Document:

ASSIGNMENT AGREEMENT

                                       AND

                   SECOND AMENDMENT TO CONTRIBUTION AGREEMENT

     This Assignment  Agreement and Second  Amendment to Contribution  Agreement
(this "Agreement"),  dated as of April 1, 2000 (the "Effective Date"), is by and
between Prime Medical  Services,  Inc. a Delaware  corporation  ("PMSI"),  Prime
Medical Operating,  Inc., a Delaware  corporation  ("PMOI"),  Prime RVC, Inc., a
Delaware  corporation  ("Prime RVC"),  Prime  Refractive  Management,  L.L.C., a
Delaware  limited  liability  company ("Prime  Management"),  Barnet Dulaney Eye
Center,  P.L.L.C.,  an Arizona  professional limited liability company ("BDEC"),
LASIK  Investors,  L.L.C.,  a  Delaware  limited  liability  company  ("LASIK"),
Prime/BDR  Acquisition,  L.L.C.,  a Delaware limited  liability  company ("Prime
BDR"),  Prime/BDEC  Acquisition,  L.L.C., a Delaware limited  liability  company
("Prime BDEC"),  Prime Refractive,  L.L.C., a Delaware limited liability company
("Prime Refractive"), David D. Dulaney, M.D. ("Dulaney"), Ronald W. Barnet, M.D.
("Barnet"), and Mark Rosenberg ("Rosenberg"). All of the foregoing parties other
than Prime RVC are hereinafter referred to as the "Existing Parties".

                             Preliminary Statements

         LASIK  and  Prime  BDR are  each a party to that  certain  Contribution
Agreement,  dated as of September 1, 1999, among PMSI,  PMOI, Prime  Management,
BDEC,  LASIK,  Prime BDR, Prime BDEC, Prime  Refractive,  Dulaney,  Barnet,  and
Rosenberg,  as amended by that certain First Amendment to Contribution Agreement
dated as of January 31, 2000 (the "Contribution Agreement").

         The parties to this Agreement desire that LASIK transfer to PMOI all of
LASIK's  ownership in Prime BDR,  including,  without  limitation,  that certain
forty percent (40%) membership interest received by LASIK in connection with the
consummation of the transactions contemplated by the Contribution Agreement (the
"Prime BDR Interest").

         The parties to this Agreement desire that Prime Refractive  transfer to
Prime RVC all of Prime Refractive's  ownership in Caster One, L.L.C., a Delaware
limited  liability  company and partially owned  subsidiary of Prime  Refractive
("Caster One"), including,  without limitation, that certain sixty percent (60%)
membership  interest owned Prime Refractive  (collectively the "Caster Interest"
and, together with the Prime BDR Interest, the "Transferred Interests").

         In  partial   consideration   of  the  assignment  of  the  Transferred
Interests, PMSI desires to issue certain Warrants described herein.

         The Existing  Parties also desire that,  effective upon transfer of the
Transferred  Interests,  Prime RVC shall assume all  obligations for any and all
amounts  owed by  Prime  Refractive  to  Prime  Management  under  that  certain
Promissory  Note  executed  by Prime  Refractive  and dated March 1, 2000 in the
principal  amount of $5,828,724 (the  "Promissory  Note"),  and Prime Refractive
shall thereupon be released from any obligation under the Promissory Note.

                             Statement of Agreement

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

                                   ARTICLE I.

                             ASSIGNMENT OF INTEREST

         Section 1.1       Assignment and Grant of Warrants.
                           --------------------------------

                  (a) Prime BDR Interest.  LASIK hereby  conveys,  transfers and
assigns to PMOI,  and PMOI  hereby  acquires  from  LASIK all  right,  title and
interest  in and to the Prime BDR  Interest,  such that on the  Effective  Date,
LASIK shall not own (i) any ownership or other interest in Prime BDR or (ii) any
rights or securities  exercisable  or  exchangeable  for, or  convertible  into,
ownership or other interests in Prime BDR.

                  (b) Caster  One  Interest.  As  allowed  by Section  2.5(i) of
Caster One's  Limited  Liability  Company  Agreement,  Prime  Refractive  hereby
conveys,  transfers and assigns to Prime RVC, and Prime RVC hereby acquires from
Prime  Refractive all right,  title and interest in and to the Caster  Interest,
such  that  on the  Effective  Date,  Prime  Refractive  shall  not  own (i) any
ownership  or other  interest  in Caster  One or (ii) any  rights or  securities
exercisable  or  exchangeable  for,  or  convertible  into,  ownership  or other
interests in Caster One.

                  (c) Warrants.  In partial  consideration  of the assignment of
the  Transferred  Interests,  PMSI  agrees to deliver  warrants to LASIK (or any
combination  of  the  principals  of  LASIK  provided  in  written  instructions
delivered  to PMSI  within  5 days of the  execution  of this  Agreement),  such
warrants  to be in  substantially  the form  attached  hereto as  Exhibit K (the
"Warrants").  The Warrants delivered in partial consideration of the transfer of
the Prime BDR Interest shall entitle the holder(s) thereof to purchase, upon the
terms and  conditions  contained in the Warrants,  a collective  total of 81,263
shares of $0.01 par value common stock of PMSI, at a per share purchase price of
$10.38. The Warrants  delivered in partial  consideration of the transfer of the
Caster Interest shall entitle the holder(s) thereof to purchase,  upon the terms
and conditions contained in the Warrants, a collective total of 43,715 shares of
$0.01 par value common stock of PMSI, at a per share purchase price of $8.25.

                                   ARTICLE II.

                                    AMENDMENT

         Section 2.1       Amendments to Contribution Agreement.
                           ------------------------------------

                  (a) The Existing  Parties hereby agree to amend Section 4.3(a)
of the Contribution  Agreement to replace the reference to "Loan Agreement" with
a reference instead to "Development Facility".

                  (b) The Existing  Parties hereby agree to amend Section 4.3(e)
of the  Contribution  Agreement to replace the two references to "Loan Agreement
or Development Facility" with references instead to "Development Facility",  and
to delete the reference to "(as applicable)".

     (c) The  Existing  Parties  hereby  agree to amend  Section  4.3(f)  of the
Contribution Agreement to read in its entirety as follows:

                                    (a) The  parties  agree that all of the loan
                  agreements, promissory notes, guarantees, security agreements,
                  assignment  and  security  agreements  and  other  agreements,
                  documents or  instruments  executed by any party in connection
                  with the  Development  Facility are  hereinafter  collectively
                  referred to as the "Credit Documents."

                  (d) The Existing  Parties hereby agree to amend Section 8.2(c)
of the  Contribution  Agreement  to replace the  reference to "Exhibit A" with a
reference instead to "Exhibit K".

     (e) The Existing Parties hereby agree to amend the TABLE OF EXHIBITS to the
Contribution Agreement to add at the bottom:

                  Exhibit K                 Form of Target Center Warrants

                  (f)  The   Existing   Parties   hereby   agree  to  amend  the
Contribution Agreement to add as Exhibit K, immediately following Exhibit J, the
Form of Target Center Warrant attached to this Agreement as Exhibit K.

