shall be converted into the
right to receive 6516.07 SCN Shares (the ratio of 6516.07 SCN Shares to
one VERO Share is referred to herein as the "Conversion Ratio"). Each
Dissenting Share shall be converted into the right to receive payment from
the Surviving Corporation with respect thereto in accordance with the
provisions of the Florida Business Corporation Act. The Conversion Ratio
shall be subject to equitable adjustment in the event of any stock split,
stock dividend, reverse stock split, or other change in the number of VERO
Shares or SCN Shares outstanding. For all purposes, each SCN Share is
agreed to have a value of $6.00 per share.

(vi) SCN Shares. Each SCN Share issued and outstanding at and as of
the Effective Time will remain issued and outstanding.

3. Representations and Warranties of VERO and the VERO Stockholders. VERO
and the VERO Stockholders, severally and with respect to themselves only,
represent and warrant to SCN that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the disclosure schedule (the "Disclosure Schedule"). The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Section 3 and will be completed
pursuant to Section 5(j).

- 4 -
<PAGE>

(a) Organization, Qualification, and Corporate Power. VERO is a
corporation duly incorporated, validly existing, and in good standing under the
laws of the State of Florida. VERO is duly authorized to conduct business and is
in good standing under the laws of each jurisdiction in which the character or
location of the properties owned or the business conducted by VERO makes such
qualification necessary. VERO has the corporate power and authority to carry on
the business in which it is engaged and to own and use the properties owned and
used by it.

(b) Capitalization. The entire authorized capital stock of VERO consists
of 100 VERO Shares, of which 100 VERO Shares are issued and outstanding and zero
VERO Shares are held in treasury. All of the issued and outstanding VERO Shares
have been duly authorized and are validly issued, fully paid, and nonassessable.
There are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights or other contracts or
commitments that could require VERO to issue, sell or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation, or similar rights with
respect to VERO.

(c) Authorization of Transaction. VERO has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; provided, however, that VERO cannot consummate the Merger unless and
until it receives the Requisite VERO Stockholder Approval. This Agreement
constitutes the valid and legally binding obligation of VERO, enforceable in
accordance with its terms and conditions.

(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which VERO
is subject or any provision of the charter or bylaws of VERO or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which VERO is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). VERO is not required to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.

(e) Subsidiaries and Investments. VERO does not own, directly or
indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, limited liability
company, trust, joint venture, or other entity.

(f) Financial Statement. VERO has furnished SCN with audited balance
sheets dated December 31, 1994 and 1995, and audited income statements for the
twelve (12) month periods ending December 31, 1995, 1994 and 1993. Such
financial statements, including the notes thereto, except as indicated therein,
were prepared on a basis consistent with past accounting practices of VERO and
fairly present the results of operations for the periods noted therein. The
balance sheets of VERO delivered by VERO to SCN fairly present the financial
condition of VERO at the date thereof, and except as indicated therein, reflect
all claims against and all debts and liabilities of VERO, fixed or contingent,
as of the date thereof.

(g) Undisclosed Liabilities. VERO has no uninsured liability (whether
known or unknown, asserted or unasserted, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, and whether due or to

- 5 -
<PAGE>

become due), including any liability for taxes, except for (i) liabilities set
forth on the face of the balance sheet dated as of December 31, 1995 and (ii)
liabilities which have arisen after December 31, 1995 in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law).

(h) Brokers' Fees. VERO does not have any liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.

(i) Material Contracts. Section 3(i) of the Disclosure Schedule lists the
following contracts and other material agreements to which VERO is a party:

(i) any agreement (or group of related agreements) for the lease of
real or personal property to or from any Person;

(ii) any agreement (or group of related agreements) for the purchase
or sale of supplies, products, or other personal property or for the
furnishing or receipt of services;

(iii) any agreement concerning a partnership or joint venture;

(iv) any agreement (or group of related agreements) under which VERO
has created, incurred, assumed, or guaranteed any indebtedness for
borrowed money, or any capitalized lease obligation pursuant to which it
has imposed a Security Interest in respect of any of its assets, tangible
or intangible;

(v) any agreement concerning confidentiality or noncompetition;

(vi) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of VERO's current or former directors,
officers, and employees;

(vii) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual
compensation in excess of $25,000 or providing severance benefits;

(viii) any agreement pursuant to which VERO has advanced or loaned
any amount to any of its directors, officers, and employees;

(x) any other agreement (or group of related agreements) outside the
ordinary course of VERO's business or operations the performance of which
involves consideration in excess of $15,000.

VERO has delivered or given SCN access to a correct and complete copy of each
written agreement listed in Section 3(i) of the Disclosure Schedule (as amended
to date) and a written summary setting forth the terms and conditions of each
oral agreement referred to in Section 3(i) of the Disclosure Schedule. With
respect to each

- 6 -
<PAGE>

such agreement: (A) the agreement is legal, valid, binding, enforceable, and in
full force and effect; (B) except as set forth in Section 3(i) of the Disclosure
Schedule, no notice of this Agreement or consent of any third party is required
in order to execute and deliver this Agreement or to consummate the transaction
contemplated hereby, and, after assignment to SCN at Closing, the agreement will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms; (C) to VERO's Knowledge, no party is in breach or default,
and no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the agreement; and (D) no party has repudiated any provision of the agreement.

(j) Insurance; Malpractice. Section 3(j) of the Disclosure Schedule
contains a list and brief description of all policies or binders of fire,
liability, product liability, workers compensation, health and other forms of
insurance policies or binders currently in force insuring against risks which
will remain in full force and effect at least through the Closing Date. Section
3(j) of the Disclosure Schedule contains a description of all current
malpractice liability insurance policies of the VERO Stockholders, VERO and
VERO's professional employees and all predecessor policies in effect since
February 1, 1990. Except as set forth on Section 3(j) of the Disclosure Schedule
(a) neither VERO, the VERO Stockholders, nor its professional employees have, in
the last seven (7) years, filed a written application for any insurance coverage
relating to VERO's business or property which has been denied by an insurance
agency or carrier and (b) VERO, VERO's professional employees and the VERO
Stockholders have been continuously insured for professional malpractice claims
during the same period. Section 3(j) of the Disclosure Schedule also sets forth
a list of all claims for any insured loss in excess of Five Thousand Dollars
($5,000.00) per occurrence filed by VERO, VERO's professional employees or the
VERO Stockholders during the three (3) year period immediately preceding the
date hereof, including workers compensation, general liability, environmental
liability and professional malpractice liability claims. None of VERO, VERO's
professional employees nor the VERO Stockholders is in material default with
respect to any provision contained in any such policy and none of them has
failed to give any notice or present any claim under any such policy in due and
timely fashion.

(k) No Changes Prior to Closing Date. During the period from December 31,
1995 through the date hereof, VERO has not (i) incurred any liability or
obligation of any nature (whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated and
whether due or to become due), except in the Ordinary Course of Business, (ii)
written off as uncollectible any notes or accounts receivable, except write-offs
in the Ordinary Course of Business charged to applicable reserves, none of which
individually or in the aggregate is material to VERO, (iii) conducted its
business in such a manner so as to materially increase its accounts payable or
so as to materially decrease its accounts receivable, (iv) granted any increase
in the rate of wages, salaries, bonuses, or other remunerations of any employee,
except in the Ordinary Course of Business, (v) canceled or waived any claims or
rights of substantial value, (vi) made any change in any method of accounting,
(vii) otherwise conducted its business or entered into any transaction, except
in the usual and ordinary manner and in the Ordinary Course of Business, (viii)
agreed, whether or not in writing, to do any of the foregoing, or (ix) disposed
of its assets other than in the Ordinary Course of Business.

(l) Title; Condition. Section 3(l) of the Disclosure Schedule contains a
complete, true and correct list of those assets which are material to the
business or operations of VERO (the "Practice Assets"). VERO has good and
marketable title to, or leasehold interests in, all of the Practice Assets.
Except as disclosed on Section 3(l) of the Disclosure Schedule, none of the
Practice Assets is subject to a contract or other agreement of sale or subject
to security interests, mortgages, encumbrances, liens (including income,
personal property and other tax liens) or charges of any kind or character. Upon
completion of the merger, VERO shall own or lease the

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<PAGE>

Practice Assets free and clear of all liens and encumbrances, except as
disclosed in Section 3(l) of the Disclosure Schedule.

(m) Litigation. Except as set forth in Section 3(m) of the Disclosure
Schedule, there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding or investigation by any
governmental entity pending, or, to the Knowledge of VERO, threatened against,
or affecting VERO or any of the Practice Assets, or any physician or other
health care professional engaged or employed by VERO, and to the best of VERO
and the VERO Stockholders' Knowledge there is no basis for any of the foregoing.
None of the actions, suits, proceedings, hearings, and investigations set forth
in Section 3(m) of the Disclosure Schedule could result in any material adverse
change in the operations, results of operations, or future prospects of the
business assets to be operated by SCN after the Closing.

(n) Permits and Licenses. VERO and all physicians and other health care
professionals engaged or employed by VERO have all permits and licenses required
by all applicable laws; have made all regulatory filings necessary for the
conduct of VERO's business; and are not in violation of any of said permitting
or licensing requirements.

(o) Tax Matters. Except as set forth in Section 3(o) of the Disclosure
Schedule, VERO has filed or caused to be filed all federal, state and local tax
returns which are required to have been filed by VERO, including all income,
excise, franchise, and payroll tax returns, and VERO has paid or established an
adequate accrual reserve for all taxes accrued through the Effective Time of the
Merger and has otherwise complied with all federal, state, local and other tax
laws applicable to it.

(p) Employee Benefit Plans.

(i) List of Plans. Section 3(p) of the Disclosure Schedule contains
an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or
not any Employee Benefit Plans are otherwise exempt from the provisions of
ERISA, established, maintained or contributed to by VERO (including all
employers (whether or not incorporated) which by reason of common control
are treated together with VERO and/or the VERO Stockholders as a single
employer within the meaning of Section 414 of the Code) since September 2,
1974.

(ii) Status of Plans. VERO has never maintained and does not now
maintain or contribute to any Employee Benefit Plan subject to ERISA which
is not in substantial compliance with ERISA, or which has incurred any
accumulated funding deficiency within the meaning of Section 412 or 418B
of the Code, or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section
412 of the Code or which is subject to Title IV of ERISA. VERO has not
incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") in connection with any Employee Benefit Plan covering any
employees of VERO or ceased operations at any facility or withdrawn from
any such Plan in a manner which could subject it to liability under
Section 4062(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any liability of VERO to the PBGC
under Title IV of ERISA which could reasonably be anticipated to result in
any claims being made against the VERO by the PBGC. VERO has not incurred
any

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<PAGE>

withdrawal liability (including any contingent or secondary withdrawal
liability) within the meaning of Sections 4201 and 4202 of ERISA, to any
Employee Benefit Plan which is a Multiemployer Plan (as defined in Section
4001 of ERISA), and no event has occurred, and there exists no condition
or set of circumstances, which represent a material risk of the occurrence
of any withdrawal from or the partition, termination, reorganization or
insolvency of any Multiemployer Plan which would result in any liability
of VERO.

(iii) Contributions. Full payment has been made of all amounts which
VERO is required, under applicable law or under any Employee Benefit Plan
or any agreement relating to any Employee Benefit Plan to which VERO is a
party, to have paid as contributions thereto as of the last day of the
most recent plan year of such Employee Benefit Plan ended prior to the
date hereof. VERO has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under
the terms of any Employee Benefit Plan or related agreements. Benefits
under all Employee Benefit Plans are as represented and have not been
increased subsequent to the date as of which documents have been provided.

(iv) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and, to the Knowledge of VERO,
nothing has occurred since the date of the last such determination which
resulted or is likely to result in the revocation of such determination.

(v) Transactions. VERO has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a material
tax, penalty or liability for prohibited transactions under ERISA or the
Code nor have any of its directors, officers or employees to the extent
they or any of them are fiduciaries with respect to such plans, breached
any of their responsibilities or obligations imposed upon fiduciaries
under Title I of ERISA which would result in any material claim being made
under or by or on behalf of any such plans by any party with standing to
make such claim.

(vi) Other Plans. VERO presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit
plans other than those listed on Section 3(p) of the Disclosure Schedule.

(vii) Documents. VERO has delivered or caused to be delivered to SCN
true and complete copies of (i) all Employee Benefit Plans as in effect,
together with all amendments thereto which will become effective at a
later date, as well as the latest Internal Revenue Service determination
letter obtained with respect to any such Employee Benefit Plan qualified
under Section 401 or 501 of the Code, and (ii) the most recently filed
Form 5500 for each Employee Benefit Plan required to file such form.

(q) Third-Party Relations. VERO has not received any notice that any
material patient, supplier, employee or associated physician intends to cease
doing business with VERO.

(r) Compliance with Applicable Laws. Except as set forth in Section 3(r)
of the Disclosure Schedule, to VERO's Knowledge, VERO has operated in compliance
with all federal, state, county and municipal laws, constitutions, ordinances,
statutes, rules, regulations and orders applicable thereto ("Applicable Laws").
No item

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<PAGE>

disclosed in Section 3(r) of the Disclosure Schedule has a material effect on
the operations of VERO. To VERO's Knowledge, neither VERO nor any physician
associated with or employed by VERO has received payment or any remuneration
whatsoever to induce or encourage the referral of patients or the purchase of
goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b), or
otherwise perpetrated any Medicare or Medicaid fraud or abuse nor has any fraud
or abuse been alleged within the last five (5) years by any government agency.

(s) Employee Compensation. VERO has paid or discharged or will pay or
discharge or assume all liabilities for compensation and benefits to which all
physician employees are entitled through the Closing Date, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of VERO's physician employees.

(t) Environmental Matters.

(i) Except as set forth in Section 3(t) of the Disclosure Schedule,
VERO is in material compliance with all applicable Environmental Laws.

(ii) VERO has not authorized or conducted nor does VERO have
Knowledge of the disposal or release, or other handling of any hazardous
substance, hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon, polychlorinated
biphenyls ("PCBs"), petroleum product or waste (including crude oil or any
fraction thereof), natural gas, liquefied gas, synthetic gas, biohazardous
or biomedical material, or other material defined, regulated controlled or
potentially subject to any remediation requirement under any Environmental
Law (collectively "Hazardous Materials"), on, in, under or affecting any
property owned or leased by VERO.

(iii) VERO has, and is in compliance with, all licenses, permits,
registrations, and government authorizations necessary to operate under
all applicable Environmental Laws. Section 3(t) of the Disclosure Schedule
lists all such licenses, permits, registrations and government
authorizations required by any Environmental Law.

(iv) Except as disclosed in Section 3(t) of the Disclosure Schedule,
VERO has not received any written or oral notice from any governmental
agency or entity or any other Person and there is no pending or threatened
claim, litigation or any administrative agency proceeding that: (a)
alleges a violation of any Environmental Law(s) by VERO or, with respect
to the Practice Assets or any property owned or leased by VERO (b) alleges
that VERO is a liable party or potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. ss. 9601, et seq., or any analogous state law, (c) has resulted or
could result in the attachment of an environmental lien on any of the
Practice Assets or property owned or leased by VERO, or (d) alleges that
VERO is liable for any contamination of the environment, contamination of
any property owned or leased by VERO, damage to natural resources,
property damage, or personal injury based on its activities or the
activities of any predecessor or third parties involving Hazardous
Materials, whether arising under the Environmental Laws, common law
principles, or other legal standards.

(u) Healthcare Compliance. VERO is participating in or otherwise
authorized to receive reimbursement from Medicare and Medicaid and is a party to
other third-party payor agreements if any, discussed in Section 3(i) of the
Disclosure Schedule. All necessary certifications and contracts required for

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<PAGE>

participation in such programs are in full force and effect and have not been
amended or otherwise modified, rescinded, revoked or assigned, and no condition
exists or event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such third-party payor program. VERO is in
compliance in all material respects with the requirements of all such
third-party payors applicable thereto. VERO, its Stockholders, and its physician
employees do not have any financial relationship (whether investment interest,
compensation interest, or otherwise) with any entity to which any of the
foregoing refer patients, except for such financial relationships that qualify
for exceptions to state and federal laws restricting physician referrals to
entities in which they have a financial interest.

(v) Fraud and Abuse. To VERO's Knowledge, VERO, the VERO Stockholders and
persons and entities providing professional services for VERO have not engaged
in any activities which are prohibited under 42 U.S.C. ss. 1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related state
or local statutes or regulations, or which are prohibited by rules of
professional conduct, including the following: (a) knowingly and willfully
making or causing to be made a false statement or representation of a material
fact in any application for any benefit or payment; (b) knowingly and willfully
making or causing to be made any false statement or representation of a material
fact for use in determining rights to any benefit or payment; (c) failing to
disclose knowledge by a claimant of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its own behalf or on
behalf of another, with intent to fraudulently secure such benefit or payment;
and (d) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay or receive such remuneration (i)
in return for referring an individual to a person for the furnishing or
arranging for the furnishing or any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (ii) in return for
purchasing, leasing, or ordering or arranging for or recommending purchasing,
leasing, or ordering any good, facility, service or item for which payment may
be made in whole or in part by Medicare or Medicaid.

