AMENDED AND RESTATED SERVICE AGREEMENT

 CONFIDENTIAL TREATMENT REQUESTED

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                     AMENDED AND RESTATED SERVICE AGREEMENT

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                          PROMEDCO OF LAKE -WORTH, INC.

                                       AND

                          TARRANT FAMILY PRACTICE, P.A.

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                             Effective June 1, 1996

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                                Table of Contents

1.  RESPONSIBILITIES OF THE PARTIES.................................1
         1.1  General Responsibilities of the Parties...............1
         1.2  Tarrant's Matters.....................................2
         1.3  Patient Referrals.....................................2

2.  POLICY COUNCIL...................................................2
         2.1  Formation and Operation of the Policy Council.........2
         2.2  Duties and Responsibilities of the Policy Council.......2

3.  OBLIGATIONS OF PROMEDCO-LW........................................4
         3.1  Management and Administration..........................4
         3.3  Expansion of Clinic..................................8
         3.4  Events Excusing Performance..............................8
         3.5  Compliance With Applicable Laws........................8

4.  REPRESENTATIONS OF TARRANT........................................8

5.  OBLIGATIONS OF TARRANT............................................9
         5.1  Professional Services..................................9
         5.2  Employment Of Physician Employees.......................9
         5.3  NonClinic Expenses......................................9
         5.4  Medical Practice........................................9
         5.5  Professional Insurance Eligibility......................9
         5.6  Employment Of Non-Physician Employees...................9
         5.7  Events Excusing Performance.............................10
         5.8  Compliance With Applicable Laws.........................10
         5.9  Restrictions on Use of Clinic Facility..................10
         5.10  Tarrant Employee Benefit Plans..........................10
         5.11  Physician Powers of Attorney............................11
         5.12  Spokesperson............................................11

6.  RECORDS...........................................................11
         6.1  Patient Records.........................................11
         6.2  Other Records..........................................11
         6.3  Access to Records.......................................11

7.  FACILITIES TO BE PROVIDED BY PROMEDCO-LW..........................11
         7.1  Facilities..............................................11
         7.2  Use of Facilities......................................12

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8.  FINANCIAL ARRANGEMENTS....................................................12

8.1  Payments to Tarrant and ProMedCo-LW....................................12
         8.2  Distribution....................................................12
         8.3  Clinic Expenses.................................................12
         8.4  Accounts Receivables............................................12

9.  INSURANCE AND INDEMNITY...................................................13
         9.1  Insurance to Be Maintained by ProMedCo-LW.......................13
         9.2  Insurance to be Maintained by Tarrant...........................13
         9.3  Tail Insurance Coverage.........................................13
         9.4  Additional Insured.............................................14
         9.5  Indemnification................................................14

10.   RESTRICTIVE COVENANTS AND LIQUIDATED DAMAGES...........................14
         10.1  Restrictive Covenants by Tarrant..............................14
         10.2  Restrictive Covenants By Current Physician Shareholders 
                  and Physician Employees...................................14
         10.3  Restrictive Covenants By Future Physician Employees............15
         10.4  Physician Shareholder and Physician Employee Liquidated Damages15
         10.5  Enforcement....................................................16
         10.6  Termination of Restrictive Covenants...........................16

11.  TERM.....................................................................17
         11.1  Term and Renewal...............................................17
         11.2  Termination by Tarrant.........................................17
         11.3  Termination by ProMedCo-LW....................................17
         11.4  Actions After Termination......................................18

12.  DEFINITIONS............................................................19
         12.1  Clinic .......................................................19
         12.2  Clinic Expenses ...............................................20
         12.3  Clinic Expenses shall not include..............................20
         12.4  Clinic Facility ...............................................21
         12.5  Distribution Funds ............................................21
         12.6  Effective Date ................................................21
         12.7  IPO............................................................21
         12.8  Net Clinic Revenues ...........................................21
         12.9  Opening Balance Sheet .........................................21
         12.10  Physician Employees .........................................22
         12.11  Physician Extenders ..........................................22
         12.12  Physician Shareholders ......................................22

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         12.13  ProMedCo-LW Distribution .....................................22
         12.14  Risk Pool Surpluses ..........................................22
         12.15  Tarrant Employees ............................................22
         12.16  Technical Employees ..........................................22

13.  GENERAL PROVISIONS.......................................................22
         13.1  Independent Contractor.........................................22
         13.2  Other Contractual Arrangement..................................23
         13.3  Proprietary Property...........................................24
         13.4  Cooperation....................................................24
         13.5  Licenses, Permits and Certificates............................24
         13.6  Compliance with Rules, Regulations and Laws....................24
         13.7  Generally Accepted Accounting Principles (GAAP)................25
         13.8  Notices........................................................25
         13.9  Attorneys' Fees................................................25
         13.10  Severability..................................................25
         13.11  Alternative Dispute Resolution................................25
         13.12  Construction of Agreement.....................................25
         13.13  Assignment and Delegation.....................................26
         13.14  Confidentiality...............................................26
         13.15  Waiver........................................................26
         13.16  Headings.....................................................26
         13.17  No Third Party Beneficiaries..................................26
         13.18  Time is of the Essence........................................26
         13.19  Modifications of Agreement for Prospective Legal Events.......26
         13.20  Whole Agreement...............................................27

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                     AMENDED AND RESTATED SERVICE AGREEMENT

         AMENDED AND  RESTATED  SERVICE  AGREEMENT  dated June 24, 1996  between
ProMedCo of Lake Worth,  Inc. a Texas corporation  ("ProMedCo-LW"),  and Tarrant
Family  Practice,  P.A.,  an  association  of  physicians  licensed  to practice
medicine in the State of Texas ("Tarrant").

RECITALS:

         Tarrant  and   HealthFirst   Services,   Inc.,   a  Texas   corporation
("HealthFirst") entered into a Management Services Agreement dated March 1, 1995
(the "Service  Agreement").  Pursuant to an Asset Purchase Agreement dated as of
May  29,  1996  (the  "Asset  Purchase   Agreement")   between  HealthFirst  and
ProMedCo-LW, HealthFirst assigned to ProMedCo-LW all of HealthFirst's rights and
obligations under the Service  Agreement.  ProMedCo-LW and Tarrant now desire to
amend and restate the Service Agreement as set forth herein.

         The parties agree as follows:

         The  Service  Agreement  is  hereby  amended  and  restated  to read as
follows:

                               "SERVICE AGREEMENT

         Service Agreement  ("Agreement")  dated June 24, 1996, between ProMedCo
of Lake Worth,  Inc., a Texas  corporation  ("ProMedCo-LW")  and Tarrant  Family
Practice,  P.A., an association of physicians  licensed to practice  medicine in
the State of Texas ("Tarrant").

RECITALS:

         Subject to the terms and conditions  hereof,  Tarrant desires to engage
ProMedCo-LW to provide to Tarrant management  services,  facilities,  personnel,
equipment and supplies  necessary to operate the Clinic (as defined  herein) and
ProMedCo-LW desires to accept such engagement.

         The parties agree as follows:

1.  RESPONSIBILITIES OF THE PARTIES

         1.1 General Responsibilities of the Parties.  ProMedCo-LW shall provide
Tarrant with offices, facilities, equipment, supplies,  non-professional support
personnel,  and management  and financial  advisory  services.  Tarrant shall be
responsible for the recruitment  and hiring of physicians,  physician  extenders
and all issues related to patient care and  documentation  thereof.  ProMedCo-LW
shall neither  exercise  control over nor interfere  with the  physician-patient
relationship,  which shall be  maintained  strictly  between the  physicians  of
Tarrant and their patients.

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         1.2 Tarrant's  Matters.  Tarrant shall  maintain  sole  discretion  and
authority over the financial  matters  relative to its corporate  existence.  It
shall set  compensation  levels  for  Tarrant  Employees.  Tarrant  will also be
responsible for all other matters pertaining to the operation of Tarrant.

         1.3 Patient  Referrals.  The parties agree that the benefits to Tarrant
do not require,  are not payment for, and are not in any way contingent upon the
admission,  referral or any other  arrangement  for the provision of any item or
service  offered by ProMedCo-LW to any of Tarrant's  patients in any facility or
laboratory controlled, managed or operated by ProMedCo-LW.

2.  POLICY COUNCIL

         2.1  Formation and Operation of the Policy  Council.  A Policy  Council
will be established which shall be responsible for the major policies which will
serve as the basis for  operations  of the  Clinic.  The  Policy  Council  shall
consist of four members.  ProMedCo-LW  shall designate,  at its sole discretion,
two members of the Policy Council.  Members of the Policy Council  designated by
ProMedCo-LW shall be entitled to attend and vote by proxy at any meetings of the
Policy Council so long as at least one such representative is present in person.
Tarrant  at its sole  discretion  shall  designate  two  members.  Except as may
otherwise  be  provided,  the act of a  majority  of the  members  of the Policy
Council shall be the act of the Policy Council.

         2.2 Duties and Responsibilities of the Policy Council.  During the term
of this  Agreement,  the  Policy  Council  shall have the  following  duties and
responsibilities.

         (a)      Annual  Budgets.  All annual  capital  and  operating  budgets
                  prepared  by  ProMedCo-  LW,  as set  forth in  Section  3 and
                  employing ProMedCo-LW's financial expertise,  shall be subject
                  to the review and  approval of the Policy  Council,  provided;
                  however,  ProMedCo-LW shall have final approval of any capital
                  expenditure required by ProMedCo-LW.

     (b)  Administrator.  The  selection  and  retention  of  the  Administrator
pursuant  to  Section  3.1 shall be subject to the  reasonable  approval  of the
Policy  Council.  If Tarrant is dissatisfied  with the services  provided by the
Administrator, Tarrant shall refer the matter to the Policy Council. ProMedCo-LW
and Policy Council shall in good faith determine  whether the performance of the
Administrator  could  be  brought  to  acceptable  levels  through  counsel  and
assistance, or whether the Administrator should be terminated. ProMedCo-LW shall
have the ultimate authority to terminate the Administrator.

     (c) Advertising. All advertising,  marketing, and public relations shall be
subject to the prior review and approval of the Policy  Council,  in  compliance
with applicable laws and regulations governing  professional  advertising and in
accordance with the standards and

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     medical ethics of the American  Medical  Association  and the Texas Medical
Association.

     (d) Ancillary  Services.  The Policy Council shall approve Clinic  provided
ancillary  services  based  upon the  pricing,  access  to and  quality  of such
services.

         (e)      Capital  Improvements and Expansion.  The Policy Council shall
                  determine the priority for any renovation, expansion plans and
                  major equipment  expenditures with respect to the Clinic based
                  upon economic feasibility, physician support, productivity and
                  market  conditions.  Any  capital  expenditure  in  excess  of
                  $10,000 shall require the approval of the Policy Council.

