AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

               NORTH CAROLINA PROSTATHERAPY LIMITED PARTNERSHIP I

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                                    AGREEMENT
                             OF LIMITED PARTNERSHIP
                                       OF
               NORTH CAROLINA PROSTATHERAPY LIMITED PARTNERSHIP I

                                TABLE OF CONTENTS

         Article Heading                                                 Page

         1.       FORMATION..................................................1

         2.       NAME.......................................................1

         3.       OFFICES....................................................1

         4.       PURPOSE....................................................1

         5.       TERM.......................................................2

         6.       CERTAIN DEFINED TERMS......................................2

         7.       CAPITAL CONTRIBUTIONS AND DILUTION OFFERINGS...............6

         8.       CONDITIONS TO THE CAPITAL CONTRIBUTIONS OF THE LIMITED
                  PARTNERS...................................................6

         9.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                  GENERAL PARTNER............................................7

         10.      ADMISSION OF LIMITED PARTNERS..............................7

         11.      CAPITAL ACCOUNTS...........................................8

         12.      ALLOCATIONS................................................9

         13.      DISTRIBUTIONS.............................................10

         14.      RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................10

         15.      LIMITED LIABILITY.........................................12

         16.      TRANSFER OF INTERESTS AND ADMISSION OF PARTNERS...........12

         17.      OPTIONAL PURCHASE OF LIMITED PARTNERSHIP INTERESTS ON CERTAIN
                  EVENTS....................................................16



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         18.      SALE, ASSIGNMENT OR OTHER TRANSFER OF THE GENERAL
                  PARTNER'S INTEREST........................................22

         19.      TERMINATION OF THE SERVICES OF THE GENERAL PARTNER........22

         20.      MANAGEMENT AND OPERATION OF BUSINESS......................23

         21.      RESERVES..................................................25

         22.      INDEMNIFICATION AND EXCULPATION OF THE GENERAL PARTNER....26

         23.      DISSOLUTION OF THE PARTNERSHIP............................26

         24.      DISTRIBUTION UPON DISSOLUTION.............................27

         25.      BOOKS OF ACCOUNT, RECORDS AND REPORTS.....................28

         26.      NOTICES...................................................29

         27.      AMENDMENTS................................................29

         28.      LIMITATIONS ON AMENDMENTS.................................29

         29.      MEETINGS, CONSENTS AND VOTING.............................30

         30.      SUBMISSIONS TO THE LIMITED PARTNERS.......................30

         31.      ADDITIONAL DOCUMENTS......................................30

         32.      SURVIVAL OF RIGHTS........................................30

         33.      INTERPRETATION AND GOVERNING LAW..........................31

         34.      SEVERABILITY..............................................31

         35.      AGREEMENT IN COUNTERPARTS.................................31

         36.      THIRD PARTIES.............................................31

         37.      POWER OF ATTORNEY.........................................31

         38.      ARBITRATION...............................................32

         39.      CREDITORS.................................................32

                  Schedule A...............  Schedule of Partnership Interests



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THE  LIMITED  PARTNERSHIP  INTERESTS  REPRESENTED  BY THIS  LIMITED  PARTNERSHIP
AGREEMENT HAVE NOT BEEN REGISTERED  WITH THE SECURITIES AND EXCHANGE  COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, QUALIFIED UNDER THE NORTH CAROLINA
SECURITIES ACT OR THE LAWS OF NORTH CAROLINA,  OR REGISTERED  UNDER SIMILAR LAWS
OR ACTS OF OTHER STATES IN RELIANCE UPON EXEMPTIONS UNDER SUCH LAWS.


                                    AGREEMENT
                             OF LIMITED PARTNERSHIP
                         OF NORTH CAROLINA PROSTATHERAPY
                              LIMITED PARTNERSHIP I


                  THIS AGREEMENT OF LIMITED  PARTNERSHIP  (the  "Agreement")  is
made  as of  August 14,  1997,  by and  among  PROSTATHERAPIES,  INC.,  a
Delaware corporation (the "General Partner"), and the parties listed on Schedule
A attached hereto as the Limited Partners.

                  1.       FORMATION.

                  The  Partnership was formed pursuant to a filing in the Office
of the Secretary of State of North  Carolina on June 6, 1997, a  Certificate  of
Limited Partnership in accordance with the provisions of the Act.

                  2.       NAME.

                  2.1      The name of the Partnership is "North Carolina
Prostatherapy Limited Partnership I."

                  2.2 The  Partnership  business  shall be conducted  under such
names as the General  Partner may from time to time deem necessary or advisable,
provided that appropriate amendments to this Agreement and all necessary filings
under  applicable  assumed  or  fictitious  name  statutes  or the Act are first
obtained.

                  3.       OFFICES.

                  3.1 The principal  office of the Partnership  shall be at 2008
Litho Place,  Fayetteville,  North Carolina 28304, or at such other place as the
General  Partner  may,  from time to time,  designate  by notice to the  Limited
Partners (the "Records Office").

                  3.2 The Partnership  may have such  additional  offices as the
General Partner may, from time to time, deem necessary or advisable.


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                  4.       PURPOSE.

                  The purpose and business of the  Partnership  shall be: (i) to
operate one or more Prostatron(R)  microwave thermotherapy devices (or any other
BPH treatment equipment) for the transurethral  treatment of the symptoms of BPH
in various  locations in eastern North Carolina or in such other  location(s) as
the General  Partner may determine,  in its sole  discretion,  to be in the best
interests  of the  Partnership,  (ii) to acquire  and  operate in the future any
other  urological  device  or  equipment  that as of the date of this  Agreement
either has not been invented or has not received FDA premarket approval, as long
as such device has such approval at the time it is acquired by the  Partnership;
(iii)  to  acquire  an  interest  in any  business  entity,  including,  without
limitation,  a limited  partnership,  limited  liability company or corporation,
that engages in any business  activity  described in this Article 4; and (iv) to
engage in any and all activities  incidental or related to the  foregoing,  upon
and subject to the terms and conditions of this Agreement.

                  5.       TERM.

                  The  Partnership  shall  terminate  on June 30,  2047,  unless
sooner terminated as herein provided.

                  6.       CERTAIN DEFINED TERMS.

                  Certain terms used in this Agreement  shall have the following
meanings:

                  Act.  The Act means the North Carolina Revised Uniform Limited
Partnership Act, as then in effect.

                  Affiliate.  An  Affiliate  is  (i)  any  person,  partnership,
corporation, association or other legal entity ("person") directly or indirectly
controlling, controlled by or under common control with another person; (ii) any
person owning or controlling 10% or more of the  outstanding  voting interest of
such other person;  (iii) any officer,  director or partner of such person;  and
(iv) if such other  person is an officer,  director  or partner,  any entity for
which such person acts in such capacity.

                  Agreement.  This Agreement of Limited Partnership, as the same
may be amended from time to time.

                  BPH.  Benign Prostatic Hyperplasia, common enlargement of the
prostate.

                  Capital Account.  The Partnership capital account of a Partner
as computed pursuant to Article 11 of this Agreement.

                  Capital  Contributions.  All capital  contributions  made by a
Partner or his predecessor in interest which shall include,  without limitation,
contributions made pursuant to Article 7 of this Agreement.


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                  Capital Transaction.  Any transaction which, were it to
generate proceeds, would produce Partnership Sales Proceeds or Partnership
Refinancing Proceeds.

                  Carolina Lithotripsy.  Carolina Lithotripsy, a North Carolina
limited partnership.  Carolina Lithotripsy initially is the holder of a Majority
in Interest of the Limited Partner interests in the Partnership.

                  Class A Units. The 200 equal limited partnership  interests in
the  Partnership  offered  pursuant  to the  Summary  for a  price  per  Unit of
$2,487.50 in cash.

                  Class B. Units.  The 120 equal limited partnership interests
in the Partnership offered pursuant to the Summary for a price per Unit of
$2,600 in cash.

                  Code.  The Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent, superseding revenue laws.

                  Dilution  Offering.   As  provided  in  Section  7.4  of  this
Agreement,  the future offering of additional limited  partnership  interests in
the Partnership by the General Partner.  Except as otherwise provided in Section
7.4, any successful Dilution Offering will proportionately reduce the Percentage
Interests of the then current Partners in the Partnership.

                  Domestic Proceeding.  Any divorce, annulment, separation or
similar domestic proceeding between a married couple.

                  Equipment.  The  initial  equipment  to  be  acquired  by  the
Partnership for the operation of the  Prostatron(R)  Mobile System.  The initial
equipment to be used in the  operation of the  Prostatron(R)  Mobile System will
include the Trailer,  a tractor truck, the  Prostatron(R),  an ultrasound system
and miscellaneous medical equipment and supplies.

                  FDA.  The United States Food and Drug Administration.

                  General Partner.  The General Partner of the Partnership,
Prostatherapies, Inc., a Delaware corporation and wholly owned subsidiary of
Prime.

                  Initial  Limited  Partner.  Dan A. Myers,  M.D., a resident of
North Carolina. The Initial Limited Partner is to be the only limited partner of
the Partnership  until such time as the new Limited Partners are admitted to the
Partnership,  at which time the Initial  Limited Partner shall withdraw from the
Partnership.

                  Limited Partners.  The Limited Partners are those investors in
the Units  admitted  to the  Partnership  and any person  admitted  as a Limited
Partner in accordance with the provisions of this Agreement.

                  Losses.  The net loss (including Net Losses from Capital
Transactions) of the Partnership for each Year of the Partnership as determined
for federal income tax purposes.

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                  Majority  in Interest  of the  Limited  Partners.  The Limited
Partners who hold more than 50% of the Limited Partner  Percentage  Interests in
the Partnership.

                  Net Gains from Capital Transactions. The gains realized by the
Partnership  as a result of or upon any sale,  exchange,  condemnation  or other
disposition of the capital assets of the Partnership (which assets shall include
Code Section 1231 assets) or as a result of or upon the damage or destruction of
such capital assets.

                  Net Losses from Capital  Transactions.  The losses realized by
the Partnership as a result of or upon any sale, exchange, condemnation or other
disposition of the capital assets of the  Partnership  (which shall include Code
Section 1231 assets) or as a result of or upon the damage or destruction of such
capital assets.

                  Partners.  The General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the
term is used herein.

                  Partnership.  North Carolina Prostatherapy Limited
Partnership I, a North Carolina limited partnership.

                  Partnership  Cash Flow. For the applicable  period the excess,
if any,  of (A) the sum of (i) all  gross  receipts  from  any  source  for such
period,  other than from  Partnership  loans,  Capital  Transactions and Capital
Contributions,  and (ii) any funds released by the  Partnership  from previously
established  reserves,  over  (B) the sum of (i) all cash  expenses  paid by the
Partnership  for such  period;  (ii) the amount of all  payments of principal on
loans to the Partnership;  (iii) capital  expenditures of the  Partnership;  and
(iv) such  reasonable  reserves as the General  Partner shall deem  necessary or
prudent to set aside for future repairs,  improvements or equipment  replacement
or additions,  or to meet working capital requirements or foreseen or unforeseen
future liabilities and contingencies of the Partnership; provided, however, that
the  amounts  referred  to in (B)(i),  (ii) and (iii)  above shall be taken into
account  only to the extent not funded by Capital  Contributions,  loans or paid
out of previously  established reserves.  Such term shall also include all other
funds deemed  available for  distribution  and designated as  "Partnership  Cash
Flow" by the General Partner.

                  Partnership Interest.  The interest of a Partner in the
Partnership as defined by the Act and this Agreement.

                  Partnership  Refinancing Proceeds.  The cash realized from the
refinancing of Partnership assets after retirement of any secured loans and less
(i) payment of all expenses  relating to the transaction and (ii)  establishment
of such  reasonable  reserves as the General  Partner  shall deem  necessary  or
prudent to set aside for future repairs,  improvements, or equipment replacement
or additions,  or to meet working capital requirements or foreseen or unforeseen
future liabilities or contingencies of the Partnership.

