10-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934

For the fiscal year ended May 31, 1997

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the transition period ________ to _________

                           Commission File No. 0-9833

                             UNIHOLDING CORPORATION
             (Exact name of registrant as specified in its charter)

       Delaware                                            58-1443790
(State or other jurisdiction                           (I.R.S. Employer
of incorporation)                                      Identification Number)

96 Spring Street, New York, New York                         10012
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code: (212) 219-9496

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $0.01 Par Value Per Share
                                (title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.[ ]

As of October 14, 1997, 7,632,970 shares of Registrant's Common Stock, par value
$0.01 per share, were outstanding. The aggregate market value of the Common
Stock, based on the closing price on The Nasdaq Stock Market/Nasdaq Small Cap as
of October 14, 1997, held by nonaffiliates of the Registrant was approximately
$33 million.

                       DOCUMENTS INCORPORATED BY REFERENCE

Page 1 of __





                                     PART I


ITEM 1. BUSINESS

1.1  General

     UniHolding Corporation (the "Company" or "UniHolding") is a Delaware
corporation organized in 1987. The present name of the Company was adopted
August 30, 1993, as UniHolding Corp. and modified into UniHolding Corporation in
December 1995. The Company's principal business and operations are in European
clinical laboratory testing services (the "Diagnostic Laboratory Division"), and
in clinical trials testing for the pharmaceutical industry (the "Clinical Trials
Division").

     The Company entered the clinical laboratory industry on March 31, 1994,
when the Company acquired a majority interest in a group of companies in the
European clinical laboratory industry pursuant to a Stock Exchange Agreement
dated March 9, 1994 (the "Acquisition Agreement") with Unilabs Holdings SA, a
Panama corporation ("Holdings"). In accordance with the Acquisition Agreement,
the Company (1) issued 3,275,865 shares of Common Stock, par value $0.01 (the
"Common Stock") to Holdings thereby giving Holdings 65.75% of the outstanding
shares of the Company, (2) issued a promissory note in the principal amount of
$18 million bearing interest at the annual rate of five percent (5%) to
Holdings, and (3) canceled a loan in the approximate amount of $2.9 million due
to the Company from Holdings. In exchange, the Company received 60% of the
outstanding shares of Unilabs Group Limited, a British Virgin Islands
corporation ("UGL"), and 100% of the outstanding shares of Uni Clinical
Laboratories UCL Engineering SA, a Switzerland corporation ("UCLE") from
Holdings. Pursuant to the terms of the Acquisition Agreement, the Company also
received options to purchase Holdings' majority interests in its Italian and
Spanish operating subsidiaries, which the Company exercised on May 31, 1995.

     UGL is a medical services holding company. UGL is the majority shareholder
of Unilabs SA, a Switzerland corporation ("ULSA"), which, through a number of
substantially wholly owned subsidiaries, supplies clinical testing services in
Switzerland, the United Kingdom, Spain and Italy. UGL also has a wholly-owned
subsidiary, Global Unilabs Clinical Trials Limited, a British Virgin Islands
corporation ("GUCT"), which is the majority shareholder of Unilabs Clinical
Trials International, Inc., a Delaware corporation ("UCTI"). UCTI supplies
clinical trials testing services dedicated to the pharmaceutical industry in the
United States and in Europe.

     Since its inception in 1987, ULSA's Swiss operations have grown into the
largest clinical laboratory group in Switzerland, with a network of 7
laboratories which provide a full spectrum of clinical laboratory tests that are
used in the diagnosis, monitoring and treatment of diseases and illnesses.

     Laboratory testing services in the United Kingdom are provided through
ULSA's wholly-owned subsidiary, Unilabs Group (UK) Limited ("UGUK", formerly
United Laboratories Limited, "ULL"), a holding company, which holds 100% of
Unilabs Clinical Pathology Limited ("UCP", formerly JS Pathology, "JSP"),
Farrer-Brown Histopathology Limited ("FBH"), and Unilabs Trust Laboratories


                                      I-1



Limited ("UTL"), all of which are United Kingdom corporations.

     UGL acquired UCP on November 10, 1993. UGUK was formed by UGL shortly after
the acquisition of UCP, and UCP was then transferred to UGUK in a
reorganization. Thereafter, FBH was acquired on January 1, 1994 by UGUK. UTL was
formed in November 1994 in order to manage the contract with the North
Hertfordshire NHS Trust signed on August 11, 1994. On May 29, 1995, with a view
to streamlining the European subsidiary structure, UGL sold UGUK to ULSA.

     On June 30, 1995, the Company acquired the remaining 40% of UGL from Unilab
Corporation, a Delaware corporation, in consideration for $13 million in cash,
the assumption of a $2 million note due by Unilab Corporation to UCP, and a $15
million one year note (the "Unilab Note"). As a result of the above acquisition,
the Company owns 100% of UGL. The Unilab Note converted as of January 1, 1997,
into 1,394,963 shares of the Company's Common Stock.

     On May 31, 1995, the Company exercised the options granted under the terms
of the Acquisition Agreement for the purchase of Holdings' majority interests in
the Italian and Spanish operations (the "Italian Option" and the "Spanish
Option"). The Company exercised the Italian Option obtaining 100% of Istituto
Medico Di Torino SpA and 50% of Medil Srl at an exercise price of Sfr 5.3
million ($4.5 million) in the form of a one year interest-bearing promissory
note (the "Italian Note"). The Company exercised the Spanish Option obtaining
98% of United Laboratories Espana S.A. at an exercise price of Sfr 3.3 million
($2.8 million) in the form of a one year interest-bearing promissory note (the
"Spanish Note"). Both the Italian Note and the Spanish Note were offset against
cash advances previously made to Holdings. On December 9, 1996, with a view to
further streamlining the European structure, the Italian and Spanish operations
were transferred to ULSA.

     UCLE is a wholly-owned subsidiary of the Company acquired pursuant to the
Acquisition Agreement. UCLE was organized in December 1991 basing its operations
in Geneva, Switzerland. Until May 31, 1996, UCLE provided scientific and quality
control services, primarily to the Company's laboratories. During the year ended
May 31, 1997, all remaining personnel of UCLE have been transferred to other
subsidiaries (primarily ULSA). UCLE is at present a dormant company.

     On March 1, 1995, the Company entered into a Cooperation Agreement, a
Licensing Agreement and a Marketing Agreement (together referred to as the "NDA
Agreements") with NDA Clinical Trials Services Inc., a Delaware corporation
based in New York. The NDA Agreements were intended to provide a global product
of laboratory testing services to the pharmaceutical industry in clinical
evaluations in the United States and Europe utilizing similar procedures in
testing and data management. The Company has established two new European
subsidiaries to undertake the laboratory testing for clinical evaluations in
Europe, Unilabs Clinical Trials Limited, a United Kingdom subsidiary ("UCT"),
and UCT Software SA ("UCTS", formerly Pharmasoft SA), a Swiss subsidiary. Such
service is provided using the laboratory facilities of UCP in London and those
of the Company's subsidiary in the United States, NDA. On June 1, 1996, UCT
acquired the clinical trials business thus far performed


                                      I-2



by UCP, for a consideration comprising a note of $610,000 and the establishment
of a five-year agreement between UCT and UCP for the provision of testing and
administrative services by UCP and the renting of space in UCP's facilities. The
price for the subcontracting of testing has been fixed such that UCP makes a
profit over the period of the contract which, together with the $610,000 note,
equals the fair value of the business as of June 1, 1996. As of October 16,
1995, the Company entered into a Stock Purchase Agreement and an Option
Agreement with NDA. Under these Agreements, the Company acquired 17% of NDA's
capital through the purchase of newly-issued shares, together with an option to
increase its stake in NDA to 30% on or before May 31, 1998. The consideration
for the acquisition of 17% was $1,188,000 paid in cash at closing.
Simultaneously, UCT granted to NDA and NDA's stockholders (excluding the
Company), an option to subscribe to new shares of UCT. This option was
contingent upon the Company exercising its option on 13% of NDA's equity. As of
July 23, 1996, the reciprocal options on 13% of NDA's equity and on new shares
of UCT were terminated by mutual consent. As of July 23, 1996, the Company
transferred the assets of its Clinical Trials Division, consisting of 100% of
the equity of UCT, 100% of the equity of UCTS and 17% of the equity of NDA to
its newly formed wholly-owned subsidiary GUCT in exchange for 217,000 ordinary
shares representing all of the issued and outstanding shares of GUCT. The
ownership of the 217,000 shares of GUCT was then transferred to UGL.

     Also on July 23, 1996, the Company, through GUCT, made a loan of $700,000
to NDA. From August 1996 through January 1997, the Company made further loans to
NDA, totaling $1.2 million. GUCT entered into and closed a Master Combination
Agreement ("UCTI Agreement") dated as of January 31, 1997 with NDA and the
stockholders of NDA. Pursuant to the UCTI Agreement, GUCT and the NDA
stockholders contributed their respective holdings in NDA (aggregating 100%) and
GUCT contributed its 100% holdings in UCT and UCTS to a newly-formed Delaware
corporation, UCTI. GUCT also converted an aggregate of approximately $1.9
million of debt of NDA and approximately UK(pound)0.3 million of debt of UCT
into equity of NDA and UCT respectively, which were then exchanged for stock of
UCTI. Further, GUCT contributed approximately $2.2 million to UCTI, which,
together with the other contributions of stock, caused GUCT's ownership in UCTI
to be approximately 70% at January 31, 1997. In May 1997, UCTI offered $7.1
million of convertible notes to all of its shareholders in proportion to their
share of UCTI's equity. GUCT subscribed a note of $5.0 million corresponding to
its approximate 70% ownership. Five other UCTI shareholders subscribed to a
total of $0.3 million, thus leaving an unsubscribed balance of $1.8 million.
Such balance was offered in a second round of subscriptions to those
shareholders who had subscribed to the first round. Accordingly, GUCT subscribed
to an additional $1.7 million, and one other shareholder subscribed to the
balance of $0.1 million. The notes bear interest at the rate of 12% per annum,
payable annually, and the principal is payable on May 16, 2000. Interest and
principal may be repaid by UCTI, at the election of holders of notes
representing at least 66.7% of the aggregate outstanding principal amount,
either in cash or by the issuance of shares of UCTI common stock.

     UCTS is a Swiss company and currently is a wholly-owned subsidiary of 




                                      I-3



UCTI established for the purpose of maintaining and updating the software
systems and support services necessary for the clinical trials operations
performed by UCT.

     On May 30, 1995, the Company formed a wholly-owned subsidiary, Unilabs
Management Company Limited, a Gibraltar corporation ("UMC"), for the purpose of
providing financial consulting, bookkeeping services and other administrative
support to the Company and its subsidiaries. Operations started in July 1995, at
which time UMC was transferred to ULSA for approximately $150,000, a
consideration equal to the issued share capital of UMC.

     On September 14, 1995, UGL entered into an agreement with Health Strategies
Limited, a Jersey, Channel Islands corporation ("HSL", a company which at the
time might be deemed to be related to the Company for the reasons mentioned
elsewhere herein, and which the Company believed might be deemed to be
controlled by a then director of Unilab Corporation), whereby a new company,
MISE S.A., a British Virgin Islands corporation ("MISE") was formed. UGL
invested $3,005,000 in MISE for 33.3% of the voting rights and 66.6% of the
equity of MISE. $2,005,000 was paid during the year ended May 31, 1996, and the
balance was payable in two installments of $500,000 each in September 1996 and
1997. HSL owned the remaining voting and equity interests in MISE for which it
contributed a nominal amount of cash and its agreement to obtain for MISE
certain know-how and related software and services. MISE then acquired for
$1,500,000 certain know-how and computer software from HSL, which know-how and
software were simultaneously acquired for $250,000 by HSL from Medical
Diagnostic Management Inc., a U.S. corporation ("MDM"). Further, MISE committed
to pay HSL a total of $1,500,000 for certain plans for marketing the know-how
and software in several European countries. Out of such amount, $500,000 was
paid during the year ended May 31, 1996, and the balance was payable in two
installments of $500,000 each in October 1996 and 1997. The fee agreed for the
marketing plans also included support services and customization to European
needs. The installment due in October 1996 (as well as the capital contribution
in September 1996) had not been paid principally because HSL had not entirely
delivered all services it committed to deliver. For several months, there was
little communication between the Company and HSL, Unilab Corporation or its
directors. A director of HSL has since resigned as a director of Unilab
Corporation and communications between HSL and the Company were re-established.
The parties then considered several alternatives to achieve their initial goals.
The investment was made so that it provides the Company access to certain
know-how developed by MDM. MDM is a company active in the industry of health
information services in the U.S., and is focusing on organizing and managing
access to discounted provider networks for ambulatory diagnostic services
(radiology, other imaging techniques, and laboratory). MDM is a small company
organized in 1989. Although it has a history of operating losses, it has a
positive net worth. Its strategy is to be a clinical, financial, administrative
and information management intermediary among referring physicians, payers and
diagnostic providers. The know-how acquired by MISE from HSL included, but not
limited to, a certain computerized information system proprietary to MDM. HSL
granted to MISE a perpetual license for the use of the MDM know-how and related
software for use in Western Europe. In addition, HSL agreed to provide marketing
and support 




                                      I-4



services for a three-year period at no further cost to MISE. Both UGL and HSL
agreed to use their best efforts to implement the MISE business in Western
Europe and agreed not to compete with MISE in the same territory. The Company,
through MISE, intended to market the concept, including the computerized
information system, to health insurance companies throughout Europe. The Company
believes that such a concept should be particularly useful and applicable in the
context of the ongoing deregulation of the health care system and may provide a
useful tool to achieve substantial savings in health care costs in several
European countries. As a result of their discussions, HSL, MDM and UGL agreed to
restructure their relationship. First, UGL made its two previously required
$500,000 installment payments to MISE. Upon receipt of those two installments,
MISE paid its two previously required $500,000 installment payments to HSL.
Thereupon, the three parties entered into the restructure agreement. More
specifically, as of May 30, 1997, (i) UGL agreed to sell its MISE shares to HSL,
(ii) HSL agreed to cause MISE to assign to MDM all of its rights related to the
MDM know-how and computer software and (iii) MDM agreed to issue certain
preferred stock of MDM. Such preferred stock is redeemable at MDM's option, in
whole or in part at a total price of $3 million in 1998, escalating to $3.6
million in 2002. Should MDM offer any of its common stock in an initial public
offering, all outstanding shares of preferred stock owned by UGL will be
converted into common stock representing the lesser of (a) 15% of the MDM equity
on a fully-diluted basis after the public offering, or (b) $5 million valued at
the offering price. Further, as part of the agreement, MDM is obligated to use
its best efforts to introduce and implement its business in Europe and MDM will
pay UGL a commission of 5% on its net sales in Europe for a period of seven
years. As a result of this share exchange, the Company does not maintain a
healthcare management services division and no longer considers healthcare
management services to be an industry segment.

     On October 8, 1996, the Company, through its subsidiary Unilabs
International Limited (a British Virgin Islands corporation, "UIL"), signed a
joint venture agreement with the state affiliated company MEDINCENTER of the
Main Administration for Services to the Diplomatic Corps of the Ministry of
Foreign Affairs of the Russian Federation. Pursuant to the agreement, the
Company has invested $120,000 in cash and has agreed to invest a further
$120,000 in cash in fiscal 1998, and will hold 50% of Unimed Laboratories (a
newly-established Russian close joint stock company, "Unimed"), which will
establish a diagnostic laboratory in Moscow and provide a comprehensive range of
clinical laboratory tests to public and private medical institutions, doctors
and patients in Russia. The Company will also provide the venture with certain
engineering services in connection with the construction and establishment of
the new laboratory, and will provide on-going management supervision. The new
Unimed laboratory is expected to start operations on October 15, 1997.

     On January 31, 1997, the Company, through a subsidiary, signed an agreement
for the acquisition of 70% of an Istanbul-based laboratory, with an option to
increase the participation to 95%. The Company made this acquisition together
with another investor, and will thus initially own a controlling interest of
approximately 43% of the Turkish laboratory, for an 



                                      I-5



investment of approximately $0.6 million. This Istanbul laboratory is among the
most well-known private laboratories in the city. The Company expects it to grow
significantly over the next few years, as a result of increasing demand for
state-of-the-art clinical laboratory services in Turkey. The agreement was
closed on May 29, 1997.

     On May 28, 1997, ULSA acquired the remaining shares of Pathologie-Labor
Brunnhof AG ("PLB"), the Bern based laboratory specializing in cytology and
histopathology which was already majority owned by ULSA. The price paid was $2.5
million. The acquisition was recorded as a purchase and the excess of the price
paid over the fair value of the assets acquired, $2.2 million, was allocated to
goodwill.

     The Company had announced on February 27, 1996 that it would be considering
several alternative proposals to maximize shareholder values, including the
selling of a minority or majority stake in some of its operations, and the
floating of one or more of its subsidiaries on a major European exchange. As
part of this plan, UGL and ULSA made an initial public offering of ULSA's
newly-issued and existing shares, which closed on April 24, 1997. Such offering,
which was heavily over-subscribed, was made at the price of SFr.675 per share,
thus valuing the Company's investment of 61% in ULSA as of May 31, 1997, at
SFr.98.8 million (approximately $70 million). The offering comprised the
issuance by ULSA to the public of a further 20% of its equity, and the sale by
UGL of a portion of its holding in ULSA, thereby diluting the Company's holding
in ULSA to 60% post-initial public offering. The shares of ULSA have been listed
on the Swiss Exchange since April 25, 1997. As of September 19, 1997, the quoted
price for one bearer share of ULSA was SFr.654 (approximately $464 at May 31,
1997 exchange rate), thus valuing the Company's investment in ULSA as of May 31,
1997, at SFr.95.7 million (approximately $67.9 million at May 31, 1997 exchange
rate).

     The Company, UGL and ULSA, as well as certain of the Company's direct and
indirect shareholders, have agreed for a certain period of time to respect
certain restrictions regarding the transfer and listing of ULSA's shares held by
them and the maintenance of the existing shareholder control. The restrictions
are summarized as follows: (a) no sale or other transfer of ULSA's bearer shares
and/or registered shares for a period of 24 months from April 25, 1997, without
the prior written consent of the lead manager of the initial public offering;
(b) no listing of the ULSA's registered shares on any securities exchange for a
period of five years from April 25, 1997; and (c) maintenance of existing
majority ownership and effective control of ULSA for a period of 24 months from
April 25, 1997.

1.2 The Clinical Testing Industry in Europe

     Clinical laboratory tests are used by both general practitioners and
specialists and other health care providers to diagnose, monitor and treat
illnesses, diseases and other medical conditions through the detection of
substances or abnormalities in blood, urine or other body fluids and tissue
samples. Clinical laboratory tests are primarily performed in hospitals,
physician-owned laboratories and independent laboratories.


                                      I-6



     The European clinical testing industry differs from the United States
industry as it is characterized by fragmentation and substantial cultural,
social, ethical and regulatory differences from country to country. Overall, the
European clinical testing volume is estimated to be at least $20 billion
annually. There are at least 12,000 active, independent clinical laboratory
companies in Europe. The Company presently operates its laboratory interests in
Switzerland, the United Kingdom, Italy and Spain.

     The Swiss market is an approximately $1.2 billion a year industry, for a
population of approximately 7 million people. Currently, the Company estimates
that physician-owned laboratories represent approximately 50% of the Swiss
clinical testing market, with hospitals (private and public) representing 30%
and private clinical laboratories, including the Company and its subsidiaries
(i.e., ULSA), represent the remaining 20% of the market.

     The clinical laboratory testing market in the United Kingdom (UK) is
dominated by the National Health Service ("NHS"). The NHS spends approximately
$3 billion annually for clinical testing, representing more than 90% of the
market. Otherwise, the industry and market are highly fragmented with at least
200 independent laboratories competing on a local basis. However, the NHS is
implementing a cost control program based on the decentralization of financial
responsibility and the allocation of budgets at a unit level (referred to as
"trusts"). These efforts are expected to provide opportunities for independent
clinical laboratories. Specifically, new UK legislation deems public health care
providers to be trusts and doctors and administrators to be fundholders who have
both the authority and responsibility to run their respective businesses within
a set budget utilizing outside independent contractors, laboratories, etc. to
improve the quality of services and contain costs through competitive bidding.
This process is hoped to bring about increased competition and improved
performance within the industry. In 1995, the Company was awarded the first
contract of this kind in the UK for an NHS hospital.

     The Company estimates that the Italian market for clinical testing services
is approximately $3.2 billion. In Italy, where physicians are prohibited from
performing clinical laboratory tests, tests performed by hospitals and private
laboratories represent approximately 75% and 25% of the total volume,
respectively. There are presently approximately 2,000 private laboratories in
Italy. The Italian health care sector is undergoing radical changes, including
revisions of Social Security reimbursement practices, fueling the emergence of a
growing private health insurance sector. The Company has entered the Italian
market based on the growth potential in the market for private laboratories, and
on the potential for managing public hospitals' laboratories.

     The clinical laboratory testing market in Spain is currently estimated at
$1.6 billion and comprises approximately 1,000 private laboratories, the vast
majority of which are very limited in size. Spain is experiencing rapid growth
in its private health insurance market forcing price containment and
consolidation in the industry. Currently, the Company estimates that private
laboratories represent approximately 25% of the Spanish clinical testing market,
with hospitals (private and public) representing the remaining 75%. 



                                      I-7



Due to the Company's network of laboratories in Spain, management believes the
operations are well situated to take advantage of the changing marketplace.

     With respect to laboratory testing in clinical trials for the
pharmaceutical industry, the market for Phase II and Phase III is now estimated
to be approximately $550 million a year in the U.S. and $600 million a year in
Europe. Approximately 50% of the European market is concentrated within four
countries: the UK, Germany, France and Italy. The market for laboratory testing
and data management services in Europe is expected to continue growing at an
annual rate of 13% to 17%, based on growth in the underlying market for
pharmaceutical research and development expenditures.

     In the Company's view, the European clinical testing services market will
continue to grow based on a number of factors. These include (i) rising health
care expenditures resulting from an aging population, rising standards of living
and the availability of both new and improved treatments for diseases and other
medical conditions, (ii) increasing emphasis placed by health care providers on
preventive care and the early detection of diseases, (iii) increasing
occupational testing by insurance companies and large public and private
employers, (iv) increasing testing for substance abuse, sexually transmitted
diseases and AIDS, (v) increasing numbers and types of clinical tests resulting
from an expanding base of scientific, technical and medical knowledge and (vi)
expanding development of highly automated laboratory testing equipment, leading
to increasing laboratory operating efficiencies.

1.3  Current Operations

     As a result of its decision to expand in the business of clinical testing
in connection with clinical trials performed by the pharmaceutical industry, and
in view of the fact that its former subsidiary MISE had no activity until the
restructuring of this investment, the Company currently considers that it had
two business segments in fiscal years 1996 and 1997 : its core clinical
laboratory business (the Diagnostic Laboratory Division), and the clinical
trials testing business (the Clinical Trials Division). Following are the key
financial data of the respective businesses for purposes of segment information.

                                      I-8




 (in thousands of dollars) :

                                                            Year Ended May 31
                                                        -----------------------
                                                             1997          1996
                                                        ---------     ---------

Revenues from unaffiliated customers:

                 Diagnostic Laboratory Division           $92,635       $92,634
                 Clinical Trials Division                   7,009         4,427

Operating Profit (Loss):

                 Diagnostic Laboratory Division           (22,804)       10,270
                 Clinical Trials Division                  (6,823)       (1,832)


Identifiable Assets:

                 Diagnostic Laboratory Division            89,719       121,052
                 Clinical Trials Division                  15,584         2,200


     While the Clinical Trials Division commenced during the year ended May 31,
1996, the Company, through UCP, already had some activities in the clinical
trials business during the year ended May 31, 1995, which activities were
transferred to UCT as of June 1, 1996. Accordingly, for analysis and comparative
purposes, the activities conducted by UCP in the clinical trials business during
both years have been included under the Clinical Trials Division caption.

Diagnostic Laboratory Operations

     As European clinical laboratories are perceived as proximity services, a
successful service requires personal interaction and on-site facilities which
are capable of producing quality testing. However, these laboratories need to be
supervised, networked and centrally supported to fulfill their role and survive
economically in the changing marketplace.

     On a local level, laboratory operations must be appropriately located in
the cities near hospitals, patients and physicians. Whereas, on a national
level, the operations must be complemented with access to specialized entities
which can produce high-level resources, whether human, scientific or technical
to enhance the service and productivity of each of the operations.

     The Company operates in Switzerland, the United Kingdom, Italy and Spain
within a competitive environment. The Company believes it is the largest
independent clinical laboratory group in each of Switzerland and the United
Kingdom and plans to capitalize on its experience, knowledge, and solid growth
to maintain its market leadership. The Company's laboratory operations offer a
wide range of tests and deliver quality services typically within 24 hours
through the use of highly advanced testing equipment, thorough procedures and
its advanced proprietary data processing systems. The Company centralizes the
development and maintenance of such data processing systems and scientific
control and monitoring in each country to enhance its overall services and




                                      I-9



profitability. The Company also allows each laboratory to have a local
commercial autonomy, while in the aggregate the laboratories are supervised,
coordinated and centrally supported in order to provide for greater
administrative and management efficiencies.

     The Company expects to further develop its market leadership and achieve
further growth in the private health care sector through volume increases,
market share gain and improvement in its test mix, while also continuing to
optimize its operations to achieve maximum efficiencies. In addition, the
Company is now well positioned to capitalize on opportunities in the public
health care sector, primarily in the United Kingdom where the industry is moving
towards privatization thereby allowing private market forces to deliver quality,
efficient medical services within the public system. The Company's size,
economies of scale and experience in acquiring and integrating new operations
furnishes it with a clear competitive advantage. The Company is already leading
the industry in this growth area, having signed the first contract with a large
public hospital in the United Kingdom to manage and operate the hospital's
laboratory and provide other necessary clinical testing through its own
laboratories. On October 30, 1996, ULSA entered into an agreement with a group
of hospitals of the Zurich area to create a central laboratory and emergency
laboratories, which agreement is described in more details elsewhere herein. The
Company intends to pursue other such contracts with large health care providers
in various countries.

     The Italian and Spanish markets offer similar opportunities for growth due
to changes in governmental policies and funding which will be monitored and
pursued to increase the customer bases in those countries if such opportunities
meet the Company's criteria.

     In a rapidly evolving industry which is subject to concentration,
technological innovation and political changes, the Company believes it is
uniquely positioned to take advantage of the opportunities for expansion and
acquisitions that are being created in the European clinical laboratory
industry, where the Company at present is the only multinational group.

     The Company is well-positioned to realize such market expansion and
increased efficiencies due to a number of factors. The management of the Company
believes its experience in operating a network of laboratories of varying sizes
in diverse geographic regions, its automated testing equipment and its
sophisticated data processing (relating to both medical tests and financial
data) and communication systems make it a credible partner for large-scale
health care providers. Increasing pressure for cost containment and improved
quality of health care are leading to consolidation in the highly fragmented
European markets where clinical testing is performed by private laboratories.
Similar pressures are leading health care providers in both the public and
private sector to contract with private laboratories in order to achieve lower
costs, greater efficiency and better quality care. The management of the Company
believes its size, economies of scale and experience in acquiring and
integrating new operations give it competitive advantages in the current and
evolving marketplace.


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Diagnostic Laboratory Services

     The Company's core business is its network of laboratories which offers a
comprehensive range of clinical tests to its clients, performing routine tests
(tests which its laboratories perform every day, irrespective of the discipline
or complexity of the test) and esoteric tests (non-routine and specialized
tests) for physicians, hospitals, clinics, other health care providers and
employers. The laboratories make extensive use of automated testing equipment
and data processing systems. Test results are communicated to its clients by
mail, courier, facsimile, telephone or electronic transmission.

     Examples of the broad range of clinical tests offered include (i) the
testing of blood, urine and other body fluids for the presence or absence of a
specific disease or medical condition; (ii) the cultivation, identification and
treatment of bacterial diseases in connection with the testing for general
infections and tropical parasites; (iii) the detection of viral diseases through
the study of the effects of viral infections on blood serum (including the
testing for hepatitis, many sexually transmitted and tropical diseases, AIDS and
German measles); (iv) pathological testing to detect abnormalities that are
associated with disease in the composition, form or structure of tissue; and (v)
the examination of cells (e.g., PAP smear) under a microscope to detect
abnormalities in composition, form or structure which are associated with
disease. In addition to testing for diseases, routine tests are often performed
in connection with the preparation of patient profiles that include basic
chemical and hematological screening information, such as sugar, urea,
cholesterol, blood count and coagulation levels. Examples of esoteric tests
include tests for antibodies, vitamins and metals, among other substances.

     Most of the Company's laboratories process specimens on a continuous flow
basis, which means that specimens arrive from clients or from collection
stations throughout the day and are processed as soon as possible, most often
within 24 hours. All test results are scanned by computer to identify results
which are not within the standard ranges. Any such results are verified by a
second testing. Final test results are further reviewed by a physician to check
for abnormalities. If, at any time in the course of the testing process, an
imminently life-threatening result is found, the referring physician is
contacted immediately. Results are delivered by mail or courier service or by
telefax, telephone or electronic transmission as instructed by the client.

     The Company offers specialized testing in histopathology and cytology
through two subsidiaries. Its UK subsidiary, FBH, is the largest laboratory of
its kind specializing in this area. FBH is also one of two UK laboratories which
is able to offer PAPNET(TM), a computerized cytology screening system which can
significantly reduce the rate of false negative screening results. PAPNET(TM) is
a registered Trade Mark of NSI Europe B.V. In Switzerland, PLB offers similar
services to a large number of doctors and hospitals throughout the Northern part
of Switzerland.

     The Company was also the first to provide pathology services through a NHS
hospital. The implementation of this contract has been made possible by


                                      I-11



governmental reforms of the NHS. Under the present UK health care structure,
trusts administer the provision of health care, primarily through public
hospitals and general practitioners. Patients are entitled to receive care free
of charge at the point of delivery financed through Government taxation. In
accordance with reforms launched several years ago, each Trust is also
responsible for the delivery of services, and is responsible for its own
financial control within a pre-defined budget. The purpose of the reforms is to
maintain or enhance the quality of health care while containing cost.
Accordingly, the Trusts are encouraged to look for alternative outside service
providers when such could lead to long term savings and economies of scale. In
August 1994, the Company signed a seven year contract to provide pathology
services to the North Hertfordshire NHS Trust at its 400 bed hospital in
Stevenage, England commencing on December 1, 1994. The contract was won through
a competitive tendering process. The on-site laboratory run by the Company
provides pathology services both to the hospital and to local General
Practitioners. The laboratory has been comprehensively renovated by the Company
to provide an efficient open plan work area with certain new machinery. A new
computerized laboratory management system developed by the UGUK group has been
installed. The Company believes that it can effectively contribute to containing
the costs of laboratory services to patients and taxpayers, while assuring an
undisputed high level of service quality.

     On October 30, 1996, ULSA entered into an agreement with a group of 4
private and 3 state-run hospitals located in the Zurich area. Pursuant to the
agreement, ULSA has agreed to create a central laboratory and 3 emergency
laboratories within those hospitals that are not located close to the central
laboratory. The central laboratory will conduct all regular analyses for the
group of hospitals, and ULSA's existing Zurich laboratory will specialize in
handling all esoteric analyses for the group of hospitals. This is the first
agreement of its kind in Switzerland. Construction of the central laboratory was
completed by the end of May 1997, and actual testing started in June 1997. The
central laboratory and the emergency laboratories are not owned by ULSA, but are
subject to an exclusive management contract, which has an initial duration of 7
years.

Clients, Sales, Marketing and Client Service

     The Company's sales strategy is tailored to the requirements of the various
cultural preferences of its clients and patients and the local markets in which
it operates. Each of the laboratories generally operates under its own name with
its own local reference. The Company was careful not to disturb the valuable
existing commercial structures upon acquiring each laboratory. It respects the
cultural diversity and aims to improve and enhance the image of the existing
business rather than promote a group or network concept.

     The Swiss laboratories direct their marketing efforts to physicians,
hospital laboratories and hospital administrators. No advertising may be made
directly to patients. Their clients are primarily physicians, who, in fiscal
years 1995, 1996 and 1997, accounted for more than 90% of its consolidated net
revenues and the remaining portion of revenues were derived from hospitals,
clinics, referrals from other laboratories and other clients. No single client


                                      I-12



represents more than 2% of ULSA's revenues. ULSA's clinical testing laboratories
primarily provide services to clients whose patients are covered by the private
health insurance sector.

     The UK laboratories provide clinical testing services principally for the
medical profession and are used to confirm doctors' clinical diagnoses and to
monitor patients' responses to treatment. In addition to general practitioners
and consultants, representing 33% of its net revenues, UCP's services are used
by private hospitals, representing 20% of its net revenues and clinics,
pharmaceutical companies and health screening centers, collectively 47%. The UK
laboratories only accept patient referrals from members of the medical and
allied professions. Personal service to the referring doctor has been in the
past, and remains, pivotal to the success of the UK labs. All clinicians have
direct access to the medical staff of the laboratory or the technically
qualified heads of each department for discussion of required tests or
interpretation of results.

     The Italian laboratories primarily serve those medical doctors consulting
in the Turin region as well as providing occupational medical testing through
Medil, a majority owned subsidiary, to large industrial companies. No
advertising may be made directly to patients. The laboratories have earned a
first class reputation in the Turin area and caters primarily to those patients
who can afford the quality services offered by a private diagnosis center and by
a private laboratory as the patients know that, in most cases, they will receive
limited reimbursement or no reimbursement from their insurance. While this
private market is estimated to represent a maximum of only 25% of the total
market presently, it is a lucrative market.

     The Company's Spanish subsidiary operations, ULSP, caters primarily to
privately insured patients, capitalizing on the strong growth experienced in
recent years by the private mutual health insurance sector, especially in the
more developed urban areas such as Madrid and Barcelona. ULSP is approved by all
the major health insurers in Spain which have become its major clients. In
addition, ULSP provides services to fully private patients and to hospitals and
clinics, where in certain cases ULSP manages the on-site emergency laboratory.
ULSP further undertakes certain clinical trials for pharmaceutical firms and
occupational health testing for employee health check-up programs. No
advertising may be made directly to patients; however, being on the approved
list of health insurers is a strong marketing point for patients as this ensures
that laboratory costs will be reimbursed.

Government and Industry Regulation

     The Swiss clinical testing industry is currently subject to limited
government regulation. In Switzerland, prices are regulated by the Office
Federal des Assurances Sociales ("OFAS"), which publishes detailed maximum price
lists for all types of clinical testing that are applicable to private
laboratories and on which such laboratories base their billing. Effective
January 1, 1994, OFAS implemented changes in its price list which have resulted
in a reduction in prices for certain routine clinical testing services and an
increase in prices for other routine and esoteric tests. The




                                      I-13



Company estimates that prices for routine tests performed by some private
laboratories may have been reduced by as much as 10% to 25%, depending upon the
particularities of their clientele. Owing to their own clientele mix, the
Company's laboratories have experienced an average overall price reduction of
less than 5% per year in fiscal 1995, 1996 and 1997. In June 1997, OFAS
announced a decision to further reduce by 10% the prices of the 50 most frequent
tests effective October 1, 1997. Given ULSA's test mix and cost basis, as well
as the prices already offered by ULSA on most tests concerned, the Company
expects the impact of this new price reduction to be limited on its existing
client base. Further, ULSA believes that such reduction may provide
opportunities for growth at the expense of smaller or less efficient
laboratories. Physician-owned laboratories, which represent approximately 50% of
the Swiss clinical testing market, are permitted to invoice customers at prices
based on cantonal guidelines, which now typically approximate 20% to 30% higher
than the published OFAS prices. While such cantonal prices have not been
affected by the OFAS price change, discussions are currently being held in a
number of cantons between Medical Associations, health authorities and health
care insurance federations to adjust cantonal price lists to the OFAS price
list, although the timing of such adjustments, if any, are uncertain. In
addition, the current OFAS price list requires all clinical testing laboratories
to participate satisfactorily in specified quality control programs.
Laboratories which fail to maintain adequate quality standards are subject to a
25% price reduction. In Switzerland, new clinical testing laboratories must be
inspected to receive certification to perform testing. In addition, new
laboratories must be authorized by the government of the canton in which the
laboratory is located. Swiss regulations also require that all laboratory
supervisors be Swiss citizens. Yet, there are currently no ongoing verification
or inspection processes. In addition, Switzerland regulates the disposal of
radioactive waste and has adopted a law with respect to infectious waste
disposal. The Company believes its procedures are sufficient to protect its
employees and to comply with Swiss law. The Company's management does not
believe these regulations will have a material effect on its ability to operate
its business. However, the Company cannot predict the potential effect of any
future regulations which may be imposed on its operations.

     The UK clinical testing industry is currently subject to limited
governmental regulation and there are no statutory requirements to hold a
license from a governmental authority in order to carry out pathology or
clinical testing services specifically. However, there are other UK legislative
measures which are relevant in the industry, including generally applicable
legislation such as the Health and Safety at Work Regulations and more specific
legislation depending on the tests carried out and substances used, including,
for example, authorization under the Misuse of Drugs Act 1971 which is required
for persons in possession of certain drugs and chemicals, registration under the
Radioactive Substances Act 1960 and under the Data Protection Act 1984. In
addition, there are compliance programs, including, for example, those by the
Department of Health ("DOH") and the Royal College of Pathology accreditation
programs and quality assessment programs. The UK General Medical Council also
issues ethical guidelines for the medical profession with which UCP fully
complies.


                                      I-14



     In Italy, where physicians are prohibited from performing clinical
laboratory tests, tests performed by hospitals and private laboratories
represent approximately 75% and 25% of the total volume, respectively. The
Italian health care sector is undergoing radical changes, including revisions of
Social Security reimbursement practices, fueling the emergence of a growing
private health insurance sector. Expected changes in laboratory regulations will
likely allow private laboratories to cover a greater geographical area, since,
for example, restrictions on the transportation of blood are being abolished.
Both trends are expected to lead to a needed consolidation among Italy's almost
2,000 private laboratories. While the reforms have been long-awaited and
necessary because of the growing inability of the public sector to serve
patients in an acceptable manner at acceptable costs, the timing of these
reforms has been delayed by political instability through the recent years.
However, it now appears that the reform is beginning to take place, albeit
slowly, because the state can no longer entertain the costly structures it
currently uses. The reforms should also increase the potential for private
companies to manage laboratories of public hospitals, a segment IMT will be
interested and well positioned to develop.

     In Spain, like Italy, physicians are prohibited from performing clinical
laboratory tests so tests are performed by hospitals and private laboratories.
The Spanish health care sector is also undergoing fundamental changes, such as
the rapid growth of private health insurers and the need to revise the Social
Security system. Pricing in the private laboratory sector is set freely by
laboratories, except for private insurers which issue their own price lists. In
addition to exerting downwards pressure or containment on test prices, private
insurers have raised quality requirements in order to reduce the number of
approved laboratories capable of providing reliable testing. As a result, the
private sector is undergoing a growing consolidation. In addition to price and
quality, the ability to offer a national service through a network of
laboratories is an important competitive advantage of ULSP.

Competition

     The Swiss clinical testing industry is highly fragmented, with
approximately 150 independent private laboratories. Competition is based
primarily on the accuracy, reliability and timeliness of results, variety and
quality of service, and price. ULSA, the Swiss subsidiary holding company,
currently competes effectively in all of its markets, although certain of its
local competitors are larger in particular localities and may be willing to
devote greater resources in such localities. ULSA is the largest provider of
clinical testing services in all of Switzerland. The Company believes its size,
economies of scale and experience in acquiring and integrating new operations
give it competitive advantages in the marketplace.

