SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549

 
                                       FORM 10-K

     (Mark One)
     [ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
               EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended March 31, 1996
                                         OR

     [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ________________ to ________________
  
                      Commission file number:  0-10909

                         CORNICHE GROUP INCORPORATED
               (Exact name of registrant as specified in its charter)

                   Delaware                           22-2343568
     (State or other jurisdiction of                (I.R.S. employer
     incorporation or organization)                Identification No.)

            Wayne Interchange Plaza I
          145 Route 46 West, Wayne, NJ                   07974
     (Address of principal executive offices)           (Zip code)

Registrant's telephone number, including area code:  (201) 785-3338

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

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

                        Common Stock, $.10 par value
                               (title of class)

     Indicate by check mark whether 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 
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. [   ]

                             [Cover page 1 of 2]

                            [Page 1 of 210 pages]
                         [Exhibit Index at page 59]

                             $904,604 as of March 19, 1997
                     (Aggregate market value of the voting stock
                       held by non-affiliates of registrant)

                 2,412,278 shares, $.10 par value, as of March 19, 1997
        (Indicate the number of shares outstanding of each of the registrant's
              classes of common stock, as of the latest practicable date)

                        DOCUMENTS INCORPORATED BY REFERENCE

                   Annual Reports on Forms 10-K of Registrant for the
                   years ended March 25, 1995 and September 30, 1994

                            Proxy Statement of Registrant --
                   September 28, 1995 Annual Meeting of Stockholders

                             [Cover Page 2 of 2 pages]

PART I

ITEM 1.  BUSINESS

History

     Registrant was incorporated in Delaware on September 18, 1980 under the 
name Fidelity Medical Services, Inc.  On July 28, 1983 Registrant changed its 
name to Fidelity Medical, Inc.  From its inception through March 1995 
Registrant was engaged in the development, design, assembly, marketing and 
sale of medical imaging products through its wholly-owned subsidiary, Fidelity 
Medical, Inc., a New Jersey corporation ("FMI").  On March 2, 1995 Registrant 
acquired Corniche Distribution Ltd. ("CDL"), a United Kingdom ("UK") 
corporation established in 1992.  At such time, CDL was a holding company for 
two operating subsidiaries, Chessbourne International Ltd. ("Chessbourne"), a 
distributor/supplier of stationery products and office furniture, and The 
Stationery Company Limited ("TSCL"), a stationery retailer.  The acquisition 
of CDL resulted in the former shareholders of CDL, Brian J. Baylis and Susan 
A.M. Crisp, owning a majority of the outstanding common shares of Registrant 
after the acquisition and was treated as a recapitalization of CDL with CDL 
being treated as the acquirer.  Accordingly, Registrant changed its fiscal 
year to the last Saturday in March of each year in order to conform to the 
fiscal years of its UK operating subsidiaries and, unless otherwise indicated, 
the financial information and data thereafter contained in Registrant's 
financial reports related to the operations of CDL alone for periods prior to 
March 2, 1995.  At the time of the CDL acquisition, CDL owned 51% of the 
common stock of Chessbourne, the other 49% being owned by an unrelated entity, 
Ronatree Limited ("Ronatree"), a property investment company.  In connection 
with the CDL acquisition, Registrant acquired the 49% interest of Ronatree in 
Chessbourne by issuing to Ronatree 25,000 shares of its common stock.  At such 
time and in furtherance of the CDL acquisition, Registrant also issued 215,150 
shares of its common stock to Chester Holdings, Ltd ("Chester"), a Colorado 
corporation, in order to induce Chester to agree to terminate a pre-existing 
agreement giving Chester the right to acquire CDL and to further induce 
Chester to forgive approximately $71,000 of net indebtedness owing to Chester 
by CDL and its subsidiaries.

     Effective March 25, 1995, Registrant sold its wholly-owned medical 
imaging products subsidiary, FMI, to Chester in exchange for the 215,150 
shares of Registrant's common stock previously issued to Chester in connection 
with Registrant's acquisition of CDL and Chester's Promissory Note and Option 
Agreement dated as of March 25, 1995 (the "Note and Option Agreement").  The 
Note and Option Agreement contained an 8% promissory note from Chester to 
Registrant in the principal amount of $200,000 due October 1, 1995 (the 
"Note").  It also included an option, in favor of Registrant, to apply the 
unpaid principal balance and accrued interest due on the Note to the purchase 
of shares of FMI, Chester or any other parent company to which Chester may 
have transferred the FMI stock, at the fair market value of such shares.  
Registrant's medical imaging products business had been generating significant 
losses for a number of years resulting in the decision to dispose of the 
medical imaging products business and to focus Registrant's business 
operations on the development and expansion of its stationery operations.  The 
Note was not paid by Chester on its due date.  However, during the period May 
1996 through July 1996 Chester paid Registrant $125,000 of the principal sum 
due Registrant under the Note.  All accrued interest due under the Note and 
the remaining principal balance of $75,000 has not been paid as of the date 
hereof.  Registrant expects to exercise the option applicable to the unpaid 
balance on the Note to purchase voting shares of Medical Laser Technologies, 
Inc., the corporate parent of FMI, although no assurance can be given that 
this will prove to be the case.

     Following the sale of FMI, Registrant's business operations consisted of 
the retail stationery operations and brand marketing and stationery wholesale 
operations of TSCL and Chessbourne respectively.  These operations were funded 
in large part from loans made by the Bank of Scotland, Registrant's primary 
lender, to each of CDL, TSCL and Chessbourne over a period of several years.  
In accordance with customary UK practice, the Bank of Scotland, when making 
such loans obtained security for these loans by means of mortgages over fixed 
assets ("Fixed Assets") and debentures over pools of assets which by their 
nature will 

 3

change from time to time ("Floating Changes"). Such security interests in the 
assets of each of CDL, TSCL and Chessbourne were reflected in documents known 
as Fixed and Floating Charges.  The Bank of Scotland executed Fixed and 
Floating Charges with CDL, TSCL and Chessbourne on April 7, 1995, November 16, 
1993 and March 27, 1987, respectively.  The Fixed and Floating Charges 
contained powers for the Bank of Scotland to appoint an administrative 
receiver for the assets covered by the security interests.  Registrant 
experienced large operating losses and net cash outflows from operating 
activities during fiscal 1996 resulting in severe liquidity problems.  
Registrant was unable to secure badly needed interim financing either in the 
form of additional loans or the conversion of bank debt to equity.  
Consequently, the Bank of Scotland had Chessbourne and TSCL placed into 
receivership in the UK on February 7, 1996 and had CDL placed into 
receivership in the UK on February 28, 1996.   Since such time, Registrant has 
been inactive.

General

     During the period March 26, 1995 through February 7, 1996 Registrant was 
engaged in the retail sale and wholesale distribution of stationery and 
related office products, including office furniture, in the UK through 
Chessbourne and TSCL.  Chessbourne's operations consisted of the distribution 
and sale at wholesale of a wide variety of branded stationery products in 
England and Scotland, including products distributed under Chessbourne's 
proprietary "Style" brand.  TSCL's business consisted of the operation of 
retail stationery stores in England.  Prior to March 25, 1995, Registrant was 
engaged in the development, design, assembly, marketing and sale of medical 
imaging products through its wholly-owned subsidiary, FMI.  As of March 25, 
1995, Registrant discontinued those operations and sold that business to 
Chester.  Such sale was intended to enable Registrant to terminate the 
significant cash outflows and operating losses being realized from the 
operation of the medical imaging products business and to permit it to focus 
its efforts and resources on its newly-acquired U.K. stationery business. 

     On March 31, 1995 TSCL acquired seven fully operational retail stationery 
stores.  The consideration paid totaled approximately $772,000 and was paid 
substantially by way of the assumption of liabilities.  The assets acquired 
were independently valued at approximately $374,000 and in addition to 
assumption of liabilities in the amount of approximately $1,121,000, TSCL also 
paid $25,000 in cash.  The liabilities assumed comprised a bank loan 
($320,000), trade payables ($383,000) and amounts due to Chessbourne and TSCL 
of approximately $418,000.  The bank loan carried an interest rate of 2% over 
the lending bank's primary rate and was collateralized by the assets of TSCL.

     In June 1995, CDL acquired a freehold interest in a Leek, Staffordshire 
warehouse and office facilities for a cash consideration of approximately 
$240,000.  The consideration was partly funded by a $152,000 fifteen year 
business loan from Lloyds Bank Plc, banker and secured lender to CDL.  The 
loan was secured by a mortgage on the property which became due following the 
institution of receivership proceedings.  The loan carried a variable interest 
rate which was .85% per month at the time the loan was made.  Principal and 
interest due on the loan were repayable in equal monthly installments over the 
term of the loan.  The Leek facilities had been occupied by TSCL under lease 
from a non-affiliated landlord since July 1994.  These facilities were used 
for the storage and distribution of inventory for TSCL and also housed the 
marketing, buying and administrative functions of Chessbourne and TSCL.

Operations of Chessbourne

     CDL's wholesale stationery operations commenced in October 1993 with its 
acquisition of Chessbourne.  At the time of such acquisition, Chessbourne's 
business was being operated as a traditional wholesale distribution operation 
with Chessbourne purchasing and distributing stationery products, office 
supplies and office furniture manufactured by third parties.  Shortly 
thereafter, Chessbourne's wholesale operations were expanded to include both 
traditional wholesale distribution activities as well as the 

 4

development of a line of stationery products to be marketed and sold under 
Chessbourne's proprietary "Style" brand.

     The customers of Chessbourne's wholesale operations were primarily small, 
independently-owned stationery and office supply stores, other stationery 
wholesalers and distributors, several small chain stationery stores and 
specialist and non-specialist retailers and retail groups.  During the 40 week 
period ended December 30, 1995, approximately 15% of Chessbourne's sales were 
made to TSCL's retail stores.

     Until April 1995, Chessbourne maintained a large warehouse and filled and 
shipped orders for stationery and office supply products using its own 
personnel.  In April 1995, however, Chessbourne closed its stationery and 
office supplies warehouse and entered into an agreement with a third-party 
warehouse operator to provide warehouse space and order filling and shipping 
services for its products on a fee-for-service basis.  Chessbourne's 
outsourcing of its warehousing operations was intended both to reduce its 
costs of operations and to permit Chessbourne to devote a greater portion of 
its resources to the development and marketing of its "Style" brand products.

     Notwithstanding the closure of its stationery and office supplies 
warehouse, Chessbourne continued to maintain a warehouse and showroom from 
which it filled and shipped orders for office furniture using its own 
personnel.  Chessbourne sold its office furniture products to retail sellers 
of office supplies and office furniture, to designers of office interiors, and 
to commercial end users.  Chessbourne's wholesale stationery business 
generally shipped goods to fill small orders within five days of receiving 
orders therefor.  Large orders from major customers were generally received 
well in advance of the requested date.  Chessbourne's wholesale sales were 
primarily made on open account with payment generally being due within 35 days 
of shipment.

     Through February 1996, when it was placed into receivership, Chessbourne 
devoted substantial resources to the development and marketing of its line of 
stationery products and office supplies being marketed and sold under 
Chessbourne's proprietary "Style" brand.  The "Style" brand line of products 
was intended to be value-oriented while still maintaining a high level of 
quality.  As of February 1996, Chessbourne was using the "Style" brand name on 
a wide variety of stationery and office supplies and was marketing 
approximately 500 items under the "Style" brand.  Sales of Chessbourne's 
"Style" brand products accounted for approximately 90% of the Registrant's 
wholesale sales for the 40 week period ended December 30, 1995 (85% for the 
comparable period during fiscal 1995).  Further development of the "Style" 
brand was adversely impacted by the Registrant's operating losses and working 
capital limitations which ultimately resulted in a shortage of key inventory 
lines.

     Chessbourne did not manufacture any of its "Style" brand products.  
Instead, Chessbourne designed such products and contracted with various third 
party manufacturers to manufacture and/or print those products to 
Chessbourne's specifications.  Chessbourne utilized short-term contracts and 
limited or single production run purchase orders and was not a party to any 
long-term manufacturing contracts.  Chessbourne's customer base for its 
"Style" brand products included a number of specialist and non-specialist 
retailers, including TSCL, and distributors and other wholesalers.

     Chessbourne maintained an in-house marketing department to promote its 
wholesale business and products.  Customer awareness of Chessbourne's 
wholesale operations and its products was achieved through promotional 
literature, incentives, catalogs, trade shows and in the case of furniture 
products, brochures.  A team of in-house account managers was utilized to 
increase sales to existing customers and expand the customer base through 
telemarketing and  sales calls.  Advertising consisted of brand promotions, 
seasonal support and direct offers to customers.  During the 40 week period 
ended December 30, 1995, Chessbourne employed approximately 9 people full-time 
in its wholesale marketing department.

 5

Operations of TSCL

     In addition to Chessbourne's wholesale operations, Registrant, through 
TSCL, operated a chain of retail stationery stores in the UK which sold social 
and commercial stationery products, gift items, greeting cards and writing 
instruments to individuals and large and small businesses.  TSCL's stores were 
primarily designed and operated as traditional stationery and office supplies 
retail stores.  Throughout TSCL's existence as a subsidiary of Registrant, 
Registrant was constantly seeking to expand the operations of TSCL through the 
acquisition of similar retail chains and the opening of additional stores in 
target market areas of the UK.  These expansion plans were adversely impacted, 
however, by Registrant's operating losses and working capital deficiency which 
ultimately lead to TSCL being placed into receivership on February 7, 1996.

     TSCL's retail stores offered a wide range of social and commercial 
stationery products.  These retail stores sold approximately 2,500 products, 
including a selection of Chessbourne's "Style" brand products, with 
approximately 14,000 other products being available within 24 hours by special 
order.  In addition, many of the stores provided business services including 
printing, binding, photocopying and facsimile transmission and receipt, while 
others sold a limited range of office furniture.  Approximately 80% of the 
merchandise sold in each store consisted of products sold by all of the retail 
stores.  The balance of approximately 20% of the merchandise offered and sold 
was specifically tailored to perceived needs of the customers of each 
individual store.

     Through February 1996, TSCL was attempting to implement a policy to 
divide its retail stores into two different but related store concepts, each 
operating under a different trade name.  Certain of TSCL's stores were being 
converted to operate under the trade name "Memo".  Each of these stores was 
operated as conventionally-merchandised stationery store of approximately 
1,500 square feet.  Each Memo store contained conventional stationery products 
and standard retail fixturing and relied on conventional merchandising 
techniques, stylish displays and appropriate point of sale material.  These 
stores were located primarily in more affluent areas within TSCL's geographic 
retail market.

     The balance of TSCL's stores were being converted to operate as price and 
value oriented stationery stores under the name "Memo Express".  Initially, 
these stores were approximately the same size as the Memo stores, although 
TSCL believed that the Memo Express concept and style was adaptable to larger, 
warehouse-style stores.  Memo Express stores featured metal racking in TSCL's 
corporate colors and "cut case" presentations of products with the intention 
of highlighting pricing and enhancing the appearance of value.  Memo Express 
stores were intended to be primarily located in areas of significant 
commercial activity and more working class neighborhoods and marketed to 
businesses and other cost-conscious buyers.  Both retail concepts featured 
products marketed and sold under the proprietary "Memo" and "Style" brands.

     In addition to promoting uniformity of store design, TSCL was also in the 
process of developing a value priced line of stationery products to be 
marketed under its proprietary "Memo" brand.  Like Chessbourne's "Style" brand 
of products, TSCL's "Memo" brand of products was intended to include a broad 
array of stationery and office supply products.  Also, like the "Style" 
products, TSCL intended to attempt to promote brand loyalty through the use of 
uniform product packaging.  Unlike Chessbourne's "Style" brand products, 
however, the "Memo" brand products were exclusive to TSCL's retail stores and 
were planned to be fundamental to generating customer loyalty to those 
stores.  At the time of the February 1996 receivership, TSCL's "Memo" brand 
product line was still under development and only a limited number of such 
products had become available in its stores.

     TSCL's retail operations attempted to increase sales by the use of 
seasonal promotions, in-store promotions, such as sale pricing, and 
advertising.  All of TSCL's promotional activities were conducted by TSCL's 
management with input from store managers.  TSCL also entered into 
arrangements with manufacturers for special promotions, such as the sale of 
advertising space on TSCL's retail stores' shopping bags and by special 
introductory promotions.

 6

Annual Meeting of Shareholders

     On September 28, 1995 Registrant conducted its Annual Meeting of 
Stockholders.  At such meeting (i) Brian J. Baylis, Susan A.M. Crisp, James 
Fyfe, George Lombardi and Mathew P. Pazaryna were elected as directors of 
Registrant; (ii) Registrant received approval to change its name from Fidelity 
Medical, Inc. to Corniche Group Incorporated; (iii) Registrant received 
approval for a ten for one reverse split of its outstanding common stock to be 
effective October 1, 1995 and an increase in the par value of each share of 
common stock from $.01 to $.10; and (iv) Registrant received approval to 
increase the number of shares of its authorized preferred stock from 1,000,000 
shares to 5,000,000 shares.  To effectuate the name change,  change in par 
value of common stock, and increase in number of authorized shares of 
preferred stock, Registrant amended its Certificate of Incorporation on 
September 28, 1995.

Receivership Proceedings

     As the result of Registrant's inability to overcome its liquidity 
problems and reverse the trend of recurring and significant operating losses, 
the Bank of Scotland, Registrant's primary banker and secured lender in the 
UK, appointed receivers to Chessbourne and TSCL on February 7, 1996 and to CDL 
on February 28, 1996.  (See Item 7. Management's Discussion and Analysis of 
Financial Condition and Results of Operations).  The receiverships resulted in 
the discontinuation of all of Registrant's business operations.

     Under UK law, Registrant is not liable for the liabilities of CDL, TSCL 
and Chessbourne absent a guarantee or other enforceable promise by Registrant 
to pay such liabilities.  (See "Opinion Letter of Smithsons Solicitors" 
included herewith and filed with the Securities and Exchange Commission as 
Exhibit 99(a).)  Registrant has given no such guarantee or promise and as such 
has no liability for the payment thereof.   Similarly, the appointment of an 
administrative receiver in respect of the assets of CDL, TSCL and Chessbourne 
has no effect on the assets of Registrant.  Notwithstanding the foregoing, the 
receivers for CDL made certain claims against Registrant for sums allegedly 
owed to CDL by Registrant in connection with a contested share issue.  To 
resolve such dispute, a Compromise Agreement dated March 4, 1996 between 
Registrant, CDL and the receivers for CDL was entered into which had the 
effect of releasing Registrant from any and all liability to CDL upon 
performance by Registrant of its obligations under that agreement.   In 
connection therewith Registrant issued a promissory note to the Bank of 
Scotland, the secured creditor of CDL,  in the principal amount of 50,000 
pounds sterling (£50,000).  On January 30, 1997, Registrant paid off the 
Note in full, including all interest accrued thereon through the date of 
payment and executed a Mutual Release with the Bank of Scotland (See Item 1. 
Business - Subsequent Events).

     In connection with the receiverships, Brian J. Baylis and Susan A.M. 
Crisp, Registrant's then chief executive officer and chief financial officer, 
who collectively owned approximately 45% of Registrant's outstanding common 
stock entered into pledge agreements (the "Pledge Agreements") whereby they 
pledged their common shares of Registrant to the Bank of Scotland as 
collateral against the shortfall which was to be realized by the Bank of 
Scotland in the receivership proceedings.  Pursuant to Pledge Agreements dated 
February 19, 1996 and February 21, 1996 Brian J. Baylis and Susan A.M. Crisp 
pledged 877,800 shares and 219,450 shares, respectively, of Registrant's 
common stock to the Bank of Scotland.  The shares were pledged to 
collateralize the February 19, 1996 personal guarantees of Brian J. Baylis and 
Susan A.M. Crisp to the Bank of Scotland with respect to certain liabilities 
of CDL, TSCL and Chessbourne to the Bank of Scotland.

 7

Reverse Stock Split

     On October 1, 1995, Registrant effected a one for ten reverse split of 
its common stock.  In connection therewith Registrant increased the par value 
of such common stock from $.01 to $.10 per share.  Registrant had 24,083,075 
shares of common stock issued and outstanding prior to reverse stock split and 
approximately 2,408,307 shares of common stock issued and outstanding 
following the effectiveness of the reverse stock split.  Additionally, 
Registrant had 3,806,128 shares of common stock reserved for issuance prior to 
the reverse split and approximately 380,613 shares of common stock reserved 
for issuance following the effectiveness of the reverse stock split.  In 
connection with the reverse split, Registrant did not issue fractional shares 
choosing instead to pay shareholders otherwise entitled to a fractional share 
the cash value thereof.  Except where specifically noted, all references in 
this Form 10-K to Registrant's common shares give effect, and in some cases 
retroactive effect, to Registrant's October 1, 1995 one for ten reverse split.

     The purpose of effecting the reverse split was twofold.  First and 
foremost, it was done in an effort to avoid having Registrant's common stock 
delisted from the NASDAQ Small Cap Market by reason of not maintaining a 
minimum share bid price of $3 per share.  Despite the effectuation of the 
reverse split, however, Registrant's common stock was delisted from the Small 
Cap Market on October 11, 1995 due to Registrant's failure to maintain a 
minimum share bid price of $3 per share and failure to maintain a required 
minimum level of capital and surplus.  The secondary reason for the reverse 
split was to significantly reduce the number of Registrant's common shares 
issued and outstanding and the number of common shares reserved for issuance 
thereby granting the Registrant the flexibility of engaging in future equity 
financings or acquisitions utilizing Registrant's common stock without having 
to amend its Certificate of Incorporation to increase the number of authorized 
common shares.

Increase In Authorized Number of Preferred Shares

     Effective September 28, 1995, Registrant amended its certificate of 
Incorporation to, among other things, increase the number of shares of its 
authorized preferred stock, $.001 par value per shares, from 1,000,000 to 
5,000,000.  At the time of such amendment, Registrant had 946,069 shares of 
its Series A $.07 Convertible Preferred Stock issued and outstanding leaving 
few additional shares of preferred stock available for issuance.  The increase 
was deemed necessary and desirable by Registrant to permit Registrant the 
flexibility of engaging in future equity financings or acquisitions utilizing 
preferred stock.

Securities Offerings

     Simultaneously with Registrant's acquisition of CDL on March 2, 1995, 
NWCM Limited, a Hong Kong investment banker ("NWCM"), agreed, on a staggered 
basis, to raise up to $5,000,000 of new equity capital for Registrant on a 
"best efforts" basis.  The offering was conducted pursuant to the requirements 
of Regulation S of the Securities Act of 1933, as amended, and was made solely 
to experienced, sophisticated investors who were "non-U.S. persons".  An 
initial offering of up to 600,000 shares of Registrant's common stock was made 
at a price of $2.00 per share.  Through the conclusion of the offering on 
September 8, 1995,  528,600 of such shares were sold at an aggregate purchase 
price of $1,057,200, which resulted in net proceeds to Registrant of $880,336 
after the payment of a $50,000 due diligence fee,  10% sales commissions and 
2% non-accountable expense allowance to NWCM.  No additional equity capital 
was raised by NWCM on behalf of Registrant subsequent to September 8, 1995 and 
there are no existing plans for NWCM to undertake any further equity offerings 
on behalf of Registrant.

     On March 13, 1995 NWCM negotiated the conversion of a promissory note of 
Registrant in the amount of $300,000 payable to Avalon Investments Ltd. on 
November 30, 1995, into 150,000 shares of the 

 8

common stock of Registrant.  NWCM was paid a commission of $36,000 in respect 
of such conversion.  The promissory note had been entered into pursuant to a 
bridge financing agreement in December 1994.  

Other Matters

     Registrant currently has no employees and pays no salaries, wages, or 
similar compensation.  James Fyfe is Registrant's sole executive officer and 
director.

Subsequent Events

Transfer of Pledged Securities

     Effective January 30, 1997 Registrant entered into a Stock Purchase 
Agreement with the Bank of Scotland and twelve unrelated persons whereby 
1,042,250 of the 1,097,250 shares of Registrant's common stock pledged to the 
Bank of Scotland by Brian J. Baylis and Susan A.M. Crisp to secure certain 
debts of Registrant to the Bank of Scotland (See Item I.  Business - 
Receivership Proceedings) were sold by the Bank of Scotland, following a 
default in the obligation secured by the pledge, to such twelve persons, at a 
price of $.12 per share or $125,070 on an aggregated basis.

Resignation of Director

     In September 1996, Mathew P. Pazaryna, a director of Registrant since 
1993, was deemed to have resigned his position as such.  (See Item 10. 
Directors and Executive Officers of Registrant).

Payment on Promissory Note to Bank of Scotland

     On January 30, 1997 Registrant paid the Bank of Scotland $89,374.49 in 
full satisfaction of all principal and interest due under Registrant's 
February 1996 promissory note to the Bank of Scotland in the principal amount 
of fifty thousand pounds sterling (£50,000).  The note had been issued 
to settle a disputed claim with the receivers for CDL.  (See Item 1.  
BUSINESS-Receivership Proceedings). In consideration thereof, the parties 
executed a Mutual Release dated as of January 30, 1997 whereby the Bank of 
Scotland released Registrant and James Fyfe, Registrant's sole officer and 
director, from all liabilities, accounts, courses of action, sums of money, 
reckonings, contracts, controversies, agreements, damages, judgments, 
executions, claims, demands, debts, obligations, promises, covenants, actions 
and undertakings which against Registrant or Fyfe the Bank of Scotland ever 
had, had at the time of the release, or could thereafter have by reason of any 
matter up to and through the date of the release and Registrant and Fyfe 
released the Bank of Scotland in similar fashion.

Consulting Agreement

     On September 23, 1996 Registrant entered into a six month consulting 
agreement with Albermarle Investments & Consulting S.A. ("Albermarle"), a 
financial consulting firm.  The consulting agreement, which ran from October 
1, 1996 thorugh March 31, 1997, required Albermarle to provide Registrant with 
advisory and investment banking services which included, among other things, 
(i) reviewing and reorganizing Registrant's stock structure to facilitate a 
viable future financing strategy for Registrant; (ii) assisting Registrant to 
secure interim financing to settle outstanding liabilities; (iii) assisting 
Registrant in completing outstanding 

 9

regulatory filings; (iv) analyzing and evaluating potential public and private 
financing options; and (v) identifying and evaluating acquisitions.

     The consulting agreement provided for Registrant to pay Albermarle a fee 
of $10,000 per month or an aggregate of $60,000.  Due to its financial 
situation, Registrant has not been able to make any payments due to Albermarle 
pursuant to the consulting agreement.

Securities Offerings

     During the fiscal year ended March 31, 1997 Registrant conducted two 
private securities offerings pursuant to Rule 506 of Regulation D of the 
Securities Act of 1933, as amended, one of which is still in progress.  The 
purpose of each of such offerings was, in part, to provide Registrant with the 
ability to settle and pay off certain of its outstanding liabilities thereby 
making it a desirable acquisition candidate.  The first of such offerings 
commenced in July 1996 and was completed in December 1996 upon the sale of 4 
Units resulting in $100,000 in gross proceeds to Registrant.  This offering, 
of up to $300,000 in Units, was conducted on a "best-efforts" basis through 
Robert M. Cohen & Co., Inc., a New York based broker dealer ("RMCC") and was 
offered and sold in the form of $25,000 units.  Each unit consisted of one 
$25,000 face amount, 90 day, 8% convertible promissory note and one redeemable 
common stock purchase warrant to purchase 60,000 shares of Registrant's common 
stock at a price of $.50 per share during a period of three years from 
issuance.  All of the notes issued in such offering were subsequently paid in 
full and all of the warrants issued in such offering were subsequently 
redeemed by the Registrant at a price of $.075 per underlying share.  The 
second of such offerings commenced in January 1997 and is still in progress.  
Similar to the prior offering, it is being conducted on a "best-efforts" basis 
through RMCC and consists of $25,000 units, each consisting of one $25,000 
face amount, 90 day, 8% convertible promissory note and one redeemable common 
stock purchase warrant to purchase 60,000 shares of Registrant's common stock 
at a price of $.50 per share during a period of three years from issuance.  
This offering will involve the sale of up to 19 units resulting in gross 
proceeds to Registrant of $475,000 if all of the Units offered are sold.  As 
of the date, hereof 14 Units have been sold by RMCC.  In connection with each 
of the offerings, Registrant has paid or is paying RMCC a sales commission 
equal to 10% of the subscription price for each Unit sold.

ITEM 2.  PROPERTIES

     Registrant currently utilizes approximately 200 square feet of office 
space, rent free, at the offices of its former subsidiary, FMI, as its 
corporate office.  These accommodations are made available under an informal 
arrangement with FMI and are terminable at will by FMI. 

     Prior to on or about February 7, 1996, CDL was leasing approximately 1670 
square feet of office space at 272 London Road, Wallington, Surrey in 
England.  In addition, a portion of Chessbourne's telemarketing staff 
servicing southern England was based at these offices. 

     Through April 15, 1995 Chessbourne operated from 60,000 square feet of 
warehouse and office space in Dundee, Scotland.  On April 15, 1995 the lease 
was canceled by agreement with the landlord.  On that date, the marketing, 
buying and administrative offices of Chessbourne were transferred to the TSCL 
facilities at Leek, Staffordshire.  In connection with the relocation of 
Chessbourne's administrative offices, Chester also entered into a lease in 
April 1995, in Dundee, Scotland, on a month to month basis, of approximately 
1,800 square feet of office space to house certain of its telesales and its 
legal and secretarial staff.  Throughout the period of its ownership by CDL, 
Chessbourne also leased 10,500 square feet of office, showroom and warehousing 
space in Glasgow, Scotland which was used primarily for the sale of office 
furniture.

 10

     Prior to on or about February 7, 1996 TSCL operated from 20,000 square 
feet of warehouse and office space in Leek, Staffordshire.  That facility was 
used for the storage and distribution of inventory and housed the 
administrative offices of TSCL, including marketing, buying and finance 
functions.  From April 15, 1995 through on or about February 7, 1996 this 
facility was also used to house the administrative and marketing offices of 
Chessbourne.  The Leek facility had been occupied under lease from an 
unaffiliated  landlord pending the June 1995 consummation of purchase by CDL 
of the freehold interest in the property.

     All of TSCL's retail outlets were located in leased facilities on 
standard terms and with varying expiration dates.  As a result of the 
receivership proceedings involving Registrant's U.K. operations, which were 
instituted in February 1996, all of the CDL, Chessbourne and TSCL properties 
were handed over to the receivers and subsequently handed back to the landlord 
or sold and the sale proceeds remitted to the secured lenders.

ITEM 3.  LEGAL PROCEEDINGS

     Registrant and certain of its former officers and directors were involved 
in a shareholders' derivative action filed in Delaware Chancery Court filed on 
April 7, 1995.  The causes of action asserted included breach of fiduciary 
duty, breach of duty of care and trust to the Registrant's shareholders, gross 
negligence and mismanagement, as well as common law conspiracy and aiding and 
abetting.  The court granted Registrant's motion to dismiss by Opinion and 
Order dated May 2, 1995.  Registrant's litigation counsel thereafter advised 
Registrant in June 1995 that the time for appeal regarding the derivative 
action had expired.

     Registrant filed a complaint in the Superior Court of New Jersey against 
its former chief executive officer, Efriam Landa on May 4, 1995 alleging 
breach of fiduciary duty.  Mr. Landa answered the complaint on October 16, 
1995 and asserted counterclaims.  On December 5, 1996 (the "Release Date"), 
Registrant and Landa entered into a Release Agreement dismissing the action 
and releasing one another from any claims or rights each may have had against 
the other based on circumstances created or arising before the Release Date.

     On April 14, 1994, a former officer and director of Registrant, Rone H. 
Lewis, filed suit against Registrant in Superior Court, Law Division, Morris 
County (MRS-L-781-94), seeking damages for Registrant's alleged failure to 
timely permit him to sell certain shares of Registrant's restricted common 
stock.  The complaint asserted consequential damages of approximately 
$100,000.  In December 1994, Registrant agreed to settle this claim for 
$32,000.  An initial settlement payment of $15,000 was made in January 1995, 
and Registrant issued a two year 8% promissory note to Mr. Lewis dated January 
12, 1995 with respect to the $17,000 principal balance.  The note provided for 
24 equal payments of $768.87 each.  Registrant made the first 8 monthly 
payments required under the note during the period February 1995 through 
September 1995 leaving due a balance of 16 payments in the aggregate amount of 
$12,301.92.  Due to its financial problems, however, Registrant was thereafter 
unable to make any further payments to Mr. Lewis on the note.  In March 1997 
Registrant and Mr. Lewis entered into a settlement agreement whereby Mr. Lewis 
agreed to accept $5,000 in full satisfaction of all remaining sums due to him 
under the note including accrued interest.
 
     No other material legal proceedings are pending to which Registrant or 
any of its property is subject, nor to the knowledge of Registrant are any 
such legal proceedings threatened.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Registrant submitted no matters to a vote of its security holders during 
the fourth quarter of the  fiscal year ended March 31, 1996.

 11

PART II

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

     From April 4, 1994 until October 11, 1995 Registrant's common stock was 
traded on NASDAQ's SmallCap Market under the symbol "FMSI".  On October 11, 
1995 Registrant's common stock was deleted from that system by reason of 
Registrant's failure to meet required NASDAQ Small Cap Market listing 
standards relating to minimum bid price per share and minimum capital and 
surplus.  Prior thereto, Registrant's common stock had been trading on 
NASDAQ's National Market System.  Since October 11, 1995 Registrant's common 
stock has been listed for trading on the OTC Bulletin Board under the symbol 
"CGII".  The following table sets forth the range of high and low bid prices 
of Registrant's common stock for periods since April 4, 1994.  The quotations 
represent prices between dealers in securities, do not include retail 
mark-ups, mark-downs, or commissions and do not necessarily represent actual 
transactions.  The quarters referred to are based on Registrant's fiscal year 
which for fiscal year 1995 ended on the last Saturday in March (March 25, 
1995) and which for fiscal years thereafter, 1996 and beyond, ended on March 
31.

                                                           Bid Prices
                                                         High       Low 
                                                            
     Fiscal 1995(1)
     
          First Quarter                                 $8.40     $3.10
          Second Quarter                                 5.00      3.80
          Third Quarter                                  4.70      2.50
          Fourth Quarter                                 5.00      2.50

     Fiscal 1996(1)

          First Quarter                                  $7.19     $3.12
          Second Quarter                                  5.00      2.66
          Third Quarter                                   4.00       .25
          Fourth Quarter                                   .50       .1875

     Fiscal 1997(1)

          First Quarter                                  $ .25     $ .1875
          Second Quarter                                   .375      .1875
          Third Quarter                                    .30       .1250
          Fourth Quarter*                                  .375      .1875

(1)All prices shown give effect, and in some cases retroactive effect, to 
Registrant's 1 for 10 reverse stock split which was effected on October 1, 
1995.

*Through March 19, 1997

     At March 19, 1997, there were approximately 1,851 record holders of 
Registrant's common stock.  Holders of common stock are entitled to dividends 
when, as, and if declared by the Board of Directors out of funds legally 
available therefor.  Registrant has not paid any cash dividends on its common 
stock and, for the foreseeable future, intends to retain earnings, if any, to 
finance the operations, development, and expansion of its business.  Future 
dividend policy is subject to the discretion of Registrant's Board of 
Directors.

 12

ITEM 6.  SELECTED FINANCIAL DATA

     The selected statements of operations and balance sheet data set forth 
below are derived from the financial statements of Registrant, which were 
examined by Simontacchi & Co., independent certified public accountants, for 
the year ended March 31, 1996 and by Mahoney Cohen & Company, PC, independent 
certified public accountants, for each of the three years in the period ended 
March 25, 1995.  Mahoney Cohen & Company, PC did not audit Registrant's UK 
subsidiaries, the financial statements of which were audited by another 
auditor whose report was furnished to Mahoney Cohen & Company, PC. The 
information set forth below should be read in conjunction with the audited 
financial statements of Registrant and related notes appearing elsewhere in 
this Report (See Item 8. Financial Statements and Supplemental Data). 

                                           FISCAL YEAR ENDING
                                 --------------------------------------------
                                              March 31,     March 25,     March 27,     March 31,
                                                1996         1995          1994         1993 
                                                                                 
Statement of Operations:

     Net Sales                               $       0     $21,048,151     $7,585,360     $336,779
     Cost of Sales                                   0      15,531,102      5,121,884       20,381
     Gross Profit                                    0       5,517,049      2,463,476      316,398
     Operating (Loss) Income                  (593,207)     (2,821,339)       207,300       16,436
     Net (Loss) Income                        (664,348)     (3,394,652)         1,804          496
     Net (Loss) Income per common share:          (.29)          (2.05)             0            0
     Weighted average number
       of shares outstanding                 2,296,829        1,656,903      1,669,784   1,670,232

     Dividends per common share                     -0-              -0-            -0-         -0-

                                             March 31, 1996     March 25, 1995
                                                                
Balance Sheet Data:

     Working capital (deficiency)                 $(661,078)      $(1,863,138)
     Total assets                                   136,201         9,822,570
     Current liabilities                            796,144         9,122,665
     (Accumulated deficit) Retained earnings     (2,457,623)       (3,827,879)
     Stockholders' equity (deficiency)             (659,943)       (2,879,165)

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

     During the fiscal year ended March 31, 1996 Registrant financed its 
activities from sales revenues, increased bank loans, net proceeds from the 
issuance of shares of its common stock and trade credit to meet its working 
capital requirements and other operating needs.  However, due to recurring and 
significant operating losses Registrant still suffered material reductions in 
working capital and eventually encountered great difficulty in replenishing 
the inventory of its key product lines.  Efforts to achieve alternative 
sources of

 13

financing proved unsuccessful as did efforts to convert a significant portion 
of Registrant's bank debt to equity.  Registrant took several steps to reduce 
its required cash outlays including relocating its corporate facilities and 
reducing personnel and other operating expenses but was unable to overcome its 
liquidity problems.  Consequently, the Bank of Scotland, Registrant's primary 
banker and secured lender in the UK, appointed receivers to Chessbourne and 
TSCL on February 7, 1996 and to CDL on February 28, 1996.  The receiverships 
resulted in the discontinuation of all of Registrant's business operations.

     At the time of the appointment of an administrative receiver to each of 
CDL, Chessbourne, and TSCL, each of these companies was insolvent.  The 
liabilities of these companies to the Bank of Scotland, secured by the 
respective Fixed and Floating Charges, far outweighed the value of the assets 
in each of the three companies.  The administrative receiver, in each of these 
instances, collected and realized upon the secured assets to repay the Bank of 
Scotland.  Given that the liabilities exceed the assets, all of the assets of 
CDL, TSCL and Chessbourne were paid to the Bank of Scotland by the receiver.

     The appointment of receivers in the UK effectively suspended the power of 
Registrant, CDL, TSCL and Chessbourne and their respective officers and 
directors to deal with the assets which were subject to the respective Fixed 
and Floating Charges.  Since, in the present instance, all of the assets of 
CDL, TSCL and Chessbourne were subject to a Fixed and Floating Charge, the 
respective companies are unable to operate as the result of the receiverships 
and the officers and directors thereof have no control over such entities.  
Further, Registrant, as the direct or indirect shareholder of each of these 
three companies, has no further control over them during the entire period of 
the receivership and Registrant has been advised that it will never regain contr
ol, since, upon the termination of the respective receiverships, the companies 
will be left with material liabilities and no assets.  Given the foregoing, 
Registrant has been further advised that at the conclusion of the 
receiverships, each of CDL, Chessbourne and TSCL will be liquidated and their 
existence terminated.  Additionally, it has become effectively impossible for 
each of CDL, Chessbourne and TSCL to be audited for the year ended March 31, 
1996 given that the respective receivers have possession and control over the 
books, records and documents of each of the corporations and will not make 
them available to Registrant or any auditor retained on its behalf.  (See 
"Opinion Letter of Smithsons Solicitors" included herewith and filed with the 
Securities and Exchange Commission as Exhibit 99(a).)  Consequently, 
Registrant has treated each of CDL, Chessbourne and TSCL as no longer being 
subsidiaries of Registrant, as reflected in Registrant's financial statements 
for the year ended March 31, 1996.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

     The financial statements of Registrant, itemized in the subtopic, 
"Financial Statements" under Item 14 hereof, are set forth below.  The audit 
reports of Coopers & Lybrand dated August 3, 1995 and March 31, 1995 
respectively, included with the financial statements and previously filed in 
connection with Registrant's Annual Report on Form 10-K for the year ended 
March 25, 1995 have not been re-signed by Coopers & Lybrand for reasons 
relating to the institution of receivership proceedings against Registrant's 
former operating subsidiaries.  (See "Letter of James J. Fyfe regarding 
Unavailability of Re-Signed Audit Report from Coopers & Lybrand" included 
herewith and filed with the Securities and Exchange Commission as Exhibit 
99(b)).  The audit report of Mahoney Cohen & Company, PC  dated July 25, 1995 
included with the financial statements and previously filed in connection with 
Registrant's Annual Report on Form 10-K for the year ended March 25, 1995 has 
not been re-signed by Mahoney Cohen Rashba & Pokart, CPA, PC, formerly Mahoney 
Cohen & Company, PC, due to such reports reliance on the audit of Registrant's 
former operating subsidiaries performed by Coopers & Lybrand and Coopers & 
Lybrand's not re-signing their audit report (See "Letter of Mahoney Cohen 
Rashba & Pokart, CPA, PC Regarding Their Inability to Re-Sign Their July 25, 
1995 Audit Report" included herewith and filed with the Securities and 
Exchange Commission as Exhibit 99(c)).

 14

SIMONTACCHI & COMPANY, LLP                             9 LAW DRIVE
CERTIFIED PUBLIC ACCOUNTANTS                   FAIRFIELD, NEW JERSEY 07004
                                                   TEL (201) 575-5040
                                                   FAX (201) 575-5044

To The Stockholders and
Board of Directors
Corniche Group Incorporated
Wayne, New Jersey

INDEPENDENT AUDITOR'S REPORT

We have audited the accompany balance sheet of Corniche Group Incorporated as 
of March 31, 1996 and the related statements of operations, stockholders' 
deficiency, and cash flows for the year then ended.  These financial 
statements and the financial statement schedule are the responsibility of the 
Company's management.  Our responsibility is to express an opinion on these 
financial statements based on our audit.  We did not audit the financial 
statements and the financial statement schedule of Corniche Distribution 
Limited and Subsidiaries, a former consolidated subsidiary, as of March 31, 
1996 and for the year then ended.  These statements and schedules were not 
audited as the corporations were in receivership in the United Kingdom (see 
Note 3 of the Financial statements), and the records are unavailable for 
audit.  The financial statements of Corniche Group Incorporated and Subsidiary 
at March 25, 1995 and for the year then ended were audited by other auditors 
whose report, dated July 25, 1995, was unqualified.

We conducted our audit in accordance with generally accepted auditing 
standards.  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 audit provides a reasonable basis 
for our opinion.

In our opinion, based on our audit the financial statements referred to above 
present fairly, in all material respects, the financial position of Corniche 
Group Incorporated as of March 31, 1996, and the results of their operations 
and their cash flows for the year then ended in conformity with generally 
accepted accounting principles.

/s/ SIMONTACCHI & COMPANY, LLP

Fairfield, New Jersey
April 1, 1997

             MEMBER, AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

 15

INDEPENDENT AUDITOR'S REPORT

To the Stockholders and
   Board of Directors
Fidelity Medical, Inc. and Subsidiary
Wayne, New Jersey

     We have audited the accompanying consolidated balance sheet of Fidelity 
Medical, Inc. and Subsidiary as of March 25, 1995, and the related 
consolidated statements of operations, stockholders' deficiency, and cash 
flows for the year then ended.  These financial statements and the financial 
statement schedule are the responsibility of the Company's management. Our 
responsibility is to express an opinion on these financial statement financial 
statements schedule based on our audit.  We did not audit the financial 
statements and the financial statement schedule of Corniche Distribution 
Limited and Subsidiaries, a consolidated subsidiary, as of March 25, 1995 and 
for the year then ended, which statements reflect total assets and results of 
operations constituting 99.8% and 81.8%, respectively, of the related 
consolidated totals.  Those statements and schedule were audited by another 
auditor whose report has been furnished to us, and our opinion, insofar as it 
relates to the amounts included for Corniche Distribution Limited and 
Subsidiaries for the year ended March 25, 1995 is based solely on the report 
of the' other auditor.

     We conducted our audit in accordance with generally accepted auditing 
standards.  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 audit and the report of the other 
auditor provide a reasonable basis for our opinion.

     In our opinion, based on our audit and the report of the other auditor, 
the consolidated financial statements referred to above present fairly, in all 
material respects, the consolidated financial position of Fidelity Medical, 
Inc. and Subsidiary as of March 25, 1995, and the results of their operations 
and their cash flows for the year then ended in conformity with generally 
accepted accounting principles.

