Nonqualified Stock Option Plan and Agreement - Sutter Surgery Centers Inc. and Timothy R. Kelly


                   SUTTER SURGERY CENTERS, INC., NONQUALIFIED
                     STOCK OPTION PLAN AND AGREEMENT (KELLY)

         THIS  AGREEMENT  is entered  into as of May 16,  1994,  between  SUTTER
SURGERY CENTERS,  INC., a Delaware  corporation (the 'Company'),  and TIMOTHY R.
KELLY (the 'Optionee').

                                    Recitals

         The Company's Board has established  this Agreement in order to fulfill
the  Company's  obligation  under  Section  3 of  the  Consulting  Agreement  by
providing  the  Optionee  with an  opportunity  to acquire  common  stock of the
Company;

         NOW, THEREFORE, it is agreed as follows:

                                    Agreement

ARTICLE 1. GRANT OF OPTION.

         On the terms and conditions  stated below, the Company hereby grants to
the Optionee the option to purchase TWENTY-FIVE THOUSAND (25,000) Shares for the
sum of ONE DOLLAR ($1.00) per Share,  the Fair Market Value of the Shares.  This
Option is not intended to be an incentive stock option  described in section 422
of the Code.

ARTICLE 2. NO TRANSFER OR ASSIGNMENT OF OPTION.

        Except as  otherwise  provided  in this  Agreement,  this Option and the
rights and  privileges  conferred  hereby  shall not be  transferred,  assigned,
pledged or  hypothecated  in any way,  whether by operation of law or otherwise,
and shall not be subject to sale under execution, attachment or similar process.
Except as otherwise  provided  herein,  upon any transfer,  assignment,  pledge,
hypothecation or other  disposition of this Option, or of any right or privilege
conferred  hereby,  contrary to the  provisions  hereof-,  or any sale under any
execution,  attachment  or  similar  process  upon  the  rights  and  privileges
conferred  hereby,  this Option and the rights and privileges  conferred  hereby
shall immediately become null and void.




ARTICLE 3. RIGHT TO EXERCISE.

         3.01.  Vesting.  Optionee may  exercise  this Option only to the extent
that  the  Optionee's  interest  in  this  Option  has  vested.  Subject  to the
conditions  stated in this  Agreement,  the right to exercise  this Option shall
accrue in installments as follows:

                                     No. of             Percentage of
       Vesting Period                Shares           Shares Exercisable

        May 16,1995                  5,000                   20%
        May 16,1996                 10,000                   40%
        May 16,1997                 15,000                   60%
        May 16,1998                 20,000                   80%
        May 15,1999                 25,000                  100%
          Total                     25,000                  100%

         In the case of each  vesting  period,  the  number  of Shares of common
stock, if any, previously purchased under this Option shall be deducted from the
amount of Shares  Optionee is entitled to acquire.  Any other  provision of this
Agreement notwithstanding,  if the Optionee does not provide consulting services
under the Consulting  Agreement for any reason, and (i) the Consulting Agreement
is still in effect,  and (ii) the Company has provided the Optionee with written
notice that, although the Consulting  Agreement is still in effect, the Optionee
is not  currently  providing  consulting  services to the Company  (referred  to
herein as a 'Lapse  Notice'),  then the date when any installment of this Option
would otherwise become exercisable under the foregoing schedule shall be delayed
for a period equal to the duration of the Lapse  Notice.  The Lapse Notice shall
be of no further  effect once the Company has  notified  the  Optionee  that the
Lapse Notice has terminated.

         3.02.  Periods of  Nonexercisability  . This Section 3.02 shall prevail
over any other  portion of this  Agreement.  The Company shall have the right to
designate  as many as two (2)  periods of time,  each of which  shall not exceed
twelve (12) consecutive months in length,  during which this Option shall not be
exercisable.  The  Company  may only make such a  designation  if it  reasonably
determines that such a limitation on exercise is reasonably likely to facilitate
(i) a lessening of any restriction on transfer pursuant to the Securities Act or
any state

                                       -2-

securities  laws  on any  issuance  of  securities  by  the  Company,  (ii)  the
registration  or  qualification  of any  securities  by the  Company  under  the
Securities  Act or any state  securities  laws,  or (iii) the  perfection of any
exemption from the registration or qualification  requirements of the Securities
Act or any applicable  state securities laws for the issuance or transfer of any
securities. This limitation on exercise shall not alter the vesting schedule set
forth in Section  3.01 other than to limit the periods  during which this Option
shall be  exercisable.  The Optionee  shall be notified in writing in advance of
any such designation by the Company.

