PRIME MEDICAL SERVICES INC /TX/
EX 10.164 MANAGEMENT AGREEMENT- TEXAS VIII
<DOCUMENT>
<TYPE>EX-10.164
<SEQUENCE>77
<FILENAME>0077.txt
<DESCRIPTION>EX 10.164 MANAGEMENT AGREEMENT- TEXAS VIII
<TEXT>



                              MANAGEMENT AGREEMENT

         THIS MANAGEMENT AGREEMENT (this "Agreement"),  is made and entered into
this the 13th day of October,  2000,  by and between Texas  Lithotripsy  Limited
Partnership  VIII, a limited  partnership  formed under the laws of the State of
Texas (the "Partnership"), and Lithotripters, Inc., a North Carolina corporation
(the "Management Agent'").

                                                W I T N E S S E T H :
                                                --------------------


         WHEREAS, the Partnership is in the business of owning and operating one
or more mobile  extracorporeal  shock-wave  lithotripters  for the  treatment of
kidney stones (the "Lithotripsy Systems") at various locations in Harris County,
Texas and the surrounding counties (the "Service Area"); and

         WHEREAS,  the Partnership  desires to engage the Management  Agent upon
the terms and conditions  hereinafter set forth, to supervise and coordinate the
management and administration of the day-to-day  operations of the Partnership's
Lithotripsy  Systems,  and the Management Agent desires and is willing to accept
such engagement upon such terms and conditions.

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
herein contained, the Partnership and the Management Agent agree as follows:

1. Engagement. The Partnership hereby engages the Management Agent to coordinate
and supervise the management and administration of the day-to-day  operations of
the  Lithotripsy  Systems during the term hereof.  The  Management  Agent hereby
accepts the engagement  offered by the Partnership for and in  consideration  of
the  compensation  hereinafter  provided,  and agrees to use its best efforts in
coordinating and supervising the management and administration of the day-to-day
operations of the Lithotripsy Systems.

2. Term.  The initial term of this  Agreement  shall be for a period of five (5)
years beginning on the date hereof. Thereafter, the term of this Agreement shall
be extended automatically,  without any further action by the Partnership or the
Management  Agent,  for three (3) successive  five-year  terms.  If either party
desires  to  terminate  this  Agreement  at the end of the  initial  term or any
succeeding  five-year  term, such party shall give written notice of such desire
to the other  party at least  sixty  (60) days  prior to the  expiration  of the
initial term or any succeeding  five-year term, and after such notice and at the
expiration of the then existing term,  this Agreement shall become of no further
force or  effect  whatsoever,  and each of the  parties  shall be  relieved  and
discharged therefrom.

3. Compilation of Partnership Data. The Partnership hereby agrees to provide any
and all patient data concerning the Partnership's  Lithotripsy Systems treatment
services  (the  "Partnership  Data") to the  Management  Agent and grants to the
Management  Agent the right to compile the Partnership Data for the creation and
maintenance  of an outcome  analysis  program  database  (the  "Database").  The
Management  Agent  covenants  that  the  Partnership  Data  will be used for the
creation  of the  Database  and that  such use  will be in  compliance  with all
applicable   state  laws  and   regulations,   including   those   relating   to
physician-patient  confidentiality.  As a part of the services to be rendered by
the Management  Agent  hereunder,  the Management Agent will use the Database to
provide  outcome  analysis  reports  to the  Partnership  solely  for use by the
Partnership  in  maintaining  and improving its quality of care to its patients.
The  Partnership  shall have no  ownership  interest in the Database and may not
disclose any  information  or data  contained in the Database to any third party
except for the express purpose of treatment of patients of the Partnership.

4.                         Specific Management Duties.
                           --------------------------

         (a) The Management  Agent shall  perform,  or shall contract with third
parties (including Affiliates) for the performance of the following services:

(i)  Coordinating, the marketing and advertising of the Lithotripsy Systems.

(ii)     Managing billing and collection  services for the Lithotripsy  Systems'
         operations.  The fees  charged to  patients  for  different  urological
         services  provided by the  Lithotripsy  Systems shall be established by
         the mutual  agreement of the Partnership and the Management  Agent. The
         Management Agent will not bill the professional urological component of
         the  services  provided  by the  Partnership  as the  same  will be the
         responsibility of each treating urologist.

(iii)    Engaging all nonphysician  personnel  reasonably necessary to staff and
         operate the Lithotripsy Systems, including without limitation, drivers,
         technicians,   nurses,  physicians'  assistants,   secretaries,  office
         managers  and  receptionists.  It is  understood  and  agreed  that the
         Partnership shall pay the wages or other compensation of such personnel
         and that the Management Agent shall in no way be liable to such persons
         for their wages or other compensation, nor to the Partnership or others
         for any action or omission on the part of such persons.

(iv)     Making or causing to be made all  repairs,  replacements,  alterations,
         additions  and  improvements  to the  equipment  comprising  or used in
         connection with the Lithotripsy Systems.