         Section 2.2 Assumption of Promissory Note. Prime RVC hereby assumes, as
of the Effective Date, all of the obligations arising under the Promissory Note,
and Prime  Management  agrees that Prime  Refractive is hereby released from any
and all obligations it may have under the Promissory Note, regardless of whether
such obligations are past due.  Notwithstanding the foregoing, the parties agree
that all amounts  previously paid under the Promissory Note are  non-refundable,
and each  party to this  agreement  agrees  that it will not take any  action to
recover  any  such  amount.  Prime  Management  further  agrees  that  it  shall
irrevocably cancel the Promissory Note following the assumption thereof by Prime
RVC. The existence of and amounts  advanced under the Promissory  Note shall not
reduce  the  maximum   principal   amount  of  the  Development   Facility  from
$29,165,000.

                                  ARTICLE III.

                                 REPRESENTATIONS

         Section 3.1 All Parties. Each party to this Agreement hereby represents
and warrants that (a) as of the date of this  Agreement,  it has full and lawful
power and authority to execute and deliver this  Agreement and to consummate and
perform the  transactions  contemplated  in this  Agreement,  (b)  assuming  due
execution  and  delivery  by  the  other  parties  hereto,   this  Agreement  is
enforceable   against  it,  and   constitutes  its  valid  and  legally  binding
obligation,  (c) except as  provided  herein,  it is not  required to obtain any
consent  from or  approval  or action of, or make any filing with or give notice
to, any person, public authority or entity, in connection with the execution and
delivery of this Agreement,  and (d) by virtue of its direct or indirect partial
ownership of or  involvement  with Prime BDR and Caster One, it has personal and
detailed knowledge of the operations and assets of Prime BDR and Caster One, and
it has neither requested nor relied on any additional information from any other
party to this  Agreement (or any agent or  representative  of any other party to
this Agreement).

         Section 3.2  Representations  of LASIK.  LASIK  hereby  represents  and
warrants to the parties to this  Agreement that the Prime BDR Interest is hereby
conveyed to PMOI free and clear of any and all liens,  claims,  encumbrances and
restrictions of any kind whatsoever (other than those expressly set forth in the
Contribution Agreement or the Limited Liability Company Agreement of Prime BDR).

         Section  3.3  Representations  of Prime  Refractive.  Prime  Refractive
hereby  represents and warrants to the parties to this Agreement that the Caster
Interest  is hereby  conveyed  to Prime RVC free and clear of any and all liens,
claims,  encumbrances and restrictions of any kind whatsoever  (other than those
expressly set forth in the contribution  agreement  governing Prime Refractive's
acquisition of the Caster Interest or in the Limited Liability Company Agreement
of Caster One).

                                   ARTICLE IV.

                        Resignations and ENTIRE INTEREST

         Each of Barnet,  Dulaney and Rosenberg  hereby resigns from any and all
positions  or titles  which he may hold or claim to hold with Prime BDR,  Caster
One or any  entity in which  either of the  foregoing  owns an equity  ownership
interest. Each of Barnet,  Dulaney,  Rosenberg and LASIK acknowledges and agrees
that he or it does not now have any right to purchase or otherwise  acquire,  at
any time  subsequent to the  Effective  Date,  any direct or indirect  ownership
interests in Prime BDR or Caster One.

                                   ARTICLE V.

                                     GENERAL

         Section 5.1 Subsequent Amendment of Prime BDR Governance Documents. The
parties  hereby  agree that Prime RVC and PMOI may,  at any time on or after the
Effective  Date, (a) amend,  supplement or replace  entirely the  Certificate of
Formation,  Limited  Liability  Company  Agreement  or any other  organizational
document of Prime BDR,  in any manner they desire and (b) subject to  applicable
law, dissolve Prime BDR and distribute its assets in any manner they desire.

     Section 5.2  Transaction  Document.  This  Agreement  shall be considered a
"Transaction Document" under the Contribution Agreement.

         Section 5.3 No Assumption of Liabilities.  Except as expressly provided
in Section 2.3 above,  none of PMSI, PMOI, Prime RVC or Prime Management  hereby
assumes any debt, obligation or liability of any other party to this Agreement.

         Section 5.4 Ratification by Members of Prime Refractive.  Each party to
this  Agreement  agrees that by  executing  this  Agreement,  it is deemed to be
voting its ownership  interest (if any) in Prime  Refractive to authorize  Prime
Refractive to enter into and perform this  Agreement  and any other  document or
agreement to which Prime  Refractive is a party and that is  contemplated  by or
executed in connection with this Agreement.  Each such party hereby consents (in
all  capacities  for which it is entitled to or required to give consent) to the
transfer  of the  Transferred  Interests,  and  further  agrees to execute  such
resolutions  and  written  consents,  and  take  such  other  actions,  in their
capacities  as members of Prime  Refractive,  as any other  party  hereto  shall
reasonably  require  after  the date of this  Agreement  in order to have  Prime
Refractive ratify and adopt this Agreement.

         Section  5.5  Ratification  by  Members  of LASIK.  Each  party to this
Agreement agrees that by executing this Agreement, it is deemed to be voting its
ownership  interest  (if  any) in  LASIK to  authorize  LASIK to enter  into and
perform this  Agreement and any other  document or agreement to which LASIK is a
party and that is contemplated by or executed in connection with this Agreement.
Each such party hereby  consents (in all  capacities for which it is entitled to
or required to give consent) to the transfer of the Transferred  Interests,  and
further agrees to execute such resolutions and written  consents,  and take such
other  actions,  in their  capacities  as members of LASIK,  as any other  party
hereto shall  reasonably  require  after the date of this  Agreement in order to
have LASIK ratify and adopt this Agreement.

         Section 5.6  Ratification  by Members of Prime BDR.  Each party to this
Agreement agrees that by executing this Agreement, it is deemed to be voting its
ownership  interest (if any) in Prime BDR to  authorize  Prime BDR to enter into
and perform this  Agreement  and any other  document or agreement to which Prime
BDR is a party and that is  contemplated  by or executed in connection with this
Agreement.  Each such party hereby  consents (in all  capacities for which it is
entitled  to or required to give  consent)  to the  transfer of the  Transferred
Interests,  and further agrees to execute such resolutions and written consents,
and take such other actions, in their capacities as members of Prime BDR, as any
other party hereto shall reasonably  require after the date of this Agreement in
order to have Prime BDR ratify and adopt this Agreement.

         Section 5.7       Effect on Existing Agreements.
                           -----------------------------

                  (a)  Contribution  Agreement.  This Agreement is  incorporated
into the  Contribution  Agreement by  reference.  Other than as provided in this
Agreement  and that certain  First  Amendment to  Contribution  Agreement  dated
January 31,  2000 among of the  Existing  Parties,  the  Contribution  Agreement
(including  Exhibits and  Schedules)  has not been modified or amended and is in
full force and effect.  Each of the  Existing  Parties  hereby  affirms  that it
remains a party to the  Contribution  Agreement  (as amended by this  Agreement)
after  the  execution  of this  Agreement.  The  Contribution  Agreement  may be
restated as amended hereby for the convenience of the parties hereto.