     In the UK, UCP provides its services primarily to the independent health
care sector. Patients are a mixture of those with health insurance and those who
pay personally. The UK clinical testing industry is also fragmented, with at
least 200 independent laboratories competing on a local basis. Most of these are
attached to private hospitals, but there is a concentration of stand-alone
private laboratories around the Harley Street area in London. 



                                      I-15



Competition is based primarily on the reliability and timeliness of results, the
variety and quality of service, and price. UCP's principal competition in its
traditional markets are laboratories run by BMI/Columbia Healthcare Group, The
Doctors Laboratory, the London Clinic and a number of smaller laboratories.
Traditionally the private pathology operators have serviced private
practitioners, and National Health Service ("NHS") laboratories have serviced
NHS practitioners. UCP has gone into competition with NHS laboratories by
actively seeking work from GP Fundholders and community units. This is very much
in line with the government's policy towards privatization under the
provider/purchaser arrangements. The NHS has not been able to match the level of
service offered by the private sector in the opinion of the Company's
management, but has managed to retain its customary markets by low, and probably
subsidized, prices and through doctors' loyalties to the NHS. UGUK has entered
this market through the provision of testing by the UCP laboratories to GP
Fundholders and through the contract between UTL and the North Hertfordshire NHS
Trust.

     The Company believes its Italian and Spanish laboratories are the leading
private laboratories in their operating regions. It is estimated that the
Italian laboratories compete with approximately 10 local laboratories, while the
Spanish laboratories compete with approximately 50 local competitors in each
city of operations.

Quality Assurance

     The Company considers the accuracy and reliability of its testing services
to be of paramount importance. The Company has established its own comprehensive
and rigorous quality control program. This program includes control testing,
regular review of test data by laboratory technicians and medical personnel and
repetitive testing for abnormal results.

     Each laboratory is supervised by a medical director who is a physician and
who is assisted in most cases by a technical director and other qualified
medical professionals. A primary role of laboratory professionals is to ensure
the accuracy of test results. Each laboratory is equipped with sophisticated
testing equipment, which is routinely checked in accordance with a regular
maintenance program.

     In 1995, ULSA applied to the Swiss Federal Accreditation Service for
accreditation of all its Swiss laboratories under the European Standard EN 45001
("General criteria for the operation of testing laboratories"). Accreditation is
awarded based on an external audit of the laboratory's ability to provide
testing services of a high quality, certifying the laboratory's competence and
its compliance with international standards and good laboratory practices. The
process comprises two stages: first, laboratories assess themselves against the
EN 45001 standards, indicating compliance with or exemption from such standards;
and second, an on-site assessment is conducted by the accrediting body to verify
the laboratory's claims. Once accredited, laboratories are subject to periodic
re-inspection. The accreditation process is progressing according to schedule,
and ULSA currently expects the accreditation to be completed shortly. As part of
its




                                      I-16



quality plan, ULSA also participates in industry proficiency testing programs as
required by the new OFAS regulations. Such programs generally require ULSA's
laboratories to perform tests, the results of which are already known, enabling
verification of the accuracy of ULSA's test procedures. These programs are
conducted by groups such as the Swiss Center for Clinical Testing Quality
Control or the German Clinical Chemistry Association and other industry
organizations. To date, ULSA has met all the requirements for accuracy in all
such programs in which it has participated.

     The UK laboratories recognize the fundamental importance of accurate and
reproducible results, and therefore attaches very high priority to quality
procedures. Accuracy of results through internal and external quality control is
imperative. To this end, UCP has established a free-standing Quality Systems
Department under the leadership of a Head of Corporate Quality. As well as
certification for Good Laboratory Practice, run by the UK Department of Health,
UCP is the first independent laboratory to have all its services fully
accredited by Clinical Pathology Accreditation (UK) Ltd., the new benchmark
standard for clinical laboratories. In addition, UCP has been accredited by the
College of American Pathologists, giving greater recognition of UCP's
laboratories on the international stage. In addition to comprehensive in-house
quality control programs involving the continual checking of results by an
independent operator and repeated monitoring of any drift in machines, UCP also
participates in various national and international quality assessment programs
where "unknown" samples are sent to UCP for analysis and the results are
adjudicated by the programs' organizers. These external programs cover all major
aspects of the analytical work. An example of one such program is the national
Clinical Chemistry program, which comprise several hundred laboratories
throughout the UK, including the major teaching hospitals. Each participant in
this program receives, on a twice-weekly basis, a serum sample from which 15
constituents of unknown value are analyzed and the results are returned to the
quality control center for comparison with the other laboratories. Similarly,
there is the international program, which involves a wide range of unknown
constituents and has some 1,600 participating laboratories. UCP's performance
has been consistently above average for participating laboratories over the past
four years in all such programs. Overall, UCP participates in approximately 60
such quality control programs both nationally and internationally. FBH has
obtained full Clinical Pathology Accreditation. FBH additionally takes part in
external quality assurance schemes run by independent agencies. All cytology
smears presented for screening are re-checked by a 30 second "quick screen"
after initial screening with all abnormal smears and suspicious historical cases
being re-screened by a pathologist. The PAPNET(TM) system also provides a
further check for negative results.

     The Italian and Spanish laboratories adhere to the same strict quality
control procedures as instituted throughout the laboratory group. Regular
quality control tests are performed under the supervision of the scientific
directors. Accreditation is awarded by local authorities based on an external
audit of each laboratory's ability to provide testing services of a high quality
certifying the laboratory's competence and its compliance with international
standards and good laboratory practices. These standards cover 



                                      I-17



a set of defined conditions used throughout laboratories and covering all
aspects of an investigation, including specimen collection and reporting.

Information technology services

     The Company considers it critical to use state-of-the-art information
systems to process its laboratory tests and related results. All the Company's
laboratories use computer software packages specifically tailored to the needs
of their local market, which are comprehensive laboratory information and
management software, generally running on IBM AS/400 or UNIX-based computers.
Such systems handle all stages of a clinical sample laboratory processing:

     - Operational Planning and Monitoring: generating bar-coded labels and work
     schedules; supporting bi-directional connections to laboratory
     instrumentation; providing process monitoring, interactive entry, automated
     controls and computer-assisted test validation through on- screen
     consultation and reports.

     - Data Retrieval and Reporting : downloading test requests and retrieving
     test results, on-line.

     - Test Prescription : transmission of test prescription to the reference
     laboratory, avoiding duplication of specimen collection and test data entry
     between laboratories

     - Request Validation and Control.

     - Transmission of Results : routing and dispatching, videotext access,
     electronic fax service and downloading to the prescriber's computer or
     hospital ward stations.

     - Administrative Management : handling test and result archiving, inventory
     management and operational statistics.

     - Marketing : enabling easy client monitoring and provides such marketing
     tools as mail merging and videotext services.

     - Financial Control : invoicing, debtors accounting and receivables
     collection management.

     The Company believes that the efficient handling of information by a
clinical laboratory is a critical factor in providing proper client service and
in achieving success over the competition. Therefore, the Company places a high
degree of priority on the appropriate evolution of its management information
systems, and is investing considerable amounts of money each year in this area
in each region.

Employees


                                      I-18



     The Company employs approximately 680 people throughout its Diagnostic
Laboratory Division, as computed on a full-time equivalent basis. The Company
has never experienced any work stoppages, slow-downs, or other material labor
problems and believes its relations with its employees are satisfactory.

Seasonality

     The laboratory operations, like those of most clinical laboratory
companies, are affected by certain seasonal trends. Testing volumes tend to be
lower during the holiday seasons which vary throughout the year according to the
cultural and regional influences. Therefore, the Company's results for a
particular quarter may not be indicative of results in future quarters.

Clinical Trials Operations

     During the year ended May 31, 1995, the Company decided to expand in the
field of testing performed in connection with clinical evaluations for the
pharmaceutical industry. It thus created a Clinical Trials Division, as opposed
to its core Diagnostic Laboratory Division.

     As of May 31, 1996, the Clinical Trials Division included two wholly-owned
Company subsidiaries, UCT and UCTS, as well as a 17% stake in NDA, the US
commercial partner of UCT, all of which were held through the Company's
wholly-owned British Virgin Islands subsidiary, GUCT. On January 31, 1997, GUCT
entered into a Master Combination Agreement with the NDA stockholders pursuant
to which GUCT and the NDA stockholders contributed their respective holdings in
NDA (aggregating 100%) and GUCT contributed its 100% holdings in UCT and UCTS to
a newly formed Delaware corporation, UCTI. GUCT also converted an aggregate of
approximately $1.9 million of debt of NDA and approximately UK(pound)0.3 million
debt of UCT into equity of NDA and UCT, respectively, which were then exchanged
for stock of UCTI. Further, GUCT contributed approximately $2.2 million in cash
to UCTI, which, together with the other contributions of stock, caused GUCT's
ownership in UCTI to be approximately 70% at January 31, 1997. As discussed
elsewhere herein, GUCT has invested further amounts in UCTI after January 31,
1997.

     The Company believes that the Clinical Trials Division will be subject to
substantial development in the near future. The Company believes that there will
be intense competition in this industry area in Europe, but equally believes
that its new concept and the stronger structure resulting from the merger of its
operations with NDA will offer it a competitive advantage.

Clinical Trials Services

     UCTI is dedicated exclusively to providing central laboratory testing and
project support services for clinical trials to pharmaceutical company sponsors,
clinical research organizations (CROs) and investigating clinicians on a
uniform, global basis. UCTI's services are provided in Europe through the UCP
laboratory facility in London and in the United States through NDA's laboratory.


                                      I-19



     Both laboratories are fully accredited and provide automated same-day
reports with reference ranges in accordance with customers' wishes. They operate
under common operational procedures and utilize similar or comparable technology
producing comparable laboratory data. This data is presented to sponsors through
the use of a common, specifically designed software program providing a protocol
management system.

     The UCTI service for Europe also includes a regional network of Site
Service Agents (SSA) providing investigator support locally. UCTI employs 19
such SSAs around Europe and the Far East.

     Most modern prescription drugs are born in the research laboratories of
pharmaceutical manufacturers. But before they may be sold, they must undergo a
rigorous, step-by-step approval process overseen by government agencies such as
the U.S. Food and Drug Administration (FDA). In the U.S., for instance, the
process begins only after the new drug has been successfully tested in animals.
Armed with the test results, sponsors of the product submit an Investigational
New Drug (IND) application to the FDA. If the IND is approved, sponsors may
begin clinical trials of the drug in humans.

     The clinical trials process consists of three, and sometimes four, phases:

     Phase I   examines the drugs clinical pharmacology; its effects on the
               body, preferred modes of administration and dosage ranges. These
               tests are usually done on small numbers of healthy volunteers.

     Phase II  tests the safety and efficacy of the drug at expected dosage
               levels among a few patient volunteers who have the medical
               condition the drug is designed to treat.

     Phase III trials are broad studies involving hundreds or even thousands of
               patients, where new drugs are compared with placebos and with
               existing similar drugs. This is the busiest and most intensive
               part of a clinical research program and is the pivotal study for
               approval where researchers are gathering further information on a
               drug's benefits and risks.

     Phase IV  trials are post-marketing tests mandated either for some
               exceptionally potent or complex drugs to gather additional data
               on their effects in the general population, or marketing studies
               aimed at further comparing a drug with its competitors or
               extending a drug's range of indications.

     After Phase III trials, the manufacturer submits a New Drug Application. In
the United States, it is only when the FDA has approved this Application that
the drug may be sold to the public. The entire approval process from initial
submission of the IND to final approval of the New Drug Application takes an
average of five years.


                                      I-20



     The process is generally similar in Europe but must typically be repeated
for each individual country (and must sometimes be performed at a regional
level). New European regulations aimed at simplifying the process (by allowing
one single submission for the whole EEC to the European Medical Evaluation
Agency) have been proposed, and the EMEA is expected to be by 1999 the only
European licensing authority.

     Because of the importance and complexity of clinical trials (a typical
submission to the FDA can run to thousands of pages), many manufacturers employ
outside specialists to perform the trials. Often, the manufacturer hires a
clinical research organization (CRO) to manage the trial. The CRO, in turn,
hires clinical laboratories which will perform the actual tests required by the
trial protocol. The final link is a network of investigators, usually
physicians, who work directly with patients, monitoring their medical status and
gathering clinical samples for testing. Data management capacity is thus an
essential factor in the whole drug approval process.

Competition and Markets

     The U.S. market for Phases II and III clinical trial laboratory testing is
estimated to be approximately $550 million based on current hospital, physician
and commercial laboratory fees. The market for laboratory testing and data
management services is expected to grow at the same pace as the underlying U.S.
market for pharmaceutical research and development expenditures; whereas the
centralized laboratory testing segment is expected to grow more rapidly due to
the continuing centralization trend.

     The European market for Phases II and III clinical trial laboratory testing
is estimated to be approximately $600 million based on current hospital,
physician and commercial laboratory fees. The European market for laboratory
testing and data management services is expected to continue growing more
rapidly than in the U.S. based on growth in the underlying market for
pharmaceutical research and development expenditures, whereas the centralized
laboratory testing segment is expected to grow even more rapidly due to the
continuing centralization trend.

     The expected European growth is explained by a shift from U.S. to
European-based clinical trials as a result of the approval of European Good
Clinical Practices (GCPs) in 1991 and the introduction by a growing number of
countries of Good Laboratory Practices (GLPs). These programs, which make it
possible for pharmaceutical companies to obtain FDA drug approval in the U.S.
with European clinical trials data, is expected to cause some of the European-
based pharmaceutical companies to shift the geographical focus of their clinical
trial activity towards Europe because of the logistical benefits and cost
savings. This shift is also expected to enable a reduction in the global number
of patients submitted for testing of a new drug, thus reducing costs.

     Most of the laboratory testing for European clinical trials is currently
performed by local hospitals and is initiated by and through each sponsor's
national subsidiary offices. Approximately 70% of all trials conducted in Europe
are multi-country suggesting that the concept of a global 




                                      I-21



service/single sourcing would be attractive to industry participants. It is
estimated that between 10 to 20 European companies offer some form of
centralized clinical testing facilities. In the U.S., which pioneered the
concept of centralized clinical testing, it is estimated that between 20 to 30
companies offer some form of centralized clinical testing facilities. In all, it
is estimated that only five to ten companies offer some form of centralized
clinical testing services in both Europe and the U.S. The largest such
companies, which belong to much larger groups than the Company, are (1) a
division of Covance, Inc., (2) a subsidiary of SmithKline Beecham PLC, and (3) a
division of Quintiles Transnational Corp.

     UCTI has recently concluded a strategic alliance with Melbourne Pathology,
an Australian laboratory group, which will give UCTI extensive support in the
servicing of Australian investigational sites. Future developments are always
being contemplated and UCTI expects to see further laboratory alliances around
the world, advanced sample storage and tracking systems, greater interaction
with investigators and the continuing process of the introduction of new
laboratory techniques to meet customer demands.

Quality Assurance

     UCTI has devised a system to ensure that its two laboratories operate as
one, including the use of instruments and reagents from the same manufacturer.
Identical operating and validation procedures have been instituted. Further,
quality control data is transmitted electronically between sites on a daily
basis to assure each site of the other's performance.

     External quality control data from the College of American Pathologists
(CAP) is used to monitor bias. The London laboratory has British CPA and GLP
accreditation, as well as CAP accreditation. The U.S. laboratory is also
accredited by CAP. A laboratory services coordinator ensures close adherence to
all these criteria. All the procedures guarantee the high quality of all results
and allow them to be combined into a trial database as if they had been
generated from one laboratory.

Employees

     The Company employs approximately 110 people throughout its Clinical Trials
Division, as computed on a full-time equivalent basis. The Company has never
experienced any work stoppages, slow-downs, or other material labor problems and
believes its relations with its employees are satisfactory.

Backlog

     Certain of UCTI's contracts are performed over an extended period of time
which may be one to three years. With respect to such studies or projects, UCTI
maintains an order backlog to track anticipated net revenues for such work that
has yet to be earned. Backlog is principally calculated with respect to work to
be performed pursuant to letters of intent and contracts. Once work under a
letter of intent or contract commences, net



                                      I-22



revenue is recognized over the life of the contract as the actual work is
performed.

     Backlog is a meaningful tool for management as it provides both an
excellent indicator of the growth trend and, owing to the trials' average
duration, helps management in planning expansion. However, no assurance can be
given that the Company will be able to realize all or any net revenue included
in backlog. Further, the Company believes that its aggregate backlog as of any
date is not necessarily a meaningful indicator of future results.

     Subject to the above discussion, the Company's aggregate backlog was
approximately $17 million as of May 31, 1997.

ITEM 2 PROPERTIES

     All of the laboratory facilities have been improved and adapted for the
sole purpose of providing clinical testing services. Accordingly, the facilities
are suitable and adequate and utilized solely for such services. Following are
the descriptions of each regional facility.

ULSA

     ULSA's executive management is located in Geneva, Switzerland. Its
principal laboratories are located in Geneva (13,500 square feet), Bern (7,500
square feet), Zurich (5,000 square feet) and St. Gallen (27,500 square feet),
and regional or specialized laboratories are located in Bern, Montreux and
Baden. ULSA leases laboratory space and other service sites and facilities at
various locations at market rates. ULSA believes that such laboratory spaces,
service sites and facilities are fully suitable and adequate for its business.
The leases expire at various dates through May 31, 2001. Upon expiration of any
lease, ULSA could find alternative space at competitive market rates and
relocate its operations.

UGUK

     In 1982, UCP acquired a long-term lease expiring in 2065 on its 80 Harley
Street facility, which is currently used for patient services. In September
1988, UCP acquired a freehold site at Camden Lock, London NW1, where it
constructed a new building on the site to provide laboratory space to meet
present requirements and those for the foreseeable future. The building,
completed in 1991, provides approximately 54,000 square feet of usable space.
While the Company believes that such building is suitable and adequate for its
purpose, the Company has, during the year ended May 31, 1997, made a decision to
sell it and move to other premises which it has not yet found. Such decision was
made in consideration of the overall Company's development strategy in the UK
for both UCP and UCT. As a result of this decision, the Company recorded a
one-time charge of approximately $5.8 million to adjust the building's carrying
value to its estimated market value. Except for the service site at Harley
Street, all activities of UGUK in London are located in the Camden Lock
building.


                                      I-23



IMT/Medil

     IMT occupies two floors of a building located in the heart of Turin. The
total surface area is 6,000 square feet, out of which 5,000 square feet are
owned by IMT, and 1,000 square feet are leased under a long-term lease. IMT
believes that such laboratory space and facilities are fully suitable and
adequate for its business.

     Medil occupies 500 square feet in a nearby building, under a long-term
lease.

ULSP

     ULSP's executive management is located in Madrid, Spain. Its principal
laboratories are located in Madrid and Barcelona. ULSP leases laboratory space
and other service sites and facilities at various locations at market rates.
During the year ended May 31, 1996, ULSP completed a move to new Madrid
facilities of approximately 10,000 square feet. ULSP believes that such
laboratory spaces, service sites and facilities are fully suitable and adequate
for its business. Upon expiration of any lease, ULSP could find alternative
space at competitive market rates and relocate its operations.

            Regional laboratories are located in Valencia and Murcia.

UCT

     UCT is located in London, UK, where it subleases office space from UCP at
market rates. UCT believes that such facilities are fully suitable and adequate
for its business. Upon expiration of any lease, the Company could find
alternative space at competitive market rates and relocate its operations.

UCTS

     UCTS is domiciled in Neuchatel, Switzerland. UCTS believes that, when there
is a need for office space in the future, it can find facilities suitable and
adequate for its business at competitive market rates.

NDA

     NDA is located in Farmingdale, New York where it leases laboratory space
and office space under a long-term lease at market rates. Management of NDA
believes that such laboratory space and office space are fully suitable and
adequate for its business.

ITEM 3 LEGAL PROCEEDINGS

     In 1990 and 1991, the Company under the name of United Fashions, Inc.,
through various stock purchase and stock exchange agreements, acquired up to
91.5% of the outstanding capital stock of Americanino Capital Corporation, a
Delaware corporation ("ACC") which held interests in the Italian apparel goods


                                      I-24



industry. However, in 1991, the Company decided to divest itself of its
controlling interest in the group of apparel companies as the business did not
meet with the expected success. The Company consummated the disposition in 1993
in an Asset Purchase Agreement and a Sharing Agreement (the "ACC Sale
Agreement") with Linford Enterprises Inc., a British Virgin Islands corporation
("Linford") for an aggregate consideration consisting, among other things, of
$50,000 in cash and approximately 80% of the value of the net appreciation of
the shares of ACC arising from any subsequent sale by Linford of all or a
portion of such shares of ACC. In addition, the ACC Sale Agreement provided that
ACC would use its best efforts to pursue legal action against certain parties
involved in the purchase by ACC of the various Italian apparel businesses, based
on certain management actions and misrepresentations made to ACC and others at
the time of such purchase. The Company is entitled to 80% of the net recovery
(less legal fees and costs), limited to the amount of approximately $15 million,
of any settlement or successful resolution of the pending arbitration instituted
by ACC and described below.

     In February 1993, ACC instituted the arbitration proceedings against Mr.
Eugenio Schiena, Mr. Raffaele Palma, Mr. Tonino Manzali, FIBRA S.p.A., GEFAPI
S.r.l., "S.G.F." SOCIETE GENERALE COMMERCIALE ET FINANCIERE S.A., PARIBAS
FINANZIARIA S.p.A., BANQUE PARIBAS (Milan, Italy), and BANQUE PARIBAS (Paris,
France) (hereinafter collectively referred to as the "Defendants") for
misrepresentations and fraudulent conduct in the negotiation, consummation and
performance under an agreement by and between the above mentioned parties. The
arbitration is presently pending before an Arbitral Tribunal of three qualified
arbitrators (the "Arbitral Tribunal") under the auspices of the International
Court of Arbitration. As of November 9, 1994, the Terms of Reference were
established by the Arbitral Tribunal and sent to all the parties for signature.
The Terms of Reference were signed by ACC and certain of the Defendants. Some
Defendants did not sign them within the time limit set by the Arbitral Tribunal,
but, in accordance with the prevailing arbitration rules, the proceedings are
going forward irrespective of who has signed the Terms of Reference. The
International Court of Arbitration further summoned all the Defendants to
effectuate payment within 30 days in the amount of $212,500 representing their
share of the advance costs. The Arbitral Tribunal fixed a deadline date of April
30, 1995 for the Claimant, ACC, to file its brief on jurisdiction and on the
merits of its claim; and fixed a deadline date of July 31, 1995 for all the
Defendants to file their briefs in reply. ACC filed its Brief with the
International Court of Arbitration in compliance with the deadline. In July
1995, the Company decided to open a bank guarantee in favor of the International
Court of Arbitration to cover the amount of $212,500 which the Defendants have
failed to pay, in order for the proceedings to continue. In July 1995, ACC was
notified by the Arbitral Tribunal that PARIBAS FINANZIARIA S.p.A., BANQUE
PARIBAS (Italy), and BANQUE PARIBAS (France) on the one hand, and Mr. MANZALI on
the other hand, had each appointed new legal counsels, who requested an
extension of the July 31 reply deadline in order to be able to study the files.
The Arbitral Tribunal agreed to such an extension. Accordingly, a new deadline
date of September 30, 1995 was set by the Arbitral Tribunal for all the
Defendants to file their briefs in reply. To the Company's knowledge, all
Defendants filed their briefs in reply, with the exception of Messrs. Schiena
and Palma, and GEFAPI. ACC filed 




                                      I-25



a further brief in response to the replies on April 1, 1996. In the meantime,
ACC agreed to withdraw its claim against BANQUE PARIBAS (Italy), and BANQUE
PARIBAS (France) in an effort to simplify the arbitration proceedings. In briefs
in reply dated September 1996, PARIBAS FINANZIARIA on one hand, and Mr. MANZALI
on the other, vigorously contested again all the claims made by ACC. Further,
PARIBAS FINANZIARIA continued to contest the competence of the Arbitral Tribunal
over itself. Accordingly, ACC proposed, and the Arbitral Tribunal agreed, that
this specific issue be pleaded separately, and the parties accordingly argued
this issue. A hearing limited to oral argument on jurisdiction took place in
Geneva on May 6, 1997, and the decision on jurisdiction was rendered by the
Arbitral Tribunal on September 10, 1997. Such decision states that (a) FIBRA is
not subject to the Arbitral Tribunal's jurisdiction, (b) PARIBAS FINANZIARIA is
not subject to the Arbitral Tribunal's jurisdiction, (c) ACC shall reimburse
FIBRA as part of the arbitration costs its legal costs and expenses in an amount
of $15,000, and (d) PARIBAS FINANZIARIA is not entitled to any claim for its
legal costs and expenses. As a result of such decision, the parties subject to
the Arbitral Tribunal's jurisdiction remain: Mr. Eugenio Schiena, Mr. Raffaele
Palma, Mr. Tonino Manzali, GEFAPI S.r.l., and "S.G.F." SOCIETE GENERALE
COMMERCIALE ET FINANCIERE S.A. (a holding company member of the PARIBAS group of
companies). The award on the merits is not expected until the Spring of 1998.
ACC had previously informed the Company that, independently from the
arbitration, it filed suit against BANQUE PARIBAS (France), BANQUE PARIBAS
(Suisse) and BANQUE PARIBAS (Milan) before the Commercial Court of Paris
(France), which suit is currently in its initial phase of depositing evidence
and. Any possible proceeds from this suit would inure to the Company following
the same formula and limitations as proceeds from the arbitration.

     While, to the best of the Company's knowledge, the Claimant appears to have
a legitimate claim, there can be no assurance that any award will be rendered in
ACC's favor and thus benefit the Company as provided under the terms of the ACC
Sale Agreement. The Company believes that any estimate of recovery is still
subject to many factors beyond the Company's control. Pending developments in
the arbitration proceedings, and in absence of other criteria, the management of
the Company has recorded its rights at a present fair market value of $10,000
which is estimated to be the amount an unrelated party might presently pay to
acquire all such rights arising from the ACC Sale Agreement. Realization of any
amount is entirely dependent upon a favorable award from the Court and the
collection thereof, if any, from the Defendants. The Company's management will
continuously monitor and report the progress of the proceedings.

Foreclosure Proceedings

     Pursuant to the CORA/Kinghino Sale Agreement, ACC sold its interest in
CORA, one of the Italian apparel companies, to two of the original sellers of
the Italian interest (the "Sellers"). (See, the Company's Annual Report on Form
10-K for the year ended December 31, 1993 incorporated by reference herein).
Simultaneously, the Sellers agreed to replace certain security previously
arranged by the Company to guarantee bank loans of Americanino and CORA (the
"CORA Guarantees"). As security for the fulfillment of the Sellers'



                                      I-26



obligations to replace such guarantees, the Sellers executed notes totaling Lit.
7.6 billion in favor of the Company, secured by mortgages on all buildings owned
by CORA (the "CORA Buildings"). The debt was recorded at its estimated fair
value of $1.26 million in connection with its deemed acquisition by ULSA and
UCLE as of March 31, 1994.

     Because the Sellers have defaulted on their commitment to compensate the
Company for the execution of the CORA Guarantees, the Company has instituted
legal proceedings to foreclose upon the CORA Buildings. Such proceedings have
been brought in the domicile and situs of the properties in Italy. Upon
successful completion of the foreclosure proceedings, the Company intends to
sell the CORA Buildings as market conditions permit; however, the Company cannot
determine when such proceedings will be completed, nor when any sale will take
place thereafter. The management of the Company believes the proceeds from the
future sale of the CORA Buildings will be sufficient to cover the carrying value
of the notes receivable.

     During June 1994, one of the CORA Buildings was sold. The Company has
received Lit. 469 million ($0.290 million) less certain incidental fees and
expenses from the sale. The Company's management anticipates that another
building may be sold in 1997. Such building was recently valued by a
professional appraiser at Lit. 2,000 million ($1.3 million).

Attachment Claim

     On April 6, 1995, the Company presented a Complaint, a Memorandum of Law in
Support of a Motion for a Writ or Order of Attachment and an Affidavit in
Support of Motion for Attachment with an Order to Show Cause to the United
States District Court in Newark, New Jersey against Tonino Manzali, Alessandra
Sichirollo, Claudio Barozzi, Frederica Sichirollo, Marco Martinolli, Giuseppe
Mortellaro, Giampaolo Pattarello, Giorgio Pezzolato, Brigida Russo and Anna
Zinetti (known as the "Manzali Group"). The Company presented therewith the
Motion for Attachment against two of the above shareholders, Tonino Manzali and
Alessandra Sichirollo. Mr. Manzali and Ms. Sichirollo have taken the necessary
steps to dissipate the assets (their shares) during the pendency of the
above-described ACC arbitration proceeding of which they are a party. On April
17, 1995, the Court awarded and ordered the Attachment against Defendants
Manzali and Sichirollo as they did not show cause against the Attachment.

     On February 13, 1996, the Court placed the attachment proceeding on its
suspense docket until such time as the parties re-open the proceedings for good
cause shown for the entry of any stipulation or order, or for any other purpose
required to obtain a final determination of the litigation. The Company will
re-open the proceedings upon a decision being rendered in the above arbitration.

     On March 22, 1996, upon notice of a request for transfer of additional
shares of the Manzali Group held in the name of Antonio Sichirollo, the Company
filed an adverse claim with its transfer agent estopping the further transfer of
such shares for a 30 day period. Since such time, the Company has



                                      I-27



retained counsel to proceed with an attachment claim in the state of Colorado
based on the same facts and circumstances as the attachment claim made in the
United States District Court of New Jersey.

     On July 26, 1996, the Colorado Court placed the proceeding on its suspense
docket until such time as the parties re-open the proceedings for good cause
shown or entry of any order or for any other purpose required to obtain final
determination of the litigation.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were presented to the shareholders for a vote in the quarter
ended May 31, 1997.



                                      I-28



                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS
        MATTERS

     The UniHolding Common Stock is currently traded on the National Association
of Securities Dealers Automated Quotation System Small Cap Market ("NASDAQ/Small
Cap") under the symbol UHLD.

     Until the March 1994 acquisition by the Company, the Company's shares had
no substantial established public trading. The following table sets forth the
high and low ask and bid prices for the Company's common stock by fiscal
quarters, as reported by NASDAQ for the preceding two years through May 1997.
The prices represent prices between dealers, without retail mark-up, mark-down
or commission and may not reflect actual transactions.

     The following table reflects for all periods presented the four-to-one
reverse split which UniHolding effected as of December 27, 1995.

                             Year ended May 31, 1996

         Quarter Ended               High                   Low

         August 31, 1995            $23.50                $18.00
         November 30, 1995          $22.00                $15.00
         February 29, 1996          $17.50                $13.25
         May 31, 1996               $18.00                $13.25




                             Year ended May 31, 1997

         Quarter Ended               High                   Low

         August 31, 1996            $16.75                $15.00
         November 30, 1996          $16.25                $13.75
         February 28, 1997          $14.75                $ 6.75
         May31, 1997                $11.50                $ 7.25

     The closing sale price on October 14, 1997 was $9. As of October 14, 1997,
the number of holders of record of the UniHolding Common Stock was approximately
424. UniHolding has not paid, and does not for the foreseeable future expect to
pay, dividends with respect to the UniHolding Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

Historical Selected Financial Information

     The following table presents selected historical consolidated financial
data of UniHolding for each of the three years in the period ended May 31, 1997,
which have been derived from financial statements appearing elsewhere herein
that have been audited by independent auditors, and from the financial
statements of the Company and the Company's Predecessor for the years ended May


                                      II-1




31, 1994 and 1993 (not appearing herein). The data should be read in conjunction
with consolidated financial statements and the notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations", which
are included elsewhere herein (in thousands, except per share data):




                                                                                     Years Ended May 31,
                                                                                     -------------------
                                                     1997              1996               1995              1994          1993
                                                     ----              ----               ----              ----          ----
                                                                                                                      (Predecessor)
                                                                                                               
Revenue                                            $99,644            $97,061            $82,543           $63,926      $47,814

Earnings before
Interest, Taxes,                                    11,567             16,317             17,719            15,800       14,222
Depreciation  and
Amortization

Operating Income                                   (29,627)             8,438             10,517            10,474       10,566
(loss)

Income (loss) before
Taxes and Minority                                 (16,358)             3,038              8,811             9,439        9,510
Interests

Tax Provision                                       (3,588)             2,355              1,975             2,792        2,856
(credit)

Minority Interests                                     536                983              3,763             3,569        2,318

Income (loss) from
Continuing Operations                              (13,306)              (300)             3,073             3,078        4,336

Net Income (loss)                                  (13,306)              (300)             2,839             3,078        4,336


Net Income (loss) per
common share from
Continuing Operations                               ($1.90)            ($0.05)             $0.53            $0.86

Net Income (loss) per
common share                                        ($1.90)            ($0.05)             $0.49            $0.86

Weighted Average
Number of Common                                     7,016              6,006              5,783             3,560
Shares Outstanding



                                      II-2



                                                                                                             
Total Assets                                       105,303            123,252            133,558            99,099       49,244

Long-term debt, net
of current portion                                  14,555             38,354             34,048            37,182       12,887


Stockholders' Equity                                48,345             34,242             37,877            12,612        8,510




                                      II-3




ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Results of Operations for the Three Years Ended May 31, 1997

Twelve months ended May 31, 1997 compared with the twelve months ended May 31,
1996

     The Company's results of operations for the year ended May 31, 1997,
include the operations of the Company's core business (the "Diagnostic
Laboratory Division") and of the Company's expanded activities in clinical
trials testing for the pharmaceutical industry (the "Clinical Trials Division").
The following tables present a reconciliation of the results of operations of
each division with the consolidated statement of operations, for the purpose of
discussing the results of operations.



                                                                                       Year ended May 31, 1997
                                                                                       -----------------------

                                                                   Diagnostic       Clinical
                                                                   Laboratory        Trials                                 As
                                                                   division         division           Adjustments         Reported
                                                                   --------         --------           -----------         --------

                                                                                                                    
REVENUE                                                        $    95,638        $     7,009            ($3,003)       $    99,644

Operating expenses:
  Salaries and related charges                                      37,431              3,804                                41,235
  Supplies                                                          15,545                475                                16,020
  Other operating expenses                                          25,454              8,371             (3,003)            30,822
  Depreciation and amortization of
    tangible assets                                                  5,118              1,112                                 6,230
  Adjustment of carrying value of
    building                                                         5,805                                                    5,805
  Amortization of intangible assets                                  5,367                 70                                 5,437
  Adjustment of carrying value of
    goodwill in subsidiary                                          23,722                                                   23,722
                                                               -----------        -----------        -----------        -----------

OPERATING INCOME (LOSS)                                            (22,804)            (6,823)                 0            (29,627)

Interest, net                                                       (2,965)              (118)                               (3,083)
Equity in loss of affiliates                                             0               (253)                                 (253)
Gain on sale of subsidiary shares                                   16,164                                                   16,164
Other, net                                                             508                (67)                                  441
                                                               -----------        -----------        -----------        -----------

Income (loss) before taxes and
  minority interests                                                (9,097)            (7,261)                 0            (16,358)
Tax credit (provision)                                                (814)             4,402                                 3,588
                                                               -----------        -----------        -----------        -----------

Income (loss) before minority interests                             (9,911)            (2,859)                 0            (12,770)
Minority interests in income (loss)                                   (362)              (174)                                 (536)
                                                               -----------        -----------        -----------        -----------

NET INCOME (LOSS)                                                  (10,273)           ($3,033)       $         0           ($13,306)
                                                               ===========        ===========        ===========        ===========

Weighted average common shares
  outstanding                                                    7,015,943          7,015,943                             7,015,943
Earnings (loss) per share of
  common stock                                                      ($1.47)           ($0.43)                                ($1.90)


     Consolidated revenue was $99.6 million for the year ended May 31, 1997,
representing an increase from the prior year of $2.5 million (including the


                                      II-4



effect of the change in the US dollar exchange rate of $11.9 million). Revenue
generated by the Diagnostic Laboratory Division increased by 10.2% in local
currency terms, including a 4.4% revenue increase for the Swiss operations only,
as a result of additional specimen volume of 3.9% and an increase attributable
to test mix of 0.5%. Revenue generated by the UK Diagnostic Laboratory Division
also increased due to additional revenue primarily resulting from an existing
Government contract. Spanish operations almost doubled their revenues due to an
increased market share. The Clinical Trials Division increased its revenues to
$7.0 million (a 58% increase) due to the development of a new client base.

     Operating income for the year ended May 31, 1997 decreased by $38 million
(including the effect of the change in the US dollar exchange rate of $2.7
million) versus the prior year. Three major components of the decrease are
non-cash charges totaling $32.5 million: (a) the write-down of goodwill in one
of the UK subsidiaries of $23.7 million, (b) a revision of the estimated useful
life of goodwill producing an additional charge of $3 million, and (c) the
write-down in the carrying value of the UK property of $5.8 million. During the
year, management performed its periodic evaluation of the Company's goodwill,
based on undiscounted expected future cash flows. As a result thereof, in view
of unexpected delays in returning UK operations to a level of profitability
meeting the Company's criteria, and in view of the present and estimated future
cash flows of such operations, management recorded a charge to adjust such
goodwill to its estimated fair value. Further, the Company revised its estimate
of the useful life of the Company's goodwill to 20 years. Further, as a result
of its strategic decision to sell the Company's building used by its UK
operations, management reconsidered the carrying value of such building in light
of current real estate market conditions, and the Company therefore recorded a
charge of $5.8 million to adjust such carrying value to its estimated fair
market value. Excluding the effect of the above items, the Diagnostic Laboratory
Division increased operating income by 6.7% in local currency terms, whereas in
dollar terms operating income decreased by $0.5 million because of the effect of
the fluctuation of the dollar ($1.2 million) with respect to other currencies.
The improvement in local currency terms was the result of improved profitability
(or reduced losses) in several countries, primarily Switzerland, the United
Kingdom and Spain. Italian operations continued to maintain a small positive
contribution to operating income. In local currency terms, the cumulative
operating loss of Spain for the year was approximately 20% of that of the prior
year due to substantial operating profits being made in the second half of this
fiscal year, confirming a positive trend of returning to profitability. The
variance in operating results of the Clinical Trials Division (an operating loss
of $6.8 million as compared to $1.8 million) reflects fixed expenses which are
not matched with income to be recorded in the future from a backlog of
contracts, due to lead-time of up to six months from the signing of a contract
to the actual start of a study.

     Interest expense, net, was practically stable in dollar terms during the
year ended May 31, 1997, as compared to the prior year, primarily due to higher
average borrowing levels by the Company resulting from the Company's acquisition
of the 40% minority interest in UGL, which was repaid in full January 1, 1997 by
the issuance of UniHolding share capital, partly offset by a decrease in
interest rates. The ULSA initial public offering had little effect on interest




                                      II-5



expense for the year ended May 31, 1997, as proceeds were received on April 30,
1997.

     Other income before taxes of $16.5 million was recorded during the year,
resulting primarily from a capital gain by UGL on its ULSA investment in
connection with ULSA's initial public offering, and from foreign currency
transactions, changes in foreign currency positions, as compared to income of
$0.9 million in the prior year.

     Provision for income taxes for the year ended May 31, 1997, is a tax
benefit of $3.6 million. $4.4 million of such benefit is attributable to losses
of the Clinical Trials Division which gave rise to a tax benefit, which
management believes it is more likely than not that the Company will recover
through future income of such Division in view of the already existing backlog
of contracts. The other $0.8 million relate to taxation of the Diagnostic
Laboratory Division as offset by tax benefits of $3.7 million due to the losses
incurred by the write-down due to impairment of goodwill and the value of the UK
property.

