Document:

INCIDENTAL REGISTRATION RIGHTS AGREEMENT

         THIS INCIDENTAL REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 1, 2000 (the "Effective Date"), by and among Prime Medical Services,
Inc., a Texas  corporation  (the "Company") and MBC Holding  Company,  L.L.C., a
Texas limited liability company (the "Holder").

         WHEREAS, the Company has issued a Warrant Certificate,  dated as of the
Effective Date (the "Warrant"),  pursuant to which the Company has issued to the
Holder,  a Warrant to purchase shares of the Company's  common stock,  $0.01 par
value (interchangeably, "Stock" or "Common Stock").

         WHEREAS,  in order to induce the Holder to purchase  the Common  Stock,
the parties  hereto have agreed to enter into this  Agreement  pursuant to which
the Company has agreed to grant  registration  rights with respect to the Common
Stock.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.       Registration Rights.
         -------------------

1.1  Incidental  Registration  Rights.  If the  Company at any time  proposes to
register  any of its  Common  Stock  under  the  Securities  Act for sale to the
public, whether for its own account or for the account of other security holders
or both (except with respect to  registration  statements on Form S-4 or another
form not available for  registering  the Stock for sale to the public),  it will
give written  notice to the Holder of its intention so to do, which notice shall
include a list of the  jurisdictions  in which the Company intends to attempt to
qualify the Stock under the applicable  state  securities laws. Upon the written
request of the Holder, given within 10 days after receipt of any such notice, to
register  any of its or their  Stock  (including  Stock which the holder has the
right to acquire upon the exercise of the Warrant), the Company will, subject to
the limitations and conditions  contained herein,  use its best efforts to cause
the Stock as to which  registration  shall have been so  requested  (which shall
also be referred to as the "Covered Shares") to be included in the securities to
be covered by the  registration  statement  proposed to be filed by the Company,
all to the  extent  requisite  to permit  the sale or other  disposition  by the
Holder; provided, however, that:

(a)      The Holder shall have the right to request  inclusion of its Stock (and
         have such  Stock  included)  in two  registration  statements  that are
         declared effective by the Commission;

(b)      If, at any time after  giving such written  notice of its  intention to
         register  any  securities  and  prior  to  the  effective  date  of the
         registration statement filed in connection with such registration,  the
         Company shall determine for any reason not to register such securities,
         the  Company  may,  at  its  election,  give  written  notice  of  such
         determination to the Holder,  if a request as hereinabove  provided has
         been  made,  and  thereupon  the  Company  shall  be  relieved  of  its
         obligation  to  register  any  Common  Stock in  connection  with  such
         registration; and

(c)      If such registration involves an underwritten  offering, the Holder, if
         the Holder has requested to be included in the Company's  registration,
         must sell its Common Stock to the underwriters  selected by the Company
         on the same terms and  conditions  as apply to the  Company  (except as
         otherwise set forth herein).

         The number of Covered  Shares to be included in such an offering may be
reduced if and to the extent that the managing underwriter,  if any, shall be of
the opinion that such  inclusion  would  adversely  affect the  marketing of the
securities to be sold by the Company  therein.  Notwithstanding  anything to the
contrary  contained  in  this  Section  1.1,  in  the  event  that  there  is an
underwritten  public  offering  of  securities  of  the  Company  pursuant  to a
registration  covering  Stock and the Holder does not elect to sell its Stock to
the  underwriters of the Company's  securities in connection with such offering,
the  Holder  shall  refrain  from  selling  such  Stock  during  the  period  of
distribution  of the Company's  securities by such  underwriters,  the period in
which the underwriting syndicate participates in the after market and during any
lock-up  period  requested by such  underwriters;  provided,  however,  that the
Holder  shall,  in any event,  be entitled to sell its Stock  commencing  on the
180th day after the effective date of such registration statement.

     1.2 Registration Procedures. If and whenever the Company is required by the
provisions of Section 1 hereof to effect the  registration of any of the Covered
Shares under the Securities Act, the Company will, as expeditiously as possible:

(a)      prepare and file with the Commission a registration  statement  (which,
         in the case of an underwritten  public offering pursuant to Section 1.1
         hereof,   shall  be  on  Form  S-1,  SB-2  or  other  form  of  general
         applicability satisfactory to the managing underwriter) with respect to
         such  securities  and use its best  efforts to cause such  registration
         statement  to  become  and  remain  effective  for  the  period  of the
         distribution contemplated thereby (determined as hereinafter provided);

(b)      prepare and file with the Commission such amendments and supplements to
         such registration  statement and the prospectus in connection therewith
         as may be necessary to keep such registration  statement  effective for
         the period of  distribution  and as may be necessary to comply with the
         provisions of the Securities Act with respect to the disposition of all
         Common Stock covered by such registration  statement in accordance with
         the  sellers   intended   method  of  disposition  set  forth  in  such
         registration statement for such period;

(c)      furnish to the Holder, as applicable,  and each underwriter such number
         of copies of the  registration  statement and the  prospectus  included
         therein (including each preliminary  prospectus) as they may reasonably
         request in order to facilitate the public sale or other  disposition of
         the Covered Shares covered by such registration statement;

(d)      use its best efforts to register or qualify the Covered  Shares covered
         by such registration statement under the securities or blue sky laws of
         such  jurisdictions  as the Holder  or, in the case of an  underwritten
         public offering,  the managing  underwriter,  shall reasonably  request
         (provided  that  the  Company  will  not be  required  to  (1)  qualify
         generally  to do  business  in any  jurisdiction  where  it  would  not
         otherwise be required to qualify but for this  subsection,  (2) subject
         itself to taxation in any such  jurisdiction  or (3) consent to general
         service of process in any such jurisdiction);

(e)      promptly notify the Holder under such  registration  statement and each
         underwriter, at any time when a prospectus relating thereto is required
         to be delivered  under the  Securities Act when it becomes aware of the
         happening of any event as a result of which the prospectus contained in
         such  registration  statement,  as then in effect,  includes  an untrue
         statement  of a  material  fact or  omits to state  any  material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         contained  therein not  misleading in light of the  circumstances  then
         existing;

(f)  use its best efforts (if the offering is underwritten)  to furnish,  at the
     request of the Holder on the date that the Covered  Shares are delivered to
     the  underwriters  for sale pursuant to such  registration:  (1) an opinion
     dated such date of counsel  representing  the Company  for the  purposes of
     such registration,  addressed to the underwriters and in customary form and
     covering such matters as are customarily  covered by opinions of counsel in
     similar registrations and as may be required in the underwriting  agreement
     relating thereto,  as may reasonably be requested by the underwriters or by
     the Holder,  as  applicable;  and (2) a comfort letter dated such date from
     the independent  public accountants  retained by the Company,  addressed to
     the  underwriters,  in  customary  form and  covering  such  matters as are
     customarily covered by such comfort letters in similar registrations and as
     may be required in the underwriting  agreement  relating  thereto,  as such
     underwriters or the Holder, as applicable, may reasonably request; and

(g)      make   available  for  inspection  by  the  Holder,   any   underwriter
         participating  in  any  distribution   pursuant  to  such  registration
         statement, and any attorney, accountant, or other agent retained by the
         Holder,  or  underwriter,  all financial and other  records,  pertinent
         corporate  documents,  and  properties  of the  Company,  and cause the
         Company's officers,  directors, and employees to supply all information
         reasonably  requested  by  any  such  seller,  underwriter,   attorney,
         accountant, or agent in connection with such registration statement.

         For  purposes  of  paragraphs  (i)  and  (ii)  above,   the  period  of
distribution  of Covered  Shares in an  underwritten  public  offering  shall be
deemed to extend until each  underwriter  has completed the  distribution of all
securities  purchased by it, and the period of distribution of Covered Shares in
any other  registration  shall be deemed to extend until the earlier of the sale
of all Covered Shares or 180 days after the effective date thereof.

         In connection with each registration hereunder, the Holder will furnish
to the  Company  in  writing  such  information  with  respect to itself and the
proposed  distribution  by it as shall be  requested  by the Company in order to
assure compliance with federal and applicable state securities laws.

         In connection with each  registration  covering an underwritten  public
offering, the Company agrees to enter into a written agreement with the managing
underwriter  selected in the manner herein  provided in such form and containing
such  provisions  as are  customary  in the  securities  business  for  such  an
arrangement  between major  underwriters and companies of the Company's size and
investment  stature;  provided  that such  agreement  shall not contain any such
provision  applicable to the Company that is  inconsistent  with the  provisions
hereof and, further,  provided that the time and place of the closing under such
agreement shall be as mutually agreed upon between the Company and such managing
underwriter.

         The Company  will not be obligated to include any shares of Stock owned
by the Holder upon the  Holder's  request that a proposed  registration  include
such Stock if the Company  delivers  to the Holder the opinion of the  Company's
counsel to the effect that the requested  registration is not required to permit
the proposed  disposition  or any resale of such Stock without  restrictions  on
transfer under the Securities  Act, which opinion may be furnished to and relied
upon by any broker through which the Holder intends to sell shares of Stock.

1.3  Conditions  to  Obligation to Register  Shares.  The Company's  obligations
     under  this  Section 1 shall be subject to the  following  limitations  and
     conditions:

(a)      Information.  The Company  shall have received from the Holder all such
         information  as the  Company  may  reasonably  request  from the Holder
         concerning  itself  and its  methods of  distribution  of the shares of
         Stock to enable the  Company to include in the  registration  statement
         all material facts required to be disclosed therein.

(b)  Notice  Requirements.  Any request by the Holder pursuant to this Agreement
     for  registration  of the  offering,  sale and  delivery of shares of Stock
     shall  provide  that the  Holder (i) has a present  intention  to sell such
     shares; (ii) agrees to execute all consents,  powers of attorneys and other
     documents required in order to cause such registration  statement to become
     effective;  (iii)  agrees,  if the  offering is at the market,  to give the
     Company  written  notice of the first bona fide offering of such shares and
     to use the prospectus  forming a part of such  registration  statement only
     for a  period  of 90 days  after  the  effective  date of the  registration
     statement  unless the  offering is pursuant  to a  continuous  registration
     pursuant to Rule 415 promulgated  under the Securities Act; (iv) subject to
     adverse events regarding the selling price of the shares, agrees to utilize
     the  proposed  method of  distribution  of the  shares;  and (v)  agrees to
     promptly  notify the Company and each  underwriter,  if any, with regard to
     any  registration  statement,  at any  time  when it  becomes  aware of the
     happening  of any event as a result of which any  prospectus  contained  in
     such  registration  statement that has been provided to the Holder includes
     an untrue  statement of a material  fact  regarding  the Holder or omits to
     state a material fact regarding the Holder required to be stated therein or
     necessary to make the statements contained therein regarding the Holder not
     misleading in light of the circumstances then existing.

1.4  Distribution  Arrangements.  The Holder  agrees  that,  in disposing of the
shares of Stock owned by it in the registered  public  offering,  it will comply
with Rules 10b-2,  10b-6 and 10b-7 and any other applicable rules promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of 1934
(the "1934 Act").

1.5  Expenses.  All  expenses  incurred  by  the  Company  in  complying  with a
registration covering Stock,  including,  without limitation,  all registration,
qualification,  and filing fees, blue sky fees and expenses,  printing expenses,
fees and disbursements of legal counsel and independent  public  accountants for
the Company,  the reasonable  fees and expenses of one law firm serving as legal
counsel for the Holder, fees of the National  Association of Securities Dealers,
Inc., transfer taxes,  escrow fees, fees of transfer agents and registrars,  and
costs of  insurance,  but  excluding  any Selling  Expenses,  are herein  called
"Registration  Expenses." All underwriting  discounts,  and selling  commissions
applicable to the sale of Covered Shares are herein called "Selling Expenses."

         The Company shall pay all Registration  Expenses in connection with any
registration statement filed pursuant to this Section 1. All Selling Expenses in
connection  with any  registration  statement  filed  pursuant to this Section 1
shall be borne by the Holder,  or by such persons other than the Company (except
to the extent the Company shall be a seller), as they may agree.