     The accompanying consolidated financial statements have been prepared 
assuming, that the Company will continue as a going concern.  As discussed in 
Note 2 to the consolidated financial statements. the Company has suffered 
recurring losses from operations and its total liabilities exceed its total 
assets.  This raises substantial doubt about the Company's ability to continue 
as a going concern.  Management's plans in regard to these matters are also 
described Note 2.  The consolidated financial statement do not include any 
adjustments that might result from the outcome of this uncertainty.

New York, New York                    /s/ Mahoney Cohen & Company PC
July 25, 1995

 16

REPORT OF THE AUDITORS TO THE DIRECTORS OF 
CORNICHE DISTRIBUTION LIMITED

We have audited the attached consolidated balance sheet of Corniche 
Distribution Limited and subsidiaries ("the Company") as at March 25, 1995 and 
the related consolidated statements of operations, cashflows and changes in 
stockholders' equity for the period then ended, included in the Company's 
consolidation package which we have initialled for the purposes of 
identification.  Our audit also included the financial statement schedule 
listed on item 14(a) for the periods ended March 25, 1995, March 27, 1994 and 
March 31, 1993.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

The company's directors are responsible for the preparation of the 
consolidation package.  It is our responsibility to express an opinion on the 
consolidation package based on our audit and to report our opinion to you.

BASIS OF OPINION

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

FUNDAMENTAL UNCERTAINTIES

In forming our opinion we have considered the adequacy of the disclosures made 
in the consolidation package concerning the Company's dependence on the 
renewal of banking facilities on or shortly after July 31, 1995 and on 
substantially meeting the Company's forecasts or, if not achieved, its 
dependence on gaining additional funding.  In addition the financial 
statements include £2, 131,770 due from the ultimate parent company, 
Fidelity Medical, Inc, ("FMI") in settlement of unpaid calls on shares issued 
as at the end of this year.  The receipt of these monies is dependent upon the 
outcome of a planned equity placing by FMI.  The consolidation package has 
been prepared on a going concern basis and the validity of this depends on 
successful outcomes of the above matters.  The consolidation package does not 
include any adjustments that would be required if the above matters are not 
successfully achieved.  Details of the circumstances relating to these 
fundamental uncertainties are described in the consolidation package.

 17

OPINION

Subject to any adjustments that might be, required as a result of the 
fundamental uncertainties described above, in our opinion the consolidation 
package, which has been prepared in accordance with the accounting policies 
stated therein and in conformity with USGAAP, contains financial information 
suitable for inclusion in the consolidated financial statements of FMI as of 
March 25, 1995 and for the period from March 28, 1994 to March 25, 1995 except 
that the consolidation package does not include adjustments required to 
reflect the reverse acquisition of FMI by the Company.

/s/ Coopers & Lybrand
Chartered Accountants and Registered Auditors
London

August 3, 1995

 18

CORNICHE DISTRIBUTION LIMITED

Report of Independent Accountants

To the stockholders of Corniche Distribution Limited

We have audited the accompanying consolidated balance sheets of Corniche 
Distribution Limited, and Subsidiaries as of March 27, 1994 and March 31, 1993 
and the related consolidated statements of operations, cash flows and changes 
in stockholders' equity for the years then ended.  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 auditing standards generally 
accepted 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 financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Corniche 
Distribution Limited, and Subsidiaries as of March 27, 1994 and March 31, 
1991, and the consolidated results of their operations and their cash flows 
for the years then ended in conformity with accounting principles generally 
accepted in the United States of America.

/s/ Coopers & Lybrand

Plumtree Court
London
3rd March 1995

 19

                              CORNICHE GROUP INCORPORATED
                                    BALANCE SHEET

                                       ASSETS

                                                     March 31,     March 25,     Proforma
                                                      1996           1995        March 25, 1995 
                                                                          
Current Assets:

Cash                                                     $66     $ 108,438            $100
     Accounts Receivable, net of allowances for
     doubtful accounts of $345,108 in 1995                 0     3,393,594               0
Notes Receivable                                     125,000       200,000         200,000
Inventory                                                  0     3,146,307               0
Prepaid Expenses-and Other Receivables                10,000       411,188          18,422

     Total Current Assets                            135,066     7,259,527         218,522

Other Assets:

Property and Equipment - at cost, net                135,066     7,259,527               0
Intangible Assets - at cost, net                           0     1,206,495               0
Investment in and Advances to UK Subsidiary         --------     ----------        --------      
                                                           0             0         514,322

     Total Assets                                    $136,201    $9,822,570       $732,844
                                                     =========   ==========       ========

                                           See Accompany Notes
 21

                                   CORNICHE GROUP INCORPORATED
                                          BALANCE SHEET
 
                        LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY

                                              March 31,     March 25,          Proforma
                                                1996           1995          March 25, 1995 
                                                                          
Current Liabilities:

Notes Payable                                  $  5,000     $2,521,452             $ 16,292
Note Payable on Debt Compromise                  77,630              0                    0
Trade Accounts Payable                          183,123      4,065,439               55,366
Current Portion of Long-Term Debt                     0        415,177                    0
Dividends Payable - Preferred Stock              84,749         21,954               21,954
Accrued Liabilities                             104,804      1,512,873              555,874
Deferred Income                                       0         23,570                    0
Payroll and Sales Tax Payable                         0        562,200                    0
     Total Current Liabilities                  455,306      9,122,665              649,486

Long-Term Liabilities:
Long-Term Debt                                        0      3,323,565                    0
Deferred Income                                       0         57,159                    0
Deferred Credit                                       0         37,998                    0
     Total Long-Term Liabilities                      0      3,418,722                    0

     Total Liabilities                          455,306     12,541,387             $649,486

Cumulative Redeemable Preference Shares and
  Class B Ordinary Shares                              0       160,348                    0

Stockholders' (Deficiency) Equity:

7% Cumulative Convertible Preferred Stock
     authorized 5,000,000 shares, and issued
     outstanding 909,267 shares (March 31, 1996)
     and 946,069 (March 25, 1995)                909,267       946,069              946,069
Common Stock, $0. 1 0 par value, authorized -
     30,000,000 shares, issued 2,630,378 (March 31,
     1996) and 2,119,857 (March 25, 1995)        263,037       211,985              211,985
     Additional Paid-In Capital                  830,086             0                    0
     (Accumulated Deficit) Retained Earnings  (2,116,785)   (3,827,879)            (869,986)
                                                (114,395)   (2,669,825)             288,068

     Cumulative Translation Adjustment                 0        (4,630)                   0
Treasury Stock - at cost, 218, 100 shares       (204,710)     (204,710)            (204,710)
     Total Stockholders' (Deficiency) Equity    (319,105)    (2,879,165)             83,358

Total Liabilities and Stockholders'
     (Deficiency) Equity                     $   136,201     $9,822,570            $732,844

                                        See Accompanying Notes
 21

                                      CORNICHE GROUP INCORPORATED
                                       STATEMENT OF OPERATIONS

                                               March 31,     March 25,     March 27,
                                                 1996          1995          1994  
                                                                     
Net Sales                                      $      0    $21,048,151    $7,585,360

     Cost of Sales                                    0     15,531,102     5,121,884

Gross Profit                                          0      5,517,049     2,463,476

     Selling, General and Administrative
        Expenses                                 257,073     8,338,388     2,256,176

Operating Loss                                  (257,073)   (2,821,339)      207,300

     (Loss) on Sale of Assets                     (3,042)      (22,221)      (40,017)

     Interest (Net)                                 (600)     (538,646)      164,070

(Loss) Income before Income Tax                  (260,715)   (3,382,206)       3,213

     Income Tax Benefit (Expense)                       0         9,508       (1,409)

Net (Loss) Income before Pref. Dividend          (260,715)    (3,372,698)      1,804

     Preferred Stock Dividend                     (62,795)       (21,954)          0

Net (Loss) Income from Continuing Operations     (323,510)     (3,394,652)     1,804

     Loss from Discontinued Operations          (3,432,032)             0          0

     Excess of UK Subsidiary Cumulative Losses
        over Investment                          5,466,636              0          0

Net Income (Loss)                               $1,711,094    $(3,394,652)    $1,804

Profit / (Loss) per share of Common Stock

Income (Loss) from Continuing Operations            (0.14)         (2.05)       0.00

Profit (Loss) from Discontinued Operations           0.88           0.00        0.00

Net Profit (Loss) per share                    $     0.74     $    (2.05)       0.00

Weighted Average Number of Common Shares
     Outstanding                                2,300,289      1,656,903   1,669,784

                                             See Accompanying Notes
 22
                                    CORNICE GROUP INCORPORATED
                         STATEMENT OF STOCKHOLDERS' (DEFICIENCY) EQUITY

                                                    Common Stock          

                                                         Additional               Cumulative
                              Preferred    Number of              Paid-In     Accumulated  Translation   Treasury
                              Stock        Shares     Amount      Capital     Deficit      Adjustment    Stock      Total
                                                                                            
Balance - April 1, 1993           $  0   572,981     $   57,298    150,127     $ (23,644)       61    $(183,196)  $  646
Recision of Common Stock Sale        -     (895)           (90)    24,041)       24,131          -            -        -
Recapitalization Adjustment          -        -              -         (9)            -          -            -        (9)
Net Income                           -        -              -          -         1,804          -            -     1,804
                                                                                                                        
Balance - March 27, 1994             0   572,086         57,208   126,077         2,291          61      (183,196)   2,441
                                                                                                                                   
Issuance of Preferred Stock   1,000,000        -              -         -            -            -             -    1,000,000
Conversion of Preferred Stock  (53,931)   10,371          1,037    52,894            -            -             -            -
Preferred Stock Dividends            -        -              -         -      (21,954)            -             -      (21,954)
Purchase of Treasury Stock           -        -              -         -            -             -       (21,514)     (21,514)
Issuance of Common Stock             -  1,337,400        133,740    99,000          -             -             -      232,740
Conversion of Note, net              -    150,000         15,000   235,000          -             -             -      250,000
Issuance of Common Stock             -     50,000          5,000   (95,000)         -             -             -      100,000
Costs Related of Sale of Common Stock-          -              -   (50,000)         -             -             -      (50,000)
Recapitalization Adjustment          -          -              -  (557,971)    (435,518)          -             -     (993,489)
Net Loss                             -          -              -         -   (3,372,879)          -             -   (3,372,698)
Cumulative Translation Adjustment    -          -              -         -          -          (4,691)          -       (4,691)  
                                                                                                                  
Balance - March 25, 1995        946,069  2,119,857        211,985         0   (3,827,879)      (4,630)     (204,710)   (2,879,165)
                                                                                                                     
Conversion of Preferred Stock   (36,802)    7,077            708     36,094          -            -             -             -
Adjustment to Common Stock            -      (156)           (16)        16          -            -             -             -
Issuance of Common Stock              -   478,600         47,860    909,340          -            -             -       957,200
Costs Related to Sale of Common Stock -         -              -   (162,864)         -            -             -      (162,864)
Issuance of Common Stock              -    25,000          2,500    47,500           -            -             -        50,000
Preferred Stock Dividends             -         -              -         -      (62,795)          -             -       (62,795)
Elimination of UK Subsidiaries        -         -              -         -    2,034,604         4,630           -     2,036,234
Net Loss                              -         -              -         -     (260,715)          -             -      (260,715)
                                                                                                                      
Balance - March 31, 1996        $909,267$2,630,378       $263,037  $830,086  $(2,116,785)     $     0    $(204,710)    $(319,105)

                                                        See Accompanying Notes
 23

                                   CORNICHE GROUP INCORPORATED
                                     STATEMENT OF CASH FLOWS

                                                            March 31,       March 25,        March 27,
                                                              1996            1995             1994
                                                                                      
Cash Flows from Operation Activities:
     Net Loss Income from Continuing Operations
     in 1996 and Net (Loss) Income in 1995 and 1994        $(260,715)     $(3,372,698)         $1,804

Adjustments to reconcile Net Loss from Continuing
     Operations to Net Cash used in Operating
     Activities in 1996 and Net (Loss) Income to Net
     Cash provided by (used in) Operating Activities in
     1995 and 1994:
      Depreciation                                            1,749           346,668         82,026
      Amortization of Goodwill                                    -            97,651         19,261
      Amortization of Trademarks                                  -             1,248          2,104
      Amortization of Development Costs                           -            18,524              -
      Amortization of Deferred Credit                             -            (4,223)          (675)
      Loss on Sale of Property and Equipment                  3,042            22,220         40,017
      Allowance for Bad Debts                                     -           349,231        131,692

Changes in Assets and Liabilities Net of Effects
  from Acquisitions:
     Decrease (Increase) in Accounts Receivable                   -         (217,151)        167,940
     Decrease in Notes Receivable                            75,000                -               -
     Decrease in Inventory                                        -          561,291         292,519
     Decrease (Increase) in Prepaid Expenses and
        Other Receivables                                     8,422          (59,268)        (72,400)
     Decrease in Notes Payable                              (11,292)               -               -
     Increase (Decrease) in Trade Accounts Payable          127,757          286,501        (359,536)
     Increase (Decrease) in Accrued Liabilities            (451,070)         893,946           7,255
     Increase (Decrease) in Deferred Credit                       -          (23,138)         53,912
     Increase in Taxes Payable                                    -          259,217         104,891

Net Cash used by Continuing Activities in 1996
   and Net Cash provided by (Used In)
   Operating Activities in 1995 and 1994                   (507,107)         (839,981)       470,810

     Net Cash used in Discontinued Operations              (331,337)                -              -

Net Cash used in Operating Activities                      (838,444)         (839,981)       470,810

Cash Flows from Investing Activities:
     Payments to Acquired Fixed Assets                       (8,926)         (439,169)      (499,592)
     Proceeds from Sale of Equipment                          3,000            54,607        641,946
     Payments for Acquisition of Business                         -                 -     (5,267,364)
 
     Net Cash used in Investing Activities                   (5,926)         (384,562)    (5,125,010)

Balance Carried Forward                                    $(844,370)     $(1,224,543)   $(4,654,200)

 24

                                    CORNICHE GROUP INCORPORATED
                                      STATEMENT OF CASH FLOWS

  
                                                           March 31,        March 25,         March 27,
                                                             1996             1995              1994  
                                                                                        
Balance Brought Forward                                   $(844,370)     $(1,224,543)      $(4,654,200)

     Cash Flows from Financing Activities:
     Net Proceeds from Issuance of Common Stock for
          Cash                                              794,336           50,000                 -
     Net Proceeds from Issuance of Common Stock for
          Services                                           50,000                -                 -
     Net Borrowings under Line of Credit Agreement                -        1,018,536         1,397,606
     Principal Payments under Capital Lease Obligations           -         (106,369)          (32,864)
     Proceeds from Issuance of Long-Term Debt                     -                -         3,151,155

     Net Cash Provided by Financing                         844,336          962,167         4,515,897

Effect of Exchange Rate on Cash                                   -           (7,725)             (515)

Net Decrease in Cash                                           (34)         (270,101)         (138,818)
Cash at Beginning of Period                                    100             9,940           148,758

Cash received from FMI                                           -           368,599                 -

Cash at End of Period                                   $       66       $   108,438       $     9,940

Supplemental Disclosures of Cash Flow
Information

Cash Paid during the Year for:
     Interest                                           $    600         $   538,646       $   167,946
     Income Taxes                                       $      -         $         -       $     3,451

                                             See Accompany Notes
 25

                                         CORNICHE GROUP INCORPORATED
                                      STATEMENT OF CASH FLOWS (CONCLUDED)

                                Supplemental Schedule of Non-Cash Investing
                                           and Financing Activities

During the year ended March 31, 1996 the Company accrued preferred stock 
dividends of $62,795 and (1995 - $21,954).

During the year ended March 31, 1996 holders of 36,802 shares of preferred 
stock converted such shares into 7,077 shares of CGI's common stock.  In March 
1995, holders of 53,931 shares of preferred stock converted such shares into
10,371 shares of CGI's common stock (Note 11).

On March 2, 1995 CGI issued 1,097,250 shares of its common stock for 100% of 
the issued and outstanding common stock of Corniche (Note 2).  Additionally, it 
issued 25,000 shares to the 49 shareholder of Chessbourne (Note 11) and 
215,150 shares to Chester Holdings, Ltd.

On March 25, 1995, Chester Holdings, Ltd. returned the 215,150 shares to CGI 
in exchange for the medical imaging subsidiary of CGI (Note 11).

In March 1995, holders of a promissory note in the amount of $300,000 
converted such note into common stock of CGI (Note 11).

During the year ended March 25, 1995, Corniche acquired a company through the 
assumption of debt as follows:

                                          March 27, 1995

     Fair Value of Assets Acquired          $2,046,000
     Cash Paid                                       0
     Liabilities Assumed and Incurred       $2,046,000

In connection with the reverse acquisition on March 2, 1995, cash of $368,599 
was received.

                                See Accompanying Notes

 26

                                CORNICHE GROUP INCORPORATED
                               NOTES TO FINANCIAL STATEMENTS

NOTE 1     THE COMPANY

     Corniche Group Incorporated, formerly Fidelity Medical, Inc. (hereinafter 
referred to as the "Company" or "CGI") as result of a reverse acquisition with 
Corniche Distribution Limited and its Subsidiaries ("Corniche") (see "Reverse 
Acquisition" below), was engage in the retail sale and wholesale distribution 
of stationery products and related office products, including office 
furniture, in the United Kingdom.  The operating subsidiaries of Corniche were 
Chessbourne International Limited ("Chessbourne") and The Stationery Company 
Limited ("TSCL").

     Corniche experienced large operating losses and net cash outflows from 
operating activities in fiscal 1995 and 1996 resulting in a significant 
reduction in working capital during that period.  The Company was unsuccessful 
in its efforts to raise interim financing to resolve its liquidity problems.  
Additionally, the Company was not able to convert a significant portion of its 
bank debt to equity.  As a result, receivers were appointed to Corniche's 
subsidiaries Chessbourne and TSCL on February 7, 1996 by their primary bankers 
and secured lender, Bank of Scotland.  Corniche Distribution Limited was 
placed in receivership on February 28, 1996 (See Notes 2 & 3).

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Reverse Acquisition

     On March 2, 1995, the stockholders of Corniche exchanged all of their 
common stock for 1,097,250 shares of CGI.  Since the former stockholders' of 
Corniche owned a majority of the outstanding stock of CGI after the 
acquisition, such purchase transaction was accounted for as a reverse 
acquisition.  The acquired company (Corniche) was deemed to have acquired the 
acquiring company (CGI).  Accordingly, CGI changed its fiscal year to the last 
Saturday in March of each year in order to conform to the fiscal year of its 
operating subsidiary.  Historical stockholders' equity of Corniche has been 
retroactively restated to give effect to the recapitalization.  The historical 
financial statements prior to March 2, 1995 are those of Corniche.  Further, 
on March 2, 1995, CGI acquired a 49 % interest in the outstanding shares of 
Chessbourne.

 27

                                  CORNICHE GROUP INCORPORATED
                                 NOTES TO FINANCIAL STATEMENTS

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

          UK Receivership Proceeding

     Significant losses were incurred during the forty weeks to December 30, 
1995, and in the fiscal year ended March 25, 1995, resulting in a working 
capital and a stockholders deficiency as of December 30, 1995 and March 25, 
1995.  Management of Corniche had taken several steps to reduce the amount of 
cash used by operations, including relocation of its corporate facilities and 
reduce staffing levels and other operating expenses.  However, a receivership 
proceeding involving the operating subsidiaries of the Company was commenced 
on February 7, 1996 and the UK holding company, Corniche Distribution Limited, 
was placed in receivership on February 28, 1996.  The receiverships resulted 
in the loss of all of the Company's operations and operating assets and 
eliminated most liabilities.  Accordingly, the operating activities of the UK 
subsidiaries have been classified as a discontinued operation and the excess 
of the UK subsidiary's cumulative losses over the Company's investment is 
included in the income statement for the year ended March 31, 1996.  In 
addition, the UK Subsidiaries have been removed from the balance sheet as of 
March 31, 1996 and the audited balance sheet as of March 25, 1995 has been 
restated on a proforma basis to reflect the removal of the UK subsidiaries as 
of that date.  This significantly reduces the Company's stockholder equity 
deficiency.  The adjustments necessary to eliminate the UK subsidiaries are 
set out in Note 3.

          Basis of Presentation

     The accompanying financial statements have been prepared assuming that 
the Company will continue as a going concern.  The Company's ability to 
continue as a going concern may depend on its ability to obtain outside 
financing sufficient to support it pending identification and completion of a 
suitable acquisition or acquisitions and its ability to obtain financing and 
consummate such acquisition or acquisitions.  There can be no assurance given 
that the Company will obtain such short-term or long-term outside financing or 
complete the acquisition of new business operations.

     Effective October 1, 1995, the Company declared a one-for-ten reverse 
stock split and all numbers of shares and share values stated herein reflect 
such reverse split unless otherwise noted.

  28

                                CORNICHE GROUP INCORPORATED
                               NOTES TO FINANCIAL STATEMENTS

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

          Consolidation Policy

     The consolidated financial statements for the fiscal years ended March 
25, 1995 and March 27, 1994 include the accounts of CGI and its subsidiary, 
Corniche.  All significant intercompany accounts and transactions have been 
eliminated in consolidation.

          Inventories

     Inventories were valued at the lower of cost (first-in, First-out method) 
or market for wholesale inventories ($1,906,300 in 1995).  The retail 
inventory method ($1,240,007 in 1995) was used for inventory in retail stores.

          Property and Equipment

     Machinery and equipment, furniture and fixtures and motor vehicles are 
depreciated by the straight-line method over the estimated useful lives of the 
assets, which range principally from two to five years.  Leasehold 
improve-ments were amortized over the lesser of the estimated useful lives or 
the remaining lease term.

     Repairs and maintenance which did not materially extend the useful lives 
of the assets were expensed as incurred.  The cost of assets sold or retired 
and the related accumulated depreciation or amortization are removed from the 
accounts with any resulting gain or loss included in the statement of 
operations.

     Intangible Assets

          Goodwill

     Goodwill arising on acquisitions represents the cost in excess of the 
fair value of net assets acquired and was amortized on the straight-line 
method over ten years.

          Trademarks

     Trademarks were being carried at cost and were amortized over a period of 
two years.

 29

                               CORNICHE GROUP INCORPORATED
                              NOTES TO FINANCIAL STATEMENTS

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

          Intangible Assets (Cont'd)

          Intangible Assets are as follows:

                                                  March 31     March 25
                                                    1996         1995

          Goodwill                              $        0     $1,321,363

          Trademarks                                     0         11,374
                                                         0      1,332,737

          Less:  Accumulated Amortization                0        126,242
                                               $         0     $1,206,495

          Income Taxes

     Effective October 1993, the Company adopted SFAS 109, "Accounting for 
Income Taxes", which recognizes (a) the amount of taxes payable or refundable 
for the current year and, (b) deferred tax liabilities and assets for the 
future tax consequences of events that have been recognized in an enterprise's 
financial statement or tax returns.

     Income tax expense/benefit is calculated on a separate company basis 
between CGI and Corniche.

          Reverse Premiums and Rent Free Periods

     Reverse premiums received on the inception of lease agreements and rent 
free periods were accounted for as deferred income and were amortized over the 
lease term on a straight-line basis.

          New Accounting Standards

     Effective fiscal 1996, the Company adopted Statement of Financial 
Accounting Standards No. 107, "Disclosure About Fair Value of Financial 
Instruments", and Statement of Position 94-6, "Disclosure of Certain 
Significant Risks and Uncertainties".

 30

                               CORNICHE GROUP INCORPORATED
                              NOTES TO FINANCIAL STATEMENTS

NOTE 2     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

          Translation of Foreign Currency

     Corniche's functional currency was pounds sterling.  Assets and 
liabilities of non-U.S. operations were translated into U.S. dollars at year 
end exchange rates.  Revenue and expenses were translated using average 
exchange rates.  The resulting translation adjustment was reported as a 
separate component of stockholders' equity.  Gains and losses from non-U.S. 
currency transactions were included in results of operations.

          Concentrations of Credit Risk

     Financial instruments which subject the Company to credit risk consist of 
deposits with financial institutions and in the case of Corniche, trade 
receivables.  Corniche's deposits were primarily held with a single financial 
institution and its trade receivables were due from retailers and mass 
merchants.  Corniche performed ongoing credit evaluations of its customers.

          Use of Estimates

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements and 
accompanying notes.  Although these estimates are based on management's 
knowledge of current events and actions it may take in the future, they may 
ultimately differ from actual results.

          Per Share Information

     Per share information has been computed based on the weighted average 
number of shares and dilutive common stock equivalents outstanding during each 
respective period.  Common stock equivalents were excluded from the loss per 
common share computation in fiscal 1995 as the effect of their inclusion would 
be anti-dilutive and for fiscal 1994 the dilutive effect was less than 3%.  
Retroactive effect has been given to the recapitalization discussed in Note 2.

 31

                              CORNICHE GROUP INCORPORATED
                             NOTES TO FINANCIAL STATEMENTS

NOTE 3     UK SUBSIDIARY RECEIVERSHIP PROCEEDING

     Receivers were appointed to Chessbourne and TSCL on February 7, 1996 and 
to Corniche Distribution Limited on February 28, 1996.  Corniche had prepared 
unaudited financial statements as of December 30, 1995.  No financial 
statements were prepared for the period from December 31, 1995 to the date of 
the receivership proceedings as none were required under UK corporate laws nor 
generally accepted accounting standards.  In addition, as a result of the 
receivership proceedings no audit of the financial statements of Corniche for 
their period from March 25, 1995 will be carried out.  Accordingly, proforma 
financial statements reflecting the impact of the receiverships and 
adjustments necessary to eliminate these companies from the balance sheet of 
CGI were prepared as of December 30, 1995 and are as follows:

          PROFORMA BALANCE SHEET

                                             Consolidated                        Proforma
                                              December 30,     EIimination     December 30,
     ASSETS                                       1995         of subsidiary       1995
                                                                           
     Current Assets:

     Cash                                        $ 45,433           $ 45,223     $      210
     Accounts receivable                          679,297            679,297              0
     Allowances for doubtful
        accounts                                 (34,146)           (34,146)              0
     Notes receivable                            200,000                  0         200,000
     Inventory                                 2,120,367          2,120,367               0
     Prepaid expenses                          1,372,141          1,229,356         142,785
     Other receivables                            86,067                  0          86,067

     Total Current Assets                      4,469,159          4,040,097         429,062

     Other Assets:

     Property and equipment                    1,781,126          1,779,894           1,232
        at cost, net
     Intangible Assets
        at cost, net                           1,788,499          1,788,499               0

     Total Assets                             $8,038,784         $7,608,490        $430,294

 32

                                               CORNICHE GROUP INCORPORATED
                                              NOTES TO FINANCIAL STATEMENTS

NOTE 3     UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)

          PROFORMA BALANCE SHEET (Cont'd)

                                                   Consolidated                         Proforma
                                                   December 30,     EIimination of    December 30,
Liabilities                                            1995           subsidiary          1995
                                                                                      
Current Liabilities:

Notes Payable                                      $ 2,026,387         $ 2,014,708    $     11,679
Note Payable on Debt Compromise                              0             (77,630)         77,630
Trade-Accounts Payable                               4,792,996           4,467,350         325,646
Current Portion of Long-term Debt                      700,476             700,476               0
Dividends Payable                                       72,897                   0          72,897
Accrued Liabilities                                  1,581,497           1,245,677         335,820
Deferred Income                                         69,067              69,067               0
Payroll and Sales Tax Payable                          994,342             994,342               0

Total Current Liabilities                           10,237,662           9,413,990         823,672

Long-term Liabilities:

Long-term Debt                                       3,258,962           3,258,962               0
Deferred Income                                        212,108             212,108               0
Deferred Credit                                         33,805              33,805               0

Total Long-term Liabilities                          3,504,875           3,504,875               0

Total Liabilities                                  $13,742,537         $12,918,865        $823,672

Cumulative Redeemable Preference
Shares and
Class B Ordinary Shares                               156,261              156,261               0

 33

                                CORNICHE GROUP INCORPORATED
                               NOTES TO FINANCIAL STATEMENTS

NOTE 3         UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)

          PROFORMA BALANCE SHEET (Cont'd)

                                                Consolidated                           Proforma
                                                 December 30,      Elimination of    December 30,
Liabilities                                          1995            subsidiary        1995
                                                                               
Stockholders' (deficiency) equity:

7% Cumulative Convertible
     Preferred Stock authorized
     5,000,000. shares, issued and
     outstanding 909,267 (December
     30, 1995) and 946,069 (March 25,
     1995)                                          946,069                     0         946,069

Common Stock, $0. 1 0 par value,
     authorized 30,000,000 shares,
     issued 2,623,457 (December 30,
     1995) and 2,119,857 (March 25,
     1995)                                           262,345                    0         262,345

Additional Paid-in Capital                           793,976                    0         793,976

Accumulated Deficit                               (7,754,330)          (5,563,272)     (2,191,058)
                                                  (5,751,940)          (5,563,272)       (188,668)

Cumulative Translation Adjustment                     96,636               96,636               0

Treasury Stock at cost, 218,100
     shares                                        (204,710)                    0        (204,710)

Total Stockholders' Deficiency                   (5,860,014)           (5,466,636)       (393,378)

Total Liabilities and Stockholders'
(Deficiency) Equity                             $ 8,038,784           $ 7,608,490     $   430,294

 34

                                           CORNICHE GROUP INCORPORATED
                                          NOTES TO FINANCIAL STATEMENTS

NOTE 3     UK SUBSIDIARY RECEIVERSHIP PROCEEDING (Cont'd)

          Consolidated Statement of Operations

     The "Consolidated Statement of Operations" for the forty weeks ended 
December 30, 1995 and for the corresponding period in 1994, before the impact 
of the receivership proceedings involving the UK subsidiaries, was as follows:

                                       ------------ 40 Weeks Ended------------

                                          December 30,                December 30,
                                              1995                        1994
                                                                      
Net Sales                                 $12,370,716                  $16,311,552

     Cost of Sales                         (8,554,569)                  (11,667,351)

Gross Profit                                3,816,147                     4,644,201

     Selling, general & admin. expenses   (7,086,773)                    (5,527,519)

Operating Loss                            (3,270,626)                      (883,318)

     (Loss) gain on sale of equipment         (6,563)                         1,308
     Interest expense, net                  (501,683)                      (391,178)

Net Loss before preferred stock dividend  (3,778,872)                    (1,273,188)

     Preferred stock dividend                (50,943)                             0

Net Loss                                 $(3,829,815)                   $(1,273,188)

Loss per share of common stock                $(1.69)                        $(0.76)

Weighted average number of common
      shares outstanding                    2,260,599                     1,669,336

     Although financial statements for Corniche for the period December 31, 
1995 to the date of receivership are not available, had such financial 
statements been available the impact on the Company's balance sheet as of 
March 31, 1996 and on the results of operations for the year then ended would 
have remained unchanged as any profit earned or loss incurred by Corniche in 
the period would have been offset by a corresponding increase or decreased in 
the excess of the UK subsidiary cumulative losses over the Company's 
investment.

 35

                                 CORNICHE GROUP INCORPORATED
                                NOTES TO FINANCIAL STATEMENTS

NOTE 4     NOTES RECEIVABLE

     Notes Receivable comprise a 180-day promissory note in the principal 
amount of $200,000 due from Chester Holdings, Ltd. ("Chester") as part 
consideration for the Company's former medical imaging subsidiary sold to 
Chester on March 25, 1995.  The note was due on October 1, 1995 and includes 
an option to apply any unpaid balance of such note to purchase voting 
securities of Chester's operating subsidiary, or any new parent company of 
such operating subsidiary, at the fair market value of such securities.  As of 
March 31, 1996 Chester was in default on the note and no principal or interest 
had been received.  Subsequent to March 31, 1996, the company received 
payments of principal in the aggregate sum of $125,000.  Accordingly, a 
provision of $75,000 has been made at March 31, 1996 and no interest has been 
accrued.  The Company may exercise the option applicable to the unpaid balance 
of the Note to purchase voting shares of Medical Laser Technologies, Inc., the 
corporate parent of the operating subsidiary.

NOTE 5     PROPERTY AND EQUIPMENT

          Property and Equipment consists of the following:

                                                   March 31,     March 25,
                                                     1996          1995

     Leasehold Property                        $         0      $  652,950
     Machinery and Equipment                             0         925,500
     Motor Vehicles                                      0         287,588
     Furniture and Fixtures                          1,426         538,409
                                                     1,426       2,404,447
     Less:  Accumulated Depreciation                   291       1,047,899
                                                   $ 1,135      $1,356,548

     Motor Vehicles and Machinery and Equipment include assets held under 
capital leases as follows:

                                                      March 31,     March 25,
                                                        1996          1995

     Cost                                         $          0     $ 311,385
     Less: Accumulated Depreciation                          0       102,409
     Net book value                               $          0     $ 208,976
 36

                               CORNICHE GROUP INCORPORATED
                              NOTES TO FINANCIAL STATEMENTS

NOTE 6     NOTE PAYABLE ON DEBT COMPROMISE

     Notes Payable on debt compromise comprise a 180-day promissory note in 
the principal amount of 50,000 pounds sterling (approximately $77,630 as of 
March 31,1996) in favor of the Bank of Scotland, primary banker to Corniche.  
The note was issued to settle certain claims involving Corniche and the 
Company following the receivership proceeding involving the Company's UK 
Subsidiary.  The note was paid in full, including accrued interest, on January 
30, 1997 and simultaneously the Company was released from any further 
obligation.

NOTE 7       REVOLVING LINE OF CREDIT - BANK

     TSCL and Chessbourne had separate revolving lines of credit with a bank 
of approximately $400,000 and $1,740,000, respectively.  The facilities were 
reviewed annually and interest was payable at 3% over the bank's base rate 
(9.75 % at March 25, 1995) for TSCL and 2 % over the bank's base rate (8.75 % 
at March 25, 1995) for Chessbourne.

NOTE 8     LONG-TERM DEBT

          Long-term Debt as of March 25, 1995 consisted of:

          Chessbourne bank loan payable over 12 years from
          October 12, 1993 eliminated by UK receivership
          proceeding                                         $3,186,400

          Corniche bank loan payable in monthly installments
          through June 16, 2004 eliminated by UK receivership
          proceeding                                            266,071

          Corniche bank loan due on October 31, 1995 eliminated
          by UK receivership proceeding                         159,320

          Capital lease obligations payable through July 1997
          eliminated by UK receivership proceeding              126,951
                                                               --------- 
                                                               3,738,742
          Less: Current portion                                  415,177
                                                              $3,323,565
                                                              ===========

 37

                                     CORNICHE GROUP INCORPORATED
                                    NOTES TO FINANCIAL STATEMENTS

NOTE 8     LONG-TERM DEBT (Cont'd)

     These notes and the revolving lines of credit (see Note 7) were secured 
by substantially all of the assets of Corniche, which security interest was 
demanded in February 1996 and resulted in the receivership proceeding.

NOTE 9     ACQUISITIONS

     On March 31, 1995 Corniche acquired seven retail stationery stores.  The 
consideration paid totalled approximately $772,000 and was paid substantially 
by way of assumption of liabilities.  The acquisition was accounted for under 
the purchase method of accounting.

     The results of operations of those stores from the date of acquisition 
had been included in the Company's consolidated statement of operations to 
December 30, 1995 (See Note 3).

     The assets acquired and liabilities assumed (in thousands) on acquisition 
were as follows:

     Fair Value of Assets Acquired     $ 374
     Goodwill                            772
     Cash Paid                           (25)
                                       -------
     Liabilities Assumed               $1,121

NOTE 10     PENSION PLANS

     Corniche operated a self-administered money purchase pension plan for 
directors and senior employees.  Contributions to the plan were determined by 
the board of directors.  The plan commenced on January 1, 1994.  In addition, 
Chessbourne operated an insured defined contribution employee benefit pension 
plan available to all full-time employees.  Contributions were set at 4% of 
salary by Chessbourne and 4% by the employee.  Pension costs charged to 
operations for the year ended March 25, 1995 were $45,536 and $22,529 for the 
year ended March 27, 1994.

 38

                                  CORNICHE GROUP INCORPORATED
                                 NOTES TO FINANCIAL STATEMENTS

NOTE 11         STOCKHOLDERS EQUITY

     Effective October 1, 1995 the Company declared a one-for-ten reverse 
stock split and all numbers of shares and share values stated herein reflect 
such reverse split unless otherwise noted.

     In connection with the settlement of the securities class action 
litigation (see Note 13), the Company issued 1,000,000 shares of 7% cumulative 
convertible preferred stock with an aggregate value of $1,000,000.  The 
preferred stock has a liquidation value of $1 per share, is non-voting and 
convertible into common stock of the Company at a price of $5.20 per share.  
Preferred stockholders are entitled to receive a cash dividend of 7% paid 
semi-annually.  The preferred shares are callable by the Company at any time 
after the first anniversary of issuance, at prices ranging from 101 % to 105 % 
of face value.  In addition, if the closing price of the Company's common 
stock exceeds $13.80 per share for a period of 20 consecutive trading days, 
the preferred shares are callable by the Company at a price equal to 1 % of 
face value.  In March 1995, the holders of 53,931 shares of preferred stock 
exercised their rights to convert and, accordingly, 10,371 shares of common 
stock were issued.  During the year ended March 31, 1996, holders of 36,802
shares of preferred stock converted such shares into 7,077 shares of CGI's
common stock.

     In March 1995, the Company issued a total of 1,312,400 shares of common 
stock to acquire all of the issued and outstanding stock of Corniche.  Brian 
J. Baylis was issued 877,800 shares of common stock and Susan A.M. Crisp was 
issued 219,450 shares of common stock in exchange for their holdings 
representing 100% of the issued common stock of Corniche, and the balance of 
215,150 shares were issued to Chester in connection with the acquisition.  In 
addition, the Company issued 25,000 shares of the Company's common stock to 
Ronatree in exchange for the remaining 49% of the common shares of 
Chessbourne.

     Simultaneous with the Company's acquisition of Corniche on March 2, 1995, 
NWCM Limited ("NWCM"), a Hong Kong investment banker, agreed on a staggered 
basis, to raise up to $5,000,000 of new equity capital on a "best efforts" 
basis.  This offer was limited to experienced, sophisticated investors who are 
"non-U.S. persons" under Regulation S of the United States Securities Act of 
1933.  An initial tranche of 600,000 shares was offered at a price of $2.00 
per share.  Pursuant to the transaction, the Company paid NWCM a fee of 
$50,000.  In addition, NWCM was paid a sales commission of 10% and a 
non-accountable expense allowance equal to 2% of the total dollars raised, a 
total of $162,864.  The offering was closed on September 8, 1995 and the 
Company raised a total of $957,200 gross, $794,336 net of sales commission and 
expense allowance in the year ended March 31, 1996 and $100,000 March 25, 
1995.  The Company has agreed to indemnify NWCM for certain liabilities 
arising from the transaction.

 39

                                CORNICHE GROUP INCORPORATED
                               NOTES TO FINANCIAL STATEMENTS

NOTE 11        STOCKHOLDERS EQUITY (Cont'd)

     During the year ended March 31, 1996, the Company issued 25,000 shares of 
common stock to Trisec Holdings, Ltd. for consulting services in connection 
with the "Reverse Acquisition' (see Note 2) of Corniche on March 2, 1995.

     On March 13, 1995, the Company converted a promissory note in the amount 
of $300,000 payable on November 10, 1995, which had been entered into pursuant 
to a bridge finance agreement in December 1994, into 150,000 shares of the 
common stock of the Company.  In connection with the conversion, the Company 
paid NWCM a fee of $36,000.

     The Company has issued common stock purchase warrants from time to time 
to investors in private placements, certain vendors, underwriters, and 
directors and officers of the Company.

     A total of 150,175 shares of common stock are reserved for issuance upon 
exercise of warrants.  Warrants issued are summarized as follows:

                                 Shares
                               Issuable on     Exercise            Expiration
                                Exercise       Price                 Date

     February 1991                48,867         $36.00              1/98
     September 1993                9,375         $46.40              4/99
     March 1995                   91,933      $3.20 - $8.10      1/99 - 11/03

     In March 1995, as a result of the sale by the Company of its medical 
imaging subsidiary, stock options held by certain directors, officers and 
employees under the Company's 1986 Stock Option Plan were converted to 
warrants on substantially the same terms as the previously held stock options, 
except these warrants are immediately vested.

          Stock Option Plans

     CGI has two stock option plans.  The 1986 Stock Option Plan provides for 
the grant of options to purchase shares of the Company's common stock to 
employees.  The 1992 Stock Option Plan provides for the grant of options to 
directors.

 40

                           CORNICHE GROUP INCORPORATED
                          NOTES TO FINANCIAL STATEMENTS

NOTE 11     STOCKHOLDERS EQUITY (Cont'd)

          Stock Option Plans (cont'd)

     The 1986 Stock Option Plan allows for the grant of incentive stock 
options (ISO), non-qualified stock options (NQSO) and stock appreciation 
rights (SAR).  The maximum number of shares of the Company's common stock that 
may be granted, as amended in April 1993, is 140,000 shares.  The terms of the 
plan provide that options are exercisable for a period of up to ten years from 
the date of grant or a period of five years with respect to incentive stock 
options if the holder owns more that 10% of the Company's outstanding common 
stock.  The exercise price and grantees of options are established by the 
Stock Option Committee.  The exercise price of ISO's must be at least 100% of 
the fair market value of the common stock at the time of grant.  For holders 
of more than 10% of the Company's outstanding -common stock, the exercise 
price must be at least I 10% of fair market value.  The exercise price of 
NQSO's must be not less than 80% of the fair market value of the common stock 
at the time of grant.  An option is exercisable not earlier than six months 
from the date of grant.

     In April 1992, the Company adopted the 1992 Stock Option Plan to provide 
for the granting of options to directors.  According to the terms of this 
plan, each director is granted options to purchase 1,500 shares each year.  
The maximum amount of the Company's common stock that may be granted under 
this plan is 20,000 shares.  Options are exercisable at the fair market value 
of the common stock on the date of grant and have five year terms.

     Information with respect to options under the 1986 and 1992 Stock Option 
Plans is summarized as follows:

                                               ---------- Year Ended ---------

                           March 31,     March 25,     Sept. 30,     Sept. 30,
                             1996          1995           1994          1993
                                                            
     Outstanding,
     Beginning of Year       28,980       131,367        82,900         22,875

     Granted                  9,000        15,896        69,117         86,000
     Converted                    0       (91,933)            0              0
     Expired                (30,480)      (26,350)      (20,650)       (25,975)
     Exercised                    0             0             0              0

     Outstanding,
     End of Year                700        28,980        131,367        82,900

 41

                                   CORNICHE GROUP INCORPORATED
                                  NOTES TO FINANCIAL STATEMENTS

NOTE 11     STOCKHOLDERS EQUITY (Cont'd)

          Stock Option Plans (cont'd)

     The Company reclassified 18,000 options shown as expired in its 1994 
financial statements to be outstanding as of March 25, 1995.

     Outstanding options expire 90 days after termination of holder's status 
as employee or director.  Included in the outstanding options at March 31, 
1996 were 1,500 shares which expired in April 1996 and 3,000 shares which 
expired in June 1996.

     At March 31, 1996, there were 1,500 exercisable outstanding options and 
152,500 shares avoidable for grant.  Exercise prices of outstanding options 
ranged from $3.80 to $32.50.

     On May 1, 1996, 3,000 options were granted at an exercise price of 
$0.40625 per share.

 42

                            CORNICHE GROUP INCORPORATED
                           NOTES TO FINANCIAL STATEMENTS

NOTE 12        RELATED PARTY TRANSACTIONS

     B.R. Linton, a director of Chessbourne until April 28, 1995, is also a 
director of Ash Property Company Limited, a property investment company.  
During the year ended March 25, 1995, a property was leased by Corniche from 
Ash Property Company Limited at a rental of approximately $94,000.

     B.R. Linton is also a director of Ronatree.  Until March 2, 1995, 
Ronatree beneficially owned a 49% interest in the ordinary share capital of 
Chessbourne.  On March 2, 1995, CGI purchased such interest from Ronatree in 
exchange for the issuance of 25,000 shares of CGI.

     On March 2, 1995, Chester acquired 215,150 common shares of CGI.  CGI 
issued the shares in order to induce Chester to agree to terminate a 
pre-existing agreement to acquire Corniche and in forgiveness by Chester of 
approximately $71,000 of indebtedness owed to Chester and its subsidiaries by 
Corniche.

     Effective March 25, 1995, CGI sold its wholly-owned medical imaging 
products subsidiary to Chester in exchange for the 215,150 shares of the 
Company's common stock previously issued to Chester in connection with the 
Company's acquisition of Corniche and a 180-day promissory note in the 
principal amount of $200,000.  The promissory note also includes an option to 
apply the unpaid balance of such note to purchase securities of Chester or 
such operating subsidiary, or any other parent company of such operating 
subsidiary at the fair market value of such securities.