     Minority interests in income decreased by $0.5 million as compared to the
prior year, resulting from (a) the decrease in the minority interests in income
due to the acquisition of the 40% minority interest in UGL as of June 30, 1995,
offset by the reduction in the holding in ULSA as a result of its initial public
offering, and to the variance in operating income of the respective
subsidiaries, and (b) the increase in losses of the Clinical Trials Division
attributable to minority shareholders.

Twelve months ended May 31, 1996 compared with the twelve months ended May 31,
1995

     The Company's results of operations for the year ended May 31, 1996,
include the operations of the Diagnostic Laboratory Division and of the Clinical
Trials Division. The following table presents a reconciliation of the results of
operations of each division with the consolidated statement of operations, for
the purpose of discussing the results of operations. While the Clinical Trials
Division commenced to exist during the year ended May 31, 1996, the Company,
through UCP, already had some activities in the clinical trials business during
the year ended May 31, 1995, which activities were transferred to UCT as of June
1, 1996. Accordingly, for analysis and comparative purposes, the activities
conducted by UCP in the clinical trials business during both years have been
included under the Clinical Trials Division caption.


                                      II-6





                                                                          Year ended May 31, 1996
                                                                          -----------------------

                                                                          Health care
                                                            Diagnostic    Management         Clinical
                                                            Laboratory    Services           Trials                        As
                                                            division      division           division     Adjustments      reported
                                                            --------      --------           --------     -----------      --------
                                                                                                               
REVENUE                                                     $93,409                          $4,427           ($775)        $97.061
Operating expenses:
      Salaries and related charges                           38,569                           1,413                          39,982
      Supplies                                               15,083                             157                          15,240
      Other operating expenses                               21,747                           4,551            (775)         25,522
      Depreciation and amortization of                        5,387                              61                           5,448
        tangible assets
      Amortization of intangible assets                       2,354                              77                           2,431
                                                        -----------     -----------     -----------     -----------     -----------

OPERATING INCOME (LOSS)                                      10,270               0          (1,832)              0           8,438

Interest net                                                 (2,935)                            (49)                         (2,984)
Equity in loss of affiliate                                  (3,005)                           (294)                         (3,299)
Other net                                                       846                              37                             883
                                                        -----------     -----------     -----------     -----------     -----------

Income before minority interests                              8,181          (3,005)         (2,138)              0           3,038
Tax provision                                                (2,979)                            624                          (2,355)
                                                        -----------     -----------     -----------     -----------     -----------


Income before interests in income                             5,202          (3,005)         (1,514)              0             683

Minority interests in income                                   (942)                            (41)                           (983)
                                                        -----------     -----------     -----------     -----------     -----------

NET INCOME (LOSS)                                            $4,260         ($3,005)        ($1,555)             $0           ($300)
                                                        ===========     ===========     ===========     ===========     ===========

Weighted average common shares outstanding                6,005,643       6,005,643       6,005,643                       6,005,643

Earnings (loss) net share of common stock                     $0.71          ($0.50)         ($0.26)                         ($0.05)


     Further, the Company's results for the year ended May 31, 1996 include the
acquisition by UGL, as of June 30, 1995, of 40% of the capital stock of UGL,
while the Company's results for the year ended May 31, 1995 included a 40%
minority interest in UGL's earnings. The financial statements also give effect
to the acquisition of UGUK by ULSA from UGL. The following table presents the
required pro forma adjustments to the results of operations for the year ended
May 31, 1995, providing a comparative analysis with the comparable period in the
1996 fiscal year, had the 40% of UGL's common stock been acquired as of June
1,1994, and had UGUK been owned by ULSA as of June 1, 1994 (unaudited). The
results of operations for the year ended May 31, 1995 were translated into U.S.
dollars using the exchange rates which were then valid.

     Had the Spanish and Italian operations been acquired by the Company as of
June 1, 1994, there would have been no material effect on the consolidated
operations of the Company for the year ended May 31, 1995.





                                      II-7







                                                                              Year ended May 31, 1995
                                                                              -----------------------
                                                        Diagnostic       Clinical
                                                        laboratory       Trials         As                               Pro
                                                        division         division      reported    Adjustments           Forma
                                                        --------         --------      --------    -----------           -----

                                                                                                            
REVENUE                                                   $79,003         $3,450        $82,543                          $82,543
Operating expenses:                                                                                                 
      Salaries and related charges                         34,436            556         34,992                           34,992
      Supplies                                             13,554            138         13,692                           13,692
      Other operating expenses                             13,792          2,348         16,140                           16,140
      Depreciation and amortization of                      5,244             11          5,255                            5,255
        tangible assets                                                                                             
      Amortization of intangible assets                     1,947              0          1,947             83((j)         2,030
                                                      -----------    -----------    -----------        -----------   -----------

OPERATING INCOME                                           10,031            486         10,517            (83)           10,434

Interest net                                               (1,509)             0         (1,509)        (1,656)(b)        (3,165)
Other net                                                    (197)             0           (197)                            (197)
                                                      -----------    -----------    -----------        -----------   -----------

Income before taxes minority interests                      8,325            486          8,811         (1,739)            7,072
Tax provision                                              (1,832)          (143)        (1,975)           497(e)         (1,053)
                                                                                                           262(C)
                                                                                                           163(g)
                                                      -----------    -----------    -----------        -----------   -----------
Income before minority interests from                       6,492            344          6,836           (817)            6,019
      continuing operations

Minority interests in income on
      continuing operations                                (3,719)           (44)        (3,763)         2,246(a)         (1,395)
                                                                                                           177(d)
                                                                                                           (34)(f)
                                                                                                           (21)(h)
                                                      -----------    -----------    -----------        -----------   -----------

Income on continuing operations                             2,773            300          3,073          1,551             4,624
Loss on disposition of discontinued operation,
      net of tax and minority interests                      (234)             0           (234)                            (234)


NET INCOME                                                 $2,539           $300         $2,839         $1,551            $4,390
                                                      ===========    ===========    ===========        ===========   ===========

Weighted average common shares outstanding              5,782,902      5,782,902      5,782,902                        5,782,902
Earnings per share of common stock
      On income from continuing operations                  $0.48          $0.05          $0.53                            $0.80 
      On loss on disposition of                            ($0.04)         $0.00         ($0.04)                          ($0.04)
             discontinued operation                                                                                   
      On net income                                         $.044          $0.05          $0.49                            $0.76


(a)  To record the cancellation of the 40% minority interest in the 1995 net
     income of UGL.
(b)  To record the interest cost on repurchase of 40% in UGL at an effective
     rate of 5.5%.
(c)  To record the tax benefit at 30% on the interest cost on repurchase of 40%
     of UGL.
(d)  To record a 12.8% minority interest to be borne by the ULSA minority
     shareholders in thr ULL 1995 losses.
(e)  To record the tax benefit to ULSA of reversing interest received from UGL
     during 1995.
(f)  To record the minority interest effect on (c) at 12.8%, the minority
     shareholders' share in ULSA.
(g)  To record the tax benefit on the interest charge incurred by ULSA on the
     SFr. 12 million loan due to UGL.
(h)  To record the minority interest effect on (g) at 12.8%, the minority
     shareholder share in ULSA.
(i)  To record goodwill amortization on the acquisition of 40% in UGL.

     Consolidated revenue increased to $97.1 million for the twelve months ended
May 31, 1996, representing an increase of $14.5 million from the comparable
prior year period. Excluding the effect of the change in the US dollar exchange
rate versus the Swiss franc and the pound Sterling (approximately $4.2 million
for the twelve months), and excluding revenue generated by the newly-acquired
Italian, and Spanish operations ($7.1 million for the twelve months,
consolidated for the first year in 1996), revenue increased by approximately
$3.0 million, as compared to the prior year. Revenue generated by the Swiss
operations increased by approximately 2.7% as a result of additional specimen
volume of 3% partly offset by a decrease in the test mix of 0.3%. Revenue
generated by the UK operations increased by approximately 12% in respect of the
Diagnostic Laboratory Division due to additional revenue resulting from the NHS
contract and a new contract with a major public transport service, offset by the
final effects on revenues due to the prior loss of a significant client.
Revenues of $4.4 million were recorded by the Clinical 



                                      II-8



Trials Division due to the expansion of client base and the signing of new
contracts as a result of intensive marketing efforts. During the second half of
the year Spain almost doubled its revenue versus the comparable prior year
period.

      Operating income for the year ended May 31, 1996 decreased by $2.1 million
versus the comparable prior year. This decrease is comprised of the effect of
the change in the US dollar exchange rate versus the Swiss franc and the pound
Sterling (approximately $1.2 million), an increase in operating costs related to
the strengthening of certain administrative functions and controls, business
development costs related to the research of new markets ($0.5 million), and the
Clinical Trials Division operating costs and expenses ($6.2 million) offset by
increased performance in the United Kingdom Diagnostic Laboratory Division.
Operating losses generated by the Spanish operations ($0.8 million) resulted
from the Company's strategic decision to increase penetration in the Spanish
market requiring investment in facilities and human resources. Italian
operations, on the other hand, maintained a small positive contribution ($0.1
million) to operating income.

     Interest expense, net, increased $1.5 million during the twelve months
ended May 31, 1996 as compared to the prior year, primarily due to higher
average borrowing levels by the Company resulting from the Company's acquisition
of the 40% minority interest in UGL and other capital expenditures, partly
offset by an overall decrease in interest rates.

     Other income was recorded from exchange gains realized on certain assets
and liabilities as a result of fluctuations in exchange rates.

     Other income was also negatively impacted by a charge of $3.0 million
resulting from the equity pick-up of the Company's investment in MISE. This was
due to the fact that MISE has recorded a one-time amortization of the know-how
and computer software it purchased during the year. While the Company's
management believes that the fair value of its investment in MISE has not been
impaired, accounting principles generally accepted in the U.S. require that
know-how and marketing plans, such as those purchased by MISE, purchased from
either related or unrelated parties, be expensed as incurred.

     Provision for income taxes increased $0.4 million in the twelve months
ended May 31, 1996, The first-year losses of UCT gave rise to a tax benefit of
$0.8 million which management believes the Company will recover through future
income of such division.

     Minority interests in income decreased substantially as compared to the
prior year, resulting primarily from the decrease in the minority interests in
income due to the acquisition of the 40% minority interest in UGL as of June 30,
1995.

Liquidity and Capital Resources

     Net cash provided by operating activities for the year ended May 31, 1997
amounted to $5.1 million, a decrease of $6.2 million from the prior year
primarily due to working capital needs of the Clinical Trials Division.


                                      II-9



     Net cash used in financing activities for the year ended May 31, 1997 was
$2.8 million, as compared to $0.2 million in the prior year. The increase of
$2.6 million primarily resulted from cash proceeds from the issuance of share
capital by UniHolding and ULSA, offset by repayment of long term and lease debt
and reduction in bank overdrafts.

     Net cash provided by investing activities for the year ended May 31, 1997
was $4.2 million, a change of $30.5 million from the prior year. Such change
consisting primarily of the proceeds from the sale of assets of $26.8 million in
relation to the ULSA initial public offering, and to a $3.6 change in the amount
of loans and advances made to affiliates, primarily Unilabs Holdings SA. The
balance of approximately $3.6 million currently due by Unilabs Holdings SA is
expected to be paid within twelve months.

     The Company's bank facilities provide for a total of approximately $23
million, including secured senior revolving facilities consisting of term loans,
working capital loans and/or guarantees. As of September 19, 1997, the Company
had approximately $7 million of availability under the aggregate credit
facilities.

     On July 23, 1996, the Company issued 333,333 new shares of its common stock
to a U.S. institutional investor at $15.00 per share.

     During the year ended May 31, 1997, UGL and ULSA sold an aggregate of
94,000 shares (or 39.2% on a fully-diluted basis) of ULSA's common stock to
financial institutions and to the public for a total consideration of SFr.62.7
million (approximately $44.5 million) through an initial public offering of
ULSA's newly-issued and existing shares. As of April 24, 1997, such initial
public offering closed. Such offering, which was heavily over-subscribed, was
made at the price of SFr.675 per share. The offering comprised the issuance by
ULSA to the public of a further 20% of its equity, and the sale by the Company
of a portion of its holding in ULSA, thereby diluting the Company's holding in
ULSA to approximately 60% post-initial public offering. The shares of ULSA are
listed on the Swiss Exchange since April 25, 1997. The proceeds were used to
reduce existing bank debt in the amount of approximately SFr.17.5 million
(approximately $12.5 million), and the balance is being used principally for
acquisitions and financing the development of the Clinical Trials Division.

     In September 1988, UCP acquired a freehold site at Camden Lock, London NW1,
where it constructed a new building on the site to provide laboratory space to
meet present requirements and those for the foreseeable future. The building,
completed in 1991, provides approximately 54,000 square feet of usable space.
While the Company believes that such building is suitable and adequate for its
purpose, the Company has, during the year ended May 31, 1997, made a decision to
sell it and move to other premises which it has not yet found. Such decision was
made in consideration of the overall Company's development strategy in the UK
for both UCP and UCT. As a result of this decision, the Company recorded a
one-time charge of approximately $5.8 million to adjust the building's carrying
value to its estimated market value. The Company actively pursues efforts in
order to sell the building. It intends to use the proceeds of such sale, if any,
to reimburse most of the debts of the UK operations.


                                     II-10



     With respect to the Diagnostic Laboratory Division, the Company believes
that the liquidity provided by the cash flow from operations, the existing cash
balances and the borrowing arrangements described above will be sufficient to
meet the Company's capital requirements including anticipated operating expenses
arising from the Company's recent expansion into the Spanish and Italian
markets, as well as debt repayments.

     With respect to the Clinical Trials Division, the Company believes that the
liquidity provided by the proceeds received from the ULSA initial public
offering, the existing cash balances and the borrowing arrangements described
above will be sufficient to meet the Company's capital requirements for the
foreseeable future including anticipated operating expenses, as well as debt
repayments.

     In addition, the Company has outstanding obligations and commitments under
capital leases which mature over the next five to ten years.

     On August 8, 1997, the Company announced its intention to merge UniHolding
into its wholly owned subsidiary, UGL. The proposed merger is intended to
streamline the corporate structure. It is subject to shareholder and regulatory
approvals, but the principle of such merger has been unanimously approved by the
Company's board of directors.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

The preceding "Business" and Management's Discussion and Analysis contains
various "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, which represent the Company's expectations or beliefs
concerning the Company's operations, economic performance and financial
condition, including, in particular, forward-looking statements regarding the
Company's expectation of future performance following implementation of its new
business strategy. Such statements are subject to various risks and
uncertainties. Accordingly, the Company hereby identifies the following
important factors that could cause the Company's actual financial results to
differ materially from those projected, forecast, estimated, or budgeted by the
Company in such forward-looking statements.

(a)  Heightened competition, including the intensification of price competition.

(b)  Impact of changes in tests and payor mix.

(c)  Adverse actions by governmental or other third-party payors, including
     unilateral reduction of fee schedules payable to the Company.

(d)  Failure to obtain new customers, retain existing customers or reduction in
     tests ordered or specimens submitted by existing customers.

(e)  Adverse results in significant litigation matters, if any.


                                     II-11



(f)  Denial of certification or licensure of any of the Company's clinical
     laboratories by governmental agencies.

(g)  Adverse publicity and news coverage about the Company or the clinical
     laboratory industry.

(h)  Inability to carry out marketing and sales plans.

(i)  Inability to successfully integrate the operations of or fully realize
     costs savings expected from the consolidation of certain operations and the
     elimination of duplicative expenses or risk that declining revenues or
     increases in other expenses will offset such savings.

(j)  Ability of the Company to attract and retain experienced and qualified
     personnel.

(k)  Changes in interest rates causing an increase in the Company's effective
     borrowing rate, and changes in exchange rates causing variances in
     consolidated income and expenses reported in dollars.

(l)  The effect of the Company's effort to improve account profitability by
     selectively repricing or discontinuing business which perform below Company
     expectations.

(m)  Inability to successfully develop the Company's Clinical Trials operations.

Other Information

     The Company operates in Europe in the currencies of the countries in which
it is located. For reporting purposes the financial statements are translated in
accordance with U.S. generally accepted accounting principles which require,
generally, that assets, liabilities and equity are translated at the exchange
rates in effect at the balance sheet date and revenues and expenses at the
weighted average rates during each year. Accordingly assets, liabilities and
shareholders' equity will be affected by changes in such exchange rates.

     The Company's operating results will continue to be affected by the volume,
mix and timing of test orders received during a period and by conditions in the
industry (including pricing regulations) and in the economies in which the
Company operates, such as recessionary periods, political instability, and
fluctuations in interest or currency exchange rates.

     The Company further experiences both increases and decreases in its volume
of testing due to seasonality shifts. All laboratories experience a slow down
during the holiday seasons, primarily in summer. This may lead to quarterly
information which is not indicative of the trend of the Company's business.

     Inflation was not a material factor in either revenue or operating expenses
during the years presented, and is not expected to be in the current year.


                                     II-12



               ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                     Page Number

Reports of Independent Auditors ..................................     II-F-2


UniHolding Corporation and Subsidiaries Consolidated
Balance Sheets as of May 31, 1997, and 1996 ......................     II-F-4


UniHolding Corporation and Subsidiaries Consolidated
Statements of Operations for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-6


UniHolding Corporation and Subsidiaries Consolidated
Statements of Stockholders' Equity for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-7


UniHolding Corporation and Subsidiaries Consolidated
Statements of Cash Flows for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-8


UniHolding Corporation and Subsidiaries Notes to
Consolidated Financial Statements for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-10








ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

(a) Effective May 31, 1997, the Board of Directors by unanimous written consent
elected to change the principal accountants, and elected to engage ATAG Ernst &
Young SA, member of Ernst & Young International, to audit the registrant's
financial statements for the year ending May 31, 1997 and to replace Richard A.
Eisner & Company, LLP as the principal accountants.

(b) This change of principal accountants was recommended by the Audit Committee
of the Board of Directors, which recommendation was adopted by the Audit
Committee at a meeting on May 26, 1997. The unanimous written consent was
completed by the directors on May 30, 1997. On the same date the former
accountant was notified of the change of accountants.

(c) The reports of Richard A. Eisner & Company, LLP on the registrant's
financial statements for the years ended May 31, 1996 and May 31, 1995 contained
no adverse opinion or disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope, or accounting principles.

(d) During the registrant's two most recent fiscal years ended May 31, 1996 and
during the subsequent interim period through May 30, 1997, except as described
in section (e) below, there were no disagreements with Richard A. Eisner &
Company, LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope and procedures, which disagreements, if
not resolved to the satisfaction of Richard A. Eisner & Company, LLP would have
caused Richard A. Eisner & Company, LLP to make reference to the subject matter
of the disagreements in connection with its report.

(e) (i) During fiscal year 1996 the registrant invested approximately $3 million
for a 1/3 voting interest (and 2/3 of the equity) in MISE S.A. The MISE
transaction is described in detail in Note 11 to the 1996 financial statements
and other sections of the 1996 Form 10-K. The registrant initially capitalized
the investment and reflected the $3 million as an asset in the balance sheet of
interim financial statements included in Forms 10-Q for fiscal 1996 and
initially misdescribed certain aspects of the investment. The former accountant
advised the registrant of the need to expand significantly the scope of its
audit in connection with the MISE transaction. As a result of the expanded
inquiries, the former accountant believed that U.S. generally accepted
accounting principles required the $3 million to be expensed and the registrant
accordingly agreed and expensed the $3 million as reported in its 1996 Form
10-K.


                                     II-14



     (ii) The Board of Directors discussed in detail the MISE transaction which
was the subject of a disagreement in the view of the former accountant. However,
the Board did not discuss the matter with the former accountant because the
registrant had agreed with the former accountant, thereby resolving the matter.

     (iii) The registrant has authorized the former accountant to respond fully
to the inquiries of the successor accountant concerning the MISE transaction and
any other transactions.

(f) During the registrant's two most recent fiscal years ended May 31, 1996 and
during the subsequent interim period through May 30, 1997, except as described
in section (g) below, there are no other reportable events (as defined in Item
304(a)(1)(v)).

(g) The former accountant has advised the registrant that information has come
to the accountant's attention concerning current tax provisions/benefits and
deferred tax asset and liability accounts and accounting treatment of a recent
segment recapitalization and recent writedowns of real estate and goodwill that,
if further investigated, may materially impact the fairness or reliability of
the financial statements issued covering the fiscal period ending February 28,
1997 (i.e., subsequent to the date of the most recent audited financial
statements), and due to the change of accountants the former accountant did not
conduct such further investigation.

(h) The registrant has requested Richard A. Eisner & Company, LLP to furnish it
with a letter addressed to the Securities and Exchange Commission stating
whether it agrees with the above statements. The letter from Richard A. Eisner &
Company, LLP is an Exhibit to this Form 10-K.


                                     II-15



ITEM 8.                 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                     Page Number

Reports of Independent Auditors ..................................     II-F-2


UniHolding Corporation and Subsidiaries Consolidated
Balance Sheets as of May 31, 1997, and 1996 ......................     II-F-4


UniHolding Corporation and Subsidiaries Consolidated
Statements of Operations for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-6


UniHolding Corporation and Subsidiaries Consolidated
Statements of Stockholders' Equity for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-7


UniHolding Corporation and Subsidiaries Consolidated
Statements of Cash Flows for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-8


UniHolding Corporation and Subsidiaries Notes to
Consolidated Financial Statements for the Years Ended
May 31, 1997, 1996 and 1995 ......................................     II-F-10



                                     II-F-1




ATAG ERNST & YOUNG       6, rue d'italie      Telephone: ++41 22 318 06 18
                         P.O. Box 3270        Telefax:   ++41 22 312 01 70
                         CH-1211 Geneva 3
                         Switzerland

REPORT OF INDEPENDENT AUDITORS
to the Board of Directors and Shareholders of

UNIHOLDING CORPORATION, Delaware, USA

We have audited the accompanying consolidated balance sheet of UniHolding
Corporation and subsidiaries (the "Company") as of May 31, 1997 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit. The
consolidated financial statements of UniHolding Corporation and subsidiaries for
the year ended May 31, 1996, were audited by other auditors whose report dated
September 28, 1996, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the 1997 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of UniHolding
Corporation and subsidiaries at May 31, 1997 and the consolidated results of
their operations and their cash flows for the year ended May 31, 1997, in
conformity with accounting principles generally accepted in the United States of
America.


Geneva, Switzerland,
October 3rd, 1997                   ATAG ERNST & YOUNG SA


                        /s/                       /s/
                        ---------------------     ---------------
                        C. Picci                  D. Russo
                     Expert-comptable diplome
                        (Auditor in charge)

                                                 

                                                ATAG ERNST & YOUNG: offices in
                                                Basel, Aarau, Berne/Thun,
                                                Bienne, Brig, Chur, Fribourg,
                                                Geneva, Kreuzlingen, Lausanne,
                                                Lucerne, Neuchatel/La
                                                Chaux-de-Fonds, St.
                                                Gallen/Buchs, Sion, Sointhurn,
                                                Winterthur, Zurich

                                         Member of the Swiss Chamber of Auditors




                                     II-F-2



REPORT OF INDEPENDENT AUDITORS


Board of Directors
UniHolding Corporation
New York, New York

     We have audited the accompanying consolidated balance sheet of UniHolding
Corporation and subsidiaries (the "Company") as of May 31, 1996, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the years in the two-year period ended May 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of UniHolding Corporation and
subsidiaries at May 31, 1996 and the results of their operations and their cash
flows for each of the years in the two-year period ended May 31, 1996 in
conformity with generally accepted accounting principles.

     As more fully described in Note 11, during the year ended May 31, 1996, the
Company invested $3 million in a newly formed company accounted for by the
equity method, which in turn, used the funds to acquire know-how, software and
marketing plans. The equity investee's loss was charged to earnings in the year
ended May 31, 1996.


/s/ Richard A. Eisner & Company, LLP

New York, New York
September 26, 1996


                                     II-F-3



                     UNIHOLDING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)




                                                                   May 31,
           ASSETS                                            1997           1996
                                                         --------       --------

CURRENT ASSETS:
  Cash and cash equivalents                              $  8,201       $  1,587
  Accounts receivable, net of
    allowance for doubtful accounts
    of $1,201 in 1997 and $1,500 in
    1996                                                   21,133         18,726
  Due from related companies                                3,573          4,960
  Inventories                                               2,272          1,910
  Prepaid expenses                                          2,046          2,535
  Other current assets                                        770          1,051
                                                         --------       --------

           Total current assets                            37,995         30,769
                                                         --------       --------


NON-CURRENT ASSETS:
  Long-term notes receivable                                  818            818
  Deferred tax assets                                       5,293          1,212
  Intangible assets, net                                   30,019         54,828
  Property, plant and equipment, net                       28,610         33,238
  Investment in equity affiliates                           1,480          1,423
  Other assets, net                                         1,088            964
                                                         --------       --------

           Total non-current assets                        67,308         92,483
                                                         --------       --------

                                                         $105,303       $123,252
                                                         ========       ========


                        See notes to financial statements



                                     II-F-4




                     UNIHOLDING CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)


                                                                May 31,
                                                          1997           1996
                                                       ---------      ---------
CURRENT LIABILITIES:
  Bank overdrafts                                      $   5,889      $   6,686
  Lease payable                                            1,733          1,331
  Payable to related parties                                 150              9
  Trade payables                                           9,501          6,843
  Accrued liabilities                                      4,458          4,568
  Note payable                                              --           15,000
  Long-term debt                                           4,741          2,971
  Taxes payable                                            4,707          3,175
                                                       ---------      ---------

        Total current liabilities                         31,179         40,583
                                                       ---------      ---------

NON-CURRENT LIABILITIES:
  Lease payable                                            2,446          2,633
  Long-term debt                                          12,109         35,721
  Taxes payable                                              155            199
  Deferred taxes                                             725          4,410
                                                       ---------      ---------

        Total non-current liabilities                     15,435         42,963
                                                       ---------      ---------

        Total liabilities                                 46,614         83,546
                                                       ---------      ---------

MINORITY INTERESTS                                        10,344          5,464
                                                       ---------      ---------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Common stock, $0.01 par value;
    Voting; authorized 18,000,000 shares
    issued 7,627,736 at May 31, 1997
    and 5,823,785 at May 31, 1996                             76             58
    Non-Voting; authorized 2,000,000 shares;
    issued and outstanding 298,384 at
    May 31, 1997 and 1996                                      3              3
  Additional paid-in capital                              49,832         32,429
  Cumulative translation adjustment                       (3,050)          (239)
  Retained earnings                                        5,559          5,153
                                                       ---------      ---------
                                                          52,420         37,404
Less--cost of 293,150 and 168,000 shares
  of Common Stock held in treasury at
  May 31, 1997 and May 31, 1996,
  respectively                                            (4,075)        (3,162)
                                                       ---------      ---------

        Total stockholders' equity                        48,345         34,242
                                                       ---------      ---------

                                                       $ 105,303      $ 123,252
                                                       =========      =========



                        See notes to financial statements



                                     II-F-5



                     UNIHOLDING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in thousands, except per share data)




                                                          Years ended May 31
                                                 1997           1996           1995
                                             -----------    -----------    -----------

                                                                          
REVENUE                                      $    99,644    $    97,061    $    82,543

Operating expenses:
  Salaries and related charge                     41,235         39,982         34,992
  Supplies                                        16,020         15,240         13,692
  Other operating expenses                        30,822         25,522         16,140
  Depreciation and amortization of
    tangible assets                                6,230          5,448          5,255
  Adjustment of carrying value of building         5,805             --             --
  Amortization of intangible assets                5,437          2,431          1,947
  Adjustment of carrying value of goodwill
    in subsidiary                                 23,722             --             --
                                             -----------    -----------    -----------

OPERATING INCOME (LOSS)                          (29,627)         8,438         10,517

Interest expense, net of interest income
  of $268 and $664 in 1997 and 1996               (3,083)        (2,984)        (1,509)
Equity in loss of affiliates                        (253)        (3,299)            --
Gain on sale of subsidiary shares                 16,164             --             --
Other, net                                           441            883           (197)
                                             -----------    -----------    -----------

Income (loss) before taxes and minority
  interests                                      (16,358)         3,038          8,811
Tax benefit (provision)                            3,588         (2,355)        (1,975)
                                             -----------    -----------    -----------

Income (loss) from continuing operations
  before minority interests                      (12,770)           683          6,836
Minority interests in income (loss) of
  continuing operations                             (536)          (983)        (3,763)
                                             -----------    -----------    -----------

Income (loss) from continuing operations         (13,306)          (300)         3,073
Loss on disposition of discontinued
  operation, net of tax benefit of
  $195 and minority interests of $220                 --             --           (234)
                                             -----------    -----------    -----------

NET INCOME (LOSS)                            $   (13,306)   $      (300)   $     2,839
                                             ===========    ===========    ===========

Weighted average common shares outstanding     7,015,943        005,643      5,782,902
Earnings per share of common stock
  Net income (loss) from continuing
    operation                                $     (1.90)   $     (0.05)   $      0.53
  Loss on disposition of discontinued
    operation                                         --             --    $     (0.04)
  Net income (loss)                          $     (1.90)   $     (0.05)   $      0.49



                        See notes to financial statements




                                     II-F-6




                             UNIHOLDING CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (Dollars in thousands)



                                                                 Common Stock                      Additional    Cumulative    
                                                                 -----------                        
                                                       Voting                    Non-Voting           Paid-in   Translation    

                                                Shares        Amount        Shares        Amount      Capital    Adjustment    
                                                ------        ------        ------        ------      -------    ----------    

                                                                                                          
    Balances, May 31, 1994                   4,982,569            50            --            --        9,328           620    
Net income                                                                                                                     
Excess of purchase price of subsidiaries
  over predecessor cost                                                                                (1,335)                 
Issuance of common stock for repayment
  of note and accrued interest due to
  stockholder                                  827,613             8                                   18,199
                                                                                                                               
Issuance of common stock for cash, net
  of expenses of $250                          250,000             2                                    4,998                  
Cumulative translation adjustment                                                                                              
                                            ----------    ----------    ----------    ----------   ----------    ----------    

    Balances, May 31, 1995                   6,060,182            60            --            --       31,190         1,174    
Net loss                                                                                                                       
Adjustment for 4-to-1 reverse split               (513)           
Issuance and exchange of Non-Voting
  Common Stock for Voting Common Stock        (298,384)           (3)      298,384             3
Issuance of common stock for cash, net
  of expenses of $113                           62,500             1                                    1,239                  
Cost of Common Stock held in treasury                                                                                          
Cumulative translation adjustment                                                                                    (1,413)   
                                            ----------    ----------    ----------    ----------   ----------    ----------    

    Balances, May 31, 1996                   5,823,785            58       298,384             3       32,429          (239)   

Net loss                                                                                                                       
Issuance of common stock for cash              333,333             3                                    4,997                  
Issuance of common stock for no
  additional consideration, pursuant to
  antidilutive provisions                       75,655             1                                       (1)                 
Issuance of common stock for repayment of
  note and accrued interest due to former
  UGL stockholder                            1,394,963            14                                   15,736                  
Excess of purchase price of subsidiaries
  over predecessor cost                                                                                (3,329)                 
Issuance of shares at a premium by ULSA                                                                                        
Cost of Common Stock held in treasury                                                                                          
Cumulative translation adjustment                                                                                    (2,811)   
                                            ----------    ----------    ----------    ----------   ----------    ----------    
                                             7,627,736            76       298,384             3       49,832        (3,050)   
                                            ==========    ==========    ==========    ==========   ==========    ==========    

                                                                            Total 
                                                                                  
                                             Retained      Treasury  Stockholders'
                                                                                  
                                             Earnings         Stock        Equity 
                                             --------         -----        ------ 
                                                                                  
                                                                         
    Balances, May 31, 1994                      2,614            --        12,612 
Net income                                      2,839                       2,839 
Excess of purchase price of subsidiaries                                          
  over predecessor cost                                                    (1,335)
Issuance of common stock for repayment                                            
  of note and accrued interest due to                                             
  stockholder                                                                     
                                                                           18,207 
Issuance of common stock for cash, net                                            
  of expenses of $250                                                       5,000 
Cumulative translation adjustment                 554                         554 
                                           ----------    ----------    ---------- 
                                                                                  
    Balances, May 31, 1995                      5,453            --        37,877 
Net loss                                         (300)                       (300)
Adjustment for 4-to-1 reverse split                                            --   
Issuance and exchange of Non-Voting                                               
  Common Stock for Voting Common Stock                                            
Issuance of common stock for cash, net                                            
  of expenses of $113                                                       1,240 
Cost of Common Stock held in treasury                        (3,162)       (3,162)
Cumulative translation adjustment                                          (1,413)
                                           ----------    ----------    ---------- 
                                                                                  
    Balances, May 31, 1996                      5,153        (3,162)       34,242 
                                                                                  
Net loss                                      (13,306)                    (13,306)
Issuance of common stock for cash                                           5,000 
Issuance of common stock for no                                                   
  additional consideration, pursuant to                                           
  antidilutive provisions                                                      -- 
Issuance of common stock for repayment of                                         
  note and accrued interest due to former                                         
  UGL stockholder                                                          15,750 
Excess of purchase price of subsidiaries                                          
  over predecessor cost                                                    (3,329)
Issuance of shares at a premium by ULSA        13,712                      13,712 
Cost of Common Stock held in treasury                          (913)         (913)
Cumulative translation adjustment                                          (2,811)
                                           ----------    ----------    ---------- 
                                                5,559        (4,075)       48,345 
                                           ==========    ==========    ========== 


                        See notes to financial statements



                                     II-F-7



                     UNIHOLDING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)



                                                       Years ended May 31,
                                                 1997        1996        1995
                                               --------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                              $(13,306)   $   (300)   $  2,839
  Adjustments to reconcile net income
    to net cash provided by operations:
  Equity in loss of affiliates                      253       3,299          --
  Minority interests in income                      536         983       3,543
  Deferred taxes                                 (7,594)       (922)        445
  Depreciation and amortization of
    tangible assets                              12,035       5,448       5,255
  Amortization of intangible assets              29,159       2,431       1,947
  Gain on sale of subsidiary shares             (16,164)         --          --
  Other non-cash (income) expenses                 (389)        (22)          7
Net changes in assets and liabilities,
    net of acquisitions:
   Accounts receivable                           (3,122)     (2,027)        172
   Inventories                                     (348)       (164)        758
   Prepaid expenses                                 528         174        (171)
   Other current assets                             251        (496)        218
   Trade payables                                 1,791       2,362      (2,604)
   Accrued liabilities                             (373)       (130)       (373)
   Taxes payable                                  1,870         675      (1,756)
                                               --------    --------    --------

  Net cash provided by operating
  activities                                      5,127      11,311      10,280
                                               --------    --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash proceeds from issuance of share
  capital, net of expenses                       21,152       1,240       5,000
  Repayment of long-term debt                   (20,115)     (1,156)     (1,504)
  Cash proceeds from long-term debt                  --       4,560      13,415
  Proceeds (reimbursement) from (of)
  bank overdrafts                                (1,131)        171       3,796
  Dividend paid to minority shareholders           (209)       (331)       (319)
  Repayment of lease debt                        (1,818)     (1,539)       (826)
  Payment for purchase of treasury stock           (696)     (3,162)         --
                                               --------    --------    --------

  Net cash provided by (used in)
  financing activities                           (2,817)       (217)     19,562
                                               --------    --------    --------


                                   (continued)




                                     II-F-8




                     UNIHOLDING CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)

                                   (continued)



                                                        Years ended May 31,
                                                   1997        1996        1995
                                               --------    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Payment for purchases of property
  and equipment                                  (4,476)     (3,788)     (4,611)
  Loans and advances (to) from
  affiliates and related companies, net          (2,497)     (6,142)        503
  Payment for purchase of interest
  in subsidiaries                               (15,403)    (16,418)     (8,948)
  Payment for purchase of intangible
  assets                                           (293)       (456)     (2,249)
  Proceeds from sale of subsidiary
  shares                                         26,842         481       1,047
                                               --------    --------    --------

  Net cash provided by (used in)
  investing activities                            4,173     (26,323)    (14,258)
                                               --------    --------    --------


  Effect of exchange rate changes on
  cash                                              131        (123)        260

  Net increase (decrease) in cash and
  cash equivalents                                6,614     (15,352)     15,844
  Cash and cash equivalents, beginning
  of year                                         1,587      16,939       1,095
                                               --------    --------    --------

  Cash and cash equivalents, end of
  year                                         $  8,201    $  1,587    $ 16,939
                                               ========    ========    ========


                        See notes to financial statements



                                     II-F-9



                     UNIHOLDING CORPORATION AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS
               (Monetary amounts in 000's, except per share data)

1.   Description of the Company and Basis of Presentation

     UniHolding Corporation ("UniHolding") and its subsidiaries (collectively
the "Company") primarily provide clinical laboratory testing services to
physicians, managed care organizations, hospitals and other health care
providers through its laboratories in Switzerland, the United Kingdom, Italy and
Spain. It also provides clinical laboratory testing services in connection with
clinical trials conducted for pharmaceutical companies.

     On March 31, 1994 UniHolding issued 3,275,865 (post reverse split, see Note
6) shares (then 65.75%) of its common stock, a promissory note in the amount of
$18,000 and canceled a debt in the amount of $2,900 in exchange for 60% of the
capital stock of Unilabs Group Limited ("UGL"), 100% of the capital stock of Uni
Clinical Laboratories UCL Engineering SA ("UCLE") and options to acquire certain
laboratory operating companies in Spain and Italy from Unilabs Holdings SA, a
Panama corporation, ("Holdings") pursuant to a stock exchange agreement between
UniHolding and Holdings.

     The acquisitions set out in the preceding paragraph were accounted for as
the reverse acquisition of UniHolding by an "accounting entity" consisting of
Unilabs SA ("ULSA") and UCLE because, following the transaction, the former
shareholder of ULSA and UCLE was in control of the Company.

     UGL was formed pursuant to a Stock Purchase Agreement dated January 19,
1993 among Unilab Corporation ("Old Unilab"), MetCal, Inc. (now known as "Unilab
Corporation" or "Unilab") and Holdings. Pursuant to the agreement, which closed
on November 10, 1993, Holdings contributed 70% of ULSA, subject to the
assumption by Unilab from UGL of a liability of $21,000 to Holdings and Unilab
contributed 100% of the capital stock of Unilabs Clinical Pathology Limited
("UCP", formerly JS Pathology plc, "JSP") in exchange for 60% and 40%,
respectively, of the capital stock of UGL. Subsequent to November 10, 1993,
Holdings and Unilab agreed upon an increase in the relative value of Holdings'
original contribution by approximately $4,100. Accordingly, UGL issued a note in
this amount to Holdings. UCP was subsequently transferred to Unilabs Group (UK)
Limited ("UGUK", formerly United Laboratories Limited, "ULL"), a newly formed
United Kingdom corporation and 100% subsidiary of UGL, in a reorganization which
is deemed to have occurred as of November 10, 1993. As of May 29, 1995, with a
view to streamlining the European subsidiary structure, UGL sold UGUK, its
wholly-owned subsidiary, to ULSA, then an 87.2% subsidiary of UGL.

     On May 31, 1995, the Company exercised its options, obtained on March 31,
1994, to acquire Spanish and Italian laboratory operations from Holdings for an
aggregate cost of $7,342 paid in the form of two promissory notes offset against
cash advances. The acquisitions were accounted for at predecessor cost and the
excess of the purchase price over Holdings' carrying value, $375, was charged to
additional paid-in capital. Had the Spanish and Italian operations been acquired
by the Company as of June 1, 1994, there would have been no material effect on
the consolidated operations of the Company for the year ended May 31, 1995. As
of December, 1996, with a view to streamlining the European subsidiary
structure, UniHolding sold the Spanish and Italian operations to ULSA, for a
consideration of S.Fr. 9,700 ($7,342).