     (f) Exceptions to Inclusion in the Net Revenue  Calculation.  The exclusion
of any revenue from Net Clinic Revenues,  whether now or in the future, shall be
subject to the approval of the Policy Council.

         (g)      Grievance Issues.  Subject to the provisions of Section 1.2 of
                  this  Agreement,  the Policy  Council shall  consider and make
                  final decisions regarding grievances pertaining to matters not
                  specifically  addressed in this Agreement as referred to it by
                  Tarrant's Board or ProMedCo-LW.

     (h) Patient Fees. In consultation with Tarrant and ProMedCo-LW,  the Policy
Council  shall review and adopt the fee schedule for all physician and ancillary
services rendered by the Clinic.

         (i)      Physician  Hiring.  The Policy Council,  with  information and
                  analysis  provided by ProMedCo-LW,  shall determine the number
                  and type of physicians required for the efficient operation of
                  the  Clinic  and  Tarrant  shall   determine  the   individual
                  physicians to be hired to fill such positions. The approval of
                  ProMedCo-LW  shall  be  required  for  any  variations  to the
                  restrictive covenants in any physician employment contract.

     (j) Provider and Payor  Relationships.  The Policy  Council  shall make the
decisions  regarding the  establishment  and maintenance of  relationships  with
institutional  health care  providers  and payors.  The Policy  Council shall be
responsible  for approving the  allocation of capitation  risk pools between the
professional  and  institutional   components  of  these  pools  to  the  extent
applicable under a payor agreement.  ProMedCo-LW and Tarrant shall use actuarial
data from a nationally  recognized  actuarial firm as agreed to by both parties,
for the purposes of allocating capitation funds, for those professional services
provided directly by Tarrant.

     (k)  Strategic  Planning.  The  Policy  Council,  with  the  assistance  of
ProMedCo-LW, shall develop long-term strategic planning objectives.

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3.  OBLIGATIONS OF PROMEDCO-LW

         During the term of this Agreement, ProMedCo-LW shall provide or arrange
for the  services set forth in this Section 3, the cost of all of which shall be
included in Clinic  Expenses.  ProMedCo-LW  is hereby  expressly  authorized  to
perform its  services in whatever  manner it deems  reasonably  appropriate,  in
accordance with policies  approved by the Policy Council,  and including without
limitation,  performance  of some  functions at locations  other than the Clinic
Facility.  Tarrant will not act in a manner which would prevent ProMedCo-LW from
efficiently  managing the Clinic Facility  operations in a businesslike  manner.
Tarrant,   through  Tarrant  Employees,   will  provide  all  medical  services.
ProMedCo-LW will have no authority, directly or indirectly, to perform, and will
not perform, any medical function.  ProMedCo-LW may, however,  advise Tarrant as
to the relationship between its performance of medical functions and the overall
administrative and business functioning of the Clinic.

         3.1 Management and  Administration.  During the term of this Agreement,
Tarrant  hereby  appoints  ProMedCo-LW  as the sole and  exclusive  manager  and
administrator  of all  non-medical  functions and services  related to Tarrant's
services  at the  Clinic.  Tarrant  shall  perform  all  medical  services,  and
ProMedCo-LW  shall have no authority,  directly or indirectly,  to perform,  and
will not perform,  any medical function.  Without limiting the generality of the
foregoing,  ProMedCo-LW shall provide the following  administrative,  management
and marketing services as may be required in conjunction with Tarrant's services
at the Clinic. ProMedCo-LW shall hire and supervise an Administrator, subject to
the reasonable  approval of the Policy Council,  to manage and administer all of
the day-to-day business functions of ProMedCo-LW, including without limitation:

                  3.1.1 Annual  Budgets.  Financial  planning and preparation of
         annual budgets. Annually and at least 30 days prior to the commencement
         of each fiscal year,  ProMedCo-LW  shall prepare and deliver to Tarrant
         capital  and  operating   budgets   reflecting  in  reasonable   detail
         anticipated  revenues  and  expenses,  sources  and uses of  capital to
         maintain and enhance Tarrant's medical practice and Clinic services.

                  3.1.2 Financial Statements.  ProMedCo-LW shall prepare monthly
         and fiscal year  unaudited  financial  statements  containing a balance
         sheet and a statement of income for Clinic  operations,  which shall be
         delivered  to Tarrant  within  thirty (30) days after the close of each
         calendar  month.  The fiscal  year  statement  shall be  reviewed  by a
         certified  public  accountant as selected by  ProMedCo-LW in connection
         with the audit of the  financial  statements  of  ProMedCo.  If Tarrant
         desires an audit in addition to the audit provided by ProMedCo-LW, such
         an audit would be at Tarrant's expense.

     3.1.3  Non-Physician  Personnel.  ProMedCo-LW  will  provide all  personnel
reasonably  necessary for the conduct of Clinic operations with the exception of
Physician  Extenders and Technical  Employees.  ProMedCo-LW  shall determine and
cause to be paid the

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         salaries,  fringe benefits and any sums for income taxes,  unemployment
         insurance,  social  security  taxes or any  other  withholding  amounts
         required  by  applicable  law or  governmental  authority,  of all such
         personnel. Such personnel shall be under the direction, supervision and
         control of ProMedCo-LW,  with those personnel  performing  patient care
         services subject to the professional supervision of Tarrant. If Tarrant
         is dissatisfied with the services of any person,  Tarrant shall consult
         with ProMedCo-LW. ProMedCo-LW shall in good faith determine whether the
         performance  of that  employee  could be brought to  acceptable  levels
         through  counsel and  assistance,  or whether such  employee  should be
         terminated.  All of ProMedCo-LW's  obligations regarding staff shall be
         governed by the overriding principle and goal of providing high quality
         medical care. At ProMedCo-LW's  option some or all of the non-physician
         personnel may be carried on the books of Tarrant as Tarrant's employees
         in which  event the costs  associated  with  such  employees  will be a
         Clinic Expense.

                  3.1.4 Quality  Assurance.  ProMedCo-LW  will assist Tarrant in
         fulfilling  its  obligation  to its  patients to maintain  high quality
         medical  and  professional  services,  including  patient  satisfaction
         programs,  employee  education,  outcomes  analysis,  clinical protocol
         development and to implement a risk management program.

                  3.1.5  Facilities and Equipment.  ProMedCo-LW  will ensure the
         proper cleanliness of the premises,  maintenance and cleanliness of the
         equipment, furniture and furnishings located on the premises.

                  3.1.6 Inventory Control and Purchasing  Supplies.  ProMedCo-LW
         shall  order  and  purchase  inventory  and  supplies,  and such  other
         ordinary,  necessary or appropriate  materials which  ProMedCo-LW shall
         deem to be necessary in the operation of the Clinic, to deliver quality
         Clinic services in a cost effective manner.

                  3.1.7   Managed   Care   Contracting.   ProMedCo-LW   will  be
         responsible for marketing,  negotiation,  and administering all managed
         care contracts,  subject to the provisions of Section 2.2(j); provided,
         however, no contract or arrangement regarding the provision of clinical
         services shall be entered into without Tarrant's consent.

                  3.1.8 Billing and Collections. ProMedCo-LW shall bill patients
         and  collect  all fees for  services  performed  inside or outside  the
         Clinic  Facility or arrange for such  billing and  collection.  Tarrant
         hereby appoints  ProMedCo-LW,  for the term hereof,  to be its true and
         lawful attorney-in-fact for the following purposes (i) to bill patients
         in  Tarrant's  name  and  on  its  behalf,  (ii)  to  collect  accounts
         receivable  resulting  from such billing in  Tarrant's  name and on its
         behalf,  (iii) to receive  payments  from Blue  Cross and Blue  Shield,
         Medicare,  Medicaid,  payments from health  plans,  and all other third
         party  payors;  (iv) to  receive  the  cash  proceeds  of any  accounts
         receivable;  (v) to  take  possession  of and  endorse  in the  name of
         Tarrant  (and/or in the name of an individual  physician,  such payment
         intended for purpose of payment of a

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         physician's bill) any notes, checks,  money orders,  insurance payments
         and other instruments received in payment of accounts  receivable;  and
         (vi) in accordance  with  policies  adopted by the Policy  Council,  to
         initiate  legal  proceedings  in the name of  Tarrant  to  collect  any
         accounts  and  monies  owed to the  Clinic,  to  enforce  the rights of
         Tarrant as  creditors  under any  contract  or in  connection  with the
         rendering of any  service,  and to contest  adjustments  and denials by
         governmental  agencies (or its fiscal  intermediaries)  as  third-party
         payors. All adjustments made for uncollectible  accounts,  professional
         courtesies and other  activities that do not generate a collectible fee
         shall be done in a  reasonable  and  consistent  manner  acceptable  to
         ProMedCo- LW's independent certified public accountants.

                  3.1.9 Deposit of Net Clinic Revenues.  During the term of this
         Agreement,  all  Net  Clinic  Revenues  collected  resulting  from  the
         operations  of the  Clinic  shall  be  deposited  directly  into a bank
         account of which  Tarrant shall be the owner  ("Account").  ProMedCo-LW
         and Tarrant shall maintain their accounting records in such a way as to
         clearly  segregate Net Clinic  Revenues from other funds of ProMedCo-LW
         or Tarrant. Tarrant hereby appoints ProMedCo- LW as its true and lawful
         attorney-in-fact  to deposit in the  Account  all  revenues  collected.
         Tarrant  covenants,  and shall cause all Tarrant Employees to covenant,
         to forward any payments  received  with respect to Net Clinic  Revenues
         for services  provided by Tarrant and Tarrant  Employees to ProMedCo-LW
         for deposit.  ProMedCo-LW  shall have the right to withdraw  funds from
         the  Account and all owners of the  Account  shall  execute a revocable
         standing  transfer  order  ("Transfer  Order")  under  which  the  bank
         maintaining the Account shall periodically  transfer the entire balance
         of the Account to a separate bank account  owned solely by  ProMedCo-LW
         ("ProMedCo-LW  Account").  Tarrant  and  ProMedCo-LW  hereby  agree  to
         execute from time to time such documents and  instructions  as shall be
         required by the bank  maintaining  the Account and mutually agreed upon
         to  effectuate  the  foregoing  provisions  and to extend or amend such
         documents and instructions.  Any action by Tarrant that interferes with
         the  operation  of this  Section,  including,  but not  limited to, any
         failure to deposit or have ProMedCo-LW  deposit any Net Clinic Revenues
         into the  Account,  any  withdrawal  of any funds from the  Account not
         authorized by the express terms of this Agreement, or any revocation of
         or attempt to revoke the Transfer Order (otherwise than upon expiration
         or termination  of this  Agreement),  will  constitute a breach of this
         Agreement  and will  entitle  ProMedCo-LW,  in  addition  to any  other
         remedies that it may have at law or in equity,  to seek a court ordered
         assignment of the following rights:

     (a) To collect accounts receivable resulting from the provision of services
to patients of Tarrant and the Tarrant Employees;

                  (b)      To receive payments from patients,  third party payor
                           plans,  insurance companies,  Medicare,  Medicaid and
                           all other payors with respect to services rendered by
                           Tarrant and its Tarrant Employees;

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                  (c)      To take possession of and endorse any notes,  checks,
                           money  orders,   insurance  payments  and  any  other
                           instruments  received  as  payment  of such  accounts
                           receivable; and

                  (d)      To collect all revenues of the Clinic.