1.6      Miscellaneous.
         -------------

                  1.6.1   Registration   Rights   are   Exclusive.   The  Holder
         understands  that it has certain  registration  rights pursuant to this
         Agreement  with  respect  to its  shares  of Stock,  but other  than as
         specifically  set  forth  in  this  Agreement,   the  Company  has  not
         covenanted  and is not  obligated  to finish a  registration  statement
         under the  Securities  Act  covering  any  shares  of Stock,  to file a
         notification  under  Regulation A promulgated  under the Securities Act
         with respect to shares of Stock, or to take any other action that would
         make available an exemption from registration.

                  1.6.2  No  Requirement.  In no  event  shall  the  Company  be
         required to amend any  registration  statement  filed  pursuant to this
         Agreement  after it has become  effective or to amend or supplement any
         prospectus  to permit  the  continued  disposition  of shares of Common
         Stock registered under any registration statement in either case beyond
         the period initially contemplated therein.

1.7 Indemnification. In the event of a registration of any of the Covered Shares
under the  Securities  Act, the Company  shall  indemnify  and hold harmless the
Holder  thereunder,  and each  underwriter  and each  associate,  if any, of the
Holder, as applicable,  or underwriter,  against any losses, claims, damages, or
liabilities,  joint or several, to which the Holder, or underwriter or associate
thereof may become  subject under the  Securities  Act or otherwise,  insofar as
such losses,  claims,  damages,  or liabilities (or actions in respect  thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of any material fact contained in any  registration  statement  under which such
Covered  Shares  were  registered  under the  Securities  Act,  any  preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof,  or arise out of or are based upon the omission or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not  misleading,  or any violation by the Company of any
rule or  regulation  promulgated  under the  Securities  Act  applicable  to the
Company and relating to action or inaction by the Company in connection with any
such  registration,  and shall  reimburse the Holder,  each  underwriter  and/or
associate thereof for any legal or other expenses reasonably incurred by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability, or action; provided,  however, that the Company will not be liable in
any such  case if and to the  extent  that  any such  loss,  claim,  damage,  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement or omission or alleged  omission made in conformity  with  information
furnished by the Holder,  each underwriter  and/or associate  thereof in writing
specifically for use in such registration statement or prospectus.

         In the event of a  registration  of any of the Covered Shares under the
Securities  Act, the Holder will indemnify and hold harmless the Company and its
affiliates,  if any, and each  underwriter and each associate of any underwriter
against all losses, claims,  damages or liabilities,  joint or several, to which
the  Company or such  underwriter  or  associate  may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged untrue  statement of any material fact contained in
the registration statement under which such Covered Shares were registered under
the Securities Act, any  preliminary  prospectus or final  prospectus  contained
therein,  or any amendment or supplement  thereof,  or arise out of or are based
upon the omission or alleged  omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company,  each underwriter  and/or associate  thereof for
any legal or other  expenses  reasonably  incurred  by them in  connection  with
investigating or defending any such loss,  claim,  damage,  liability or action;
provided,  however, that the Holder will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue  statement or alleged untrue statement or omission
or alleged  omission made in reliance upon and in  conformity  with  information
pertaining  to the Holder as such,  furnished  in writing to the  Company by the
Holder  specifically for use in such registration  statement or prospectus;  and
provided  further,  however,  that the liability of each of the Holder hereunder
shall be limited to the proportion of any such loss, claim, damage, liability or
expense that is equal to the proportion that the public offering price of shares
sold by the Holder under such  registration  statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
received  by the  Holder,  from  the  sale  of  Common  Stock  covered  by  such
registration statement.

         Promptly after receipt by an indemnified  party  hereunder of notice of
the  commencement  of any action,  such  indemnified  party shall, if a claim in
respect thereof is to be made against the indemnifying  party hereunder,  notify
the  indemnifying  party in writing  thereof,  but the omission so to notify the
indemnifying  party shall not relieve it from any  liability  it may have to any
indemnified  party  other than under this  Section  1.7. In case any such action
shall  be  brought  against  any  indemnified  party  and it  shall  notify  the
indemnifying party of the commencement  thereof, the indemnifying party shall be
entitled  to  participate  in and,  to the extent it shall  wish,  to assume and
undertake  the defense  thereof with  counsel  reasonably  satisfactory  to such
indemnified  party,  and,  after  notice  from  the  indemnifying  party to such
indemnified  party of its  election  so to  assume  and  undertake  the  defense
thereof,  the indemnifying  party shall not be liable to such indemnified  party
under this  Section  1.7 for any legal  expenses  subsequently  incurred by such
indemnified  party in connection  with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided, however
that, if the  defendants in any such action include both the  indemnified  party
and  the  indemnifying  party  and if the  interests  of the  indemnified  party
reasonably  may be deemed to conflict  with the  interests  of the  indemnifying
party, the indemnified party shall have the right to select separate counsel and
to assume its  defense  and  otherwise  to  participate  in the  defense of such
action,  with the expenses and fees of such separate  counsel and other expenses
related to such  participation  to be  reimbursed by the  indemnifying  party as
incurred.  The  indemnifying  party will not be subject to any  settlement  made
without its consent,  which  consent  shall not be  unreasonably  withheld.  The
indemnifying  party  will pay to the  indemnified  party all sums due  hereunder
within 10 days of a final non-appealable  judgment or pursuant to the terms of a
settlement agreement.

1.8  Limitation on Subsequent  Registration  Rights.  From and after the date of
this Agreement,  without the prior written consent of Holder,  the Company shall
not  enter  into any  agreement  with any  holder or  prospective  holder of any
securities  of the Company  (nor shall the  Company,  in the absence of any such
prior agreement,  permit any such holder or prospective  holder) to include such
securities  in any  registration  contemplated  by  this  Agreement  other  than
"piggyback"  registration  rights with terms which are less favorable than those
granted in this Agreement.

                            [Signature page follows]

<PAGE>

S-1

                                 SIGNATURE PAGE

                                       TO

                    INCIDENTAL REGISTRATION RIGHTS AGREEMENT

         IN WITNESS  WHEREOF,  the  Company  and the  Holder  have  caused  this
Agreement  to be  signed  and  delivered  by  its  duly  authorized  officer  or
representative as of the Effective Date.

                                               PRIME MEDICAL SERVICES, INC.

                                            By:  _____________________________
                                            Printed Name: _____________________
                                            Title:  ____________________________

                                                MBC HOLDING COMPANY, L.L.C.

                                            By:  _____________________________
                                            Printed Name: _____________________
                                            Title:  ____________________________CONTRIBUTION AGREEMENT

                                      Among

                          PRIME MEDICAL SERVICES, INC.,

                                PRIME RVC, INC.,

                       NEW YORK LASER MANAGEMENT, L.L.C.,

                                KEN MOADEL, M.D.,

                                       and

              KEN MOADEL, M.D., P.C. d/b/a NEW YORK EYE SPECIALISTS

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

                            Dated as of April 1, 2000

<PAGE>

                                       37

043838.0019 AUSTIN  176405 v6

                             CONTRIBUTION AGREEMENT

     This  Contribution  Agreement  (this  "Agreement")  is  entered  into to be
effective  as of April 1, 2000  (the  "Effective  Time"),  among  Prime  Medical
Services,  Inc., a Delaware  corporation  ("PMSI"),  Prime RVC, Inc., a Delaware
corporation ("Prime"), Ken Moadel, M.D., P.C. d/b/a New York Eye Specialists,  a
New York professional  corporation ("PC"), New York Laser Management,  L.L.C., a
Delaware limited liability company ("Newco") and Ken Moadel, M.D., an individual
residing in New York, New York and the sole shareholder of PC ("Moadel").

The parties hereto agree as follows:

                                    ARTICLE I

                         Agreement of Purchase and Sale

         1.1 Agreement.  Upon the basis of the  representations  and warranties,
for the consideration, and subject to the terms and conditions set forth in this
Agreement,  (a) Prime agrees to purchase from Moadel,  as of the Effective Time,
by payment of $8,871,619 (the "Purchase Price"), an undivided sixty-five percent
(65%)  interest in (i) all of the Assets (as  hereinafter  defined) and (ii) the
business conducted with the Assets,  which business consists of providing space,
equipment,  non-professional  personnel and certain administrative services on a
turn-key basis to professional  providers of Refractive  Surgery (as hereinafter
defined), including, without limitation, initially providing such accommodations
on an exclusive  basis to the  Refractive  Surgery  practice of Moadel and PC in
accordance  with the terms set forth in this  Agreement and that certain  office
and  equipment use agreement  (the "Office and Equipment Use  Agreement")  among
Newco, Moadel and PC in the form attached hereto as Exhibit A (collectively, the
"Assets Related  Business");  (b) Prime agrees to contribute to Newco, as of the
Effective  Time, the undivided  sixty-five  percent (65%) interest in the Assets
and the  Assets  Related  Business  purchased  by  Prime,  and  will  receive  a
sixty-five  percent (65%) ownership  interest in Newco; and (c) Moadel agrees to
contribute,  as of the  Effective  Time,  the  remaining  undivided  thirty-five
percent (35%) interest in the Assets and the Assets  Related  Business to Newco.
The parties agree that:

                  (y) immediately prior to the Closing (as hereinafter defined),
all of the outstanding  membership  interests of Newco shall be owned by Moadel,
and, immediately after the Closing,  Prime shall own sixty-five percent (65%) of
all of the  outstanding  membership  interests  of Newco  and  Moadel  shall own
thirty-five  percent  (35%) of all of the  outstanding  membership  interests of
Newco; and

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

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

         1.3 Assets. As used in this Agreement, the term "Assets" shall mean and
include all of the items listed on Schedule 1.3(a) attached hereto, and, without
duplication, all Permits (as hereinafter defined) for which transfer to Newco is
not prohibited  under applicable law, all business  records  (excluding  medical
records) of Refractive Surgery and the business conducted by PC and Moadel prior
to the Closing  Date,  cash of at least  $325,000  (for  purposes of  satisfying
Assumed Liabilities after the Closing), any and all rights of PC or Moadel under
leases  (including  rights to receive  returns of deposits under such leases) or
contracts  listed on  Schedule  1.3(a),  the  goodwill  related to the  business
conducted by PC and Moadel prior to the Closing Date  (excluding  the Refractive
Surgery Business, as hereinafter  defined),  the name "New York Eye Specialists"
and all likenesses  thereof,  and all of the related  business  benefiting PC or
Moadel prior to the Closing Date  (excluding the Refractive  Surgery  business).
Each of PC and Moadel hereby represents and warrants that the Assets include all
property  and  assets,  real,  personal  and  mixed,  tangible  and  intangible,
including,  without limitation,  leases and contracts,  equipment,  instruments,
computer software used in connection with the equipment or instruments, Permits,
personal  property,  furniture,  business records and other assets that are used
primarily  in or are  materially  relied  on for  the  Assets  Related  Business
conducted by PC and Moadel prior to the Closing.  Notwithstanding the foregoing,
the following shall not be "Assets" and shall be retained by PC and/or Moadel:

                  (a) all of the business of PC and Moadel which,  by applicable
law,  may only be  performed by a licensed  medical  professional,  or an entity
owned  exclusively by licensed medical  professionals  (the "Refractive  Surgery
Business");

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

                  (c) the  books  of  account  and  record  books  of PC and the
Business  (complete and accurate copies of which,  insofar as they relate to the
Assets Related Business during the calendar years 1998, 1999 and 2000, up to and
including the Closing  Date,  shall have been provided to Prime on or before the
Closing Date);

                  (d)      PC's and Moadel's rights under this Agreement;

                  (e) any asset that (i) is neither  used in, nor relied on for,
the  business  conducted by PC and Moadel  prior to the Closing  (excluding  the
Refractive  Surgery Business and the practice of medicine) and (ii) is set forth
on Schedule 1.3(d) attached hereto;

                  (f) all cash and accounts receivable, but this exclusion shall
not in any way limit the requirement that the Assets include cash of $325,000 or
any  obligation  Moadel  or PC may have  under  the  Office  and  Equipment  Use
Agreement; and

                  (g) any  medical or  clinical  records  (although  the parties
acknowledge  that Newco may from time to time have  physical  possession of such
records).