                                    II-F-10



     During the year ended May 31, 1995, the Company sold to a third-party a
subsidiary engaged in a separate line of business, the operations of which were
not material, and realized a non-recurring loss on discontinued operations of
approximately $234 (or $0.04 per share).

     As of June 30, 1995, UniHolding and UGL entered into an agreement whereby
UGL acquired from Unilab 40% of UGL's common stock for a total consideration of
$30,000. The consideration was paid $13,000 in cash, $2,000 through the
assumption of a debt from Unilab to UCP, and $15,000 in the form of a one-year,
interest-bearing promissory note. The interest on the $15,000 promissory note is
the greater of (i) 10% and (ii) the 3-month LIBOR rate on the business day
immediately preceding the first day of a calendar quarter plus 3.25%. Such
interest started accruing on January 1, 1996. The acquisition of the minority
interest in UGL was accounted for as a purchase and the excess of the purchase
price over the fair value, which approximated the carrying value, of the assets
acquired, $3,301, was allocated to goodwill. The agreement provided that if the
principal of the note, together with any accrued interest, was still unpaid on
December 31, 1996, it should be converted into shares of UniHolding's common
stock at 75% of then market value. As of December 31, 1996, the $15,000 note due
Unilab was unpaid. Accordingly, the note's principal, together with accrued but
unpaid interest of $750 as of December 31, 1996, converted into 1,394,963
newly-issued shares of Common Stock. Further, pursuant to certain antidilution
provisions, the Company issued to a minority investor 75,655 newly-issued shares
of Common Stock for no additional consideration. Had the Unilab note converted
as of June 1, 1996, the results of operations for the year ended May 31, 1997,
would have been as follows. Such unaudited pro forma financial information may
not be indicative of the results of operations that would have been actually
achieved had the transactions taken place at the date indicated and should not
be construed as indicative of UniHolding's results of operations for any future
period.

                                            Year ended
                                           May 31, l997

        Sales                                $99,644

        Operating loss                       (29,627)

        Net loss                             $12,341)

        Per share                             ($1.58)

     Had the additional 40% of UGL's common stock been acquired as of June 1,
1994, and had UGUK been owned by ULSA as of June 1, 1994, consolidated
operations of the Company for the year ended May 31, 1995 would have been as
follows. Such unaudited pro forma financial information may not be indicative of
the results of operations that would have been actually achieved had the
transactions taken place at the date indicated and should not be construed as
indicative of UniHolding's results of operations for any future period.


                                    II-F-11



                                                  Year ended
                                                 May 31, l995

        Sales                                     $ 82,543

        Operating income                            10,434

        Income from continuing operations            4,624

        Net income                                   4,390

        Per share, from continuing operations       $ 0.80

        Per share                                   $ 0.76

     On March 1, 1995, the Company entered into a Cooperation Agreement, a
Licensing Agreement and a Marketing Agreement (together referred to as the "NDA
Agreements") with NDA Clinical Trials Services Inc., a Delaware corporation
based in New York ("NDA"). The NDA Agreements were intended to provide a global
product of laboratory testing services to the pharmaceutical industry in
clinical evaluations in the United States and Europe utilizing similar
procedures in testing and data management. The Company has established two new
European subsidiaries to undertake the laboratory testing for clinical
evaluations in Europe, Unilabs Clinical Trials Limited, a United Kingdom
subsidiary ("UCT"), and UCT Software SA ("UCTS", formerly Pharmasoft SA), a
Swiss subsidiary. Such service is provided using the laboratory facilities of
UCP in London and those of the Company's subsidiary in the United States, NDA.
On June 1, 1996, UCT acquired the clinical trials business thus far performed by
UCP, for a consideration comprising a note of $610 and the establishment of a
five-year agreement between UCT and UCP for the provision of testing and
administrative services by UCP and the renting of space in UCP's facilities. The
price for the subcontracting of testing has been fixed such that UCP makes a
profit over the period of the contract which, together with the $610 note,
equals the fair value of the business as of June 1, 1996. As of October 16,
1995, the Company entered into a Stock Purchase Agreement and an Option
Agreement with NDA. Under these Agreements, the Company acquired 17% of NDA's
capital through the purchase of newly-issued shares, together with an option to
increase its stake in NDA to 30% on or before May 31, 1998. The consideration
for the acquisition of 17% was $1,188 paid in cash at closing. Simultaneously,
UCT granted to NDA and NDA's stockholders (excluding the Company), an option to
subscribe to new shares of UCT. This option was contingent upon the Company
exercising its option on 13% of NDA's equity. As of July 23, 1996, the
reciprocal options on 13% of NDA's equity and on new shares of UCT were
terminated by mutual consent. As of July 23, 1996, the Company transferred the
assets of its Clinical Trials Division, consisting of 100% of the equity of UCT,
100% of the equity of UCTS and 17% of the equity of NDA to its newly formed
wholly-owned British Virgin Islands subsidiary, Global Unilabs Clinical Trials
Ltd. ("GUCT") in exchange for 217,000 ordinary shares representing all of the
issued and outstanding shares of GUCT. The ownership of the 217,000 shares of
GUCT was then transferred to UGL. Also on July 23, 1996, the Company, through
GUCT, made a loan of $700 to NDA. From August 1996 through January 1997, the
Company made further loans to NDA, totaling $1,200. GUCT entered into and closed
a Master Combination Agreement ("UCTI Agreement") dated as of January 31, 1997
with NDA and the stockholders of NDA. Pursuant to the UCTI Agreement, GUCT and
the NDA stockholders contributed their respective holdings in NDA (aggregating
100%) and GUCT contributed its


                                    II-F-12



100% holdings in UCT and UCTS to a newly-formed Delaware corporation, Unilabs
Clinical Trials International, Inc., ("UCTI"). GUCT also converted an aggregate
of approximately $1,900 of debt of NDA and approximately UK(pound)300 of debt of
UCT into equity of NDA and UCT respectively, which were then exchanged for stock
of UCTI. Further, GUCT contributed approximately $2,200 to UCTI, which, together
with the other contributions of stock, caused GUCT's ownership in UCTI to be
approximately 70% at January 31, 1997. Since the UCTI Agreement as of January
31, 1997, the operations of NDA have been combined with those of UCT, and both
UCT and NDA are now wholly-owned subsidiaries of UCTI. In May 1997, UCTI offered
$7,092 of convertible notes to all of its shareholders in proportion to their
share of UCTI's equity. GUCT subscribed a note of $5,000 corresponding to its
approximate 70% ownership. Five other UCTI shareholders subscribed to a total of
$347, thus leaving an unsubscribed balance of $1,745. Such balance was offered
in a second round of subscriptions to those shareholders who had subscribed to
the first round. Accordingly, GUCT subscribed to an additional $1,739, and one
other shareholder subscribed to the balance of $6. The notes bear interest at
the rate of 12% per annum, payable annually, and the principal is payable on May
16, 2000. Interest and principal may be repaid by UCTI, at the election of
holders of notes representing at least 66.7% of the aggregate outstanding
principal amount, either in cash or by the issuance of shares of UCTI common
stock. The acquisition by the Company of 70% of UCTI pursuant to the UCTI
Agreement was accounted for as a purchase and the excess of the purchase
consideration over the fair value, which approximated the carrying value, of the
assets acquired, $4,125, was allocated to goodwill.

     Had the UCTI Agreement closed as of June 1, 1996, consolidated operations
of the Company for the year ended May 31, 1997 would have been as follows. Such
unaudited pro forma financial information may not be indicative of the results
of operations that would have been actually achieved had the transactions taken
place at the date indicated and should not be construed as indicative of
UniHolding's results of operations for any future period.


                                                          Year ended
                                                         May 31, l997

        Sales                                             $ 102,796

        Operating income (loss)                             (30,799)

        Net loss                                           ($13,445)

        Per share                                           ($ 1.92)

     During the year ended May 31, 1997, in conformity with the Company's plans
to maximize shareholder values, UGL and ULSA organized an initial public
offering of ULSA's newly-issued and existing shares, which closed on April 24,
1997. Such offering, which was heavily over-subscribed, was made at the price of
SFr.675 per bearer share, thus valuing the Company's investment in ULSA as of
May 31, 1997, at SFr.98,806 (approximately $70,071). The offering comprised the
sale by ULSA to the public of newly issued shares of common stock corresponding
to 20% of its equity, and the sale by UGL of a portion of its holding in ULSA,
thereby diluting the Company's holding in ULSA to 60% post-initial public
offering. The shares of ULSA have been listed on the Swiss Exchange since April
25, 1997.


                                    II-F-13



2.   Significant Accounting Policies

     Principles of Consolidation

     The consolidated financial statements include the accounts of UniHolding
and its majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The investment in the Company's equity
affiliates is accounted for on the equity method. In prior years, the investment
in the Company's equity affiliates MISE and NDA were accounted for on the equity
method.

     Use of estimates

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions. Actual results may differ from those estimates.

     Inventories

     Inventories, which consist principally of purchased clinical laboratory
supplies, are valued at the lower of cost (first-in, first-out method) or
market.

     Revenue Recognition

     Revenue from performing laboratory testing services is recognized at the
time service is provided. The Company's revenue is based on the amount billed or
billable.

     Property and Equipment

     Property and equipment are stated at cost and depreciated using the
straight line method over the estimated useful lives of the related assets which
range from 3 to 50 years. Property and equipment includes items acquired under
finance leases which are capitalized and the related equipment is amortized over
its useful life. Leasehold properties are depreciated over the lease period,
which may range from 1 to 10 years and leasehold improvements are depreciated
using the straight-line method over the remaining term of the related lease or
their useful life, whichever is shorter. The Company's policy generally is to
capitalize purchased and internally-generated data processing software costs
which are considered to have a useful life of over one year and to amortize them
over their useful life estimated to be not more than 5 years.

     Goodwill

     Goodwill represents the excess of cost over the fair value of net tangible
and identifiable intangible assets acquired and is amortized using the straight
line method. Goodwill is evaluated periodically based on undiscounted expected
future cash flows and adjusted if necessary, if events and circumstances
indicate that a permanent decline in value below the current unamortized
historical cost has occurred. During the year ended May 31, 1997, the Company
revised its estimate of the useful life of existing goodwill from 40 to 20
years. The net effect of such change was a charge before tax effect of $3,025
(or $0.43 per share).


                                    II-F-14



     Other Intangible Assets

     Customer lists are recorded at cost and amortized utilizing the straight
line method over periods determined by the relative circumstances but not
exceeding 15 years. The value of the customer lists is reviewed and evaluated
periodically by management and adjusted, if necessary, if events and
circumstances indicate that a permanent decline in value below the current
unamortized historical cost has occurred.

     Income Taxes

     The Company accounts for income taxes utilizing the liability method
requiring the recognition of deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the basis of
assets and liabilities for financial reporting purposes and tax purposes.

     The Company currently provides income taxes on the earnings of foreign
subsidiaries to the extent they are taxable or expected to be remitted.

     Any dividend received from subsidiaries by UniHolding, through UGL, would
be subject to withholding taxes at a maximum rate of 35%, which the Company
could not recover, but may be creditable against U.S. Federal income tax.

     Foreign Currency Transactions

     Gains and losses resulting from foreign currency transactions and changes
in foreign currency positions are included in income or expense currently. Other
income includes an exchange loss of approximately $248 and a gain of $696 in
fiscal 1997 and 1996, respectively.

     Foreign Currency Translation

     The Company's principal operations during the fiscal years 1997, 1996 and
1995 are located in Switzerland, the United Kingdom, Italy, Spain and the United
States. A significant part of net assets, revenues and expenses are denominated
in the currency of those countries, while the Company presents its consolidated
financial statements in US dollars. Assets and liabilities are translated at the
exchange rates in effect at the balance sheet date. Revenues and expenses are
translated at the weighted average exchange rates for the period. Net gains and
losses arising upon translation of local currency financial statements to US
dollars are accumulated in a separate component of Stockholders' Equity, the
Cumulative Translation Adjustment account, which may be realized upon the
eventual disposition by the Company of part or all of its European investments.

     Income (Loss) Per Common Share

     For the years ended May 31, 1997, 1996 and 1995 income or loss per common
share was computed by dividing net income or net loss by the weighted average
number of voting and non-voting shares outstanding during the year.


                                    II-F-15



     Cash and Cash Equivalents

     For purposes of the statement of cash flows, the Company considers cash and
all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.

     Fair Value of Financial Instruments

     The carrying amount reported in the consolidated balance sheets for cash,
accounts receivable, accounts payable and accrued liabilities approximates fair
value because of the immediate or short-term maturity of these financial
instruments. The carrying amount reported for outstanding bank indebtedness
approximates fair value because the debt is generally at a variable rate that
reprices frequently. The Company believes that its non-bank indebtedness
approximates fair value based on current yields for debt instruments of similar
quality and terms.

     Stock Based Compensation Plans

     The Company accounts for its stock-based compensation plans in accordance
with Accounting Principles Board Opinion No. 25 ("APB "25"), "Accounting for
Stock Issued to Employees". In 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard No. 123 ("SFAS 123"),
"Accounting for Stock-Based Compensation". SFAS 123 provides an alternative to
APB 25 and is effective for fiscal years beginning after December 15, 1995. As
permitted by SFAS 123, the Company has elected to continue to account for its
stock-based compensation plans in accordance with the provisions of APB 25 and
to adopt only the disclosure provisions of SFAS 123. Accordingly, adoption of
SFAS 123 in the year ended May 31, 1997, did not have any impact on the results
of operations or the financial position of the Company.

     Recently Issued Accounting Pronouncements

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128 ("SFAS 128"), "Earnings per Share".
SFAS 128 is effective for financial statements issued for periods ending after
December 31, 1997, including interim periods and earlier application is
permitted. The Company believes adoption of SFAS 128 will not have a material
impact on its financial statements.

3.   Property, Plant and Equipment, net and Intangible Assets

     Property, Plant and Equipment, net consists of the following:



                                    II-F-16



                                                      May 31, 1997  May 31, 1996
                                                      ------------  ------------
     
     Land and buildings                                 $ 15,277       $ 20,508
     Long-term leasehold and improvements                  8,936          8,849
     Furniture and fittings                                6,700          5,446
     Laboratory and office equipment                      28,254         27,329
     Capitalized data processing software                  3,599          3,133
                                                        --------       --------
                                                        $ 62,766       $ 65,265
     Less:
     Accumulated depreciation and amortization           (34,156)       (32,027)
                                                        --------       --------
                                                        $ 28,610       $ 33,238
                                                        ========       ========

     Depreciation and amortization of tangible assets expense was $12,035,
$5,448 and $5,255 in the years ended May 31, 1997, 1996 and 1995. During the
year ended May 31, 1997, as a result of its decision to sell the Company's
building used by its UK operations, management reconsidered the carrying value
of such building, and the Company therefore recorded a one-time charge of $5,805
(the equivalent of (pound)4,000) to adjust such carrying value to its currently
estimated market value.

     Routine maintenance and repair, which are charged to expense, amounted to:

             May 31, 1997 : $2,652
             May 31, 1996 : $2,125
             May 31, 1995 : $1,788

     The net amount of capitalized data processing software is $1,997 and $2,047
as of May 31, 1997 and 1996 respectively. The gross amount of assets under
capital leases is $7,533 and $7,856 as of May 31, 1997 and 1996 respectively.

     Property leased under capital leases included above consist of:

                                                  May 31, 1997      May 31, 1996
                                                  ------------      ------------
     
     Equipment                                       $ 7,044            $ 6,816
     Furniture and fittings                               38                607
     Automobiles                                         451                433
                                                     -------            -------
                                                       7,533              7,856
     Less-Accumulated
     amortization                                     (3,646)            (3,813)
                                                     -------            -------
     Net leased property
     under capital lease                             $ 3,887            $ 4,043
                                                     =======            =======




                                    II-F-17




     Intangible assets consist of:

                                                 May 31, 1997       May 31, 1996
                                                 ------------       ------------

     Goodwill                                      $ 63,519            $ 53,430
     Customer lists                                  10,494              11,650
     Other                                            1,613                 529
                                                   --------            --------
                                                     75,626              65,609
     Less Accumulated
     amortization                                   (45,607)            (10,781)
                                                   --------            --------
                                                   $ 30,019            $ 54,828
                                                   ========            ========

     Amortization of intangible and other assets was $29,159, $2,431 and $1,947
in the years ended May 31, 1997, 1996 and 1995. During the year ended May 31,
1997, the Company revised its estimate of the useful life of existing goodwill
from 40 to 20 years. The net effect of such change was a charge before tax
effect of $3,025 (or $0.43 per share).

     Further, during the year ended May 31, 1997, management performed its
periodic evaluation of the Company's goodwill, based on undiscounted expected
future cash flows. As a result thereof, in view of unexpected delays in
returning UK operations to a level of profitability meeting the Company's
criteria, and in view of the present and estimated future profitability of such
operations, management concluded to record a charge before tax effect of $23,722
(or $3.38 per share) to adjust such goodwill.

4.   Long Term Debt

     Long term debt consists of the following:

                                                    May 31, 1997    May 31, 1996
                                                    ------------    ------------
     Senior secured debt:
     ULSA Credit Agreement                            $ 10,461         $ 30,141
     UCP Term Loan                                       3,184            2,555
     UGUK Term Loan                                      1,099            1,278
     UTL Term Loan                                       1,645            1,530
     Note to seller in connection
          with an acquisition by UCP                        --            1,379
     Other debt                                            461            1,800
     Capital leases:
     Gross obligation                                    4,656            4,411
     Interest component                                   (477)            (438)
                                                      --------         --------
                                                      $ 21,029         $ 42,656
     Less: current portion                              (6,474)          (4,302)
                                                      --------         --------
                                                      $ 14,555         $ 38,354
                                                      ========         ========


                                    II-F-18



     Senior Secured Debt

     On June 18, 1996, and February 27, 1997, ULSA entered into a new credit
agreement (the "ULSA New Credit Agreement") with a bank, replacing all previous
agreements. The ULSA New Credit Agreement provides for borrowings up to an
aggregate principal amount of $17,700 in the form of secured senior debt
consisting of term loans, working capital loans and/or guarantees. At May 31,
1997, $10,461 was outstanding under the ULSA New Credit Agreement. Pursuant to
an amended repayment schedule agreed on February 27, 1997, the ULSA New Credit
Agreement has no fixed repayment terms.

     The ULSA New Credit Agreement is secured by a pledge of the common stock of
substantially all ULSA's subsidiaries, and contains covenants of a customary
nature.

     Interest on the term loans under the ULSA New Credit Agreement is generally
at Swiss Franc LIBOR plus 1.25%. At May 31, 1997, the effective blended interest
rate was approximately 4.25%.

     On December 3, 1993, UCP entered into a credit agreement with a bank,
providing for borrowings in the form of senior debt consisting of a seven-year
term loan (the "UCP Term Loan"). The proceeds of this loan were used to repay
debt owed to the previous chairman and majority shareholder of UCP. At May 31,
1997, $3,184 was outstanding under this facility. In addition, on March 16,
1994, UGUK entered into a credit agreement with the same bank, providing for
borrowings in the form of senior debt consisting of a seven-year term loan (the
"UGUK Term Loan"). The proceeds of the new loan were used to finance an
acquisition. At May 31, 1997, $1,099 was outstanding under this facility. On
January 24, 1996, a subsidiary of UGUK entered into a credit agreement with a
finance company, providing for a borrowing of $1,650 for a duration of 7 years
(the "UTL Term Loan"). The proceeds of the UTL Term Loan were used to fund
working capital and expansion.

     The UCP, UGUK and UTL Term Loans and the UCP Working Capital Loan are
secured by UCP's and UGUK's land, building, accounts receivable and other
assets, and are cross-guaranteed by all other subsidiaries of UCP and UGUK,
respectively. In addition, the UTL Term Loan is secured by a guarantee from
UniHolding Corporation.

     Interest on the UTL Term Loan is at 10%. Interest on the UCP and UGUK Term
Loans is at Pound Sterling LIBOR plus 1.75%. At May 31, 1997, such interest rate
was approximately 7.60%. Interest on the UCP Working Capital Loan was between
7.00% and 7.125% per annum at May 31, 1997, depending on the funding options
chosen. The UCP Term Loan requires quarterly payments of approximately $117. The
UGUK Term Loan requires 23 quarterly payments of approximately $68 which
commenced in June 1995. Because the UCP and UGUK loans include certain covenants
which have been breached, the entire outstanding balances as of May 31, 1997,
have been classified as short-term liabilities. The Company is negotiating
amended loans with the bank, and management is of the opinion that such breaches
will not have any significant effect on the Company's ability to continue its UK
operations as a going concern. Effective in June 1997, the UTL Term Loan
requires monthly repayments of $32 including interest.

     Maturities

     At May 31, 1997, future scheduled principal payments of long-term debt and
capital lease obligations were as follows:


                                    II-F-19




                                                     Net obligation
                                                     --------------

     1998                                                $ 6,252
     1999                                                  1,753
     2000                                                  1,406
     2001                                                    439
     2002                                                    236
     thereafter                                           10,943
                                                         -------
                                                         $21,029
                                                         =======
     
5.   Income Taxes

     Deferred income tax assets and liabilities are provided for temporary
differences between financial statement income and the amounts currently taxable
in the jurisdictions in which the Company operates. Income (loss) before income
taxes and minority interests of domestic and foreign corporations is as follows:

                                                   Years ended May 31
                                      1997              1996             1995
                                    --------          --------         --------
     
     Domestic                       $ (3,052)         $    118         $   (232)
     Foreign                         (13,306)            2,920            9,043
                                    --------          --------         --------
     Total                          ($16,358)         $  3,038         $  8,811
                                    ========          ========         ========
     

     The provision (benefit) for income taxes is as follows:

                                                    Years ended May 31
                                         1997             1996             1995
                                       -------          -------          -------
     
     Current:
     Foreign                           $   864            3,468            1,543
     
     U.S.                                3,000               --               --
     
     Deferred:
     Foreign                            (7,452)          (1,113)             432
                                       -------          -------          -------
     Total                             ($3,588)         $ 2,355          $ 1,975
                                       =======          =======          =======
     


                                    II-F-20



     Deferred taxes are provided principally in relation to temporary
differences in the amortization of intangibles and to different book and tax
rates of depreciation of tangible assets.

     The deferred tax assets and liabilities as of May 31, 1997, are as follows:

                                                         Assets      Liabilities
     Depreciation of tangible assets                    $    --          $   699
     Amortization of intangibles                             --               26
     Operating loss carryforwards                         7,938               --
                                                        -------          -------
                                                          7,938              725
     Valuation allowance                                 (2,645)              --
                                                        -------          -------
                                                        $ 5,293          $   725
                                                        =======          =======

     The net change in the valuation allowance for deferred tax assets was an
increase of $2,249, relating to benefits arising from operating loss
carryforwards.

     The tax charge in Switzerland is an accumulation of the taxes due to the
city, the canton (state) and the federal authorities. Therefore, the tax burden
varies from one entity to another depending upon its location. While the actual
tax rate is a function of the percentage of profitability in relation to taxable
equity, the effective cumulative maximum rate is approximately 30%. In addition,
as Swiss tax laws do not permit consolidated tax filings, possible tax losses in
one entity do not offset taxable income in another. United Kingdom corporation
tax is based on profits for the period at a rate of 33%. Spanish corporation
income tax is 35%, and Italy's corporation tax is 53%.

     On January 1, 1995, a new federal tax law, and for most Swiss cantons, a
new cantonal tax law, came into force in Switzerland. The new laws provide for a
change in the system of assessment from a two-year past assessment period to a
one-year current assessment period. Because the change in the law may create a
gap during which certain profits made in prior financial years may be not or
partially taxed, the new law has provided for a transition period during which a
special method is followed to calculate income taxes. Since the 1995 taxes due
based on the old methods of assessment had been fully accrued for during 1993
and 1994, the 1995 tax charge only related to the adjustment needed based on the
1995 income.

     During the year ended May 31, 1996, the Company decided to merge two of its
principal Swiss subsidiaries. This had the effect of decreasing the effective
tax rate of Swiss operations to approximately 24%, but caused a non-recurring
charge of $1,092.

     A reconciliation between the actual income tax expense (benefit) and income
taxes computed by applying the US Federal income tax rate of 34% to earnings
before taxes and minority interests is as follows (in thousands):



                                    II-F-21



                                                       Years ended May 31
                                                1997         1996         1995
                                              -------      -------      -------

Computed income tax charge
     (benefit) at rate of 34%                 ($5,562)     $ 1,033      $ 2,996
Impact of difference between
     statutory and US tax rates                  (709)        (647)        (145)
Effect of change in accounting
     estimates                                 (2,510)          --           --
Permanent differences                           4,383          175          815
Impact of change
     in Swiss tax law                              --           --       (1,577)
Impact of change
     in effective Swiss tax rate                   --         (730)          --
Impact of merger
     of certain Swiss subsidiaries                 --        1,092           --
Change in valuation reserves
     on deferred tax assets                     2,774          173          (16)
Impact of equity
     in loss of affiliates                         --        1,021           --
Effect of Operating Loss
     Carry Forward Acquired                    (2,490)          --           --
Other                                                          238          (98)
                                              -------      -------      -------
                                              ($3,588)     $ 2,355      $ 1,975
                                              =======      =======      =======

     Certain of the Company's subsidiaries have incurred losses which can be
used to offset their taxable income for up to six years after incurring the
losses, depending on the applicable tax legislation. Total net operating loss
carry forwards amount to approximately $30,000. Management has reviewed the
probability of realization of the tax benefits which may arise from these losses
being carried forward. Based on the estimated realization, the Company has
reserved for the tax benefits in all cases where it has not been satisfied that
it is more likely than not that the benefits will be realized. Therefore, the
Company has recognized deferred tax assets of $5,293. The major portion of
underlying net operating loss carry forwards are expected to expire starting in
2004.

     Taxes have not been provided on approximately $11 million of accumulated
foreign unremitted earnings because those earnings are expected to remain
invested indefinitely. It is not practical to estimate the amount of additional
tax that might be payable if such accumulated earnings were remitted.
Additionally, if such accumulated earnings were remitted, certain countries
impose withholding taxes that, subject to certain limitations, are available for
use as a tax credit against any Federal income tax liability arising from such
remittance.

     During the year ended May 31, 1997, the Company has recorded a general
provision of $3,000 for possible tax consequences arising from transactions
related to the ULSA initial public offering. The definition and quantification
of such consequences is dependent upon interpretation of U.S. and foreign tax
laws. Further, the ultimate cost may depend upon the ability to use net
operating losses carry forward,


                                    II-F-22



and on the availability of tax credits, which the Company's management believes
would substantially reduce or eliminate the exposure. While the Company's
management believes that such general provision may exceed the ultimate cost, it
has decided to record it to cover any possible tax contingency.

6.   Capital stock, Additional Paid In Capital, Stock Options and Warrants

     Effective as of December 27, 1995, UniHolding effected a four-to-one
reverse split of its Common Stock. These financial statements reflect this
reverse split for all periods presented including corresponding adjustments to
share amounts and purchase prices of the underlying share amounts. The reverse
split has no effect on the financial position or results of operations of the
Company.

     As of the same date, UniHolding decreased its authorized shares of Common
Stock from 60 million to 20 million.

     Capital stock and Additional Paid-in Capital

     On March 31, 1994, immediately prior to the acquisition of UGL and UCLE,
UniHolding had 1,706,704 shares of common stock outstanding. On that date it
issued 3,275,865 shares in connection with the acquisition. Because the
acquisition was accounted for as the reverse acquisition of UniHolding by an
"accounting entity" consisting of ULSA and UCLE, it is deemed that 3,275,865
shares of capital stock of UniHolding, which were issued in connection with the
reverse acquisition, have been outstanding from June 1, 1993 up to March 31,
1994 when 1,706,704 shares were deemed issued by the Company in exchange for the
net assets of UniHolding.

     In March 1994, the Company entered into an agreement with Unilab, effective
as of January 31, 1994, whereby Unilab contributed to UGL 678 shares of cap ital
stock of ULSA (then 4.3%) which it purchased in 1993 for $5,000, and Holdings
contributed 1,876 shares of capital stock of Unilabs SA (then 11.7%) subject to
a note of approximately $7,100, thereby increasing UGL's ownership of ULSA to
approximately 86%. The shares received from Unilab have been recorded at their
fair value of $5,695 of which $660 was allocated to tangible net assets and
$5,035 was allocated to goodwill. The shares received from Holdings were
recorded at Holdings' predecessor cost, resulting in a decrease in goodwill of
$3,973.

     At various times during the year ended May 31, 1995, UGL acquired from
Holdings 186 shares of capital stock of ULSA (then 1.2% of that company's share
capital) for cash. The excess of the purchase price over Holdings' carrying
value, $960, was charged to additional paid-in capital.

     On May 31, 1995, the Company exercised its options to acquire Spanish and
Italian laboratory operations from Holdings. The excess of the purchase price
over Holdings' carrying value, $375, was charged to additional paid-in capital.

     In connection with the March 31, 1994, acquisition discussed in Note 1,
UniHolding issued a promissory note of $18,000 in favor of Holdings. Such note
was repayable after five years, and carried an interest rate of 5% per annum
payable at UniHolding's option either in cash or in shares, or any combination
thereof. On June 22, 1994, the note, together with then accrued interest of
$207, was repaid in advance by issuing to Holdings 825,000 newly-issued shares
of UniHolding's common stock, calculated on the basis of the price of $22 per
share. If such additional shares had been issued on March 31, 1994, the



                                    II-F-23



weighted average number of shares outstanding during the period ended May 31,
1994, would have been 3,698,251, and, considering the effect of the interest
charge of $155 on the period, earnings per share would have been $0.88 for the
year ended May 31, 1994, and the effect on earnings for the year ended May 31,
1995 would not have been material.

     As of April 28, 1995, UniHolding issued 250,000 new shares of common stock
to two investors, at the price of $21 per share.

     As of July 3, 1995, UniHolding issued 25,000 new shares of common stock to
one investor, at a price of $22.00 per share, including warrants for 12,500
shares at a price of $26.00 exercisable for 18 months from July 3, 1995.
Further, as of October 5, 1995, UniHolding issued 37,500 new shares of common
stock to two investors, at a price of $22.00 per share, including warrants for
18,750 shares at a price of $26.00 exercisable for 18 months from October 5,
1995.

     On July 22, 1996, UniHolding issued 333,333 new shares of common stock to
an investor, at a price of $15 per share. The investor received certain
antidilution and preemptive subscription rights. The antidilution provisions
provided that if the Company issued its Common Stock to repay the $15,000 note
owed to Unilab, it would transfer to the investor additional shares of Common
Stock so that the percentage of ownership of the investor would remain
substantially unchanged. The preemptive right provisions provide that the
Company and its affiliates will not sell, pledge, encumber or otherwise transfer
any shares of Common Stock at a value below market without first offering the
same shares to the investor on the same conditions.

     As of December 31, 1996, the $15,000 note due Unilab was unpaid.
Accordingly, pursuant to the agreement with Unilab dated as of June 30, 1995,
the note's principal, together with accrued but unpaid interest of $750 as of
December 31, 1996, converted into 1,394,963 newly-issued shares of Common Stock.
As a result, total Stockholders' Equity increased from $41,269 to $57,019.
Further, pursuant to the antidilution provisions referred to in the preceding
paragraph, the Company issued to an investor 75,655 newly-issued shares of
Common Stock, for no additional consideration

     Non-Voting Common Stock

     As of March 11, 1996, UniHolding amended its Certificate of Incorporation
and designated 2,000,000 of its authorized shares as Non-Voting Common Stock.
The Non-Voting shares have identical rights and privileges as the Voting shares,
other than the vote. The Non-Voting shares are convertible into an equal number
of Voting shares at the holder's option, except in certain circumstances.

     In February 1996, Holdings exchanged with UniHolding 298,384 shares of
Common Stock for 298,384 shares of Non-Voting Common Stock. Holdings then
exchanged with a wholly-owned subsidiary of Swiss Bank Corporation 298,384
shares of Common Stock and 298,384 shares of Non-Voting Common Stock for 1600
shares (10%) of the common stock of ULSA. In compliance with certain U.S.
regulations on banks, the exchange agreement provides that the Non-Voting shares
are not convertible into Voting Shares as long as they are held by such
subsidiary of Swiss Bank Corporation.



                                    II-F-24



     Treasury Stock

     During the year ended May 31, 1996, UniHolding acquired 155,000 shares of
UniHolding's common stock from Holdings for $2,900, the fair market value of
such shares which was less than the cost of such shares to Holdings. Further,
during the year ended May 31, 1996, the Company acquired 13,000 of its own
shares on the market for $217.

     During the year ended May 31, 1997, the Company acquired 125,150 of its own
shares on the market for $914.

     Stock Options

     As of June 28, 1994, UniHolding's Board of Directors adopted a Stock Option
Plan for the Company whereby options can be granted to directors, key officers
or management personnel of the Company or any of its subsidiaries or affiliates
by the Administrator of the Plan, acting in agreement with the Board. 500,000
shares of UniHolding's common stock can be so reserved each year for issuance
pursuant to the Plan, as amended. Options are granted with an exercise price at
no less than 100% of the fair market value of UniHolding's common stock on the
date of the grant or the book value on the date of the most recent financial
statements. Shares subscribed by Option grantees must be held for two years from
the date of grant prior to sale. The Plan will expire on June 28, 2004.
Accordingly, the Company will be able to grant 4 million options in addition to
those already granted.

     On August 17, 1995, a total of 163,750 options were granted. These options
are all exercisable on or after February 17, 1997, at $22 per share for 63,750
options and at $ 24 per share for 100,000 options, and expire on June 28, 2004.

     On July 9, 1996, a total of 357,142 additional options were granted. These
options are all exercisable on or after January 9, 1998, at $16 per share, and
expire on June 28, 2004.


     The following tables summarize information about options outstanding at May
31, 1997:



                                                            Outstanding Options
                                 --------------------------------------------------------------------------

                                 Shares Outstanding         Weighted-Average
                                   at May 31, 1997              Remaining                 Weighted-Average
                                                            Contractual Life                Exercise Price
     Range of Exercise Prices
     ------------------------    -----------------          -----------------             ----------------
                                                                                           
              $24.00                       100,000                   7.08                        $24.00
              $22.00                        63,750                   7.08                        $22.00
              $16.00                       357,142                   7.08                        $16.00
                                           -------                   ----                        ------
                                           520,892                   7.08                        $18.27
                                           =======                   ====                        ======




                                    II-F-25






                                                           Options Exercisable
                                                           -------------------

                                                Shares Outstanding
                                                  at May 31, 1997                        Weighted-Average
          Range of Exercise Prices                                                          Exercise Price
          -----------------------               ------------------                       -----------------
                                                                                              
                   $24.00                            100,000                                     $24.00
                   $22.00                             63,750                                     $22.00

                                                     -------                                     ------
                                                     163,750                                     $23.22
                                                     =======                                     ======

                                     
     All options outstanding as of May 31, 1997 expire on June 28, 2004. No
options were exercised during the year ended May 31, 1997.

     Pro forma information:

     Pro forma information regarding net loss and loss per share is required by
SFAS 123. This information is required to be determined as if the Company had
accounted for its employee stock options granted subsequent to May 31, 1995,
under the fair value method of that statement. All option grants to date have
been made with an exercise price greater than the fair market value on the grant
date. For purposes of proforma disclosures, the estimated fair value of the
options, if any, is recognized in expense on the option vesting date. At May 31,
1997, 163,750 vested options are outstanding. All of these options vested during
the year ended May 31, 1997. Accordingly, there is no pro-forma on net loss or
loss per share for the year ended May 31, 1996. For the year ended May 31, 1997,
any pro-forma effect to net loss and loss per share is immaterial. Since pro
forma compensation cost relates to all periods over which the options vest, the
initial impact on pro forma results may not be representative of option expense
in subsequent years, when the effect of the amortization of multiple awards
would be reflected.

     Capital Stock of Subsidiary and Initial Public Offering by Subsidiary

     The share capital of ULSA was restructured on February 24, 1997. As a
result thereof, the ULSA share capital was divided into 120,000 registered
shares of SFr.20 par value each and 140,000 bearer shares of SFr.40 par value
each. In accordance with Swiss law, each shareholder as of February 24, 1997,
received its proportionate amount of new registered and bearer shares, and all
old shares were canceled. Accordingly, all amounts of ULSA shares disclosed
herein are the amounts after such restructuring became effective.

     During the year ended May 31, 1997, ULSA acquired 3,750 bearer shares (or
1.9%) of its own common stock from unaffiliated investors in ULSA for a total
consideration of SFr.2,010 ($1,550), all of which was paid during the period.

     Also during the year ended May 31, 1997, ULSA acquired in February 10,000
bearer shares (or 5.0%) of its own common stock from the Company's controlling
shareholder, Unilabs Holdings SA, for a total consideration of SFr. 6,500
($5,000), which was paid through a partial



                                    II-F-26



set-off of advances previously made. In March, ULSA acquired a further 10,000
bearer shares (or 5.0%) of its own common stock from the Company's controlling
shareholder, Unilabs Holdings SA, for a total consideration of SFr. 6,500
($5,000), which was paid through a partial set-off of advances previously made.
According to the related purchase contracts, the purchase price was subject to
an adjustment whereby the Company and Unilabs Holdings SA would share on an
equal basis any difference between the purchase price initially set and the
price per share on the first day of trading of the ULSA shares on the Swiss
Exchange after the ULSA initial public offering discussed below. Based upon the
last price paid on April 25, 1997 (the first day of trading of the ULSA shares
on the Swiss Exchange), of SFr. 705 per new ULSA bearer share, an amount of SFr.
550 became due by the Company to Unilabs Holdings SA and was paid through a
partial set-off of advances previously made. The excess of the purchase price
over the predecessor cost ($3,329) was debited to paid-in capital.

     During the year ended May 31, 1997, UGL and ULSA sold an aggregate of
30,000 shares (or 15.0% of the then ULSA's equity) of ULSA's common stock to
three financial institutions for a total consideration of SFr. 19,500
(approximately $15,000). Such sales were made in preparation of an initial
public offering of ULSA's newly-issued and existing bearer shares. As a result
of this series of transactions, the Company owned approximately 84% of ULSA as
of March 31, 1997. As of April 24, 1997, the initial public offering closed. The
offering, which was heavily over-subscribed, was made at the price of SFr. 675
per bearer share. The offering comprised the issuance by ULSA to the public of a
further 20% of its equity, and the sale by the Company of a portion of its
holding in ULSA, thereby diluting the Company's holding in ULSA to 60% post-
initial public offering. The shares of ULSA have been listed on the Swiss
Exchange since April 25, 1997.


7.   Related Party Transactions

     The following were the receivables and payables to related parties:

                                                 May 31, 1997       May 31, 1996
                                                 ------------       ------------
                                                               
Receivables:                                                  
Unilabs Holdings SA                                  $3,573             $4,703
Others                                                   --                257
                                                     ------             ------
                                                     $3,573             $4,960
                                                     ======             ======
                                                               
Payables:                                                     
Others                                                  150                  9
                                                     ------             ------
                                                     $  150             $    9
                                                     ======             ======
                                                                
                                                             


                                    II-F-27



     Advances to and from related companies bear an interest rate based on the 3
months LIBOR plus 2% per annum. These advances are unsecured.