     During the year ended March 25, 1995, the Company charged fees of 
$261,211 to Chester for management services provided by its directors and 
employees to Chester.  These fees were still owed by Chester as of March 25, 
1995.  The Company fully provided against this receivable.

     During the year ended March 25, 1995, the Company sold inventory 
totalling $732,367 to a subsidiary of Chester.  In addition, the Company 
purchased inventory from a subsidiary of Chester for $204,323.

     On march 31, 1995, an agreement was completed whereby seven retail stores 
were acquired from a subsidiary of Chester.  The consideration paid totalled 
$772,000 (see Note 9).

 43

                                 CORNICHE GROUP INCORPORATED
                                NOTES TO FINANCIAL STATEMENTS

NOTE 13     COMMITMENTS, CONTINGENCIES AND OTHER

     Legal Proceedings

     During fiscal 1994, the Company disclosed irregularities in its revenue 
recognition practices which led to the restatement of the Company's financial 
statements for fiscal years ended September 30, 1989, 1990, and 1991, and the 
first quarter of fiscal 1992.  As a result, nine class action securities 
complaints (the "lawsuits") were filed against the Company and certain other 
persons which were settled in January 1994.  Pursuant to the settlement, the 
Company paid $2,560,000 in cash in 1995 and issued $1,000,000 in 7% cumulative 
convertible preferred stock.  The preferred- stock is convertible into common 
stock at a price of $5.20 per share, and will be callable for five years.  The 
preferred stock has been included in stockholders' equity at March 31, 1996 
and at March 25, 1995.  Stockholders who purchased CGI's shares between 
January 3, 1989 and May 7, 1992 have been included within the plaintiff class 
for purposes of the settlement.

     CGI and certain of its former officers and directors were involved in a 
shareholders' derivative action filed in Delaware Chancery Court.  The causes 
of action asserted included breach of fiduciary duty, breach of duty of care 
and trust of the Company's shareholders, gross negligence and mismanagement, 
as well as common law conspiracy and aiding and abetting.  The Court granted 
the Company's motion to dismiss by Opinion and Order dated May 2, 1995.  The 
Company instituted its own action in State Court in New Jersey against its 
former chief executive officer, Efriam Landa.  The complaint was filed on May 
4, 1995.  Mr. Landa answered on October 16, 1995 and asserted counterclaims 
seeking (a) reimbursement of defense costs in the derivative action and 
related investigations by the Securities and Exchange Commission ("SEC') and 
the United States Attorney for the District of New Jersey and (b) damages for 
breach of his employment contract.  This matter was settled by exchange of 
mutual releases on December 5, 1996.

     In the opinion of management, there are no other lawsuits or claims 
pending against the Company.

 44

                                 CORNICHE GROUP INCORPORATED
                                NOTES TO FINANCIAL STATEMENTS

NOTE 14     INCOME TAXES

     Income Tax Expense (benefit) represents United Kingdom corporation tax 
(benefit) for the years ended March 25, 1995 and March 27, 1994.  There were 
no significant differences between the financial statement and tax basis of 
assets and liabilities that were expected to give rise to taxable income in 
the future in view of the Company's substantial tax losses available for 
carryforward.

     Earnings (loss) before income taxes and preferred stock dividend is 
attributable to the following sources:

                                                    Years Ended In
                                         =====================================

                                              1996        1995         1994

     United Kingdom                        $     0   $(2,786,689)     $3,213

     United States                        (596,849)      (595,517)         0

                                          $(596,849)  $(3,382,206)     $3,213

     In the United States the Tax Reform Act of 1986 enacted a complex set of 
rules limiting the utilization of net operating loss carryforwards to offset 
future taxable income following a corporate ownership change.  The Company's 
ability to utilize its NOL carryforwards is limited following a change in 
ownership in excess of fifty percentage points.  The Company has fully 
reserved the balance of tax benefits of its operating losses because the 
likelihood of realization of the tax benefits cannot be determined.

     The Company is delinquent in the filing of Federal and State Income Tax 
returns for the fiscal year ended September 30, 1994, short period ended March 
25, 1995 and the fiscal year ended March 31, 1996.

NOTE 15     S.E.C. FILINGS

          The Company is delinquent in its filing of the following reports with
          the S.E.C:

          *    Annual Report on Form 10-K for the fiscal year ended March 31,
               1996.

          *    Quarterly Report on Form IO-Q for the quarter ended June 30,
               1996. 

          *    Quarterly Report on Form 10-Q for the quarter ended September
               30, 1996. 

          *    Quarterly Report on Form 10-Q for the quarter ended December 
               31, 1996.

 45

                                   CORNICHE GROUP INCORPORATED
                                  NOTES TO FINANCIAL STATEMENTS

NOTE 16     SUBSEQUENT EVENTS

          Transfer of Pledged Securities

     Effective January 30, 1997 the Company entered into a Stock Purchase 
Agreement with the Bank of Scotland and twelve unrelated persons whereby 
1,042,250 of the 1,097,250 shares of the Company's common stock pledged to the 
Bank of Scotland by Brian J. Baylis and Susan A.M. Crisp to secure certain 
debts of Corniche Distribution Limited and subsidiaries to the Bank of 
Scotland were sold by the Bank of Scotland following a default in the 
obligation secured by the pledge to such twelve persons for an aggregate 
consideration of $125,070.

          Mutual Release

     On January 30, 1997 the Company paid the Bank of Scotland $89,374.49 in 
fun satisfaction of all principal and interest due under a Promissory Note 
dated February 1996 to the Bank of Scotland in the principal amount of fifty 
thousand sterling (see Note 6).  In consideration thereof, the parties 
executed a Mutual Release dated as of January 30, 1997 whereby the Bank of 
Scotland released the Company and James J. Fyfe, the Company's sole officer 
and director, from all liabilities, accounts, courses of action, sums of 
money, reckonings, contracts, controversies, agreements, damages, judgements, 
executions, claims, demands, debts, obligations, promises, covenants, actions 
and undertakings which the Company or James J. Fyfe the Bank of Scotland ever 
had at the time of the release or could thereafter have by reason of any 
matter up to and through the date of the release and the Company and James J. 
Fyfe released the Bank of Scotland in similar fashion.

          Equity Offerings

     During the period July 1996 through December 1996 the Company engaged in 
a private offering of securities pursuant to Rule 506 of Regulation D of the 
Securities Act of 1933, as amended.  The offering of up to $300,000 - was 
conducted on a "best efforts" basis through Robert M. Cohen & Co., Inc. 
("RMCC"), a New York based broker-dealer and was offered and sold in the form 
of $25,000 units.  Each unit consisted of one $25,000 face amount 90-day, 8% 
promissory note and one redeemable common stock purchase warrant to purchase 
60,000 shares of the Company's common stock at a price of $ .50 per share 
during a period of three years from issuance.  The offering was terminated in 
January 1997 upon sale of 4 units resulting in $100,000 in gross proceeds.  In 
connection with such offering, RMCC was paid sales commissions equal to 10% of 
the aggregate purchase price of the units sold resulting in aggregate sales 
commissions of $10,000.

 46

                             CORNICHE GROUP INCORPORATED
                            NOTES TO FINANCIAL STATEMENTS

NOTE 16     SUBSEQUENT EVENTS (Cont'd)

          Equity Offerings (Cont'd)

     During the period January 1997 through date hereof, the Company engaged 
in a private offering of securities pursuant to Rule 506 of Regulation D of 
the Securities Act of 1933, as amended.  The offering consists of up to 19 
units being sold at an offering price of $25,000 per unit.  Each unit consists 
of one $25,000 face amount 90-day, 8% promissory note and one redeemable 
common stock purchase warrant to purchase 60,000 shares of the Company's 
common stock at a price of $ .50 per share during a period of three years from 
issuance.  The offering of up to $475,000 is being conducted on a "best 
efforts" basis through RMCC.  In connection with such ' offering, RMCC is 
being paid sales commissions equal to 10% of the purchase price for each unit 
sold or $2,500 per unit.  To date RMCC has sold 14 units.

          Settlement of Accounts Payable

     The Company has settled its Accounts Payable with its major creditors.  
The settlement resulted in a reduction of selling general and administrative 
expenses in the amount of $175,637.

          Settlement of Note Payable

     The Company has settled its Note Payable for $5,000 in full satisfaction 
of all remaining sums due including accrued interest.  The adjustment has been 
reflected in the Financial Statements.

 47

                                  CORNICHE GROUP INCORPORATED
                                          SCHEDULE II
                              VALUATION AND QUALIFYING ACCOUNTS
            FOR THE YEARS ENDED MARCH 31,1996, MARCH 25,1995 AND MARCH 27,1994

     COL. A               COL B.                                  COL. C                  COL. D                 COL. E
                                                                 ADDITIONS

                          Balance at Beginning     Charges to Costs     Acquisitions     Deductions           Balance at
     Description                 of Period           and expenses     of Subsidiaries     Describe             End of Period
                                                                                                    
Allowance for Doubtful
Account             1994      $         0                $ 71,832             $59,860       $       0            $131,692
                    1995           131,692                 349,231                   0        135,815 (1)         345,108
                    1996           345,108                       0                   0        345,108 (3)               0

Reserve against
Notes Receivable
in Default           1994              0                         0                  0              0                   0
                     1995              0                         0                  0              0                   0
                     1996              0                    75,000                  0              0              75,000

Inventory Reserve    1994              0                    56,659             29,930              0              86,589
                     1995         86,589                     9,758                  0         56,123 (2)          40,224
                     1996         40,224                         0                  0         40,224 (3)               0

(1)     Elimination of reserve on bad debt write-off.
(2)     Release of provision no longer required.
(3)     Elimination of UK subsidiary following receivership proceeding.

 48

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     On April 5, 1995, Registrant terminated its relationship with the 
accounting firm of Ernst & Young, LLP ("Ernst & Young") as Registrant's 
independent auditors responsible for the audit of Registrant's financial 
statements.  This action was recommended by Registrant's Audit Committee and 
approved by its Board of Directors.  The decision to terminate Ernst & Young 
as Registrant's principal independent auditors was made because another 
accounting firm, Coopers & Lybrand LLP ("Coopers"), had been the auditor for 
Registrant's then recently-acquired subsidiary, CDL, for some time.

     In connection with the audits of Registrant's financial statements for 
the fiscal year ended September 30, 1994, and in the subsequent interim 
period, there were no disagreements with Ernst & Young on any matters of 
accounting principles or practices, financial statement disclosure, or 
auditing scope and procedures which, if not resolved to the satisfaction of 
Ernst & Young, would have caused Ernst & Young to make reference to such 
matter in their report.  Ernst & Young's report on Registrant's financial 
statements for its fiscal year ended September 30, 1994 expressed an unqualified
 opinion on those financial statements based on their audit but included an 
explanatory paragraph noting a "substantial doubt about Registrant's ability 
to continue as a going concern" based upon the several matters summarized in 
such report. 

     During the period April 1995 through on or about July 6, 1995 Registrant 
negotiated with Coopers regarding the preparation of Registrant's audited 
financial statements for the year ended March 25, 1995.  Coopers subsequently 
declined to act as Registrant's independent auditors even though Coopers' U.K. 
office continued to act as auditor for Registrant's subsidiary, CDL, and 
provided audited financial statements for CDL for the year ended March 25, 
1995.  Coopers decision not to act as Registrant's auditors was not based on 
any disagreements with Registrant on any matters of accounting principles or 
practices, financial statement disclosure or auditing scope and procedures 
which, if not resolved to Coopers satisfaction, would have caused Coopers to 
make reference to such matters in their reports.  Coopers never offered 
Registrant a formal reason for declining to act as Registrant's auditors 
although Registrant was led to believe that Coopers' U.S. offices did not want 
to act for a company with a recent experience of significant losses coupled 
with prior shareholder litigation.

     On July 20, 1995, Registrant appointed Mahoney Cohen & Company, PC 
("Mahoney Cohen") as Registrant's independent auditors responsible for the 
audit of Registrant's financial statements.  This action was recommended by 
Registrant's Audit Committee and approved by its Board of Directors.  
Registrant had not consulted Mahoney Cohen regarding any accounting or 
financial reporting issues prior to that firm being retained by Registrant.

     In connection with its audit of Registrant's financial statements for the 
fiscal year ended March 25, 1995, and in the subsequent interim period through 
on or about April 17, 1997 when the relationship was formally terminated and 
it resigned as Registrant's independent auditors, there were no disagreements 
between Mahoney Cohen and Registrant on any matters of accounting principles 
or practices, financial statement disclosure or auditing scope and procedures 
which, if not resolved to the satisfaction of Mahoney Cohen, would have caused 
Mahoney Cohen to make reference to such matters in their report.  Mahoney 
Cohen's report on Registrant's financial statements for the fiscal year ended 
March 25, 1995 expressed an unqualified opinion on those financial statements 
based upon their audit but included a paragraph noting a "substantial doubt 
about Registrant's ability to continue as a going concern" based upon the 
several matters summarized in such report.

     In February 1997 Registrant appointed Simontacchi & Co., P.A. 
("Simontacchi") as Registrant's independent auditors responsible for the audit 
of Registrant's financial statements.  This action was approved by 
Registrant's board of directors.  Registrant had not consulted Simontacchi 
regarding any accounting or financial reporting issues prior to that firm 
being retained by Registrant.

  49

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

Directors

     The following sets forth, as at March 31, 1996, the directors of 
Registrant, their respective ages, the year in which each was first elected or 
appointed a director, and any other office in Registrant held by each 
director.  Each director holds office until the next annual meeting of 
shareholders and until their successors have been elected and qualified.

                            Other Offices                    Director
       Name                      Held              Age        Since  
                 
     James J. Fyfe        Vice President, Chief     42         1995
                            Operating Officer
     Mathew P. Pazaryna   None                      54         1993

     In September 1996, Mathew P. Pazaryna ceased all his activities relating 
to his engagement as a director of Registrant.  Efforts to contact him proved 
unsuccessful and consequently, his association with Registrant was 
terminated.  Although no written resignation was provided to Registrant by Mr. 
Pazaryna, Registrant, based upon the actions of Mr. Pazaryna, treated Mr. 
Pazaryna as having resigned effective September 1996.  During the fiscal year 
ended March 31, 1996 several other directors of Registrant resigned their 
positions as such including George Lombardi (January 1996), Manfred Pfeiler 
(May 28, 1995),  Werner Haas (June 27, 1995), Brian J. Baylis (March 6, 1996), 
and Susan A.M. Crisp (March 6, 1996).  None of the foregoing resignations were 
the result of any disagreements with Registrant on any matter relating to 
Registrant's operations, policies or practices.  The resignations of Brian J. 
Baylis and Susan A.M. Crisp were the result of the receivership proceedings 
instituted against Registrant's operating subsidiaries. 

Executive Officers

     The following sets forth the executive officers of Registrant, their 
respective ages, the year in which each was first appointed an executive 
officer of Registrant and all positions and offices in Registrant held by each 
such person as at March 31, 1996.

                                                         Office Held
       Name               Offices Held         Age          Since  

     James J. Fyfe        Vice President        42        May 1995

     During the fiscal year ended March 31, 1996 all of Registrant's executive 
officers, with the exception of James J. Fyfe, resigned.  Brian J. Baylis and 
Susan A. M. Crisp resigned on March 6, 1996 as the result of the receivership 
proceedings instituted against Registrant's operating subsidiaries.  At the 
time of their resignations, Mr. Baylis had been serving as Registrant's 
president and chief executive and Ms. Crisp had been serving as Registrant's 
vice president for finance and administration, chief financial officer, 
treasurer and secretary.  Mr. Baylis and Ms. Crisp had been serving in such 
capacities as of March 25, 1995 when they replaced Werner Haas and George 
Lombardi, respectively, following Registrant's sale of its medical imaging 
products subsidiary, FMI, to Chester.

 50

Family Relationships

     No family relationship exists between any director, executive officer of 
Registrant or any person contemplated to become such.

Business Experience

     The following summarizes the occupation and business experience during at 
least the five years preceding March 31, 1996 of each person who served as a 
director and/or executive officer of Registrant at March 31, 1996.

     JAMES J. FYFE has been a director, vice president and the chief operating 
officer of Registrant since May 1995.  From January 1991 to May 1995, he was 
an independent business consultant.  Prior to January 1991 he was chairman and 
chief executive officer of the Lewis Group, a UK based chain of department 
stores and specialty retail outlets.

     MATHEW P. PAZARYNA was a director of Registrant from December 1993 until 
September 1996.   From May 1995 through September 1996, Mr. Pazaryna was an 
independent business consultant.  From 1992 until April 1995, he was the 
senior vice president and chief financial officer of Bio-Technology General 
Corp.  From 1966 until 1992, he held positions in finance, accounting, and 
strategic planning for several subsidiaries and divisions of Johnson & 
Johnson, a consumer products manufacturer.

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth the aggregate compensation paid during the 
three years ended March 31, 1996 to each person who served as Registrant's 
Chief Executive Officer during fiscal 1996 and any other executive officer of 
Registrant earning in excess of $100,000 for services rendered during fiscal 
1996.

                                             Summary Compensation Table
                                                                 Long-Term Compensation 
                                    Annual Compensation        Awards            Payouts          
                                    --------------------       --------------------------
                                                        Other                                          All
Name                                                    Annual       Rest.                             Other
and                                                     Compen-      Stock     Options     LTIP        Compen-
Principal                        Salary     Bonus       sation       Awards     SARs     Payouts       sation
Position              Year        ($)        ($)        ($)(1)        ($)        (#)        ($)        ($)(2)
                                                                                
Brian J. Baylis     1996     79,335           0         10,311         0       1,500         0               0
 CEO(3)             1995     78,200           0         16,198         0           0         0          17,204
                    1994     37,500           0          9,808         0           0         0          16,500

(1)    Includes car allowance.
(2)    Includes pension contributions.
(3)    Compensation includes amounts paid to Mr. Baylis by CDL and its 
       subsidiaries prior to their acquisition by Registrant in March 1995.
       Mr. Baylis resigned as Registrant's chief executive officer on
       March 6, 1996.

 51

              Option/SAR Grants During The Fiscal Year Ended March 31, 1996
                                    Individual Grants

                      Number           % of
                      Shares of        Total
                      Common Stock     Options/
                      Underlying       SARs
                      Options/         Granted to      Exercise
                      SARs             Employees       or Base
                      Granted          in Fiscal       Price     Expiration
Name                    (#)            Year            ($/Sh)       Date     
- - ------------------------------------------------------------------------------
                                                        
Brian J. Baylis       1,500            16.67%           .48     June 6, 1996

         Aggregate Options/SAR Exercises During Fiscal Year Ended March 31, 1996
                            and Fiscal Year-End Options/SAR/Values            

                                                                                    Value of
                                                               Number of            Unexercised
                                                               Unexercised          In-the-Money
                                                               Options/SARs         Options/SARs
                                                               At FY-End (#)        At FY-End ($)
                   Shares Acquired                             Exercisable/         Exercisable/
Name               on Exercise (#)   Value Realized ($)        Unexercisable        Unexercisable   
                                                                            
Brian J. Baylis            0                 0                 1,500 (unexercisable)    N/A

Compensation of Directors

     Directors who are not full-time members of management receive $300 per 
Board of Directors meeting attended, in addition to reimbursement of travel 
expenses.  Directors are also compensated for special assignments from time to 
time.  No special compensation was paid in fiscal 1996.

     All directors receive options to purchase 1,500 shares of Registrant's 
common stock each May under Registrant's 1992 Stock Option Plan for Directors.

Compliance with Section 16(a) of the Exchange Act

     Any person who is an officer, director, or the beneficial owner, directly 
or indirectly, of more than 10% of the outstanding common stock of Registrant 
is required under Section 16(a) of the Securities Exchange Act of 1934, as 
amended (the "Exchange Act") to file certain reports with the Securities and 
Exchange Commission (the "Commission") disclosing his or her holdings or 
transactions in any securities of Registrant.  For purposes of this 
discussion, all such persons required to file such reports will be referred to 
as "Reporting Persons".  Every Reporting Person must file an initial statement 
of his or her beneficial ownership of Registrant's securities on the 
Commission's Form 3 within ten days after he or she becomes a Reporting 
Person.  Thereafter (with certain limited exceptions), all changes in his or 
her beneficial ownership of Registrant's securities must be reported on the 
Commission's Form 4 on or before the 10th day after the end of the month in 
which such change occurred.  Certain changes in beneficial ownership are 
exempt from the 

 52

Form 4 reporting requirements, but are required to be reported on a Form 5 
within 45 days of the end of the fiscal year in which such changes occurred.  
The Registrant knows of no person who was a Reporting Person during the fiscal 
year ended March 31, 1996, who has failed to file any reports required to be 
filed during such period on Forms 3 and 4 with respect to his holdings or 
transactions in the Company's securities.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

     As of March 19, 1997 there were no persons known to Registrant to be the 
beneficial owners of more than 5% of Registrant's common stock, $.10 par value.

Security Ownership of Management

     The following table sets forth information concerning the beneficial 
ownership of Registrant's common stock, as of March 19, 1997, by (i) each 
person who was a director or a nominee to become a director, (ii) Registrant's 
executive officers, and (iii) all persons who were directors and officers of 
Registrant, as a group, and the percentage of Registrant's issued and 
outstanding stock represented by such beneficial ownership.

        Name and Address       Amount and Nature of
      of Beneficial Owner      Beneficial Ownership     Percent of Class

     James J. Fyfe                    -0- (1)                 -0-
     145 Route 46 West
     Wayne, NJ 07974

     All directors and officers       -0- (1)                 -0-
       as a group (1 person)

________________

(1)     Does not include 1,500 shares of common stock which may be issued to 
Mr. Fyfe upon the exercise of 1,500 stock options issued to Mr. Fyfe as of May 
1996 in connection with his services as a director of Registrant.  These 
options were issued in connection with Registrant's 1992 Stock Option Plan and 
are not exercisable until May 1997.  Each option is exercisable at an exercise 
price of $.40625 per share.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions With Management and Others

     During the fiscal year ended March 31, 1996 and all subsequent periods 
there have been no material transactions between Registrant and any member of 
management or any principal shareholder of Registrant.

 53

                                 PART IV

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

Financial Statements

     The financial statements filed as a part of this report are as follows:

     Report of independent accountants

     Balance Sheets - March 31, 1996 and March 25, 1995

     Statements of Operations - Years ended March 31, 1996,
       March 25, 1995 and March 27, 1994

      Statement of Changes in Stockholders' (Deficiency)/Equity -
       Years ended March 31, 1996, March 25, 1995 and March 27, 1994

     Statements of Cash Flows - Years ended March 31, 1996,
       March 25, 1995 and March 27, 1994

     Notes to consolidated financial statements

Financial Statement Schedules

     The financial statement schedule filed as a part of this report is as 
follows:

     Valuation and Qualifying Accounts for the years ended March 31, 1996, 
March 25, 1995 and March 27, 1994.

     Other financial statement schedules have been omitted for the reason that 
they are not required or are not applicable, or the required information is 
shown in the financial statements or notes thereto.

Exhibits

     The exhibits filed as a part of this report are as follows:

     
                                                                          Exhibit No. as filed
                                                                          with registration statement
                                                                         or report specified below

      3    (a)     Certificate of Incorporation filed September 18, 1980 (1)   3
           (b)     Amendment to Certificate of Incorporation filed
                    September 29, 1980 (1)                                     3
           (c)     Amendment to Certificate of Incorporation filed
                    July 28, 1983 (2)                                          3(b)
           (d)     Amendment to Certificate of Incorporation filed
                    February 10, 1984 (2)                                      3(d)
          (e)     Amendment to Certificate of Incorporation filed
                    March 31, 1986 (3)                                         3(e)

 54

          (f)     Amendment to Certificate of Incorporation filed
                    March 23, 1987 (4)                                         3(g)
          (g)     Amendment to Certificate of Incorporation filed
                    June 12, 1990 (5)                                          3.8
          (h)     Amendment to Certificate of Incorporation filed
                    September 27, 1991 (6)                                     3.9
          (i)     Certificate of Designation filed November 12, 1984 (7)       3.8
          (j)     Amendment to Certificate of Incorporation filed
                    September 28, 1995                                           *
          (k)     By-laws of the Registrant, as amended on
                  December 22, 1983(2)                                         3(c)
          (l)     By-laws of the Registrant, as amended on
                  December 5, 1985(3)                                         3(f)
          (m)     By-laws of the Registrant, as amended on
                   April 25, 1991(6)                                          3.10
     4     (a)     Form of Underwriter's Warrant (6)                          4.9.1
          (b)     Form of Promissory Note - 1996 Offering                         *
          (c)     Form of Promissory Note - 1997 Offering                         *

          (d)     Form of Common Stock Purchase Warrant - 1996 Offering           *
          (e)     Form of Common Stock Purchase Warrant - 1997 Offering           *
     10     (a)     Form of Financial Advisory Agreement between
                    Registrant and Commonwealth Associates (6)                10.13
          (b)     Underwriting Agreement among Registrant,
                    Commonwealth Associates and Selling Stockholders,
                    dated November 15, 1991 (8)                              10.14
          (c)     1986 Stock Option Plan, as amended (7)                     10.6
          (d)     1992 Stock Option Plan (9)                                    B
          (e)     Novation Agreement relating to a Share Sale and Purchase
                    Agreement dated April 24, 1994 among Brian John
                    Baylis, Susan Ann Meadows Crisp and Fidelity
                    Medical, Inc. dated March 2, 1995 (10)                     2(a)
          (f)     Supplemental Agreement relating to a Share Sale and
                    Purchase Agreement dated April 24, 1994 among
                    Brian John Baylis, Susan Ann Meadows Crisp and
                    Fidelity Medical, Inc. dated March 2, 1995 (10)            2(b)
          (g)     Agreement for sale and purchase of the entire issued
                    share capital of Corniche Distribution Limited among
                    Brian John Baylis, Susan Ann Meadows Crisp and
                    Fidelity Medical, Inc. dated March 2, 1995 (10)            2(c)
          (h)     Letter of Agreement between Fidelity Medical, Inc. and
                    NWCM Limited dated as of March 6, 1995 (10)                2(d)
          (i)     Supplemental Agreement with respect to Options
                    dated March 2, 1995 (10)                                   9(b)
          (j)     Stock Purchase Agreement dated as of March 25, 1995
                    by and between Fidelity Medical, Inc. and Chester
                    Holdings, Ltd (11)                                         2(a)
          (k)     Promissory Note and Option Agreement dated as of
                    March 25, 1995 from Chester Holdings, Ltd. to
                    Fidelity Medical, Inc. (11)                                2(b)

 55

          (l)     Form of Warrant of Fidelity Medical, Inc. to be issued
                    to employees of Fidelity Medical, Inc., a New Jersey
                    corporation, in replacement of stock options (11)          2(c)
          (m)     Stock Purchase Agreement dated as of January 30, 1997
                    by and among Registrant, the Bank of Scotland and 12 Buyers  *
          (n)     Mutual Release dated as of January 30, 1997 by and among
                    Registrant, James Fyfe and the Bank of Scotland              *
     27            Financial Data Schedule
     99     (a)    Opinion Letter of Smithsons Solicitors dated March 7, 1997
                    regarding the status of Registrant's former subsidiaries
                    as the result of the February 1996 receivership proceedings. *
     99     (b)     Letter of James J. Fyfe Regarding Unavailablity of Re-signed
                    Audit Reports from Coopers & Lybrand LLP                     *
     99     (c)     Letter of Mahoney Cohen Rashba & Pokart, CPA, PC Regarding
                     Their Inability to Re-Sign Their July 25, 1995 Audit Report *

* Filed herewith
- - -----------------
Notes:

(1)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-18, 
File No. 2-69627, which exhibit is incorporated herein by reference.

(2)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-2, 
File No. 2-88712, which exhibit is incorporated herein by reference.

(3)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-2, 
File No. 33-4458, which exhibit is incorporated herein by reference.

(4)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1987, which exhibit is incorporated herein by 
reference.

(5)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-3, 
File No. 33-42287, which exhibit is incorporated herein by reference.

(6)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-1, 
File No. 33-42154, which exhibit is incorporated herein by reference.

(7)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1994, which exhibit is incorporated herein by 
reference.

(8)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1991, which exhibit is incorporated herein by
reference.

(9)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the proxy statement of Registrant dated March 30, 1992, 
which exhibit is incorporated herein by reference.

 56

(10)  Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the current report of Registrant on Form 8-K, dated 
March 2, 1995, which exhibit is incorporated herein by reference.

(11)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the current report of Registrant on Form 8-K, dated 
April 5, 1995, which exhibit is incorporated herein by reference.

Reports on Form 8-K

     No reports on Form 8-K have been filed by Registrant during the last 
quarter of the period covered by this report other than Registrant's Report on 
Form 8-K dated February 7, 1996 reporting on Item 3, Bankruptcy or 
Receivership, and relating to the appointment of a receiver for Registrant's 
operating subsidiaries, Chessbourne and TSCL. 

 57

                                     SIGNATURES

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

                                         CORNICHE GROUP INCORPORATED

                                         By /s/ James J. Fyfe 
                                           JAMES J. FYFE, Vice President

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

     Signatures                           Title                   Date 

Principal Executive Officer:

/s/ James J. Fyfe                    Vice President           April 24, 1997
JAMES J. FYFE

Principal Financial and
 Accounting Officer:

/s/ James J. Fyfe                    Vice President           April 24, 1997
JAMES J. FYFE

A Majority of the board of directors:

/s/ James J. Fyfe                                             April 24, 1997
JAMES J. FYFE

 58

                                    EXHIBITS

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

                           CORNICHE GROUP INCORPORATED

                                    FORM 10-K

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

                                  Exhibit Index

     The exhibits indicated below as having heretofore been filed with another 
document with the Securities and Exchange Commission are incorporated herein 
by reference.

                                                                        Exhibit No. as filed
                                                                          with registration
                                                                          statement or report
                                                                            specified below       Page No.

     3     (a)     Certificate of Incorporation filed September 18, 1980 (1)          3
          (b)     Amendment to Certificate of Incorporation filed
                    September 29, 1980 (1)                                            3
          (c)     Amendment to Certificate of Incorporation filed
                    July 28, 1983 (2)                                               3(b)
          (d)     Amendment to Certificate of Incorporation filed
                    February 10, 1984 (2)                                           3(d)
          (e)     Amendment to Certificate of Incorporation filed
                    March 31, 1986 (3)                                              3(e)
          (f)     Amendment to Certificate of Incorporation filed
                    March 23, 1987 (4)                                              3(g)
          (g)     Amendment to Certificate of Incorporation filed
                    June 12, 1990 (5)                                               3.8
          (h)     Amendment to Certificate of Incorporation filed
                    September 27, 1991 (6)                                          3.9
          (i)     Certificate of Designation filed November 12, 1984 (7)            3.8
          (j)     Amendment to Certificate of Incorporation filed
                    September 28, 1995                                                *             62
          (k)     By-laws of the Registrant, as amended on
                  December 22, 1983(2)                                              3(c)
          (l)     By-laws of the Registrant, as amended on
                  December 5, 1985(3)                                               3(f)
          (m)     By-laws of the Registrant, as amended on
                    April 25, 1991(6)                                               3.10
     4     (a)     Form of Underwriter's Warrant (6)                                4.9
          (b)     Form of Promissory Note - 1996 Offering                             *             69
          (c)     Form of Promissory Note - 1997 Offering                             *             76
          (d)     Form of Common Stock Purchase Warrant - 1996 Offering               *             83
          (e)     Form of Common Stock Purchase Warrant - 1997 Offering               *             88

  59

     10     (a)     Form of Financial Advisory Agreement between
                    Registrant and Commonwealth Associates (6)                      10.13
          (b)     Underwriting Agreement among Registrant,
                    Commonwealth Associates and Selling Stockholders,
                    dated November 15, 1991 (8)                                     10.14
          (c)     1986 Stock Option Plan, as amended (7)                            10.6
          (d)     1992 Stock Option Plan (9)                                           B
          (e)     Novation Agreement relating to a Share Sale and Purchase
                    Agreement dated April 24, 1994 among Brian John
                    Baylis, Susan Ann Meadows Crisp and Fidelity
                    Medical, Inc. dated March 2, 1995 (10)                            2(a)
          (f)     Supplemental Agreement relating to a Share Sale and
                    Purchase Agreement dated April 24, 1994 among
                    Brian John Baylis, Susan Ann Meadows Crisp and
                    Fidelity Medical, Inc. dated March 2, 1995 (10)                   2(b)
          (g)     Agreement for sale and purchase of the entire issued
                    share capital of Corniche Distribution Limited among
                    Brian John Baylis, Susan Ann Meadows Crisp and
                    Fidelity Medical, Inc. dated March 2, 1995 (10)                   2(c)
          (h)     Letter of Agreement between Fidelity Medical, Inc. and
                    NWCM Limited dated as of March 6, 1995 (10)                       2(d)
          (i)     Supplemental Agreement with respect to Options
                    dated March 2, 1995 (10)                                          9(b)
          (j)     Stock Purchase Agreement dated as of March 25, 1995
                    by and between Fidelity Medical, Inc. and Chester
                    Holdings, Ltd (11)                                                2(a)
          (k)     Promissory Note and Option Agreement dated as of
                    March 25, 1995 from Chester Holdings, Ltd. to
                    Fidelity Medical, Inc. (11)                                       2(b)
          (l)     Form of Warrant of Fidelity Medical, Inc. to be issued
                    to employees of Fidelity Medical, Inc., a New Jersey
                    corporation, in replacement of stock options (11)                 2(c)
          (m)     Stock Purchase Agreement dated as of January 30, 1997
                    by and among Registrant, the Bank of Scotland and 12 Buyers         *              93
          (n)     Mutual Release dated as of January 30, 1997 by and among
                    Registrant, James Fyfe and the Bank of Scotland                     *             115
     27     Financial Data Schedule                                                     *             118
     99     (a)     Opinion Letter of Smithsons Solicitors dated March 7, 1997
                    regarding the status of Registrant's former subsidiaries
                    as the result of the February 1996 receivership proceedings.        *             119
     99     (b)     Letter of James J. Fyfe Regarding Unavailablity of Re-signed
                    Audit Reports from Coopers & Lybrand LLP                            *     206
     99     (c)     Letter of Mahoney Cohen Rashba & Pokart, CPA, PC Regarding Their
                    Inability to Re-Sign Their July 25, 1995 Audit Report               *     210

* Filed herewith
________________

Notes:

(1)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-18, 
File No. 2-69627, which exhibit is incorporated herein by reference.

 60

(2)   Filed with the Securities and Exchange Commission as an exhibit, numbered
as indicated above, to the registration statement of Registrant on Form S-2, 
File No. 2-88712, which exhibit is incorporated herein by reference.

(3)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-2, 
File No. 33-4458, which exhibit is incorporated herein by reference.

(4)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1987, which exhibit is incorporated herein by 
reference.

(5)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-3, 
File No. 33-42287, which exhibit is incorporated herein by reference.

(6)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the registration statement of Registrant on Form S-1, 
File No. 33-42154, which exhibit is incorporated herein by reference.

(7)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1994, which exhibit is incorporated herein by 
reference.

(8)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the annual report of Registrant on Form 10-K for the 
year ended September 30, 1991, which exhibit is incorporated herein by 
reference.

(9)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the proxy statement of Registrant dated March 30, 1992, 
which exhibit is incorporated herein by reference.

(10)  Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the current report of Registrant on Form 8-K, dated 
March 2, 1995, which exhibit is incorporated herein by reference.

(11)Filed with the Securities and Exchange Commission as an exhibit, numbered 
as indicated above, to the current report of Registrant on Form 8-K, dated 
April 5, 1995, which exhibit is incorporated herein by reference.

 61

                                                                EXHIBIT 3 ( j )

 62

                                  STATE OF DELAWARE                  Page 1

                            OFFICE OF THE SECRETARY OF STATE

     I,  EDWARD J. FREEL,  secretary of state of the state of delaware, do 
hereby certify the attached is a true copy and correct copy of the certificate 
of amendment of "fidelity medical, inc.", changing its name from "fidelity 
medical, inc.", to "corniche group incorporated", filed in this office on the 
twenty-eighth dat of September, a.d. 1995, at 9 o'clock a.m. 

     a certified copy of this certificate has been forwarded to the kent 
county recorder of deeds for recording.

                  [DELAWARE'S STATE SEAL APPEARS AS WATERMARK]

                                   /s/  Edward J. Freel
                                   Edward J. Freel, Secretary of State
                                                   AUTHENTICATION:     7659162
                                                             DATE:     09-29-95
     0899444     0100
     950223828

 63

                                 CERTIFICATE OF AMENDMENT

                                            OF

                               CERTIFICATE OF INCORPORATION
 
                                           OF

                                  FIDELITY MEDICAL, INC.

                      (Under Section 242 of the General Corporation Law)

     The undersigned, being the President and Secretary, respectively, of 
Fidelity Medical, Inc., a corporation organized and existing under the laws of 
the State of Delaware (the "Corporation"), do hereby amend and certify as 
follows:

          1.     The name of the Corporation is Fidelity Medical, Inc.

          2.     The Certificate of Incorporation of the Corporation is hereby 
amended effective October 1, 1995 to effect the following amendments which 
were set forth in a resolution adopted by the board of directors and adopted 
by the holders of a majority of the outstanding shares of common stock of the 
Corporation entitled to vote thereon, in accordance with the provisions of 
Section 242 of the Delaware General Corporation Law: (a) to change the name of 
the Corporation, (b) to reduce the number of shares of common stock, par value 
$.01 per share ("Common Stock"), issued and outstanding by means of a reverse 
stock split of one share for every ten shares outstanding on October 1, 1995 
(without reducing the number of authorized common shares), and (c) to increase 
the number of authorized shares of Preferred Stock.

          3.     To accomplish the second of the foregoing amendments, Article 
FIRST of  the Restated Certificate of Incorporation is hereby amended to 
change the name of the corporation as follows: "The name of the Corporation is 
CORNICHE GROUP INCORPORATED."

          4.     To accomplish the second of the foregoing amendments, Article 
FOURTH of the Restated Certificate of Incorporation is amended by adding the 
following clause at the end of such Article, which reads in its entirety as 
follows:

                  Immediately prior to the date of filing this
                  Certificate of Amendment, there were 24,083,075
                  shares of Common Stock outstanding.  The Corporation
                  hereby is reducing the number of shares of Common Stock
                  issued and outstanding by means of a reverse stock split
                  of one for every ten shares outstanding on October 1, 
                  1995.  Upon surrender to the Corporation of certificates
                  (duly endorsed in blank) representing shares of common
                  Stock to be converted, certificates representing the
                  appropriate number of 

 64

                  shares of Common Stock will be issued.  with respect to
                  any resulting fractional shares, the Corporation shall (i)
                  arrange for the disposition of fractional interests by
                  those entitled thereto and (ii) pay in cash the fair 
                  value of fractions of a share as of the time when those
                  entitled to receive such fractions are determined.

          5.     To accomplish the third of the foregoing amendments, Article 
FOURTH of the Restated Certificate of Incorporation is restated in its 
entirety as follows (with the preceding paragraph to follow):

          FOURTH:   The total number of shares of stock which the Corporation 
shall have authority to issue is THIRTY FIVE MILLION (35,000,000) consisting 
of (i) Thirty Million(30,000,000) shares of Common Stock of the par value of 
$.10 per share and (ii) Five Million (5,000,000) shares of Preferred Stock of 
the par value of $.01 per share.

     The designations and the powers, preferences and right, and the 
qualifications, limitations or restrictions thereof of the Preferred Stock, 
and the Common Stock are as follows:

     A.     Preferred Stock.

          The Board of Directors is authorized, subject to limitations 
prescribed by law and the provisions of this Article FOURTH, to provide for 
the issuance of the Preferred Stock in series and by filing a Certificate 
pursuant to the Delaware General Corporation Law to establish the number of 
shares to be included in each such series.  The Preferred Stock may be issued 
either as a class without series, or as so determined from time to time by the 
Board of Directors, either in whole or in part in one or more series, each 
series to be appropriately designated by a distinguishing number, letter or 
title prior to the issue of any shares thereof.  Whenever the term "Preferred 
Stock" is used in this Article FOURTH, it shall be deemed to mean and include 
Preferred Stock issued as a class without series, or one or more series 
thereof, or both unless the context shall otherwise require.  There is hereby 
expressly granted to the Board of Directors of the Corporation authority, 
subject to the limitations provided by law, to fix the voting power, the 
designations, and the relative preferences, powers, participating, optional or 
other special rights, and the qualifications, limitations or restrictions 
thereof, of the shares of each series of said Preferred Stock and the 
variations in the relative powers, rights, preferences and limitations as 
between series, and to increase the number of shares constituting each series, 
and to decrease such number of shares (list not to less than tile number of 
outstanding shares of the series), in the resolution or resolutions adopted by 
the Board of Directors providing for the issue of said Preferred stock.

     The authority of the Board of Directors of die corporation with respect 
to each series shall include, but shall not be limited to, the authority to 
determine the following:

     1. The designation of the series;

     2. The number of shares initially constituting such series;

 65

     3. The increase, and the decrease to a number not less than the
number of the outstanding shares of such series, of the number of shares
constituting such series theretofore, fixed;

     4.  The rate or rates and the times and conditions under which dividends
on the shares of such series shall be paid, and, (i) if such dividends are 
payable in preference to, or in relation to, the dividends payable on any 
other class or classes of stock, the terms and conditions of such payment, and 
(ii) if such dividends shall be cumulative, the date or dates from and after 
which they shall accumulate;

     5.  Whether or not the shares of such series shall be redeemable, and, if 
such shares shall be redeemable, the terms and conditions of such redemption, 
including, but not limited to, the date or dates upon or after which such 
shares shall be redeemable and the amount per share which shall be payable 
upon such redemption, which amount may vary under conditions and at different 
redemption dates;

     6.  The amount payable on the shares of such series in the event of the 
dissolution of, or upon any distribution of the assets of, the Corporation;

     7.  Whether or not the shares of such series may be convertible into, or 
exchangeable for, shares, of any other class or series and the price or prices 
and the rates of exchange and the terms of any adjustments to be made in 
connection with such conversion or exchange;

     8.  Whether or not the shares of such series shall have voting rights in 
addition to the voting rights provided by law, and, if such shares shall have 
such voting rights, the terms and conditions thereof, including but not 
limited to, the right of the holders of such shares to vote as a separate 
class either alone or with the holders of shares of one or more other series 
of Preferred Stock and the right to have more or less than one vote per share;

     9.  Whether or not a purchase fund shall be provided for the shares of
such series, and, if such a purchase fund shall be provided, the terms and 
conditions thereof;

     10.  Whether or not a sinking fund shall be provided for the redemption of 
the shares of such series and if such a sinking fund shall be provided, the 
terms and conditions thereof; and

     11.  Any other powers, preferences and relative, participating, optional, 
or other special rights, and qualifications, limitations or restrictions 
thereof, as shall not be inconsistent with the provisions of this Article 
FOURTH or the limitations provided by law.

 66

B.     Common Stock.

     1.  Subject to the rights of the Preferred stockholders, the holders of
the Common Stock shall be entitled to receive such dividends as may be declared
thereon by the Board of Directors of the Corporation in its discretion, from 
time to time, out of any funds or assets of the Corporation lawfully available 
for the payment of such dividends.

     2.  In the event of any liquidation, dissolution or winding up of the 
Corporation, or any reduction of its capital, resulting in a distribution of 
its assets to its stockholders, whether voluntary or involuntary, then, after 
there shall have been paid or set apart for the holders of the Preferred Stock 
the full preferential amounts to which they are entitled, the holders of the 
Common Stock shall be entitled to receive as a class, pro rata, the remaining 
assets of the Corporation available for distribution to its stockholders.

     3.  For any and all purposes of this Certificate of Incorporation neither 
the merger or consolidation of the Corporation into or with any other 
corporation, nor the merger or consolidation of any other corporation into or 
with the Corporation, nor a sale, transfer or lease of all or substantially 
all of the assets of the Corporation, or any other transaction or series of 
transactions having the effect of a reorganization shall be deemed to be a 
liquidation, dissolution or winding-up of the Corporation.

     4.  Except as otherwise expressly provided by, law or in a resolution of 
the Board of Director, providing voting rights to the holders of the Preferred 
Stock, the holders of the Common Stock shall possess exclusive voting power 
for the election of directors and for all other purposes and each holder 
thereof shall be entitled to one vote for each share thereof.

 67

          IN WITNESS WHEREOF,  the undersigned being duly elected officers of 
the above-named corporation, have executed this Certificate of Amendment and 
affirm the statements herein contained on this 28th day of September, 1995.

                              FIDELITY MEDICAL INC.