     3.1.10 Management Information  Systems/Computer Systems.  ProMedCo-LW shall
supervise and provide information systems that are necessary and appropriate for
the operation of the Clinic.

                  3.1.11  Legal  and  Accounting  Services.   ProMedCo-LW  shall
         arrange for or render to Tarrant such business and financial management
         consultation  and advice as may be reasonably  required or requested by
         Tarrant  and  directly   related  to  the  operations  of  the  Clinic.
         ProMedCo-LW  shall not be  responsible  for  rendering any legal or tax
         advice or  services or  personal  financial  services to Tarrant or any
         employee or agent of Tarrant.

                  3.1.12  Negotiation  and Payment of Premiums For All Insurance
         Products  Held By Tarrant.  ProMedCo-LW  shall  negotiate for and cause
         premiums  to be paid with  respect  to the  insurance  provided  for in
         Section 9. Premiums and deductibles with respect to such policies shall
         be a Clinic Expense.

                  3.1.13 Physician Recruiting.  ProMedCo-LW shall assist Tarrant
         in recruiting additional  physicians,  carrying out such administrative
         functions as may be appropriate such as advertising for and identifying
         potential candidates,  checking credentials,  and arranging interviews;
         provided,  however,  Tarrant  shall  interview  and make  the  ultimate
         decision as to the  suitability  of any physician to become  associated
         with the Clinic.  All physicians  recruited by ProMedCo-LW and accepted
         by Tarrant  shall be the sole  employees  of Tarrant to the extent such
         physicians  are  hired  as  employees.  Any  expenses  incurred  in the
         recruitment of physicians,  including,  but not limited to,  employment
         agency  fees,  relocation  and  interviewing  expenses  shall be Clinic
         Expenses approved by the Policy Council.

     3.1.14  Supervision of Ancillary  Services.  ProMedCo-LW  shall operate and
supervise such ancillary services as approved by the Policy Council.

     3.1.15 Strategic  Planning  Assistance.  ProMedCo-LW  shall assist with and
implement the strategic plan as approved by the Policy Council.

     3.1.16  Advertising  and  Public  Relations.  This  would be subject to the
review and approval of the Policy Council.

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                  3.1.17  Files and Records.  ProMedCo-LW  shall  supervise  and
         maintain  custody of all files and records relating to the operation of
         the Clinic,  including but not limited to accounting,  billing, patient
         medical records, and collection records.  Patient medical records shall
         at all times be and remain the property of Tarrant and shall be located
         at Clinic  facilities so that they are readily  accessible  for patient
         care.  The  management  of all  files and  records  shall  comply  with
         applicable  state  and  federal  statutes.  ProMedCo-LW  shall  use its
         reasonable efforts to preserve the confidentiality of patients' medical
         records and use  information  contained  in such  records  only for the
         limited  purpose  necessary to perform the  services set forth  herein,
         provided,  however, in no event shall a breach of said  confidentiality
         be deemed a default under this Agreement.

     3.2  Administrator.  The  selection  and  retention  of the  Administrator,
subject to the provisions of Section 2.2(b).

         3.3 Expansion of Clinic.  ProMedCo-LW  will pursue various  programs to
increase  revenue  and  profitability  including  assisting  Tarrant  in  adding
additional  office based  procedures,  ancillary  services and adding additional
satellite  office(s) as determined by the Policy Council to be beneficial to the
Clinic. ProMedCo-LW will also assist in recruiting new physicians and developing
relationships and affiliations with other physicians, hospitals, networks, HMOs,
etc.  To  assist  in  the  continued  growth  and  development  of  the  Clinic,
ProMedCo-LW may acquire other physician  practices.  Tarrant will cooperate with
ProMedCo-LW in such expansion  efforts and use its reasonable  efforts to assist
ProMedCo-LW  with  respect  thereto.  Without  limiting  the  generality  of the
foregoing,  Tarrant will not enter into any agreements  with respect to any such
matter without the prior consent of ProMedCo-LW.

         3.4 Events  Excusing  Performance.  ProMedCo-LW  shall not be liable to
Tarrant for failure to perform any of the services  required herein in the event
of strikes,  lock-outs,  calamities, acts of God, unavailability of supplies, or
other  events over which  ProMedCo-LW  has no control for so long as such events
continue, and for a reasonable amount of time thereafter.

     3.5 Compliance  With  Applicable  Laws.  ProMedCo-LW  shall comply with all
applicable  federal,  state and local laws,  regulations and restrictions in the
conduct of its obligations under this Agreement.

4.  REPRESENTATIONS OF TARRANT

         Tarrant has made various  representations and warranties to ProMedCo-LW
in an  Inducement  Agreement  dated as of May 29, 1996 , which are  incorporated
herein.

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                                                        -9-

5.  OBLIGATIONS OF TARRANT

         5.1 Professional Services.  Tarrant shall provide professional services
to  patients  in  compliance  at all  times  with  ethical  standards,  laws and
regulations  applying to the medical profession.  Tarrant shall also ensure that
each physician associated with Tarrant is licensed by the State of Texas. In the
event that any disciplinary actions or medical malpractice actions are initiated
against any such physician,  Tarrant shall immediately  inform the Administrator
of such action and the underlying facts and  circumstances.  Tarrant shall carry
out  a  program  to  monitor  the  quality  of  medical  care  practiced,   with
ProMedCo-LW's  assistance.  Tarrant will  cooperate  with  ProMedCo-LW in taking
steps to resolve any utilization  review or quality  assurance  issues which may
arise in connection with the Clinic.

         5.2  Employment  Of Physician  Employees.  Tarrant  shall have complete
control  of  and  responsibility  for  the  hiring,  compensation,  supervision,
evaluation  and  termination  of  its  Physician   Shareholders   and  Physician
Employees,  although at the request of Tarrant,  ProMedCo-LW  shall consult with
Tarrant regarding such matters. Tarrant shall enforce formal employee agreements
from  each of its  Physician  Shareholders  and  Physician  Employees,  hired or
contracted, substantially in the form attached hereto as Exhibit "C".

         5.3 Non-Clinic  Expenses.  Tarrant shall be solely  responsible for the
payment of all costs and expenses incurred in connection with Tarrant operations
which are not Clinic  Expenses,  including,  but not limited to,  accounting and
other  professional  services  fees,  salaries  and  benefits,  retirement  plan
contributions,  health,  disability and life insurance premiums,  payroll taxes,
membership in  professional  associations,  continuing  medical  education,  and
licensing  and  board  certification  fees  for  its  Physicians  Employees  and
Physician Extenders.

         5.4 Medical Practice.  Tarrant shall use and occupy the Clinic Facility
exclusively  for the practice of medicine,  and shall comply with all applicable
local  rules,  ordinances  and all  standards of medical  care.  It is expressly
acknowledged by the parties that the medical practice or practices  conducted at
the Clinic  Facility  shall be conducted  solely by physicians  associated  with
Tarrant,  and no other physician or medical  practitioner  shall be permitted to
use or occupy the  Clinic  Facility  without  the prior  written  consent of the
Policy Council.

         5.5 Professional Insurance Eligibility.  Tarrant shall cooperate in the
obtaining and retaining of professional liability insurance by assuring that its
Physician Shareholders and Physician Employees are insurable,  and participating
in an ongoing risk management program.

         5.6  Employment  Of  Non-Physician  Employees.  There  will be  certain
Technical  Employees  that  perform  technical  functions  for  Tarrant.   These
Technical Employees will remain in the employ of Tarrant. As provided in Section
3.1.3,  ProMedCo-LW  will provide payroll and  administrative  services for such
Technical Employees.

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         5.7  Events  Excusing  Performance.  Tarrant  shall  not be  liable  to
ProMedCo-LW  for failure to perform any of the services  required  herein in the
event  of  strikes,  lock-outs,  calamities,  acts  of  God,  unavailability  of
supplies,  or other events over which Tarrant has no control for so long as such
events continue, and for a reasonable amount of time thereafter.

     5.8  Compliance  With  Applicable  Laws.  Tarrant  shall  comply  with  all
applicable  federal,  state and local laws,  regulations and restrictions in the
conduct of its obligations under this Agreement.

         5.9 Restrictions on Use of Clinic Facility.  Tarrant shall at all times
during the term of this Agreement  comply with the policy of ProMedCo-LW  stated
in Section 7.2 herein.

         5.10  Tarrant Employee Benefit Plans.

                  (a)      As of the Effective Date of this  Agreement,  Tarrant
                           has in effect the employee  welfare benefit plans (as
                           such term is defined in Section  3(1) of the Employee
                           Retirement  Income  Security Act of 1974,  as amended
                           ("ERISA")) and the employee pension benefit plans (as
                           such term is defined in  Section  3(2) of ERISA),  as
                           set forth in Exhibit 1.6 to the Inducement  Agreement
                           dated May 29, 1996 between ProMedCo-LW and Tarrant.

     (b)  Tarrant  shall  not enter  into any new  "employee  benefit  plan" (as
defined  in  Section  3(3) of ERISA)  without  the  express  written  consent of
ProMedCo-LW.  Except as otherwise  required by law, Tarrant shall not materially
amend, freeze,  terminate or merge any employee welfare or employee benefit plan
without  the  express  written  consent of  ProMedCo-LW  unless  such  action is
contemplated  by the  Asset  Purchase  Agreement.  Tarrant  agrees  to make such
changes to any employee welfare or employee benefit plan,  including the freeze,
termination, or merger of such plan, as may be approved by ProMedCo-LW.

                  (c)      Expenses incurred in connection with any Tarrant Plan
                           or other employee benefit plan maintained by Tarrant,
                           including  without  limitation  the  compensation  of
                           counsel,  accountants,  corporate  trustees and other
                           agents shall not be included in Clinic Expenses.

