CONTRIBUTION AGREEMENT

                                      Among

                          PRIME MEDICAL SERVICES, INC.,

                            PRIME REFRACTIVE, L.L.C.,


                               CASTER ONE, L.L.C.,


                              ANDREW CASTER, M.D.,


                                       and

                         CASTER EYE CENTER MEDICAL GROUP

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


                            Dated as of March 1, 2000


<PAGE>


                                        3

043838.0000  AUSTIN  169304 v11



                             CONTRIBUTION AGREEMENT

         This  Contribution  Agreement (this  "Agreement") is entered into to be
effective  as of March 1, 2000  (the  "Effective  Time"),  among  Prime  Medical
Services,  Inc., a Delaware corporation  ("PMSI"),  Prime Refractive,  L.L.C., a
Delaware limited liability company ("Prime"), Caster Eye Center Medical Group, a
California  corporation  ("Seller"),  Caster  One,  L.L.C.,  a Delaware  limited
liability company ("Newco") and Andrew Caster,  M.D., an individual  residing in
Beverly Hills, California and the sole shareholder of Seller ("Caster").

The parties hereto agree as follows:

                                    ARTICLE I

                         Agreement of Purchase and Sale

         1.1 Agreement.  Upon the basis of the  representations  and warranties,
for the consideration, and subject to the terms and conditions set forth in this
Agreement,  (a) Prime agrees to purchase from Seller,  as of the Effective Time,
by payment of $366,489 (the "Asset Purchase Price"),  an undivided sixty percent
(60%) interest in all of the Assets (as hereinafter  defined);  (b) Prime agrees
to purchase from Caster,  as of the Effective  Time,  sixty percent (60%) of the
Goodwill (as  hereinafter  defined),  by payment of  $5,462,235  (the  "Goodwill
Purchase  Price") (c) Prime agrees to contribute  to Newco,  as of the Effective
Time, its entire interest in the Assets it purchased from Seller in return for a
sixty  percent  (60%)  ownership  interest in Newco which Newco hereby agrees to
issue to  Prime;  and (d)  Seller  agrees  to  contribute  to  Newco,  as of the
Effective  Time,  the entire  remaining  interest in the Assets not purchased by
Prime in return for the other forty percent (40%)  ownership  interest in Newco.
The Goodwill  Purchase Price and Asset Purchase Price are herein  referred to in
the aggregate as the "Aggregate Purchase Price." The parties agree that:

                  (y) immediately prior to the Closing (as hereinafter defined),
all of the outstanding  membership  interests of Newco shall be owned by Caster,
and,  immediately after the Closing,  Prime shall own sixty percent (60%) of all
of the  outstanding  membership  interests  of Newco and Seller  shall own forty
percent (40%) of all of the outstanding membership interests of Newco; and

                  (z) prior to the  Closing  Date,  Prime and Seller  shall have
executed the limited liability company agreement, in the form attached hereto as
Exhibit A, and any other organizational  documents of Newco  (collectively,  the
"Organizational Documents").

         1.2  Closing.  The closing of the  purchase  and sale  contemplated  by
Section  1.1 (the  "Closing")  shall  take place at the  offices of Akin,  Gump,
Strauss,  Hauer & Feld,  L.L.P.,  1900 Frost Bank Plaza,  816  Congress  Avenue,
Austin,  Texas 78701,  or at such other  location as the parties may agree.  The
date on which the Closing  occurs is  hereinafter  referred  to as the  "Closing
Date."

         1.3 Assets. As used in this Agreement, the term "Assets" shall mean and
include all of the items listed on Schedule 1.3(a) attached hereto,  all Permits
(as hereinafter  defined),  all business  records  (excluding  medical  records)
related to the Business (as hereinafter  defined)  conducted after the Effective
Time, copies of the business records  (excluding medical records) related to the
Business conducted during the period beginning January 1, 1998 and ending on the
Effective Time, any and all rights of Seller under leases  (including  rights to
receive  returns of deposits under such leases) or contracts  listed on Schedule
1.3(a),  the name  "Caster  Eye  Center"  and all  likenesses  thereof,  and all
trademarks,  service marks and applications for trademarks or service marks that
are related to the iris in motion  portrayal  utilized  by Caster in  connection
with the Business (the "Iris IP").  Notwithstanding the foregoing, the following
shall not be deemed "Assets", and shall not be acquired by Prime:

     (a) all activities that constitute the practice of medicine;

                  (b) the books of account and record  books of Seller up to and
including the Effective Time (provided, that Caster must give to Prime, prior to
the Closing Date,  complete and accurate copies thereof,  insofar as they relate
to the Business  during the period  beginning  January 1, 1998 and ending on the
Effective Time);

                  (c)      Seller's rights under this Agreement;

                  (d)      all medical records of Seller and Caster;

     (e) any limited  partnership  interest owned by Seller in Keratome  Leasing
Associates, LLC, a California limited liability company;

                  (f)  all  cash,  cash  equivalents,  and  accounts  receivable
arising from  procedures done or work performed prior to the Effective Time, and
all bank accounts and other deposit  accounts (but  excluding cash on deposit in
such  accounts  that  arose from  procedures  done or work  performed  after the
Effective Time);

     (g) all assets that are neither  used in, nor relied on for, the conduct of
the Business;

                  (h) except as expressly  set forth in this  Agreement,  assets
that are owned individually by Caster,  including,  without limitation,  (A) all
stock  owned  by  Caster  in Aris  Vision  Centers  and  Presby  Corp.,  (B) any
copyright,  held individually by Caster,  for the medical book entitled "The Eye
Laser Miracle:  The Complete Guide to Better Vision" and authored by Caster, (C)
that  certain  United  States  Patent No.  5,711,045,  issued  January 27, 1998,
pertaining to an infant sleep device,  (D) all of Caster's medical records,  (E)
the  practice  of  medicine  by  Caster,  and (F)  Caster's  rights  under  this
Agreement;

                  (i) any written or oral employment,  payor or personal service
agreement with respect to any medically  trained person  required to be licensed
under the  California  Business  and  Professions  Code,  including  physicians,
registered nurses and optometrists;

     (j) any refund of any amount to which Seller claims  entitlement  and which
is specifically  identified in the Schedules  hereto as being retained by Seller
after the Closing; and

                  (k)      any artwork depicting Caster's children.

         As used in this Agreement,  "Business"  shall mean the business related
to the conduct of Refractive  Surgery and related activities that are incidental
thereto,  excluding  in all  cases the  practice  of  medicine.  As used in this
Agreement,  "Technical  Assistance" shall mean,  collectively,  the rendering of
personnel and technical assistance in relation to the operation of the Business,
other than the practice of medicine,  including, without limitation,  personnel,
equipment, space and services, in connection with Refractive Surgery acquired by
Caster  personally  as a bi-product  of his practice of medicine and  "Goodwill"
shall mean the goodwill arising solely from the Technical Assistance. As used in
this  Agreement,  "Refractive  Surgery"  shall mean any  current  and/or  future
surgical  procedures  intended to correct refractive error,  including,  without
limitation,   myopia,   hyperopia,   presbyopia  or   astigmatism  of  the  eye.
Notwithstanding anything in this Agreement to the contrary, "Refractive Surgery"
shall not include any specific  procedure  that, at the time the procedure is to
be  performed,  is  required  in  the  exercise  of  a  physician's  independent
professional  judgment  as to  the  individual  patient  to be  performed  in an
operating  room  approved by the American  Association  of  Ambulatory  Surgical
Centers or Joint Commission on Accreditation of Healthcare Organizations (or any
similar or successor accreditation board or body) with the capability of general
anesthesia,  in each instance  within either an  ambulatory  surgical  center or
acute care  hospital  that,  in either case,  meets all  licensing  requirements
applicable in the State of Texas  (provided,  however,  that this sentence shall
not  exclude  from  "Refractive  Surgery"  any  surgical  procedure  included in
"Refractive  Surgery" at the Effective  Time, and if any  applicable  regulatory
change occurs that would result in such a reclassification,  the parties to this
Agreement  will work together to  restructure  the operating  mechanics of their
relationship  in a manner that allows the  operations  of the Business to comply
with such  regulatory  change and also  preserves  the economic  benefits of the
parties arising under this Agreement and the other Transaction Documents).

         1.4 Assumed  Liabilities.  Seller and Caster  each agree  that,  at the
Closing,  Newco shall  assume only the  following  (collectively,  the  "Assumed
Liabilities") (a) those executory lease or other contract  obligations  accruing
after the Effective  Time under leases or contracts  specifically  identified as
Assumed  Liabilities  on Schedule  1.3(a),  and (b) those trade payables on open
account with unrelated third parties incurred with respect to goods and services
received  or  used  by  Seller  on or  after  the  Effective  Time  (the  "Trade
Payables").  With respect to inventory items included in the Assets,  there will
be a pro-ration of the cost of such inventory items based on the extent to which
the inventory  items were used prior to or after the Effective Time. The parties
agree to  cooperate  in good  faith to  account  for such  pro-ration  and remit
amounts that may become due another party based on such pro-ration.  The parties
specifically  agree  that  Newco  will  have  no  responsibility,  liability  or
obligation  whatsoever for (x) those  obligations under such leases or contracts
which accrued prior to the Effective  Time,  (y) any breaches or defaults  under
such leases or contracts,  which occurred or were alleged to have occurred prior
to the Closing Date and (z) trade  payables not  included in the  definition  of
"Assumed Liabilities" above.

         Except for the Assumed  Liabilities,  Seller and Caster each agree that
any and all debts,  liabilities,  and  obligations of Seller or Caster,  whether
known or unknown, absolute,  contingent or otherwise (including, but not limited
to, federal,  state,  and local taxes,  any sales taxes,  use taxes and property
taxes,  any taxes arising from the  transactions  contemplated by this Agreement
and any liabilities arising from any litigation or civil, criminal or regulatory
proceeding involving or related to Seller or its business) shall remain the sole
responsibility  of Seller or Caster  (whichever  owed such  debt,  liability  or
obligation),  and each covenants to pay promptly and otherwise  fulfill all such
debts,  liabilities  or  obligations  as and when the same  become  due  (unless
contested  in good  faith).  Except for the  assumption  by Newco of the Assumed
Liabilities,  and without  otherwise  limiting the foregoing  provisions of this
Section,  each of Seller and Caster  specifically  acknowledges  and agrees that
none of PMSI,  Prime,  any affiliate of PMSI or Prime, or Newco shall assume any
claims,  debts,  liabilities  or  obligations  whatsoever  of Seller or  Caster,
including,  without limitation,  those related to or arising out of or under any
claim or other action disclosed on Schedule 3.13.

         Notwithstanding  the  foregoing,  PMSI may,  if and only to the  extent
required pursuant to the express provisions of Section 10.11, be required to pay
amounts  under certain  guarantees of contracts  listed on Schedule 1.4 attached
hereto.

         1.5 Payment and Allocation of Purchase  Price.  Prime agrees to pay the
Asset Purchase Price to Seller at the Closing by cashier's check,  wire transfer
or  delivery  of other  immediately  available  funds.  Prime  agrees to pay the
Goodwill  Purchase  Price to Caster at the  Closing  by  cashier's  check,  wire
transfer or delivery of other  immediately  available  funds. The Asset Purchase
Price  will be  allocated  among the  Assets in  accordance  with  Schedule  1.5
attached hereto.

                                   ARTICLE II

                Representations and Warranties of PMSI and Prime

                  PMSI and Prime  hereby  represent  and  warrant  to Caster and
Seller,  jointly and severally,  that each of the following  matters is true and
correct in all respects as of the Closing Date (with the understanding that such
representations   and  warranties  shall  survive  the  Closing  and  are  being
materially  relied on by Caster and Seller in entering into and performing  this
Agreement and each of the other contracts, documents,  instruments or agreements
to be entered into in connection with or as contemplated by this Agreement,  all
of  which,  including  this  Agreement,  are  collectively  referred  to as  the
"Transaction Documents"):

         2.1 Due Organization and Principal Executive Office. Prime is a limited
liability company duly organized,  validly existing,  and in good standing under
the laws of the State of Delaware and has full corporate  power and authority to
carry on its business as now conducted and as proposed to be conducted.  PMSI is
a corporation duly organized,  validly existing,  and in good standing under the
laws of the State of Delaware  and has full  corporate  power and  authority  to
carry on its business as now conducted and as proposed to be conducted.  Each of
PMSI's and Prime's  principal  executive  offices are located at 1301 Capital of
Texas Highway,  Austin, Texas 78746. Since the Effective Time, there has been no
material  adverse  change in the  financial  condition or  operations of PMSI or
Prime.

         2.2 Due Authorization.  Each of PMSI and Prime has full corporate power
and  authority to enter into and perform  this  Agreement  and each  Transaction
Document required to be executed by it in connection  herewith.  With respect to
each of PMSI and Prime,  this Agreement and each Transaction  Document  required
herein to be executed by it has been duly and validly  authorized,  executed and
delivered by it, and the terms and  provisions  of this  Agreement and each such
Transaction Document constitute the valid,  binding and enforceable  obligations
of it. With  respect to each of PMSI and Prime,  the  execution,  delivery,  and
performance of this Agreement and each Transaction  Document  required herein to
be executed by it will not (a) violate any federal, state, county, or local law,
rule, or regulation  (collectively,  "Laws")  applicable to it or its properties
(provided,  however,  that any  representation or warranty by Prime or PMSI with
respect to Laws  regulating  or  legislating  the provision of healthcare or the
practice of medicine shall be limited to the actual knowledge possessed by Prime
and PMSI on the  Closing  Date),  (b) violate or  conflict  with,  or permit the
cancellation  of,  any  agreement  to  which it is a party or by which it or its
properties  are bound,  (c)  permit  the  acceleration  of the  maturity  of any
indebtedness  of, or any  indebtedness  secured  by the  property  of, it or (d)
violate or conflict with any provision of its organizational  documents.  Except
for the filing  requirements  of PMSI arising under the  Securities and Exchange
Act of 1934, no action,  consent,  or approval of, or filing with,  any federal,
state, county, or local governmental  authority is required by either of PMSI or
Prime  in  connection  with  the  execution,  delivery  or  performance  of this
Agreement or any Transaction Document.  Furthermore,  neither Prime nor PMSI has
any actual  knowledge on the Closing Date that the structure of the transactions
contemplated  by this  Agreement is reasonably  certain to result in a breach by
Caster  or  Seller  of the  representations  made by them  with  respect  to (y)
compliance  with Laws  regulating or legislating  the provision of healthcare or
the practice of  medicine,  or (z) the effect of any such Laws on any Permits of
Caster or Seller.

         2.3 Brokers and Finders.  Neither PMSI nor Prime has engaged, or caused
to be incurred any liability to, any finder, broker, or sales agent (and neither
has paid,  or will pay,  any finder's  fee or similar fee or  commission  to any
person) in connection  with the  execution,  delivery,  or  performance  of this
Agreement or the transactions contemplated hereby.

         2.4 Claims and Proceedings.  No inquiry, action, or proceeding has been
asserted,  instituted, or (to the knowledge of Prime or PMSI) threatened against
Prime or PMSI,  by any court,  federal,  state or local  governmental  agency or
other body having the right to regulate  all or any portion of their  respective
business   operations,   to  restrain  or  prohibit  the  carrying  out  of  the
transactions contemplated by this Agreement or to challenge the validity of such
transactions or any part thereof or seeking damages on account thereof.

