ASSET PURCHASE AGREEMENT

                                      Among

                        PRIME LITHOTRIPSY SERVICES, INC.

                                    as Buyer,

                   RESTON HOSPITAL LITHOTRIPTER JOINT VENTURE

                                   as Seller,

                       RESTON LITHOTRIPSY ASSOCIATES, INC.

                  COLUMBIA ARLINGTON HEALTHCARE SYSTEM, L.L.C.

                                       and

                                ROBERT BALL, M.D.











                              Dated July 21, 1999


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                            ASSET PURCHASE AGREEMENT

         This Asset Purchase  Agreement  ("Agreement") is entered into as of the
21 day of July, 1999 ("Effective Date"), between and among PRIME LITHOTRIPSY
SERVICES,  INC., a New York corporation ("Buyer"),  RESTON HOSPITAL LITHOTRIPTER
JOINT VENTURE,  a Virginia general  partnership  ("Seller"),  RESTON LITHOTRIPSY
ASSOCIATES, INC., a Virginia corporation and partner in Seller ("RLA"), COLUMBIA
ARLINGTON  HEALTHCARE  SYSTEM,  L.L.C., a Virginia limited liability company and
partner in Seller ("CAHS"), and Robert Ball, M.D., an individual residing in the
Commonwealth of Virginia and partner in Seller ("ROBERT BALL, M.D.").

                             Preliminary Statements

         Seller owns a Dornier  Model HMT 482L  Extracorporeal  Shockwave  Renal
Lithotripter,  serial number 293, ("Lithotripter"),  leases the Lithotripter for
use to others, and provides related services to others.

         Buyer  desires to purchase  from  Seller and Seller  desires to sell to
Buyer the Lithotripter.

     RLA, CAHS and ROBERT BALL,  M.D. are the only partners of Seller,  and each
joins in the execution of this Agreement for the purposes set forth herein.

                             Statement of Agreement

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained  herein,  and  for  other  valuable  consideration,  the  receipt  and
sufficiency of which are acknowledged, the parties intending to be legally bound
hereby, agree as follows:

                                   ARTICLE I.

                           SALE AND PURCHASE OF ASSETS

         On the terms and subject to the conditions contained in this Agreement,
at the Closing (as hereinafter  defined),  Seller hereby agrees to sell, convey,
assign and  transfer to Buyer,  and Buyer agrees to purchase  from  Seller,  the
assets of Seller set forth  below,  free and clear of any  indebtedness,  liens,
encumbrances  or claims  by any  person or  entity.  The  assets of Seller to be
purchased by Buyer pursuant to this Agreement shall be collectively  referred to
herein as the "Assets," and are as follows:

     a. Property and Equipment. Lithotripter, operating manuals and the trailer.

     b.  Goodwill.  The  goodwill and  business  reputation  related to Seller's
business as of the Closing Date.

                                   ARTICLE II.

                         WARRANTIES, REPRESENTATIONS AND

              COVENANTS OF SELLER, RLA, CAHS AND ROBERT BALL, M.D.

         Each of the parties hereto other than Buyer (collectively, the "Control
Parties")  hereby  represents and warrants to Buyer as follows.  If a particular
representation and warranty is expressly stated below to be made, in whole or in
part,  about the  "Control  Parties,"  each  Control  Party will be deemed to be
making that  representation and warranty only about itself.  Representations and
warranties  expressly  about the "Seller"  will be deemed to be made jointly and
severally  by Seller  and each of the other  Control  Parties.  Otherwise,  each
Control Party (severally, and not jointly) is making each of the representations
and warranties in this Article II as to all matters  stated  therein  (including
without  limitation  paragraph h of this  Article  II).  Any  reference  in this
Agreement  to the "actual  knowledge"  of Seller  shall be defined as the actual
knowledge of Robert Ball, M.D., William A. Adams and A. Daniel Laurent, M.D. Any
reference in this  Agreement to the "actual  knowledge" of a particular  Control
Party  shall be  defined  (i) in the case of ROBERT  BALL,  M.D.,  as the actual
knowledge  of  Robert  Ball,  M.D.;  (ii) in the  case of  CAHS,  as the  actual
knowledge  of  William  A.  Adams;  and (iii) in the case of RLA,  as the actual
knowledge of A. Daniel Laurent, M.D.

                  a. Existence and Power.  Seller is a general  partnership duly
organized,  validly existing and in good standing under the laws of the State of
Virginia  and has all  requisite  power to own and operate  its  business as now
conducted  and as  proposed to be  conducted,  and to enter into and perform the
terms of this Agreement. RLA represents that it is a corporation duly organized,
validly  existing  and  in  good  standing  under  the  laws  of  its  state  of
incorporation,  and has all requisite  corporate power to enter into and perform
the terms of this  Agreement.  CAHS  represents  that it is a limited  liability
company duly organized,  validly existing and in good standing under the laws of
the Commonwealth of Virginia,  and has all requisite  limited  liability company
power to enter into and perform the terms of this Agreement.  ROBERT BALL, M.D.,
represents that he is an individual residing in the Commonwealth of Virginia and
possesses  all  necessary  power to enter  into and  perform  the  terms of this
Agreement.

                  b. Corporate Action.  The execution,  delivery and performance
of this Agreement and each other agreement,  document, instrument or certificate
required  to be  executed  by Seller or any other  Control  Party in  connection
herewith (collectively,  including this Agreement, the "Transaction Documents"),
are  authorized  by (as  applicable)  Seller's  or such  other  Control  Party's
respective shareholders,  members, directors,  governors,  partners, managers or
other  persons  having a right to direct its affairs,  and no further  action or
consent is needed by or from Seller or such other  Control  Party to make any of
the  Transaction  Documents  valid and binding upon Seller or such other Control
Party in accordance  with its terms.  Except with respect to Buyer,  each of the
Transaction  Documents  has been,  or prior to Closing will be, duly and validly
executed and delivered by Seller  and/or the other  Control  Parties (if a party
thereto) and  constitutes  a valid and binding  obligation  of Seller and/or the
other Control Parties,  enforceable  against each of them in accordance with its
terms.

     c. Consents and Approvals.  No action,  consent,  or approval of, or filing
with,  any  governmental  authority  is  required  by Seller or any of the other
Control Parties in connection with the execution, delivery or performance of any
of the Transaction Documents.

                  d. Title to Assets.  Seller  represents that it holds good and
marketable record and beneficial title and ownership to all of the Assets,  free
and  clear of any lien,  security  interest,  encumbrance  or claim and that the
Lithotripter  and  the  trailer  are in  reasonably  good  operating  condition.
Furthermore,  Seller  represents that, except for personnel and Permits (defined
below),  all the  assets of Seller  used in  connection  with the  operation  of
Seller's business as it is presently conducted, are included in the Assets to be
acquired by Buyer pursuant to this Agreement.