                  (d)      The  contribution  and  administration  expenses  for
                           Physician  Shareholders and Physician Employees shall
                           be an  expense  of  Tarrant.  ProMedCo-LW  shall make
                           contributions or payments with respect to any Tarrant
                           Plan,  as a Clinic  Expense,  on behalf  of  eligible
                           Technical Employees.

                  (e)      ProMedCo-LW   shall  have  the  sole  and   exclusive
                           authority to adopt,  amend, or terminate any employee
                           benefit plan for the benefit of its employees.

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                           ProMedCo-LW   shall  have  the  sole  and   exclusive
                           authority  to appoint  the  trustee,  custodian,  and
                           administrator of any such plan.

         5.11  Physician  Powers of Attorney.  Tarrant shall require all Tarrant
Employees to execute and deliver to ProMedCo-LW powers of attorney, satisfactory
in form and substance to  ProMedCo-LW  and Tarrant,  appointing  ProMedCo-LW  as
attorney-in-fact  for each for the  purposes  set  forth in  Sections  3.1.8 and
3.1.9, which powers of attorney shall immediately  terminate upon termination of
this Agreement.

         5.12 Spokesperson.  Tarrant shall serve as spokesperson for ProMedCo-LW
and ProMedCo in Clinic,  ProMedCo-LW and ProMedCo  development  activities.  The
parties agree that Drs. Hardee and Morrison, or such other Physician Shareholder
as the Policy Council shall  appoint,  shall serve in this capacity on behalf of
Tarrant.

6.  RECORDS

         6.1 Patient Records. Upon termination of this Agreement,  Tarrant shall
retain all patient medical  records  maintained by Tarrant or ProMedCo-LW in the
name of Tarrant.  Tarrant shall, at its option,  be entitled to retain copies of
financial and accounting records relating to all services performed by Tarrant.

     6.2 Other Records.  All records relating in any way to the operation of the
Clinic which are not the property of Tarrant under the provisions of Section 6.1
above, shall at all times be the property of ProMedCo-LW.

         6.3  Access  to  Records.  During  the  term  of  this  Agreement,  and
thereafter,  Tarrant or its designee shall upon 24 hours notice have  reasonable
access during normal  business  hours to Tarrant's and  ProMedCo-LW's  financial
records,  including,  but not limited to, records of  collections,  expenses and
disbursements  as kept by  ProMedCo-LW in performing  ProMedCo-LW's  obligations
under this Agreement, and Tarrant may copy any or all such records.

7.  FACILITIES TO BE PROVIDED BY PROMEDCO-LW

         7.1  Facilities.  ProMedCo-LW  hereby agrees to provide or arrange as a
Clinic Expense the offices and facilities for Clinic  operations,  including but
not limited to, the Clinic  Facility and all costs of repairs,  maintenance  and
improvements,   utility  (telephone,  electric,  gas,  water)  expenses,  normal
janitorial  services,  related real or personal property lease cost payments and
expenses, taxes and insurance,  refuse disposal and all other costs and expenses
reasonable  incurred in conducting  operations in the Clinic Facility during the
term of this Agreement.

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                                                       -12-

         7.2 Use of  Facilities.  Voluntary  abortions  will not be performed in
facilities  that are owned or leased by  ProMedCo-LW or any of its affiliates in
whole or in part.  ProMedCo-LW and Tarrant agree that Tarrant, as an independent
contractor,  is a separate organization that retains the authority to direct the
medical,  professional,  and  ethical  aspects  of its  medical  practice.  If a
Physician  Shareholder or a Physician  Employee performs abortion  procedures in
any facility,  ProMedCo-LW  shall not receive any ProMedCo-LW  Distribution from
the revenue generated from such procedures.

8.  FINANCIAL ARRANGEMENTS

         8.1 Payments to Tarrant and ProMedCo-LW.  Tarrant and ProMedCo-LW agree
that  the  compensation  set  forth  herein  is  being  paid to  ProMedCo-LW  in
consideration of a substantial commitment made by ProMedCo-LW hereunder and that
such fees are fair and  reasonable.  As payment  for its  services  rendered  to
Tarrant,  each month ProMedCo-LW shall be paid the amount of all Clinic Expenses
and the  ProMedCo-LW  Distribution.  All Net Clinic  Revenues after deduction of
Clinic Expenses, and the ProMedCo-LW  Distribution,  shall be referred to as the
"Tarrant Distribution."

         8.2  Distribution.  The  amounts to be paid to  ProMedCo-LW  under this
Section  8.2 shall be payable  monthly.  ProMedCo-LW  shall pay to  Tarrant,  in
accordance with the provisions of Section 8.4, the Tarrant  Distribution amounts
on or about the 15th day of such  following  month.  Some amounts may need to be
estimated,  with  adjustments  made as necessary the following  month. Any audit
adjustments would be made after completion of the fiscal year audit.

         8.3 Clinic  Expenses.  Commencing  on the Effective  Date,  ProMedCo-LW
shall pay all Clinic Expenses as they fall due (including without limitation any
Non-Physician  Personnel  carried on the books of Tarrant at the  requirement of
ProMedCo-LW),  provided,  however,  that  ProMedCo-LW may, in the name of and on
behalf of Tarrant, contest in good faith any claimed Clinic Expenses as to which
there is any dispute regarding the nature, existence or validity of such claimed
Clinic  Expenses.  ProMedCo-LW  hereby  agrees  to  indemnify  and hold  Tarrant
harmless from and against any liability, loss, damages, claims, causes of action
and  reasonable  expenses  of Tarrant  resulting  from the contest of any Clinic
Expenses.

         8.4 Accounts Receivables. Except for the first month of this Agreement,
on  approximately  the 15th day of each month,  ProMedCo-LW  shall  purchase the
accounts  receivable of Tarrant arising during the previous month, by payment of
cash,  or  other  readily  available  funds  into an  account  of  Tarrant.  The
consideration  for  the  purchase  shall  be an  amount  equal  to  the  Tarrant
Distribution  for such  previous  month.  Although  it is the  intention  of the
parties  that  ProMedCo-LW  purchase  and thereby  become  owner of the accounts
receivable  of  Tarrant,  in case such  purchase  shall be  ineffective  for any
reason,  Tarrant,  as of the Effective Date of this Agreement,  grants and shall
cause each Tarrant Employee to grant to ProMedCo-LW a first priority lien on and
security  interest in and to any and all  interest  of Tarrant and such  Tarrant
Employees  in any  accounts  receivable  generated  by the  medical  practice of
Tarrant and the Tarrant Employees or otherwise  generated through the operations
of the

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Clinic,  and all  proceeds  with  respect  thereto,  to secure  the  payment  to
ProMedCo-LW of all such accounts receivable,  and this Agreement shall be deemed
to be a  security  agreement  to the  extent  necessary  to give  effect  to the
foregoing. In addition, Tarrant shall cooperate with ProMedCo-LW and execute and
deliver,  and cause each Tarrant Employee to execute and deliver,  all necessary
documents  in  connection  with  the  pledge  of  such  accounts  receivable  to
ProMedCo-LW or at ProMedCo-LW's  option, its lenders. All collections in respect
of such  accounts  receivable  shall be  deposited  in a bank  account at a bank
designated by ProMedCo-LW.  To the extent Tarrant or any Tarrant  Employee comes
into possession of any payments in respect of such accounts receivable,  Tarrant
or such Tarrant  Employee shall direct such payments to ProMedCo-LW  for deposit
in bank accounts designated by ProMedCo-LW.

9.  INSURANCE AND INDEMNITY

         9.1 Insurance to Be Maintained by  ProMedCo-LW.  Throughout the term of
this Agreement, ProMedCo-LW will use reasonable efforts to provide and maintain,
as a Clinic  Expense,  comprehensive  professional  liability  insurance for all
professional  employees of  ProMedCo-LW  and Tarrant  with limits as  determined
reasonable  by  ProMedCo-LW  in  its  national  program,  comprehensive  general
liability  insurance  and property  insurance  covering the Clinic  Facility and
operations.

         9.2 Insurance to be Maintained by Tarrant.  Unless otherwise determined
by the Policy  Council,  throughout the term of this  Agreement,  subject to the
provisions of Section 5.5 and Section 9.1, Tarrant shall maintain  comprehensive
professional liability insurance: (i) with limits for primary care physicians of
not less than  $500,000 per claim and with  aggregate  policy limits of not less
than $1,000,000 per physician;  and (ii) with limits for specialists of not less
than  $1,000,000  per claim and with  aggregate  policy  limits of not less than
$3,000,000  per  physician;  with a separate  limit in either case for  Tarrant;
provided however,  Tarrant may maintain lesser limits for any physician employed
by Tarrant on the date  hereof if such  limits are at least  $200,000  per claim
with  aggregate  policy limits of at least  $600,000 per such  physician  with a
separate  limit for Tarrant.  Tarrant shall be responsible  for all  liabilities
(including  without  limitation  deductibles  and excess  liabilities)  not paid
within  the  limits  of such  policies.  ProMedCo-LW  shall  have the  option of
providing such professional  liability insurance through an alternative program,
provided such program meets the  requirements  of the Insurance  Commissioner of
the State of Texas and is approved by the Policy Council.

         9.3  Tail  Insurance  Coverage.  Tarrant  will  cause  each  individual
physician  associated  with the Clinic to enter into an  agreement  with Tarrant
that upon termination of such  physician's  relationship  with Tarrant,  for any
reason,  tail insurance coverage will be purchased by the individual  physician.
Such provisions may be contained in employment agreements,  restrictive covenant
agreements  or other  agreements  entered  into by  Tarrant  and the  individual
physicians,  and Tarrant  hereby  covenants  with  ProMedCo-LW  to enforce  such
provisions  relating to the tail insurance  coverage or to provide such coverage
at the expense of Tarrant.

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         9.4  Additional  Insured.  Tarrant and  ProMedCo-LW  agree to use their
reasonable  efforts to have each  other  named as an  additional  insured on the
other's respective  professional  liability  insurance programs at ProMedCo-LW's
expense.