                  Partnership  Sales Proceeds.  The cash realized from the sale,
exchange,  casualty  or other  disposition  of all or a portion  of  Partnership
assets after the retirement of all secured loans and less (i) the payment of all
expenses related to the transaction and (ii) establishment of such reasonable

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reserves as the General Partner shall deem necessary or prudent to set aside for
future repairs,  improvements, or equipment replacement or additions, or to meet
working  capital  requirements or foreseen or unforeseen  future  liabilities or
contingencies of the Partnership.

                  Percentage  Interest.  The  interest  of each  Partner  in the
Partnership,  to be  determined  initially  in the case of a Limited  Partner by
reference to his or her Unit ownership based upon the Limited  Partners  holding
an aggregate 80% Percentage Interest in the Partnership,  with each initial Unit
sold representing an initial 0.25% interest.  The General Partner initially will
own a 20%  Percentage  Interest  in  the  Partnership.  A  Partner's  Percentage
Interest may be reduced by a future Dilution Offering.  The Partners' Percentage
Interests in the  Partnership as of the date hereof are as set forth in Schedule
A attached hereto. Any future adjustments in the Partners' Percentage Interests,
due to future Dilution Offerings or otherwise, will be reflected by revisions to
Schedule A.

                  Prime.   Prime Medical Services, Inc., a Delaware corporation.
Prime owns all the capital stock of the General Partner and Lithotripters,
Inc., the management agent.

                  Profit.  The net income of the Partnership (including Net
Gains from Capital Transactions) for each Year of the Partnership as determined
for federal income tax purposes.

                  Pro  Rata  Basis.   In   connection   with  an  allocation  or
distribution,  an allocation  or  distribution  in proportion to the  respective
Percentage Interests of the class of Partners to which reference is made.

                  Prostatron(R).   The  Prostatron(R)   microwave  thermotherapy
device manufactured by EDAP Technomed,  Inc., a Delaware corporation,  and to be
utilized by the Partnership for the treatment of the symptoms of BPH.

                  Prostatron(R) Mobile System.  The Trailer and tractor truck
with the installed and operational Prostatron(R) and ultrasound system.

                  Related Parties.  Carolina Lithotripsy, the General Partner
and their Affiliates and designees.

                  Sales Agency  Agreement.  The sales agency  agreement  through
which  MedTech  Investments,  Inc.,  an Affiliate  of the General  Partner and a
broker-dealer company registered with the Securities and Exchange commission and
a member of the National Association of Securities Dealers, Inc. shall offer and
sell  the  limited  partnership  interest  of the  Partnership  pursuant  to the
Summary.

                  Sales Commission.  The $112.50 sales commission paid to
MedTech Investments, Inc. for each Class B Unit sold to parties other than
Related Parties.

                  Service.  The Internal Revenue Service.

                  Summary.  The Confidential Summary of the Offering of the
Partnership dated June 18, 1997, including all Appendices thereto, and as
amended or as supplemented.

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                  Trailer.  The new mobile trailer manufactured and upfitted by
AK Associates, Inc. to house the Prostatron(R).

                  Units.   The  200   Class  A  and  the  120   Class  B  Units,
collectively,  where no distinction is required by the context in which the term
is used herein.

                  Year.  An annual accounting period ending on December 31 of
each year during the term of the Partnership.

                  7.       CAPITAL CONTRIBUTIONS AND DILUTION OFFERINGS.

                  7.1  General  Partner  Contribution.  On or before the date of
this  Agreement,  the  General  Partner  will  contribute  to the capital of the
Partnership  cash in an amount  equal to 20% (up to  $202,375) of the total cash
contributed to the  Partnership by the Partners in the offering made pursuant to
the Summary.

                  7.2 Limited Partner Contribution.  Each Limited Partner hereby
agrees to contribute and shall  contribute to the capital of the  Partnership on
the date of his admission to the  Partnership the cash amount set forth opposite
his name on Schedule A attached hereto.

                  7.3      No Interest.  Except as otherwise provided herein, no
 interest shall be paid on any contribution to the capital of the Partnership.

                  7.4 Dilution Offerings. As provided in Article 20.5(a), if the
General  Partner and a Majority in  Interest of the Limited  Partners  determine
that it is in the best  interest of the  Partnership,  the General  Partner may,
from  time to  time,  issue,  offer  and  sell  additional  limited  partnership
interests in the Partnership (a "Dilution Offering") to local urologists who are
not already Limited Partners ("Qualified Investors"). The primary purpose of any
Dilution  Offering would be (i) to raise  additional  capital for any legitimate
Partnership  purpose as set forth in  Article 4, and (ii) to assure the  highest
quality of patient care by admitting  Qualified Investors to the Partnership who
would be dedicated and motivated as owners to follow the Partnership's treatment
protocol,  and comply with its quality assurance and outcome analysis  programs.
Any  limited  partnership  interests  offered by the  Partnership  in a Dilution
Offering  shall be sold in the manner and  according to the terms  prescribed in
the  sole  discretion  of the  General  Partner;  provided,  however,  that  any
additional limited partnership  interests offered in a Dilution Offering will be
sold for a price no lower than the highest price for which proportionate limited
partnership  interests  in the  Partnership  have  been  previously  sold by the
Partnership. Any sale of additional limited partnership interests will result in
the  proportionate  dilution  of the  Partnership  Percentage  Interests  of the
existing  Partners.  Notwithstanding  the  above,  in the  event  of a  Dilution
Offering,  the General  Partner,  Carolina  Lithotripsy  and Related Parties may
elect,  in their  sole  discretion,  to  prevent  dilution  of their  respective
Percentage Interests by either contributing a proportionate amount of additional
capital  to  the  Partnership  or  purchasing   additional  limited  partnership
interests in any Dilution  Offering.  Any other  Limited  Partners  will have no
right to purchase  additional  limited  partnership  interests  in any  Dilution
Offering.  Any investor acquiring a limited  partnership  interest in a Dilution
Offering  shall agree to be bound by the terms of this  Agreement,  and shall be
automatically  admitted as a Limited Partner of the Partnership  notwithstanding
any other provisions in

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this  Agreement to the contrary.  Any  adjustment  in the  Partners'  Percentage
Interests  resulting  from a Dilution  Offering shall be set forth on Schedule A
attached hereto.

                  8.       CONDITIONS TO THE CAPITAL CONTRIBUTIONS OF THE
                           LIMITED PARTNERS.

                  The  obligations of the Limited  Partners to make cash Capital
Contributions  hereunder are subject to the condition that the  representations,
warranties, agreements and covenants of the General Partner set forth in Article
9 of this Agreement are and shall be true and correct or have been and will have
been  complied  with  in  all  material   respects  on  the  date  such  Capital
Contributions  are  required  to be made,  except  to the  extent  that any such
representation or warranty expressly pertains to an earlier date.

                  9.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                           GENERAL PARTNER.

                  9.1 The General Partner hereby  represents and warrants to the
Limited Partners that:

                  (a)  The  Partnership  is  a  limited  partnership  formed  in
         accordance  with  and  validly  existing  under  the Act and the  other
         applicable laws of the State of North Carolina;

                  (b) The interests in the  Partnership of the Limited  Partners
         will have been duly  authorized  or created and validly  issued and the
         Limited  Partners shall have no personal  liability to contribute money
         to the  Partnership  other than the amounts agreed to be contributed by
         them in the  manner  and on the  terms  set  forth  in this  Agreement,
         subject, however, to such limitations as may be imposed under the Act;

                  (c) No material  breach or default  adverse to the Partnership
         exists under the terms of any other  material  agreement  affecting the
         Partnership; and

                  (d) The General Partner is a Delaware  corporation  formed and
         existing under the laws of the State of Delaware.

                  9.2  The  General  Partner  hereby  covenants  to the  Limited
Partners that:

                  (a)      It will at all times act in a fiduciary manner with
respect to the Partnership and the Limited Partners;

                  (b) Except as provided in Articles 18 and 19, it will serve as
         the  General  Partner  of the  Partnership  until  the  Partnership  is
         terminated without reconstitution; and

                  (c) It will cause the  Partnership  to carry  adequate  public
         liability,  property  damage and other insurance as is customary in the
         business to be engaged in by the Partnership.

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                  10.      ADMISSION OF LIMITED PARTNERS.

                  The  General  Partner may permit the offer and sale of limited
partnership  interests  on the terms and  conditions  provided in the Summary or
future  Dilution  Offerings and may admit persons  subscribing  for interests as
Limited  Partners in the  Partnership  on the terms and  conditions set forth in
this Article 10.

                  (a) The General  Partner  shall have approved of the admission
         of said person in writing on such terms and  conditions  as the General
         Partner shall determine;

                  (b)  Said  person  shall  have  executed  such   documents  or
         instruments  as the General  Partner may deem necessary or desirable to
         effect his admission as a Limited Partner;

                  (c) Said  person  shall have  accepted  and adopted all of the
         terms and provisions of this Agreement, as then amended;

                  (d)  Said  person  (if a  corporation)  shall  deliver  to the
         General  Partner  a  certified  copy of a  resolution  of its  Board of
         Directors  authorizing  it to become a Limited  Partner under the terms
         and conditions of this Agreement; and

                  (e) Said person,  upon request by the General  Partner,  shall
         pay such reasonable  expenses as may be incurred in connection with its
         admission as a Limited Partner.

                  11.      CAPITAL ACCOUNTS.

                  A capital  account shall be  established  for each Partner and
shall at all  times be  determined  and  maintained  as  provided  by the  Final
Treasury  Regulations  under  Section  704(b)  of the  Code,  as the same may be
amended.  A Partner  shall not be entitled  to withdraw  any part of his capital
account or to receive any distribution from the Partnership,  except as provided
in Articles 13 and 24.

                  (a)      Each Partners' capital account shall be increased by:

                           (i)      The amount of his Capital Contribution
                  pursuant to Article 7; and

                           (ii)     The amount of Profits allocated to him
                  pursuant to Article 12; and

                           (iii) The Partner's pro rata share (determined in the
                  same  manner as such  Partner's  share of  Profits  and Losses
                  allocated pursuant to Article 12 hereof) of any income or gain
                  exempt from tax.

                  (b) Each Partner's capital account shall be decreased by:

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                           (i)      The amount of Losses allocated to him
                  pursuant to Article 12; and

                           (ii) The amount of Partnership Cash Flow, Partnership
                  Sales   Proceeds   and   Partnership    Refinancing   Proceeds
                  distributed to him pursuant to Article 13; and

                           (iii)  The  Partner's  pro rata  share  of any  other
                  expenditures  of the  Partnership  which are not deductible in
                  computing  Partnership  Profits  or  Losses  and which are not
                  added to the tax basis of any Partnership property, including,
                  without   limitation,   expenditures   described   in  Section
                  705(a)(2)(B) of the Code. The Partner's pro rata share of such
                  expenditures  shall be  determined  in the same manner as such
                  Partner's  share of Profits and Losses  allocated  pursuant to
                  Article 12.

                  12.      ALLOCATIONS

                  (a)  Profits  and  Losses.  The  Profits  and  Losses  of  the
         Partnership  shall be allocated  among the Partners in accordance  with
         their  respective  Percentage  Interests.  In  allocating  Profits  and
         Losses,  Net Gains and  Losses  from  Capital  Transactions  (a part of
         Profits and Losses), if any, shall be allocated first.

                  (b)  Qualified  Income  Offset.  If any  Partner  unexpectedly
         receives  any  adjustment,  allocation  or  distribution  described  in
         Treasury Regulations Section 1.704- 1(b)(2)(ii)(d)(4) through (6) which
         causes or increases a deficit balance in such Partner's Capital Account
         (adjusted  for  this  purpose  in  the  manner   provided  in  Treasury
         Regulations Section 1.704-1(b)(2)(ii)(d)),  items of Partnership income
         and gain shall be specially allocated to each such Partner in an amount
         and manner  sufficient  to  eliminate,  to the extent  required  by the
         Regulations,  the deficit Capital Account of such Partner as quickly as
         possible,   provided  that  an  allocation  pursuant  to  this  Article
         12(d)(iii)  shall be made if and only to the extent  that such  Partner
         would  have a deficit  Capital  Account  after  all  other  allocations
         provided for in this  Article  12(d) have been  tentatively  made as if
         this Article  12(d)(iii)  were not in the Agreement.  This provision is
         intended  to be a  "qualified  income  offset,"  as defined in Treasury
         Regulations  Section  1.704-  1(b)(2)(ii)(d),   such  Regulation  being
         specifically incorporated herein by reference.

