Exhibit 10.53
                        REVOLVING CREDIT LOAN AGREEMENT

                                     between


                    AMERICAN PHYSICIANS SERVICE GROUP, INC.,
                                   as Borrower


                                       and


                           NATIONSBANK OF TEXAS, N.A.,
                                    as Lender



                                February 10, 1998




<PAGE>


                                                                                
                         REVOLVING CREDIT LOAN AGREEMENT

                                Table of Contents

                                           Page                                 
                                             
SECTION 1         DEFINITION OF TERMS       1
         1.01.    Definitions       1
         1.02     Time References   7
         1.03     Other References  7
         1.04     Accounting Principles     7

SECTION 2         THE REVOLVING CREDIT LOAN 7
         2.01.    The Revolving Credit Loan and Revolving Credit Commitment   7
         2.02.    Manner of Borrowing       8
         2.03.    Fees     8
         2.04.    Notes and Note Payments   8
         2.05.    Interest 9
         2.06.    Taxes    10
         2.07.    Capital Adequacy  10

SECTION 3         CONDITIONS PRECEDENT      10
         3.01.    Initial Borrowing 10
         3.02.    All Borrowings    11

SECTION 4         REPRESENTATIONS AND WARRANTIES     11
         4.01.    Corporate Existence, Good Standing, and Authority    11
         4.02     Subsidiaries and Names    11
         4.03.    Authorization and Contravention    11
         4.04.    Enforceable Obligations   11
         4.05.    Financial Condition       12
         4.06.    No Default        12
         4.07.    Material Agreements       12
         4.08.    No Litigation     12
         4.09.    Use of Proceeds; Margin Stock      12
         4.10.    Taxes    12
         4.11.    Environmental Matters     12
         4.12.    Employee Plans    12
         4.13.    Properties; Liens 13
         4.14.    Government Regulations    13
         4.15.    Transactions with Affiliates       13
         4.16.    Debt     13
         4.17.    Leases   13
         4.18.    Insurance         13
         4.19.    Labor Matters     13
         4.20.    Intellectual Property     14
         4.21.    Pledged Shares    14
         4.22.    Full Disclosure   14
         4.23.    Representations and Warranties     14

SECTION 5         AFFIRMATIVE COVENANTS     14


                                       i
<PAGE>

         5.01.    Financial Statements, Reports and Documents 14
         5.02.    Use of Credit     16
         5.03.    Payment of Taxes and Other Indebtedness     16
         5.04.    Books and Records; Access 16
         5.05.    Compliance with Law       16
         5.06.    Payment of Obligations    16
         5.07.    Expenses 16
         5.08.    Maintenance of Existence, Assets, and Business       16
         5.09.    Insurance         17
         5.10.    Environmental Matters     17
         5.11.    Further Assurances        17
         5.12.    INDEMNITY BY BORROWER     17

SECTION 6         NEGATIVE COVENANTS        18
         6.01.    Limitation on Sale; Negative Pledge18
         6.02.    Limitation on Indebtedness18
         6.03.    Limitation on Disposition of Assets18
         6.04.    Liquidity Maintenance     19
         6.05.    Distributions     19
         6.06.    Net Worth         19
         6.07.    Repurchase of Borrower Stock       19
         6.08.    Transaction with Affiliates        20
         6.09     Mergers, Consolidations, and Dissolutions   20

SECTION 7         EVENTS OF DEFAULT 20
         7.01.    Events of Default 20
         7.02.    Remedies Upon Event of Default     21
         7.03.    Performance by Lender     22

SECTION 8         MISCELLANEOUS     22
         8.01.    Accounting Reports        22
         8.02. Waiver 22 8.03. Notices 22
         8.04.    Governing Law     22
         8.05.    Invalid Provisions        22
         8.06.    Maximum Interest Rate     23
         8.07.    Nonliability of Lender    23
         8.08.    Offset   23
         8.09.    Successors and Assigns    23
         8.11.    Headings 23
         8.12.    Survival 23
         8.13.    Participations    23
         8.14.    No Third Party Beneficiary24
         8.15.    Waiver of Jury Trial      24
         8.16.    Multiple Counterparts     24
         8.17.    Arbitration       24
         8.18     Limitation on Damages     25

                                       ii

<PAGE>


Schedules

Schedule 3.01     Closing Conditions
Schedule 4.01     Jurisdiction Where Doing Business
Schedule 4.02     Subsidiaries
Schedule 4.11     Environmental Matters
Schedule 4.12     Employee Plans
Schedule 4.13     Liens
Schedule 4.15     Transactions With Affiliates
Schedule 4.16     Debt
Schedule 4.17     Leases
Schedule 4.20     Intellectual Property


Exhibits

Exhibit A         Form of Revolving Credit Note
Exhibit B         Form of Pledge Agreement
Exhibit C         Notice of Borrowing

                                      iii

<PAGE>


                                                                              
                         REVOLVING CREDIT LOAN AGREEMENT


         This  Revolving  Credit Loan Agreement is entered into as of the day of
February,  1998 by and between AMERICAN  PHYSICIANS SERVICE GROUP, INC., a Texas
corporation  ("Borrower"),  and NATIONSBANK OF TEXAS,  N.A., a national  banking
association ("Lender").

                              W I T N E S S E T H:

         WHEREAS,  Borrower has requested  that Lender  provide  Borrower with a
revolving credit loan facility to fund potential acquisitions,  investments, and
stock  repurchases  and Lender is willing to provide such a facility to Borrower
upon the terms and subject to the conditions set forth in this Agreement;

         NOW,  THEREFORE,   in  consideration  of  the  mutual  promises  herein
contained  and for other  valuable  consideration,  the parties  hereto agree as
follows:


                                    SECTION 1
                              DEFINITION OF TERMS

         1.01.  DEFINITIONS  . As used  in  this  Agreement,  all  exhibits  and
schedules attached and in any note, certificate,  report or other Loan Documents
made or delivered pursuant to this Agreement, the following terms shall have the
respective  meanings  assigned  to them in this  Section 1 or in the  section or
recital referred to below (unless  otherwise  specifically  defined in such Loan
Document):

         "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person.

         "Agreement"  means this Revolving Credit Loan Agreement,  including the
schedules and exhibits hereto,  as the same may be renewed,  extended,  amended,
restated, or modified from time to time.

         "Base Rate" means the variable rate of interest  established  from time
to time by Lender as its  general  reference  rate of  interest  (which  rate of
interest  may not be the lowest rate charged by Lender on similar  loans).  Each
change in the Base Rate shall become effective  without prior notice to Borrower
automatically  as of the  opening of  business on the date of such change in the
Base Rate.

         "Borrower"  is defined in the preamble of this  Agreement  and includes
any successor or assign consented to by Lender.

         "Borrowing"  means any amount  disbursed  under the Loan  Documents  by
Lender to or on behalf of Borrower.

         "Borrowing Date" means the date on which a Borrowing is to be disbursed
under Sections 2.01.

         "Business  Day" means any day other than a  Saturday,  Sunday or day on
which  national banks are authorized to be closed under the laws of the State of
Texas.

         "Capital Lease" means any lease or sublease that is required by GAAP to
be capitalized on a balance sheet.


                                       1
<PAGE>

         "CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. ss.ss.9601 et seq.

         " Code" means the Internal  Revenue Code of 1986,  as amended,  and all
regulations promulgated and rulings issued thereunder.

         "Collateral" is defined in the Pledge Agreement.

         "Company" means Borrower and each of its Subsidiaries.

         "Collateral  Documents"  means  all  security  agreements,  guaranties,
pledge  agreements,  and other agreements or documents  executed or delivered to
secure repayment of all or any part of the Obligation.

         "Consolidated Net Worth" means, at any time and for any Person, the sum
of its stockholder's equity.

         "Current Financials" means, unless otherwise specified, either:

                  (a) Except as provided in clause (b) below, the (i) Companies'
         consolidated  Financials for the year ended December 31, 1996, and (ii)
         Companies'  consolidated Financials for the nine months ended September
         30, 1997; or

                  (b) At any time after annual  Financials  are first  delivered
         under Section 5.01,  the (i)  Companies'  annual  Financials  then most
         recently  delivered to Lender under Section 5.01(a) and (ii) Companies'
         quarterly  Financials  then most  recently  delivered  to Lender  under
         Section 5.01(b).

         "Debt" means, for any Person, at any time, and without duplication, the
sum of (a) all obligations for borrowed money, (b) all obligations  evidenced by
bonds, debentures, notes, or similar instruments, (c) all obligations to pay the
deferred  purchase price of property or services  except trade accounts  payable
arising in the ordinary course of business,  (d) all  obligations  arising under
acceptance  facilities  or  facilities  for the  discount  or  sale of  accounts
receivable,  (e) all direct or contingent  obligations  in respect of letters of
credit,  (f)  liabilities  secured  (or for which the  holder of the Debt has an
existing Right,  contingent or otherwise, to be so secured) by any Lien existing
on property owned or acquired by that Person,  (g) Capital Leases,  plus (h) all
guaranties, endorsements, and other contingent obligations for Debt of others.

         "Debtor  Laws"  means  all  applicable  liquidation,   conservatorship,
bankruptcy,  arrangement,  receivership,  insolvency,  reorganization or similar
laws from time to time in effect affecting the rights of creditors generally.

         "Default"  means the  occurrence of any event set forth in Section 7.01
which,  upon expiration of the applicable grace period set forth therein,  would
constitute an Event of Default.

         "Distribution"  means,  with respect to any shares of any capital stock
or other equity  securities  issued by a Person (a) the retirement,  redemption,
purchase,  or  other  acquisition  for  value  of  those  securities,   (b)  the
declaration  or payment of any dividend on or with respect to those  securities,
(c) any loan or advance by that  Person to, or other  investment  by that Person
in, the  holder of any of those  securities,  and (d) any other  payment by that
Person with respect to those securities.

                                       2
<PAGE>

         "Environmental  Investigation" means any environmental site assessment,
investigation,  audit,  compliance  audit, or compliance review conducted at any
time or from time to time  whether at the  request of Lender,  upon the order or
request of any Governmental  Authority,  or at the voluntary  instigation of any
Company concerning any Real Property or the business operations or activities of
any Company,  including,  without  limitation  (a) air,  soil,  groundwater,  or
surface-water sampling and monitoring, and (b) preparation and implementation of
any closure or remedial plans.

         "Environmental Law" means any applicable Governmental  Requirement that
relates to protection of the  environment  or to the regulation of any Hazardous
Substances,  including,  without  limitation,  CERCLA,  the Hazardous  Materials
Transportation  Act (49 U.S.C. ss. 1801 et seq.), the Resource  Conservation and
Recovery Act (42 U.S.C.  ss. 6901 et seq.),  the Clean Water Act (33 U.S.C.  ss.
1251 et seq.),  the  Clean  Air Act (42  U.S.C.  ss.  7401 et  seq.),  the Toxic
Substances  Control Act (15 U.S.C. ss. 2601 et seq.),  the Federal  Insecticide,
Fungicide,  and  Rodenticide  Act (7  U.S.C.  ss.  136 et seq.),  the  Emergency
Planning and Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), the Safe
Drinking  Water Act (42  U.S.C.  ss. 201 and ss.  300f et seq.),  the Rivers and
Harbors Act (33 U.S.C.  ss. 401 et seq.),  the Oil Pollution Act (33 U.S.C.  ss.
2701 et seq.),  analogous state, local, and foreign  Governmental  Requirements,
and any analogous future enacted or adopted Governmental Requirement.

         "Environmental  Liability" means any liability,  loss,  fine,  penalty,
charge, lien, damage, cost, or expense of any kind to the extent that it results
(a) from the  violation  of any  Environmental  Law,  (b)  from the  Release  or
threatened Release of any Hazardous Substance,  or (c) from actual or threatened
damages to natural resources.

         "Environmental   Permit"  means  any  permit,  or  license,   from  any
Governmental  Authority  that is required  under any  Environmental  Law for the
lawful conduct of any business, process, or other activity.

         "ERISA" means the Employee Retirement Income Security Act of 1974.

         "ERISA  Affiliate"  means any Person that,  for purposes of Title IV of
ERISA,  is a member of either  Borrower's  controlled  group or is under  common
control with that Borrower  within the meaning of Section 414 of the Code (which
provisions are deemed by this agreement to apply to Foreign Persons).

         "Event of Default" is defined in Section 7.01.

         "Excess Interest Amount" is defined in Section 2.05(d).

