AGREEMENT OF LIMITED PARTNERSHIP


                                       OF

                 TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VII, L.P.








 
















<PAGE>

                                    AGREEMENT
                             OF LIMITED PARTNERSHIP
                                       OF
                 TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VII, L.P.

                                TABLE OF CONTENTS

                                                                            Page

         1.       FORMATION..................................................-1-

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

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

         4.       PURPOSE....................................................-2-

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

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

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

         8.       CONDITIONS TO THE CAPITAL CONTRIBUTIONS OF CERTAIN
                  LIMITED PARTNERS...........................................-7-

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

         10.      ADMISSION OF LIMITED PARTNERS..............................-8-

         11.      CAPITAL ACCOUNTS...........................................-9-

         12.      ALLOCATIONS...............................................-10-

         13.      DISTRIBUTIONS.............................................-11-

         14.      RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................-11-

         15.      LIMITED LIABILITY.........................................-13-

         16.      TRANSFER OF INTERESTS AND ADMISSION OF PARTNERS...........-13-

         17.      OPTIONAL PURCHASE OF LIMITED PARTNERSHIP INTERESTS ON
                  CERTAIN EVENTS............................................-18-


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         18.      SALE, ASSIGNMENT OR OTHER TRANSFER OF THE GENERAL
                  PARTNER'S INTEREST........................................-23-

         19.      TERMINATION OF THE SERVICES OF THE GENERAL PARTNER........-23-

         20.      MANAGEMENT AND OPERATION OF BUSINESS......................-24-

         21.      RESERVES..................................................-27-

         22.      INDEMNIFICATION AND EXCULPATION OF THE GENERAL
                  PARTNER...................................................-27-

         23.      DISSOLUTION OF THE PARTNERSHIP............................-27-

         24.      DISTRIBUTION UPON DISSOLUTION.............................-29-

         25.      BOOKS OF ACCOUNT, RECORDS AND REPORTS.....................-29-

         26.      NOTICES...................................................-30-

         27.      AMENDMENTS................................................-31-

         28.      LIMITATIONS ON AMENDMENTS.................................-31-

         29.      MEETINGS, CONSENTS AND VOTING.............................-31-

         30.      SUBMISSIONS TO THE LIMITED PARTNERS.......................-32-

         31.      ADDITIONAL DOCUMENTS......................................-32-

         32.      SURVIVAL OF RIGHTS........................................-32-

         33.      INTERPRETATION AND GOVERNING LAW..........................-32-

         34.      SEVERABILITY..............................................-33-

         35.      AGREEMENT IN COUNTERPARTS.................................-33-

         36.      THIRD PARTIES.............................................-33-

         37.      POWER OF ATTORNEY.........................................-33-

         38.      ARBITRATION...............................................-34-



                                                        ii
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         39.      CREDITORS.................................................-34-


                                    SCHEDULES

Schedule A  -  Schedule of Partnership Interests


                                                        iii
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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, UNDER THE TEXAS SECURITIES ACT, AS
AMENDED,  OR  UNDER  SIMILAR  LAWS OR ACTS OF  OTHER  STATES  IN  RELIANCE  UPON
EXEMPTIONS  UNDER SUCH LAWS.  IN ADDITION,  NO TRANSFERS OF LIMITED  PARTNERSHIP
INTERESTS  MAY BE MADE WITHOUT  COMPLIANCE  WITH THE  RESTRICTIONS  SET FORTH IN
ARTICLE 16 BELOW.

                                    AGREEMENT
                             OF LIMITED PARTNERSHIP
                                       OF
                                TEXAS LITHOTRIPSY
                          LIMITED PARTNERSHIP VII, L.P.


THIS AGREEMENT OF LIMITED  PARTNERSHIP (the "Agreement") is made as of September
4, 1998, by and among  LITHOTRIPTERS,  INC., a North Carolina  corporation  (the
"General Partner"), and MICHAEL MADLER, a resident of the State of Texas, as the
Initial Limited Partner.

               1. FORMATION.

               The  Partnership  was formed pursuant to the filing in the Office
          of the  Secretary  of State of Texas on or about  January 5, 1998 of a
          Certificate of Limited  Partnership in accordance  with the provisions
          of the Act.