                  (c) Sales Commission.  The Sales Commission shall be allocated
         to the  Limited  Partners  holding  Class B Units  to the  extent  such
         Limited Partners paid the Sales Commission,  and in proportion to their
         respective  capital  contributions  represented  by such  Units  (i.e.,
         $112,50 in Sales  Commissions  per each Class B Unit).  The  purpose of
         this  Article  12(c)  is to  allocate  the  Sales  Commission  to those
         Partners who actually bore the burden of paying the Sales Commission.


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                  (d)  Allocations  Between  Transferor and  Transferee.  In the
         event of the transfer (other than the pledges of the General  Partner's
         interest  permitted  by Article 18 or  Permitted  Pledges  described in
         Article  16.2(b))  of all or  any  part  of a  Partner's  interest  (in
         accordance with the provisions of this Agreement) in the Partnership at
         any time other  than at the end of a Year,  or the  admission  of a new
         Partner  (in  accordance  with  the  terms  of  this  Agreement),   the
         transferring  Partner  or new  Partner's  share  of  the  Partnership's
         income,  gain,  loss,  deductions  and  credits,  as computed  both for
         accounting  purposes  and for  Federal  income tax  purposes,  shall be
         allocated between the transferor Partner and the transferee Partner (or
         Partners),  or the new Partner and the other Partners,  as the case may
         be, in the same  ratio as the  number of days in such Year  before  and
         after the date of the transfer or admission; provided, however, that if
         there  has  been a sale  or  other  disposition  of the  assets  of the
         Partnership  (or any part thereof)  during such Year,  then the General
         Partner may elect, in its sole discretion,  to treat the periods before
         and after the date of the transfer or  admission as separate  Years and
         allocate the Partnership's net income,  gain, net loss,  deductions and
         credits for each of such deemed  separate  Years.  Notwithstanding  the
         foregoing, the Partnership's "allocable cash basis items," as that term
         is used in Section  706(d)(2)(B)  of the Code,  shall be  allocated  as
         required  by  Section   706(d)(2)  of  the  Code  and  the  regulations
         thereunder.

                  (e) Tax  Withholding.  The Partnership  shall be authorized to
         pay, on behalf of any  Partner,  any amounts to any  federal,  state or
         local taxing  authority,  as may be necessary  for the  Partnership  to
         comply with tax withholding  provisions of the Code or the other income
         tax or  revenue  laws  of any  taxing  authority.  To  the  extent  the
         Partnership  pays any such  amounts  that it may be  required to pay on
         behalf  of  a  Partner,  such  amounts  shall  be  treated  as  a  cash
         Distribution  to such  Partner  and shall  reduce the amount  otherwise
         distributable to such Partner.

                  13.      DISTRIBUTIONS.

                  (a)  Distribution of Partnership  Cash Flow.  Partnership Cash
         Flow shall be distributed to the Partners  within 60 days after the end
         of each Year, or earlier in the discretion of the General  Partner,  in
         proportion  to their  respective  Percentage  Interests  at the time of
         distribution.

                  (b)  Distribution  of  Partnership  Refinancing  Proceeds  and
         Partnership  Sales  Proceeds.   Partnership  Refinancing  Proceeds  and
         Partnership  Sales Proceeds shall be distributed to the Partners within
         60 days of the Capital  Transaction  giving rise to such  proceeds,  or
         earlier in the  discretion  of the General  Partner,  in  proportion to
         their respective Percentage Interests at the time of distribution.

                  (c)  Distribution  in  Liquidation.  Upon  liquidation  of the
         Partnership,  all of the  Partnership's  property  shall  be  sold  and
         Profits and Losses allocated accordingly. Proceeds from the liquidation
         of the Partnership shall be distributed in accordance with Article 24.


                                                      -10-


<PAGE>



                  14.      RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS.

                  14.1  Management.  The Limited Partners shall not take part in
the management of the business,  nor transact any business for the  Partnership,
nor  shall  they  have  power  to  sign  for or to  bind  the  Partnership.  The
Partnership may,  however,  contract with one or more Limited Partners to act as
the local Medical Director and Quality Assessment Director for the Prostatron(R)
Mobile System.  No Limited Partner may withdraw from the  Partnership  except as
expressly permitted herein.

                  14.2 Operation of  Prostatron(R)  Mobile  System.  The Limited
Partners shall not operate or utilize the  Prostatron(R)  Mobile System or other
Partnership  equipment except pursuant to (i) an Agreement with the Partnership;
or (ii) any other arrangement specifically approved by the General Partner.

                  14.3 Outside Activities.  The Limited Partners agree that they
owe fiduciary  duties to the  Partnership  and, as a  consequence,  each Limited
Partner (that is not the General Partner or an Affiliate of the General Partner)
agrees that he or she shall not engage in "Outside  Activities"  while he or she
is a Limited Partner in the Partnership.  The phrase "Outside  Activities" means
directly or indirectly  owning,  leasing or subleasing a  Prostatron(R)  (or any
similar  equipment  or competing  devices  used for  treating  BPH) or any other
therapeutic equipment acquired by the Partnership. Prohibited indirect ownership
shall include the ownership of any interest in a business venture (through stock
ownership,  partnership  interest ownership,  or as otherwise determined in good
faith by the General Partner) involving the ownership, purchase, lease, sublease
or operation of a Prostatron(R)  (or similar equipment or competing devices used
for treating BPH), or other  competing  device or equipment,  unless the General
Partner determines that such activity by the Limited Partners is not detrimental
to the best interests of the Partnership .

                  Upon  the  termination  or  transfer  of a  Limited  Partner's
interest in the  Partnership  for any reason,  including a transfer  pursuant to
Article 17.3 hereof, the withdrawing  Limited Partner shall not, for a period of
two (2)  years  following  the date of the  withdrawal,  engage  in any  Outside
Activities in any "Market Area" in which the Partnership is transacting business
or within the prior  twelve  months has  transacted  business  (the  "Restricted
Facilities").  For the purposes of this  Article  14.3,  the term "Market  Area"
shall mean (i) the area within a ten mile radius of any Restricted Facility, but
if such area is determined by a court of competent jurisdiction to be too broad,
then it shall  mean (ii) the area  within a five mile  radius of any  Restricted
Facility, but if such area is determined by a court of competent jurisdiction to
be too broad then it shall mean (iii) the area  within a two mile  radius of any
Restricted Facility.

                  In the event a Limited Partner wishes and intends to engage in
an Outside  Activity in a Market Area, he or she must provide  written notice of
such intent to the General  Partner  prior to engaging in the Outside  Activity.
The  written  notice  shall be deemed an  election  by the  Limited  Partner  to
withdraw from the Partnership (the "Notice of  Withdrawal"),  and shall give the
General Partner the purchase rights as provided  Article 17.3 hereof.  After the
Notice of  Withdrawal,  the  former  Limited  Partner  may  engage in an Outside
Activity in the Market Area only after waiting the period of two years specified
in this  Article  14.3.  In the  event of  breach  of the  waiting  period,  the
Partnership shall be

                                                      -11-


<PAGE>



entitled to any remedy at law or equity with respect to such  breach,  including
without limitation an injunction or suit for damages.

                  If a Limited  Partner during his or her  participation  in the
Partnership  engages in an  Outside  Activity  in a Market  Area  without  first
notifying  the General  Partner in violation of this Article  14.3,  the Limited
Partner  shall be deemed to have  given a Notice of  Withdrawal  on the date the
General Partner first becomes aware of the Limited Partner's Outside Activity in
the Market Area.  Upon  receiving a Limited  Partner's  Notice of  Withdrawal or
equivalent  thereof,  the Partnership may invoke the purchase rights provided in
Article  17.3  and  shall be  entitled  to any  other  remedy  at law or  equity
including without limitation an injunction or suit for damages.

                  14.4  Disclosure  of  Confidential  Information.  Each Limited
Partner acknowledges and agrees that his or her participation in the Partnership
under this Agreement necessarily involves his or her understanding of and access
to certain trade secrets and other  confidential  information  pertaining to the
business of the Partnership.  Accordingly,  each Limited Partner (other than the
General Partner and its Affiliates that may also hold Limited Partner interests)
agrees that at all times during his or her participation in the Partnership as a
Limited  Partner and  thereafter,  he or she will not,  directly or  indirectly,
without the express written authority of the Partnership, unless required by law
or directed by a applicable legal authority having jurisdiction over the Limited
Partner,  disclose or use for the benefit of any  person,  corporation  or other
entity  (other  than the  Partnership),  or himself or  herself,  (i) any trade,
technical,  operational,  management or other  secrets,  any patient or customer
lists  or  other   confidential  or  secret  data,  or  any  other  proprietary,
confidential or secret  information of the Partnership or (ii) any  confidential
information concerning any of the financial  arrangements,  financial positions,
hospital  or  physician  contracts,  third  party  payor  arrangements,  quality
assurance  and  outcome  analysis  programs,  competitive  status,  customer  or
supplier matters, internal organizational matters, technical abilities, or other
business affairs of or relating to the Partnership.  The Limited Partners (other
than the General  Partner and its Affiliates  that may also hold Limited Partner
interests)  acknowledge  that  all  of  the  foregoing  constitutes  proprietary
information, which is the exclusive property of the Partnership. In the event of
breach  of  this  Article  14.4  as  determined  by  the  General  Partner,  the
Partnership  shall be entitled  to any remedy at law or equity  with  respect to
such breach, including without limitation, an injunction or suit for damages.

                  15.      LIMITED LIABILITY.

                  No Limited Partner shall be required to make any  contribution
to the  capital of the  Partnership  except as set forth in Article 7, nor shall
any Limited  Partner in his capacity as such, be bound by, or personally  liable
for,  any expense,  liability or  obligation  of the  Partnership  except to the
extent of his or her (i) interest in the  Partnership;  and (ii)  obligation  to
return distributions made to him or her under certain  circumstances as required
by the Act.


                                                      -12-


<PAGE>



                  16.      TRANSFER OF INTERESTS AND ADMISSION OF PARTNERS.

                  16.1     Transferability.

                  (a) The  term  "transfer"  when  used in this  Agreement  with
         respect to a Partnership  Interest includes a sale,  assignment,  gift,
         pledge,  exchange,  or any other  disposition (but does not include the
         issuance of new Partnership Interests pursuant to a Dilution Offering);

                  (b) Except as otherwise  provided herein,  the General Partner
         shall not at any time  transfer or assign its interest or obligation as
         General Partner;

                  (c) The Partnership  Interest of any Limited Partner shall not
         be  transferred,  in whole or in part,  except in  accordance  with the
         conditions and limitations set forth in Articles 16.2 or 17;

                  (d) The  transferee of a Partnership  Interest by  assignment,
         operation of law or otherwise,  shall have only the rights,  powers and
         privileges  enumerated in Article 16.3 or otherwise provided by law and
         may not be admitted to the  Partnership as a Limited  Partner except as
         provided in  Articles  7.4 and 16.4 or as a General  Partner  except as
         provided in Article 16.5;

                  (e) Notwithstanding any provision herein to the contrary,  the
         Partnership  Agreement  shall  in  no  way  restrict  the  issuance  or
         transfers of stock of the General Partner; and

                  (f) Notwithstanding any provision herein to the contrary,  the
         issuance of Partnership  Interests  pursuant to a Dilution Offering and
         the admission of new Limited Partners  pursuant to a Dilution  Offering
         shall be governed by the provisions of Section 7.4 of this Agreement.