                  (b) Financing Documents.  The parties to this Agreement hereby
terminate  that  certain   Assignment  and  Security  Agreement  (the  "Security
Agreement")  dated as of  September 1, 1999  originally  between PMOI and LASIK,
securing LASIK's  obligations  under the Loan Agreement (as such term is defined
in the Contribution Agreement prior to the effect of the amendments contained in
this Agreement).  PMOI and Prime RVC agree to promptly file with the appropriate
offices a release of all financing statements securing only those obligations of
Prime BDR under the Loan Agreement.  Notwithstanding the foregoing provisions of
this  subsection,  the parties to this Agreement  acknowledge  that the Security
Agreement and such financing  statements have been collaterally  assigned to one
or more  lenders of PMSI,  and that the consent of such lenders will be required
in order  to  fully  effect  the  termination  and  releases  described  in this
subsection.  PMOI and Prime RVC hereby agree to exercise all reasonable  efforts
to promptly  have such  lenders  provide the  consents  necessary  to effect the
provisions of this subsection.

         Section 5.8  Cooperation and Further  Assurance.  From time to time, as
and when reasonably requested by another party after the date of this Agreement,
each party hereto agrees to (at the expense of the requesting party) execute and
deliver, or cause to be executed and delivered, all such documents,  instruments
and consents,  and to use reasonable efforts to take all such other actions,  as
may be reasonably requested or necessary to carry out the intent and purposes of
this Agreement and vest in Prime RVC good title to, possession of and control of
the Transferred  Interests.  Without  limiting the foregoing,  the parties agree
that the last  paragraph  of Section  9.3 of the  Contribution  Agreement  as it
relates to LASIK's  disposition of the Prime BDR Interest  hereunder  shall only
deal with the return of Proprietary Information,  credit cards, keys, equipment,
supplies and other  materials that are specific only to Prime BDR, and shall not
(as a result of the disposition of the Prime BDR Interest hereunder) require the
return of Proprietary  Information  and such items that relate both to Prime BDR
and either of Prime Refractive or Prime BDEC.

     Section 5.9 GOVERNING LAW AND  CONSTRUCTION.  THIS AGREEMENT IS PERFORMABLE
IN TRAVIS COUNTY, TEXAS, AND IS GOVERNED BY THE LAWS OF TEXAS.

         Section 5.10 ARBITRATION. ANY CONTROVERSY BETWEEN THE PARTIES REGARDING
THIS  AGREEMENT  AND ANY  CLAIMS  ARISING  OUT OF  THIS  AGREEMENT  OR A  BREACH
HEREUNDER  SHALL BE SUBMITTED TO ARBITRATION  BY THE PARTIES IN ACCORDANCE  WITH
AND GOVERNED BY SECTION 10.11 OF THE CONTRIBUTION AGREEMENT.

         Section  5.11  Severability.  If any  provision  of this  Agreement  is
rendered  or  declared  illegal or  unenforceable  by reason of any  existing or
subsequently enacted statute, rule or regulation,  or by order of or judgment of
a court,  any and all other terms and  provisions  hereof  shall  remain in full
force and effect as stated and set forth  herein.  Furthermore,  in lieu of such
illegal or unenforceable  provision,  there shall be added automatically as part
of this  Agreement,  a provision as similar in effect to the result  intended by
such  illegal or  unenforceable  provision as may be possible and still be legal
and enforceable.

         Section 5.12  Miscellaneous.  This Agreement shall be binding upon, and
shall inure to the benefit of, the parties  hereto and their  respective  heirs,
executors, administrators,  successors and permitted assigns. This Agreement may
be executed in multiple  counterparts,  each of which shall be an original,  but
all of which shall  constitute one and the same  instrument.  This Agreement has
been negotiated by the parties and their  respective  counsel and will be fairly
interpreted in accordance with its terms and without any strict  construction in
favor of or against  any party.  When the  context  requires,  the gender of all
words used herein  shall  include  the  masculine,  feminine  and neuter and the
number of all words shall include the singular and plural.  The captions in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect  any of  the  terms  or  provisions  hereof.  There  are  no  third-party
beneficiaries to this Agreement. This Agreement may not be modified,  altered or
amended  except by a writing signed by all of the parties  hereto.  No waiver of
any provisions hereof shall be effective unless contained in a writing signed by
the person to be bound thereby.

                            [Signature page follows]

<PAGE>

S-4

                                 SIGNATURE PAGE

                                       TO

                              ASSIGNMENT AGREEMENT

                                       AND

                   SECOND AMENDMENT TO CONTRIBUTION AGREEMENT

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.

PMSI:                                       PRIME MEDICAL SERVICES, INC.

                                            Teena Belcik, Treasurer

PMOI:                               PRIME MEDICAL OPERATING, INC.

                                            Teena Belcik, Treasurer

PRIME RVC:                          PRIME RVC, INC.

                                            Teena Belcik, Treasurer

PRIME MANAGEMENT:          PRIME REFRACTIVE MANAGEMENT, L.L.C.

                                            Teena Belcik, Treasurer

BDEC:                               Barnet Dulaney Eye CENTER, P.L.L.C.

                                            By:
                         David D. Dulaney, M.D., manager

LASIK:                              LASIK INVESTORS, L.L.C.

                                            By:
                         Ronald W. Barnet, M.D., manager

                                            By:
                         David D. Dulaney, M.D., manager

PRIME BDR:                          PRIME/BDR ACQUISITION, L.L.C.

Ronald W.  Barnet,  M.D.,  signing as a manager of Prime BDR,
  and on behalf of LASIK as a member of Prime BDR

David D.  Dulaney,  M.D.,  signing as a manager  of Prime BDR,
  and on behalf of LASIK as a member of Prime BDR

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

PRIME BDEC:                         PRIME/BDEC ACQUISITION, L.L.C.

Ronald W.  Barnet,  M.D.,  signing as a manager of Prime BDEC,
          and on behalf of LASIK as a member of Prime BDEC

David D.  Dulaney,  M.D.,  signing as a manager of Prime BDEC,
          and on behalf of LASIK as a member of Prime BDEC

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

PRIME REFRACTIVE:          PRIME REFRACTIVE, L.L.C.

Ronald W. Barnet,  M.D.,  signing as a manager of Prime Refractive,
          and on behalf of LASIK as a member of Prime Refractive

David D. Dulaney,  M.D.,  signing as a manager of Prime Refractive,
          and on behalf of LASIK as a member of Prime Refractive

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

DULANEY:

                                            David D. Dulaney, M.D.

BARNET:

                                            Ronald W. Barnet, M.D.