                              By: /s/ Brian J. Baylis                    
                                  Brian J. Baylis, President

ATTEST:

/s/ Susan A.M. Crisp                  
Susan A. M. Crisp, Secretary

 68
                                                               EXHIBIT 4 ( b )

 69

NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION 
THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 
"ACT"), OR ANY STATE SECURITIES LAW, AND MAY BE TRANSFERRED ONLY IF 
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR ANY APPLICABLE STATE 
SECURITIES LAW OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE

                                  PROMISSORY NOTE

No.  NA-__________                                                  $25,000

Dated: ____________, 1996                                  Wayne, New Jersey

FOR VALUE RECEIVED, CORNICHE GROUP INCORPORATED, a Delaware corporation 
(hereinafter called the "Company), hereby promises to pay

                     ________________________________________
                                     (Name)

                     ________________________________________
                                 (Street and No.)

                     ________________________________________
                           (City, State and Zip Code)

                     ________________________________________
                 (Social Security No. or Federal Employer ID No.)

                       ________________________________________
                                   (Date of Birth)

(herein called the "Holder"), or to his order, the sum of TWENTY-FIVE THOUSAND 
DOLLARS ($25,000), together with interest thereon at the rate of eight percent 
(8%) per annum from the date hereof on ________, _____.  Interest shall be 
payable at maturity, and shall be computed on the balance of principal 
outstanding from time to time based on actual number of days elapsed.

     Both principal hereof and interest thereon are payable in lawful money of 
the United States of America at the Holder's address above or such other 
address as the Holder shall designate in writing delivered to the Company from 
time to time.

 70

                                   ARTICLE ONE

                                EVENTS OF DEFAULT

     If any of the following events of default (each, an "Event of Default") 
shall occur, the Holder hereof, at its option, may declare the sum of 
principal then remaining unpaid hereon immediately due and payable.

1.01     Event of Default

     For purposes of this instrument, an Event of Default will be deemed to 
have occurred if:

          (a)     the Company shall fail to pay the principal of or interest 
due on this Promissory Note on the due date and such non-payment shall 
continue for a period of five (5) days from the date due; or

          (b)     a receiver, liquidator or trustee of the Company or of any 
property of the Company, shall be appointed by court order and such 
appointment shall remain in effect for 60 days; or the Company shall be 
adjudged bankrupt or insolvent; or any of the property of the Company shall be 
sequestered by court order and such order shall remain in effect for more than 
60 days; or a petition to reorganize the Company under any bankruptcy, 
reorganization or insolvency law shall be filed against the Company and shall 
not be dismissed within 60 days after such filing; or

          (c)     the Company shall file a petition in voluntary bankruptcy or 
requesting reorganization under any provision of any bankruptcy, 
reorganization or insolvency law or shall consent to the filing of any 
petition against it under any such law; or

          (d)     the Company shall make a formal or informal assignment for 
the benefit of its creditors or admit in writing its inability to pay its 
debts generally when they become due or shall consent to the appointment of a 
receiver, trustee or liquidator of the Company or of all or part of the 
property of the Company after the date hereof.

     1.02     Remedies on Default

     If an Event of Default shall have occurred, in addition to its rights and 
remedies under this Promissory Note, and any other instruments, the Holder may 
at its option by written notice to the Company declare all indebtedness to the 
Holder hereunder to be due and payable, together with all reasonable expenses 
of enforcement of the Holder's rights including legal fees and related 
disbursements, whereupon the same shall forthwith mature and become due and 
payable without any further notice to and without presentment, demand, protest 
or notice of protest, all of which are hereby waived.

     The Holder may proceed to protect and enforce its rights by suit in 
equity, action at law or other appropriate proceedings, including, without 
limitation action for specific performance of any agreement contained herein 
or in any other instrument, or for an injunction against a violation of any of 
the terms hereof or thereof, or in aid of the exercise of any right, power or 
remedy granted hereby or by law, equity or otherwise.

                                 ARTICLE TWO

                             CONVERSION PRIVILEGE

     The Company hereby grants to the Holder of this Promissory Note the right 
to convert the principal and interest on this Promissory Note into fully paid 
and non-assessable shares of the Company's Common Stock, $0.10 par value, at 
the "Conversion Price" per share.  The "Conversion Price" is defined as ten 
cents ($0.10). 

 71

The right to convert may be exercised at any time after an Event of Default up 
to and including _____________, ____.  The right to convert may only be 
exercised with respect to the entire amount due on this Promissory Note at the 
exercise date.  The Company will reserve 300,000 (three hundred thousand) 
shares of its Common Stock for the foregoing purpose.

     2.01     Exercise Procedure

          (a)     The Conversion privilege shall be deemed to have been
exercised (the "Exercise Time") when the Company shall have received all of 
the following:

          (i)     a properly completed Exercise Agreement in the form set out 
in Section 2.02 below executed by the Holder; and

          (ii)     this Promissory Note.

          (b)     Certificates for the underlying shares acquired shall be 
delivered to the purchaser within 20 days after the Exercise Time.

     2.02     Exercise Agreement

     Upon exercise, the undersigned shall execute an agreement stating as 
follows: "An event of default has occurred which has not been cured and 
therefore the undersigned irrevocably elects to subscribe for and purchase 
shares of the Company's Common Stock as provided in the Promissory Note, and 
makes payment in full therefor by conversion.  The undersigned hereby 
represents and warrants that the shares of Common Stock to be acquired upon 
exercise are being acquired for its own account, without any present intention 
of reoffering, reselling or distributing such Common Stock, except to the 
extent permitted under the Securities Act of 1993, as amended".

2.03     Changes in Capital Structure

          (a)     In the event that the outstanding shares of Common Stock of 
the Company are hereafter increased or decreased, or changed into or exchanged 
for a different number or kind of shares or other securities of the Company, 
or of any other corporation, by reason of reorganization, merger, 
consolidation, recapitalization, reclassification, stock split-up, combination 
of shares, or dividends payable in capital stock of the Company, appropriate 
adjustments shall be made by the Company in the number and kind of shares to 
be purchased upon exercise of this conversion right to the end that the 
Holder's proportionate interest shall not be altered.  All such adjustments 
made by the Board of Directors of the Company shall be conclusive, absent 
manifest error.

          (b)     Until this Promissory Note has been paid in full or the 
conversion privilege has been exercised, the Company will not issue any shares 
of its Common Stock for a price less than the then fair market value of the 
stock.

                                   ARTICLE THREE

                               RESTRICTIONS ON TRANSFER

     The Holder, by execution of the acknowledgment at the end of this 
Promissory Note, acknowledges that it understands that the Company will rely 
upon the representations set forth herein in issuing the Promissory Note and 
the Underlying Shares, if any, without registration under the Securities Act 
of 1933, as amended, the New Jersey Uniform Securities Law, or any other state 
securities law.

 72

     Accordingly, the Holder, by acceptance of the Promissory Note, represents 
and warrants that this offering is being made pursuant to the exemption from 
registration with the Securities and Exchange Commission ("SEC") afforded by 
Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended ("Act") 
relating to transactions by an issuer not involving any public offering.  The 
Holder understands that the Company has no present intention, and is under no 
obligation to, register the Promissory Note or the Underlying Shares under the 
Act, or any applicable state law.

     The Holder understands that due to lack of registration, the Promissory 
Note and the Underlying Shares will be restricted securities, that the holder 
must bear the economic risk of the investment for an indefinite period, that 
the Promissory Note and the Underlying Shares may not be sold, pledged or 
otherwise disposed of unless they are registered under the Act and any 
applicable state securities law, or an exemption from such laws is available 
and the Company is supplied with an opinion of counsel to the Holder, 
satisfactory to the Company, that registration is not required under any of 
such laws, and in the opinion of counsel for the Company, such sale, transfer, 
or pledge will not cause the Company to fail to be in compliance with the 
exemption provisions under which the Promissory Note or the Underlying Shares 
were issued.

     The Holder has such knowledge and experience in financial and business 
affairs that it is capable of evaluating the merits and risks of the 
prospective investment.

     The Holder is able to bear the economic risk of this investment.  An 
investment in the Promissory Note and the Underlying Shares is suitable for 
the Holder in light of its financial position and investment objectives, with 
full knowledge that this investment could result in a complete loss.  The 
Holder recognizes that the Promissory Note represents a HIGH-RISK, SPECULATIVE 
INVESTMENT and that there is no assurance that any return will be received 
thereon.  The Holder can afford a total loss of this investment.

The Holder is an Accredited Investor" as that term is defined in Regulation D 
under the Securities Act of 1933 as amended.

     The Promissory Note is being, and the Underlying Shares will be, 
purchased for the Holder's own account for investment purposes and not with a 
view to the resale or distribution thereof by the Holder.

     The Holder has reviewed the Company's Annual Report on Form 10-K for the 
year ended March 25, 1995; its quarterly reports on Form 10-Q for the quarters 
ended June 17, October 6, and December 30, 1995; its proxy statement for an 
annual meeting held on September 28, 1995; and all current reports on Form 8-K 
filed on or after March 25, 1995, including but not limited to, the Form 8-K 
filed on February 12, 1996.  The Holder has also been informed that the 
proceeds of this investment shall be used for general corporate purposes, 
including the settlement of accrued past due liabilities due to the Company's 
professional advisors, suppliers of goods and corporate services, director and 
officer liability insurance premiums and director and officer fees and 
expenses.  Prior to the date hereof, the Holder has had ample opportunity to 
ask questions of and receive answers from the officers and directors of the 
Company, concerning the Company, the Promissory Note and the Company's 
business and to obtain any additional information which was considered 
necessary to verify the information supplied by those individuals.

     The Holder understands that a restrictive legend in substantially the 
following form shall be placed on the certificates representing the Underlying 
Shares:

"The shares represented by this certificate have not been registered under the 
Securities Act of 1933, as amended ("Act").  Such shares have been acquired 
for investment and may not be publicly offered or sold in the absence of (1) 
an effective registration for such shares under the Act; (2) opinions of 
counsel to the Company and to the holder hereof and presented to the Company 
prior to any proposed transfer to the effect that registration is not required 
under the Act; or (3) a letter presented to the Company, prior to any proposed

 73

transfer, from the staff of the Securities and Exchange Commission, to the 
effect that it will not take enforcement action if the proposed transfer is 
made without registration under the Act"

     Except as set forth in the documents which the Holder has reviewed, no 
representations or warranties have been made to the Holder by the Company.  In 
entering into this transaction, the Holder is not relying upon any 
information, other than the results of its own independent investigation.

                                 ARTICLE FOUR

                        PIGGY-BACK REGISTRATION RIGHTS

     If this Promissory Note has been converted to Common Stock, and if the 
Company proposes to file a registration statement under the Securities Act 
with respect to an offering by the Company of Company Common Stock (other than 
a registration statement on Form S-4 or S-8 or any form substituting therefor) 
the Company shall in each such case give written notice of such proposed 
filing and the proposed method of distribution of securities covered by such 
proposed filing to the Holder of shares issued upon conversion of this 
Promissory Note at least ten (10) days before the anticipated filing date.  
The Company will use its best efforts to include in the registration statement 
proposed to be filed by the Company all shares issued upon conversion hereof 
and other Promissory Notes in this series with respect to which the Company 
has received written requests for inclusion therein prior to the anticipated 
filing date.  Notwithstanding the foregoing, if the managing underwriter or 
underwriters of such offering deliver a written opinion to the holders of 
securities to be included therein to the effect that .the total amount of 
securities intended to be included in such offering would materially and 
adversely affect the success of such offering, then the amount of securities 
to be offered for the account of the participating holders shall be reduced 
(pro rata among the participating holders) to the extent necessary to reduce 
the total amount of securities to be included in such offering to the amount 
recommended by such managing underwriter or underwriters.  The Holder shall 
provide the Company and any underwriters with any further documents and 
assurances reasonably required to effect such registration.  Notwithstanding 
anything to the contrary herein, if the Company determines, in its business 
judgment, that there are business reasons to delay the effectiveness of,-or to 
withdraw, a registration statement prior to it becoming effective under the 
Securities Act, the Company shall not be deemed to have breached any of its 
obligations hereunder.

                                ARTICLE FIVE

                                MISCELLANEOUS

5.01     Failure or Delay Not Waiver

     No failure or delay on the part of the Holder hereof in the exercise of 
any power, right or privilege hereunder shall operate as a waiver thereof, nor 
shall any single or partial exercise of any such power, right or privilege precl
ude, other or further exercise thereof or of any other right, power or 
privilege.  All rights and remedies existing hereunder are cumulative to, and 
not exclusive of, any rights or remedies otherwise available.

5.02     Notices

     Any notice herein required or permitted to be given shall be given by 
federal express or similar overnight courier or by same day courier service or 
by certified mail, return receipt requested, if to the Holder, at the address 
set forth on the first page hereof, or, if to the Company:

 74

     Corniche Group Incorporated, Wayne Interchange Plaza 1, 145 Route 46 
West, Wayne, New Jersey 07470.

5.03     Amendments

     The term "Promissory Note" or "this Promissory Note" and all reference 
thereto, as used through this instrument, shall mean this instrument as 
originally executed or, if later amended or supplemented, then, as so amended 
or supplemented

     5.04     Assignability

     This Promissory Note shall be binding on the Company, its successors and 
assigns, and shall inure to the benefit of the Holder, its successors and 
assigns.

     5.05     Governing Law and Jurisdiction

     This Promissory Note has been executed in and shall be governed by the 
laws of the State of New Jersey and any proceeding brought to enforce its 
terms shall be brought in a federal or state court located in the State of New 
Jersey.

     5.06     No Personal Liability

     No officer, director, shareholder, employee, consultant or agent of the 
Company shall be personally liable for repayment of this Promissory Note.

     IN WITNESS WHEREOF, the Company has caused this Promissory Note to be 
signed in its name by its duly authorized officer and its-corporate seal to be 
affixed hereto.
 
                                          CORNICHE GROUP INCORPORATED

                                          _________________________________
                                          James J. Fyfe
                                          Director and Vice President

     I acknowledge the accuracy of the representations in Article Three of 
this Promissory Note.

                                          By:______________________________

 75

                                                               EXHIBIT 4 ( c )

 76

NEITHER THIS PROMISSORY NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION 
THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 
"ACT"), OR ANY STATE SECURITIES LAW, AND MAY BE TRANSFERRED ONLY IF 
REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR ANY APPLICABLE STATE 
SECURITIES LAW OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE

                                 PROMISSORY NOTE

No.  NA-__________                                                     $25,000

Dated: ____________, 1997                                    Wayne, New Jersey

FOR VALUE RECEIVED, CORNICHE GROUP INCORPORATED, a Delaware corporation 
(hereinafter called the "Company), hereby promises to pay

                    ______________________________________________
                                       (Name)

                    ______________________________________________
                                  (Street and No.)

                    ______________________________________________
                            (City, State and Zip Code)

                    ______________________________________________
                   (Social Security No. or Federal Employer ID No.)

                    ______________________________________________
                                   (Date of Birth)

(herein called the "Holder"), or to his order, the sum of TWENTY-FIVE THOUSAND 
DOLLARS ($25,000), together with interest thereon at the rate of eight percent 
(8%) per annum from the date hereof on __________  ___, 1997.  Interest shall 
be payable at maturity, and shall be computed on the balance of principal 
outstanding from time to time based on actual number of days elapsed.

     Both principal hereof and interest thereon are payable in lawful money of 
the United States of America at the Holder's address above or such other 
address as the Holder shall designate in writing delivered to the Company from 
time to time.

                                  ARTICLE ONE

                               EVENTS OF DEFAULT

     If any of the following events of default (each, an "Event of Default") 
shall occur, the Holder hereof, at its option, may declare the sum of 
principal then remaining unpaid hereon immediately due and payable.

 77

1.01     Event of Default

     For purposes of this instrument, an Event of Default will be deemed to 
have occurred if:

          (a)     the Company shall fail to pay the principal of or interest 
due on this Promissory Note on the due date and such non-payment shall 
continue for a period of five (5) days from the date due; or

          (b)     a receiver, liquidator or trustee of the Company or of any 
property of the Company, shall be appointed by court order and such 
appointment shall remain in effect for 60 days; or the Company shall be 
adjudged bankrupt or insolvent; or any of the property of the Company shall be 
sequestered by court order and such order shall remain in effect for more than 
60 days; or a petition to reorganize the Company under any bankruptcy, 
reorganization or insolvency law shall be filed against the Company and shall 
not be dismissed within 60 days after such filing; or

          (c)     the Company shall file a petition in voluntary bankruptcy or 
requesting reorganization under any provision of any bankruptcy, 
reorganization or insolvency law or shall consent to the filing of any 
petition against it under any such law; or

          (d)     the Company shall make a formal or informal assignment for 
the benefit of its creditors or admit in writing its inability to pay its 
debts generally when they become due or shall consent to the appointment of a 
receiver, trustee or liquidator of the Company or of all or part of the 
property of the Company after the date hereof.

     1.02     Remedies on Default

     If an Event of Default shall have occurred, in addition to its rights and 
remedies under this Promissory Note, and any other instruments, the Holder may 
at its option by written notice to the Company declare all indebtedness to the 
Holder hereunder to be due and payable, together with all reasonable expenses 
of enforcement of the Holder's rights including legal fees and related 
disbursements, whereupon the same shall forthwith mature and become due and 
payable without any further notice to and without presentment, demand, protest 
or notice of protest, all of which are hereby waived.

     The Holder may proceed to protect and enforce its rights by suit in 
equity, action at law or other appropriate proceedings, including, without 
limitation action for specific performance of any agreement contained herein 
or in any other instrument, or for an injunction against a violation of any of 
the terms hereof or thereof, or in aid of the exercise of any right, power or 
remedy granted hereby or by law, equity or otherwise.

                                ARTICLE TWO

                            CONVERSION PRIVILEGE

     The Company hereby grants to the Holder of this Promissory Note the right 
to convert the principal and interest on this Promissory Note into fully paid 
and non-assessable shares of the Company's Common Stock, $0.10 par value, at 
the "Conversion Price" per share.  The "Conversion Price,, is defined as ten 
cents ($0.10). The right to convert may be exercised at any time after an 
Event of Default up to and including ____________, 1997.  The right to convert 
may only be exercised with respect to the entire amount due on this Promissory 
Note at the exercise date.  The Company will reserve 300,000 (three hundred 
thousand) shares of its Common Stock for the foregoing purpose.

  78

     2.01     Exercise Procedure

          (a)     The Conversion privilege shall be deemed to have been
exercised (the "Exercise Time") when the Company shall have received all of 
the following:

          (i)     a properly completed Exercise Agreement in the form set out 
in Section 2.02 below executed by the Holder; and

          (ii)     this Promissory Note.

          (b)     Certificates for the underlying shares acquired shall be 
delivered to the purchaser within 20 days after the Exercise Time.

     2.02     Exercise Agreement

     Upon exercise, the undersigned shall execute an agreement stating as 
follows: "An event of default has occurred which has not been cured and 
therefore the undersigned irrevocably elects to subscribe for and purchase 
shares of the Company's Common Stock as provided in the Promissory Note, and 
makes payment in full therefor by conversion.  The undersigned hereby 
represents and warrants that the shares of Common Stock to be acquired upon 
exercise are being acquired for its own account, without any present intention 
of reoffering, reselling or distributing such Common Stock, except to the 
extent permitted under the Securities Act of 1993, as amended".

2.03     Changes in Capital Structure

          (a)     In the event that the outstanding shares of Common Stock of 
the Company are hereafter increased or decreased, or changed into or exchanged 
for a different number or kind of shares or other securities of the Company, 
or of any other corporation, by reason of reorganization, merger, 
consolidation, recapitalization, reclassification, stock split-up, combination 
of shares, or dividends payable in capital stock of the Company, appropriate 
adjustments shall be made by the Company in the number and kind of shares to 
be purchased upon exercise of this conversion right to the end that the 
Holder's proportionate interest shall not be altered.  All such adjustments 
made by the Board of Directors of the Company shall be conclusive, absent 
manifest error.

          (b)     Until this Promissory Note has been paid in full or the 
conversion privilege has been exercised, the Company will not issue any shares 
of its Common Stock for a price less than the then fair market value of the 
stock.

                                ARTICLE THREE

                           RESTRICTIONS ON TRANSFER

     The Holder, by execution of the acknowledgment at the end of this 
Promissory Note, acknowledges that it understands that the Company will rely 
upon the representations set forth herein in issuing the Promissory Note and 
the Underlying Shares, if any, without registration under the Securities Act 
of 1933, as amended, the New Jersey Uniform Securities Law, or any other state 
securities law.

     Accordingly, the Holder, by acceptance of the Promissory Note, represents 
and warrants that this offering is being made pursuant to the exemption from 
registration with the Securities and Exchange Commission ("SEC") afforded by 
Sections 3(b) and/or 4(2) of the Securities Act of 1933, as amended ("Act") 
relating to transactions by an issuer not involving any public offering.  The 
Holder understands that the 

 79

Company has no present intention, and is under no obligation to, register the 
Promissory Note or the Underlying Shares under the Act, or any applicable 
state law.

     The Holder understands that due to lack of registration, the Promissory 
Note and the Underlying Shares will be restricted securities, that the holder 
must bear the economic risk of the investment for an indefinite period, that 
the Promissory Note and the Underlying Shares may not be sold, pledged or 
otherwise disposed of unless they are registered under the Act and any 
applicable state securities law, or an exemption from such laws is available 
and the Company is supplied with an opinion of counsel to the Holder, 
satisfactory to the Company, that registration is not required under any of 
such laws, and in the opinion of counsel for the Company, such sale, transfer, 
or pledge will not cause the Company to fail to be in compliance with the 
exemption provisions under which the Promissory Note or the Underlying Shares 
were issued.

     The Holder has such knowledge and experience in financial and business 
affairs that it is capable of evaluating the merits and risks of the 
prospective investment.

     The Holder is able to bear the economic risk of this investment.  An 
investment in the Promissory Note and the Underlying Shares is suitable for 
the Holder in light of its financial position and investment objectives, with 
full knowledge that this investment could result in a complete loss.  The 
Holder recognizes that the Promissory Note represents a HIGH-RISK, SPECULATIVE 
INVESTMENT and that there is no assurance that any return will be received 
thereon.  The Holder can afford a total loss of this investment.

The Holder is an Accredited Investor" as that term is defined in Regulation D 
under the Securities Act of 1933 as amended.

     The Promissory Note is being, and the Underlying Shares will be, 
purchased for the Holder's own account for investment purposes and not with a 
view to the resale or distribution thereof by the Holder.

     The Holder has reviewed the Company's Annual Report on Form 10-K for the 
year ended March 25, 1995; its quarterly reports on Form 10-Q for the quarters 
ended June 17, October 6, and December 30, 1995; its proxy statement for an 
annual meeting held on September 28, 1995; and all current reports on Form 8-K 
filed on or after March 25, 1995, including but not limited to, the Form 8-K 
filed on February 12, 1996.  The Holder has also been informed that the 
proceeds of this investment shall be used for general corporate purposes, 
including the settlement of accrued past due liabilities due to the Company's 
professional advisors, suppliers of goods and corporate services, director and 
officer liability insurance premiums and director and officer fees and 
expenses.  Prior to the date hereof, the Holder has had ample opportunity to 
ask questions of and receive answers from the officers and directors of the 
Company, concerning the Company, the Promissory Note and the Company's 
business and to obtain any additional information which was considered 
necessary to verify the information supplied by those individuals.

     The Holder understands that a restrictive legend in substantially the 
following form shall be placed on the certificates representing the Underlying 
Shares:

"The shares represented by this certificate have not been registered under the 
Securities Act of 1933, as amended ("Act").  Such shares have been acquired 
for investment and may not be publicly offered or sold in the absence of (1) 
an effective registration for such shares under the Act; (2) opinions of 
counsel to the Company and to the holder hereof and presented to the Company 
prior to any proposed transfer to the effect that registration is not required 
under the Act; or (3) a letter presented to the Company, prior to any proposed 
transfer, from the staff of the Securities and Exchange Commission, to the 
effect that it will not take enforcement action if the proposed transfer is 
made without registration under the Act"

 80

     Except as set forth in the documents which the Holder has reviewed, no 
representations or warranties have been made to the Holder by the Company.  In 
entering into this transaction, the Holder is not relying upon any 
information, other than the results of its own independent investigation.

                              ARTICLE FOUR

                        PIGGY-BACK REGISTRATION RIGHTS

     If this Promissory Note has been converted to Common Stock, and if the 
Company proposes to file a registration statement under the Securities Act 
with respect to an offering by the Company of Company Common Stock (other than 
a registration statement on Form S-4 or S-8 or any form substituting therefor) 
the Company shall in each such case give written notice of such proposed 
filing and the proposed method of distribution of securities covered by such 
proposed filing to the Holder of shares issued upon conversion of this 
Promissory Note at least ten (10) days before the anticipated filing date.  
The Company will use its best efforts to include in the registration statement 
proposed to be filed by the Company all shares issued upon conversion hereof 
and other Promissory Notes in this series with respect to which the Company 
has received written requests for inclusion therein prior to the anticipated 
filing date.  Notwithstanding the foregoing, if the managing underwriter or 
underwriters of such offering deliver a written opinion to the holders of 
securities to be included therein to the effect that .the total amount of 
securities intended to be included in such offering would materially and 
adversely affect the success of such offering, then the amount of securities 
to be offered for the account of the participating holders shall be reduced 
(pro rata among the participating holders) to the extent necessary to reduce 
the total amount of securities to be included in such offering to the amount 
recommended by such managing underwriter or underwriters.  The Holder shall 
provide the Company and any underwriters with any further documents and 
assurances reasonably required to effect such registration.  Notwithstanding 
anything to the contrary herein, if the Company determines, in its business 
judgment, that there are business reasons to delay the effectiveness of, or to 
withdraw, a registration statement prior to it becoming effective under the 
Securities Act, the Company shall not be deemed to have breached any of its 
obligations hereunder.

                                     ARTICLE FIVE

                                     MISCELLANEOUS

5.01     Failure or Delay Not Waiver

     No failure or delay on the part of the Holder hereof in the exercise of 
any power, right or privilege hereunder shall operate as a waiver thereof, nor 
shall any single or partial exercise of any such power, right or privilege 
preclude, other or further exercise thereof or of any other right, power or priv
ilege.  All rights and remedies existing hereunder are cumulative to, and not 
exclusive of, any rights or remedies otherwise available.

5.02     Notices

     Any notice herein required or permitted to be given shall be given by 
federal express or similar overnight courier or by same day courier service or 
by certified mail, return receipt requested, if to the Holder, at the address 
set forth on the first page hereof, or, if to the Company:

     Corniche Group Incorporated, Wayne Interchange Plaza 1, 145 Route 46 
West, Wayne, New Jersey 07470.

 81

5.03     Amendments

     The term "Promissory Note" or "this Promissory Note" and all reference 
thereto, as used through this instrument, shall mean this instrument as 
originally executed or, if later amended or supplemented, then, as so amended 
or supplemented

     5.04     Assignability

     This Promissory Note shall be binding on the Company, its successors and 
assigns, and shall inure to the benefit of the Holder, its successors and 
assigns.

     5.05     Governing Law and Jurisdiction

     This Promissory Note has been executed in and shall be governed by the 
laws of the State of New Jersey and any proceeding brought to enforce its 
terms shall be brought in a federal or state court located in the State of New 
Jersey.

     5.06     No Personal Liability

     No officer, director, shareholder, employee, consultant or agent of the 
Company shall be personally liable for repayment of this Promissory Note.

     IN WITNESS WHEREOF, the Company has caused this Promissory Note to be 
signed in its name by its duly authorized officer and its-corporate seal to be 
affixed hereto.

                                              CORNICHE GROUP INCORPORATED

                                             _________________________________
                                             James J. Fyfe
                                             Director and Vice President
 
     I acknowledge the accuracy of the representations in Article Three of 
this Promissory Note.

                                            By:______________________________

 82

                                                               EXHIBIT 4 ( d )

 83

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE THEREOF HAVE BEEN 
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES 
ACT"); AND THIS WARRANT IS NOT TRANSFERABLE EXCEPT ON DEVOLUTION OF SUCH 
WARRANT BY OPERATION OF THE LAWS OF DESCENT AND DISTRIBUTION IN THE EVENT OF 
THE DEATH OR ADJUDICATED INCOMPETENCE OF THE HOLDER.

No.  WA-__________                            3-Year Warrant to purchase
                                        *60,000* shares (subject to adjustment)
Dated: _____________, 1996                 of common stock, $.10 par value, of
                                              Corniche Group Incorporated

                     VOID AFTER ______________, 1999

                       CORNICHE GROUP INCORPORATED

         Non-Transferable, Redeemable Common Stock Purchase Warrant

     Corniche Group Incorporated (hereby called the "Company"), a Delaware 
corporation, hereby certifies that, for and in consideration of the sum of 
$1,000:

                  ______________________________________________
                                      (Name)

                  ______________________________________________
                                 (Street and No.)

                   ______________________________________________
                             (City, State and Zip Code)

                   ______________________________________________
                  (Social Security No. or Federal Employer ID No.)

                   ______________________________________________
                                  (Date of Birth)

is entitled to purchase from the Company, at any time or from time to time, 
subsequent to the date of issuance hereof and before 3:00 P.M. New York local 
time on _________, 1999 (the "Exercise Period"), subject to prior redemption 
by the Company, an aggregate of up to 60,000 fully paid and non-assessable 
shares (the number or character of such shares being subject to adjustment as 
provided below) of the common stock, $.10 par value per share, of the Company 
(the "Underlying Shares") on the payment therefor of $.50 for each share of 
the common stock subscribed for and purchased, upon the surrender of this 
warrant duly signed by the registered holder hereof or assigns at the time of 
subscription, accompanied by payment of the total subscription price in cash 
or by certified check or bank draft payable to the order of the Company, upon 
the terms and subject to the conditions hereinafter set forth.

     1.     Notice of Exercise.  Notice of intention to exercise any of the 
purchase rights evidenced by this warrant must be given during the Exercise 
Period by written notice addressed to the Company at its principal office or 
by written notice addressed to its duly designated and acting agent, if any, 
at least 10 days prior to any intended exercise.  Such notice shall specify 
the date on which purchase rights are to be exercised and the number of shares 
of the common stock to be purchased on that date.

 84

     2.     Exercise of Warrant.  On or before the date of exercise specified 
in such notice given during the Exercise Period, the holder shall surrender 
this warrant (in negotiable form, if not surrendered by the holder named 
above) to the principal office of the Company, or to that of its duly 
designated and acting agent with the exercise form attached to this warrant 
duly signed together with the purchase price of the common stock represented 
by certified or official bank check on New York Clearing House funds payable 
to the order of the Company, in the amount of the said purchase price.

     3.     Delivery of Stock Certificates on Exercise.  As soon as 
practicable after the exercise of this warrant and payment of the purchase 
price, and in any event no later than 10 days thereafter, the Company or its 
duly designated and acting agent, if any, will cause to be issued in the name 
of and delivered to the holder hereof, or such holder's nominee or nominees, a 
certificate or certificates for the number of full shares of the common stock 
of the Company to which such holder shall be entitled upon such exercise.  In 
case, between the date of such exercise and the date on which such certificate 
or certificates are issued, the record holder of such shares shall become 
entitled to any dividend or other right, the Company will forthwith pay or 
cause to be paid in cash to the holder hereof the amount of such dividend, or 
transfer to the holder hereof such right, as the case may be.  No fraction of 
a share or scrip certificate for such fraction shall be issued upon the 
exercise of this warrant; in lieu thereof, the Company will pay or cause to be 
paid to such holder cash equal to a like fraction at the then prevailing 
market price for such share as determined by the Company.

     4.     Partial Exercise of a Warrant.  In case this warrant shall be 
exercised for less than the full number of shares to which the holder is 
entitled the Company, at its expense, will issue, or will cause to be issued 
and delivered to the holder hereof, a new warrant or warrants of like tenor 
issued in said holder's name, representing the unexercised warrants.

     5.     Dividends in Stock, Property, Reclassifications.  In case at any 
time or from time to time the holders of the common stock of the Company (or 
any other shares of stock or other securities at that time receivable upon 
exercise of this warrant) shall have received, or as of a record date shall 
have become entitled to receive other or additional or less stock or other 
securities or property (other than cash) without payment therefor (whether 
through a dividend in stock of any class of stock of the Company or any other 
corporation, or a dividend in any securities or property other than cash, or 
through stock split, spin-off, reclassification, combination, of shares or 
otherwise), then and in each such case the holder of this warrant upon the 
exercise thereof and upon the payment of the sum obtained by multiplying (a) 
the number of shares of the common stock of the Company called for on the face 
of this warrant by (b) the purchase price per share obtaining on the date of 
such event, as hereinabove provided, shall be entitled to receive, in lieu of 
the shares called for hereby, the stock or other securities of property which 
said holder would hold on the date of such exercise, if, from the date hereof 
to and including such date, he had been the holder of record of the number of 
shares of the common stock of the Company called for on the face of this 
warrant and had retained such shares and all such other or additional or less 
stock and other securities and property receivable in respect of such shares.  
In case of the partial exercise of this warrant under such circumstances, the 
number of shares of stock which would have been receivable upon the full 
exercise of this warrant, computed as provided above, shall be proportionately 
reduced.

     6.     Reorganization, Consolidations, Mergers.  In case of any 
reorganization of the Company, or any other corporation, the stock or 
securities of which are at the time deliverable on the exercise of this 
warrant, or in case the Company or such other corporation shall consolidate 
with or merge into another corporation, or convey all or substantially all of 
its assets to another corporation, the holder of this warrant, upon the 
exercise hereof and upon the payment of the sum obtained by multiplying (a) 
the number of shares of the Company called for on the face of the warrant by 
(b) the purchase price per share obtaining on the date of such event, as 
hereinabove provided, shall be entitled to receive, in lieu of the shares 
theretofore called for hereby, the stock or other securities or property to 
which such holder would have been entitled upon the consummation of such 
reorganization, consolidation, merger or conveyance if he had purchased the 
shares 

 85

called for hereby immediately prior thereto; and in such case, the provisions 
of this warrant shall be applicable to the shares of stock or other securities 
or property thereafter deliverable upon the exercise of this warrant.  In the 
case of the partial exercise of this warrant under such circumstances, the 
number of shares of stock or other securities or property which would have 
been receivable upon the full exercise of this warrant, and the sum payable 
therefor, shall be proportionately reduced.

     7.     Redemption Of Warrants.  The unexercised portions, if any, of the 
warrants are redeemable at the option of the Company at a price of $.075 per 
Underlying Share at any time during a period of one hundred twenty days 
commencing on the date hereof (the "Redemption Period").  If the Company shall 
elect to redeem warrants as permitted by this Section 7, notice of redemption 
shall be given to the holders of all outstanding warrants to whom the 
redemption shall apply by mailing, by regular first class or certified mail or 
by recognized courier service, a notice of such redemption, accompanied by 
payment in full therefor by check or draft at the rate herein provided, to 
their last addresses as they shall appear upon the Company's registry books.  
The date of the mailing of such notice and payment shall be deemed the 
effective date of such redemption (the "Redemption Date") whereupon, as of the 
close of business on the Redemption Date, the warrants which shall have been 
thus redeemed shall be null, void and of no further force and effect.

     8.     Lost, Stolen, Destroyed or Mutilated Warrants.  Upon receipt by 
the Company or its duly designated and acting agent, if any, of evidence 
satisfactory (in the exercise of reasonable discretion) to each of them of the 
ownership of and the loss, theft or destruction or mutilation of this or any 
warrant and (in the case of loss, theft or destruction) of indemnity 
satisfactory (in the exercise of reasonable discretion) to each of them, and 
(in the case of mutilation) upon the surrender and cancellation thereof, the 
Company or its duly designated and acting agent will issue and deliver, in 
lieu thereof, a new warrant of like tenor.

     9.     Transferability.  This warrant has not been registered under the 
Securities Act; and is not transferable except on devolution of such warrant 
by operation of the laws of descent and distribution in the event of the death 
or adjudicated incompetence of the holder.  Neither this warrant nor any 
shares of common stock issued by reason of the exercise thereof shall be 
pledged, hypothecated, made the subject of a security interest or otherwise 
lodged as collateral to secure or guaranty the payment or performance of any 
debt, indemnity, cause, claim, demand or other obligation of any kind, in 
furtherance of which the certificate(s) evidencing any such shares of common 
stock shall bear a restrictive legend reciting the proscription set forth 
above.

     10.     Piggyback Registration Rights.  If at any time, or from time to 
time, commencing on the date of issuance hereof and ending three years after 
the date of issuance hereof, the Company proposes to file a registration 
statement with the Securities and Exchange Commission with respect to the sale 
of any securities of the Company, the Company will, at least thirty (30) days 
prior to such filing, give written notice thereof to the holders of this 
warrant and the holders of the Underlying Shares and if, within twenty (20) 
days after receipt of such notice, such holders request inclusion in such 
registration statement of the Underlying Shares, the Company will use its best 
efforts to include the Underlying Shares in such registration statement.  The 
Company will pay and bear all costs and expenses in connection with 
registering such Underlying Shares.

     11.     Miscellaneous. This warrant shall not be valid for any purpose 
unless signed by an authorized officer of the Company and countersigned by the 
duly designated and acting agent, if any.  This warrant does not confer upon 
the holder any right to vote or to consent or to receive notice as a 
stockholder of the Company.

     12.     Headings.  The headings in this warrant are for purposes of 
reference only, and shall not limit or otherwise affect the meaning hereof.

     13.     Expiration.  This warrant will be wholly void and of no effect 
after 3 P.M., New York local time, on the expiration date set forth on the 
first page hereof.

 86

     14.     Law Governing.  This warrant shall be construed and enforced in 
accordance with and governed by the laws of the State of New Jersey.

     15.     Savings Clause.  If any provision of this warrant, or the 
application of such provision to any person or circumstance, shall be held 
invalid, the remainder of this warrant, or the application of such provision 
to persons or circumstances other than those as to which it is held invalid, 
shall not be affected thereby.

                                            CORNICHE GROUP INCORPORATED

                                          By_______________________________
                                             JAMES J. FYFE, Vice President

ATTEST:

_______________________________
                    , Secretary

 87

                                                               EXHIBIT 4 ( e )

 88

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE ON THE EXERCISE THEREOF HAVE BEEN 
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES 
ACT"); AND THIS WARRANT IS NOT TRANSFERABLE EXCEPT ON DEVOLUTION OF SUCH 
WARRANT BY OPERATION OF THE LAWS OF DESCENT AND DISTRIBUTION IN THE EVENT OF 
THE DEATH OR ADJUDICATED INCOMPETENCE OF THE HOLDER.

No.  WA-__________                             3-Year Warrant to purchase
                                        *60,000* shares (subject to adjustment)
Dated: ______________, 1997                 of common stock, $.10 par value, of
                                               Corniche Group Incorporated

                        VOID AFTER ______________, 2000

                          CORNICHE GROUP INCORPORATED

          Non-Transferable, Redeemable Common Stock Purchase Warrant

     Corniche Group Incorporated (hereby called the "Company"), a Delaware 
corporation, hereby certifies that, for and in consideration of the sum of 
$1,000:

                      ______________________________________________
                                          (Name)

                      ______________________________________________
                                     (Street and No.)

                       ______________________________________________
                                 (City, State and Zip Code)

                       ______________________________________________
                      (Social Security No. or Federal Employer ID No.)

                        ______________________________________________
                                      (Date of Birth)

is entitled to purchase from the Company, at any time or from time to time, 
subsequent to the date of issuance hereof and before 3:00 P.M. New York local 
time on _____________, 2000 (the "Exercise Period"), subject to prior 
redemption by the Company, an aggregate of up to 60,000 fully paid and 
non-assessable shares (the number or character of such shares being subject to 
adjustment as provided below) of the common stock, $.10 par value per share, 
of the Company (the "Underlying Shares") on the payment therefor of $.50 for 
each share of the common stock subscribed for and purchased, upon the 
surrender of this warrant duly signed by the registered holder hereof or 
assigns at the time of subscription, accompanied by payment of the total 
subscription price in cash or by certified check or bank draft payable to the 
order of the Company, upon the terms and subject to the conditions hereinafter 
set forth.

     1.     Notice of Exercise.  Notice of intention to exercise any of the 
purchase rights evidenced by this warrant must be given during the Exercise 
Period by written notice addressed to the Company at its principal office or 
by written notice addressed to its duly designated and acting agent, if any, 
at least 10 days prior to any intended exercise.  Such notice shall specify 
the date on which purchase rights are to be exercised and the number of shares 
of the common stock to be purchased on that date.

 89

     2.     Exercise of Warrant.  On or before the date of exercise specified 
in such notice given during the Exercise Period, the holder shall surrender 
this warrant (in negotiable form, if not surrendered by the holder named 
above) to the principal office of the Company, or to that of its duly 
designated and acting agent with the exercise form attached to this warrant 
duly signed together with the purchase price of the common stock represented 
by certified or official bank check on New York Clearing House funds payable 
to the order of the Company, in the amount of the said purchase price.

     3.     Delivery of Stock Certificates on Exercise.  As soon as 
practicable after the exercise of this warrant and payment of the purchase 
price, and in any event no later than 10 days thereafter, the Company or its 
duly designated and acting agent, if any, will cause to be issued in the name 
of and delivered to the holder hereof, or such holder's nominee or nominees, a 
certificate or certificates for the number of full shares of the common stock 
of the Company to which such holder shall be entitled upon such exercise.  In 
case, between the date of such exercise and the date on which such certificate 
or certificates are issued, the record holder of such shares shall become 
entitled to any dividend or other right, the Company will forthwith pay or 
cause to be paid in cash to the holder hereof the amount of such dividend, or 
transfer to the holder hereof such right, as the case may be.  No fraction of 
a share or scrip certificate for such fraction shall be issued upon the 
exercise of this warrant; in lieu thereof, the Company will pay or cause to be 
paid to such holder cash equal to a like fraction at the then prevailing 
market price for such share as determined by the Company.

     4.     Partial Exercise of a Warrant.  In case this warrant shall be 
exercised for less than the full number of shares to which the holder is 
entitled the Company, at its expense, will issue, or will cause to be issued 
and delivered to the holder hereof, a new warrant or warrants of like tenor 
issued in said holder's name, representing the unexercised warrants.

     5.     Dividends in Stock, Property, Reclassifications.  In case at any 
time or from time to time the holders of the common stock of the Company (or 
any other shares of stock or other securities at that time receivable upon 
exercise of this warrant) shall have received, or as of a record date shall 
have become entitled to receive other or additional or less stock or other 
securities or property (other than cash) without payment therefor (whether 
through a dividend in stock of any class of stock of the Company or any other 
corporation, or a dividend in any securities or property other than cash, or 
through stock split, spin-off, reclassification, combination, of shares or 
otherwise), then and in each such case the holder of this warrant upon the 
exercise thereof and upon the payment of the sum obtained by multiplying (a) 
the number of shares of the common stock of the Company called for on the face 
of this warrant by (b) the purchase price per share obtaining on the date of 
such event, as hereinabove provided, shall be entitled to receive, in lieu of 
the shares called for hereby, the stock or other securities of property which 
said holder would hold on the date of such exercise, if, from the date hereof 
to and including such date, he had been the holder of record of the number of 
shares of the common stock of the Company called for on the face of this 
warrant and had retained such shares and all such other or additional or less 
stock and other securities and property receivable in respect of such shares.  
In case of the partial exercise of this warrant under such circumstances, the 
number of shares of stock which would have been receivable upon the full 
exercise of this warrant, computed as provided above, shall be proportionately 
reduced.

     6.     Reorganization, Consolidations, Mergers.  In case of any 
reorganization of the Company, or any other corporation, the stock or 
securities of which are at the time deliverable on the exercise of this 
warrant, or in case the Company or such other corporation shall consolidate 
with or merge into another corporation, or convey all or substantially all of 
its assets to another corporation, the holder of this warrant, upon the 
exercise hereof and upon the payment of the sum obtained by multiplying (a) 
the number of shares of the Company called for on the face of the warrant by 
(b) the purchase price per share obtaining on the date of such event, as 
hereinabove provided, shall be entitled to receive, in lieu of the shares 
theretofore called for hereby, the stock or other securities or property to 
which such holder would have been entitled upon the consummation of such 
reorganization, consolidation, merger or conveyance if he had purchased the 
shares

 90

called for hereby immediately prior thereto; and in such case, the provisions 
of this warrant shall be applicable to the shares of stock or other securities 
or property thereafter deliverable upon the exercise of this warrant.  In the 
case of the partial exercise of this warrant under such circumstances, the 
number of shares of stock or other securities or property which would have 
been receivable upon the full exercise of this warrant, and the sum payable 
therefor, shall be proportionately reduced.