     In March 1992, the Company's Predecessor entered into a cooperation
agreement with Holdings covering (i) the use of its logo and provision of
financial and market research advisory services to the Predecessor ("General
Services") and (ii) mergers and acquisitions advisory services. The agreement,
which expired on May 31, 1996, provided for an annual general services fee of
$260 to be paid by ULSA. In connection with the Acquisition Agreement and other
transactions described in Note 1, Holdings assigned the benefits of the
cooperation agreement to UniHolding as of March 31, 1994. During the year ended
May 31, 1994, Holdings also billed $355 to the Company, representing general and
administrative expenses incurred by Holdings in providing certain administrative
support on behalf of UniHolding and its subsidiaries, and an additional $69 for
various other consulting services provided to the Company; the Company billed
Holdings $387 related to laboratory management and financial engineering
consulting services.

     During the year ended May 31, 1994, the Company entered into a management
services contract with a company owned by the Chairman of UniHolding's Board of
Directors. The management contract replaced and superseded his previous
employment contract with one of the Company's subsidiaries. The contract
provided for an annual payment of SFr.600 ($476 at year end exchange rate) for a
term of 5 years. Under this contract the Company paid SFr.600 ($470 at average
exchange rate) and SFr.600 ($507 at average exchange rate) during the years
ended May 31, 1995 and 1996 respectively. Such contract was canceled and
replaced by a new management contract under which a subsidiary of ULSA paid
SFr.720 ($610 at average exchange rate) during the year ended May 31, 1997. In
addition, during the year ended May 31, 1997, pursuant to a Management
Consulting Agreement, GUCT paid $300 to a company wholly-owned by the Company's
Chairman.

     During the year ended May 31, 1995, the Company entered into a management
services contract with a company affiliated with a Director of the Company. The
Company paid $470 under this contract during the year ended May 31, 1995. As of
May 31, 1995, the contract was terminated.

     During the year ended May 31, 1996 the Company made payments of SFr.600
($507 at average exchange rate) for consultancy services to a company affiliated
with a Director of the Company.

     During the year ended May 31, 1997, a subsidiary of ULSA paid SFr.720 ($610
at average exchange rate) for consultancy services to a company affiliated with
two Directors of the Company. In addition, during the year ended May 31, 1997,
pursuant to a Management Consulting Agreement, GUCT paid $300 to a company
affiliated with two Directors of the Company.

     Net interest payments made by Holdings to the Company during the years
ended May 31, 1997, 1996 and 1995 amounted to $247, $160 and $113, respectively.



                                    II-F-28




     During the year ended May 31, 1996, UniHolding exchanged with Holdings
298,384 shares of UniHolding's Voting Common Stock for 298,384 shares of
UniHolding's Non-Voting Common Stock. See Note 6.

     During the year ended May 31, 1996, UniHolding, through UGL, acquired an
investment in MISE S.A. and thus acquired rights to certain know-how of a
company which may be deemed to be related. See Note 11.

8.   Retained Earnings

     Retained earnings of Swiss subsidiaries are partially restricted by law as
to distribution. Restricted amounts (including temporary restrictions) were
approximately $17,982 and $ 3,885 at May 31, 1997 and 1996.

9.   Retirement plans

     All of the Company's employees participate in the pension or retirement
plans legally required in their place of work. Most of such plans are defined
contribution plans, with the exception of one defined benefit pension plan in
the United Kingdom. Under all such plans, which are administered by third
parties, contributions are made by the employees and by the Company. This
contribution is expensed in the period that the cost is incurred. The defined
benefit pension plan covers 30 employees, and was not materially underfunded at
year end.

     Total benefit plans expenses was approximately $1,336, $1,424 and $1,160
for ULSA for the years ended May 31, 1997, 1996 and 1995 respectively.

     The Company does not maintain any plans for other post-employment or
post-retirement employee benefits.

10.  Commitments and Contingencies

     The Company is obligated under capital and operating leases for laboratory
premises, offices and equipment expiring at various times through 2065. Minimum
lease payments for leases that have initial or remaining noncancellable terms in
excess of one year approximate:


                                    II-F-29



                                              Operating leases    Capital leases
                                              ----------------    --------------

           1998                             $   2,645               $  1,747
           1999                                 1,809                  1,461
           2000                                   994                  1,034
           2001                                   758                    382
           2002                                   261                     32
           thereafter                             252                      -
                                                                 -----------
     Minimum lease payments                                            4,656

     Less: amount representing interest                                 (477)
     Present value of net minimum                                -----------
     lease payments                                                 $  4,179


     Operating lease expenses, which primarily relate to the rental of
buildings, office furniture and equipment, were approximately $3,220, $3,476 and
$2,500 for the years ended May 31, 1997, 1996 and 1995 respectively.

     Certain key officers have employment agreements which provide for aggregate
annual salaries of approximately $1,500 and which include non-competition
clauses. In the event that the Company invokes such clauses after termination of
the employment agreements, the Company may be obligated, under certain
circumstances, to compensate these individuals for differences in salary between
the compensation paid to them by the Company on the date of the expiration of
the employment agreements and their new annual salaries.

     At the request of an affiliate of Holdings, the Company had deposited 51%
of the capital stock of ULSA and 67% of the capital stock of UGL with a bank to
be held in safe keeping until a loan to the affiliate in the amount of $7,143 at
May 31, 1996 was repaid. During the year ended May 31, 1997, a substantial
portion of the loan was repaid, and the above safekeeping arrangement was
canceled.

     In connection with the initial public offering of ULSA's bearer shares on
April 25, 1997, the Company, UGL and ULSA, as well as certain of the Company's
direct and indirect shareholders, have agreed for a certain period of time to
respect certain restrictions regarding the transfer and listing of ULSA's shares
held by them and the maintenance of the existing shareholder control. The
restrictions are summarized as follows: (a) no sale or other transfer of ULSA's
bearer shares and/or registered shares for a period of 24 months from April 25,
1997, without the prior written consent of the lead manager of the initial
public offering; (b) no listing of ULSA's registered shares on any securities
exchange for a period of five years from April 25, 1997; and (c) maintenance of
existing majority ownership and effective control of ULSA for a period of 24
months from April 25, 1997.


                                    II-F-30



     In the United Kingdom, UCP has sublet certain leased properties to third
parties but retains a contingent liability to pay the rent in the event of
default by the assignee. The contingent liability related to assigned property
leases is $4,000 as of May 31, 1997.

     In connection with its contract with the North Hertfordshire NHS Trust,
which started in December 1994, the Company has committed to make annual minimum
payments of $1,200 over the duration of the contract which is 7 years. As of May
31, 1997, the total commitment therefore amounts to approximately $4,150, which
the Company's management believes will be offset by revenues generated by the
contract.

     Among the assets of UniHolding deemed to have been acquired by the Company
is the contract right to receive from a former subsidiary, Americanino Capital
Corporation ("ACC") and/or from the present majority shareholder of ACC, Linford
Enterprises Inc., 80% of any appreciation in value of the capital stock of that
subsidiary and 80% of any net proceeds from an arbitration being conducted by
ACC in connection with its acquisition of certain Italian apparel concerns, net
of legal costs, limited to $15,023. While, to the best of the Company's
knowledge, ACC appears to have a legitimate claim, there can be no assurance
that an award will be rendered in ACC's favor. Therefore, the Company has
recorded its rights at present fair value of $10 which is estimated to be the
amount an unrelated party might presently pay to acquire such rights. Ultimate
recovery of this amount is solely dependent upon the Court's award and upon the
collection thereof, if any, as to which there can be no assurance at the present
time.

     In the normal conduct of its business, the Company may be a party to
certain litigation. As of May 31, 1997, the Company is a party to a litigation
in connection with a test subcontracted to a third party laboratory. While the
proceedings are still at an early stage, in the opinion of management, as
confirmed by legal counsel, the resolution of this matter should have no
material effect, if any, on the financial position or results of operations.

11.  Investment in Equity Affiliates

     Medical Diagnostic Management Inc.

     On September 14, 1995, UGL entered into an agreement with Health Strategies
Limited, a Jersey, Channel Islands corporation ("HSL", a company which at the
time might be deemed to be related to the Company for the reasons mentioned
elsewhere herein, and which the Company believed might be deemed to be
controlled by a then director of Unilab Corporation), whereby a new company,
MISE S.A., a British Virgin Islands corporation ("MISE") was formed. UGL
invested $3,005 in MISE for 33.3% of the voting rights and 66.6% of the equity
of MISE. $2,005 was paid during the year ended May 31, 1996, and the balance was
payable in two installments of $500 each in September 1996 and 1997. HSL owned
the remaining voting and equity interests in MISE for which it contributed a
nominal amount of cash and its agreement to obtain for MISE certain know-how and
related software and services. MISE then acquired for $1,500 certain know-how
and computer software from HSL, which know-how and software were simultaneously


                                    II-F-31



acquired for $250 by HSL from Medical Diagnostic Management Inc., a U.S.
corporation ("MDM"). Further, MISE committed to pay HSL a total of $1,500 for
certain plans for marketing the know-how and software in several European
countries. Out of such amount, $500 was paid during the year ended May 31, 1996,
and the balance was payable in two installments of $500 each in October 1996 and
1997. The fee agreed for the marketing plans also included support services and
customization to European needs. The installment due in October 1996 (as well as
the capital contribution in September 1996) had not been paid principally
because HSL had not entirely delivered all services it committed to deliver. For
several months, there was little communication between the Company and HSL,
Unilab Corporation or its directors. A director of HSL has since resigned as a
director of Unilab Corporation and communications between HSL and the Company
were re-established. The parties then considered several alternatives to achieve
their initial goals. The investment was made so that it provides the Company
access to certain know-how developed by MDM. MDM is a company active in the
industry of health information services in the U.S., and is focusing on
organizing and managing access to discounted provider networks for ambulatory
diagnostic services (radiology, other imaging techniques, and laboratory). MDM
is a small company organized in 1989. Although it has a history of operating
losses, it has a positive net worth. Its strategy is to be a clinical,
financial, administrative and information management intermediary among
referring physicians, payers and diagnostic providers. The know-how acquired by
MISE from HSL included, but not limited to, a certain computerized information
system proprietary to MDM. HSL granted to MISE a perpetual license for the use
of the MDM know-how and related software for use in Western Europe. In addition,
HSL agreed to provide marketing and support services for a three-year period at
no further cost to MISE. Both UGL and HSL agreed to use their best efforts to
implement the MISE business in Western Europe and agreed not to compete with
MISE in the same territory. The Company, through MISE, intended to market the
concept, including the computerized information system, to health insurance
companies throughout Europe. The Company believes that such a concept should be
particularly useful and applicable in the context of the ongoing deregulation of
the health care system and may provide a useful tool to achieve substantial
savings in health care costs in several European countries. As a result of their
discussions, HSL, MDM and UGL agreed to restructure their relationship. First
UGL made its two previously required $500,000 installment payments to MISE. Upon
receipt of those two installments, MISE paid its two previously required
$500,000 installment payments to HSL. Thereupon, the three parties entered into
the restructure agreement. More specifically, as of May 30, 1997, (i) UGL agreed
to sell its MISE shares to HSL, (ii) HSL agreed to cause MISE to assign to MDM
all of its rights related to the MDM know--how and computer software and (iii)
MDM agreed to issue certain preferred stock of MDM. Such preferred stock is
redeemable at MDM's option, in whole or in part at a total price of $3,000 in
1998, escalating to $3,600 in 2002. Should MDM offer any of its common stock in
an initial public offering, all outstanding shares of preferred stock owned by
UGL will be converted into common stock representing the lesser of (a) 15% of
the MDM equity on a fully-diluted basis after the public offering, or (b) $5,000
valued at the offering price. Further, as part of the agreement, MDM is
obligated to use its best efforts to introduce and implement its business in
Europe and MDM will pay UGL a commission of 5% on its net sales in Europe for a
period of seven years. As a result of this share exchange, the Company does not
maintain a healthcare


                                    II-F-32



management services division and no longer considers healthcare management
services to be an industry segment.

     Accounting principles generally accepted in the U.S. require that know-how
and marketing plans such as those purchased by MISE, purchased from either
related or unrelated parties, be expensed as incurred. Accordingly, during the
year ended May 31, 1996, the Company recognized a loss from its equity investee
of $3,000. As a result thereof and of the above reorganization, the Company
accounts for its investment in MDM as if such investment was fully provided for.

     Unimed Laboratories (Moscow)

     On October 8, 1996, the Company, through its subsidiary Unilabs
International Limited (a British Virgin Islands corporation, "UIL"), signed a
joint venture agreement with the state affiliated company Medincenter of the
Main Administration for Services to the Diplomatic Corps of the Ministry of
Foreign Affairs of the Russian Federation. Pursuant to the agreement, the
Company has invested $120 in cash and has agreed to invest a further $120 in
cash in fiscal 1998, and will hold 50% of Unimed Laboratories (a
newly-established Russian close joint stock company, "Unimed"), which will
establish a diagnostic laboratory in Moscow and provide a comprehensive range of
clinical laboratory tests to public and private medical institutions, doctors
and patients in Russia. The Company will also provide the venture with certain
engineering services in connection with the construction and establishment of
the new laboratory, and will provide on-going management supervision. The new
Unimed laboratory is expected to start operations on October 15, 1997.

12.  Subsequent Event

     On August 8, 1997, UniHolding Corporation announced that it intends to
merge into its wholly owned subsidary, Unilabs Group Limited, a British Virgin
Islands corporation. The proposed merger is intended to streamline the corporate
structure of the entire Group. The merger is subject to shareholder and
regulatory approvals, but the principle of such merger has been unanimously
approved by the Company's Board of Directors.

13.  Supplemental Disclosures of Cash Flow Information



                   (in thousands)                          Years ended May 31
                                                1997              1996              1995
                                                ----              ----              ----
                                                                             
     Cash paid during the year for :
     Interest                                  $2,318             $3,048           $1,845
     Income taxes                               2,129              2,756            3,682


     Capital lease obligations of $1,904, $3,581 and $1,391 were incurred during
the years ended May 31, 1997, 1996 and 1995, respectively.


                                    II-F-33



     During the year ended May 31, 1995, a loan from Holdings amounting to
$18,000, plus accrued interest of $207, was converted into 827,614 shares of
UniHolding's common stock.

     During the year ended May 31, 1996, in connection with its acquisition of
40% of the share capital of UGL, the Company issued a note of $15,000 and
assumed a note of $2,000 payable to UCP.

     During the year ended May 31, 1997, the note of $15,000, together with $750
accrued and unpaid interest, was converted into 1,394,963 newly issued shares of
UniHolding's common stock.

14.  Quarterly Financial Data (unaudited)

     Summarized unaudited quarterly financial data for the years ended May 31,
1997 and 1996 is as follows (in thousands, except per share data):

                                           Year ended May 31, 1997
                                           -----------------------

                                First        Second       Third         Fourth
                               Quarter       Quarter      Quarter       Quarter
                               -------       -------      -------       -------

Revenue                        $22,844       $26,771      $24,108       $25,921
Operating income                   362         2,106      (32,086)           (9)
Net income (loss)               (1,495)          647      (19,215)        6,757
Per share data:
Net income (loss)               ($0.24)        $0.10       ($2.59)        $0.85

Price range:
High                            $16.75        $16.25       $14.75        $11.50
Low                             $15.00        $13.75        $6.75         $7.25

                                           Year ended May 31, 1996
                                           -----------------------

                                First        Second       Third         Fourth
                               Quarter       Quarter      Quarter       Quarter
                               -------       -------      -------       -------

Revenue                        $22,063       $25,612      $23,587       $25,799
Operating income                 1,316         3,441          827         2,855
Net income (loss)                  804        (2,012)         105           803
Per share data:
Net income (loss)                $0.12        ($0.33)       $0.02         $0.13

Price range:
High                            $23.50        $22.00       $17.50        $18.00
Low                             $18.00        $15.00       $13.25        $13.25



                                    II-F-34




     The unaudited financial data for the second quarter of fiscal 1996 has been
revised from the quarterly report on Form 10-Q previously filed to reflect a
$3,000 loss from an equity investee.

     Earnings per share are computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share for a year
does not equal the total computed for the year due to stock transactions which
occurred during the periods.

15.  Segment Information

     During the year ended May 31, 1996, the Company expanded its activities in
testing performed in relation to clinical trials for the pharmaceutical industry
and therefore distinguishes its core clinical laboratory business (the
"Diagnostic Laboratory Division") from its clinical trials testing business (the
"Clinical Trials Division"). In connection therewith, the Company transferred to
UCT, as of June 1, 1996, certain clinical trials activities heretofore performed
by UCP. Accordingly, for analysis and comparative purposes, the activities
conducted by UCP in the clinical trials business during both years have been
included under the Clinical Trials Division caption.

     Further, in view of the fact that its former subsidiary MISE had no
activity until the restructuring of this investment, when the shares of MISE
were sold and shares of preferred stock of MDM were acquired, the Company does
not maintain a healthcare management services division and no longer considers
healthcare management services to be an industry segment. Accordingly, the
Company currently considers that it had two business segments in fiscal years
1996 and 1997 : its core clinical laboratory business (the Diagnostic Laboratory
Division), and the clinical trials testing business (the Clinical Trials
Division).

     Following are the key financial data of the respective businesses for
purposes of segment information.

                                                             Year Ended May 31
                                                           ---------------------
                                                           1997            1996
                                                           ----            ----
Revenues from unaffiliated customers:
          Diagnostic Laboratory division                 $92,635        $92,634
          Clinical Trials division                         7,009          4,427


Operating Profit or Loss:
          Diagnostic Laboratory division                 (22,804)        10,270
          Clinical Trials division                        (6,823)        (1,832)

Identifiable Assets:
          Diagnostic Laboratory division                  89,719        121,052
          Clinical Trials division                        15,584          2,200


                                    II-F-35



     Following are the key financial data of the Company for purposes of
geographical information.

                                                              Year Ended May 31
                                                              -----------------
                                                            1997           1996
                                                            ----           ----
Revenues from unaffiliated customers
               U.S                                         1,196
               Non-U.S                                    98,448         97,061
                                           
Operating Profit or Loss 
               U.S                                        (1,548)
               Non-U.S                                   (28,079)         8,438

Identifiable Assets
               U.S                                        12,000          1,188
               Non-U.S                                    93,303        122,064














                                    II-F-36



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS, EXECUTIVE OFFICERS AND KEY MANAGEMENT PERSONNEL

     The following table sets forth certain information as of August 28, 1997
regarding the directors, executive officers and key management personnel of the
Company and its subsidiaries.

Directors and Executive Officers of The Company





    Name                        Age                        Position
    ----                        ---                        --------

                                                                                     
Edgard Zwirn                     51        Chairman of The Board and Director, Chief Executive
                                           Officer and member of Audit Committee

Enrico Gherardi                  48        Director and Secretary

Alessandra van Gemerden          25        Director

Tobias Fenster                   51        Director

Daniel Regolatti                 66        Director and member of Audit Committee

Pierre-Alain Blum                51        Director and member of Audit Committee

Paul Hokfelt                     43        Executive Vice President and Chief Operating Officer;
                                           also Chief Operating Officer, Unilabs Group (UK)
                                           Limited ("UGUK"), UCT International, Inc. ("UCTI")
                                           and Unilabs Clinical Trials Limited ("UCT"), all
                                           subsidiaries of the Company

Bruno Adam                       48        Chief Financial Officer

Eric Wavre                       45        Executive Vice President, Treasurer and Chief
                                           Financial and Administrative Officer-European Affairs



Key Executive and Managerial Officers of Subsidiaries


                                     III-1





    Name                        Age                        Position
    ----                        ---                        --------

                                                                                     

Joseph Schuler                   46        Executive Vice President and Chief Operating Officer
                                           - ULSA

Miguel Payro                     34        Chief Financial Officer - UCT, Chief Financial Officer
                                           - South Europe Region, Vice President and Financial
                                           Controller - ULSA, Head of Financial Planning and
                                           Business Development

Frederic Herren                  41        President and Chief Operating Officer - UIL



     Edgard Zwirn has been Chairman and a member of UniHolding's board of
directors since April 28, 1994. Edgard Zwirn was appointed as Chief Executive
Officer of UniHolding on April 26, 1994. Edgard Zwirn has been the Chairman of
the board of directors of Unilabs Holdings SA (a Panama corporation, "Holdings",
which is the Company's largest shareholder) since 1993, ULSA since 1989, UCP
since 1993, UGL since inception in October 1993, UGUK since inception in
December 1993, UIL, GUCT and UCTI since their respective inception in 1996, and
UCLE since its inception in December 1991. He has been Chairman of the board,
President and Chief Executive Officer of Unilabs Holdings SA (a Swiss
corporation which is the parent company of Holdings, "Swiss Holdings") since
1987. He has been President of UGL since October of 1993. Edgard Zwirn has been
a member of Unilab Corporation's board of directors since November 1993 after
having served as a member of the board of directors of the predecessor of Unilab
Corporation from its formation in November 1988 until November 1993. Mr. Zwirn
resigned from the Unilab Corporation board as of June 30, 1995. He has held
various senior management positions with companies in Belgium principally in the
areas of computer software for medical applications and technical equipment
leasing. Previously, he had been a director of IESA Investissements SA from
April 1987 to February 1992.

     Enrico Gherardi has been a Management and Financial Consultant and
continues to act as a consultant for various companies in Europe on both
management and marketing related issues. Enrico Gherardi has been a Director of
the Company since June 20, 1994. He has been a Director of Team International,
Inc., a Massachusetts corporation, since its inception in April 1993. He became
Chairman of the board of directors of Team International in November 1993.
Enrico Gherardi has been a Director of UGUK since April 30, 1996, and a Director
of ULSA since November 28, 1995. Mr.Enrico Gherardi was appointed Secretary of
UniHolding in April 1996.


                                     III-2



     Alessandra van Gemerden has been a member of UniHolding's board of
directors since July 1996. She holds degrees in Management and Psychology and
has had prior experience in public relations and management of investment
portfolios. Alessandra van Gemerden has been a Director of UGUK since April 30,
1996, and a Director of UIL, GUCT and UCTI since their respective inception in
1996. Ms. van Gemerden holds directorships in various non-U.S. corporations
involved in the asset management business. She is the niece of Mr. Enrico
Gherardi.

     Tobias Fenster has been a member of UniHolding's board of directors since
July 1996. He holds degrees in Industrial Engineering and Business
Administration from Stanford University. His previous work experience includes
consulting services with Booz Allen & Hamilton and management of closely-held
enterprises in the wood industry and in the computer distribution industry.
Tobias Fenster currently is General Manager of United Laboratories Espa-a S.A.,
a subsidiary of the Company ("ULSP"). Mr.Fenster has been a Director of UGUK
since April 30, 1996, and a Director of UIL, GUCT and UCTI since their
respective inception in 1996. Mr. Fenster is Mr. Zwirn's brother-in-law.

     Daniel Regolatti has been a member of UniHolding's board of directors and
of the Audit Committee since October 1996. From 1957 to 1992, Mr.Regolatti held
various positions with the Nestle group of companies, including his last
position as Director of Finance at the Nestle world headquarters. He is
currently an independent consultant in management and finance. Mr. Regolatti is
a director of Julius Baer Holding and Bank Julius Baer, Zurich. He currently
also is a director of ULSA. Mr. Regolatti is also a Member of the International
Council for the Verwaltungs und Privat-Bank, Vaduz, Liechtenstein and a Member
of the Advisory Council for the MBA Program of the University of Rochester
N.Y./Berne, Switzerland.

     Pierre-Alain Blum has been a member of UniHolding's board of directors and
of the Audit Committee since October 1996. Mr.Blum was the founder of the EBEL
Swiss watch manufacturing group in 1970. He left EBEL in 1996. He currently is
an independent consultant in management. Mr. Blum is a director of several
companies in various countries. He currently also is a director of ULSA.

     Paul Hokfelt was appointed Executive Vice President and Chief Operating
Officer of UniHolding as of June 1, 1995. Mr.Hokfelt has been Executive Vice
President and Chief Operating Officer of UGL from November 1993 to July 1996,
and a Director of GUCT and UCTI since their respective inception in 1996. He has
been a Director of UGL from April 1994 to July 1996. He was the General manager
of ULSA from 1989 to 1994. From 1987 to 1989, Paul Hokfelt was a


                                     III-3


self-employed consultant and the manager of a finance company acquired by Swiss
Holdings in 1988. From 1978 to 1987, he held various management positions with
various financial institutions, including the Finans Skandic and Barclays Bank
groups.

     Bruno Adam was a member of UniHolding's board of directors from April 1994
to October 1996. Mr. Adam has been the Chief Financial Officer of UniHolding
since May 1994. He has been the Chief Financial Officer and an Executive Vice
President of Swiss Holdings since 1988. Mr. Adam has been a Director of Holdings
since 1993, Chief Financial Officer of ULSA from 1988 to 1993, and a Director of
UGL from November of 1993 to July 1996. Prior to 1988, he was employed by Arthur
Andersen in their Geneva offices.

     Eric Wavre was appointed Executive Vice President and Chief Financial and
Administrative Officer-European Affairs of UniHolding as of June 1, 1995. Mr.
Wavre has been Executive Vice President and Chief Financial and Administrative
Officer of UGL from January 1994 to July 1996. He was a Director of UGL from
April 1994 to July 1996. From 1978 to 1993, Eric Wavre held various management
positions at Swiss Bank Corporation in Geneva where he was first hired as a
lawyer in the Legal Department in 1978. He then joined the Domestic Credit
Department in 1981 and was appointed Senior Vice President in charge of the
Commercial Division in 1992, after having been Senior Vice President at the
Luxembourg branch in charge of the Logistic, Finance and Commerce Divisions from
1988 to 1990.

     Joseph Schuler was appointed as Executive Vice President and Chief
Operating Officer of ULSA in June 1994. From 1989 to 1994, Dr. Joseph Schuler
was Executive Vice President of Enzymlabor Dr. H. Weber AG, a laboratory owned
by ULSA. He was also the Department Chief of Hematology in such laboratory from
1986 to 1989. Dr. Joseph Schuler has also previously worked as a medical doctor
in several Swiss hospitals.

     Miguel Payro has been a Vice President in charge of operations and
financial controller of ULSA since 1994. In October 1996, he has also been
appointed Chief Financial Officer of UCT and of the South Europe Region. From
1993 to 1994, he was a Vice President of ULSA. From 1991 to 1993, he was an
officer at Holdings. From 1989 to 1991, Miguel Payro was employed by Banque
Paribas (Suisse) SA where he was a manager, active in mergers and acquisitions
and acquisition financing. From 1986 to 1988, he was Assistant Vice President of
Manufacturers Hanover (Suisse) SA in charge of the New Bond Issue and
Syndication Department.

     Frederic Herren joined ULSA in November 1995 and was appointed Chief
Operating Officer of UIL in October 1996. Mr.



                                     III-4



Herren was from 1980 to 1987 a member of the Executive Board and Director of
international activities of the World Economic Forum in Geneva. From 1987 to
1995, he was a Vice President of Economic Affairs at SGS Societe Generale de
Surveillance in Geneva, where his activities included business development in
Asia and Eastern Europe.

Section 16(a) Beneficial Reporting Compliance

Based solely upon the Company's review of the Forms 3 and 4, and any amendments
thereto, furnished to it during its most recent fiscal year and the written
representations from each of the persons or entities required to file such
forms, no person was required to file a Form 5. Each of four directors,
Alessandra van Gemerden, Tobias Fenster, Pierre-Alain Blum and Daniel Regolatti,
filed one late report required by Section 16(a) of the Exchange Act during the
most recent fiscal year.


ITEM 11. EXECUTIVE COMPENSATION

     From 1991 through April 1994, none of the Company's directors or executive
officers were compensated for their services. At present, no Director of the
Company is compensated for his services to the Company in such capacity.

     The following table sets forth the annual and long-term compensation paid
or accrued by the Company for services rendered in all capacities to UniHolding
and its subsidiaries during the last three years of those persons who were at
May 31, 1997, (i)the Chief Executive Officer of the Company and (ii)the other
three executive officers of the Company whose total annual salary and bonus for
the year ended May 31, 1997 exceeded $100,000.




                                     III-5



                         SUMMARY COMPENSATION TABLE (1)




                                                                                             Long Term Compensation
                                                               Annual Compensation                   Awards
             Name and Principal
                  Position             Year                   Salary and Bonus ($)               Options (#) (4)
                  --------             ----                   --------------------               ---------------
                                                                                               
Edgard Zwirn (2),                                                                                    
Chairman of the Board                                                                                
                                       1997                         $841,000                         112,821
                                       1996                         $475,000                         112,821
                                       1995                         $470,000                          50,000
                                                                                                     
Paul Hokfelt (3),                                                                                    
Chief Operating Officer                                                                              
                                       1997                         $411,000                          15,000
                                       1996                         $481,000                          30,000
                                       1995                         $420,000                          12,500
                                                                                                     
Bruno Adam,                                                                                          
Chief Financial Officer                                                                              
                                       1997                         $335,000                          30,000
                                       1996                         $380,000                          20,000
                                       1995                         $354,000                          10,000
                                                                                                     
Eric Wavre,                                                                                          
Treasurer, CFO-Europe                                                                                
                                       1997                         $357,000                          25,000
                                       1996                         $406,000                          20,000
                                       1995                         $414,000                           2,500
                                                                    
                                                                            
                                                                            
(1) Until May of 1997 and the date hereof, UniHolding did not compensate any of
its Directors or Executive Officers. All Directors and Executive Officers are
compensated by Company subsidiaries.

(2) Since the fiscal year 1994 Mr. Edgard Zwirn is compensated by the Company's
subsidiary, ULSA, through a Management Consulting Agreement currently providing
for a management fee of Sfr 720,000 annually (approximately $610,000 in fiscal
1997) paid to a company wholly-



                                     III-6



owned by Mr. Zwirn. The management contract replaced his previous employment
contract with ULSA. In addition, since fiscal 1997, Mr. Zwirn is also
compensated by GUCT through a Management Consulting Agreement providing for a
management fee of $300,000 annually, paid to a company wholly-owned by Mr.
Zwirn.

(3) During the year ended May 31, 1997, Mr. Hokfelt was compensated by GUCT and
by UGUK, whereas during the years ended May 31, 1996 and 1995, he was
compensated by ULSA and by UGUK.

(4) The Company has granted such Options to such individuals on August 17, 1995,
July 9, 1996, and August 22, 1997, with such Options so granted not being
exercisable until February 17, 1997, January 9, 1998, and February 22, 1999,
respectively.

Pension Benefits

     Other than Mr. Edgard Zwirn, who is compensated through a management
contract with a company he owns, all of the named executive officers have
retirement benefits pursuant to mandatory provisions of Swiss and UK law. Under
the Swiss system, amounts ranging from 9% to 15% of each employee's
compensation, depending on age and sex, is deducted by the Company and paid to
the social security system and to such employee's account in a fund managed by
an independent insurance company, while the Company contributes like amounts. In
addition to the legally required plans, the Company offers to its executive
officers and other employees supplemental retirement programs, based upon a
defined contribution system. During the year ended May 31, 1996, the Company's
contribution to the supplemental retirement programs of the named executive
officers averaged approximately $30,000 for each. Upon termination of employment
contracts, the total employer contribution may be transferred to new pension
plans. Relative to its executive officers, the Company has no other pension or
retirement liability and has no unfunded liability.

Employment Agreements

     Mr. Bruno Adam's employment agreement does not contain any special clause
other than a notice period of 12 months by either party, with or without cause.
His agreement does not contain any provisions of mandatory bonus or additional
compensation based upon Company performance or results.

     Mr. Paul Hokfelt's employment agreement does not contain any special clause
other than a notice period of 12 months by either party, with or without cause.
His agreement does not contain any provisions of mandatory bonus or additional
compensation based upon Company performance or results.

     Mr. Eric Wavre's employment agreement does not contain any special clause
other than a notice period of 6 months by either party, with or without cause.
His agreement does not contain


                                     III-7



any provisions of mandatory bonus or additional compensation based upon Company
performance or results.

     The board of directors of the Company may award bonuses or incentive pay to
employees during the year at their discretion.

     During the years ended May 31, 1997 and 1996 respectively, a subsidiary of
ULSA made payments of Sfr. 720,000 (approximately $610,000) and Sfr. 600,000
(then approximately $475,000) for consultancy services to a company which may be
deemed to be affiliated with Mr. Enrico Gherardi and with Ms. Alessandra Van
Gemerden, both Directors of the Company, and with Mr. Giorgio Gherardi, a
director of UCTI. Also, during the year ended May 31, 1997, GUCT made payments
of $300,000 for consultancy services to the same company which may be deemed to
be affiliated with Mr. Enrico Gherardi and with Ms. Alessandra Van Gemerden, and
with Mr. Giorgio Gherardi, a director of UCTI.

Stock Options

     The Company amended its Stock Option Plan dated June 28, 1994 whereby
options may be granted to directors, key officers or management personnel of the
Company or any of its subsidiaries or affiliates. The aggregate number of shares
available for issuance under such Plan is 500,000 shares of the Company's common
stock each year. The Administrator, acting in agreement with a majority of the
board of directors, determines the number of shares which shall be subject to
each Option, the time or times when such Option(s) shall be granted, the
exercise date(s) of such Option(s), and the exercise price of each option, but
not less than 100% of the fair market value of the common stock on the date of
granting such Option. This Plan (and all options outstanding under the Plan)
will expire as of June 28, 2004.

     On August 17, 1995, the Company implemented its amended Stock Option Plan
with the grant of options for 163,750 shares of common stock to certain of its
personnel. The options so granted vested in February 1997.

     On July 9, 1996, a total of 357,142 additional options were granted. These
options vest in January 1998.

     On August 22, 1997, a total of 352,142 additional options were granted.
These options vest in February 1999.

     The options granted by the Company to its executive officers named in the
Summary Compensation Table for the year ended May 31, 1997, are as follows:




                                     III-8





                                               Option Grants in Last Fiscal Year

                                                                                                      Potential Realizable
                                                                                                         Value at Assumed
                                      Individual Grants                                               Annual Rates of Stock
                                                                                                     Price Appreciation for
                                                                                                         Option Term (1)
                 
                 
                                            Percent of                                          Potential              Potential
                            Number             Total                                           realization            realization
                              of              Options                                             value                  value
    Executive              Options          Granted to       Exercise       Expiration            at 5%                  at 10%
      Name                 Granted           Employees        Price            Date
                                                                                                   ($)                    ($)
                 
                                                                                                           
Edgard                     112,821             32%            10.00         6-28-2004           (372,255)              (128,864)
Zwirn

Bruno                       30,000              9%            10.00         6-28-2004           (98,986)                (34,266)
Adam

Paul Hokfelt                15,000              4%            10.00         6-28-2004           (49,493)                (17,133)

Eric Wavre                  25,000              7%            10.00         6-28-2004           (82,488)                (28,555)



(1) Potential realizable values are negative because the exercise prices
substantially exceed the market price at the time of the grants.

     In addition, on August 22, 1997, the Company granted: (a) Mr. Enrico
Gherardi, a Director, an option for 112,821 shares of common stock at a price of
$10.00 per share exercisable on or after February 22, 1999, and

(b) Mr. Tobias Fenster, a Director, an option for 12,000 shares of common stock
at a price of $10.00 per share exercisable on or after February 22, 1999.

     The aggregate number of options granted to date by the Company to the above
named persons are as follows:




                                     III-9






       Executive Name     Fiscal Year 1995              Fiscal Year 1996             Fiscal Year 1997             Aggregate Options
       --------------     ----------------              ----------------             ----------------             -----------------
                                                                                                                 
Edgard Zwirn                    50,000                       112,821                     112,821                         275,642
Bruno Adam                      10,000                        20,000                      30,000                          60,000
Paul Hokfelt                    12,500                        30,000                      15,000                          57,500
Eric Wavre                       2,500                        20,000                      25,000                          47,500
Enrico Gherardi                 50,000                       112,821                     112,821                         275,642
Tobias Fenster                    --                          12,000                      12,000                          24,000

                                                       
     The options granted in fiscal year 1995 have become exercisable on February
17, 1997, while those issued in fiscal year 1996 will become exercisable on
January 9, 1998 and those issued in fiscal year 1997 will become exercisable on
February 22, 1999. None of the options granted are in the money.

     In addition, the Company's subsidiary GUCT agreed to give the following
options to the following individuals: three of GUCT's directors and officers,
Edgard Zwirn, Giorgio Gherardi (a brother of Mr. Enrico Gherardi and Ms. Van
Gemerden's father) and Paul Hokfelt may purchase from GUCT a portion of the
investment which GUCT has in UCTI, corresponding for each individual to 2% of
the outstanding UCTI capital. The exercise price of the option equals the per
share cost paid by GUCT, plus interest at a rate which will fluctuate each year
in accordance with market, and has been set at 10% per annum until June 1, 1998.
Such options are exercisable any time over a period of 5 years commencing on
June 1, 1997.

     In addition, UCTI has issued to three former NDA shareholders a total of
115,500 warrants to purchase UCTI newly-issued shares of common stock at a price
of $1.22 to $1.33 per share. Further UCTI has granted to certain of its
employees options to acquire a total of 915,700 newly-issued shares of common
stock at the price of $1.50 per share. The number of shares of common stock of
UCTI currently outstanding is 16,905,200, out of which the Company owns
11,882,200.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         DIRECTORS

     As of September 19, 1997, there were issued 7,627,736 shares of Voting
Common Stock, the only class of voting securities of the Company. Each share of
Voting Common Stock entitles its holder to one vote, with the exception of
293,150 shares of Voting Common Stock held in treasury by the Company. There are
accordingly 7,334,586 shares of Voting Common Stock presently with voting
rights.

     The following table sets forth, as of September 19, 1997 the name and
address of each person known to the Company to be the beneficial owner of more
than 5% of the Voting Common Stock, the total number of shares of Voting Common
Stock owned by each such person and the percentage of the class owned by each
such person. Except as otherwise noted, each such person has full voting and
investment power with respect to the shares so owned.



                                     III-10







                                                                   Amount and Nature of
                                                                   Beneficial Ownership
                       Name and Address of Beneficial                                                     Percent of Class
Title of Class                      Owner                                                                         (1)

                                                                                                       
    Voting            Unilabs Holdings SA                                 2,433,579                            32.69%
 Common Stock         53rd Street
                      Urbanizacion Obarrio
                      Torre Swiss Bank
                      Sixteenth Floor
                      Panama

      "               Edgard Zwirn (2)                                    3,149,866                            42.31%
                      80, Harley Street
                      London W1 1AE
                      United Kingdom

      "               Unilab Corporation 401 Hackensack                   1,394,963(3)                         18.74%(3)
                      Ave.  Hackensack,
                      NJ 07601  (3)

      "               Franklin Mutual                                       697,482                             9.37%
                      Advisers, Inc.
                      51 John F. Kennedy
                      Parkway
                      Short Hills,
                      NJ 07078   (4)

      "               Mutual European Fund                                  576,585                             7.74%
                      51 John F. Kennedy
                      Parkway
                      Short Hills,
                      NJ 07078   (5)

      "               Grace Brothers, Ltd.
                      1560 Sherman Avenue, Suite 900
                      Evanston, IL  60201                                   464,987                             6.25%
                      (6)

      "               Alessandra van                                        490,125                             6.58%
                      Gemerden (7)
                      c/o Unilabs S.A.
                      12 place de Cornavin
                      CH 1211 Geneva,
                      Switzerland






                                     III-11



                                                                                                       
      "               Morgan Stanley & Co. Incorporated (8)                447,301                              5.86%
                      1585 Broadway
                      New York, NY 10036

      "               SBC Equity Partners                                  298,384                              4.01%
                      1, Europastrasse
                      8152 Opfikon, Switzerland

      "               All Directors and Executive Officers as a          3,907,549                             52.48%
                      group (9)

   Non-Voting         SBC Equity Partners                                  298,384                            100.00%
 Common Stock,        1, Europastrasse
par value $0.01       8152 Opfikon, Switzerland
   per share




(1) Percent of Class is calculated by dividing the number of currently issued
and outstanding shares held by such beneficial owner by the total number of
currently issued and outstanding shares of the Company.