                  e. Licenses and Permits.  Schedule II(e) lists, to the best of
Seller's actual knowledge,  all third party and federal, state, county and local
governmental  licenses,  certificates and permits held by Seller and required in
connection with Seller's business activities or Seller's operation or use of the
Assets  (the  "Permits").  These  Permits  are not  assignable  and  will not be
transferred to Buyer at the Closing.  Seller represents that it is in compliance
with the terms and  conditions  of the  Permits,  except  to the  extent  that a
violation does not and cannot  reasonably be expected to have a material adverse
effect on the Assets. Seller further represents that it does not possess, nor is
it required to possess,  a  certificate  of public need to conduct the  Seller's
business as it is currently being conducted.

                  f. List of  Procedures.  Schedule II(f) lists the total number
of lithotripsy  procedures performed by Columbia Reston Hospital Center for each
of the calendar  years ending  December  31,  1996,  1997 and 1998,  and for the
period  beginning  January 1, 1999 and ending May 31, 1999.  Schedule II(f) also
lists the total number of Maryland residents who received  lithotripsy  services
at Columbia  Reston  Hospital  Center for the calendar year ending  December 31,
1998 and for the period  beginning  January 1, 1999 and  ending  June 29,  1999.
Seller  represents and warrants that Schedule II(f) fairly represents the number
of  lithotripsy  procedures  performed  on patients for the  indicated  periods.
Seller also represents and warrants that Schedule II(f) fairly  represents ^ the
number of Maryland residents receiving lithotripsy procedures at Columbia Reston
Hospital Center for the indicated periods.

                  g. No Adverse  Changes.  Since ^ May 31,  1999,  there has not
been any adverse change in the Assets,  business or operations of Seller,  other
than  changes in the  ordinary  course of business  that are not (when viewed in
conjunction with all other such changes) materially adverse.

                  h.  Claims  and  Litigation.  To the best of  Seller's  actual
knowledge, after due inquiry, there are no claims, actions, litigation, suits or
proceedings  pending  or  threatened  against  or  affecting  Seller,   Seller's
business, the Assets, or the transactions contemplated by this Agreement, at law
or in  equity,  at or before  any  federal,  state or  municipal  court or other
governmental department,  commission,  board, bureau, agency or instrumentality.
None of the  Control  Parties is subject  to or in default  with  respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department,  agency or instrumentality  or arbitration  tribunal with respect to
the ownership,  operation or sale of the Assets or having a material and adverse
effect  on the  ability  of such  Control  Party  to  perform  their  respective
covenants and obligations set forth in this Agreement.

                  i. No Material Misstatements.  No representation,  warranty or
covenant of any of the Control Parties that is contained in this  Agreement,  or
in any Schedule or Exhibit hereto,  contains any untrue  statement of a material
fact or omits  any  material  fact  necessary  to make any such  representation,
warranty or covenant,  in light of the circumstances under which they were made,
not misleading.


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                                       37

                  j. No Violation; Compliance with Laws. The execution, delivery
and performance of each of the Transaction  Documents,  and the  consummation of
the  transactions  contemplated  hereby  and  thereby,  do not and  will not (i)
violate any law or regulation or any judicial or  administrative  order,  award,
judgment or decree  applicable  to Seller or the Assets  (other than  applicable
"bulk sales" laws); (ii) result in the creation of any lien,  security interest,
charge or encumbrance upon any of the Assets;  or (iii) violate or conflict with
any provision of Seller's organizational documents, excluding from the foregoing
clauses  (i) and (iii)  such  violations  that do not and cannot  reasonably  be
expected to have a material adverse effect on the Assets.

     k. No Known Breaches by Other Parties.  Each Control Party (severally,  and
not jointly) represents and warrants to Buyer that it has no actual knowledge of
any  breach  or  default  by any of the  other  Control  Parties  hereto  of any
representation,  warranty  or  covenant  contained  in any  of  the  Transaction
Documents.

                  l.  Representations  and Warranties True at Closing.  Each and
every  representation  and  warranty  by the Control  Parties  shall be true and
correct as of the  Closing  Date in all  respects,  regardless  of  whether  the
Closing  Date occurs on the date of  execution  of this  Agreement or some later
date pursuant to Section 7.1 hereof.

     m. Ownership of Seller; Equity Interest Owners of RLA. RLA, CAHS and ROBERT
BALL,  M.D.  each possess a  partnership  interest in Seller of 72%, 27% and 1%,
respectively.  RLA,  CAHS and ROBERT BALL,  M.D. are the only partners of Seller
and no other person or entity holds an equity interest of Seller. Schedule II(m)
sets  forth a list of each and every  person or  entity  that owns an  ownership
interest in RLA.

                  n.  Disclaimer of Warranties.  BUYER  ACKNOWLEDGES  AND AGREES
THAT EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED HEREIN, SELLER HAS MADE AND MAKES
NO WARRANTIES EITHER EXPRESS OR IMPLIED,  WITH RESPECT TO THE ASSETS,  INCLUDING
WITHOUT  LIMITATION,  THE  IMPLIED  WARRANTY OF  MERCHANTABILITY  OR THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR  PURPOSE.  BUYER FURTHER  ACKNOWLEDGES  AND
AGREES THAT EXCEPT AS OTHERWISE  SPECIFICALLY  PROVIDED  HEREIN,  THE ASSETS ARE
BEING TRANSFERRED AS IS, WHERE IS, AND WITH ALL FAULTS.

                                  ARTICLE III.

                         WARRANTIES, REPRESENTATIONS AND

                               COVENANTS OF BUYER

         Buyer  hereby  represents,  warrants to, and  covenants  with Seller as
follows:

     a. Corporate  Existence.  Buyer is a corporation  duly  organized,  validly
existing  in good  standing  under the laws of the  State of New York.  Buyer is
authorized  to  transact  business  in  Virginia,  and Buyer  has all  requisite
corporate  power to own and operate its  business  and to enter into and perform
the terms of this Agreement.

                  b. Corporate Action.  The execution,  delivery and performance
of each  Transaction  Document to which Buyer is a party have been authorized by
all necessary  corporate  action,  and such Transaction  Document  constitutes a
valid and binding  obligation upon Buyer,  enforceable  against it in accordance
with its terms.

     c. No Violation.  The execution,  delivery and performance by Buyer of each
Transaction  Document to which  Buyer is a party,  and the  consummation  of the
transactions  contemplated  herein and therein,  do not and will not violate any
law or regulation or any judicial or administrative  order,  award,  judgment or
decree applicable to Buyer.

                                   ARTICLE IV.

                           PURCHASE PRICE AND PAYMENT

         The total purchase price and consideration for the Assets to be sold to
Buyer pursuant to this Agreement shall be $2,400,000.00, to be paid to Seller at
the Closing in immediately available funds.

                                   ARTICLE V.

                          ALLOCATION OF PURCHASE PRICE

         Seller and Buyer hereby agree to allocate the purchase  price among the
Assets, the  non-competition  covenant set forth in Article VIII hereof, and the
other agreements  entered into in connection with this Agreement,  in accordance
with the allocations set forth on Schedule V hereto.  Such allocations have been
mutually  determined by the parties at arm's length and the parties hereto agree
to use such allocations for federal income tax purposes.