     7.     Redemption Of Warrants.  The unexercised portions, if any, of the 
warrants are redeemable at the option of the Company at a price of $.075 per 
Underlying Share at any time during a period of one hundred twenty days 
commencing on the date hereof (the "Redemption Period").  If the Company shall 
elect to redeem warrants as permitted by this Section 7, notice of redemption 
shall be given to the holders of all outstanding warrants to whom the 
redemption shall apply by mailing, by regular first class or certified mail or 
by recognized courier service, a notice of such redemption, accompanied by 
payment in full therefor by check or draft at the rate herein provided, to 
their last addresses as they shall appear upon the Company's registry books.  
The date of the mailing of such notice and payment shall be deemed the 
effective date of such redemption (the "Redemption Date") whereupon, as of the 
close of business on the Redemption Date, the warrants which shall have been 
thus redeemed shall be null, void and of no further force and effect.

     8.     Lost, Stolen, Destroyed or Mutilated Warrants.  Upon receipt by 
the Company or its duly designated and acting agent, if any, of evidence 
satisfactory (in the exercise of reasonable discretion) to each of them of the 
ownership of and the loss, theft or destruction or mutilation of this or any 
warrant and (in the case of loss, theft or destruction) of indemnity 
satisfactory (in the exercise of reasonable discretion) to each of them, and 
(in the case of mutilation) upon the surrender and cancellation thereof, the 
Company or its duly designated and acting agent will issue and deliver, in 
lieu thereof, a new warrant of like tenor.

     9.     Transferability.  This warrant has not been registered under the 
Securities Act; and is not transferable except on devolution of such warrant 
by operation of the laws of descent and distribution in the event of the death 
or adjudicated incompetence of the holder.  Neither this warrant nor any 
shares of common stock issued by reason of the exercise thereof shall be 
pledged, hypothecated, made the subject of a security interest or otherwise 
lodged as collateral to secure or guaranty the payment or performance of any 
debt, indemnity, cause, claim, demand or other obligation of any kind, in 
furtherance of which the certificate(s) evidencing any such shares of common 
stock shall bear a restrictive legend reciting the proscription set forth 
above.

     10.     Piggyback Registration Rights.  If at any time, or from time to 
time, commencing on the date of issuance hereof and ending three years after 
the date of issuance hereof, the Company proposes to file a registration 
statement with the Securities and Exchange Commission with respect to the sale 
of any securities of the Company, the Company will, at least thirty (30) days 
prior to such filing, give written notice thereof to the holders of this 
warrant and the holders of the Underlying Shares and if, within twenty (20) 
days after receipt of such notice, such holders request inclusion in such 
registration statement of the Underlying Shares, the Company will use its best 
efforts to include the Underlying Shares in such registration statement.  The 
Company will pay and bear all costs and expenses in connection with 
registering such Underlying Shares.

     11.     Miscellaneous. This warrant shall not be valid for any purpose 
unless signed by an authorized officer of the Company and countersigned by the 
duly designated and acting agent, if any.  This warrant does not confer upon 
the holder any right to vote or to consent or to receive notice as a 
stockholder of the Company.

     12.     Headings.  The headings in this warrant are for purposes of 
reference only, and shall not limit or otherwise affect the meaning hereof.

     13.     Expiration.  This warrant will be wholly void and of no effect 
after 3 P.M., New York local time, on the expiration date set forth on the 
first page hereof.

 91

     14.     Law Governing.  This warrant shall be construed and enforced in 
accordance with and governed by the laws of the State of New Jersey.

     15.     Savings Clause.  If any provision of this warrant, or the 
application of such provision to any person or circumstance, shall be held 
invalid, the remainder of this warrant, or the application of such provision 
to persons or circumstances other than those as to which it is held invalid, 
shall not be affected thereby.

                                           CORNICHE GROUP INCORPORATED

                                         By_____________________________
                                           JAMES J. FYFE, Vice President

 92

                                                              EXHIBIT 10 ( m )

 93

                              STOCK PURCHASE AGREEMENT

     THIS AGREEMENT,  entered into as of January 30, 1997, by and among:

                         The Governor and Company of
                         The Bank of Scotland
                                                  (the "Bank")

                         Those persons named in
                         Schedule A annexed hereto
                                                  (collectively, jointly and
                                                   severally "Buyers")
                                 and

                         Corniche Group Incorporated
                           a Delaware corporation
                                                  (the "Company")

Whereas:

     A.     Pursuant to an agreement dated February 21, 1996, Susan A. Crisp 
has pledged 219,450 shares, $.01 par value per share, of the issued and 
outstanding common stock of the Company (the "Shares") to the Bank in order to 
secure certain obligations to the Bank.

     B.     Pursuant to an agreement dated February 19, 1996, Brian J. Baylis 
has pledged 877,800 Shares to the Bank in order to secure certain obligations 
to the Bank.

     C.     Buyers desire to purchase 1,042,250 of the pledged Shares (the 
"Sale Shares").

     D.     The Bank is willing to exercise its rights as pledgee of the 
Shares to sell all right, title and interest of Ms. Crisp and Mr. Baylis in 
the Sale Shares to the Buyers.

Now, Therefore, for the mutual consideration set out herein, the parties agree 
as follows:

1.     Purchase And Sale Of Company Shares

     1.1     The Bank shall sell to Buyers and Buyers shall purchase from the 
Bank, in the respective amounts set forth in Schedule A, all of the right, 
title and interest of Ms. Crisp and Mr. Baylis in and to the Sale Shares at a 
closing of such sale (the "Closing") to be held at the place and on the date 
hereinafter provided (the "Closing Date").

     1.2     The purchase price (the "Price") shall be $.12 per Sale Share or 
$125,070 on an aggregated basis.

     1.3     The Price shall be paid at the Closing to the Bank by wire 
transfer of immediately available funds to an account in London or Edinburgh 
designated by the Bank.

     1.4     At the Closing Date, the Bank will deliver the certificates 
purportedly representing the Sale Shares which were delivered to the Bank by 
Crisp and Baylis and purportedly represent the Sale Shares.  Such certificates 
shall be accompanied by stock powers executed by Baylis and Crisp indicating 
appropriate signature guarantees.  Since the number of Shares purportedly 
represented by such certificates exceeds the number of Sale Shares, the Bank 
and the Buyers shall make reasonable arrangements to cause certificates

 94

representing the excess number of Shares to be issued in the names of Brian 
J. Baylis (44,000 Shares) and Susan A. Crisp (11,000 Shares) and delivered to 
the Bank.  The Company has advised the Bank and the Buyers that: (a) the Sale 
Shares are not registered under the Securities Act of 1933 as amended (the 
"'33 Act"); (b) the Sale Shares are subject to usual and appropriate stop 
transfer orders on the books and records of the Company's transfer agent 
pertaining to securities not registered under the '33 Act; (c) the 
certificates for the Sale Shares delivered by the Bank bear and all new 
certificates for the Sale Shares to be delivered to Buyers shall bear on their 
face the following restrictive legend:

     "No sale, offer to sell or transfer of the shares represented by this 
certificate shall be made unless a registration statement under the Federal 
Securities Act of 1933, as amended, with respect to such shares is then in 
effect or an exemption from the registration requirements of such Act is then 
in fact applicable to such shares."

2.     Representations And Covenants Of Bank

     The Bank hereby represents and warrants, to the extent of the facts known 
to the Bank, that, effective this date and the Closing Date, the 
representations listed below are true and correct except to the extent 
specifically set forth in a schedule annexed hereto and numbered in accordance 
with the subsection number in which the relevant representation is made.

     2.1     The certificates purportedly representing the Sale Shares are the 
certificates heretofore delivered by Crisp and Baylis to the Bank pursuant to 
the Pledge Agreements between the Bank and each of Crisp and Baylis.

      2.2     The execution of this Agreement will not violate or breach any 
agreement, contract, or commitment to which the Bank is a party, the Bank has 
been duly authorized by all appropriate and necessary action to enter into and 
perform this Agreement, and this Agreement is fully enforceable against the 
Bank under English law.

     2.3     The Bank will have no claim or lien on the Sale Shares upon 
payment of the Price indefeasibly and in full.

     2.4     The representations and warranties of the Bank contained in this 
Section 2 shall survive the Closing Date.

          The Bank makes no other representation or warranty of any nature 
whatsoever.  The Buyers have agreed to purchase the Sale Shares without 
recourse to the Bank and, insofar as the Bank is concerned, the Sale Shares 
will be sold "AS IS AND WHERE IS" and without representation or warranty 
(including any representation or warranty as to condition, value or any other 
matter concerning the Sale Shares or the Company, including the suitability of 
the Sale Shares as an investment).  Without limiting the foregoing, the Bank 
has no basis to believe that the Sale Shares have a value equal to the Price, 
and the Sale Shares' value could be less than the Price and the Sale Shares 
could have no value.

3.     Representations and Covenants of the Company

     The Company hereby represents and warrants, to the extent of the facts 
known to the Company, that, effective this date and the Closing Date, the 
representations listed below are true and correct except to the extent 
specifically set forth in a schedule annexed hereto and numbered in accordance 
with the subsection number in which the relevant representation is made.

     3.1     A copy of the audited financial statements of the Company dated 
March 25, 1995 and the unaudited financial statements of the Company dated 
December 31, 1995 and September 30, 1996 (collectively the "Financial 
Statements") are attached hereto as Schedule 3.1.  Except as noted therein, 
the Financial Statements fairly present the financial position of the Company 
for the periods indicated in conformity

 95

with generally accepted accounting principles consistently applied for such 
periods.  Except as disclosed in Schedule 3.1 there has not been and will not 
be, prior to the Closing Date, any material changes in the financial position 
of the Company as reflected in the Financial Statements.

     3.2     The Company is a corporation duly incorporated, validly existing 
and in good standing under the laws of the State of Delaware, has all 
requisite corporate power and authority to own or lease and operate its 
properties and to carry on its business as presently conducted.  The Company 
is duly qualified as a foreign corporation, and is in good standing, in each 
jurisdiction listed on the Schedule 3.2 attached hereto, and in each other 
jurisdiction where the character of its properties owned or held under lease 
require it to be so qualified.  Attached to Schedule 3.2 is a complete and 
correct copy of the Company's Certificate of Incorporation, as amended to 
date, certified by the Secretary of the State of Delaware, and the Company's 
By-Laws, as currently in effect.  This Agreement has been duly executed and 
delivered on behalf of the Company and constitutes the valid and binding 
obligation of the Company, enforceable against the Company in accordance with 
its terms, subject to general equitable principles and except as the 
enforceability thereof may be limited by applicable bankruptcy, insolvency, 
reorganization, moratorium or other similar laws of general application 
relating to creditors' rights.

     3.3     The authorized capital stock of the Company consists of 
30,000,000 shares of Common Stock, $.01 par value per share, of which 
2,405,357 shares are issued and outstanding, 1,097,250 of which are owned of 
record and beneficially by Crisp and Baylis and were pledged to the Bank to 
secure certain obligations.  The Company has further authorized capital stock 
consisting of 1,000,000 shares of 7% cumulative convertible preferred stock, 
of which 946,069 shares are issued and outstanding..  All outstanding shares 
have been duly authorized and validly issued, are fully paid and 
non-assessable and were not issued in violation of any preemptive rights.  
There is outstanding no security, option, warrant, right, call, subscription, 
agreement, commitment or understanding of any nature whatsoever, fixed or 
contingent, that directly or indirectly (i) calls for the issuance, sale, 
pledge or other disposition of any shares or of any other capital stock of the 
Company or any securities convertible into, or other rights to acquire, any 
such shares or other capital stock of the Company or (ii) obligates the 
Company to grant, offer or enter into any of the foregoing or (iii) relates to 
the voting or control of such shares, capital stock, securities or rights 
except as disclosed in Schedule 3.3 attached hereto.  No person has any right 
to require the Company to register any of its securities under the '33 Act, 
except as disclosed in Schedule 3.3 attached hereto.

     3.4     Except as set forth in Schedule 3.4 attached hereto, the Company 
is not involved in any pending litigation or governmental investigation or 
proceeding and, to the best knowledge of the Company, no litigation, claims, 
assessments, or governmental investigation or proceeding is threatened against 
the Company, or its assets.

     3.5     The Company has good and marketable title to all of the assets 
and properties which it purports to own and which are reflected on the 
Financial Statements contained in Schedule 3.1 hereof, free and clear of all 
encumbrances, except for (a) liens for current taxes not yet due and payable 
or for taxes the validity of which is being contested in good faith by 
appropriate proceedings, and (b) encumbrances which individually or in the 
aggregate do not materially and adversely affect the business, operations or 
financial condition of the Company.

     3.6     The Company has no debts, obligations or liabilities of whatever 
kind or nature, either direct or indirect, absolute or contingent, matured or 
unmatured, except debts, obligations and liabilities that are fully reflected 
in, or reserved against on, the Financial Statements contained in Schedule 3.1 
hereof.

     3.7     Except as set forth in Schedule 3.7 attached hereto, or except as 
otherwise contemplated by this Agreement, since the date of the Financial 
Statements contained in Schedule 3.1 there has not been (a) any damage, 
destruction or casualty loss to the physical properties of the Company 
(whether covered by insurance or not); (b) any material change in the 
business, operations or financial condition of the Company; (c) any entry into 
any transaction, commitment or agreement including without limitation any 
borrowing or capital expenditure) material to the Company's course of 
business; (d) any redemption or other acquisition by the Company of the 
Company's capital stock or any declaration, setting aside or payment of any 
dividend or other distribution in cash, stock or property with respect to the 
Company's capital stock; (e) any increase

 96

 in the rate or terms of compensation payable or to become payable by the 
Company to its directors, officers or employees or any increase in the rate or 
terms of any bonus, pension, insurance or other employee benefit plan, payment 
or arrangement made to, for or with any such directors, officers or key 
employees; (f) any change in production schedules, acceleration of sales, or 
reduction of aggregate administrative, marketing, advertising and promotional 
expenses or research and development expenditures other than in the ordinary 
course of business; (g) any sale, transfer or other disposition of any asset 
of the Company to any party except for payment of third-party obligations 
incurred in the ordinary course of business in accordance with the Company's 
regular payment practices; (h) any termination or waiver of any rights of 
value to the business of the Company; or (i) any failure by the Company to pay 
its accounts payable or other obligations in the ordinary course of business 
consistent with past practice.

     3.8     Except as otherwise disclosed in the Company's Annual Report on 
Form 10-K for the fiscal year ended March 25, 1995, the Company has complied 
with all state, federal and local laws in connection with its formation, 
issuance of securities, organization, capitalization and operations, and no 
contingent liabilities have been threatened or claims made, and no basis for 
the same exists with respect to said operations, formations or capitalization, 
including claims for violation of any state or federal securities laws, except 
that the Company is delinquent in its filings with the Securities and Exchange 
Commission as set forth in Schedule 3.8 hereof.

     3.9     Except as otherwise disclosed in Schedule 3.9 hereof, the Company 
has filed and as of the Closing Date will have filed, all state, federal, and 
local tax or related returns and reports due or required to be filed and has 
paid and as of the Closing Date will have paid, all taxes or assessments which 
have become due.

     3.10     The Company has no subsidiary corporations other than as 
disclosed in Schedule 3.10 attached hereto.

     3.11     The execution of this Agreement will not violate or breach any 
agreement, contract, or commitment to which the Company is a party and has 
been duly authorized by all appropriate and necessary action.

     3.12     The Company is registered under Section 12(g) of the Securities 
Exchange Act of 1934 (the "Exchange Act") and its common stock is listed for 
quotation by the OTC Bulletin Board.

4.     REPRESENTATIONS AND COVENANTS OF BUYERS

     EACH OF THE BUYERS HEREBY REPRESENTS AND WARRANTS THAT, EFFECTIVE THIS 
DATE AND THE CLOSING DATE, THE REPRESENTATIONS LISTED BELOW ARE TRUE AND 
CORRECT.

     4.1     BUYER HAS MADE ALL REASONABLE INQUIRIES WITH RESPECT TO THE 
COMPANY AND THE SALE SHARES AND IS FULLY AWARE OF THE CONDITION AND PROSPECTS, 
FINANCIAL AND OTHERWISE, OF THE COMPANY, HAVING BEEN SUPPLIED WITH SUCH 
FINANCIAL AND OTHER DATA RELATING TO THE COMPANY AS BUYER CONSIDERED NECESSARY 
AND ADVISABLE TO ENABLE BUYER TO FORM A DECISION CONCERNING THE PURCHASE 
HEREIN PROVIDED.

     4.2     BUYER IS FULLY AWARE THAT THE SALE SHARES, WHEN DELIVERED, WILL 
NOT HAVE BEEN REGISTERED UNDER THE ACT; THAT ACCORDINGLY NO SALE, OFFER TO 
SELL OR TRANSFER OF THE SALE SHARES SHALL BE MADE BY BUYER UNLESS A 
REGISTRATION STATEMENT UNDER THE '33 ACT WITH RESPECT TO THE SALE SHARES IS 
THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE '33 
ACT IS THEN IN FACT APPLICABLE TO THE SALE SHARES OR, IN THE OPINION OF 
COMPANY'S COUNSEL, REGISTRATION IS NOT REQUIRED.

     4.3     BUYER HAS BEEN FULLY ADVISED BY THE BANK THAT THE BANK WILL SELL 
THE SALE SHARES TO BUYER WITHOUT REGISTRATION UNDER THE '33 ACT ON THE BASIS 
OF A STATUTORY EXEMPTION IN SECTION 4 OF THE '33 ACT AND THAT THE BANK'S 
RELIANCE UPON THE STATUTORY EXEMPTION IS BASED IN LARGE PART UPON BUYER'S 
REPRESENTATIONS MADE IN THIS AGREEMENT.

 97

     4.4     BUYER IS ACQUIRING THE SALE SHARES FOR INVESTMENT FOR BUYER'S OWN 
ACCOUNT AND NOT WITH A VIEW TO RESELL OR OTHERWISE DISTRIBUTE THE SALE 
SHARES.  IN MAKING THE FOREGOING REPRESENTATIONS, BUYER UNDERSTANDS THAT, IN 
THE VIEW OF THE SECURITIES AND EXCHANGE COMMISSION, THE STATUTORY EXEMPTION 
UNDER SECTION 4 OF THE '33 ACT WOULD NOT BE AVAILABLE IF, NOTWITHSTANDING 
BUYER'S REPRESENTATIONS, BUYER HAD IN MIND MERELY ACQUIRING THE SALE SHARES 
FOR RESALE UPON THE OCCURRENCE OR NONOCCURRENCE OF SOME PREDETERMINED EVENT.

     4.5     BUYER HAS THE FULL RIGHT, POWER AND AUTHORITY TO PURCHASE THE 
SALE SHARES IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND OTHERWISE TO 
CONSUMMATE AND CLOSE THE TRANSACTION PROVIDED FOR IN THIS AGREEMENT IN THE 
MANNER AND UPON THE TERMS HEREIN SPECIFIED.

     4.6     EACH BUYER LISTED ON SCHEDULE A ATTACHED HERETO IS ACTING 
INDEPENDENTLY OF EACH OTHER BUYER  AND NONE OF THEM ARE ACTING JOINTLY OR IN 
CONCERT FOR THE PURPOSE OF ACQUIRING OF THE SALE SHARES.  ALL SUCH BUYERS HAVE 
ACTED IN THE PREMISES THROUGH A BROKER-DEALER, ROBERT M. COHEN & CO., INC. 
("RMCC") ACTING ON THEIR BEHALF.  THE BANK HAS NO LIABILITY TO RMCC FOR 
COMMISSIONS, FINDERS FEES, OR OTHERWISE IN CONNECTION WITH RMCC'S 
PARTICIPATION IN THIS TRANSACTION.  FOLLOWING SUCH PURCHASE OF THE SALE 
SHARES, EACH BUYER WILL CONTINUE TO ACT INDEPENDENTLY, ONE FROM THE OTHER, AND 
WILL NOWISE ACT JOINTLY OR IN CONCERT IN THE VOTING, PLEDGING, SALE OR OTHER 
ACTIVITY OF ANY KIND RELATING TO THE SALE SHARES.

     4.7     BUYER IS A SOPHISTICATED BUYER WITH RESPECT TO THE PURCHASE OF 
THE SALE SHARES AND HAS ADEQUATE INFORMATION CONCERNING THE BUSINESS AND 
FINANCIAL CONDITION OF THE COMPANY TO MAKE AN INFORMED DECISION REGARDING THE 
PURCHASE OF THE SALE SHARES AND HAS INDEPENDENTLY AND WITHOUT RELIANCE UPON 
THE BANK AND BASED ON SUCH INFORMATION BUYER HAS DEEMED APPROPRIATE, MADE HIS 
OWN ANALYSIS AND DECISION TO ENTER INTO THIS AGREEMENT, EXCEPT THAT BUYER HAS 
RELIED UPON THE REPRESENTATIONS, WARRANTIES, AGREEMENTS AND COVENANTS OF THE 
COMPANY CONTAINED IN THIS AGREEMENT.

     4.8     BUYER ACKNOWLEDGES AND AGREES TO THE BANK'S REPRESENTATIONS AND 
STATEMENTS CONTAINED IN THE PARAGRAPH FOLLOWING SECTION 2.4 OF THIS 
AGREEMENT.  BUYER IS NOT RELYING ON ANY REPRESENTATIONS OF THE BANK, EXCEPT AS 
EXPRESSLY PROVIDED IN SECTION 2.  BUYER UNDERSTANDS THAT IT MAY LOSE ITS 
ENTIRE INVESTMENT AND REPRESENTS THAT IT IS ECONOMICALLY ABLE TO SUSTAIN SUCH 
LOSS.  BUYER REPRESENTS THAT IT HAS HAD ADEQUATE OPPORTUNITY TO CONSULT WITH 
COUNSEL AND OTHER SOPHISTICATED ADVISORS IN CONNECTION WITH THE PURCHASE OF 
THE SALE SHARES.  THE REPRESENTATIONS AND WARRANTIES OF BUYER CONTAINED IN 
THIS SECTION 4 SHALL SURVIVE THE CLOSING DATE.

5.     Closing Date

     The Closing Date herein referred to shall be upon such date as the 
parties hereto may mutually agree upon.  At the Closing, Buyers will be 
provided with and  accept delivery of the Sale Shares, and in connection 
therewith, will make payment of all sums due to the Bank.  Certain closing 
documents may be delivered subsequent to the Closing Date upon the mutual 
agreement of the parties hereto.

     In the event the Closing Date has not occurred on or prior to January 31, 
1997, each party to this Agreement will have the right to terminated this 
Agreement at any time thereafter upon written notice to the other parties and 
thereafter no party to this Agreement will have any liability or obligation to 
any other party to this Agreement.

6.     Conditions Precedent To The Obligations Of The Bank

     All obligations of the Bank under this Agreement are subject to the 
fulfillment, prior to or at the closing on the Closing Date, of each of the 
following conditions:

 98

     6.1     The representations and warranties by Buyers and the Company 
contained in this Agreement shall be true in all material respects at and as 
of the time of Closing as though such representations and warranties were made 
at and as of such time.

     6.2     Buyers and the Company shall have performed and complied with all 
covenants, agreements, and conditions required by this Agreement to be 
performed or complied with by Buyers and the Company prior to or at the 
Closing including the payment of the Price by Buyers in accordance with the 
terms hereof, including the allocations set forth on Schedule A hereto.

7.     Conditions Precedent To The Obligations Of Buyer

     All obligations of Buyers under this Agreement are subject to the 
fulfillment, prior to or at the Closing on the Closing Date, of each of the 
following conditions:

     7.1     The representations and warranties by the Bank and the Company 
contained in this Agreement shall be true at and as of the time of Closing as 
though such representations and warranties were made at and as of such time.

     7.2     The Company and the Bank shall have performed and complied with 
all covenants, agreements, and conditions required by this Agreement to be 
performed or complied with by them prior to or at the Closing.

8.     Documents At Closing

     At the Closing, the following transactions shall occur, all of such 
transactions being deemed to occur simultaneously:

     8.1     The Bank will deliver the certificates and stock powers referred 
to in Section 1.4 hereof.

     8.2     The Company will deliver, or cause to be delivered, to Buyers the 
following:

          a.a copy of the most recent shareholder list of the Company in the 
Company's possession certifying the number of shares outstanding.  In the 
event additional shares of the Company have been issued since the date of such 
shareholder list, such issuances will be identified on a schedule attached to 
the shareholder list.

          b.such other instruments, documents and certificates, if any, as are 
required to be delivered pursuant to the provisions of this Agreement or which 
may be reasonably requested in furtherance of the provisions of this 
Agreement;

     8.3     Buyer will deliver or cause to be delivered to the Bank:

          a.the Price.

          b.such other instruments and documents as are required to be 
delivered pursuant to the provisions of this Agreement or which may be 
reasonably requested in furtherance of the provisions of this Agreement.

     8.4     The Company will deliver or cause to be delivered to the Bank and 
the Company's transfer agent, Continental Stock Transfer & Trust Company, an 
opinion of counsel to the effect that the sale of the Sale Shares by the Bank 
to the Buyers will be exempt from the registration requirements of the '33 
Act.

 99

9.     Miscellaneous

     9.1     Further Assurances.  At any time, and from time to time, after 
the effective date, each party will execute such additional instruments and 
take such action as may be reasonably requested by the other party to carry 
out the intent and purposes of this Agreement.

     9.2     Waiver.  Any failure on the part of any party hereto to comply 
with any of its obligations, agreements or conditions hereunder may be waived 
in writing by the party to whom such compliance is owed.

     9.3     Notices.  All notices and other communications hereunder shall be 
in writing and shall be deemed to have been given if delivered in person or 
sent by prepaid first class registered or certified mail, return receipt 
requested, fax or recognized courier to the following addresses:

          To the Bank:
                         The Governor and Company
                         of the Bank of Scotland
                         The Mound
                         Edinburg, Scotland Attention: Legal Services

          With copies to:
                         Sullivan & Worcester LLP
                         767 Third Avenue
                         New York, NY 10017
                         Attention: Paul R. Wiener, Esq.
                         Telephone: 212-486-8200
                         Fax: 212-758-2151

          To the Company:
                         Corniche Group Incorporated
                           a Delaware corporation
                         Wayne Interchange Plaza I
                         145 Route 46 West
                         Wayne, NJ 07974

          To Buyer:
                         See Schedule A

          With copies to:
                         The Law Offices of John L. Milling
                         115 River Road, Bldg. 12
                         Edgewater, NJ 07020
                         Telephone: 201-313-1600
                         Fax: 201-313-7249

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

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

     9.6     Governing Law     a.  With respect to any suit, action, or 
proceedings relating to this Agreement, each party irrevocably submits to the 
exclusive jurisdiction of the English courts.  This Agreement shall be 
governed by English law.

 100

                    b.  Each party waives any objection which it may have at 
any time to the  laying of venue of any proceedings in any such count, waives 
any claim that such proceedings have been brought in an inconvenient forum and 
further waives the right to object with respect to such proceedings, that such 
court does not have jurisdiction over such party.
  
     9.7     Binding Effect.  This Agreement shall be binding upon the parties 
hereto and inure to the benefit of the parties, their respective heirs, 
administrators, executors, successors and assigns.

     9.8     Entire Agreement.  This Agreement is the entire agreement of the 
parties covering everything agreed upon or understood in the transaction.  
There are no oral promises, conditions, representations, understandings, 
interpretations or terms of any kind as conditions or inducements to the 
execution hereof.

     9.9     Severability.  If any part of this Agreement is deemed to be 
unenforceable the balance of this Agreement shall remain in full force and 
effect.

     In Witness Whereof,  the parties have executed this Agreement as of the 
day and year first above written.

                               THE GOVERNOR AND COMPANY
                               OF THE BANK OF SCOTLAND

                              By /s/  John Kelly

                              CORNICHE GROUP INCORPORATED

                              By /s/  James F. Fyfe
                                JAMES FYFE, Vice President

                              BUYERS

                               /s/  David Abrams
                               /s/  Anthony J. Blazej
                               /s/  Ethel Blazej/AIB                          
                               /s/  Betty Charlson                            
                               /s/  Dr. Lawrence R. Gluck                
                               /s/  Robert Gmuer                             
                               /s/  Lou Hammer                               
                               /s/  Danny Jacobson & Estelle Jacobson, JTWROS
                               /s/  Jeff Klein
                               /s/  Steve Miner                               
                               /s/  Wilfred Saint Jr. 
                               /s/  Mary S. Saint     

                              Sutton West Realty Pension Plan

                              By /s/  Steve Wacher - Trustee          

 101

                                Schedule A - List of Buyers

      Buyer                                 Number of Shares to be Purchased
                                                        
     Lou Hammer                                          120,000
     2 Cranberry Street
     Parsipanny, NJ 07054

     Steve Miner                                         120,000
     193 Steele Road
     West Hartford, CT 06119

     Jeff Klein                                           50,000
     52 Greenlawn Road
     Clifton, NJ 07013

     Wilfred Saint & Mary Sue Saint                       50,000
     14325 Shoreham Drive
     Silver Spring, MD 20905

     Robert Gmuer                                        100,000
     3137 Holl Avenue
     Bronx, NY 10467

     Betty Chalson                                       100,000
     53 Normandy B
     Delray Beach, FL 33484

     Ethel Blazej                                         50,000
     62 Green Drive
     Toms River, NJ 08755

     Anthony Blazej                                      100,000
     70 Lakeview Avenue
     New Canaan, CT 06840

     Danny & Estelle Jacobsen, JTWROS                    100,000
     17268 Hampton Blvd.
     Boca Raton, FL 33496

     Dave Abrams                                          50,000
     35 E Cheryl Road
     Pine Brook, NJ 07058

     Larry Gluck                                         100,000
     220 Currier Drive
     Orange, CT 06477

     Sutton West Realty Inc. Pension Plan                102,250
     Steve Wacher - Trustee
     100 E. 64th Street, Suite 270
     New York, NY 10021                                _________

         Total Shares to be Purchased                  1,042,250

 102

                                    SCHEDULE 3.1

     3.1.1     MARCH 25, 1995 AUDITED FINANCIAL STATEMENT (1)

     3.1.2     DECEMBER 31, 1995 UNAUDITED FINANCIAL STATEMENTS (2)

     3.1.3     SEPTEMBER 30, 1996 UNAUDITED FINANCIAL STATEMENTS

________________

   (1)  Incorporated by reference to the Company's Annual Report on Form 10-K 
for the year ended March 25, 1995 filed with the Securities and Exchange 
Commission.

   (2)  Incorporated by reference to the Company's Current Report on Form 10-Q 
for the quarter ended December 31, 1995 filed with the Securities and Exchange 
Commission.

 103

                                                                SCHEDULE 3.1.3

                    SEPTEMBER 30, 1996 UNAUDITED FINANCIAL STATEMENTS

 104

                             CORNICHE CROUP INCORPORATED
                                    Balance Sheet
                                     (Unaudited)

                                       ASSETS

                                                   September 30,     March 31,
                                                      1996             1996    
                                                                 
Current assets:

     Cash                                                 $398             $66
     Notes receivable                                        0         125,000
     Other receivables                                       0          10,000

     Total current assets                                  398         135,066

Other assets:

     Property and equipment, net                           941           1,135

          Total assets                                  $1,339        $136,201

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY

Current liabilities:

     Notes Payable                                      $86,679        $11,679
     Note Payable on debt compromise                     77,630         77,630
     Trade account payable                              260,484        358,760
     Dividends payable - preferred stock                122,565         89,453
     Accrued liabilities                                223,121        258,622

          Total current liabilities                     770,479        796,144

Stockholders' (deficiency) equity:

     7% cumulative convertible preferred
       stock authorized and issued 1,000,000
        shares, and outstanding 946,069 shares          946,069        946,069
     Common stock, $0.10 par value,
       authorized - 30,000,000 shares,
       issued 2,623,457                                 262,345        262,345
     Additional paid-in capital                         793,976        793,976
      (Accumulated deficit) retained earnings       (2,566,820)     (2,457,623)
                                                    (   564,430)    (  455,233)
Treasury stock-at cost, 218,100
 shares.                                            (   204,710)    (  204,710)

     Total stockholders' (deficiency) equity        (   769,140)    (  659,943)

     Total liabilities and stockholders'
       (deficiency) equity                               $1,339       $136,201

 105

                                  CORNICHE CROUP INCORPORATED
                                    Statement of Operations
                                         (UNAUDITED)

                                 -- 3 Months Ended --     -- 6 Months Ended --
                                  Sept 30,     Sept 30,   Sept 30,     Sept 30,
                                    1996         1995       1996         1995 
                                                              
Net sales                          $     0      $     0     $     0     $        0

     Cost of sales                       0            0           0              0
                                         -            -           -              -
Gross profit                             0            0           0              0
                                         -            -           -              -

     General & administrative
       expenses                    (37,610)     (183,503)    (71,860)     (271,201)
                                  -----------   -----------  ---------    ------------
Operating loss                     (37,610)     (183,503)     (71,860)    (271,201)

     Interest (net)              (   2,425)        8,329     (  4,225)       8,329
                                ------------  ----------   ------------   ---------
Net loss before
   Preferred Dividends             (40,035)     (175,174)     (76,085)    (262,872)

     Preferred dividends           (16,556)     ( 20,377)     (33,112)    ( 35,660)
                                 -----------   -----------   ----------   -----------
Net loss                         $ (56,591)     $(195,551)   $(109,197)  $(298,532)

Loss per share of
    common stock                    $(0.02)       $(0.73)       $(0.05)     $(1.39)

Weighted average
   Number of common
   shares outstanding             2,405,357     2,298,136     2,405,357  2,195,336

 106

                            CORNICHE GROUP INCORPORATED AND SUBSIDIARY

                               Consolidated Statement of Cash Flows

                                           (Unaudited)

                                                  ------ 6 Months Ended ------
                                                  Sept 30,            Sept 30,
                                                    1996                 1995  

Cash flows from operations:

     Net loss                                    $(109,197)         $(298,532)

Adjusted to reconcile net loss
     to net cash used in operations
     activities:

     Depreciation                                      194                858

Changes in assets and liabilities:

     (Inc)/Dec in notes receivable                 125,000                  0
     (Inc)/Dec in other receivables                 10,000          (  66,465) 
     (Inc)/Dec in prepaid expenses                       0          (  64,124)
     (Inc)/Dec in accounts payable               (  98,276)           271,241
     (Inc)/Dec in accrued liabilities             ( 35,501)          (266,038)
     (Inc)/Dec in notes payable                     75,000          (   4,613)
     Increase in dividends payable                  33,112             35,660
     Advances to subsidiary                              0           (441,800)
                                              -------------     --------------
Net cash used in operations                            322           (833,813)
                                              -------------     --------------

Cash flows from investing activities:

     Payments to acquired fixed assets                   0          (   8,926)
                                                         -       -------------
Net cash used in investing activities                    0          (   8,926)
                                                         -       -------------

Cash flows from financing activities:

     Issuance of common stock for cash                   0            794,336
     Issuance of common stock for
        settlement of liabilities                        0             50,000
                                                         -         -----------
Net cash provided by financing activities                0            844,336
                                                         -         -----------
Net increase in cash                                   322              1,597

Cash at beginning of period                             66                100
                                                       ---              ------
Cash at end of period                                 $398             $1,697
                                                      ====             ======

 107

                                SCHEDULE 3.2

The Company is qualified to do business and is in good standing in the State 
of New Jersey.  A copy of the Company's Certificate of Incorporation, as 
amended, and a copy of the Company's By-Laws, as amended, are incorporated by 
reference to the Company's Annual Report on Form 10-K for the year ended March 
31, 1996 (Exhibit 3(j)) and by reference to the Company's registration 
statement on Form S-1 (File No. 33-42154) (Exhibit 3.10), respectively, as 
filed with the Securities and Exchange Commission.

 108

                                SCHEDULE 3.3

                      OUTSTANDING STOCK OPTIONS AND WARRANTS

WARRANTS

Issue Date     Exercise Price     # of Shares     Expiration
                     $                               Date
                                            
February 1991      36.00            48,867           1/98
September 1993     46.40             9,375           4/99
March 1995      3.20 - 8.10          91,933      1/99 - 11/03

1986 Stock Option Plan

Issue Date     Exercise Price     # of Shares     Expiration
                      $                              Date
                                             
August 1992        32.50             18,000

1992 Stock Option Plan

Issue Date      Exercise Price     # of Shares     Expiration
                       $                              Date
                                             
May 1996               .18              1,500         2001

 109

                                SCHEDULE 3.4

                Pending Litigation, Governmental Investigations, Etc.

1.  There are no outstanding legal proceedings.  All matters referred to in the
Company's December 30, 1995 Report on Form 10-Q have been settled.

2.  The IRS is currently conducting an audit of the Company's books and records
for the fiscal year ended September 30, 1993, with regard to the Company's 
then wholly-owned subsidiary, Fidelity Medical Inc.

 110

                                   SCHEDULE 3.7

3.7  (i)Since the receivership proceedings in February 1996 involving the 
Company's UK subsidiaries, the Company has not been able to settle its 
liabilities in a timely fashion.  Accordingly, the liabilities included in the 
Company's most recent financial statements are considerably past due.

 111

                                  SCHEDULE 3.8

Delinquent SEC Filings

The Company is delinquent in its filing of the following reports with the SEC:

1.  Annual Report on Form 10-K for the fiscal year ended March 31, 1996.

2.  Quarterly Report on Form 10-Q for the quarter ended June 30, 1996.

3.  Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.

 112

                                 SCHEDULE 3.9

                 Delinquent Federal, State and Local Tax Returns

The Company is delinquent in the filing of Federal and State tax returns for 
the fiscal years ended September 30, 1994 and September 30, 1995.

 113

                                 SCHEDULE 3.10

Subsidiaries

Through February 1996 the following UK corporations were wholly-owned 
subsidiaries of the Company:

     Corniche Distribution Limited ("CDL")

     The Stationery Company Limited (owned by CDL)

     Chessbourne International Limited (owned by CDL)

All of the foregoing corporations are in receivership in the UK and have 
either been liquidated or will be liquidated shortly.  The Company has not 
received and will not receive cash or any other assets or items of value in 
connection with these liquidations.

 114

                                                                 EXHIBIT 10(n)

 115

                               MUTUAL RELEASE

KNOW ALL MEN BY THESE PRESENTS:

     That Whereas:

     A.      Corniche Group Incorporated, a Delaware corporation ("CGI") 
borrowed UK£50,000 from The Bank of Scotland (the "Bank") and in 
consideration therefor issued to the Bank CGI's promissory note dated in 
February 1996 (the "Note") providing for, among other things, maturity in 
August 1996 and an annual rate of interest calculated at 2% above the 3-month 
London Interbank Offered Rate ('LIBOR") ascertained at specified times ; and

     B.     The Bank advised CGI that it would accept in full satisfaction and 
discharge of all principal, accrued interest and any and all others sums which 
may be  due under the Note the sum of US$ 89,374.49, payable in lawful money 
of the United States and in same day funds on the date hereof; and

     C.     CGI has this day made payment herewith to the Bank of the amount 
set forth in Preamble B above, in accordance with the terms specified therein, 
and in full satisfaction and discharge of the obligations specified therein.

     Now, Therefor:

               CORNICHE GROUP INCORPORATED
               JAMES FYFE
                               (the said corporation and individuals,
                                together with their respective 
                                executors, administrators, successors
                                and assigns collectively jointly, and 
                                severally the "CGI Group")

                    and

               THE GOVERNOR AND COMPANY OF
               THE BANK OF SCOTLAND

                               (the said corporation together with its
                                successors and assigns, collectively, 
                                jointly, and severally the "Bank Group")

for good and valuable consideration, the receipt of which is acknowledged each 
from the other, have entered into the agreements of release set forth below.

 116

     1.     The CGI Group and each and every one of them respectively do, by 
these presents, remise, release and forever discharge the Bank Group and each 
and every one of them from all liabilities, accounts, causes of action, sums 
of money, reckonings, contracts, controversies, agreements, damages, 
judgments, executions, claims, demands, debts, obligations, promises, 
covenants, actions and undertakings, in law or in equity, which against the 
Bank Group and each and every one of them the CGI Group and each and every one 
of them ever had, now have or hereafter can, shall or may have, for or by 
reason of any matter, cause or thing whatsoever, up to and through the date 
hereof.

     2.     The Bank Group and each and every one of them respectively do, by 
these presents, remise, release and forever discharge the CGI Group and each 
and every one of them from all liabilities, accounts, causes of action, sums 
of money, reckonings, contracts, controversies, agreements, damages, 
judgments, executions, claims, demands, debts, obligations, promises, 
covenants, actions and undertakings, in law or in equity, which against the 
CGI Group and each and every one of them the Bank Group and each and every one 
of them ever had, now have or hereafter can, shall or may have, for or by 
reason of any matter, cause or thing whatsoever, up to and through the date 
hereof.

     3.     In the event the payment to the Bank referred to in Preamble B 
must be returned, repaid or disgorged to the CGI Group, a trustee or any other 
person, in whole or in part, Sections 1 and 2 hereof shall be null and void 
and of no force or effect.

     In Witness Whereof, the parties have caused these presents to be executed 
by the following persons thereunto duly authorized as of January 30, 1997.

                                               CORNICHE GROUP INCORPORATED

                                               By: /s/ James Fyfe
                                                  JAMES FYFE, Vice President

                                                   /s/ James Fyfe
                                                    JAMES FYFE
       
                                                THE GOVERNOR AND COMPANY OF 
                                                THE BANK OF SCOTLAND

                                                   By /s/ John Kelly

  117

          5

                                   YEAR            YEAR            YEAR
                        MAR-31-1996     MAR-25-1995     MAR-27-1994
                           MAR-26-1995     MAR-28-1994     APR-01-1993
                             MAR-31-1996     MAR-25-1995     MAR-27-1994
                                            66         108,438           9,940
                                       0               0               0
                                200,000       3,938,702       3,442,136
                                  75,000        (345,108)       (131,692)
                                        0       3,146,307       3,097,662
                             135,066       7,259,527       6,661,197
                                         1,426       1,047,899       1,273,207
                                   291       9,822,570         588,428
                               136,201       9,122,665       7,713,433
                        455,306       3,323,565       4,277,770
                                            0               0       3,167,055
                              0         946,069               0
                                  909,267         211,985               0
                                     263,037     (4,037,219)          57,208
                                 1,491,409      9,822,570          (54,767)
                 136,201     21,048,151        7,713,433
                                            0     21,048,151        7,585,360
                                   0     15,531,102        7,585,360
                                              0     15,531,102        5,121,884
                                      0      8,011,378        5,121,884
                             185,115        349,231        2,224,361
                              75,000        538,646           71,832
                               600     (3,404,160)         164,070
                             (323,510)    (3,404,160)           3,213
                                       0         (9,508)           1,409
                         (325,510)     (3,394,652)          1,804
                             (3,432,032)             0               0
                             5,466,636              0               0
                                           0              0               0
                                1,711,094     (3,394,652)          1,804
                                     .74          (2.05)            .00
                                     .74          (2.05)            .00

                                                                EXHIBIT 99 (a)

 119

       Smithsons                                              79 Mosley Street
- - ----------------------------                                        Manchester 
S  O  L  I  C  I  T  O  R  S                                            M2 3LT

                                                      Telephone: 0161 237 9283
Our Ref:   AGS/AS/C31-1/cgi1                          Facsimile: 0161 237 9284
Your Ref:                                               DX: 18574 Manchester 7

                                                                  7 March 1997

J J Fyfe Esq
Corniche Group Incorporated
Wayne Interchange Plaza I
3rd Floor
145 Route 46 West
WAYNE, NJ 07470, USA

Dear Sir

Corniche Distribution Limited (In Administrative Receivership)
The Stationery Company Limited (In Administrative Receivership)

We have been asked to give a legal opinion as to the status of the above 
subsidiary companies of Corniche Group Incorporated ("CGI") as a result of 
receivership proceedings.  This opinion is based upon the information and copy 
documents supplied by CGI and the other sources referred to in this opinion.

1     Background

Corniche Distribution Limited (In Administrative Receivership) ("CDL"") and 
The Stationery Company Limited (In Administrative Receivership) ("TSCL") 
borrowed considerable sums of money from The Bank of Scotland.  It is the 
normal practice in England for banks, when advancing sums of money to limited 
companies, to obtain security for those borrowings by means of mortgages over 
fixed assets ("Fixed Charges') and debentures over pools of assets which by 
their nature will change from time to time ("Floating Charges").  This 
security is taken in one document known as a Fixed and Floating Charge.  CDL 
executed a Fixed and Floating Charge in favour of The Bank of Scotland dated 7 
April 1995 and TSCL similarly executed such a document in favour of The Bank 
of Scotland dated 16 November 1993.

A copy of the charge executed by TSCL has been supplied by CGI and is annexed 
to this opinion.  We are informed by officers of CGI that the charges executed 
by CDL and Chessbourne International Limited ("CIL") are in substantially the 
same form.  We refer to paragraph 3.1 of the charge and are of the opinion 
that all the assets set out in the Summaries referred to below are caught by 
the security created by those charges.