               2. NAME. 

               2.1 The name of the  Partnership  is "Texas  Lithotripsy  Limited
               Partnership  VII,  L.P."

               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 1301
          Capital of Texas Highway, Suite C-300, Austin, Texas 78746, or at such
          other place as the General  Partner may, from time to time,  designate
          by notice to the Limited Partners (the "Records Office").

                                                        -1-
<PAGE>


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

               4. PURPOSE.

               The purpose  and  business  of the  Partnership  shall be: (i) to
          become  a  party  to  and  the  survivor  of a  merger  whereby  Texas
          Lithotripsy  Limited  Partnership II L.P., a Texas limited partnership
          ("Texas II"), Texas Lithotripsy  Limited  Partnership IV L.P., a Texas
          limited  partnership  ("Texas IV") and Texas ESWL/Laser  Lithotripter,
          Ltd., a Texas  limited  partnership  ("ESWL")  will be merged with and
          into the Partnership; (ii) to continue the business of Texas II, Texas
          IV and ESWL and to acquire and operate  one or more  additional  fixed
          base or mobile  lithotripters  (or any  other  renal  stone  treatment
          equipment)  for the treatment of renal stones in such  location(s)  as
          the General Partner may determine,  in its sole  discretion,  to be in
          the best interests of 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
          (including  without  limitation bilary lithotripsy if the same is ever
          approved by the FDA),  upon and subject to the terms and conditions of
          this Agreement.

               5. TERM.

               The  Partnership  shall terminate on  December 31,  2040,  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 Texas Revised 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.

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


                                                        -2-
<PAGE>


               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.

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

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

               Dilution Offering.  As provided in Article 7.4 of this Agreement,
          the future offering of additional limited partnership interests in the
          Partnership  as  determined  by the General  Partner.  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.

               Effective Time. The time at which the Merger becomes effective as
          provided in the Merger Agreement.

               Equipment.   The   equipment   used  in  the   operation  of  the
          Lithotripter  Systems,  including the mobile transport  vehicles,  the
          lithotripters and miscellaneous medical equipment and supplies.

               ESWL.  Texas  ESWL/Laser  Lithotripter,  Ltd.,  a  Texas  limited
          partnership  organized  and  operated  by its general  partner,  Texas
          Litho,  Inc., a Delaware  corporation  and an Affiliate of the General
          Partner.  Immediately  prior to the Effective Time, Texas Litho,  Inc.
          will  distribute its general  partner  interest in ESWL to the General
          Partner.

               FDA. The United States Food and Drug Administration.

               General   Partner.   The  General  Partner  of  the  Partnership,
          Lithotripters, Inc., a North Carolina corporation.

               Initial Limited Partner.  Michael Madler, a resident of Texas and
          an Affiliate of the General Partner. The Initial Limited Partner is to
          be the only limited partner of the Partnership  until such time as the
          first 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 will be the former limited
          partners  of Texas II,  Texas IV and ESWL  acquiring  limited  partner
          interests in the Partnership pursuant to the Merger,

                                                        -3-
<PAGE>


               those  investors  in the Units  admitted  to the  Partnership  as
          limited  partners  and any  person  admitted  as a limited  partner in
          accordance with the provisions of this Agreement.

               Lithotripters.  The  extracorporeal  shock-wave  lithotripters of
          Texas II, Texas IV and ESWL acquired by the  Partnership in connection
          with  the  Merger  and  any   replacements   therefor  or   additional
          lithotripters to be purchased by the Partnership.

               Lithotripter  Systems.  The  mobile  transport  systems  with the
          installed and operational Lithotripters.

               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.

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

               Memorandum.  The Confidential Private Placement Memorandum of the
          Partnership dated September 4, 1998, as amended or as supplemented.

               Merger. The transaction  whereby Texas II, Texas IV and ESWL will
          merge with and into the Partnership at the Effective Time on the terms
          and conditions provided in the Merger Agreement.

               Merger  Agreement.  The  Agreement  and Plan of Merger  among the
          Partnership,  Texas II,  Texas IV,  ESWL and the other  persons  named
          therein providing for the Merger.

               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.

               Offering.  The  offer to  potential  investors  of up to 40 Units
          pursuant to the Memorandum.