                  16.2     Restrictions on Transfers by Limited Partners.

                  (a) All or part of a Partnership  Interest may be  transferred
         by a  Limited  Partner  only  with the prior  written  approval  of the
         General  Partner,  which  approval may be granted or denied in its sole
         discretion

                  (b) The General  Partner  shall not approve any  transfer of a
         Partnership  Interest,  except a pledge of any Partnership  Interest by
         the General Partner to any bank,  insurance  company or other financial
         institution to secure payment of indebtedness  (a "Permitted  Pledge"),
         or otherwise  unless the proposed  transferee  shall have furnished the
         General Partner with a sworn statement that:


                                                      -13-


<PAGE>



                           (i) The proposed  transferee  proposes to acquire his
                  Partnership  Interest as a principal,  for  investment and not
                  with a view to resale or distribution;

                           (ii) The proposed  transferee meets such requirements
                  regarding sophistication,  income and net worth as required by
                  applicable state and Federal securities laws;

                           (iii) The proposed  transferee has met such net worth
                  and income  suitability  standards as have been established by
                  the General Partner;

                           (iv)  The   proposed   transferee   recognizes   that
                  investment in the Partnership  involves  certain risks and has
                  taken  full  cognizance  of and  understands  all of the  risk
                  factors related to the purchase of a Partnership Interest; and

                           (v)  The  proposed   transferee  has  met  all  other
                  requirements of the General Partner for the proposed transfer.

                  (c) Other than in the case of a Permitted  Pledge,  a transfer
         of a  Partnership  Interest  may be made  only  if,  prior  to the date
         thereof,  the Partnership  upon request receives an opinion of counsel,
         satisfactory in form and substance to the General Partner, that neither
         the offering nor the proposed transfer will require  registration under
         Federal or applicable state securities laws or regulations.

                  16.3     Rights of Transferee.

                  Unless  admitted to the Partnership in accordance with Article
16.4, the  transferee of a Partnership  Interest or a part thereof or any right,
title or interest therein shall not be entitled to any of the rights, powers, or
privileges of his  predecessor in interest,  except that he shall be entitled to
receive and be credited or debited with his  proportionate  share of Partnership
income, gains, Profits, Losses, deductions, credits or Distributions.

                  16.4     Admission of Limited Partners.

                  Except as  otherwise  provided  in  Articles  7.4 and 17,  the
General Partner, or the transferee of all or part of the Partnership Interest of
either  a  General  Partner  or a  Limited  Partner,  may  be  admitted  to  the
Partnership as a Limited  Partner upon  furnishing to the General Partner all of
the following:

                  (a) The  written  approval of a Majority in Interest of all of
         the Limited  Partners  (except the assignor  Partner),  or the assignor
         Partner  alone,  which  approval  may be  granted or denied in the sole
         discretion of such Partners or Partner (as the case may be);

                                                      -14-


<PAGE>



                  (b)  The  written  approval  of  the  General  Partner,  which
         approval may be granted or denied in the sole discretion of the General
         Partner;

                  (c) Acceptance, in a form satisfactory to the General Partner,
         of all the  terms  and  conditions  of  this  Agreement  and any  other
         documents  required in connection with the operation of the Partnership
         pursuant to the terms of this Agreement;

                  (d)  A  properly  executed  power  of  attorney  substantially
         identical to that contained in Article 37;

                  (e) Such other  documents or instruments as may be required in
         order to effect his or her admission as a Limited Partner; and

                  (f) Payment of such reasonable  expenses as may be incurred in
         connection with his or her admission as a Limited Partner.

                  16.5     Admission of General Partners.

                  A Limited  Partner,  or the  transferee  of all or part of the
Partnership  Interest of the General Partner, may be admitted to the Partnership
as a  general  partner  upon  furnishing  to  the  General  Partner  all  of the
following:

                  (a) The  written  consent of both the  General  Partner  and a
         Majority  in Interest of the  Limited  Partners,  which  consent may be
         granted or denied in the sole discretion of the Partners;

                  (b) Such financial statements,  guarantees or other assurances
         as the General  Partner  may require  with regard to the ability of the
         proposed  general  partner to fulfill the  financial  obligations  of a
         general partner hereunder;

                  (c) Acceptance,  in form  satisfactory to the General Partner,
         of all the  terms  and  provisions  of  this  Agreement  and any  other
         documents  required in connection with the operation of the Partnership
         pursuant to the terms of this Agreement;

                  (d) A certified copy of a resolution of its Board of Directors
         (if it is a  corporation)  authorizing  it to become a general  partner
         under the terms and conditions of this Agreement;

                  (e)      A power of attorney substantially identical to that
         contained in Article 37;

                  (f) Such other  documents or instruments as may be required in
         order to effect its admission as a general partner; and


                                                      -15-


<PAGE>



                  (g) Payment of such reasonable  expenses as may be incurred in
         connection with its admission as a general partner.

                  Notwithstanding  the above,  a transferee  that controls or is
controlled by the General Partner or one or more of its Affiliates that receives
all or part of the  Partnership  Interest of the General Partner may be admitted
to the  Partnership as a general  partner upon complying with all the provisions
of Article  16.5  except for  subparagraph  16.5(a).  As long as the  transferee
either  controls or is controlled  by the General  Partner or one or more of its
Affiliates,  no  Limited  Partner  consents  will  be  required  to  admit  such
transferee as a General Partner to the Partnership.

                  16.6     Amendment of Certificate of Limited Partnership and
Qualification.

                  The  General  Partner  shall  take  all  steps  necessary  and
appropriate to prepare and record any  amendments to the  Certificate of Limited
Partnership, as may be necessary or appropriate from time to time to comply with
the requirements of the Act, including,  without limitation,  upon the admission
to the Partnership of any general partner  pursuant to the provisions of Article
16.5, and may for this purpose  exercise the power of attorney  delivered to the
General Partner pursuant to Article 16.5 or 37. In addition, the General Partner
shall take all steps necessary and appropriate to prepare and record any and all
documents  necessary to qualify the Partnership to do business in  jurisdictions
where the Partnership is doing business,  and may for this purpose  exercise the
power of attorney  delivered to the General  Partner  pursuant to Articles 16.4,
16.5 or 37.

                  16.7     Fundamental Changes.

                  As provided in Article  20.5(b),  if the General Partner and a
Majority in Interest of the Limited  Partners  approve a plan  providing for the
merger or consolidation of the Partnership with another person or entity, or the
sale of all or substantially all of the Partnership Interests, including without
limitation the exchange of Partnership Interests for equity interests in another
person or entity or for cash or other consideration or combination thereof, then
and in such event,  the Limited  Partners  shall be obligated to take or refrain
from  taking,  as the  case  may be,  such  actions  as the  plan  may  provide,
including,  without limitations,  executing such instruments, and providing such
information as the General Partner shall reasonably request.  Any plan described
in this Article 16.7 may also effect an amendment to the  Partnership  Agreement
or the adoption of a new partnership  agreement in connection with the merger of
the  Partnership  with another person or entity.  The plan may also provide that
the General Partner and its Affiliates shall receive fees for services  rendered
in connection  with the  operation of the  Partnership  or any successor  entity
following  the  consummation  of the  transactions  described  in the plan,  and
neither the  Partnership nor the Partners shall have any right by virtue of this
Agreement in the income derived therefrom. Any securities or other consideration
to be distributed  to the Partners  pursuant to the plan shall be distributed in
the  manner  set forth in Article  24(c) as though  the  Partnership  were being
liquidated.  For this purpose only,  the fair market value of the  securities or
other  consideration  to be  received  pursuant  to the plan shall be treated as
"Profits"  and the capital  accounts of the  Partners  shall be increased in the
manner  provided  in Article  11(a)(ii).  No Partner  shall be  entitled  to any
appraisal  or similar  rights in  connection  with a plan  contemplated  by this
Article 16.7.


                                                      -16-


<PAGE>



                  16.8     Withdrawal of Initial Limited Partner.

                  Upon the date the first  Limited  Partner is  admitted  to the
Partnership in accordance with Article 10 of this Agreement, the Initial Limited
Partner  shall  withdraw  from  the  Partnership,   and  thereupon  his  Capital
Contribution shall be returned and his Partnership Interest shall be reallocated
to the Limited Partners.

                  17.      OPTIONAL PURCHASE OF LIMITED PARTNERSHIP INTERESTS ON
                           CERTAIN EVENTS.

                  17.1     Death.

                  Upon the  death of a Limited  Partner,  the  deceased  Limited
Partner's  executor,  administrator,  or other legal or personal  representative
shall give  written  notice of that fact to the  General  Partner.  The  General
Partner shall have the option to purchase at the Closing (as defined  below) the
Partnership   Interest  of  the  deceased   Limited  Partner  (whose   executor,
administrator  or other  legal or  personal  representative  shall  then  become
obligated  to sell such  Partnership  Interest) at the price  determined  in the
manner  provided  in  Article  17.8  of  this  Agreement  and on the  terms  and
conditions provided in Article 17.9 of this Agreement. The General Partner shall
have a period of thirty (30) days following the date it first received notice of
the death of the Limited Partner (the "Option Period") within which to notify in
writing the deceased Limited Partner's executor, administrator or other legal or
personal representative, whether the General Partner wishes to purchase all or a
portion of the  Partnership  Interest of the deceased  Limited  Partner.  If the
General  Partner does not elect to purchase the entire  Partnership  Interest of
the deceased  Limited  Partner before the expiration of the Option Period and in
the  manner  provided  herein,  the  portion  of the  Partnership  Interest  not
purchased   shall  be  held  by  the  deceased   Limited   Partner's   executor,
administrator,  or other  legal  representative  pursuant  to the  terms of this
Agreement. The General Partner, in its sole discretion,  may elect to assign its
rights to purchase the Partnership  Interest of a deceased Limited Partner under
this Section 17.1 to the Partnership  and, in such case, the  Partnership  shall
have the same rights as  provided  for the General  Partner  under this  Section
17.1.

                  17.2     Bankruptcy, Insolvency or Assignment for Benefit of
                           Creditors of a Limited Partner.

                   In the event  that an  involuntary  or  voluntary  proceeding
under the  Federal  Bankruptcy  Code,  as  amended,  is filed for or against any
Limited  Partner,  or if any Limited  Partner shall make an  assignment  for the
benefit of his creditors,  or if any Limited Partner has a receiver or custodian
appointed  for his assets,  or any Limited  Partner  generally  fails to pay his
debts when due, the insolvent  Limited  Partner  shall give written  notice (the
"Notice of Insolvency")  to the General Partner of the  commencement of any such
proceeding or the  occurrence of such event within five days of the first notice
to him of such  commencement  or occurrence of such event.  The General  Partner
shall  have the  option to  purchase  at the  Closing  (as  defined  below)  the
Partnership  Interest of the insolvent  Limited Partner (which insolvent Limited
Partner  or  his  trustee,  custodian,  receiver  or  other  personal  or  legal
representative,  as the case may be,  shall then become  obligated  to sell such
Partnership  Interest) at the price determined in the manner provided in Article
17.8 of this Agreement and on the terms and

                                                      -17-


<PAGE>



conditions provided in Article 17.9 of this Agreement. The General Partner shall
have a period of thirty  (30) days  following  the date of either  the Notice of
Insolvency,  or if such formal notice is not given, the date the General Partner
first  becomes  aware of the  financial  condition  of the  Limited  Partner  as
outlined in this Article 17.2 (the "Option  Period"),  within which to notify in
writing the insolvent Limited Partner or his trustee,  custodian,  receiver,  or
other legal or personal  representative,  whether the General  Partner wishes to
purchase all or a portion of the Partnership  Interest of the insolvent  Limited
Partner.  If  the  General  Partner  does  not  elect  to  purchase  the  entire
Partnership  Interest of the insolvent  Limited Partner before the expiration of
the  Option  Period  and in the  manner  provided  herein,  the  portion  of the
Partnership  Interest not purchased shall be held by the insolvent Partner,  his
trustee, custodian,  receiver or other legal or personal representative pursuant
to the terms of this Agreement. The General Partner, in its sole discretion, may
elect to assign its rights to purchase the Partnership  Interest of an insolvent
Limited  Partner under this Section 17.2 to the  Partnership  and, in such case,
the  Partnership  shall have the same rights as provided for the General Partner
under this Section 17.2.