         2.5      Investment Representations.  Each of PMSI and Prime:
                  --------------------------

                  (a) Is an  "accredited  investor,"  and  has not  retained  or
consulted with any "purchaser representative" (as such terms are defined in Rule
501 of Regulation D  promulgated  under the  Securities  Act of 1933, as amended
(the  "Securities  Act")) in connection with its execution of this Agreement and
the consummation of the transactions contemplated hereby;

     (b) Has such  knowledge and  experience  in financial and business  matters
that it is capable of evaluating the merits and risks of an investment in Newco;

                  (c) Will acquire any Newco  interests  for its own account for
investment  and not with the view toward  resale or  redistribution  in a manner
which  would  require  registration  under  the  Securities  Act  or  the  Texas
Securities  Act,  as  amended,  and it does not  presently  have any  reason  to
anticipate any change in its circumstances or other particular occasion or event
which  would  cause it to sell its  Newco  interests,  or any  part  thereof  or
interest  therein,  and  it has no  present  intention  of  dividing  the  Newco
interests with others or reselling or otherwise disposing of the Newco interests
or any part thereof or interest therein either currently or after the passage of
a fixed or determinable  amount of time or upon the occurrence or  nonoccurrence
of any predetermined event or circumstance;

                  (d) In connection  with entering into this  Agreement and each
of the other  Transaction  Documents  to which it is a party,  and in making the
investment decisions associated therewith, it has neither received nor relied on
any representations or warranties from Newco, Caster,  Seller, the affiliates of
Caster or Seller, or the officers, directors, shareholders, employees, partners,
members, agents,  consultants,  personnel or similarly related parties of Caster
or Seller,  other than those  representations  and warranties  contained in this
Agreement and the other Transaction Documents;

                  (e) Is able to bear the economic  risk of an investment in the
Newco  interests and it has sufficient net worth to sustain a loss of its entire
investment without material economic hardship if such a loss should occur; and

                  (f)  Acknowledges  that  the  Newco  interests  have  not been
registered under the Securities Act, or the securities laws of any of the states
of the United States,  that an investment in the Newco interests involves a high
degree of risk, and that the Newco interests are an illiquid investment.

                                   ARTICLE III

               Representations and Warranties of Seller and Caster

         Caster and Seller hereby  represent  and warrant to Prime,  jointly and
severally,  that  each of the  following  matters  is true  and  correct  in all
respects   as  of  the   Closing   Date  (with  the   understanding   that  such
representations   and  warranties  shall  survive  the  Closing  and  are  being
materially  relied on by Prime and PMSI in  entering  into and  performing  this
Agreement).

         3.1 Due Organization.  Seller is a corporation duly organized,  validly
existing, and in good standing under the laws of the State of California and has
full  power and  authority  to carry on its  business  as now  conducted  and as
proposed to be  conducted.  Seller is  qualified  to do business  and is in good
standing in every  jurisdiction  where such  qualification  is required  for the
conduct of Seller's business as conducted on the Closing Date. As of the Closing
Date,  Caster is the sole holder of all equity  ownership  interests  in Seller,
after  assuming  the  conversion,  exercise or exchange of any and all rights or
securities that are convertible into, or exercisable or exchangeable for, equity
ownership interests in Seller.

         3.2  Subsidiaries.  Seller  does not  directly or  indirectly  have (or
possess any options or other rights to acquire) any  subsidiaries  or any direct
or  indirect  ownership   interests  in  any  person,   business,   corporation,
partnership,  limited liability company,  association,  joint venture, trust, or
other entity.

         3.3 Due  Authorization.  Each of Seller  and  Caster has full power and
authority to enter into and perform this Agreement and each Transaction Document
required  to be  executed  by  Seller  or Caster  in  connection  herewith.  The
execution, delivery, and performance of this Agreement and each such Transaction
Document  has been  duly  authorized  by all  necessary  action of  Seller,  its
directors,  its  officers and its  shareholders.  This  Agreement  and each such
Transaction  Document has been duly and validly executed and delivered by Seller
and Caster and constitutes a valid and binding  obligation of Seller and Caster,
enforceable  against each of them in accordance  with its terms.  The execution,
delivery,  and  performance of this  Agreement,  and each  Transaction  Document
required  herein to be executed by Caster  and/or  Seller do not (a) violate any
Law applicable to Seller,  the Business or the Assets (provided,  however,  that
the  representation and warranty in this sentence,  the first sentence,  and the
last  sentence  of this  Section  3.3 does not extend to any Law that might give
rise to  Covered  Taxes,  as such  term is  hereinafter  defined,  and  provided
further, that any representation or warranty by Caster or Seller with respect to
Laws  regulating or  legislating  the provision of healthcare or the practice of
medicine shall be limited to the actual knowledge possessed by Caster and Seller
on the Closing Date),  (b) violate or conflict with, or permit the  cancellation
of,  any  agreement  to which  Seller  is a party,  or by  which  Seller  or its
properties are bound, or result in the creation of any lien,  security interest,
charge, or encumbrance upon any of such properties,  (c) permit the acceleration
of the maturity of any  indebtedness  of Caster or Seller,  or any  indebtedness
secured by the  property  of Seller (but this  provision  does not extend to any
assertion of Covered  Taxes),  or (d) violate or conflict  with any provision of
the organizational  documents of Seller. No action,  consent, waiver or approval
of, or filing with, any federal,  state, county or local governmental  authority
is required by Caster or Seller in connection with the execution,  delivery,  or
performance of this Agreement (or any Transaction Document).

         3.4  Financial  Statements.  The  unaudited  balance  sheet and  income
statement of Seller as of and for each of the years ended  December 31, 1998 and
1999, and the unaudited  balance sheet and income  statement of Seller as of and
for the period  beginning  on January 1, 2000,  and ending on February  29, 2000
(the "Balance Sheet Date") are attached hereto as Exhibit B  (collectively,  the
"Financial  Statements").  To the knowledge of Seller, the Financial  Statements
have been  prepared  using the cash method of  accounting  consistently  applied
(except as  specifically  noted therein or in Schedule  3.4),  and the Financial
Statements  (taking  into  account  the effect of the  obligations  specifically
disclosed in the Schedules to this Agreement  which may not be reflected on such
financial  statements)  fairly  present the  financial  position  and results of
operations  of Seller as of the indicated  dates and for the indicated  periods.
Except as  reflected on the  Financial  Statements  or in the  Schedules to this
Agreement,  and except for open account trade payables  incurred in the ordinary
course of business and amounts owed to Caster,  as of the Closing  Date,  Seller
has no claims,  debts,  liabilities,  or obligations,  whether known or unknown,
absolute,  contingent  or  otherwise  (including,  but not limited to,  federal,
state,  and local taxes,  any sales taxes, use taxes and property taxes, and any
liabilities  arising  from any  litigation  or  civil,  criminal  or  regulatory
proceeding  involving or related to Seller, its assets or the Business).  Seller
and Caster each agree to indemnify  and hold harmless  Prime and its  affiliates
from and against any and all such claims,  debts,  liabilities and  obligations.
Except as set forth in Schedule 3.4 hereto,  since the Effective  Time there has
been no material  adverse change in the assets of Seller,  the Business,  or the
results of operations or financial position of Seller.

         3.5  Conduct  of  Business;  Certain  Actions.  Except  as set forth on
Schedule 3.5 attached hereto,  and except as expressly  required or contemplated
under the terms of this Agreement and the other Transaction Documents, since the
Balance Sheet Date,  Seller has conducted its operations in the ordinary  course
and  consistent   with  its  past  practices  and  has  not  (a)  increased  the
compensation  of any employees,  agents,  contractors,  vendors or other parties
providing  services to Seller,  except for wage and salary increases made in the
ordinary  course of business and  consistent  with the past practices of Seller,
(b) sold any asset (or any  group of  related  assets)  in any  transaction  (or
series of related  transactions)  in which the purchase  price or book value for
such  asset (or group of related  assets)  exceeded  $10,000,  (c)  suffered  or
permitted any lien,  security interest,  claim,  charge, or other encumbrance to
arise or be  granted  or  created  against  or upon any of its  assets,  real or
personal,  tangible or intangible, (d) amended its organizational documents, (e)
made or paid any  severance or  termination  payment to any  director,  officer,
employee,  agent, contractor,  vendor or consultant,  (f) made any change in its
method of  accounting,  (g) made any  investment or  commitment  therefor in any
person,  business,  corporation,  association,  partnership,  limited  liability
company,  joint  venture,  trust,  or other entity,  (h) amended,  terminated or
experienced a termination of any material contract, agreement, lease, franchise,
or  license  to  which it is a  party,  (i)  entered  into  any  other  material
transactions except in the ordinary course of business, (j) changed or suspended
its  procedures  for  collecting  accounts  receivable  and paying its  accounts
payable, (k) entered into any contract, commitment,  agreement, or understanding
to do any acts described in the foregoing  clauses (a)-(j) of this Section,  (l)
suffered any material  damage,  destruction,  or loss (whether or not covered by
insurance) to any assets,  (m) experienced any strike,  slowdown,  or demand for
recognition by a labor  organization by or with respect to any of its employees,
or (n)  experienced  or effected any  shutdown,  slow-down,  or cessation of any
operations conducted by, or constituting part of, it.

         3.6 Assets;  Licenses,  Permits,  etc.  Other than the  personnel,  the
Assets include all property and assets,  real, personal and mixed,  tangible and
intangible  (other than goodwill),  including,  without  limitation,  leases and
contracts, equipment, instruments, computer software used in connection with the
equipment  or  instruments,  Permits,  personal  property,  furniture,  business
records and other assets that are  necessary in the Business as conducted  prior
to the  Closing  Date,  or used  primarily  in,  materially  relied  on for,  or
substantially  related to the conduct of the  Business by Seller as it exists on
the Closing Date.  Except as set forth on Schedule  3.6(a),  Seller has good and
marketable title to all of the Assets, in each case free and clear of all liens,
security  interests,  claims,  rights of another,  and  encumbrances of any kind
whatsoever.  The Assets are in good operating  condition and repair,  subject to
ordinary  wear  and  tear,  taking  into  account  the  respective  ages  of the
properties  involved  and are all  that are  necessary  for the  conduct  of the
Business.  Attached  hereto as Schedule  3.6(b) is a list and description of all
federal,   state,  county,  and  local  governmental   licenses,   certificates,
certificates of need, permits,  waivers,  filings and orders held or applied for
by Seller and used or relied on (or to be used or relied on) in connection  with
the Assets or the  Business  ("Permits").  Seller has  complied in all  material
respects,  and Seller is in compliance in all material respects,  with the terms
and  conditions of any such Permits.  No additional  Permit is required from any
federal,  state,  county,  or  local  governmental  agency  or body  thereof  in
connection  with the conduct of the  Business as presently  conducted  (provided
that,  with respect to any Permit required under a Law regulating or legislating
the  provision of healthcare  or the practice of medicine,  this  representation
shall be limited to the actual  knowledge  possessed by Seller and Caster on the
Closing Date). No claim has been made by any governmental authority (and, to the
knowledge of Caster and Seller, no such claim has been threatened) to the effect
that a Permit not  possessed by Seller is necessary in respect of the  Business.
Except  as  specifically  noted on  Schedule  3.6(b),  no  Permit  is or will be
adversely affected by the consummation of the transactions  contemplated by this
Agreement  (provided  that,  with  respect  to any Permit  required  under a Law
regulating  or  legislating  the  provision  of  healthcare  or the  practice of
medicine, this representation shall be limited to the actual knowledge possessed
by Seller and Caster on the Closing Date).

         3.7      Environmental Issues.

                  (a) For purposes of this  Agreement,  the term  "environmental
laws"  shall  mean  all  laws  and  regulations  relating  to  the  manufacture,
processing,  distribution,  use, treatment,  storage,  disposal,  transport,  or
handling, or the emission, discharge, or release, of any pollutant, contaminant,
chemical,  or industrial  toxic or hazardous  substance or waste,  and any order
related thereto.

                  (b) Seller has  complied  in all  material  respects  with and
obtained  all  authorizations  and made all filings  required by all  applicable
environmental  laws.  The  properties  occupied  or used by Seller have not been
contaminated with any hazardous wastes, hazardous substances, or other hazardous
or toxic  materials  in  violation  of any  applicable  environmental  law,  the
violation of which could have a material  adverse  impact on the Business or the
financial position of Seller.

                  (c) Seller has not received any notice from the United  States
Environmental Protection Agency that it is a potentially responsible party under
the  Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
("Superfund Notice"), any citation from any federal, state or local governmental
authority for non-compliance with its requirements with respect to air, water or
environmental  pollution,  or the  improper  storage,  use or  discharge  of any
hazardous waste, other waste or other substance or other material  pertaining to
its business ("Citations") or any written notice from any private party alleging
any such  non-compliance;  and  there are no  pending  or  unresolved  Superfund
Notices,  Citations or written  notices from private  parties  alleging any such
non-compliance.

         3.8  Intellectual  Property  Rights.  To the  knowledge  of Seller  and
Caster,  and except  for:  (i) the Iris IP; (ii) rights  granted  under  medical
equipment  contracts to which Seller is a party; and (iii) those items disclosed
on Schedule 3.8, there are no patents,  trademarks,  trade names, or copyrights,
and no  applications  therefor,  owned by or registered in the name of Seller or
Caster  or in which  Seller or  Caster  has any  right,  license,  or  interest;
provided,  however,  that the  foregoing  representation  does not  apply to any
patents,  tradenames,  copyrights or applications  owned by or registered in the
name of Caster to the  extent  such items do not  pertain to the  conduct of the
Business.  Except as  disclosed  on Schedule  3.8,  Seller is not a party to any
license agreement,  either as licensor or licensee, with respect to any patents,
trademarks, trade names, or copyrights.  Seller has not received any notice that
it is infringing any patent, trademark, trade name, or copyright of others.

         3.9 Compliance with Laws. To the knowledge of Seller and Caster, Seller
has  complied  in all  material  respects,  and Seller is in  compliance  in all
material respects, with all Laws currently in effect (provided however, that any
representation  or warranty by Caster or Seller with respect to Laws  regulating
or legislating  the provision of healthcare or the practice of medicine shall be
limited to the actual  knowledge  possessed  by Caster and Seller on the Closing
Date).  No claim  has been  made or (to the  knowledge  of  Seller  and  Caster)
threatened by any governmental  authority  against Seller to the effect that the
business  conducted by Seller fails to comply in any respect with any law, rule,
regulation, or ordinance.

         3.10  Insurance.  Attached  hereto  as  Schedule  3.10 is a list of all
policies of fire, liability, business interruption, and other forms of insurance
(including,  without  limitation,  professional  liability  insurance)  and  all
fidelity bonds held by or applicable to Seller at any time within the past three
(3) years,  which  schedule sets forth in respect of each such policy the policy
name,  policy number,  carrier,  term,  type of coverage,  deductible  amount or
self-insured  retention amount,  limits of coverage,  and annual premium. To the
knowledge  of Seller  and  Caster,  no event  directly  relating  to Seller  has
occurred which will result in a retroactive  upward adjustment of premiums under
any such  policies  or which is  likely  to  result  in any  prospective  upward
adjustment in such premiums.  There have been no material changes in the type of
insurance  coverage  maintained  by Seller  during  the past  three  (3)  years,
including without  limitation any change which has resulted in any period during
which Seller had no insurance coverage.  Excluding insurance policies which have
expired  and been  replaced,  no  insurance  policy of Seller has been  canceled
within  the last  three  (3) years  and no  threat  has been made to cancel  any
insurance policy of Seller within such period.

         3.11 Employee  Benefit  Matters.  Except as set forth on Schedule 3.11,
Seller does not maintain nor does it contribute nor is it required to contribute
to any  "employee  welfare  benefit  plan" (as  defined in  section  3(1) of the
Employee  Retirement  Income  Security Act of 1974 (and any sections of the Code
amended by it) and all regulations promulgated thereunder, as the same have from
time to time been amended  ("ERISA")) or any "employee pension benefit plan" (as
defined in ERISA).  Seller does not presently maintain and has never maintained,
or had any obligation of any nature to contribute  to, a "defined  benefit plan"
within the meaning of the Code.