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


                                                        -4-
<PAGE>


               Partnership.  Texas Lithotripsy  Limited Partnership VII, L.P., a
          Texas 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 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  as set forth on Schedule A hereto,  which will be amended
          upon the admission of the Limited Partners acquiring their Partnership
          Interests  in the Merger and the  Offering  as  provided in the Merger
          Agreement and the  Memorandum,  respectively.  A Partner's  Percentage
          Interest  may be reduced  by a future  Dilution  Offering.  Any future
          adjustments  in the  Partners'  Percentage  Interests,  due to  future
          Dilution Offerings or otherwise,  will also be reflected by amendments
          to Schedule A.

               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.


                                                        -5-
<PAGE>


               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.

               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 up to 40 Units  pursuant  to the
          Memorandum.

               Sales  Commission.  The $250  sales  commission  paid to  MedTech
          Investments, Inc. for each Unit sold.

               Service. The Internal Revenue Service.

               Texas II. Texas Lithotripsy  Limited Partnership II L.P., a Texas
          limited  partnership  organized  and operated by its general  partner,
          Lithotripters, Inc., a North Carolina corporation

               Texas IV. Texas Lithotripsy  Limited Partnership IV L.P., a Texas
          limited  partnership  organized  and operated by its general  partner,
          Lithotripters, Inc., a North Carolina corporation.

               Units. The 40 equal limited partner  interests in the Partnership
          offered  pursuant to the  Memorandum for a price per Unit of $5,688 in
          cash.

               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.  The General Partner initially
          will hold a 99% Percentage Interest,  which interest shall be canceled
          in the Merger and redetermined following the Effective Time based upon
          the conversion of its general partner  interests in Texas II, Texas IV
          and ESWL in the  Merger on the terms and  conditions  set forth in the
          Merger Agreement.

               7.2 Limited Partner Contribution.  Each Limited Partner acquiring
          his  Partnership  Interest upon the  conversion  of a limited  partner
          interest in either  Texas II,  Texas IV or ESWL in the Merger shall do
          so upon the terms and conditions set forth in the Merger Agreement and
          shall become a Limited  Partner at the  Effective  Time.  Each Limited
          Partner  acquiring  his Units in  connection  with the Offering  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 the  amendment to  Schedule A  to be attached  hereto upon the
          closing of such Offering.

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


                                                        -6-
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               7.4  Dilution  Offerings.  If the  General  Partner,  in its sole
          discretion,  determines  that  it is  in  the  best  interest  of  the
          Partnership,  the General Partner may, from time to time,  offer, sell
          and issue,  for and on behalf of the Partnership,  additional  limited
          partnership  interests in the  Partnership (a "Dilution  Offering") to
          investors   who  are  not   already   Limited   Partners   ("Qualified
          Investors").  The primary purpose of any Dilution Offering would be to
          raise additional capital for any legitimate Partnership purpose as set
          forth in Article 4. 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  (excluding for this purpose the conversion of
          partnership  interests in the Merger) unless otherwise determined by a
          vote of the General  Partner and a Majority in Interest of the Limited
          Partners.  Any sale of additional limited  partnership  interests will
          result in the  proportionate  dilution of the Percentage  Interests of
          the existing Partners.  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. Any adjustment in the Partners' Percentage
          Interests  resulting from a Dilution Offering shall be set forth on an
          amended Schedule A to be attached hereto.

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

               The   obligations  of  any  Limited   Partners   acquiring  their
          Partnership  Interests in the Offering or a Dilution  Offering 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 Texas;

               (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

                                                        -7-
<PAGE>


               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)  Except  as  disclosed  in the  Memorandum  or  documentation
          prepared in connection with a Dilution Offering, 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 North Carolina  corporation  formed
          and existing under the laws of the State of North Carolina.

               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  Article  18,  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.

               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
          Merger  Agreement and the Memorandum or future  Dilution  Offering 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;


                                                        -8-
<PAGE>


               (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 in accordance with 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 (or in the case of a Partner  acquiring his Partnership
               Interest  in the Merger,  the  balance of his capital  account in
               Texas II, Texas IV or ESWL,  as the case may be, at the Effective
               Time); 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:

                    (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

                                                        -9-
<PAGE>


                    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(b) 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 have been  tentatively  made as if this Article 12(b) 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 Units  acquired in the Offering in proportion to
               their respective capital contributions  represented by such Units
               (i.e., $250 in Sales Commissions per each such 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.