ROSENBERG:

                                            Mark RosenbergSTOCK PURCHASE AGREEMENT

         This Stock Purchase  Agreement  (this  "Agreement") is made and entered
into as of the close of business on December 31, 2000, (the "Effective Date") by
and between Prime Medical Services,  Inc., a Delaware corporation ("Seller") and
Innovative Medical  Technologies,  Inc., an exempted company incorporated in the
Cayman Islands with limited liability ("Purchaser").

                             Preliminary Statements

         Seller owns all of the  outstanding  capital stock of  Prostatherapies,
Inc., a Delaware  corporation  (the  "Company") and desires to sell such capital
stock to  Purchaser  subject  to the  terms  and  conditions  set  forth in this
Agreement.

         Purchasers  desires to acquire all of such capital stock subject to the
terms and conditions set forth in this Agreement.

                             Statement of Agreement

         For and in consideration of the mutual promises and covenants contained
in this Agreement,  and for other good and valuable  consideration,  the receipt
and  sufficiency of which are hereby  acknowledged,  the parties hereto agree as
follows:

         Section 1 Sale of Stock. As of the Effective Date, subject to the terms
and conditions of this  Agreement,  and in reliance on the  representations  and
warranties  of  Seller,   Seller  hereby  transfers  to  Purchaser  all  of  the
outstanding shares of the Company's capital stock (the "Shares").  Purchaser, in
exchange  for the  Shares,  will pay to Seller  the  amount of  $950,000  as the
purchase price (the "Purchase  Price").  The Purchase Price shall be tendered by
Purchaser's  delivery on or before the Closing (as hereinafter defined) of (a) a
promissory note duly executed by Purchaser in the principal  amount of $950,000,
in the form  attached  hereto as Exhibit A (the  "Promissory  Note"),  and (b) a
stock  certificate  evidencing  the  issuance  hereby  to  Seller  of  shares of
Purchaser's  common  stock  amounting  to 0.1% of  Purchaser's  total  shares of
outstanding  capital stock (including any additional shares received solely as a
result of the ownership of such shares, the "Share Consideration").  At any time
after the Effective Date Purchaser shall have the right, in its sole discretion,
to redeem the shares  constituting the Share Consideration by delivery to Seller
of either  (1) $100 cash or (2)  securities  of  equivalent  value of any entity
which, by merger, consolidation or otherwise,  acquires substantially all of the
assets or business of Purchaser  ("Substitute  Securities").  If such redemption
right is exercised  using  Substitute  Securities,  the redemption  rights shall
survive and be again exercisable with respect to such Substitute Securities. Any
such  redemption  shall be  deemed  effective  immediately  upon  tender of such
consideration,  and,  upon such tender,  Purchaser  shall be entitled to reflect
cancellation  of such shares in it stock record books  without any action on the
part of Seller.  The parties agree that neither  Purchaser nor Seller does, as a
result  of  this   Agreement,   any  documents,   instruments  or   certificates
contemplated  by or executed in connection  with this  Agreement  (collectively,
including this Agreement, the "Transaction  Documents"),  or the consummation of
any of the  transactions  contemplated  by  this  Agreement  or any  Transaction
Document,  assume any debts,  liabilities  or  obligations of the Company or any
Subsidiary (as hereinafter defined).

                  Subject  only to the  conditions  to closing  described in the
following   sentence  of  this  paragraph,   the  closing  of  the  transactions
contemplated  by this  Agreement  (the  "Closing")  shall take  place  within 30
calendar  days of the  Effective  Date  on a date  mutually  agreed  upon by the
parties.  The date on which  the  Closing  takes  place is  referred  to in this
Agreement as the "Closing Date"). Notwithstanding the foregoing:

                  (A) Seller may elect,  in its sole  discretion,  to  terminate
this Agreement without any obligation hereunder if:

                           (i)  Purchaser  fails to execute and  deliver,  at or
         prior to the Closing,  the  Promissory  Note, a Mutual  Non-Competition
         Agreement  in  form  and  substance  satisfactory  to both  Seller  and
         Purchaser (the "Non-Compete"), and an Assignment and Security Agreement
         securing Purchaser's obligations under the Promissory Note, in form and
         substance satisfactory to Seller (the "Security Agreement");

     (ii) any of the  representations  or  warranties  made by Purchaser in this
Agreement or any other Transaction Document,  shall, in any material respect, be
untrue, incorrect or misleading;

                           (iii) there has,  after the  Effective  Date,  been a
         material  change in the  condition or nature of the  Company's  and the
         Subsidiaries'  businesses  that, in the aggregate,  could reasonably be
         believed to materially increase the value of the Shares;

                           (iv)  Purchaser  has not  delivered to Seller,  at or
         prior to the Closing, such good standing certificates,  certificates of
         existence,  officer's  certificates  and  resignations  as  Seller  may
         reasonably request; and

                  (B) Purchaser may elect, in its sole discretion,  to terminate
this Agreement without any obligation hereunder if:

                           (i) Seller fails to execute and deliver,  at or prior
         to the  Closing,  the  Non-Compete  and one or more stock  certificates
         representing the Shares,  accompanied by blank stock power(s) in a form
         provided by Purchaser;

                           (ii) any of the representations or warranties made by
         Seller  in  this  Agreement  or  any  other  Transaction  Document  (as
         hereinafter  defined),  shall,  in any  material  respect,  be  untrue,
         incorrect or misleading;

                           (iii) there has,  after the  Effective  Date,  been a
         material  change in the  condition or nature of the  Company's  and the
         Subsidiaries'  businesses  that, in the aggregate,  could reasonably be
         believed to materially decrease the value of the Shares;

                           (iv) Seller has not  delivered  to  Purchaser,  at or
         prior to the Closing, such good standing certificates,  certificates of
         existence,  and  officer's  certificates  as Purchaser  may  reasonably
         request.

         Section  2   Representations   and  Warranties  of  Seller.   Purchaser
acknowledges and agrees that Purchaser's sole remedy for any breach by Seller of
a  representation  or  warranty  set  forth  in this  Section  shall  be to seek
indemnification pursuant to the express provisions of Section 4 and Section 6(f)
of this Agreement. Seller hereby represents and warrants to Purchaser that (with
the understanding that such representations and warranties are deemed to be made
as of both the Effective Date and the Closing):

                  (a)  Organization  and Standing;  Authority.  The Company is a
corporation duly organized, validly existing and in good standing under the Laws
(as  hereinafter  defined) of the State of Delaware and has the corporate  power
and authority to conduct its business as now conducted.  Seller is a corporation
duly  organized,  validly  existing and in good  standing  under the Laws of the
State of  Delaware  and has the  corporate  power and  authority  to conduct its
business as now  conducted  and to enter into and perform  this  Agreement.  The
execution,  delivery and  performance  by Seller of this Agreement and any other
Transaction  Documents to which Seller is a party have been duly  authorized  by
all  necessary   corporate  action  of  Seller,  its  officers,   directors  and
shareholders and the Transaction Documents have been duly executed and delivered
by Seller and are  enforceable  against  Seller in accordance  with their terms,
except (i) as  limited by  applicable  bankruptcy,  insolvency,  reorganization,
moratorium,  and other  Laws of general  application  affecting  enforcement  of
creditors'  rights   generally,   (ii)  as  limited  by  Laws  relating  to  the
availability  of specific  performance,  injunctive  relief,  or other equitable
remedies, and (iii) to the extent any indemnification  provisions may be limited
by applicable federal or state securities Laws.