                                   ARTICLE VI.

                                   LIABILITIES

         Buyer is not  assuming any debts,  liabilities  or  obligations  of any
kind, of Seller or any Control  Parties,  or otherwise,  in connection  with the
purchase of the  Assets,  the Closing or the  consummation  of the  transactions
contemplated  by this Agreement.  All claims,  liabilities or obligations of, or
against, Seller and each other Control Party (including, without limitation, any
and all federal,  state or other  governmental  taxes and related  liabilities),
whether accrued, absolute, contingent or otherwise, and whether due or to become
due, fixed or contingent, known or unknown, will be and remain the liability and
responsibility of Seller or such other Control Party, as applicable.  SELLER AND
EACH OTHER CONTROL PARTY AGREE TO HOLD BUYER AND THE BUYER  INDEMNIFIED  PARTIES
HARMLESS  FOR SAME  AND  AGREE TO  DEFEND  AND  INDEMNIFY  BUYER  AND THE  BUYER
INDEMNIFIED  PARTIES  IN  CONNECTION  WITH  ANY  SUCH  CLAIMS,  LIABILITIES,  OR
OBLIGATIONS  ASSERTED  AGAINST  BUYER,  PURSUANT TO THE PROVISIONS OF ARTICLE IX
HEREOF.

                                  ARTICLE VII.

                                     CLOSING

         Section 7.1 Closing.  The purchase,  sale and transfer of possession of
the Assets  (the  "Closing")  shall take place at the  offices of Grad,  Logan &
Klewans, P.C., 1421 Prince Street, Suite 320, Alexandria, Virginia 22314, on the
date of execution of this  Agreement,  or at such other place,  date and time as
the parties  hereto  shall  mutually  agree upon in  writing.  The date that the
Closing occurs is referred to herein as the "Closing Date."

         Section 7.2 Action by Seller. At the Closing,  Seller shall execute (as
applicable),  acknowledge and deliver, or cause to be executed and delivered, to
Buyer, the following:

          a.  Assignment  and Warranty Bill of Sale, in  substantially  the form
     attached hereto as Exhibit A, covering all Assets.

                  b.  Executed  copies of  non-compete  agreements,  in the form
attached  hereto as Exhibit B, for each of the sixteen  shareholders  in RLA who
does not own an existing,  competing  interest and is not engaged in a competing
activity.

                  c.  Executed  copies of  non-compete  agreements,  in the form
attached  hereto as Exhibit C, for each of the two  shareholders in RLA who owns
an existing, competing interest or engages in a competing activity.

                  d.  Closing  certificate  executed  by an  authorized  general
partner of Seller stating that all  representations and warranties of Seller set
forth in any Transaction  Document are true, complete and correct at the time of
Closing,  and that  between the date hereof and the  Closing,  there has been no
material change in the condition of the Assets or Seller's business.

                  e.  Closing  certificate  executed  by  the  President  of RLA
stating  that  all  representations  and  warranties  of RLA  set  forth  in any
Transaction  Document are true,  complete and correct at the time of Closing and
that RLA has no actual knowledge of a breach of a representation and warranty by
either of the other Control Parties.

                  f. Closing  certificate  executed by an authorized  officer of
CAHS stating that all  representations  and  warranties of CAHS set forth in any
Transaction  Document are true,  complete and correct at the time of Closing and
that CAHS has no actual knowledge of a breach of any representation and warranty
by either of the other Control Parties.

          g. Closing certificate  executed by ROBERT BALL, M.D. stating that all
     representations  and  warranties  of  ROBERT  BALL,  M.D.  set forth in any
     Transaction  Document are true, complete and correct at the time of Closing
     and that  ROBERT  BALL,  M.D.  has no actual  knowledge  of a breach of any
     representation and warranty by either of the other Control Parties.

         Section 7.3 Action by Buyer.  At the Closing,  Buyer shall  execute (as
applicable),  acknowledge and deliver, or cause to be executed and delivered, to
Seller, the following:

          a. The cash sum in the amount of $2,400,000.00  pursuant to Article IV
     hereof, by wire transfer to an account designated by Seller.

                  b. Closing certificate  executed by the President or Secretary
of Buyer stating that all  representations  and warranties of Buyer set forth in
any Transaction Document are true, complete and correct at the time of Closing.

         Section 7.4 Further Assurances. At any time and from time to time after
the Closing,  Seller and the other  Control  Parties  shall,  at the  reasonable
request of Buyer, execute and deliver or cause to be executed and delivered, all
such bills of sale,  assignments,  consents,  documents  (including documents of
title  with  respect  to  any  titled  property   included  among  the  Assets),
certificates  and  instruments,  and take or cause  to be taken  all such  other
action, as may be reasonably deemed necessary or desirable in order to put Buyer
in actual  possession and operating  control of the Assets, or to more fully and
effectively vest in Buyer or to confirm in buyer full right,  title and interest
to the Assets, free and clear of all liens and security interests, in accordance
with this  Agreement,  or to assist Buyer in exercising  its rights with respect
thereto, or otherwise to carry out the intents and purposes of this Agreement.

         Section 7.5  Conditions  to Closing.  In the event the Closing does not
occur on the date of  execution  of this  Agreement,  it shall be a condition to
Closing by each party that (i) Buyer,  Prime Medical Services,  Inc., a Delaware
corporation ("Prime"),  or one of Prime's subsidiaries shall have entered into a
Lithotripsy  Agreement  with  CAHS  pursuant  to which  Buyer or one of  Prime's
subsidiaries  will provide  lithotripsy and related  services at Reston Hospital
Center;  (ii) all actions required to be taken by the other party or parties set
forth in this  Article  VII shall  have been  taken at or prior to the  Closing;
(iii) all  documents  to be  delivered  pursuant  to this  Article  VII shall be
satisfactory in form and substance to such party and its counsel;  and (iv) such
party or its counsel shall have received copies of all documents, instruments or
certificates,  executed  or  certified,  whichever  may  be  appropriate,  as is
required by this Article VII. For purposes of this Section, all forms of closing
documents  attached to this Agreement are hereby stipulated by the parties to be
in satisfactory form.

                                  ARTICLE VIII.

                            NON-COMPETITION COVENANTS

         Section 8.1 Seller,  RLA and Ball,  severally  and not jointly,  hereby
agrees that,  until the  expiration  of its  respective  Restriction  Period (as
defined for each below), it will not directly or indirectly,  either through any
kind of  ownership  (other  than  ownership  of  securities  of a publicly  held
corporation of which they own less than five percent of any class of outstanding
securities), or as a principal, agent, employer, advisor, consultant, co-partner
or in any individual or  representative  capacity  whatever,  either for its own
benefit or for the benefit of any other person, firm or corporation, without the
prior written  consent of Buyer,  commit any of the following  acts,  which acts
shall be considered violations of this covenant not to compete:

                  (a)  Lithotripsy  Services.  Except as  permitted  pursuant to
Section  8.3  below,   directly  or  indirectly  provide  lithotripsy  services,
including  without  limitation,   patient  lithotripsy   services,   lithotripsy
management  services,  Lithotripter  leasing,  or similar  lithotripsy  services
(collectively,  "Lithotripsy  Services"),  anywhere  within 50 miles of Columbia
Reston Hospital Center, Reston, Virginia.