(w) Practice Compliance. VERO is duly licensed as a medical practice and
is lawfully operated in accordance with the requirements of all Applicable Laws
and has all necessary authorizations for the use and operation of a medical
practice, all of which are in full force and effect. There are no outstanding
notices of deficiencies relating to VERO issued by any governmental authority or
third-party payor requiring conformity or compliance with any applicable law or
condition for participation with such governmental authority or third-party
payor, and after reasonable and independent inquiry and due diligence and
investigation, VERO has neither received notice nor has any Knowledge or reason
to believe that such necessary authorizations may be revoked or not renewed in
the Ordinary Course of Business.

(x) Rates and Reimbursement Policies. The jurisdiction in which VERO is
located does not currently impose any restrictions or limitations on rates which
may be charged to private pay patients receiving services provided by VERO. VERO
does not have any rate appeal currently pending before any governmental
authority or any administrator of any third-party payor program. VERO has no
Knowledge of any Applicable Law which affects rates or reimbursement procedures
which has been enacted, promulgated or issued within the eighteen (18) months
preceding the date of this Agreement or any such legal requirement proposed or
currently pending in the jurisdiction in which VERO is located, which could have
a material adverse effect on VERO or may result in the imposition of additional
Medicaid, Medicare, charity, free care, welfare, or other discounted or
government assisted patients at VERO or require VERO to obtain any necessary
authorization which VERO does not currently possess.

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<PAGE>

(y) Accounts Receivable. All accounts receivable, unbilled invoices and
other debts due or recorded in the respective records and books of account of
VERO, as being due to VERO, as at the Closing Date have arisen in the Ordinary
Course of Business; and none of such accounts receivable or other debts is or
will at the Closing Date be subject to any counterclaim or set-off except to the
extent of any such provision or reserve. There has been no material adverse
change since December 31, 1995 in the amount of accounts receivable or other
debts due VERO, the allowances with respect thereto, or accounts payable of VERO
from that reflected in the Balance Sheet previously delivered by VERO to SCN.

(z) Guaranties. VERO is not a guarantor and otherwise is not liable for
any liability or obligation (including indebtedness) of any other Person.

(aa) Powers of Attorney. There are no outstanding powers of attorney
executed by VERO, except as may be contained in financing documents or security
agreements listed in Section 3(i) of the Disclosure Schedule.

(bb) Tangible Assets. VERO owns or leases all land, buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its business
as presently conducted. To VERO's Knowledge, each tangible asset has been
maintained in accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear).

(cc) Full Disclosure. No representation or warranty made by VERO in this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.

4. Representations and Warranties of SCN. SCN represents and warrants to
VERO that the statements contained in this Section 4 are correct and complete as
of the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 4).

(a) Organization. SCN is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.

(b) Capitalization. The entire authorized capital stock of the SCN
consists of 52,000,000 SCN Shares and 2,000,000 shares of preferred stock, no
par value, of which 1,365,000 SCN Shares are issued and outstanding and zero SCN
Shares are held in treasury and zero shares of preferred stock are issued and
outstanding. All of the SCN Shares to be issued in the Merger have been duly
authorized and, upon consummation of the Merger, will be validly issued, fully
paid, and nonassessable.

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<PAGE>

judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, professional regulatory organization or court to which SCN
is subject, or may become subject as a result of the transaction contemplated by
this Agreement, or any provision of the charter or bylaws of SCN or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which SCN is a party or by which it is bound
or to which any of its assets is subject. Other than state and federal filings
required by the Securities Act and similar state statutes, SCN does not need to
give any notice to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.

5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.

(b) Notices and Consents. VERO will give any notices to third parties, and
will use its best efforts to obtain any third party consents, that SCN
reasonably may request in connection with the matters referred to in Section
3(i) above.

(ii) General Corporation Law. VERO will call a special meeting of
its stockholders (the "Special VERO Meeting") as soon as practicable in
order that the VERO Stockholders may consider and vote upon the adoption
of this Agreement and the approval of the Merger in accordance with the
Florida General Corporation Law. SCN will call a special meeting of its
stockholders (the "Special SCN

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<PAGE>

Meeting") as soon as practicable in order that the stockholders may
consider and vote upon the adoption of this Agreement and the approval of
the Merger in accordance with the Delaware General Corporation Law.

(d) Operation of Business. From the date of this Agreement through the
Closing Date, VERO will not engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business. Without limiting
the generality of the foregoing:

(i) VERO will not authorize or effect any change in its charter or
bylaws;

(ii) VERO will not grant any options, warrants, or other rights to
purchase or obtain any of its capital stock or issue, sell, or otherwise
dispose of any of its capital stock (except upon the conversion or
exercise of options, warrants, and other rights currently outstanding);

(iii) VERO will not declare, set aside, or pay any dividend or
distribution with respect to its capital stock (whether in cash or in
kind), or redeem, repurchase, or otherwise acquire any of its capital
stock in either case outside the Ordinary Course of Business without the
consent of SCN, which consent shall not be unreasonably withheld;

(iv) VERO will not issue any note, bond, or other debt security or
create, incur, assume, or guarantee any indebtedness for borrowed money or
capitalized lease obligation outside the Ordinary Course of Business;

(v) VERO will not impose any Security Interest upon any of its
assets outside the Ordinary Course of Business;

(vi) VERO will not make any capital investment in, make any loan to,
or acquire the securities or assets of any other Person outside the
Ordinary Course of Business;

(vii) VERO will not make any change in employment terms for any of
its directors, officers, and employees outside the Ordinary Course of
Business; and

(viii) VERO will not commit to any of the foregoing.

(e) Full Access. Upon three (3) days prior notice, VERO will permit
representatives of SCN to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to VERO during normal business hours. SCN will treat and hold as
such any confidential information it receives from VERO in the course of the
reviews contemplated by this Section 5(e), will not use any of the confidential
information except in connection with this Agreement, and, if this Agreement is
terminated for any reason whatsoever, agrees to return to VERO all tangible
embodiments (and all copies) thereof which are in its possession.

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<PAGE>

(g) Exclusivity. Until the earlier of (i) December 31, 1996, or (ii) the
Effective Time, VERO will not solicit, initiate, or encourage the submission of
any proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of VERO (including any
acquisition structured as a merger, consolidation, or share exchange). VERO
shall notify SCN immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing.

(h) Collection of Accounts Receivable. The VERO Stockholders agree to
cooperate with SCN in the collection of accounts receivable owned by VERO as of
the Effective Time acquired pursuant to this Agreement. SCN, at its option,
shall have the right to require the collection of said accounts receivable
through a lockbox or bank account sweep arrangement. In connection therewith,
the VERO Stockholders agree to execute the necessary documents and follow the
necessary procedures as described in the Service Agreement between the parties
which is attached hereto as Exhibit 7(a)(iv) to accommodate the collection of
the accounts receivable in such manner.

(i) Payment of Expenses. On or before the Effective Time, VERO shall have
paid or discharged any and all liabilities or charges for costs or fees owed as
a result of the transaction contemplated by this Agreement.

(j) Completion of Schedules. The parties hereto acknowledge that this
Agreement is being executed and delivered before the Disclosure Schedule has
been completed and attached hereto. SCN therefore agrees that VERO and the VERO
Stockholders may complete the Disclosure Schedule and that said Disclosure
Schedule may be attached hereto after the execution and delivery of this
Agreement; provided, however, that the Disclosure Schedule shall be in form,
substance and content acceptable to SCN in its sole discretion and shall be
completed and delivered to SCN by VERO and the VERO Stockholders on or prior to
November 7, 1996. SCN shall have the right to terminate this Agreement at any
time on or prior to November 12, 1996, in its sole discretion, based upon its
review of the Disclosure Schedule furnished by VERO and the VERO Stockholders
and the documents, events, facts or other circumstances referred to therein. In
the event that this Agreement is terminated pursuant to this Section 5(j),
neither party shall be obligated to the other, except as set forth in Section
8(b).

(k) Loan Agreement. Within thirty (30) days after the Effective Time, SCN
agrees to make a line of credit available to the VERO Stockholders up to a
maximum aggregate of $781,928 on terms mutually agreed upon by the parties
thereto and ultimately approved by NationsBank of Tennessee, N.A. The line of
credit shall be for a term of two (2) years from the Closing Date; provided,
however, that if Securities and Exchange Commission Rule 144 promulgated under
the Securities Act is amended to shorten the period which stockholders are
required to hold restricted securities before being able to sell them pursuant
to Rule 144, then the term of the line of credit shall be reduced accordingly,
and all borrowings under the line of credit must be repaid within thirty (30)
days after the end of such period.

(l) Consulting Agreement. As of the Effective Time, SCN will enter into a
Consulting Agreement with Charlene Wilson, M.D. on terms mutually agreed upon by
the parties thereto pursuant to which Charlene Wilson,

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<PAGE>

M.D., will render certain consulting services to SCN in exchange for an option
to purchase 50,000 SCN Shares at an option price of $6.00 per share.

6. Conditions to Obligation to Close.

(a) Conditions to Obligation of SCN. The obligation of SCN to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

(i) the VERO Stockholders shall have received a copy of the Private
Placement Memorandum, and no less than five (5) days after receipt of the
Private Placement Memorandum, this Agreement and the Merger shall have
received the Requisite VERO Stockholder Approval and the number of
Dissenting Shares shall not exceed five percent (5%) of the number of
outstanding VERO Shares;

(ii) VERO shall have procured all of the third party consents
specified in Section 5(b) above;

(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;

(iv) VERO shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(vi) VERO shall have delivered to SCN a certificate to the effect
that each of the conditions specified above in Section 6(a)(i)-(v) is
satisfied in all respects;

(vii) this Agreement and the Merger shall have received the
Requisite SCN Stockholder Approval;

(viii) SCN shall have received from counsel to VERO an opinion in
form and substance as set forth in Exhibit 6(a)(viii) attached hereto,
addressed to SCN, and dated as of the Closing Date;

(ix) SCN shall have received from the VERO Stockholders subscription
documents in form and substance as set forth in Exhibit 6(a)(ix) attached
hereto;

(x) SCN shall have received the resignations, effective as of the
Closing, of each director and officer of VERO other than those whom SCN
shall have specified in writing at least five (5) business days prior to
the Closing;

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<PAGE>

(xi) all actions to be taken by VERO in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to SCN;

(xii) SCN shall have closed its financing with NationsBank of
Tennessee, N.A. on terms and conditions that are satisfactory to SCN;

(xiii) the issuance of the SCN Shares to VERO or the VERO
Stockholders will not violate federal securities laws or the securities
laws of any state of the United States;

(xiv) SCN and VERO shall have all licenses and permits necessary to
operate their respective businesses;

(xv) all physicians and employees of VERO must be covered by medical
malpractice insurance and, to the extent applicable, medical malpractice
tail insurance to cover prior occurrences;

(xvi) VERO shall have distributed to the VERO Stockholders all of
the assets listed on Exhibit 6(a)(xv), which constitute the entirety of
the assets owned by VERO not being acquired by SCN (the "Excluded
Assets"). Additionally, on or before the Effective Time, VERO shall have
paid or discharged all liabilities or charges for costs or fees owed as a
result of the transactions contemplated by this Agreement. With respect to
Employee Benefit Plans, all Plans shall be transferred to a new entity
controlled by the VERO Stockholders, and the instrument of transfer shall
provide that the new entity assumes all of the liabilities of the Plans,
including, but not limited to any current or future funding liabilities;

(xvii) VERO shall have established an adequate accrual reserve for
payment of the taxes accrued with respect to the taxable periods or
portion thereof ended as of the Effective Time of the Merger contemplated
herein;

(xviii) VERO shall have caused the payoff of all indebtedness owed
to banks or other financial institutions or lenders or the assumption
thereof by a new entity organized by the VERO stockholders;

(xix) on or before the Effective Time, the transactions contemplated
by (i) that certain Merger Agreement between SCN and Reconstructive
Orthopaedic Assocs., Inc. dated November 12, 1996, and (ii) that certain
Stock Purchase Agreement between SCN and the stockholders of Princeton
Orthopaedic Associates, P.A. dated October 21, 1996, shall have been
consummated; and

(xx) on or before the Closing Date, VERO will satisfy and discharge
any and all liabilities to any employee of VERO for accrued vacation time
and accrued sick time in excess of one week.

SCN may waive any condition specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

(b) Conditions to Obligation of VERO. The obligation of VERO to consummate
the transactions to be performed by it in connection with the Closing is subject
to satisfaction of the following conditions:

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<PAGE>

(i) this Agreement and the Merger shall have received the Requisite
SCN Stockholder Approval;

(ii) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the
Closing Date;

(iii) SCN shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;

(v) SCN shall have delivered to VERO a certificate to the effect
that each of the conditions specified above in Section 6(b)(i)-(iv) is
satisfied in all respects;

(vi) VERO shall have received from counsel to SCN an opinion in form
and substance as set forth in Exhibit 6(b)(vi) attached hereto, addressed
to the VERO Stockholders, and dated as of the Closing Date;

(vii) this Agreement and the Merger shall have received the
Requisite VERO Stockholder Approval;

(ix) upon review of the Private Placement Memorandum, the VERO
Stockholders shall have elected to close the transaction by delivery to
SCN of completed subscription documents in form and substance as set forth
in Exhibit 6(a)(ix);

(xi) there shall have been no changes in the Applicable Laws
affecting SCN's proposed operations as described in the Private Placement
Memorandum; and

(xii) on or before the Effective Time, the transactions contemplated
by (i) that certain Merger Agreement between SCN and Reconstructive
Orthopaedic Assocs., Inc. dated November 12, 1996, and (ii) that certain
Stock Purchase Agreement between SCN and the stockholders of Princeton
Orthopaedic Associates, P.A. dated October 21, 1996, shall have been
consummated.

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<PAGE>

VERO may waive any condition specified in this Section 6(b) if it executes a
writing so stating at or prior to the Closing.

7. Items to be Delivered at or Prior to Closing.

(a) By the VERO Stockholders or VERO. The VERO Stockholders or VERO, as
applicable, shall execute and deliver to VERO, prior to or at the Closing:

(i) Certified resolutions of VERO authorizing the execution of all
documents and the consummation of all transactions contemplated hereby;

(ii) The Florida Articles of Merger which shall be in substantially
the form attached hereto as Exhibit 2(c)(i);

(iii) Stock Certificates representing ownership of all shares of
VERO (other than Dissenting Shares), duly endorsed to SCN;

(iv) A Service Agreement in substantially the form attached hereto
as Exhibit 7(a)(iv);

(v) The Certificate required by Section 6(a)(vi);

(vi) An opinion from VERO's counsel in substantially the form
attached hereto as Exhibit 6(a)(viii);

(vii) Subscription Documents in substantially the form attached
hereto as Exhibit 6(a)(ix);

(viii) A Specialty Care Network, Inc. Stockholder's Agreement; and

(ix) Such other instruments as may be reasonably requested by SCN in
order to effect to or carry out the intent of this Agreement.

(b) By SCN. SCN shall deliver to VERO at or prior to the Closing:

(i) Cash and Stock Certificates representing the SCN Shares being
issued to each of the VERO Stockholders pursuant to Section 2(d)(v);

(ii) The Delaware Articles of Merger in substantially the form
attached hereto Exhibit 2(c);

(iii) An opinion from SCN's counsel in substantially the form
attached hereto as Exhibit 6(b)(vi);

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<PAGE>

(v) A Specialty Care Network, Inc. Stockholder's Agreement; and

(vi) Such other instruments as may be reasonably requested by the
VERO Stockholders in order to effect to or carry out the intent of this
Agreement.

8. Termination.

(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;

(ii) SCN may terminate this Agreement by giving written notice to
VERO at any time prior to the Effective Time (A) in the event VERO has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, SCN has notified VERO of the breach,
and the breach has continued without cure for a period of 30 days after
the notice of breach, (B) if the Closing shall not have occurred on or
before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(a) hereof (unless the failure results primarily
from SCN breaching any representation, warranty, or covenant contained in
this Agreement) or (C) in accordance with Section 5(j);

(iii) VERO may terminate this Agreement by giving written notice to
SCN at any time prior to the Effective Time (A) in the event SCN has
breached any representation, warranty, or covenant contained in this
Agreement in any material respect, VERO has notified SCN of the breach,
and the breach has continued without cure for a period of 30 days after
the notice of breach or (B) if the Closing shall not have occurred on or
before December 31, 1996 by reason of the failure of any condition
precedent under Section 6(b) hereof (unless the failure results primarily
from VERO breaching any representation, warranty, or covenant contained in
this Agreement);

(iv) any Party may terminate this Agreement by giving written notice
to the other Party at any time in the event this Agreement and the Merger
fail to receive the Requisite VERO Stockholder Approval or the Requisite
SCN Stockholder Approval respectively.