         3.03. Listing, Registration or Qualification of Shares. If the listing,
registration  or  qualification  of the  Shares  subject  to this  Option on any
securities  exchange  or under any state or  federal  law or if the  consent  or
approval of any regulatory  body is necessary in connection with the granting of
this  Option or the  delivery  or  purchase  of Shares,  this  Option may not be
exercised, in whole or in part, until such listing, registration, qualification,
consent or approval has been effected or obtained.  The Company shall make every
reasonable   effort  to  effect  or  obtain  any  such  listing,   registration,
qualification, consent or approval as may be required.

ARTICLE 4.        EXERCISE PROCEDURES.

         4.01.    Notice of Exercise.

                  A. The Optionee may exercise  this Option by giving  notice to
the Chief Financial  Officer of the Company.  In the notice,  the Optionee shall
specify (i) the election to exercise  this Option;  (ii) the number of Shares to
be issued;  and (iii) the form of payment for such Shares.  The  Optionee  shall
sign the notice.  The Optionee  shall deliver the notice to the Chief  Financial
Officer of the Company; and at the time of giving the notice, the Optionee shall
make payment in a form  permissible  under  Article 5 for the full amount of the
Purchase Price. The notice shall be in the form attached as Exhibit 4.01.

                  B. A  representative  of the Optionee may exercise this Option
on behalf of the Optionee in accordance  with the procedures of Section  4.0l.A.
In addition to the  procedures  of Section  4.0l.A.,  the  representative  shall
provide proof satisfactory to the Company of the representative's authority as a
condition of the representative's right to exercise this Option.

         4.02.  Issuance of Shares.  After receiving a proper notice of exercise
and full  payment for the  Shares,  the Company  shall  issue a  certificate  or
certificates  for the Shares  subject to this Option  exercised by the Optionee,
registered in the name of

                                       -3-


the Optionee (or a person set forth in Section 6.03), or, if so specified in the
notice  of option  exercise,  in the names of the  Optionee  and the  Optionee's
spouse as community property or as joint tenants with right of survivorship. The
Company shall deliver any certificates representing the Shares to the Optionee.

ARTICLE 5.        PAYMENT FOR STOCK.

         The Optionee  shall pay for the entire  Purchase Price in United States
dollars,  or, at Optionee's  discretion,  Optionee may elect to surrender Shares
provided the Shares have been held for more than six (6) months and provided the
Shares are surrendered to the Company in good form for transfer and the transfer
will not cause Optionee or the Company to be in violation of the Securities Act,
the Securities Exchange Act, or state securities laws.

         The combined  amount paid in cash and the value of  surrendered  Shares
must  equal the  Purchase  Price.  The Board  shall  determine  the value of any
surrendered Shares.

ARTICLE 6.        TERM AND EXPIRATION.

         6.01.  Basic  Term.  This  Option  shall  expire on May 15, 2000 unless
extended due to a delay as  described  in Section 3.02 with the delay  occurring
after  the  second  (2nd)  anniversary  of the  Date of  Grant.  If a  delay  in
exercising  this Option (as  described in Section  3.02) occurs after the second
(2nd)  anniversary  of the  Date of  Grant,  the  term of this  Option  shall be
extended by one day for each day of such delay  occurring after the second (2nd)
anniversary of the Date of Grant.

         6.02.  Termination  of Service  (Except by  Death).  If the  Optionee's
Service  terminates  for any reason  other than death,  then this  Option  shall
expire  on the  earliest  of the  following  occasions:  

                  A. The date determined pursuant to Section 6.01, above;

                  B. The date  twelve  (12)  months  after  the  termination  of
Optionee's Service without cause by the Company pursuant to Section 10.A. of the
Consulting Agreement; or

                  C.  The  date  ninety  (90)  days  after  the  termination  of
Optionee's  Service for any reason other than termination of Optionee's  Service
without  cause by the  Company  pursuant  to  Section  10.A.  of the  Consulting
Agreement.