         As used in this Agreement, the "Business" shall mean the Assets Related
Business and the  Refractive  Surgery  Business,  collectively.  As used in this
Agreement,  "Refractive  Surgery" shall mean,  collectively,  any current and/or
future surgical  procedures  intended to correct  refractive  error,  including,
without  limitation,  myopia,  hyperopia,  presbyopia or astigmatism of the eye.
Notwithstanding anything in this Agreement to the contrary, "Refractive Surgery"
shall not include any specific  procedure  that, at the time the procedure is to
be  performed,  is  required  in  the  exercise  of  a  physician's  independent
professional  judgment  as to  the  individual  patient  to be  performed  in an
operating  room  approved by the American  Association  of  Ambulatory  Surgical
Centers or Joint Commission on Accreditation of Healthcare Organizations (or any
similar or successor accreditation board or body) with the capability of general
anesthesia,  in each instance  within either an  ambulatory  surgical  center or
acute care hospital that is, in either case,  licensed pursuant to Article 28 of
the New York Public Health Law (provided,  however,  that if this sentence would
exclude from "Refractive Surgery" any surgical procedure included in "Refractive
Surgery" at the Effective  Time,  then the parties to this  Agreement  will work
together to  restructure  the  operating  mechanics of their  relationship  in a
manner that allows the operations of the Business to comply with such regulatory
change  and  also  preserves  the  economic  benefits  of each  of the  parties,
including PC and Moadel,  arising under this Agreement and the other Transaction
Documents,  as such term is hereinafter defined, giving due consideration to any
recoupment of a party's investment hereunder or opportunity therefor).

         1.4 Assumed Liabilities. PC and Moadel each agree that, at the Closing,
Newco shall assume the following (collectively,  the "Assumed Liabilities"): (a)
those lease or other contract obligations that are executory in nature and arise
after the  Effective  Time under leases or contracts  that are (i)  specifically
named or  described on Schedule  1.3(a) and (ii)  denoted on Schedule  1.3(a) as
having the related  obligations assumed by Newco to the extent described in this
Section,  (b) those lease or other  contract  obligations  that are executory in
nature and arise after the Effective Time under those certain agreements between
VISX,  Incorporated and Moadel that are (i)  specifically  named or described on
Schedule  3.12  and  (ii)  denoted  on  Schedule  3.12  as  having  the  related
obligations   assumed  by  Newco  to  the  extent   described  in  this  Section
(collectively,  the "VISX Agreements"), (c) those trade payables on open account
owed to unrelated third parties and accrued  expenses less than ninety (90) days
old  (including,  without  limitation,  salary and benefits)  that were, in each
case, incurred or accrued in the ordinary course of business after the Effective
Time, and (d) those salaries and benefits arising between the Effective Time and
the Closing  Date and  attributable  to  employees  of Moadel or Seller that are
hired or  employed  by Newco on or after the  Closing  Date.  From and after the
Closing Date, Newco shall be solely responsible for the Assumed Liabilites.  The
parties specifically agree that Newco will have no responsibility,  liability or
obligation  whatsoever for (x) those  obligations under such leases or contracts
which  accrued  prior  to the  Effective  Time,  (y) any  breaches  or  defaults
thereunder  which occurred or were alleged to have occurred prior to the Closing
Date  or  (z)  trade  payables  not  included  in  the  definition  of  "Assumed
Liabilities" above.

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

         1.5 Payment and Allocation of Purchase  Price.  Prime agrees to pay the
Purchase  Price to PC at the Closing by check,  money order or wire  transfer of
funds, at PC's option.  The Purchase Price will be allocated among the Assets in
accordance with Schedule 1.5 attached hereto.

                                   ARTICLE II

                Representations and Warranties of PMSI and Prime

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

         2.1  Due  Organization  and  Principal  Executive  Office.  Prime  is a
corporation  duly organized,  validly  existing,  and in good standing under the
laws of the State of Delaware  and has full  corporate  power and  authority  to
carry on its business as now conducted and as proposed to be conducted.  PMSI is
a corporation duly organized,  validly existing,  and in good standing under the
laws of the State of Delaware  and has full  corporate  power and  authority  to
carry on its business as now conducted and as proposed to be conducted.  Each of
PMSI's and Prime's  principal  executive  offices are located at 1301 Capital of
Texas Highway, Austin, Texas 78746.

         2.2 Due Authorization.  Each of PMSI and Prime has full corporate power
and  authority to enter into and perform  this  Agreement  and each  Transaction
Document required to be executed by it in connection  herewith.  With respect to
each of PMSI and Prime,  this Agreement and each Transaction  Document  required
herein to be executed by it has been duly and validly  authorized,  executed and
delivered by it, and the terms and  provisions  of this  Agreement and each such
Transaction Document constitute the valid,  binding and enforceable  obligations
of it. With  respect to each of PMSI and Prime,  the  execution,  delivery,  and
performance of this Agreement and each Transaction  Document  required herein to
be executed by it will not (a) violate any federal, state, county, or local law,
rule, or regulation applicable to it or its properties (provided,  however, that
any  representation  or  warranty  by Prime  or PMSI  with  respect  to any laws
regulating  or  legislating  the  provision  of  healthcare  or the  practice of
medicine shall be limited to the actual knowledge possessed by Prime and PMSI on
the Closing Date),  (b) violate or conflict with, or permit the cancellation of,
any agreement to which it is a party or by which it or its properties are bound,
(c) permit the  acceleration  of the  maturity  of any  indebtedness  of, or any
indebtedness  secured by the property of, it or (d) violate or conflict with any
provision of its organizational documents. Except for the filing requirements of
PMSI arising under the Securities and Exchange Act of 1934, no action,  consent,
or  approval  of,  or  filing  with,  any  federal,   state,  county,  or  local
governmental authority is required by either of PMSI or Prime in connection with
the execution,  delivery or  performance  of this  Agreement or any  Transaction
Document.

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

         2.4 Claims and  Proceedings.  Neither  PMSI nor Prime is a party to any
claims, actions,  suits,  proceedings,  or investigations,  at law or in equity,
before or by any court, municipal or other governmental department,  commission,
board,  agency,  or  instrumentality  which seeks to  restrain  or prohibit  the
carrying out of the transactions  contemplated by this Agreement or to challenge
the  validity of such  transactions  or any part  thereof or seeking  damages on
account thereof; and, to the knowledge of PMSI and Prime, no such claim, action,
suit, proceeding or investigation is threatened.

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

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

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

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

                  (d) In connection  with entering into this  Agreement and each
of the other contracts, documents,  instruments or agreements to be entered into
in  connection  with or as  contemplated  by this  Agreement  (all of which  are
collectively referred to as the "Transaction Documents") to which it is a party,
and in making the  investment  decisions  associated  therewith,  it has neither
received nor relied on any representations or warranties from Newco, Moadel, PC,
the  affiliates  of  Moadel  or PC, or the  officers,  directors,  shareholders,
employees,  partners,  members,  agents,  consultants,  personnel  or  similarly
related parties of Moadel or PC, other than those representations and warranties
contained in this Agreement and the other Transaction Documents;

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

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

                                   ARTICLE III

                 Representations and Warranties of PC and Moadel

         Moadel  and PC hereby  represent  and  warrant  to Prime,  jointly  and
severally,  that  each of the  following  matters  is true  and  correct  in all
respects  as of  both  the  Effective  Time  and  the  Closing  Date  (with  the
understanding that Prime is relying  materially on each such  representation and
warranty  in  entering  into and  performing  this  Agreement),  and which shall
survive the Closing.

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

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

         3.3 Due  Authorization.  Each  of PC and  Moadel  has  full  power  and
authority to enter into and perform this Agreement and each Transaction Document
required to be executed by PC or Moadel in connection  herewith.  The execution,
delivery,  and performance of this Agreement and each such Transaction  Document
has been duly  authorized  by all  necessary  action of PC, its  directors,  its
officers and its shareholders. This Agreement and each such Transaction Document
has  been  duly  and  validly  executed  and  delivered  by PC  and  Moadel  and
constitutes a valid and binding obligation of PC and Moadel, enforceable against
each of them in accordance with its terms.  Except as set forth on Schedule 3.3,
the execution, delivery, and performance of this Agreement, and each Transaction
Document  required  herein to be executed by Moadel and/or PC do not (a) violate
any federal,  state, county, or local law, rule, or regulation applicable to PC,
Moadel,  the Business or the Assets, (b) violate or conflict with, or permit the
cancellation of, any agreement to which PC or Moadel is a party, or by which PC,
Moadel or their  properties are bound,  or (except as expressly set forth herein
or in the  other  Transaction  Documents)  result in the  creation  of any lien,
security  interest,  charge,  or encumbrance  upon any of such  properties,  (c)
permit the  acceleration of the maturity of any indebtedness of Moadel or PC, or
any  indebtedness  secured by the  property  of Moadel or PC, or (d)  violate or
conflict  with any provision of the  organizational  documents of PC. No action,
consent,  waiver or approval of, or filing with, any federal,  state,  county or
local governmental  authority is required by Moadel or PC in connection with the
execution,  delivery,  or  performance  of this  Agreement  (or any  Transaction
Document).

         3.4  Financial  Statements.  The  unaudited  balance  sheet and  income
statement for the Business as of and for the year ended  December 31, 1999,  and
the unaudited  balance sheet and income statement for the Business as of and for
the  period  beginning  on April 1,  1999,  and  ending on March  31,  2000 (the
"Balance  Sheet  Date")  are  attached  hereto as Exhibit C  (collectively,  the
"Financial  Statements").   The  Financial  Statements  have  been  prepared  in
accordance with generally accepted accounting  principles ("GAAP")  consistently
applied  (except as  specifically  noted  therein or in Schedule 3.4) and fairly
present  in  all  material  respects  the  financial  position  and  results  of
operations  of the  Business  as of the  indicated  dates and for the  indicated
periods.  Except for Assumed  Liabilities  and liabilities set forth on Schedule
3.4  attached  hereto,  as of the  Closing  Date,  neither PC nor Moadel has any
claims,  debts,  liabilities,  or  obligations  related to the  Business  or the
Assets, whether known or unknown, absolute,  contingent or otherwise (including,
but not limited to, federal,  state, and local taxes, any sales taxes, use taxes
and property taxes, any taxes arising from the transactions contemplated by this
Agreement and any liabilities arising from any litigation or civil,  criminal or
regulatory  proceeding  involving  or related to PC,  Moadel,  the Assets or the
Business).  Except as set forth in Schedule 3.4 hereto, since the Effective Time
there has been no material  adverse  change in the Assets,  the  Business or the
results of operations of the Business.

         3.5  Conduct  of  Business;  Certain  Actions.  Except  as set forth on
Schedule 3.5 attached  hereto,  since the Balance Sheet Date, PC and Moadel have
conducted the Business in the ordinary course and consistent with past practices
and  have  not  (a)  increased  the  compensation  of  any  employees,   agents,
contractors, vendors or other parties, except for wage and salary increases made
in the ordinary  course of business and consistent with the past practices of PC
or  Moadel,  (b)  sold  any  asset  (or any  group  of  related  assets)  in any
transaction (or series of related  transactions)  in which the purchase price or
book value for such asset (or group of related  assets)  exceeded  $10,000,  (c)
suffered or permitted  any lien,  security  interest,  claim,  charge,  or other
encumbrance to arise or be granted or created against or upon any of its assets,
real or  personal,  tangible  or  intangible,  (d)  amended  its  organizational
documents,  (e)  made  or paid  any  severance  or  termination  payment  to any
director,  officer, employee, agent, contractor,  vendor or consultant, (f) made
any change in its method of  accounting,  (g) made any  investment or commitment
therefor in any person, business, corporation, association, partnership, limited
liability  company,  joint  venture,   trust,  or  other  entity,  (h)  amended,
terminated or  experienced a termination  of any material  contract,  agreement,
lease,  franchise, or license to which it is a party, (i) entered into any other
material transactions except in the ordinary course of business, (j) changed the
standard, undiscounted per procedure fee generally charged to patients, which is
$2,250  at the time of  Closing,  (k)  entered  into any  contract,  commitment,
agreement,  or understanding  to do any acts described in the foregoing  clauses
(a)-(j) of this Section, (l) suffered any material damage,  destruction, or loss
(whether or not covered by insurance) to any assets, (m) experienced any strike,
slowdown,  or demand for recognition by a labor  organization by or with respect
to any of its employees, (n) experienced or effected any shutdown, slow-down, or
cessation of any operations  conducted by, or  constituting  part of, it, or (o)
changed or suspended its  procedures  for  collecting  accounts  receivable  and
paying its accounts payable.