     (b)  Subsidiaries.  The Company owns the interests  described  below in the
following entities (each, a "Subsidiary"):

                           (i) California I Prostatherapy  Limited  Partnership.
         The  Company  owns a  5.875%  limited  partnership  interest  and a 20%
         general  partnership  interest in  California I  Prostatherapy  Limited
         Partnership, a California limited partnership.

                           (ii) Texas I Prostatherapy  Limited Partnership.  The
         Company  owns a 33.5%  limited  partnership  interest and a 20% general
         partnership interest in Texas I Prostatherapy  Limited  Partnership,  a
         Texas limited partnership.

                           (iii)   North    Carolina    Prostatherapy    Limited
         Partnership  I. The Company owns a 6.75% limited  partnership  interest
         and a 20% general partnership interest in North Carolina  Prostatherapy
         Limited Partnership I, a North Carolina limited partnership.

         Except as  disclosed  in  writing to  Purchaser  or as set forth in the
partnership   agreements   of  each  of  the   Subsidiaries   (the   "Subsidiary
Organizational  Documents"),  there are no  rights or  options  to  acquire  any
ownership interest in or from a Subsidiary,  nor are there any rights or options
to  acquire  any  securities  that  are  exercisable  or  exchangeable  for,  or
convertible into, ownership interests of a Subsidiary.

                  (c)   Capitalization.    The   Company   has   an   authorized
capitalization  consisting of 1,000 shares of common stock,  of which 100 shares
are issued and outstanding.  All of such issued and outstanding shares of common
stock are owned  entirely  by  Seller.  There are no other  rights or options to
acquire any capital  stock of or from the  Company,  nor are there any rights or
options to acquire any securities that are  exercisable or exchangeable  for, or
convertible into, capital stock of the Company. All such outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable.

                  (d) Conflicting  Agreements and Other Matters.  The execution,
delivery and  performance by Seller of this Agreement and the other  Transaction
Documents and compliance by Seller with the terms and provisions thereof and the
sale of the Shares by Seller,  does not  violate  any  provision  of any Law, or
conflict  with or result in a breach of, the  Certificate  of  Incorporation  or
bylaws of the Company or the Certificate of  Incorporation  or bylaws of Seller.
Seller  does  not  have any  knowledge  of any  pending  or  threatened  adverse
activities by or of any of the Subsidiaries.  Furthermore,  Seller does not have
any knowledge that any Subsidiary,  or any limited partner of any Subsidiary, is
not in compliance with any restrictions on outside activities applicable to such
party pursuant to the respective Subsidiary's partnership agreement.

                  (e)   Consents,   Etc.   Assuming  the   correctness   of  the
representations by Purchaser in Section 3, no authorization,  consent, approval,
license,  qualification  or  exemption  from,  nor any  filing,  declaration  or
registration  with,  any  court,  any  federal or state  governmental  agency or
regulatory  authority or any securities exchange or any other Person, other than
authorizations,  consents,  approvals, licenses or qualifications to do business
in the states as a foreign corporation and required pursuant to state "blue sky"
laws is required in connection  with the  execution,  delivery or performance by
Seller of this Agreement or the other  Transaction  Documents on or prior to the
date hereof or the transfer of the Shares  (except such as have been obtained on
or prior to the date hereof and are,  and will be on the Closing  Date,  in full
force and effect).

                  (f) Proceedings,  Litigation,  Etc. Seller has no knowledge of
any laws, rules,  regulations,  ordinances,  orders, writs, judgments,  decrees,
determinations or awards ("Laws") promulgated by any federal,  state, county, or
local judicial or governmental  authority  ("Governmental  Authority") which (i)
are applicable to the Company,  the Subsidiaries or their respective  businesses
and (ii) when complied with by the Company and/or such Subsidiary  would, in the
aggregate,  materially  and  adversely  affect the business or operations of the
Company and the Subsidiaries as conducted on the Effective Date. None of Seller,
the Company nor any  Subsidiary  is in violation of any Law of any  Governmental
Authority  (or  subject to or party to any order of any  Governmental  Authority
arising out of any action,  suit or proceeding under any Law) which could affect
the ability of the parties  hereto to consummate the  transactions  contemplated
hereby.  There is no pending  (or,  to the  knowledge  of  Seller,  threatened),
action, suit,  proceeding at law or in equity,  arbitration or administrative or
other proceeding by or before (or, to the knowledge of Seller, any investigation
by) any Governmental Authority against or affecting the Company.

                  (g) Disclosure of Liens,  Liabilities  and other  Obligations.
Seller has (i) disclosed in writing to Purchaser all liabilities and obligations
of the Company and the Subsidiaries  that are individually in excess of $25,000;
(ii) provided  Purchaser with true and complete  copies or  descriptions  of all
agreements,  arrangements or understandings pursuant to which the Company or any
Subsidiary may or will have executory  obligations after the Closing Date; (iii)
disclosed to Purchaser in writing all liens or encumbrances  that related to the
Company's or any Subsidiary's assets.

                  (h)  Ownership  of Assets.  Except as  otherwise  disclosed in
writing to  Purchaser  on or before  the  Closing  Date,  the  Company  and each
Subsidiary owns unencumbered title to all of the assets and properties, tangible
or intangible,  real or personal, that are used in the conduct of its respective
business.

                  (i) Existing  Agreement.  Seller represents that an officer of
Urologix has orally  indicated to Seller that Urologix  would  continue to honor
the existing terms of a certain contract pursuant to which  EDAP/Technomed  has,
prior to the  Closing,  provided  certain  supplies  and  equipment to Seller in
connection  with the business of Seller.  Purchaser  agrees that Seller does not
represent or warrant that the terms and  provisions  of such  contract  will, as
written, remain enforceable after the Closing.

         Section 3 Representations of Purchaser.  Seller acknowledges and agrees
that  Seller's  sole remedy for any breach by Purchaser of a  representation  or
warranty set forth in this Section shall be to seek indemnification  pursuant to
the express  provisions  of Section 4 and Section  6(f) of this  Agreement.  The
Purchaser  represents and warrants to Seller as follows (with the  understanding
that such  representations  and  warranties are deemed to be made as of both the
Effective Date and the Closing):

                  (a)  Organization  and  Standing;  Authority.  Purchaser is an
exempted company  incorporated in the Cayman Islands with limited liability,  is
duly  organized,  validly  existing and in good  standing  under the Laws of the
Cayman Islands and has the corporate power and authority to conduct its business
as now conducted and to enter into and perform any Transaction Document to which
it is a party.  The  execution,  delivery and  performance  by Purchaser  and/or
Ronald  Sorensen,   M.D.   ("Sorensen")  of  this  Agreement  and/or  any  other
Transaction  Document,  have been duly authorized by all necessary  corporate or
other action of Purchaser  and Sorensen,  including any necessary  action by the
officers,  directors and  shareholders of any of the foregoing.  The Transaction
Documents  have been duly  executed and  delivered  by each of Purchaser  and/or
Sorensen  and are  enforceable  against  each of them in  accordance  with their
terms.  Sorensen owns all of the outstanding equity or other ownership interests
in Purchaser  (after giving effect to any rights or options that are exercisable
or  exchangeable  for,  or  convertible  into,  any  equity  or other  ownership
interests of Purchaser).