                  The  Optionee  may  exercise all or part of this Option at any
time before its expiration under the preceding sentence,  but only to the extent
that this

                                       4-


Option had become  vested  before the  Optionee's  Service  terminated,  and the
balance of this Option shall lapse when the Optionee's  Service  terminates.  If
the Optionee dies after the  termination of Service but before the expiration of
this Option,  all or part of this Option may be exercised  (prior to expiration)
by the executors or administrators of the Optionee's estate or by any person who
has acquired  this Option  directly  from the  Optionee by bequest,  beneficiary
designation  or  inheritance  but only to the extent that this Option had become
vested before the Optionee's Service terminated.

         6.03.  Death of 0ptionee.  If the Optionee dies while in Service,  then
this Option shall expire on the earlier of the following dates:

                  A. The  expiration  date  determined  pursuant to Section 6.01
above; or

                  B. The date twelve (12) months after the Optionee's death. All
or part of this Option may be exercised at any time before its expiration  under
the preceding  sentence by the  executors or  administrators  of the  Optionee's
estate or by any person who has acquired this Option  directly from the Optionee
by bequest,  beneficiary  designation or inheritance but only to the extent that
such  Option(s)  had  become  vested  before  the  Optionee's  death  or  became
exercisable as a result of the Optionee's  death.  The balance of such Option(s)
shall lapse when the Optionee dies.

ARTICLE 7. LEGALITY OF INITIAL ISSUANCE.

         Shares  shall be issued  upon the  exercise  of this Option only if the
Company  has  determined  that (i) it and the  Optionee  have taken any  actions
required by law to register the Shares under the Securities Act or to perfect an
exemption  from the  registration  requirements  thereof;  (ii)  any  applicable
listing  requirement  of any stock  exchange or automated  quotations  system on
which the Shares are listed has been satisfied;  and (iii) any other  applicable
provision of state or federal securities law has been satisfied.

ARTICLE 8.     REGISTRATION RIGHTS.

         The Company may, but shall not be obligated to, register or qualify the
resale  of  Shares  by the  Optionee  under  the  Securities  Act  or any  other
applicable  law.  The Company  shall not be  obligated  to take any  affirmative
action in order to cause a resale of Shares to comply with any law. However, the
Company has granted this

                                       -5-

Option  pursuant  to the  terms of Rule 701  under  the  Securities  Act and the
Optionee may resell Shares,  provided the Optionee  complies with the provisions
described in the Option Exercise Form, attached as Exhibit 4.01.

ARTICLE 9.   RESTRICTIONS ON TRANSFER OF SHARES.

         9.01.  Restrictions.  Regardless  of whether the  offering  and sale of
Shares under this  Agreement  have been  registered  under the Securities Act or
have been registered or qualified  under the securities  laws of any state,  the
Company may impose  restrictions upon the sale, pledge or other transfer of such
Shares  (including the placement of appropriate  legends on stock  certificates)
if, in the  judgment of the  Company  and its  counsel,  such  restrictions  are
necessary or desirable in order to achieve  compliance  with the Securities Act,
the securities laws of any state or any other law or with  restrictions  imposed
by the Company's underwriters.

         9.02. Administration.  Any determination by the Company and its counsel
in  connection  with any of the  matters  set  forth in this  Article 9 shall be
conclusive and binding on the Optionee and all other persons.

         9.03.  Investment  Purpose.  The Optionee  hereby  represents  that any
Shares of common stock  purchased upon exercise of this Option will be purchased
for  investment  and not  with a view to the  distribution  thereof  within  the
meaning of the Securities Act. As a condition  precedent to any exercise of this
Option,  the  Optionee  agrees that,  if requested by the Board,  he or she will
promptly  submit a written  statement in a form  satisfactory to counsel for the
Company to the effect  that such  representation  is true and  correct as of the
date of purchase of any Shares hereunder.

                  A. As a further  condition  precedent  to any exercise of this
Option,  the Optionee shall comply with all regulations and  requirements of any
regulatory authority having control of, or supervision over, the issuance of the
common  stock of the Company and, in  connection  therewith,  shall  execute any
documents  which the Board  deems  necessary  or  advisable,  provided  that the
Optionee  shall  not be  required  to bear  any  expense  associated  with  such
compliance.