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

         3.7      Environmental Issues.

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

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

                  (c)  Neither PC nor Moadel has  received  any notice  from the
United  States  Environmental   Protection  Agency  that  it  is  a  potentially
responsible party under the Comprehensive  Environmental Response,  Compensation
and Liability Act ("Superfund Notice"),  any citation from any federal, state or
local  governmental  authority for  non-compliance  with its  requirements  with
respect to air, water or environmental  pollution,  or the improper storage, use
or discharge of any  hazardous  waste,  other waste or other  substance or other
material pertaining to the Business ("Citations") or any written notice from any
private  party  alleging  any such  non-compliance;  and there are no pending or
unresolved Superfund Notices,  Citations or written notices from private parties
alleging any such non-compliance.

         3.8  Intellectual  Property Rights.  There are no patents,  trademarks,
trade names, or copyrights, and no applications therefor, owned by or registered
in the name of PC or Moadel or in which PC or Moadel has any right,  license, or
interest other than those disclosed on Schedule 3.8.  Neither PC nor Moadel is a
party to any license agreement,  either as licensor or licensee, with respect to
any patents,  trademarks,  trade names, or copyrights other than those disclosed
on  Schedule  3.8.  Neither  PC nor Moadel has  received  any notice  that it is
infringing any patent, trademark, trade name, or copyright of others.

         3.9  Compliance  with Laws. To the  knowledge of PC and Moadel,  PC and
Moadel  have  complied  in all  material  respects,  and PC  and  Moadel  are in
compliance in all material respects,  with all federal, state, county, and local
laws, rules,  regulations and ordinances currently in effect and relating to the
Business.  No claim has been made or  threatened by any  governmental  authority
against PC or Moadel to the  effect  that any  aspect of the  Business  fails to
comply in any respect with any law, rule, regulation, or ordinance.

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

         3.11 Employee  Benefit  Matters.  Except as set forth on Schedule 3.11,
neither PC nor Moadel  maintains or  contributes or is required to contribute to
any "employee  welfare benefit plan" (as defined in section 3(1) of the Employee
Retirement  Income Security Act of 1974 (and any sections of the Code amended by
it) and all regulations  promulgated  thereunder,  as the same have from time to
time been amended  ("ERISA")) or any "employee pension benefit plan" (as defined
in ERISA). Neither PC nor Moadel presently maintains or has ever maintained,  or
had any  obligation  of any nature to  contribute  to, a "defined  benefit plan"
within the meaning of the Code.

         3.12 Contracts and  Agreements.  Attached  hereto as Schedule 3.12 is a
list of all written or oral contracts, commitments, leases, and other agreements
(including, without limitation, all promissory notes, loan agreements, and other
evidences  of  indebtedness,  mortgages,  deeds of trust,  security  agreements,
pledge agreements,  service  agreements,  and similar agreements and instruments
and all confidentiality  agreements) relating to the Business and to which PC or
Moadel  is a party or by which PC or  Moadel  or any of the  Assets  are  bound,
pursuant to which the  obligations  thereunder  of any party thereto are, or are
contemplated as being, in respect of any such individual contracts, commitments,
leases, or other agreements during any year during the term thereof,  $25,000 or
greater,  or which are  otherwise  material to the  Business  (collectively  the
"Contracts" and individually,  a "Contract").  Neither PC nor Moadel is, and, to
the best knowledge of PC and Moadel,  no other party thereto is, in default (and
no event has occurred  which,  with the passage of time or the giving of notice,
or both, would  constitute a default) under any Contract.  Neither PC nor Moadel
has waived any material  right under any Contract,  and no consents or approvals
(other than those  obtained in writing and  delivered to Prime prior to Closing)
are  required  under any Contract in  connection  with the  consummation  of the
transactions  contemplated  hereby.  Neither PC nor Moadel  has  guaranteed  any
obligation of any other person or entity insofar as it relates to the Business.

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

         3.14 Taxes.  All federal,  foreign,  state,  county,  and local income,
gross receipts, excise, property,  franchise,  license, sales, use, withholding,
and other tax  (collectively,  "Taxes")  returns,  reports,  and declarations of
estimated tax  (collectively,  "Returns")  which were required to be filed by PC
(or Moadel with respect to the  Business) on or before the date hereof have been
filed within the time  (including any applicable  extensions)  and in the manner
provided  by law,  and all such  Returns  are true and  correct in all  material
respects  and  accurately  reflect  the Tax  liabilities  of PC (or Moadel  with
respect to the Business). PC has provided Prime with true and complete copies of
all returns filed for and during any tax period  throughout PC's existence.  All
Taxes,  assessments,  penalties,  and interest which have become due pursuant to
such Returns have been paid or adequately  accrued in the Financial  Statements.
The  provisions  for Taxes  reflected  on the  balance  sheet  contained  in the
Financial  Statements  are  adequate  to cover  all of PC's (and  Moadel's  with
respect to the Business)  estimated Tax liabilities  for the respective  periods
then ended and all prior  periods.  As of the Closing  Date, PC (and Moadel with
respect  to the  Business)  will not owe any Taxes for any  period  prior to the
Closing which are not reflected on the  Financial  Statements,  except for Taxes
attributable to the operations of of the Business between the Balance Sheet Date
and the Closing Date. Neither PC nor Moadel has executed any presently effective
waiver or  extension  of any  statute of  limitations  against  assessments  and
collection  of Taxes.  There are no pending or threatened  claims,  assessments,
notices,  proposals  to  assess,  deficiencies,  or audits  (collectively,  "Tax
Actions")  against PC or Moadel with respect to any Taxes owed or allegedly owed
in respect of the Business. There are no tax liens on any of the assets of PC or
the Assets.  Proper and accurate  amounts have been  withheld and remitted by PC
and  Moadel  from and in  respect  of all  persons  from whom  either of them is
required by applicable  law to withhold for all periods in  compliance  with the
tax withholding  provisions of all applicable laws and  regulations.  Neither PC
nor Moadel is a party to any tax sharing agreement.

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

         3.16  Business  Relations.  Neither  PC nor  Moadel  has any  reason to
believe and has not been  notified that any supplier or customer of the Business
will cease or refuse to do  business  with the  Business  in the same  manner as
previously  conducted  with the  Business  as a result of or within one (1) year
after the consummation of the transactions  contemplated  hereby,  to the extent
such  cessation or refusal might affect the Assets or the  Business.  Neither PC
nor  Moadel  has  received  any  notice  of any  disruption  (including  delayed
deliveries or allocations by suppliers) in the  availability of the materials or
products used in the Business.

         3.17     This section intentionally omitted.

         3.18 Agents.  Except as set forth on Schedule 3.18 attached hereto,  PC
(and Moadel with respect to the  Business)  has not  designated or appointed any
person (other than PC's  employees,  officers and  directors) or other entity to
act for it or on its  behalf  pursuant  to any power of  attorney  or any agency
which is presently in effect.

         3.19  Indebtedness To and From Directors,  Officers,  Shareholders  and
Employees.  No director,  officer,  shareholder,  employee or affiliate of PC or
Moadel has any indebtedness owed to it from Moadel or PC, excluding indebtedness
for travel advances or similar  advances for expenses  incurred on behalf of and
in the  ordinary  course of the  Business  and  consistent  with past  practices
associated with the Business.  As of the Effective Time and the Closing Date all
amounts due PC or Moadel from any of their (as applicable) directors,  officers,
employees or affiliates (or any of their family  members) shall have been repaid
in full.

         3.20 Commission Sales  Contracts.  Except as disclosed in Schedule 3.20
attached hereto,  neither PC nor Moadel has an employment  relationship with any
individual,  corporation,  partnership,  or other entity related to the Business
whose  compensation  from PC or  Moadel is in whole or in part  determined  on a
commission basis.

         3.21 Certain  Consents.  Except as set forth on Schedule  3.21 attached
hereto,  there are no consents,  waivers,  or approvals  required to be executed
and/or  obtained  by  PC  or  Moadel  from  third  parties  (including,  without
limitation,  the spouse,  if any, of Moadel) in connection  with the  execution,
delivery,   and   performance  of  this  Agreement  or  any  other   Transaction
Documents").

         3.22 Brokers.  Except for a certain fee or commission payable by Moadel
to Nexus  Health  Capital,  neither  PC nor Moadel  has  engaged,  or caused any
liability to be incurred to, any finder, broker, or sales agent (and neither has
paid,  nor will pay, any finders fee or similar fee or commission to any person)
in connection with the execution,  delivery, or performance of this Agreement or
the transactions  contemplated hereby.  Moadel and PC acknowledge and agree that
the  fee or  commission  payable  to  Nexus  Health  Capital  is not an  Assumed
Liability,  and  none of  PMSI,  Prime or Newco  shall  have any  obligation  or
liability whatsoever with respect to such fee or commission.

         3.23 Interest in Competitors,  Suppliers, and Customers.  Except as set
forth on Schedule  3.23  attached  hereto,  neither PC nor any  affiliate  of PC
(including, without limitation,  Moadel), and to the knowledge of PC and Moadel,
no  director,  officer,  employee or  affiliate  of PC or any  affiliate  of any
director,  officer,  employee or affiliate of PC, has any ownership  interest in
any  competitor,  customer or supplier of the Business (other than the ownership
of  securities of a publicly held entity of which it owns less than five percent
(5%)  of any  class  of  outstanding  securities)  or any  property  used in the
operation of the Business.

         3.24  Warranties.  Except as set forth on Schedule 3.24, there have not
been made any  warranties  or  guarantees  to third  parties with respect to any
products sold or services  rendered in connection  with the Business.  Except as
set forth on Schedule 3.24 attached  hereto,  no claims for breach of product or
service warranties have ever been made with respect to products sold or services
rendered in connection with the Business.

         3.25     Investment Representations.  Each of PC and Moadel:
                  --------------------------

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

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

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

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

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

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

                                   ARTICLE IV

                                    Covenants

         4.1 Use of Name. Except to the extent allowed under the limited license
contained  in the  Office and  Equipment  Use  Agreement,  each of Moadel and PC
agrees that,  following the Closing Date, it will cease using the name "New York
Eye  Specialists" or any words or phrases which are deceptively  similar to such
name.

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

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

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

         4.4 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.

         4.5  Guaranty of PMSI.  PMSI  hereby  unconditionally  and  irrevocably
guarantees  each of the payment and  performance  obligations of Prime hereunder
and under each of the  Transaction  Documents.  Without  limiting the foregoing,
PMSI agrees that if Prime shall default in any obligation to pay to PC or Moadel
any  amount  then due and  payable  by Prime to PC or Moadel  under  Article  I,
Article VI or Article VII hereunder,  PMSI shall  immediately pay such amount to
PC or Moadel.  PMSI hereby agrees not to require PC or Moadel to proceed against
Prime or any other  person  or to pursue  any  other  remedy  before  proceeding
against PMSI under this guaranty.

         4.6 Earnout.  In further  consideration  of the purchase of  sixty-five
percent  (65%) of the Assets  Related  Business,  Prime agrees to pay Moadel the
amount (if any) specified  below, in accordance with the provisions  below.  Any
amounts  payable  pursuant  to this  Section  are in  addition to payment of the
Purchase  Price  pursuant to Section 1.1,  and no amount of the  Purchase  Price
shall reduce amounts payable under this Section.