                    (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

                                                       -10-
<PAGE>


                    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.

                    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  directors of
               any Lithotripter System. No Limited Partner may withdraw from the
               Partnership except as expressly permitted herein.

                                                       -11-
<PAGE>


                    14.2 Operation of Lithotripter Systems. The Limited Partners
               shall not operate or utilize any Partnership  Lithotripter 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
               shall not engage in "Outside  Activities"  (as defined  below) in
               the  "Market  Area"  (as  defined  below)  while he is a  Limited
               Partner in the  Partnership and shall otherwise be subject to the
               provisions of this Article 14.3. The phrase "Outside  Activities"
               means  directly or  indirectly  owning,  leasing or  subleasing a
               lithotripter (or any similar  equipment or competing devices used
               for  treating  renal  or  biliary  stone  disease)  or any  other
               therapeutic  equipment  acquired by the  Partnership.  Prohibited
               indirect ownership shall include without limitation the direct or
               indirect ownership of any interest in a business venture (through
               stock ownership,  partnership interest ownership, ownership by or
               through a close family member, or as otherwise determined in good
               faith by the General Partner) involving the ownership,  purchase,
               lease,  sublease,   promotion,   management  or  operation  of  a
               lithotripter (or similar  equipment or competing devices used for
               treating  renal or  biliary  stone  disease)  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.  The ownership of less than 1%
               of the capital stock  (calculated  on a fully diluted basis) of a
               corporation  whose stock is publicly owned or regularly traded on
               any public exchange shall not constitute an Outside Activity.

                    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
               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 fifty (50) 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 thirty (30) 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  fifteen  (15) 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 in 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 entitled to any remedy at law or equity with
               respect  to  such  breach,   including   without   limitation  an
               injunction or suit for damages.


                                                       -12-
<PAGE>


                    If  a  Limited  Partner  during  his  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.  Notwithstanding anything in this
               Section  14.3  to the  contrary,  "Outside  Activity"  shall  not
               include  conduct by any former ESWL limited  partner which he had
               engaged in immediately  prior to the Effective Time and which did
               not  constitute a violation  of Section  16.16(a) of ESWL's First
               Amended  and  Restated  Agreement  of Limited  Partnership  as in
               effect  immediately  prior to the  Merger;  provided,  that  such
               partner does not increase or enhance such  interest or activities
               during the term of the Partnership.

                    14.4  Disclosure of Confidential  Information.  Each Limited
               Partner  acknowledges  and agrees that his  participation  in the
               Partnership  under  this  Agreement   necessarily   involves  his
               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  Partnership  Interests)  agrees that at all times during
               his  participation  in the  Partnership as a Limited  Partner and
               thereafter,  he 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,   (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 condition,  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
               Partnership  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 (i) interest in the  Partnership;  and (ii)  obligation to
               return  distributions made to him under certain  circumstances as
               required by the Act.




                                                       -13-
<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 the
               Merger, the Offering or 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  Article  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 Article
               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 the
               sole discretion of the General Partner.

                    (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:


                                                       -14-
<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 Article  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);



                                      -15-
<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 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


                                      -16-
<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.  In the event a plan is approved by the General
Partner  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 limitation,  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 as provided in Section 2.11 of the Act. 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
dissent,  appraisal or similar rights in connection with a plan  contemplated by
this Article 16.7.


                                      -17-
<PAGE>


     16.8 Cancellation of Partnership  Interest of Initial Limited Partner.  The
Partnership  Interest of the  Initial  Limited  Partner  will be canceled at the
Effective Time.