         3.12  Contracts and  Agreements.  Except for Trade  Payables,  attached
hereto as Schedule 3.12 is a list of all written or oral contracts, commitments,
leases,  and other agreements  (including,  without  limitation,  all promissory
notes, loan agreements, and other evidences of indebtedness, mortgages, deeds of
trust, security agreements,  pledge agreements,  service agreements, and similar
agreements and instruments and all  confidentiality  agreements) to which Seller
is a party or by which  Seller or any of its Assets is bound,  pursuant to which
the  obligations  thereunder  of any party thereto are, or are  contemplated  as
being,  in respect of any such individual  contracts,  commitments,  leases,  or
other  agreements  during any year during the term  thereof,  $25,000 or greater
(collectively  the "Contracts" and  individually,  a "Contract").  Seller is not
and, to the best  knowledge of Seller and Caster,  no other party  thereto is in
default (and no event has occurred which, with the passage of time or the giving
of  notice,  or both,  would  constitute  a default  by  Seller  or, to the best
knowledge of Seller and Caster,  by any other party thereto) under any Contract.
Seller has not waived any material right under any Contract,  and no consents or
approvals  (other than those obtained in writing and delivered to Prime prior to
Closing) are required under any Contract in connection with the  consummation of
the transactions  contemplated hereby.  Seller has not guaranteed any obligation
of any other person or entity.

         3.13 Claims and Proceedings. Attached hereto as Schedule 3.13 is a list
and description of all claims, actions, suits,  proceedings,  and investigations
pending or, to the knowledge of Seller and Caster,  threatened against Seller or
Caster,  at law or in  equity,  or before or by any  court,  municipal  or other
governmental department,  commission, board, agency, or instrumentality.  Except
as set forth on Schedule 3.13  attached  hereto,  none of such claims,  actions,
suits,  proceedings,  or investigations  will result in any liability or loss to
Seller which (individually or in the aggregate) is material,  and Seller has not
been,  and  Seller  is  not  now,  subject  to  any  order,  judgment,   decree,
stipulation,  or consent of any court,  governmental  body, or agency that could
reasonably  be expected to  materially  and  adversely  affect the Assets or the
Business. No inquiry,  action, or proceeding has been asserted,  instituted,  or
(to the knowledge of Seller or Caster)  threatened  against  Seller or Caster to
restrain or prohibit the carrying out of the  transactions  contemplated by this
Agreement or to challenge the validity of such  transactions or any part thereof
or seeking damages on account thereof.

         3.14 Taxes.  All federal,  foreign,  state,  county,  and local income,
gross receipts, excise, property,  franchise,  license, sales, use, withholding,
and other tax  (collectively,  "Taxes")  returns,  reports,  and declarations of
estimated  tax  (collectively,  "Returns")  which were  required  to be filed by
Seller on or before the date hereof have been filed  within the time  (including
any  applicable  extensions)  and in the manner  provided  by law,  and all such
Returns are true and correct in all material respects and accurately reflect the
Tax  liabilities  of Seller.  Seller has  provided  Prime with true and complete
copies of all Returns filed for or with respect to any period occurring  between
January 1, 1996 and December 31, 1999. All Taxes,  assessments,  penalties,  and
interest  which have become due  pursuant to such Returns have been paid or will
be paid by Caster or Seller when due (but shall not, under any circumstances, be
included  in  Assumed  Liabilities).  Seller  has  not  executed  any  presently
effective waiver or extension of any statute of limitations  against assessments
and collection of Taxes. There are no pending or threatened claims, assessments,
notices,  proposals  to  assess,  deficiencies,  or audits  (collectively,  "Tax
Actions")  against  Seller with respect to any Taxes owed or  allegedly  owed by
Seller.  There  are no tax  liens on any of the  assets of  Seller.  Proper  and
accurate  amounts have been  withheld and remitted by Seller from and in respect
of all persons  from whom it is required by  applicable  law to withhold for all
periods in compliance with the tax withholding provisions of all applicable laws
and regulations. Seller is not a party to any tax sharing agreement.

         3.15 Personnel. Attached hereto as Schedule 3.15 is a list of names and
current  annual rates of  compensation  of the officers,  employees or agents of
Seller who are  necessary  for the  operation of the Business or who utilize (or
are  necessary  for  the   utilization   of)  the  Assets   (collectively,   the
"Employees").  Except as set forth on Schedule 3.15, there are no bonus,  profit
sharing, percentage compensation, company automobile, club membership, and other
like  benefits,  if any, paid or payable by Seller to any Employees that are not
fully and  specifically  reflected in the  Financial  Statements.  Schedule 3.15
attached  hereto also  contains a brief  description  of all  material  terms of
employment agreements and confidentiality  agreements to which Seller is a party
and all  severance  benefits  which any  director,  officer,  Employee  or sales
representative of Seller is or may be entitled to receive.  Seller has delivered
to  Prime  accurate  and  complete  copies  of all such  employment  agreements,
confidentiality   agreements,  and  all  other  agreements,   plans,  and  other
instruments  to which  Seller  is a party  and under  which  its  employees  are
entitled  to  receive  benefits  of any  nature.  Schedule  3.15 also sets forth
personal  expenses  incurred  by Seller for any of its  employees  that were not
incurred in the  ordinary  course of Seller's  business.  Except as described on
Schedule  3.13  attached  hereto,  there is no pending or (to the  knowledge  of
Seller or Caster)  threatened (i) labor dispute or union  organization  campaign
relating to Seller,  (ii) claims against  Seller by any employees of Seller,  or
(iii) terminations, resignations or retirements of any employees of Seller. None
of the employees of Seller are  represented by any labor union or  organization.
There is no unfair labor practice claim against Seller before the National Labor
Relations Board or any strike,  labor dispute,  work slowdown,  or work stoppage
pending  or (to the  knowledge  of  Seller  or  Caster)  threatened  against  or
involving Seller.

         3.16  Business  Relations.  Seller has no reason to believe and has not
been notified that any supplier or customer of Seller will cease or refuse to do
business with Seller in the same manner as previously conducted with Seller as a
result of or within  one (1) year  after the  consummation  of the  transactions
contemplated  hereby,  to the extent such  cessation or refusal might affect the
Goodwill, the Assets or the Business.  Seller has not received any notice of any
disruption  (including  delayed  deliveries or  allocations by suppliers) in the
availability of the materials or products used by Seller.

         3.17  Agents.  Except as set forth on Schedule  3.17  attached  hereto,
Seller  has  not  designated  or  appointed  any  person  (other  than  Seller's
employees,  officers  and  directors)  or other  entity  to act for it or on its
behalf  pursuant to any power of attorney or any agency  which is  presently  in
effect.

         3.18  Indebtedness To and From Directors,  Officers,  Shareholders  and
Employees.  Except as specifically  reflected in the Financial Statements or set
forth on Schedule 3.18, Seller does not owe any indebtedness to Caster or any of
its  directors,  officers,  shareholders,   employees  or  affiliates,  or  have
indebtedness  owed  to it  from  Caster  or  any  of  its  directors,  officers,
shareholders,   employees  or  affiliates,  excluding  indebtedness  for  travel
advances  or similar  advances  for  expenses  incurred  on behalf of and in the
ordinary  course of  business  of  Seller  and  consistent  with  Seller's  past
practices.  As of the Effective Time and the Closing Date all amounts due Seller
from any of its  directors,  officers,  employees or affiliates (or any of their
family members) shall have been repaid in full.

         3.19 Commission Sales  Contracts.  Except as disclosed in Schedule 3.19
attached  hereto,  Seller  does not  employ  or have any  relationship  with any
individual,  corporation,  partnership,  or other entity whose compensation from
Seller is in whole or in part determined on a commission basis.

         3.20 Certain  Consents.  Except as set forth on Schedule  3.20 attached
hereto,  and except for  consents  obtained and provided to Prime prior to or at
the  Closing,  there are no  consents,  waivers,  or  approvals  required  to be
executed  and/or  obtained  by Seller  from third  parties  (including,  without
limitation,  the spouse,  if any, of Caster) in connection  with the  execution,
delivery,  and performance of this Agreement or any other  Transaction  Document
(provided that, with respect to any such consent required under a Law regulating
or  legislating  the provision of  healthcare or the practice of medicine,  this
representation  shall be limited to the actual knowledge possessed by Seller and
Caster on the Closing Date).

         3.21  Brokers.  Seller has not engaged,  or caused any  liability to be
incurred to, any finder,  broker, or sales agent (and has not paid, and will not
pay, any finders fee or similar fee or  commission  to any person) in connection
with  the  execution,   delivery,  or  performance  of  this  Agreement  or  the
transactions contemplated hereby.

         3.22 Interest in Competitors,  Suppliers, and Customers.  Except as set
forth on Schedule  3.22  attached  hereto,  neither  Seller nor any affiliate of
Seller,  and to the  knowledge  of Seller  and  Caster,  no  director,  officer,
employee or  affiliate  of Seller or any  affiliate  of any  director,  officer,
employee or affiliate of Seller,  has any ownership  interest in any competitor,
customer or supplier of Seller  (other than the  ownership  of  securities  of a
publicly  held entity of which it owns less than five  percent (5%) of any class
of  outstanding  securities)  or  any  property  used  in the  operation  of the
Business.

         3.23 Warranties.  Except as set forth on Schedule 3.23,  Seller has not
made any  warranties or guarantees to third parties with respect to any products
sold or services rendered by it, other than those arising solely by operation of
law without  any  agreement  or  arrangement  by Seller.  Except as set forth on
Schedule  3.23  attached  hereto,  no claims  for  breach of  product or service
warranties  have ever been made against  Seller in  connection  with  Refractive
Surgery.

         3.24 Billing  Arrangement.  Prior to the  Closing,  Seller has operated
subject to an  arrangement  between  Seller  and  Westside  Ambulatory  Surgical
Medical Center, Inc., a California corporation  ("Westside"),  pursuant to which
Westside has  performed  certain  billing and related tasks on behalf of Seller.
With respect to Westside: (a) Caster is the sole owner of all of the outstanding
capital  stock  and  other  ownership   interests  of  Westside   (assuming  the
conversion,  exercise  or  exchange  of  all  rights  and  securities  that  are
convertible  into, or exercisable or  exchangeable  for,  capital stock or other
ownership  interests of  Westside);  (b) since its  formation,  Westside has not
engaged  in any  material  business  operations  that  were not  related  to the
Business and the  operations  of Seller;  and (c) Westside has provided to Prime
prior to the  Closing  true  and  complete  copies  of each  and  every  written
contract,  agreement or arrangement  to which Westside is a party,  and has also
provided  to Prime  prior to the  Closing a complete  and  accurate  description
reflecting  each oral contract,  agreement or arrangement to which Westside is a
party (with sufficient  detail to accurately  depict all material aspects of the
terms and provisions thereof).

         3.25     Investment Representations.  Each of Seller and Caster:
                  --------------------------

                  (a) Is an  "accredited  investor,"  and  has not  retained  or
consulted with any "purchaser representative" (as such terms are defined in Rule
501 of Regulation D  promulgated  under the  Securities  Act of 1933, as amended
(the  "Securities  Act")) in connection with its execution of this Agreement and
the consummation of the transactions contemplated hereby;

     (b) Has such  knowledge and  experience  in financial and business  matters
that it is capable of evaluating the merits and risks of an investment in Newco;

                  (c) Will acquire any Newco  interests  for its own account for
investment  and not with the view toward  resale or  redistribution  in a manner
which would require  registration  under the  Securities  Act or the  California
Corporate Securities Law of 1968, as amended, and it does not presently have any
reason  to  anticipate  any  change  in its  circumstances  or other  particular
occasion or event which would cause it to sell its Newco interests,  or any part
thereof or interest  therein,  and it has no present  intention  of dividing the
Newco  interests  with others or reselling  or otherwise  disposing of the Newco
interests or any part thereof or interest  therein either currently or after the
passage  of a fixed or  determinable  amount of time or upon the  occurrence  or
nonoccurrence of any predetermined event or circumstance;

                  (d) In connection  with entering into this  Agreement and each
of the other  Transaction  Documents  to which it is a party,  and in making the
investment decisions associated therewith, it has neither received nor relied on
any  representations  or warranties from Newco,  PMSI,  Prime, the affiliates of
PMSI or Prime, or the officers, directors,  shareholders,  employees,  partners,
members, agents, consultants,  personnel or similarly related parties of PMSI or
Prime,  other  than  those  representations  and  warranties  contained  in this
Agreement and the other Transaction Documents;

                  (e) Is able to bear the economic  risk of an investment in the
Newco  interests and it has sufficient net worth to sustain a loss of its entire
investment without material economic hardship if such a loss should occur; and

                  (f)  Acknowledges  that  the  Newco  interests  have  not been
registered under the Securities Act, or the securities laws of any of the states
of the United States,  that an investment in the Newco interests involves a high
degree of risk, and that the Newco interests are an illiquid investment.

                                   ARTICLE IV

                                    Covenants

         4.1 Use of Name.  Each of Caster and Seller  agrees that  following the
Closing  Date,  Seller  will  change  its name from,  and cease  using the name,
"Caster Eye Center Medical Group" or any words or phrases which are  deceptively
similar to such name;  provided,  however,  that Seller shall not be required to
change its legal name from  "Caster  Eye  Center  Medical  Group" for the period
beginning on the Closing Date and ending on the earlier of (i) the expiration of
one hundred  eighty (180) days  immediately  following the Closing Date and (ii)
Seller's receipt of a new  Medicare/Medicaid  provider number  applicable to the
name  Seller  intends  to use after the  Closing  (the  "Interim  Period");  and
provided  further that Seller may use such name as the name of Seller during the
Interim Period, and Newco hereby grants a non-exclusive license to Seller to use
such name after the Interim Period,  limited in both cases to only the following
instances: (a) advertising and promotional materials, as long as such use is not
in connection with, or for the promotion of, any activity that is a violation of
this Agreement,  including,  without limitation,  Section 9.2 of this Agreement,
(b) billing for procedures or services that involve the use of Newco's equipment
or  facilities,  and (c) any  other  use that is  consistent  with  the  express
provisions of this Agreement and any other Transaction  Document.  The foregoing
license and use of such name shall be terminated  (y) upon delivery of notice to
Caster by Newco of a material breach (subject to any rights to cure such breach)
by Caster or Seller of this Agreement or any other  Transaction  Document or (z)
automatically  upon any delivery of the  Termination  Notice pursuant to Section
9.3(a) hereof or breach by Caster of the  provisions of or default under ARTICLE
VIII or ARTICLE IX hereof (either,  a "Trigger Event").  Promptly  following any
such termination, Seller agrees to terminate any use of such name and to execute
all  documents  reasonably  necessary  or  requested  by Prime  concerning  such
cessation  of  use  and  the  vesting  of  use  in  Prime  or  Prime's  nominee.
Notwithstanding  any contrary provision of this Agreement,  nothing herein shall
preclude  Caster  from using his full  legal  individual  name and  professional
accomplishments in the practice of medicine.

     4.2  Cooperation  Relating  to  Financial  Statements.   Seller  agrees  to
cooperate with Prime,  at Newco's  expense,  in the preparation of any financial
statements  of Seller  which  Prime or its  affiliates  may be  required  by any
applicable law to prepare.

         4.3 Action by Owners;  Joint and Several  Liability  of Caster.  Caster
agrees to vote any interest it owns in Seller, and to take such other actions as
may be necessary in his capacity as the sole  director and sole  shareholder  of
Seller,  to authorize and direct Seller to perform all of its obligations  under
this  Agreement and under the  Organizational  Documents  and other  Transaction
Documents to which Seller is a party. Furthermore,  Caster and Seller each agree
that,  until such time as neither of them owns any direct or indirect  ownership
interest in Newco,  neither of them will,  without  obtaining  the prior written
consent of Prime,  which  consent may be withheld in Prime's  sole and  absolute
discretion,  (i) authorize the issuance of any additional capital stock or other
ownership  interest in Seller to any person other than Caster, a Permitted Trust
or a Permitted  Entity (as such terms are defined in Newco's  Limited  Liability
Company Agreement) or (ii) transfer, assign, pledge,  hypothecate, or in any way
alienate  any  capital  stock  of  Seller,  or  any  interest  therein,  whether
voluntarily or by operation of law, or by gift or otherwise, to any person other
than Caster, a Permitted Trust or a Permitted Entity,  without the prior written
consent of Prime.  Any purported  transfer in violation of this Section shall be
void ab initio  without  any  action by any  party,  and  shall not  operate  to
transfer any interest or title to the  purported  transferee.  All  evidences of
ownership in Seller,  including,  without  limitation,  all stock  certificates,
shall bear the following legend:

              "THE  INTERESTS  REPRESENTED  HEREBY  AND  THE  SALE,  ASSIGNMENT,
              TRANSFER,  PLEDGE OR OTHER  DISPOSITION  THEREOF  ARE  SUBJECT  TO
              CERTAIN RESTRICTIONS  CONTAINED IN A CONTRIBUTION  AGREEMENT AMONG
              THE  COMPANY  AND THE  WITHIN  NAMED  PARTIES,  AND ANY  AMENDMENT
              THERETO.  THE  CONTRIBUTION   AGREEMENT  LIMITS  THE  USE  OF  THE
              INTERESTS REPRESENTED HEREBY AS COLLATERAL FOR ANY LOAN WHETHER BY
              PLEDGE,  HYPOTHECATION  OR OTHERWISE.  A COPY OF THE  CONTRIBUTION
              AGREEMENT AND ALL APPLICABLE  AMENDMENTS THERETO WILL BE FURNISHED
              BY THE COMPANY TO THE HOLDER  HEREOF  WITHOUT  CHARGE UPON WRITTEN
              REQUEST  TO THE  COMPANY AT ITS  PRINCIPAL  PLACE OF  BUSINESS  OR
              REGISTERED OFFICE."