                  (b) Purchase Entirely for Own Account.  This Agreement is made
with Purchaser in reliance upon  Purchaser's  express  representation  to Seller
that the  Shares  will be  acquired  for  investment  for such  Purchaser's  own
account,  not as a  nominee  or  agent,  and not  with a view to the  resale  or
distribution of any part thereof, and that Purchaser has no present intention of
selling,  granting any participation  in, or otherwise  distributing the Shares.
The  Purchaser   further   represents  that  it  does  not  have  any  contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person,  with respect to any of the
Shares.

                  (c)  Authority.  The  execution,  delivery and  performance by
Purchaser of this Agreement and the other  Transaction  Documents have been duly
authorized by all necessary  action on behalf of Purchaser,  and this  Agreement
and the other Transaction Documents to which Purchaser is a party have been duly
executed and delivered by Purchaser.  This  Agreement and the other  Transaction
Documents constitute valid and binding obligations of Purchaser,  enforceable in
accordance  with their  respective  terms,  except (i) as limited by  applicable
bankruptcy,  insolvency,  reorganization,  moratorium, and other Laws of general
application  affecting  enforcement  of  creditors'  rights  generally,  (ii) as
limited by Laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent any indemnification
provisions may be limited by applicable  federal or state  securities  Laws. The
execution and delivery of this  Agreement and  performance  of the  transactions
contemplated  by this Agreement and compliance  with its provisions by Purchaser
will not violate any  provision of Law and will not  conflict  with or result in
any breach of any of the terms,  conditions  or  provisions  of, or constitute a
default under, its articles of incorporation or bylaws.

                  (d)  Restricted  Securities.  Purchaser  understands  that the
Shares it is purchasing are "restricted securities" under the federal securities
Laws because they are being acquired from Seller in a transaction  not involving
a public  offering  and that under  such Laws the  Shares may be resold  without
registration under the Securities Act of 1933, as amended (the "Securities Act")
and applicable state securities Laws only in certain limited  circumstances.  In
this  regard,  Purchaser  represents  that it is  familiar  with  Rule  144,  as
promulgated  under the Securities Act, and  understands  the resale  limitations
imposed thereby and by the Securities Act.

                  (e)  Disclosure  of  Information.  Purchaser  has received and
reviewed all the information it considers  necessary or appropriate for deciding
whether to purchase the Shares.  Purchaser further represents that it is relying
solely  on its  own  expertise  and  that  of its  consultants,  and  not on any
representation  of  Seller  not  expressly  contained  in  this  Agreement.  The
Purchaser  has had an  opportunity  to ask  questions  and receive  answers from
Seller regarding the Company, its business and the acquisition of the Shares.

                  (f)  Investment   Experience.   Purchaser  is  an  "accredited
investor," and has not retained or consulted with any "purchaser representative"
(as such terms are defined in Rule 501 of  Regulation  D  promulgated  under the
Securities  Act) in  connection  with its  execution of this  Agreement  and the
consummation of the transactions  contemplated hereby.  Purchaser is an investor
in securities of companies and acknowledges  that it is able to fend for itself,
can  bear the  economic  risk of its  investment,  and has  such  knowledge  and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Shares.

         Section 4         Indemnification.
                           ---------------

                  (a)  Indemnification of Purchaser.  Seller (and its successors
and  assigns)  hereby  agrees to  indemnify  and hold  harmless  Purchaser,  the
Company,  each parent  company,  subsidiary  and/or  affiliate  of either of the
foregoing (including, without limitation, each Subsidiary) and each shareholder,
member, partner (or other owner), officer,  director,  manager, agent, employee,
representative   or   similarly   situated   party  of  any  of  the   foregoing
(collectively, the "Purchaser Indemnified Parties") from and against any and all
damages, losses, claims, liabilities, demands, charges, suits, penalties, costs,
and expenses (including court costs and attorneys' fees and expenses incurred in
investigating and preparing for any litigation, investigation, compliance action
or proceeding but excluding such items as have been disclosed to the other party
in writing prior to the Closing  Date)  (collectively,  "Indemnifiable  Costs"),
including,  without  limitation,  Indemnifiable Costs arising in connection with
the commencement or assertion of any action, investigation,  proceeding, demand,
or claim by a third party, which includes,  without limitation, any Governmental
Authority  (collectively,  a "Third-Party  Action"),  which any of the Purchaser
Indemnified Parties may sustain,  arising out of or related to (i) any breach or
default  by  Seller  of any of the  representations,  warranties,  covenants  or
agreements of Seller  contained in this Agreement or any  Transaction  Document,
(ii) any actual or alleged  actions or omissions  by Seller or any  affiliate of
Seller  (other  than the Company and the  Subsidiaries),  regardless  of whether
occurring or existing before, on, or after the Closing Date, (iii) any actual or
alleged actions or omissions by the Company, or any of the Company's  directors,
officers, shareholders, agents, employees, representatives,  subsidiaries and/or
affiliates  occurring  prior to the Closing  Date  (regardless  of whether  such
Indemnifiable  Costs are asserted at any time before or after the Closing Date),
or (iv) any claim  that the  structure  of the  Company's  or the  Subsidiaries'
businesses  or  business  relationships  violates  any Laws of any  Governmental
Authority  regulating or legislating  the provision of or billing for healthcare
or the practice of medicine,  but only to the extent such claim or alleged claim
specifically  relates to acts occurring or  circumstances  existing prior to the
Closing Date.

                  Notwithstanding  the foregoing,  (A) no Purchaser  Indemnified
Party  shall be  entitled  to assert  any claim for  indemnification  under this
Section unless and until such time as all claims of such  Purchaser  Indemnified
Party,  individually  and not in combination  with other  Purchaser  Indemnified
Parties,  exceed $50,000 in the  aggregate,  after which time all claims of such
Purchaser  Indemnified  Party in  excess  of  $50,000  in the  aggregate  may be
asserted,  and (B) Seller's  obligations under this Section shall not exceed the
amount of the Purchase Price.