                  (a) The net  income  for  Newco  shall be  calculated  for the
twelve  consecutive  calendar  months ending on the one-year  anniversary of the
Closing  Date,  using  the same  methodology  and  principles  reflected  in the
calculation  of Base Net Income (as  hereinafter  defined) shown on Schedule 4.6
attached hereto (the "First  Anniversary Net Income").  If the First Anniversary
Net Income  exceeds  Base Net Income by at least  twenty  percent  (20%),  Prime
agrees to pay Moadel an amount equal to the result  obtained by (A) dividing the
Purchase  Price by five (5) and (B)  multiplying  such  quotient  by 9.75%  (the
"First Anniversary Earnout").

                  (b) The net  income  for  Newco  shall be  calculated  for the
twelve  consecutive  calendar  months ending on the two-year  anniversary of the
Closing  Date,  using  the same  methodology  and  principles  reflected  in the
calculation  of Base Net Income  shown on  Schedule  4.6  attached  hereto  (the
"Second  Anniversary  Net Income").  To the extent that any one of the following
requirements  are  met,  Prime  agrees  to  pay  Moadel  the  respective  amount
determined as follows (the "Second  Anniversary  Earnout," and together with the
First Anniversary Earnout, the "Earnout Payments"),  with the understanding that
a Second Anniversary  Earnout,  if any, will only be paid with respect to one of
the following three alternatives,  even if the requirements for more than one of
the alternatives are satisfied:

                           (i) If Second  Anniversary  Net Income  exceeds First
         Anniversary  Net Income by at least  twenty  percent  (20%) and a First
         Anniversary  Earnout was due and  payable in  accordance  with  Section
         4.6(a),  then  Prime  agrees to pay to  Moadel  an amount  equal to the
         result  obtained by (A) dividing the Purchase Price by five (5) and (B)
         multiplying such quotient by 22.75%.

                           (ii) If (a) Second  Anniversary  Net  Income  exceeds
         First  Anniversary  Net Income by less than twenty percent  (20%),  (b)
         Second  Anniversary  Net Income exceeds Base Net Income (as hereinafter
         defined) by at least forty percent (40%),  and (c) a First  Anniversary
         Earnout was due and payable in  accordance  with Section  4.6(a),  then
         Prime agrees to pay to Moadel an amount equal to the result obtained by
         (A) dividing the Purchase  Price by five (5) and (B)  multiplying  such
         quotient by 22.75%.

                           (iii) If Second  Anniversary  Net Income exceeds Base
         Net  Income by at least  forty  percent  (40%) and a First  Anniversary
         Earnout was not due and payable in accordance with Section 4.6(a), then
         Prime agrees to pay to Moadel an amount equal to the result obtained by
         (A) dividing the Purchase  Price by five (5) and (B)  multiplying  such
         quotient by 32.50%.

                  (c) As used in this Agreement,  Base Net Income shall mean the
amount of $2,464,383,  resulting from the calculations contained in Schedule 4.6
attached  hereto and  representing  the estimated  recurring net income from the
Assets Related Business (on a stand alone basis) for the twelve (12) consecutive
calendar  months ending March 31, 2000,  based on  information  available at the
date of calculation and assuming all of the representations and warranties of PC
and Moadel  contained in this Agreement are true,  complete and not  misleading.
The parties  acknowledge  and agree that the manner of calculation  set forth on
Schedule 4.6 attached hereto reflects the agreed upon means of calculating  Base
Net Income (subject to exclusions/additions described below in subsection (d)).

                  (d) The parties agree that,  notwithstanding  any provision of
this Agreement to the contrary,  (i) the revenues,  income,  costs, and expenses
(including,  without  limitation,  startup  and  transaction  costs,  legal  and
accounting  costs and fees, and applicable  financing  costs)  resulting from or
attributable to the acquisition  and/or  operation of any Existing  Locations by
Newco or Newco's  subsidiaries  shall be excluded  from the  calculation  of the
Earnout Payments and (ii) the revenues,  income, costs, and expenses (including,
without  limitation,  startup and transaction  costs, legal and accounting costs
and fees, and applicable financing costs), resulting from or attributable to the
development   and/or  operation  of  any  New  Locations  by  Newco  or  Newco's
subsidiaries  shall be included in the calculation of the Earnout  Payments.  To
the  extent  possible,  the  operating  results  from  New  Locations  shall  be
incorporated into the calculation of the Earnout Payments in a manner consistent
with the  treatment  on  Schedule  4.6 of the  operating  results of PC existing
immediately  prior  to  the  Effective  Time,  with  appropriate  departures  to
incorporate,  among other items,  non-recurring costs such as startup costs. The
provisions of this  subsection  (d) shall not be construed to require any party,
including Newco, to develop or acquire any Target Location.

                  (e) Prime shall calculate the First Anniversary Earnout within
ninety (90) days of the end of the one-year  anniversary of the Closing Date and
shall  calculate the Second  Anniversary  Earnout within ninety (90) days of the
end of the  two-year  anniversary  of the Closing  Date.  Within the  applicable
ninety (90) day period,  Prime shall  deliver to PC, via certified or registered
U.S. Mail, a statement (the "Calculation  Statement") showing calculation of the
applicable  Earnout  Payment  and  the  basis  on  which  it was  calculated  in
reasonable  detail.  If PC shall fail to receive a Calculation  Statement within
either ninety (90) day period,  then PC shall  promptly  notify Prime in writing
that the  Calculation  Statement has not been received,  and Prime shall have an
additional  five (5) days  following  its receipt of such notice from PC, within
which Prime may deliver the Calculation Statement without having been in default
under this subsection  (d). If Prime fails to deliver the Calculation  Statement
within such additional five (5) day period,  and an Earnout Payment is required,
Prime agrees to pay interest at PMSI's  overnight  funds  investment rate on the
amount  of the  Earnout  Payment,  charged  from the first  day  following  such
addition five (5) day period until the day on which the Calculation Statement is
delivered.

                  PC shall have  thirty  (30) days  following  its  receipt of a
Calculation  Statement  during  which Newco and Prime agree to provide to Moadel
and PC  reasonable  access to  Newco's  books and  records.  If PC shall fail to
deliver an Objection Notice (as hereinafter defined) within such thirty (30) day
period,  then such failure shall  constitute  PC's  acceptance of the respective
Calculation  Statement,  which shall thereupon become  conclusive and binding on
all parties hereto,  and shall not be subject to further review,  challenge,  or
adjustment.  During such thirty  (30) day period,  PC may deliver to Prime,  via
certified  or  registered  U.S.  Mail,  a  written  notice of  objection  to the
respective Calculation Statement (an "Objection Notice"), which Objection Notice
shall set forth in reasonable  detail PC's  calculation  of the Earnout  Payment
calculated  therein,  and PC's basis for  objection,  in which case the  parties
shall meet and in good faith attempt to resolve any  disagreement  within thirty
(30) days after  Prime's  receipt of the  Objection  Notice.  If the parties are
unable to resolve such  disagreement  within such time period,  the disagreement
shall be referred to a "Big Five"  accounting firm selected by mutual  agreement
of PC and Prime, or if the parties cannot agree on such  selection,  then a "Big
Five"  accounting  firm  selected  by lot,  excluding  those that have  provided
services  to PC or Prime  within the  preceding  twenty-four  (24)  months  (the
"Settlement  Accountants").  The Settlement Accountants shall be directed to use
their best efforts to reach a determination  of the correct Earnout Payment (the
"Audit Amount") within  forty-five (45) days after such referral,  and the Audit
Amount  shall be final  and  binding  on the  parties  hereto,  and shall not be
subject to further  review,  challenge or adjustment.  The costs and expenses of
the  services  of the  Settlement  Accountants  (the  "Audit  Costs")  shall  be
allocated  to and borne by each of Prime and Moadel  pursuant  to the  following
calculation.  First, the Settlement  Accountants  shall  calculate,  for each of
Prime and Moadel,  the difference  between such party's  estimate of the Earnout
Payment and the Audit  Amount (for either  party,  expressed  only as a positive
number, the "Difference"). Next, each of Prime's and Moadel's share of the Audit
Costs shall be  determined  by  multiplying  the Audit Costs by a fraction,  the
numerator  of which shall be such party's  Difference,  and the  denominator  of
which shall be the sum of the Differences of both parties.  Notwithstanding  the
foregoing,  if the Audit Amount exceeds Moadel's estimate, then Prime shall bear
all Audit Costs,  and if the Audit Amount is lower than Prime's  estimate,  then
Moadel  shall  bear all Audit  Costs.  Prime  shall pay any  applicable  Earnout
Payment  in cash  to PC  within  fifteen  (15)  days  following  the  conclusive
determination  of the amount of such Earnout Payment pursuant to this paragraph.
With  respect to any Earnout  Payment  that is being  contested  by the parties,
Prime  agrees to pay in cash to PC  Prime's  estimate  of the  required  Earnout
Payment (as shown in the respective  Calculation  Statement) within fifteen (15)
days following Prime's receipt of the respective Objection Notice.

         4.7 Right of First  Refusal.  For so long as Moadel:  (i) owns not less
than thirty  percent  (30%) of all of the  outstanding  membership  interests of
Newco, or such lesser percentage as may result solely from the issuance by Newco
of any new membership  interests of Newco,  whether as part of an acquisition by
Newco or  otherwise  (whatever  percentage  may  from  time to time  apply,  the
"Required  Percent")  and (ii) is  performing  the  majority  of his  Refractive
Surgery procedures at one of Newco's locations within the Restricted Area, PMSI,
Prime or any affiliate  thereof owning a membership  interest in Newco (a "Prime
Entity") shall be subject to the right of first refusal (the "Right of Refusal")
specified as follows:

                  (a) If at any time, a Prime Entity proposes to transfer all or
a portion of its outstanding  membership interests of Newco to one or more third
parties  pursuant to an agreement with such third parties (a  "Transfer"),  then
the Prime Entity shall give Moadel  written  notice of its intention to make the
Transfer (the  "Transfer  Notice") which shall include all of the material terms
of the intended Transfer.

                  (b) Moadel  shall  have an option for a period of twenty  (20)
days  from the  Prime  Entity's  delivery  of the  Transfer  Notice  to elect to
purchase  the  membership  interests  described  in  the  Transfer  Notice  upon
substantially the same terms and conditions as set forth in the Transfer Notice.
Acceptance of this Right of Refusal shall be in writing addressed to PMSI at the
address  provided  for  notice  herein.  If Moadel  elects not to  purchase  the
membership  interests  pursuant to this Section (or fails to respond  during the
20-day  period),  the  selling  Prime  Entity  shall be free to  consummate  the
Transfer to a third party only upon  substantially the same terms and conditions
as set forth in the Transfer  Notice,  but if Transfer has not been  consummated
prior to the  expiration of six (6) months  following  Moadel's  election not to
purchase,  all of the  provisions  of this  Section  shall  again  apply  to any
Transfer of such membership interests.

                  (c) The  provisions  of this Section shall apply to successive
proposed  Transfers,  and  application  of the provisions of this Section to any
particular  Transfer  shall not affect  application  of the  provisions  of this
Section to subsequent Transfers;  provided,  however, that any proposed transfer
by a Prime Entity to an affiliate or  subsidiary of PMSI shall not be considered
a "Transfer" for purposes of this Section 4.7.

         4.8 Key-Man Life Insurance. The parties agree that Newco shall maintain
a key-man life  insurance  policy and a disability  policy (the  "Policies")  on
Moadel, each in a policy amount equal to or exceeding $10,000,000. Such Policies
shall be maintained by Newco until Moadel no longer  materially  participates in
the Assets  Related  Business as reasonably  determined  by the Managers.  Prime
agrees  that it shall pay or  reimburse  Newco for any  portion  of the  related
premiums  owing to coverages  exceeding  $10,000,000,  and, with respect to such
disability policy, any portion of the related premium in excess of $10,000.

         4.9 VISX  Agreements.  Moadel and PC each hereby  agree to take any and
all  actions  that may at any time after the  Closing be  necessary,  including,
without limitation, executing any document, instrument or agreement, in order to
confer to Newco all  benefits,  economic or  otherwise,  arising  under the VISX
Agreements or any contract or agreement, whether written or oral, that replaces,
supplements or amends any of the VISX Agreements.