     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 17.6  of  this  Agreement  and  on the  terms  and
conditions provided in Article 17.7 of this Agreement. The General Partner shall
have a period of thirty (30) days  following  the date of 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 Article 17.1 to
the Partnership and, in such case, the Partnership shall have the same rights as
provided for the General Partner under this Article 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 the 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) at the price determined
in the manner  provided in  Article 17.6  of this Agreement and on the terms and
conditions provided in Article 17.7 of this Agreement. The General Partner shall
have a period of thirty (30) days following the date of the Notice of Insolvency
(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

                                      -18-
<PAGE>


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 Article 17.2 to the  Partnership  and, in such case,
the  Partnership  shall have the same rights as provided for the General Partner
under this Article 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 a breach  of  Article  14.3 by or with  respect  to 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  the
Notice of  Withdrawal or notice of the  defaulting  event.  The General  Partner
shall  have the  option to  purchase  at the  Closing  (as  defined  below)  the
Partnership  Interest of the  Defaulting  Limited  Partner (which the Defaulting
Limited Partner shall then become  obligated to sell) at the price determined in
the manner  provided  in  Article  17.6 of this  Agreement  and on the terms and
conditions provided in Article 17.7 of this Agreement. The General Partner shall
have a period of  thirty  (30) days  following  the date it sends the  Notice of
Default (the "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 Article 17.3 to the  Partnership  and, in such case, the  Partnership
shall  have the same  rights as  provided  for the  General  Partner  under this
Article 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 Partner involved in the Domestic
Proceeding  (which the Limited Partner shall then become  obligated to sell), at
the price  determined in the manner  provided in Article 17.6 of this  Agreement
and on the terms and conditions provided in Article 17.7 of this Agreement.  The
General  Partner  shall have a period of thirty (30) days  following the date of
the Notice of Domestic  Proceeding (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

                                      -19-
<PAGE>


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  Article 17.4 to the  Partnership  and, in such
case,  the  Partnership  shall have the same rights as provided  for the General
Partner under this Article 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 sole 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(f).  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 17.6 and shall be on the terms and conditions as provided in
Article 17.7. The transfer of the  Partnership  Interests and the payment of the
purchase  price (as  provided  in  Article  17.6)  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.  The  foregoing  power of  attorney  shall not be affected by the
subsequent incapacity or mental incompetence of any Limited Partner.

     17.6  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  Article 17.1,  17.2, 17.3, 17.4 or 17.5 (the "Selling Limited
Partner")  shall be determined in the manner  provided in this Article 17.6. The
purchase price for a Partnership  Interest  purchased pursuant to the provisions
of Article  17.1,  17.2,  17.3 or 17.4 shall be an amount equal to the lesser of
(i) the fair market value of the Selling Limited Partner's  Partnership Interest
on the  Valuation  Date  (prorated  in the  event  that  only a  portion  of his
Partnership  Interest is being  purchased)  as  determined  by an Appraiser  (as
defined  below)  selected by the General  Partner,  or (ii) the Selling  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  Selling  Limited  Partner  (unadjusted  for any
appreciation  in Partnership  assets and as reduced by  depreciation  deductions
claimed  by the  Partnership  for tax  purposes)  as of the  Valuation  Date (as
defined below). The General Partner, in its sole discretion,  may pursue both of
the above valuation  methods and choose the lesser value of the two as indicated
above,  or may designate and follow only one of the methods in  calculating  the
purchase price. In the case of a purchase of a Partnership  Interest pursuant to
the  provisions of Article 17.5,  the purchase price shall be an amount equal to
the greater of (i) two (2) times the aggregate  distributions  made with respect
to such Partnership Interest


                                                       -20-
<PAGE>


     pursuant to Article  13(a)  during the  twelve-month  period  ending on the
Valuation Date or (ii) the Selling Limited  Partner's share of the Partnership's
book value  determined  in the manner  described  above.  For  purposes  of this
Article 17.6, the term  "Appraiser"  shall mean an independent  appraiser who is
qualified in appraising limited partnership  interests and who has at least five
years  experience.  In determining  fair market value,  the Appraiser shall take
into  consideration  any  outstanding  indebtedness,   liabilities,   liens  and
obligations  of the  Partnership  and the  relative  Partnership  Interests  and
capital  accounts of all Partners,  as well as applying any customary  discounts
for  lack of  liquidity  and  control.  Such  appraisal  shall be  conducted  in
accordance with professional appraisal standards. The valuation of the Appraiser
shall be  conclusive  and binding upon the  Partnership,  the  purchaser and the
Selling  Limited  Partner  and his  representatives.  The  determination  of the
Selling Limited Partner's Capital Account or aggregate  distributable  amount on
the  Valuation  Date  (as  defined  below)  shall  be made by the  Partnership's
internal  accountant  (the  "Partnership  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 or
aggregate  distributable  amount of the Selling Limited Partner on the Valuation
Date shall be binding and conclusive upon the Partnership, the purchaser and the
Selling 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  Selling  Limited  Partner,  in the case of a  purchase  by reason of
death;  (ii) the bankruptcy or insolvency of a Selling 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;  or (v) the Notice of
Election  as  provided  in Article  17.5,  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 or 17.5 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  Selling  Limited  Partner  shall  be  deemed  to occur as of the
Valuation  Date and the Selling  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 the  Partnership  shall have the right to deduct the amount of any such
distributions  made to the Selling Limited Partner after the Valuation Date from
the purchase price.