                  (b)  Indemnification  of Seller.  Purchaser  hereby  agrees to
indemnify and hold  harmless  Seller,  each parent  company,  subsidiary  and/or
affiliate of Seller,  and each  shareholder,  member,  partner (or other owner),
officer,  director,  manager,  agent,  employee,   representative  or  similarly
situated party of any of the foregoing  (collectively,  the "Seller  Indemnified
Parties") from and against any and all Indemnifiable Costs,  including,  without
limitation,  Indemnifiable  Costs arising in connection with the commencement or
assertion of any Third-Party Action, which any of the Seller Indemnified Parties
may sustain, arising out of or related to (i) any breach or default by Purchaser
of any of the representations,  warranties, covenants or agreements of Purchaser
contained in this  Agreement  or any  Transaction  Document,  (ii) any actual or
alleged  actions or omissions by Purchaser or any affiliate of Purchaser  (other
than the Company  and the  Subsidiaries),  regardless  of whether  occurring  or
existing  before,  on, or after the  Closing  Date,  (iii) any actual or alleged
actions  or  omissions  by the  Company,  or any  of  the  Company's  directors,
officers, shareholders, agents, employees, representatives,  subsidiaries and/or
affiliates  occurring  after  the  Closing  Date,  or (iv)  any  claim  that the
structure  of  the  Company's  or  the  Subsidiaries'   businesses  or  business
relationships  violates any Laws of any  Governmental  Authority  regulating  or
legislating  the  provision  of or billing  for  healthcare  or the  practice of
medicine,  but only to the  extent  such  claim or  alleged  claim  specifically
relates to acts occurring or circumstances  existing after the Closing Date that
differ in one or more  material  respects from acts  occurring or  circumstances
existing immediately prior to the Closing Date.

                  Notwithstanding the foregoing, (A) no Seller Indemnified Party
shall be entitled  to assert any claim for  indemnification  under this  Section
unless  and until  such time as all  claims of such  Seller  Indemnified  Party,
individually  and not in  combination  with other  Seller  Indemnified  Parties,
exceed  $50,000 in the  aggregate,  after  which time all claims of such  Seller
Indemnified Party in excess of $50,000 in the aggregate may be asserted, and (B)
Purchaser's  obligations  under this Section  shall not exceed the amount of the
Purchase Price.

                  (c)  Defense  of  Third-Party  Claims.  A  party  entitled  to
indemnification  under this  Section  shall give  prompt  written  notice to the
indemnifying party of the commencement or assertion of any Third-Party Action in
respect of which such indemnified  party shall seek  indemnification  hereunder.
Any  failure  to  so  notify  the  indemnifying  party  shall  not  relieve  the
indemnifying  party from any liability that it may have to the indemnified party
under this  Section  except to the extent  that the  failure to give such notice
materially and adversely  prejudices  indemnifying party. The indemnifying party
shall have the right to assume control of the defense of,  settle,  or otherwise
dispose  of such  Third-Party  Action  on such  terms as it  deems  appropriate;
provided, however, that:

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

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

                           (iii) The indemnifying party shall not consent to the
         entry of any  consent  order,  decree  or  judgment  or enter  into any
         settlement  that  does not  (except  as  agreed  to in  writing  by the
         indemnified  party)  include  as  an  unconditional  term  thereof  the
         execution  and delivery of a release  from all  liability in respect of
         such Third-Party  Action by each claimant or plaintiff to, and in favor
         of, each indemnified party;

                           (iv) The indemnifying  party shall not be entitled to
         control (but shall be entitled to participate at its own expense in the
         defense of), and the  indemnified  party shall be entitled to have sole
         control over,  the defense or  settlement,  compromise,  admission,  or
         acknowledgment  of any Third-Party  Action as to which the indemnifying
         party fails to assume the defense  within  thirty (30) days;  provided,
         however,   that  the  indemnified   party  shall  make  no  settlement,
         compromise,  admission,  or  acknowledgment  which  would  give rise to
         liability  on the part of the  indemnifying  party,  without  the prior
         written consent of the indemnifying party;

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

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

                  (d) No Rights of Offset  Against  Promissory  Note.  Purchaser
agrees that,  notwithstanding  any contrary  provision in the  Promissory  Note,
Purchaser  is not  entitled to and will not attempt to offset any  Indemnifiable
Costs that may be or become owed pursuant to this Section  against  amounts that
Purchaser owes Seller  pursuant to the Promissory  Note,  unless and only to the
extent that (i) Purchaser  and Seller have agreed that  Purchaser is entitled to
receive such Indemnifiable  Costs pursuant to this Section or (ii) Purchaser has
been finally determined to be entitled to the Indemnifiable  Costs in accordance
with the  provisions  of  Section  6(f) of this  Agreement  relating  to binding
arbitration.

                  (e)  Costs  of  Voluntary   Restructuring  After  the  Closing
Excluded.  Purchaser  agrees  that  any  and all  costs,  expenses  and  charges
associated  with  any  voluntary  restructuring  of  the  Company's  and/or  the
Subsidiaries'  businesses (or the Company's  and/or the  Subsidiaries'  business
relationships)  after the Closing cannot be  Indemnifiable  Costs, and Purchaser
agrees  that no  Purchaser  Indemnified  Party  will be  permitted  to seek  any
reimbursement for any such costs, expenses or charges.

         Section 5         Post-Closing Covenants.
                           ----------------------

                  (a) Public  Statements and Press Releases.  The parties hereto
covenant and agree that, except as provided for hereinbelow,  each will not from
and after the date hereof make, issue or release any public announcement,  press
release, statement or acknowledgment of the existence of, or reveal publicly the
terms,  conditions and status of, the transactions provided for herein,  without
the prior written consent of the other parties hereto as to the content and time
of release of and the media in which such  statements or  announcement  is to be
made,  provided,  however,  that the  following  shall  not be a breach  of this
Section:  (a) filings and  disclosures  required by the  Securities and Exchange
Commission,  and (b) announcements,  statements,  acknowledgments or revelations
which either party is required by Law to make,  issue or release as long as such
party shall have given, to the extent reasonably possible, not less than two (2)
calendar  days  prior  notice  to the  other  parties  hereto,  and  shall  have
attempted,  to the  extent  reasonably  possible,  to clear  such  announcement,
statement,  acknowledgment  or revelation  with the other parties  hereto.  Each
party hereto agrees that it will not  unreasonably  withhold any such consent or
clearance.  The  provisions  of this  Section  shall not limit or  restrict  any
party's  communications  with its personal  consultants or advisors,  including,
without limitation, its attorneys, accountants and financial advisors.

                  (b) Transition of Business.  Seller agrees to provide all good
faith efforts and  cooperation  in order to assist  Purchaser and the Company in
transitioning  the  management  of the  Company's  business  after the  Closing,
including the relationships  maintained by the Company's management with respect
to the  Company's  business  and  employees  existing  immediately  prior to the
Closing. Seller agrees to not take any action or make any disclosure,  including
disclosures  related to the transactions  contemplated by this Agreement,  which
might alter or impair any relationship with any Subsidiary partner, customer, or
other person or entity which did business with the Company prior to the Closing.

         Section 6         Miscellaneous.
                           -------------

                  (a)  Survival of  Representations  and  Warranties.  Except as
otherwise  provided  herein,  all  agreements,  covenants,  representations  and
warranties  contained  herein shall  survive the  execution and delivery of this
Agreement and the closing of the  transactions  contemplated  herein;  provided,
however,  that the representations and warranties  contained in Section 2 and in
Section 3 of this Agreement (and any indemnification  obligations that may arise
out of a breach of such representations and warranties) shall only survive for a
period of one year following the Closing Date.