         9.5 Indemnification.  Tarrant shall indemnify, hold harmless and defend
ProMedCo-LW, its officers, directors and employees, from and against any and all
liability,  loss,  damage,  claim,  causes of action,  and  expenses  (including
reasonable  attorneys' fees), to the extent not covered by insurance,  caused or
asserted to have been caused,  directly or indirectly,  by or as a result of (i)
the  performance  of medical  services or any other acts or omissions by Tarrant
and/or its shareholders,  agents,  employees and/or  subcontractors  (other than
ProMedCo-LW) during the term hereof,  including any claim against ProMedCo-LW by
a Tarrant Employee, which claim arises out of such Tarrant Employees' employment
relationship  with Tarrant or as a result of services  performed by such Tarrant
Employee,  and which claim would  typically be covered by worker's  compensation
and (ii)  ProMedCo-LW's  entering  into and its  performance  of the  terms  and
conditions of this Agreement except for than ProMedCo-LW's negligence or willful
misconduct.  ProMedCo-LW shall indemnify,  hold harmless and defend Tarrant, its
officers, directors and employees, from and against any and all liability, loss,
damage,  claim, causes of action, and expenses (including  reasonable attorneys'
fees),  to the extent not covered by insurance,  caused or asserted to have been
caused,  directly or  indirectly,  by or as a result of the  performance  of any
intentional  acts,  negligent  acts  or  omissions  by  ProMedCo-LW  and/or  its
shareholders,  agents,  employees  and/or  subcontractors  (other than  Tarrant)
during the term of this Agreement.

10.   RESTRICTIVE COVENANTS AND LIQUIDATED DAMAGES

         The parties  recognize  that the services to be provided by ProMedCo-LW
shall be feasible only if Tarrant  operates an active medical  practice to which
the physicians associated with Tarrant devote their full time and attention.  To
that end:

         10.1  Restrictive  Covenants  by  Tarrant.  During  the  term  of  this
Agreement, Tarrant shall not establish, operate or provide physician services at
any medical  office,  clinic or other health care  facility  providing  services
substantially  similar to those  provided by Tarrant  pursuant to this Agreement
anywhere within a radius of 25 miles of the Clinic Facility,  or within a radius
of 25 miles of any current or future medical office, clinic or other health care
facility from which Tarrant provides medical services.

         10.2  Restrictive  Covenants  By  Current  Physician  Shareholders  and
Physician  Employees.  Tarrant shall enforce  employment  agreements,  in a form
satisfactory  to  ProMedCo-LW,  with  its  current  Physician  Shareholders  and
Physician  Employees pursuant to which the Physician  Shareholders and Physician
Employees agree that during the term of said Physician  Shareholder or Physician
Employee's  employment  agreement,  and for a  period  of two  years  after  any
termination  of employment  with Tarrant,  not to establish,  operate or provide
physician services at any medical office, clinic or outpatient and/or ambulatory
treatment or diagnostic facility providing services substantially

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similar to those provided by Tarrant  pursuant to this Agreement within a radius
of 25 miles of the Clinic Facility or within a radius of 25 miles of any medical
office, clinic or other health care facility from which Tarrant provides medical
services or is in the process of developing.  ProMedCo-LW shall have third-party
rights to enforce such agreements.

         10.3 Restrictive Covenants By Future Physician Employees. Tarrant shall
obtain  and  enforce  formal  employment  agreements  from  each  of its  future
Physician Shareholders and Physician Employees in the form attached to the Asset
Purchase Agreement, pursuant to which such physicians agree that during the term
of  said  future  Physician   Shareholder  or  Physician  Employee's  employment
agreement,  and for a period of two years after any  termination  of  employment
with Tarrant,  not to establish,  operate or provide  physician  services at any
medical office,  clinic or outpatient and/or ambulatory  treatment or diagnostic
facility providing services  substantially  similar to those provided by Tarrant
pursuant to this Agreement within a radius of 25 miles of the Clinic Facility or
within a radius of 25 miles of any medical  office,  clinic or other health care
facility from which Tarrant  provides  medical  services or is in the process of
developing.   ProMedCo-LW   shall  have  third-party   rights  to  enforce  such
agreements.

         10.4  Physician Shareholder and Physician Employee Liquidated Damages.

         (a)      Release from Restrictive Covenants.  The restrictive covenants
                  described  in Sections  10.2 and 10.3 of this  Agreement  will
                  provide  that  the   Physician   Shareholders   and  Physician
                  Employees  (existing  or  future)  may be  released  from such
                  restrictive  covenants  by paying  Liquidated  Damages  in the
                  amount of one times  such  physician's  income  related to the
                  Clinic,  as reported to the Internal  Revenue  Service for the
                  previous 12 months.

     (b)  Repayment  of  Consideration  in Certain  Events.  In  addition,  if a
Physician   Shareholder   or  Physician   Employee   received  any   ProMedCo-LW
consideration  pursuant  to the Asset  Purchase  Agreement,  and said  Physician
Shareholder or Physician  Employee  terminates their  employment  agreement with
Tarrant  for any  reason  (other  than death or  disability)  prior to the fifth
anniversary of the Closing under the Asset Purchase Agreement,  or is terminated
for cause by Tarrant  prior to the fifth  anniversary  of the Closing  under the
Asset  Purchase  Agreement,  then Tarrant (or if the Physician  Shareholder  has
received any of the  consideration  paid to HealthFirst by ProMedCo-LW under the
Asset  Purchase  Agreement,  said Physician  Shareholder or Physician  Employee)
shall  be  required  to  reimburse  back  to  ProMedCo-LW  some  or  all  of the
consideration  received  by  Tarrant  (or  that  physician,  as the case may be,
pursuant to the Asset  Purchase  Agreement as follows:  (i) if such  termination
occurs prior to the third such anniversary, 100% of such consideration;  (ii) if
such termination occurs thereafter and prior to the fourth such anniversary, 67%
of such consideration; and (iii) if such termination occurs thereafter and prior
to the fifth such anniversary, 33% of such

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                  consideration. Such payments shall be passed on to ProMedCo-LW
                  by  Tarrant  simultaneously  with the  payment  thereof by the
                  physician to Tarrant.  For the purposes of this clause (b) Dr.
                  Jay H.  Haynes,  III shall be deemed to have  received  38,697
                  shares of ProMedCo  Stock,  net of any reductions  required by
                  ss.  2.13(d)(i)(1)  of the Asset  Purchase  Agreement;  in the
                  event   the   management   agreement   contemplated   by   ss.
                  2.13(d)(i)(1)  of the Asset  Purchase  Agreement is terminated
                  under circumstances which, if it were a employment  agreement,
                  would require some or all of such consideration to be returned
                  hereunder  each  individual  of Tarrant who received  ProMedCo
                  Stock  as a result  of the  transactions  contemplated  by the
                  Asset Purchase  Agreement  shall be responsible  for returning
                  such  shares pro rata in  relation  to the number of shares of
                  the Stock  Consideration  (as  defined  in the Asset  Purchase
                  Agreement)  received by such individual.  All payments made to
                  ProMedCo-LW  under this  clause (b) shall be first  applied to
                  all costs incurred by  ProMedCo-LW  in the  enforcement of the
                  employment  or management  agreement,  as the case may be, for
                  that  departing  physician  and the balance,  if any,  held in
                  escrow by  ProMedCo-LW  to be used  solely  for new  physician
                  growth  within  Tarrant,  subject  to  approval  of the Policy
                  Council.  The  accounting  treatment  of such  funds  shall be
                  consistently applied and approved by ProMedCo-LW's independent
                  certified public accountants and the Policy Council.

         10.5  Enforcement.  ProMedCo-LW and Tarrant  acknowledge and agree that
since a remedy at law for any breach or attempted  breach of the  provisions  of
this Section 10 shall be inadequate,  either party shall be entitled to specific
performance and injunctive or other equitable  relief in case of any such breach
or attempted  breach,  in addition to whatever  other remedies may exist by law.
All parties hereto also waive any requirement for the securing or posting of any
bond in connection  with the obtaining of any such injunctive or other equitable
relief.  If any provision of Section 10 relating to territory  described therein
shall be declared  by a court of  competent  jurisdiction  to exceed the maximum
time period, scope of activity, restricted or geographical area such court deems
reasonable  and  enforceable  under  applicable  law, the time period,  scope of
activity,  restricted  and/or area of  restriction  deemed to be reasonable  and
enforceable by the court shall thereafter be the time period, scope of activity,
restricted  and/or area of restriction  applicable to the  restrictive  covenant
provisions  in this Section 10. The  invalidity  of  non-enforceability  of this
Section 10 in any respect shall not affect the validity of enforceability of the
remainder of this Section 10 or of any other provisions of this Agreement unless
the invalid or non-enforceable  provisions materially affect the benefits either
party would  otherwise be entitled to receive under this Section 10 or any other
provision of this Agreement.

         10.6 Termination of Restrictive Covenants.  Notwithstanding anything to
the contrary  contained  herein,  if this  Agreement is  terminated  pursuant to
Section 11.2 herein, the employment  agreement term contained in this Section 10
shall be null and void and of no force or effect.

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11.  TERM RENEWAL; TERMINATION;

         11.1 Term and Renewal. The term of this Agreement shall commence on the
Effective  Date  hereof and shall  continue  for 40 years,  after which it shall
automatically  renew for five-year  terms unless either party provides the other
party with at least 12 months but not more than 13 months  written  notice prior
to any renewal date.

     11.2  Termination  by Tarrant.  Tarrant may  terminate  this  Agreement  as
follows:

               (i)         In the event of the filing of a petition in voluntary
                           bankruptcy  or  an  assignment  for  the  benefit  of
                           creditors by ProMedCo-LW,  or upon other action taken
                           or suffered, voluntarily or involuntarily,  under any
                           federal  or state law for the  benefit  of debtors by
                           ProMedCo-LW,  except for the filing of a petition  in
                           involuntary  bankruptcy against  ProMedCo-LW which is
                           dismissed within 30 days thereafter, Tarrant may give
                           notice   of  the   immediate   termination   of  this
                           Agreement.

     (ii) In the event ProMedCo-LW  shall materially  default in the performance
of any duty or  obligation  imposed upon it by this  Agreement  and such default
shall  continue for a period of 90 days after  written  notice  thereof has been
given to ProMedCo-LW by Tarrant; or ProMedCo-LW shall fail to remit the payments
due as provided in Section 8.2 hereof and such  failure to remit shall  continue
for a period of 30 days after written notice thereof, Tarrant may terminate this
Agreement.  Termination of this Agreement  pursuant to this Section  11.2(ii) by
Tarrant shall require the affirmative vote of 75% of the Physician Shareholders.

             (iii)         On each of the fourth,  fifth or sixth  anniversaries
                           of the Closing under the Asset Purchase  Agreement if
                           (x) ProMedCo shall not have completed an IPO, as such
                           term is defined in the Asset  Purchase  Agreement and
                           (y)   Tarrant   shall  have  given   notice  of  such
                           termination  no  earlier  than 30 days  prior  and no
                           later than 15 days prior to such  anniversary  in the
                           event the IPO is not completed by such anniversary.