                                    ARTICLE V

                              Conditions to Closing

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

                  (a) each of Moadel and PC shall have  executed  and  delivered
each of the  Transaction  Documents to which it is a party  (including,  without
limitation,  the Limited Liability Company Agreement of Newco attached hereto as
Exhibit  B), and shall have  performed  or  complied  in all  respects  with its
agreements  and covenants  required by this  Agreement or any other  Transaction
Document  to have  been  performed  or  complied  with by it  prior to or at the
Closing;

     (b) as of the Closing  Date,  the amount of cash included in the Assets and
conveyed by Prime and PC to Newco shall be at least $325,000;

                  (c) since the Effective Time,  except as set forth on Schedule
3.4  hereto,  there  shall  not have  been any  material  adverse  change in the
condition  (financial  or  otherwise)  of the PC,  the  Assets  or the  Business
(including,  without  limitation,  any material  change in the amount of Working
Capital  reasonably  necessary to operate the Assets Related Business during any
one-month period);

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

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

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

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

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

                  (c)  Prime   shall   have   delivered   such   good   standing
certificates,  officer  certificates,  and similar documents and certificates as
counsel for Moadel and PC may have reasonably requested.

                                   ARTICLE VI

                            Indemnification of Prime

         6.1 Indemnification of Prime. Each of Moadel and PC agrees to indemnify
and hold harmless Prime,  each parent company,  subsidiary  and/or  affiliate of
Prime  (including,   without   limitation,   Newco)  and  each  parent  company,
subsidiary,  affiliate,  shareholder, member, partner (or other owner), officer,
director,  manager,  agent,  employee and representative of any of the foregoing
(collectively,  the "Prime  Indemnified  Parties")  from and against any and all
damages, losses, claims, liabilities, demands, charges, suits, penalties, costs,
and expenses (including court costs and attorneys' fees and expenses incurred in
investigating  and preparing for any  litigation or  proceeding)  (collectively,
"Indemnified Costs"), including,  without limitation,  Indemnified Costs arising
in  connection  with the  commencement  or assertion of any action,  proceeding,
demand, or claim by a third party (collectively,  a "Third-Party Action"), which
any of the Prime Indemnified  Parties may sustain,  arising out of or related to
(a)  any  breach  or  default  by  Moadel  or PC of any of the  representations,
warranties,   covenants  or  agreements  contained  in  this  Agreement  or  any
Transaction Document,  (b) any claim, debt, obligation or liability of Moadel or
PC, (c) any actual or alleged actions or omissions by Moadel, PC, or any of PC's
directors,   officers,   shareholders,   agents,   employees,   representatives,
subsidiaries  and/or affiliates  occurring prior to the Closing Date (regardless
of whether such  Indemnified  Costs are asserted at any time before or after the
Closing Date),  and (d) any actual or alleged  actions or omissions by Moadel or
PC occurring  after the Closing that either were not made by Moadel or PC in its
capacity as a director, officer or shareholder of Newco (as applicable),  or, if
made by Moadel or PC in such a capacity,  constituted  a breach of any fiduciary
or other  duty  owed by  Moadel or PC under  applicable  law or any  Transaction
Document.

                  For purposes of this  Section,  any decrease in the value of a
Prime Indemnified  Party's ownership  interest (if any) in Newco, as a result of
the acts,  omissions  or  circumstances  described in clauses (a) through (d) of
this Section,  shall be deemed an Indemnified  Cost, and such Prime  Indemnified
Party shall be entitled to indemnification  hereunder in an amount equal to such
decrease in value; provided further that,  notwithstanding any provision of this
Agreement or any other Transaction Document to the contrary,  neither Moadel nor
PC may, and each hereby  agrees not to, seek  contribution,  indemnification  or
reimbursement from Newco for any amount Moadel or PC is required to pay pursuant
to this Article, regardless of whether Moadel or PC is entitled to contribution,
indemnification   or   reimbursement   under  any  Transaction   Document,   the
organizational documents of Newco or applicable law.

                  The parties agree that indemnification may not be sought under
this ARTICLE or ARTICLE VII on the basis that the structure of the  transactions
contemplated  by this Agreement  violate any federal,  state,  county,  or local
laws, rules,  regulations or ordinances  regulating or legislating the provision
of healthcare or the practice of medicine.  The parties also agree that recourse
under this ARTICLE or ARTICLE VII shall not be the sole  recourse of the parties
against one  another for a breach of the  provisions  of this  Agreement  or any
other Transaction Document.

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

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

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

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

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

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

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

                                   ARTICLE VII

                        Indemnification of Moadel and PC

         7.1  Indemnification  of Moadel and PC. Prime  agrees to indemnify  and
hold harmless Moadel, PC, each parent company, subsidiary and/or affiliate of PC
(including,  without  limitation,  Newco) and each parent  company,  subsidiary,
affiliate,  shareholder,  member, partner (or other owner),  officer,  director,
manager,   agent,   employee  and   representative   of  any  of  the  foregoing
(collectively,  the "PC  Indemnified  Parties"),  from and  against  any and all
Indemnified Costs, including,  without limitation,  Indemnified Costs arising in
connection with the  commencement or assertion of any Third Party Action,  which
any of the PC  Indemnified  Parties  may  sustain,  arising out of any breach or
default  by  Prime  of any  of the  representations,  warranties,  covenants  or
agreements contained in this Agreement or any Transaction Document.

                  The parties agree that indemnification may not be sought under
this ARTICLE or ARTICLE VI on the basis that the  structure of the  transactions
contemplated  by this Agreement  violate any federal,  state,  county,  or local
laws, rules,  regulations or ordinances  regulating or legislating the provision
of healthcare or the practice of medicine.  The parties also agree that recourse
under this ARTICLE and ARTICLE VI shall not be the sole  recourse of the parties
against one  another for a breach of the  provisions  of this  Agreement  or any
other Transaction Document.

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

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

                  (b) Prime shall  obtain the prior  written  approval of the PC
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 PC Indemnified Party;

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

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

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

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

                                  ARTICLE VIII

            Covenants Regarding Future Acquisitions and Developments

         8.1      Restrictions on Acquisitions and Development.
                  --------------------------------------------

                  (a) De Novo Development.  Except as expressly  provided below,
each of PMSI,  Prime, PC and Moadel agrees that,  following the Closing Date, it
will not,  without  obtaining the prior written  consent of the other parties to
this  Agreement,  directly or indirectly  through any affiliate,  except through
Newco or one of its  subsidiaries,  develop or establish  any office or premises
(which does not include the acquisition of an existing office or premises, as to
which  Section  8.1(b)  shall  apply) that may be used by medical  professionals
(either directly or through practice  entities) to perform Refractive Surgery (a
"New  Location"),  anywhere  within  the  Manhattan  Borough of New York City or
within five (5) miles of any Target Location (as  hereinafter  defined) that has
been  developed or acquired by Newco after the Closing Date  (collectively,  the
"Restricted  Area"). The parties acknowledge that Newco's development of any New
Location requires the approval of Moadel (or his manager  designee)  pursuant to
the terms of the Limited Liability Company Agreement of Newco.

                  (b) Acquisitions.  Except as expressly provided below, each of
PMSI, Prime, PC and Moadel agrees that, following the Closing Date, it will not,
without  obtaining  the  prior  written  consent  of the other  parties  to this
Agreement, directly or indirectly through any affiliate, except through Newco or
one of its subsidiaries, acquire any existing office or premises that is used to
a  substantial  extent by  medical  professionals  (either  directly  or through
practice  entities)  to perform  Refractive  Surgery (an  "Existing  Location"),
anywhere  within the  Restricted  Area.  The parties  acknowledge  that  Newco's
development of any New Location  requires the approval of Moadel (or his manager
designee)  pursuant to the terms of the Limited  Liability  Company Agreement of
Newco.

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

                  (a)  Notwithstanding  the provisions of Section 8.1, any party
shall be free to independently  develop or acquire all or any portion of any New
Location or Existing  Location  ("Target  Locations")  that is located  entirely
outside of the Restricted Area.

                  (b) No provision of this Article shall be construed to require
any party to this Agreement to acquire or develop any Target  Location and in no
event  shall  Newco's  acquisitions  or  development  result in  PMSI's  owning,
directly or indirectly,  less than  fifty-one  percent (51%) of the total voting
equity interests in a Target Location without the prior written consent of PMSI,
but  neither  Moadel  nor PC shall be in  breach  of this  subsection  (b) if an
acquisition or development  described herein is inadvertently  consummated under
the direction of Newco's managers;

                  (c)  Notwithstanding  the provisions of Section 8.1, any party
shall be free to independently  acquire all or any portion of the non-Refractive
Surgery assets and business of any Target Location,  regardless of whether it is
in the  Restricted  Area,  to the  extent  those  assets  and  business  are not
significantly used by such Target Location for the conduct of Refractive Surgery
or any business substantially the same as the Assets Related Business;

                  (d)  Notwithstanding  the provisions of Section 8.1, any party
shall be free to independently  acquire or (with respect to PMSI or Prime) merge
with any Existing Business if, with respect to such Existing  Business,  (i) the
prior  twelve  months'  revenues  that  arose  from  Refractive  Surgery  in the
Restricted  Area  comprise  not more than ten  percent  (10%) of the total prior
twelve months' revenues that arose from Refractive Surgery or (ii) the number of
Refractive  Surgery  procedures  done during the prior twelve  months within the
Restricted  Area comprise not more than ten percent (10%) of the total number of
Refractive Surgery procedures done during the prior twelve months.

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

                  (a) The direct or indirect  acquisition  or  development  of a
Target  Location by either PMSI or Moadel  independently  if either (i) Newco is
financially  unable to acquire or develop  such  Target  Location  using its own
financial  resources  (without  requiring a guarantee or any other  financial or
credit  assistance  from Prime,  PMSI,  any  subsidiary or affiliate of Prime or
PMSI, or any Member of Newco) or (ii) with respect only to  developments  of New
Locations,  the other party was financially  unable or elected not to contribute
to Newco its  proportionate  share of the costs necessary fund the establishment
and  maintenance  of such New  Location,  in each  case,  on or before  the date
reasonably  specified pursuant to the affirmative vote or written consent of two
of the three managers of Newco;

                  (b) The direct or indirect  acquisition  or  development  of a
Target Location by any party  independently if any manager of Newco that was not
designated by such party or its affiliates pursuant to Newco's Limited Liability
Company Agreement has previously voted against the acquisition or development of
such Target Location;  provided,  however,  that the exception contained in this
subsection (b) shall not apply to any Target Location that is located within one
(1) mile from the  location of the Newco  premises;  provided  further,  that no
party  shall  instruct  its  designee  to vote in  favor of the  acquisition  or
development of a Target Location to avoid the application of this subsection (b)
if such party does not actually intend that Newco acquire or develop such Target
Location, and the other party may seek damages pursuant to Section 11.12 of this
Agreement for any such attempt to manipulate the  provisions of this  subsection
(b);

                  (c) The direct or indirect  acquisition  or  development  of a
Target Location by PMSI, Prime or either of their affiliates if either Moadel or
PC has  previously  terminated  or  materially  breached  any  provision of this
Agreement,  the Limited  Liability  Company  Agreement of Newco,  the Office and
Equipment Use Agreement or any Credit Document; or

                  (d) The direct or indirect  acquisition  or  development  of a
Target  Location by Moadel,  PC or either of their  affiliates if either PMSI or
Prime has previously terminated or breached any provision of this Agreement, the
Limited  Liability  Company  Agreement of Newco,  the Office and  Equipment  Use
Agreement or any Credit Document.