         "Financials"  of  a  Person  means  balance  sheets,  profit  and  loss
statements,  reconciliations of capital and surplus, and statements of cash flow
prepared  (a)  according to GAAP  (subject to year-end  audit  adjustments  with
respect to interim  Financials)  and (b) in  comparative  form to prior year-end
figures or corresponding  periods of the preceding fiscal year or other relevant
period, as applicable.

         "GAAP"  means  those  generally  accepted  accounting   principles  and
practices,  applied on a consistent  basis,  which are recognized as such by the
American Institute of Certified Public Accountants acting through its Accounting
Principles  Board and the  Financial  Accounting  Standards  Board  and/or their
respective  successors and which are applicable in the  circumstances  as of the
date the applicable Financials were prepared.

                                       3
<PAGE>

         "Governmental   Authority"  means  any  government  (or  any  political
subdivision  or  jurisdiction   thereof),   court,   bureau,   agency  or  other
governmental  authority  having  jurisdiction  over  any  Company  or any of its
business, operations or properties.

         "Governmental   Requirements"  means  all  applicable  statutes,  laws,
treaties, ordinances, rules, regulations,  orders, writs, injunctions,  decrees,
and  judgments  and  legally  binding  opinions  and   interpretations   of  any
Governmental Authority.

         "Guarantors"  means APS Realty,  Inc., a Texas  corporation and Syntera
Technologies,  Inc.,  a Delaware  corporation,  together  with their  respective
successors and assigns, and any other Person who may from time to time guarantee
the Obligation, or any part thereof.

         "Hazardous Substance" means any substance that is designated,  defined,
classified,  or regulated as a hazardous waste,  hazardous material,  pollutant,
contaminant,   explosive,   corrosive,  flammable,   infectious,   carcinogenic,
mutagenic,  radioactive, or toxic or hazardous substance under any Environmental
Law, including,  without limitation,  any hazardous substance within the meaning
of ss. 101(14) of CERCLA.

         "Lien" means any lien, mortgage,  security interest,  tax lien, pledge,
encumbrance or title  retention  arrangement,  or any other interest in property
designed to secure the repayment of Debt,  whether arising by agreement or under
any statute or law.

         "Loan  Documents"  means  this  Agreement,  the  Note,  the  Collateral
Documents,  and any  agreements,  documents (and with respect to this Agreement,
and such other agreements and documents, any renewals, extensions, amendments or
supplements  thereto) or certificates at any time executed or delivered pursuant
to the terms of this Agreement.

         "Material   Adverse  Event"  means  any  circumstance  or  event  that,
individually  or  collectively,  is  reasonably  expected  to  result in any (a)
material  impairment of (i) the ability of any Company to perform its payment or
other  obligations  under any Loan  Document,  or (ii) the  ability of Lender to
enforce any of those  obligations or any of its Rights under the Loan Documents,
(b) material and adverse effect on the business, assets,  operations,  financial
or  other  condition,  or  prospects  of any  Company  (individually)  or of the
Companies (as a whole), or (c) Event of Default or Potential  Default;  provided
that any default by Consolidated  Eco-Systems,  Inc. (formerly known as Exsorbet
Industries,  Inc.  or its  subsidiaries)  under  any of  their  agreements  with
Borrower shall not be a Material Adverse Event.

         "Maximum Rate" means the highest nonusurious rate of interest (if any) 
permitted  from  day  to day by  applicable  law.  Lender  hereby  notifies  and
discloses to Borrower that, for purposes of Tex. Rev. Civ. Stat. Ann. art. 5069,
as it may from time to time be amended,  the "applicable  rate ceiling" shall be
the "weekly"  ceiling from time to time in effect as limited by article 5069(b);
provided,  however,  that to the extent  permitted  by  applicable  law,  Lender
reserves the right to change the "applicable  rate ceiling" from time to time by
further notice and disclosure to Borrower.

         "Multiemployer  Plan" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section  414(f) of the Code (or any similar type
of plan established or regulated under the laws of any foreign country) to which
any Company or any ERISA  Affiliate is making,  or has made, or is accruing,  or
has accrued, an obligation to make contributions.

         "Note" means the Revolving  Credit Note,  substantially  in the form of
Exhibit A attached,  executed by Borrower and delivered pursuant to the terms of
this Agreement, together with any renewals, extensions or modifications.

         "Notice of Borrowing" is defined in Section 2.02.

                                       4
<PAGE>

         "Obligation"  means all present and future  indebtedness,  obligations,
and  liabilities and all renewals and extensions  thereof,  or any part thereof,
now or hereafter owed to Lender by Borrower,  whether arising pursuant to any of
the Loan  Documents,  or  otherwise,  and all renewals and  extensions  thereof,
together with all interest  accruing thereon and costs,  expenses and attorneys'
fees incurred in the enforcement or collection thereof.

         "OSHA" means the Occupational Safety and Health Act of 1970, 29 U.S.C. 
ss. 651 et seq.

         "Permitted Debt" means each of the following;:

                  (a) The existing  Debt that is described on Schedule  4.17 and
all renewals, extensions,  amendments,  modifications,  and refinancings of (but
not any  principal  increases  after the date of this  agreement to) any of that
Debt.

                  (b) The Obligation  and any  guaranties of it delivered  under
this agreement.

                  (c) Debt and Capital Lease obligations incurred by any Company
to acquire,  construct,  or improve  assets  that never  exceed  $500,000  total
principal  amount  outstanding  for  all  of the  Companies  together  with  any
guaranties of such obligations given by any Company,  and renewals,  extensions,
amendments,  modifications,  and refinancings of that Debt and those obligations
or guaranties subject to the foregoing limitations of this clause (c).

                  (d) Trade payables,  accrued taxes, and other liabilities that
do not  constitute  Debt;  and  endorsements  of negotiable  instruments  in the
ordinary course of business.

         "Permitted Liens" means, at any time, the following:

                  (a) The existing Liens that are described on Schedule 4.14 (to
         the  extent  that  such  schedule  does  not  indicate  they  are to be
         extinguished  as a condition  precedent to  extensions  of credit under
         this  agreement)  and  all  renewals,   extensions,   amendments,   and
         modifications  of any of them to the  extent  that the total  principal
         amount each  individually  secures  never  exceeds the total  principal
         amount secured by it on the date of this agreement.

                  (b)      Liens in favor of Lender.

                  (c) Any  interest or title of a lessor in assets  being leased
         under an operating lease that does not constitute Debt.

                  (d) Rights of setoff or recoupment and banker's Liens.

                  (e) Pledges or deposits (that shall not cover any  Collateral)
         made  to  secure   payment  of  workers'   compensation,   unemployment
         insurance,  or other forms of governmental  insurance or benefits or to
         participate  in any  fund in  connection  with  workers'  compensation,
         unemployment insurance, pensions, or other social security programs.

                  (f)  Good-faith  pledges or deposits (that shall not cover any
         Collateral)  (i) for 10% or less of the  amounts due under (and made to
         secure) any Company's  performance of bids, tenders,  contracts (except
         for the repayment of borrowed money), or leases, or (ii) made to secure
         statutory obligations, surety or appeal bonds, indemnity,  performance,
         or other similar  bonds,  or customs or brokers liens  benefitting  any
         Company in the ordinary course of its business.

                                       5
<PAGE>

                  (g)  Zoning  and  similar  restrictions  on the  use  of  (and
         easements,   restrictions,   covenants,   title  defects,  and  similar
         encumbrances on) real property that do not materially impair the use of
         the real  property  and that are not  violated  by existing or proposed
         structures or land use.

                  (h) If no Lien has been filed in any jurisdiction or agreed to
         (i) claims and Liens for Taxes not yet due and payable, (ii) mechanic's
         Liens  and  materialman's  Liens for  services  or  materials  (real or
         personal) and similar Liens incident to construction and maintenance of
         real  property,  in each  case for  which  payments  is not yet due and
         payable, (iii) landlord's Liens for rental not yet due and payable, and
         (iv) Liens of  warehousemen,  carriers,  and vendors and similar  Liens
         securing obligations that are not yet due and payable.

                  (i) Any of the  following  to the extent that the  validity or
         amount is being  properly  contested  in good  faith,  reserve or other
         appropriate provision (if any) required by GAAP has been made, levy and
         execution  has  not  issued  or  continues  to be  stayed,  they do not
         individually or collectively  detract  materially from the value of the
         property of the Person in question or materially impair the use of that
         property in the  operation  of its  business,  and (other than any such
         Liens given statutory  priority) they do not cover any Collateral:  (i)
         claims and Liens for Taxes;  (ii) claims and Liens upon, and defects of
         title to,  real or  personal  property,  including  any  attachment  of
         personal or real property or other legal process before adjudication of
         a  dispute  on  the  merits;  (iii)  claims  and  Liens  of  mechanics,
         materialmen,  warehousemen, carriers, landlords, vendors, or other like
         Liens;  (iv) Liens  incident to  construction  and  maintenance of real
         property; and (v) adverse judgments,  attachments,  or orders on appeal
         for the payment of money.

                  (j) Liens that  secure any of the Debt  described  in Schedule
         4.16 and any renewal,  extension,  amendment,  or modification of those
         Liens so long as those Liens,  renewals,  extensions,  amendments,  and
         modifications never cover any Collateral.

         "Person" means any individual, entity, or Governmental Authority.

         "Pledge  Agreement" means that certain Pledge Agreement,  substantially
in the form of Exhibit B  attached  hereto,  executed  by  Borrower  in favor of
Lender, and any renewals, extensions, amendments,  modifications or restatements
thereof.

         "Pledged Shares" is defined in the Pledge Agreement.

         "Prime" means Prime Medical Services, Inc., a Delaware corporation.

         "Principal Debt" means, at any time, the unpaid principal balance of 
Borrowings.

         "Real  Property"  means  any  land,  buildings,   fixtures,  and  other
improvements  to land now or in the future  directly or indirectly  owned by any
Company,  leased to or otherwise  operated by any  Company,  or subleased by any
Company to any other Person.

         "Revolving Credit Commitment" is defined in Section 2.01.

         "Rights" mans rights, remedies, powers, privileges, and benefits.
         "Solvent" means, as to any Person, that (a) the total fair market value
of its assets exceeds its liabilities, (b) it has sufficient cash flow to enable
it to pay its Debts as they mature,  and (c) it does not have unreasonably small
capital to conduct its businesses.

                                       6
<PAGE>

         "Subsidiary" of any Person means any corporation, partnership, or other
entity  of which 50% or more (in  number  of votes) of the stock (or  equivalent
interests) is owned of record or beneficially,  directly or indirectly,  by that
Person.

         "Taxes"  means  all  present  and  future  taxes  (including,   without
limitation,   gross  receipts,  sales,  use,  consumption,   property,   income,
franchise, capital,  occupational,  value added and excise taxes), withholdings,
assessments, levies, imposts, customs, and other duties, fees or charges, of any
nature  whatsoever,  together with any penalties,  fines or interest  thereon or
other  additions  thereto  imposed,  withheld,  levied or assessed by any taxing
authority or  Governmental  Authority  or by any  international  authority,  and
"Tax," "Taxation," and cognate expressions shall be construed accordingly.

         "Termination Date" means the earlier of (i) February , 2001 or (ii) the
date Lender's  commitment to fund  Borrowings is terminated  pursuant to Section
7.02.

         1.02 TIME REFERENCES . Time references (e.g., 9:30 a.m.) are to time in
Austin, Texas. In calculating a period from one date to another, the word "from"
means  "from  and  including"  and  the  word  "to"  or  "until"  means  "to but
excluding."

         1.03 OTHER REFERENCES . Where  appropriate,  the singular  includes the
plural and vice  versa,  and words of any  gender  include  each  other  gender.
Heading and caption references may not be construed in interpreting  provisions.
Monetary  references  are to currency of the United States of America.  Section,
paragraph,   annex,  schedule,  exhibit,  and  similar  references  are  to  the
particular  Loan  Document  in which they are used.  References  to  "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions.
References to any Person include that Person's heirs, personal  representatives,
successors,  trustees,  receivers, and permitted assigns.  References to any law
include every  amendment or supplement to it, rule and regulation  adopted under
it, and  successor or  replacement  for it.  References  to any Loan Document or
other  document  include  every  renewal  and  extension  of it,  amendment  and
supplement to it, and replacement or substitution for it.