We have considered the copy document supplied to us and on the basis that all 
charges are in the form annexed, we are of the opinion that all the assets of 
CDL and TSCL are the subject of security in favour of The Bank of Scotland as 
a result of such charges.

A G Smithson R K Wilson (Notary Public)
REGULATED BY THE LAW SOCIETY IN THE CONDUCT OF INVESTMENT BUSINESS
also at 6 Raymond Buildings, Gray's Inn, London WC1R 5DA.

  120

We have been supplied with copy Summaries of Assets and Liabilities at the 
date of the appointment of the relevant administrative receiver of CDL, TSCL 
and CIL by CGI and it can be seen that the liabilities secured by the charge 
in favour of the Bank far outweigh the value of the assets in each of the two 
companies.  In the case of CDL the estimated deficiency was £4,276,456, 
in the case of TSCL the estimated deficiency was £4,041,333 and in the 
case of CIL the estimated deficiency was £5,137,617.  The administrative 
receivers referred to in paragraph 2 below prepared statutory reports on the 
companies.  Copies of these reports are annexed to this opinion together with 
a copy of the report on CIL which is referred to in paragraph 10 below.  These 
reports, while disagreeing with certain of the figures on the Summaries, 
conclude that there will be deficiencies in the receiverships.  We have also 
been supplied with this information in the case of CIL and it is reported by 
the administrative receivers (who are common to all three companies) that 
there is a deficiency of assets over liabilities in CIL.

2.     Administrative Receivership

The two Fixed and Floating Charges executed by CDL and TSCL in favour of The 
Bank of Scotland plc ("the Charges") contain powers for the bank to appoint an 
administrative receiver of the assets covered by the security.

The appointment of an administrative receiver was effected on 7 February 1996 
in the case of TSCL and 28 February 1996 in the case of CDL.

The role of administrative receivers is to collect and realize the assets of 
the security to the extent necessary to repay the chargeholder (i.e. Bank of 
Scotland).  Given that the liabilities exceed the assets, all the assets of 
CDL and TSCL are to be realized by the administrative receivers under the 
charge and the net proceeds of disposal are to be paid to the bank as payment 
against the liabilities owed to the bank by CDL and TSCL.

3     Effect of Receivership on the Officers of the Company

The officers of companies in England and Wales comprise the company secretary 
(whose function is purely administrative) and the directors who are the 
officers charged with the day to day management of the company.  The powers of 
the directors are set out in the Company's memorandum and articles of 
association, and in the case of CDL and TSCL, the Companies Act 1985.

Statute is silent as to the effect of administrative receivership on the 
powers of the directors of companies placed in administrative receivership but 
the matter fell to be decided by the English Courts on a number of occasions 
and the most recent case, Gomba Holdings UK Limited -v- Homa in 1986, held 
that the appointment of a receiver suspends the powers of a company and its 
directors to deal with the assets which are the subject of the charge.  The 
effect of the suspension of the powers of CDL, TSCL and their respective 
directors, were complete since all the assets of the two companies were caught 
by the Charges.

The powers of administrative receivers are contained partly in the Charges and 
are also contained in statute, namely the Insolvency Act 1986, s.42 (1) and 
Schedule 1. The powers contained in the Charges and Schedule I Insolvency Act 
1986 are far reaching and replace in all material respects the powers formerly 
enjoyed by CDL, TSCL and their directors for the duration of the receivership.

   121

4     Effect of Receivership on CGI

CGI is the holder of the entire issued share capital of CDL and through CDL it 
is the holder of the entire issued share capital of TSCL.  Such a relationship 
does not create any obligations on the part of CGI in respect of the 
liabilities secured by the Charges save insofar as any guarantee of the 
obligations of CDL and TSCL were given by CGI to the bank.  We are informed by 
the officers of CGI that no such guarantees have been given to the bank by CGI 
and consequently we confirm that no liability can attach to CGI by virtue of 
the charges.

We have been supplied with a copy of a mutual release which the officers of 
CGI inform us has been executed by The Bank of Scotland and CGI.  A copy of 
this mutual release, in the form signed by CGI, is attached to this opinion 
and clause 2 of that document releases CGI from any liabilities to The Bank of 
Scotland.

Similarly, the appointment of administrative receivers in respect of the 
assets of CDL and TSCL have no effect on the assets of CGI.  We acted for CGI 
in connection with claims made against CGI by the receivers of CDL in 
connection with sums allegedly owed by CGI to CDL on the intercompany 
accounts.  All such liabilities were compromised between CGI and CDL.  We 
attach a copy of the compromise agreement and are of the opinion that the 
agreement is enforceable on its terms and has the effect of releasing CGI from 
all liability to CDL on performance by CGI of its obligations under that 
agreement.  It is open to a subsequently appointed liquidator to question 
transactions carried out by a receiver.  The only basis upon which the 
compromise agreement could be attacked would be that it was a transaction at 
an under value.  The valuation letter from Baker Tilley makes any such attack 
most unlikely.  Even if such an attack were launched we are of the opinion 
that it would be unsuccessful.

5.     Statutory Obligations of the Companies

The status and nature of the company does not change in law upon the 
appointment of an administrative receiver, and consequently strictly speaking 
the company remains liable to file annual returns and statutory accounts.  In 
practice this is not done and the Registrar of Companies (the government 
official in England and Wales responsible for overseeing companies) will not 
enforce such an obligation.  It would be normal for directors to resign 
shortly after receivership although their obligation to assist with the 
process continues.  A receiver would have no responsibility for compliance 
with the regulatory requirements and consequently in practice there is no one 
against whom the Registrar could proceed for a breach of the company's filing 
requirements.  Even if the directors remained in office the Registrar, as a 
matter of practice, does not require the filing of annual returns or statutory 
accounts since to take enforcement proceedings in that regard might adversely 
affect the receivership.  The Registrar takes the view that such proceedings 
would be inappropriate.

This is a matter of practice and there is nothing in statute which relieves 
the company from these filing obligations.  We have, in providing this 
opinion, spoken with the appropriate regulatory authorities at Companies House 
who have confirmed this practice to us over the telephone.

The obligation to file accounts on a company is one on the officers of the 
company and there is no responsibility on the part of CGI, as holding company, 
to ensure that returns and accounts are filed with Companies House by either 
CDL or TSCL.

 122

It follows therefore that the preparation of financial statements is 
impractical since the receivers have control of the books and papers of the 
companies.  Preparation of such financial statements will also be costly and 
in practice no auditor could be found to prepare the financial statements.

6     Length of Receivership

There is no minimum or maximum time specified for a receivership and as a 
result some receiverships can go on for a number of years.  The receivership 
will end when the receivers have disposed of all the assets under the Charges 
and applied the proceeds of such disposals.

7     Position post-receivership

Once the receivership of CDL and TSCL is at an end the companies will have no 
assets remaining.  CDL and TSCL will therefore be placed into liquidation 
after the conclusion of the receivership.  The liquidation will be a 
liquidation by order of the Court, known as a compulsory winding up, and the 
powers of the directors of CDL and TSCL cease upon the Court making a 
compulsory winding up order.  Upon liquidation there will be restrictions 
under Companies Act 1985 which will prevent CGI from dealing with or disposing 
of the shares in CDL and TSCL without consent of either the liquidator or the 
Court as appropriate.  After liquidation, CDL and TSCL will be dissolved 
automatically by virtue of the Insolvency Act 1986 s.205 at the end of the 
period of three months beginning with the day of registration of a notice of 
the final meeting of creditors and vacation of office by the liquidator.
Dissolution of a company results in the company ceasing to exist as a legal 
entity.

8     Trading post-receivership

We have specifically been asked to advise whether or not the business of CDL 
and TSCL ran continue during the receivership.  The business may be continued 
by the administrative receiver within a specific power so to do contained in 
the Insolvency Act 1986 Schedule 1 paragraph 14.  The power of the directors 
of CDL and TSCL, having been suspended by virtue of the receivership, prevents 
them from continuing to trade CDL or TSCL.

The summaries of the assets and liabilities of CDL and TSCL demonstrate that 
the liabilities of both companies exceed the assets.  As a result, the 
receivership is insolvent.  CDL was a holding company and never traded.  TSCL 
was a trading company and the receiver ceased trading in TSCL on the date of 
their appointment, namely 7 February 1996 following a sale of 18 of the 22 
shops to Stationery Box Limited.  There are consequently no circumstances in 
which either CDL or TSCL could re-commence trading given the net deficiency in 
assets over liabilities.  In the event that, at the end of the receivership of 
CDL and TSCL, there is no application made for an appointment of a liquidator, 
the receiver should report the situation to the Registrar of Companies.  Under 
Companies Act 1985 s.652 the Registrar of Companies will initiate proceedings 
resulting in the company being struck off the Register of Companies and 
thereby ceasing to exist.

 123

In practice the receiver is almost certain to hand the resulting empty husk of 
CDL and TSCL to a government official known as the Official Receiver who will 
act as liquidator of the companies.  The reason that receivers take this 
course of action is that they no longer have any power to destroy or dispose 
of books and records of the Company and this power now lies solely with the 
liquidator.  The appointment of a liquidator, albeit the Official Receiver, is 
in the interests of receivers so as to dispose of unwanted books and records.

9.     Summary

We can confirm that the effect of the above is that the shareholders of an 
English company placed in receivership in England have no further control of 
any kind over the company during the entire period that the administrative 
receivership continues and that such shareholders will never regain effective 
control of the company where, upon the termination of the administrative 
receivership, the company will be left with material liabilities and no 
assets.  Under such circumstances it would follow that the company would be liqu
idated and thereafter the company's existence would be terminated.

The position in summary, therefore, is that:-

     (i) CDL and TSCL have lost control of their assets

     (ii) It is effectively impossible for the companies to prepare financial 
statements for the year ended 31 March 1996 or any period thereafter

     (iii) In the light of the deficiency in assets over liabilities and the 
fact that the companies do not trade, the winding up of the companies is 
inevitable.

10     Chessbourne International Limited

CIL was a company within the CGI group of companies.  CIL is registered in 
Scotland and accordingly the laws of England do not apply to such a company.  
As English solicitors we can give no opinion on Scots law.  As a general 
matter we can however state that all material provisions of the Companies Act 
1985 are common to companies registered in England and Scotland.  The 
provisions of the Insolvency Act relating to administrative receivership are 
not common in the two jurisdictions and there are separate provisions for 
England and Scotland.

We have reviewed the different provisions in the Insolvency Act and, without 
giving any opinion as to Scots law, can see nothing in the provisions of 
Chapter 11 Insolvency Act 1986 (s.50 to 71 inclusive) which contain the 
provisions which relate exclusively to Scotland, that would lead to any 
different result in Scotland.  The only exception to this is that it would 
appear that, whereas in England receivership will be completed before 
liquidation takes place, it is possible for liquidation to have taken place in 
Scotland and for the receivership to take place in parallel with the 
liquidation.

The powers of administrative receivers in England and Wales are set out in 
Schedule 1 Insolvency Act 1986 and the powers for administrative receivers in 
Scotland are set out in Schedule 2 Insolvency Act 1986.  The powers are 
identical in many respects save for differences arising from the powers 
necessary to effect dispositions of land in the two

 124

jurisdictions.  Furthermore, in England the receivers have power to create 
subsidiaries and transfer assets within newly created subsidiaries.  This 
power does not exist in Scotland.

Finally, it should be noted that the two jurisdictions are sufficiently 
similar for there to be provision in s.72 Insolvency Act 1986 which states 
that where a receiver is appointed in either part of Great Britain (i.e. in 
England and Wales or Scotland) that receiver may exercise his powers which 
arise from a charge created in one part of Great Britain over assets situated 
in the other part of Great Britain.

We have been provided with a copy of the report of the receivers on CIL and 
can confirm from that report that the receivers were appointed on 7 February 
1996.  We can confirm that the receivers effectively ceased trading in CIL on 
the date of their appointment save for asset disposals referred to in the 
report.

Yours faithfully

/S/  Smithsons
Smithsons

encs

 125

                         D E B E N T U R E

                         by

                         THE STATIONERY COMPANY LIMITED

                         in favor of

                         THE GOVERNOR AND COMPANY OF
                         THE BANK OF SCOTLAND

GFL2W463/15

 126

1.  THE STATIONERY COMPANY LIMITED (registered in England and Wales with No. 
02731602) (hereinafter called "the Company") whose registered office is at 79 
MOSLEY STREET, MANCHESTER, M2 3LT hereby covenants that it will, on demand in 
writing made to the Company, pay or discharge to the Governor and Company of 
the Bank of Scotland (hereinafter called "the Bank") all moneys liabilities 
which shall for the time being (and whether on or at any time after such 
demand) be due, owing or incurred in whatsoever manner to the Bank by the 
Company, whether actually or contingently and whether solely or jointly with 
any other person and whether as principal or surety and whether or not the 
Bank shall have been an original party to the including interest, discount, 
commission and relevant transaction, and including interest, discount, 
commission and other lawful charges or expenses which the Bank may in the 
course of its business charge in respect of any of the matters aforesaid or 
for keeping count, and so that interest shall be computed and the Company's 
account, and so that interest shall be computed and compounded according to 
the usual mode of the Bank as well after as before any demand made or judgment 
obtained hereunder.

2.  A demand for payment or any other demand or notice under this Debenture may 
be made or given by any manager or officer of the Bank or of any branch 
thereof by letter addressed to the Company and sent by post to or left at the 
registered office of the Company or its existing or its last known place of 
business (or if more than one any one of such places), and so that such demand 
or notice if sent by post shall be deemed to have been made or given at noon 
on the day following the day the letter was posted.

3.1.  The Company as beneficial owner hereby charges with the payment or 
discharge of all moneys and liabilities hereby covenanted to be paid or 
discharged by the Company:-

     3.1.1  by way of legal mortgage, all the freehold and leasehold property
of the Company now vested in it, whether or not the title thereto is registered
at H.M. Land Registry, including that which is described in the Schedule 
hereto, together with all buildings and fixtures (including trade and tenant's
fixtures) now and hereafter thereon and all plant and machinery now and 
hereafter annexed thereto for whatever purpose;

     3.1.2 by way of fixed charge, all freehold and leasehold property 
hereafter belonging to the Company together with all buildings and fixtures 
(including trade and tenant's fixtures) thereon and all plant and machinery 
annexed thereto for whatever purpose;

     3.1.3 by way of fixed charge, all interests not hereinbefore effectively 
charged now or hereafter belonging to the Company in or over land or the 
proceeds of sale of land, all licences now or hereafter held by the Company to 
enter upon or use land, and the benefit of all other agreements relating to 
land to which the Company is or may become party or otherwise entitled, and 
all trade and tenant's fixtures, plant and machinery now and hereafter annexed 
for whatever purpose to all freehold and leasehold property, an interest in 
which stands charged hereunder;

 127

     3.1.4 by way of fixed charge, all the goodwill and uncalled capital for 
the time being of the Company;

     3.1.5 by way of fixed charge, all stocks, shares and other securities now 
or hereafter owned (whether at law or in equity) by the Company, and all 
rights and interests of the Company in and claims under all policies of 
insurance and assurance now or hereafter held by or inuring to the benefit of 
the Company;

     3.1.6 by way of fixed charge, all patents, trade marks, patent 
applications, brand names, service marks, copyrights, rights in the nature of 
copyright, design rights, registered designs and other intellectual property 
rights and agreements relating to the use by the Company of patents and trade 
marks to which the Company is now or may hereafter become entitled and all 
agreements under which the Company is now or may become entitled -to the 
payment of any royalty fee or similar income;

     3.1.7 by way of fixed charge, all book and other debts of the Company 
whether now or hereafter existing and whether presently payable or hereafter 
falling due for payment and all rights and claims of the Company against third 
parties now or hereafter existing and capable of being satisfied by the 
payment of money (save as charged under sub-clause 3.1.5. hereof);

     3.1.8 by way of floating charge all the Assets (as defined in Clause 19 
hereof) whatsoever and wheresoever not hereinbefore effectively charged by way 
of fixed charge, including (without limitation) any immovable property of the 
Company situate in Scotland, and any Assets falling within any of the types 
mentioned in sub-clauses 3.1.3 to 3.1.7 inclusive situate in Scotland but so 
that the Company is not to be at liberty to create otherwise than in favor of 
the Bank any mortgage or fixed or floating charge or other security upon and 
so that no lien (other than a lien arising through operation of law in the 
ordinary course of business) shall in any case or in any manner arise on or 
affect any part of such Assets either in priority to or pari passu with the 
floating charge hereby created, and further that the Company shall have no 
power without the consent of the Bank to part with or dispose of any part of 
such Assets except by way of sale in the ordinary course of its business.

3.2. The Bank may from time to time by notice in writing to the Company convert 
the floating charge created pursuant to sub-clause 3.1.8 into a fixed charge 
as regards any Assets thereby charged as specified in any such notice and such 
floating charge shall automatically be converted into a fixed charge:

     3.2.1 in respect of any Assets which shall become subject to a fixed 
charge in favor of any other person or to a disposition otherwise than by way 
of sale in the ordinary course of the Company's business immediately upon such 
charge or disposition; and

 128

     3.2.2 in respect of all the Assets thereby charged if and when the Company
shall cease to carry on business or to be a going concern; 

but so that this sub-clause 3.2 shall not apply to any Assets situate in 
Scotland.

3.3. The Company shall not without the previous written consent of the Bank 
create or purport or attempt to create any mortgage, charge or encumbrance on 
any freehold or leasehold property of the 'Company or any other Asset subject 
to a fixed charge hereunder, nor in any way dispose of the equity of 
redemption thereof or any interest therein, and the Company hereby applies to 
the Chief Land Registrar for a restriction to be entered on the register of 
title of all present and future registered freehold and leasehold property to 
the Company in the following terms:-

          "Except under an order of the Registrar no disposition by the 
           proprietor of the land is to be registered without the consent
           of the proprietor for the time being of (the charge hereby
           created)".

3.4.  The Company shall, subject to the rights of any prior mortgagee, deposit
with the Bank and the Bank during the continuance of this security shall be 
entitled to hold, all deeds and documents of title relating to the Company's 
freehold, leasehold and heritable property and stocks, shares and other 
securities and all policies of insurance or assurance.

3.5. The Company shall on demand in writing made to the Company by the Bank, at
the cost of the Company:

     3.5.1 execute a valid legal mortgage in the Bank's standard form for the
time being, or in such other form as the Bank may reasonably require, of any 
freehold or leasehold property presently belonging to the Company which is not 
by this Debenture effectively charged by way of legal mortgage and of any 
freehold or leasehold property hereafter acquired by the Company;

     3.5.2 execute and deliver a standard security or other valid fixed 
security acceptable to the Bank over heritable or other property, land and 
buildings wherever situate;

     3.5.3 execute a valid fixed charge or assignation in security in such form 
as the Bank may reasonably require of any Asset subject to a floating charge 
hereunder; and

     3.5.4 do and concur in all such other acts or things as the Bank may deem 
necessary to vest in the Bank title to all or any of the Assets.

3.6. Any fixed mortgage, charge or other security hereafter created by the 
Company in favor of the Bank shall have priority over the floating charge 
created by this Debenture, except insofar as the Bank shall declare otherwise 
whether at or after the time of creation of such fixed security.

 128

3.7. The Company shall pay into the Company's account with the Bank or as the 
Bank may direct all moneys which it may receive in respect of any policies of 
insurance or assurance, royalties or book or other debts or any other of the 
rights and claims hereinbefore charged to the Bank under subclauses 3.1.5, 
3.1.6 and 3.1.7 and until such payment hold all moneys so received upon trust 
for the Bank, and shall not without the prior written consent of the Bank 
charge, factor, discount or assign any of the said policies, royalties, debts, 
rights or claims in favor of any other person or purport so to do.

4. This security shall be a continuing security to the Bank notwithstanding any 
settlement of account or other matter or thing whatsoever, and shall be 
without prejudice and in addition to any other right, remedy or security, 
whether by way of mortgage equitable charge or otherwise howsoever, which the 
Bank may now or at any time hereafter or, but for the charges hereby created, 
would have on or in respect of the Assets or any part thereof for or in 
respect of the moneys hereby secured or any part thereof.

5. During the continuance of this security the Company shall:

     5.1 furnish to the Bank copies of the trading and profit and loss account 
and audited balance sheet in respect of each financial year of the Company, 
its holding company (if any) and every subsidiary of the Company, forthwith 
upon the same becoming available and not in any event later than the 
expiration of three months from the end of such financial year, and also from 
time to time such other financial statements and information respecting the 
assets and liabilities of the Company, its holding company and every such 
subsidiary as the Bank may reasonably require;

     5.2 maintain the aggregate value of the Company's book debts (excluding 
debts owing by any Group Company (as defined in Clause 19 hereof) or any other 
company from time to time specified by the Bank) and cash in hand as appearing 
in the Company's books and of its stock according to the best estimate that 
can be formed without it being necessary to take stock for the purpose, at a 
level to be fixed by the Bank from time to time and whenever required by the 
Bank shall obtain from the Managing Director of the Company for the time being 
or, if there shall be no Managing Director, then from one of the Directors of 
the Company and furnish to the Bank a certificate showing the said aggregate 
value;

     5.3 forthwith notify the Bank of the acquisition of any freehold, 
leasehold or heritable property by the Company;

     5.4 not, without the previous written consent of the Bank, redeem or 
purchase any of its own shares or issue any redeemable shares.

6.1. The Company hereby covenants with the Bank that the Company will.

     6.1.1 keep all buildings and all fixtures and fittings, plant, machinery 
and other effects in good and substantial repair and in good working order 
and  condition, and will maintain all such insurances as are normally 
maintained by prudent companies carrying on similar

 130

      businesses, and in particular will insure and keep insured such of its 
Assets as are insurable with an insurance office or underwriters to be 
approved by the Bank in writing from time to time in the name of the Company 
with the interest of the Bank noted on the policy, or, at the option of the 
Bank, in the joint names of the Company and the Bank, against loss or damage 
by fire and such other risks (and with the policy containing such provisions 
for the protection of the Bank) as the Bank may from time to time require in 
their full replacement value for the time being.

     6.1.2 pay all premiums and other moneys necessary for effecting and 
keeping up such insurances within one week of the same becoming due, and will 
on demand produce to the Bank the policy or policies of such insurance and the 
receipt for every such payment.

6.2. If the Company shall make default in keeping such buildings,. fixtures and 
fittings, plant, machinery and other effects in good and substantial repair 
and in good working order and condition, or in effecting or keeping up such 
insurances as aforesaid, the Bank may, as it shall think fit, repair and keep 
in repair the said buildings and other Assets or any of them (with liberty for 
that purpose by itself or its agents to enter upon the freehold and leasehold 
property of the Company) or effect or renew any such insurances as aforesaid.

6.3. The Bank shall be entitled to be paid the proceeds of any such policy of 
insurance (other than in respect of employers' or public liability) and the 
Company hereby irrevocably instructs any insurer in respect of any such policy 
to pay such proceeds to the Bank and undertakes to the Bank to issue such 
further instructions to that effect as the Bank may require.

6.4. All moneys received on any insurance whatsoever (other than as.,aforesaid) 
shall, as the Bank requires, be applied either in. making good the loss or 
damage in respect of which the money is received, or in or towards discharge 
of the moneys for the time being hereby secured.

6.5. The Company will permit any authorized representative of the Bank at all 
reasonable times to enter upon any part of the freehold and leasehold property 
of the Company and of any other property where the Company may be carrying out 
any contract or other works.

7.1. The Company will at all times observe and perform, and ensure the 
observance and performance by any other person or company at any time 
occupying the freehold and leasehold property of the Company or any part 
thereof of, all restrictive and other covenants to which the same or any part 
thereof may from time to time be subject, all obligations on the part of the 
Company in any lease or tenancy agreement, all building regulations, and all 
restrictions, conditions and stipulations for the time being affecting the 
same or any part thereof or the mode of user or enjoyment of the same and 
provide to the Bank on request such evidence of such

 131

observance or performance as the Bank shall require, and within three days 
will deliver to the Bank any notice or proceedings served by any landlord and 
relating to any alleged breach of the terms of the relevant lease or tenancy.

7.2. The Company will on request produce to or provide for the Bank such 
documents or information relating to the freehold and leasehold Property of 
the Company or the development thereof as the Bank shall require.

8.1. At any time after the Bank shall have demanded payment of any moneys 
hereby secured (and whether or not the Company shall have been accorded 
sufficient or any time in which to satisfy the same) or (notwithstanding the 
terms of any other agreement between the Company and the Bank save only an 
express exclusion of this provision by reference to this Debenture) after the 
presentation of a petition applying for an administration order to be made in 
relation to the Company pursuant to Section 9 of the Insolvency Act 1986, or 
if requested by the Company, the Bank may appoint by writing any person or 
persons to be an administrative receiver or administrative receivers 
(hereinafter called "the Receiver' which expression shall where the context so 
admits include the plural, and any substituted administrative receiver or 
administrative receivers, and so that where more than one administrative 
receiver is appointed they shall have power to act severally unless the Bank 
shall in the appointment specify to the contrary) of all or any part of the 
Assets hereby charged.  Such an appointment over part only of the Assets 
hereby charged shall not preclude the Bank from making any subsequent 
appointment of a Receiver over any part of the Assets over which an 
appointment has not previously been made by the Bank.

8.2. The Bank may from time to time determine the remuneration of the Receiver 
and may (subject to the application of Sections 45 of the Insolvency Act 1986) 
remove the Receiver from all or any part of the Assets of which he is the 
Receiver, and, at any time after the Receiver shall have vacated office or 
ceased to act in respect of any of the Assets, appoint a further Receiver over 
all or any part of the Assets or of the part thereof in respect of which he 
shall have ceased to act.

8.3. The Receiver shall be the agent of the Company (which shall be solely 
liable for his acts, defaults and remuneration) unless and until the Company 
goes into liquidation, whereafter he shall act as principal and shall not 
become the agent of the Bank, and shall have and be entitled to exercise in 
relation to the Company all the powers set out in Schedule 1 to the Insolvency 
Act 1986 and all the powers conferred from time to time on Receivers by 
statute and in particular b way of addition to but without hereby limiting 
such powers (and without prejudice to the Bank's powers) the-Receiver shall 
have powers to do the following things namely:

     8.3.1 to sell, let or lease or concur in selling, letting or leasing and 
to vary the terms or determine, surrender or accept surrenders of leases or 
tenancies of, or grant options and licences over. all or any part of the 
Assets and so that any such sale may be made for cash payable by instalments 
or for shares or securities of another company and the Receiver may promote or 
concur in promoting a company to purchase the Assets to be sold;

     8.3.2 to sever any fixtures from the property of which they form part;

     8.3.3 to exercise all voting and other rights attaching to stocks, shares 
and other securities owned by the Company;

 132

     8.3.4 to make and effect all repairs and improvements;

     8.3.5 to redeem any prior encumbrance and co settle and pass the accounts 
of the encumbrancer; any accounts so settled and passed shall (subject to any 
manifest error) be conclusive and binding on the Company and the moneys so 
paid shall be deemed to be an expense properly incurred by the Receiver;

     8.3.6 to do all such other acts and things as may be considered by the 
Receiver to be incidental or conducive to any of the matters or powers 
aforesaid, or otherwise incidental or conducive to the preservation, 
improvement or realization of the Assets.

8.4. A person dealing with the Receiver in good faith and for value shall not 
be concerned to enquire whether the Receiver is validly appointed or acting 
within his powers.

9. The Company hereby irrevocably appoints the Bank (whether or not the 
Receiver has been appointed) and also (as a separate appointment) the Receiver 
severally the Attorney and Attorneys of the Company, for the Company and in 
its name and on its behalf and as its act and deed or otherwise to execute and 
deliver and otherwise perfect any deed, assurance, agreement, instrument or 
act which may be required of the Company hereunder or may be deemed proper for 
any of the purposes aforesaid, and to convey or transfer a legal estate to any 
purchaser of any freehold, leasehold or heritable property hereby charged.

10. Any moneys received under the powers hereby conferred shall, subject to the 
repayment as far as necessary of any claims having priority to this Debenture, 
be paid or applied in the following order of priority:-

     10.1 in satisfaction of all costs, charges and expenses properly incurred 
and payments properly made by the Bank or the Receiver, and of the 
remuneration of the Receiver;
     10.2 in or towards satisfaction of the moneys outstanding and secured by 
this Debenture in such order as the Bank may at its discretion require;

     10.3 as to the surplus (if any), to the person or persons entitled 
thereto.

Provided that the Receiver may retain any moneys in his hands for so long as 
he shall think fit, and the Bank is also to be at liberty, without prejudice 
to any other rights the Bank may have at any time and from time to time, to 
place and keep for such time as the Bank may think prudent, any moneys. 
received, recovered or realized under or by virtue of this Debenture to or at 
a separate or suspense account to the credit either of the Company or of the 
Bank, as the Bank shall think fit without any intermediate obligation on the 
Bank's part to apply the same or any part thereof in or towards the discharge 
of the moneys due or owing to the Bank as aforesaid by the Company.

 132

11.     During the continuance of this security:

     11.1 no statutory or other power of granting or agreeing to grant or of 
accepting or agreeing to accept surrenders of leases or tenancies of the 
freehold and leasehold property hereby charged or any part thereof shall be 
capable of being exercised by the Company without the previous written consent 
of the Bank;

     11.2 the Company shall not be entitled to part with possession (otherwise 
than on the determination of any lease, tenancy or licence) of any property 
hereby charged, or to share the occupation thereof with any other person or 
persons, or to surrender or purport to surrender or permit to be forfeited the 
lease of any leasehold property hereby charged without such consent as 
aforesaid;

     11.3 Section 93 of the Law of Property Act 1925 dealing with the 
consolidation of mortgages shall not apply to this security.

12.1 Section 103 of the Law of Property Act 1925 shall not apply to this 
security but the statutory power of sale, shall as between the Bank and a 
purchaser from the Bank, arise on and be exercisable at any time after the 
execution of this security, provided that the Bank shall not exercise the said 
power of sale until payment of moneys hereby secured has been demanded or the 
Receiver has been appointed, but this proviso shall not affect a purchaser or 
put him upon inquiry whether such demand or appointment has been validly made.

12.2 The statutory powers of sale, leasing and accepting surrenders exercisable 
by the Bank hereunder are hereby extended so as to authorize the Bank, whether 
in its own name or in that of the Company to grant a lease or leases of the 
whole or any part or parts of the freehold and leasehold property of the 
Company with such rights relating to other parts thereof and containing such 
covenants on the part of the Company and generally on such terms and 
conditions (including the payment of money to a lessee or tenant or on a 
surrender) and whether or not at a premium as the Bank shall think fit.

13. All costs, charges and expenses incurred hereunder by the Bank, and all 
other moneys paid by the Bank or by the Receiver in perfecting or otherwise in 
connection with this security or in respect of the Assets, including (without 
prejudice to the generality of the foregoing) all moneys expended by the Bank 
under Clauses 6 and 17 hereof and all costs of the Bank (on a solicitor and 
own client basis) of all proceedings for the enforcement of this security or 
for obtaining payment of moneys hereby secured or arising out of or in 
connection with the acts authorized by Clause 8 hereof and all costs and 
losses to the Bank arising in consequence of any default by the Company in the 
performance of its obligations and all administrative charges of the Bank 
based on the time spent by it in connection with any of the foregoing shall be 
recoverable from the Company as a debt and may be debited to any account of 
the Company and shall bear interest accordingly and shall be charged on the 
Assets.

14. On receiving notice that the Company has encumbered or disposed of the 
Assets or any part thereof the Bank shall be entitled to close the Company's 
then current account or accounts and to open a new account or accounts

 134

with the Company, and (without prejudice to any right of the Bank to combine 
accounts) no money paid in or carried to the Company's credit in any such new 
account shall be appropriated towards or have the effect of discharging any 
part of the amount due to the Bank on any such closed account. If the Bank 
does not open a new account or accounts immediately on receipt of such notice 
it shall nevertheless be treated as if it had done so at the time when it 
received such notice and as from that time all payments made by the Company to 
the Bank shall be credited or be treated as having been credited to such new 
account or accounts and shall not operate to reduce the amount due from the 
Company to the Bank at the time when it received such notice.

15. The Company agrees that any moneys from time to time standing to its credit 
on any account with the Bank may be retained as cover for and, at any time 
without notice to the Company, applied by the Bank in or towards payment or 
satisfaction of any moneys or liabilities now or hereafter from time to time 
due owing or incurred by the Company to the Bank in whatsoever manner whether 
presently payable or not, whether actually or contingently, whether solely or 
jointly with any other person And whether as principal or surety.

16. The Bank may from time to time seek from any other person having dealings 
with the Company such information about the Company and its affairs as the 
Bank may think fit, and the Company hereby authorizes and requests any such 
person to provide any such information to the Bank and agrees to provide such 
further authority in this regard as the Bank may from time to time require.

17. The Company shall at its own cost at any time if so requested by the Bank 
appoint an accountant or firm of accountants nominated by the Bank to 
investigate the financial affairs of the Company and/or any subsidiary of the 
Company and report thereupon to the Bank, and hereby authorizes the Bank 
itself at any time to make such appointment on behalf of the -Company or on 
its own account as it shall think fit, and in every such case the fees and 
expenses of such accountant or firm shall be paid by the Company and may be 
paid by the Bank on behalf of the Company, and the Bank may at the time of 
such appointment or thereafter guarantee payment by the Company of such fees 
and expenses.

18. It is hereby certified that the security created by this Debenture, both in 
respect of freehold and leasehold property of which the Company is registered 
at H.M. Land Registry as proprietor and otherwise, does not contravene any of 
the provisions of the Memorandum and Articles of Association of the Company.

19. In this Debenture where the context so admits:-

     19.1 the expression 'the Bank" shall include persons deriving title under 
the Bank;

     19.2 any reference to any statute or any section of any statute shall be 
deemed to include reference to any statutory modification or re-enactment 
thereof for the time being in force;

 135

     19.3 "Assets" shall mean all the undertaking, property and assets of the 
Company whatsoever and wheresoever present and future;

     19.4 "Group Company" shall mean any company which is a subsidiary company 
or a holding company (as such terms are defined in Section 736 of the 
Companies Act 1985 which definitions shall apply for all the purposes hereof) 
of the Company or a subsidiary of any such holding company or any company 
which has 50% or more of the holders of its equity share capital in common 
with the Company.

 136

IN WITNESS WHEREOF this Debenture has been executed by the Company as a deed 
and signed on behalf of the Bank this sixteenth day of November 1993.

THE SCHEDULE ABOVE REFERRED TO

     County and District     Title No.(s)
     (or London Borough)      (if registered land)     Address or Description
     ________________________________________________________________________

EITHER

THE COMMON SEAL of the Company was
hereunto affixed pursuant to a resolution of the
Board of Directors in the presence of:

Director /s/ Brain John Baylis                    

Director/Secretary /s/ Susan A.M. Crisp     

OR

Executed and Delivered as a deed by the
Company (pursuant to a resolution of its
Board of Directors) acting by

Director____________________________

Director/Secretary____________________

Signed on behalf of the Bank by

/s/ Anne Mc Queen                                       
Anne Mc Queen

The address for service of the Bank in the case of any registered land is:

Bank of Scotland,
Legal Services Department
Teviot House
41 South Gyle Crescent
EDINBURGH
EH12 9DR
Revised 21.9.93

 137
 
                                [REGISTRAR SEAL]
 
                         CERTIFICATE OF THE REGISTRATION
                            OF A MORTGAGE OR CHARGE

              Pursuant to section 401(2) of the Companies Act 1985

                                COMPANY No.02731602

THE REGISTRAR OF COMPANIES FOR ENGLAND AND WALES HEREBY CERTIFIES THAT A 
DEBENTURE DATED THE 16th NOVEMBER 1993 AND CREATED BY THE STATIONERY COMPANY 
LIMITED FOR SECURING ALL MONIES DUE OR TO BECOME DUE FROM THE COMPANY TO THE 
GOVERNOR AND THE COMPANY OF THE BANK OF SCOTLAND ON ANY ACCOUNT WHATSOEVER WAS 
REGISTERED PURSUANT TO CHAPTER 1 PART XII OF THE COMPANIES ACT 1985 ON THE 
30th NOVEMBER 1993.

GIVEN AT COMPANIES HOUSE, CARDIFF THE 2nd DECEMBER 1993.

                                             /s/  P. Jones

                                   for the Registrar of Companies

                        [DEPARTMENT STAMP APPEARS
                        HERE DATED 6 DECEMBER 1996]

                                    CH
                             COMPANIES HOUSE                             HC026

 138

CHESSBOURNE INTERNATIONAL

                                  SECTION 4

                    4.1       Statement of Affairs

 139

Rule 3.2                The Insolvency Act of 1986                        Form 3.1 (scot)

                         NOTICE REQUIRING SUBMISSION OF RECEIVERSHIP
                         STATEMENT OF AFFAIRS

                         Pursuant To Section 66(1) and (4) of the Insolvency Act 1986 and 
                         Rule 3.2(1) of the Insolvency (Scotland) Rules 1986
     
(a) Insert name of      (a)   CHESSBOURNE INTERNATIONAL LIMITED 
    the company in          --------------------------------------------------------------
    receivership

(b) Insert full name    Take note that I, (b) IAIN T WATTERS
    of receiver         require you (c) ___________________________________________
                        to submit statement as to the affairs of the company by 
(c) Insert date by      (d) 6 MARCH 1996
    which statement
    required to
    submit statement

(d) Insert date by
    which statement
    must by            The statement shall be in the prescribed form of which a copy is 
    submitted under    attached.
    section 66(a) and
    (5)

                         Dated this 13th day of the FEBRUARY 1996

                         Signed________________________________________________

               Warning
               If without reasonable excuse you fail to comply with any 
               obligation under Section 66, you will be liable:
                    (i) On summary conviction to fine not exceeding the
                    statutory maximum and, for the continued contravention, to a daily
                    default fine not exceeding one-tenth of the statutory maximum.
                    (ii) On conviction on indictment to a fine.

 140

                                                                                                  
                            Pursuant to sections 95, 99 and 131 of the Insolvency Act 1986
                            and Rule 4.7 and 4.8 of the Insolvency (Scotland) Rules 1986

Insert name of the          Statement as to affairs of
company                     CHESSBOURNE INTERNATIONAL LTD. 
- - ---------------------------------------------------------------------------------------------
                            Affidavit
                            This affidavit must be sworn/affirmed before Notary Public, Justice
                            of the Peace or Commissioner for Oaths or other person duly
                            authorised to administer oaths, when you have completed the rest
(a) Insert full             of this form.
name(s) and
occupation(s) of            I/WE (a) BRIAN JOHN BAYLIS  
deponents                   ___________________________________________________________________

(b) Insert full             of (b) DARAT ALKHAIT, BEECHCROFT, 
address(es)                 CHISLEHURST, KENT, BR7 5DB

                           do swear/affirm that the statement set out overleaf and the list A 
                           to G annexed and signed as relative hereto are to the best of my/our
                           knowledge and belief a full, true and complete statement as to the 
                           affairs of the above named company as at
(c) Insert date of         (c) 7th February 1996.
commencement
of the winding up
which is:
(i) in a
voluntary
winding up the
date of the                Sworn/affirmed at 30 High Street Chislehurst in the London Borough
resolution by the          of Bromley
company for                Date 19th day of March 1996
winding up                 Signature(s) of deponent(s) /s/ Brian John Baylis
[section 86]. and
(ii) in a winding
up by the court,
the date of the            Before me /s/ John Harrison
presentation of            Person administering the oath of affirmation
of the petition for
winding up                  JOHN HARRISON
unless it is                A SOLICITOR EMPOWERED
preceded by a               TO ADMINISTER OATHS
resolution for
voluntary                  The person administering the oaths or affirmation IS particular
winding up under           requested, before swearing the affidavit, to make sure that the full
(1) [section 129],         name, address and description of the Deponent(s) are stated, and
but in the case of         to ensure that any crossings-out or alterations in the printed form are
a creditors'               initialled.
voluntary
winding up the
date inserted
should be the
nearest                   NOTE
practicable date          This affidavit should be sworn/affirmed and the statement made out
before the date           and submitted:
of the meeting of         (1) in a winding up by the court by any person required to do so
creditors under           under section 131 of the Act by the Liquidator;
section 98.               (2) in a members' voluntary winding up which becomes a
                              creditors' voluntary winding up section 95 and 96, by the Liquidator
                              under Section 95; and
                          (3) in a creditors' voluntary winding up by the directors.

 141

        Rule 4.7                                                                           Form 4.4 (Scot)
             4.8                                                                              (contd)      

     STATEMENT as to affairs of the company as at                                              [INSTRUCTIONS]
                                                                          Estimated            Please do not
                                                                          Realisable Value          write in
                                                                            £
                                                                                             
     Assets                                                  £                           the margin

     Assets not specifically secured (as per List "A")                             554,800     Please complete
                                                                                               legibly, preferably in
     Assets specifically secured (as per List "B")                                             black type, or
                                                                                               bold black lettering
          Estimated realisable value                         196,176
          Less: Amount due to secured creditors              196,176
          Estimated surplus                                                            ---    

     Estimated Total Assets available for preferential creditors,
     holders of floating charges and unsecured creditors                           554,800

     LIABILITIES
          Preferential creditors (as per List "C")                                 129,193

          Estimated balance of assets available for
          holders of floating charges and unsecured creditors                      430,607

          Holders of floating charges (as per List "D")                          3,155,635

          Estimated surplus/deficiency as regards 
                  holders of floating charges                                   (2,725,028)

     Unsecured Creditors
                                                                   £     
          Trade accounts (as per List "E")                        738,500
          Bills payable (as per List "F")                             ---    
          Contingent or other liabilities (as per List "G")       147,274
          Total unsecured creditors                                                885,834

          Estimated Surplus/Deficiency as regards creditors                     (3,610,867)
          Issued and Called-up Capital                                           1,526,750
          Estimated Surplus/Deficiency as regards members                        5,137,617

These figures must be read subject to the following:-

     [(a) There is no unpaid capital liable to be called up]:                    delete as
     [(b) The nominal amount of unpaid capital liable to be called                   appropriate 
          up is £_______________ estimated to produce 
          £______________ which is/is not charged in favour of the 
          holders of Floating Charges

     The estimates are subject to expenses of the Liquidation and to any 
     surplus or deficiency 
     on trading pending realisation of the Assets.                                                  Page 2

 142

Please do not               Statement of Affairs LIST "A"
write in                    Assets not specifically secured
the margin
Please complete
legibly, preferably in     
black type, or
bold black lettering

                           Particulars of assets                    Book Value     Estimated to produce
                                                                         £             £            
                                                                                                
                           Balance at bank                                   ---                ---
                           Cash in hand                                      ---                ---
                           Marketable Securities (as per schedule I)         ---                ---
                           Bills receivable (as per schedule II)             ---                ---
                           Trade debtors (as per schedule III)             333,139            136,000
                           Loans and advances (as per schedule IV)       1,428,872              ---
                           Unpaid calls (as per schedule V)                  ----               ---
                           Stock in trade                                  659,343            400,000
                           _________________________
                           other debts and prepayment                      111,359              8,800
                           Work in progress                                   ----               ---- 
                           ______________________
                           ______________________
                           Heritable property
                           Leasehold property                                  241              ---
                           Plant, machinery and vehicles                    92,258             15,000
                           Furniture and Fittings, etc.                      ---                ---
                           Patents, trade marks, etc.                        ---                ---
                           Investments other than marketable securities      ---                ---
                           Other property                                    ---                ---

                           Total                                         2,625,212            554,800

                           Signed /s/ Brian John Baylis     Dated 18/3/96
                           Brian John Baylis

THIS AND THE FOLLOWING 21 PAGES IS LIST A REFERRED TO IN THIS AFFIDAVIT OF 
BRIAN JOHN BAYLIS SWORN BEFORE ME ON THE 19TH DAY OF MARCH 1996

/S/ JOHN HARRISON
JOHN HARRISON

A SOLICITOR EMPOWERED
TO ADMINISTER OATHS

 143

Please do not 
write in 
the margin

Please complete         SCHEDULE I TO LIST "A"
legibly, preferably     Statement of Affairs
in black type, or       Marketable Securities
bold black lettering

                        Names to be arranged in alphabetical order and numbered 
                        consecutively

     No     Name of organization in which     Details of           Book Value     Estimated
            securities are held               securities held                     to produce
                                                                    £       £: 

                                                                     ----           ----

          Signed /s/ Brian John Baylis     Dated   18/3/96
                 Brian John Baylis

 144

Please do not 
write in 
the margin

Please complete         SCHEDULE I TO LIST "A"
legibly, preferably     Statement of Affairs
in black type, or       Bills of exchange, promissory notes, etc. available as
                        assets
bold black lettering
                        Names to be arranged in alphabetical order and numbered
                        consecutively

     No     Name and address        Amount of       Date   Estimated     Particulars of any
            of acceptor of bill     bill or note    when   to produce    property held as
            or note                                 due                  security for payment
                                    £                 £      of bill or note

                                                            ----

               Signed /s/ Brian John Baylis     Dated   18/3/96
               Brian John Baylis

 145

                           CHESSBOURNE INTERNATIONAL LTD

                    Minutes of a meeting of the Board of Directors
                            held on Monday 18th March 1995

     Present     Mr.B.J.Baylis
                  Mrs.S.A.M.Crisp
                  Mr M.Holland
                  Mrs. K.Sparkes

     1. BJB reminded the Board that under section 66 of the Insolvency Act 1986
that they were required to submit a Statement of Affairs of the Company.  With 
the agreement of the Receivers, a Statement had been prepared by Ian Mills 
which to the best of our knowledge is a true and fair representation of the 
Company's affairs as at 7th February 1996.