         8.4      Credit Facilities.

                   (a) Acquisition  Capital Line of Credit.  PMSI, Newco, Moadel
and PC (as applicable) each agree to execute,  on or before the Closing Date (i)
the Loan Agreement in substantially  the form attached hereto as Exhibit D1 (the
"Loan  Agreement"),  which  provides  for a term loan  facility,  in the maximum
principal  amount of $10,000,000  (the  "Acquisition  Line"),  pursuant to which
Newco shall be entitled,  subject to the conditions and limitations contained in
the Loan Agreement,  to borrow funds,  from time to time, in order to finance up
to one hundred  percent  (100%) of the  purchase  price of an Existing  Location
being  acquired (not  developed) by Newco and (ii) the  Assignment  and Security
Agreement in  substantially  the form  attached  hereto as Exhibit D2,  securing
Newco's obligations under the Loan Agreement. In connection with the Acquisition
Line,  Newco  agrees to  execute,  and all  parties  hereto  agree to vote their
interests in Newco,  if any, and to take such other action as may be  necessary,
to cause any entity through which Newco  acquires or develops a Target  Location
(regardless  of whether  funded using the  Acquisition  Line) to execute,  on or
before each closing date of a Target Location acquisition or the commencement of
development,  a Promissory  Note in  substantially  the form attached  hereto as
Exhibit D3 and an Assignment and Security  Agreement in  substantially  the form
attached  hereto as Exhibit  D4. In  addition,  if Newco is to  obtain,  through
development or acquisition, directly or indirectly, a one hundred percent (100%)
interest in any Target Location, Newco, then all parties hereto shall cause such
Target  Location  to  execute  a  security  agreement,  acceptable  in form  and
substance  to PMSI,  granting to PMSI the highest  available  priority  security
interest in all of the assets of such Target Location.

                  (b)  Notwithstanding  anything herein to the contrary,  PMSI's
obligations  to make each  extension of credit  pursuant to subsection (a) above
are subject  entirely  and in all  respects to PMSI's  obtaining  prior  written
approval from the bank syndication under its outstanding  borrowing  facilities.
Each  of the  parties  to  this  Agreement  acknowledges  and  agrees  that  the
assignment and security agreements,  and security agreements,  executed pursuant
to this Section will be  assignable,  and that PMSI intends to make a collateral
assignment for the benefit of one or more of its lenders.  In addition,  each of
the parties to this Agreement agrees to take such action (including voting their
interests  in any  entity)  which may be  necessary  to ensure  the  filing  and
perfection  of  security  interests  required  to be  granted  pursuant  to this
Section.

                  (c)  Each of the PCs  acknowledges  and  agrees  that  none of
Prime,  PMSI or any affiliate of either of them may be required to (i) except as
expressly  set  forth  in  this  Article  VIII,  extend  any  financing,  credit
facilities,  guarantees or other credit  enhancements to any PC or Newco or (ii)
issue any of its  capital  stock (or rights to  acquire  its  capital  stock) in
connection with the  acquisition or development of a Target Location  (provided,
however, that Prime, PMSI or such affiliate may elect to issue its capital stock
in connection  with the acquisition or development of a Target Location by Newco
or any of its  subsidiaries,  and any such  issuance  shall be  treated  for all
purposes as a loan by PMSI to Newco  pursuant  to the  Acquisition  Line,  in an
amount equal to the fair market value of the capital stock issued on the date of
issuance  which,  in the case of PMSI,  shall  equal the  average  of the NASDAQ
closing  "bid" prices for the ten (10) trading days  immediately  preceding  the
closing of the related acquisition or development).

                  (d) Each of PC and Newco  acknowledges  and agrees  that Newco
shall not distribute (or allow to be distributed)  to its members,  with respect
to their respective  membership  interests,  any cash or other property of Newco
if, at the time of the proposed distribution,  any amounts (whether principal or
interest) are outstanding  under the Credit Documents (as hereinafter  defined);
provided,  however that this sentence shall not limit Newco's obligation to make
Tax Distributions (as defined in Newco's Limited Liability Company Agreement) in
the manner and to the extent  contemplated in Newco's Limited  Liability Company
Agreement. Furthermore, each of the PC and Newco agrees that Newco, after making
distributions to its members for tax purposes in the manner described in Newco's
Limited Liability Company  Agreement,  shall pay all available cash flow to PMSI
in payment of Newco's  outstanding  obligations,  if any, under the  Acquisition
Line, irrespective of whether such payments exceed the minimum required payments
under the  Acquisition  Line. For purposes of allocating such payments among any
two or more of such  outstanding  obligations,  such payments shall be allocated
pro rata, based upon the respective  balances of such obligations,  unless (i) a
greater portion of the payment is required to be paid toward a given  obligation
in order to prevent a default with respect to that  obligation  (but only to the
extent  necessary to prevent such a default) or (ii) majority of the managers of
Newco  elect to allocate  the  payments in a  different  manner  (provided  that
Moadel's manager designee must have voted with the majority).

                  (e) All of the loan agreements,  promissory notes, guarantees,
security  agreements,  assignment and security  agreements and other agreements,
documents or  instruments  required to be executed by any party pursuant to this
Section are hereinafter collectively referred to as the "Credit Documents."

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

                  (a) If,  subject to the right to cure  provided in Section 9.7
of this Agreement,  any party to this Agreement: (i) becomes insolvent, or makes
a transfer  in fraud of  creditors,  or makes an  assignment  for the benefit of
creditors,  or admits in writing its  inability  to pay its debts as they become
due; (ii) generally is not paying its debts as such debts become due, and one of
the other parties, in good faith,  determines that such event or condition could
frustrate  the  operation of this Article or  otherwise  inhibit the  delinquent
party's  ability  to  perform  its  obligations  under  this  Agreement  or  any
Transaction Document; (iii) has a receiver,  trustee or custodian appointed for,
or take  possession  of, all or  substantially  all of the assets of such party,
either in a proceeding  brought by such party or in a proceeding brought against
such party;  (iv) files a petition for relief under the United States Bankruptcy
Code or any other present or future federal or state  insolvency,  bankruptcy or
similar laws (all of the foregoing  hereinafter  collectively called "Applicable
Bankruptcy  Law"),  or an involuntary  petition for relief is filed against such
party under any  Applicable  Bankruptcy  Law, or an order for relief naming such
party is  entered  under any  Applicable  Bankruptcy  Law,  or any  composition,
rearrangement,  extension,  reorganization  or other  relief of  debtors  now or
hereafter existing is requested or consented to by such party; (v) fails to have
discharged within a period of thirty (30) days any attachment,  sequestration or
similar writ levied upon,  or any claim  against or  affecting,  any property of
such  party;  or (vi)  fails to pay  within  thirty  (30) days any  final  money
judgment   against  such  party  (the  events  described  in  this  Section  are
hereinafter referred to as "Bankruptcy Events");

                  (b) If, at any time after the  Closing,  Moadel and any entity
owned or controlled by Moadel,  collectively  own less than the Required Percent
of the total  outstanding  membership  interests  of Newco  (after  assuming the
conversion, exchange or exercise of any and all securities or rights convertible
into, or exchangeable or exercisable for, ownership interests of Newco),  unless
and only to the extent a simple majority of Newco's  managers consent in writing
to the  transaction(s)  that  caused the  decrease  in  Moadel's  and such other
entities' percentage ownership of Newco; or

     (c) upon the  expiration of the six (6) year period  immediately  following
the Closing Date.

         Nothing in this  Section 8.5 shall be  construed  as to  terminate  any
obligation  of Newco,  PC or Moadel under the  Acquisition  Line and the related
Credit Documents.

                                   ARTICLE IX

                                            Restrictive Covenants

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

         Except with prior written approval of Discloser,  each of Moadel and PC
agrees that it will not: (i) directly or  indirectly,  disclose any  Proprietary
Information to any person except  authorized  personnel of Discloser or (ii) use
Proprietary  Information in any way, except as expressly  contemplated otherwise
in the Transaction Documents. Within forty-eight (48) hours of the time at which
Moadel and PC no longer own any voting  equity  interests in Newco,  whether the
result of  voluntary  or  involuntary  disposition,  each of Moadel  and PC will
deliver to Prime (without  retaining  copies thereof) all documents,  records or
other memorializations  including copies of documents and any notes which it has
prepared,   that  contain  Proprietary  Information  or  relate  to  Discloser's
business,  all other  tangible  Proprietary  Information  in its  possession  or
control,  and  all of  Discloser's  credit  cards,  keys,  equipment,  vehicles,
supplies and other materials that are in possession or under its control.

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

         9.2 Exclusive Use. Except as expressly otherwise provided below, Moadel
hereby  agrees  that,  during  the  period  of time  (the  "Restricted  Period")
beginning  on the  Closing  Date and  ending  on the  later of (a) the  six-year
anniversary  of the Closing  Date or (b) the first time at which  Moadel and his
affiliates  no longer  own any direct or  indirect  interest  in Newco,  he will
perform,  and will  direct all other  full-time,  medically  trained or licensed
medical  professionals  under his direction or control to perform,  all services
related to  Refractive  Surgery only at the premises of, and using the equipment
of,  Newco.  Furthermore,  Moadel  agrees  that,  for a period  of six (6) years
immediately  following the  Effective  Time,  Moadel shall devote  Moadel's full
business time and attention (in amounts generally  consistent with the practices
of Moadel prior to the Closing Date) to rendering  professional  ophthalmic  and
medical  services in (i) Restricted  Area or the immediate  vicinity  thereof or
(ii) or such area or areas in which Newco may in the future provide premises and
equipment for Refractive Surgery  including,  without  limitation,  new premises
being  developed  in  Stamford  and  Greenwich,  Connecticut  (each,  an  "Other
Location").  Furthermore,  Moadel and PC agree  that,  as a  condition  to using
Newco's premises and equipment,  each medical professional employed by Moadel or
PC that  performs  or intends to  perform a  majority  of his or her  Refractive
Surgery  procedures (or related  medical  services)  using Newco's  premises and
equipment,  whether  in the  Restricted  Area or an Other  Location,  to sign an
exclusive use agreement  containing  substantially  similar  provisions to those
contained in this Section 9.2 and naming Newco as a beneficiary, except that the
term shall end upon such employee's cessation of the use of Newco's premises and
equipment  (unless such employee is also an equity holder in Newco in which case
a different term shall apply in accordance with applicable provisions of Newco's
Limited  Liability  Company  Agreement).  Without limiting the provisions of the
first sentence of this Section,  the parties agree that the following activities
by Moadel shall not (as long as they do not interfere with Moadel's  devotion of
his full  business  time and  attention  in the  manner  described  above)  be a
violation of the second  sentence of this Section:  the devotion of a reasonable
amount of time to charitable  and community  activities;  and, the management of
personal investments that are passive in nature, including,  without limitation,
Moadel's  passive  investment  in Infinity  Laser  Centers,  Inc.  ("Infinity"),
provided  that Moadel  cannot,  despite any  disclosure  in any schedule to this
Agreement, serve as a director,  officer,  employee,  consultant or in any other
similar  capacity with respect to Infinity.  Notwithstanding  the  provisions of
this  Section,  the death or  Disability of Moadel shall not be the basis of any
breach  or  default  of the  provisions  of  this  Section,  but in the  case of
Disability  performance  shall be  excused  only  for so long as the  Disability
exists.  As used in this  Agreement,  Disability  shall mean any  incapacity  or
disability  of Moadel  giving rise to benefits  under the  disability  insurance
policy acquired by Newco pursuant to Section 4.8 hereof, or if no such policy is
in effect,  Moadel's  having a mental or  physical  incapacity  that  reasonably
prevents Moadel's resumption of the normal performance of his medical practice.

         9.3  Noncompetition.  Except for the passive  ownership by Moadel of an
equity ownership  interest in Infinity (which Moadel agrees may not be increased
through a purchase of additional  stock in Infinity by Moadel or his affiliates,
despite  any  disclosure  on any  schedule  to this  Agreement),  each of PC and
Moadel, as a material inducement to PMSI and Prime to enter into this Agreement,
hereby agrees that,  at all times up until the  expiration of two (2) full years
immediately  following  the end of the  Restricted  Period,  such party will not
directly  or  indirectly,  either  through  any kind of  ownership  (other  than
ownership of  securities of a publicly  held  corporation  of which it owns less
than  five  percent  (5%)  of any  class  of  outstanding  securities),  or as a
principal,  shareholder, agent, employer, advisor, consultant,  co-partner or in
any individual or representative  capacity whatever,  either for its own benefit
or for the benefit of any other person, corporation or other entity, without the
prior written  consent of each other party  hereto,  commit any of the following
acts, which acts shall be considered violations of this covenant not to compete:

                  (a) Except  through  Newco or its  subsidiaries,  directly  or
indirectly engage in, or provide,  anywhere within the Restricted Area or within
a five (5) mile  radius of any Other  Location  existing on or before the end of
the  Restricted  Period,  any  services  (other  than  services  included in the
practice of medicine)  related to (i) the  operating of premises used to provide
Refractive Surgery,  (ii) the manufacture,  maintenance,  refurbishing,  repair,
sale, or leasing of any  equipment  related to or necessary for the operating of
premises used to provide Refractive  Surgery,  or (iii) providing any management
services,  training  or  consulting  services  related to any of the  activities
described in (i) or (ii);

                  (b) Except  through  Newco or its  subsidiaries,  directly  or
indirectly provide, anywhere within the Restricted Area, (i) premises, equipment
and  non-physician  personnel  for the  performance  of  Refractive  Surgery  by
physicians, (ii) the marketing,  scheduling and management of Refractive Surgery
(but excluding, with respect to Moadel, marketing,  scheduling and management of
patients for treatment by Moadel),  (iii) the  credentialing  and  scheduling of
physicians  to perform  Refractive  Surgery and (iv) the billing,  collecting or
accounting  for  the  use of  any  such  premises,  equipment  or  non-physician
personnel.