                  (b)  Interference  with  Business  Relationships.  Directly or
indirectly request or advise any patient or physician or any other person,  firm
or  corporation  having a  business  relationship  with  Buyer or any of Buyer's
affiliates  (or having a past  business  relationship  with Seller) to withdraw,
curtail,  or cancel its business with Buyer or Buyer's  affiliates,  as the case
may be; or

                  (c) Solicitation of Employees. Directly or indirectly hire any
employee of Buyer or any of Buyer's affiliates or induce or attempt to influence
any  employee  of Buyer or any of Buyer's  affiliates  to  terminate  his or her
employment with such entity.

         Section 8.2 So long as Buyer,  its affiliates,  assignees or successors
continues to provide Lithotripsy Services to Reston Hospital Center, CAHS hereby
agrees that, until the expiration of its Restriction  Period (as defined below),
it will not  directly or  indirectly,  ^ whether  through any kind of  ownership
(other than ownership of securities of a publicly held corporation of which they
own less than five percent of any class of  outstanding  securities),  ^ through
the  actions of its  member  HCA Health  Services  of  Virginia,  Inc.,  or as a
principal, agent, employer, advisor, consultant, co-partner or in any individual
or  representative  capacity  whatever,  either  for its own  benefit or for the
benefit of any other  person,  firm or  corporation,  without the prior  written
consent  of  Buyer,  commit  any of the  following  acts,  which  acts  shall be
considered violations of this covenant not to compete:

                  (a)  Lithotripsy  Services.  Except as otherwise  permitted in
this  subparagraph  (a) and Section 8.3 below,  directly or  indirectly  provide
Lithotripsy  Services  anywhere within the Restriction  Area (defined below) for
the applicable  period. The restriction set forth in this subparagraph (a) shall
not apply to any facility in which CAHS, or any affiliate or successor  thereof,
acquires  after the  Closing a  beneficial  interest  that,  at the time of such
acquisition, provides Lithotripsy Services to the general public and for which ^
annual  gross  revenues  from  Lithotripsy  Services  do not exceed 5% of ^ such
facility's  ^  annual  gross  revenues.  For  purposes  of this  Agreement,  the
"Restriction  Area"  shall mean that area  within the  Commonwealth  of Virginia
which is defined by a driving  distance  radius from  Columbia  Reston  Hospital
Center,  Reston,  Virginia  of 50 miles  for the first  year of the  Restriction
Period, 30 miles for the second year of the Restriction  Period and 20 miles for
each of the third, fourth and fifth years of the Restriction Period.

                  (b)  Interference  with  Business  Relationships.  Directly or
indirectly request or advise any patient or physician or any other person,  firm
or  corporation  having a  business  relationship  with  Buyer or any of Buyer's
affiliates  (or having a past  business  relationship  with Seller) to withdraw,
curtail,  or cancel its business with Buyer or Buyer's  affiliates,  as the case
may be; or

                  (c) Solicitation of Employees. Directly or indirectly hire any
employee of Buyer or any of Buyer's affiliates or induce or attempt to influence
any  employee  of Buyer or any of Buyer's  affiliates  to  terminate  his or her
employment with such entity.

         Section  8.3  Medical  Judgment.  Nothing  in this  Agreement  shall be
construed to limit or infringe upon the professional medical judgment or ability
to practice medicine of any party hereto that is a physician (including, but not
limited to, the selection of appropriate  facilities  for medical care),  and no
exercise of such a party's professional medical judgment or act constituting the
practice of medicine shall be considered a violation of this Agreement.

         Section 8.4 Restriction  Period.  For purposes of this  Agreement,  the
"Restriction  Period" shall begin on the Effective  Date and continue until five
(5) years after the Effective Date.

         Section 8.5  Affiliates.  For purposes of this  Agreement,  the Buyer's
affiliates  shall  include  Prime,  and each of Prime's and  Buyer's  respective
current and future  (throughout  the Restriction  Period),  direct and indirect,
subsidiaries and affiliates.

         Section 8.6 Restrictions  Reasonable.  RLA, CAHS and Ball have reviewed
and carefully  considered the  provisions of this Article VIII and,  having done
so, agree that the  restrictions  set forth  herein (a) are fair and  reasonable
with respect to time,  geographic area and scope, (b) are not unduly burdensome,
and (c) are reasonably  required for the protection of the respective  interests
of the parties.

         Section  8.7  Equitable  Relief.  RLA,  CAHS and Ball each agree that a
violation on its part of any covenant  contained in this Article VIII will cause
the  other  parties  irreparable  damage  for  which  remedies  at  law  may  be
insufficient,  and for that  reason,  each agrees that the other  parties  shall
each,  independently,  be entitled as a matter of right to  equitable  remedies,
including  specific  performance and injunctive relief,  therefor.  The right to
specific  performance and injunctive  relief shall be cumulative and in addition
to whatever other remedies,  at law or in equity,  may be available,  including,
specifically, recovery of additional damages.

                                   ARTICLE IX.

                            INDEMNIFICATION OF BUYER

         Section 9.1  Indemnification  of Buyer. For a period of two years after
the Closing  Date,  Seller and each of the other  Control  Parties,  jointly and
severally, but subject to the limitation set forth below, agree to indemnify and
hold Buyer,  Prime and each of Prime's and Buyer's  respective  representatives,
officers,  directors,  employees,  and  affiliates  (collectively,   the  "Buyer
Indemnified  Parties")  harmless  from and against any and all damages,  losses,
claims,  liabilities,  demands,  charges, suits, penalties,  costs, and expenses
(including court costs and reasonable  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 Buyer  Indemnified  Parties may sustain,
arising  out of, or with  respect to, (i) any breach or default by Seller or any
of  the  other  Control  Parties  of any  of  the  representations,  warranties,
covenants  or  agreements  contained  in  any  Transaction  Document,  (ii)  any
obligations or any  liabilities to any finder,  broker or sales agent engaged or
retained by Seller or another  Control  Party,  (iii) any debts,  liabilities or
obligations of Seller (iv) any debts,  liabilities or obligations of any Control
Parties with respect to the Assets or business  conducted  utilizing the Assets,
(v) any act or omission by Seller that  occurred  prior to the Closing,  or (vi)
any act or omission by any of the Control  Parties that relates to the Assets or
business  conducted  utilizing  the Assets and  occurred  prior to the  Closing.
Regardless of anything  contained in this  Agreement to the  contrary,  Seller's
indemnification  liability  shall be limited to an amount  equal to the purchase
price  and  each of the  Control  Parties'  indemnification  liability  shall be
limited to an amount equal to $24,000.00  for ROBERT BALL,  M.D.,  $1,728,000.00
for RLA and $648,000.00 for CAHS, and in no case shall the collective  liability
of the Seller and Control Parties be greater than the purchase price.