         1.04  ACCOUNTING  PRINCIPLES  .  GAAP  determines  all  accounting  and
financial  terms and compliance  with  financial  reporting  covenants.  GAAP in
effect  on the  date of this  agreement  determines  compliance  with  financial
covenants. Otherwise, all accounting principles applied in a current period must
be  comparable in all material  respects to those  applied  during the preceding
comparable period other than changes concurred in by the Companies'  independent
public accountants.


                                    SECTION 2
                           THE REVOLVING CREDIT LOAN

         2.01. THE REVOLVING CREDIT LOAN AND REVOLVING CREDIT COMMITMENT .

                  (a)  COMMITMENT  AND  BORROWINGS.  Subject  to the  terms  and
conditions of this  Agreement,  including the  conditions  precedent in Sections
2.01(b),  3.01 and 3.02,  Lender  agrees to  extend to  Borrower,  from the date
hereof through the Termination  Date, a revolving line of credit which shall not
exceed at any one time outstanding the sum of $10,000,000 (the "Revolving Credit
Commitment").  Within the  limits of this  Section  2.01,  during  such  period,
Borrower may borrow, repay and reborrow in accordance with this Agreement.  Each
advance  hereunder is called a  "Borrowing"  and all  borrowings  hereunder  are
collectively  referred to as the  "Loan."  Borrower  shall have the right,  upon
three (3) Business Days' prior written notice to Lender,  to permanently  reduce
the unutilized portion of the Revolving Credit Commitment.

                                       7
<PAGE>

                  (b)  LIQUIDITY  REQUIREMENTS.   As  a  condition  to  Lender's
obligation  to advance any Borrowing  hereunder,  Borrower must be in compliance
with the requirements of Section 6.04 hereof related to maintenance of liquidity
and the Collateral Maintenance provisions of the Pledge Agreement.

                  (c) USE OF  PROCEEDS.  Borrower  shall use the proceeds of the
Loan to  fund  potential  acquisitions  and  investments,  to  repurchase  up to
$1,000,000  market value of its stock, for general  corporate  purposes,  and to
guarantee  a loan from  Lender to  William  A.  Searles,  not to exceed  $85,000
outstanding  principal amount.  Borrower shall not use proceeds of any Borrowing
(i) to  purchase or carry any  "margin  securities"  (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System),  (ii) for
any  unlawful  purpose,  or (iii) for the purpose of making any  hostile  tender
offer to acquire shares of stock or other equity interests in another Person.

         2.02.  MANNER OF BORROWING . Borrower  shall give Lender prior  written
notice on or before  10:00 a.m.  (Austin,  Texas time) on any day a Borrowing is
requested  (a "Notice of  Borrowing")  of each  requested  Borrowing in the form
attached as Exhibit C and shall specify the aggregate  amount and requested date
of such  Borrowing.  Each  Borrowing  shall be in an amount of $100,000.00 or an
integral  multiple  thereof.  Not later  than 2:00 p.m.  on the date  specified,
subject  to the  terms and  conditions  of this  Agreement,  Lender  shall  make
available to Borrower,  at Lender's offices in Austin, Texas, the amount of such
requested Borrowing in immediately available funds.

         2.03. FEES . In connection  with Lender's  agreement to enter into this
Agreement and fund the Loan  hereunder,  Borrower has committed to pay to Lender
an  up-front  commitment  fee in the  amount of $37,500  which  would be due and
payable upon the execution of this  Agreement.  In addition,  from and after the
Closing Date,  Borrower shall pay to Lender an unused fee, payable as it accrues
on the last day of each March,  June,  September,  and December  (commencing  on
March 31, 1998) and on the  Termination  Date. Each payment of the unused fee is
equal to the following,  determined for the calendar  quarter (or portion of the
calendar  quarters  commencing  on the date of this  Agreement  or ending on the
Termination Date) preceding and including the date it is due: the product of (i)
1/4 of 1% per annum,  times (ii) the amount by which the average daily Revolving
Credit  Commitment  exceeds the sum of the average daily Principal  Debt,  times
(iii) a fraction with the number of days in the applicable quarter or portion of
it as the numerator and 360, as the denominator.  Borrower acknowledges that the
commitment fee payable  hereunder is a bona fide  commitment fee and is intended
as reasonable  compensation  to Lender for committing to make funds available to
Borrower as described herein and for no other purposes.

         2.04.    NOTES AND NOTE PAYMENTS .

                  (a) NOTE.  The  Borrowings  made under  Section 2.01 by Lender
         shall be evidenced by the Note in form and  substance  satisfactory  to
         Lender  executed  by  Borrower,  which Note shall (i) be dated the date
         hereof,  (ii) be in the  maximum  amount  of  $10,000,000.00,  (iii) be
         payable to the order of Lender,  and (iv) bear  interest in  accordance
         with Section 2.05.

                  (b)      PAYMENTS.

                           (1) PRINCIPAL AND INTEREST.  The unpaid  principal of
         the Note, and all accrued but unpaid interest thereon, shall be due and
         payable on the Termination Date. Interest shall also be due and payable
         quarterly on the last day of each March, June, September, and December,
         commencing March 31, 1998.

                                       8
<PAGE>

                           (2)  OPTIONAL  PREPAYMENTS.  Borrower  shall have the
         right,  from time to time upon three (3) Business  Days' written notice
         to Lender, and without penalty, to prepay the Note, in whole or in part
         upon the  payment of  accrued  interest  on the  amount  prepaid to and
         including the date of payment.

                           (3) MANNER AND APPLICATION OF PAYMENTS.  All payments
         and prepayments by Borrower on account of principal, interest, and fees
         hereunder  shall  be made in  immediately  available  funds.  All  such
         payments  shall be made to Lender at its office in Austin,  Texas,  not
         later than 12:00 noon,  Austin,  Texas time,  on the date due and funds
         received  after  that hour  shall be deemed  to have been  received  by
         Lender on the next following  Business Day. If any payment is scheduled
         to become due and  payable on a day which is not a Business  Day,  such
         payment  shall  instead  become  due  and  payable  on the  immediately
         following  Business Day and interest on the  principal  portion of such
         payment  shall be  payable  at the then  applicable  rate  during  such
         extension.  All  payments  made on the Note shall be  credited,  to the
         extent of the  amount  thereof,  in the  following  manner:  (i) first,
         against the amount of interest accrued and unpaid on the Note as of the
         date of such  payment;  and (ii) second,  against all principal due and
         owing on the Note as of the date of such payment.

         2.05.    INTEREST .

         (a) INTEREST RATE. Subject to Section 2.05(b),  the unpaid principal of
each Borrowing shall bear interest from the date of advance until paid at a rate
per annum that from day-to-day  equals the lesser of (a) the Base Rate in effect
from day-to-day minus 1/4 of 1% (the "Contract Rate"), or (b) the Maximum Rate.

         (b)  DEFAULT  RATE.  All  past  due  principal  of,  and to the  extent
permitted by applicable  law,  interest on, the Note shall bear  interest  until
paid at the lesser of (i) the Base Rate from  time-to-time  in effect plus three
percent (3%), or (ii) the Maximum Rate.

         (c)  COMPUTATION OF INTEREST RATES.  Subject to applicable  usury laws,
interest shall be computed at a daily rate equal to 1/360 of the applicable rate
of interest per annum for all  Borrowings,  unless the Maximum Rate or Base Rate
shall be in effect,  in which case  interest  shall be  computed at a daily rate
equal to 1/365 or 1/366, as appropriate,  of the applicable rate of interest per
annum.

         (d) RECAPTURE RATE. If, on any interest  payment date,  Lender does not
receive  interest on the Note computed (as if no Maximum Rate  limitations  were
applicable)  at the  Contract  Rate  pursuant  to Section  2.05(a)  because  the
Contract  Rate exceeds or has exceeded the Maximum Rate,  then  Borrower  shall,
upon the  written  demand of Lender,  pay to Lender,  in  addition  to  interest
otherwise  required  hereunder,  on each interest payment date  thereafter,  the
Excess  Interest  Amount  (hereinafter  defined)  calculated  as of  such  later
interest  payment date;  provided,  however,  that in no event shall Borrower be
required to pay,  for any  appropriate  computation  period,  interest at a rate
exceeding  the Maximum  Rate  effective  during such  period.  The term  "Excess
Interest  Amount" means,  on any date, the amount by which (a) the amount of all
interest  that would have accrued  before that date on the principal of the Note
(had  the  applicable  Contract  Rate  at all  times  been  in  effect,  without
limitation by the Maximum  Rate)  exceeds (b) the  aggregate  amount of interest
actually paid to Lender on the Note on or before that date.

                                       9
<PAGE>

         2.06.  TAXES . Any and all payments by Borrower  hereunder or under the
Note  shall be made  free and  clear of and  without  deduction  for any and all
present or future taxes, levies, imposts,  deductions,  charges or withholdings,
and all liabilities with respect thereto  (hereinafter  referred to as "Taxes"),
excluding  taxes  imposed on Lender's  income,  and  franchise  taxes imposed on
Lender, by the jurisdiction under the laws of which Lender is organized or is or
should be qualified  to do business or any  political  subdivision  thereof and,
taxes imposed on Lender's  income,  and franchise taxes imposed on Lender by the
jurisdiction of Lender's lending office or any political subdivision thereof. If
Borrower  shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under the Note to Lender,  (i) the sum payable shall be
increased  as may be  necessary  so that after  making all  required  deductions
(including  deductions  applicable to additional sums payable under this Section
2.06) Lender  receives an amount equal to the sum it would have  received had no
such  deductions  been made,  (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant  taxation  authority
or other authority in accordance  with  applicable law.  Borrower will indemnify
Lender for the full amount of Taxes (including,  without  limitation,  any Taxes
imposed by any  jurisdiction on amounts payable under this Section 2.06) paid by
Lender or any liability  (including penalties and interest) arising therefrom or
with  respect  thereto,  whether  or not such Taxes  were  correctly  or legally
asserted.  This  indemnification  shall be payable  upon Lender  making  written
demand therefor.

         2.07.  CAPITAL ADEQUACY . If, after the date hereof,  Lender shall have
reasonably  determined  that either (i) the adoption  (after the date hereof) of
any applicable law, rule, regulation or guideline regarding capital adequacy, or
any  change  therein,  or any  change in the  interpretation  or  administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration  thereof, or (ii) compliance by Lender
(or any lending  office of Lender) with any request or directive  (issued  after
the date hereof)  regarding capital adequacy (whether or not having the force of
law) of any such  authority,  central  bank or  comparable  agency,  and  having
general  application to lenders such as Lender,  has or would have the effect of
reducing  the rate of return on  Lender's  capital  as a  consequence  of its or
Borrower's  obligations  hereunder to a level below that which Lender could have
achieved but for such  adoption,  change or compliance  by an amount  reasonably
deemed by Lender to be  material,  then from time to time,  within five (5) days
after demand by Lender,  Borrower shall pay to Lender such additional  amount as
will adequately  compensate  Lender for such  reduction,  provided that Borrower
will not be  required  to pay any more  than  similarly  situated  customers  of
Lender.  Lender  will  notify  Borrower  of any  event of  which  it has  actual
knowledge,  occurring  after the date  thereof,  which  will  entitle  Lender to
compensation  pursuant to this Section 2.07. No failure by Lender to immediately
demand payment of any additional  amounts payable  hereunder shall  constitute a
waiver of Lender's  right to demand  payment of such  amounts at any  subsequent
time.


                                    SECTION 3
                              CONDITIONS PRECEDENT

         3.01.  INITIAL  BORROWING  . The  obligation  of Lender to advance  its
initial Borrowing is subject to the conditions  precedent that, on or before the
date of such  Borrowing,  (a) Borrower  shall have paid to Lender all fees to be
received by Lender pursuant to this Agreement or any other Loan Document and (b)
Lender shall have received duly executed copies of each of the documents  listed
on Schedule 3.01, each dated as of the date of such Borrowing,  and each in form
and substance satisfactory to Lender.
         3.02.  ALL  BORROWINGS  . The  obligation  of  Lender  to  advance  any
Borrowing  under this  Agreement  (including  the  initial  Borrowing)  shall be
subject to the conditions  precedent  that, as of the date of such Borrowing and
after giving  effect  thereto:  (a) there exists no Default or Event of Default;
(b) no change that would cause a Material  Adverse Effect has occurred since the
date of the Current

                                       10
<PAGE>

Financials referenced in Section 4.05; (c) Lender shall have
received  from  Borrower  a  Notice  of  Borrowing  dated as of the date of such
Borrowing and all of the statements  contained in such Notice of Borrowing shall
be true and correct; (d) the representations and warranties contained in each of
the Loan  Documents  shall be true in all respects as though made on the date of
such Borrowing; (e) the Maximum Rate exceeds the Contract Rate; and (f) Borrower
has satisfied the condition precedent contained in Section 2.01(b).