         Caster  shall be  jointly  and  severally  liable for the  payment  and
performance of each and every  obligation of Seller  hereunder and under each of
the  Transaction  Documents,  including  without  limitation,  under the Limited
Liability Company Agreement of Newco.

         4.4 Public  Statements and Press Releases.  The parties hereto covenant
and agree that,  except as  provided  for herein  below,  each will not from and
after the date  hereof  make,  issue or release any public  announcement,  press
release, statement or acknowledgment of the existence of, or reveal publicly the
terms,  conditions and status of, the transactions provided for herein,  without
the prior written consent of the other parties hereto as to the content and time
of release of and the media in which such  statements or  announcement  is to be
made,  provided,  however,  that  in  the  case  of  announcements,  statements,
acknowledgments  or  revelations  which either party is required by law to make,
issue or release,  the making,  issuing or releasing  of any such  announcement,
statement,  acknowledgments  or  revelation by the party so required to do so by
law shall not  constitute  a breach of this  Agreement  if such party shall have
given,  to the extent  reasonably  possible,  prior notice to the other  parties
hereto; provided further, that the foregoing prohibition shall not preclude oral
disclosures  by Caster  after the Closing to other  individuals  concerning  the
existence  of the  transactions  contemplated  by this  Agreement  and the other
Transaction  Documents.  Each party hereto agrees that it will not  unreasonably
withhold any such consent or clearance. The provisions of this Section shall not
limit or restrict any party's  communications  with its personal  consultants or
advisors,   including,  without  limitation,  its  attorneys,   accountants  and
financial advisors.

         4.5 Joint and  Several  Liability  of PMSI.  PMSI shall be jointly  and
severally liable for the payment and performance of each and every obligation of
Prime  hereunder  and under  each of the other  Transaction  Documents.  Without
limiting  the  foregoing,  PMSI  agrees  that  if  Prime  shall  default  in any
obligation  to pay to Seller or Caster any amount  then due and payable by Prime
to  Seller or Caster  under  ARTICLE I or  ARTICLE  VII  hereunder,  PMSI  shall
immediately  pay such  amount to Seller or  Caster.  PMSI  hereby  agrees not to
require  Seller or Caster to  proceed  against  Prime or any other  person or to
pursue any other remedy before proceeding against PMSI under this Agreement.

         4.6 Working  Capital  Line.  Caster  hereby  agrees to loan  amounts to
Newco, from time to time, during the first four (4) months immediately following
the Closing  Date,  not to exceed  $200,000 in the  aggregate,  upon  request by
Prime, to cover any actual deficit in working capital that Newco may experience.
The parties agree that amounts borrowed must be repaid by Newco prior to Newco's
distribution of any of its earnings to Prime.

                                    ARTICLE V

                              Conditions to Closing

         5.1 Prime's Conditions to Closing. Prime's obligation to consummate the
transactions  contemplated  in this  Agreement  is subject to the  satisfaction,
prior to or at the Closing, of each of the following conditions, any one or more
of which may be waived by Prime in writing. Upon failure of any of the following
conditions, Prime may terminate this Agreement:

                  (a) each of Caster,  Seller and Newco shall have  executed and
delivered each of the Transaction  Documents to which it is a party  (including,
without  limitation,  the Limited  Liability Company Agreement of Newco attached
hereto as Exhibit  A, and  financing  statements  securing  the  rights  granted
pursuant to Section 10.2 hereof for the States of Texas and  California,  and to
the extent permitted under applicable law, the California county of Los Angeles,
and the Texas  county of Travis),  and shall have  performed  or complied in all
respects with its  agreements  and covenants  required by this  Agreement or any
other  Transaction  Document to have been performed or complied with by it prior
to or at the Closing;

                  (b) each of Caster,  Seller and Newco shall have  executed and
delivered that certain  Facility Use Agreement,  in the form attached  hereto as
Exhibit C (the "Facility Use Agreement");

                  (c) since the Effective Time,  except as set forth on Schedule
3.4  hereto,  there  shall  not have  been any  material  adverse  change in the
condition (financial or otherwise) of Seller, the Assets or the Business;

                  (d) Prime and PMSI shall have  obtained  the approval of their
unaffiliated  lenders  under  any  of  the  credit  facilities  of  PMSI  or any
subsidiary of PMSI that owns, directly or indirectly, an interest in Prime;

                  (e) each of the  representations and warranties made by Caster
or Seller in this  Agreement or any other  Transaction  Document  shall be true,
correct and not misleading in any material respect; and

                  (f) each of Caster and Seller shall have  delivered  such good
standing   certificates,   officer  certificates,   and  similar  documents  and
certificates as counsel for Prime may have reasonably requested.

         5.2 Caster's and Seller's  Conditions to Closing.  Each of Caster's and
Seller's  obligation  to  consummate  the  transactions   contemplated  in  this
Agreement is subject to the satisfaction, prior to or at the Closing, of each of
the following  conditions,  any one or more of which may be waived by Caster and
Seller in writing.  Upon failure of any of the following  conditions,  Caster or
Seller may terminate this Agreement:

                  (a) each of Prime and Newco shall have  executed and delivered
each of the  Transaction  Documents to which it is a party  (including,  without
limitation, the Limited Liability Company Agreement of Newco, attached hereto as
Exhibit A, and the Facility Use Agreement), and shall have performed or complied
in all respects with its agreements and covenants  required by this Agreement or
any other  Transaction  Document to have been  performed or complied  with by it
prior to or at the Closing,  including,  without limitation,  the payment of the
Asset Purchase Price to Seller and the Goodwill Purchase Price to Caster;

                  (b) since the Effective Time,  except as set forth on Schedule
3.4  hereto,  there  shall  not have  been any  material  adverse  change in the
condition (financial or otherwise) of Prime or PMSI;

     (c)  each of the  representations  and  warranties  made by  Prime  in this
Agreement  or any other  Transaction  Document  shall be true,  correct  and not
misleading in any material respect; and

                  (d)  Prime   shall   have   delivered   such   good   standing
certificates,  officer  certificates,  and similar documents and certificates as
counsel for Caster and Seller may have reasonably requested.

                                   ARTICLE VI

                            Indemnification of Prime

         6.1  Indemnification  of Prime.  Each of Caster  and  Seller  agrees to
indemnify  and hold  harmless  Prime,  each parent  company,  subsidiary  and/or
affiliate of Prime (including,  without  limitation,  Seller and Newco) and each
parent company, subsidiary,  affiliate,  shareholder,  member, partner (or other
owner), officer, director, manager, agent, employee and representative of any of
the foregoing  (collectively,  the "Prime Indemnified Parties") from and against
any and all damages,  losses,  claims,  liabilities,  demands,  charges,  suits,
penalties,  costs,  and expenses  (including court costs and attorneys' fees and
expenses   incurred  in  investigating  and  preparing  for  any  litigation  or
proceeding)   (collectively,   "Indemnified   Costs")  in  connection  with  the
commencement or assertion of any action, proceeding, demand, or claim by a third
party (collectively,  a "Third-Party Action") which any of the Prime Indemnified
Parties may  sustain,  arising out of or related to (a) any breach or default by
Caster  or  Seller  of any  of the  representations,  warranties,  covenants  or
agreements contained in this Agreement or any Transaction  Document,  (b) except
for Assumed Liabilities,  any claim, debt,  obligation or liability of Caster or
Seller,  (c) except for Assumed  Liabilities,  any actual or alleged  actions or
omissions  by  Caster,   Seller,  or  any  of  Seller's   directors,   officers,
shareholders, agents, employees, representatives, subsidiaries and/or affiliates
occurring  prior to the Closing Date  (regardless  of whether  such  Indemnified
Costs are  asserted at any time before or after the Closing  Date),  and (d) all
Taxes owed by Seller or Caster, including,  without limitation, Taxes arising as
a result of the transactions contemplated by this Agreement,  including, without
limitation,  any  Covered  Taxes (as  hereinafter  defined) in excess of Covered
Taxes  required to be paid or  reimbursed  by Prime or PMSI  pursuant to Section
7.1(b);  provided  this clause (d) shall not be construed to require  Sellers or
Caster to provide any  indemnity  for the amounts  required to be  reimbursed by
Prime or PMSI pursuant to Section 7.1(b)

                  Prior to receiving indemnification under this Section, a Prime
Indemnified  Party must seek recovery from then  existing  applicable  insurance
policies,  but in no event is a Prime  Indemnified  Party  required  to  exhaust
remedies against  insurance  companies if coverage is  non-existent,  limited or
declined;  provided,  however, that the Prime Indemnified Party may be required,
upon  request by the  indemnifying  parties,  to obtain the advice of such Prime
Indemnified  Party's own legal counsel advising that there is a reasonable basis
for denial of  insurance  of  limitation  of  insurance  coverage;  and provided
further,  that the Prime  Indemnified  Party must,  as a condition  to receiving
recovery under this Section, assign whatever rights to denied benefits that such
Prime  Indemnified  Party  may  have  and may  legally  assign,  subject  to any
contractual  or  other   limitations  on  assignment.   Without  in  any  manner
restricting a Prime Indemnified Party's right to independently obtain insurance,
no Prime Indemnified Party shall be required to acquire or maintain insurance as
a condition to exercising its rights under this Section.

                  For  purposes of this  Section 6.1 only,  any  decrease in the
value of a Prime Indemnified  Party's ownership interest (if any) in Newco, as a
result of the acts,  omissions or circumstances  described in clause (c) of this
Section,  shall,  to the extent  indemnification  with  respect  thereto has not
already  been  paid  directly  to  a  Prime  Indemnified  Party,  be  deemed  an
Indemnified  Cost,  and  such  Prime  Indemnified  Party  shall be  entitled  to
indemnification hereunder in an amount equal to such decrease in value.

                  Notwithstanding  any provision of this  Agreement or any other
Transaction Document to the contrary, none of Caster, Seller or any other Seller
Indemnified  Party  may,  and each  hereby  agrees  not to,  seek  contribution,
indemnification  or reimbursement  from Newco for any amount Caster or Seller is
required to pay pursuant to this ARTICLE,  regardless of whether Caster,  Seller
or  such  other   Seller   Indemnified   Party  is  entitled  to   contribution,
indemnification   or   reimbursement   under  any  Transaction   Document,   the
organizational documents of Newco or applicable law.

                  Furthermore, the Prime Indemnified Parties,  collectively, may
not,  with respect to any  Indemnified  Cost,  recover  more than the  aggregate
amount of such Indemnified  Cost, or recover  Indemnified  Costs in the event of
any act or omission of Caster or Seller  resulting  solely and exclusively  from
Caster's death or Permanent Disability (including,  without limitation, a breach
or default under this Agreement resulting solely and exclusively therefrom). For
purposes of this Agreement,  "Permanent Disability" with respect to Caster shall
mean  Caster's  having a mental or physical  incapacity  that can  reasonably be
anticipated  to prevent  Caster's  resumption of the normal  performance  of his
medical  practice  within  the six (6) months  succeeding  the  commencement  of
Caster's incapacity, or (b) Caster's receipt of benefits for a period of six (6)
consecutive months by reason of disability under a salary continuation, or other
disability plan.

                  In  addition,   and  notwithstanding  any  provision  of  this
Agreement or any other Transaction  Document to the contrary,  the provisions of
ARTICLE VI concerning the  indemnification  of Prime  Indemnified  Parties shall
have no  application  to a  violation  or  breach  by  Caster  or  Seller of any
applicable  covenant or provision  contained in ARTICLE VIII or in ARTICLE IX of
this  Agreement,  it being the intent of the parties that the remedies  provided
for in Sections  9.7(a) and 9.7(b) of this Agreement  shall  constitute the sole
remedies of the Prime Indemnified Parties.

         6.2 Defense of Third-Party Claims. A Prime Indemnified Party shall give
prompt  written  notice to  Caster,  of the  commencement  or  assertion  of any
Third-Party  Action in respect of which such Prime  Indemnified Party shall seek
indemnification  hereunder.  Any failure to so notify  Caster  shall not relieve
Caster  or  Seller  from  any  liability  that  either  may  have to such  Prime
Indemnified  Party  under this  ARTICLE  unless the  failure to give such notice
materially  and  adversely  prejudices  Caster.  Caster  shall have the right to
assume  control  of the  defense  of,  settle,  or  otherwise  dispose  of  such
Third-Party  Action on such terms as it deems  appropriate;  provided,  however,
that:

     (a) The Prime Indemnified Party shall be entitled,  at his, her, or its own
expense, to participate in the defense of such Third-Party Action;

                  (b) Caster  shall  obtain the prior  written  approval  of the
Prime  Indemnified  Party,  which approval shall not be  unreasonably  withheld,
before  entering  into or  making  any  settlement,  compromise,  admission,  or
acknowledgment  of the validity of such  Third-Party  Action or any liability in
respect thereof if, pursuant to or as a result of such  settlement,  compromise,
admission,  or  acknowledgment,  injunctive or other  equitable  relief would be
imposed against the Prime Indemnified Party;

                  (c) Caster  shall not consent to the entry of any  judgment or
enter into any settlement that does not include as an unconditional term thereof
the  execution  and delivery of a release from all  liability in respect of such
Third-Party Action by each claimant or plaintiff to, and in favor of, each Prime
Indemnified Party;

                  (d) Caster  shall not be  entitled  to  control  (but shall be
entitled to  participate  at its own expense in the defense  of),  and the Prime
Indemnified  Party shall be entitled to have sole control  over,  the defense or
settlement,  compromise,  admission, or acknowledgment of any Third-Party Action
as to which  Caster  fails to  assume  the  defense  within  thirty  (30)  days;
provided,  however,  that the Prime  Indemnified Party shall make no settlement,
compromise,  admission,  or acknowledgment which would give rise to liability on
the part of Caster,  without the prior written consent of Caster,  which consent
may be given, withheld, or conditioned in Caster's sole and absolute discretion;

                  (e) Caster shall make  payments of all amounts  required to be
made pursuant to the foregoing  provisions of this ARTICLE to or for the account
of the entitled Prime  Indemnified Party from time to time promptly upon receipt
of bills  or  invoices  relating  thereto  or when  otherwise  due and  payable,
provided  that the Prime  Indemnified  Party has agreed in writing to  reimburse
Caster for the full amount of such  payments if the Prime  Indemnified  Party is
ultimately determined not to be entitled to such indemnification; and

                  (f) The parties hereto shall extend reasonable  cooperation in
connection with the defense of any  Third-Party  Action pursuant to this ARTICLE
and, in  connection  therewith,  shall furnish such  records,  information,  and
testimony and attend such conferences,  discovery proceedings, hearings, trials,
and appeals as may be reasonably requested. Without limiting the foregoing, with
respect to any  Indemnified  Costs asserted  pursuant to Section  6.1(e),  Prime
agrees to cooperate fully with Caster to vigorously  defend the assertion of any
Covered Taxes.