         Section 9.2 Defense of Third-Party  Claims. A Buyer  Indemnified  Party
shall give prompt written notice to Seller and the other Control  Parties of the
commencement  or  assertion of any  third-party  action in respect of which such
Buyer Indemnified Party shall seek indemnification  hereunder. Any failure so to
notify  Seller and the other Control  Parties  shall not relieve  Seller and the
other  Control  Parties  from any  liability  that  they may have to such  Buyer
Indemnified  Party under this Article IX, unless the failure to give such notice
materially and adversely prejudices Seller and the other Control Parties. Seller
and the other  Control  Parties  shall  have the right to assume  control of the
defense of,  settle,  or otherwise  dispose of such  third-party  action on such
terms as they deem appropriate; provided, however, that:

          (a) The Buyer Indemnified Party shall be entitled, at his, her, or its
     own expense, to participate in the defense of such third-party action;

                  (b)  Seller and the other  Control  Parties  shall  obtain the
prior written approval of the Buyer Indemnified  Party, which approval shall not
be  unreasonably  withheld  or  delayed,  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 Buyer  Indemnified  Party
or  if,  in  the  reasonable  opinion  of  the  Buyer  Indemnified  Party,  such
settlement,  compromise,  admission,  or  acknowledgment  would  have a material
adverse effect on its business or, in the case of a Buyer  Indemnified Party who
is a natural person, on his or her assets or interests;

                  (c) Seller and the other Control  Parties shall not consent to
the entry of any judgment or enter into any settlement  that does not include as
an  unconditional  term thereof the giving by each claimant or plaintiff to each
Buyer  Indemnified  Party of a release  from all  liability  in  respect of such
third-party action;

                  (d) Seller and the other Control Parties shall not be entitled
to control  (but shall be  entitled to  participate  at their own expense in the
defense  of),  and the Buyer  Indemnified  Party  shall be entitled to have sole
control   over,   the  defense  or   settlement,   compromise,   admission,   or
acknowledgment  of any  third-party  action (i) as to which Seller and the other
Control  Parties fail to assume the defense  within a reasonable  length of time
after  giving  notice to Seller  and the other  Control  Parties  or (ii) to the
extent the  third-party  action seeks an order,  injunction,  or other equitable
relief  against  the  Buyer  Indemnified  Party  which,  if  successful,   would
materially  adversely  affect the  business,  operations,  assets,  or financial
condition of the Buyer  Indemnified  Party;  provided,  however,  that the Buyer
Indemnified  Party  shall  make  no  settlement,   compromise,   admission,   or
acknowledgment  which would give rise to  liability on the part of Seller or the
other Control  Parties without the prior written consent of Seller and the other
Control Parties;

                  (e) Seller and the other  Control  Parties shall make payments
of all amounts required to be made pursuant to the foregoing  provisions of this
Article  IX to or for the  account of the Buyer  Indemnified  Party from time to
time  promptly  upon  receipt  of bills or  invoices  relating  thereto  or when
otherwise due and payable,  provided that the Buyer Indemnified Party has agreed
in writing to reimburse Seller and the other Control Parties for the full amount
of such payments if the Buyer 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
IX 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.

                                   ARTICLE X.

                               INDEMNIFICATION OF

                               THE CONTROL PARTIES

         Section 10.1  Indemnification  of Seller and the other Control Parties.
For a period of one year after the Closing  Date,  Buyer agrees to indemnify and
hold harmless Seller and the other Control Parties, and, where applicable, their
respective   partners,   officers,   directors,    employees,   and   affiliates
(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 with respect to, (i) any breach or default by Buyer of any of
the  representations,  warranties,  covenants  or  agreements  contained  in any
Transaction Document,  (ii) any obligations or liabilities to any finder, broker
or sales  agent  engaged or  retained  by Buyer or (iii) any act or  omission by
Buyer that  relates to the Assets and occurs after the  Closing.  Regardless  of
anything  contained in this Agreement to the contrary,  Buyer's  indemnification
liability  to each  Control  Party  shall  be  limited  to an  amount  equal  to
$24,000.00 for ROBERT BALL,  M.D.,  $1,728,000.00  for RLA and  $648,000.00  for
CAHS, and in no case shall the collective liability of the Buyer be greater than
the purchase price.

         Section 10.2 Defense of Third-Party  Claims. A Seller Indemnified Party
shall give prompt  written notice to Buyer 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 Buyer shall not relieve
Buyer from any liability that it may have to such Seller Indemnified Party under
this Article X unless the failure to give such notice  materially  and adversely
prejudices  Buyer.  Buyer 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, her, or
     its own expense, to participate in the defense of such third-party action;

                  (b) Buyer  shall  obtain  the prior  written  approval  of the
Seller Indemnified  Party, which approval shall not be unreasonably  withheld or
delayed, 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 or if; in the reasonable opinion of
the  Seller  Indemnified  Party,  such  settlement,  compromise,  admission,  or
acknowledgment  would have a material  adverse effect on its business or, in the
case of a Seller Indemnified Party who is a natural person, on his or her assets
or interests;

                  (c) Buyer  shall not  consent to the entry of any  judgment or
enter into any settlement that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to each Seller  Indemnified  Party of a
release from all liability in respect of such third-party action; and

                  (d) Buyer  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
(i) as to which Buyer fails to assume the defense within a reasonable  length of
time or (ii) to the extent the third-party action seeks an order, injunction, or
other  equitable  relief  against  the  Seller   Indemnified   Party  which,  if
successful, would materially adversely affect the business,  operations, assets,
or financial condition of the Seller Indemnified Party; 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 Buyer  without
the prior written consent of Buyer.

                  (e) Buyer shall make  payments  of all amounts  required to be
made  pursuant  to the  foregoing  provisions  of this  Article  X 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
Buyer 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 X
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.

                                   ARTICLE XI

                                     GENERAL

         Section 11.1 Costs.  Each party hereto  agrees to pay their  respective
costs and expenses incurred by them in the negotiation, preparation, performance
of and compliance  with all  agreements,  covenants and conditions  contained in
each Transaction Document to which it is a party, including, but not limited to,
their respective attorney's fees and accountant's fees.

         Section 11.2 No Brokers. Each party represents that no brokers,  agents
or finders are  involved in this  transaction  and each agrees to hold the other
harmless  from  liability  for  any  brokerage,  agency,  or  finder's  fees  or
commissions  with  respect  to  which  any  such  party  may  have  incurred  an
obligation.

         Section 11.3  Assignability.  This Agreement may not be assigned by any
party  hereto  without the prior  written  consent of all other  parties to this
Agreement,  except that Buyer may,  upon written  notice to Seller and the other
Control Parties, assign its rights pursuant to the non-competition covenants set
forth in Article  VIII hereof  without  the  written  consent of any other party
hereto,  provided that any such  assignment is made in connection with a sale or
transfer  of  (i)  all  or  substantially  all  of  the  Assets,   (ii)  all  or
substantially  all of the  business  or assets of Buyer  (including  the  assets
required to provide  Lithotripsy  Services to Reston Hospital Center),  (iii) at
least 50% of the  outstanding  voting stock of Buyer or consummation of a merger
or other  transaction  that  results in a change of control of Buyer,  or (iv) ^
Buyer's or Buyer's  affiliates' ^  obligations  under the  lithotripsy  services
agreement referred to in Section 7.5.