(2) Edgard Zwirn may be deemed to be the beneficial owner of 2,433,579 shares by
virtue of his position as Chairman of the Board of Unilabs Holdings SA, a
Switzerland corporation ("Swiss Holdings") which is the parent of Unilabs
Holdings SA (Panama). However, Mr. Zwirn disclaims beneficial ownership of such
shares except for 22.3% thereof, his proportionate ownership of Swiss Holdings
or 542,688 shares. Further, he is deemed to beneficially own 580,000 shares by
virtue of his position of director in companies which own such shares; Mr. Zwirn
disclaims beneficial ownership of all such shares. He directly owns 136,287
shares of the Common Stock of the Company. Mr. Zwirn has the right to acquire an
additional 50,000 shares of Common Stock pursuant to an option granted by the
Company on August 17, 1995 and exercisable in February 1997, 112,821 shares of
Common Stock pursuant to an option granted by the Company on July 9, 1996 and
exercisable in January 1998, and 112,821 shares of Common Stock pursuant to an
option granted by the Company on August 22, 1997 and exercisable in February
1999. Further, Mr. Zwirn has the right to acquire from GUCT up to 2% of the
capital of UCTI, such option being exercisable over a period of 5 years
commencing on June 1, 1997.

(3) Unilab Corporation sold a 100% participation interest in the Unilab Note to
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), which in turn sold
subparticipation interests amounting to 100% of its participation interest in
the Unilab Note to BankAmerica Investment Corporation ("BankAmerica"), Franklin
Mutual Advisers, Inc. ("FMAI") and Grace Brothers, Ltd. ("Grace Brothers")
(collectively, the "Subparticipants"). The Unilab Note converted as of January
1, 1997 into 1,394,963 shares of UniHolding Common Stock, for which Unilab
Corporation is the record holder on behalf of the Subparticipants. Unilab
Corporation disclaims beneficial ownership of such shares.



                                     III-12



(4) FMAI is an investment adviser registered under the Investment Advisers Act
of 1940. Two of FMAI's advisory clients (the "Advisory Clients"), one of which
is Mutual European Fund, the beneficial owner of 576,585 shares of UniHolding
common Stock (see 5)), are the beneficial owners, in the aggregate, of 697,482
shares of UniHolding Common Stock. Pursuant to investment advisory agreements
with the Advisory Clients, FMAI has sole investment discretion and voting
authority with respect to the UniHolding Common Stock beneficially owned by the
Advisory Clients. On behalf of the Advisory Clients, FMAI purchased from DLJ a
subparticipation interest in a 100% participation interest in the Unilab Note
purchased by DLJ from Unilab Corporation (the "FMAI Subparticipation Interest").
The Unilab Note converted as of January 1, 1997 into 1,394,963 shares of
UniHolding Common Stock. The Advisory Clients obtained beneficial ownership of
697,482 shares of UniHolding Common Stock by means of the FMAI Subparticipation
Interest. FMAI is a wholly owned subsidiary of Franklin Resources, Inc. ("FRI"),
a diversified financial services organization. Charles B. Johnson and Rupert H.
Johnson, Jr. (the "Principal Shareholders") each own in excess of 10% of the
outstanding common stock of FRI and are the principal shareholders of FRI. FMAI,
FRI and the Principal Shareholders may be deemed to be, for purposes of Rule
13d-3 under the Securities Exchange Act of 1934, the beneficial owners of the
UniHolding Common Stock owned by the Advisory Clients. FMAI, FRI and the
Principal Shareholders have no interest in dividends or proceeds from the sale
of UniHolding Common Stock and disclaim beneficial ownership of all UniHolding
Common Stock owned by the Advisory Clients.

(5) Mutual European Fund is one of five portfolios comprising Franklin Mutual
Series Fund Inc., an open-end management investment company registered under the
Investment Company Act of 1940. Pursuant to an investment advisory agreement
with FMAI, FMAI has sole investment discretion and voting authority with respect
to the shares of UniHolding Common Stock owned by Mutual European Fund. Mutual
European Fund obtained beneficial ownership of 576,585 shares of UniHolding
Common Stock by means of the FMAI Subparticipation Interest.

(6) Grace Brothers purchased from DLJ a subparticipation interest in a 100%
participation interest in the Unilab Note purchased by DLJ from Unilab
Corporation (the "Grace Brothers Subparticipation Interest"). The Unilab Note
converted as of January 1, 1997 into 1,394,963 shares of UniHolding Common
Stock. Grace Brothers obtained beneficial ownership of 464,987 shares of
UniHolding Common Stock by means of the Grace Brothers Subparticipation
Interest.

(7) Alessandra van Gemerden, a Director, is deemed to beneficially own 490,125
shares of the Company's Common Stock; however, Ms. Van Gemerden disclaims
beneficial ownership of such shares except for 90,125 thereof.

(8) Morgan Stanley holds 408,988 shares that were acquired pursuant to the
Morgan Stanley Agreement, including 75,655 that were acquired pursuant to
antidilution rights related to the conversion of the Unilab Note. In addition,
as of September 19, 1997, Morgan Stanley held as market maker 48,061 shares of
UniHolding Common Stock.


                                     III-13



(9) Of the officers and directors as a group, Edgard Zwirn may be deemed to
beneficially own 3,149,866 shares of the Company's Common Stock. Enrico
Gherardi, a Director, is deemed to beneficially own 249,875 shares of the
Company's Common Stock. Mr. Enrico Gherardi has the right to acquire 50,000
shares of common stock of the Company pursuant to an option granted by the
Company on August 17, 1995 and exercisable in February 1997, 112,821 shares of
common stock pursuant to an option granted by the Company on July 9, 1996 and
exercisable in January 1998, and 112,821 shares of common stock pursuant to an
option granted by the Company on August 22, 1997 and exercisable in February
1999. On August 17, 1995, the Company granted options to its other executive
officers totaling 27,500 shares of common stock of the Company exercisable in
February of 1997. On July 9, 1996, the Company granted options to its other
executive officers totaling 70,000 shares of common stock of the Company
exercisable in January of 1998. On August 22, 1997, the Company granted options
to its other executive officers totaling 70,000 shares of common stock of the
Company exercisable in February of 1999. Alessandra van Gemerden, a Director, is
deemed to beneficially own 490,125 shares of the Company's Common Stock;
however, Ms. van Gemerden disclaims beneficial ownership of such shares except
for 90,125 thereof.

     Three Swiss pension funds, Retraites Populaires, Caisse de Pensions de
l'Etat de Vaud and Caisse Intercommunale de Pensions, acquired 579,038 shares,
or approximately then 9.97% of the Company's common stock in 1994. However, no
one fund owns over 5% individually and each pension fund maintains its own
voting power and control.

     Pursuant to the terms of a Stock Purchase Agreement, dated June 30, 1995,
by and between the Company and UGL, the Company acquired 40% of the common stock
of UGL in exchange for the Unilab Note in the principal amount of $15,000,000
and certain other consideration. The principal amount of the Unilab Note was due
as of June 30, 1996. Pursuant to the terms of the Unilab Note, the Unilab Note
was converted as of January 1, 1997 into 1,394,963 shares of UniHolding Common
Stock.

ITEM 13. CERTAIN RELATIONSHIPS AND TRANSACTIONS WITH RELATED PERSONS

     The following sets forth certain relationships among beneficial
shareholders, executive officers and directors of the Company, in particular,
the relationship between Mr. Zwirn and Mr. Adam as executive officers and
directors of the Company, of Unilabs Holdings SA, a Swiss corporation ("Swiss
Holdings"), and of Unilabs Holdings SA, a Panamanian corporation ("Holdings").

     The acquisition of March 31, 1994, whereby the Company acquired 60% of UGL
and 100% of UCLE from Holdings with an option to purchase Holdings' majority
interests in its Italian and Spanish operating subsidiaries is considered a
related party transaction. Pursuant to the Acquisition Agreement, Holdings
assigned to the Company its rights and obligations under the Stockholders'
Agreement with Unilab Corporation concerning UGL. In connection with the


                                     III-14




acquisition of 40% of UGL from Unilab Corporation on June 30, 1995, such
Stockholders' Agreement was terminated.

     During fiscal 1994, UGL acquired some of the minority interests in ULSA
from Holdings through an offset of receivables from Holdings (aggregating
approximately $10 million) against payables to Holdings. UGL thereafter owned
86% of ULSA.

     On June 22, 1994, the board of directors of the Company determined that it
would be in the best interest of the Company to accelerate the payment of the
$18 million Promissory note (the "Note") to Holdings with shares of the
Company's common stock in lieu of cash. The terms of the Note required payment
of principal and interest (accruing at 5% per annum), in cash or shares, over
five years with the first installment being due March 31, 1995. Holdings
accepted early payment of the Note in shares of the Company's common stock in
lieu of cash. Further, Holdings agreed that such payment would be calculated on
the basis of $5.50 per share (prior to the reverse split of the Company's common
stock). Accordingly, the Company issued 3,310,455 (prior to the reverse split of
the Company's common stock) shares of common stock valued at $5.50 per share
(unadjusted) to Holdings (equivalent to the principal and accrued interest of
$18,207,500 as of June 22, 1994) in consideration for the cancellation of the
Note.

     During the year ended May 31, 1995, the Company acquired from Holdings (a)
186 additional shares of ULSA for a consideration of $1,800,000 paid in cash,
and (b) the Italian and Spanish laboratory operations for a consideration of
$7,342,000 represented by two promissory notes subsequently offset against
advances.

     ULSA previously entered into a Cooperation Agreement dated March 25, 1992
with Holdings covering (i) the use of the Unilabs logo and provision of
financial and market research advisory services to ULSA ("General Services") and
(ii)Mergers and acquisitions advisory services. The agreement, which expired on
May 31, 1996, provided for an annual general services fee of $238,000 payable by
ULSA. The Cooperation Agreement was assigned to and assumed by UniHolding
pursuant to the Acquisition Agreement. Holdings also billed ULSA an additional
$355,000 for general and administrative expenses and $282,000 as a finder's fee
in relation to the acquisition of UCP during fiscal year 1994. The Company also
billed Holdings $387,000 relating to laboratory management and consulting
services in fiscal 1994. The management fees paid to Holdings by the Company
provided for, among other things, the services of Mr. Bruno Adam up to May 31,
1994.

     In December 1993, the Company extended a loan of approximately $2.9 million
to Holdings bearing interest at an annual rate of 3.375% which was subsequently
canceled by the Company on March 31, 1994, in partial consideration for the
acquisition of the European clinical testing companies.

     Edgard Zwirn, as CEO of the Company, is compensated for his services
through and pursuant to a Management Consulting Agreement between a subsidiary
of ULSA and a company


                                     III-15




which is wholly-owned by Mr. Zwirn. The agreement requires an annual payment of
Sfr 720,000 (approximately $610,000). Such agreement replaces a previous
agreement under which the annual payment was Sfr.600,000 ($476,000). Also,
during the year ended May 31, 1997, GUCT made payments of $300,000 for
consultancy services to another company which is wholly-owned by Mr. Zwirn.

     During the year ended May 31, 1995, the Company entered into a management
services contract with a company which may be deemed to be affiliated with Mr.
Enrico Gherardi, a Director of the Company. The Company paid Sfr. 600,000 (then
approximately $470,000) under this contract during the year ended May 31, 1995.
As of May 31, 1995, the contract was terminated. During the years ended May 31,
1997 and 1996 respectively, a subsidiary of ULSA made payments of Sfr. 720,000
(approximately $610,000) and Sfr. 600,000 (then approximately $500,000) for
consultancy services to a company which may be deemed to be affiliated with Mr.
Enrico Gherardi and with Ms. Alessandra Van Gemerden, both Directors of the
Company, and with Mr. Giorgio Gherardi, a director of UCTI. Also, during the
year ended May 31, 1997, GUCT made payments of $300,000 for consultancy services
to the same company which may be deemed to be affiliated with Mr. Enrico
Gherardi and Ms. Alessandra Van Gemerden, and with Mr. Giorgio Gherardi, a
director of UCTI.

     During the year ended May 31, 1996, UniHolding acquired 155,000 shares of
UniHolding's common stock from Holdings for $2,900,000, the then market value of
such shares which was less than the cost of such shares to Holdings. The Company
also purchased 13,000 shares of UniHolding's common stock for $217,000.

     During the year ended May 31, 1997, UGL acquired 20,000 bearer shares of
ULSA's common stock from Holdings for SFr. 13.5 million (approximately $9.6
million), the fair market value of such shares which approximated the cost of
such shares to Holdings. Half of such shares were resold by UGL to third party
investors prior to ULSA's initial public offering at a value which was higher
than the price paid by UGL to Holdings. The other half of such shares were
resold by UGL in ULSA's initial public offering at a value which was higher than
the price paid by UGL. According to the related purchase contracts, the purchase
price was subject to an adjustment whereby the Company and Holdings would share
on an equal basis any difference between the purchase price initially set and
the price per share on the first day of trading of the ULSA shares on the Swiss
Exchange after the ULSA initial public offering discussed below. Based upon the
last price paid on April 25, 1997 (the first day of trading of the ULSA shares
on the Swiss Exchange) of SFr.705 per new ULSA bearer share, an amount (included
in the above mentioned value) of SFr. 550,000 (approximately $390,000) became
due by the Company to Holdings and was paid through a partial set-off of
advances previously made.

     On September 14, 1995, UGL entered into an agreement with Health Strategies
Limited ("HSL"), a company which might be deemed to be related to the Company
for the reasons mentioned below, and which the Company believed might be deemed
to be controlled by a director of Unilab Corporation, whereby a new company,
MISE S.A. ("MISE") was formed. UGL


                                     III-16



invested $3,005,000 in MISE for 33.3% of the voting rights and 66.6% of the
equity of MISE. $2,005,000 was paid during the year ended May 31, 1996, and the
balance was payable in two installments of $500,000 each in September 1996 and
1997. HSL owns the remaining voting and equity interests in MISE for which it
contributed a nominal amount of cash and its agreement to obtain for MISE
certain know-how and related software and services. MISE then acquired for
$1,500,000 certain know-how and computer software from HSL, which know-how and
software were simultaneously acquired for $250,000 by HSL from Medical
Diagnostic Management, Inc. ("MDM"), which may be deemed to be related to HSL,
and, for the reasons mentioned below, may also be deemed to be related to the
Company. Further, MISE committed to pay HSL a total of $1,500,000 for certain
plans for marketing the know-how and software in several European countries. Out
of such amount, $500,000 was paid during the year ended May 31, 1996, and the
balance was payable in two installments of $500,000 each in October 1996 and
1997. The fee agreed for the marketing plans also included support services and
customization to European needs. The installment due in October 1996 (as well as
the capital contribution in September 1996) had not been paid principally
because HSL had not entirely delivered all services it committed to deliver. For
several months, there was little communication between the Company and HSL,
Unilab Corporation or its directors. A director of HSL has since resigned as a
director of Unilab Corporation and communications between HSL and the Company
were re-established. The parties then considered several alternatives to achieve
their initial goals. The investment was made so that it provides the Company
access to certain know-how developed by MDM. MDM is a company founded in 1989
which is active in the industry of health information services in the U.S., and
is focusing on organizing and managing access to discounted provider networks
for ambulatory diagnostic services (radiology, other imaging techniques, and
laboratory). Its strategy is to be a clinical, financial, administrative and
information management intermediary among referring physicians, payers and
diagnostic providers. The know-how acquired by MISE from HSL included, but not
limited to, a certain computerized information system proprietary to MDM. HSL
granted to MISE a perpetual license for the use of the MDM know-how and related
software for use in Western Europe. In addition, HSL agreed to provide marketing
and support services for a three-year period at no further cost to MISE. Both
UGL and HSL agreed to use their best efforts to implement the MISE business in
Western Europe and agreed not to compete with MISE in the same territory. The
Company, through MISE, intended to market the concept, including the
computerized information system, to health insurance companies throughout
Europe. The Company believes that such a concept should be particularly useful
and applicable in the context of the ongoing deregulation of the health care
system and may provide a useful tool to achieve substantial savings in health
care costs in several European countries. As a result of their discussions, HSL,
MDM and UGL agreed to restructure their relationship. As of May 30, 1997, UGL
agreed to exchange its MISE shares for certain preferred stock of MDM. Such
preferred stock is redeemable at MDM's option, in whole or in part at a total
price of $3 million in 1998, escalating to $3.6 million in 2002. Should MDM
offer any of its common stock in an initial public offering, all outstanding
shares of preferred stock owned by UGL will be converted into common stock
representing the lesser of (a) 15% of the MDM equity on a fully-diluted basis
after the public offering, or (b) $5 million valued at the offering price.
Further, as part of the



                                     III-17



agreement, MDM will pay UGL a commission of 5% on its net sales in Europe for a
period of seven years.

     Following are entities affiliated with the Company:

     Holdings. Swiss Holdings owns 100% of Holdings. Edgard Zwirn is Chairman.
Bruno Adam is Director, Secretary and Chief Financial Officer of Holdings. As of
May 31, and October 14, 1997, the Company had an intercompany receivable of
approximately $3.5 million due from Holdings.

     Swiss Holdings. Edgard Zwirn is Chairman of the board of directors of Swiss
Holdings and, together with certain members of his immediate family, he owns
23.3% of the voting and equity interests in Swiss Holdings. Bruno Adam is
Executive Vice President and Chief Financial Officer of Swiss Holdings.




                                     III-18



                                                                  DRAFT 97/10/10

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES AND
         REPORTS ON FORM 8-K


                                                                        Page No.


FINANCIAL STATEMENTS AND SCHEDULES:

1.  Financial Statements - See Index
            to Financial Statements at ITEM 8 ....................        II-F-1

2.  Financial Statement Schedules ................................        IV-2



EXHIBITS:

The information required pursuant to Item 601
      of Regulation S-K is incorporated by
      reference to the Exhibit Index of this Report ..............        IV-4

                                      
REPORTS ON FORM 8-K:

1.   Current Report on Form 8-K dated 
     February 27, 1997 (filed March 7, 1997)
     reporting on Item 2

2.   Current Report on Form 8-K dated 
     May 30, 1997 (filed June 5, 1997)
     reporting on Item 4

3.   Amended Current Report on Form 8-K/A dated 
     February 27, 1997 (filed April 15, 1997) 
     reporting on Item 2 with Financial Statements 
     of NDA Clinical Trials Services, Inc.

4.   Amended Current Report on Form 8-K/A dated 
     February 20, 1997 (filed May 28, 1997) 
     reporting on Item 2

5.   Amended Current Report on Form 8-K/A dated 
     May 30, 1997 (filed June 10, 1997) 
     reporting on Item 4


                                      IV-1



                                                                  DRAFT 97/10/10

               UNIHOLDING CORPORATION AND SUBSIDIARIES               Schedule II
                        VALUATION AND QUALIFYING ACCOUNTS
                             (dollars in thousands)



                                                                                          Additions
                                                   Balance at     Charged to              Charged to              Effect of  Balance
                                                   Beginning      Cost and                Other                   Currency   at End
                                                   of Period      Expenses      Other     Accounts   Deductions   Changes    Period
                                                   ---------      --------      -----     --------   ----------   -------    ------
                                                                                                           
Year ended May 31, 1995
     Allowance for doubtful accounts                 $1,151          $535        $21(1)        $0       $408       $158      $1,457
  Deferred tax on loss carryforwards                    745             0          0            0        312         77         510


Year ended may 31, 1996
     Allowance for doubtful accounts                 $1,457(2)       $743         $0           $0       $605       ($95)     $1,500
  Deferred tax on loss carryforwards                    510             0          0            0        173         59         396


Year ended May 31, 1997
     Allowance for doubtful accounts                 $1,500          $595         $0           $0       $826       ($68)     $1,201
  Deferred tax on loss carryforwards                    396         2,249          0            0          0          0       2,645




(1)  allowance for doubtful accounts of ULSP and IMT, acquired on May 31, 1995.

(2)  total allowance for doubtful accounts of $1,901 as disclosed in the balance
     sheet as of May 31, 1995, included $444 of allowance on long-term notes
     receivable, not included above, and classified separately in the balance
     sheet as of May 31, 1996.


                                      IV-2



INDEPENDENT AUDITORS' REPORT ON SCHEDULE

Board of Directors
UniHolding Corporation
New York, New York

The audits referred to in our report dated September 26, 1996 on the
consolidated financial statements of UniHolding Corporation and subsidiaries,
which appears in Part II, also included Schedule II for each of the years in the
two-year period ended May 31, 1996. This schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein, in
compliance with the applicable accounting regulation of the Securities and
Exchange Commission.

New York, New York
September 26, 1996


                                      IV-3



                                                                  DRAFT 97/10/10

                                  EXHIBIT INDEX

Exhibit No.                               Description


2.1                         Share Purchase Agreement between Unilabs
                            Management Company, Ltd. as Seller, and EIBA
                            "Eidgenoessische Bank" Beteiligungs und
                            Finanzgesellschaft as Purchaser, dated January 17,
                            1997 (1)

2.2                         Share Purchase Agreement between Unilabs
                            Group Limited and Unilabs Management
                            Company Ltd. and Banque Cantonale de Geneve,
                            dated February 6, 1997 (1)

2.3                         Share Purchase Agreement between Unilabs
                            Group Limited and KK Trust AG., dated February
                            17, 1997 (1)

2.4                         Share Purchase Agreement between Unilabs
                            Group Limited and Unilabs Holdings SA, dated
                            February 18, 1997

2.5                         Share Purchase Agreement between Unilabs
                            Group Limited and Unilabs Holdings SA, dated
                            March 13, 1997

2.6                         Underwriting Agreement between Unilabs SA and
                            Union Bank of Switzerland, dated April 24, 1997

2.7                         Master Combination Agreement by and among
                            NDA Clinical Trials Services, Inc. ("NDA"),
                            certain NDA stockholders and Global Unilabs
                            Clinical Trials, Ltd., dated as of January 31, 1997
                            (4)

2.8                         Stock Purchase Agreement, dated as of July 23,
                            1996, between Morgan Stanley & Co.,
                            Incorporated and UniHolding Corporation (5)

2.9                         Agreement by and among Unilabs Group Limited,
                            Health Strategies Limited and Medical Diagnostic
                            Management, Inc., dated as of May 23, 1997

3.1                         Amended Certificate of Incorporation of
                            UniHolding Corporation (2)

3.2                         Bylaws of UniHolding Corporation


                                      IV-4




                                                                  DRAFT 97/10/10


10.1                        Memorandum of Agreement between Health
                            Strategies Ltd. and Unilabs Group Ltd. (3)
                      
10.2                        Amended Stock Option Plan (3)
                      
10.3                        Lock-Up Agreement between Edgard Zwirn, Unilabs
                            Holdings SA, UniHolding Corp., Unilabs Group Ltd.,
                            Unilabs SA and Union Bank of Switzerland, dated 
                            April 14, 1997
                      
16                          Letter from Richard A. Eisner & Company, LLP, dated
                            June 16, 1997 (6)
                      
21                          Subsidiaries of Registrant
                      
23                          Consent of Accountant, ATAG Ernst & Young SA
                      
27                          Financial Data Schedule
                      
- ----------
                  
(1)  Incorporated by reference to Current Report on Form 8-K dated February 20,
     1997.
(2)  Incorporated by reference to Quarterly Report on Form 10-Q for the period
     ended November 30, 1996.
(3)  Incorporated by reference to Annual Report on Form 10-K for the Fiscal Year
     ended May 31, 1996.
(4)  Incorporated by reference to Current Report on Form 8-K dated January 31,
     1997.
(5)  Incorporated by reference to Quarterly Report on Form 10-Q for the period
     ended August 31, 1996
(6)  Incorporated by reference to Amended Current Report on Form 8-K/A dated May
     30, 1997



                                      IV-5



                                                                  DRAFT 97/10/10

                                   SIGNATURES

     Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                   UniHolding Corporation


Date:       10/14/97                               By: /s/ Bruno Adam
                                                      --------------------------
                                                      Bruno Adam
                                                      CFO/Treasurer

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By: /s/ Edgard Zwirn                                             Date:  10/14/97
    Edgard Zwirn
    CEO and Director

By: /s/ Bruno Adam                                               Date:  10/14/97
    Bruno Adam
    CFO and Treasurer

By: /s/ Pierre-Alain Blum                                        Date:  10/14/97
    Pierre-Alain Blum
    Director and Member Audit Committee

By: /s/ Daniel Regolatti                                         Date:  10/14/97
    Daniel Regolatti
    Director and Member Audit Committee

By: /s/ Enrico Gherardi                                          Date:  10/14/97
    Enrico Gherardi
    Director and Secretary

By: /s/ Alessandra Van Gemerden                                  Date:  10/14/97
    Director

By: /s/ Tobias Fenster
    Director                                                     Date:  10/14/97

EX-2.4

                                   Exhibit 2.4

                        Share Purchase Agreement between
                 Unilabs Group Limited and Unilabs Holdings SA,
                             dated February 18, 1997





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

                            SHARE PURCHASE AGREEMENT



                                     BETWEEN



                              UNILABS GROUP LIMITED



                                       AND



                             UNILABS HOLDINGS S. A.



                   Relating to 5% of the Shares in Unilabs SA

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

                                                               February 18, 1997





This Share Purchase Agreement was entered into on February 18, 1997 between the
following parties:

     Unilabs Group Limited, a British Virgin Islands corporation with its
     registered address at Road Town, Pasea Estate, P.O. Box 3149, Tortola,
     British Virgin Islands,

     (hereinafter referred to as "Purchaser")

                                                               on the first part

                                       and

     Unilabs Holdings SA, a Panama corporation with its principal place of
     business at 207-208 Neptune House, Marina Bay, Gibraltar,

     (hereinafter referred to as "UHP")

                                                              on the second part

Introduction

The Purchaser is the majority shareholder of Unilabs SA, a Swiss corporation
(the "Company"), currently holding 74% of the Company's issued and outstanding
share capital.

The Company intends to do an initial public offering ("IPO") by listing its
shares on the Swiss Stock Exchange. For purposes of preparing the IPO, the
Purchaser is prepared to buy an equity interest in the Company.

Based on the foregoing, the Parties agree as follows:

1.   Sale and Purchase of Shares

     UHP agrees to sell to the Purchaser and the Purchaser agrees to buy from
     UHP 800 bearer shares of the Company with a nominal value of Sfrs. 500. --
     each, representing 5% of the total of the issued and outstanding share
     capital of the Company.

     The 800 shares to be sold to the Purchaser are hereinafter referred to as
     the "Shares".

2.   Purchase Price

     The purchase price for the Shares shall be Sfrs. 8'125 -- per share,
     representing Sfrs. 6'500'000. -- in the aggregate (the "Purchase Price").
     The Purchase Price shall be payable at the Closing (as defined under
     Section 3.1 below) by wire transfer to the account to be 

                                       1





     designated by UHP and against delivery of the Shares.

     In addition, in the event of an IPO before December 31st, 1998, the
     difference between (a) the price per share specified above and (b) the
     price per share on the first day of trading on the Swiss Exchange for a
     number of shares substantially equivalent to 800 such bearer shares will be
     shared equally between the Purchaser and UHP. Accordingly, in such an event
     the Purchaser shall pay to UHP a supplemental consideration equal to
     on-half of such difference.

3.   Closing

3.1 Place and Date

     The sale and purchase of the Shares shall be consummated at the offices of
     the Company in Geneva, or at such other place as the Parties may agree, no
     later than 3 days after the condition precedent set forth in Section 3.2
     below has been met (the "Closing Date"). At the Closing the Purchaser shall
     execute by wire transfer to the account to be designated by UHP the
     Purchase Price against delivery of the Shares.

3.2 Condition Precedent

     The sale and purchase of the Shares contemplated herein shall be subject to
     the following condition being met on or before February 21, 1997:

          Board Approval: Approval of the purchase of the Shares by the board of
          directors of the Purchaser.

4.   Representations and Warranties of Seller

     UGL acknowledges that, in its capacity as heretofore 74% shareholder of the
     Company, it possesses all the necessary knowledge about the Company, and
     accordingly hereby waives any requirement for representations and
     warranties to be made by UHP in connection with the Company and its state
     of affairs.

     UHP hereby represents and warrants to the Purchaser, that:

          (a) As of the signing of this Agreement and at Closing, it is the sole
          legal and beneficial owner of the Shares, free and clear of all liens,
          encumbrances, options, charges and other claims arising from any
          privilege, pledge or security arrangement. UHP has full right and
          capacity to transfer and sell the Shares.

          (b) Upon delivery of the Shares, the Purchaser will receive good and
          valid title to the Shares, free and clear of all liens, encumbrances
          or other rights of third parties.

                                       2



          (c) On the Closing Date, the ownership structure of the Company will
          be as follows:

                                            % of capital
                                            ------------

                 Unilabs Group Ltd.:            79.0%
                 EIBA:                           5.0%
                 KK Trust AG:                    5.0%
                 Banque Cantonale de Geneve.:    5.0%
                 UHP:                            5.0%
                 Third Party:                    1.0%

5.   Miscellaneous

5.1  Costs and Expenses

     Each Party shall pay its own legal fees, costs, traveling expenses and
     other expenses in connection with this transaction.

5.2  Taxes

     Each party shall bear all taxes or other charges which become due by itself
     in connection with the execution or performance of this Agreement, such as
     securities transfer tax.

5.3  Notices

     Communications under this Agreement shall be made in writing by letter,
     telex or telefax and addressed as follows:

     if to the Purchaser:

     UNILABS GROUP LIMITED
     207-208 Neptune House
     Marina Bay
     Gibraltar
     Tel: +350 45 447
     Fax: +350 45 726

     if to UHP:

     207-208 Neptune House
     Marina Bay
     Gibraltar
     Tel: +350 45 447
     Fax: +350 45 726


                                       3


     with copy to:

     Mr. Bruno Adam
     Unilabs SA
     12, place Cornavin
     1201 Geneva
     Tel: +41-22-909-7777
     Fax: +41-22-909-7707

5.4  Entire Agreement

     This Agreement embodies the entire agreement between the parties hereto
     with respect to the transaction contemplated herein and there have been and
     are no agreements or warranties between the parties other than those set
     forth or provided for herein. This Agreement may be amended only in writing
     through an instrument signed by all the parties hereto.

5.5  Confidentiality

     The Parties hereto agree and undertake to keep the terms and contents of
     this Agreement strictly confidential and not to disclose any related
     information to any third party without a written consent of the other
     Parties, unless required to do so by law, a recognized stock exchange or
     pursuant to an order of a competent governmental authority of court. In
     such an event the Party concerned shall inform the other Parties of such
     disclosure.

5.6  Governing Law and Jurisdiction

     This Agreement shall be governed by Gibraltarian law. Disputes arising out
     of or in connection with this Agreement shall be submitted to the
     jurisdiction of the ordinary courts of Gibraltar, venue being Gibraltar.
     The Purchaser reserves the right to take legal action against UHP at its
     registered offices or at any other competent place of jurisdiction.


     UNILABS GROUP LTD.                     UNILABS  HOLDINGS SA


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


                                        4

EX-2.5

                                   Exhibit 2.5

                        Share Purchase Agreement between
                 Unilabs Group Limited and Unilabs Holdings SA,
                              dated March 13, 1997







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

                            SHARE PURCHASE AGREEMENT



                                     BETWEEN



                              UNILABS GROUP LIMITED



                                       AND



                             UNILABS HOLDINGS S. A.



                   Relating to 5% of the Shares in Unilabs SA

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

                                                                  March 13, 1997





This Share Purchase Agreement was entered into on March 13, 1997 between the
following parties:

     Unilabs Group Limited, a British Virgin Islands corporation with its
     registered address at Road Town, Pasea Estate, P.O. Box 3149, Tortola,
     British Virgin Islands,

     (hereinafter referred to as "Purchaser")

                                                               on the first part

                                       and

     Unilabs Holdings SA, a Panama corporation with its principal place of
     business at 207-208 Neptune House, Marina Bay, Gibraltar,

     (hereinafter referred to as "UHP")

                                                              on the second part

Introduction

The Purchaser is the majority shareholder of Unilabs SA, a Swiss corporation
(the "Company"), currently holding 79% of the Company's issued and outstanding
share capital.

The Company intends to do an initial public offering ("IPO") by listing its
shares on the Swiss Stock Exchange. For purposes of preparing the IPO, the
Purchaser is prepared to buy an equity interest in the Company.

Based on the foregoing, the Parties agree as follows:

1.   Sale and Purchase of Shares

     UHP agrees to sell to the Purchaser and the Purchaser agrees to buy from
     UHP 800 bearer shares of the Company with a nominal value of Sfrs. 500. --
     each, representing 5% of the total of the issued and outstanding share
     capital of the Company.

     The 800 shares to be sold to the Purchaser are hereinafter referred to as
     the "Shares".

2.   Purchase Price

     The purchase price for the Shares shall be Sfrs. 8'125 -- per share,
     representing Sfrs. 6'500'000. -- in the aggregate (the "Purchase Price").
     The Purchase Price shall be payable at the Closing (as defined under
     Section 3.1 below) by wire transfer to the account to be designated by UHP
     and against delivery of the Shares.



                                       1


     In addition, in the event of an IPO before December 31st, 1998, the
     difference between (a) the price per share specified above and (b) the
     price per share on the first day of trading on the Swiss Exchange for a
     number of shares substantially equivalent to 800 such bearer shares will be
     shared equally between the Purchaser and UHP. Accordingly, in such an event
     the Purchaser shall pay to UHP a supplemental consideration equal to
     on-half of such difference.

3.   Closing

3.1  Place and Date

     The sale and purchase of the Shares shall be consummated at the offices of
     the Company in Geneva, or at such other place as the Parties may agree, no
     later than 3 days after the condition precedent set forth in Section 3.2
     below has been met (the "Closing Date"). At the Closing the Purchaser shall
     execute by wire transfer to the account to be designated by UHP the
     Purchase Price against delivery of the Shares.

3.2  Condition Precedent

     The sale and purchase of the Shares contemplated herein shall be subject to
     the following condition being met on or before March 17, 1997:

          Board Approval: Approval of the purchase of the Shares by the board of
          directors of the Purchaser.

4.   Representations and Warranties of Seller

     UGL acknowledges that, in its capacity as heretofore 74% shareholder of the
     Company, it possesses all the necessary knowledge about the Company, and
     accordingly hereby waives any requirement for representations and
     warranties to be made by UHP in connection with the Company and its state
     of affairs.

     UHP hereby represents and warrants to the Purchaser, that:

          (a) As of the signing of this Agreement and at Closing, it is the sole
          legal and beneficial owner of the Shares, free and clear of all liens,
          encumbrances, options, charges and other claims arising from any
          privilege, pledge or security arrangement. UHP has full right and
          capacity to transfer and sell the Shares.

          (b) Upon delivery of the Shares, the Purchaser will receive good and
          valid title to the Shares, free and clear of all liens, encumbrances
          or other rights of third parties.

          (c) On the Closing Date, the ownership structure of the Company will
          be as follows:



                                       2



                                                  % of capital
                                                  ------------
                 Unilabs Group Ltd.:                 84.0%
                 EIBA:                                5.0%
                 KK Trust AG:                         5.0%
                 Banque Cantonale de Geneve.:         5.0%
                 Third Party:                         1.0%

5.   Miscellaneous

5.1  Costs and Expenses

     Each Party shall pay its own legal fees, costs, traveling expenses and
     other expenses in connection with this transaction.

5.2  Taxes

     Each party shall bear all taxes or other charges which become due by itself
     in connection with the execution or performance of this Agreement, such as
     securities transfer tax.

5.3  Notices

     Communications under this Agreement shall be made in writing by letter,
     telex or telefax and addressed as follows:

     if to the Purchaser:

     UNILABS GROUP LIMITED
     207-208 Neptune House
     Marina Bay
     Gibraltar
     Tel: +350 45 447
     Fax: +350 45 726

     if to UHP:

     207-208 Neptune House
     Marina Bay
     Gibraltar
     Tel: +350 45 447
     Fax: +350 45 726

                                       3


     with copy to:

     Mr. Bruno Adam
     Unilabs SA
     12, place Cornavin
     1201 Geneva
     Tel: +41-22-909-7777
     Fax: +41-22-909-7707

5.4  Entire Agreement

     This Agreement embodies the entire agreement between the parties hereto
     with respect to the transaction contemplated herein and there have been and
     are no agreements or warranties between the parties other than those set
     forth or provided for herein. This Agreement may be amended only in writing
     through an instrument signed by all the parties hereto.

5.5  Confidentiality

     The Parties hereto agree and undertake to keep the terms and contents of
     this Agreement strictly confidential and not to disclose any related
     information to any third party without a written consent of the other
     Parties, unless required to do so by law, a recognized stock exchange or
     pursuant to an order of a competent governmental authority of court. In
     such an event the Party concerned shall inform the other Parties of such
     disclosure.

5.6  Governing Law and Jurisdiction

     This Agreement shall be governed by Gibraltarian law. Disputes arising out
     of or in connection with this Agreement shall be submitted to the
     jurisdiction of the ordinary courts of Gibraltar, venue being Gibraltar.
     The Purchaser reserves the right to take legal action against UHP at its
     registered offices or at any other competent place of jurisdiction.



     UNILABS GROUP LTD.                     UNILABS HOLDINGS SA



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


                                        4

EX-2.6

                                   Exhibit 2.6

                         Underwriting Agreement between
                    Unilabs SA and Union Bank of Switzerland
                              dated April 24, 1997





                                   Unilabs SA
                       INITIAL SHARE OFFERING - APRIL 1997
                             UNDERWRITING AGREEMENT
                                     Between
UNILABS -SA, Avenue Blanc 53, 1202 Geneva, Switzerland
hereinafter called the 'Company'
                                       and

UNION-BANK OF SWITZERLAND, Bahnhofstrasse 45, 8001 Zurich, Switzerland

hereinafter called 'UBS' acting for itself and as agent of a banking consortium
comprising the following banks:


Union Bank of Switzerland, Zurich
Banque Cantonale de Geneve, Geneva
Bank Julius Baer & Co. Ltd., Zurich
Bank Sarasin & Cie, Basle
Pictet & Cie, Geneva

hereinafter collectively called the 'Banks'




                                       1



                                    Preamble

a)   Existing Capital Structure of the Company

     As a result of the extraordinary general shareholders' meetings of the
     Company held on February 24 and on April 10, 1997, the Company's share
     capital has been restructured as follows:

     (i)  Split of the bearer shares of CHF 500 each in proportion of 1:12.5

     The existing 16'000 bearer shares of a nominal value of CHF 500 each have
     been split in the proportion 1:12.5 into 200'000 bearer shares of a nominal
     value of CHF 40 each.

     (ii) Creation of registered shares of a nominal value of CHF 20 each

     Out of the 200'000 newly created bearer shares 60'000 bearer shares of a
     nominal value of CHF 40 each have been converted into registered shares of
     a nominal value of CHF 40 each. Subsequently, the 60'000 newly created
     registered shares of a nominal value of CHF 40 each have been split in
     proportion of 1:2 into 120'000 registered shares of a nominal value of CHF
     20 each.

     (iii) Ordinary share capital increase at the exclusion of subscription
           rights of existing shareholders

     The existing share capital of CHF 8 million has been increased by way of an
     ordinary share capital increase through the issue of 40'000 new bearer
     shares of a nominal value of CHF 40 each, resulting in a share capital
     increase of CHF 1.6 million to an aggregate nominal share capital of CHF
     9.6 million. The newly issued bearer shares have been paid for in their
     nominal amount of CHF 40 each, i.e. CHF 1.6 million in) the aggregate and
     they are entitled to dividends as from June 1, 1996.