                                   ARTICLE VII

                      Indemnification of Caster and Seller

         7.1      Indemnification of Caster and Seller.

                  (a) PMSI and Prime, jointly and severally,  agree to indemnify
and  hold  harmless  Caster,  Seller,  their  respective  affiliates,  including
Westside, and each of their agents, employees and representatives (collectively,
the "Seller  Indemnified  Parties"),  from and  against any and all  Indemnified
Costs in connection with the commencement or assertion of any Third-Party Action
which any of the Seller  Indemnified  Parties  may  sustain,  arising  out of or
related to (i) any  breach or  default  by Prime of any of the  representations,
warranties,   covenants  or  agreements  contained  in  this  Agreement  or  any
Transaction  Document,  (ii) any claim, debt, obligation or liability of PMSI or
Prime,  and (iii) any actual or alleged actions or omissions by PMSI,  Prime, or
the  directors,  officers,  shareholders,  agents,  employees,  representatives,
subsidiaries and/or affiliates of either of PMSI or Prime occurring prior to the
Closing Date (regardless of whether such  Indemnified  Costs are asserted at any
time before or after the Closing Date).

                  (b) Each of PMSI and Prime,  jointly and severally,  agrees to
indemnify and promptly reimburse Seller and/or Caster, as and when incurred, for
any corporate  income and/or  corporate  franchise taxes that either or both the
State of  California or the United States  Internal  Revenue  Service may assess
against Seller as a result of the consummation of the transactions  contemplated
by Section 1.1 of this Agreement and only  (notwithstanding the other provisions
of this  ARTICLE)  those  actually  paid by Seller  (collectively,  the "Covered
Taxes"), together with one-half of any interest and penalties related to Covered
Taxes and one-half of any costs  (including  actual  attorney's  fees and costs)
arising  out of,  incurred  and paid by either or both of Seller  and  Caster in
connection  with any audit,  administrative  proceeding  or suit by or against a
taxing   authority  or  governmental   entity  related  to  any  Covered  Taxes.
Notwithstanding  the foregoing,  Prime's and PMSI's  aggregate  obligation under
this  subsection  (b) shall not  exceed  (i) an  amount  equal to the  lesser of
thirty-seven  and one half percent (37.5%) of the amount of any Covered Taxes or
$900,000, plus (ii) fifty percent (50%) of all interest and penalties related to
Covered  Taxes,  plus (iii) fifty percent (50%) of all costs  (including  actual
attorneys'  fees and costs) arising out of,  incurred and paid by either or both
of Seller and Caster in connection with any audit, administrative proceeding, or
suit by or against a taxing  authority  or  governmental  entity  related to any
Covered Taxes. Furthermore,  Prime's and PMSI's obligation under this subsection
(b) is contingent  on Seller's and Caster's  compliance  with their  obligations
under Section 7.2.  Seller and Caster,  jointly and  severally,  agree that they
shall  indemnify  Prime and PMSI from and against  any  Covered  Taxes (and such
related amounts described above) that are in excess of the amount Prime and PMSI
are required to pay pursuant to this subsection (b).

                  (c) Prior to receiving  indemnification  under this Section, a
Seller  Indemnified  Party  must seek  recovery  from then  existing  applicable
insurance  policies,  but in no event is a Seller  Indemnified Party required to
exhaust  remedies  against  insurance  companies  if coverage  is  non-existent,
limited or declined; provided, however, that the Seller Indemnified Party may be
required, upon request by the indemnifying parties, to obtain the advice of such
Seller Indemnified Party's own legal counsel advising that there is a reasonable
basis for denial of insurance of limitation of insurance coverage;  and provided
further,  that the Seller  Indemnified  Party must,  as a condition to receiving
recovery under this Section, assign whatever rights to denied benefits that such
Seller  Indemnified  Party  may  have and may  legally  assign,  subject  to any
contractual  or  other   limitations  on  assignment.   Without  in  any  manner
restricting  a  Seller  Indemnified   Party's  right  to  independently   obtain
insurance,  no Seller Indemnified Party shall be required to acquire or maintain
insurance as a condition to exercising its rights under this Section.

                  (d) For purposes of this Section 7.1 only, any decrease in the
value of a Seller Indemnified Party's ownership interest (if any) in Newco, as a
result of the acts,  omissions or circumstances  described in clause (a)(iii) of
this Section,  shall, to the extent indemnification with respect thereto has not
already  been  paid  directly  to a  Seller  Indemnified  Party,  be  deemed  an
Indemnified  Cost,  and such  Seller  Indemnified  Party  shall be  entitled  to
indemnification hereunder in an amount equal to such decrease in value.

                  (e)  Notwithstanding  any  provision of this  Agreement or any
other  Transaction  Document to the contrary,  none of Prime,  PMSI or any other
Prime Indemnified  Party may, and each hereby agrees not to, seek  contribution,
indemnification  or  reimbursement  from Newco for any  amount  Prime or PMSI is
required to pay pursuant to this ARTICLE,  regardless of whether Prime,  PMSI or
such other Prime Indemnified Party is entitled to contribution,  indemnification
or reimbursement under any Transaction Document, the organizational documents of
Newco or applicable law.

                  (f) Furthermore, the Seller Indemnified Parties, collectively,
may not, with respect to any Indemnified  Cost,  recover more than the aggregate
amount of such Indemnified Cost.

         7.2 Defense of Third-Party  Claims.  A Seller  Indemnified  Party shall
give prompt  written  notice to Prime of the  commencement  or  assertion of any
Third-Party  Action in respect of which such Seller Indemnified Party shall seek
indemnification  hereunder.  Any  failure so to notify  Prime  shall not relieve
Prime from any liability that it may have to such Seller Indemnified Party under
this ARTICLE  unless the failure to give such notice  materially  and  adversely
prejudices  Prime.  Prime shall have the right to assume  control of the defense
of, settle, or otherwise dispose of such Third-Party  Action on such terms as it
deems appropriate; provided, however, that:

     (a) The  Seller  Indemnified  Party  shall be  entitled,  at his or its own
expense, to participate in the defense of such Third-Party Action;

                  (b) Prime  shall  obtain  the prior  written  approval  of the
Seller  Indemnified  Party,  which approval shall not be unreasonably  withheld,
before  entering  into or  making  any  settlement,  compromise,  admission,  or
acknowledgment  of the validity of such  Third-Party  Action or any liability in
respect thereof if, pursuant to or as a result of such  settlement,  compromise,
admission,  or  acknowledgment,  injunctive or other  equitable  relief would be
imposed against the Seller Indemnified Party (provided, however, that Prime may,
but is not  obligated  to, pay  directly  to the  appropriate  agency or service
provider  any amount it is required to pay pursuant to Section  7.1(b),  without
obtaining the prior written approval of the Seller Indemnified Party);

                  (c) Prime  shall not  consent to the entry of any  judgment or
enter into any settlement that does not include as an unconditional term thereof
the  execution  and delivery of a release from all  liability in respect of such
Third-Party  Action by each  claimant  or  plaintiff  to, and in favor of,  each
Seller Indemnified Party; and

                  (d) Prime  shall not be  entitled  to  control  (but  shall be
entitled to  participate  at its own expense in the defense  of), and the Seller
Indemnified  Party shall be entitled to have sole control  over,  the defense or
settlement,  compromise,  admission, or acknowledgment of any Third-Party Action
as to which Prime fails to assume the defense within thirty (30) days; provided,
however, that the Seller Indemnified Party shall make no settlement, compromise,
admission,  or acknowledgment  which would give rise to liability on the part of
Prime  without the prior written  consent of Prime,  which consent may be given,
withheld, or conditioned in Prime's sole and absolute discretion.

                  (e) Prime shall make  payments  of all amounts  required to be
made pursuant to the foregoing  provisions of this ARTICLE to or for the account
of the Seller Indemnified Party from time to time promptly upon receipt of bills
or invoices  relating  thereto or when otherwise due and payable,  provided that
the Seller  Indemnified  Party has agreed in writing to reimburse  Prime for the
full  amount of such  payments  if the Seller  Indemnified  Party is  ultimately
determined not to be entitled to such indemnification.

                  (f) The parties hereto shall extend reasonable  cooperation in
connection with the defense of any  Third-Party  Action pursuant to this ARTICLE
and, in  connection  therewith,  shall furnish such  records,  information,  and
testimony and attend such conferences,  discovery proceedings, hearings, trials,
and appeals as may be reasonably requested.

                  (g) Notwithstanding  the foregoing  provisions of this Section
7.2, this subsection 7.2(g) shall apply with respect to the assertion of Covered
Taxes. Seller and Caster shall have the right to control the defense of, settle,
or otherwise  dispose of such  Third-Party  Action,  as long as they  vigorously
contest such Third-Party Action; provided, however, that Seller and Caster shall
not enter into any settlement or other  agreement with any  governmental  taxing
authority  regarding  Covered Taxes without having first obtained the consent of
Prime (not to be unreasonably  withheld).  Further,  Caster shall obtain Prime's
consent (not to be unreasonably withheld) on all material aspects of the defense
of such Third-Party Action, including without limitation,  the selection of lead
tax counsel, necessary appraisers, and, if necessary,  accountants.  Prime shall
cooperate fully with Caster and Seller to vigorously defend the assertion of any
Covered Taxes, and shall be entitled,  at its own expense, to participate in the
defense of such  Third-Party  Action.  The other  provisions of this Section 7.2
which are not inconsistent  with the terms of this subsection 7.2(g) shall apply
to Third Party Actions relating to the assertion of Covered Taxes.

                                  ARTICLE VIII

            Covenants Regarding Future Acquisitions and Developments

                        in Los Angeles County, California

8.1  Restrictions  on  Acquisitions  and  Development  in  Los  Angeles  County,
California.
                  (a) De Novo Development.  Except as expressly  provided below,
each of PMSI,  Prime, the Company and Caster agrees that,  following the Closing
Date, it will not,  without  obtaining  the prior  written  consent of the other
parties to this Agreement,  directly or indirectly through any affiliate, except
through Newco or one of its  subsidiaries,  develop or establish (which does not
include the acquisition of an existing facility) a facility equipped to perform,
among other things,  Refractive  Surgery (a "New Center"),  anywhere  within Los
Angeles County, California (the "Restricted Area").

                  (b) Acquisitions.  Except as expressly provided below, each of
PMSI, Prime, the Company and Caster agrees that,  following the Closing Date, it
will not,  without  obtaining the prior written  consent of the other parties to
this  Agreement,  directly or indirectly  through any affiliate,  except through
Newco or one of its subsidiaries,  acquire an existing facility or business,  or
convert  such  an  acquisition  into  a  facility  or  business,  that  provides
Refractive  Surgery as a substantial  component of its business  operations  (an
"Existing Center"), anywhere within the Restricted Area.

8.2 Additional  Qualifications,  Limitations.  In addition to the qualifications
and limitations set forth elsewhere in this ARTICLE, the following shall apply:

                  (a)  Notwithstanding  the provisions of Section 8.1, any party
shall be free to independently  develop or acquire all or any portion of any New
Center or any Existing Center (collectively,  "Target Centers" and individually,
"Target Center") whose physical location is outside the Restricted Area;

     (b) No provision of this Article shall be construed to require any party to
this Agreement to acquire or develop any Target Center;

                  (c)  Notwithstanding  the provisions of Section 8.1, any party
shall be free to  independently  acquire  all or any  portion  of the assets and
business of any Target  Center,  that are not related to  Refractive  Surgery or
ophthalmology,  regardless  of whether such Target  Center is in the  Restricted
Area,  to the  extent  those  assets and  business  are not used  primarily  in,
materially relied on for, or substantially  related to the conduct of Refractive
Surgery by such Target Center;

                  (d)  Notwithstanding the provisions of Section 8.1, as part of
a larger  acquisition  transaction  any  party  shall  be free to  independently
acquire,  or with respect to PMSI or Prime merge with, any existing business if,
with respect to such existing business, (i) the prior year's revenues that arose
from  Refractive  Surgery  comprise not more than ten percent (10%) of the total
prior year's revenues or (ii) the number of Refractive  Surgery  procedures done
during the prior year  within the  Restricted  Area  comprise  not more than ten
percent (10%) of the total number of Refractive  Surgery  procedures done during
the  prior  year;  provided,   however,  that  if  PMSI  acquires,  directly  or
indirectly,  an interest in a center that is located within the Restricted  Area
(an  "Incidental  Center"),  then PMSI shall,  to the extent  allowed  under the
credit facilities of PMSI and its subsidiaries,  within thirty (30) days of such
acquisition,  notify  Caster  thereof  and  provide  him with  such  information
concerning the Incidental Center as he shall reasonably request in order to make
his  investment  decision  hereunder),  and Caster  shall have  thirty (30) days
following  receipt of such  notice  within  which  Caster may elect to acquire a
forty percent (40%) profits  interest (not  ownership  interest) with respect to
PMSI's economic interest in such Incidental Center (the "Profits  Acquisition").
For example,  and only for  purposes of  illustration,  if a subsidiary  of PMSI
acquired a sixty percent (60%) ownership  interest in an Incidental  Center, the
Profits  Acquisition  pursuant to this  subsection  (d) would  enable  Caster to
acquire,  indirectly through such subsidiary,  the right to twenty-four  percent
(24%) of the profits of the Incidental  Center (i.e. 40% multiplied by 60%). The
closing of any Profits  Acquisition  must occur within sixty (60) days following
delivery of  Caster's  election  to acquire a profits  interest,  with the price
determined using the allocable portion of the purchase price paid by PMSI or its
affiliate in the acquisition giving rise to the Incidental Center, and upon such
other terms and conditions as may be negotiated by the parties in good faith. If
Caster  elects not to acquire a profits  interest in an  Incidental  Center,  or
fails to notify PMSI of his election to do so within the 30-day period  provided
above (which shall be deemed an election not to acquire), or if such acquisition
is prohibited under the credit facilities or subordinated debt indenture of PMSI
or its subsidiaries,  then PMSI must elect, or cause its acquiring subsidiary to
elect, among the following  alternative  actions,  which selected action must be
taken within the time period specified below.

                           (i)  Within  one  hundred  twenty  (120) days of such
         election  not  to  acquire  a  profits  interest,  Prime  or  PMSI,  as
         applicable,  shall convert the Incidental  Center to a Discount  Center
         (as hereinafter defined).

                           (ii)  Within one  hundred  twenty  (120) days of such
         election  not  to  acquire  a  profits  interest,  Prime  or  PMSI,  as
         applicable,  shall  terminate all of the operations of such  Incidental
         Center  that  consist of and are  reasonably  related to the conduct of
         Refractive Surgery.

                           (iii)  Within  one (1) year of such  election  not to
         acquire  a  profits  interest,  PMSI  shall  (but  only if PMSI has not
         elected  one of the  alternatives  specified  in  clauses  (i) and (ii)
         above) sell all of its direct or indirect  interest in such  Incidental
         Center to a third  party,  retaining  no interest of any kind,  whether
         direct or indirect,  in said  Incidental  Center  (except that PMSI may
         retain  a  creditor  interest,  but not a  profits  interest  or  other
         interest measured by operations or results of operations,  with respect
         to any deferred portion of the purchase price applicable to such sale);
         provided  further,  that PMSI  must  exercise  commercially  reasonable
         efforts  to sell  such  interest  as soon as  practical,  and PMSI will
         ensure that neither it nor any of its affiliates or  subsidiaries  will
         share  Proprietary   Information  (as  hereinafter  defined)  with  the
         Incidental Center pending such sale.