         Section 11.4 Entire Agreement. This Agreement and the other Transaction
Documents, together with all schedules and exhibits referred to herein, which by
this  reference  are hereby  incorporated  herein and made a part hereof for all
purposes,  contain the entire agreement  between the parties hereto with respect
to the  transactions  contemplated  herein,  and  supersede  all written or oral
negotiations,  commitments, warranties or representations, and cannot be altered
or otherwise  amended except pursuant to an instrument in writing signed by each
of the parties hereto. For all purposes of this Agreement, in lieu of physically
attaching referenced exhibits to this Agreement, such exhibits may be signed and
approved by the parties hereto and delivered concurrently with the execution and
delivery of this Agreement and deemed attached hereto.

         Section  11.5  Notices.  All  notices,   requests,  demands  and  other
communications  hereunder  shall be in writing  and shall be deemed to have been
duly given if personally  delivered or mailed by certified or  registered  mail,
postage prepaid to:

         If to Buyer:               Prime Lithotripsy Services, Inc.
                                    1301 Capital of Texas Highway
                                    Suite C-300
                                    Austin, TX 78746
                                    Attn: Cheryl L. Williams

                  With Copy to:     Akin, Gump, Strauss, Hauer & Feld L.L.P.
                                            816 Congress Avenue, Suite 1900
                                            Austin, TX 78701
                                            Attn: Tim LaFrey

         If to Seller:              Reston Hospital Lithotripter Joint Venture
                                    1850 Town Center Parkway
                                    Reston, Virginia  22090

                  With Copy to:     Michael P. Logan, Esquire
                                            Grad, Logan & Klewans, P.C.
                                            1421 Prince Street, Suite 320
                                            Alexandria, Virginia 22314

         If to RLA:                 Reston Lithotripsy Associates, Inc.
                                    1850 Town Center Parkway
                                    Reston, VA 22090
                                    Attn: A. Daniel Laurent, M.D.


                  With Copy to:     Michael P. Logan, Esquire
                                            Grad, Logan & Klewans, P.C.
                                            1421 Prince Street, Suite 320
                                            Alexandria, Virginia 22314

         If to CAHS:                Reston Hospital Center
                                    1850 Town Center Parkway
                                    Reston, VA 22090
                                    Attn: William A. Adams, CEO

                  With Copy to:     McGuire, Woods, Battle & Boothe LLP
                                            One James Center
                                            901 East Cary Street
                                            Richmond, Virginia 23219
                                            Attn: Thomas J. Stallings

         If to ROBERT BALL, M.D.: Robert Ball, M.D.
                                             7005 Symphony Court
                                             McLean, Virginia 22101

         Section 11.6  Waiver.  The failure of any party at any time or times to
require  performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same.  Except as otherwise  provided  herein,  no
waiver by any party of any  condition,  or of any breach of any term,  covenant,
representation  or  warranty  contained  in this  Agreement,  in any one or more
instances,  shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach, or a waiver of any other condition or breach of
any other term, covenant, representation or warranty.

         Section 11.7  Headings.  The headings of the sections and paragraphs of
this Agreement have been inserted for convenience of reference only and shall in
no way restrict or otherwise modify any of the terms or provisions hereof.

         Section 11.8 Materiality. The term "material" as used in this Agreement
is hereby defined to mean all accounting  adjustments,  costs, values,  damages,
deficiencies,  assessments  or expenses  with respect to the value of the Assets
and  businesses  to be purchased by Buyer  hereunder  or the  liabilities  to be
assumed by Buyer hereunder,  which either  separately or in the aggregate exceed
the sum of $10,000.

         Section 11.9 Counterparts.  This Agreement,  and each other Transaction
Document may be executed simultaneously in multiple counterparts,  each of which
when so executed shall be deemed to be an original,  and such counterparts shall
together constitute one and the same instrument.

         Section  11.10  Severance.  Should  any  portion of this  Agreement  be
declared  invalid and  unenforceable,  then such  portion  shall be deemed to be
severed from this Agreement and shall not affect the remainder thereof.

         Section 11.11 Extension of Benefits. All of the terms and conditions of
this  Agreement  shall be binding upon and inure to the benefit of, and shall be
enforceable  by,  the  parties  hereto  and  their  respective  heirs,  personal
representatives,  executors,  successors and assigns; provided, however, that in
the event that CAHS is dissolved, the terms and conditions of this Agreement, if
still applicable, shall solely be binding upon, and inure to the benefit of, HCA
Health Services of Virginia, Inc., a Virginia corporation and a member of CAHS.

         Section 11.12 Tax Advice. Each party hereto acknowledges that they have
consulted with their respective tax advisors in connection with the transactions
contemplated by this  Agreement,  and each party hereto  acknowledges  that they
have not relied  upon any  advice or  opinions  given by the other  party or its
attorneys or agents,  nor has any party hereto  guaranteed  any  particular  tax
consequences in connection with the transactions contemplated by this Agreement.

         Section 11.13  Survival of  Representations,  Warranties and Covenants.
All of the representations, warranties and covenants contained in this Agreement
shall survive the Closing Date for a period of two years.

         IN WITNESS WHEREOF, the parties have executed and delivered,  or caused
this Agreement to be executed and delivered by their  respective duly authorized
officers, on the day and year first above written.

BUYER:                     PRIME LITHOTRIPSY SERVICES, INC.


                                    By:/s/ Cheryl Williams
                                    ---------------------
                                    Printed Name: Cheryl Williams
                                    Title: Chief Financial Officer


SELLER:                    RESTON HOSPITAL LITHOTRIPTER
                                    JOINT VENTURE
                           Reston Lithotripsy Associates, Inc.
                           General Partner

                                    By: /s/ Michael R. Hardy, President
                                    ----------------------------------
                                    Printed Name: Michael R. Hardy, President
                                    Title: President, Reston Lithotripsy
                                           Associates, Inc.

RLA:                                RESTON LITHOTRIPSY ASSOCIATES, INC.


                                    By: /s/ Michael R. Hardy
                                    ------------------------
                                    Printed Name: Michael R. Hardy
                                    Title: President

CAHS:                      COLUMBIA ARLINGTON HEALTHCARE SYSTEM, L.L.C.


                                    By:/s/ William A. Adams
                                    -----------------------
                                    Printed Name: William A. Adams
                                    Title: COO/Authorized Agent

BALL:

                                    /s/ Robert Ball, M.D.
                                    -------------------------------------
                                    ROBERT BALL, M.D.



<PAGE>


                                 Schedule II(e)

                        Non-Assignable Permits of Seller

Business and Professional Occupations License issued by the County of
Fairfax, Virginia.


