10/22/2002

HPSC Announces Completion Of Financing
Providing Total Of $ 85 Million In New Financing Capacity
Strong Buy Recommendation Reiterated

HPSC announced on October 21, 2002 the completion of the previously announced Receivables Interest Purchase Agreement with ING Capital LLC ("ING"). Under the terms of the agreement, ING is to provide the Company with additional liquidity of up to 3.75% of Eligible Receivables in the Bravo Facility for assets previously pledged or sold to Bravo, up to a maximum amount of $20,000,000. Interest on the ING borrowings is based on one-month LIBOR rates plus 3%. Concurrent with the execution of the Receivables Interest Purchase Agreement, Bravo sold to ING an initial Receivable Interest Purchase in the aggregate amount of $13,840,000. The proceeds were used to retire amounts outstanding under the Revolving Loan Agreement with Fleet National Bank.

In a separate release the HPSC announced the expansion of its HPSC Bravo Funding LLC loan from its surety and liquidity providers (MBIA) by $65 million to a new total of $450 million.

These new loan agreements give evidence of the continued financial support by HPSC lenders. In addition the increased capacity provides HPSC with necessary capital to meet the needs of its clients. The demand for financing from the medical and dental professionals continues to be strong in spite of the current economic environment.

We are estimating that HPSC will report net income for the just completed third quarter of $1,045,000, basic EPS $0.26 and diluted EPS $0.24. Based on our fully diluted estimate of $0.98 for the year ended 12/31/03 the stock is currently selling at an 8.7 P/E ratio. Considering HPSC?s current and future growth prospects and the fact that the stock has decreased more than 22% from its recent high of $10.15 on June 18, 2002, we believe the stock affords investors an excellent buying opportunity.

We reiterate our STRONG BUY RECOMMENDATION and our price target over the next twelve to eighteen months remains at $14.00 to $16.00 a share.

J.M.Dutton & Associates, LLC. John M. Dutton, President and Supervisory Analyst, 1129 Manning Drive, Suite 310, El Dorado Hills, CA 95762 Phone (916) 941-4985, Fax (978) 418-6422 Email: [email protected] Web site: www.JMDutton.com

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