         8.3  Exceptions.  Notwithstanding  the  provisions  of Section 8.1, the
following  acquisitions  or  developments  of Target  Centers  located  or to be
located within the Restricted Area are permitted:

                  (a) Developments of Volume Centers. The development of any New
Center by any party if the following conditions are satisfied: (i) the standard,
undiscounted  fee that will generally be charged to the patients treated at such
New Center will be less than the product of fifty-four  percent (54%) multiplied
by the greater of (A) the Patient Fee (as defined in the Facility Use Agreement)
then being charged with respect to procedures done by Caster  utilizing  Newco's
facilities (taking into account any imminent or planned reductions by Newco) and
(B) $1,435 (such product is hereinafter  referred to as the  "Threshold  Patient
Fee", and a New Center satisfying the criteria in (i) is also referred to herein
as a "Discount  Center");  and (ii) Caster (if the developing party is Prime) or
Prime (if the  developing  party is Caster) has been offered the  opportunity to
purchase and receive up to ten percent (10%) of the interest  being  acquired by
the  developing  party  (or,  if the  developing  party is  Prime,  such  lesser
percentage  interest as would  allow  Prime to acquire  not less than  fifty-one
percent (51%) of the aggregate  ownership  interests of the New Center),  on the
same terms and conditions afforded the developing party; provided, however, that
nothing in this subsection (a) shall require that the developing  party be given
a guarantee  or other  financial  or credit  assistance  from Newco or any other
party;

                  (b) Developments of Luminary  Centers.  The development of any
New  Center by any party if the  following  conditions  are  satisfied:  (i) the
standard,  undiscounted  fee that will  generally  be  charged  to the  patients
treated at such New Center will be greater than the Threshold  Patient Fee; (ii)
Newco  has been  offered  the  opportunity  to  develop  the New  Center  but is
financially  unable to  develop  the New  Center  using its  existing  financial
resources (without requiring a guarantee or other financial or credit assistance
from any of its members or their affiliates),  as reasonably  determined in good
faith by the affirmative vote or written consent of two of the three managers of
Newco  (provided  that, as long as a Trigger Event has not previously  occurred,
Caster, Seller or their manager designee must be one of the affirming managers);
and  (iii)  two  of the  three  managers  of  Newco  elect  to  require  capital
contributions from Newco's members in order to develop such New Center (provided
that, as long as a Trigger Event has not previously occurred,  Caster, Seller or
their manager  designee must be one of the  affirming  managers),  and Caster or
Seller (if the developing  party is Prime) or Prime (if the developing  party is
Caster) fails to contribute to Newco its proportionate share (in accordance with
its membership interest in Newco) of the costs necessary to fund the development
of such New Center, in each case, on or before the date that development of such
New Center could begin following the determination  made in (ii) above.  Nothing
in this  subsection  (b)  shall  require  that the  developing  party be given a
guarantee or other financial or credit assistance from Newco or any other party.
Furthermore,  and notwithstanding the foregoing, neither Caster nor Seller shall
be required to make any  contribution  of any kind for the  development of a New
Center  undertaken  by Newco  without  Caster's or Seller's  manager  designees'
consent;  provided  this shall not be construed to allow the  revocation  of any
consent once given.

         8.4  Acquisition  of Existing  Centers.  In  determining  the manner of
funding an acquisition  of an Existing  Center desired by the managers of Newco,
Newco agrees to acquire the Existing  Center  using its own  resources  prior to
seeking contributions from its members;  provided further, that any contribution
sought by Newco from its members shall be allocated among the Members  according
to their respective  percentage  ownership  interests of Newco, and no member or
its affiliates shall be required to contribute its share of such contribution or
otherwise provide any money, or any guarantee or financial or credit assistance,
for such acquisition.  If, however,  two of the three managers of Newco elect to
require  capital  contributions  from  Newco's  members in order to acquire such
Existing  Center  (provided  that, as long as a Trigger Event has not previously
occurred,  Caster, Seller or their manager designee must be one of the affirming
managers),  such decision shall be final,  and if either Caster or Seller on the
one  hand,  or  Prime  on the  other  hand,  fails to  contribute  to Newco  its
proportionate share (in accordance with its membership interest in Newco) of the
costs necessary to acquire the Existing  Center,  in each case, on or before the
earliest  date such  Existing  Center can be acquired,  the other party shall be
entitled to  independently  acquire the  Existing  Center,  notwithstanding  the
provisions of Section 8.1.  Notwithstanding  the  foregoing,  neither Caster nor
Seller  shall  be  required  to  make  any  contribution  of any  kind  for  the
acquisition  of an  Existing  Center  undertaken  by Newco  without  Caster's or
Seller's  manager  designee's  consent;  provided this shall not be construed to
allow the revocation of any consent once given.

8.5 Automatic  Termination.  This entire ARTICLE shall terminate and become null
and void automatically:

                  (a) If any party to this Agreement:  (i) becomes insolvent, or
makes a transfer in fraud of creditors,  or makes an assignment  for the benefit
of creditors, or admits in writing its inability to pay its debts as they become
due; (ii) generally is not paying its debts as such debts become due, and one of
the other parties, in good faith,  determines that such event or condition could
frustrate  the  operation of this ARTICLE or  otherwise  inhibit the  delinquent
party's  ability  to  perform  its  obligations  under  this  Agreement  or  any
Transaction Document; (iii) has a receiver,  trustee or custodian appointed for,
or take  possession  of, all or  substantially  all of the assets of such party,
either in a proceeding  brought by such party or in a proceeding brought against
such party;  (iv) files a petition for relief under the United States Bankruptcy
Code or any other present or future federal or state  insolvency,  bankruptcy or
similar laws (all of the foregoing  hereinafter  collectively called "Applicable
Bankruptcy  Law"),  or an involuntary  petition for relief is filed against such
party under any  Applicable  Bankruptcy  Law, or an order for relief naming such
party is entered under any  Applicable  Bankruptcy  Law which is not  discharged
within ninety (90) days of filing, or any composition, rearrangement, extension,
reorganization or other relief of debtors now or hereafter existing is requested
or consented to by such party;  (v) fails to have discharged  within a period of
ninety (90) days any attachment,  sequestration  or similar writ levied upon, or
any claim against or affecting, any property of such party; or (vi) fails to pay
within thirty (30) days any final money judgment  against such party (the events
described in this Section are hereinafter referred to as "Bankruptcy Events");

                  (b) If, at any time after the Closing,  Caster, Seller and any
entity owned or  controlled by Caster,  and all  Permitted  Trusts and Permitted
Entities,  collectively  own less  than  forty  (40%) of the  total  outstanding
membership  interests  of Newco  (after  assuming  the  conversion,  exchange or
exercise of any and all securities or rights  convertible  into, or exchangeable
or exercisable for, ownership interests of Newco), unless and only to the extent
Prime  consented  in writing to the  transaction(s)  that caused the decrease in
Caster's, Seller's and such other entities' percentage ownership of Newco;

                  (c) upon  the  expiration  or  termination  of the  Restricted
Period (as hereinafter defined), unless and as long as Caster is still complying
with the  provisions  of Section  9.3(b)  hereof as if there was no six (6) year
limitation on the obligations contained in Section 9.3(b);

     (d) upon a material  breach  (subject  to any  applicable  cure  period) by
either party of the provisions of this ARTICLE or ARTICLE IX; or

                  (e)      upon the death or Permanent Disability of Caster.

                                   ARTICLE IX

                              Restrictive Covenants

         9.1 Confidentiality  Agreement.  Each of Caster, Seller, PMSI and Prime
agrees that it has been and may continue to be,  through its  relationship  with
Newco,  exposed to confidential  information and trade secrets pertaining to, or
arising  from,  the business of the other  parties  hereto  (including,  without
limitation,  Newco)  and/or  each  of  the  other  parties'  present  or  future
affiliates  (which,  with  respect to Prime and PMSI,  includes  each present or
future  affiliate or subsidiary of PMSI) (in any instance,  the party or parties
to whom such information  belongs are hereinafter  referred to, individually and
collectively, as "Discloser"). The parties agree that such information and trade
secrets are unique and valuable  and that  Discloser  would  suffer  irreparable
injury  if  this  information  or  trade  secrets  were  divulged  to  those  in
competition with Discloser.  Therefore,  each of Caster,  Seller, Prime and PMSI
agrees to keep in strict  secrecy  and  confidence,  both  during  and after the
period  during  which  Discloser  owns  any  interest  in  Newco,  any  and  all
information  concerning  Discloser which it acquires,  or to which it has access
through its relationship with Discloser, that has not been publicly disclosed by
Discloser  or  that  is not a  matter  of  common  knowledge  among  Discloser's
competitors   (collectively,   "Proprietary   Information").   The   Proprietary
Information of Discloser covered by this Agreement shall include,  but shall not
be limited to, information of Discloser  relating to any inventions,  processes,
software, formulae, plans, devices, compilations of information, technical data,
mailing lists,  management  strategies,  business distribution methods, names of
suppliers  (of both goods and services)  and  customers,  names of employees and
terms of  employment,  arrangements  entered into with  suppliers and customers,
including, but not limited to, proposed expansion plans of Discloser,  marketing
and other  business  and pricing  strategies,  and trade  secrets of  Discloser.
Notwithstanding   the  foregoing,   "Proprietary   Information"   shall  exclude
confidential  information and trade secrets (a)  substantially  pertaining to or
arising  from the business of Seller and Caster prior to the Closing Date or (b)
that constitute the practice of medicine.

         Except  with  prior  written  approval  of  Discloser,  each of Caster,
Seller,  Prime and PMSI agrees  that it will not:  (i)  directly or  indirectly,
disclose any Proprietary  Information to any person except authorized  personnel
of Discloser or (ii) use Proprietary Information in any way; provided,  however,
that  nothing  in  this  Section  shall  preclude  Prime  from   disclosing  the
Proprietary  Information  of Newco for the purpose of benefiting  affiliates and
subsidiaries  of  Prime or PMSI  that  operate  other  centers  in a manner  not
prohibited by this Agreement. Within forty-eight (48) hours of the time at which
any of Caster,  Seller,  Prime or PMSI no longer directly or indirectly owns any
voting equity interests in Newco, whether the result of voluntary or involuntary
disposition,  such party will deliver to the remaining  owners of Newco (without
retaining  copies  thereof)  all  documents,  records or other  memorializations
including copies of documents and any notes which it has prepared,  that contain
Proprietary  Information  or  relate to  Newco's  business,  all other  tangible
Proprietary  Information in its possession or control, and all of Newco's credit
cards,  keys,  equipment,  vehicles,  supplies and other  materials  that are in
possession or under its control.

         The  provisions of this Section shall not limit or restrict any party's
communications  with its personal  consultants or advisors,  including,  without
limitation, its attorneys, accountants and financial advisors.

         9.2  Non-Solicitation  and  Non-Interference  Agreement.  Each  of  the
parties to this Agreement  hereby agrees that during the  Restricted  Period (as
hereinafter  defined),  and  thereafter  as long as Caster is  retired  from the
practice of medicine,  such party will not,  directly or indirectly,  either for
its own benefit or for the  benefit of any other  person,  corporation  or other
entity,  without  the  prior  written  consent  of the  other  parties  to  this
Agreement,  commit any of the  following  acts,  which acts shall be  considered
violations of this Section:

                  (y) Request or advise any person, firm, physician, corporation
or other  entity  having a  business  relationship  with  another  party to this
Agreement (or any of such party's affiliates),  to withdraw,  curtail, or cancel
its business with such party; or

                  (z) Hire any  employee  of, or induce or attempt to induce the
termination  of such  employee's  employment by, another party to this Agreement
(or any of such party's affiliates).

         9.3      Exclusive Use and Efforts Agreement.

                  (a) As used in this Agreement,  the "Restricted  Period" shall
mean the period of time beginning on the Closing Date and ending on the later of
(i) the  expiration  of eight (8) years  following  the Closing Date or (ii) the
expiration of two and one-half (2.5) years following  delivery of written notice
by Caster stating that Caster desires to terminate the terms of this Section 9.3
(the  "Termination  Notice");  provided,  that Caster cannot  deliver  notice of
termination  prior to the expiration of five and one-half (5.5) years  following
the  Closing  Date,  and any  Termination  Notice  may be  withdrawn  in writing
delivered  to Prime  (which  Prime may reject in writing in its sole  discretion
within fifteen days of receiving the withdrawal  notice) prior to the expiration
of  two  and  one-half  (2.5)  years  following   delivery   thereof  (with  the
understanding  that,  if the  Withdrawal  Notice is not  rejected by Prime,  the
Restricted Period will remain in effect until the expiration of a contiguous two
and one-half (2.5) year period  following  delivery of a subsequent  Termination
Notice that is not  withdrawn).  Except as expressly  otherwise  provided in the
immediately following sentence, and notwithstanding the provisions of subsection
(b) below, during the Restricted Period,  Caster hereby agrees that Caster will,
and will direct any other medically  trained or licensed  medical  professionals
under the direction or control of Caster to, perform  Refractive Surgery and any
services related to Refractive Surgery at and using the facilities and equipment
of Newco.  Notwithstanding  the foregoing,  the parties agree that the following
shall not be a breach by Caster of this Section  (including  the  provisions  of
subsection (b) below): (i) the performance of procedures by Caster at a facility
described  in Section  10.8  hereof,  but only to the extent and  subject to the
conditions  under which such  procedures  are allowed under Section 10.8 hereof;
(ii) the performance of procedures by Caster at a facility  described in Section
10.9 hereof,  but only to the extent and subject to the  conditions  under which
such  procedures  are allowed  under  Section  10.9  hereof;  or (iii)  Caster's
cessation  of his  professional  medical  services  at the end of six (6) months
following  Caster's  notice of termination as described in this Section  9.3(a).
Furthermore,  Caster's inability to comply with this subsection (a) because of a
temporary disability occurring during the period while Caster is obligated under
subsection  (b) below shall not be deemed a breach of this  subsection  (a), but
the  running of the  Restricted  Period  shall be tolled  until such time as the
temporary  disability no longer prevents  compliance with the obligations  under
subsection (b).

                  (b)  Without   limiting  or  restricting   the  provisions  of
subsection  (a) of this Section,  Caster further agrees that, at all times prior
to the  expiration  of six (6) years  immediately  following  the Closing  Date,
Caster  shall  devote  Caster's  full  business  time and  attention  (above  or
consistent  with Caster's  practices  prior to the Effective  Time) to rendering
professional ophthalmic and medical services in Beverly Hills, California or the
immediate  vicinity  thereof.  Without limiting or restricting the provisions of
subsection (a) of this Section,  the parties agree that the following  shall not
be a breach by Caster of this  subsection  (b): (i) the devotion of a reasonable
amount of time to charitable  and community  activities;  (ii) the management of
personal investments that are passive in nature; (iii) the writing or editing of
books,  articles  and  journals or other  literature  pertaining  to  Refractive
Surgery,  ophthalmology,  or the practice of medicine;  (iv) Caster's  taking of
vacation, holidays or sick time consistent with past practices; (v) the death or
Permanent  Disability of Caster; (vi) attending  continuing  education and other
professional  conferences;  (vii) the  management  of any interest in any Target
Center  independently  acquired by Caster  pursuant to ARTICLE VIII  hereof;  or
(viii) the management of any center established pursuant to Section 10.8 hereof,
but only to the extent allowed under Section 10.8 hereof; provided however, that
the time and effort  spent on  activities  described in clauses (i) through (iv)
and (vi)  (inclusive) of this sentence must be below or consistent with the time
and effort  devoted to such matters  prior to the  Effective  Time.  The parties
expressly  acknowledge and agree that (I) Caster's inability to comply with this
subsection (b) because of a temporary disability shall not be deemed a breach of
this  subsection  (b),  but the running of six (6) year period  described  above
shall be tolled until such time as the temporary  disability no longer  prevents
compliance,  and (II) without  limiting the  application of this subsection (b),
the retirement or cessation by Caster of  professional  medical  services during
the six (6) year  period  described  above  (as  extended  due to any  temporary
disability) shall necessarily be a breach and default under this subsection (b).

         9.4  Practice  of  Medicine.  Notwithstanding  any  provision  of  this
Agreement or any other Transaction  Document to the contrary,  the provisions of
this ARTICLE shall not be construed to require  Caster,  or any other  medically
trained or licensed  medical  professionals  under the  direction  or control of
Caster, to perform Refractive Surgery at the facilities of, or use the equipment
of,  Newco,  if in Caster's  professional  medical  judgment,  such use would be
detrimental to Caster's  patients.  Provided further,  that this Agreement shall
not apply to any Refractive Surgery or related services that are to be paid for,
or reimbursed by,  Medicare,  Medicaid,  Champus,  or any other state or federal
health  care  program,  or in any other  instance  where the  operation  of this
Agreement would constitute a violation of applicable law.