                  17.3     Breach of Article 14.3.

                  In the event the General  Partner either  receives a Notice of
Withdrawal  as provided in Article 14.3 or receives  notice of breach of Article
14.3 by a Limited  Partner  (the  "Defaulting  Limited  Partner"),  the  General
Partner  may  elect,  in its sole  discretion,  to treat such event as a default
under this  Agreement  and enforce the  provisions  of this Article 17.3. If the
General  Partner  elects to enforce the  provisions  of this Article  17.3,  the
General  Partner  shall give  written  notice of such  election  (the "Notice of
Default")  to the  Defaulting  Limited  Partner  within 180 days of the date the
General Partner first received notice of the defaulting  event.  Upon giving the
Notice of Default,  the General Partner shall have the option to purchase at the
Closing (as defined below) the  Partnership  Interest of the Defaulting  Limited
Partner (which  Defaulting  Limited Partner shall then become  obligated to sell
such  Partnership  Interest) at the price  determined in the manner  provided in
Article  17.8 of this  Agreement  and on the terms and  conditions  provided  in
Article  17.9 of this  Agreement.  The  General  Partner  shall have a period of
thirty (30) days  following the date of the Notice of Default (the "First Option
Period")  within  which to notify in writing  the  Defaulting  Limited  Partner,
whether  the  General  Partner  wishes  to  purchase  all  or a  portion  of the
Partnership  Interest of the Defaulting Limited Partner.  If the General Partner
does not elect to purchase  the entire  Partnership  Interest of the  Defaulting
Limited  Partner  before the  expiration  of the Option Period and in the manner
provided herein, the portion of the Partnership  Interest not purchased shall be
held by the Defaulting  Limited Partner pursuant to the terms of this Agreement.
The General Partner,  in its sole discretion,  may elect to assign its rights to
purchase the  Partnership  Interest of a Defaulting  Limited  Partner under this
Section 17.3 to the Partnership  and, in such case, the  Partnership  shall have
the same rights as provided for the General Partner under this Section 17.3.

                  17.4     Domestic Proceeding.

                  In the  event  that a spouse of a  Limited  Partner  commences
against  a  Limited  Partner,  or a  Limited  Partner  is named  in, a  Domestic
Proceeding,  the Limited  Partner  shall give  written  notice  (the  "Notice of
Domestic  Proceeding")  to the General  Partner of the  commencement of any such
proceeding within five days of the first notice to him of such commencement. The
General  Partner  shall have the option to  purchase  at the Closing (as defined
below) the Partnership Interest of the Limited

                                                      -18-


<PAGE>



Partner  involved in the Domestic  Proceeding  (which Limited Partner shall then
become obligated to sell such Partnership Interest),  at the price determined in
the manner  provided  in  Article  17.8 of this  Agreement  and on the terms and
conditions provided in Article 17.9 of this Agreement. The General Partner shall
have a period of thirty  (30) days  following  the date of either  the Notice of
Domestic  Proceeding or if such formal notice is not given, the date the General
Partner is first aware of the domestic  circumstances  of the Limited Partner as
provided in this Article 17.4 (the "Option  Period"),  within which to notify in
writing the Limited  Partner  involved in the Domestic  Proceeding,  whether the
General Partner wishes to purchase all or a portion of the Partnership  Interest
of such Limited  Partner.  If the General Partner does not elect to purchase the
Partnership  Interest of the Limited Partner involved in the Domestic Proceeding
before the  expiration of the Option Period and in the manner  provided  herein,
the portion of the  Partnership  Interest  not  purchased  shall be held by such
Limited Partner pursuant to the terms of this Agreement. The General Partner, in
its sole discretion,  may elect to assign its rights to purchase the Partnership
Interest of the Limited Partner  involved in the Domestic  Proceeding under this
Section 17.4 to the Partnership  and, in such case, the  Partnership  shall have
the same rights as provided for the General Partner under this Section 17.4.

                  17.5     Divestiture Option.

                  If  state  or  federal  regulations  or laws  are  enacted  or
applied,  or if any other legal developments occur, which, in the opinion of the
General Partner adversely affect (or potentially adversely affect) the operation
of the Partnership (e.g., the enactment or application of prohibitory  physician
self-referral  legislation against the Partnership or its Partners), the General
Partner shall promptly either, in its discretion, (i) take the steps outlined in
this Article 17.5 to divest the Limited Partners of their Partnership Interests,
or (ii) dissolve the Partnership as provided in Article 23.1(e).  If the General
Partner  chooses  option  (i), it shall  deliver a written  notice to all of the
Limited  Partners  (the  "Notice of  Election")  and purchase  such  Partnership
Interests  for  its  own  account.  The  purchase  price  to be  paid  for  each
Partnership  Interest  shall be  determined in the manner as provided in Article
17.8 and shall be on the terms and  conditions as provided in Article 17.9.  The
transfer of the Partnership  Interests and the payment of the purchase price (as
provided  in  Article  17.8)  shall be made at such  time as  determined  by the
General  Partner to be in the best interests of the  Partnership and its Limited
Partners.  Each  Limited  Partner  hereby  makes,  constitutes  and appoints the
General  Partner,  with  full  power  of  substitution,   his  true  and  lawful
attorney-in-fact,  to take such actions and execute such documents on his behalf
to effect the transfer of his  Partnership  Interest as provided in this Article
17.5.

                  17.6     Dissolution of Carolina Lithotripsy.

                  Upon the  voluntary  or  involuntary  dissolution  of Carolina
Lithotripsy,  Carolina  Lithotripsy's  general  partner or, if there is none,  a
representative  of its limited  partners  shall give written  notice of the fact
(the "Notice of Dissolution") to the General Partner.  The General Partner shall
have the option to purchase at the  Closing (as defined  below) the  Partnership
Interest of Carolina  Lithotripsy (whose general partner or other representative
shall then become  obligated  to sell such  Partnership  Interest)  at the price
determined in the manner  provided in Article 17.8 of this  Agreement and on the
terms and  conditions  provided in Article 17.9 of this  Agreement.  The General
Partner shall have a period of thirty (30) days following the date of either the
Notice of  Dissolution  of Carolina  Lithotripsy or if such formal notice is not
given, the date the General Partner is first aware of the dissolution (the

                                                      -19-


<PAGE>



"Option  Period"),  within  which to notify in  writing  Carolina  Lithotripsy's
general partner or other  representative,  whether the General Partner wishes to
purchase all or a portion of the Partnership  Interest of Carolina  Lithotripsy.
If the  General  Partner  does not  elect to  purchase  the  entire  Partnership
Interest of Carolina  Lithotripsy before the expiration of the Option Period and
in the manner  provided  herein,  the portion of the  Partnership  Interest  not
purchased  shall be held by the  successors in interest to Carolina  Lithotripsy
upon dissolution  pursuant to the terms of this Agreement.  The General Partner,
in its  sole  discretion,  may  elect to  assign  its  rights  to  purchase  the
Partnership  Interest of Carolina  Lithotripsy  under this  Section  17.6 to the
Partnership  and, in such case,  the  Partnership  shall have the same rights as
provided for the General Partner under this Section 17.6.

                  17.7     Regulatory Action Regarding Carolina Lithotripsy.

                  In the event Carolina  Lithotripsy is conclusively  determined
by a court of  competent  jurisdiction  or state or  federal  authority  to have
violated any law or  regulation,  and such action is  determined  by the General
Partner to effect the Partnership's participation under the Medicare or Medicaid
programs,   or  otherwise  adversely  effects  the  material  interests  of  the
Partnership,  the General Partner may elect to treat such action as a defaulting
event by Carolina  Lithotripsy (the "Defaulting  Event"). If the General Partner
elects to enforce the provisions of this Article 17.7, the General Partner shall
give  written  notice  of such  election  (the  "Default  Notice")  to  Carolina
Lithotripsy  within ninety days of the date the General  Partner first  received
notice of the  Defaulting  Event.  Upon giving the Default  Notice,  the General
Partner shall have the option to purchase at the Closing (as defined  below) the
Partnership   Interest  of  Carolina   Lithotripsy   (in  which  event  Carolina
Lithotripsy's general partner or other representative, as the case may be, shall
then become obligated to sell such Partnership Interest) at the price determined
in the manner  provided in Article 17.8 of this  Agreement  and on the terms and
conditions provided in Article 17.9 of this Agreement. The General Partner shall
have a period of thirty (30) days  following the date of the Default Notice (the
"Option Period") within which to notify Carolina  Lithotripsy in writing whether
the  General  Partner  wishes to  purchase  all or a portion of the  Partnership
Interest  of Carolina  Lithotripsy.  If the  General  Partner  does not elect to
purchase  the entire  Partnership  Interest of Carolina  Lithotripsy  before the
expiration of the Option Period and in the manner provided  herein,  the portion
of the Partnership  Interest not purchased shall be held by Carolina Lithotripsy
pursuant  to the  terms of this  Agreement.  The  General  Partner,  in its sole
discretion,  may elect to assign its rights to purchase the Partnership Interest
of Carolina  Lithotripsy under this Section 17.7 to the Partnership and, in such
case,  the  Partnership  shall have the same rights as provided  for the General
Partner under Section 17.7.

                  17.8     Purchase Price.

                  The purchase price to be paid for the Partnership  Interest of
any Limited Partner whose interest is being purchased pursuant to the provisions
of Articles 17.1, 17.2,  17.3,  17.4, 17.5, 17.6 or 17.7 (the "Retiring  Limited
Partner")  shall be an amount equal to the Retiring  Limited  Partner's share of
the Partnership's book value, if any, (prorated in the event that only a portion
of his  Partnership  Interest is being  purchased)  as  reflected by the Capital
Account of the Retiring  Limited  Partner  (unadjusted  for any  appreciation in
Partnership  assets  and as reduced by  depreciation  deductions  claimed by the
Partnership  for  tax  purposes).  The  determination  of the  Retiring  Limited
Partner's Capital Account on the Valuation Date (as defined below) shall be made
by the Partnership's internal accountant (the "Partnership

                                                      -20-


<PAGE>



Accountant")  upon a review of the  Partnership  books of account,  and a formal
audit is expressly  waived.  The statement of the  Partnership  Accountant  with
respect to the Capital Account of the Retiring  Limited Partner on the Valuation
Date shall be binding and conclusive upon the Partnership, the purchaser and the
Retiring Limited Partner and his representative. The Valuation Date shall be the
last day of the month immediately  preceding the month in which occurs:  (i) the
death of a Limited Partner,  in the case of a purchase by reason of death;  (ii)
the bankruptcy or insolvency of a Limited Partner,  in the case of a purchase by
reason of such  bankruptcy  or  insolvency;  (iii) the Notice of  Withdrawal  or
breach of Article  14.3 as provided in Article 17.3 in the case of a purchase by
reason thereof; (iv) the commencement of the Domestic Proceeding, in the case of
a purchase by reason thereof;  (v) the Notice of Election as provided in Article
17.5;  (vi) the date of  dissolution  as provided in Article  17.6; or (vii) the
Default  Notice as provided in Article 17.7, in the case of a purchase by reason
thereof. Any Limited Partner whose Partnership Interest is purchased pursuant to
the provisions of Article 17.1,  17.2,  17.3,  17.4, 17.5, 17.6 or 17.7 shall be
entitled  only to the purchase  price which shall be paid at the Closing in cash
(or  by  certified  or  cashier's  check)  and  shall  not  be  entitled  to any
Partnership  distributions  made after the  Valuation  Date.  The  transfer of a
Partnership  Interest of a Retiring  Limited Partner shall be deemed to occur as
of the Valuation Date and the Retiring  Limited  Partner shall have no voting or
other  rights as a Limited  Partner  after such  date.  The  purchaser  shall be
entitled to any distributions attributable to the transferred interest after the
Valuation  Date and  shall  have the  right to  deduct  the  amount  of any such
distributions made to the Retiring Limited Partner after the Valuation Date from
the purchase price.

                  17.9     Closing.

                  17.9.1  Closing  of  Purchase  and Sale.  The  Closing  of any
         purchase and sale of a Partnership  Interest  pursuant to Article 17.1,
         17.2, 17.3, 17.4, 17.5, 17.6 or 17.7 of this Agreement shall take place
         at the  principal  office  of the  Partnership,  or  such  other  place
         designated by the General  Partner,  on the date  determined as follows
         (the "Closing"):

                  (a) In the case of a purchase and sale  occurring by reason of
         the death of a Limited  Partner as  provided  in  Article  17.1 of this
         Agreement,  the Closing  shall be held on the thirtieth day (or if such
         thirtieth  day is not a business  day, the next  business day following
         the thirtieth day) next following the last to occur of:

                           (i)      Qualification of the executor or personal
                  administrator of the deceased Limited Partner's estate;

                           (ii) The date on which any necessary determination of
                  the purchase price of the Partnership Interest to be purchased
                  has been made; or

                           (iii) The date that  coincides  with the close of the
                  Option Period.