                                    SECTION 4
                         REPRESENTATIONS AND WARRANTIES

         To induce Lender to make the Loan  hereunder,  Borrower  represents and
warrants to Lender that:

         4.01. CORPORATE EXISTENCE,  GOOD STANDING, AND AUTHORITY . Each Company
is duly organized,  validly existing, and in good standing under the laws of its
jurisdiction of  incorporation.  Except where not a Material Adverse Event, each
Company is duly  qualified  to transact  business  and is in good  standing as a
foreign  corporation  in each  jurisdiction  where the  nature and extent of its
business and  properties  require due  qualification  and good standing (each of
which jurisdictions is identified on Schedule 4.01, as supplemented from time to
time, by a supplement to that schedule that is dated, executed, and delivered by
Borrower  to  Lender  to  reflect  changes  in  that  schedule  as a  result  of
transactions  permitted  by the Loan  Documents).  Each  Company  possesses  all
requisite  authority and power to conduct its business as is now being conducted
and as proposed  under the Loan Documents to be conducted and to own and operate
its assets as now owned and  operated  and as proposed to be owned and  operated
under the Loan Documents.

         4.02  SUBSIDIARIES AND NAMES . Schedule 4.02 (as supplemented from time
to time by a supplement to that schedule that is dated,  executed, and delivered
by  Borrower  to Lender  to  reflect  changes  in that  schedule  as a result of
transactions  permitted  by  the  Loan  Documents),  describes  (a)  all  of the
Companies,  (b)  every  name or  trade  name  used by each  Company  during  the
five-year period before the date of this agreement, and (c) every change of each
Company's  name during the four month period before the date of this  agreement.
All of the outstanding  shares of capital stock (or similar voting interests) of
Borrower's  Subsidiaries  are duly authorized,  validly issued,  fully paid, and
nonassessable,  owned of record and  beneficially as described in Schedule 4.02,
free and clear of any Liens  except  Permitted  Liens,  and not  subject  to any
warrant,  option,  or other  acquisition  Right of any  Person or subject to any
transfer  restriction except  restrictions  described on Schedule 4.02 and those
imposed by the Loan Documents and by securities and general corporate laws.

         4.03.  AUTHORIZATION  AND CONTRAVENTION . The execution and delivery by
each Company of each Loan Document to which it is a party and the performance by
it of its  obligations  under those Loan  Documents (a) are within its corporate
power,  (b) have been duly  authorized by all necessary  corporate  action,  (c)
require  no action by or filing  with any  Governmental  Authority  (except  any
action or filing that has been taken or made on or before the applicable Closing
Date), (d) do not violate any provision of its charter or bylaws, and (e) do not
violate any provision of law applicable to it or any material agreement to which
it is a party except  violations that  individually  or  collectively  are not a
Material Adverse Event.

         4.04.  ENFORCEABLE  OBLIGATIONS  . The Loan  Documents  have  been duly
executed and delivered by each Company,  as  appropriate,  and are the legal and
binding  obligations of each Company which is a party thereto,  as  appropriate,
enforceable  in accordance  with their  respective  terms,  except as limited by
Debtor Laws.

                                       11
<PAGE>

         4.05.  FINANCIAL CONDITION . Borrower has delivered to Lender copies of
the Current Financials of the Companies. The Current Financials of the Companies
are true and correct,  fairly represent the consolidated  financial condition of
Borrower  and its  Subsidiaries  as of such  date  and  have  been  prepared  in
accordance  with GAAP.  The  Financials  of the  Companies  contain no  material
inaccuracies.  As of the date hereof,  there are no obligations,  liabilities or
indebtedness  (including  contingent and indirect  liabilities) of the Companies
which are material and are not reflected in the Companies'  Current  Financials.
No  Material  Adverse  Effect  has  occurred  since  the  date of  such  Current
Financials.

         4.06.  NO  DEFAULT  . No event has  occurred  and is  continuing  which
constitutes a Default or an Event of Default.

         4.07.  MATERIAL  AGREEMENTS  . No Company is in default in any material
respect  under any  contract or agreement to which such Company is a party or by
which any of its properties are bound.

         4.08. NO  LITIGATION . Except as disclosed in writing to Lender,  there
are no  actions,  suits  or  legal,  equitable,  arbitration  or  administrative
proceedings  pending,  or to the knowledge of Borrower  threatened,  against any
Company that could, if adversely determined, have a Material Adverse Effect.

         4.09. USE OF PROCEEDS;  MARGIN STOCK . The proceeds of the Loan will be
used by Borrower solely for the purposes specified in Section 2.01(c).  Borrower
will furnish to Lender a statement in conformity  with the  requirements  of the
Federal  Reserve Form U-1 referred to in  Regulation U of the Board of Governors
of the Federal Reserve System.  No part of the proceeds of the Loan will be used
for any purpose which  violates,  or is  inconsistent  with,  the  provisions of
Regulations U or X of the Board of Governors of the Federal Reserve System.

         4.10.  TAXES . All tax  returns  required to be filed by any Company in
any  jurisdiction  have been filed and all taxes (including  mortgage  recording
taxes),  assessments,  fees and other  governmental  charges upon any Company or
upon any of its properties, income or franchises have been paid except for taxes
being contested in good faith by appropriate proceedings diligently projected.

         4.11.  ENVIRONMENTAL MATTERS . Except as disclosed on Schedule 4.11, as
supplemented  from time to time by a supplement  to that schedule that is dated,
executed,  and  delivered  by  Borrower  to Lender to  reflect  changes  in that
schedule,  and is acceptable to Lender,  (a) no Company has received notice from
any  Governmental  Authority  that  it has  actual  or  potential  Environmental
Liability and no Company has knowledge that it has any Environmental  Liability,
which actual or potential  Environmental  Liability in either case constitutes a
Material  Adverse  Event,  and (b) no  Company  has  received  notice  from  any
Governmental Authority that any Real Property is affected by, and no Company has
knowledge  that any Real  Property is affected by, any Release of any  Hazardous
Substance which constitutes a Material Adverse Event.

         4.12.  EMPLOYEE  PLANS . Except as disclosed on Schedule  4.12 or where
not a Material  Adverse Event (a) no Employee Plan subject to ERISA has incurred
an  "accumulated  funding  deficiency"  (as  defined in Section  302 of ERISA or
Section 512 of the Code),  (b) neither any Company nor any ERISA  Affiliate  has
incurred  liability,  except for liabilities for premiums that have been paid or
that are not past due,  under ERISA to the PBGC in connection  with any Employee
Plan, (c) neither any Company nor any ERISA Affiliate have withdrawn in whole or
in part from  participation  in a Multiemployer  Plan in a manner that has given
rise to a withdrawal  liability under Title IV of ERISA, (d) neither Any Company
nor any ERISA Affiliate have engaged in any "prohibited transaction" (as defined
in Section 406 of ERISA or Section 4975 of the Code), (e) no "reportable  event"
(as defined in Section  4043 of ERISA) has occurred  excluding  events for which
the notice requirement is waived under applicable

                                       12
<PAGE>

PBGC regulations,  (f) neither
any Company nor any ERISA  Affiliate  has any  liability,  or are subject to any
Lien,  under ERISA or the Code to or on account of any Employee  Plan,  (g) each
Employee Plan subject to ERISA and the Code  complies in all material  respects,
both in form and operation,  with ERISA and the Code,  and (h) no  Multiemployer
Plan subject to the Code is in reorganization  within the meaning of Section 418
of the Code.  None of the matters  disclosed  on Schedule  4.12 give rise to any
other "reportable events," as defined above.

         4.13. PROPERTIES; LIENS . Each Company has good and marketable title to
all its property reflected on the Current Financials as being owned by it except
for  encumbrances  described on Schedule  4.13 and property  that is obsolete or
that has been disposed of in the ordinary course of business between the date of
the Current Financials and the date of this agreement or, after the date of this
agreement,  as permitted by Section 6.09 and  otherwise as disclosed on Schedule
4.13. Except as described on Schedule 4.13 no Company owns any Real Property. No
Lien exists on any  property  of any  Company (a) on the date of this  agreement
except the existing  Liens  described on Schedule  4.13 and (b) at anytime after
the date of this agreement except Permitted Liens. Except as otherwise disclosed
on Schedule 4.13, no Company is party or subject to any  agreement,  instrument,
or order which in any way restricts its ability to allow Liens to exist upon any
of its assets except the Loan Documents.

         4.14.  GOVERNMENT  REGULATIONS  . No Company  is subject to  regulation
under the Investment  Company Act of 1940 or the Public Utility  Holding Company
Act of 1935.

         4.15.  TRANSACTIONS WITH AFFILIATES . Except as otherwise  disclosed on
Schedule  4.15 or permitted by Section 6.08, no Company is a party to a material
transaction  with any of its Affiliates,  which could  reasonably be expected to
have a Material Adverse Effect.

         4.16. DEBT . No Company has any Debt (a) on the date of this agreement,
except the existing Debt  described on Schedule  4.16,  and (b) at anytime after
the date of this agreement, except Permitted Debt.

         4.17.  LEASES . Except  where  not a  Material  Adverse  Event (a) each
Company enjoys peaceful and undisturbed  possession  under all leases  necessary
for the  operation  of its  properties  and assets,  none of which  contains any
unusual or burdensome  provisions  which might  materially  affect or impair the
operation of those  properties  and assets,  and (b) all  material  leases under
which any Company is a lessee are in full force and  effect.  All leases of Real
Property  under  which any  Company is a lessee and where any of its  inventory,
equipment, or fixtures is located are described on Schedule 4.17 as supplemented
from time to time by a supplement to that schedule that is dated,  executed, and
delivered by Borrower to Lender to reflect in that schedule.

         4.18.  INSURANCE  . Each  Company  maintains  with  financially  sound,
responsible,  and  reputable  insurance  companies  or  associations  (or, as to
workers'  compensation  or  similar  insurance,  with  an  insurance  fund or by
self-insurance  authorized by the jurisdictions in which it operates)  insurance
concerning its properties and businesses  against  casualties and  contingencies
and of types  and in  amounts  (and with  co-insurance  and  deductibles)  as is
customary in the case of similar businesses.

         4.19.  LABOR MATTERS . Except where not a Material Adverse Event (a) no
actual  or, to the  knowledge  of either  Borrower,  threatened  strikes,  labor
disputes, slow downs, walkouts, work stoppages, or other concerted interruptions
of operations that involve any employees employed at any time in connection with
the business  activities or operations  at the Real  Property  exist,  (b) hours
worked by and payment made to the  employees  of any Company or any  predecessor
have  not  been in  violation  of the  Fair  Labor  Standards  Act or any  other
applicable  Governmental  Requirements  pertaining  to  labor  matters,  (c) all
payments  due from any  Company  for  employee  health  and  welfare  insurance,
including, without 

                                       13
<PAGE>

limitation, workers compensation insurance, have been paid or
accrued as a liability on its books, (d) the business  activities and operations
of each  Company are in  compliance  with OSHA and other  applicable  health and
safety laws.

         4.20.  INTELLECTUAL  PROPERTY . Except as  disclosed  on Schedule  4.20
(none of which  matters  constitute a Material  Adverse  Event) (a) each Company
owns  or  has  the  right  to  use  all  material  licenses,   patents,   patent
applications,  copyrights, service marks, trademarks, trademark applications and
trade  names  necessary  to  continue to conduct  its  businesses  as  presently
conducted by it and proposed to be conducted by it immediately after the date of
this  agreement,  (b) to the  best of  Borrowers'  knowledge,  each  Company  is
conducting its business  without  infringement  or claim of  infringement of any
license, patent, copyright, service mark, trademark, trade name, trade secret or
other intellectual property right of others, and (c) no infringement or claim of
infringement by others of any material license, patent, copyright, service mark,
trademark,  trade  name,  trade  secret or other  intellectual  property  of any
Company exists.

         4.21.  PLEDGED SHARES . Borrower owns 3,064,503  total shares of Common
Stock, $.01 par value of Prime,  which represent  approximately  15.9% of all of
the issued and outstanding common shares of Prime. On the date hereof,  Borrower
has pledged to Lender  500,000 of those shares,  which  represent  approximately
2.6% of all of the issued and outstanding common shares of Prime.