(v)      Purchasing or causing to be purchased all equipment, medical and office
         supplies  necessary for the efficient  maintenance and operation of the
         Lithotripsy Systems.

(vi)     Making  all  contracts  for  electricity,   gas,  fuel,  steam,  water,
         telephone,  rubbish removal,  laundry  service,  and other utilities or
         services as are necessary for the efficient  maintenance  and operation
         of the Lithotripsy Systems.

(vii)Supervising and coordinating any necessary  training of physicians who will
     use the Lithotripsy Systems.

(viii)   Consulting  with and advising the  Partnership,  through the Management
         Agent's  physician  personnel,  regarding  all  medical  aspects of the
         Partnership's practice.

(ix) Monitoring the progress in  technological  developments  in lithotripsy and
     advising the Partnership regarding the nature of these developments.

(x)  Arranging for the continuing education of the physicians trained to use the
     Lithotripsy Systems regarding the latest developments in lithotripsy.

(xi)     Supervising  the  management  of  the  day-to-day   operations  of  the
         Lithotripsy  Systems through the engagement by the Management  Agent of
         one or more local physician  medical directors as provided in Section 8
         herein.

(xii)    Determining  the  travel  and  location  itinerary  of the  Lithotripsy
         Systems in the Service Area, and  coordinating  and  communicating  the
         same  with  the  physicians   responsible  for  providing  professional
         urological services for the Partnership.

(xiii) Providing the scheduling of patients for treatment  with the  Lithotripsy
     Systems.

(xiv)    Administering  any usage agreement  between the Partnership and a third
         party with aspect to such party's operation of the Lithotripsy Systems.

(xv)     Creating  and  maintaining  an outcome  analysis  program  and  quality
         assurance  program,  including  without  limitation,  the  creation and
         maintenance of the Database referenced in Section 2, for monitoring and
         improving the efficacy of the Lithotripsy Systems treatment services.

         (b) It is specifically  understood and agreed that the Management Agent
may  contract  with  one or  more  hospitals  and  surgical  centers  where  the
Lithotripsy  Systems  will be  located,  or any  other  third  party  (including
Affiliates),  for the direct  provision  of the services as provided in Sections
4(a)(i),  (ii),  (iii),  (iv),  (v),  (vi) and (xiii) above.  In such case,  all
personnel  necessary  to provide such  services  will remain the  employees  and
responsibility  of such  third  party.  Compensation  payable  to third  parties
providing  services to the Partnership  shall be the sole  responsibility of the
Partnership,  and the amount of such  compensation  and terms of such employment
shall be determined in the sole discretion of the Partnership.

5.                         Fiscal Responsibilities.
                           -----------------------

         (a) All monies  furnished by the Partnership as working capital and all
Lithotripsy  Systems revenues  received by the Management Agent for or on behalf
of the  Partnership  shall be  accounted  for  separately.  Such funds  shall be
disbursed by the Management  Agent in such amounts and at such times as the same
are  required to pay for  obligations,  liabilities,  costs,  expenses  and fees
(including,  without  limitation,  the  compensation of the Management  Agent as
hereinafter  provided) arising on account of or in connection with the operation
and management of the Lithotripsy  Systems.  The Management Agent shall remit to
the Partnership  upon submission of the monthly  statement  described in Section
5(b) below,  the difference  between (i) the  Lithotripsy  Systems  revenues and
other monies  received by the Management  Agent,  and (ii) the expenses paid and
disbursements  made by the Management  Agent,  after deduction of the payment to
the Management Agent of the compensation for its services hereunder.

         (b) The Management  Agent shall maintain  complete books and records of
the  management  and operation of the  Lithotripsy  Systems in  accordance  with
generally accepted  accounting  principles,  which books of account shall at all
times be open to the  inspection  of the  Partnership  or any of its partners or
duly  authorized  agents.  The  Partnership  shall  have the  right to audit the
Management  Agent's  books and records  for any period  during  normal  business
hours. In the event that any such audit discloses that the Management  Agent has
not  reported  the  full  amount  payable  to  the  Partnership  hereunder,  the
Management  Agent shall promptly pay the  deficiency  and the  Management  Agent
shall reimburse the Partnership for the entire cost of the audit. The Management
Agent shall  render to the  Partnership  a monthly  statement  of  receipts  and
disbursements, such statements to be furnished on or before the thirtieth day of
each month for the preceding  month.  The Management Agent may contract with any
third  party,  including  Affiliates,  as  provided in Section  4(b)  above,  to
maintain  the books and records of the  Lithotripsy  Systems as provided in this
Section 5(b).

         (c) Except as otherwise  provided herein, the Partnership shall pay all
obligations,   liabilities,  costs  (including  without  limitation,   overhead,
personnel  costs and  regional  director  fees),  expenses  and fees  arising on
account  of  or  in  connection   with  the  operation  and  management  of  the
Partnership's Lithotripsy Systems.