                  (c) Directly or indirectly request or advise any person, firm,
physician, corporation or other entity having a business relationship with Newco
or any of its subsidiaries,  Prime, or any affiliate or related entity of any of
them, to withdraw,  curtail,  or cancel its business with such person or entity;
or

                  (d) Directly or  indirectly  hire any employee of Newco or any
of its  subsidiaries,  Prime, or any affiliate or related entity of any of them,
or  induce  or  attempt  to  influence  any  employee  of  Newco  or  any of its
subsidiaries,  Prime or any such affiliate or related entity to terminate his or
her employment with such person or entity.

         Furthermore,  Moadel and PC agree that, as a condition to using Newco's
premises and equipment,  each full-time medical professional  employed by Moadel
or PC that  performs or intends to perform a majority  of his or her  Refractive
Surgery  procedures (or related  medical  services)  using Newco's  premises and
equipment,  whether  in the  Restricted  Area or an  Other  Location,  to sign a
non-compete  agreement  containing  substantially  similar  provisions  to those
contained in this Section 9.3 and naming Newco as a beneficiary, except that, as
long as such  employee is not an equity  owner in Newco (in which case the terms
and provisions of the Newco's Limited Liability  Agreement relating to transfers
of Newco interests shall govern) (i) the term of the non-compete agreement shall
end one  year  after  such  employee  ceases  its  use of  Newco's  offices  and
equipment,  and (ii) it shall not be necessary to include a provision  requiring
that  such  employee  devote  his or her full  business  time and  attention  to
rendering  professional opthalmic and medical services for any period of time or
in any location.

         Each of PMSI and Prime hereby  agrees  that,  at all times up until the
expiration of two (2) full years immediately following the end of the Restricted
Period,  such party will not directly or indirectly,  either for its own benefit
or for the benefit of any other person, corporation or other entity, without the
prior  written  consent  of  Moadel,  hire any  employee  of Newco or any of its
subsidiaries,  or induce or attempt to influence any employee of Newco or any of
its subsidiaries to terminate his or her employment with such person or entity

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

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

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

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

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

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

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

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

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

         9.7      Remedies.

                  (a) General. Each party agrees that a violation on its part of
any applicable  covenant contained in this Article or in Article VIII will cause
the other parties  hereto for whose benefit such  restrictions  were agreed upon
irreparable  damage for which remedies at law may be insufficient,  and for that
reason,  it agrees that the other parties shall be entitled as a matter of right
to equitable  remedies,  including  specific  performance and injunctive relief,
therefor.  The right to specific  performance  and  injunctive  relief  shall be
cumulative and in addition to whatever other remedies, at law or in equity, that
the other  parties may have,  including,  specifically,  recovery of  liquidated
damages as provided below and any other additional damages.

                  (b) Liquidated Damages. Because of the difficulty of measuring
economic  losses to the other  parties as a result of a  material  breach of any
provision of this Article or Article VIII, each of Moadel and PC agrees that, in
the  event of such a breach  by it,  it  shall be  obligated  to pay to Prime as
liquidated damages (which damages are in addition to all other remedies provided
for in this  Agreement,  or  available  to Prime or another  party  pursuant  to
arbitration hereunder) an amount determined by multiplying the Purchase Price by
a fraction,  the numerator of which is the difference between sixty (60) and the
number of entire consecutive months passed after the Effective Time and prior to
such breach, and the denominator of which is the number sixty (60).

                  (c) Before  any  remedy may be sought by any party  under this
Agreement  with respect to a breach of the provisions of this Article or Article
VIII,  the  breaching  party shall be given  thirty days  following  delivery of
notice by the party  asserting the breach  (identifying  such  material  breach)
within which the breaching party may cure such material breach.

                                    ARTICLE X

                             Post Closing Agreements

         10.1 Transition of Business.  Each of Moadel and PC agrees to cooperate
fully with Prime and Newco in transitioning the Assets Related Business existing
prior to the Closing,  including the  relationships  maintained by Moadel and PC
with respect to the Assets Related  Business,  to Newco after the Closing;  and,
each of Moadel  and PC  agrees  not to take any  action or make any  disclosure,
including   disclosures  related  to  the  transactions   contemplated  by  this
Agreement,  which might alter or impair any relationship  with any customer,  or
other  service  recipient,  person or entity which did business with PC prior to
the  Closing.  Each of  Moadel  and PC  agrees  to  promptly  remit to Newco any
payments  required  to have  been  made  under  the  Office  and  Equipment  Use
Agreement.  Newco agrees that it shall, as of the Effective Time, employ each of
the individuals listed on Schedule 3.15 attached hereto.

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

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

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

         10.3 Ratification by Newco. Each of Prime, Moadel and PC agrees that by
executing  this  Agreement it is deemed to be voting any ownership  interests or
management  vote it may have in Newco  (whether  now or at any  time  after  the
Closing) to authorize Newco to enter into and perform this Agreement and each of
the  Transaction  Documents  to  which  Newco  is a  party,  including,  without
limitation, the Office and Equipment Use Agreement. Each of Prime, Moadel and PC
agrees to execute such  resolutions  and written  consents,  and take such other
actions,  in their  capacities as owners of Newco, as any party shall reasonably
require  after the  Closing  to have  Newco  ratify  and adopt  this  Agreement,
notwithstanding  the time of creation of Newco or the time of  execution  of the
Organizational Documents.

         10.4 Post-Closing Capital Contributions. Without in any way limiting or
qualifying  the  representation  and warranty  with  respect to Working  Capital
contained in Section 3.17, all parties to this Agreement  acknowledge  and agree
that no member  of Newco,  nor any other  party,  has any  obligation  after the
Closing to make a capital contribution to Newco.

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

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

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

                                    ARTICLE X

                                  Miscellaneous

         11.1 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.

         11.2  Successors and Assigns.  No party's  rights or obligations  under
this Agreement may be assigned  without the prior written consent of all parties
hereto, except that Prime may assign its rights and obligations hereunder to any
entity,  more than fifty percent (50%) of the voting equity ownership  interests
of which is at the time owned,  directly or indirectly,  by PMSI. Any assignment
in violation of the foregoing  shall be null and void.  Subject to the preceding
sentences  of this  Section,  the  provisions  of this  Agreement  (and,  unless
otherwise expressly provided therein, of any document delivered pursuant to this
Agreement)  shall be binding upon and inure to the benefit of the parties hereto
and their respective  heirs,  legal  representatives,  successors,  and assigns.
Notwithstanding   any  contrary   provision  of  this  Agreement  or  any  other
Transaction Document, all of the parties agree that PMSI shall be free to effect
a transfer,  assignment or encumbrance  of the ownership  interests or assets of
any of its direct or indirect  subsidiaries  other than Newco and Newco's direct
or indirect subsidiaries (an "Upstream Transfer"), and that no Upstream Transfer
shall give rise to or be subject to any rights or approval requirements that are
applicable to a direct  transfer of the membership  interests or assets of Newco
under this Agreement or any other Transaction Document.

         11.3  Expenses.   Except  as  set  forth  in  the  following  sentence,
regardless of whether the transactions contemplated hereby are consummated, each
party  hereto  shall  pay  all of  its  costs  and  expenses  incurred  by it in
connection  with this  Agreement,  including the fees and  disbursements  of its
legal counsel and accountants.  Notwithstanding  the foregoing,  up to $6,500 of
the costs and expenses  incurred by Prime that are associated  specifically with
the formation and documentation of Newco,  including legal fees and expenses for
drafting the Organizational  Documents,  shall be paid or reimbursed to Prime by
Newco.

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

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

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

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

PC:                                 New York Eye Specialists
                                    16 East 53rd Street, 5th Floor
                                    New York, New York  10022
                                    Attn:  Ken Moadel, M.D.
                            Facsimile: (212) 752-4730

Moadel:                    Ken Moadel, M.D.
                                    New York Eye Specialists
                                    16 East 53rd Street, 5th Floor
                                    New York, New York  10022
                            Facsimile: (212) 752-4730

with a copy to:                     Mr. Timothy Kahler
                                    Parker Chapin, LLP
                                    The Chrysler Building
                                    405 Lexington Avenue, 8th Floor
                                    New York, NY 10174
                            Facsimile: (212) 704-6288

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

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

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

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

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

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

         11.12 Arbitration.  Any controversy  between the parties regarding this
Agreement  or any other  Transaction  Document,  any claims  arising  out of any
breach or alleged breach of this Agreement or any other Transaction Document and
any claims arising out of the relationship between the parties created hereunder
shall be  submitted  to binding  arbitration  by all  parties  involved.  In any
arbitration  proceeding  pursuant to this Section,  the prevailing party in such
proceeding shall be entitled to recover its costs and reasonable attorneys' fees
in addition to any other relief granted.  The arbitration  proceedings  shall be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration  Association (subject to the express provisions of this
Section).  The  arbitration  shall  be  conducted  in  Austin,  Texas,  but  the
arbitrator  shall  not have the right to award  punitive  or  exemplary  damages
against either party.

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

                            [Signature page follows]

<PAGE>

                                       S-2

                                SIGNATURE PAGE TO

                             CONTRIBUTION AGREEMENT

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

PMSI:                        Prime Medical Services, Inc.

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

                             Teena Belcik, Treasurer

Prime:                       Prime RVC, Inc.

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

                             Teena Belcik, Treasurer

Moadel:                      _______________________________________________

                             Ken Moadel, M.D.

PC:                          Ken Moadel,M.D.,P.C. d/b/a New York Eye Specialists

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

                             Ken Moadel, M.D., President

Newco:                       New York Laser Management, L.L.C.

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

                             Ken Moadel, M.D., as manager and as member

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

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

                                CONSENT OF SPOUSE

                  The undersigned spouse of Ken Moadel, M.D. acknowledges on her
             own behalf that: I have read the foregoing Agreement and I know its
             contents.  I am aware that by its provisions PC and my spouse grant
             Newco certain assets that may include community property,  and that
             this Agreement  further  restricts my ability to later transfer any
             community  property  interest  I may have in such  assets  or in my
             spouse's  ownership  interest  in  PC.  I  hereby  approve  of  the
             provisions  of the  Agreement,  including  the  contribution  of my
             community property  interest,  if any, in the assets contributed to
             Newco by PC and my spouse, upon the terms and conditions  described
             herein,  and I further agree that any ownership  interest in Newco,
             or any community  property interest I may have therein,  is subject
             to the provisions of Newco's Limited  Liability  Company  Agreement
             restricting transfer thereof. I agree that I will take no action at
             any time to hinder  operation of this Agreement or Newco's  Limited
             Liability Company Agreement with respect to any ownership  interest
             in Newco, or any interest therein.

                                     Signature:  ___________________________

                                     Printed Name:  ________________________

<PAGE>

043838.0000  AUSTIN  176405 v4

                                    EXHIBITS

Exhibit A                  Office and Equipment Use Agreement
Exhibit B                  Limited Liability Company Agreement For Newco
Exhibit C                  Financial Statements
Exhibit D                  Credit Documents

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