         4.22. FULL DISCLOSURE . All written information previously furnished to
Lender by or at the direction of the respective  Company in connection  with the
Loan  Documents  was true and  accurate  in all  material  respects  or based on
reasonable estimates on the date the information is stated or certified.

         4.23.  REPRESENTATIONS  AND WARRANTIES . Each Notice of Borrowing shall
constitute,   without  the  necessity  of  specifically   containing  a  written
statement, a representation and warranty by Borrower that no Default or Event of
Default exists and that all  representations  and  warranties  contained in this
Section 4 or elsewhere in this  Agreement or in any other Loan Document are true
and correct on and as of the date the requested Borrowing is to be made.


                                    SECTION 5
                             AFFIRMATIVE COVENANTS

         So long as Lender has any commitment to make Borrowings, hereunder, and
until payment in full of the  Obligation,  Borrower  agrees that (unless  Lender
shall otherwise consent in writing):

         5.01.  FINANCIAL  STATEMENTS,  REPORTS AND  DOCUMENTS . Borrower  shall
deliver or cause to be delivered to Lender each of the following:

                  (a) ANNUAL  FINANCIALS.  Promptly  after  preparation,  but no
         later  than 120 days  after  the  last day of each  fiscal  year of the
         Companies,  Financials  showing the Companies'  consolidated  financial
         condition  and results of  operations as of, and for the year ended on,
         that  last  day,  accompanied  by (i)  the  opinion,  without  material
         qualification, of KMPG Peat Marwick, L.L.P. or other firm of nationally
         recognized   independent   certified  public   accountants   reasonably
         acceptable  to  Lender,  based on an  audit  using  generally  accepted
         auditing standards,  that the consolidated  portion of those Financials
         were  prepared  in  accordance  with GAAP and  present  fairly,  in all
         material respects, the Companies'  consolidated financial condition and
         results of operations, and (ii) a Compliance Certificate.

                                       14
<PAGE>

                  (b) QUARTERLY  FINANCIALS.  Promptly after  preparation but no
         later than 45 days after the last day of each of the first three fiscal
         quarters of the Companies each year,  unaudited  Financials showing the
         Companies'  consolidated  financial condition and results of operations
         for that fiscal  quarter and for the period from the  beginning  of the
         current fiscal year to the last day of that fiscal quarter, accompanied
         by a Compliance Certificate.

                  (c) MANAGEMENT LETTERS.  Promptly upon receipt thereof, a copy
of  any  management  letter  or  written  report  submitted  to any  Company  by
independent certified public accountants with respect to the business, condition
(financial or otherwise), operations, or properties of any Company.

                  (d)  NOTICE OF  LITIGATION.  Promptly  after the  commencement
thereof,  notice of all actions,  suits, and proceedings before any Governmental
Authority or arbitrator  affecting any Company which, if determined adversely to
such Company, could have be a Material Adverse Event.

                  (e) NOTICE OF DEFAULT.  As soon as  possible  and in any event
within five (5) days after Borrower  knows of the occurrence of each Default,  a
written  notice  setting  forth the details of such  Default and the action that
Borrower has taken and proposes to take with respect thereto.

                  (f)  ERISA  REPORTS.  Promptly  after the  filing  or  receipt
thereof, copies of all reports,  including annual reports, and notices which any
Company  files with or receives  from the PBGC or the U.S.  Department  of Labor
under ERISA; and as soon as possible and in any event within five (5) days after
any Company knows or has reason to know that any reportable  event or prohibited
transaction  has  occurred  with  respect  to any Plan or that the PBGC,  or any
Company has instituted or will institute  proceedings under Title IV of ERISA to
terminate any Plan, a  certificate  of the chief  financial  officer of Borrower
setting forth the details as to such reportable event or prohibited  transaction
or Plan  termination and the action that Borrower  proposes to take with respect
thereto.

                  (g) REPORTS TO OTHER CREDITORS.  Promptly after the furnishing
thereof, copies of any statement or report furnished by any Company to any other
creditor to which any Company owes  $100,000.00 or more pursuant to the terms of
any indenture,  loan, or credit or similar agreement and not otherwise  required
to be furnished to the Lender pursuant to any other clause of this Section 5.01.

                  (h) PROXY STATEMENTS,  Etc. As soon as available, one (1) copy
of each financial statement,  report, notice or proxy statement sent by Borrower
to its  stockholders  generally  and one (1) copy of each  regular,  periodic or
special report, registration statement, or prospectus filed by Borrower with any
securities  exchange or the Securities and Exchange  Commission or any successor
agency including, without limitation, all Forms 10-K, 10-Q and 8-K and all other
periodic reports required to be filed under the Securities  Exchange Act of 1934
and the rules and regulations promulgated thereunder.

                  (i) GOVERNMENTAL  AUTHORIZATIONS.  Upon the request of Lender,
but not more often than one (1) time  during each  fiscal  year of  Borrower,  a
complete and accurate list of each  Governmental  Authorization  held by each of
Companies or that  otherwise  relate to the business of, or to any of the assets
owned or used by, each of the Companies.

                  (j) QUARTERLY LIQUIDITY  STATEMENTS.  As soon as available and
in any  event,  within  twenty  (20) days  after  the last day of each  calendar
quarter,  a statement of  Borrower's  Unencumbered  Liquid Assets (as defined in
Section 6.04) in detail reasonably satisfactory to Lender.

                  (k)  GENERAL  INFORMATION.  Promptly,  such other  information
concerning  Borrower or any of its  Subsidiaries  as the Lender may from time to
time reasonably request.


                                       15
<PAGE>

         5.02.  USE OF CREDIT . Borrower  shall use proceeds of Borrowings  only
for the purposes represented in this agreement.

         5.03.  PAYMENT OF TAXES AND OTHER  INDEBTEDNESS  .  Borrower  shall and
shall cause each Company to pay and  discharge  (i) all taxes,  assessments  and
governmental  charges or levies imposed upon it or upon its income,  or upon any
property belonging to it, before  delinquent,  (ii) all lawful claims (including
claims for labor, materials and supplies),  which, if unpaid, might give rise to
a Lien upon any of its property, and (iii) all of its other indebtedness, except
as prohibited under the Loan Documents; provided, however, that no Company shall
be  required to pay any such tax,  assessment,  charge or levy if and so long as
the amount,  applicability  or validity  thereof shall currently be contested in
good faith by appropriate proceedings and appropriate accruals and cash reserves
have been established in accordance with GAAP.

         5.04.  BOOKS  AND  RECORDS;  ACCESS . Upon  five (5) days  notice  from
Lender,  Borrower  shall give any  representative  of Lender  access  during all
business  hours to, and permit  such  representative  to  examine,  copy or make
excerpts  from,  any and all books,  records and documents in the  possession of
Borrower and relating to its affairs,  and to inspect any of the  properties  of
Borrower. Borrower shall maintain complete and accurate books and records of its
transactions in accordance with good accounting practices.

         5.05. COMPLIANCE WITH LAW . Borrower shall and shall cause each Company
to comply with all applicable laws,  rules,  regulations,  and all orders of any
Governmental Authority.

         5.06.  PAYMENT OF  OBLIGATIONS  .  Borrower  shall and shall cause each
Company to promptly pay (or renew and extend) all of its material obligations as
they become due (unless the  obligations  are being  properly  contested in good
faith).

         5.07.  EXPENSES . Within five Business Days after demand accompanied by
an invoice  describing  the costs,  fees,  and  expenses in  reasonable  detail,
Borrowers shall,  subject to the last sentence in this Section 5.07, pay (a) all
reasonable costs,  fees, and expenses paid or incurred by Lender incident to any
Loan Document (including,  without limitation,  the reasonable fees and expenses
of Lender's counsel in connection with the negotiation,  preparation,  delivery,
and  execution  of the Loan  Documents  and any related  amendment,  waiver,  or
consent)  and (b) all  reasonable  costs  and  expenses  incurred  by  Lender in
connection with the enforcement of the obligations of any Company under the Loan
Documents or the exercise of any Rights under the Loan  Documents,  all of which
are part of the Obligation,  bearing interest, (if not paid within five Business
Days after demand  accompanied  by an invoice  describing  the costs,  fees, and
expenses in reasonable detail) at the Default Rate until paid.

         5.08. MAINTENANCE OF EXISTENCE,  ASSETS, AND BUSINESS . Borrower agrees
that it shall and shall  cause each  Company to (a)  except in  connection  with
dispositions  permitted  under  Section  6.09 and mergers,  consolidations,  and
dissolutions  permitted under Section 6.09, maintain its corporate existence and
good standing in its jurisdiction of  incorporation,  and (b) except where not a
Material Adverse Event (i) maintain its authority to transact  business and good
standing  in all other  states  where  required,  (ii)  maintain  all  licenses,
permits, and franchises (including,  without limitation,  Environmental Permits)
necessary for its business,  and (iii) keep all of its material  assets that are
useful in and  necessary  to its business in good  working  order and  condition
(ordinary  wear  and  tear   excepted)  and  make  all  necessary   repairs  and
replacements.

         5.09.  INSURANCE . In addition to any other  requirements  set forth in
other Loan  Documents,  Borrower  shall and shall cause each Company at its cost
and expense,  to maintain with  financially  sound,  

                                       16
<PAGE>

responsible,  and reputable
insurance companies or associations (or, as to workers'  compensation or similar
insurance,  with  an  insurance  fund  or by  self-insurance  authorized  by the
jurisdictions  in which it operates)  insurance  concerning  its  properties and
businesses against casualties and contingencies and of types and in amounts (and
with  co-insurance  and  deductibles)  as is  customary  in the case of  similar
businesses.

         5.10.  ENVIRONMENTAL  MATTERS .  Borrower  shall and shall  cause  each
Company to (a)  operate  and manage its  businesses  and  otherwise  conduct its
affairs in compliance  with all  Environmental  Laws and  Environmental  Permits
except to the extent noncompliance does not constitute a Material Adverse Event,
(b)  promptly  deliver  to  Lender  a  copy  of any  notice  received  from  any
Governmental  Authority  alleging that any Company is not in compliance with any
Environmental  Law or  Environmental  Permit if the  allegation  (if  determined
adversely)  would  constitute a Material Adverse Event, and (c) promptly deliver
to Lender a copy of any notice received from any Governmental Authority alleging
that any Company has any potential Environmental Liability if the allegation (if
determined adversely) would constitute a Material Adverse Event.

         5.11.  FURTHER ASSURANCES . Borrower shall and shall cause each Company
to make,  execute  and  deliver  or file or cause the same to be done,  all such
notices, additional agreements, mortgages, assignments,  financing statements or
other  assurances,  and take any and all such other action,  as Lender may, from
time to time,  deem  necessary  or  proper  in  connection  with any of the Loan
Documents, including actions necessary or proper to preserve or perfect Lender's
security interest in Pledged Shares and other Collateral.

         5.12.    INDEMNITY BY BORROWER .

                  (a) AS USED IN THIS SECTION:  (i) "INDEMNITOR"  MEANS (SUBJECT
         TO CLAUSE (C) BELOW) BORROWER;  (ii)  "INDEMNITEE"  MEANS LENDER,  EACH
         PRESENT  AND  FUTURE  AFFILIATE  OF  LENDER,  EACH  PRESENT  AND FUTURE
         REPRESENTATIVE OF LENDER, OR ANY OF THOSE AFFILIATES,  AND EACH PRESENT
         AND FUTURE  SUCCESSOR AND ASSIGN OF LENDER,  OR ANY OF THOSE AFFILIATES
         OR  REPRESENTATIVES;  AND  (iii)  "INDEMNIFIED  LIABILITIES"  MEANS ALL
         PRESENT  AND  FUTURE,   KNOWN  AND  UNKNOWN,   FIXED  AND   CONTINGENT,
         ADMINISTRATIVE,  INVESTIGATIVE,  JUDICIAL,  AND OTHER CLAIMS,  DEMANDS,
         ACTIONS, CAUSES OF ACTION, INVESTIGATIONS,  SUITS, PROCEEDINGS, AMOUNTS
         PAID  IN  SETTLEMENT,   DAMAGES,  JUDGMENTS,  PENALTIES,  COURT  COSTS,
         LIABILITIES,  AND  OBLIGATIONS,  AND  ALL  PRESENT  AND  FUTURE  COSTS,
         EXPENSES,  AND  DISBURSEMENTS  (INCLUDING,   WITHOUT  LIMITATION,   ALL
         REASONABLE  ATTORNEYS'  FEES AND  EXPENSES  WHETHER  OR NOT ANY SUIT OR
         OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY SUIT OR OTHER
         PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING, THAT MAY AT ANY
         TIME BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE AND
         IN ANY  WAY  RELATING  TO OR  ARISING  OUT OF ANY  (A)  LOAN  DOCUMENT,
         TRANSACTION  CONTEMPLATED  BY ANY LOAN DOCUMENT,  COLLATERAL  UNDER ANY
         LOAN DOCUMENT, OR REAL PROPERTY, (B) ENVIRONMENTAL LIABILITY IN ANY WAY
         RELATED  TO  ANY  COMPANY,  PREDECESSOR,   COLLATERAL  UNDER  ANY  LOAN
         DOCUMENT, REAL PROPERTY, OR ACT, OMISSION,  STATUS, OWNERSHIP, OR OTHER
         RELATIONSHIP,  CONDITION,  OR  CIRCUMSTANCE  CONTEMPLATED  BY,  CREATED
         UNDER, OR ARISING  PURSUANT TO OR IN CONNECTION WITH ANY LOAN DOCUMENT,
         OR (C) INDEMNITEE'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE.