(b) Effect of Termination. If any Party terminates this Agreement pursuant
to Section 8(a) above, all rights and obligations of the Parties hereunder shall
terminate without any liability of any party to any other Party (except for any
liability of any Party then in breach). Notwithstanding the foregoing, in the
event the transaction contemplated by this Agreement does not close and such
failure is not the fault of SCN, then VERO agrees to reimburse SCN for
seventy-five percent of SCN's out of pocket expenses, including but not limited
to professional fees, related to the proposed transaction; provided, however,
VERO's obligation to reimburse SCN shall not exceed fifty-six thousand two
hundred fifty dollars ($56,250).

9. Indemnification.

(a) Indemnification by the VERO Stockholders. The VERO Stockholders agree
to and shall, jointly and severally, defend, indemnify and hold harmless SCN,
its successors and assigns, officers and directors against

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<PAGE>

any and all losses, liabilities, expenses (including, but without limitation,
reasonable attorneys fees) and damages resulting from or arising out of the
breach, untruth or inaccuracy of any representation, warranty or covenant of
VERO or the VERO Stockholders set forth in this Agreement. The VERO Stockholders
shall not be liable to SCN for any claims against the VERO Stockholders under
this Section 9(a) unless and until the aggregate of all claims against the VERO
Stockholders exceeds the sum of $25,000.00, whereupon SCN shall be entitled to
recover the full amount of all claims, including the initial $25,000.00.
Notwithstanding the foregoing provisions, the obligations of any VERO
Stockholder executing this Agreement to indemnify SCN shall not exceed the value
of the portion of the SCN Shares and cash delivered to such VERO Stockholder at
the Closing.

(b) Notice to the VERO Stockholders; Opportunity to Defend. SCN agrees to
give prompt notice to the VERO Stockholders of the assertion of any claim, or
the commencement of any suit, action or proceeding, in respect of which
indemnity may be sought under Section 9(a). The VERO Stockholders may
participate in and at their election, or at the request of SCN, assume the
defense of any such suit, action or proceeding at the VERO Stockholders's
expense. The VERO Stockholders shall not be liable under Section 9(a) for any
settlement effected without their consent of any claim, litigation or proceeding
in respect of which indemnity may be sought under Section 9(a) which consent
shall not be unreasonably withheld.

(c) General Indemnification by SCN. SCN agrees to and shall defend,
indemnify and hold harmless the VERO Stockholders, their heirs and assigns
against any and all losses, liabilities, expenses (including, but without
limitation, reasonable attorneys fees) and damages resulting from the breach,
untruth or inaccuracy of any representation, warranty or covenant of SCN set
forth in this Agreement. SCN shall not be liable to the VERO Stockholders for
any claims against VERO under this Section 9(c) unless and until the aggregate
of all claims against VERO exceeds the sum of $25,000.00, whereupon the VERO
Stockholders shall be entitled to recover the full amount of all claims,
including the initial $25,000.00.

(d) Notice to SCN; Opportunity to Defend. The VERO Stockholders agree to
give prompt notice to SCN of the assertion of any claim, or the commencement of
any suit, action or proceeding in respect of which indemnity may be sought under
Section 9(c). SCN may participate in and at its election, or at the request of
the VERO Stockholders, assume the defense of any such suit, action or proceeding
at SCN's expense. SCN shall not be liable under Section 9(c) for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder, which consent shall not be
unreasonably withheld.

(e) Survival. The representations and warranties of the VERO Stockholders,
VERO and SCN contained in this Agreement and the indemnifications contained
herein shall survive the Closing. No claim for indemnification with respect to
any alleged misrepresentation or breach of warranty may be made after two (2)
years following the Closing Date. Any matter to which indemnification pertains
and with respect to which a claim has been asserted or threatened following the
Closing Date shall continue to be subject to the indemnification under this
Agreement until finally terminated, settled, resolved or adjudicated; and all
terms, conditions and stipulations of this Agreement shall likewise continue to
apply.

(f) Security for Indemnity. The VERO Stockholders hereby agree that in the
event (i) any final judgment is rendered in favor of SCN, (ii) SCN is entitled
to indemnification pursuant to the provisions of this Agreement, and (iii) the
VERO Stockholders do not pay to SCN the amount due hereunder, then SCN shall
have the right to redeem any SCN Share then owned by the VERO Stockholders
pursuant to the terms of the Stockholder's Agreement.

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<PAGE>

10. Miscellaneous.

(a) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the parties and their respective
successors and permitted assigns.

(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(e) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

If to VERO: Copy to:

Kathy Trapp, Administrator James A. Taylor, III, Esq.
Vero Orthopaedics, Inc. Clem, Polackwich, Vocelle & Taylor
1260 37th Street Univest Bldg., Suite 501
Vero Beach, Florida 32960 2770 N. Indian River Blvd.
Facsimile: (561) 569-8349 Vero Beach, FL 32960
Facsimile: (561) 562-2870

If to SCN: Copy to:

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<PAGE>

(j) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

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<PAGE>

(l) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

* * * * *

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

SPECIALTY CARE NETWORK, INC.

By:___________________________________
Title:________________________________

VERO ORTHOPAEDICS, INC.

By:___________________________________
Title:________________________________

VERO STOCKHOLDERS:

______________________________________
James L. Cain, M.D., Stockholder

______________________________________
David W. Griffin, M.D., Stockholder

______________________________________
George K. Nichols, M.D., Stockholder

______________________________________
Peter G. Wernicki, M.D., Stockholder

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<PAGE>

SERVICE AGREEMENT

BY AND BETWEEN

SPECIALTY CARE NETWORK, INC.,

VERO ORTHOPAEDICS II, P.A.

AND

JAMES L. CAIN, M.D.
DAVID W. GRIFFIN, M.D.
GEORGE K. NICHOLS, M.D.
PETER G. WERNICKI, M.D.
CHARLENE WILSON, M.D.

Dated as of November 12, 1996

<PAGE>

TABLE OF CONTENTS Page
----

ARTICLE I.
RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship.........................................1
1.2. Responsibilities of the Parties..................................1
1.3. VERO II Matters..................................................1
1.4. Patient Referrals................................................1
1.5. Professional Judgment............................................2

ARTICLE II.
DEFINITIONS

2.1. Definitions......................................................2

ARTICLE III.
PRACTICE OFFICES TO BE PROVIDED BY COMPANY

3.1. Practice Offices.................................................6
3.2. Use of Practice Offices..........................................6

ARTICLE IV.
DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board......................6
4.2. Duties and Responsibilities of the Policy Board..................6

ARTICLE V.
ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions..............................7
5.2. Financial Planning and Goals.....................................7
5.3. Audits and Financial Statements..................................8
5.4. Inventory and Supplies...........................................8
5.5. Management Services and Administration...........................8
5.6. Personnel.......................................................10
5.7. Events Excusing Performance.....................................10
5.8. Compliance with Law and Business Standards......................10
5.9. Quality Assurance...............................................10
5.10. New Medical Services and Additional Practice Offices............10
5.11. Collection of Certain Patient Receipts and Payment of
Clinic Expenses...............................................11
5.12. Other VERO II Accounts..........................................11
5.13. Discounts.......................................................11

ARTICLE VI.
OBLIGATIONS OF VERO II AND PHYSICIAN OWNERS

6.1. Professional Services...........................................11
6.2. Medical Practice................................................11

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6.3. Employment of Physician Employees...............................12
6.4. Professional Dues and Education Expenses........................12
6.5. Professional Insurance Eligibility..............................12
6.6. Events Excusing Performance.....................................12
6.7. Fees for Professional Services..................................12
6.8. Peer Review.....................................................12
6.9. VERO II Employee Benefit Plans..................................12
6.10. Credentialing..................................................13

ARTICLE VII.
RESTRICTIVE COVENANTS AND ENFORCEMENT

7.1. Exclusive Arrangement...........................................14
7.2. Restrictive Covenants...........................................14
7.3. Restrictive Covenants By Future Physician Employees.............15
7.4. Rights of Company...............................................15
7.5. Enforcement.....................................................15
7.6. Modification of Restrictive Covenants...........................15

ARTICLE VIII.
FINANCIAL ARRANGEMENTS

8.1. Service Fees....................................................16
8.2. Payment of Service Fee..........................................18
8.3. Purchase of Accounts Receivable.................................18
8.4. Payment of Clinic Expenses......................................19

ARTICLE IX.
RECORDS

9.1. Patient Records.................................................20
9.2. Records Owned by Company........................................20
9.3. Access to Records...............................................20
9.4. Government Access to Records....................................20

ARTICLE X.
INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by VERO II..........................20
10.2. Insurance to be Maintained by Company..........................20
10.3. Additional Insureds............................................21
10.4. Indemnification................................................21

ARTICLE XI.
TERM, TERMINATION AND RETIREMENT

11.1. Term of Agreement..............................................21
11.2. Extended Term..................................................21
11.3. Termination by VERO II for Cause...............................22

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<PAGE>

11.4. Termination by Company for Cause...............................22
11.5. Early Termination by VERO II or Company Without Cause
Upon Third (3rd) Anniversary of Agreement....................23
11.6. Consequences of VERO II Termination............................23
11.7. Closing of Purchase by VERO II and Effective
Date of Termination..........................................24
11.8. Tail Policy....................................................24
11.9. Restrictions Applicable to Physician Owners....................24

ARTICLE XII.
DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds......................................26
12.2. Temporary Space................................................26

ARTICLE XIII.
REPRESENTATIONS AND WARRANTIES OF VERO II AND PHYSICIAN OWNERS

13.1. Validity.......................................................26
13.2. Litigation.....................................................27
13.3. Permits........................................................27
13.4. Authority......................................................27
13.5. Compliance with Applicable Law.................................27
13.6. Health Care Compliance.........................................27
13.7. Fraud and Abuse................................................27
13.8. VERO II Compliance.............................................28
13.9. Rates and Reimbursement Policies...............................28
13.10. Accounts Receivable...........................................28
13.11. Full Disclosure...............................................30
13.12. Exhibits......................................................30

ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES OF COMPANY

14.1. Organization...................................................30
14.2. Authority......................................................30
14.3. Absence of Litigation..........................................30
14.4. Transactions with Affiliates...................................30

ARTICLE XV.
COVENANTS OF VERO II AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements....................31
15.2. Necessary Authorizations/Assignment of Licenses and Permit......31
15.3. Transaction with Affiliates.....................................31
15.4. Compliance with All Laws........................................31
15.5. Third-Party Payor Programs......................................31
15.6. Change in Business or Credit and Collection Policy..............31
15.7. Treatment of Accounts Receivable................................31

15.8. Security Interest...............................................32

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ARTICLE XVI.
GENERAL PROVISIONS

16.1. Assignment.....................................................32
16.2. Whole Agreement; Modification..................................33
16.3. Notices........................................................33
16.4. Binding on Successors..........................................33
16.5. Waiver of Provisions...........................................33
16.6. Governing Law..................................................33
16.7. No Practice of Medicine........................................33
16.8. Severability...................................................34
16.9. Additional Documents...........................................34
16.10. Attorneys' Fees................................................34
16.11. Time is of the Essence.........................................34
16.12. Confidentiality................................................34
16.13. Contract Modifications for Prospective Legal Events............34
16.14. Remedies Cumulative............................................34
16.15. Language Construction..........................................34
16.16. No Obligation to Third Parties.................................35
16.17. Communications.................................................35

<PAGE>

SERVICE AGREEMENT

THIS SERVICE AGREEMENT ("Agreement") dated as of November 12, 1996, by and
between SPECIALTY CARE NETWORK, INC., a Delaware corporation ("Company"), VERO
ORTHOPAEDICS II, P.A., a Florida corporation, ("VERO II") and JAMES L. CAIN,
M.D., DAVID W. GRIFFIN, M.D., GEORGE K. NICHOLS, M.D., PETER G. WERNICKI, M.D.
and CHARLENE WILSON, M.D. ("Physician Owner[s]"), citizens and residents of
Florida.

W I T N E S S E T H:

WHEREAS, VERO II and Physician Owners desire to obtain the services of
Company in performing such management functions so as to permit VERO II and
Physician Owners to devote VERO II's and Physician Owners' efforts on a
concentrated and continuous basis to the rendering of medical services to
patients.

ARTICLE I.

RELATIONSHIP OF THE PARTIES

1.1. Independent Relationship. VERO II, Physician Owners and Company
intend to act and perform as independent contractors, and the provisions hereof
are not intended to create any partnership, joint venture, agency or employment
relationship between the parties. Notwithstanding the authority granted to
Company herein, Company, VERO II, and Physician Owners agree that VERO II and
Physician Owners shall retain all authority to direct the medical, professional,
and ethical aspects of VERO II's and Physician Owners' medical practice
including but not limited to the admission of new patients and providing care to
indigent patients. Each party shall be solely responsible for and shall comply
with all state and federal laws pertaining to employment taxes, income
withholding, unemployment compensation contributions and other employment
related statutes applicable to that party.

1.2. Responsibilities of the Parties. As more specifically set forth
herein, Company shall provide VERO II with offices and facilities, equipment,
supplies, certain support personnel, management and financial advisory services.
As more specifically set forth herein, VERO II shall be responsible for the
recruitment and hiring of physicians and all issues related to the professional
practice of medicine, medical practice patterns and documentation thereof.
Notwithstanding anything herein to the contrary, no "designated health service,"
as defined in 42 U.S.C. ss. 1395nn, including any amendments or successors
thereto, shall be provided by Company under this Agreement.

1.3. VERO II Matters. Matters involving the internal agreements and
finances of VERO II, including the disposition of professional fee income, tax
planning, and investment planning (and expenses relating solely to these
internal business matters) shall remain the sole responsibility of VERO II.

1.4. Patient Referrals. The parties agree that the benefits to VERO II and
Physician Owners hereunder do not require, are not payment for, and are not in
any way contingent upon the admission, referral or any other arrangement for the
provision of any item or service offered by Company to any of VERO II's patients
in any facility operated by Company.

to and do not control the professional and clinical relationship between and
among VERO II, Physician Employees, VERO II Employees, and VERO II's patients.
Nothing in this Agreement shall be construed to alter or in any way affect the
legal, ethical, and professional relationship between and among VERO II,
Physician Owners, Physician Employees, and VERO II's patients, nor shall
anything contained in this Agreement abrogate any right, privilege, or
obligation arising out of or applicable to the physician-patient relationship.

ARTICLE II.

DEFINITIONS

2.1. Definitions. For the purpose of this Agreement, the following
definitions shall apply:

"Account Debtor" means an account debtor or any other Person obligated in
respect of an Account Receivable.

"Accounts Receivable" means, with respect to VERO II, all accounts and any
and all rights to payment of money or other forms of consideration of any kind
now owned or hereafter acquired (whether classified under the Uniform Commercial
Code as accounts, chattel paper, general intangibles or otherwise) for goods
sold or leased or for services rendered by VERO II, including, but not limited
to, accounts receivable, proceeds of any letters of credit naming VERO II as
beneficiary, chattel paper, insurance proceeds, contract rights, notes, drafts,
instruments, documents, acceptances and all other debts, obligations and
liabilities in whatever form from any other Person; provided that, cash, checks
and credit card purchases are not included in the definition of Accounts
Receivable.

power for the election of directors of such Person, or (b) direct or cause the
direction of management and policies of a business, whether through the
ownership of voting securities, by contract or otherwise and either alone or in
conjunction with others or any group.

"Assigned Lease" shall have the meaning as defined in Section 3.1.

"Base Service Fee" shall equal [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxx] per year, payable in monthly payments of [xxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

"CHAMPUS" means the Civilian Health and Medical Program of the Uniformed
Services.

"Clinic Expenses" shall have the meaning as defined in Section 8.1.3.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

- 2 -
<PAGE>

"Company" shall mean Specialty Care Network, Inc., a Delaware corporation,
together with its successors and assigns.

"Company Expenses" shall have the meaning as defined in Section 8.1.7.

"Designated Leased Employees" shall have the meaning as defined in Section
6.9.1.

"Direct Lease" shall have the meaning as defined in Section 3.1.

"Disabled" or "Disability" shall mean that a Physician suffers from a
mental or physical condition resulting in such Physician Employee's inability to
perform the essential functions of his or her job as required by Section 6.1.1
(and as may be described with greater specificity in written job descriptions
prepared and maintained by VERO II and approved by the Policy Board) without
significant risk to the health or safety of others, even with such reasonable
accommodation as may be available under the circumstances, and the Policy Board
may reasonably anticipate that such Physician Employee will remain disabled for

at least two years following the commencement of such disability.

"Excluded Expenses" shall have the meaning as defined in Section 8.1.8.

"Governmental Receivables" means an Account Receivable of VERO II which
(i) arises in the ordinary course of business of VERO II, (ii) has as its
Third-Party Payor the United States of America or any state or any agency or
instrumentality of the United States of America or any state which makes any
payments with respect to Medicare or Medicaid or with respect to any other
program (including CHAMPUS) established by federal or state law, and (iii) is
required by federal or state law to be paid or to be made to VERO II as a
healthcare provider. Governmental Receivables shall not, however, refer to
amounts payable by private insurers under contract to provide benefits under the
Federal Employee Health Benefit Program.