<PAGE>



                                 Schedule II(f)

                               List of Procedures

                           Year                          Procedures

                           1996                               506

                           1997                               443

                           1998                               534

                           1999, up to May 31, 1999           228








                                Maryland Patients

                           Year                             Patients

                           1998                                 8

                           1999, up to June 29, 1999            7


<PAGE>



                                                                  Schedule II(m)

                                Ownership of RLA

  Amer Z. Al-Juberi, M.D.
  Janice Arnold, M.D.
  John J. Basile, M.D.
  Michael E. Beall, M.D.
  Myron Berger, M.D.
  Robert M. Berger, M.D.
  Mark Bilowus, M.D.
  Giovanni DiSandro, M.D.
  William Glover, Jr., M.D.
  Michael R. Hardy, M.D.
  A. Daniel Laurent, M.D.
  J. Martin Lebowitz, M.D.
  EK Seng Lou, M.D.
  Jeff Pan, M.D.
  Philip A. St. Raymond, M.D.
  William Reha, M.D.
  Domingo Suatengco, M.D.
  Anthony Vara, M.D.


<PAGE>


                                   Schedule V

                          Allocation of Purchase Price


                                     <PAGE>



                                    EXHIBIT A

                  Form of Assignment and Warranty Bill of Sale


<PAGE>



                                    EXHIBIT B

                          Form of Non-compete Agreement


                            Non-competition Agreement

         THIS NON-COMPETITION AGREEMENT (this "Agreement") entered into this ___
day of July, 1999 (the  "Effective  Date"),  by the undersigned  individual (the
"Restricted Party") for the benefit of Prime Medical Services,  Inc., a Delaware
corporation (the "Company") and the Company's affiliates.

         WHEREAS,  the  Company,  through a  subsidiary,  has  acquired  certain
lithotripsy  equipment from the Restricted  Party and certain  affiliates of the
Restricted Party; and

         WHEREAS,  as a material  inducement for the Company's  purchase of such
equipment, the Restricted Party has agreed, among other things, not to engage in
certain competitive  activities,  or assist or participate with any other person
or entity engaging in such activities, as provided herein.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged and confessed, the Restricted Party
hereby covenants and agrees as follows:

         1. Agreement.  The Restricted  Party hereby  covenants and agrees that,
until  the  expiration  of  the  Restriction  Period  (as  defined  below),  the
Restricted  Party will not,  directly or indirectly,  either through any kind of
ownership  (other than ownership of securities of a publicly held corporation of
which the  Restricted  Party  owns less than five  percent  (5%) of any class of
outstanding  securities),   or  as  a  principal,   agent,  employer,   advisor,
consultant, co-partner or in any individual or representative capacity whatever,
either for the  Restricted  Party's  own benefit or for the benefit of any other
person,  corporation or other entity,  without the prior written  consent of the
Company,  commit any of the following  acts  described in paragraphs (a) through
(c) below,  which acts shall be  considered  violations  of this covenant not to
compete:

         (a) Lithotripsy Services. Except as permitted pursuant to paragraph (d)
below,  directly or indirectly provide lithotripsy  services,  including without
limitation,  patient  lithotripsy  services,  lithotripsy  management  services,
lithotripter  leasing,  or similar lithotripsy  services,  anywhere within fifty
(50) miles of Columbia  Reston  Hospital  Center in Reston,  Virginia.  The area
described  in  the  preceding  sentence  is  hereinafter   referred  to  as  the
"Restricted Area."

         (b) Interference  with Business  Relationships.  Directly or indirectly
request or advise any patient or physician or any other person,  corporation  or
other  entity  having a  business  relationship  with the  Company or any of the
Company's  affiliates  to withdraw,  curtail,  or cancel its business  with such
entity.

         (c) Solicitation of Employees. Directly or indirectly hire any employee
of the  Company  or any of the  Company's  affiliates  or induce or  attempt  to
influence  any  employee of the Company or any of the  Company's  affiliates  to
terminate his or her employment with such entity.

         (d) Medical  Judgment.  Nothing in this Agreement shall be construed to
limit or infringe upon the professional  medical judgment or ability to practice
medicine  of the  Restricted  Party,  if the  Restricted  Party  is a  physician
(including,  but not limited to, the  selection of  appropriate  facilities  for
medical  care),  and  no  exercise  of  professional  medical  judgment  or  act
constituting  the practice of medicine  shall be  considered a violation of this
Agreement.

        2. Restriction Period. For purposes of this Agreement,  the "Restriction
Period" shall begin on the  Effective  Date and continue  until five (5) years
after the Effective Date.

        3. General. For purposes of this Agreement,  the Company's affiliates
shall  include  its  current  and future  (throughout  the  Restriction  Period)
subsidiaries  and  affiliates.  The Restricted  Party has reviewed and carefully
considered the provisions of this Agreement and, having done so, agrees that the
restrictions  set forth herein (a) are fair and reasonable with respect to time,
geographic area and scope, (b) are not unduly burdensome, and (c) are reasonably
required for the protection of the  legitimate  interests of the Company and its
affiliates.  The  Restricted  Party  agrees that a violation  on its part of any
covenant  contained in this  Agreement will cause the Company and its affiliates
irreparable  damage for which remedies at law may be insufficient,  and for that
reason, agrees that the Company and its affiliates shall each,  independently be
entitled  as a  matter  of  right  to  equitable  remedies,  including  specific
performance and injunctive relief,  therefor.  The right to specific performance
and  injunctive  relief shall be  cumulative  and in addition to whatever  other
remedies,  at  law or in  equity,  may be  available,  including,  specifically,
recovery of additional damages.

         4.       Miscellaneous.
         (a)  Collateral  Agreements,  Amendments,  and Waivers.  This Agreement
(together with the documents  delivered  pursuant  hereto)  supersedes all prior
documents,  understandings,  and agreements,  oral or written, relating to these
transactions  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 document  delivered  pursuant
to this Agreement unless otherwise  expressly provided therein) may be made only
by an instrument in writing executed by the Company.

         (b)      Expenses.  The Restricted  Party shall pay all costs and
expenses incurred by it in connection  with this Agreement, including the fees
and disbursements of its counsel.
         (c) 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.

         (d)  Waiver.  No  failure  or  delay  on the  part  of the  Company  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.

         (e)  Construction.  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 Restricted Party acknowledges and
agrees 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.

         (f)  Forum.   The   Restricted   Party  consents  to  the  in  personam
jurisdiction  of any state or federal court in  Alexandria,  Virginia and waives
any objection to the venue of any such suit, action or proceeding.  In the event
that the Restricted Party institutes a proceeding  involving this Agreement in a
jurisdiction outside Alexandria,  Virginia, the Restricted Party shall indemnify
the Company and its  affiliates for any losses and expenses that may result from
the failure to institute  such  proceeding  only in a state or federal  court in
Alexandria,  Virginia,  including  without  limitation any  additional  expenses
incurred as a result of litigating in another  jurisdiction,  such as reasonable
fees and expenses of local counsel and travel and lodging  expenses for parties,
witnesses, experts and support personnel.