     (vi) Creation of conditional share capital

     A conditional share capital in the amount of CHF 480'000 has been created
     for the purpose of implementing a management share option plan.

     Accordingly, the Company's issued share capital amounts to CHF 9.6 million
     and is composed of 120'000 registered shares of a nominal value of CHF 20
     each and 180'000 bearer shares of a nominal value of CHF 40 each, and its
     conditional share capital amounts to CHF 480'000.


                                       2


b)   Public Placement of Bearer Shares of Nominal Value of CHF 40 each

     The board of directors of the Company has resolved to offer to the public
     (1) the 40,000 newly issued bearer shares of a nominal value of CHF 40 each
     resulting from the share capital increase, and (ii) 44'000 bearer shares of
     a nominal value of CHF 40 each which are currently held by Unilabs Group
     Ltd. and other shareholders of Unilabs SA. The public share offering will
     be made by the Banks and lead managed by UBS. The offering price will be
     determined on the basis of a "book-building" process.

     The bearer shares with a par value of CHF 40 each shall be listed on the
     Swiss Exchange, whereas the registered shares with a par value of CHF 20
     each shall not be listed. In this connection, the Company and its current
     direct and indirect major shareholders have, subject to certain
     limitations, agreed in a separate lock-up agreement (i) not to sell or
     otherwise transfer for a period of two years from the settlement date of
     the public offering their registered shares and/or bearer shares which have
     not been placed in the public offering, (ii) not to list the Company's
     registered shares for a period of five years from the settlement date of
     the public offering and (iii) to maintain for a period of two years from
     the settlement date of the public offering their existing direct or
     indirect effective control in the Company.

     In accordance with a separate purchase agreement, the Company's 40'000
     newly issued bearer shares have been sold to the Company at their nominal
     value.

     The sale of the 44'000 bearer shares of a nominal value of CHF 40 each by
     existing shareholders to the Company is governed by separate purchase
     agreements between existing shareholders and the Company.

     In addition, for purposes of covering any difference between the number of
     shares underwritten by the Banks and the number of shares allotted to
     investors (over-allotment), UBS will have the right, subject to the terms
     of this Agreement, to purchase from the Company up to 8'400 additional
     bearer shares of the Company of a nominal value of CHF 40 each. To supply
     the necessary number of bearer shares to UBS, the Company has entered into
     a separate "green shoe option" agreement with its major shareholder,
     Unilabs Group Ltd. Pursuant to the terms of such agreement, Unilabs Group
     Ltd. has pledged and deposited 8'400 bearer shares of the Company of a
     nominal value of CHF 40 each on a separate securities deposit account with
     UBS.


                                       3




                                    Article 1

Following a book-building; process pursuant to which the Banks from April 16
until April 24. 1997, 12.00 hours, have offered the bearer shares of the Company
to the public at a price ranging from CHF 625 to CHF 675, the Banks hereby
underwrite the following bearer shares of the Company (the "Shares"):

     (i)  40'000 bearer shares of a nominal value of CHF 40 each, with dividend
          entitlement as from June 1, 1996, resulting from the share capital
          increase referred to under Clause a (iii) of the Preamble above; and

     (ii) 44'000 bearer shares of a nominal value of CHF 40 each, with dividend
          entitlement as from June 1, 1996, resulting from the sale by existing
          shareholders to the Company.

The price at which the Banks underwrite the Shares shall amount to CHF 675 per
Share.

                                    Article 2

The Banks undertake to sell the Shares to the public at a placement price of CHF
675 per Share.

The allocation of the Shares shall be made on April 24, 1997 jointly by the
Company and UBS, at their complete discretion, and shall be communicated to
investors on April 25, 1997. Payment of the shares shall be made by investors on
April 30, 1997, against delivery of the relevant shares (the "Settlement Date").

                                    Article 3

In connection with the underwriting and placement of the Shares with the public
pursuant to Article 1 and 2 above, UBS shall do the following:

     (i)  On the Settlement Date of the public offering (as defined in Article 3
          below) transfer the proceeds resulting from the issue and sale of the
          40'000 new bearer shares of a nominal value of CHF 40 each in
          accordance with Article 1 (1) above, reduced by the duties and fees
          pursuant to Article 8 below, to a separate account of the Company to
          be opened with UBS (the "Transaction Account");

     (ii) On the Settlement Date of the public offering transfer the proceeds
          resulting from the sale of 44'000 bearer shares of a nominal value of
          CHF 40 each in accordance with Article 1 (ii), reduced by the duties
          and fees pursuant to Article 8 below, to the Transaction Account; and

    (iii) On the Settlement Date of the public offering transfer the proceeds
          of the sale of any additional shares by UBS to the public in
          accordance with Article 4 below (green shoe option), reduced by any
          duties and fees in accordance with Article 8 below, to the


                                       4



          Transaction Account.

                                    Article 4

In connection with the public offering of the Shares, UBS as lead manager of the
Banks shall hove the right until May 23, 1997 to underwrite up to a maximum of
8'400 additional bearer shares of a nominal value of CHF 40 each, with dividend
entitlement as from June 1, 1996, at the placement price of CHF 675 per Share
for the purpose of covering any difference between the number of shares
underwritten by the Banks and the number of shares allotted to investors
(over-allotment).

To exercise its purchase right pursuant to this Article 4, UBS shall notify the
Company in writing of the number of shares it wishes to purchase as well as of
the aggregate purchase price to be paid. The purchase right is deemed to be
exercised on the day UBS dispatches the written notification to the Company. The
Company shall promptly upon exercise of the purchase right deliver the relevant
number of shares to UBS against payment of the purchase price. The 8'400
additional bearer shares have been pledged to UBS and are deposited on a
separate securities deposit account with UBS.

In the event that UBS until May 23, 1997 fails to exercise its purchase right
with respect to all of the bearer shares of a nominal value of CHF 40 each
subject to the option pursuant to this Article 4, the remaining shares shall be
released from the pledge and delivered to the Company according to separate
instructions.

                                    Article 5

The Company shall prepare the listing prospectus (the "Prospectus") in
compliance with the prospectus requirements of Swiss law and the listing
regulations of the Swiss Exchange. The Prospectus shall be prepared in English.
A short form version of the Prospectus shall be prepared in German and French.
The Company shall furnish UBS with four signed copies of the Prospectus in
English as well as of the short form version of the Prospectus in German and
French.

UBS shall assist the Company in the preparation of the Prospectus. For this
purpose, the Company agrees to provide UBS with all the information necessary
or, in the opinion of UBS, appropriate to be included In the Prospectus. The
Company undertakes to fully comply with the regulations of the Swiss Exchange
applicable to the listing and the maintaining of the listing of its bearer
shares. In particular, the Company undertakes to publish on a timely basis all
information required to be published under the listing provisions regarding ad
hoc publicity.


                                       5



                                    Article 6

The Company undertakes to place the Shares at UBS' disposal with SEGA
Schweizerische Effekten-Giro AG, Olten.

                                    Article 7

The Company shall apply for the listing of all 180'000 bearer shares of a
nominal value of CHF 40 each on the Swiss Exchange and gives herewith the
mandate to UBS to prepare the necessary listing application. For this purpose,
the Company agrees to assist UBS in the preparation and the filing of the
listing application.

                                    Article 8

The Company shall bear the following costs of this transaction:

     (i)  overall fee of 5% for the placing of the Shares, calculated on the
          placement price of CHF 675 per Share;

     (ii) Swiss Federal Capital Issue Tax of 2% on the proceeds of the sale of
          the 40'000 newly issued bearer shares of a nominal value of CHF 40
          each in accordance with Article l(i) above;

    (iii) Swiss Federal Securities Transfer Tax. Cantonal Tax and the Stock
          Exchange Duty, which in the aggregate presently amount to 0.18%,
          levied on the placement price of CHF 675 per Share in accordance with
          Article I hereinbefore; such taxes and duties will be deducted from
          the net proceeds and UBS will effect the payment thereof to the
          relevant authorities;

     (iv) the costs incurred for the printing and the shipping of the share
          certificates to SEGA Schweizerische Effekten-Giro AG in connection
          with the public offering;

     (v)  all external costs incurred in connection with the production and
          dispatch to the Banks of the necessary printed materials (excluding
          translations) and the publication of notices, advertisements, etc. in
          connection with the public offering;

     (vi) the costs of translations incurred in connection with the printed
          materials and publications mentioned in (v);

    (vii) the costs incurred in connection with the listing of the Company's
          bearer shares on the SWISS Exchange;

   (viii) the costs of the presentations (road shows, etc.) regarding the
          public offering in Zurich, Geneva, Base[, Frankfurt, London, Edinburgh
          and other cities and of re-


                                       6



          lated preparatory work and

     (ix) all costs and fees relating to the underwriting by UBS to additional
          bearer shares of a nominal value of CHF 40 each in accordance with
          Art. 4 above, i.e.

          -    overall fee of 5% for the placing of the Shares, calculated on
               the placement price of CHF 675 per Share;

          -    Swiss Federal Securities Transfer Tax, Cantonal Tax and Stock
               Exchange Duty, which in the aggregate presently amount to 0.18%,
               levied on the placement price of CHF 675 per Share. UBS will
               deduct such costs directly from the placement proceeds and will
               deliver the relevant amounts to the relevant tax authorities.

In addition, the Company will bear any further Taxes which could arise in
connection with the consummation of the transactions stipulated in this
Agreement. In such an event, payment to the relevant authorities will be
effected directly by the Company.

The Company will pay the overall fee to USS in accordance with Clause (I) above
with value date April 30, 1997 according to instructions given to the Company by
UBS. The taxes payable in accordance with Clauses (ii) and C(iii) above shall be
deducted by UBS from the proceeds of the issue and sale of the Company's bearer
shares value date April 3C, 1997. The costs specified in Clauses (iv) to (viii)
are payable on receipt of invoice.

The overall fee pursuant to Clause (ix) above shall be payable with value date
May 23, 1997 according to instructions given to the Company by UBS.



                                    Article 9

The Company shall appoint UBS cs principal paying agent and the other Banks as
official paying agents in Switzerland (hereinafter called 'Paying Agents') for
the payment of dividends on its bearer shores with c par value of CHF 40 each.
The Company shall pay a paying agency commission in accordance with Convention
IX of the Swiss Bankers' Association.

With regard To the Company, the Paying Agents and banks responsible for
Implementing and executing paying agent services will be represented by USS. The
Company shall not appoint any other paying agents In Switzerland without prior
consultation with UBS.

All notices in connection with paying agent services for dividends shall be
issued by the Company and published at its expense.

                                       7



                                   Article 10

Sales restrictions: U.S.A./U.S. persons

The Shares have not been and will not be registered under the United States
Securities Act of 1933 (the 'Securities Act') and may not be offered, sold or
delivered within the United States of America (the 'United States') or to U.S.
persons. Each of the syndicate members has agreed that it will not offer, sell
or deliver Shares within the United States or to U.S. persons. In addition), an
offer or sale of Shares Within the United States by any dealer (whether or not
participating in the offering) may violate the registration requirements of the
Securities Act.

The offering is not being made in the United States and offering materials with
respect to the offering may not be distributed or sent into the United States.
The rights described herein may be exercised only outside the United States.

The Shares may not be offered or sold in any country other than Switzerland or
to residents of any country other than Switzerland except in accordance with the
relevant applicable laws.

                                   Article 11

For purposes of this Agreement, USS shall act as agent of the Banks in relation
to the Company.

The Banks shall participate in the rights and obligations arising from this
Agreement in the maximum percentages listed below. The Banks' liability shall be
individual and not joint and several.

                       Union Bank of Switzerland      60%
                       Banque Cantonale de Geneve     10%
                       Bank Julius Baer & Co. Ltd.    10%
                       Bank Scrosin & Cie             10%
                       Pictet & Cie                   10%
                                                     ----
                       Total                         100%


                                   Article 12

The Banks, jointly but not severally, reserve the right to withdraw from this
Agreement, it prior to the Settlement Date, events should occur in Switzerland
or elsewhere in the world, of a political, economic, financial, monetary or
other character which, in the opinion of the Banks,


                                       8



would be such as to jeopardize the success of the public share offering. Any
such decision of withdrawal by the Banks shall be final and binding upon the
Company. Should the Banks decide to withdraw from this Agreement, USS on behalf
of the Banks shall notify the Company forthwith by telex or fax, followed by
registered letter. In the event of such withdrawal, each party hereto shall pay
the expenses incurred by it in connection with this public share offering and no
party shall have any claim against the others with respect of such withdrawal.


                                   Article 13

Notices to be given under this Agreement shall be given in writing and sent by
mail, telefax or courier to the following addresses:

To the Company

Unilabs SA
attn.  Mr. Miguel Payro/Mr. Eric Wavre
12, place Cornovin
1211 Geneva

Tel.:    +41-22-909 77 35
Fax:     +41-22-909 77 33
         +41-22-909 77 07


To UBS:

Union Bank of Switzerland
attn. Mr. Eduardo Schindler/Ms. Jacqueline Morard
Bahnhofstrasse 45
8021 Zurich

                                   Article 14

This Agreement is governed by Swiss law. The place of jurisdiction is Zurich 1.

This Agreement shall be executed in two counterparts and the contracting parties
shall each receive one original.

Each of the Banks shall receive a copy of this Agreement for its records.

Geneva, April 24,1997


                                       9



                                   Unilabs SA



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



Zurich, April 24, 1997

                                   Union Bank of Switzerland



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


                                       10

EX-2.9

                                   Exhibit 2.9

                  Agreement by an among Unilabs Group Limited,
                          Health Strategies Limited and
                      Medical Diagnostic Management, Inc.,
                            dated as of May 23, 1997




                                    AGREEMENT

     AGREEMENT, dated as of the 23rd of May, 1997, by and among UNILABS GROUP
LIMITED, a British Virgin Islands corporation with an address' at Road Town,
Pasea Estate, P.O. Box 3149, Tortola, British Virgin Islands (hereinafter
referred to as "UGL"), HEALTH STRATEGIES LIMITED, a Jersey corporation with an
address at 17 Bond Street, St. Helier, Jersey, Channel Islands (hereinafter
referred to as "HSL") and MEDICAL DIAGNOSTIC MANAGEMENT INC., a New Jersey
corporation with offices at 401 Hackensack Avenue, Hackensack, New Jersey 07601
(hereinafter referred to a "MDM"),

     WHEREAS, UGL owns 50 Class B ordinary shares, without par value (the "MISE
Shares"), of MISE S.A., a British Virgin Islands corporation (hereinafter
referred to as "MISE"); and

     WHEREAS, HSL wishes to acquire from UGL ail of UGL's right and title in and
to the MISE Shares; and

     WHEREAS, MISE owns the right (the "European Flights") to utilize the MDM
Concept and the MDM Software (as such terms are hereinafter defined) throughout
certain jurisdictions in Europe (the "Territory"), and

     WHEREAS, MDM wishes to acquire the European Rights presently possessed by
MISE; and

     WHEREAS, following its acquisition of the MISE Shares, HSL, as the sole
shareholder of MISE, is willing to cause MISE to assign the European Rights to
MDM; and

     WHEREAS, in consideration of the assignment to MDM of the European Rights,
MDM is willing to issue shares of its Series C Preferred Stock to UGL and to pay
to UGL commissions based upon sales of MDM in the Territory,

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:

     1. Sale of MISE Shares. UGL hereby sells, assigns, transfers and delivers
to HSL, and HSL hereby purchases from UGL, all of UGL's right, title and
interest in and to the MISE Shares. In furtherance thereof, UGL is delivering to
HSL simultaneously herewith a certificate evidencing the MISE Shares registered
in the name of UGL, in form for transfer and with stock powers executed by UGL
annexed thereto, and with all signatures guaranteed, receipt of which by HSL is
hereby acknowledged.

     2. Agreement With Respect to the Assignment of the European Rights. HSL
undertakes and agrees to cause MISE to assign to MDM all of MISE's right to
utilize the MDM Concept and the MDM Software in the Territory consisting of the
jurisdictions listed on Exhibit A


                                       1



hereto. As used herein, the term "MDM Concept" shall mean the business concept
developed by MDM and utilized by it in the United States, under which MDM
arranges for, and furnishes administrative services in connection with, the
provision of certain medical diagnostic services on a reduced-fee basis for
employers, unions, insurance companies, third party benefit administrators and
other entities and organizations which offer health benefits to eligible
persons. As used herein, the term "MDM Software" shall mean certain proprietary
computer software applications programs developed by MDM and used by it in the
United States in connection with the implementation of the MDM Concept and the
operation of its business.

     3. Consideration for MISE Shares. The aggregate consideration for the sale
of the MISE Shares to HSL shall consist of the following:

          3.1 The issuance by MDM to UGL of 30 shares of Series C Preferred
     Stock of MDM ("Series C Shares), having a liquidation preference of
     $100,000 per share and such other relative rights, preferences and
     limitations as are set forth in the Certificate of Amendment of the
     Certificate of Incorporation of MDM, a copy of which is affixed hereto as
     Exhibit B, evidenced by a certificate therefor, registered in the name of
     UGL, which MDM agrees to deliver to UGL within thirty (30) days from and
     after the date hereof.

          3.2 The payment to UGL by MDM of commissions ("Commissions") in
     amounts equal to five percent (5%) of the Net Sales (as hereinafter
     defined) of MDM (or, if it conducts business in the Territory through an
     affiliated entity ("European Subsidiary"), the Net Sales of the European
     Subsidiary) during the period of seven (7) years from and after the date
     hereof attributable to customers in the Territory. (The entity through
     which the MDM Concept is implemented in the Territory, whether it be MDM or
     the European Subsidiary is hereinafter referred to as "MDM Europe.")
     Commissions shall be payable to UGL by MDM on the last business day of
     January, April, July and October with respect to Net Sales recognized
     during the immediately preceding calendar quarter. As used herein, the term
     "Net Sales" shall mean the sales of MDM Europe derived from the Territory,
     net of any fees collected by MDM Europe and, in turn, paid by MDM Europe to
     providers of health care services, and any discounts and disallowances. MDM
     shall use its best efforts to introduce and implement the MDM Concept in
     the Territory, either directly or through a European Subsidiary.

          3.3 For a period of ninety (90) months from and after the date hereof,
     UGL shall have the right, during normal business hours and upon no less
     than ten (10) days' prior written notice given to MDM, to have its
     employees, representatives or designees ("UGL Auditors") examine at the
     offices where MDM Europe's financial books and records with respect to its
     business in the Territory are regularly maintained, those books and records
     of MDM Europe relating to its sales ("Sales Records") which are reasonably
     necessary to verify the amount of Commissions paid or payable to UGL under
     Section 3.2 hereof and the amounts of Net Sales of MDM Europe on which they
     are based. The cost of such examination shall be borne by UGI; provided,
     however, if such examination determines that the Net Sales have been
     understated by MDM Europe by more than 10%, and such determination is
     upheld after prompt review by an independent auditor selected jointly by
     MDM and the UGL Auditor, the costs and expenses of


                                       2


     such audit and subsequent review shall be borne by MDM.

     4.   Representations, Warranties and Agreements.

          4.1 UGL represents and warrants to and agrees with HSL and MDM that:

               4.1.1 Subject to the Agreement between HSL and UGL, dated 14
          September 1996, (I) it is the record and beneficial owner of the MISE
          Shares, free and clear of all liens, claims, charges and encumbrances
          of any nature whatsoever, and (II) all of the MISE Shares are duly and
          validly issued, fully-paid and nonassessable. The MISE Shares are
          hereby assigned, transferred and delivered to HSL pursuant hereto, and
          good marketable title thereto, free and clear of all liens, claims,
          charges and encumbrances of any nature whatsoever, are hereby passed
          to, and vested in, HSL.

               4.1.2 UGL has full right, power and authority to execute and
          deliver this Agreement, transfer, assign and deliver to HSL the MISE
          Shares and consurnmate the transactions contemplated hereby.

               4.1.3 UGL is not subject to any restrictions or agreements which
          prohibit, or would be violated by, the execution of this Agreement or
          the consummation of the transactions contemplated hereby, and no
          consent or approval of any person, including, without limitation, any
          governmental agency, court or tribunal, is required to consummate the
          transactions contemplated hereby.

          4.2 MDM represents and warrants to, and agrees with UGL that

               4.2.1 The authorized capital stock of MDM consists of 10,000,000
          shares of Common Stock, including 400,000 shares designated as Class B
          Common Stock; and 250,000 shares of Preferred Stock, including 50,000
          shares designated an Series A Convertible Preferred Stock, 20,000
          shares designated as Series B Preferred Stock and 30 shares designated
          as Series C Preferred Stock. As of the date hereof, there are no
          shares of capital stock of MDM issued and outstanding, except for
          2,044,386 shares of MDM Common Stock, 388,000 shares of Class B Common
          Stock and 9,531 shares of Series B Preferred Stock;

               4.2.2 MDM has delivered to UGL (I) the unaudited balance sheets
          of MDM as at December 31, 1993, 1994, 1995 and 1996 and the related
          unaudited statements of income and expense for each of the fiscal
          years then ended and (II) the unaudited interim balance sheet of MDM
          as at March 31, 1997 and the related unaudited statement of income and
          expense for the three-month period then ended. All such financial
          statements present fairly the financial position of MDM at such dates
          and the results of its operations for such periods, and to the
          knowledge of MDM, there are no material modifications required to be
          made to such financial statements in order for them to be in
          conformity with generally accepted accounting principles (promulgated
          by the United States Financial Accounting Standards Board) applied on
          a consistent

                                        3



          basis throughout the periods covered. As of March 31, 1997, MDM did
          not have liabilities of any nature, kind or description, whether
          absolute, accrued, liquidated, unliquidated, contingent or otherwise,
          and whether due or to become due, which were not reflected on the
          balance sheet as at March 31, 1997, as a liability or by reserves
          therefor to the full extent thereof, except for liabilities under the
          leases listed on Exhibit C hereto;

               4.2.3 It has full right, power and authority to execute and
          deliver this Agreement, issue and deliver to UGL the Series C Shares
          and consummate the transactions contemplated hereby;

               4.2.4 It is not subject to any restrictions or agreements which
          prohibit, or would be violated by, the execution of this Agreement or
          the consummation of the transactions contemplated hereby, and no
          consent or approval of any person, including, without limitation, any
          governmental agency, court or tribunal, is required to consummate the
          transactions contemplated hereby; and

               4.2.5 From and after the date hereof, it shall not issue (I) any
          shares of its authorized and unissued shares of Series A Convertible
          Preferred Stock or (II) any class or series of its capital stock to
          which the Series C Preferred Stock is subordinated.

          4.3 HSL represents and warrants to, and agrees with UGL and MDM that

               4.3.1 It has full right, power and authority to execute and
          deliver this Agreement, and consummate the transactions contemplated
          hereby; and

               4.3.2 It is not subject to any restrictions or agreements which
          prohibit, or would be violated by, the execution of this Agreement or
          the consummation of the transactions contemplated hereby, and no
          consent or approval of any person, including, without limitation, any
          governmental agency, court or tribunal, is required to consummate the
          transactions contemplated hereby.

     5. Notices. All notices or other communications provided for herein shall
be in writing and if not delivered in person, shall be deemed to have been
delivered when sent via prepaid courier service, return receipt requested, and
addressed to the respective parties at their addresses herein above set forth or
to such other address as either such party may have designated by notice given
as aforesaid.

     6. Miscellaneous.

          6.1 This Agreement may not be modified, amended or terminated except
     by a written agreement signed by all of the parties hereto.

          6.2 If any provision of this Agreement shall be held invalid or
     unenforceable, such invalidity or unenforceability shall attach only to
     such provision and shall not


                                       4


     in any manner affect or render invalid or unenforceable any other severable
     provision of this Agreement, and this Agreement shall be carried out as if
     any such invalid or unenforceable provision were not contained herein.

          6.3 Except as otherwise expressly provided herein, this Agreement
     shall be binding upon and inure to the benefit of each of the parties
     hereto, and its successors and assigns.

          6.4 Each party hereto shall cooperate and shall take such further
     action and shall execute and deliver such further documents as may be
     reasonably requested by the other party in order to carry out the
     provisions and purposes of this Agreement.

          6.5 This Agreement may be executed in one or more counterparts, all of
     which taken together shall be deemed one original.

          6.6 This Agreement shall be governed by and construed in accordance
     with the laws of Switzerland. The parties hereby agree to submit any
     disputes arising with respect to or in connection with this Agreement to be
     finally decided by one or more arbitrators in accordance with the Rules of
     Arbitration of the Chamber of Commerce and Industry of Geneva. The
     arbitration proceedings shall be conducted in English and the arbitration
     shall take place in Geneva.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.



                                       Signed sealed and delivered by  )
                                       UNILABS GROUP LIMITED           )


By:                                    By:
    ---------------------------------      ----------------------------------
    Name: Edgard Zwrin                     Name:
    Title:   Director                      Title:


                                       Signed sealed and delivered by  )
                                       HEALTH STRATEGIES LIMITED       )


                                       By:
                                           ----------------------------------
                                           Name: Rosemary E. Marr
                                           Title: Diretor

                                       5




                                       Signed sealed and delivered by       )
                                       MEDICAL DIAGNOSTIC MANAGEMENT, INC.  )


                                       By:
                                           ----------------------------------
                                           Andrew H. Baker
                                           Chairman of the Board



                                       6




                                    EXHIBIT A

INCLUDED EUROPEAN JURISDICATIONS

                              Pursuant to Section 2

Austria

Belgium

France

Germany

Greece

Holland

Ireland

Italy

Portugal

Russia

Scandinavia

Spain

Switzerland

Turkey

United Kingdom



                                       7




                                    EXHIBIT B

                            CERTIFICATE OF AMENDMENT

                                     OF THE

                          CERTIFICATE OF INCORPORATION
                                       OF
                       MEDICAL DIAGNOSTIC MANAGEMENT INC.


     MEDICAL DIAGNOSTIC MANAGEMENT INC., a corporation organized and existing
under the laws of the State of New Jersey, does hereby execute the following
Certificate of Amendment of its Certificate of Incorporation pursuant to the
provisions of Sections 14A:9-2(2) and 14A:7-2(4) of the New Jersey Business
Corporation Act

          1. The name of the corporation is MEDICAL DIAGNOSTIC MANAGEMENT INC,
     (the "Corporation").

          2. The certificate of incorporation of the Corporation was filed in
     the office of the Secretary of State of New Jersey on May 12, 1989, and
     Certificates of Amendment thereof were so filed on September 28, 1990,
     March 20, 1992, November 14, 1994 and October 18, 1995.

          3. The following resolutions creating a series of Preferred Stock and
     determining the designation, number of shares, relative rights, preferences
     and limitations of such series were duly adopted by the Executive Committee
     of the Board of Directors of the Corporation as of the day of May, 1997,
     under the authority vested in the Board by the Certificate of incorporation
     of the Corporation, as amended, pursuant to Sections 14A:7-2(2) and
     14A:7-2(3) of the New Jersey Business Corporation Act:

          RESOLVED, that pursuant to the authority granted to the Board of
     Directors of the corporation by Article SECOND of the Certificate of
     Incorporation of the Corporation, the Board of Directors hereby authorizes
     the creation of a series of Preferred Stork consisting of up to 30 shares
     and designated as series C Preferred Stock out of the 250,000 shares Of
     Preferred Stock authorized by said Certificate of Incorporation; and

          RESOLVED, that the designation and the number of shares of Series C
     Preferred Stock and the relative rights, preferences, and limitations of
     the shares of Series C Preferred stock be, and they hereby are, as follows:

          1. Designation and Number of Shares. Of the 250,000 shares of
          Preferred Stock authorized by of incorporation, 30 shares are hereby

                                       8



          designated as Series C Preferred Stock (the "Series C Stock").

          2. Dividends and Distributions. The holders of Series C Stock shall be
          entitled to receive dividends when, as and if declared by the Board of
          Directors out of funds legally available therefor.

          3. Voting Rights. The holders of Series C Stock shall have no right to
          vote for the election of directors of the Corporation and no right to
          vote on any matter presented to the shareholders for their vote or
          approval.

          4. Redemption. The shares of Series C Stock are redeemable upon the
          following terms and conditions, subject, in any event, to the
          limitations contained in the New Jersey Business Corporation Act:

                    (a) The Corporation may, at its option, at any time it may
               lawfully do so from and after its issuance, redeem for cash all,
               or from time to time, any part of the Series C Stock, in each
               case, at a Redemption Price per share determined in accordance
               with paragraph (b) below, plus an amount equal to all declared
               but unpaid dividends thereon. Subject to the foregoing, the
               timing of any such redemption of Series C Stock under this
               paragraph (a), the number of shares to be redeemed and the
               selection of holders whose shares are to be redeemed shall be
               determined by the Corporation, in its sole discretion.

                    (b) The Redemption Price for each share of Series C Stock
               shall be the product of $100,000.00 and the applicable percentage
               set forth below:

                   Calendar Year of           Applicable
                   Redemption                 Percentage

                   1998                       100%
                   1999                       105%
                   2000                       110%
                   2001                       115%
                   2002 and thereafter        120%

          5. Liquidation, Dissolution or Winding Up. Upon any liquidation,
          dissolution or winding up of the Corporation, the holders of Series C
          Stock then outstanding shall be entitled to be paid out of the assets
          of the Corporation legally available for distribution to its
          shareholders, an amount equal to $100,000.00 per share of Series C
          Stock, plus an amount equal to all declared but unpaid dividends
          thereon, and no more, after prior payment


                                       9



          of the full preferential amount to the holders of the Series B
          Preferred Stock but before any payment or other distribution shall be
          made to the holders of Common Stock, Class B Common Stock or any other
          class or series of the Corporation's Common Stock (the Common Stock,
          Class B Common Stock or such other class or series of the
          Corporation's Common Stock being hereinafter together referred to as
          "Junior Shares"). In the event that the assets of the Corporation
          legally available for distribution to shareholders is not sufficient
          to permit the payment of the full preferential amounts to the holders
          of Series C Stock and to the holders of any other series of Preferred
          Stock of the Corporation then outstanding which rank pari pasu with
          the Series C Stock ("Pari Pasu Shares"), then all of such assets shall
          be distributed as between the holders of the Series C Stock and the
          holders of such Pari Pasu Shares in the same proportion as their
          respective per share preferential amounts bear to the sum of the per
          share preferential amounts of the Series C Stock and the Pari Pasu
          Shares. In the event that the assets of the Corporation legally
          available for distribution to the holders of Series C Stock is not
          sufficient to permit the payment of the full preferential amount as
          aforesaid, then all of the assets of the Corporation available for
          distribution to such holders shall be distributed to them on a pro
          rata basis in accordance with their respective holdings of Series C
          Stock. Following the payment in full to the holders of the Series C
          Stock, the Pari Pasu Shares and any Junior Shares which are entitled
          to preferential distributions of the respective preferential amounts
          to which they are entitled out of the assets of the Corporation
          legally available therefor, the remainder of the assets of the
          Corporation legally available therefor may be distributed to the
          holders of the Common Stock and Class B Common Stock on a pro rata
          basis. A merger or consolidation of the Corporation with or into any
          other corporation, a share exchange involving the Corporation, or a
          sale, lease, exchange of transfer of all or any part of the assets of
          the Corporation shall not result in the liquidation of the
          Corporation, and the distribution of its assets to its shareholders
          shall not be deemed to be a voluntary or involuntary liquidation,
          dissolution or winding up of corporation for purposes of this
          paragraph.

          6. Conversion.

          (a) In the event that the Corporation offers and sells any shares of
          Common Stock in a public offering registered under the Securities Act
          of 1933, as amended (such public offering being hereinafter referred
          to as the "Conversion Event", all shares of Series C Stock then out.
          standing shall be converted into shares of Common Stock of the
          Corporation ("Conversion Shares"), so that upon such conversion, the
          holders of Series C Stock, as a group. shall hold, in the aggregate, a
          number of Conversion Shares having an aggregate value equal to the
          lesser of,. 0 fifteen percent (15%) of the

                                       10



          aggregate value of the shares of Common Stock of the Corporation
          outstanding after giving effect to the issuance shares in, or in
          connection with, such public offering, valued based upon the public
          offering price of each share of Common Stock being so issued and sold
          ("Public Offering Price") and (ii) $5,000.000. In furtherance of the
          foregoing, each share of Series C Stock outstanding at the time the
          Conversion Event occurs shall automatically, without any action on the
          part of any holder thereof, be converted into that number of fully
          paid and nonassessable shares of Common Stock of the Corporation
          ("Conversion Rate") obtained by dividing the product of (x) 0.17647
          and (y) the number of shares of the Corporation's Common Stock
          outstanding immediately following the Conversion Event (but before the
          issuance of any Conversion Shares), by the number of shares of Series
          C Stock then outstanding; provided, however, that in no event shall
          the aggregate value of the Conversion Shares, valued at the Public
          Offering Price, exceed $5,000,000.00; and provided further, that the
          Conversion Rate is subject to adjustment in accordance with
          subparagraph (b) hereof.

          (b) The Conversion Rate shall be subject to adjustment from time to
          time, calculated as follows, except that no adjustments to the
          Conversion Rate shall be made until cumulative adjustments would
          affect the Conversion Rate by one or more Conversion Shares:

                    (i) If the Corporation changes its Common Stock into the
               same or a different number of shares of any other class or
               classes of stocks, whether by recapitalization, reclassification
               or otherwise (unless otherwise provided for in subparagraph
               (b)(iii)), then the Conversion Rate in effect immediately prior
               to such action shall be adjusted so that each holder of Series C
               Stock thereafter converted may receive the number and class or
               series of shares of capital stock of the Corporation which such
               holder would have owned immediately following such action if such
               shares of Series C had been converted immediately prior to such
               action;

                    (ii) If the Corporation: (A) issues rights or warrants
               entitling holders of its Common Stock to subscribe for, or
               purchase shares of its Common Stock or securities convertible
               into its Common Stock; or (B) distributes to the holders of its
               Common Stock any of its assets or debt securities or any rights
               or warrants to purchase debt securities, assets or other
               securities of the Corporation, then, in either case, the
               Conversion Rate immediately prior to such action shall be
               adjusted so that each holder of Series C Stock thereafter
               converted may receive the number of rights, warrants, assets or
               debt securities to which such holder would have been entitled


                                       11


               immediately following such action if such Series C Stock had been
               converted immediately prior to such action;

                    (iii) If the Corporation shall consolidate with or merge
               into any other corporation or transfer all of substantially all
               of its properties and assets as an entirety to any person, then
               upon consummation of such transaction, each share of Series C
               Stock shall automatically be corrected into the kind and amount
               of securities cash or other assets to which the holder of such
               share would have been entitled immediately after such
               consolidation, merger or transfer if such share of Series C Stock
               had been converted immediately prior to the effective date of
               such transaction;

                    (iv) In the case of any adjustment in the Conversion Rate
               occasioned by the events referred to in subparagraph (b)(i) or
               (b)(iii) hereof, appropriate adjustments shall be made in the
               application of the provisions of this paragraph with respect to
               the rights of the holders of Series C Stock after such event to
               the end that the provisions of this paragraph (including the
               provisions relating to the adjustment of the Conversion Rate)
               shall be applicable after the event as nearly equivalent as
               practicable; and

                    (v) Adjustments shall become effective immediately after the
               record date in the case of a distribution and immediately after
               the effective date in the case of (i) a change in the
               Corporation's Common Stock or (ii) a consolidation or merger of
               the Corporation.


          (c) The Corporation shall not be required to issue fractions of shares
          of its Common Stock upon the conversion of the Series C Stock, and the
          number of shares of its Common Stock to be issued shall be rounded to
          the nearest whole share.

          (d) Within fifteen (15) days following the occurrence of a Conversion
          Event, the Corporation shall give written notice thereof to each
          holder of Series C Stock. Upon receipt of such notice, each such
          holder shall surrender the certificate or certificates theretofore
          representing outstanding shares of Series C Stock at the offices of
          the Corporation, and each such holder shall upon such surrender,
          receive in exchange therefor, a certificate representing the number of
          full Conversion Shares into which the shares of Series C Stock
          theretofore represented by the certificate or certificates so
          surrendered shall have been converted in accordance with subparagraph
          (a) hereof. Any certificate surrendered for conversion shall be duty
          endorsed.

                                       12



          (e) The Corporation shall at ail times reserve and keep available out
          of its authorized but unissued shares of Common Stock. solely for the
          purpose of effecting the conversion of the shares of Series C Stock,
          such number of shares of its Common stock as shall from time to time
          be sufficient to effect the conversion of all of the outstanding
          shares of Series C Stock; and if, at any time, the number of
          authorized but unissued shares of the Corporation's Common Stock shall
          net be sufficient to effect the conversion of all then outstanding
          shares of Series C Stock, the Corporation will take such corporate
          action as may, in the opinion of its counsel, be necessary to increase
          its authorized but unissued shares of Common Stock to such number of
          shams as shall be sufficient for such purpose.

          4. The foregoing resolutions were duty adopted by the unanimous
     written consent of the Executive Committee of the Board of Directors of the
     Corporation, dated as of the ______ day of May, 1997, pursuant to Section
     14A:6-7. 1. (5) of the New Jersey Business Corporation Act.

          5. The Certificate of Incorporation is hereby amended so that the
     designation and number of shares of Series C Preferred Stock and the
     relative rights, preferences and limitations thereof are as stated in the
     foregoing resolutions.


     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of its Certificate of incorporation to be signed by Andrew H. Baker,
its Chairman of the Board, and attested by Robert S. Gold, its Secretary, on
this __ day of May, 1997.

                                       MEDICAL DIAGNOSTIC MANAGEMENT INC.



                                       By
                                          --------------------------------------
                                          Andrew Baker
                                          Chairman of the Board

ATTEST:


- -------------------------------------
Secretary



                                       13


                                    EXHIBIT C


                  LIABILITIES UNDER LEASES AS AT MARCH 31,1997
                            Pursuant to Section 4.2.2

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

Lease for Toyota 4Runner

Canon Copier Lease

Postage Meter Lease

EX-3.2

                                   Exhibit 3.2

                        Bylaws of UniHolding Corporation




                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                             UNIHOLDING CORPORATION






                                     Annex B



TABLE OF CONTENTS


     ARTICLE I - OFFICE.......................................................1
     Section 1. Registered Office.............................................1
     Section 2. Other Offices.................................................1

     ARTICLE II - STOCKHOLDERS................................................1
     Section 1. Meetings......................................................1
     Section 2. Annual Meeting................................................1
     Section 3. List of Stockholders..........................................2
     Section 4. Special Meetings .............................................2
     Section 5. Notice........................................................2
     Section 6. Quorum........................................................3
     Section 7. Voting........................................................3
     Section 8. Proxy ........................................................3
     Section 9. Action by Consent ............................................3

     ARTICLE III - BOARD OF DIRECTORS ........................................4
     Section 1. Board of Directors ...........................................4
     Section 2. Number of Directors ..........................................4
     Section 3. Newly Created Directorships and Vacancies ....................5
     Section 4. Removal ......................................................5

     ARTICLE IV - MEETINGS OF THE BOARD
     Section 1. Meetings .....................................................5
     Section 2. Annual Meeting ...............................................5
     Section 3. Regular Meetings .............................................5
     Section 4. Special Meetings .............................................5
     Section 5. Quorum .......................................................6
     Section 6. Committees ...................................................6
     Section 7. Action by Consent ............................................6
     Section 8. Compensation of Directors ....................................6

     ARTICLE V - NOTICE OF MEETINGS
     Section 1. Form of Notice ...............................................7
     Section 2. Waiver .......................................................7
     Section 3. Telephone Meetings ...........................................7

                                       1



     ARTICLE VI - OFFICERS
     Section 1.  In General ..................................................7
     Section 2.  Election ....................................................7
     Section 3.  Salaries ....................................................7
     Section 4.  Term of Office and Removal ..................................8
     Section 5.  Chairman ....................................................8
     Section 6.  Chief Executive Officer .....................................8
     Section 7.  President ...................................................8
     Section 8.  Chief Financial Officer .....................................9
     Section 9.  Vice Presidents .............................................9
     Section 10. Secretary ...................................................9
     Section 11. Assistant Secretaries ......................................10
     Section 12. Treasurer ..................................................10
     Section 13. Assistant Treasurer ........................................10
     Section 14. Bonding ....................................................10

     ARTICLE VII - CERTIFICATES OF SHARES
     Section 1. Form of Certificates ........................................10
     Section 2. Lost Certificates ...........................................10
     Section 3. Transfer of Shares ..........................................11
     Section 4. Registered Stockholders .....................................11

     ARTICLE VIII - GENERAL PROVISIONS
     Section 1. Dividends ...................................................11
     Section 2. Reserves ....................................................11
     Section 3. Fiscal Year .................................................11
     Section 4. Seal ........................................................11

     ARTICLE IX - INDEMNITY
     Section 1. Damages and Expenses ........................................12
     Section 2. Insurance, Contracts and Funding ............................12

     ARTICLE X - AMENDMENTS
     Section 1. By Stockholders .............................................13
     Section 2. By the Board of Directors ...................................13

                                       2



                                                                         Annex B

                                   1. OFFICES

1. Registered Office. The initial registered office of the corporation shall be
at such place as is designated in the Certificate of Incorporation (herein, as
amended from time to time, so called), or thereafter the registered office may
be at such other place as the Board of Directors may from time to time designate
by resolution.