     2. In the interests of expediency BJB had consulted Mr. Alan Pepper, The
Receivers representative who after in turn consulting their own legal advisers 
confirmed that it would be in order for one member to swear the statement on 
behalf of The Board.

     3. IT WAS RESOLVED that the Statement of Affairs as prepared be adopted 
and that BJB be instructed to Swear on behalf of the Board.

     4. The being no other business, the meeting ended.

/s/  B.J.Baylis
B.J.Baylis

 146

Please complete        SCHEDULE III TO LIST "A"
legibly, preferably    Statement of Affairs
in black type, or      Trade debtors
bold black lettering
                       Names to be arranged in alphabetical order and numbered 
                       consecutively

     No     Name and address     Particulars      Amount of     Estimated to
            of debtor            of any           debt          produce
                                 Securities          
                                 held for
                                  debt             £       £

             As per Listing                         333,139       136,000

Note:
If the debtor to the company is also a creditor, but for a lesser amount than 
his indebtedness, the gross amount due to the company and the amount of the 
contra account should be shown in the third column and only the balance be 
inserted in the fourth column. No such claim should be included in List "E"

                  Signed /s/ Brian John Baylis         Dated   18/3/96
                         Brian John Baylis

 147

                                CORNICHE DISTRIBUTION

                                      SECTION 4

               4.1          Statement of Affairs

 148

AA&Co
Intraoffice memorandum
==========================================================================

To                                             To (for reply)
   THE FILES
___________________________________________________________________________

From                     Ext.          Date    From      Ext.        Date
NEIL A BOYD                          21/10/96
____________________________________________________________________________

Subject
                  ATTACHED STATEMENT OF AFFAIRS:  CORNICHE
____________________________________________________________________________

[ ] Follow up please      [ ] Prepare reply for       [ ] As requested
[ ] Note and return            my signature           [ ] For your review
[ ] Note and forward      [ ] Send me information     [ ] For your information
     to files                  required to answer     [ ] As per conversation
[ ] See (phone) me re     [ ] For signature, if         
     attached                  you approve
____________________________________________________________________________

The attached statement of affairs has been marked "COPY" in error.

     This is the ORIGINAL.
                 ========

     Disregard the over-writing of "COPY".

                                             /s/ Neil

                   Please call me - extension         [       ]

 149

          COPY     COPY     COPY     COPY     COPY     COPY     COPY     COPY

          /s/ B Baylis                                    No.          of 19__

Statement of Affairs         IN THE HIGH COURT OF JUSTICE
No. 2.9 (incorporating
Forms 2.9, 3.2, 4.18
and 4.19) (Rules 2.12,       Chancery Division
3, 4, 4.34 - CVL)
(1)(1)  Delete title of the
Court and number
where appropriate.           Companies Court

(2) Insert name of           IN THE MATTER OF (2) CORNICHE DISTRIBUTION LTD.
Company.     

                                    AND

                            IN THE MATTER of the Insolvency Act of 1986.

                            Statement as to Affairs of (2) CORNICHE DISTRIBUTION LTD.
(3) Delete as
appropriate.                on the 28th February 1996 the date of the (3)
                            [administration order] [THE ADMINISTRATIVE 
[WHAT IS IN                 RECEIVER'S APPOINTMENT] [resolution for winding-up]
UPPERCASE IS                [opinion formed by the liquidator under Section 95 of the
WHAT THE COMPANY            Insolvency Act 1986].
CHOOSE OR FILLED IN.]                                   
                          __________________________________________________

                            Affidavit
                            This affidavit must be SWORN or affirmed before a Solicitor or 
                            Commissioner of Oaths when you have completed the rest of this form

(4) Insert name and         I(4) BRIAN JOHN BAYLIS - COMPANY DIRECTOR
occupation.

(5) Insert full address.    of DARAT ALKHAIR, BEECHCROFT, CHISLEHURST, KENT, BR7 5DE

                            make oath and say that the several pages exhibited hereto and marked

                            are to the best of my knowledge and belief a full, true and complete 
                            statement as to the affairs of the above named company as at 28th FEBRUARY 
                            1996, the date (3) [of the administration order] [of the appointment of the 
                            Administrative Receiver] [of the resolution for winding-up] [I formed the 
                            opinion that the company would be unable to pay its debts in full (together 
                            with interest) within the period stated in the directors' declaration of 
                            solvency made under Section 89 of the Insolvency Act 1986]

                           and that the said company carried on business as

                           Sworn at 30 High Street Chislehurst
                           in the London Borough of Bromley
                           Date 19th March 1996      /s/ B Baylis
                           Before me /s/ John Harrison
                                         JOHN HARRISON
                          A SOLICITOR or Commissioner of Oaths     A SOLICITOR EMPOWERED
                                                                   TO ADMINISTER OATHS
                          Before swearing the affidavit the SOLICITOR or Commissioner is
                          particularly requested to  make sure that the full name, 
                          address and description of the Deponent are stated, and to initial 
602.94 1 of 4             any crossings-out or other alterations in the printed form.  A deficiency in 
                          the affidavit in any of the above respects will mean that it 
SUED 01/94                is refused by The  court, and will need to be re-sworn.

 150

Corniche Distribution Limited (in Administrative Receivership)

Al - Summary of Liabilities
                                                                   
                                                                     Estimated to
                                                                        Realise
                                                                        £
Estimated total assets available for preferential creditors
(carried forward from Page A)                              £     (118,098)

Liabilities
Preferential creditors:
                                                           £   
Employees                                                   4,566
Inland Revenue                                             51,501
Customs & Excise                                            3,825
                                                                         59,892
Estimated deficiency/surplus as regards preferential creditor          
                                                               £ (177,990)

Debts secured by a floating charge:                         £

                                                                           -----
Estimated deficiency/surplus of assets available for non-               
                                                                       (177,990)
preferential creditors

Non-preferential claims:                                    £
Trade creditors                                             290,597
Other creditors                                             164,534
Amounts due to group companies                              195,562
Royal Bank of Scotland                                       16,579
Employees                                                   776,934
Directors Loan                                              100,000
                                                                      1,544,206
Estimated deficiency/surplus as regards creditors          £   (1,722,196)

Issued and called up capital:     
                                                           £      
Ordinary shares                                           2,500,000

                                                                      2,500,000
Estimated total deficiency/surplus as regards members      £   (4,222,196)

Signature   /s/ B Baylis       Date     18/3/96

  151

Corniche Distribution Limited (in Administrative Receivership)

A - Summary of Assets
                                                                     
                                                                Book     Estimated to
                                                                Value    Realise
                                                               £    £    
Assets
Assets specifically pledged:

Lloyds Bank PLC:
Freehold property - Old Bank Mill, Leek                        164,000   150,000
Mortgage loan                                                  (86,162)  (86,162)
                                                                £   63,838
Bank of Scotland plc:
Investment in Chessbourne International Limited                 291,360     ---
Investment in The Stationery Company Limited                  1,000,000     ---
Investment in Kassel Limited                                      9,597     ---
Other debtors and prepayments                                    22,432     ---
Amount due from Corniche Group, Inc.                          1,990,112     ---

Bank of Scotland loan account                                  (191,936) (191,936)
                                                                £  (128,098)

Assets not specifically pledged:

Plant, machinery and equipment                                    8,800     2,000
Motor vehicles                                                      718     8,000
                                                                 £ (118,098)

Estimated total assets available for preferential creditors              (118,098)

Signature       /s/ B Baylis                    Date     18/3/96

This and the preceding page is the statement referred to in the affidavit of 
Brian John Baylis sworn before this 19th day of March 1996.

/s/ John Harrison
JOHN HARRISON
A SOLICITOR EMPOWERED
TO ADMINISTER OATHS

 152

                                 CORNICHE DISTRIBUTION LTD.

                      Minutes of a meeting of the Board of Directors
                              held on Monday 18th March 1995

Present     Mr.B.J.Baylis
           Mrs.S.A.M.Crisp

     1. BJB reminded the Board that under Section 47 of the Insolvency Act 1986 
that they were required to submit a Statement of Affairs of the Company.  With 
the agreement of the Receivers, a Statement had been prepared by Ian Mills 
which to the best of our knowledge is a true and fair representation of the 
Company's affairs as at 28th February 1996.

     2. In the interests of expediency BJB had consulted Mr. Alan Pepper, The 
Receivers representative who after in turn consulting their own legal advisers 
confirmed that it would be in order for one member to swear the statement on 
behalf of The Board.

     3. IT WAS RESOLVED that the Statement of Affairs as prepared be adopted
and that BJB be instructed to Swear on behalf of the Board.

     4. The being no other business, the meeting ended.

/s/  B.J.Baylis
B.J.Baylis

 153

              Corniche Distribution Limited (in Administrative Receivership)

A - Summary of Assets
                                                                     
                                                           Book        Estimated to
                                                           Value       Realize
                                                           £     £

Assets
Assets specifically pledged:

Lloyds Bank PLC:
Freehold property - Old Bank Mill, Leek                    164,000     164,000
Mortgage loan                                              (86,162)    (86,162)
                                                            £     77,838
Bank of Scotland plc:
Investment in Chessbourne International Limited             291,360        ---
Investment in The Stationery Company                      1,000,000        ---
Investment in Kassel Limited                                  9,597        ---
Plant, machinery and equipment                                8,800      5,000
Motor vehicles                                                  718      5,000
Other Debtors and prepayments                                22,432        ---
Amount due from Corniche Group, Inc.                      1,990,112        ---

Bank of Scotland loan account                              (191,936)  (191,936)
                                                             £  (104,098)

Assets not specifically pledged:

Estimated total assets available for preferential creditors           (130,358)

Signature                              Date          

 154

Corniche Distribution Limited (in Administrative Receivership)

Al - Summary of Liabilities
                                                                     
                                                                           Estimated to
                                                                           Realise
                                                                           £

Estimated total assets available for preferential
creditors (carried forward from Page A)                                    (130,358)

Liabilities
Preferential creditors:                                      £      

Employees                                                     1,337
Inland Revenue                                               51,501
Customs & Excise                                              3,825

                                                                             56,663
Estimated deficiency/surplus as regards
preferential creditor                                        £       (187,021)

Debts secured by a floating charge:                          £       

                                                                                ---
Estimated deficiency/surplus of assets available for non-    £       (187,021)
preferential creditors

Non-preferential claims:                                     £     
Trade creditors                                              290,597
Other creditors                                              164,534
Amounts due to group companies                               195,562
Royal Bank of Scotland                                        16,579
Directors Loan                                               100,000
                                                                            767,272
Estimated deficiency/surplus as regards creditors            £       (954,293)

Issued and called up capital:                                £     
Ordinary shares                                            2,500,000

                                                                          2,500,000
Estimated total deficiency/surplus as regards members        £     (3,454,293)

Signature________________________________  Date _____________ 

     
 155

                                Corniche Distribution Ltd

Statement of Affairs workings

       
                                          
Nominal Account                                                       Amount
                                                                    
Investment in Chessbourne International                           291,360.00
Investment in The Stationery Company                            1,000,000.00
Investment in Kassel                                                9,597.45
Fixtures & fittings - cost                                         20,036.80
Fixtures & fittings - depn.                                       (17,961.08)
Plant & Machinery - cost                                           15,665.18
Plant & Machinery - depn.                                          (8,940.54)
BMW 318i - cost                                                    15,000.00
BMW 318i - depn.                                                  (15,000.00)
Volvo - cost                                                        1,000.00
Volvo - depn.                                                        (282.00)
Freehold property - cost                                          165,897.94
Freehold property - depn.                                          (1,897.94)
Other debtors                                                      17,004.41
Loan account - E. WARD                                                665.81
Insurance recharge suspense                                         4,748.21
Petty cash                                                             14.25
Recharges - Chessbourne                                            (8,451.56)
Bank of Scotland - loan                                          (191,936.42)
Royal Bank of Scotland - Current                                  (18,165.32)
Royal Bank of Scotland - High Interest                              1,586.92
Royal Bank of Scotland - No. 2                                         (0.60)
Lloyds Bank mortgage                                              (86,162.21)
Creditors Control                                                (575,517.66)
BJB Directors Loan                                               (100,000.00)
VAT Paid                                                          (27,359.52)
VAT Inputs                                                            249.46
VAT Outputs                                                        (4,047.71)
Salary Control                                                     (1,337.37)
PAYE Control account                                              (27,099.97)
NI Control account                                                (24,400.63)
HP Agreement control                                                 (485.49)
current account - Chessbourne                                     (21,285.23)
Current account - Stationery Company                              (69,361.41)
Current account - Kassel Ltd.                                    (128,237.57)
Current account - Corniche Group Inc.                           1,990,111.79
Ordinary shares                                                (2,500,000.00)

                                                                 (113,725.73) 
 
Accrued against PL debit balances                                     (1,288)
                                                                    (115,014)

 156

Corniche Distribution Ltd

Statement of Affairs workings

    
Nominal Account                                                      Amount
                                                                     
Investment in Chessbourne International                           
Investment in The Stationery Company                            
Investment in Kassel                                            
Fixtures & fittings - cost                                      
Fixtures & fittings - depn.                                     
Plant & Machinery - cost                                        
Plant & Machinery - depn.                                       
BMW 318i - cost                                                 
BMW 318i - depn.                                                
Volvo - cost                                                    
Volvo - depn.                                                   
Freehold property - cost                                        
Freehold property - depn.                                       
Other debtors                                                   
Loan account - E. WARD                                          
Insurance recharge suspense                                     
Petty cash                                                      
Recharges - Chessbourne                                            (8,451.56)
Bank of Scotland - loan                                         
Royal Bank of Scotland - Current                                
Royal Bank of Scotland - High Interest                           
Royal Bank of Scotland - No. 2                                  
Lloyds Bank mortgage                                              
Creditors Control                                                (406,875.14)
BJB Directors Loan                   
VAT Paid                                                          (27,359.52)
VAT Inputs                                                            249.46
VAT Outputs                                                        (4,074.71)
Salary Control                                                     (1,337.71)
PAYE Control account                                              (27,099.97)
NI Control account                                                (24,400.63)
HP Agreement control                                                 (485.49)
current account - Chessbourne                                              
Current account - Stationery Company                               69,361.43
Current account - Kassel Ltd.                                    (128,237.57)
Current account - Corniche Group Inc.                           1,990,111.79
Ordinary shares                                                (2,500,000.00)

                                                                1,990,111.79

                                                                1,990,112.00
Accrued against PL debit balances                               1,990,112.00

 157
                                    THE STATIONERY COMPANY

SECTION 4

                         4.1          Statement of Affairs 

 158

                                                          No.          of 19

Statement of Affairs         IN THE HIGH COURT OF JUSTICE
No. 2.9 (incorporating
Forms 2.9, 3.2, 4.18
and 4.19) (Rules 2.12,       Chancery Division
3. 4, 4.34 - CVL)
(1)(1)  Delete title of the
Court and number
where appropriate.           Companies Court

(2) Insert name of           IN THE MATTER OF (2) THE STATIONERY COMPANY LTD.
Company.     

                                    AND

                            IN THE MATTER of the Insolvency Act of 1986.

                            Statement as to Affairs of (2) THE STATIONERY COMPANY LTD.

(3) Delete as
appropriate.                on the 7th February 1996 the date of the (3)[administration order]
                            [THE ADMINISTRATIVE RECEIVER'S APPOINTMENT] [resolution for winding-up]
                            [opinion formed by the liquidator under Section 95 of the
                            Insolvency Act 1986].
                                   
                           __________________________________________________

                           Affidavit
                           This affidavit must be sworn or affirmed before a Solicitor or 
                           Commissioner of Oaths when you have completed the rest of this form

(4)  Insert name and       I(4) BRIAN JOHN BAYLIS - COMPANY DIRECTOR
occupation.

(5)  Insert full address.  of DARAT ALKHAIR, BEECHCROFT, CHISLEHURST, KENT, BR7 5DE

                          make oath and say that the several pages exhibited hereto
                          and marked are to the best of my knowledge and belief a full,
                          true and complete statement as to the affairs of the above named
                          company as at 7th February 1996, the date (3) [of the administration
                          order] [of the appointment of the Administrative Receiver] [of the
                          resolution for winding-up] [I formed the opinion that the company would
                          be unable to pay its debts in full (together with interest) within
                          the period stated in the directors' declaration of solvency made under
                          Section 89 of the Insolvency Act 1986]

                         and that the said company carried on business as

                         Sworn at 30 High Street Chislehurst
                         in the London Borough of Bromley
                         Date 19th March 1996                      /s/ B Baylis
                         Before me /s/ John Harrison
                                       JOHN HARRISON
                         A Solicitor or Commissioner of Oaths     A SOLICITOR EMPOWERED
                                                                  TO ADMINISTER OATHS
                        Before swearing the affidavit the Solicitor or Commissioner is
                        particularly requested to  make sure that the full name, address and
602.94 1 of 4           description of the Deponent are stated, and to initial any 
                        crossings-out or other alterations in the printed form.  A deficiency
                        in the affidavit in any of the above respects will mean that it is 
SUED 01/94              refused by  the court, and will need to be re-sworn.

 159

The Stationery Company Limited (in Administrative Receivership)

A - Summary of Assets

                                                         Book     Estimated to
                                                         Value    Realise
                                                         £  £
                                                             
Assets

Assets specifically pledged:

Freehold                                                 18,656         ---
Short Leasehold                                         800,573     500,000
Plant & Equipment                                         5,530         ---
Fixtures & Fittings Cost                                334,902         ---
Trademarks                                                1,177         ---
Stocks                                                  348,300         ---
Trade Debtors                                         1,394,106     155,000
Other Debtors                                           311,560      15,000
Amounts due from Group Companies                         52,175         ---
                                                      3,266,979     670,000

Debts secured by a Fixed Charge                        233,170

Bank of Scotland                                                    233,170
                                                      3,033,809     436,830

Assets not specifically pledged:

New Store-set-up costs                                   17,858        ---

Estimated total assets available for
   preferential creditors                             3,051,394     436,830

Signature /s/ Brian John Baylis               Date 18/3/96

This and the following five pages are the statement referred to in the 
affidavit of Brian John Baylis sworn before me on this 19th day of March 1996.

/s/ John Harrison
JOHN HARRISON

A SOLICITOR EMPOWERED
TO ADMINISTER OATHS

 160

The Stationery Company Limited (in Administrative Receivership)

A1 - Summary of Liabilities

                                                                   Estimated to
                                                                   Realise
                                                                   £

Estimated total assets available for
preferential creditors carried forward from Page A)                   436,830

Liabilities
Preferential creditors:                                £
Employees                                              100,475
Inland Revenue                                         120,639
Customs & Excise                                       165,099
Pension Scheme                                             322
                                                       386,535
Estimated deficiency/surplus as 
regards preferential creditor                          £         50,295

Debts secured by a floating charge:                    £     

Estimated deficiency/surplus of                        £         50,295
assets available for non-preferential creditors

Non-preferential claims:                               £     
Trade creditors                                      1,634,067
Other creditors                                        183,331
Amounts due to group companies                       1,274,230

                                                                    3,091,628

Estimated deficiency/surplus as regards creditors      £     (3,041,333)

Issued and called up capital:
Ordinary shares                                       1,000,000
"B" Ordinary shares                                         ---
Preference shares                                           ---

                                                                    1,000,000
Estimated total deficiency/surplus as regards members    £   (4,041,333)

Signature /s/ Brian John Baylis     Date 18/3/96

 161

NOTE  You must identify creditors under hire-purchase, chattel leasing or 
conditional sale agreements and customers claiming amounts paid in advance of 
the supply of goods or services and creditors claiming retention of title over 
property in the company's possession.  If there is insufficient space, 
continuation sheets should be used and annexed hereto securely to the rest of 
the form.

Name of creditor          Address                 Amount     Details of any security     Date security     Value of
or claimant          (with postcode)             Of debt     held by creditor               Given          security
                                                                                               
Tippex Limited     Unit 5 Admiralty Way         1,824,95
                   Southern Trade Centre
                   Camberley
                   Surrey

Handley Printers
  Limited          Crosland Industrial Estate  21,933.96
                   125 Stockport Road West
                   Bredbury
                   Stockport

Helix Limited      P.O. Box 15                16,049.86
                   Engine Lane
                   Lye
                   Stourbridge
                   West Midlands

Euro Packaging
  Plc              Unit m                      6,432.54
                   Waterloo Road
                   Yardley
                   Birmingham

Artcare Limite     Challenger House           9,934.47
                   194 Clerkenwell Close
                   London

Platignum Ltd      20 Greenfield             20,398.84
                   Royston
                   Herts
                   SG85XX

Signature /s/ Brian John Baylis     Date  18/3/97

 161

NOTE  You must identify creditors under hire-purchase, chattel leasing or 
conditional sale agreements and customers claiming amounts paid in advance of 
the supply of goods or services and creditors claiming retention of title over 
property in the company's possession.  If there is insufficient space, 
continuation sheets should be used and annexed hereto securely to the rest of 
the form.

Name of creditor               Address           Amount     Details of any security     Date security     Value of
or claimant                 (with postcode)     Of debt     held by creditor            Given             security

Holland Enterprises Ltd     18 Bourne Court        614.96
                            Southend Road
                            Woodford Green
                            Essex IG8 8HD

Framemaker Products Ltd     Stanley Street         693.73
                            Buton-on-Trent
                            Staffs.     

Maxpress Limited            Danebridge Mill       7,424.89
                            Mill Street
                            Congleton
                            Chesshire CW12 1XX

William B Harris            5 Lea Road           39,227.50
                            Abingdon
                            Northampton NN1 4PE

Brown Watson Ltd            The Old Mill           8,171.95
                            76 Fleckney Road
                            Kibworth Beauchamp
                            Leicester LE8 0HG

Kibworth Books                                     2,667.00
(MacMillan
 Distribution Ltd)           Houndsmills
                             Basingstoke
                             Hants. RG1 6XS

Kaleidoscope                 P.O. Box 76          29,480.28
                             Raynesway
                             Derby DE21 7BL

Signature   /s/ Brian John Baylis      Date     18/3/97     

 163

NOTE  You must identify creditors under hire-purchase, chattel leasing or 
conditional sale agreements and customers claiming amounts paid in advance of 
the supply of goods or services and creditors claiming retention of title over 
property in the company's possession.  If there is insufficient space, 
continuation sheets should be used and annexed hereto securely to the rest of 
the form.

Name of creditor               Address                   Amount     Details of any security     Date security     Value of
or claimant                    (with postcode)           Of debt     held by creditor              Given          security

Flipfile Limited               Unit 3, Oaktree Place     1,019.87
                               Matford Business Place
                               Exeter
                               Devon EX2 8WA

Silver Lynx Products Ltd        Lynx House                 6,501.83
                                10/11Amber Business Village
                                Amber Close
                                Tamworth, Staffs.

Illusion                         P.O. Box 481               5,549.12
                                 Carshalton
                                 Surrey SM5 2AB

Woolbro Distributors Ltd         Prospect House             3,405.11
                                 Victoria Road
                                 Morley
                                 Leeds LS27 9DB

Lambourne Limited                Crossing Gates             3,674.23
                                 Oaston Road
                                 Nuneaton
                                 Warwickshire CV11 6JX          
     
Tollit & Harvey Ltd              Old Meadow Road             4,148.37
                                 Hardwick Industrial Estate
                                 Kings Lynn
                                 Norfolk
                                 PE30 4LW

Signature   /s/ Brian John Baylis   Date     18/3/97     

 164

Name of creditor       Address                    Amount     Details of any security     Date security     Value of
or claimant            (with postcode)            Of debt     held by creditor             Given            security

Gustav Botkai          21 Belfield Road             995.49
                       Didsbury
                       Manchester M20 0BJ

NES Arnold Limited     Ludlow Hill Road            1,203.98
                       West Bridgford
                       Nottingham NG2 6HD

N Yeomans & Co Ltd     Valley Road                 5,811.94
                       Clacton on Sea
                       Essex CO15 4AG

Grandreams Ltd         Jadwin House                5,236.80
                       205/211 Kentish Town Road
                       London NW5 2JU

Porth Innovations Ltd  Caemawr Industrial Estate   14,471.68
                       Treorchy
                       Mid Glamorgan CF42 6EJ

Virgin Euro-
Magnetic Products       Unit 5, Salbrook Road       4,304.08
                        Salfords
                        Redhill
                        Surrey RH1 5DY

Cathian Leather 
Company                 Compstall Mills Estate        753.18
                        Andrew Street
                        Compstall
                        Stockport SK6 5HN

Signature   /s/ Brian John Baylis      Date     18/3/97     

 165

Name of creditor                 Address                     Amount     Details of any security     Date security     Value of
or claimant                    (with postcode)               Of debt     held by creditor             Given           security

RMS International Ltd           Unit 18, Orton Way            -----
                                Hayward Industrial Park
                                Chester Road
                                Castle Bromwich
                                Birmingham

Prestige Balloon Co Ltd         Unit B6 Mercia Way           9,701.06
                                Park Gram Road
                                Foxhills Industrial Estate
                                Scunthscope
                                DN15 8RE

David Halsall Plc               Eastham House                28,766.18
                                Copse Road
                                Fleetwood
                                Lansc. FY7 7NY

Heritage Youngsley Ltd          Heritage House               11,105.38
                                Unit 3 Marshgate Lane
                                London E15 2NG

Signature   /s/ Brian John Baylis          Date     18/3/97     

 166
  
                                 THE STATIONERY COMPANY LTD

                         Minutes of a meeting of the Board of Directors
                                held on Monday 18th March 1995

Present       Mr.B.J.Baylis
              Mrs.S.A.M.Crisp
              Mr.B.Pearson
              Mr.M.Holland
In attendance Mrs. J.Lucas

1.  BJB reminded the Board that under section 47 of the Insolvency Act 1986
that they were required to submit a Statement of Affairs of the Company.  With
the agreement of the Receivers, a Statement had been prepared by Ian Mills
which to the best of our knowledge is a true and fair representation of the 
Company's affairs as at 7th February 1996.

2.  In the interests of expediency BJB had consulted Mr. Alan Pepper, The 
Receivers representative who after in turn consulting their own legal advisers 
confirmed that it would be in order for one member to swear the statement on 
behalf of The Board.

3.  IT WAS RESOLVED that the Statement of Affairs as prepared be adopted and 
that BJB be instructed to Swear on behalf of the Board.

4.  The being no other business, the meeting ended.

 /s/  B.J.Baylis       
B.J.Baylis

 167

                                     Arthur
                                    Andersen
                            Arthur Andersen & Co. SC

29 March 1996                                             ___________________
                                                           18 Charlotte Square
                                                             Edinburgh EH2 4DF
                                                       0131 225 4554 Telephone
                                                       0131 226 3948 Facsimile

                                                     Direct Line 0131 469 6246

                                                        Our ref AHP/MM/CDL/U-1

                                                        Your Ref
TO ALL CREDITORS

Dear Sirs

CORNICHE DISTRIBUTION LTD
(IN ADMINISTRATIVE RECEIVERSHIP)

Following our appointment as joint Administrative Receivers of the above 
company on 28 February 1996, we are required by Section 48(2) of the 
Insolvency Act 1986 to call a meeting of the unsecured creditors of the 
company.  The purpose of the meeting is to formally present a report covering 
the events leading up to our appointment and the progress of the 
receivership.  We enclose formal notice of that meeting along with a copy of 
the report which will be presented.

Please note this meeting is being convened solely to comply with the 
requirements of Section 48(2) of the Insolvency Act 1986.  It is not for the 
purpose of appointing a liquidator to the company nor is it a meeting which 
the directors are required to attend.  No information will be presented to the 
meeting other than that contained in the report.

We enclose a form of proxy for your use in connection with this meeting.

Yours faithfully

/s/  Alan D Pepper
Alan D Pepper
for lain T Watters
Joint Administrative Receiver

 168

                                NOTICE OF MEETING OF CREDITORS

                                  CORNICHE DISTRIBUTION LTD
                               (IN ADMINISTRATIVE RECEIVERSHIP)

NOTICE IS HEREBY GIVEN, in pursuance of Section 48 of the Insolvency, Act 
1986, that a meeting of the creditors of the above-named company will be held 
at the Manchester Airport Hilton Hotel on Monday, the 15th of April 1996 at 
1200pm for the purpose of having an account laid before them, showing the 
events leading up to the appointment of the Joint Administrative Receivers, 
the manner in which the administrative receivership has been conducted and the 
property of the company disposed of, and of hearing any explanation that may 
be given by the joint Administrative Receivers.  A copy of the report is 
enclosed with this notice.

Creditors whose claims are wholly secured are not entitled to attend or be 
represented at the meeting.

A person is entitled to vote at the meeting only if

1.  he has given to the Joint Administrative Receivers, not later than 12.00 
hours on the business day before the day fixed for the meeting, details in 
writing of the debt that he claims to be due to him from the company, and the 
claim has been duly admitted.

2.  there has been lodged with the Joint Administrative Receiver, any proxy 
which the creditor intends to be used on his behalf.

DATED this 21st day of March 1996

/s/ Iain T Watters
Iain T Watters
Joint Administrative Receiver

 169

                                                                                  
     Rule 8.1                     Insolvency Act 1986                                   Form S.
   
                                  Proxy (Administrative Receivership)

Notes to help completion
of the form

Please give full name and         Name of Creditor____________________________________________
address for communication         Address___________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________
Please insert name of person      Name of proxy-holder________________________________________
(who must be 18 or over) or       __________________________________________________________
the "Chairman of the meeting".    __________________________________________________________
If you wish to provide for        __________________________________________________________
alternative proxy-holders in      __________________________________________________________
the circumstances that your       __________________________________________________________
first choice is unable to attend  __________________________________________________________
please state the name(s) of       __________________________________________________________
the alternatives as well          __________________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________
                                  __________________________________________________________

Please delete words in            I appoint the above person to be my/the creditors proxy-holder at the
brackets if the proxy-holder      meeting of creditors to be brackets if theproxy-holder held on - or at any
is only to vote as directed       adjournment of that meeting.  The proxy-holder is to purpose or vote as 
he has no discretion              instructed below (and in respect of any resolution for which no specific
                                  instruction is given, may vote or abstain at his/her discretion)

                                   __________________________________________________________

                                  Voting instruction for resolutions

                                  for the appointment of ________________________________________
                                  of ________________________________________________________
                                  representing _______________________________________________

                                  as a member of the Creditors' committee
This form must be signed          Signature_______________________ Date________________________

                                  Name in CAPITAL LETTERS __________________________________

Only to be completed if the       Position with creditor or relationship to creditor or other authority for signature
creditor has not signed
in person               
                                  __________________________________________________________

                                  Remember: there may be resolutions on the other side of this form

FU 302.94

Issued 01/94

 170

                                         Arthur
                                        Andersen

                                 Arthur Andersen & Co. SC

29 March 1996                                             ___________________
                                                           18 Charlotte Square
                                                             Edinburgh EH2 4DF
                                                       0131 225 4554 Telephone
                                                       0131 226 3948 Facsimile

                                                     Direct Line 0131 469 6246

                                                     Our ref ADP/CDL/U-1 cc SE
TO ALL KNOWN CREDITORS
                                                     Your Ref

Dear Sirs

Corniche Distribution Limited (In Administrative Receivership) ("Corniche")

1.     INTRODUCTION

     1.1  I, lain T Watters and my partner, Gordon Christie of Arthur Andersen 
were appointed Joint Administrative Receivers of Corniche Distribution Ltd 
("the Company") by the Bank of Scotland ("the Bank") on 28 February 1996 under 
the powers contained in a Debenture dated 7 April 1995.

As required by Section 48 of the Insolvency Act 1986, we now present our 
report to the creditors.  The remainder of the report is set out as follows:

          2.     Background to the Company
          3.     Events, so far as we are aware, leading to our appointment
          4.     Directors' Statement of Affairs
          5.     Carrying on of the Company's business and disposal of assets
          6.     Amounts due to security holders
          7.     Amounts payable to preferential creditors
          8.     Amounts likely to be available for the payment of a dividend
                 to other creditors
          9.     Directors' conduct

2.     BACKGROUND TO THE COMPANY
     2.1  The principal activity of the Company was that of a holding company 
for its two trading subsidiaries, The Stationer), Company Limited and 
Chessbourne International Limited, to which we were appointed Administrative 
Receivers/Receivers prior to our appointment to Corniche.  The Company 
operated from an office in Wallington, Surrey and owned a property in Leek, 
Staffordshire from which the subsidiaries operated.

 171

TO ALL KNOWN CREDITORS                                           29 March 1996

     2.2  The Company was incorporated on 30 March 1992 in order to exploit 
opportunities in the retail stationery and allied business sectors.  Corniche 
subsequently acted as the holding company for two trading companies, The 
Stationery Company Ltd, set up in September 1992 and Chessbourne International 
Ltd, which became a subsidiary in October 1993.  As a result of a reverse 
takeover in March 1995, the directors, and sole shareholders, of the Company 
became the majority shareholders in Corniche Group Inc., the Company's parent 
which is registered in the USA and quoted on the NASDAQ securities market.

     2.3  Latterly, the Company was a party to a conditional sale agreement for
the purchase of the shares of Kassel Ltd ("Kassel"), a small retail stationery 
chain.  The conditions were never fulfilled and the shareholders of Kassel 
rescinded the agreement in January of this year.

     2.4  The Directors holding, office during the period of 3 years prior to 
our appointment, to the best of our knowledge, were as follows:-

                                   Date of Appointment     Date of Resignation

     Brian J Baylis                       22/04/92                   -
     Susan A M Crisp                      22/04/92                   -

     2.5  The shareholders of the Company at the date of our appointment and at
the filing of the last accounts (27 March 1994) were as follows:-

                                         Date of Appointment     27 March 1994
     Brian J Baylis                                                    80
     Susan A M Crisp                                                   20
     Corniche Group Inc.                      2,500,000

     2.6  The following financial information has been extracted from the 
accounts of the Company:-

                      Draft Management
                      Accounts for the           Draft Accounts         Audited accounts
                      24 weeks to                for the year ended     for the year ended
                      9 September 1995           25 March 1995          27 March 1994
                      £                    £                £
                                                               
     Directors'
     Remuneration     Not Available              60,932                 60,932

     Fixed Assets     2,155,643                  1,569,158              593,624
     Current Assets   1,993,968                  2,653,666              17,100
     Creditors
     and Provisions  (1,674,722)                (1,781,885)             (446,156)
     NET Assets       2,474,889                  2,440,939               161,568

 172

TO ALL KNOWN CREDITORS                                           29 March 1996

3.     EVENTS, SO FAR AS WE ARE AWARE, LEADING TO OUR APPOINTMENT

     3.1  The Company carried out no trading activities, its sole activity
being that of a holding company with its only material assets consisting of its
investments in the two subsidiaries, the property at Leek and amounts 
receivable from its US parent company, Corniche Group Inc. ("CGI").  As a 
result of the losses being made by its subsidiaries, the Company in turn had 
incurred losses over a number of years.

     3.2  With the appointment of Administrative Receivers/Receivers to the two
subsidiary companies it became obvious that the investments in these companies 
were worthless and with their write down to nil value, combined with doubts as 
to the recoverability of monies due from the parent company, the Company 
became insolvent on a balance sheet basis.  Furthermore, the Company no longer 
had access to funding from its subsidiaries' operations and no other sources 
of finance were available.

     3.3  As a result, the directors requested the Bank to appoint 
Administrative Receivers and, accordingly, we were appointed Joint 
Administrative Receivers on 28 February 1996.

4.     DIRECTORS' STATEMENT OF AFFAIRS

     4.1  The Directors have complied with their responsibilities in accordance
with Section 47 of the Insolvency Act 1986 and ha ve provided us with a 
Statement of Affairs of the Company in the prescribed form, which is 
summarised in Appendix 1.

     4.2  The following aspects of the Statement of Affairs prepared by the 
Directors are, in our opinion, incorrectly stated:-

          * The valuation of the property is based on a valuation carried out 
            in excess of one year ago.  Our agents have valued the property at 
            £100,000

          * The Statement of Affairs does not provide for the necessary costs 
            of preservation and realisation of the Company's assets.

          * The figures stated for the banks' debt do not accord with the 
            claims received from the banks as disclosed in Section 6 below.

 173

TO ALL KNOWN CREDITORS                                           29 March 1996

     4.3  As a consequence of the above, the statement is inaccurate in
relation to dividend prospects for the various classes of creditors.  At
present, notwithstanding that there are a number of substantial matters
remaining outstanding in this case , it is clear that there will be no funds
available to ordinary creditors.

5.     CARRYING ON OF THE COMPANY'S BUSINESS AND DISPOSAL OF ASSETS

     5.1  The Company's sole business was that of an intermediary holding 
company and, with the business and assets of the subsidiary companies under 
the control of Receivers/Administrative Receivers, no operational business 
remained.

     5.2  The sole substantive asset of the Company is a property located in 
Leek, Staffordshire, over which Lloyds Bank plc holds a fixed charge.  This 
property was used as the operational base for both The Stationery Company Ltd 
and Chessbourne International Ltd.  With the cessation of the business of both 
companies, the property is no longer in use and we are making efforts to sell 
it.

     5.3  As at the date of our appointment, the Company's records showed a 
receivable from the US parent company, CGI of £1,990,112 in respect of a 
contested share issue.  The financial position of CGI is uncertain given that 
it has no substantive assets other than its investments in the UK 
subsidiaries. and accordingly we have agreed a settlement of £50,000 in 
respect of the unpaid debt.  This settlement figure was the subject of an 
affirmative opinion by an independent accountant after analysis of CGI's most 
recent balance sheet.  There is unlikely to be any further recovery from this 
source.

     5.4  The remaining assets, including motor vehicles and furniture have
been disposed of.

6.     AMOUNTS DUE TO SECURITY HOLDERS

     6.1  Lloyds Bank plc holds a prior ranking fixed charge over the property 
at Leek.  The amount outstanding at the date of our appointment was 
£92,464.

     6.2  The amount due to Bank of Scotland plc at the date of our appointment 
was as follows:-

     Capital                    £194,635

     Interest has continued to accrue on the outstanding balance since our
     appointment and is covered under the Bank's Debenture.

 174

TO ALL KNOWN CREDITORS                                           29 March 1996

7.     AMOUNTS PAYABLE TO PREFERENTIAL CREDITORS

     7.1  At the date of our appointment to the Company the preferential 
creditors were estimated as follows:-

                                              £      
          Inland Revenue - PAYE/NIC           51,501
          H M Customs &- Excise - VAT          3,825
          Employees                            4,566
             Total                            59,892

     7.2  Whilst Crown creditors have yet to lodge their formal preferential 
claims, we are not aware at this stage of any reason why these should 
significantly vary from the above.

8.  AMOUNTS LIKELY TO BE AVAILABLE FOR THE PAYMENT OF A DIVIDEND TO OTHER 
        CREDITORS

     8.1  Based on current estimates the prior ranking fixed charge holder will
be paid in full.  It is clear, however, that there will be a shortfall as 
regards the second fixed char-e holder.  In addition there is no prospect 
whatsoever of a dividend being available to preferential or ordinary 
creditors.

     8.2  Creditors should note that they may recover VAT on supplies made
after 1 April 1989 providing that the debt is over six months old and has been
fully written off in their accounts.  Full details of the reclaim procedure are
available from HM Customs & Excise on request.

9.     DIRECTORS' CONDUCT

     9.1  In terms of the Directors Disqualification Act 1986, Receivers are 
required to prepare a report on the conduct of those individuals who have been 
directors, or shadow directors, of an insolvent company in the three year 
period prior to their appointment.  If any creditor is aware of any matters 
which they believe should be brought to our attention in this regard, they 
should supply details to us in writing.

Yours faithfully

/s/ Iain T Watters
lain T Watters
Joint Administrative Receiver

 175

Corniche Distribution Ltd. (In Administrative Receivership)                    APPENDIX 1
Directors' Statement of Affairs as at 28 February 1996

                                                            BOOK     ESTIMATED
                                                            VALUE     TO REALISE
                                                                    
     ASSETS SPECIFICALLY PLEDGED
     Freehold Property                                     164,000     150,000
                                                           164,000     150,000

     MORTGAGE HOLDER - LLOYDS BANK                         (86,162)    (86,162)

     SURPLUS/DEFICIT AS REGARDS MORTGAGE HOLDER             77,838      63,838

     ASSETS SUBJECT TO FIXED CHARGE
     Investment in Chessbourne International Limited        291,360          0
     Investment in the Stationery Company Limited         1,000,000          0
     Investment in Kassel Limited                             9,597          0
     Other debtors and prepayments                           22,432          0
     Amount due from Corniche Group, Inc.                 1,990,112          0
                                                          3,313,501          0

     FIXED CHARGE HOLDER - BANK OF SCOTLAND                (191,936)   (63,838)
     SURPLUS AS REGARDS FIXED CHARGE HOLDER               3,199,403          0

     ASSETS SUBJECT TO FLOATING CHARGE
     Plant, machinery & equipment                             8,800      2,000
     Motor vehicles                                             718      8,000
                                                              9,518     10,000

     AVAILABLE TO PREFERENTIAL CREDITORS                  3,253,609     10,000

     PREFERENTIAL CREDITORS
     Inland Revenue                                         (51,501)   (51,501)
     HMC&E                                                   (3,825)    (3,825)
     Employees                                               (4,566)    (4,566)
                                                            (59,892)   (59,892)

     AVAILABLE TO FLOATING CHARGE HOLDER                   3,193,717   (49,892)

     FLOATING CHARGE HOLDER - BANK OF SCOTLAND                        (128,098)

     AVAILABLE TO UNSECURED CREDITORS                      3,193,717  (177,990)

     UNSECURED CREDITORS                                  (1,544,206)(1,544,206)
                                                                      
     DEFICIT AS REGARDS UNSECURED CREDITORS                1,649,511 (1,721,196)

 176

                                      Arthur
                                     Andersen

                             Arthur Andersen & Co. SC

7 May 1996                                                 ___________________
                                                           18 Charlotte Square
                                                             Edinburgh EH2 4DF
                                                       0131 225 4554 Telephone
                                                       0131 226 3948 Facsimile

                                                     Direct Line 0131 469 6246

                                                     Our ref ADP/CDL/U-1 cc SE
TO ALL KNOWN CREDITORS
                                                     Your Ref

Dear Sirs

Corniche Distribution Limited (In Administrative Receivership)

1. Meeting of Creditors

   In accordance with Section 48 of the Insolvency Act 1986 a meeting of 
   Creditors of the above Company was held at the Manchester Airport Hilton
   Hotel in Manchester on 15 April 1996.

2. Committee of Creditors

   The Creditors present at the meeting decided not to elect a Committee of 
   Creditors.

3. VAT Bad Debt Relief

    I refer to Section 8.2 of the Creditors Report previously circulated
    regarding the recovery of VAT on bad debts.

Yours faithfully

/s/  Iain T Watters
Iain T Watters
Joint Administrative Receiver

 177

                                  Arthur
                                 Andersen
 
                         Arthur Andersen & Co. SC

29 March 1996                                              ___________________
                                                           18 Charlotte Square
                                                             Edinburgh EH2 4DF
                                                       0131 225 4554 Telephone
                                                       0131 226 3948 Facsimile

                                                     Direct Line 0131 469 6246

                                                    Our ref  ADP/SCL/U-1 cc SE
TO ALL KNOWN CREDITORS
                                                    Your Ref

Dear Sirs

The Stationery Company Limited (In Administrative Receivership) ('SCL')

1.     INTRODUCTION

     1.1 I, Iain T Watters and my partner, Gordon Christie, of Arthur 
Andersen were appointed Joint Receivers of The Stationery Company Limited (the 
Company') by the Bank of Scotland ("the Bank") on 7 February 1996 under powers 
contained in a Debenture dated 16 November 1993.

     1.2  As required by Section 48 of the Insolvency Act 1986, we now present 
our report to the creditors.  The reminder of the report is set out as 
follows:-

          2.  Background to the Company;
          3.  Events, so far as we are aware, leading to our appointment
          4.  Directors' Statement of Affairs;
          5.  Carrying on of the company's business and disposal of assets;
          6.  Amounts due to the Debenture Holder,
          7.  Amounts due to preferential creditors,
          8.  Amounts likely to be available for the payment of a dividend to 
              other creditors;
          9.  Directors' conduct.