"Governmental Rules and Regulations" shall have the meaning as defined in
Section 13.7.

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<PAGE>

"Lease" shall mean the Assigned Lease, Direct Leases, and the New Leases,
including all amendments thereto, described in Section 3.1 hereof.

"Leased Premises" shall mean the real property described in the Lease.

"Lender" shall have the meaning as defined in Section 7.2.

"Main Office" shall mean the Leased Premises and all equipment and
facilities owned or operated by Company and utilized by VERO II or any of its
employees within said Leased Premises.

"Medicare" means any medical program established under Title XVIII of the
Social Security Act and administered by the Health Care Financing
Administration.

"Merger" shall mean the acquisition of Vero Orthopaedics, Inc. ("VERO")
pursuant to the Merger Agreement.

"Merger Agreement" means that certain Merger Agreement, dated November 12,
1996 by and between Company, VERO and Physician Owners.

"Merger A/R" means the accounts receivable acquired from VERO by Company
pursuant to the Merger Agreement.

"Necessary Authorizations" means with respect to VERO II, all certificates
of need, authorization, certifications, consents, approvals, permits, licenses,
notices, accreditations and exemptions, filings and registrations, and reports
required by Applicable Law, including, without limitation, Health Care Law,
which are required, necessary or reasonably useful to the lawful ownership and
operation of VERO II's business.

"New Lease" shall have the meaning as defined in Section 3.1.

"Office Locations" shall have the meaning as defined in Section 3.1.

"Physician Employees" shall mean the term as defined in Section 8.1.6.

"Physician Extender Employees" shall mean the term as defined in Section
8.1.5.

"Physician Owners" shall mean Charlene Wilson, M.D. and those Physician
Employees who own an interest, directly or indirectly, in the equity of VERO II.

"Plans" shall have the meaning as defined in Section 6.9.1.

"Policy Board" shall mean a board established pursuant to Section 4.1.

"Practice Net Revenue" shall mean the term as defined in Section 8.1.1.

"Practice Offices" shall mean (i) the Main Office and (ii) all of the
Satellite Offices.

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<PAGE>

"Professional Services Revenue" shall mean the term as defined in Section
8.1.2.

"Purchase Price" shall mean the term as defined in Section 8.4.2.

"Purchased A/R" means, with respect to VERO II, the Accounts Receivable
purchased pursuant to Section 8.3 of this Agreement.

"VERO II Operating Account" shall mean that certain operating account
established by VERO II at a bank selected by VERO II in VERO II's sole
discretion as more fully described in Section 5.11.

"VERO II Plan" shall mean the term as defined in Section 6.9.1.

"Satellite Offices" shall mean each location at which one or more of VERO
II's employees provide services as described on Exhibit 2.1 and all equipment
and facilities owned or operated by Company and utilized by any of said persons
at such location.

"Settlement Date" shall mean the term as defined in Section 8.3.3.

"Service Agreement" means this Agreement.

"Substitute Physician(s)" shall mean the term as defined in Section
11.9.1(b).

"Technical Employees" shall mean the term as defined in Section 8.1.4.

"Third-Party Payors" means each Person which makes payment under a
Third-Party Payor Program, and each Person which administers a Third-Party Payor
Program.

as any future similar programs.

ARTICLE III.

PRACTICE OFFICES TO BE PROVIDED BY COMPANY

(b) Company agrees to provide offices and facilities at the Office
Locations (or at comparable facilities on the termination of the Assigned Leases
or Direct Leases) to VERO II. Such facilities shall include all personal
property necessary to operate the facility. If any Assigned Leases or Direct
Leases are terminated by their terms, Company shall enter into a lease of a new
facility comparable to the Office Location whose lease is terminated (the "New
Lease") with the consent of the Policy Board. Company shall not enter into a
lease for a new Main Office or Satellite Office for VERO II without the approval
of the Policy Board.

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<PAGE>

3.2. Use of Practice Offices. VERO II shall not use or occupy the Main
Office or Satellite Offices for any purpose which is prohibited by the Assigned
Leases, Direct Leases or New Leases, by this Agreement or which is directly or
indirectly forbidden by law, ordinance, or governmental or municipal regulation
or order, or which may be dangerous to life, limb or property, or which would
increase the fire and extending coverage insurance rate in any Practice Office
or contents.

ARTICLE IV.

DUTIES OF THE POLICY BOARD

4.1. Formation and Operation of the Policy Board. The parties shall
establish a Policy Board which shall be responsible for developing management
and administrative policies for the overall operation of any Practice Office.
The Policy Board shall consist of six (6) members. Company shall designate, in
its sole discretion, three (3) members of the Policy Board. VERO II shall
designate, in VERO II's sole discretion, three (3) members of the Policy Board.
Any matter decided by a majority of the members of the Policy Board shall
constitute the decision of the Policy Board with respect to the matter.

4.2. Duties and Responsibilities of the Policy Board. The Policy Board

shall have the following duties and obligations:

4.2.1. Capital Improvements and Expansion. The Policy Board shall review
all requests by VERO II for any renovations, capital improvements, expansions
and new equipment purchases or leases. The Policy Board shall determine whether
such expenditures are appropriate based upon economic feasibility, physician
support, productivity, market conditions, and the annual budget formulated
pursuant to this Agreement. If the Policy Board determines that the acquisition
of additional equipment or facilities is appropriate, then Company shall use its
best efforts to arrange for the financing and acquisition of the property.
Governance issues affecting the Policy Board shall be addressed in accordance
with the rules set forth in Exhibit 4.1.

4.2.2. Annual Budgets. All annual capital and operating budgets prepared
by Company in accordance with Section 5.2 of this Agreement, shall be subject to
the review of the Policy Board.

4.2.3. Marketing. All advertising and other marketing of the services
performed at any Practice Office shall be subject to the prior review and
approval of the Policy Board.

4.2.4. Patient Fees; Collection Policies. As a part of the annual
operating budget in consultation with VERO II and Company, to the extent allowed
by Applicable Law, the Policy Board shall review and advise VERO II as to an
appropriate fee schedule for all physician and ancillary services rendered by
VERO II, which fee schedule shall ultimately be determined by VERO II in VERO
II's sole discretion. In addition, the Policy Board shall approve the credit
collection policies of VERO II.

4.2.5. VERO II and Payor Relationships. Decisions regarding the
establishment or maintenance of relationships with institutional health care
providers and payors, or with parties under arrangements for setting up new
Satellite Offices of VERO II in the future, shall be made by the Policy Board in
consultation with VERO II.

4.2.6. Strategic Planning. The Policy Board shall develop long-term
strategic planning objectives.

4.2.7. Capital Expenditures. The Policy Board shall determine the priority
of major capital expenditures including the procurement of any new or additional
office space for Practice Offices.

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ARTICLE V.

ADMINISTRATIVE SERVICES TO BE PROVIDED BY COMPANY

5.1. Performance of Management Functions. Company shall use its best
efforts to manage the day-to-day operations of the Main Practice Office and any
Satellite Offices in a business-like manner. Company shall provide or arrange
for the services set forth in this Article V, the cost of all of which shall be
included in Clinic Expenses. Company is hereby expressly authorized to perform
its services hereunder in whatever manner it deems reasonably appropriate to
meet the day-to-day requirements of Practice Office operations in accordance
with the general standards approved by the Policy Board and to maintain the
lease agreements for each of the Practice Offices, including, without
limitation, performance of some of the business office functions at locations
other than the Main Practice Office. VERO II will not act in a manner which
would prevent Company from efficiently managing the day-to-day operations of the
Main Practice Office and maintaining the operations of the Satellite Offices in
a business-like manner.

5.2. Financial Planning and Goals. Subject to Section 4.2.2. of this
Agreement, Company shall prepare annual capital and operating budgets reflecting
in reasonable detail anticipated revenues and expenses, and sources and uses of
capital for growth in VERO II's practice and medical services rendered at the
Practice Office. Said budgets shall reflect amounts, if any, allocated for
capital purchases, improvements, expansion and any new leasing arrangements.
Thereafter, but no later than thirty (30) days prior to the end of the fiscal
year, the Policy Board and Company shall agree upon a budget for the upcoming
fiscal year. The budget, as described in Section 4.2.2., shall be binding upon
Company and VERO II. Company shall consult with VERO II and the Policy Board in
the preparation of all budgets. Company and VERO II acknowledge and agree that
once a budget has been approved, neither Company nor VERO II shall make
expenditures or incur expenses in excess of budgeted amounts without the prior
approval of the Policy Board.

5.3. Audits and Financial Statements. Company shall prepare annual
financial statements for the operations of VERO II and, in its sole discretion,
may cause the financial statements to be audited by a certified public
accountant selected by Company. VERO II shall cooperate fully in such audit. The
cost of such audit shall be included in Clinic Expenses. If Company elects to
have the financial statements audited by a certified public accountant with a
big six accounting firm, the resulting audited financial statements shall be
binding on VERO II and Company. If Company elects not to have VERO II's
financial statements so audited, VERO II shall have the option to obtain such an
audit, by a certified public accountant with a mutually acceptable accounting
firm. Company shall fully cooperate in such audit. The cost of such audit shall
be included in Clinic Expenses. In such event, Company and VERO II shall be
bound by the resulting audited financial statements. All parties shall be
entitled to copies of any information provided to or by the auditors by or to
any party. Additionally, Company shall prepare monthly unaudited financial
statements containing a balance sheet and statements of income from Practice
Office operations, which shall be delivered to VERO II within thirty (30)
business days after the close of each calendar month.

5.4. Inventory and Supplies. Except as limited by Section 5.11, Company
shall order and purchase inventory and supplies and such other ordinary,
necessary or appropriate materials which Company shall deem to be necessary in
the operation of the Practice Offices and which are requested by VERO II and are
within the budget for the applicable fiscal period. Company shall not purchase
inventory, goods or supplies from any Affiliate of Company without approval of
the Policy Board and after full disclosure of all terms to the Policy Board.

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5.5. Management Services and Administration.

5.5.1. VERO II hereby appoints Company as VERO II's sole and exclusive
manager and administrator of all day-to-day business functions. VERO II agrees
that the purpose and intent of this Agreement is to relieve VERO II and
Physician Employees to the maximum extent possible of the administrative,
accounting, personnel and business aspects of their practice, with Company
assuming responsibility and being given all necessary authority to perform these
functions. Company agrees that VERO II and only VERO II will perform the medical
functions of VERO II's practice. Company will have no authority, directly or
indirectly, to perform, and will not perform, any medical function. Company may,
however, advise VERO II as to the relationship between VERO II's performance of
medical functions and the overall administrative and business functioning of
VERO II's practice. To the extent that a Company employee assists Physician
Employees in performing medical functions, such employees shall be subject to
the professional direction and supervision of Physician Employees and in the
performance of such medical functions shall not be subject to any direction or
control by, or liability to, Company, except as may be specifically authorized
by Company.

5.5.2. Company shall, on behalf of VERO II, bill patients and collect the
professional fees for medical services rendered by VERO II or any Physician
Employee, regardless of when or where such services are rendered. All billings
for Physician Employee's services shall be made in the name of and under the
provider number of VERO II. VERO II hereby appoints Company to be VERO II's true
and lawful attorney-in-fact, for the following purposes: (i) to bill patients in
VERO II's name and on VERO II's behalf; (ii) to collect Accounts Receivable
resulting from such billing in VERO II's name and on VERO II's behalf; (iii) to
receive payments from insurance companies, prepayments from health care plans,
and all other Third-Party Payors; (iv) to take possession of and endorse in the
name of VERO II (and/or in the name of an individual physician, such payment
intended for purpose of payment of a physician's bill) any notes, checks, money
orders, insurance payments and other instruments received in payment of Accounts
Receivable; and (v) to initiate legal proceedings in the name of VERO II to
collect any accounts and monies owed to VERO II or any Physician Employee, to
enforce the rights of VERO II as creditors under any contract or in connection
with the rendering of any service, and to contest adjustments and denials by any
Governmental Authority (or its fiscal intermediaries) as Third-Party Payors.
Except for cash proceeds from the collection of Accounts Receivable purchased
from VERO II by Company, Company shall deposit any cash receipts collected on
behalf of VERO II into the VERO II Operating Account described in Section 5.11.

5.5.3. Company shall design, supervise and maintain possession of all
files and records relating to the operation of VERO II, including but not
limited to accounting, billing, patient medical records, and collection records.
While the Company shall maintain custody, patient medical records shall at all
times be and remain the property of VERO II and shall be located at the Practice
Offices so that they are readily accessible for patient care. The Physician
Employees shall have the obligation to oversee the preparation and maintenance
of patient medical records, and to provide such medical information as shall be
necessary and appropriate to the records' clinical function and to sustain and
ensure the availability of Third-Party Payor reimbursement for services
rendered. The management of all files and records shall comply with applicable
state and federal statutes. Company shall use its best efforts to preserve the
confidentiality of patient medical records and use information contained in such
records only as permitted by law, to the extent necessary to perform the
services set forth herein.

5.5.4. Company shall supply to VERO II necessary clerical, accounting,
bookkeeping and computer services, printing, postage and duplication services,
medical transcribing services and any other ordinary, necessary or appropriate
service for the operation of the Practice Offices.

5.5.5. Subject to the overall guidance of the Policy Board, Company shall
design and implement an adequate and appropriate public relations program on
behalf of VERO II, with appropriate emphasis on public awareness of the
availability of services at the Practice Offices. The public relations program
shall be conducted in compliance with Applicable Law and regulations governing
advertising by the medical profession and applicable canons of principles of
professional ethics of VERO II and Physician Employees of VERO II.

5.5.6. Company shall provide the data necessary for VERO II to prepare
VERO II's annual income tax returns. Company shall have no responsibility for
the preparation of VERO II's federal or state income tax returns or the payment

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of such income taxes. Company shall prepare or cause to be prepared on VERO II's
behalf, necessary employment tax returns. VERO II shall be obligated to pay any
taxes due on such employment tax returns with respect to the Physician Owners.

5.5.7. Company shall assist VERO II in recruiting additional physicians,
carrying out such administrative functions as may be appropriate, such as
advertising for and identifying potential candidates, obtaining credentials, and
arranging interviews; provided, however, VERO II shall interview and make the
ultimate decision as to the suitability of any physician to become associated
with VERO II. All physicians recruited by Company and accepted by VERO II shall
be the sole employees of VERO II, to the extent such physicians are hired as
employees.

5.5.8. Company shall negotiate managed care contracts on behalf of VERO II
and shall administer all managed care contracts in which VERO II participates.
VERO II, at its discretion, shall have the right to enter into or reject such
contracts negotiated by Company.

5.5.9. Company shall arrange for legal and accounting services related to
operations of the Practice Offices and Physician Employee's practice at the
Practice Offices incurred traditionally in the ordinary course of business,
including the cost of enforcing any contract with a Physician Employee
containing restrictive covenants, provided such services shall be approved in
advance by the Policy Board. Notwithstanding the foregoing, VERO II shall have
the authority to arrange for legal and accounting services relating to matters
other than day-to-day management of VERO II; such other matters including but
not limited to issues relating to VERO II governance issues, compensation of
Physician Owners, and issues which arise between VERO II and Company; provided,
however, such fees shall be considered Excluded Expenses.

5.5.10. Company shall provide for the proper cleanliness of the premises,
and maintenance and cleanliness of the equipment, furniture and furnishings
located upon such premises.

5.5.12. Company shall negotiate for and cause premiums to be paid with
respect to the insurance provided for in Section 10.1.

5.6. Personnel. After Company (or a subsidiary of Company) has obtained a
license from the Florida Department of Business and Professional Regulation to
offer staff leasing services pursuant to Chapter 402 of the Florida Statutes
Annotated (prior to Company having obtained such license, the employees
referenced in this sentence shall be employees of VERO II), Company shall
provide Physician Extender Employees and other non-physician professional
support (administrative personnel, clerical, secretarial, bookkeeping and
collection personnel) reasonably necessary for the conduct of the operations at
the Practice Offices. Company shall determine and cause to be paid the salaries
and fringe benefits of all such personnel. Such personnel shall be employees of
Company, with those personnel performing patient care services subject to the
professional direction and supervision of Physician Employees. If VERO II is
dissatisfied with the services of any person, VERO II shall consult with
Company. Company shall in good faith determine whether the performance of that
employee could be brought to acceptable levels through counsel and assistance,
or whether such employee should be terminated. All of Company's obligations
regarding staff shall be governed by the overriding principle and goal of
providing quality medical care. Employee assignments shall be made to assure
consistent and continued rendering of quality medical support services and to
ensure prompt availability and accessibility of individual medical support staff
to physicians in order to develop constant, familiar and routine working
relationships between individual physicians and individual members of the
medical support staff. If VERO II disagrees with an assignment, VERO II may
appeal such assignment to the Policy Board. Company shall maintain established
working relationships wherever possible and Company shall make every effort
consistent with sound business practices to honor the specific requests of VERO
II with regard to the assignment of Company's employees.

5.7. Events Excusing Performance. Company shall not be liable to VERO II

or Physician Owners for failure to perform any of the services required herein
in the event of strikes, lock-outs, calamities, acts of God, unavailability of

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supplies or other events over which Company has no control for so long as such
events continue, and for a reasonable period of time thereafter.