                  (b)   Expenses.   Regardless   of  whether  the   transactions
contemplated  hereby are  consummated,  each party  hereto  shall pay all of its
costs  and  expenses  incurred  by it in  connection  with the  negotiation  and
preparation of this Agreement and the Transaction Documents,  including the fees
and disbursements of its legal counsel and accountants.

                  (c)  Counterparts.  This  Agreement may be executed in several
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.  Signatures  delivered by
telecopy  shall  be  considered  for all  purposes  to be the  same as  original
signatures.

                  (d)  Severability.  If any provision of this Agreement is held
by final judgment of a court of competent jurisdiction to be invalid, illegal or
unenforceable, such invalid, illegal or unenforceable provision shall be severed
from the remainder of this Agreement,  and the remainder of this Agreement shall
be enforced. In addition, the invalid,  illegal or unenforceable provision shall
be deemed to be automatically  modified,  and, as so modified, to be included in
this Agreement,  such modification being made to the minimum extent necessary to
render the provision valid, legal and enforceable.

     (e)  Governing  Law. This  Agreement  shall be governed by and construed in
accordance with the Laws of the State of Texas.

                  (f) Arbitration. Any controversy between the parties regarding
this  Agreement and any claims arising out of this Agreement or its breach shall
be submitted to binding arbitration by either party. The arbitration proceedings
shall be conducted by a single arbitrator pursuant to the Commercial Arbitration
Rules  of  the  American  Arbitration  Association.  The  arbitration  shall  be
conducted in Atlanta,  Georgia and the arbitrator  shall have the right to award
actual  damages  and  attorney  fees and costs,  but shall not have the right to
award  punitive,  exemplary  or  consequential  damages  against  either  party.
Notwithstanding  the  foregoing,  (i) any party may seek  equitable  relief in a
court of law rather than  pursuant to  arbitration  under this  Section and (ii)
Seller may pursue any  enforcement  of or any action arising out of the Security
Agreement in a court of law.

                  (g) Further  Assurances.  Each party of this Agreement  hereby
covenants  and agrees,  without the necessity of any further  consideration,  to
execute and deliver any and all such further documents and take any and all such
other  actions as may be  necessary  to  appropriately  carry out the intent and
purposes of this Agreement and to consummate the transactions contemplated. Each
party  will  use its  good  faith  efforts  to  carry  out and  comply  with the
provisions of this Agreement.

                  (h)  Successors  and Assigns.  Neither party may assign any of
its rights or  obligations  under this  Agreement  without  first  obtaining the
written  consent of the other party in each  instance.  The  provisions  of this
Agreement  shall be binding  upon,  and inure to the benefit  of, the  permitted
respective  successors,  assigns,  heirs,  executors and  administrators  of the
parties hereto.

                  (i)  Collateral  Agreements,   Amendments  and  Waivers.  This
Agreement (together with the documents delivered pursuant hereto) supersedes all
prior documents,  understandings,  and agreements,  oral or written, relating to
this transaction and constitutes the entire understanding among the parties with
respect to the subject  matter  hereof.  Any  modification  or amendment  to, or
waiver of, any provision of this Agreement (or any document  delivered  pursuant
to this Agreement unless otherwise  expressly provided therein) may be made only
by an instrument in writing executed by each party thereto.  No failure or delay
on the part of any party in exercising any right,  power, or privilege hereunder
or under any of the  Transaction  Documents  shall  operate  as a waiver of such
right, power, or privilege; nor shall any single or partial exercise of any such
right,  power, or privilege preclude any other or future exercise thereof or the
exercise of any other right, power or privilege.

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

Seller:                             Prime Medical Services, Inc.
                   1301 Capital of Texas Highway, Suite C-300
                               Austin, Texas 78746
                              Attention: President

                            Facsimile: (512) 314-4398

with a copy to:                     Mr. Timothy L. LaFrey
                                    Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                                    816 Congress Avenue, Suite 1900
                                    Austin, Texas 78701
                            Facsimile: (512) 703-1111

Purchaser:                          Innovative Medical Technologies, Inc.
                                    c/o Daedalus Consulting Group
                                    P.O. Box 2932
                                    Spokane, Washington  99220
                                    Attn:  Ronald Sorensen, M.D.
                            Facsimile: (509) 623-1023

with copies to:                     Mr. John A. Riherd, Esq.
                                    Riherd & Sherman, P.S.
                                    1212 N. Washington, Suite 210
                                    Spokane, Washington  99201
                            Facsimile: (509) 324-3364

         and:                       Mr. Jeffrey Slopen, Esq.
                                    Wilson, Walker, Hochberg & Slopen
                                    443 Ouelette Ave., Suite 300
                                    Windsor, Ontario, CANADA  N94 6R4

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

                  (k)  Construction,  Knowledge and Materiality.  This Agreement
and any other  Transaction  Document  shall be construed  without  regard to the
identity of the person who drafted the various  provisions of the same. Each and
every provision of this Agreement and the other  Transaction  Documents shall be
construed as though all of the parties  participated  equally in the drafting of
the same.  Consequently,  the  parties  acknowledge  and agree  that any rule of
construction that a document is to be construed against the drafting party shall
not be applicable  either to this Agreement or any other  Transaction  Document.
For purposes of this  Agreement,  whenever there are references to "material" or
"materially,"  such terms shall be deemed to mean an economic  impact  exceeding
$50,000 with respect to the fact or matter being  referred to or  described.  As
used herein,  "day" or "days" refers to calendar days unless otherwise specified
in each  instance.  When  the  term  "knowledge"  is used in this  Agreement  in
reference  to (i)  Seller,  it shall  mean such  items as are  within the actual
knowledge of Ken Shifrin,  Brad Hummel,  Joseph Jenkins,  M.D., Teena Belcik and
Cheryl  Williams,  without any obligation to investigate and (ii) Purchaser,  it
shall mean such items as are within the actual  knowledge  of  Sorensen  or Bill
Jonz without any obligation to investigate.

                            [Signature pages follow.]

<PAGE>

                                       S-1

                                 SIGNATURE PAGE

                                       TO

                            STOCK PURCHASE AGREEMENT

         IN WITNESS  WHEREOF,  Seller and  Purchaser  have  executed  this Stock
Purchase Agreement as of the day and year first above written.

SELLER:                    Prime Medical Services, Inc., a Delaware corporation

                                 By:
                                   Cheryl  Williams,  Senior Vice President
                                         and Chief Financial Officer

PURCHASER:                 Innovative  Medical   Technologies,   Inc.,
                                  an  exempted  company incorporated in the
                                  Cayman Islands with limited liability

                                  By:
                                   Ronald Sorensen, M.D., President

<PAGE>

                                       A-1

                                    EXHIBIT A

                             FORM OF PROMISSORY NOTE

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