                  B. By  accepting  this Option,  the  Optionee  agrees that the
Optionee shall not, directly or indirectly, without the prior written consent of
the Company, sell, offer, contract to sell, pledge, grant any option to purchase
or otherwise  dispose of any Shares of common stock acquired by exercise of this
Option for a period  beginning  on the date of the Initial  Public  Offering and
ending one

                                       -6-


hundred  eighty  (180)  days  after  the date that  Shares  of common  stock are
released  by the  Company's  underwriters  for sale to the  public in an Initial
Public  Offering.  Nothing in this Option shall be  construed  as requiring  the
Company to complete or attempt an Initial Public Offering.

                  C.  Each  stock  certificate  issued  by  the  Company  to the
Optionee  upon the  Optionee's  exercise of the Option  granted  shall bear such
legend as the Company deems  necessary or desirable to reflect the provisions of
this Section 9.03.

ARTICLE 10. SHARES AND ADJUSTMENTS.

         10.01.  General. If there is a subdivision of the outstanding Shares, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the value
of  Shares,  a  combination  or  consolidation  of the  outstanding  Shares  (by
reclassification   or   otherwise)   into  a  lesser   number   of   Shares,   a
recapitalization or a similar  occurrence,  the Board shall make all appropriate
adjustments  in both (i) the number of Shares  covered by this Option;  and (ii)
the Exercise Price.

         10.02. Merger;  Consolidation;  Sale; Liquidation.  If the Company is a
party to a merger or consolidation or if there is a sale of all or substantially
all of the Company's assets other than a sale or transfer to a Subsidiary,  this
Option shall be subject to the agreement of merger,  consolidation or sale. Such
agreement  may, as determined by the Board,  provide for: (i) the  assumption of
this Option by the surviving corporation or its parent; (ii) its continuation by
the Company,  if the Company is the surviving  corporation;  (iii) payment for a
cash  settlement  equal to (a) the difference  between the amount to be paid for
one (1) Share under such agreement and the Exercise Price  multiplied by (b) the
number  of  Shares  subject  to the  Option,  vested or  unvested,  or both,  as
determined  by the  Company;  or (iv) the  acceleration  of the  vesting of this
Option,  followed by the  cancellation  of this Option if not exercised,  in all
other  cases other than  clause  (iii)  without  the  Optionee's  consent.  (The
Optionee's  consent  shall be required for a cash  settlement.)  A  cancellation
shall not occur  earlier  than  thirty  (30) days  after  such  acceleration  is
effective  and the  Optionee  has been  notified of such  acceleration.  If this
Option has been  outstanding  for less than twelve (12) months,  a  cancellation
need not be preceded by an acceleration.

         10.03.  Reservation  of Rights.  Except as  provided in Article 10, the
Optionee shall have no rights by reason of (i) any subdivision or  consolidation
of

                                       -7-

shares of stock of any class;  (ii) the  payment of any  dividend;  or (iii) any
other  increase or  decrease in the number of shares of stock of any class.  Any
issue by the Company of shares of stock of any class, or securities  convertible
into shares of stock of any class, shall not affect, and no adjustment by reason
thereof  shall be made with  respect  to,  the number or  Exercise  Price of the
Shares subject to this Option.  The grant of this Option shall not affect in any
way the right or power of the  Company to make  adjustments,  reclassifications,
reorganizations  or changes of its  capital or business  structure,  to merge or
consolidate or to dissolve,  liquidate,  sell or transfer all or any part of its
business or assets.

ARTICLE 11. MISCELLANEOUS PROVISIONS.

         11.01. Withholding Taxes. If the Company determines that it is required
to withhold foreign,  federal,  state or local taxes as a result of the exercise
of this  Option,  the  Optionee,  as a condition to the exercise of this Option,
shall make  arrangements  satisfactory  to the  Company to enable the Company to
satisfy all withholding requirements.

         11.02. Rights as a Stockholder.  The Optionee shall not have any rights
as a  stockholder  with respect to any Shares  subject to this Option until such
Shares have been issued as provided in Section 4.02.

         11.03. No Employment or Directorship Rights.  Nothing in this Agreement
shall be  construed  as giving the Optionee the right to become or be treated as
an Employee of the Company or any  Subsidiary  or a member of the Board.  

         11.04. Notice. Any notice required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal  delivery or two
(2) days after the date of deposit with the United  States  Postal  Service,  by
registered or certified  mail with postage and fees prepaid and addressed to the
party entitled to such notice at the address shown below such party's  signature
on this  Agreement,  or at such other address as such party may designate by ten
(10) days' advance written notice to the other party to this Agreement.