         (d) The Management  Agent is the management  agent for various  medical
services partnerships.  As a consequence, many employees of the Management Agent
and its Affiliates provide various  management and  administrative  services for
numerous partnerships,  including the Partnership. In order to properly allocate
the costs of the Management Agent's and its Affiliates'  employees among all the
partnerships  (including the Partnership) for which they provide services,  such
costs will be divided among all the partnerships  based upon the relative number
of patients treated by each partnership.

         (e) The Partnership  shall reimburse the Management  Agent promptly for
any monies  which the  Management  Agent may elect to advance for the account of
the  Partnership.  Nothing  herein  contained,  however,  shall be  construed to
obligate the Management Agent to make any such advances.

6.  Independent  Contractor.   In  the  performance  of  its  work,  duties  and
obligations,  it is mutually  understood and agreed that the Management Agent is
at all times acting and performing as an independent contractor. The Partnership
shall  neither have nor  exercise  any control or direction  over the methods by
which the Management  Agent or its  employees,  if any, shall perform their work
and functions.  The sole interest and  responsibility  of the  Partnership is to
assure that the services  covered  under this  Agreement  shall be performed and
rendered in a competent,  efficient  and  satisfactory  manner.  Nothing  herein
contained  shall be  construed  to limit the  Management  Agent  from  providing
similar services to other partnerships as long as the provision of such services
does not infringe upon its ability to perform its duties under this Agreement.

7.                         Management Fee.
                           --------------

         (a) The Partnership covenants and agrees to pay to the Management Agent
for its  services  hereunder a monthly fee equal to 7.0% of the  Adjusted  Gross
Revenues (as defined  below) per month (the  "Management  Fee").  It is intended
that the Management Agent's only compensation for its services rendered pursuant
to this Agreement shall be the Management Fee and the  reimbursement of expenses
incurred by the Management Agent as provided in Section 5(e) above. For purposes
of  this  Agreement,   the  Partnership's  "Adjusted  Gross  Revenues"  for  the
applicable  period shall be all gross  receipts from any source for such period,
other than from Partnership loans, the refinancing,  sale,  exchange casualty or
other disposition of the Partnership's  assets and capital  contributions,  less
adjustments for contractual reimbursements and bad debts.

         (b) The  Management  Fee for any given month shall be paid on or before
the 30th day of the next  succeeding  month and shall  begin to accrue as of the
date hereof.

     8. Medical  Directors.  The  Management  Agent may engage one or more local
medical  directors to coordinate and supervise the local medical  management and
administration of the Mobile Lithotripsy  Systems.  The Partnership will pay and
be solely liable for the payment of the compensation to be received by the local
medical director(s).

     9. Assignment.  Except as expressly  provided herein,  the Management Agent
may not assign this  Agreement  nor any of its duties or  obligations  hereunder
without the prior written consent of the Partnership.  Subject to the foregoing,
this  Agreement  shall be  binding  upon,  and  inure  to the  benefit  of,  the
successors in interest and permitted assignees of the parties hereto.

10.  Entire  Agreement.  This  Agreement  contains  the entire  agreement of the
parties relating to the subject matter hereof,  and the parties hereto have made
no agreements,  representations or warranties  relating to the subject matter of
this Agreement  which are not set forth herein.  No amendment or modification of
this  Agreement  shall be valid unless made in writing and signed by the parties
hereto.  No term or  condition  of this  Agreement  shall be deemed to have been
waived except by written instrument of the party charged with such waiver.

     11.  Governing  Law.  This  Agreement  shall be  construed  and enforced in
accordance with the laws of the State of Texas.

     12. Notices. Any notice to be sent hereunder shall be either hand delivered
or  sent  by  registered  mail,  return  receipt  requested,  addressed  to  the
appropriate party at:

                  To the Partnership:                Texas Lithotripsy Limited
                                                       Partnership VIII
                                                     c/o Lithotripters, Inc.
                                                     1301 Capital of Texas
                                                      Highway, Suite C-300
                                                     Austin, Texas 78746
                                                     Attention: David Vela, M.D.

                  To the Management Agent:  Lithotripters, Inc.
                                                     1301 Capital of Texas
                                                      Highway, Suite C-300
                                                     Austin, Texas 78746
                                                     Attention:  David Vela M.D.

     13. Counterparts.  This Agreement may be executed  simultaneously in one or
more counterparts,  each of which shall be deemed to be an original,  but all of
which together constitute one and the same instrument.


               [Remainder of this page intentionally left blank.]


<PAGE>


                  IN WITNESS WHEREOF, this Agreement has been executed on behalf
of the  Partnership  and the  Management  Agent on the day and year first  above
written.

                               PARTNERSHIP:
                               -----------

                               TEXAS LITHOTRIPSY LIMITED PARTNERSHIP VIII

                                 By:      Lithotripters, Inc.,
                                          a North Carolina corporation and the
                                          General Partner of the Partnership

                                 By:
                                          Joseph Jenkins, M.D.
                                          President

                                            MANAGEMENT AGENT

                                            LITHOTRIPTERS, INC.,
                                            a North Carolina corporation

                                 By:
                                          Joseph Jenkins, M.D.
                                          President

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