5.8. Compliance with Law and Business Standards. Company shall comply with
Applicable Law including, without limitation, Health Care Law including, without
limitation, federal, state, and local laws and regulations affecting billing and
reimbursement, referrals, patient privacy and confidentiality, and management of
hazardous materials and infectious waste. Company shall discharge its
obligations under this Agreement consistent with applicable business and
industry standards and practices.

5.9. Quality Assurance. Company shall assist VERO II in fulfilling VERO
II's obligations to patients to maintain professionally recognized quality of
medical and professional services.

5.10. New Medical Services and Additional Practice Offices. If VERO II
desires to have a new medical service provided at any of the Practice Offices or
desires to establish a new clinic, a proposal of such service or the
establishment of such new clinic shall be submitted to the Policy Board. Should
the Policy Board approve the expansion of service or the establishment of such
new clinic, Company, at its option, shall have the exclusive right to provide
services necessary to support VERO II in VERO II's delivery of such new medical
services at the Practice Office or new clinic, as applicable; provided, however,
if the type of service is an ancillary service that would be improper under any
rules, regulations or laws for Company to offer to VERO II patients, then
Company shall not have the option to provide such service. Should Company
decline to provide the necessary support service for the new service or new
clinic, VERO II shall be entitled to perform such service at VERO II's own
expense and the revenues therefrom shall not be included in the calculation of
Company's service fees under Article VIII of this Agreement; provided, however,
that Company shall have the option to assume performance of the necessary
support services for providing such new service or new clinic by buying out VERO
II's investment in the service at VERO II's Book Value at anytime within
eighteen (18) months of the date such new service is first provided, which Book
Value shall be based on the price of the assets purchased by VERO II less
depreciation accrued to the date of acquisition of such service by Company, as
determined under GAAP.

5.11. Collection of Certain Patient Receipts and Payment of Clinic
Expenses. VERO II agrees to establish and maintain a bank account, which shall
be referred to as the VERO II Operating Account, for the purpose of (a)
depositing proceeds from the sale of VERO II's Accounts Receivable pursuant to
Section 8.3 and (b) paying (i) any Service Fees owed pursuant to Article VIII of
this Agreement, (ii) expenses which are solely the obligation of VERO II
(Excluded Expenses), and (iii) compensation or distributions to Physician
Owners, and the distributions shall be made in that order of payment. VERO II
shall designate a Company employee as a signatory on the VERO II Operating

Account. After the payment of any Service Fees owed pursuant to Article VIII of
this Agreement, and expenses which are solely the obligation of VERO II, VERO II
may withdraw amounts for distributions to Physician Owners.

5.12. Other VERO II Accounts. VERO II shall have the right to open or
create bank accounts in addition to the VERO II Operating Account described in
Section 5.11 of this Agreement.

5.13. Discounts. All discounts on purchases made by Company on behalf of
VERO II shall be passed on to VERO II.

ARTICLE VI.

OBLIGATIONS OF VERO II AND PHYSICIAN OWNERS

6.1. Professional Services.

6.1.1. VERO II, its Physician Owners and Physician Employees shall provide
professional services to patients.

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6.1.2. VERO II, its Physician Owners and Physician Employees shall provide
the professional services to patients described in Section 6.1.1 above in
compliance at all times with ethical standards, laws and regulations applying to
VERO II's professional practice. VERO II shall also make all reports and
inquiries to the National Practitioners Data Bank and/or any state data bank
required by Applicable Law. VERO II shall use its best efforts to determine that
each Physician Employee and Technical Employee associated with VERO II who
provides medical care to patients of VERO II is licensed by the state or states
in which he or she renders professional services. If any disciplinary or medical
malpractice action is initiated against any such individual, VERO II shall
immediately provide Company with copies of any third-party documents (not
otherwise privileged) served on VERO II or letters delivered to VERO II. Such
information shall be deemed confidential information and shall, notwithstanding
such disclosure, remain subject to all privileges and immunities provided by
Applicable Law. Company shall take all steps reasonably necessary to assure that
such privileges and immunities remain intact. VERO II shall carry out a program
to monitor the quality of medical care practiced at the Practice Offices to
promote a high quality of medical care.

6.2. Medical Practice. VERO II shall use and occupy the Practice Offices
exclusively for the practice of medicine and shall comply with all Applicable
Law and standards of medical care. It is expressly acknowledged by the parties
that the medical practice or practices conducted at the Main Office shall be
conducted solely by physicians or medical practitioner associated with VERO II,
and no other physician or medical practitioner shall be permitted to use or
occupy the Main Office without the prior written consent of Company.

6.3. Employment of Physician Employees. VERO II shall have complete
control of and responsibility for the hiring, compensation, supervision,
evaluation and termination of Physician Employees, although at the request of

VERO II, Company shall consult with VERO II respecting such matters. VERO II
shall be responsible, subject to Section 8.4, for the payment of such Physician
Employees' salaries and wages, payroll taxes, Physician Employee benefits and
all other taxes and charges now or hereafter applicable to them. With respect to
physicians, VERO II shall only employ and contract with licensed physicians
meeting applicable credentialing guidelines established by VERO II.

6.4. Professional Dues and Education Expenses. Except to the extent
provided in Section 8.1.3(k), Physician Owners shall be solely responsible for
the cost of membership in professional associations and the cost of continuing
professional education. VERO II shall ensure that each Physician Employee
participates in such continuing medical education as is necessary for such
physician to remain licensed.

6.5. Professional Insurance Eligibility. VERO II shall cooperate in the
obtaining and retaining of professional liability insurance by assuring that all
Physician Employees are insurable and participating in an on-going risk
management program.

6.6. Events Excusing Performance. VERO II and Physician Owners shall not
be liable to Company for failure to perform any of the services required herein
in the event of strikes, lock-outs, calamities, acts of God, unavailability of
supplies or other events over which VERO II has no control for so long as such
events continue, and for a reasonable period of time thereafter.

6.7. Fees for Professional Services. VERO II shall be solely responsible
for legal, accounting and other professional services fees (Excluded Expenses)
incurred by VERO II, except as otherwise determined by the Policy Board.

6.8. Peer Review. VERO II agrees to cooperate with Company in establishing
a system of peer review within and among the provider practices as necessary to
obtain provider contracts. In connection therewith, VERO II agrees to assist in
the formulation of provider guidelines for each treatment or surgical modality,
and agrees to abide by said guidelines, and further agrees to submit to periodic
reviews by a third party to monitor compliance with said guidelines. VERO II
acknowledges that the establishment of provider guidelines may be necessary to
obtain PPO, HMO, IPA and other similar provider contracts, both private and
government funded. To the extent that said provider guidelines must be filed or
registered with any Third-Party Payor, VERO II agrees to cooperate with Company
in making such filings or registrations. It is agreed and acknowledged that all
such peer review guidelines shall be established and monitored by medical
personnel on the staff of VERO II and other practices that are part of the peer
review process, and shall not be promulgated, established

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or enforced independently by Company. To the extent possible, all information
obtained through the peer review process shall remain confidential and the
parties shall take all steps reasonably necessary to assure that all privileges
and immunities provided by Applicable Law remain intact.

6.9. VERO II Employee Benefit Plans.

6.9.1. Effective as of the date of the closing under the Merger Agreement,
VERO II shall amend the tax-qualified retirement plan(s) described on Exhibit
6.9.1 (the "VERO II Plan") to provide that employees of Company who are
classified as "leased employees" (as defined in Code Section 414(n)) of VERO II
shall be treated as VERO II employees for purposes described in Code Section
414(n)(3). Not less often than annually, VERO II and Company shall agree upon
and identify in writing those individuals to be classified as leased employees
of VERO II (the "Designated Leased Employees"). VERO II and Company shall
establish mutually agreeable procedures with respect to the participation of
Designated Leased Employees in the VERO II Plan. Such procedures shall be
designed to avoid the tax disqualification of the VERO II Plan, similar plans of
practices similarly situated, (collectively, the "Plans").

6.9.2. If the Policy Board determines that the relationship between
Company and VERO II (and other practices similarly situated) constitutes an
"affiliated service group" (as defined in Code Section 414(m)), Company and VERO
II shall take such actions as may be necessary to avoid the tax disqualification
of the Plans. Such actions may include the amendment, freeze, termination or
merger of the VERO II Plan.

6.9.3. The Plans described on Exhibit 6.9.1 attached hereto are approved
by Company. VERO II shall not enter into any new "employee benefit plan" (as
defined in Section 3(3) of the Employment Retirement Income Security Act of
1974, as amended ("ERISA") without the consent of Company. In addition, VERO II
shall not offer any retirement benefits or make any material retirement payments
other than under the VERO II Plan to any stockholder of VERO II without the
express written consent of Company. Except as otherwise required by law, VERO II
shall not materially amend, freeze, terminate or merge the VERO II Plan without
the express written consent of Company. In the event of either of the foregoing,
Company's consent shall not be withheld if such action would not jeopardize the
qualification of any of the Plans. VERO II agrees to make such changes to the
VERO II Plan, including the amendment freeze, termination or merger of the VERO
II Plan, as may be approved by the Policy Board and Company but only if such
changes are necessary to prevent the disqualification of any of the Plans.

6.9.4. Expenses incurred in connection with the VERO II Plan or other VERO
II employee benefit plans, including, without limitation, the compensation of
counsel, accountants, corporate trustees, and other agents shall be included in
Clinic Expenses.

6.9.5. The contribution and administration expenses for the Designated
Leased Employees shall be included in VERO II's operating budget. VERO II and
Company shall not make employee benefit plan contributions or payments to VERO
II for their respective employees in excess of such budgeted amounts unless
required by law or the terms of the VERO II Plan. Company shall make
contributions or payments with respect to the VERO II Plan or other VERO II
employee benefit plans, as a Clinic Expense, on behalf of eligible Designated
Leased Employees, and other eligible VERO II employees. In the event a VERO II
Plan or other VERO II employee benefit plan is terminated, Company shall be
responsible, as a Clinic Expense, for any funding liabilities related to
eligible Designated Leased Employees; provided, however, Company shall only be
responsible for the funding of any liability accruing after the date of the
Merger Agreement.

6.9.6. Company shall have the sole and exclusive authority to adopt, amend
or terminate any employee benefit plan for the benefit of its employees,
regardless of whether such employees are Designated Leased Employees, unless
such actions would require the amendment, freeze or termination of the VERO II
Plan to avoid disqualification of the VERO II Plan, in which case any such
action would be subject to the express prior written consent of the Policy
Board. Company shall have the sole and exclusive authority to appoint the
trustee, custodian and administrator of any such plan.

6.9.7. In the event that any "employee welfare benefit plan" (as defined
in ERISA Section 3(l)) maintained or sponsored by VERO II must be amended,
terminated, modified or changed as a result of VERO II or Company being deemed

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to be a part of an affiliated service group, the Policy Board will replace such
plan or plans with a plan or plans that provides those benefits approved by the
Policy Board. It shall be the goal of the Policy Board in such event to provide
substantially similar or comparable benefits if the same can be provided at a
substantially similar cost to the replaced plan.

6.10. Credentialing. To the extent permitted by applicable law, Company
shall assist VERO II in the credentialing of each Physician Employee, each
Technical Employee and each Physician Extender Employee.

ARTICLE VII.

RESTRICTIVE COVENANTS AND ENFORCEMENT

The parties recognize that the services to be provided by Company shall be
feasible only if VERO II operates an active medical practice to which both VERO
II and the physicians associated with VERO II devote their full time and
attention. To that end:

7.1. Exclusive Arrangement. During the term of this Agreement, Company
shall be VERO II's and Physician Owners' sole provider of the management
services described in this Agreement and neither VERO II, Physician Owners nor
any of VERO II's or Physician Owners' employees shall provide such management
services during the term of this Agreement. VERO II and the Physician Owners
agree that during the term of this Agreement, neither VERO II nor Physician
Owners will enter into any similar agreements with any physician practice
management company or entity. VERO II and the Physician Owners further agree
that during the term of this Agreement, they will not engage, directly or
indirectly, as a principal owner, shareholder (other than a holder of fewer than
5% of the outstanding shares of a publicly-traded company), partner, joint
venturer, agent, equity owner, or in any other capacity whatsoever, in any
corporation, partnership, joint venture, or other business association or entity
that operates ambulatory surgery centers or provides management services of the
nature provided by Company pursuant to this Agreement, within Indian River
County, Florida or contiguous counties or any location within seventy-five (75)
miles of the Main Clinic or any future facility that replaces the Main Clinic

(wherever located) or any Satellite Office utilized by VERO II at any time
during the term of this Agreement.

7.2. Restrictive Covenants.

7.2.1. By Current Physician Employees. VERO II shall obtain and enforce
formal agreements from current Physician Employees, other than Technical
Employees, pursuant to which the Physician Employees agree not to establish,
operate or provide physician services at any medical office, clinic or
outpatient and/or ambulatory treatment or diagnostic facility providing services
substantially similar to those provided by VERO II, except on VERO II's behalf,
within Indian River County, Florida or contiguous counties or any location
within seventy-five (75) miles during the first five (5) years of the term of
this Agreement or fifty (50) miles thereafter of the Main Office or any future
facility that replaces the Main Office (wherever located at such time) or any
Satellite Office thereafter at the time of termination of employment with VERO
II and for a period of twenty-four (24) months after any termination of
employment with VERO II. Such agreements shall be a condition to employment and
shall be in a form satisfactory to Company and shall provide that Company is a
third-party beneficiary to such agreements and that such third-party beneficiary
rights may be assigned to Company's lender ("Lender"). This Section 7.2 shall
relate solely to Physician Employees who are not also Physician Owners.

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<PAGE>

upon the request of Company, VERO II shall assign to Company such causes of
action and/or other rights it has related to such breach or default and shall
cooperate with and provide reasonable assistance to Company with respect
thereto; in which case, all costs and expenses incurred in connection therewith
shall be borne by Company and shall be included in Company Expenses, and Company
shall be entitled to all damages and other amounts recovered thereby. The above
described restrictive covenants between VERO II and Physician Owners shall be in
addition to and not in place of the restrictive covenants described in Exhibit
11 between Company and the Physician Owners.

7.3. Restrictive Covenants By Future Physician Employees. VERO II shall
obtain and enforce formal agreements from each future Physician Employee other
than Technical Employees, hired or contracted, pursuant to which such physicians

agree not to establish, operate or provide physician services at any medical
office, clinic or outpatient and/or ambulatory treatment or diagnostic facility
providing services substantially similar to those provided by VERO II except on
VERO II's behalf, within Indian River County, Florida or contiguous counties or
any location within seventy-five (75) miles during the first five (5) years of
the term of this Agreement or fifty (50) miles thereafter of the Main Office or
any future facility that replaces the Main Office (wherever located at such
time) or any Satellite Office at the time of termination of said Physician
Employee's contract with VERO II and for a period of twenty-four (24) months
thereafter. Such agreements shall be a condition to employment and shall be in a
form satisfactory to Company and shall provide that Company is a third-party
beneficiary to such agreements and that such third-party beneficiary rights may
be assigned to any Lender. This Section 7.3 shall relate solely to Physician
Employees who are not also Physician Owners. The terms and conditions of Exhibit
11 shall govern restrictive covenants relating to Physician Owners.

7.4. Rights of Company. Except as limited below, Company shall at all
times during the term of this Agreement and thereafter have the right to enter
into additional service agreements with other physicians and practices
regardless of where such physicians and/or practices are located providing for
management services and facilities to such physicians and/or practices.
Notwithstanding the foregoing, and except as set forth in Section 11.9.3, in the
event that Company desires to enter into a Service Agreement with another
practice located within seventy-five (75) miles during the first five (5) years
of the term of this Agreement or fifty (50) miles thereafter of VERO II's Main
Office or any Satellite Office, then the Policy Board must first approve Company
entering into such agreement. In the event that the individuals representing
Company on the Policy Board can reasonably demonstrate that entering into such
agreement will not have a material adverse effect on VERO II's practice
operations, earnings or cash flow, then the individuals representing VERO II
shall consent to Company entering into such agreement.

7.5. Enforcement. VERO II acknowledges and agrees that since a remedy at
law for any breach or attempted breach of the provisions of this Article VII
shall be inadequate, Company shall be entitled to specific performance and
injunctive or other equitable relief in case of any such breach or attempted
breach in addition to whatever other remedies may exist by law. All parties
hereto also waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other equitable relief.
If any provision of Article VII relating to the restrictive period, scope of
activity restricted and/or the territory described therein shall be declared by
a court of competent jurisdiction to exceed the maximum time period, scope of
activity restricted or geographical area such court deems reasonable and
enforceable under Applicable Law, the time period, scope of activity restricted
and/or area of restriction held reasonable and enforceable by the court shall
thereafter be the restrictive period, scope of activity restricted and/or the
territory applicable to the restrictive covenant provisions in this Article VII.
In addition, breach of the provisions of this Article VII may trigger certain
rights of Company to redeem a Physician Owner's Company common stock pursuant to
the terms of Article VIII of that certain stockholders agreement between Company
and its stockholders (the "Stockholders Agreement").