     17.7 Closing.

     17.7.1  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 or 17.5 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

                                      -21-
<PAGE>


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 or 17.5 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 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 Selling
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 Selling 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 or 17.5 and compliance with all the Articles of
this  Agreement,  except the execution of the transfer  documents by the Selling
Limited  Partner as provided  above in this Article  17.7.1,  are  sufficient to
effect the  complete  transfer  of the  Selling  Limited  Partner's  Partnership
Interest and the Selling 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 Selling Limited Partner shall be deemed to occur as of
the Valuation Date as defined in Article 17.6. The deemed  transfer is effective
regardless of whether the Selling Limited Partner  performs the duties set forth
in this Article 17.7.1.

                                      -22-
<PAGE>


     17.7.2 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.

     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 purposes 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.

     If the General  Partner  shall be finally  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,  the  General  Partner  may be removed and another
substituted with the consent of all of the Limited Partners.  Such consent shall
be evidenced by a certificate of removal signed by all of the Limited  Partners.
In the


                                      -23-
<PAGE>

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.

     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 execute and deliver the Merger  Agreement  and conduct the  Offering
and any Dilution Offering on behalf of the Partnership;

     (b) To acquire on behalf of the  Partnership  (i) one or more fixed-base or
mobile  lithotripsy  systems,  (ii) any other assets related to the provision of
lithotripsy  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"),  at such times and at such
price  and upon  such  terms,  as the  General  Partner  deems to be in the best
interest of the Partnership;



                                      -24-
<PAGE>

     (c) To purchase,  hold, manage,  lease,  license and dispose of Partnership
assets,  including the purchase,  exchange,  trade or sale of the  Partnership's
assets at such price, or amount, for cash, securities or other property and upon
such  terms,  as the  General  Partner  deems to be in the best  interest of the
Partnership; provided, that should the Partnership assets be exchanged or traded
for  securities  or other  property  (the  "Replacement  Property")  the General
Partner shall have the same powers with regard to the Replacement Property as it
does towards the traded property;

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

     (e)  To  determine  the  travel   itinerary  and  site  locations  for  the
Lithotripter Systems or other Partnership technology;

     (f) 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;

     (g) 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;

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

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

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

     (k) To form a new limited  partnership  made up of  qualified  investors to
treat gallstone  patients (if the FDA approves a lithotripter for such purpose),
and to contract on behalf of the  Partnership  with the new limited  partnership
for the use for a fee of a Partnership lithotripter for the treatment of the new
limited partnership's gallstone patients; and

     (l) 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,


                                      -25-
<PAGE>

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
the General  Partner with respect to the  supervision  and  coordination  of the
management and administration of the day-to-day  operations of the Partnership's
business for a monthly fee equal to 7.5% of Partnership Cash Flow per month. All
costs incurred by the General  Partner under the Management  Agreement  shall be
paid or  reimbursed  by the  Partnership  directly.  The  Partnership  may  also
contract with healthcare  facilities and/or qualified physicians desiring to use
its  Lithotripter  Systems for the treatment of patients.  Owning an interest in
the Partnership shall not be a condition to using any Lithotripter  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  fixed-base  or  mobile
lithotripsy  unit,  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 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) 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;

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



                                      -26-
<PAGE>

     (e) 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.

     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 General  Partner shall,  in its sole
discretion, determine the amount of payments to such reserve.