     11.3  Termination by ProMedCo-LW.  ProMedCo-LW may terminate this Agreement
as follows:

               (i)         In the event of the filing of a petition in voluntary
                           bankruptcy  or  an  assignment  for  the  benefit  of
                           creditors  by Tarrant,  or upon other action taken or
                           suffered,  voluntarily  or  involuntarily,  under any
                           federal  or state law for the  benefit  of debtors by
                           Tarrant,  except  for the  filing  of a  petition  in
                           involuntary   bankruptcy  against  Tarrant  which  is
                           dismissed within 30 days thereafter, ProMedCo-LW

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     may give notice of the immediate termination of this Agreement.

     (ii) In the event Tarrant shall  materially  default in the  performance of
any duty or  obligation  imposed  upon it by this  Agreement  or in the  event a
majority  of  the  Physicians  Shareholders  shall  materially  default  in  the
performance of any duty or obligation  imposed upon them by this Agreement or by
their employment  agreements with Tarrant, and such default shall continue for a
period of 90 days after  written  notice  thereof  has been given to Tarrant and
such  Physician  Shareholders  by  ProMedCo-LW,  ProMedCo-LW  may terminate this
Agreement.

         11.4 Actions After Termination.  In the event that this Agreement shall
be terminated,  the Tarrant Distribution and the ProMedCo-LW  Distribution shall
be paid through the  effective  date of  termination.  In addition,  the various
rights and remedies  herein  granted to the aggrieved  party shall be cumulative
and in addition to any others such party may be entitled to by law. The exercise
of one or more  rights or remedies  shall not impair the right of the  aggrieved
party to exercise any other right or remedy,  at law. Upon  termination  of this
Agreement, Tarrant shall:

                  11.4.1 Asset  Repurchase.  Purchase from  ProMedCo-LW  at book
         value the intangible  assets set forth on the Opening Balance Sheet, as
         adjusted through the last day of the month most recently ended prior to
         the  date  of such  termination  in  accordance  with  GAAP to  reflect
         amortization   or  depreciation   of  the  intangible   assets,   which
         amortization shall be for a period not in excess of 40 years.

     11.4.2 Real Estate.  Purchase  from  ProMedCo-LW  all real estate,  if any,
associated  with the  Clinic  and owned by  ProMedCo-LW  at the then book  value
thereof.

                  11.4.3 Improvements.  Purchase all improvements,  additions or
         leasehold improvements which have been made by ProMedCo-LW as reflected
         on  ProMedCo-LW's  books as of the last day of this Agreement and which
         relate  solely  to  the  performance  of  its  obligations  under  this
         Agreement or the properties subleased by ProMedCo-LW, if any.

                  11.4.4  Debts.   Assume  all  ordinary  and  necessary   debt,
         contracts, payables and leases which are obligations of ProMedCo-LW and
         which relate  principally to the performance of its  obligations  under
         this Agreement or the properties subleased by ProMedCo-LW, if any.

     11.4.5  Equipment;  Inventories;  Accounts  Receivable;  etc. Purchase from
ProMedCo-LW at book value as reflected on ProMedCo-LW's books as of the last day
of this Agreement:

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                                                       -19-

               (i)         Equipment.   All  of  the   equipment   acquired   by
                           ProMedCo-LW pursuant to the Asset Purchase Agreement,
                           including all replacements and additions thereto made
                           by  ProMedCo-LW  with  the  approval  of  the  Policy
                           Council   pursuant   to   the   performance   of  its
                           obligations under this Agreement;

     (ii) Inventory. All stock, including inventory and supplies,  tangibles and
intangibles of ProMedCo-LW relating to Tarrant operations;

     (iii) Accounts Receivable.  All uncollected accounts receivable theretofore
purchased  by  ProMedCo-LW  pursuant  to  Section  8.4  hereof at the book value
thereof on ProMedCo-LW's books; and

     (iv)  Other  Assets.  All  other  assets  of  ProMedCo-LW  relating  to the
operations of Tarrant.

                  11.4.6 Closing of  Repurchase.  Tarrant shall pay cash for the
         repurchased  assets or may use shares of ProMedCo  no par common  stock
         valued at $12.00 per share,  adjusted to reflect  stock  splits and the
         like.  The amount of the purchase  price shall be reduced by the amount
         of debt and liabilities of ProMedCo-LW  assumed by Tarrant and shall be
         reduced  by any  payment  ProMedCo-LW  has  failed to make  under  this
         Agreement.  Tarrant and any  physician  associated  with Tarrant  shall
         execute such documents as may be required to assume the liabilities set
         forth in Section  11.4.4 and to remove  ProMedCo-LW  from any liability
         with  respect  to such  repurchased  Stocks  and  with  respect  to any
         property leased or subleased by  ProMedCo-LW.  The closing date for the
         repurchase shall be determined by Tarrant,  but shall in no event occur
         later  than 180 days from the date of the  notice of  termination.  The
         termination of this Agreement  shall become  effective upon the closing
         of the  sale of the  assets  and  Tarrant  shall be  released  from the
         Restrictive Covenants provided for in Section 1010 on the closing date.
         From and after any  termination,  each party  shall  provide  the other
         party with  reasonable  access to books and records then owned by it to
         permit  such  requesting  party to satisfy  reporting  and  contractual
         obligations which may be required of it.

12.  DEFINITIONS

         For the purposes of this  Agreement,  the following  definitions  shall
apply:

         12.1 Clinic shall mean the medical care  services,  including,  but not
limited  to the  practice  of  medicine,  and all  related  healthcare  services
provided by Tarrant and the Tarrant Employees, utilizing the management services
of ProMedCo-LW  and the Clinic  Facility,  regardless of the location where such
services are rendered.

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         12.2 Clinic Expenses shall mean the amount of all expenses  incurred in
the operation of the Clinic including, without limitation:

               (i)         Salaries, benefits (including contributions under any
                           ProMedCo benefit plan), and other direct costs of all
                           employees  of  ProMedCo-LW  and  Technical  Employees
                           attributable to Tarrant;

     (ii) Direct costs,  including benefits,  of all employees or consultants of
ProMedCo or affiliates of ProMedCo-LW  who, with approval of the Policy Council,
provides  services  at or in  connection  with  Tarrant  required  for  improved
performance,  such as work management,  purchasing,  information systems, charge
and coding analysis, managed care sales, negotiating and contracting,  financial
analysis, and business office consultation; provided, however, only that portion
of such  employee's or  consultant's  costs without  mark-up by ProMedCo that is
allocable to Clinic will be a Clinic Expense;

     (iii)  Obligations  of  ProMedCo-LW  or ProMedCo  under leases or subleases
related to Clinic operations;

              (iv)         Interest   Expense  on   indebtedness   incurred   by
                           ProMedCo-LW  or ProMedCo to finance or refinance  any
                           of its  obligations  hereunder  or services  provided
                           hereunder.
               (v)         Personal   property  and  intangible  taxes  assessed
                           against  ProMedCo-LW's assets used in connection with
                           the  operation  of Clinic  commencing  on the date of
                           this Agreement;

              (vi)         Malpractice   insurance  expenses  for  ProMedCo-LW's
                           operations and for the Tarrant Employees,  as well as
                           any deductibles and non-insured  expenses relating to
                           malpractice claims.

     (vii)  Other   expenses   incurred  by  ProMedCo-LW  in  carrying  out  its
obligations under this Agreement.

         12.3  Clinic Expenses shall not include:

     (i)  Corporate  overhead  charges or any other  expenses of ProMedCo or any
corporation affiliated with ProMedCo other than the kind of items listed above;

              (ii)         Any federal or state income taxes;

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                                                       -21-

             (iii)         Any expenses which are expressly designated herein as
                           expenses  or   responsibilities   of  Tarrant  and/or
                           Tarrant Employees other than Technical Employees;

              (iv)         Any   amortization   expense   resulting   from   the
                           amortization   of  expenses   incurred  as  shown  on
                           ProMedCo's financial  statements,  in connection with
                           the  acquisition  and execution of the Asset Purchase
                           Agreement and the execution of this Agreement; and

               (v)         Interest   expense  on   indebtedness   incurred   by
                           ProMedCo-LW or ProMedCo to finance the  consideration
                           paid under the Asset Purchase Agreement.

              (vi)         Any  liabilities,  judgments or settlements  assessed
                           against  Tarrant or Physician  Shareholders in excess
                           of any insurance policy limits.

     (vii)  The  direct  expenses   associated  with  management  of  Risk  Pool
Surpluses.

         12.4 Clinic  Facility shall mean the clinic  facilities  located at (i)
4504 Boat Club Road,  Suite 800, Fort Worth,  Texas 76136,  (ii) 2751 Green Oaks
Road, Fort Worth,  Texas 76116,  (iii) 112 Denver Trail, Azle, Texas 76020, (iv)
6867A Green Oaks Road, Fort Worth,  Texas 76116,  (v) 313 West Main, Azle, Texas
76020, (vi) 2401 Westport  Parkway,  Suite 140, Fort Worth,  Texas 76177,  (vii)
6825-27  Green Oaks Rd.,  Fort  Worth,  Texas  76116 and  (viii) any  substitute
facility or additional  facility  location,  whether  within or without  Tarrant
County, as approved by the Policy Council.

         12.5 Distribution Funds shall mean those amounts remaining after Clinic
Expenses have been deducted from Net Clinic Revenue.

         12.6  Effective Date shall mean 12:01 a.m. on June 1, 1996.

         12.7 IPO shall mean the initial public offering of ProMedCo  securities
pursuant to a  registration  statement  filed with the  Securities  and Exchange
Commission.

         12.8 Net Clinic Revenues shall mean Tarrant's gross billings, including
ancillaries  and any other  revenues  that have  historically  been  recorded by
Tarrant  as  well  as  non-real   estate  revenues   historically   recorded  by
HealthFirst,  less any adjustments  such as uncollectible  accounts,  discounts,
contractual   adjustments,   Medicare  allowances,   Medicaid  allowances,   and
professional  courtesies  ("adjustments").  This specifically excludes Risk Pool
Surpluses.

         12.9 Opening  Balance Sheet shall mean the balance sheet of ProMedCo-LW
as of the Effective Date (as defined in the Asset Purchase Agreement),  prepared
in  accordance  with GAAP (except for the absence of certain note  information),
and substantially in the form of the attached Exhibit

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                                                       -22-

B subject to adjustments in the  Consideration (as defined in the Asset Purchase
Agreement).

         12.10 Physician  Employees shall mean any physician employed by Tarrant
and  providing  medical  services to patients on behalf of Tarrant,  who are not
Physician Shareholders.

         12.11  Physician  Extenders shall mean all  non-physician  professional
employees  who  provide  direct  patient  care  for  which a  billed  charge  is
generated.

         12.12  Physician  Shareholders  shall  mean  any  physician  who  is  a
shareholder  of  Tarrant,  both as of the  date of this  Agreement  (which  said
Physician Shareholders are parties to this Agreement) and at any future point in
time.