         11.05.  Entire Agreement.  This Agreement and the Consulting  Agreement
constitute  the entire  contract  between the parties  hereto with regard to the
subject  matter hereof and supersede all prior and  contemporaneous  agreements,
representations, warranties and understandings of the parties.

         11.06.  Choice  of Law.  This  Agreement  shall  be  governed  by,  and
construed in accordance with, the laws of the State of California  (exclusive of
its

                                       -8-


laws  regarding  the  conflict of laws),  as such laws are applied to  contracts
entered into and performed in such state.  The state courts of California  shall
have exclusive jurisdiction over any judicial proceeding relating to any dispute
arising out of the interpretation, performance or breach of this Agreement.

ARTICLE 12. DEFINITIONS.

         12.01.  Agreement.  Shall mean this Nonqualified  Stock Option Plan and
Agreement.

         12.02.  Board.  Shall mean the Board of Directors  of the  Company,  as
constituted from time to time.

         12.03. Code. Shall mean the Internal Revenue Code of 1986, as amended.

         12.04.  Consulting  Agreement.  Shall  mean the  Consulting  Agreement,
effective as of May 16, 1994, by and between the Company and the Optionee.
 
         12.05. Date of Grant. Shall mean the date as of which this Agreement is
entered into.

         12.06. Employee. Shall mean any individual who is a common law employee
of the Company or of a Subsidiary.

         12.07.  Exercise  Price.  Shall mean the amount for which one (1) Share
may be purchased upon exercise of this Option as specified in Section 1.01.

         12.08. Fair Market Value.  Shall mean the fair market value of a Share,
as determined by the Board in good faith. Such determination shall be conclusive
and binding on all persons.

         12.09.  Initial Public  Offering.  Shall mean an initial public primary
offering by  underwriters on a firm commitment or best efforts basis in which it
is expected  that the common stock will become  listed on a national  securities
exchange or traded on the Automated Quotation System of the National Association
of Securities Dealers or other over-the-counter-market.

         12.10.  0ption.  Shall mean a stock  option not  described  in sections
422(b) or 423(b) of the Code granted  under this  Agreement  and  entitling  the
Optionee to purchase Shares.

         12.11.  Purchase Price. Shall mean the Exercise Price multiplied by the
number of Shares with respect to which this Option is being exercised.

         12.12.  Securities  Act.  Shall  mean the  Securities  Act of 1933,  as
amended.

                                       -9-

         12.13.  Securities Exchange Act. Shall mean the Securities Exchange Act
of 1934, as amended.

         12.14. Service.  Shall mean consulting service of the Optionee pursuant
to the Consulting Agreement.

         12.15.  Share. Shall mean one (1) share of Common Stock, as adjusted in
accordance with Article 10 (if applicable).

         12.16.  Subsidiary.  Shall mean any corporation,  if the Company or one
(1) or more other Subsidiaries own, individually or collectively,  not less than
fifty  percent  (50%) of the  total  combined  voting  power of all  classes  of
outstanding stock of such corporation.

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed on its behalf by its officer  duly  authorized,  and the  Optionee  has
personally executed this Agreement.

                                    OPTIONEE:


                                        ----------------------------------
                                                 TIMOTHY R. KELLY 

                                       Address:
                                               ---------------------------
                                               ---------------------------

                                    COMPANY:

                                       SUTTER SURGERY CENTERS, INC., a
                                       Delaware corporation



                                       By
                                          -------------------------------
                                       Its
                                          -------------------------------
                                       Address:   1201 Alhambra BlvD., Ste. 330 
                                                  Sacramento, CA 95816








                                      -10-


                                  EXHIBIT 4.01

                              OPTION EXERCISE FORM


































                                                       Date: __________________

                            NONQUALIFIED STOCK OPTION

                                  EXERCISE FORM



Sutter Surgery Centers, Inc.
Attention: Chief Financial Officer
1201 Alhambra Boulevard, Suite 330
Sacramento, CA 95816

        The undersigned elects to exercise the option to purchase_______________
(__________) shares of common stock (the  'Shares') of Sutter  Surgery  Centers,
Inc. (the 'Company'),  in accordance with the nonqualified  stock option granted
to the undersigned by the Company as of May 16, 1994, pursuant to a Nonqualified
Stock Option Plan and Agreement (the 'Agreement').