7.6. Modification of Restrictive Covenants. Upon the termination of
employment of a Physician Owner or Physician Employee, the Policy Board shall

have the authority to release or reduce in whole or in part the terms of the
restrictive covenants, including but not limited to the mileage radius
limitations set forth above in Sections 7.2 and 7.3. In the event that the
individuals representing VERO II on the Policy Board can reasonably demonstrate
that a modification to the restrictive covenant will not have a material adverse
effect on Company's or VERO II's practice operations, earnings or cash flow,
then the individuals representing Company shall consent to the proposed
modifications.

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<PAGE>

ARTICLE VIII.

FINANCIAL ARRANGEMENTS

8.1. Service Fees. During the first thirty-six (36) months of the term of
this Agreement, Company shall receive a service fee equal to (a) the greater of
(i) [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] or (ii) the Base Service
Fee, plus (b) the amount of Clinic Expenses. Upon the expiration of the first
thirty-six (36) months of the term of this Agreement, Company shall receive a
service fee equal to [xxxxxxxxxxxxxxxxxxxxxxxxx]of Practice Net Revenue plus the
amount of Clinic Expenses. In the event that a Physician Owner ceases to
practice medicine during the first thirty-six (36) months of the term of this
Agreement, such Physician Owner shall be personally liable for any reduction in
VERO II's service fees payable as further described under Section 11.9.1 of this
Agreement. In the event that a Physician Owner either dies or becomes Disabled
during such thirty-six (36) month period, VERO II, or the applicable Physician
Owner, as the case may be, shall be entitled to satisfy the amount owed by
transferring to Company an amount of Company common stock having a Fair Market
Value equal to the amount owed or paying to Company cash in the amount owed (or
a combination thereof).

8.1.1. "Practice Net Revenue" shall mean Professional Services Revenue,
less Clinic Expenses.

8.1.2. "Professional Services Revenue" shall mean all fees actually
recorded each month (net of any amounts reimbursed to any patients or
Third-Party Payors during the applicable month and net of any adjustments for
contractual allowances, Medicaid, worker's compensation, employee/dependent
health care benefit programs, professional courtesies and other activities that
do not generate a collectible fee) by or on behalf of VERO II as a result of
professional medical services personally furnished to patients and other fees or
income generated in their capacity as Physician Employees and Technical
Employees, and any revenue from the sale of any goods.

8.1.3. "Clinic Expenses" shall mean all operating and non-operating
expenses of VERO II arising hereunder unless expressly provided otherwise,
including, without limitation:

(b) obligations of Company under Leases provided for herein under
Article III,

(d) personal property and intangible taxes assessed against
Company's assets utilized by VERO II in the Practice Offices from and
after the date of this Agreement,

(e) interest expense on indebtedness incurred by Company to (i)
satisfy the obligations of VERO II, if any, assumed under the Merger
Agreement, (ii) provide working capital for Company's performance of any
of its obligations to VERO II hereunder, or (iii) purchase equipment,

(f) malpractice insurance premiums, disability insurance premiums to
cover accommodations to the Practice Offices under the definition of
"Disabled" or "Disability," and fire, workers compensation and general
liability insurance premiums and life insurance premiums, during the first
three (3) years of this Agreement, for life insurance on the lives of
Physician Owners, with VERO II as the death beneficiary,

(g) the cost of any goods purchased for resale,

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<PAGE>

(h) the depreciation, as determined under GAAP, for any equipment or
depreciable property owned by Company and used in VERO II's Office
Locations by VERO II to be billed to VERO II on a monthly basis and paid
to Company at the same time Company pays for VERO II's Accounts Receivable
pursuant to Section 8.3,

(i) direct costs of all employees or consultants of Company engaged
to provide services at or in connection with VERO II or who actually
provide services at or in connection with the Clinic for improved
performance, such as quality assurance, reasonable expenses required for
physician accommodations under the definition of "Disabled" or
"Disability," materials management, purchasing program, change in coding
analysis, physician recruitment; provided, however, only the portion of
expenses related to such employee or consultant, without mark-up, that is
allocable in a fair and reasonable manner to work approved by the Policy
Board which is performed at or for the benefit of VERO II shall be
included in Clinic Expenses,

(l) any and all other ordinary and necessary expenses incurred by
VERO II or approved by the Policy Board and reasonably incurred by the
Company for the direct benefit of VERO II in carrying out their respective
obligations under this Agreement.

Clinic Expenses shall not include Excluded Expenses or Company Expenses.
Excluded Expenses shall be the sole obligation of VERO II. Company Expenses
shall be the sole obligation of Company.

8.1.4. "Technical Employees" shall mean individuals who provide billable
services on behalf of VERO II and are employees of VERO II.

8.1.5. "Physician Extender Employees" shall mean Physician Assistants,
Nurse Practitioners, and other such persons who are employees of Company, but
excluding any Technical Employees.

8.1.6. "Physician Employees" shall mean only those individuals who are
doctors of medicine (including Physician Owners) and who are employed by VERO II
or are otherwise under contract with VERO II to provide professional services to
patients seen in the Main Office or Satellite Offices and are duly licensed to
provide professional medical services in the state or states in which he or she
renders professional services under this Agreement.

8.1.7. "Company Expenses" shall mean, pursuant to GAAP applied on a
consistent basis:

(a) Any corporate overhead charges of Company and other items
incurred by Company that are not incurred specifically for the purpose of
providing services to VERO II or are not directly attributable to VERO II,
as reasonably determined by Company, including, without limitation,
salaries and benefits of executive officers of Company, except as
otherwise provided for in the definition of Clinic Expenses;

(b) Any amortization of any intangible asset resulting from the
Merger;

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<PAGE>

(c) Any depreciation attributable to increases in the book value of
tangible depreciable assets resulting from the Merger;

(d) Any legal and accounting expenses incurred by Company in
connection with the Merger; and

(e) All taxes of Company, including, but not limited to, state and
federal income taxes and franchise taxes, but excluding state and federal
employee taxes related to employees who provide services for VERO II,
property taxes on assets used by VERO II and other taxes specifically
included in Clinic Expenses.

8.1.8. "Excluded Expenses" shall be the sole obligation of VERO II and
shall mean, pursuant to GAAP applied on a consistent basis:

(a) Any salaries or other distributions made to Physician Owners
whether for professional fee income or otherwise;

(b) Any federal, state or other taxes associated therewith;

(c) Except as provided in Section 8.1.3(k), expenses of Physician
Owner's to maintain licensure or meet continuing education requirements,
including related travel expense; and

(d) Any other items specifically designated as Excluded Expenses
elsewhere in this Agreement including but not limited to those items
listed on Exhibit 8.1.8(d).

8.2. Payment of Service Fee. The amounts to be paid to Company under this
Article VIII shall be payable monthly, at the time that Company pays VERO II for
the Accounts Receivable previously purchased by Company as described in Section
8.3 below. The amount payable shall be estimated based upon the previous month's
operating results of VERO II. Adjustments to the estimated payments shall be
made to reconcile actual cumulative amounts due under this Article VIII, by the
end of the following month during each calendar year. Upon preparation of annual
financial statements as provided in Section 5.3, final adjustments to the
service fee for the preceding year shall be made and any additional payments
owing to Company or VERO II shall then be made to the party owed the additional
sum of money. The adjustment and any amount owed shall be calculated and paid
within ninety (90) days following the close of Company's fiscal year.

8.3. Purchase of Accounts Receivable.

8.3.1. VERO II hereby agrees to sell and assign to Company and Company
agrees to buy, all of VERO II's Accounts Receivable each month during which this
Agreement is in existence which are owing to VERO II arising out of the delivery
of medical, surgical, diagnostic or other professional medical goods or
services. Accounts Receivable shall not include, and Company shall not purchase,
any cash, checks or receivables created by credit cards. Company shall bear the
risk of collection and any overage or underage resulting from any purchased
Accounts Receivable.

8.3.2. The purchase price for each Accounts Receivable (the "Purchase
Price") will be equal to the face amount of the Accounts Receivable recorded
each month, less any non-allowed contractual adjustments and net of any reserve
for uncollectible Accounts Receivables based on the historical experience of the
practice as determined by the Company. It is the intent of the parties that the
Purchase Price reflect the actual net realizable value of the Accounts
Receivable.

8.3.3. VERO II will sell all Accounts Receivable to Company, such purchase
to be deemed to be made on the fifteenth (15th) day of the month following the
month in which such Accounts Receivable are created. Company shall pay for the
Accounts Receivable not later than the fifteenth (15th) day of each month
following the month in which the Accounts Receivable is created (the "Settlement
Date"). Company shall pay VERO II for all Accounts Receivable purchased by
check, wire transfer or intrabank transfer to the VERO II Operating Account
described in Section 5.11. The purchase of Accounts Receivable shall be
evidenced by sending Company (i) a copy of each invoice with respect to each
Third-Party Payor on the Accounts Receivable then being purchased; and (ii) any
other information or documentation (including all required Uniform

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<PAGE>

Commercial Code releases or financing statements) Company may reasonably need to
identify the Accounts Receivable and obtain payment from the Account Debtors;
provided that such failure to send such documents shall not affect the
obligation of VERO II to sell such Accounts Receivable or Company to buy such
Accounts Receivable. As consideration for the purchase of Accounts Receivable by
Company pursuant to this Section 8.3, Company promises to pay and shall be
obligated to pay for such Accounts Receivable at the time and in the manner
provided below. To the extent permissible by Applicable Law, VERO II will be
deemed to have sold to Company all of VERO II's right, title and interest in
such Accounts Receivable and in any proceeds thereof, and Company will be the
sole and absolute owner thereof and will own all of VERO II's rights and
remedies represented by such Accounts Receivable (including, without limitation,
rights to payment from the respective Account Debtors on such Accounts
Receivable), and Company will have obtained all of VERO II's rights under all
guarantees, assignments and securities with respect to each such Accounts
Receivable.

8.3.5. In connection with the initial purchase of Accounts Receivable by
Company, VERO II will execute such financing statements or amendments under the
UCC (naming Company as secured party and Lender as assignee) as Company may
reasonably request with respect to any Accounts Receivable that may be purchased
pursuant to this Agreement.

8.3.6. VERO II agrees to cooperate with Company in the collection of the
Accounts Receivable sold by VERO II, transferred pursuant to Section 8.3. At the
option of and upon the request of Company, VERO II shall execute any and all
documentation necessary for the transfer of amounts constituting Accounts
Receivables and/or the establishment of lockboxes in accordance with the
provisions of Exhibit 8.3.6 attached hereto.

8.3.7. All Accounts Receivable of VERO II purchased by Company ("Purchased
A/R") pursuant to this Section 8.3 hereof will, as such Purchased A/R are
purchased, be treated as Professional Service Revenues for accounting and
financial purposes.

8.4. Payment of Clinic Expenses. All Clinic Expenses shall be incurred in
the name of Company, unless VERO II is required by law to incur such expenses,
in which case Company shall indemnify VERO II against any such expenses. Company
shall pay all Clinic Expenses as they become due; provided, however, that
Company may, in the name and on behalf of VERO II, contest in good faith any
claimed Clinic Expense to which there is any dispute regarding the nature,
existence or validity of such claimed Clinic Expense. Upon receipt of VERO II's
service fee, Company shall be required to deposit into the VERO II Operating
Account described in Section 5.11 an amount of money necessary for VERO II to
pay the compensation and benefits associated with the Technical Employees and
Physician Employees (other than Physician Owners) employed by VERO II.

ARTICLE IX.

RECORDS

9.1. Patient Records. Upon termination of this Agreement and unless
otherwise provided herein, VERO II shall retain all patient medical records
maintained by VERO II or Company in the name of VERO II. VERO II shall, at VERO
II's option, be entitled to retain copies of financial and accounting records
relating to all services performed by VERO II. All parties agree to maintain the
confidentiality of patient identifying information and not to disclose such
information except as may be required or permitted by Applicable Law.

9.2. Records Owned by Company. All records relating in any way to the
operation of the Practice Offices which are not the property of VERO II under
the provisions of Section 9.1 above, shall at all times be the property of
Company.

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<PAGE>

9.3. Access to Records. During the term of this Agreement, and thereafter,
VERO II or VERO II's designee shall have reasonable access during normal
business hours to VERO II's and Company's financial records, which relate to the
operation of VERO II including, but not limited to, records of collections,
expenses and disbursements as kept by Company in performing Company's
obligations under this Agreement, and VERO II may copy at VERO II's expense any
or all such records.

ARTICLE X.

INSURANCE AND INDEMNITY

10.1. Insurance to be Maintained by VERO II. Throughout the term of this
Agreement, VERO II shall maintain comprehensive professional liability and
worker's compensation insurance for VERO II and all employees of VERO II in
amounts approved by the Policy Board. Not in limitation of the foregoing, VERO
II shall maintain excess general liability umbrella coverage with a One Million
Dollars ($1,000,000) limit as currently maintained by VERO II (with deductible
provisions not to exceed $25,000 per occurrence), the cost of which shall be
paid by Company as a Clinic Expense. In lieu of the foregoing, Company may
provide as a Clinic Expense group insurance for malpractice and/or worker's
compensation insurance. Notwithstanding the foregoing, in the event that Company
procures such group insurance for malpractice and/or worker's compensation
insurance, VERO II must first approve the amount of coverage, the carrier and
the terms of any such coverage for VERO II.

10.3. Additional Insureds. VERO II and Company agree to use their best
efforts to have each other named as an additional insured on the other's
respective professional liability insurance programs at Company's expense.
Further, on any insurance where Company will be named as an additional insured,
VERO II will assist Company to obtain appropriate riders to insure payment of
any party indemnified by Company.

10.4. Indemnification. VERO II shall indemnify, hold harmless and defend
Company, its officers, directors and employees, from and against any and all
liability, loss, damage, claim, causes of action, and expenses (including
reasonable attorneys' fees), caused or asserted to have been caused, directly or
indirectly, by or as a result of the performance of any intentional acts,
negligent acts or negligent omissions (other than for any claims for (or in
connection with) malpractice arising from the performance or nonperformance of
medical services) by VERO II and/or VERO II's Physician Owners, agents,
employees and/or subcontractors (other than Company) during the term hereof.
Company shall indemnify, hold

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<PAGE>

harmless and defend VERO II, the Physician Owners, VERO II's officers, directors
and employees, from and against any and all liability, loss, damage, claim,
causes of action, and expenses (including reasonable attorneys' fees), caused or
asserted to have been caused, directly or indirectly, by or as a result of the
performance of any intentional acts, negligent acts or negligent omissions by
Company and/or its shareholders, agents, employees and/or subcontractors (other
than VERO II and the Physician Owners) during the term of this Agreement.
Neither Company nor VERO II shall have any obligation to indemnify the other
party unless the claim for indemnification is based upon a liability, loss or
damage resulting in the indemnified party making payments to a third party.
Pursuant to the terms of the Stockholders Agreement, Company may have the right
to redeem a Physician Owner's Company common stock to satisfy a Physician
Owner's indemnification obligations.

ARTICLE XI.

TERM, TERMINATION AND RETIREMENT

11.3. Termination by VERO II for Cause. VERO II may terminate this
Agreement without breach as follows:

11.3.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by Company, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by Company, except for the filing of a petition in
involuntary bankruptcy against Company which is dismissed within thirty (30)
days thereafter, VERO II may give notice of the immediate termination of this
Agreement.

11.3.2. In the event Company shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement and such default
shall continue for a period of sixty (60) days after written notice thereof has
been given to Company by VERO II; or Company shall fail to remit the payments
due as provided in Article VIII hereof and such failure to remit shall continue
for a period of thirty (30) days after written notice thereof, VERO II may
terminate this Agreement.

11.3.3. In the event Company shall, intentionally or in bad faith,
misapply funds or assets of VERO II or commit a similar act which cause material
harm to VERO II, VERO II may terminate this Agreement.

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<PAGE>

11.4. Termination by Company for Cause. Company may terminate this
Agreement without breach as follows:

11.4.1. In the event of the filing of a petition in voluntary bankruptcy
or an assignment for the benefit of creditors by VERO II, or upon other action
taken or suffered, voluntarily or involuntarily, under any federal or state law
for the benefit of debtors by VERO II, except for the filing of a petition in
involuntary bankruptcy against VERO II which is dismissed within thirty (30)
days thereafter, Company may give notice of the immediate termination of this
Agreement.

11.4.2. In the event VERO II shall materially default in the performance
of any duty or obligation imposed upon it by this Agreement, and such default
shall continue for a period of ninety (90) days after written notice thereof has
been given to VERO II by Company, Company may terminate this Agreement.

11.4.3. In the event VERO II's Medicare or Medicaid Number shall be
terminated or suspended as a result of the action or inaction of VERO II or a
Physician Employee, and such termination or suspension shall continue for thirty
(30) days, Company may give notice of the immediate termination of this
Agreement, unless VERO II shall at that time be acting in good faith (and shall
provide reasonable evidence of the action being taken) to reverse such
termination or suspension. Notwithstanding any good faith effort on the part of
VERO II to reverse such termination or suspension, if such termination or
suspension shall not be reversed within ninety (90) days after occurrence,
Company shall have the right to terminate this Agreement immediately.