                            [Signature page follows]


<PAGE>

                                 SIGNATURE PAGE

                                       TO

                            NON-COMPETITION AGREEMENT

         IN  WITNESS  WHEREOF,  the  Restricted  Party  has duly  executed  this
Agreement as of the day and year first above written.

                                RESTRICTED PARTY

                                   Signature:

                                  Printed Name:



<PAGE>



                                    EXHIBIT C

                          Form of Non-compete Agreement

                            Non-competition Agreement

         THIS NON-COMPETITION AGREEMENT (this "Agreement") entered into this ___
day of July, 1999 (the  "Effective  Date"),  by the undersigned  individual (the
"Restricted Party") for the benefit of Prime Medical Services,  Inc., a Delaware
corporation (the "Company") and the Company's affiliates.

         WHEREAS,  the  Company,  through a  subsidiary,  has  acquired  certain
lithotripsy  equipment from the Restricted  Party and certain  affiliates of the
Restricted Party; and

         WHEREAS,  as a material  inducement for the Company's  purchase of such
equipment, the Restricted Party has agreed, among other things, not to engage in
certain competitive  activities,  or assist or participate with any other person
or entity engaging in such activities, as provided herein.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged and confessed, the Restricted Party
hereby covenants and agrees as follows:

         1. Agreement.  The Restricted  Party hereby  covenants and agrees that,
until  the  expiration  of  the  Restriction  Period  (as  defined  below),  the
Restricted  Party will not,  directly or indirectly,  either through any kind of
ownership  (other than ownership of securities of a publicly held corporation of
which the  Restricted  Party  owns less than five  percent  (5%) of any class of
outstanding  securities),   or  as  a  principal,   agent,  employer,   advisor,
consultant, co-partner or in any individual or representative capacity whatever,
either for the  Restricted  Party's  own benefit or for the benefit of any other
person,  corporation or other entity,  without the prior written  consent of the
Company,  commit any of the following  acts  described in paragraphs (a) through
(c) below,  which acts shall be  considered  violations  of this covenant not to
compete:

         (a) Lithotripsy Services. Except as permitted pursuant to paragraph (d)
below,  directly or indirectly provide lithotripsy  services,  including without
limitation,  patient  lithotripsy  services,  lithotripsy  management  services,
lithotripter  leasing,  or similar lithotripsy  services,  anywhere within fifty
(50) miles of Columbia  Reston  Hospital  Center in Reston,  Virginia.  The area
described  in  the  preceding  sentence  is  hereinafter   referred  to  as  the
"Restricted Area." Notwithstanding the foregoing, the passive ownership interest
by  Restricted  Party  in that  certain  lithotripsy  partnership  described  on
Exhibit-A  hereto  shall not be deemed a violation by  Restricted  Party of this
paragraph (a); provided,  however, that Restricted Party agrees that, during the
term of this  Agreement,  Restricted  Party shall not increase its  ownership in
such lithotripsy partnership.

         (b) Interference  with Business  Relationships.  Directly or indirectly
request or advise any patient or physician or any other person,  corporation  or
other  entity  having a  business  relationship  with the  Company or any of the
Company's  affiliates  to withdraw,  curtail,  or cancel its business  with such
entity.

         (c) Solicitation of Employees. Directly or indirectly hire any employee
of the  Company  or any of the  Company's  affiliates  or induce or  attempt  to
influence  any  employee of the Company or any of the  Company's  affiliates  to
terminate his or her employment with such entity.

         (d) Medical  Judgment.  Nothing in this Agreement shall be construed to
limit or infringe upon the professional  medical judgment or ability to practice
medicine  of the  Restricted  Party,  if the  Restricted  Party  is a  physician
(including,  but not limited to, the  selection of  appropriate  facilities  for
medical  care),  and  no  exercise  of  professional  medical  judgment  or  act
constituting  the practice of medicine  shall be  considered a violation of this
Agreement.

         2.       Restriction  Period. For purposes of this Agreement,  the
"Restriction  Period" shall begin on the Effective Date and continue until five
(5) years after the Effective Date.
         3.       General.  For purposes of this Agreement,  the Company's
affiliates  shall  include its current and future  (throughout  the  Restriction
Period)  subsidiaries  and  affiliates.The  Restricted  Party has  reviewed  and
carefully  considered  the  provisions of this  Agreement  and,  having done so,
agrees that the  restrictions  set forth herein (a) are fair and reasonable with
respect to time,  geographic area and scope, (b) are not unduly burdensome,  and
(c) are reasonably  required for the  protection of the legitimate  interests of
the Company and its affiliates.
         The  Restricted  Party  agrees  that a  violation  on its  part  of any
covenant  contained in this  Agreement will cause the Company and its affiliates
irreparable  damage for which remedies at law may be insufficient,  and for that
reason, agrees that the Company and its affiliates shall each,  independently be
entitled  as a  matter  of  right  to  equitable  remedies,  including  specific
performance and injunctive relief,  therefor.  The right to specific performance
and  injunctive  relief shall be  cumulative  and in addition to whatever  other
remedies,  at  law or in  equity,  may be  available,  including,  specifically,
recovery of additional damages.

         4.       Miscellaneous.
         (a)  Collateral  Agreements,  Amendments,  and Waivers.  This Agreement
(together with the documents  delivered  pursuant  hereto)  supersedes all prior
documents,  understandings,  and agreements,  oral or written, relating to these
transactions  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 document  delivered  pursuant
to this Agreement unless otherwise  expressly provided therein) may be made only
by an instrument in writing executed by the Company.

         (b) Expenses.  The Restricted  Party shall pay all costs and expenses
incurred by it in connection with this  Agreement,  including the fees and
disbursements of its counsel.

         (c)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.

         (d)  Waiver.  No  failure  or  delay  on the  part  of the  Company  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.

         (e)  Construction.  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 Restricted Party acknowledges and
agrees 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.

         (f)  Forum.   The   Restricted   Party  consents  to  the  in  personam
jurisdiction  of any state or federal court in  Alexandria,  Virginia and waives
any objection to the venue of any such suit, action or proceeding.  In the event
that the Restricted Party institutes a proceeding  involving this Agreement in a
jurisdiction outside Alexandria,  Virginia, the Restricted Party shall indemnify
the Company and its  affiliates for any losses and expenses that may result from
the failure to institute  such  proceeding  only in a state or federal  court in
Alexandria,  Virginia,  including  without  limitation any  additional  expenses
incurred as a result of litigating in another  jurisdiction,  such as reasonable
fees and expenses of local counsel and travel and lodging  expenses for parties,
witnesses, experts and support personnel.

                            [Signature page follows]


<PAGE>

                                 SIGNATURE PAGE

                                       TO

                            NON-COMPETITION AGREEMENT

         IN  WITNESS  WHEREOF,  the  Restricted  Party  has duly  executed  this
Agreement as of the day and year first above written.

                                RESTRICTED PARTY

                                   Signature:

                                  Printed Name:


<PAGE>


                                    EXHIBIT A

                          TO NON-COMPETITION AGREEMENT

                       DESCRIPTION OF EXISTING INVESTMENT

<PAGE>