         9.5 Compliance with Applicable Law. In accordance with Texas Business &
Commerce  Code  Section  15.50  (the  "Applicable  Statutory  Provision"),  this
Agreement hereby provides for the following:

     (a)  Caster  shall  not  hereby be  denied  access to any list of  Caster's
patients whom Caster has seen or treated;

                  (b)  Caster  shall  not  hereby be  denied  access to  medical
records of Caster's patients upon  authorization of the patient,  and any copies
of such medical records obtained or possessed by any of PMSI,  Prime,  Seller or
Newco shall be provided to Caster for a  reasonable  fee as  established  by the
Texas State Board of Medical  Examiners under Section 5.08(o),  Medical Practice
Act (Article 4495b, Vernon's Texas Civil Statutes);

                  (c)  access  to any  such  list  of  patients  or to any  such
patients'  medical records  referred to in (i) or (ii) above,  shall not require
such list or records to be  provided  in a format  different  than that by which
such records are maintained, except by the mutual consent of Newco and Caster;

                  (d) Caster  shall be  entitled to buy out his  performance  of
obligations  arising under Sections 9.2 and 9.3 of this Agreement (but only such
obligations  as is  necessary  in order for this  Agreement  to comply  with the
Applicable  Statutory  Provision) for an amount equal to the Aggregate  Purchase
Price, less any amounts paid pursuant to Section 9.7 hereof; provided,  however,
that in order for such buy out to be effective, Caster must also convey or cause
to be conveyed,  free of any  encumbrance,  any equity interest in Newco held by
either Caster or Seller; and

                  (e)  Caster  shall not  hereby be  prohibited  from  providing
continuing  care and  treatment  to a specific  patient or  patients  during the
course of an acute illness.

         Caster  agrees  that the buy out amount set forth in this  Section is a
reasonable  price and  represents a fair value for his  performance  of Caster's
obligations  hereunder.  Caster  and Prime have each  elected  to  utilize  such
reasonable  price in lieu of arbitration  pursuant to the  Applicable  Statutory
Provision.

         9.6  Restrictions  Reasonable.  Each  party  hereto  has  reviewed  and
carefully  considered the provisions of this ARTICLE and, having done so, agrees
that the  restrictions  applicable  to it as set forth  herein  (a) are fair and
reasonable with respect to time,  geographic area and scope,  (b) are not unduly
burdensome  to it, and (c) are  reasonably  required for the  protection  of the
interests of the other parties hereto for whose benefit such  restrictions  were
agreed upon.

         9.7      Remedies.

                  (a) General. Each party agrees that a violation on its part of
any applicable  covenant contained in this ARTICLE or in ARTICLE VIII will cause
the other parties  hereto for whose benefit such  restrictions  were agreed upon
irreparable  damage for which remedies at law may be insufficient,  and for that
reason,  it agrees that the other parties shall be entitled as a matter of right
to equitable  remedies,  including  specific  performance and injunctive relief,
therefor;  provided,  however,  that no party shall be entitled to seek specific
performance  or  injunctive  relief  (except for a breach of the  provisions  of
Section 9.1) if Prime, PMSI or any of their affiliates has received full payment
from Caster of the liquidated damages provided for in (b) below.

                  (b) Liquidated Damages. Because of the difficulty of measuring
economic  losses to the other  parties as a result of a  material  breach of any
provision  of this  ARTICLE or ARTICLE  VIII  (subject to any right to cure such
breach),  the parties agree that, in the event of such a breach by Caster and/or
Seller,  (i) Caster and Seller shall be obligated to pay to Prime as  liquidated
damages,  an amount determined by multiplying the Aggregate  Purchase Price by a
fraction,  the numerator of which is the  difference  between sixty (60) and the
number of entire  consecutive  months passed after the Closing Date and prior to
such breach,  and the denominator of which is the number sixty (60), (ii) Prime,
PMSI and  Newco  shall be  released  from all of their  obligations  under  this
ARTICLE   (excluding   the   provisions   of  Section  9.1  which  shall  remain
enforceable), ARTICLE VIII and, to the extent elected by Prime, the Facility Use
Agreement,  and (iii)  Caster and Seller  shall  lose,  and hereby  agree not to
exercise  or seek to  exercise  (directly  or  through  any  otherwise  required
approval of a Caster or Seller designated manager of Newco), any mandatory right
of approval or consent as a member or manager (or through a manager designee) of
Newco and which mandatory right of approval or consent is otherwise  required or
provided for in this  Agreement or any other  Transaction  Document  (including,
without  limitation,   Newco's  Limited  Liability  Company  Agreement).  It  is
understood  and agreed  that the  provisions  of clause  (iii) of the  preceding
sentence is not intended,  and should not be construed,  to result in any of the
following:  (x) the  requirement  that  Caster or Seller be required to make any
capital  contribution  to Newco after the Closing  without  Caster's or Seller's
consent or the  consent of  Caster's  or  Seller's  manager  designee  (it being
understood that this is not intended to allow the revocation of any consent once
given),  (y) Newco being relieved of its obligation to make distributions to pay
taxes as provided in Section 5.2 of Newco's Limited Liability Company Agreement,
or (z) Caster, Seller or any Caster or Seller designated manager of Newco losing
any approval or consent  rights  which arise  solely under the Delaware  Limited
Liability  Company  Act  and not  under  the  terms  of  this  Agreement  or Any
Transaction  Document.  Upon payment of such liquidated damages to Prime, Caster
and Seller  shall be excused  from any further  performance  under this  ARTICLE
(excluding  the  provisions  of Section  9.1 which  shall  remain  enforceable),
ARTICLE VIII and the Facility Use Agreement. Each of PMSI and Prime agrees that,
in the event of a material  breach of this ARTICLE or ARTICLE  VIII  (subject to
any right to cure such  breach),  Caster  and Seller  shall be excused  from any
further  performance under this ARTICLE (excluding the provisions of Section 9.1
which shall  remain  enforceable),  ARTICLE  VIII and, to the extent  elected by
Caster and Seller, the Facility Use Agreement.

                  (c) Cure Right. As a condition to the right of a party to seek
any remedy under this Agreement  (excluding  injunctive  relief),  the breaching
party shall be given thirty (30) days  following  delivery of written  notice by
the party asserting the breach,  identifying such material breach,  within which
the breaching party may attempt to cure such material  breach;  and, such 30-day
period  shall  be  extended  up to  sixty  (60)  additional  days as long as the
breaching  party  is  diligently   attempting  to  cure  such  material  breach.
Notwithstanding  the foregoing or any other  provision of this  Agreement or any
other  Transaction  Document,  the parties  agree that a breach by Caster of the
provisions of Section 9.3(b) of this Agreement cannot be cured.

                  (d)  Death  or  Permanent   Disability.   The  parties  hereby
acknowledge and agree that, although the death or Permanent Disability of Caster
shall not be a breach of any of the provisions of this  Agreement,  Prime,  PMSI
and Newco shall have the following rights upon the occurrence of either Caster's
death or Permanent Disability:  (i) Prime, PMSI and Newco shall be released from
all of their obligations under this ARTICLE (excluding the provisions of Section
9.1 which shall remain enforceable),  ARTICLE VIII and, to the extent elected by
Prime, the Facility Use Agreement.

                                    ARTICLE X

                             Post Closing Agreements

         10.1  Transition  of  Business.  Each of Caster  and  Seller  agrees to
cooperate  fully with Prime and Newco in  transitioning  the  Business  existing
prior to the  Closing,  including  the  relationships  maintained  by Caster and
Seller with respect to the  Business,  to Newco after the Closing;  and, each of
Prime,  PMSI,  Caster  and  Seller  agrees  not to take any  action  or make any
disclosure,  including  disclosures related to the transactions  contemplated by
this Agreement,  which might alter or impair any relationship  with any patient,
or other  service  recipient,  person or entity which did  business  with Seller
prior to the Closing.

         10.2 Right of Set Off.  Caster and Seller  agree that Newco  shall have
rights of offset  against  distributions  to them in  respect  of any  ownership
interest they may have in Newco at any time  following the Closing,  for any and
all debts,  obligations or liabilities that they may have to Prime,  PMSI or any
affiliate or subsidiary of PMSI,  including,  without limitation,  any liability
arising  out of or  relating  to  its  obligations  under  Section  6.1 of  this
Agreement,  or  other  obligations  owed  under  this  Agreement  or  any  other
Transaction Document. Caster and Seller each hereby authorizes and directs Newco
to, and hereby  agrees that Newco is entitled  to,  withhold and pay such offset
amounts to Prime and to take all other  actions  necessary to make such payment.
Newco hereby agrees to promptly  remit any and all such offset  amounts to Prime
upon request.

         Without limiting or adversely  affecting the rights of Prime under this
Section,  and in order to secure full and prompt  payment of the  obligations of
Caster and Seller  under this  Agreement  and each other  Transaction  Document,
Caster and Seller hereby grant to Prime a continuing security interest in and to
distributions  they may be  entitled to receive at any time after the Closing in
respect of any ownership  interest held by them in Newco. In connection with the
grant of a  security  interest  contained  in this  Section,  each of Caster and
Seller  agrees  (i)  to  execute  all  documents,  agreements,  instruments  and
certificates,  and to take such other actions,  as are  reasonably  necessary in
order to fully  evidence and perfect such security  interest,  and (ii) that it,
for a period of five (5) years after the Closing,  will not,  without  obtaining
the express prior written consent of Prime in each instance,  grant or assign to
any person or entity  rights of any nature in the  distributions  covered by the
security  interest granted in this Section,  irrespective of whether such rights
are to be senior or  subordinate  to the  rights  granted  under  this  Section;
provided,  however,  that clause (ii) shall not prohibit Permitted Transfers (as
such term is defined in the Organizational  Documents) of its ownership interest
in Newco,  as long as the  transferee  (A) executes a certificate  acknowledging
that such  distributions  with  respect to the  ownership  interest  transferred
remain  subject to the offset  rights and security  interest  granted under this
Section as though  such  transferee  and it were one and the same person and (B)
executes and consents to the filing of all  documents,  agreements,  instruments
and  certificates,  and takes such other  actions,  as are necessary in order to
fully evidence and perfect such security interest.

         Caster and Seller acknowledge and agree that the rights and obligations
contained in this Section shall remain  attached to any membership  interests of
Newco  conveyed by them,  regardless  of whether the  conveyance  was  permitted
pursuant  to the  Organizational  Documents  and/or  consented  to by Prime.  In
addition,  Prime may require any such  transferee  to execute an  acknowledgment
recognizing the  applicability  of the rights and obligations  contained in this
Section to the membership interest transferred.

         10.3  Ratification  by Newco.  Each of Prime,  Caster and Seller agrees
that by  executing  this  Agreement  it is  deemed to be  voting  any  ownership
interests it may have in Newco (whether now or at any time after the Closing) to
authorize  Newco to enter into and perform this  Agreement and each of the other
Transaction  Documents  to which  Newco is a party.  Each of Prime,  Caster  and
Seller agrees to execute such  resolutions and written  consents,  and take such
other  actions,  in their  capacities  as owners of  Newco,  as any party  shall
reasonably  require  after the  Closing  to have  Newco  ratify  and adopt  this
Agreement,  notwithstanding  the  time  of  creation  of  Newco  or the  time of
execution of the Organizational Documents.

         10.4 Post-Closing Capital Contributions.  All parties to this Agreement
acknowledge  and agree  that no member of Newco,  nor any other  party,  has any
obligation after the Closing to make a capital  contribution to Newco, except as
may be expressly provided otherwise in Section 8.3 hereof or pursuant to Newco's
Limited Liability Company Agreement.

         10.5 Legend.  On and after the Closing,  each  certificate  or document
representing Caster's, Seller's or Prime's ownership of any of Newco's ownership
interests,  and each certificate or document that may be issued and delivered by
Newco  upon   transfer  of  any  such   certificate,   shall  contain  a  legend
conspicuously noted in substantially the following form:

         THE INTERESTS  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
     UNDER THE  SECURITIES  ACT OF 1933, AND THEY MAY NOT BE SOLD OR TRANSFERRED
     EXCEPT  PURSUANT TO AN EXEMPTION  FROM, OR OTHERWISE IN A  TRANSACTION  NOT
     SUBJECT TO, THE REGISTRATION REQUIREMENTS OF SUCH ACT.

         IN ADDITION,  SUCH INTERESTS MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH
     CERTAIN CONDITIONS SPECIFIED IN (I) A CERTAIN CONTRIBUTION  AGREEMENT DATED
     EFFECTIVE AS OF MARCH 1, 2000,  AND (II) THE  COMPANY'S  LIMITED  LIABILITY
     COMPANY  AGREEMENT,  COMPLETE AND CORRECT COPIES OF WHICH ARE AVAILABLE FOR
     INSPECTION AT THE PRINCIPAL  OFFICE OF THE COMPANY AND WILL BE FURNISHED TO
     THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

         10.6 Covenants  Relating to Westside.  Caster hereby  covenants that he
will not transfer, assign or encumber in any way any of his capital stock of (or
other  ownership  interests in) Westside or allow  Westside to issue any capital
stock  or  other  rights  or  interests  convertible  into,  or  exercisable  or
exchangeable for, its capital stock. Caster further agrees, in Caster's capacity
as the sole owner of all of the outstanding  capital stock of Westside,  to take
all actions (including,  without limitation, the election of new directors) that
may be  necessary to cause  Westside,  notwithstanding  any  existing  contract,
agreement  or  arrangement  between  Westside  and  Seller  and/or  Newco to the
contrary,  (a) to operate  exclusively for the benefit of Newco, (b) to continue
to perform,  for the benefit of Newco, the same services that Westside performed
for Seller prior to the Closing,  and any additional  services determined by the
affirmative  vote or  written  consent  of two of the  three  managers  of Newco
(provided that, as long as a Trigger Event has not previously occurred),  Caster
or Seller's  manager  designee  must be one of the affirming  managers),  (c) to
promptly remit to Newco,  without request therefor,  all gross revenues received
by Westside for services  provided after the Effective  Time,  regardless of the
source of such  revenues,  without  offset or deduction made for any expenses or
costs  of  Westside  of any  nature.  As  long as  Westside  complies  with  the
foregoing,  Newco shall  reimburse  Westside for its accounting and tax expenses
paid to unrelated third parties and incurred solely as a result of its provision
of  services  to Newco  following  the  Closing  Date.  As a  condition  to such
reimbursement,  the amount of such  expenses  must have been  agreed upon by the
affirmative  vote or  written  consent  of two of the  three  managers  of Newco
(provided that, as long as a Trigger Event has not previously  occurred,  Caster
or Seller's manager designee must be one of the affirming managers).