11.4.4 In the event this Agreement is terminated by Company pursuant to
Section 11.4.1, Section 11.4.2, or Section 11.4.3, Company, at its option, may
require VERO II to purchase from Company all assets, both tangible and
intangible, owned by Company and used or made available for VERO II's use for
the fair market value of such assets on a going concern basis, without regard to
this Agreement. In addition thereto, VERO II shall assume all debt (including
any balance of any remaining debt incurred by the Company to acquire the assets
under the Merger Agreement) and all contracts, payables and leases which are
obligations of Company which relate to the Company's obligations which are
performed at the Office Locations under this Agreement. The fair market value of
the assets shall be determined by an independent appraiser selected by two (2)
independent accountants practicing with "big six" accounting firms, one (1)
selected by VERO II and one (1) selected by Company and neither of which is
providing or has for a period of two (2) years provided services to Company or
VERO II. In addition to the payment for the practice assets, in the event
Company terminates this Agreement pursuant to Section 11.4.1, Section 11.4.2 or
Section 11.4.3 within the first five (5) years of the term of this Agreement,
then VERO II's Physician Owners shall (i) pay to Company an amount of money
equal to the Fair Market Value, as of the date of termination, of
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to VERO II
pursuant to the Merger Agreement or (ii) surrender to Company for cancellation
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] by Company to VERO II pursuant to the Merger
Agreement. All expenses of any appraisal shall be paid by VERO II. In the event
that Company terminates this Agreement pursuant to Sections 11.4.1 through
11.4.3, inclusive, and Company requires VERO II to purchase the practice assets,
then upon the closing of the purchase of the assets, VERO II and its Physician
Employees shall be released from the restrictive covenants provided for under
Exhibit 11 of this Agreement. In addition, termination of this Agreement may
trigger certain rights of Company to redeem a Physician Owner's Company common
stock pursuant to the terms of Article VIII of the Stockholders Agreement.

11.5. Early Termination by VERO II or Company Without Cause Upon Third
(3rd) Anniversary of Agreement. Either party may terminate this Agreement
without cause upon written notice delivered to the other party not less than
nine (9) months or more than ten (10) months or more prior to the end of the
third (3rd) anniversary of the date of this Agreement if the Company has not
filed a registration statement with the United States Securities and Exchange
Commission; provided, however, if the Company files a registration statement,
for an underwritten public offering, with the United States Securities and
Exchange Commission before the end of the date of the third (3rd) anniversary of
this Agreement, then such termination shall be ineffective, and this Agreement
shall continue in force unless otherwise terminated pursuant to the other
provisions of Article XI of this Agreement. In the event that such registration
statement is not effective within one hundred twenty

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<PAGE>

(120) days from filing, then the early termination rights described in the first
sentence of this Section 11.5 shall be again exercisable; provided, further,
that if such registration statement was filed during the above described notice
period for early termination, then such period shall be extended for thirty (30)
days from and after the date such early termination rights again become
exercisable. Notwithstanding any other provision of this Agreement to the
contrary, the termination rights set forth in this Section 11.5 shall
immediately terminate and no longer be effective upon a Change in Control of the
Company. Upon a termination pursuant to this Section 11.5, VERO II shall tender
to Company all of the stock issued to VERO II by Company pursuant to the Merger
Agreement, and Company shall return to VERO II the facilities and all assets,
both tangible and intangible, used or made available for VERO II's use in the
Practice Office. VERO II shall assume all debt (including any balance of any
remaining debt incurred by the Company to acquire the assets under the Merger
Agreement) and all contracts, payables and leases which are obligations of
Company and which relate to Company's obligations which are performed at the
Office Locations under this Agreement. The Company and VERO II shall cooperate
to structure any exchange consummated pursuant to this Section 11.5 in a manner
designed to minimize the aggregate tax consequences to the parties arising from
the exchange. Closing of the exchange pursuant to this Section 11.5 shall occur
effective as of the third (3rd) anniversary of this Agreement.

11.6. Consequences of VERO II Termination. In the event that this
Agreement is terminated by VERO II under the terms of Section 11.3 or is
terminated on any other basis (other than (i) because of the normal expiration
of its term set forth in Section 11.1, (ii) by Company for cause as set forth in
Section 11.4 or (iii) by early termination as set forth in Section 11.5), then
upon such termination, VERO II shall purchase from Company all assets, both
tangible and intangible, owned by Company and used or made available for VERO
II's use for the fair market value of such assets on a going concern basis
without regard to this Agreement. In addition thereto, VERO II shall assume all
debt (including any balance of any remaining debt incurred by the Company to
acquire the assets under the Merger Agreement) and all contracts, payables and
leases which are obligations of Company which relate to the Company's
obligations which are performed at the Office Locations under this Agreement.
The fair market value of the assets shall be determined by an independent
appraiser selected by two (2) independent accountants practicing with "big six"
accounting firms, one (1) selected by VERO II and one (1) selected by Company
and neither of which is providing or has for a period of two (2) years provided
services to Company or VERO II. Termination of this Agreement by VERO II or a
Physician Owner may trigger Company's right to redeem all of Company common
stock owned by the Physician Owner as provided for in Section 8.1 (a) of the
Stockholders Agreement.

11.7. Closing of Purchase by VERO II and Effective Date of Termination.
VERO II shall, except as provided below in this Section 11.7, pay cash for the
practice assets purchased pursuant to the provisions of this Section 11. The
amount of the purchase price shall be reduced, but not below zero (0), by the
amount of debt and liabilities of Company assumed by VERO II and shall also be
reduced by any payment Company has failed to make under this Agreement, provided
that such payments or obligations are not otherwise accounted for in the
liabilities assumed by VERO II in connection with the purchase described herein.
The closing date for the purchase shall be determined by VERO II, but shall in
no event occur later than one hundred eighty (180) days from the date of the
notice of termination. The termination of this Agreement shall become effective
upon the closing of the sale of the assets and VERO II and Company shall be
released from the restrictive covenants provided for in Article VII on the
closing date. Company shall give VERO II credit towards the purchase price of
the assets for the Fair Market Value of any Company common stock tendered to the
Company in exchange for such assets. In the event that VERO II terminates this
Agreement pursuant to Sections 11.3.1 through 11.3.4, inclusive, or Sections
11.5, 11.6 or 11.7, then upon the closing of the purchase of the assets, VERO II
and its Physician Employees shall, except as VERO II may so elect to limit
through separate agreements with Physician Owners and Physician Employees, be
released from the restrictive covenants provided for under Article VII or
Exhibit 11 of this Agreement.

11.8. Tail Policy. VERO II shall obtain continuing liability insurance
coverage under either a "tail policy" or a "prior acts policy" with the same
limits and deductibles as set forth in Section 10.1 upon the termination of this
Agreement, or upon a physician's termination of his or her affiliation with VERO
II.

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<PAGE>

(i) The Policy Board shall calculate the retiring Physician
Owner's contribution to the payment of VERO II's service fees
during the twelve (12) month period preceding the retiring
Physician Owner's notice of intent to retire.

(ii) In the event the Substitute Physician(s) were Physician
Employees prior to the date upon which notice of intent to
retire was given pursuant to Section 11.9.1(a), the Policy
Board shall calculate such Physician Employee(s) contribution
to the payment of VERO II's service fees during the twelve
month period preceding the notice of intent to retire.

(d) to (i) pay to Company an amount of money equal to the Fair
Market Value, as of the date of retirement, of [xxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxx] by the Company to the retiring Physician Owner pursuant
to the Merger Agreement or (ii) surrender to Company for cancellation
[xxxxxxxxxxxxxxxxxxxxxxxx] by Company to the retiring Physician Owner
pursuant to the Merger Agreement. (All expenses of any appraisal shall be
paid by such Physician Owner.); and

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(e) to honor and comply with the restrictive covenants provided for
under Exhibit 11.

11.9.2. Retirement. If at any time after the fifth (5th) anniversary of
this Agreement, a Physician Owner desires to retire, or assume full-time
teaching responsibilities, such Physician Owner shall notify Company in writing
at least twelve (12) months prior to the effective date of such retirement or
start of teaching position; provided, however, that
[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] of the Physician Owners can retire or assume
full time teaching responsibilities within any twelve (12) month period;
provided, further, that if such retiring physician elects to, and has located a
replacement physician, Company shall waive the remaining months of said twelve
(12) month notice period, and such retirement shall be effective upon the
earlier of twelve (12) months from the date of notice or commencement of the
replacement physician's employment. Upon such retirement or start of teaching
position, such Physician Owner shall have no further obligations under this
Agreement; provided, however, the restrictive covenants provided for under
Exhibit 11 shall remain in force. In fulfilling any such full-time teaching
responsibilities, such Physician Owner would be permitted to attend patients in
a manner normal and customary for such faculty position, provided, however, such
services must be incident to the academic/teaching aspects of the institution,
and not incident to the regular examination of patients for a fee whether billed
in the name of the institution or the name of the attending physician. It is not
the intent of the Parties to permit a retired physician to conduct a medical
practice through an academic institution.

11.9.3. Physician Owner Change in Practice/Group Affiliation. In the event
that a Physician Owner leaves the employment of or terminates his or her
affiliation with VERO II, then the terminating Physician Owner may join or
establish another group/practice which has or will enter into a Service
Agreement with Company upon such terminating Physician Owner's affiliation with
such new group/practice. Upon entering into such new Service Agreement, the
terminating Physician Owner shall, except as limited by separate employment
agreements between VERO II and Physician Owners, be released from any obligation
under this Service Agreement. Company shall have the right to enter into such
new Service Agreement without satisfying the requirements of paragraph G of
Exhibit 11. In the event that (i) VERO II consents to Company entering into the
new Service Agreement, (ii) entering into the new Service Agreement will not
adversely affect the operations and earnings of Company, and (iii) the new
group/practice can satisfy the representations and warranties set forth in
Article XIII of this Agreement, then Company will not unreasonably withhold or
refrain from entering into a new Service Agreement with the terminating
Physician Owner's new group/practice. Except as set forth herein, in the event
that the Physician Owner affiliates with a new group/practice that is not a
party to a Service Agreement with Company, then Company, at its option, may
terminate this Agreement solely with respect to the terminating Physician Owner,
and the provisions of Exhibit 11 shall apply. In the event that Company does not
enter into a new Service Agreement, then Company shall terminate this Agreement
with respect to such Physician Owner, and the terminating Physician Owner shall
be obligated as described in Sections 11.9.1(a), and 11.9.1(e) of this
Agreement; provided, however, if such termination is within the first five (5)
years of the term of this Agreement, the terminating Physician Owner shall also
be obligated as described in Sections 11.9.1.(a), 11.9.1.(b), 11.9.1.(c),
11.9.1.(d) and 11.9.1.(e).

ARTICLE XII.

DAMAGE AND LOSS; CONDEMNATION

12.1. Use of Insurance Proceeds. All insurance or condemnation proceeds
payable by reason of any physical loss of any of the improvements comprising the
facilities or the furniture, fixtures and equipment used by the Practice
Offices, shall be available for the reconstruction, repair or replacement, as
the case may be, of any damage, destruction or loss. The Policy Board, in
consultation with VERO II, shall review and approve such reconstruction, repair
or replacement.

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ARTICLE XIII.

REPRESENTATIONS AND WARRANTIES OF VERO II AND PHYSICIAN OWNERS

VERO II and Physician Owners represent, warrant, covenant and agree with
Company that:

13.1. Validity. VERO II is a Florida corporation. VERO II has the full
power and authority to own VERO II's property, to carry on VERO II's business as
presently being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby. Each Physician Owner is an adult citizen and
resident of the State of Florida. Each Physician Owner has the full power and
authority to own his or her property, carry on his or her business as presently
being conducted, to enter into this Agreement, and to consummate the
transactions contemplated hereby.

13.2. Litigation. Except as disclosed pursuant to the Merger Agreement,
there is no suit, action, proceeding at law or in equity, arbitration,
administrative proceeding or other proceeding pending, or threatened against, or
affecting VERO II or any Physician Employee, or to the best of VERO II's and
each Physician Owner's knowledge, any provider or other health care professional
associated with or employed by VERO II as pertains to any claim involving the
providing of health care related services, and to the best of VERO II's and each
Physician Owner's knowledge there is no basis for any of the foregoing.

13.3. Permits. VERO II and all health care professionals associated with
or employed by VERO II have all permits and licenses and other Necessary
Authorizations required by all Applicable Law, except where failure to secure
such licenses, permits and other Necessary Authorizations does not have a
material adverse effect; have made all regulatory filings necessary for the
conduct of VERO II's business; and are not in violation of any of said
permitting or licensing requirements.

13.4. Authority. The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding Agreement of VERO II and each
Physician Owner, enforceable in accordance with its terms. VERO II and each
Physician Owner have obtained all third-party consents necessary to enter into
and consummate the transaction contemplated by this Agreement. Neither the
execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor compliance by VERO II or any Physician Owner with any
of the provisions hereof, will:

13.4.2. violate any order, writ, injunction, decree, statute, rule or
regulation applicable to either VERO II or any Physician Owner.

13.5. Compliance with Applicable Law. To the best of VERO II's and each
Physician Owner's knowledge and belief, VERO II and each Physician Owner has
operated in compliance with all federal, state, county and municipal laws,
ordinances and regulations applicable thereto and neither VERO II nor any
provider associated with or employed by VERO II has received payment or any
remuneration whatsoever to induce or encourage the referral of patients or the
purchase of goods and/or services as prohibited under 42 U.S.C. ss. 1320a-7b(b),
or otherwise perpetrated any Medicare or Medicaid fraud or abuse, nor has any
fraud or abuse been alleged within the last five (5) years by any Governmental
Authority, a carrier or a Third-Party Payor.

13.6. Health Care Compliance. VERO II is presently participating in or
otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other Third-Party Payor Programs. All necessary certifications and
contracts required for participation in such programs are in full force and
effect and have not been amended or otherwise modified, rescinded, revoked or
assigned as of the date hereof, and no condition exists or to the knowledge of
VERO II no event has occurred which in itself or with the giving of notice or
the lapse of time or both would result in the suspension,

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revocation, impairment, forfeiture or non-renewal of any such Third-Party Payor
Program. VERO II is in full compliance with the material requirements of all
such Third-Party Payor Programs applicable thereto.

13.7. Fraud and Abuse. VERO II and persons and entities providing
professional services for VERO II, have not, to the knowledge of VERO II and
each Physician Owner, after due inquiry, engaged in any activities which are
prohibited by or are in violation of the rules, regulations, policies, contracts
or laws pertaining to any Third-Party Payor Program, or which are prohibited by
rules of professional conduct ("Governmental Rules and Regulations"), including
but not limited to the following: (a) knowingly and willfully making or causing
to be made a false statement or representation of a material fact in any
application for any benefit or payment; (b) knowingly and willfully making or
causing to be made any false statement or representation of a material fact for
use in determining rights to any benefit or payment; (c) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on VERO II's own behalf or on behalf
of another, with intent to fraudulently secure such benefit or payment; or (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay or receive such remuneration (i) in return
for referring an individual to a person for the furnishing or arranging for the
furnishing or any item or service for which payment may be made in whole or in
part by Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or ordering any
good, facility, service or item for which payment may be made in whole or in
part by Medicare or Medicaid.

13.8. VERO II Compliance. VERO II has all licenses necessary to operate
the Practice Offices in accordance with the requirements of all Applicable Law
and has all Necessary Authorizations for the use and operation, all of which are
in full force and effect. There are no outstanding notices of deficiencies
relating to VERO II issued by any Governmental Authority or Third-Party Payor
requiring conformity or compliance with any Applicable Law or condition for
participation of such Governmental Authority or Third-Party Payor, and after
reasonable and independent inquiry and due diligence and investigation, VERO II
has neither received notice nor has any knowledge or reason to believe that such
Necessary Authorizations may be revoked or not renewed in the ordinary course.

13.9. Rates and Reimbursement Policies. The jurisdiction in which VERO II
is located does not currently impose any restrictions or limitations on rates
which may be charged to private pay patients receiving services provided by VERO
II. VERO II does not have any rate appeal currently pending before any
Governmental Authority or any administrator of any Third-Party Payor Program.
VERO II has no knowledge of any Applicable Law which has been enacted,
promulgated or issued within the eighteen (18) months preceding the date of this
Agreement or any such legal requirement proposed or currently pending in the
jurisdiction in which VERO II is located which could have a material adverse
effect on VERO II or may result in the imposition of additional Medicaid,
Medicare, charity, free care, welfare, or other discounted or government
assisted patients at VERO II or require VERO II to obtain any necessary
authorization which VERO II does not currently possess.