                  (b) In the case of a purchase and sale  occurring by reason of
         the  occurrence of one of the events  described in Article 17.2,  17.3,
         17.4, 17.5, 17.6 or 17.7 of this

                                                      -21-


<PAGE>



         Agreement,  the Closing  shall be held on the thirtieth day (or if such
         thirtieth  day is not a business  day, the next  business day following
         the thirtieth day) next following the later to occur of:

                           (i) The date on which any necessary determination of
                  the purchase price of the Partnership Interest to be purchased
                  has been made; or

                           (ii) The date  that  coincides  with the close of the
                  Option Period.

         At the Closing,  although not  necessary  to effect the  transfer,  the
         Retiring Limited Partner shall  concurrently with tender and receipt of
         the applicable  purchase price,  deliver to the purchaser duly executed
         instruments of transfer and  assignment,  assigning good and marketable
         title to the  portion or  portions of the  Retiring  Limited  Partner's
         entire  Partnership  Interest thus  purchased,  free and clear from any
         liens  or  encumbrances  or  rights  of  others  therein.  The  parties
         acknowledge  that occurrence of any of the triggering  events described
         in Article 17.1,  17.2,  17.3,  17.4, 17.5, 17.6 or 17.7 and compliance
         with all the Articles of this  Agreement,  except the  execution of the
         transfer  documents by the Retiring  Partner as provided  above in this
         Article 17.9.1,  are sufficient to effect the complete  transfer of the
         Retiring  Limited  Partner's  interest and the Retiring Limited Partner
         shall  be  deemed  to  consent  to  admission  of the  transferee  as a
         substitute Limited Partner.  Notwithstanding the date of the Closing or
         whether a Closing is  successfully  held, the transfer of a Partnership
         Interest of a Retiring  Limited  Partner shall be deemed to occur as of
         the Valuation Date as defined in Article 17.8.  The deemed  transfer is
         effective  regardless of whether the Retiring  Limited Partner performs
         the duties set forth in this Article 17.9.1.

                  17.9.2  Terms and  Conditions  of  Purchase.  The  Partnership
         Interest of a Limited  Partner shall not be  transferred to any Partner
         unless the  requirements  of Articles 16.2 and 16.4 (b) through (f) are
         satisfied  with  respect to it. The  purchaser  shall be liable for all
         obligations  and  liabilities   connected  with  that  portion  of  the
         Partnership  Interest  transferred  to it  unless  otherwise  agreed in
         writing.


                                                      -22-


<PAGE>



                  18.      SALE,  ASSIGNMENT  OR OTHER  TRANSFER  OF THE GENERAL
                           PARTNER'S INTEREST.

                  18.1  The   General   Partner   may  not   mortgage,   pledge,
hypothecate,  transfer,  sell, assign or otherwise dispose of all or any part of
its interest in the  Partnership,  whether  voluntarily,  by operation of law or
otherwise (the foregoing  actions being  hereafter  collectively  referred to as
"Transfers" or singularly as a "Transfer") except as permitted by this Article.

                  18.2 If the  General  Partner  makes a Transfer  (other than a
mortgage,  pledge or  hypothecation)  of its  general  partner  interest  in the
Partnership pursuant to this Article, it shall be liable for all obligations and
liabilities  incurred  by it as the  General  Partner of the  Partnership  on or
before  the  effective  date of such  Transfer,  but shall not be liable for any
obligations or liabilities of the  Partnership  arising after the effective date
of the Transfer.

                  18.3     No Transfer by the General Partner shall be permitted
unless:

                  (a) Counsel for the Partnership shall have rendered an opinion
         that none of the actions  taken in  connection  with such Transfer will
         cause the Partnership to be classified  other than as a partnership for
         Federal income tax purpose or will cause the termination or dissolution
         of the Partnership under state law; and

                  (b) Such  documents  or  instruments,  in form  and  substance
         satisfactory to counsel for the  Partnership,  shall have been executed
         and  delivered  as may be  required  in the  opinion of counsel for the
         Partnership to effect fully any such Transfer.

                  Notwithstanding the foregoing provisions of this Article 18.3,
the General  Partner may pledge its  interest  in the  Partnership  to any bank,
insurance   company  or  other  financial   institution  to  secure  payment  of
indebtedness.

                  19.      TERMINATION OF THE SERVICES OF THE GENERAL PARTNER.

                  The General  Partner  shall be removed and another  designated
and  substituted  upon (i) the election and consent of a Majority in Interest of
the Limited  Partners  upon the  General  Partner  being  adjudged by a court of
competent  jurisdiction to be liable to the Limited  Partners or the Partnership
for any act of gross negligence or willful  misconduct in the performance of its
duties  under the terms of this  Agreement,  or (ii) the election and consent of
the Limited Partners representing 80% of the aggregate limited partner interests
in the Partnership.  Such consent shall be evidenced by a certificate of removal
signed  by  the  Limited  Partners  constituting  the  requisite  percentage  of
partnership  interests necessary for removal under either proviso (i) or (ii) of
the preceding sentence.  In the event of removal,  the new general partner shall
succeed to all of the powers, privileges and obligations of the General Partner,
and the General  Partner's  interest in the  Partnership  shall become that of a
Limited  Partner,  and the General  Partner shall  maintain its same  Percentage
Interest in the Partnership notwithstanding anything contained in the Act to the
contrary.  In addition,  in the event of removal,  the new general partner shall
take all steps  necessary and  appropriate to prepare and record an amendment to
the  Certificate  of Limited  Partnership  to reflect the removal of the General
Partner and the admission of such new general partner.


                                                      -23-


<PAGE>



                  20.      MANAGEMENT AND OPERATION OF BUSINESS.

                  20.1 All  decisions  with  respect  to the  management  of the
business and affairs of the Partnership shall be made by the General Partner.

                  20.2 The General  Partner shall be under no duty to devote all
of its time to the business of the Partnership,  but shall devote only such time
as it deems  necessary  to conduct the  Partnership  business and to operate and
manage the Partnership in an efficient manner.

                  20.3 The  General  Partner may charge to the  Partnership  all
ordinary and necessary costs and expenses, direct and indirect,  attributable to
the activities,  conduct and management of the business of the Partnership.  The
costs and expenses to be borne by the  Partnership  shall  include,  but are not
limited to, all  expenditures  incurred in acquiring and financing the Equipment
or other Partnership property, legal and accounting fees and expenses,  salaries
of employees of the Partnership,  consulting and quality  assurance fees paid to
independent contractors, insurance premiums and interest.

                  20.4 In addition to, and not in limitation  of, any rights and
powers  covenanted by law or other  provisions of this agreement,  and except as
limited,  restricted or prohibited by the express  provisions of this Agreement,
the General Partner shall have and may exercise on behalf of the Partnership all
powers and rights necessary,  proper,  convenient or advisable to effectuate and
carry out the purposes, business and objectives of the Partnership.  Such powers
shall include, without limitation, the following:

                  (a)      To acquire the initial Prostatron(R) Mobile System;

                  (b) To  exercise  the  option of the  General  Partner  or the
         Partnership  to  purchase  a  Limited  Partner's  Partnership  Interest
         pursuant to Article 17;

                  (c) To determine the travel  itinerary and site  locations for
         the Prostatron(R) Mobile System or other Partnership technology;

                  (d) To borrow money for any Partnership purpose (including the
         acquisition  of the  Additional  Assets)  and,  if security is required
         therefor, to subject to any security device any portion of the property
         for the  Partnership,  to obtain  replacements  of any  other  security
         device, to prepay, in whole or in part,  refinance,  increase,  modify,
         consolidate or extend any encumbrance or other security device;

                  (e) To deposit,  withdraw,  invest, pay, retain (including the
         establishment  of reserves in order to acquire the  Additional  Assets)
         and distribute the  Partnership's  funds in any manner  consistent with
         the provisions of this Agreement;

                  (f)      To institute and defend actions at law or in equity;

                  (g) To enter into and carry out contracts and  agreements  and
         any or all documents and  instruments  and to do any and all such other
         things as may be in

                                                      -24-


<PAGE>



         furtherance of Partnership purposes or necessary or appropriate to the
         conduct of the Partnership activities;

                  (h)  To   execute,   acknowledge   and  deliver  any  and  all
         instruments  which may be deemed  necessary or convenient to effect the
         foregoing; and

                  (i) To engage or retain one or more persons to perform acts or
         provide  materials  as  may be  required  by  the  Partnership,  at the
         Partnership's  expense,  and to compensate  such person or persons at a
         rate to be set by the General  Partner,  provided that the compensation
         is at the then  prevailing  rate for the type of services and materials
         provided,  or both.  Any person,  whether a Partner,  an Affiliate of a
         Partner or otherwise, including without limitation the General Partner,
         may be employed or engaged by the  Partnership  to render  services and
         provide materials,  including, but not limited to, management services,
         professional   services,   accounting   services,   quality  assessment
         services, legal services,  marketing services,  maintenance services or
         provide materials; and if such person is a Partner or an Affiliate of a
         Partner,  he shall be entitled to, and shall be paid  compensation  for
         said services or materials,  anything in this Agreement to the contrary
         notwithstanding, provided that the compensation to be received for such
         services  or  materials  is  competitive  in price and terms  with then
         prevailing rate for the type of services and/or materials provided. The
         Partnership,  pursuant  to the terms of a  Management  Agreement,  will
         contract with Lithotripters,  Inc., a North Carolina corporation and an
         Affiliate of the General  Partner,  with respect to the supervision and
         coordination  of the  management and  administration  of the day-to-day
         operations of the  Prostatron(R)  Mobile System for a monthly fee equal
         to the greater of 7.5% of Partnership Cash Flow per month or $8,000 per
         month.  All costs  incurred by  Lithotripters,  Inc. in performing  its
         duties as management  agent shall be paid by the Partnership  directly.
         The Partnership may also contract with qualified physicians desiring to
         use the  Prostatron(R)  Mobile  System for the  treatment  of patients.
         Owning an interest in the Partnership shall not be a condition to using
         the Prostatron(R) Mobile System. The General Partner and its Affiliates
         may engage in or possess an interest in other business  ventures of any
         nature and description independently or with others, including, but not
         limited to, the  operation  of a mobile  benign  prostatic  hyperplasia
         treatment unit similar to the Prostatron(R)  Mobile System,  whether or
         not such business  ventures are in direct or indirect  competition with
         the  Partnership,  and neither the  Partnership  nor the Partners shall
         have any right by virtue of this  Agreement in and to said  independent
         ventures or to the income or profits derived therefrom.

                  20.5 Notwithstanding the provisions of Article 20.4 above, the
General  Partner shall have the authority to take the following  actions only if
it first  receives  the prior  written  consent of a Majority in Interest of the
Limited Partners:

                  (a) Offer and sell additional limited partnership interests in
         the Partnership pursuant to a Dilution Offering as described in Article
         7.4 hereof;

                  (b) Institute and carry out any plan providing for the merger,
         consolidation  or sale of  Partnership  Interests or any other  actions
         outlined in Article 16.7 hereof;

                                                      -25-


<PAGE>



                  (c)      Voluntarily dissolve the Partnership as provided in
Article 23 hereof;

                  (d) Acquire (i) additional  Prostatron(R) Mobile Systems, (ii)
         any  other  assets  related  to  the  provision  of  benign   prostatic
         hyperplasia  treatment services, or (iii) any other assets or equipment
         or an interest in another  entity  consistent  with the purposes of the
         Partnership  as provided in Article 4  (collectively,  the  "Additional
         Assets") other than in the ordinary course of business; or

                  (e)  Purchase,  hold,  manage,  lease,  license and dispose of
         Partnership assets (including the Prostatron(R)  Mobile System),  other
         than in the ordinary course of business.