         12.13  ProMedCo-LW  Distribution  shall mean [*]% of Distribution Funds
plus a percentage of Risk Pool Surpluses established by Exhibit A.

         12.14 Risk Pool  Surpluses  shall mean all  hospital  incentive  funds,
specialists  incentive  funds,  and  funds  from  shared  risk  pools  under any
risk-sharing  arrangements  after the direct expenses  associated with risk pool
management  have been  deducted.  Risk Pool  Surpluses  shall be  calculated  by
aggregating all risk pools applicable, including making any deductions for pools
that are in a deficit  position.  Primary care capitation  shall be treated as a
separate  risk pool for  purposes  of this  Section  12.14.  Pursuant to Section
2.2(j)  hereof,  the Policy  Council  shall  determine  the amount  allocated to
primary care  capitation  in  situations  in which the payor has not made such a
determination,  and shall determine the fee schedule  against which such primary
care capitation would be billed. In the event that primary care capitation is in
a deficit  position,  then that deficit shall be aggregated  with all other risk
pools  applicable  before a distribution is made pursuant to Exhibit "A" of this
Agreement.

     12.15 Tarrant  Employees shall mean all Physician  Shareholders,  Physician
Employees, Physician Extenders and Technical Employees at the relevant dates.

         12.16 Technical  Employees shall mean  technicians who provide services
in the diagnostic areas of Tarrant's  practice,  such as employees of the Clinic
laboratory,  radiology  technicians  and cardiology  technicians.  All Technical
Employees shall be Tarrant employees.

13.  GENERAL PROVISIONS

         13.1 Independent Contractor. It is acknowledged and agreed that Tarrant
and ProMedCo- LW are at all times acting and performing hereunder as independent
contractors.  ProMedCo-LW  shall  neither  have  nor  exercise  any  control  or
direction  over the methods by which Tarrant or the Tarrant  Employees  practice
medicine.  The  sole  function  of  ProMedCo-LW  hereunder  is  to  provide  all
management  services  in  a  competent,   efficient  and  satisfactory   manner.
ProMedCo-LW  shall not, by entering into and  performing its  obligations  under
this Agreement, become liable for any of the existing

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CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATLEY WTIH THE SECURITIES AND EXCHANGE COMMISSION

                                                       -23-

obligations,  liabilities  or debts of  Tarrant  unless  otherwise  specifically
provided  for  under  the  terms  of  this  Agreement.  ProMedCo-LW  will in its
management  role have only an  obligation  to  exercise  reasonable  care in the
performance of the management  services.  Neither party shall have any liability
whatsoever  for  damages  suffered  on  account  of the  willful  misconduct  or
negligence of any employee,  agent or independent contractor of the other party.
Each party shall be solely responsible for compliance with all state and federal
laws  pertaining  to  employment   taxes,   income   withholding,   unemployment
compensation contributions and other employment related statutes regarding their
respective employees, agents and servants.

         13.2  Other Contractual Arrangement.

     (a) The  parties  acknowledge  and agree  that they have been  advised  and
consent to the fact that  ProMedCo-LW,  or its affiliates (i) may have, prior to
the date of this  Agreement,  discussed  proposals with respect to, or (ii) may,
from time to time  hereafter,  enter into  agreements  with one or more  Tarrant
Employees to provide consulting, medical direction, advisory or similar services
relating to activities of ProMedCo-LW or its affiliates in clinical  areas.  The
parties agree that such  agreements,  if any,  shall be entered into at the sole
discretion  of the parties  thereto and subject to such terms and  conditions to
which such parties may agree, and any compensation payable to or by ProMedCo-LW,
on the one  hand,  and such  Tarrant  Employees,  on the other  hand,  shall not
constitute Net Clinic Revenues, or Tarrant Compensation, and shall otherwise not
be subject to the provisions of this Agreement.

     (b) Each current Physician Shareholder,  by his execution of this Agreement
as provided on the signature  page hereof,  agrees that neither the  negotiation
nor the entry into any agreement or  arrangement  of a type described in Section
13.2(a) above shall  constitute a breach of any fiduciary or other duty owned by
any Tarrant Employee to another, or by ProMedCo-LW,  to Tarrant or any Physician
Shareholder.  Accordingly,  Tarrant and each Physician  Shareholder hereby waive
any right to  disclosure  of the  negotiations,  proposals  or terms of any such
agreement,  arrangement or right to participate in and/or share revenues derived
from any such agreement or  arrangement  with any Tarrant  Employee,  and hereby
forever release and discharge Tarrant, the Physician Shareholders,  ProMedCo-LW,
and their  respective  representatives  (including,  but not limited  to,  their
respective attorneys, accountants, affiliates, shareholders, officer, directors,
employees and agents) from any and all actions,  claims, charges, suits, damages
and  liabilities  of any  kind  whatsoever  arising  from  or by  reason  of the
participation  of any Tarrant  Employee in any  agreement  or  arrangement  with
ProMedCo-LW, or their affiliates of a type described in Section 13.2(a) above or
from or by reason of the failure of ProMedCo-LW,  any Tarrant  Employee or their
respective  representatives  to disclose the negotiation,  existence or terms of
any such agreement or  arrangement.  In keeping with the private nature of these
matters, the Physician

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                                                       -24-

                  Shareholders  further agree that such negotiations,  proposals
                  or terms of agreement  are to be kept  confidential  between a
                  Tarrant  Employee on the one hand,  and  ProMedCo-  LW, on the
                  other  hand,  and  shall  not be  disclosed  by them or  their
                  representatives, except as required by applicable law.

         13.3  Proprietary Property.

                  13.3.1 Each party  agrees that the other  party's  proprietary
         property shall not be possessed,  used or disclosed  otherwise than may
         be  necessary  for  the  performance  of  this  Agreement.  Each  party
         acknowledges that its violation of this Agreement would cause the other
         party  irreparable  harm,  and may (without  limiting the other party's
         remedies  for such  breach) be  enjoined  at the  instance of the other
         party.  Each party agrees that upon  termination  of this Agreement for
         any reason,  absent the prior  written  consent of the other party,  it
         shall  have no right to and shall  cease  all use of the other  party's
         proprietary property, and shall return all such proprietary property of
         the other party in its possession to the other party.

                  13.3.2  ProMedCo-LW  shall be the sole owner and holder of all
         right, title and interest, to all intellectual property furnished by it
         under  this  Agreement,  including,  but not  limited to the trade name
         "ProMedCo,"  all  computer  software,   copyright,  services  mark  and
         trademark  right  to any  material  or  documents  acquired,  prepared,
         purchased or  furnished  by  ProMedCo-  LW pursuant to this  Agreement.
         Tarrant  shall have no right,  title or interest in or to such material
         and shall not, in any manner,  distribute  or use the same  without the
         prior written authorization of ProMedCo-LW, provided, however, that the
         foregoing  shall not restrict  Tarrant from  distributing  managed care
         information  brochures and materials without the prior written approval
         of  ProMedCo-LW  provided no  Proprietary  Property of  ProMedCo-LW  is
         contained therein.  Notwithstanding the preceding, however, ProMedCo-LW
         agrees that  Tarrant  shall be entitled  to use on a  nonexclusive  and
         nontransferable  basis for the term of this Agreement the name "Tarrant
         Family  Practice" as may be necessary or appropriate in the performance
         of Tarrant's services and obligations hereunder.

         13.4  Cooperation.  Each of the parties shall  cooperate fully with the
other  in  connection  with  the  performance  of their  respective  duties  and
obligations under this Agreement.

         13.5 Licenses, Permits and Certificates.  ProMedCo-LW and Tarrant shall
each  obtain and  maintain  in effect,  during the term of this  Agreement,  all
licenses, permits and certificates required by law which are applicable to their
respective performance pursuant to this Agreement.

         13.6  Compliance  with Rules,  Regulations  and Laws.  ProMedCo-LW  and
Tarrant  shall  comply  with all  federal  and  state  laws and  regulations  in
performance of their duties and obligations hereunder.  Neither party, nor their
employees  or  agents,  shall take any action  that would  jeopardize  the other
party's  participation,  if  applicable,  in any federal or state health program
including Medicare and

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Medicaid.  ProMedCo-LW  and Tarrant shall take particular care to ensure that no
employee or agent of either party takes any action  intended to violate  Section
1128B of the Social Security Act with respect to soliciting, receiving, offering
or paying any remuneration  (including any kickback,  bribe, or rebate) directly
or indirectly,  overtly or covertly,  in cash or in kind in return for referring
an individual to a person for the  furnishing or arranging for the furnishing of
any item or  service  for which  payment  may be made in whole or in part  under
Title  XVIII or XIX of the Social  Security  Act,  or for  purchasing,  leasing,
ordering, or arranging for or recommending purchasing,  leasing, or ordering any
good,  facility,  service,  or item for which payment may be made in whole or in
part under Title XVIII or XIX of the Social Security Act.

         13.7 Generally  Accepted  Accounting  Principles  (GAAP). All financial
statements and  calculations  contemplated by this Agreement will be prepared or
made in accordance with generally accepted  accounting  principles  consistently
applied unless the parties agree otherwise in writing.

         13.8 Notices.  Any notices  required or permitted to be given hereunder
by either party to the other may be given by personal  delivery in writing or by
registered or certified mail,  postage prepaid,  with return receipt  requested.
Notices  shall be  addressed  to the parties at the  addresses  appearing on the
signature page of the Agreement,  but each party may change such party's address
by written  notice given in  accordance  with this  Section.  Notices  delivered
personally will be deemed communicated as of actual receipt; mailed notices will
be deemed communicated as of three days after mailing.

         13.9 Attorneys' Fees. ProMedCo-LW and Tarrant agree that the prevailing
party in any legal dispute among the parties hereto shall be entitled to payment
of its attorneys' fees by the other party.

         13.10  Severability.  If any  provision of this  Agreement is held by a
court of competent  jurisdiction  or  applicable  state or federal law and their
implementing  regulations to be invalid,  void or  unenforceable,  the remaining
provisions will nevertheless continue in full force and effect.

         13.11 Alternative Dispute Resolution. Any dispute, disagreement,  claim
or controversy arising out of or related to this Agreement (a "Disputed Matter")
may,  at the option of either  party  hereto  upon  written  notice to the other
party,  be  submitted  to  non-binding  mediation  before a mutually  acceptable
neutral advisor.  To the extent the neutral advisor is compensated,  the parties
shall each bear half the cost. Any Disputed Matter that is not resolved  through
mediation will be settled by binding arbitration in accordance with the rules of
commercial  arbitration of the American  Arbitration  Association,  and judgment
upon the award rendered by the  arbitrator(s) may be entered in any court having
jurisdiction thereof. Such arbitration shall occur within Tarrant County, Texas,
unless the parties mutually agree to have such proceedings in some other locale.
The  arbitrator(s) may in any such proceeding award attorneys' fees and costs to
the prevailing party.