                  (b) EACH  INDEMNITOR  SHALL INDEMNIFY EACH INDEMNITEE FROM AND
         AGAINST, PROTECT AND DEFEND EACH INDEMNITEE FROM AND AGAINST, HOLD EACH

                                       17
<PAGE>


         INDEMNITEE  HARMLESS  FROM AND AGAINST,  AND ON DEMAND PAY OR REIMBURSE
         EACH INDEMNITEE FOR, ALL INDEMNIFIED LIABILITIES.

                  (c) THE  FOREGOING  PROVISIONS  (i) ARE NOT  LIMITED IN AMOUNT
         EVEN IF THAT  AMOUNT  EXCEEDS THE  OBLIGATION,  (ii)  INCLUDE,  WITHOUT
         LIMITATION,  REASONABLE  FEES AND EXPENSES OF ATTORNEYS AND OTHER COSTS
         AND EXPENSES OF LITIGATION OR PREPARING FOR  LITIGATION  AND DAMAGES OR
         INJURY TO PERSONS,  PROPERTY,  OR NATURAL  RESOURCES  ARISING UNDER ANY
         STATUTORY OR COMMON LAW, PUNITIVE DAMAGES,  FINES, AND OTHER PENALTIES,
         AND (iii) ARE NOT  AFFECTED  BY THE  SOURCE OR ORIGIN OF ANY  HAZARDOUS
         SUBSTANCE, AND (iv) ARE NOT AFFECTED BY ANY INDEMNITEE'S INVESTIGATION,
         ACTUAL OR CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING, OR WAIVER.

                  (d) NOTWITHSTANDING ANYTHING TO THE CONTRARY, NO INDEMNITEE IS
         ENTITLED TO BE INDEMNIFIED  UNDER THE LOAN DOCUMENTS FOR ITS OWN FRAUD,
         GROSS NEGLIGENCE, OR WILFUL MISCONDUCT.

                  (e)  THE   PROVISIONS   OF  AND   INDEMNIFICATION   AND  OTHER
         UNDERTAKINGS  UNDER THIS SECTION  SURVIVE THE FORECLOSURE OF ANY LENDER
         LIEN OR ANY  TRANSFER  IN LIEU OF THAT  FORECLOSURE,  THE SALE OR OTHER
         TRANSFER OF ANY COLLATERAL  UNDER ANY LOAN DOCUMENT OR REAL PROPERTY TO
         ANY PERSON, THE SATISFACTION OF THE OBLIGATION,  THE TERMINATION OF THE
         LOAN DOCUMENTS, AND THE RELEASE OF ANY OR ALL LIENS IN FAVOR OF LENDER.


                                    SECTION 6
                               NEGATIVE COVENANTS

         So long as Lender has any commitment to make Borrowings hereunder,  and
until payment in full of the  Obligation,  Borrower  agrees that (unless  Lender
shall otherwise consent in writing):

         6.01.  LIMITATION ON SALE;  NEGATIVE  PLEDGE . Borrower shall not sell,
assign or transfer,  or create,  incur, permit or suffer to exist any Lien upon,
or grant  options,  warrants or rights in, any stock of Prime owned by Borrower,
except for the (a) security  interest in favor of Lender;  and (b) up to 500,000
shares of Prime not subject to the Pledge Agreement.

         6.02.  LIMITATION ON  INDEBTEDNESS  . Borrower  shall not and shall not
permit the  Companies to incur,  permit or suffer to exist any Debt which causes
the aggregate amount of all such Debt of the Companies to exceed $500,000.

         6.03.  LIMITATION  ON  DISPOSITION  OF ASSETS . Borrower  shall not and
shall not permit any Company to sell,  transfer,  lease or otherwise  dispose of
any of its assets  having a fair market  value of more than $1,000 for less than
fair market.

         6.04.  LIQUIDITY  MAINTENANCE . Borrower shall not permit the aggregate
market  value of  Borrower's  Unencumbered  Liquid  Assets (as  defined  below),
determined as of the end of each March,  June,  September,  and December,  to be
less  than the  Interest  Expense  scheduled  to be due and  payable  in the two
succeeding fiscal quarters of Borrower.


                                       18
<PAGE>

         As used in this Section 6.04,  the term  "Unencumbered  Liquid  Assets"
means the following assets and rights owned or held by any Company to the extent
that they are unrestricted, are not subject to any Lien, and may be converted to
cash by sale or other means within ten days:

                  (a)      Cash;

                  (b) Demand  deposits or  interest-bearing  time and eurodollar
         deposits, certificates of deposit, or similar banking arrangements with
         banks that have capital and surplus of not less than $750,000,000;

                  (c) Direct obligations of either the United States of America,
         in the form of United States Treasury obligations,  or any governmental
         agency or instrumentality  whose obligations  constitute full faith and
         credit obligations of the United States of America,  with maturities of
         ten years or less;

                  (d) Commercial paper rated P-1 by Moody's Investors  Services,
         Inc., or A-1 by Standard & Poor's Corporation;

                  (e)  Bonds  and  other  fixed  income  instruments  (including
         tax-exempt  bonds) from companies or public  entities rated  investment
         grade, and mutual funds that invest  substantially  all of their assets
         in such bonds and other fixed income instruments, either owned directly
         by  Borrower  or  managed  on  Borrower's   behalf  by  any  nationally
         recognized investment advisor with assets under management in excess of
         $250,000,000;

                  (f) Common stocks and preferred  stocks listed on the New York
         Stock Exchange or any other national exchange or sold over the counter,
         and  which  are  subject  to no legal or  contractual  restrictions  on
         trading,  either  owned  directly by Borrower or managed on  Borrower's
         behalf by any  nationally  recognized  investment  advisor  with assets
         under management in excess of $250,000,000; and

                  (g)  Mutual   funds  or  money   market   funds  that   invest
         substantially  all of their assets in instruments  described in clauses
         (a), (b), (c), (d), (e), or (f) preceding.

         6.05.  DISTRIBUTIONS  .  Borrower  shall not and shall not  permit  any
Company to declare,  make, or pay any Distribution except (i) Distributions paid
in the  form of  additional  equity  that is not  mandatorily  redeemable,  (ii)
Distributions  by any  Company to  Borrower  and any other  shareholder  of such
Company pro rata with  Borrower,  and (iii)  payment of  expenses to  directors,
officers, and employees of the Companies in the ordinary course of business.

         6.06.  NET WORTH . Borrower  shall not permit the Companies' Net Worth,
determined  as of the end of each fiscal  quarter of  Borrower,  to be less than
$20,000,000.

         6.07.  REPURCHASE OF BORROWER  STOCK . All  repurchases of its stock by
Borrower  shall be done in  compliance  with  all  applicable  laws,  including,
without  limitation,  Regulation U. Borrower agrees that it shall not repurchase
stock having a fair market value  exceeding  $1,000,000  in the  aggregate.  All
shares  of  Borrower's  stock  repurchased  by  Borrower  shall  be  immediately
cancelled and retired.

         6.08.  TRANSACTION  WITH  AFFILIATES . Borrower shall not and shall not
permit  any  Company  to enter  into any  material  transaction  with any of its
Affiliates  except (a) those described on Schedule 4.15, and (b) transactions in
the  ordinary  course  of  business  and upon  fair  and  reasonable  terms  not


                                       19
<PAGE>

materially  less favorable than it could obtain or could become entitle to in an
arm's-length transaction with a Person that were not its Affiliate.

         6.09 MERGERS, CONSOLIDATIONS, AND DISSOLUTIONS . Borrower shall not and
shall not permit any Company to merge or  consolidate  with any other  Person or
dissolve or sell,  transfer,  or pledge all or substantially  all of its assets,
except,  (i) if there is no related Default (a) any merger between  Borrower and
any other Company, so long as the Borrower is the survivor,  and (b) between any
Company  (other  than  Borrower)  and any other  Company,  provided  that if any
Guarantor merges with a Company which is not a Guarantor,  the Guarantor must be
the survivor;  (ii) upon ten (10) Business Day's prior written  notice,  Syntera
Technologies,  Inc. may be dissolved;  (iii)  Borrower may transfer stock of APS
Practice Management,  Inc. ("Practice  Management") or cause additional stock of
Practice  Management to be issued which would cause Practice Management to cease
being a  Subsidiary;  and (iv)  Borrower  may  transfer  stock of APS  Insurance
Services,  Inc. ("APS  Insurance") to FPIC Insurance Group, Inc. pursuant to and
in accordance  with the Stock  Purchase and Stock Option  Agreement  dated as of
April 1, 1997 between Borrower and Florida Physicians  Insurance Group, Inc. and
the  Shareholders  Agreement  dated as of June 30,  1997  between  Borrower  and
Florida Physicians Insurance Group, Inc., as in effect on the date hereof.


                                    SECTION 7
                               EVENTS OF DEFAULT

         7.01.  EVENTS OF DEFAULT . An "Event of Default" shall exist if any one
or more of the following events shall occur and be continuing:

                  (a) Borrower  fails to pay any  principal or interest  payment
         when due and such failure continues for five (5) days or Borrower fails
         to pay when due all or any part of any other portion of the Obligation;

                  (b) any  representation  or warranty made under this Agreement
         or any of the other Loan Documents proves to be untrue or inaccurate in
         any  material  respect as of the date on which such  representation  or
         warranty is made;

                  (c) default occurs in the  performance of any of the covenants
         or agreements of any Company contained in this Agreement,  or in any of
         the other Loan Documents, which default is not remedied within ten (10)
         days after written notice to Borrower from Lender;  provided, that such
         ten (10) day grace  period shall not apply to the  obligations  to make
         scheduled  payments  contained  in Section 2 of this  Agreement,  or in
         Section 6 of the Pledge Agreement;

                  (d) default  shall occur in the payment of the unpaid  balance
         of, or any installment of principal or interest of, indebtedness (other
         than the Obligation)  having an aggregate  principal  balance exceeding
         the sum of $100,000 of any Company or default shall occur in respect of
         any note or credit agreement relating to any such indebtedness and such
         default  shall  continue  for more than the  period  of grace,  if any,
         specified therein;

                  (e) any of the Loan Documents  shall cease to be legal,  valid
         and binding  agreements  enforceable  against the Person  executing the
         same in accordance  with its terms,  shall be terminated,  become or be
         declared  ineffective or inoperative or cease to provide the respective
         liens, security interests, rights, titles, interests,  remedies, powers
         or privileges intended to be provided thereby;


                                       20
<PAGE>

                  (f) Any Company or Prime shall (i) apply for or consent to the
         appointment of a receiver, trustee, custodian, intervenor or liquidator
         of itself or of all or a  substantial  part of the Company's or Prime's
         assets, (ii) file a voluntary petition in bankruptcy,  admit in writing
         the Company or Prime, as the case may be, is unable to pay its debts as
         they  become due or  generally  not pay its debts as they  become  due,
         (iii) make a general assignment for the benefit of creditors, (iv) file
         a petition or answer  seeking  reorganization  of an  arrangement  with
         creditors or to take advantage of any bankruptcy or insolvency laws, or
         (v) file an answer  admitting the material  allegations  of, or consent
         to, or default in  answering,  a petition  filed against the Company or
         Prime in any bankruptcy, reorganization or insolvency proceeding; or