                  20.6 Notwithstanding the provisions of Articles 20.4 and 20.5,
and in  addition  to other  acts  expressly  prohibited  or  restricted  by this
Agreement  or by law,  the General  Partner  shall have no  authority  to act on
behalf of the Partnership in:

                  (a) Doing any act in contravention of this Agreement or the
         Partnership's Certificate of Limited Partnership;

                  (b) Doing any act which would make it  impossible  to carry on
         the ordinary business of the Partnership;

                  (c)   Confessing  a  judgment   against  the   Partnership  in
         connection with any threatened or pending legal action;

                  (d) Possessing or in any manner dealing with the Partnership's
         property  or   assigning   the  rights  of  the   Partnership   in  the
         Partnership's property for other than Partnership purposes;

                  (e)  Admitting  a person  as a  Limited  Partner  or a General
         Partner except as provided in this Agreement; or

                  (f)  Performing  any act (other  than an act  required by this
         Agreement  or any act  taken  in good  faith  reliance  upon  counsel's
         opinion)  which  would,  at the time  such act  occurred,  subject  any
         Limited Partner to liability as a general partner in any jurisdiction.

                  21.      RESERVES.

                  Subject  to the  consent  requirements  of Article  20.5,  the
General Partner may cause the Partnership to create a reserve account to be used
exclusively for repairs and  acquisition of Additional  Assets and for any other
valid Partnership  purpose.  The Partners,  in accordance with the provisions of
Article 20.5(d), shall determine the amount of payments to such reserve.


                                                      -26-


<PAGE>



                  22.    INDEMNIFICATION AND EXCULPATION OF THE GENERAL PARTNER.

                  22.1 The General  Partner is accountable to the Partnership as
a fiduciary and consequently  must exercise good faith and integrity in handling
Partnership  affairs.  This is a rapidly developing and changing area of the law
and Limited  Partners who have  questions  concerning  the duties of the General
Partner  should  consult  with  their  counsel.  The  General  Partner  and  its
Affiliates  shall have no liability to the  Partnership  which arises out of any
action or  inaction  of the  General  Partner or its  Affiliates  if the General
Partner or its Affiliates, in good faith, determined that such course of conduct
was in the best interest of the  Partnership  and such course of conduct did not
constitute gross negligence or willful  misconduct of the General Partner or its
Affiliates.  The General Partner and its Affiliates  shall be indemnified by the
Partnership  against any losses,  judgments,  liabilities,  expenses and amounts
paid in  settlement  of any  claims  sustained  by them in  connection  with the
Partnership,  provided that the same were not the result of gross  negligence or
willful misconduct on the part of the General Partner or its Affiliates.

                  22.2 The General Partner shall not be liable for the return of
the Capital Contributions of the Limited Partners, and upon dissolution, Limited
Partners shall look solely to the assets of the Partnership.

                  23.      DISSOLUTION OF THE PARTNERSHIP.

                  23.1 The Partnership shall be dissolved and terminated and its
business wound up upon the occurrence of any one of the following events:

                  (a)      The expiration of its term on June 30, 2047;

                  (b) The  filing  by, on  behalf  of, or  against  the  General
         Partner of any  petition or  pleading,  voluntary  or  involuntary,  to
         declare the General  Partner  bankrupt under any bankruptcy law or act,
         or the  commencement  in any  court  of any  proceeding,  voluntary  or
         involuntary,  to declare the General Partner insolvent or unable to pay
         its debts, or the appointment by any court or supervisory  authority of
         a  receiver,  trustee or other  custodian  of the  property,  assets or
         business of the General  Partner or the  assignment by it of all or any
         part of its  property or assets for the benefit of  creditors,  if said
         action,  proceeding  or  appointment  is  not  dismissed,   vacated  or
         otherwise terminated within ninety (90) days of its commencement;

                  (c) The  determination  of the  Partners  in  accordance  with
         Article 20.5(c) that the Partnership should be dissolved;

                  (d) The approval of a plan by the Partners, in accordance with
         Article  20.5(b),  providing for the merger,  consolidation  or sale of
         Partnership Interests or other action as described in Article 16.7.

                  (e) The  election  of the  General  Partner  to  dissolve  the
         Partnership  following the occurrence of an event  described in Article
         17.5;


                                                      -27-


<PAGE>



                  (f)  The  sale,  exchange  or  other  disposition  of  all  or
         substantially  all of the property of the  Partnership  without  making
         provision for the replacement thereof; and

                  (g)   The   dissolution,   retirement,   resignation,   death,
         disability  or legal  incapacity  of a general  partner,  and any other
         event  resulting in the  dissolution or termination of the  Partnership
         under the laws of the State of North Carolina.

                  23.2  Notwithstanding  the  provisions  of Article  23.1,  the
Partnership   shall  not  be  dissolved  and  terminated  upon  the  retirement,
resignation,  bankruptcy,  assignment for the benefit of creditors, dissolution,
death,  disability or legal  incapacity of a general  partner,  and its business
shall continue  pursuant to the terms and conditions of this  Agreement,  if any
general partner or general partners remain  following such event;  provided that
such  remaining  general  partner or general  partners  are hereby  obligated to
continue the business of the  Partnership.  If no general  partner remains after
the  occurrence of such event,  the business of the  Partnership  shall continue
pursuant to the terms and conditions of this  Agreement,  if, within ninety (90)
days after the  occurrence of such event,  a Majority in Interest of the Limited
Partners agree in writing to continue the business of the  Partnership,  and, if
necessary,  to  the  appointment  of one  or  more  persons  or  entities  to be
substituted as the general  partner.  In the event the Limited Partners agree to
continue the  business of the  Partnership,  the new general  partner or general
partners shall succeed to all of the powers,  privileges and  obligations of the
General Partner,  and the General  Partner's  interest in the Partnership  shall
become a  Limited  Partner's  interest  hereunder.  Furthermore,  in the event a
remaining general partner or the Limited Partners,  as the case may be, agree to
continue the  business of the  Partnership  as provided  herein,  the  remaining
general partner or the newly appointed general partner or general  partners,  as
the case may be, shall take all steps  necessary and  appropriate to prepare and
record an amendment to the  Certificate  of Limited  Partnership  to reflect the
continuation  of the  business of the  Partnership  and the  admission  of a new
general partner or general partners, if any.

                  24.      DISTRIBUTION UPON DISSOLUTION.

                  Upon the dissolution and termination of the  Partnership,  the
General Partner or, if there is none, a representative  of the Limited Partners,
shall  cause  the  cancellation  of the  Partnership's  Certificate  of  Limited
Partnership,  shall liquidate the assets of the Partnership, and shall apply and
distribute the proceeds of such liquidation in the following order of priority:

                  (a)  First, to the payment of the debts and liabilities of the
         Partnership, and the expenses of liquidation;

                  (b) Second,  to the creation of any reserves which the General
         Partner  (or the  representatives  of the  Limited  Partners)  may deem
         reasonably  necessary  for the payment of any  contingent or unforeseen
         liabilities or obligations of the Partnership or of the General Partner
         arising out of or in connection  with the business and operation of the
         Partnership; and

                  (c) Third,  the balance,  if any,  shall be distributed to the
         Partners in accordance  with the  Partners'  positive  Capital  Account
         balances  after such  capital  accounts  are  adjusted  as  provided by
         Article 13, and any other adjustments required by

                                                      -28-


<PAGE>



         the Final  Treasury  Regulations  under Section 704(b) of the Code. Any
         general  partner  with  a  negative   Capital  Account   following  the
         distribution of liquidation proceeds or the liquidation of its interest
         must  contribute  to the  Partnership  an amount equal to such negative
         Capital Account on or before the end of the Partnership's  taxable year
         (or, if later,  within ninety days after the date of liquidation).  Any
         capital so contributed  shall be (i) distributed to those Partners with
         positive  Capital  Accounts until such Capital  Accounts are reduced to
         zero, and/or (ii) used to discharge recourse liabilities.

                  25.      BOOKS OF ACCOUNT, RECORDS AND REPORTS.

                  25.1 Proper and complete records and books of account shall be
kept by the General  Partner in which shall be entered fully and  accurately all
transactions  and such other matters relating to the  Partnership's  business as
are usually  entered  into  records and books of account  maintained  by persons
engaged  in  businesses  of a like  character.  The  books  and  records  of the
Partnership  shall be prepared  according to the accounting method determined by
the General Partner.  The Partnership's  fiscal year shall be the calendar year.
The books and  records  shall at all times be  maintained  at the  Partnership's
Records Office and shall be open to the reasonable inspection and examination of
the Partners or their duly authorized representatives during reasonable business
hours.

                  25.2 Within  ninety (90) days after the end of each Year,  the
General  Partner shall send to each person who was a Limited Partner at any time
during such year such tax information,  including,  without limitation,  Federal
tax Schedule K-1, as shall be reasonably  necessary for the  preparation by such
person of his Federal  income tax return.  The  General  Partner  will also make
available to the Limited Partners any other information required by the Act.

                  25.3 The General  Partner shall maintain at the  Partnership's
Records  Office  copies of the  Partnership's  original  Certificate  of Limited
Partnership   and  any  certificate  of  amendment,   restated   certificate  or
certificate of cancellation with respect thereto and such other documents as the
Act shall require.  The General Partner will furnish to any Limited Partner upon
request a copy of the Partnership's  original Certificate of Limited Partnership
and any  certificate  of amendment,  restated  certificate,  or  certificate  of
cancellation, if any.

                  25.4 The General Partner shall, in its sole  discretion,  make
for the  Partnership  any and all  elections  for  federal,  state and local tax
purposes including, without limitation, any election, if permitted by applicable
law, to adjust the basis of the Partnership's property pursuant to Code Sections
754,  734(b) and  743(b),  or  comparable  provisions  of state or local law, in
connection  with  transfers  of  interests in the  Partnership  and  Partnership
Distributions.

                  25.5 The  General  Partner is  designated  as the Tax  Matters
Partner  (as  defined  in  Section  6231 of the Code) and to act in any  similar
capacity  under  state or local law,  and is  authorized  (at the  Partnership's
expense):   (i)  to  represent  the   Partnership  and  Partners  before  taxing
authorities  or courts of competent  jurisdiction  in tax matters  affecting the
Partnership  or  Partners  in their  capacity  as  Partners;  (ii) to extend the
statute of limitations for assessment of tax deficiencies  against Partners with
respect to adjustments to the Partnership's federal, state or local tax returns;
(iii) to execute any agreements or other documents relating to or affecting such
tax matters, including agreements or other documents that bind the Partners with
respect to such tax matters or otherwise affect the rights of the

                                                      -29-


<PAGE>



Partnership and Partners;  and (iv) to expend Partnership funds for professional
services and costs associated  therewith.  The General partner is authorized and
required  to  notify  the  federal,  state  or  local  tax  authorities  of  the
appointment  of a Tax  Matters  Partner  in  the  manner  provided  in  Treasury
Regulations  Section  301.6231(a)(7)-IT,  as modified  from time to time. In its
capacity  as  Tax  Matters  Partner,  the  General  Partner  shall  oversee  the
Partnership  tax affairs in the manner which,  in its best judgment,  are in the
interests of the Partners.

                  26.      NOTICES.

                  All notices under this Agreement shall be in writing and shall
be deemed to have been given when delivered  personally,  or mailed by certified
or registered mail, postage prepaid,  return receipt  requested.  Notices to the
General  Partner  shall be  delivered  at, or mailed to, its  principal  office.
Notices to the  Partnership  shall be delivered  at, or mailed to, its principal
office with a copy to each of its business offices.  Notice to a Limited Partner
shall be  delivered  to such  Limited  Partner,  or mailed  to the last  address
furnished  by him for such  purposes to the General  Partner.  Limited  Partners
shall give  notice of a change of address to the  General  Partner in the manner
provided in this Article.

                  27.      AMENDMENTS.

                  Subject to the  provisions  of Article 28, this  Agreement  is
subject to  amendment  only by  written  consent of the  General  Partner  and a
Majority in Interest of the Limited Partners;  provided, however, the consent of
the Limited Partners shall not be required if such amendments are ministerial in
nature and do not contravene the provisions of Article 28.