2. Other Offices. The corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the corporation may require.


                                II. STOCKHOLDERS

1. Meetings. All meetings of the stockholders for the election of Directors
shall be held at the principal office of the corporation, or at such other place
within or without the State of Delaware, as may be fixed from time to time by
the Board of Directors. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of Delaware, as shall
be stated in the notice of the meeting or in a duly executed waiver of notice
thereof.

2. Annual Meeting. An annual meeting of the stockholders shall be held on such
date in each fiscal year of the corporation as the Board of Directors shall
select, at which meeting the stockholders shall elect members of the Board of
Directors and transact such other business as may properly be brought before the
meeting; provided, however, that the annual meeting may be replaced by a written
consent of stockholders under Section 9 of this Article, if so permitted by the
General Corporation Law of the State of Delaware (herein called the "Act") and
other applicable laws or regulations. To be properly brought before an annual
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the Secretary of the corporation. To be timely, a stockholder's notice must be
delivered or mailed to and received at the principal executive offices of the
corporation not less than 60 calendar days prior to the meeting; provided,
however, that in the event that less than 65 calendar days' notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth calendar day following the date on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting,
(ii) the name and address, as they appear on the corporation's books, of the

                                       3



stockholder proposing such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, and (iv) any
material interest of the stockholder in such business. In addition, a
stockholder intending to nominate one or more persons for election as a
Director at an annual meeting must comply with Section 2, Article III of these
Bylaws for such nomination or nominations to be properly brought before such
meeting. No business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2. The presiding
officer of an annual meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting and in accordance with the
provisions of this Section 2 and, if such presiding officer should so determine,
such presiding officer shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.

3. List of Stockholders - At least 10 days before each meeting of stockholders,
a complete list of the stockholders entitled to vote at said meeting, arranged
in alphabetical order, with the address of and the number of voting shares
registered in the name of each, shall be prepared by the officer or agent having
charge of the stock transfer books. Such list shall be kept on file either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified at the place
where the meeting is to be held for a period of 10 days prior to such meeting
and shall be subject to inspection by any stockholder at any time during usual
business hours. Such list shall be produced and kept open at the time and place
of the meeting during the whole time thereof, and shall be subject to the
inspection of any stockholder who may be present. The Board of Directors may fix
in advance a record date for the purpose of determining stockholders entitled to
notice of or to vote at a meeting of stockholders, such record date to be not
less than ten nor more than 60 days prior to such meeting, or the Board of
Directors may close the stock transfer books for such purpose for a period of
not less than ten nor more than 60 days prior to such meeting. In the absence of
any action by the Board of Directors, the close of business on the date next
preceding the day an which the notice is given shall be the record date.

4. Special Meetings. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by the Act or by the Certificate of
Incorporation, may be called only (i) by the Chairman of the Board, (ii) the
President or (iii) by the Secretary, within 10 calendar days after receipt of a
written request of a majority of the total number of Directors then in office.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice of the meeting and no stockholder shall have the night to
bring any additional business (whether similar or dissimilar in nature) before,
or to propose or nominate any person for appointment or election to any position
or office at any special meeting unless all stockholders entitled to vote are
present and affirmatively consent thereto.

5. Notice. Written or printed notice stating the place, day and hour of any
meeting of the stockholders and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than 60 days before the date of the meeting, either personally or by
mail, by or at the direction of the Chairman of the Board, the President or the
Secretary, to each stockholder of record entitled to vote at the meeting.

6. Quorum. At all meetings of the stockholders, the presence in person or by
proxy of the

                                       4



holders of a majority of the shares issued and outstanding and entitled to vote
shall be necessary and sufficient to constitute a quorum for the transaction of
business except as otherwise provided by the Act, by the Certificate of
Incorporation or by these Bylaws. If such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, my business may be
transacted which might have been transacted at the meeting as originally
notified.

7. Voting. When a quorum is present at any meeting, the vote of the holders of a
majority of the shares having voting power present in person or represented by
proxy at such meeting shall decide any questions brought before such meeting,
unless the question is one upon which, by express provision of the Act or of the
Certificate of Incorporation or of these Bylaws, a different vote is required,
in which case such express provision shall govern and control the decision of
such question. The stockholders present in person or by proxy at a duly convened
meeting at which a quorum initially is present may continue to transact business
until the adjournment of such meeting, notwithstanding any withdrawal of
stockholders that results in a quorum ceasing to be present.

8. Proxy. Each outstanding share, regardless of class, shall be entitled to one
vote on each matter submitted to a vote at a meeting of stockholders, except to
the extent that the voting rights of the shares of any class or classes are
limited or denied by the Certificate of Incorporation. At any meeting of the
stockholders, every stockholder having the right to vote shall be entitled to
vote in person or by proxy, bat no such proxy shall be voted after three years
from its date unless it provides for a longer period. Another person may be
authorized to act as proxy for a stockholder by an instrument in writing
subscribed by such stockholder or his or her duly authorized attorney in fact or
by any other means authorized under the General Corporation Law of the State of
Delaware as from time to time in effect. Any such proxy shall be filed with the
Secretary prior to or at the time of the meeting.

A duly executed proxy shall be irrevocable if, and only as long as, it is
coupled with an interest sufficient in law to support an irrevocable power. A
proxy may be made irrevocable regardless of whether the interest with which it
is coupled is an interest in the stock itself or an interest in the corporation
generally.

9. Action by Consent. Unless otherwise provided in the Certificate of
Incorporation, any action required or permitted to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
any corporate action without a meeting by less than unanimous

                                       5



written consent shall be given to those stockholders who have not consented in
writing,

                             III. BOARD OF DIRECTORS

1. Board of Directors. The business and affairs of the corporation shall be
managed by its Board of Directors, which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by the Act or by
the Certificate of Incorporation or by these Bylaws directed or required to be
exercised or done by the stockholders.

2. Number of Directors. The number of Directors (none of whom need be
stockholders or residents of the State of Delaware) shall be fixed by resolution
of the Board of Directors from time to time. The Directors shall be classified,
with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible, as determined by the Board of
Directors, one class to hold office initially for a term expiring at the annual
meeting of stockholders to be held in 1997, another class to hold office
initially for a term expiring at the annual meeting of stockholders to be held
in 1998, and another class to hold office initially for a term expiring at the
annual meeting of stockholders to be held in 1999, with members of each class to
hold office until their successors am elected and qualified. At each annual
meeting of the stockholders of the corporation, the successors to the class of
Directors whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting of stockholders held in the third year
following the year of their election.

Nominations for the election of Directors may be made by the Board of Directors
or a committee appointed by the Board of Directors or, solely in the case of any
election that is to be held at an annual meeting of stockholders, by any
stockholder entitled to vote in the election of Directors generally. Any
stockholder entitled to vote in the election of Directors generally may nominate
one or more persons for election as Directors at an annual meeting of
stockholders only if written notice of such stockholder's intent to make such
nomination or nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the Secretary not later than 90 days
prior to the anniversary date of the immediately preceding annual meeting. Each
such notice shall set forth: (i) the name and address of the stockholder who
intends to make the nomination and of the person or persons to be nominated;
(ii) a representation that the stockholder is a holder of record of stock in the
corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (iii) a description of all arrangements or understandings between 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; (iv) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (v)
the consent of each nominee to serve as a Director of the corporation if so
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedure.

                                       6



3. Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the number of Directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled solely by the affirmative vote of a majority of
the remaining Directors then in office, even though less than a quorum of the
Board of Directors, by a sole remaining director, or, if there is no remaining
Director, by the stockholders. Any Director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of Directors in which the new directorship was created or the vacancy
occurred and until such Director's successor has been elected and qualified, No
decrease in the number of Directors constituting the Board of Directors may
shorten the term of any incumbent Director.

4. Removal. Any director may be removed from office by the stockholders only for
the reasons specified in the Certificate of Incorporation and only in the manner
provided therein.

                            IV. MEETINGS OF THE BOARD

1. Meetings. The Directors of the corporation may hold their meetings, both
regular and special, at such times and places as are fixed from time to time by
resolution of the Board of Directors.

2. Annual Meetings. A meeting of the Board of Directors shall be held without
further notice immediately following the annual meeting of stockholders, and at
the same place, unless by unanimous consent of the Directors then elected and
serving such time or place shall be changed.

3. Regular Meetings. Regular meetings of the Board of Directors may be held
without notice at such time and place as shall from time to time be determined
by resolution of the Board.

4. Special Meetings. Special meetings of the Board of Directors may be called by
the Chairman of the Board, the President or by a majority of the total number of
Directors then in office. The purpose of any special meeting shall be specified
in the notice or any waiver of notice, Each notice of a meeting of the Board of
Directors may be delivered personally or by telephone to a Director not later
than the day before the day on which the meeting is to be held; sent to a
Director at his or her residence or usual place of business, or at any other
place of which he or she shall have notified the corporation, by telegram,
telex, cable, wireless, facsimile or similar means at least 24 hours before the
time at which the meeting is to be held; or posted to him or her at such place
by prepaid first class or air mail, as appropriate, at least three days before
the day on which the meeting is to be held. Notice of a meeting of the Board of
Directors need not be given to any Director who submits a signed waiver of
notice, whether before or after the meeting, or who attends the meeting without
protesting, prior to or at its commencement, the lack of notice to him or her.

5. Quorum. At all meetings of the Board of Directors the presence of a majority
of the total number of Directors then in office shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the
affirmative vote of at least a majority of the Directors



                                       7


present at any meeting at which there is a quorum shall be the act of the Board
of Directors except as may be otherwise specifically provided by the Act or by
the Certificate of Incorporation or by these Bylaws, If a quorum shall not be
present at any meeting of Directors, the Directors present thereat may adjourn
the meeting from time to time without notice other than announcement at the
meeting, until a quorum shall be present.

6. Committees. The Board of Directors may, by resolution passed by a majority of
the total number of Directors then in office, designate one or more committees,
each committee to consist of two or more Directors of the corporation (provided,
however, that the Chairman of the Board of Directors shall be a member of each
such committee), which committees shall have such power and authority and shall
perform such functions as may be provided in such resolution. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in a resolution
of the Board of Directors with respect thereto, shall have and may exercise all
the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation and may authorize the seal of the
corporation to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be designated by the Board of
Directors and shall keep regular minutes of their proceedings and report the
same to the Board of Directors when required.

7. Action by Consent. Unless otherwise provided in the Certificate of
Incorporation, any action required or permitted to be taken at any meeting of
the Board of Directors or any committee of the Board of Directors of the
corporation, or any action which may be taken at any meeting of the Board of
Directors or any committee of the Board of Directors, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by all the members of the
Board of Directors or such committee, as the case may be, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
such committee.

8. Compensation of Directors. Unless otherwise restricted by the Certificate of
Incorporation or the Bylaws, the Board of Directors shall have the authority to
fix the compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as Director. Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor. Members of any committees may be allowed like
compensation for attending committee meetings.

                              V. NOTICE OF MEETINGS

                                       8



1. Form of Notice. Whenever notice is required to be given to any Director or
stockholder under the provisions of the Act or of the Certificate of
Incorporation or of these Bylaws, and no provision is made as to how such notice
shall be given, it shall not be construed to mean personal notice, but any such
notice may be given in writing, by mail, postage prepaid, addressed to such
Director or stockholder at such address as appears an the books of the
corporation. Any notice required or permitted to be given by mail shall be
deemed to be given at the time when the same is deposited in the United States
mail. Notice to directors may also be given by telegram or telefacsimile.

2. Waiver. Whenever any written notice is required to be given to any Director
or stockholder under the provisions of the Act or of the Certificate of
Incorporation or of these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated in such notice, shall be deemed equivalent to the giving of such notice.

3. Telephone Meetings. Stockholders, members of the Board of Directors or
members of any committee designated by the Board of Directors may participate in
and hold meetings of such stockholders, Board of Directors or committee by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other.

                                  VI. OFFICERS

1. In General. The officers of the corporation shall be elected by the Board of
Directors and shall consist of a Chairman of the Board (who, unless the Board of
Directors specifies otherwise, will also be the Chief Executive Officer), a
Chief Financial Officer and a Secretary. The Board of Directors may also elect a
President, a Treasurer and one or more Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries and Assistant Treasurers and such other
officers as the Board of Directors may from time to time determine. Any two or
more offices may be held by the same person.

2. Election. The Board of Directors, at the meeting thereof held after each
annual meeting of stockholders, shall elect from its members a Chairman of the
Board. At such meeting the Board of Directors shall also elect a President, one
or more Vice Presidents, a Secretary and a Treasurer, none of whom need be a
member of the Board of Directors. 

3. Salaries. The salaries of all officers and agents of the corporation shall be
fixed by the Board of Directors or by a committee of directors, if so authorized
by the Board of Directors; provided that the Board of Directors may delegate to
an officer of the Company the power to fix the compensation of other officers
and agents.

4. Term of Office and Removal. Each officer of the corporation shall hold office
until his or her death, or his or her resignation or removal from office, or
the election or appointment and qualification of his or her successor, whichever
shall first occur. Any officer or agent elected or

                                       9



appointed by the Board of Directors may be removed by the Board of Directors,
whenever in its judgment the best interests of the corporation will be served
thereby. If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board of Directors.

5. Chairman of the Board. The Chairman of the Board shall preside at all
meetings of the Board of Directors at which he or she may be present and at all
meetings of the stockholders and shall perform such other duties as may be
assigned to him or her by the Board of Directors. Without limiting the
generality or effect of the foregoing, the Chairman of the Board shall have full
power and authority, except as otherwise required by law or directed by the
Board of Directors, (a) to execute, on behalf of the corporation, all duly
authorized contracts, agreements, promissory notes, deeds, assignments,
conveyances, applications, consents, proxies, powers of attorney and other
documents and instruments to which the corporation may be a party, and (b) to
vote and otherwise act on behalf of the corporation, in person or by proxy, at
any meeting of stockholders (or with respect to any action of such stockholders)
of any other corporation in which the corporation may hold securities and
otherwise to exercise any and 41 rights and powers which the corporation may
possess by reason of its ownership of securities of any such other corporation.

6. Chief Executive Officer. The Chief Executive Officer of the corporation shall
have, subject only to the Board of Directors, general arid active management and
supervision of the business and affairs of the corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect. He
or she shall have all powers and duties of supervision and management usually
vested in the general manager of a corporation, including the supervision and
direction of all other officers of the corporation and the power to appoint and
discharge agents and employees. Without limiting the generality or effect of the
foregoing, the Chief Executive Officer shall have full power and authority,
except as otherwise required by law or directed by the Board of Directors, (a)
to execute, on behalf of the corporation, ail duly authorized contracts,
agreements, promissory notes, deeds, assignments, conveyances, applications,
consents, proxies, powers of attorney and other documents and instruments to
which the corporation may be a party, and (b) to vote and otherwise act on
behalf of the corporation, in person or by proxy, at any meeting of stockholders
(or with respect to any action of such stockholders) of any other corporation in
which the corporation may hold securities and otherwise to exercise any and all
rights and powers which the corporation may possess by reason of its ownership
of securities of any such other corporation. 

7. President. In the absence of the Chairman of the Board, he or she shall
preside at all meetings of the Board of Directors. The President shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors. Without limiting the generality or effect of the foregoing, the
President shall have full power and authority, except as otherwise required by
law or directed by the Board of Directors, (a) to execute, on behalf of the
corporation, all duly authorized contracts, agreements, promissory notes, deeds,
assignments, conveyances, applications, consents, proxies, powers of attorney
and other documents and instruments to which the corporation may be a party, and
(b) to vote and otherwise act on behalf of the corporation, in person or by
proxy, at any meeting of stockholders (or with respect to any 

                                       10



action of such stockholders) of any other corporation in which the corporation
may hold securities and otherwise to exercise any and all rights and powers
which the corporation may possess by reason of its ownership of securities of
any such other corporation.

8. Chief Financial Officer. The Chief Financial Officer shall be responsible for
the management and oversight of the financial affairs of the corporation and its
financial plans. He shall have the custody of all corporate funds and
securities, shall keep full and accurate accounts of receipts and disbursements
of the corporation, and shall deposit all moneys and other valuable effects in
the name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the Board of Directors, taking Proper vouchers
for such disbursements. shall render to the Chief Executive Officer and
Directors, at the regular meetings of the Board, or whenever they may require
it, an account of all his transactions as Chief Financial Officer and of the
financial condition of the corporation, and shall perform such other duties as
the Baud of Directors may prescribe.

9. Vice Presidents. Each Vice President shall have such powers and perform such
duties as the Board of Directors may from time to time prescribe, or as the
Chief Executive Officer may from time to time delegate to him. In the absence or
disability of the President, a Vice President designated by the Board of
Directors shall perform the duties and exercise the powers of the President.
Without limiting the generality or effect of the foregoing, each Vice President,
if any, designated as an "Executive Vice President" shall have Ml power and
authority, except as otherwise required by law or directed by the Board of
Directors, (a) to execute, on behalf of the corporation, all duly authorized
contracts, agreements, promissory notes, deeds, assignments, conveyances,
applications, consents, proxies, powers of attorney and other documents and
instruments to which the corporation may be a party, and (b) to vote and
otherwise act on behalf of the corporation, in person or by proxy, at any
meeting of stockholders (or with respect to any action of such stockholders) of
any other corporation in which the corporation may hold securities and otherwise
to exercise any and all rights and powers which the corporation may possess by
reason of its ownership of securities of any such other corporation.

10. Secretary. The Secretary shall attend all meetings of the stockholders and
record all votes and the minutes of all proceedings in a book to be kept for
that purpose. The Secretary shall perform like duties for the Board of Directors
when required. He or she shall give, cause to be given, notice of ail meetings
of the stockholders and special meetings of the Board of Directors and shall
perform such other duties as may be prescribed by the Board of Directors or the
Chief Executive Officer, under whose supervision he or she shall be. He or she
shall keep in safe custody the seal of the corporation.

11. Assistant Secretaries. Each Assistant Secretary shall have such powers and
perform such duties as the Board of Directors may from time to time prescribe.
Unless otherwise provided by the Board of Directors, in the absence or
disability of the Secretary, any Assistant Secretary may perform the duties and
exercise the powers of the Secretary.

                                       11



12. Treasurer. The Treasurer shall have such powers and perform such duties as
the Board of Directors may from time to time prescribe. Unless otherwise
provided by the Board of Directors, in the absence or disability of the Chief
Financial Officer, the Treasurer may perform and exercise the powers of the
Chief Financial Officer.

13. Assistant Treasurers. Each Assistant Treasurer shall have such powers and
perform such duties as the Board of Directors may from time to time prescribe.
Unless otherwise provided by the Board of Directors, in the absence or
disability of the Treasurer, any Assistant Treasurer may perform and exercise
the powers of the Treasurer.

14. Bonding. If required by the Board of Directors, all or certain of the
officers shall give the corporation a bond, in such form, 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 their office and for the restoration
to the corporation, in case of their death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in their possession or under their control belonging to the
corporation.

                           VII. CERTIFICATES OF SHARES

1. Form of Certificates. Certificates representing shares of stock of the
corporation will be in such form as may be determined by the Board of Directors,
subject to applicable legal requirements. Such certificates shall be
consecutively numbered and shall be entered in the stock book of the corporation
as they are issued. Each certificate shall state on the face thereof the
holder's name, the number, class of shares, and the par value of such shares or
a statement that such shares are without par value. Each certificate shall be
signed by the Chairman of the Board of Directors, or the President or a Vice
President and the Treasurer or an Assistant Treasurer, and may be scaled with
the seal of the corporation or a facsimile thereof, All signatures upon such
certificates may be facsimiles. In case any officer or officers who have signed,
or whose facsimile signature or signatures have been used on such certificates,
shall cease to be such officer or officers of the corporation, whether because
of death, resignation or otherwise, before such certificates have been delivered
by the corporation or its agents, such certificates may nevertheless be issued
and delivered as though the person or persons who signed such certificates or
whose facsimile signature or signatures have been used thereon had not ceased to
be such officer or officers of the corporation.

2. Lost Certificates. The Secretary or any Assistant Secretary may direct that a
new certificate 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, satisfactory to the Secretary or such Assistant
Secretary, by the person claiming the certificate to have been lost, stolen or
destroyed, and the Secretary or such Assistant Secretary may require the owner
of such lost, stolen or destroyed certificate, or his or her legal
representative, to give the corporation a bond, in such form, in such sum, and
with such surety or sureties as the Secretary or such Assistant Secretary may
approve as indemnity against any claim that may be made


                                       12



against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.

3. Transfer of Shares. Shares of stock shall be transferable only on the books
of the corporation by the holder thereof in person or by his or her duly
authorized attorney, lawfully constituted in writing.

4. Registered Stockholders. The corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, 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 law.

                            VIII. GENERAL PROVISIONS

1. Dividends. Dividends upon the outstanding shares of the corporation, subject
to the provisions of the Certificate of Incorporation, if any, may be declared
by the Board of Directors at any regular or special meeting. Dividends may be
declared and paid in cash, in property, or in shares of the corporation, subject
to the provisions of the Act and the Certificate of Incorporation. The Board of
Directors may fix in advance a record date for the purpose of determining
stockholders entitled to receive payment of any dividend, such record date to be
not more than 60 days prior to the payment date of such dividend, or the Board
of Directors may close the stock transfer books for such purpose for a period of
not more than 60 days prior to the payment date of such dividend. In the absence
of any any action by the Board of Directors, the date upon which the Board of
Directors adopts the resolution declaring such dividend shall be the record
date.

2. Reserves. There may be created by resolution of the Board of Directors out of
the net profits of the corporation such reserve or reserves as the Directors
from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the corporation, or for such other purpose as the Directors shall think
beneficial to the corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created.

3. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.

4. Seal. The corporation shall have a seal, and said seal may be used by causing
it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Any officer of the corporation shall have authority to affix the seal to any
document requiring it.

                                  IX. INDEMNITY

                                       13



1. Damages and Expenses. Without limiting the generality or effect of Article IX
of the Certificate of Incorporation, the corporation shall to the fullest extent
permitted by applicable law as then in effect indemnify any Director or officer
of the corporation (each, an "Indemnity") who is or was or is threatened to be
made to become involved in any manner (including without limitation as a party
or a witness) in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether of a civil, criminal, administrative or
investigative nature (including without limitation any action, suit or
proceeding by or in the right of the corporation to procure a judgment in its
favor) (each, a "Proceeding") by reason of the fact that such person is or was a
Director, officer, employee or agent of the corporation, or is or was serving at
the request of the Board of Directors or an officer of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (whether or not for profit, or by reason of
anything actually or allegedly done or not done by such person in any such
capacity, against any and all expenses (including attorneys' fees) actually and
reasonably incurred by, and any and all judgments, fines and penalties entered
or assessed against, and any and all amounts reasonably paid or payable in
settlement by, such person in connection with such Proceeding. Such
indemnification shall be a contract right and shall include the right to receive
payment in advance of any expenses incurred by an Indemnity in connection with
such Proceeding upon receipt of an undertaking (which may be accepted by the
corporation without any security for the performance thereof and without regard
to the financial capacity of such person to perform it obligations thereunder)
by or on behalf of such person to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the corporation
as authorized by this Article IX or otherwise.

The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article IX shall not be exclusive of any other rights to which any
person seeking indemnification may otherwise be entitled.

The rights to indemnification and advancement of expenses provided by, or
granted pursuant to, this Article IX shall continue as to a person who has
ceased to be a Director, officer, employee or agent of the corporation or any
other enterprise and shall inure to the benefit of the heirs, executors,
administrators and estate of such person.

In addition to the mandatory indemnification of Directors and officers of the
corporation provided by this Article IX, the corporation may, if and to the
extent authorized by the Board and permitted by the Act, indemnify any person or
entity against any liability whatsoever.

2. Insurance, Contracts and Funding. The corporation may purchase and maintain
insurance to protect itself or any Indemnity or other person against any
expenses, judgments, fines and amounts paid in settlement or incurred by any
Indemnity or other person in connection with any Proceeding referred to in
Article IX or otherwise, to the fullest extent permitted by applicable law as
then in effect. The corporation may enter into contracts with any person
entitled to indemnification under Article IX or otherwise, and may create a
trust fund, grant a security interest, or use other means (including without
limitation procuring one or more letters of credit) to ensure the payment of
such amounts as may be necessary to effect


                                       14


indemnification as provided in this Article IX.

                                  X. AMENDMENTS

1. By Stockholders. Except as otherwise provided by law or by the Certificate of
Incorporation or these Bylaws, these Bylaws may be amended or repealed by the
affirmative vote of the holders of at least 75% of the voting power of all
shares of the corporation entitled to vote thereon, at any regular or special
meeting of the stockholders, duly convened after notice to the stockholders of
that purpose.

2. By the Board of Directors. Except as otherwise provided by law or by the
Certificate of Incorporation or these Bylaws, these Bylaws may also be amended
or repealed by the Board of Directors by the vote of a majority of Directors.


                                       15

EX-10.3

                                  Exhibit 10.3

                            Lock-Up Agreement between
              Edgard Zwirn, Unilabs Holdings SA, UniHolding Corp.,
          Unilabs Group Ltd., Unilabs SA and Union Bank of Switzerland,
                              dated April 14, 1997








                               LOCK-UP- AGREEMENT

                                     between

                           1. Mr. Edgard Zwirn

                                       and

                           2. Unilabs Holdings SA

                                       and

                           3. UniHolding-Corp.

                                       and

                           4. Unilabs Group Ltd.

                                       and

                           5. Unilabs SA

                                       and

                           6. Union Bank of Switzerland

                                    regarding
                     Restriction on Sale of Bearer of Shares
                 and Listing of Registered Shares in Unilabs SA
                    and Maintenance of Control of Unilabs SA





This Agreement is made on April 14, 1997 by and between the following parties:

1.   Mr. Edgard Zwirn, 80 Harley Street, London WI 1AE, England


                                       and

2.   Unilabs Holding SA , 55 Boulevard de Perolles, P.O. Box 144 1700 Fribourg
     5, Switzerland

                                       and

3.   UniHolding Corp., 96 Spring Street, New York, N.Y. 10012, U.S.A.

                                  (hereinafter together with the parties
                                  named under 1 and 2 collectively
                                  referred to as the "Controlling Shareholders")

                                       and


4.   Unilabs Group Ltd., Road Town, Tortola, British Virgin Islands 
                                  (hereinafter referred to as "UGL")

                                       and

3.   Unilabs SA, Avenue Blanc 53, 1202 Geneva, Switzerland

                                  (hereinafter referred to as the "Company")

                                       and

6.   Union Bank of Switzerland, Bahnhofstrasse 45, 8001 Zurich, Switzerland,
     acting for itself and as agent for Banque Cantonale de Geneve, Bank Julius
     Baer & Co. Ltd., Bank Sarasin & Cie. and Pictet & Cie.

                                  (hereinafter referred to as "UBS")


                                       1



Introduction

a)   Existing Capital Structure of Unilabs SA

As a result of the extraordinary general shareholders' meetings of the Company
held on February 24 and on April 10, 1997, the Company's share capital has been
restructured as follows.

     (i)  Split of the bearer shares of CHF 500 each in proportion of 1:12.5

     The existing 16'000 bearer shares of a nominal value of CHF 500 each have
     been split in the proportion 1:12-5 into 200'000 bearer shares of a nominal
     value of CHF 40 each.

     (ii) Creation of registered shares of a nominal value of CHF 20 each

     Out of the 200'000 newly created bearer shares 60'000 bearer shares of a
     nominal value of CHF 40 each have been converted into registered shares of
     a nominal value of CHF 40 each. Subsequently, the 60'000 newly created
     registered shares of a nominal value of CHF 40 each have been split in
     proportion of 1:2 into 120'000 registered shares of a nominal value of CHF
     20 each.

     (iii) Ordinary share capital increase at the exclusion of subscription
           rights of existing shareholders

     The existing share capital of CHF 8 million has been increased by way of an
     ordinary share increase through the issue of 40'000 new bearer shares of a
     nominal value of CHF 40 each, resulting in a share capital increase of CHF
     1.6 million to a nominal share capital of CHF 9.6 million. The newly issued
     bearer shares have been paid for in their nominal amount of CHF 40 each,
     i.e. CHF 1.6 million in the aggregate, by Frincana AG, Zurich, and they are
     entitled to dividends as from June 1, 1996.

     (iv) Creation of conditional share capital

          A conditional share capital in the amount of CHF 480'000 has been
          created for the purpose of implementing a management share option
          plan.


b)   Public Placement of Bearer Shares of Nominal Value of CHF 40 each

     The board of directors of the Company has resolved to offer to the public
     (i) the 40'000 newly issued bearer shares of a nominal value of CHF 40 each
     resulting from the share capital increase, and (ii) 44'000 bearer shares of
     a nominal value of CHF 40 each which are currently held by Unilabs Group
     Ltd. and other shareholders of the Company. The public share offering will
     be made by a banking syndicate consisting of Union Bank of Switzerland

                                       2



     ("UBS"), Banque Cantonale de Geneve, Bank Julius Baer & Co. AG, Bank
     Sarasin & Cie. and Pictet & Cie. and lead managed by UBS on terms set in
     the underwriting agreement between the Company and UBS (the "Underwriting
     Agreement"). The offering price will be determined on April 24, 1997.

For purposes of (i) stabilizing the market for the Company's listed bearer
shares after the Company's public offering and (ii) maintaining the existing
shareholder control of the Company for a certain period of time, the parties
agree as follows:

1.   Restriction on Transfer of Shares

     Each of UGL and the Company agrees that for a period of 24 months from
     April 25, 1997 it will not, directly or indirectly, offer, sell or contract
     to sell or otherwise transfer the ownership of, or enter into any
     transaction (including a derivative transaction) having an economic effect
     similar to that of a sale of, or announce the offering of, any registered
     shares and/or bearer shares of the Company as they are deposited with UBS
     according to Section 4 or any securities which are convertible into or
     exchangeable for, or otherwise represent a right to acquire, registered
     shares and/or bearer shares of the Company without the prior written
     consent of UBS.

2.   Undertaking to Maintain Control

     The Controlling Shareholders undertake to maintain for a period of two
     years from April 25, 1997 their effective existing indirect control of the
     Company, substantially as of the date of signing of this Agreement. In
     particular, the Controlling Shareholders agree to maintain their
     involvement in the corporate governance of the Company at the current
     level, by representation on the Company's board of directors and in the
     Company's management.

3.   Undertaking not to List Registered Shares

UGL undertakes for a term of five years from the date of the initial listing of
the Company's bearer shares on the Swiss Exchange on April 25, 1997 not to list
or have listed the registered shares, or any bearer shares resulting from the
conversion of registered shares, of the Company on the Swiss Exchange or on any
other securities exchange in Switzerland and abroad. In the event UGL after
April 25, 1999 sells all or part of its registered shares to a third party
purchaser, UGL shall cause such purchaser to agree not to list or have listed
the registered shares of the Company until April 25, 2002 on the Swiss Exchange
or on any other securities exchange in Switzerland and abroad.



                                       3


4.   Deposit of Shares

     To assure compliance of UGL with its obligations under Sections 1 to 3
     above, UGL agrees to deposit by April 30, 1997 all of its shares, whether
     in bearer or in registered form, held in the Company on a separate
     securities deposit account with UBS. Such shares shall remain deposited on
     such account for a period of two years from the date of the initial listing
     of the Company's bearer shares on the Swiss Stock Exchange on April 25,
     1997.

     The obligations under this Section do not prevent UGL to pledge the
     deposited shares in favor of third parties provided that they accept to
     commit themselves according to Section 1.

     The custody fees of UBS for the deposit of the bearer and registered shares
     mentioned above shall not exceed CHF 4'000.- per year.


5.   Condition Precedent

     This Lock-up Agreement shall be subject to the Company and UBS having
     executed the Underwriting Agreement.

6.   Liquidated Damages

     If any of the Controlling Shareholders or UGL violates in any material way
     any of its obligations under Sections 1, 2 and 3 hereunder, and if the
     occurrence of such violation has been confirmed by a special ad hoc
     arbitration tribunal, as described below, UGL and UniHolding Corp. shall
     each be jointly and severally liable to pay immediately to TIBS liquidated
     damages in the amount of CHF 1 million. The payment of this penalty shall
     not release UGL or UniHolding Corp. from their obligations hereunder and
     UBS reserves the right to claim additional damages.

     For the purpose of determining whether a material violation of any of the
     terms of Section 1, 2 or 3 of this Agreement by the Controlling
     Shareholders or UGL has occurred, the parties shall set-up an ad hoc
     arbitration tribunal consisting of three arbitrators. Each of UGL and UBS
     shall appoint one arbitrator who shall then agree on a chairman. If the
     arbitrators fail to agree on a chairman, such chairman shall be appointed
     by the Chamber of Commerce and Industry of Geneva. The arbitration tribunal
     shall render its decision within three months from the date of its valid
     constitution. The arbitration tribunal shall determine its own rules. The
     seat of the arbitration tribunal shall be in Geneva and the proceedings
     shall be conducted in the English language. The decision of the arbitration
     tribunal shall be final and the parties waive all challenge of the decision
     in accordance with Art. 192 of the Swiss Private International Law Statute.


                                       4


7.   Miscellaneous

7.1  Notices to be given under this Agreement shall be given in writing and sent
     by mail, telefax or courier to the following addresses:

To Edgard Zwirn:

Mr.  Edgard Zwirn
80 Harley Street
London WI 1AE, England

To UniHolding Corp.:

UniHolding Corp.
96 Spring Street
New York, N.Y. 10012, USA

To Unilabs Holdings SA, Unilabs Group Ltd. and Unilabs SA:

Unilabs SA
attn.  Mr. Mguel Payro/Mr. Eric Wavre
12, place Cornavin
1211 Geneva, Switzerland
     Tel.: +41-22-909 77 77 
     Fax:  +41-22-909 77 33
           +41-22-909 77 07


     To UBS :

     Union Bank of Switzerland attn. Mr. Eduardo Schindler/Ms. Jacqueline Morard
     Bahnhofstrasse 45 8021 Zurich, Switzerland

     Tel.:   +41-1-234 88 48
     Fax:    +41-1-234 59 24


7.2  This Agreement shall be executed in six counterparts. Each party hereto
     shall receive one original.

7.3  This Agreement shall be governed by Swiss law- Subject to the provision in
     Section 7, all disputes arising out of or in connection with this Agreement
     shall be submitted to the non-


                                       5


     exclusive jurisdiction of the ordinary courts of the Canton of Zurich,
     venue being Zurich 1.



- ----------------------------------
Edgard Zwirn



- ----------------------------------
Unilabs Holdings  SA



- ----------------------------------
UniHolding Corp.



- ----------------------------------
Unilabs Group Ltd.



- ----------------------------------
Unilabs SA



- ----------------------------------
Union Bank of Switzerland






                                       6

EX-21

                                   Exhibit 21

                           Subsidiaries of Registrant




                                   EXHIBIT 21

                          LIST OF SUBSIDIARY COMPANIES

Unilabs Group Limited (BVI) - 100%

     Unilabs SA (Swiss) - 61%

          Unilabs Group (UK) - 100%
               Unilabs Clinical Pathology Limited - 100%
               Farrer-Brown Histopathology Limited (UK) - 100%
               United Trust Laboratories Limited - 100%

          Unilabs Medizin. Labor. AG (Swiss) - 100%
          Laboratorie Ritton SA (Swiss) - 100%
          Enzym-Labor Dr. H. Weber AG (Swiss) - 100%
          Diagnostica, Lab. AG (Swiss) - 100%
          SQ-Lab Aerztelabor AG (Swiss) - 100%
          Medizin. Labor Baden AG (Swiss) - 100%
          Medizin.Labor Dr. H.R. Ebersold AG (Swiss) - 100%
          Laboratoire Riotton SR SA (Swiss) - 100%
          Vivagen Diagnostics AG (Swiss) - 100%
          Biomedical SA (Swiss) - 100%
          MS Chimie SA (Swiss) - 100%
          Praxilab Gem. Prakt. Aerzte AG (Swiss) - 65%
          Pathologie-Labor Brunnhof AG (Swiss) - 100%

          Instituto Medico Di Torino SpA (Italy) - 100%

          Medil Srl (Italy) - 50%

          United Laboratories Espana SA (Spain) - 98%

          Unilabs Management Company Limited (Gibraltar) - 100%

          Unilabs International Limited (BVI)
               Unimed Laboratories (Russia) - 50%
               Swisslab N.V. (Netherlands Antilles) - 61.5%
               Swisslab B.V. (Netherlands) - 61.5%
               Buyuk Swisslab Laboratuari (Turkey) - 43.1%
     Uni Clinical Laboratories UCL Engineering SA
       (Swiss) (Dormant) - 100%

     Global Unilabs Clinical Trials Ltd. (BVI) - 100%
          Unilabs Clinical Trials International,
            Ltd. (US) - 70%
               Unilabs Clinical Trials Ltd. (UK) - 100%
               UCT Software SA (Swiss) - 100%
               NDA Clinical Trial Services Inc. (US) - 100%

EX-23.1

ATAG ERNST & YOUNG                  6, rue d'italie           Telephone: ++41 22
318 06 18                           P.O. Box 3270             Telefax:   ++41 22

312 0170
                                    CH-1211 Geneva 3
                                    Switzerland

Mr. Bruno Adam
Chief Financial Officer
Uniholding Corporation
C/O Unilabs SA
12, place de Cornavin
CH 1211 Geneva 1


October 13, 1997

Dear Mr. Adam,

Mr.  Attie  and I  have  reviewed  the  modifications  to  the  1997  Uniholding
Corporation consolidated financial statements received by fax from you today. We
agree with these  modifications  and hereby authorize you to include our opinion
on these financial statements in the 1997 Uniholding Corporation 10-K filing.

Sincerely yours,

/s/

Marylin Scowden

EX-23.2

                                  Exhibit 23.2

                          Consent of Former Accountant,
                        Richard A. Eisner & Company, LLP

EX-27

 


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