                  (g) An involuntary  proceeding shall be commenced  against any
         Company or Prime seeking bankruptcy or reorganization of any Company or
         Prime or the appointment of a receiver,  custodian, trustee, liquidator
         or  other  similar  official  of  any  Company  or  Prime,  or  all  or
         substantially  all  of  the  Company's  or  Prime's  assets,  and  such
         proceeding shall not have been dismissed within ninety (90) days of the
         filing thereof; or an order, order for relief, judgment or decree shall
         be entered by any court of competent  jurisdiction  or other  competent
         authority  approving a petition or complaint seeking  reorganization of
         any Company or Prime,  or  appointing a receiver,  custodian,  trustee,
         liquidator or other similar official of any Company or Prime, or of all
         or substantially all of any Company's or Prime's assets;

                  (h) any final  judgment(s)  for the payment of money in excess
         of the sum of $1,000,000 in the aggregate shall be rendered against any
         Company and such  judgment(s)  shall not be satisfied or  discharged at
         least  ten (10) days  prior to the date on which any of such  Company's
         assets could be lawfully sold to satisfy such judgment;

         7.02.  REMEDIES  UPON EVENT OF DEFAULT . If any Event of Default  shall
occur  Lender may,  without  notice,  except as  otherwise  provided for herein,
exercise any one or more of the  following  rights and  remedies,  and any other
remedies provided in any of the Loan Documents, as Lender in its sole discretion
may deem necessary or appropriate:  (i) terminate  Lender's  commitment to lend,
(ii) declare the Obligation or any part thereof to be forthwith due and payable,
whereupon the same shall forthwith  become due and payable without  presentment,
demand,  protest,  notice of default,  notice of acceleration or of intention to
accelerate or other notice of any kind, all of which Borrower  hereby  expressly
waives,   anything   contained   herein   or  in  the   Note  to  the   contrary
notwithstanding,  (iii) reduce any claim to judgment, or (iv) pursue and enforce
any of Lender's  rights and  remedies  under the Loan  Documents,  or  otherwise
provided  under  or  pursuant  to any  applicable  law or  agreement;  provided,
however,  that if any  specified  in Sections  7.01(f) or (g) shall  occur,  the
Obligation shall thereupon become due and payable  concurrently  therewith,  and
Lender's obligation to lend shall immediately  terminate hereunder,  without any
further action by Lender and without  presentment,  demand,  protest,  notice of
default, notice of acceleration or of intention to accelerate or other notice of
any kind, all of which Borrower hereby expressly waives.

         7.03.  PERFORMANCE  BY LENDER . Should  Borrower  fail to  perform  any
covenant, duty or agreement contained in any of the Loan Documents,  Lender may,
after five (5) days written  notice to  Borrower,  perform or attempt to perform
such covenant,  duty or agreement on behalf of Borrower. In such event, Borrower
shall,  at the request of Lender,  promptly pay any amount expended by Lender in
such  performance  or attempted  performance  to Lender at its office in Austin,
Texas,  together with interest thereon at the default rate of interest  provided
herein,  from the  date of such  expenditure  until  paid.  Notwithstanding  the
foregoing, it is expressly understood that Lender shall not assume any liability
or  responsibility  for the  performance of any duties of Borrower  hereunder or
under any of the Loan  Documents and none of the  covenants or other  provisions
contained in this Agreement  shall, or shall be 


                                       21
<PAGE>

deemed to, give Lender the right
or power to exercise control over the management and affairs of Borrower.


                                    SECTION 8
                                 MISCELLANEOUS

         8.01.  ACCOUNTING  REPORTS  . All  financial  reports  or  projections,
furnished by any Person to Lender  pursuant to this Agreement  shall be prepared
in such  form and such  detail  as shall be  satisfactory  to  Lender,  shall be
prepared on the same basis as those prepared by such Person in prior years.

         8.02. WAIVER . No failure to exercise,  and no delay in exercising,  on
the part of Lender,  any right hereunder shall operate as a waiver thereof,  nor
shall any  single or  partial  exercise  thereof  preclude  any other or further
exercise  thereof or the exercise of any other right. The rights of Lender under
the Loan Documents  shall be in addition to all other rights provided by law. No
modification  or waiver of any  provision of any Loan  Document,  nor consent to
departure therefrom, shall be effective unless in writing and no such consent or
waiver shall extend beyond the particular case and purpose  involved.  No notice
or demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.

         8.03. NOTICES . Any communications required or permitted to be given by
any of the Loan  Documents  must be (i) in writing and  personally  delivered or
mailed by  prepaid  certified  or  registered  mail,  or (ii) made by  facsimile
transmission  delivered  or  transmitted,  to the party to whom  such  notice of
communication is directed,  to the address of such party shown opposite its name
on the signature pages hereof.  Any such  communication  shall be deemed to have
been  given  (whether  actually  received  or not)  on the day it is  personally
delivered or, if  transmitted  by facsimile  transmission,  on the day that such
communication is transmitted as aforesaid  subject to telephone  confirmation of
receipt; provided,  however, that any notice received by Lender after 10:00 a.m.
Austin,  Texas time on any day from  Borrower  pursuant  to  Section  2.02 (with
respect  to a Notice of  Borrowing)  shall be deemed  for the  purposes  of such
Section to have been given by Borrower on the next succeeding day, or if mailed,
on the  third day after it is marked  as  aforesaid.  Any party may  change  its
address for purposes of this  Agreement  by giving  notice of such change to the
other parties pursuant to this Section 8.03.

         8.04.  GOVERNING  LAW . This  Agreement  has  been  prepared,  is being
executed  and  delivered,  and is intended to be performed in the State of Texas
and the  substantive  laws of such state and the applicable  federal laws of the
United States of America shall govern the  validity,  construction,  enforcement
and interpretation of this Agreement and all of the other Loan Documents.

         8.05. INVALID PROVISIONS . Any provision of any Loan Document held by a
court of competent  jurisdiction to be illegal,  invalid or unenforceable  shall
not invalidate the remaining provisions of such Loan Document which shall remain
in full force and effect the effect  thereof  shall be confined to the provision
held invalid or illegal.

         8.06. MAXIMUM INTEREST RATE . Regardless of any provision  contained in
any of the Loan Documents, Lender shall never be entitled to receive, collect or
apply as interest on the Note any amount in excess of interest calculated at the
Maximum  Rate,  and,  in the event that any Lender  ever  receives,  collects or
applies as  interest  any such  excess,  the  amount  which  would be  excessive
interest  shall be deemed to be a partial  prepayment  of principal  and treated
hereunder as such;  and, if the  principal  amount of the  Obligation is paid in
full, any remaining  excess shall forthwith be paid to Borrower.  In determining
whether or not the  interest  paid or  payable  under any  specific  contingency


                                       22
<PAGE>

exceeds interest  calculated at the Maximum Rate,  Borrower and Lender shall, to
the  maximum  extent  permitted  under  applicable  law,  (i)  characterize  any
nonprincipal payment as an expense, fee or premium rather than as interest; (ii)
exclude  voluntary  prepayments  and the effects  thereof;  and (iii)  amortize,
prorate,  allocate  and spread,  in equal  parts,  the total  amount of interest
throughout the entire  contemplated term of the Note; provided that, if the Note
is paid and  performed  in full prior to the end of the full  contemplated  term
thereof, and if the interest received for the actual period of existence thereof
exceeds interest calculated at the Maximum Rate, Lender shall refund to Borrower
the  amount of such  excess or credit  the  amount of such  excess  against  the
principal amount of the Note and, in such event,  Lender shall not be subject to
any  penalties  provided  by any laws for  contracting  for,  charging,  taking,
reserving or receiving interest in excess of interest  calculated at the Maximum
Rate.

         8.07.  NONLIABILITY OF LENDER . The  relationship  between Borrower and
Lender is, and shall at all times remain, solely that of Borrower and Lender and
Lender has no fiduciary or other special relationship with Borrower.

         8.08. OFFSET . Borrower hereby grants to Lender the right of offset, to
secure repayment of the Obligation, upon any and all moneys, securities or other
property  of Borrower  and the  proceeds  therefrom,  now or  hereafter  held or
received  by or in transit to Lender or its  agents,  from or for the account of
Borrower, whether for safe keeping, custody, pledge, transmission, collection or
otherwise,  and also upon any and all deposits  (general or special) and credits
of  Borrower,  and any and all  claims of  Borrower  against  Lender at any time
existing.

         8.09. SUCCESSORS AND ASSIGNS . The Loan Documents shall be binding upon
and inure to the benefit of Borrower and Lender and their respective successors,
assigns and legal  representatives;  provided,  however,  that Borrower may not,
without the prior written consent of Lender,  assign any rights,  powers, duties
or obligations thereunder.

         8.10.  CHAPTER  346.  The  Borrower  and Lender  hereby  agree that the
provisions of Chapter 346 of the Finance Code of the State of Texas  (regulating
certain revolving credit loans and revolving  triparty accounts) shall not apply
to the Loan Documents.

         8.11. HEADINGS . Section headings are for convenience of reference only
and shall in no way affect the interpretation of this Agreement.

         8.12.  SURVIVAL . All  representations  and warranties made by Borrower
herein shall survive delivery of the Note and the making of the Loan.

         8.13.  PARTICIPATIONS  .  Lender  shall  have the  right to enter  into
participation  agreements  with other banks with respect to the Note,  and grant
participations  in Loan  Documents but such  participation  shall not affect the
rights and duties of such Lender hereunder  vis-a-vis  Borrower.  Each actual or
proposed  participant  shall be entitled to receive from Lender all  information
received  by Lender  regarding  the  creditworthiness  of  Borrower,  including,
without  limitation,  information  required  to be  disclosed  to a  participant
pursuant  to  Banking  Circular  181  (Rev.,  August  2,  1984),  issued  by the
Comptroller  of the  Currency  (whether  the actual or proposed  participant  is
subject to the circular or not).

         8.14.  NO THIRD  PARTY  BENEFICIARY  . The  parties  do not  intend the
benefits  of this  Agreement  to inure to any  third  party,  nor shall any Loan
Document or any course of conduct by any party  hereto be  construed  to make or
render Lender or any of its officers,  directors, agents or employees liable (i)
to any materialman, supplier, contractor, subcontractor,  purchaser or lessee of
any property owned by Borrower, or (ii) for debts or claims accruing to any such
Persons against Borrower.


                                       23
<PAGE>

         8.15.  Waiver  of  Jury  Trial . TO THE  FULLEST  EXTENT  PERMITTED  BY
APPLICABLE LAW, BORROWER HEREBY  IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION,  PROCEEDING,  OR  COUNTERCLAIM  (WHETHER BASED UPON
CONTRACT,  TORT,  OR  OTHERWISE)  ARISING  OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS  CONTEMPLATED  THEREBY OR THE ACTIONS OF LENDER IN
THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.

         8.16.  MULTIPLE  COUNTERPARTS  . This  Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same  agreement,  and any of the parties  hereto may execute  this  Agreement by
signing any such counterpart.

         8.17.  Arbitration  . ANY  CONTROVERSY  OR CLAIM  BETWEEN  OR AMONG THE
PARTIES HERETO  INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS  AGREEMENT OR ANY LOAN  DOCUMENTS,  INCLUDING ANY CLAIM BASED ON OR ARISING
FROM AN ALLEGED TORT,  SHALL BE DETERMINED BY BINDING  ARBITRATION IN ACCORDANCE
WITH THE FEDERAL  ARBITRATION  ACT (OR IF NOT APPLICABLE,  THE APPLICABLE  STATE
LAW),  THE RULES OF PRACTICE AND  PROCEDURE  FOR THE  ARBITRATION  OF COMMERCIAL
DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES,  INC.  (J.A.M.S.),  AND
THE  "SPECIAL  RULES"  SET FORTH IN  SECTION  8.17A  BELOW.  IN THE EVENT OF ANY
INCONSISTENCY,  THE SPECIAL RULES SHALL CONTROL.  JUDGMENT UPON ANY  ARBITRATION
AWARD  MAY BE  ENTERED  IN ANY  COURT  HAVING  JURISDICTION.  ANY  PARTY TO THIS
AGREEMENT MAY BRING AN ACTION,  INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,  TO
COMPEL  ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT  APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

         A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF THE
BORROWER'S  DOMICILE AT THE TIME OF THIS AGREEMENT'S  EXECUTION AND ADMINISTERED
BY J.A.M.S.  WHO WILL APPOINT AN  ARBITRATOR;  IF J.A.M.S.  IS UNABLE OR LEGALLY
PRECLUDED FROM  ADMINISTERING  THE  ARBITRATION,  THEN THE AMERICAN  ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN NINETY
(90) DAYS OF THE DEMAND FOR  ARBITRATION;  FURTHER,  THE ARBITRATOR  SHALL ONLY,
UPON SHOWING OF CAUSE,  BE PERMITTED TO EXTEND THE  COMMENCEMENT OF SUCH HEARING
FOR UP TO AN ADDITIONAL SIXTY (60) DAYS.