2.     BACKGROUND TO THE COMPANY

     2.1 The Stationery Company Limited was incorporated on 15 July 1992 with 
its principal activity being the retail sale of stationery products.  The 
Company's strategy was for growth through acquisition and it subsequently 
acquired the businesses of two smaller retail stationery chains, Memo and 
Stationery Plus.  Ultimately it operated from 22 leased retail sites spread 
throughout England and had its head office and warehouse in lease premises in 
Leek, Staffordshire.

 178

TO ALL KNOWN CREDITORS                                           29 March 1996

2.2 The Directors holding office during the period of 3 years prior to our 
appointment, to the best of our knowledge, were as follows:-

 
                                   Date of Appointment     Date of Resignation
                                                            
     Julie P Lucas                       23/11/94                08/01/96
     Brian J Baylis                      16/09/92                    -
     Susan A M Crisp                     16/09/92                    -
     Bruce Pearson                       01/01/94                    -
     Martin Holland                      23/11/94                    -

2.3 No directors had an interest in shareholdings in the Company, except as 
nominee.  The shareholders at the date of our appointment were:-

                                       Shareholding
     Corniche Distribution Ltd           999,999
     Corniche Distribution Ltd &
     Brian J Baylis                            1

2.4 The following financial information has been extracted from the accounts
of the Company:-

                            Management Accounts     Draft Accounts         Audited Accounts
                            for 32 Weeks to         for the year ended     for the year ended
                            3 November 1995         25 March 1995          27 March 1994
                            £                 £                £
                                                                                      
     Turnover                      3,150,372              4,234,117          346,816
     Profit/(Loss)
     before Tax                    (956,394)              (373,112)         (206,590)

     Directors'
     Remuneration             Not available                  47,344           27,925

     Fixed Assets                   659,592                 709,117          692,626
     Current Assets               3,561,999               2,682,592          776,690
     Creditors and
     Provisions                  (4,076,547)            (2,539,599)         (924,557)
     Net Assets/
     (Liabilities)                  145,044                 85,110           544,752

 179

TO ALL KNOWN CREDITORS                                           29 March 1996

 3.     EVENTS, SO FAR AS WE ARE AWARE, LEADING TO OUR APPOINTMENT

     3.1 The Company had encountered trading difficulties for some considerable 
time and was suffering significant cash flow difficulties partly as a result 
of non payment of a debt due from an associated company, Kassel Ltd.  As a 
result of these difficulties the Company was unable to stock its retail units 
to an appropriate level and accordingly, sales declined to the extent that 
many of the retail units, except for peak sales periods, could not generate 
sufficient funds to cover local fixed overheads.  As a result, and as 
indicated above, the Company incurred significant trading losses in the period 
to 3 November 1995.

     3.2 It Is our understanding that from October 1995 the Directors attempted 
to refinance the Company with a view to ensuring the survival of the 
business.  In this regard, the Directors held discussions with the Board of 
the ultimate parent company, Corniche Group Inc., a company registered in the 
USA, along with that company's investment bankers.  Unfortunately, funds were 
not forthcoming from this source and the Bank was not willing to advance any 
further funds based on their existing security.

     3.3 In the absence of any other sources of funding and in the face of 
mounting pressure from creditors, the Directors were forced to request the 
Bank to appoint A Administrative Receivers under the terms of its Debenture.  
Accordingly, we were appointed Joint Administrative Receivers on 7 February 
1996.

4.     DIRECTORS' STATEMENT OF AFFAIRS

     4.1 The Directors have complied with their responsibilities under Section 
47 of the Insolvency Act, 1986, and provided us with a Statement of Affairs of 
the Company in the prescribed form which is summarised in Appendix 1.

     4.2 The following aspects of the Statement of Affairs prepared by the 
Directors are, in our opinion, incorrectly stated:-

    *  Leasehold assets are significantly overvalued at book value due to 
       the inclusion of a number of shops recently purchased at values
       significantly in excess of the assets assumed.  In addition, the
       value of the assets includes large capital costs which are coverable.
       This has resulted in a significant overstatement in the reasonable
       value of leasehold assets.

 180

TO ALL KNOWN CREDITORS                                           29 March 1996

     *  The reasonable value of stock is shown as nil.  As noted below, our 
        subsequent sale of the business included the sale of the Company's
        stationery stock from both the stores and the Company's warehouse
        at a reasonable discount on cost.

      *  Trade debtors assumes a substantial recovery from the previously 
         associated company, Kassel Ltd which we consider unlikely, after a
         review of that company's recent financial statements.

      * The Statement of Affairs does not provide for the necessary costs 
        of preservation and realisation of the Company's assets including
        specifically substantial costs associated with the sale of the
        business.

     4.3 As a consequence of the above, the statement is inaccurate in relation 
to dividend prospects for the various classes of creditors.  At present, 
notwithstanding that there are a number of substantial matters remaining 
outstanding in this case, there is little likelihood that there will be funds 
available to ordinary creditors.

5.     CARRYING ON THE COMPANY'S BUSINESS AND DISPOSAL OF ASSETS

     5.1 Immediately on appointment and because of the time constraints that 
existed in order to maintain the goodwill and viability of the business and 
thus the value of the Company's assets, we entered into negotiations with a 
third party who had expressed an interest in purchasing the business prior to 
our appointment.  It became readily apparent that concluding this agreement 
would be in the interests of the creditors as it was at a value far higher 
than would have been anticipated had we been required to trade the business 
and to enter into negotiations with a number of parties.  A quick sale also 
precluded the associated costs of trading the business over an extended 
period.  Accordingly, the business and assets of 18 of the Company's 22 
remaining operational stores were sold to Stationery Box Ltd with effect from 
the date of our appointment along with all of the Company's stock.

     5.2 As stated above, the bulk of the business and assets of the Company 
were sold to Stationery Box Ltd.  We were advised by our agents that the 
remaining leased retail units had no market value and we are currently in the 
process of surrendering these leases to the respective landlords.

     5.3 There have been a number of other minor realisations including the 
sale of plant, machinery and equipment and the recovery of some small 
outstanding debts.

 181

TO ALL KNOWN CREDITORS                                           29 March 1996

6.     AMOUNTS DUE TO THE DEBENTURE HOLDER

     6.1 The amount due to the Bank of Scotland plc at the date of our 
appointment was as follows:-

          Overdraft               £ 234,117

          Interest has continued to accrue on the outstanding balance
          since our appointment and is covered under the Bank's Debenture.

7.     AMOUNTS DUE TO PREFERENTIAL CREDITORS

     7.1 At the date of our appointment to the Company the preferential 
creditors were estimated as follows:-

                                   £        
     Inland Revenue - PAYE/NIC     120,639
     H M Customs & Excise - VAT    165,099
     Employees                     100,475
     Pension Scheme                    322
                       TOTAL        38,535

7.2 Whilst Crown creditors have yet to lodge their formal preferential claims, 
we are not at this stage aware of any reason why these should significantly 
vary from the above.

8. AMOUNTS LIKELY TO BE AVAILABLE FOR THE PAYMENT OF A DIVIDEND TO OTHER 
     CREDITORS

     8.1 Based on current estimates it is clear that the Fixed Charge holder 
will be paid In full.  It is likely, however, that there will be a significant 
shortfall to the preferential creditors, Accordingly, there is little 
likelihood of a dividend being available to ordinary creditors.

     8.2 Creditors should note however, that they may recover VAT on supplies 
made after 1 April 1989 providing that the debt is over six months old and has 
been fully written off in their accounts.  Full details of the VAT reclaim 
procedure are available from HM Customs & Excise on request.

 182

TO ALL KNOWN CREDITORS                                           29 March 1996

9.     DIRECTORS' CONDUCT

     9.1 In terms of the Directors Disqualification Act 1986, Receivers are 
required to prepare a report on the conduct of those individuals who have been 
Directors, or Shadow Director, of an insolvent company in the three year 
period prior to their appointment.  If any creditor is aware of any matters 
which they believe should be brought to our attention in this regard, they 
should supply details to us in writing.

Your faithfully

/s/ Iain T Watters
lain T Watters
Joint Administrative Receiver

 183

The Stationery Company Ltd (In Administrative Receivership)               Appendix 1
Directors' Statement of Affairs as at 7 February 1996

                                                                     ESTIMATED
                                                       BOOK VALUE    TO REALISE
                                                                    
ASSETS SUBJECT TO FIXED CHARGE
Freehold                                                   18,656             0
Leasehold Assets                                          800,573       500,000
Fixtures & Fitting                                        344,902             0
Plant & Equipment                                           5,530             0
Trademarks                                                  1,177             0
Stocks                                                    348,300             0
Trade Debtors                                           1,394,106       155,000
Other debtors                                             311,560        15,000
Amounts due from Group Companies                           52,175             0
                                                        3,266,979       670,000

AVAILABLE TO FIXED CHARGE HOLDER                        3,266,979       670,000

FIXED CHARGE HOLDER - BANK OF SCOTLAND                  (233,170)      (233,170)

SURPLUS/(DEFICIT) AS REGARDS FIXED CHARGE HOLDER        3,033,809       436,830

ASSETS NOT SPECIFICALLY PLEDGED
New store set up cost                                      17,585             0

AVAILABLE TO PREFERENTIAL CREDITORS                     3,051,394       436,830 

PREFERENTIAL CREDITORS
Inland Revenue                                           (120,639)     (120,639)
HMC&E                                                    (165,099)     (165,099)
Employees                                                (100,475)     (100,475)
Pension Scheme                                               (322)         (322)
                                                         (368,535)     (386,535)

AVAILABLE TO UNSECURED CREDITORS                        2,644,859        50,249

UNSECURED CREDITORS                                    (3,091,628)   (3,091,628)

DEFICIT AS REGARDS TO UNSECURED CREDITORS
                                                        (426,769)    (3,041,333)

 184

                                    Arthur
                                   Andersen

                           Arthur Andersen & Co. SC

29 March 1996                                              ___________________
                                                           18 Charlotte Square
                                                             Edinburgh EH2 4DF
                                                       0131 225 4554 Telephone
                                                       0131 226 3948 Facsimile

                                                     Direct Line 0131 469 6246

                                                    Our ref  ADP/CHE/U-1 cc SE
TO ALL KNOWN CREDITORS
                                                    Your Ref

Dear Sirs

Chessbourne International Limited (In Receivership)

1.     INTRODUCTION

     1.1 I, lain T Watters and my partner, Gordon Christie, of Arthur Andersen 
were appointed joint Receivers of Chessbourne International Limited ('the 
Company") by the Bank of Scotland (the Bank) on 7 February 1996 under the 
powers contained in a Floating Charge dated 27 March 1987.

     As required by Section 67 of the Insolvency Act 1996, we now present our 
report to the creditors.  The remainder of the report is set out as follows:-

          2.  Background to the Company
          3.  Events, so far as we are aware, leading to our appointment
          4.  Directors' Statement of Affairs
          5.  Carrying on of the Company's business and disposal of assets
          6.  Amounts due to the Floating Charge Holder
          7.  Amounts payable to preferential creditors
          8.  Amounts likely to be available for the payment of a dividend to 
              other creditors
          9.  Directors' conduct

2.     BACKGROUND TO THE COMPANY

     2.1 The Company was incorporated on 22 January 1987 as Hope Sixteen (No. 
105) Ltd in order to acquire the wholesale stationery business of the Okhai 
Group in a management buyout. It subsequently became it subsidiary of Corniche 
Distribution Limited in October 1993.

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TO ALL KNOWN CREDITORS                                           29 March 1996 

     2.1 The principal activity of the Company continued to be the wholesale of
stationery products, ultimately operating from premises in Leek, 
Staffordshire; Wallington, Surrey and third party warehouse facilities in 
Stanton, Essex.

     2.2 The Directors holding office during the period of 3 years prior to our
appointment, to the best of our knowledge, were as follows:-

                                   Date of Appointment     Date of Resignation
                                                            
     Martin Holland                     12/03/87                   -
     Brian J Baylis                     20/07/92                   -
     Susan A M Crisp                    07/10/93                   -
     David A Crisp                      07/10/93                28/04/95
     David D Ferguson                   01/04/95                01/12/95
     Karen Sparkes                      16/12/94                    -
     Alan Barclay                       26/06/91                08/10/93
     David A Walker                     12/03/87                15/10/93
     Bruce Linton                       12/03/87                06/05/94
     Alasdair MacCallum                 01/05/87                06/05/94

     2.3     Shareholders as at the date of our appointment were as follows:

                                           Ordinary     "B" Ordinary     CRPS
                                                                
     Ash Ltd                                                186,138     14,737
     Bank of Scotland plc                                   675,000     75,000
     Corniche Distribution Ltd               127,500        186,138     14,737
     Dundee Property Company Ltd                            199,750      9,164
     Martin Holland                                          17,794        412
     Bruce Linton                                            10,774        666
     Ronatree Ltd                            122,500
     David Walker                                            10,774        666
     Total                                   250,000      1,286,386    115,382

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TO ALL KNOWN CREDITORS                                           29 March 1996

     2.4  The following financial information has been extracted from the 
accounts of the Company:-

                                              Draft Accounts for
                       Management Accounts    the 15 months           Audited Accounts
                       for 32 Weeks to        ended                   for the year ended
                       3 November 1995        26 March 1995           27 March 1993
                       £                £                 £
                                                             
     Turnover                  3,587,669          11,202,955          10,960,640
     Profit/(Loss)
     before Tax                 (804,378)           (443,609)             (5,453)

     Directors'
     Remuneration                216,466              22,855             136,724

     Fixed Assets                106,347             152,770              97,315
     Current Assets            3,008,179           4,000,750           3,743,437
     Creditors and
     Provisions               (4,370,378)         (4,590,961)         (3,834,584)
     Net Assets/
     (Liabilities)            (1,255,852)           (437,441)             (6,168)

3.     EVENTS, SO FAR AS WE ARE AWARE, LEADING TO OUR APPOINTMENT

     3.1 The Company had encountered trading difficulties for some considerable
time, primarily as a result of large intercompany sales to its sister company, 
The Stationery Company Limited and to an associated company, Kassel Ltd for 
which payment had not been received.  Consequently the Company's records at 
the date of our appointment showed debts due from The Stationery Company Ltd 
of £1,281,515 and Kassel Ltd of £147,357.  As a consequence of the 
cash flow ties caused, the Company was unable to source an appropriate level 
and range of stock from its suppliers and this was reflected in a marked 
reduction in turnover as demonstrated in the historical financial information 
shown above.

     3.2 It is our understanding that in the period from October 1995 until our 
appointment the Directors had been seeking to conclude a refinancing agreement 
which would have resulted in the survival of the business.  However, the 
parties involved in these discussions, being Corniche Group Inc., the 
Company's ultimate parent and that company's investment bankers failed to 
agree a rescue package and the Directors were thus forced, due to the lack of 
alternative sources of funding, to request the bank to 

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TO ALL KNOWN CREDITORS                                           29 March 1996

appoint Receivers under the terms of their Floating Charge.  Accordingly, we 
were appointed Joint Receivers on 7 February 1996.

4.     DIRECTORS' STATEMENT OF AFFAIRS

     4.1 The Directors have complied with their responsibilities in accordance 
with Section 66 of the Insolvency Act 1986 and provided us with a Statement of 
Affairs of the Company In the prescribed form, which is summarised in Appendix 
1.

     4.2 The following aspects of the Statement of Affairs prepared by the 
Directors are, in our opinion, incorrectly stated:-

    * Trade Debtors includes items which were intended to be written off 
      in the Company's accounts and are irrecoverable.  The book value shown
      also includes the debt due from Kassel which, as noted below in para
      5.5, is unlikely to be recovered.

    * Stock held at the date of our appointment was of poor quality and 
      consisted mainly of old, non-marketable lines of which there were bulk 
      quantities.  Accordingly the amount recoverable from the disposal of this
      stock will be considerably less than that shown in the Statement of
      Affairs.Furthermore, as shown below, our estimate of the book value
      of this stock varies from that incorporated in the Statement of Affairs.

    * HM Customs & Excise have submitted a preferential claim amounting 
      to £39,489, approximately £20,000 greater than that shown
      on the Statement of Affairs.

     4.3 As a consequence of the above, the statement is inaccurate in relation 
to dividend prospects for the various classes of creditors.  At present, 
notwithstanding that there are a number of substantial matters remaining 
outstanding in this case, it is clear that there will be no funds available to 
ordinary creditors.

5.     CARRYING ON OF THE COMPANY'S BUSINESS AND DISPOSAL OF ASSETS

     5.1 As noted above, the Company's business had been eroded to such an 
extent that no viable business remained.  Nevertheless, we contacted it number 
of parties in the stationery business with a view to selling the remaining 
business and assets as a going concern.  Unfortunately, no interest was 
forthcoming and we have had no option but to carry on limited trading by way 
of stock disposal in order to preserve the value of the assets.

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TO ALL KNOWN CREDITORS                                           29 March 1996

     5.2 Approximately £550,000 (at cost) of stationery stock was located
at the Company's third party warehouser McGregor Cory, at the date of our 
appointment.  At that date McGregor Cory were owed £38,134 in respect of 
unpaid storage and distribution charges and under the terms of the National 
Association of Warehousers Conditions of Contract had exercised a valid lien 
over the goods contained in the warehouse.  We were forced to agree a 
settlement prior to being able to dispose of the stock.  In addition one 
supplier, Farfalla Trading Ltd, held a valid retention of title claim over 
£1 18,500 worth of stock (this is disclosed in the Directors' Statement 
of Affairs as it specifically asset with a book value of £189,591 which 
does not accord with our valuation; the Statement of Affairs also discloses as 
specifically secured a trade debtor of £7,170 due to Farfalla on which 
we are currently taking legal advice).  There was no equity in this stock and 
accordingly it was returned to Farfalla.  The bulk of the remainder of the 
stationery stock has now been disposed of and we are currently exploring 
avenues for the disposal of the final stock items.

     5.3 A small quantity of furniture held at the Company's leased warehouse 
in Bailleston, Glasgow has also been disposed of.

     5.4 The vast bulk of the debts due at the date of our appointment related 
to The Stationery Company Ltd and Kassel Ltd.  We were also appointed Joint 
Administrative Receivers of The Stationery Company Ltd on 7 February 1996, and 
our initial investigations have shown that there is little prospect of a 
dividend from that company in respect of the debt due.

     5.5 Kassel Ltd was managed by The Stationery Company Ltd under a 
management agreement which was treated by the directors of Kassel on or about 
the middle of January 1996.  The Company's records at the date of our 
appointment showed a receivable of £147,297 from Kassel; however, our 
investigations have shown that Kassel is currently in an uncertain financial 
position and accordingly it is our opinion that there is little prospect of a 
recovery in that area.

     5.6 Third party debtors at the date of our appointment amounted to 
£220,523 consisting of 170 accounts.  The Company had, however, failed 
to process a number of adjustments amounting to £124,388 of debt which 
had been identified to be written off.  Accordingly, the maximum amount 
recoverable would be £96,135, We are aggressively attempting to recover 
this money, however, the very nature of the debts (small amounts owed by small 
Companies) prohibits costly recovery action being taken.  Accordingly, we do 
not expect to recover more than £66,600 from this area.

 189

TO ALL KNOWN CREDITORS                                           29 March 1996

6.     AMOUNTS DUE TO THE FLOATING CHARGE HOLDER

     6.1     The amount due to Bank of Scotland plc at the date of our 
appointment was as follows--

     Term Loan                   £2,063,440  
     Overdraft                          1,063,259
     Wages Account                         72,794
     Total                       £3,199,493

Interest has continued to accrue on the outstanding balance since our 
appointment and is covered under the Bank's Floating Charge.

7.     AMOUNTS PAYABLE TO PREFERENTIAL CREDITORS

     7.1 At the date of our appointment to the Company the Directors estimated 
the preferential creditors as follows:-
                                         £        
     Inland Revenue - PAYE               91,890
     H M Customs & Excise - VAT          19,712
     Employees                           19,712
     Pension Scheme                       2,612
     Total                       £133,926

     7.2 While all Crown creditors have yet to lodge their formal preferential
claims, with the exception of HM Customs & Excise who, as noted at para 4.2 
have lodged a claim in excess of that shown, we are not aware at this stage of 
any reason why any of the other balances should significantly vary from the 
above.

8.  AMOUNTS LIKELY TO BE AVAILABLE FOR THE PAYMENTS OF A DIVIDEND
      TO OTHER CREDITORS

     8.1 Based on current estimates it is clear that whilst preferential 
creditors are likely to be paid in full there will be a substantial shortfall 
to the Floating Charge holder.  Accordingly, there is no prospect whatever of 
a dividend being available to ordinary creditors.

     8.2 Creditors should note that they may recover VAT on supplies made after 
1 April 1989 providing that the debt is over six months old and has been fully 
written off in their accounts.  Full details on the reclaim procedure are 
available from HM Customs & Excise an request.

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TO ALL KNOWN CREDITORS                                           29 March 1996

9.     DIRECTORS' CONDUCT

     9.1 In terms of the Directors Disqualification Act of 1986, Receivers are 
required to prepare a report on the conduct of those individuals who have been 
directors, or shadow directors, of an insolvent company in the three year 
period prior to their appointment.  If any creditor is aware of any matter 
which they believe should be brought to our attention in this regard, they 
should supply details to us in writing.

Yours faithfully

/s/ lain T Watters
lain T Watters
Joint Receiver

 191

Chessbourne International Ltd (In Receivership)                         Appendix 1
Directors' Statement of Affairs as at 7 February 1996
     
                                                                     ESTIMATED
                                                      BOOK VALUE     TO REALISE
                                                                   
ASSETS SPECIFICALLY SECURED
Stock                                                    189,591       198,591
Trade Debtors                                              7,170         7,170
                                                         196,761       196,761

AMOUNTS DUE TO SECURITY HOLDER                          (196,761)     (196,761)

SURPLUS AS REGARDS SPECIFIC SECURITY HOLDER                    0             0

ASSETS SUBJECT TO FLOATING CHARGE
Trade Debtors                                            333,139       136,000
Loans and Advances                                     1,428,872             0
Stock                                                    659,343       400,000
Other debtors and prepayments                            111,359         8,800
Leasehold Property                                           241             0
Plant, Machinery and vehicles                             92,258        15,000
                                                       2,625,212       559,800

AVAILABLE TO PREFERENTIAL CREDITORS                    2,625,212       559,800 

PREFERENTIAL CREDITORS
Inland Revenue                                          (91,890)       (91,890)
HMC&E                                                   (19,712)       (19,712)
Employees                                               (19,912)       (19,712)
Pension Scheme                                           (2,612)        (2,612)
                                                       (133,926)      (133,926)

AVAILABLE TO FLOATING CHARGE HOLDER                   2,491,286        425,874

FLOATING CHARGE HOLDER - BANK OF SCOTLAND            (3,155,635)    (3,155,635)

DEFICIT AS REGARDS FLOATING CHARGE HOLDER              (664,349)    (2,729,761)

UNSECURED CREDITORS                                    (885,839)      (885,839)

DEFICIT AS REGARDS UNSECURED CREDITORS               (1,550,188)    (3,615,600)

 193

                                       MUTUAL RELEASE

KNOW ALL MEN BY THESE PRESENTS:

     That Whereas:

     A.      Corniche Group Incorporated, a Delaware corporation ("CGI") 
borrowed UK£50,000 from The Bank of Scotland (the "Bank") and in 
consideration therefor issued to the Bank CGI's promissory note dated in 
February 1996 (the "Note") providing for, among other things, maturity in 
August 1996 and an annual rate of interest calculated at 2% above the 3-month 
London Interbank Offered Rate ('LIBOR") ascertained at specified times; and

     B.     The Bank advised CGI that it would accept in full satisfaction and 
discharge of all principal, accrued interest and any and all others sums which 
may be  due under the Note the sum of US$ 89,374.49, payable in lawful money 
of the United States and in same day funds on the date hereof; and

     C.     CGI has this day made payment herewith to the Bank of the amount 
set forth in Preamble B above, in accordance with the terms specified therein, 
and in full satisfaction and discharge of the obligations specified therein.

     Now, Therefor:

               CORNICHE GROUP INCORPORATED
               JAMES FYFE
                             (the said corporation and individuals,
                              together with their respective 
                              executors, administrators, successors and
                              assigns collectively jointly, and severally
                              the "CGI Group")

                    and

              THE GOVERNOR AND COMPANY OF
              THE BANK OF SCOTLAND

                             (the said corporation together with its
                              successors and assigns, collectively, 
                              jointly, and severally the "Bank Group")

for good and valuable consideration, the receipt of which is acknowledged each 
from the other, have entered into the agreements of release set forth below.

 193

     1.     The CGI Group and each and every one of them respectively do, by 
these presents, remise, release and forever discharge the Bank Group and each 
and every one of them from all liabilities, accounts, causes of action, sums 
of money, reckonings, contracts, controversies, agreements, damages, 
judgments, executions, claims, demands, debts, obligations, promises, 
covenants, actions and undertakings, in law or in equity, which against the 
Bank Group and each and every one of them the CGI Group and each and every one 
of them ever had, now have or hereafter can, shall or may have, for or by 
reason of any matter, cause or thing whatsoever, up to and through the date 
hereof.

     2.     The Bank Group and each and every one of them respectively do, by 
these presents, remise, release and forever discharge the CGI Group and each 
and every one of them from all liabilities, accounts, causes of action, sums 
of money, reckonings, contracts, controversies, agreements, damages, 
judgments, executions, claims, demands, debts, obligations, promises, 
covenants, actions and undertakings, in law or in equity, which against the 
CGI Group and each and every one of them the Bank Group and each and every one 
of them ever had, now have or hereafter can, shall or may have, for or by 
reason of any matter, cause or thing whatsoever, up to and through the date 
hereof.

     3.     In the event the payment to the Bank referred to in Preamble B 
must be returned, repaid or disgorged to the CGI Group, a trustee or any other 
person, in whole or in part, Sections 1 and 2 hereof shall be null and void 
and of no force or effect.

     In Witness Whereof, the parties have caused these presents to be executed 
by the following persons thereunto duly authorized as of January 30, 1997.

                                                  CORNICHE GROUP INCORPORATED

                                               By: /s/ James Fyfe
                                                   JAMES FYFE, Vice President

                                                  /s/ James Fyfe
                                                 JAMES FYFE

                                                 THE GOVERNOR AND COMPANY OF
                                                 THE BANK OF SCOTLAND

                                               By /s/ John Kelly

 194

                                      AGREEMENT
                                        among
                              CORNICHE GROUP INCORPORATED
                             CORNICHE DISTRIBUTION LIMITED
                           (IN ADMINISTRATIVE RECEIVERSHIP)
                                          and
                                 THE RECEIVERS THEREOF

                                  Dorman Jeffrey & Co
                                      Solicitors
                                       Glasgow
                                     4/AGG.159/ym

 195

                                        INDEX

     Clause      Heading                                 Page
                                                    
                 Parties                                   1
                 Preambles                                 1
     1.          Interpretation
     2.          Conditions Predent
     3.          Completion
     4.          Settlement of the Claim
     5.          Receivers
     6.          Exclusion of Representation and Warranties
     7.          Costs
     8.          Claims by CGI
     9.          Notice
     10.         Entire Agreement
     11.         Transferability
     12.         Spirit, Aims and intent
     13.         Severability
     14.         Waivers
     15.         Announcement
     16.         Lex Loci and jurisdiction

 196

AN AGREEMENT made the 4th day of March 1996  AMONG,

     1. CORNICHE GROUP INCORPORATED, a corporation organized under the laws of 
the State of Delaware (hereinafter called "CGI") of Wayne Interchange Plaza 1, 
145 Route 46 West, Wayne, NJ 07470

     2. CORNICHE DISTRIBUTION LIMITED (IN ADMINISTRATIVE RECEIVERSHIP), a 
company incorporated under the Companies Act (no. 2701498) and having its 
Registered Office at 272 London Road, Wallington, Surrey, SM6 7DJ (hereinafter 
called "CDL") acting through its joint Receivers, IAIN THOMAS WATTER and 
GORDON CHRISTIE both of 18 Charlotte Square, Edinburgh, both Chartered 
Accountants and partners of Arthur Andersen, appointed by virtue of an 
instrument of appointment by the Bank (as hereinafter defined) dated 28 
February 1996 pursuant to a Debenture in favour of the Bank by CDL dated 7 
April 1995 and registered 12 April 1995 (hereinafter together called "the 
Receivers")
                          and

        3. THE RECEIVERS, in their capacity as Receivers of CDL.

WHEREAS:

(1) CDL is in Administrative Receivership and has agreed to discharge the CDL 
Claims (as hereinafter defined) in consideration of the Settlement Sum (as 
hereinafter defined); and

(2) In consideration of CDL discharging the CDL Claims (as hereinafter 
defined), CGI has agreed to discharge the CGI claim (as hereinafter defined).

NOW THEREFORE THE PARTIES HERETO HEREBY CONTRACT AND DO HEREBY AGREE as 
follows:

1.     INTERPRETATION

1.1 In this Agreement the following words, phrases, team and expressions shall 
bear the followings meanings:

"Bank" means the Governor and Company of the Bank of Scotland

"Business Day" means a day other than a Saturday or Sunday on which the Bank 
is open for business both in Glasgow and London.

 197

"CDL Claims' means all and any claims competent to CDL against CGI in 
connection with the Shares.

"CGI Claims" means all and any claims competent to CGI against CDL of 
whatsoever nature and howsoever arising including but not limited to the CGI 
inter company account.

"Completion" means completion in terms of this Agreement.

"Completion Date" means the date of this Agreement.

"Receivers' Bank" means the client account of the Receivers' Solicitors held 
at the Bank, Account Number 00300805, Sort Code 80-07-48.

"Receivers' Solicitors" means Dorman Jeffrey & Co., Solicitors, Glasgow and 
Edinburgh.

"Settlement Sum" means the sum of FIFTY THOUSAND POUND (£50,000) 
STERLING.

"Shares" means 2,499,900 shares of £1 each in the capital of CDL,  which 
prior to the date hereof were allotted or alleged to have been allotted to 
CGI.

1.2 The provisions of the Interpretation Act 1978 with respect to the 
interpretation and Construction of this Agreement shall apply mutatis 
mutandis.

1.3 References to Clauses, unless the contrary intention appears, are to the 
Clauses of this Agreement.

1.4 The headings contained herein are for convenience only and shall not be 
construed as forming part of this Agreement or be taken into account in the 
interpretation hereof.

 198

1.5 This Agreement may be executed in any number of counterparts and all such 
counterparts taken together shall be deemed to constitute one and the same 
document.

2.     CONDITIONS PRECEDENT

2.1 This Agreement is conditional in all respect upon the following conditions 
having been implemented in full:

     2.1.1 The Receiver having received from Baker Tilly a letter (addressed to
the Receiver) setting out details as to the current financial Position of CGI, 
the terms of which (in the opinion of the Receiver) are satisfactory to the 
Receivers; and

     2.1.2 The Receivers having received from the Board of CGI a letter 
(addressed to the Receivers) setting out details as to the basis of CGI 
disputing the CDL Claims, the terms of which (in the opinion of the Receivers) 
are satisfactory to the Receivers, and which makes reference to the letter 
referred to in Clause 2.1.1 above.

2.2 The conditions precedent contained in Clause 2.1 hereof are for the sole 
and exclusive benefit of the Receivers and may only be waived by the 
Receivers.

3.     COMPLETION

3.1 The Settlement Sum shall be paid to CDL on the Completion Date by CGI by 
way of telegraphic transfer to the Receivers' Bank Account or otherwise as 
agreed by the Parties.

3.2 The provisions of Clause 4 shall only come into force and have effect upon 
the provisions of Clause 2 and Clause 3.1 both having been implemented in 
full.

 199

4.     SETTLEMENT OF THE CLAIMS

4.1 In consideration of the Settlement Sum CDL, hereby irrevocably and 
unconditionally discharges the CDL Claims.

4.2 In consideration of CDL discharging CDL Claims, CGI hereby irrevocably and 
unconditionally discharges the CGI Claims.

5.     RECEIVERS 

5.1 It is essential condition of this Agreement:

     5.1.1 that the Receivers contract solely as agents of CDL and shall incur 
no personal liability of whatsoever nature (whether directly or indirectly, 
express or implied) and howsoever arising including without prejudice to the 
foregoing generate, personal liability in respect of any action or actions of 
whatsoever nature and howsoever arising in pursuance respectively of CDL's 
rights and/or obligations under this  Agreement and whether such claim is 
formulated in contract and/or tort or by reference to any other remedy or 
right and in whatever jurisdiction or forum;

     5.1.2 that no claim which may be or become competent to CGI arising 
directly or indirectly from this (or under any deed or other document executed 
in consequence of hereof or on or under any associated or collateral agreement 
or arrangement) will lie against the Receivers personally and the Receivers 
shall be entitled at any time to have any claims, documents or others amended 
to include an exclusion of personal liability in terms of this Clause 5;

     5.1.3 that any personal liability of the Receivers which would in terms of 
the Insolvency Act 1986 arise but for the provisions of this Clause 5 is 
hereby expressly excluded, 

 200

5.2 Nothing in this Agreement shall constitute a  waiver of any right of the 
Receiver to be indemnified by, or to exercise a lien, whether under the provisio
n of the Insolvency Act 1986 or otherwise howsoever.

5.3 The Receivers have joined in as parties to this Agreement solely for the 
purpose of obtaining the benefit of the provisions of Clause 2 and this Clause 
5 and any other provisions in this Agreement in their favour.

5.4 For the purpose of this Agreement references to "the Receivers" where the 
context so permits shall mean and include their present and future firm or 
firms, partners and employees, and any legal entity or partnership using in 
its name the words "Arthur Andersen" and the partners, shareholders, officers 
and employees of any such entity or partnership.

6.     EXCLUSION OF REPRESENTATIONS AND WARRANTIES

CGI agrees that in entering into this Agreement it is not relying upon any 
information, warranty, statement, representation or silence on the part of the 
Receivers or the Receivers' Solicitors and that CGI is not relying upon any 
other written or oral representation made to it or to its representatives or 
agents by the by the Receivers or their representatives or agents.

7.     COSTS

Each party shall be responsible for its own legal costs in connection with the 
negotiation, preparation, execution and delivery of this Agreement and all 
documents and instruments executed pursuant to this Agreement.

8.     CLAIMS BY CGI

8.1 Any claim by CGI whether arising pursuant to this Agreement or otherwise 
shall be against CDL and not the Receivers; and then shall only be an 
unsecured claim against CDL.

8 2 Any claim by against CDL and/or the Receivers whether arising pursuant to 
this agreement or otherwise shall be irrevocably waived unless made in writing 
by notice by CGI to the Receivers not later than one month after the 
Completion Date, the first day of such one month period to be the Completion 
Date, time being of the essence.

 201

9.     NOTICE

9.1 All notices, requests, demands or other communications by the respective 
parties may be served by Recorded Delivery Post, personally or by fax to the 
parties' respective addresses hereinstated (in the case of CDL and the 
Receivers to the Receivers at their office at 18 Charlotte Square, Edinburgh) 
or to such other addresses as they may respectively from time to time notify 
to the other parties.  A confirmation copy of the document sent by fax shall 
also be sent to the addressee by first class post within one Business Day 
after the date of transmission by fax.

9.2 Any such notice, request, demand or communication shall:

9.2.1 if delivered personally be deemed to have been received at the time of 
delivery, or if delivery is not on a Business Day on the Business Day 
following such delivery;

9.2.2 if given by Recorded Delivery Post be deemed to have been received in the 
case of CDL and the Receivers on the second Business Day occurring and in case 
of CGI on the seventh Business Day occurring after the date of posting; and 

9.2.3 if sent by fax be deemed to have been received on the date of 
transmission, or if said transmission is not on a Business Day on the Business 
Day following such transaction.

10.     ENTIRE AGREEMENT

This Agreement forms the entire agreement between the parties relating to the 
subject matter of this Agreement.  It is agreed that any future variation 
hereof may only take the form of a formal variation of this Agreement.  In 
particular it is agreed that this Agreement supersedes all earlier meetings, 
discussions, correspondence, 

 202

facsimile transmission, telexes, letters  and communications, understandings 
and  arrangements of any kind, and that there are no collateral or 
supplemental agreements at the date of this Agreement.

11.     TRANSFERABILITY     

This Agreement shall be binding upon and enure for the  benefit of the 
successors of the parties or their personal representatives (as the case may 
be) but neither party shall be entitled to assign, novate or transfer the 
whole or any part of its rights, or obligations hereunder without the prior 
written consent of the other, except that the Receivers may assign without 
consent, the benefit of this Agreement, to any Liquidator of CDL.

12.     SPIRIT AIMS AND INTENT

The parties hereto undertake to do all acts and things necessary or expedient 
for the purpose of giving full force and effect to the provisions of this 
Agreement and the spirit, aims and intent of the arrangements contemplated 
herein.

13.     SEVERABILITY

In the event that any clause or any Sub-clause or any part of any clause or 
subclause of this Agreement shall be determined Invalid, unlawful or 
unenforceable, in any extent such term or condition or provision shall be 
severed from the remaining terms and conditions which shall continue to be 
valid and enforceable to the fullest extent permitted by law.

14.     WAIVERS

No failure or delay by any party in exercising any right, power or privilege 
hereunder, shall operate as waiver thereof or prejudice any other or further 
exercise by such party of any of its rights or remedies hereunder.

 203

15     ANNOUNCEMENTS

No party shall make any public announcement or the like, or issue any press or 
other release, statement or the like in relation to this Agreement without 
first agreeing the terms of any such announcement or release with the others 
beforehand, except that the Receivers shall be entitled to make a full report 
of all matter to the Bank, any of the parties may reveal  such information to 
any party as may be required by law or any regulatory authority and CGI may 
reveal such information in connection with all filings, releases and 
announcements advised by US Securities Counsel in connection with Federal, 
State and Securities law and regulations in the United States.

16.     LEX LOCI AND JURISDICTION

This Agreement shall be governed by and construed in accordance with the law 
of England and each of the parties hereto submits to the exclusive 
jurisdiction of the English Courts as regards any matter or claim arising 
under or in connection with this Agreement.

IN, WITNESS WHEREOF,  this Agreement consisting of this and the seven 
preceding pages is signed and witnessed as follows on this page and the 
following additional pages:

SIGNED for and on behalf of the said
CORNICHE GROUP INCORPORATED
at Roseland on the 4th day of March
Nineteen hundred and ninety six by 
James Joseph Fyfe one of its directors
in the presence of:-

Witness /s/ Alan Wovsaniker
Full Name Alan  Wovsaniker
Address 65 Livingston Ave.          /s/ James Fyfe
        Roseland, NJ               James Fyfe, Director
             USA

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SIGNED for and on behalf of
CORNICHE DISTRIBUTION LIMITED
(IN ADMINISTRATIVE RECEIVERSHIP)
by lAIN THOMAS WATTERS one of its
Receivers, (as agent and without
personal liability for either of the
Receivers) at an the Glasgow on
the fourth day of March Nineteen
hundred and ninety six in the
presence of:

Witness /s/ Ian Jardine Cuthbertson 
Full Name Ian Jardine Cuthbertson  
Address Bly Blythswood Square
     Glasgow
                                    /s/ Iain Thomas Watters   
                                    Iain Thomas Watters

SIGNED for and on behalf of THE
RECEIVERS at Glasgow on the 
Forth day of March Nineteen hundred 
and ninety six by IAIN THOMAS 
WATTERS one of the joint receivers 
(without incurring personal liability for
either Receivers) in the presence of :

Witness /s/ Ian Jardine Cuthbertson 
Full Name Ian Jardine Cuthbertson  
Address Bly Blythswood Square
     Glasgow
                                  /s/ Iain Thomas Watters 
                                  Iain Thomas Watters

 205

                                                                 EXHIBIT 99(b)

 206

James J. Fyfe
- - ------------------------------------------------------------------------------

April 15, 1997

Corniche Group Incorporated
145 Route 46 West
Wayne, NJ 07470

Dear Sirs,

Re: Auditor's Report

In connection with the preparation of the Annual Report of Comiche Group
Incorporated (the 'Company') on Form 10-K for the fiscal year ended March 31, 
1996, the Company is required to provide manually signed reports by its 
independent auditors with respect to the financial statements included in the 
Annual Report.  In situations such as the present where there have been 
changes in auditors or where audited financial statements prepared by more 
than one accounting firm are being relied upon and included, a manually signed 
report is required of each such auditor even where such report has been 
previously executed and relates to financial statements which have been 
prepared in connection with a previously filed document.

The March 31, 1996 Annual Report contains financial statements respecting the 
Company's former United Kingdom operating subsidiaries, audited by the London, 
England branch of Coopers & Lybrand L.L.P. ("Coopers").  The report page 
relating to such financial statements was originally prepared and signed by 
Coopers.,in connection with the Company's Annual Report on Form 10-K for the 
year ended March 25, 1995.  Coopers has advised the Company on several 
occasions however, that it cannot and will not provide the Company with a 
newly signed report page with respect to such audit for purposes of the March 
31, 1996 Form 10-K.  This cannot be done for the following reasons:

1. Coopers has rigorous review procedures to be fully completed prior to the 
re-signing of any audit opinion.  These procedures include visiting the 
entities which were the subject of the audit to, among other things, review 
the activities of such entities subsequent to the audit period.  This review 
includes discussions

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with management and a review of financial books and records.  In view of the 
current status of these former subsidiaries such a review could not be 
conducted to the extent required by Coopers to enable them to re-sign their 
audit report.  This conclusion is based upon the problems, as described below, 
which would be confronted by Coopers in attempting to obtain information 
regarding the former operating subsidiaries.  All of these problems relate to 
the February 1996 appointment of receivers to the operating subsidiaries and 
the related discontinuance of the operations of such operating subsidiaries.

Following the appointment of the receivers, (i) the subsidiaries ceased 
operating; (ii) the directors and other employees of the former operating 
subsidiaries ceased all activities theretofore being conducted by them on 
behalf of such entities and their employment contracts were terminated; (iii) 
all administrative facilities being operated by such entities were closed; 
(iv) all books and records of such entities were transferred and delivered to 
the receivers where they remain, and will continue to remain during the entire 
term of of the receivership, under the exclusive control of the receivers; and 
(v) conventional accounting records for the periods subsequent to the date of 
such appointments were not maintained.

2. Even ff the review referred to above were possible, Cooper's would require  
A substantial fee, in advance, to complete such a review.  The Company is
unable to pay such a fee and even ff it were, Coopers would not undertake
such a review without receipt of an additional payment representing all or a 
substantial part of the fees due from the former operating subsidiaries.  
Coopers was owed accounting fees in excess of $100,000 by the former operating 
subsidiaries at the time of the February 1996 receivership proceedings 
involving each of such subsidiaries.  Coopers made no recovery of any such 
sums in the receivership proceedings.  Although, the Company is not obligated 
to pay the liabilities of its former subsidiaries to Coopers, ft has 
materially effected Coopers willingness to cooperate with the Company.

The foregoing factors lead me to the inevitable conclusion that Coopers review 
procedures, even if undertaken, could not be satisfied.  Consequently, Coopers 
will not be providing a re-signed audit report for the purposes of the March 
31, 1996 Form 10-K.

Very truly yours,

/s/ James J. Fyfe
James J. Fyfe

 208
                                                                 EXHIBIT 99(c)

 209

                                       MCRP

                        MAHONEY COHEN RASHBA & POKART, CPA, PC

                                                                April 15, 1997

Mr. James Fyfe
Chief Executive Officer
Corniche Group Incorporated
Wayne Interchange Plaza I
3rd Floor
145 Route 46 West
Wayne, NJ 07470

Dear Mr. Fyfe:

     You have requested that Mahoney Cohen Rashba & Pokart, CPA, PC (MCRP) 
reissue their opinion on the financial statements Corniche Group Incorporated 
(formerly Fidelity Medical, Inc.) (the 'Company") for the year ended March 25, 
1995 to be included in the Company's Form 10-K for the year ended March 31, 
1996.

     In our report dated July 25, 1995, we made reference to the report of 
other auditors (Coopers & Lybrand, located in the United Kingdom), as a basis, 
in part, for our opinion.  We had informed you that due to the significance of 
the Coopers & Lybrand ("C&Y") audit report on the United Kingdom subsidiary to 
the consolidated financial statements, we would need among other items, for 
C&Y to reissue their March 25, 1995 audit report to us.  You have informed us 
that C&L will not reissue their audit report.  Accordingly, we are precluded 
by professional standards from reissuing our report for the year ended March 
25, 1995 until C&L reissues their report.

                                                Yours truly,

                                                /s/ Kenneth L. Steckler
KLS/gnc                                         Kenneth L. Steckler

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