13.10. Accounts Receivable. With respect to the Purchased A/R, as of the
date of purchase:

13.10.1. All documents and agreements relating to the Purchased A/R that
have been delivered to Company with respect to such Accounts Receivable are true
and correct; VERO II has billed the applicable Account Debtor and VERO II has
delivered or caused to be delivered to such Account Debtor all requested
supporting claim documents with respect to such Accounts Receivable; all
information set forth in the bill and supporting claim documents is true and
correct, and, if any error has been made, VERO II will promptly correct the same
and, if necessary, rebill or, if requested by Company, cooperate with Company to
rebill such Accounts Receivable.

13.10.2. The Purchased A/R are exclusively owned by VERO II and there is
no security interest or lien in favor of any third party, or the recording or
filing against VERO II, as debtor, covering or purporting to cover any interest
of any kind in any Accounts Receivable, except as has been released by each
party holding such adverse interest in the Accounts Receivable. Upon payment of
the Purchase Price with respect to the Purchased A/R and with respect to
Governmental Receivables, to the extent permissible by law, all right, title and
interest of VERO II with respect thereto shall be vested in

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Company, free and clear of any lien, security interest, claim or encumbrance of
any kind, and VERO II agrees to defend the same against the claims of all
Persons.

13.10.3. The Purchased A/R (i) are payable, in an amount not less than
their face amount, as adjusted pursuant to the provisions of Section 8.3.2, by
the Account Debtor identified by VERO II as being obligated to do so, (ii) are
based on an actual and bona fide rendition of services or sale of goods to the
patient by VERO II in the ordinary course of business, (iii) are denominated and
payable only in lawful currency of the United States, and (iv) are accounts or
general intangibles within the meaning of the UCC of the state in which VERO II
has its principal place of business, or are rights to payment under a policy of
insurance or proceeds thereof, and are not evidenced by any instrument or
chattel paper. There are no payors other than the Account Debtor identified by
VERO II as the payor primarily liable on any Purchased A/R.

13.10.4. The Purchased A/R are not (i) subject to any action, suit,
proceeding or dispute (pending or threatened), set-off, counterclaim, defense,
abatement, suspension, deferment, deductible, reduction or termination by the
Account Debtors other than routine adjustments and disallowances made in the
ordinary course of business, to the extent of such adjustments and
disallowances, (ii) past or within sixty (60) days of, the statutory limit for
collection applicable to the Account Debtor, (iii) subject to an invoice which
provides for payment more than forty-five (45) days from the date of such
invoice, (iv) an account which arises out of a sale or other transaction by or
between VERO II to an Affiliate of VERO II, (v) from an Account Debtor who is
also a creditor of VERO II, (vi) an account in which the Account Debtor has
commenced a voluntary case, or an involuntary proceeding has been instituted,
under the federal bankruptcy laws, as now constituted or hereafter amended, or
made an assignment for the benefit or creditors, or if a decree or order for
relief has been entered by a court having jurisdiction in the premises in
respect to the Account Debtor, (vii) an account of which the goods giving rise
to such Accounts Receivable have not been shipped and delivered to and accepted
by the Account Debtor or the services giving rise to such Accounts Receivable
have not been performed by VERO II and accepted by the Account Debtor or the
Accounts Receivable otherwise does not represent a final sale, (viii) is
evidenced by an instrument or chattel paper unless such instrument or chattel
paper is delivered to Company with all appropriate endorsements in favor of
Company, or (ix) other than a complete bona fide transaction which requires no
further act under any circumstances on the part of VERO II to make the Accounts
Receivable payable by the Account Debtor.

13.10.5. VERO II does not have any guaranty of, letter of credit providing
credit support for, or collateral security for, the Purchased A/R, other than
any such guaranty, letter of credit or collateral security as has been assigned
to Company, and any such guaranty, letter of credit or collateral security is
not subject to any lien in favor of any other person.

13.10.6. The goods or services provided and reflected by the Purchased A/R
were medically necessary for the patient in the opinion of VERO II and the
patient received such goods or services.

13.10.9. The proceeds of the sale of the Purchased A/R will be used for
the business and commercial purposes of VERO II. The sale of the Purchased A/R
hereunder is made in good faith and without actual intent to hinder, delay or
defraud present or future creditors of VERO II.

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13.10.10. Except with respect to Governmental Receivables, the insurance
policy, contract or other instrument obligating an Account Debtor to make
payment with respect to the Purchased A/R (i) does not contain any provision
prohibiting the transfer of such payment obligation from the patient to VERO II,
or from VERO II to Company, (ii) has been duly authorized by VERO II and to the
knowledge of VERO II has been duly authorized by the Account Debtor and,
together, with the Purchased A/R, constitutes the legal, valid and binding
obligation of the Account Debtor in accordance with its terms, (iii) together
with the applicable Purchased A/R, does not contravene in any material respect
any requirement of law applicable thereto, and (iv) was in full force and effect
and applicable to the patient at the time the services constituting the basis
for the Purchased A/R were performed.

The Purchased A/R are purchased without recourse, except for the
representations, warranties and covenants made by VERO II and the Physician
Owners with respect thereto. None of the foregoing representations and
warranties with respect to the Purchased A/R shall be deemed to constitute a
guaranty by VERO II that the Purchased A/R will be collected by Company. VERO II
shall not be responsible for any damages for any breach of a representation or
warranty under this Section 13.10 until Company has suffered a loss on the
purchase of VERO II's Accounts Receivable. Damages for such breach shall be
limited to the amount of Company's loss on the purchase of such Accounts
Receivable.

13.11. Full Disclosure. When considered in the context of all information
contained herein, to the knowledge of VERO II no representation or warranty made
by VERO II in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.

13.12. Exhibits. All the facts recited in Exhibits annexed hereto shall be
deemed to be representations of fact by VERO II as though recited in this
Article XIII.

ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES OF COMPANY

Company represents, warrants, covenants and agrees with VERO II as
follows:

14.4. Transactions with Affiliates. Company shall not enter into any
transaction or series of transactions, whether or not related or in the ordinary
course of business, with any Affiliate of VERO II or Company, other than on
terms and conditions substantially as favorable to Company as would be
obtainable by Company at the time in a comparable arm's-length transaction with
a person not an Affiliate.

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ARTICLE XV.

COVENANTS OF VERO II AND PHYSICIAN OWNERS

15.1. Merger, Consolidation and Other Arrangements. VERO II shall not
incorporate, merge or consolidate with any other entity or individual or
liquidate or dissolve or wind-up VERO II's affairs or enter into any
partnerships, joint ventures or sale-leaseback transactions or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any other person
or entity.

15.2. Necessary Authorizations/Assignment of Licenses and Permits. VERO II
and each Physician Owner shall maintain all licenses, permits, certifications,
or other Necessary Authorizations and shall not assign or transfer any interest
in any license, permit, certificate or other Necessary Authorization granted to
it by any Governmental Authority, nor shall VERO II or any Physician Owner
assign, transfer, or remove or permit any other individual or entity to assign,
transfer or remove any records of VERO II or any Physician Owner, including
without limitation, patient records, medical and clinical records (except for
removal of such patient records required under any Applicable Law).

15.3. Transaction with Affiliates. Neither VERO II nor any Physician Owner
shall enter into any transaction or series of transactions, whether or not
related or in the ordinary course of business, with any Affiliate of VERO II or
Company, other than on terms and conditions substantially as favorable to VERO
II or the Physician Owner, as would be obtainable by VERO II or the Physician
Owner at the time in a comparable arms-length transaction with a person not an
Affiliate.

15.4. Compliance with All Laws. VERO II and each Physician Owner shall use
their best efforts to comply with all laws and regulations relating to VERO II's
practice and the operation of any facility, including, but not limited to, all
state, federal and local laws relating to the acquisition or operation of a
health care practice. Furthermore, neither VERO II nor any Physician Owner shall
intentionally violate any Governmental Rules and Regulations.

15.5. Third-Party Payor Programs. VERO II shall maintain VERO II's
compliance with the requirements of all Third-Party Payor Programs in which VERO
II is currently participating or authorized to participate.

15.6. Change in Business or Credit and Collection Policy. VERO II shall
not make any change in the character of VERO II's business or in the credit and
collection policy, which change would, in either case, impair the collectibility
of any Purchased A/R or any Merger A/R or otherwise modify, amend or extend the
terms of any such account other than in the ordinary course of business.

15.7. Treatment of Accounts Receivable. VERO II will (i) treat transfers
to Company of Accounts Receivable hereunder as a sale for all purposes,
including tax and accounting (and shall accurately reflect such sale in its
financial statements), and will advise all persons who inquire about the
ownership of such Accounts Receivable that they have been sold to Company; (ii)
not treat any such Accounts Receivable as an asset on VERO II's books and
records; (iii) record in VERO II's books, records and computer files pertaining
thereto that such Accounts Receivable have been sold to Company; (iv) pay all
taxes, if any, relating to the transfer of such Accounts Receivable after the
same have been purchased by Company; (v) not impede or interfere with Company's
collection of such Accounts Receivable; (vii) not amend, waive or otherwise
permit or agree to any deviation from the terms or conditions of such Accounts
Receivable; (viii) use all reasonable efforts to obtain all consents from
patients which are required by law in order for Company, or any servicing entity
retained by Company, to secure information needed to obtain or to expedite
payment from the respective Account Debtors; and (ix) have billed such Accounts
Receivable on the same bases and using the same policies and practices that it
has used in the past unless Company has been advised in writing of a change
prior to the purchase of such Accounts Receivable. Company or its designated
representatives from time to time may verify the Accounts Receivable, inspect,
check, take copies or extracts from VERO II's books, records and files, and VERO
II will make the same available to Company or such representatives at any
reasonable time for such purposes.

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15.8. Security Interest. If, contrary to the mutual intent of VERO II and
Company, any purchase of Purchased A/R is not characterized as a sale, VERO II
shall, effective as of the date hereof, be deemed to have granted (and VERO II
does hereby grant) to Company a first priority security interest in and to any
and all of the Purchased A/R and the proceeds thereof to secure the repayment of
all amounts advanced to VERO II hereunder with accrued interest thereon, and
this Agreement shall be deemed to be a security agreement. With respect to such
grant of a security interest, Company may at its option exercise from time to
time any and all rights and remedies available to it under the UCC or otherwise.
VERO II agrees that five (5) days shall be reasonable prior notice of the date
of any public or private sale or other disposition of all or part of the
Purchased A/R. VERO II represents and warrants that the location of VERO II's
principal place of business, and all locations where VERO II maintains records
with respect to its accounts are set forth under its name in Section 16.3
hereof. VERO II agrees to notify Company in writing thirty (30) days prior to
any change in any such location. The exact name of VERO II is as set forth at
the beginning of this Agreement, and except as set forth on the signature page
hereof, VERO II has not changed its name in the last five (5) years, and during
such period VERO II did not use, nor does VERO II now use, any fictitious or
trade name. VERO II shall notify Company in writing thirty (30) days prior to
any change in any such name.

ARTICLE XVI.

GENERAL PROVISIONS

16.1. Assignment. Company shall have the right to assign its rights
hereunder to any person, firm or corporation under common control with Company
and to any lending institution from which Company obtains financing, including
but not limiting the restrictive covenants included in Article VII (covenant not
to compete), for security purposes or as collateral. VERO II agrees to, and
acknowledges, Company's right to assign Company's rights under this Agreement to
any Lender and further agrees that upon receipt of written notice from such
Lender, VERO II shall pay to Lender or cause to be paid to Lender all amounts
which are otherwise payable to Company pursuant to the terms of this Agreement,
including, without limitation, all service fees, and other Clinic Expenses and,
until such amounts are delivered to Lender, hold payments in trust for Lender.
Except as set forth above, neither Company nor VERO II shall have the right to
assign their respective rights and obligations hereunder without the written
consent of the other party. Without limiting the foregoing, VERO II acknowledges
that, as collateral for certain obligations, Company has assigned all of its
rights hereunder to NationsBank of Tennessee, N.A. as Agent (the "Agent") for
itself and other banks and institutional lenders from time to time (collectively
the "Banks") and has granted the Agent for the benefit of the Banks a lien and
security interest upon all real and personal property used in the operation of
the Office Locations (the "Pledged Assets"). As an inducement for the Banks to
extend or continue the extension of credit to Company, VERO II (i) acknowledges
that the collateral assignment to the Agent covers all rights of Company
hereunder, including, but not limited to, rights arising from warranties and
representations made by VERO II, rights to enforce covenants made by VERO II,
and rights to receive all payments due Company; (ii) agrees to regard the Agent
as the owner of any or all of the assigned rights upon written notice to VERO II
of this election from the Agent; (iii) agrees that neither the Agent nor any of
the Banks has obligation for the performance of the duties of Company hereunder,
and shall not assume any such duty by the exercise of rights as a secured
lender; (iv) agrees to give the Agent written notice of any material default
hereunder on Company's part at the address of 1 NationsBank Plaza, Nashville,
Tennessee 37239, Attn: David Dupuy, and to allow at least thirty (30) days
thereafter for the cure of such default before VERO II terminates this
Agreement; (v) agrees that the rights of VERO II under this Agreement,
including, but not limited to, the right to the use of the Pledged Assets, are
and shall be junior to any security interest that the Agent and the Banks, their
successors or assigns may have in the Pledged Assets at any time; (vi) agrees
that the benefits of the above undertakings in favor of the Agent and Banks
shall further extend to all successors and assigns of the Agent and Banks,
provided that any notices given by VERO II under this Section shall be given to
the Agent at the foregoing address unless VERO II has received written notice of
a change thereof; and (vii) agrees that this Section may not be modified, and no
provision of this Section may be waived, absent the written approval of the
Agent.

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To Company: Specialty Care Network, Inc.
44 Union Boulevard
Suite 600
Lakewood, Colorado 80228
Attention: Kerry Hicks

With a copy to: Baker, Donelson, Bearman & Caldwell
165 Madison Avenue
Suite 2000
Memphis, Tennessee 38103
Attention: David T. Popwell, Esq.

To VERO II: Vero Orthopaedics II, P.A.
1260 37th Street
Vero Beach, Florida 32960
Attention:__________________

With a copy to: Clem, Polackwich, Vocelle & Taylor
Univest Bldg., Suite 501
2770 N. Indian River Blvd.
Vero Beach, Florida 32960
Attention: James A. Taylor, III

or to such other address as either party shall notify the other.

16.4. Binding on Successors. Subject to Section 16.1, this Agreement shall
be binding upon the parties hereto, and their successors, assigns, heirs and
beneficiaries.

16.6. Governing Law. The validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida.

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<PAGE>

16.11. Time is of the Essence. Time is hereby expressly declared to be of
the essence in this Agreement.

16.12. Confidentiality. No party hereto shall disseminate or release to
any third party any information regarding any provision of this Agreement, or
any financial information regarding the other (past, present or future) that was
obtained by the other in the course of the negotiations of this Agreement or in
the course of the performance of this Agreement, including, but not limited to,
any information relating to the internal operations of VERO II, VERO II fees or
the terms of any of the managed care contracts, without the other party's
written approval; provided, however, the foregoing shall not apply to
information which (i) is generally available to the public other than as a
result of a breach of confidentiality provisions; (ii) becomes available on a
non-confidential basis from a source other than the other party or its
affiliates or agents, which source was not itself bound by a confidentiality
agreement; (iii) which is required to be disclosed by law or pursuant to court
order (Company shall provide VERO II with copies of any information regarding
VERO II provided by Company to any third party); or (iv) except for disclosure
to its bank, underwriters or lenders, or its advisors to the extent required by
Section 9.4, or as required in connection with reports on filings with the SEC
or State Departments of Securities.

16.13. Contract Modifications for Prospective Legal Events. If any state
or federal laws or regulations, now existing or enacted or promulgated after the
effective date of this Agreement, are interpreted by judicial decision, a
regulatory agency or legal counsel in such a manner as to indicate that the
structure of this Agreement may be in violation of such laws or regulations,
VERO II and Company shall amend this Agreement as necessary. To the maximum
extent possible, any such amendment shall preserve the underlying economic and
financial arrangements between and among VERO II and Company.

16.15. Language Construction. The language in all parts of this Agreement
shall be construed, in all cases, according to VERO II's fair meaning, and not
for or against either party hereto. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

16.16. No Obligation to Third Parties. Except as provided in Section 16.1,
none of the obligations and duties of Company or VERO II under this Agreement
shall in any way or in any manner be deemed to create any obligation of Company
or of VERO II to, or any rights in, any person or entity not a party to this
Agreement.

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<PAGE>

16.17. Communications. VERO II and Company agree that good communication
between the parties is essential to the successful performance of this
Agreement, and each pledges to communicate fully and clearly with the other on
matters relating to the successful operation of VERO II's practice at the
Practice Offices.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

COMPANY:

SPECIALTY CARE NETWORK, INC.

By:________________________________________

Title:_____________________________________

VERO II:

VERO ORTHOPAEDICS II, P.A.

By:________________________________________

Title:_____________________________________

PHYSICIAN OWNERS:

____________________________________________
James L. Cain, M.D.

____________________________________________
David W. Griffin, M.D.

____________________________________________
George K. Nichols, M.D.

____________________________________________
Peter G. Wernicki, M.D.

____________________________________________
Charlene Wilson, M.D.

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