     13.12  Construction  of Agreement.  This Agreement shall be governed by and
construed in accordance  with the laws of the State of Texas.  The parties agree
that the terms and provisions of this

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                                                       -26-

Agreement embody their mutual interest and agreement and that they are not to be
construed  more  liberally  in favor of, nor more  strictly  against,  any party
hereto.

         13.13  Assignment and Delegation.  ProMedCo-LW  shall have the right to
assign its rights  hereunder  to any person,  firm or  corporation  controlling,
controlled  by or under  common  control  with  ProMedCo-LW  and to any  lending
institution,  for security purposes or as collateral,  from which ProMedCo-LW or
ProMedCo obtains  financing for itself and as agent.  Except as set forth above,
neither  ProMedCo-LW nor Tarrant shall have the right to assign their respective
rights and obligations hereunder without the written consent of the other party.
Tarrant may not delegate any of Tarrant's duties hereunder,  except as expressly
contemplated  herein;   however,   ProMedCo-LW  may  delegate  some  or  all  of
ProMedCo-LW'  s  duties  hereunder  to the  extent  it  concludes,  in its  sole
discretion,  that such  delegation  is in the  mutual  interest  of the  parties
hereto.

         13.14  Confidentiality.  The terms of this  Agreement and in particular
the  provisions  regarding  compensation,  are  confidential  and  shall  not be
disclosed  except  as  necessary  to the  performance  of this  Agreement  or as
required by law.

         13.15  Waiver.  The  waiver of any  provision,  or of the breach of any
provision of this Agreement must be set forth specifically in writing and signed
by the waiving  party.  Any such  waiver  shall not operate or be deemed to be a
waiver  of any  prior  or  future  breach  of  such  provision  or of any  other
provision.

         13.16  Headings.  The subject  headings of the articles and sections of
this  Agreement  are  included for  purposes of  convenience  only and shall not
affect the construction or interpretation of any of its provisions.

         13.17 No Third Party Beneficiaries.  Nothing in this Agreement, express
or implied, is intended or shall be construed to confer upon any person, firm or
corporation  other than the parties  hereto and their  respective  successors or
assigns,  any remedy or claim under or by reason of this  Agreement or any term,
covenant or condition hereof, as third party beneficiaries or otherwise, and all
of the  terms,  covenants  and  conditions  hereof  shall  be for the  sole  and
exclusive benefit of the parties hereto and their successors and assigns.

     13.18 Time is of the Essence.  Time is hereby  expressly  declared to be of
the essence in this Agreement.

         13.19  Modifications of Agreement for Prospective  Legal Events. In the
event any state or  federal  laws or  regulations,  now  existing  or enacted or
promulgated  after the effective  date of this  Agreement,  are  interpreted  by
judicial decision, a regulatory agency or legal counsel for both parties in such
a manner as to indicate that the structure of this Agreement may be in violation
of such laws or  regulations,  or in the event the Texas  State Board of Medical
Examiners or other authority with legal

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                                                       -27-

jurisdiction  shall,  solely by virtue of this Agreement,  initiate an action to
revoke, suspend, or restrict the license of any physician retained by Tarrant to
practice  medicine in the State of Texas,  Tarrant and  ProMedCo-LW  shall amend
this Agreement as necessary.  To the maximum extent possible, any such amendment
shall  preserve the  underlying  economic  and  financial  arrangements  between
Tarrant and ProMedCo-LW. In the event it is not possible to amend this Agreement
to preserve in all material  respects  the  underlying  economic  and  financial
arrangements  between Tarrant and ProMedCo-LW,  this Agreement may be terminated
by  written   notice  by  either   party  within  90  days  from  date  of  such
interpretation or action, termination to be effective no sooner than the earlier
of 180 days from the date notice of termination is given or the latest  possible
date  specified  for  such  termination  in  any  regulatory  order  or  notice.
Termination  pursuant  to this  Section  13.19  by  Tarrant  shall  require  the
affirmative vote of a majority of Physician Shareholders.

         13.20  Whole  Agreement  Modification;.  A contract in which the amount
involved exceeds $50,000 in value is not enforceable  unless the Agreement is in
writing  and  signed  by the  party to be bound  or by that  party's  authorized
representative.  The rights  and  obligations  of the  parties  hereto  shall be
determined solely from written  agreements.  Documents and instruments,  and any
prior oral agreements between the parties are superseded by and merged into such
writings.  This  Agreement  (As  amended  in  writing  from time to  time),  the
exhibits, and the schedules delivered pursuant hereto

0346209.05
080020-003  08/15/96

                                                       -28-

represent  the final  agreement  between the parties  hereto and may not be
contradicted  by  evidence  of  prior,   contemporaneous,   or  subsequent  oral
agreements by the parties.  There are no unwritten oral  agreements  between the
parties."

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

                                    PROMEDCO OF LAKE WORTH, INC.

                                    By:
                                    Name:
                                    Title:
                                    Address:         801Cherry Street
                                   Suite 1450
                              Fort Worth, TX 76102

                                    TARRANT FAMILY PRACTICE, P.A.

                                    By:
                                    Name:
                                    Title:
                                    Address:         4504 Boat Club Road
                                    Suite 800
                              Fort Worth, TX 76135

0346209.05
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                                                       -29-

                         UNANIMOUS CONSENT OF DIRECTORS

         The  undersigned  constituting  all of the directors of Tarrant  Family
Practice,  P.A.,  a  Texas  professional  association  (the  "Company"),  hereby
unanimously  (i) consent to, and approve of, the foregoing  Amended and Restated
Service Agreement (the "Agreement");  (ii) ratify the actions of officers of the
Company in  negotiating,  executing  and  delivering  the  Agreement;  and (iii)
authorize  the  officers  of the  Company to carry into  effect the  transaction
contemplated  by the  Agreement,  including  the  taking of any  action  and the
delivery of any document reasonably in furtherance thereof.

Todd K. Cowan, M.D.

 Steve H. Hardee, M.D.

J. H. Huntzinger, M.D.

William D. Littlejohn, M.D.

Kriss E. Myers, M.D.

Marshall M. Morrison, M.D.

William M. Seger, M.D.

0346209.05
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                                                       -30-
                                   EXHIBIT "A"

Allocation of Risk Pool Surpluses

         ProMedCo-LW  shall receive a percentage of the Risk Pool Surpluses,  or
be responsible for a percentage of any Risk Pool Surpluses that are in a deficit
position.  ProMedCo-LW's  percentage  shall be based on the cumulative risk pool
surpluses that have occurred during the entire term of this Agreement, including
any renewals.  The  percentage  shall be based on the  graduated  scale as shown
below:

            Risk Pool Savings                       ProMedCo-LW Percentage
                                                            [*]%
                   [*]

The distribution of Risk Pool Surpluses shall be made based upon the following:

In the event that the payor or any  entity  other  than  Tarrant  holds the risk
pools,  and makes a payment to Tarrant in the form of a Risk Pool Surplus,  then
[*]% of that Risk Pool Surplus shall be  distributed no later than 30 days after
receipt by Tarrant.  In the event that  Tarrant  holds the risk pools,  then the
distribution  of Risk Pool  Surpluses  shall be made on an annual basis no later
than 90 days after the  conclusion of each  contract year of any relevant  payor
agreement,  and after a full  analysis of any Incurred  But Not Reported  (IBNR)
liabilities. Once the final balance of Risk Pool Surpluses have been calculated,
[*]% of that  amount  shall be  distributed,  with the  final  [*]%  held for an
additional 6 months to pay any additional IBNR or other liabilities.  At the end
of  that 6  months,  any  funds  remaining  from  the  [*]%  reserved  shall  be
distributed.

CERTAIN CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WTIH THE SECURITIES AND EXCHANGE COMMISSION
0346209.05
080020-003  08/15/96 

Basic Info X:

Name: AMENDED AND RESTATED SERVICE AGREEMENT
Type: Amended and Restated Service Agreement
Date: Aug. 23, 1996
Company: PROMEDCO MANAGEMENT CO
State: Delaware

Other info:

Date:

  • March 1 , 1995
  • June 24 , 1996
  • thirty 30
  • May 29 , 1996
  • last day of this Agreement
  • June 1 , 1996

Organization:

  • HealthFirst Services , Inc.
  • Management Services Agreement
  • ProMedCo of Lake Worth , Inc.
  • General Responsibilities of the Parties
  • American Medical Association
  • Texas Medical Association
  • Net Revenue Calculation
  • Tarrant 's Board
  • Inventory Control and Purchasing Supplies
  • Managed Care Contracting
  • Deposit of Net Clinic Revenues
  • Management Information SystemsComputer Systems
  • Payment of Premiums For All Insurance Products Held By Tarrant
  • Supervision of Ancillary Services
  • Strategic Planning Assistance
  • Expansion of Clinic
  • TARRANT 5.1 Professional Services
  • Employment Of Physician Employees
  • Professional Insurance Eligibility
  • Compliance With Applicable Laws
  • Use of Clinic Facility
  • Tarrant Employee Benefit Plans
  • Physician Powers of Attorney
  • Access to Records
  • the Insurance Commissioner of the State
  • Tail Insurance Coverage
  • Current Physician Shareholders and Physician Employees
  • Future Physician Employees
  • Physician Employee Liquidated Damages
  • Internal Revenue Service
  • Physician Shareholder or Physician Employee
  • Termination of Restrictive Covenants
  • Opening Balance Sheet
  • Securities and Exchange Commission
  • American Arbitration Association
  • Third Party Beneficiaries
  • Modifications of Agreement for Prospective Legal Events
  • Texas State Board of Medical Examiners

Location:

  • TARRANT Tarrant
  • Clinic
  • Tarrant Employees
  • Azle
  • Westport Parkway
  • Tarrant County
  • State of Texas
  • Fort Worth
  • TX
  • P.A.

Money:

  • $ 10,000
  • $ 500,000
  • $ 1,000,000
  • $ 3,000,000
  • $ 200,000
  • $ 600,000
  • $ 12.00
  • $ 50,000

Person:

  • Tarrant
  • Jay H. Haynes
  • Todd K. Cowan
  • Steve H. Hardee
  • J. H. Huntzinger
  • William D. Littlejohn
  • Kriss E. Myers
  • Marshall M. Morrison
  • William M. Seger

Time:

  • 12:01 a.m.

Percent:

  • 100 %
  • 67 %
  • 33 %
  • 75 %
  • ] %