                  28.      LIMITATIONS ON AMENDMENTS.

                  Notwithstanding  the provisions of Article 27, no amendment to
this Agreement shall:

                  (a)  Enlarge  the   obligations  of  any  Partner  under  this
         Agreement  or convert the  interest in the  Partnership  of any Limited
         Partner  into the  interest of a general  partner or modify the limited
         liability of any Limited Partner, without the consent of such Partner;

                  (b) Amend the  provisions  of Article 11, 12, 13 or 24 without
         the  approval of the General  Partner and a Majority in Interest of the
         Limited Partners;  provided,  however,  that the General Partner may at
         any time  amend  such  Articles  without  the  consent  of the  Limited
         Partners in order to permit the Partnership allocations to be sustained
         for Federal  income tax  purposes,  but only if such  amendments do not
         materially  affect  adversely the rights and obligations of the Limited
         Partners, in which case such amendments may only be made as provided in
         this Article 28(b); or

                  (c) Amend this Article 28 without the consent of all Partners.





                                                      -30-


<PAGE>



                  29.      MEETINGS, CONSENTS AND VOTING.

                  29.1 A meeting of the  Partnership to consider any matter with
respect to which the  Partners  may vote as set forth in this  Agreement  may be
called  by the  General  Partner  or by  Limited  Partners  who hold  more  than
twenty-five  percent (25%) of the aggregate interests in the Partnership held by
all the Limited Partners.  Upon receipt of a notice requesting a meeting by such
Partner or Partners and stating the purpose of the meeting,  the General Partner
shall, within ten (10) days thereafter, give notice to the Partners of a meeting
of the  Partnership  to be held at a time and place  convenient  to the  Limited
Partners  on a date not  earlier  than  fifteen  (15) days after  receipt by the
General  Partner of the notice  requesting a meeting.  The notice of the meeting
shall set forth the time, date, location and purpose of the meeting.

                  29.2 Any consent of a Partner  required by this  Agreement may
be given as follows:

                  (a) By a written  consent given by the consenting  Partner and
         received by the General  Partner at or prior to the doing of the act or
         thing for which the consent is solicited, or

                  (b) By the affirmative  vote by the consenting  Partner to the
         doing of the act or thing for which the  consent  is  solicited  at any
         meeting  called  pursuant to this Article to consider the doing of such
         act or thing.

                  29.3 When exercising voting rights expressly granted under the
Articles of this  Agreement,  each Partner shall have that number of votes as is
equal to the  Percentage  Interest  of such  Partner  at the  time of the  vote,
multiplied by 100.

                  30.      SUBMISSIONS TO THE LIMITED PARTNERS.

                  The General Partner shall give the Limited  Partners notice of
any proposal or other matter  required by any provision of this  Agreement or by
law to be submitted for consideration and approval of the Limited Partners. Such
notice shall include any  information  required by the relevant  provision or by
law.

                  31.      ADDITIONAL DOCUMENTS.

                  Each  party  hereto  agrees to  execute  and  acknowledge  all
documents and writings which the General Partner may deem necessary or expedient
in the creation of this Partnership and the achievement of its purpose.

                  32.      SURVIVAL OF RIGHTS.

                  Except as herein  otherwise  provided  to the  contrary,  this
Agreement  shall be binding upon and inure to the benefit of the parties hereto,
their successor and assigns.


                                                      -31-


<PAGE>



                  33.      INTERPRETATION AND GOVERNING LAW.

                  When the  context  in which  words are used in this  Agreement
indicates  that such is the intent,  words in the singular  number shall include
the plural and vise versa; in addition,  the masculine  gender shall include the
feminine and neuter  counterparts.  The Article headings or titles and the table
of  contents  shall not define,  limit,  extend or  interpret  the scope of this
Agreement  or any  particular  Article.  This  Agreement  shall be governed  and
construed in  accordance  with the laws of the State of North  Carolina  without
giving effect to the conflicts of laws provisions thereof.

                  34.      SEVERABILITY.

                  If any provision,  sentence,  phrase or word of this Agreement
or the application  thereof to any person or circumstance shall be held invalid,
the remainder of this Agreement, or the application of such provision, sentence,
phrase, or word to persons or circumstances,  other than those as to which it is
held invalid, shall not be affected thereby.

                  35.      AGREEMENT IN COUNTERPARTS.

                  This Agreement may be executed in several  counterparts,  each
of which shall be deemed an original,  but all of which shall constitute one and
the same  instrument.  In  addition,  this  Agreement  may contain more than one
counterpart  of the  signature  page and this  Agreement  may be executed by the
affixing of the  signatures  of each of the Partners to one of such  counterpart
signature  pages;  all of such signature  pages shall be read as though one, and
they  shall have the same  force and  effect as though  all of the  signers  had
signed a single signature page.

                  36.      THIRD PARTIES.

                  The agreements, covenants and representations contained herein
are for the benefit of the parties  hereto  inter se and are not for the benefit
of any  third  parties  including,  without  limitation,  any  creditors  of the
Partnership.

                  37.      POWER OF ATTORNEY.

                  Each Limited  Partner hereby makes,  constitutes  and appoints
Dr.  Joseph  Jenkins  and Dr.  Dan A.  Myers,  severally,  with  full  power  of
substitution,  his true and lawful  attorneys-in-fact,  for him and in his name,
place and stead and for his use and  benefit to sign and  acknowledge,  file and
record,  any  amendments  hereto among the  Partners for the further  purpose of
executing and filing on behalf of each Limited Partner, any and all certificates
of  limited   partnership  or  other  documents   necessary  to  constitute  the
Partnership or to effect the continuation of the  Partnership,  the admission or
withdrawal of a general partner or a limited partner,  the  qualification of the
Partnership in a foreign jurisdiction (or amendment to such qualification),  the
admission of substitute  Limited  Partners or the  dissolution or termination of
the   Partnership,   provided   such   continuation,    admission,   withdrawal,
qualification,  or dissolution  and termination are in accordance with the terms
of this Agreement.

                  The foregoing power of attorney is a special power of attorney
coupled with an interest,  is  irrevocable  and shall survive the death or legal
incapacity of each Limited Partner. It may be exercised

                                                      -32-


<PAGE>



by any one of said  attorneys by listing all of the Limited  Partners  executing
any  instrument  over the  signature of the  attorney-in-fact  acting for all of
them.  The power of attorney  shall  survive the delivery of an  assignment by a
Limited Partner of the whole or any portion of his Unit. In those cases in which
the assignee of, or the successor to, a Limited  Partner  owning a Unit has been
approved by the  Partners  for  admission  to the  Partnership  as a  substitute
Limited  Partner,  the power of attorney  shall  survive for the sole purpose of
enabling the General  Partner to execute,  acknowledge  and file any  instrument
necessary to effect such substitution.

                  This power of attorney shall not be affected by the subsequent
incapacity or mental incompetence of any Limited Partner.

                  38.      ARBITRATION.

                  Any  dispute  arising  out  of  or  in  connection  with  this
Agreement  or the breach  thereof  shall be decided by  arbitration  in Raleigh,
North  Carolina in accordance  with the then  effective  commercial  arbitration
rules of the  American  Arbitration  Association,  and  judgment  thereof may be
entered in any court having jurisdiction thereof.

                  39.      CREDITORS.

                  None of the  provisions  of this  Agreement  shall  be for the
benefit of or enforceable by any creditors of the Partnership.



                                                      -33-


<PAGE>



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

                                   GENERAL PARTNER:

                                   PROSTATHERAPIES, INC., a Delaware corporation


                                    By:      /s/ Dan A. Myers
                                             --------------------
                                             Dan A. Myers, M.D., President

ATTEST:

Philip J. Gallina
-------------------                                     [CORPORATE SEAL]
Secretary


                            INITIAL LIMITED PARTNER:

                                    /s/ Dan A. Myers
                                    ---------------------------------------
                                    Dan A. Myers, M.D.


STATE OF NORTH CAROLINA                     )
                                            )
COUNTY OF CUMBERLAND                        )

                  On this  14th  day of  August,  1997,  before  me, the
undersigned  Notary  Public in and for the County of  Cumberland in the State of
North Carolina, personally came Dan A. Myers, M.D., who, being by me duly sworn,
said that he is President of Prostatherapies,  Inc., the sole general partner of
North Carolina Prostatherapy Limited Partnership I, that the seal affixed to the
foregoing  instrument in writing is the corporate seal of the  corporation,  and
that said  writing  was  signed,  sworn to,  and sealed by him in behalf of said
corporation  by its  authority  duly  given.  And the said Dan A.  Myers,  M.D.,
further certified that the facts set forth in said writing are true and correct,
and acknowledged said instrument to be the act and deed of said corporation.

                  WITNESS my hand and notarial seal.

                                    /s/ Ricarda Kelly
                                    ------------------------------------------

                                    Notary Public
My commission expires:
January 8, 2002
---------------------------



                                                      -34-


<PAGE>



STATE OF NORTH CAROLINA                     )
                                            )
COUNTY OF CUMBERLAND                        )


                  I, Ricarda Kelly, a notary public, do hereby
certify that Dan A. Myers, M.D.  personally appeared before me this 14th day of
August, 1997 and acknowledged and swore to the due execution of the foregoing
Limited Partnership Agreement in his capacity as the initial limited partner.



                                    /s/ Ricarda Kelly
                                    -------------------------------------------

                                    Notary Public

My commission expires:
January 8, 2002
---------------------------


                                                      -35-


<PAGE>



                           COUNTERPART SIGNATURE PAGE


                  By signing this  Counterpart  Signature  Page, the undersigned
acknowledges  his or  her  acceptance  of  that  certain  Agreement  of  Limited
Partnership of North Carolina  Prostatherapy  Limited  Partnership I, and his or
her intention to be legally bound thereby.

                  Dated this _________ day of ___________________, 1997.



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

                                    Signature



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

                                    Printed Name




STATE OF _______________                    )
                                            )
COUNTY OF _____________                     )


                  BEFORE ME, the undersigned  Notary Public in and for the State
and County set forth  above,  on the  _______ day of  __________________,  1997,
personally  appeared  ___________________,  and,  being by me first duly  sworn,
stated that (s)he  signed this  Counterpart  Signature  Page for the purpose set
forth above and that the statements contained therein are true.




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

                                    Signature of Notary Public



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

                                    Printed Name of Notary

My Commission Expires:

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

[SEAL]

                                                      -36-


<PAGE>





                                   SCHEDULE A

                        Schedule of Partnership Interests

               NORTH CAROLINA PROSTATHERAPY LIMITED PARTNERSHIP I

      CONTRIBUTIONS OF CAPITAL TO THE PARTNERSHIP AND PERCENTAGE INTERESTS

                                                Cash               Percentage
                   General Partner           Contribution            Interest

              Prostatherapies, Inc.         $200,856.25                20%
              2008 Litho Place
              Fayetteville, NC  28304

              Limited Partners

              Preston Bradshaw                 2,600.00                   .250
              Carolina Lithotripsy           564,662.50                 56.750
              Michael Crawford                 2,600.00                   .250
              G. Mark Doyle                    7,800.00                   .750
              Richard Gavigan                  5,200.00                   .500
              Benjamin Hines                   5,200.00                   .500
              Edward Janosko                   5,200.00                   .500
              Clifford Johnson                  6500.00                   .625
              John Kaspar                      2,600.00                   .250
              Art Klose                       10,400.00                  1.000
              John Lasater                    10,400.00                  1.000
              C. Rodney Lenahan               10,400.00                  1.000
              Robert Lippitt                  10,400.00                  1.000
              Michael Lobos                    5,200.00                   .500
              John Lovett                     10,400.00                  1.000
              Louis Marchetti                 10,400.00                  1.000
              George Mozingo                   5,200.00                   .500
              Gregory Murphy                   5,200.00                   .500
              Richard Mynatt                  13,000.00                  1.250
              Robert Nichols                   5,200.00                   .500
              Prostatherapies, Inc.           67,162.50                  6.750
              James Rounder                    2,600.00                   .250
              John Seddon                      5,200.00                   .500
              Kasturi Shanker                  3,900.00                   .375
              Bernard Stanfield                2,600.00                   .250
              Thomas Stewart                  10,400.00                  1.000
              William Turner                   5,200.00                   .500
              David Varney                     5,200.00                   .500
              Edward Whitesides                2,600.00                   .250

              TOTAL:                     $ 1,004,281.25                100 %
                                         ==============                ======




<PAGE>