         10.7  Warrants.  As partial  consideration  for Caster's  covenants and
agreements  contained herein, PMSI agrees that it shall, subject to satisfaction
of the conditions set forth in this Section, issue to Caster, on or before April
30 in the years 2001,  2002,  2003,  2004 and 2005 (the "Warrant  Issue Dates"),
five  warrants  (one on each  Warrant  Issue  Date)  in  substantially  the form
attached hereto as Exhibit D (the "Warrants"), each entitling Caster to purchase
twenty  thousand  (20,000)  shares  (as  adjusted  for any stock  splits,  stock
dividends, recapitalizations and the like after the Effective Time) of $0.01 par
value common stock of PMSI. As used herein, a "Warrant Issue Period" shall mean,
with respect to any Warrant Issue Date,  the preceding  twelve (12) month period
ending  on the last day of  February  of that  year.  As a  condition  to PMSI's
obligation  to issue a Warrant  on the  Warrant  Issue  Date of April 30,  2001,
Newco's consolidated net income,  determined using generally accepted accounting
principles  consistently applied ("Consolidated Net Income"), for the respective
Warrant  Issue  Period  must  exceed one hundred  twenty  percent  (120%) of the
Consolidated  Net  Income  for the  period  beginning  March 1, 1999 and  ending
February 29, 2000. As a condition to PMSI's obligation to issue a Warrant on any
of the  Warrant  Issue  Dates in the years 2002,  2003,  2004 and 2005,  Newco's
increase in Consolidated Net Income for the respective Warrant Issue Period must
exceed a target  amount to be determined in advance of each Warrant Issue Period
by the vote or written consent of two of the three managers of Newco;  provided,
however,  that such target amount cannot exceed (a) one hundred  twenty  percent
(120%) of the Consolidated Net Income for the Warrant Issue Period ending on the
last day of February in the full calendar year immediately preceding the Warrant
Issue  Date,  or (b) with  respect  to  Warrants  issuable  on or after the 2003
Warrant Issue Date, one hundred  forty-four  percent (144%) of the  Consolidated
Net Income for the Warrant  Issue  Period  ending on the last day of February in
the second most recent full calendar year that precedes the Warrant Issue Date.

         The rights under each  Warrant  issued  pursuant to this Section  shall
vest twenty  percent (20%) upon the  expiration of each full year  following the
date of grant,  until  completely  vested,  and the Warrant and any  unexercised
right to purchase shares shall terminate  immediately upon the expiration of six
(6) years following the date of grant.  The per share exercise price  applicable
to each  Warrant  shall equal one hundred  percent  (100%) of the average of the
closing NASDAQ per share price for the ten (10) trading days  immediately  prior
to  December  31 of the  year  immediately  preceding  the date of grant of such
Warrant.  The total maximum  number of shares with respect to which Warrants may
be issued  pursuant  to this  Section  is one  hundred  thousand  (100,000)  (as
adjusted for any stock splits, stock dividends,  recapitalizations  and the like
after the  Effective  Time).  The total  maximum  number of Warrants that may be
issued pursuant to this Section is five (5).

         10.8 Mexico  Facility.  The parties  agree  that,  notwithstanding  the
provisions  of Section  9.3,  and  subject to the terms and  conditions  of this
Section,  Caster  shall be entitled to invest in and perform  procedures  at any
center in the country of Mexico that  provides  the  performance  of  Refractive
Surgery  procedures that cannot,  at the time such procedures are performed,  be
lawfully  performed  in the United  States;  provided,  however,  that  Caster's
investment  in  and/or  use of such a  facility  shall  be at any  point in time
restricted to a single facility identified in written notice delivered by Caster
to Prime,  and Caster may elect to change the  facility  by  delivering  written
notice to Prime naming the successor facility (the "Mexico Center").  Caster may
not spend more than twelve (12) days per calendar year performing  procedures at
the Mexico  Center,  and all twelve (12) of those days must occur on  Saturdays,
Sundays, or calendar days that Caster has not historically  performed procedures
at  Seller's  facilities.  Caster  may only  perform  procedures  at the  Mexico
Facility if, at the time such procedures are performed,  they cannot be lawfully
performed in the United States. In addition,  as a condition to the availability
of Caster's rights under this Section, all pre-operative and post-operative care
related to procedures performed at the Mexico Center must, to the extent legally
permitted, be done at Newco's center and using Newco's facilities.  Caster shall
be solely entitled to the surgeon fees arising out of any operation described in
this Section. For purposes of this Section,  "surgeon fees" shall mean the total
fees for the  surgical  procedure  less (a) travel  expenses  for Caster and the
patient  and (b) the  amounts  paid  for the  use of the  Mexico  facility,  its
equipment and supplies.  Notwithstanding the foregoing  sentence,  Newco will be
entitled to a  co-management  fee in an amount equal to twenty  percent (20%) of
the surgeon fees.

         10.9 Autonomous  Laser Center.  The parties  acknowledge that Caster is
currently  performing certain  procedures at the Cedars-Sinai  facility using an
autonomous laser that, in light of the nature of such  procedures,  is deemed by
Caster to be a medically necessary  alternative to the lasers owned or leased by
Seller at the time of Closing.  The  parties  agree  that,  notwithstanding  the
provisions  of Section  9.3,  and  subject to the terms and  conditions  of this
Section,  Caster shall be entitled to perform  procedures at (but not invest in,
manage or benefit from any similar  relationship)  a facility  (which can be the
Cedars-Sinai facility) providing use of an autonomous laser of substantially the
type located at the Cedars-Sinai facility (the "Autonomous  Center");  provided,
however,  that Caster may only perform at the Autonomous Center those procedures
that (a) in Caster's medical judgment,  cannot be performed using the facilities
or equipment  made  available at such time by Newco and (b) cannot,  in Caster's
judgment,  be postponed  until such time as Newco is able to make  available the
necessary  facilities.  In  addition,  as a  condition  to the  availability  of
Caster's  rights under this Section,  the full Facility Usage Fee (as defined in
the  Facility  Use  Agreement)  that would have been  payable if Caster had used
Newco's  facilities  shall be paid to Newco,  and Newco  shall pay any  facility
usage fee owed to the  Autonomous  Center  (not to  exceed  the  amount  paid to
Newco).

         10.10 Insurance  After Closing.  The parties hereto agree that Schedule
3.10 attached  hereto sets forth all of the insurance  relating to or benefiting
Newco (and the other insureds  described  therein) or Newco's  business that are
required to be in force immediately following the Closing, and each party agrees
to cause Newco to maintain  such  insurance in effect,  and with the  additional
assureds described on Schedule 3.10 in accordance with the provisions of Newco's
Limited Liability Company Agreement governing changes to insurance. In addition,
Newco  hereby  agrees  that if both  Seller and Prime are  members of Newco upon
Caster's retirement from the practice of medicine, Newco will, as long as Caster
and Seller are not then in material  breach of this Agreement or any Transaction
Document  (subject  to any  right to  cure),  acquire  a tail  insurance  policy
providing coverage substantially similar to the coverage benefiting Caster prior
to such  retirement,  for a period of time  customarily  applicable  to retiring
physicians in ophthalmology.  Subject to the foregoing  obligations of Newco and
any  other  obligations  of Newco  pursuant  to its  Limited  Liability  Company
Agreement, each party may elect to acquire in its own name and maintain whatever
level or amount of insurance it desires, without seeking or obtaining the advice
or consent of the other parties hereto.

         10.11  Guarantees  By PMSI and Prime.  With respect to any  contractual
obligation  that is an Assumed  Liability  hereunder,  and that has been clearly
identified on Schedule 1.4 as having been personally  guaranteed by Caster, each
of Prime and PMSI agrees that it shall  guarantee  the same  obligation,  to the
same extent  actually  guaranteed  by Caster,  on a joint and several basis with
Caster,  when and if the party to whom such  obligation is owed seeks to enforce
Caster's  guaranty.  Caster shall give prompt  written notice to Prime after any
such party threatens or actually  commences any enforcement  action.  Caster and
PMSI  agree  that they shall bear any  liability  under such  guaranty  40%/60%,
respectively,  and shall  indemnify and hold the other  harmless from amounts in
excess thereof.

                                    ARTICLE X

                                  Miscellaneous

         11.1 Collateral  Agreements,  Amendments,  and Waivers.  This Agreement
(together with the other Transaction  Documents) supersedes all prior documents,
understandings,  and agreements,  oral or written,  relating to this transaction
and constitutes the entire  understanding  among the parties with respect to the
subject  matter  hereof.  Any  modification  or amendment  to, or waiver of, any
provision  of this  Agreement  (or any  Transaction  Document  unless  otherwise
expressly  provided  therein)  may be made  only  by an  instrument  in  writing
executed by each party thereto.

         11.2  Successors and Assigns.  No party's  rights or obligations  under
this Agreement may be assigned  without the prior written consent of all parties
hereto, except that Prime may assign its rights and obligations hereunder to any
entity,  more than fifty percent (50%) of the voting equity ownership  interests
of which is at the time owned,  directly or indirectly,  by PMSI. Any assignment
in violation of the foregoing  shall be null and void.  Subject to the preceding
sentences  of this  Section,  the  provisions  of this  Agreement  (and,  unless
otherwise  expressly  provided  therein,  of any Transaction  Document) shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors, and assigns.

         11.3  Expenses.   Except  as  set  forth  in  the  following  sentence,
regardless of whether the transactions contemplated hereby are consummated, each
party  hereto  shall  pay  all of  its  costs  and  expenses  incurred  by it in
connection  with this  Agreement,  including the fees and  disbursements  of its
legal counsel and accountants.  Notwithstanding  the foregoing,  up to $2,500 of
the costs and expenses  incurred by Prime that are associated  specifically with
the formation and documentation of Newco,  including legal fees and expenses for
drafting the Organizational  Documents,  shall be paid or reimbursed to Prime by
Newco.

         11.4 Invalid Provisions.  If any provision of this Agreement is held to
be  illegal,  invalid,  or  unenforceable  under  present or future  laws,  such
provision  shall be fully  severable,  this  Agreement  shall be  construed  and
enforced as if such  illegal,  invalid,  or  unenforceable  provision  had never
comprised  a part  of  this  Agreement,  and the  remaining  provisions  of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal,  invalid,  or  unenforceable  provision or by its  severance  from this
Agreement.

         11.5 Waiver. No failure or delay on the part of any party in exercising
any right, power, or privilege hereunder or under any of the documents delivered
in  connection  with this  Agreement  shall  operate as a waiver of such  right,
power, or privilege; nor shall any single or partial exercise of any such right,
power,  or  privilege  preclude  any other or  future  exercise  thereof  or the
exercise of any other right, power or privilege.

         11.6 Notices.  Any notices required or permitted to be given under this
Agreement (and, unless otherwise expressly provided therein,  under any document
delivered  pursuant  to this  Agreement)  shall be given in writing and shall be
deemed  received  (a) when  delivered  personally  or by courier  service to the
relevant  party at its address as set forth below or (b) if sent by mail, on the
third (3rd) day  following  the date when  deposited in the United  States mail,
certified or registered  mail,  postage  prepaid,  to the relevant  party at its
address indicated below:

Prime:                              1301 Capital of Texas Highway
                                    Suite C-300
                                    Austin, Texas 78746
                                    Attention: President

with a copy to:                     Mr. Timothy L. LaFrey
                                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                                    816 Congress Avenue, Suite 1900
                                    Austin, Texas 78701

Seller:                             Caster Eye Center Medical Group
                                    9100 Wilshire Boulevard, Suite 265E
                                    Beverly Hills, California  90212

                                            Attn:  Andrew Caster, M.D.

with a copy to:                     Mahoney Coppenrath & Jaffe LLP
                                    2049 Century Park East, Suite 2480
                                    Los Angeles, California  90067-3126
                                            Attn:  James E. Mahoney, Esq.

Caster:                             Andrew Caster, M.D.
                                    Caster Eye Center Medical Group
                                    9100 Wilshire Boulevard, Suite 265E
                                    Beverly Hills, California  90212

with a copy to:                     Mahoney Coppenrath & Jaffe LLP
                                    2049 Century Park East, Suite 2480
                                    Los Angeles, California  90067-3126
                                    Attn:  James E. Mahoney, Esq.

         Each party may change  its  address  for  purposes  of this  Section by
proper notice to the other parties.

         11.7 Survival of Representations, Warranties, and Covenants. Regardless
of any  investigation at any time made by or on behalf of any party hereto or of
any  information  any  party  may  have  in  respect  thereof,   all  covenants,
agreements, representations, and warranties made hereunder or pursuant hereto or
in  connection  with the  transactions  contemplated  hereby  shall  survive the
Closing.

         11.8 Further Assurances.  At, and from time to time after, the Closing,
each  party  shall,  at the  request  of  another  party,  but  without  further
consideration,  execute  and  deliver  such  other  instruments  of  conveyance,
assignment, assumption, transfer and delivery and take such other action as such
party may  reasonably  request  in order  more  effectively  to  consummate  the
transactions contemplated hereby.

         11.9  Construction,  Knowledge and Materiality.  This Agreement and any
documents or instruments  delivered  pursuant  hereto or in connection  herewith
shall be construed  without regard to the identity of the person who drafted the
various  provisions of the same.  Each and every provision of this Agreement and
such other  documents  and  instruments  shall be construed as though all of the
parties  participated  equally in the  drafting of the same.  Consequently,  the
parties  acknowledge and agree that any rule of construction  that a document is
to be construed  against the drafting  party shall not be  applicable  either to
this  Agreement or such other  documents and  instruments.  For purposes of this
Agreement,  whenever  there are references to "material" or  "materially,"  such
terms shall be deemed to mean an economic impact exceeding  $10,000 with respect
to the fact or matter being referred to or described.  As used herein,  "day" or
"days" refers to calendar days unless otherwise specified in each instance. When
the term  "knowledge"  is used in this  Agreement in reference to (i) Prime,  it
shall mean such items as are within the actual  knowledge of Ken  Shifrin,  Brad
Hummel,  Teena Belcik and John Hedrick and (ii) Seller, it shall mean such items
as are within the actual  knowledge  of Caster or any person  employed by Seller
prior to the  Closing  Date who  becomes an  employee of Newco after the Closing
Date.  For purposes of this  Agreement,  when the term  "affiliate" is used with
respect  to PMSI or Prime,  it shall not  include  Seller  or  Caster,  and when
"affiliate" is used with respect to Seller or Caster,  it shall not include PMSI
or Prime.

         11.10 Other  Agreements.  Each party  hereto  agrees that any  material
breach by it of any of the terms and provisions of another Transaction  Document
to which it is a party shall also be deemed to have been a material breach by it
of this Agreement, for all purposes.

     11.11  Governing Law. This Agreement  shall be governed by and construed in
accordance with the laws of the State of Texas.

         11.12 Arbitration.  Any controversy  between the parties regarding this
Agreement  or any other  Transaction  Document,  any claims  arising  out of any
breach or alleged breach of this Agreement or any other Transaction Document and
any claims arising out of the relationship between the parties created hereunder
shall  be  submitted  to  binding  arbitration  by  all  parties  involved.  The
arbitration  proceedings shall be conducted by a single arbitrator if the amount
in  controversy is less than  $2,000,000 and three  arbitrators if the amount in
controversy is more than $2,000,000.  Except as otherwise  expressly provided in
this Section,  the  arbitration  shall be conducted  pursuant to the  Commercial
Arbitration Rules of the American Arbitration Association. The arbitration shall
be  conducted  in Phoenix,  Arizona and the  arbitrator  shall have the right to
award actual  damages and  attorney  fees and costs  resulting  from a breach or
default by any party under this  Agreement,  any other  Transaction  Document or
otherwise,  consistent with the provisions of this Agreement, but shall not have
the right to award punitive or exemplary damages against either party.

         11.13   Counterparts.   This  Agreement  may  be  executed  in  several
counterparts,  each of  which  shall  constitute  an  original  and all of which
together  shall  constitute  one and the same  instrument.  Any party hereto may
execute this Agreement by signing any one counterpart.

                            [Signature page follows]


<PAGE>


S-1

                                SIGNATURE PAGE TO

                             CONTRIBUTION AGREEMENT

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the day and year first above written.

PMSI:                                       Prime Medical Services, Inc.

                                            Teena Belcik, Treasurer

Prime:                                      Prime Refractive, L.L.C.

                                            Teena Belcik, Treasurer

Newco:                              Caster One, L.L.C.

  Teena Belcik, signing as a manager of Newco
         and on behalf of Prime, as a member of Newco



  Andrew Caster, signing as both a manager
         and as president of Seller on behalf of Seller, as a member of Newco



Caster:
                                    Andrew Caster, M.D.

Seller:                             Caster Eye Center Medical Group

                                    Andrew Caster, M.D., President


<PAGE>


















                                    Exhibit A

                       Limited Liability Company Agreement

                                    of Newco


<PAGE>







                                    Exhibit B

                          Seller's Financial Statements


<PAGE>








                                    Exhibit C

                             Facility Use Agreement


<PAGE>








                                    Exhibit D

                                 Form of Warrant