     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.  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)  December  31, 1998 if the Merger has not yet become  effective by such
date;

     (b) The expiration of its term on December 31, 2040;

     (c) 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


                                                       -27-
<PAGE>

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;

     (d) The determination of the General Partner that the Partnership should be
dissolved;

     (e) The occurrence of an event  described in a plan approved by the General
Partner   pursuant  to  Article  16.7  resulting  in  the   dissolution  of  the
Partnership;

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

     (g)  Except as  otherwise  provided  in any plan  approved  by the  General
Partner pursuant to Article 16.7, 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

     (h) 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
Texas; provided, that the events described in Sections 4.02(a)(4) and (5) of the
Act or any  similar  provisions  of any  successor  statute,  shall  not  work a
dissolution of the Partnership except as provided in (c) above.

     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 as provided above 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.


                                      -28-
<PAGE>

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
such  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 12,  and  any  other
adjustments  required by 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


                                      -29-
<PAGE>

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 or as otherwise
required  by law 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 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)-1,
as modified  from time to time.  In its  capacity as Tax  Matters  Partner,  the
General Partner shall oversee the Partnership's tax affairs in the manner which,
in its best judgment, is 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


                                      -30-
<PAGE>

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.  Further,  no Limited  Partner
consent  shall be  required  to amend  Schedule A to reflect  the  admission  of
Partners as contemplated by the Merger,  the Offering,  any Dilution Offering or
as otherwise herein permitted.

     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 12, 13, 15 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.

     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  generally  convenient to the Limited
Partners on a date not earlier than fifteen (15) days after receipt


                                      -31-
<PAGE>

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.

     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 Texas  without  giving  effect to the conflicts of
laws provisions thereof.


                                      -32-
<PAGE>

     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 Michael Madler, 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  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,


                                      -33-
<PAGE>

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 Austin,  Texas 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.

















            [The remainder of this page is intentionally left blank]


                                      -34-
<PAGE>

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

                                       GENERAL PARTNER:

                                       LITHOTRIPTERS, INC., 
                                          a North Carolina corporation


                                       By:  __________________________________
                                            Joseph Jenkins, M.D., President

ATTEST:

_________________________                                      [CORPORATE SEAL]
Secretary

[CORPORATE SEAL]
                                            INITIAL LIMITED PARTNER:


                                            __________________________________
                                            Michael Madler


STATE OF NORTH CAROLINA                     )
                                            )
COUNTY OF CUMBERLAND                        )

     On this _______ day of ___________, 1998, before me, the undersigned Notary
Public in and for the  County  of  Cumberland  in the  State of North  Carolina,
personally came Joseph Jenkins,  M.D., who, being by me duly sworn, said that he
is  President  of  Lithotripters,  Inc.,  the  sole  general  partner  of  Texas
Lithotripsy  Limited  Partnership  VII,  L.P.,  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 Joseph  Jenkins,  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.


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

                                    Notary Public
My commission expires:

___________________________


                                      -35-
<PAGE>


STATE OF TEXAS                              )
                                            )
COUNTY OF ______________                    )


     I,  _______________________________,  a notary  public in and for the State
and County set forth above,  do hereby  certify that Michael  Madler  personally
appeared before me this _____ day of _________,  1998 and acknowledged and swore
to the due  execution  of the  foregoing  Limited  Partnership  Agreement in his
capacity as the initial limited partner.




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

                                    Notary Public

My commission expires:

___________________________





                                      -36-
<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 Texas
Lithotripsy  Limited  Partnership  VII,  L.P.,  and his or her  intention  to be
legally bound thereby.

                  Dated this _________ day of ___________________, 1998.



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

                                    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  __________________,  1998,  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]


                                      -37-
<PAGE>


                                   SCHEDULE A

                        Schedule of Partnership Interests

                 TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VII, L.P.

           CONTRIBUTIONS OF CAPITAL TO THE PARTNERSHIP AND PERCENTAGE
INTERESTS

                                                Cash               Percentage
                   General Partner           Contribution            Interest

              Lithotripters, Inc.                  $0                   99%
              2008 Litho Place
              Fayetteville, NC  28304

              Initial Limited Partners

              Michael Madler                        $0                    1%
              c/o Prime Medical Services, Inc.
              1301 Capital of Texas Highway
              Suite C-300
              Austin, TX   78746


              TOTAL:                                $0                   100%



                                      -38-