         B. RESERVATION OF RIGHTS.  NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(I) LIMIT THE APPLICABILITY OF ANY OTHERWISE  APPLICABLE  STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS  CONTAINED IN THIS  AGREEMENT;  OR (II) BE A WAIVER BY
LENDER OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C.SS.  91 OR ANY SUBSTANTIALLY
EQUIVALENT  STATE LAW; OR (III) LIMIT THE RIGHT OF LENDER HERETO (A) TO EXERCISE
SELF HELP  REMEDIES  SUCH AS (BUT NOT LIMITED TO)  SETOFF,  OR (B) TO  FORECLOSE
AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL,  OR (C) TO OBTAIN FROM A COURT
PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF
OR THE  APPOINTMENT  OF A RECEIVER.  LENDER MAY EXERCISE  SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY,  OR OBTAIN SUCH PROVISIONAL OR ANCILLARY  REMEDIES
BEFORE,  DURING OR AFTER THE  PENDENCY  OF ANY  ARBITRATION  PROCEEDING  BROUGHT
PURSUANT TO THIS  AGREEMENT.  AT LENDER'S  OPTION,  FORECLOSURE  UNDER A DEED OF
TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE FOLLOWING: THE EXERCISE OF A
POWER OF SALE UNDER A DEED OF TRUST OR  MORTGAGE,  OR BY  JUDICIAL  FORECLOSURE,
PROVIDED THAT IF LENDER SHALL PETITION A COURT FOR SUCH RELIEF OR REMEDIES, THEN
BORROWER  SHALL BE  ENTITLED  TO ASSERT IN SUCH  COURT  ANY  CLAIMS OR  DEFENSES
RELATED TO THE SUBJECT  MATTER OF LENDER'S  PETITION.  NEITHER THIS  EXERCISE OF
SELF  HELP  REMEDIES  NOR  THE  INSTITUTION  OR  MAINTENANCE  OF AN  ACTION  FOR
FORECLOSURE OR PROVISIONAL  OR ANCILLARY  REMEDIES SHALL  CONSTITUTE A WAIVER OF
THE RIGHT OF ANY 


                                       24
<PAGE>

PARTY,  INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OF CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

         8.18  LIMITATION  ON DAMAGES . NEITHER PARTY SHALL BE  RESPONSIBLE  FOR
PUNITIVE,  SPECIAL OR  EXEMPLARY  DAMAGES BY REASON OF  CONTRACT  OR TORT CLAIMS
ARISING OUT OF THE TRANSACTION GOVERNED BY THIS AGREEMENT, EXCEPT FOR WILLFUL OR
OUTRAGEOUS CONDUCT.

         THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENT OF THE  PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                             SIGNATURE PAGE FOLLOWS.

                                       25

<PAGE>


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




                                                                                


Address for Notice:                              BORROWER:

American Physicians Service Group, Inc.          AMERICAN PHYSICIANS SERVICE
1301 Capital of Texas Highway                      GROUP, INC.
C-300
Austin, Texas 78746
Telecopy #:  (512) 314-4333
                                                 By:    /s/ William H Hayes  
                                                 Name:      William H Hayes
                                                 Title:     Sr VP Finance



Address for Notice:                              LENDER:

NationsBank of Texas, N.A.                       NATIONSBANK OF TEXAS, N.A.
515 Congress Avenue
11th Floor
Austin, Texas  78702
Telecopy #:  (512) 397-2052                      By:      

                                                 /s/ Teena Belcik
     Vice President

Copy to:

Haynes and Boone, L.L.P.
3100 NationsBank Plaza
901 Main Street
Dallas, TX  75202-3789
Attn: Sue P. Murphy
Telecopy #:  (214) 200-0565


                                       26
<PAGE>


                                                                                
                                  SCHEDULE 3.01

                               CLOSING CONDITIONS

                   Unless otherwise specified, all dated as of
                February 10, 1998, or a date (a "Current Date")
                     within 30 days before the Closing Date.




<PAGE>


                                                                                
H&B [1.]  REVOLVING  CREDIT LOAN AGREEMENT  (the "Loan  Agreement")  dated as of
February , 1998, between AMERICAN  PHYSICIANS  SERVICE GROUP, INC.  ("Borrower")
and  NATIONSBANK  OF  TEXAS,  N.A.  ("Lender"),   all  the  terms  of  which  or
incorporated  in which have the same  meanings  when used in this  schedule,  to
which all schedules and exhibits must be attached.

H&B               [2.]  REVOLVING  CREDIT  NOTE in the  total  stated  principal
                  amount of $10,000,000 executed by Borrower, payable to Lender,
                  in substantially the form of Exhibit A to the Loan Agreement.

H&B               [3.] PLEDGE AGREEMENT  executed by Borrower,  substantially in
                  the form of  Exhibit B to the Loan  Agreement,  together  with
                  Stock Certificates and Blank Stock Powers.

H&B      [4.]     GUARANTY executed by each of the Syntera Technologies, Inc. 
                  and APS Realty, Inc.
                  (collectively, "Guarantors").

H&B      [5.]     NOTICE OF BORROWING executed by Borrower substantially in the 
                  form of Exhibit C to the Loan Agreement. [Only applicable if
                  initial advance concurrent with closing]

Borrower's        [6.] OPINION OF COUNSEL for Borrower and Guarantors, in a form
                  satisfactory to Lender, Counsel including Rule 144 opinion.

H&B               [7.] FINANCING STATEMENTS for Borrower, as debtor, to be filed
                  in the Office of the Secretary of State of Texas.

H&B [8.] NOTICE OF NO ORAL AGREEMENTS pursuant to Section 26.02 of Texas law.

         [9.]     For Borrower and each Guarantor

                  (a)      Charter;
                  (b)      Bylaws;
                  (c)      Board of Directors Resolutions;
                  (d)      Incumbency Certificate;
                  (e)      Closing Certificate;

         [10.]    Uniform Commercial Code Search in Texas for Borrower.

         [11.]    CERTIFICATE regarding Pledge of APS Insurance Services, Inc. 
                  shares.


                                       1
<PAGE>

Borrower's        [12.]    For each of Borrower and the Guarantors Counsel

                  (a)      Certificate of Existence;
                  (b)      Certificate of Good Standing.

         [13.]    Regulation U-1 Certificate.

H&B [14.] Such other documents and items as Lender may reasonably request.




<PAGE>


                                                                                
                                    EXHIBIT A

                              REVOLVING CREDIT NOTE

$10,000,000.00                Austin, Texas                 February 10, 1998


         1. FOR VALUE RECEIVED, AMERICAN PHYSICIANS SERVICE GROUP, INC., a Texas
corporation ("Maker"),  hereby  unconditionally  promises to pay to the order of
NationsBank of Texas, N.A. ("Payee"), at the address, severally reflected on the
signature page of the Loan Agreement (as defined below),  the sum of TEN MILLION
AND NO/100  Dollars  ($10,000,000.00)  (or, if less,  so much  thereof as may be
advanced and is  outstanding),  in lawful money of the United States of America.
Capitalized  terms not defined  herein shall have the meaning  assigned to those
terms in the Loan Agreement.

         2. The unpaid principal amount of, and accrued unpaid interest on, this
Revolving  Credit  Note (this  "Note") is  payable in  accordance  with the Loan
Agreement, but not later than the Termination Date.

         3. The unpaid  principal  balance  advanced and  outstanding  hereunder
shall bear  interest  from the date of advance  until  maturity  at the rate per
annum  provided in the Loan  Agreement.  The  interest  rate  specified  in this
section is subject to adjustment under the  circumstances  described in the Loan
Agreement.
Interest shall be computed in the manner provided in the Loan Agreement.

         4.  Notwithstanding  any provision  contained in this Note or any other
document  executed or delivered in  connection  with this Note or in  connection
with the Loan  Agreement,  Payee shall never be deemed to have contracted for or
be entitled to receive, collect or apply as interest on this Note, any amount in
excess of the maximum  rate of interest  permitted  to be charged by  applicable
law,  and, if Payee ever  receives,  collects  or applies as  interest  any such
excess,  then the amount that would be  excessive  interest  shall be applied to
reduce the unpaid principal  balance of this Note, and, if the principal balance
of this  Note is paid in full by that  application,  then any  remaining  excess
shall  promptly be paid to Maker.  In  determining  whether the interest paid or
payable under any specific  contingency  exceeds the highest lawful rate,  Maker
and Payee shall,  to the maximum  extent  permitted  under  applicable  law, (i)
characterize any non-principal payment (other than payments expressly designated
as interest  payments  hereunder)  as an expense or fee rather than as interest,
(ii) exclude voluntary  prepayments and the effect thereof, and (iii) spread the
total amount of interest throughout the entire contemplated term of this Note so
that the interest rate is uniform throughout that term.

         5. This Note has been  executed and  delivered  pursuant to a Revolving
Credit Loan Agreement (as modified,  amended, or supplemented from time to time,
the "Loan Agreement"),  dated the date hereof, executed by and between Maker and
Payee,  and is the "Note"  referred to  therein,  and the holder of this Note is
entitled to the  benefits  provided in the Loan  Agreement.  Reference is hereby
made to the Loan  Agreement  for a statement of (i) the  obligation  of Payee to
advance funds hereunder, (ii) the prepayment rights and obligations of Maker and
(iii) the events on which the maturity of this Note may be accelerated.

         6. If the  principal of, or any  installment  of interest on, this Note
becomes due and payable on a day other than a Business  Day,  then the  maturity
thereof shall be extended to the next succeeding  Business Day. If this Note, or
any  installment  or payment  due  hereunder,  is not paid when due,  whether at
maturity or by acceleration, or if it is collected through a bankruptcy, probate
or other court, whether before or after maturity, then Maker shall pay all costs
of collection,  including,  but not limited to,  

                                       1
<PAGE>

attorney's fees incurred by the
holder of this Note.  All past due principal of, and to the extent  permitted by
applicable law, interest on this Note shall bear interest until paid at the rate
provided in the Loan Agreement.

         7. Maker and all sureties, endorsers, guarantors and other parties ever
liable  for  payment  of any sums  payable  pursuant  to the terms of this Note,
jointly and severally waive demand,  presentment for payment, protest, notice of
protest,  notice of acceleration,  notice of intent to accelerate,  diligence in
collection,  the  bringing  of any suit  against  any party and any notice of or
defense on account of any extensions,  renewals,  partial payments or changes in
any manner of or in this Note or in any of its terms,  provisions and covenants,
or any releases or  substitutions of any security,  or any delay,  indulgence or
other act of any trustee or any holder hereof, whether before or after maturity.

         8. All  Borrowings  made by  Payee,  the  respective  Interest  Periods
thereof (if  applicable),  and all  repayments of the  principal  thereof may be
recorded  by Payee and,  before any  transfer  hereof,  endorsed by Payee on the
schedule attached hereto, or on a continuation of the schedule attached to and a
part hereof,  provided that the failure of Payee to record any endorsement shall
not affect the obligation of Maker hereunder or under the Loan Agreement.

         9. This Note is being  executed  and  delivered,  and is intended to be
performed  in the State of  Texas.  Except  to the  extent  that the laws of the
United States may apply to the terms hereof,  the substantive  laws of the State
of Texas shall govern the validity, construction, enforcement and interpretation
of this Note.

                                     MAKER:

                                     AMERICAN PHYSICIANS SERVICE GROUP, INC.



                                     By:    /s/ William H Hayes          
                                     Name:      William H Hayes       
                                     Title:     Sr VP Finance       


                                       2

--------
[        ] indicates  items not complete at time of this draft of this schedule,
         together  with  names  of   individuals  of  parties  or  counsel  with
         responsibility for each.