         Prior to the issuance of these Shares,  I will make full payment of the
purchase price for the Shares by one of the following methods as indicated:

         [ ]     In cash in the amount of

         [ ]     By  tender  of Shares of the Company  owned by the  undersigned
                 for more than six (6) months,  having a fair market  value when
                 combined  with  other  forms of  payment  of not less  than the
                 purchase price.

         Please  issue the Shares to  ____________________________________[i.e.,
Optionee;  Optionee and spouse as community property;  or Optionee and spouse as
joint tenants with right of survivorship].

         I  represent  and agree that I am over  eighteen  (18) years of age and
that I have no present intention to transfer,  sell or otherwise dispose of such
Shares,  except as permitted  pursuant to the Agreement  and in compliance  with
applicable securities laws.

         I acknowledge  and  understand  that the Company has granted the Option
pursuant  to the  terms  of Rule  701  under  the  Securities  Act and  that the
following provisions relating to the resale of my Shares shall apply:

                       (A) If I am not an affiliate  of the Company,  as defined
                  in Rule 144 of the Securities Act of 1933 ('Securities  Act'),
                  I may  resell my Shares  ninety  (90) days  after the  Company
                  becomes subject to the reporting requirements of section 13 or
                  15(d) of the Securities  Exchange Act of 1934 ('Exchange Act')
                  (e.g.,  ninety (90) days after the  Company's  Initial  Public
                  Offering);  provided I comply with Rule 144 of the  Securities
                  Act's  manner of sale  limitations  set  forth in Rule  144(f)
                  (e.g., my Shares are sold in a 'broker's  transaction' or to a
                  'market maker'); or

                       (B) If I am an affiliate  of the  Company,  as defined in
                  Rule 144 of the Securities  Act, I may resell my shares ninety
                  (90) days after the Company  becomes  subject to the reporting
                  requirements of section 13 or 15(d) of the Exchange Act (e.g.,
                  ninety (90) days after the Company's Initial Public Offering);
                  provided I comply  with all of the  provisions  of Rule 144 of
                  the  Securities  Act, other than Rule 144(d)  (holding  period
                  requirement).

         I further  acknowledge  and understand  that,  if, for any reason,  the
Shares are not covered by the exemption  contained in Rule 701 of the Securities
Act, the Shares must be sold under the provisions of Rule 144. These  provisions
include,  among other things:  the  availability  of certain public  information
about the  Company,  the Shares  being held for a minimum of two (2) years,  the
sale being made (i) through a broker in an unsolicited 'broker's transaction' or
(ii) to a market maker, and the amount of securities being sold during any three
(3) month period not exceeding  specified  limitations  (generally,  one percent
(1%) of the total amount outstanding).

         Moreover,  I further acknowledge and understand that if the Company has
registered  the  Shares  on Form  S-8 (or any  successor  form),  the  following
provisions shall apply:

                                       -2-

                       (A) If I am not an affiliate of the Company, I may freely
                  resell my Shares, subject to any contractual obligations I may
                  have to the Company; or

                       (B) If I am an affiliate of the Company,  I may resell my
                  Shares,  subject  to (i) the  provisions  of  Rule  144 of the
                  Securities   Act,  other  than  Rule  144(d)  (holding  period
                  requirement);  and (ii) any contractual  obligations I have to
                  the Company.

         I  understand  that the Shares may be  subject to the  restrictions  on
transfer set forth in Article 9 of the Agreement.

         I agree to obtain the consent of my spouse for any such agreement which
may be required by Company.

         My address of record is:

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

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

and my Social Security number is:
                                 ---------------------------
                                     Very truly yours,



                                     -------------------------------------
                                                TIMOTHY R. KELLY

                                       -3-



         The undersigned,  being the spouse of  _______________________________,
does  hereby  acknowledge  that he or she has  read  and is  familiar  with  the
provisions  of the  above  Nonqualified  Stock  Option  Exercise  Form  and  the
Agreement,  and he or she hereby agrees thereto and joins therein to the extent,
if any, that his or her agreement and joinder may be necessary.

         DATED:
               ---------------------------

                                                --------------------------------
                                                             Signature


                                                --------------------------------
                                                             Print Name




Receipt of the above is hereby 
acknowledged:

SUTTER SURGERY CENTERS, INC.,
a Delaware corporation



By
  -------------------------------

Its
   ------------------------------

Dated:
      ---------------------------