Exhibit 10.24

                               GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September,  1996,  by  Consolidated  Environmental  Services,  Inc., an Arkansas
corporation ("Guarantor"), for the benefit of American Physicians Service Group,
Inc., a Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


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         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


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         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

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maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

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resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

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condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

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the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


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                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  Consolidated Environmental Services, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       Consolidated Environmental Services, Inc.
                                       (an Arkansas corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>

GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September,  1996,  by  Cierra, Inc., an Arkansas corporation ("Guarantor"), 
for the benefit of American Physicians Service Group, Inc., a Texas corporation
("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

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GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  Cierra, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       Cierra, Inc.
                                       (an Arkansas corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>

GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September, 1996, by Larco Environmental Services, Inc., a Louisiana corporation 
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a 
Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  Larco Environmental Services, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       Larco Environmental Services, Inc.
                                       (an Louisiana corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>


GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September, 1996, by KR Industrial Services of Alabama, Inc., an Alabama 
corporation ("Guarantor"), for the benefit of American Physicians Service Group,
Inc., a Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  KR Industrial Services of Alabama, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       KR Industrial Services of Alabama, Inc.
                                       (an Alabama corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>

GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September, 1996, by Exsorbet Technial Services, Inc., an Arkansas corporation 
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a 
Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  Exsorbet Technical Services, Inc.    
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       Exsorbet Technical Services, Inc.
                                       (an Arkansas corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>


GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September, 1996, by Eco Acquisition, Inc., Inc., an Arkansas corporation, also
known as Eco-Systems, Inc.("Guarantor"), for the benefit of American Physicians
Service Group, Inc., a Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  Eco Acquisition, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       Eco Acquisition, Inc.
                                       (an Arkansas corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8

<PAGE>

GUARANTY AGREEMENT


         THIS  GUARANTY  AGREEMENT  ("Guaranty")  is made as of the  30th day of
September, 1996, by 7-7 Merger, Inc., Inc., an Arkansas corporation, 
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a 
Texas corporation ("Creditor").

         FOR VALUE  RECEIVED,  the receipt and  sufficiency  of which  Guarantor
acknowledges,  Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any  and all  sums  becoming  due and  payable  pursuant  to the  Stock  Put
Agreement dated September 30, 1996,  executed by Exsorbet  Industries,  Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00,  which may be executed by Debtor
pursuant  to the Stock Put  Agreement,  and  payable  to the order of  Creditor,
including  without  limitation  any and all  interest  thereon  (other than such
interest as may be in excess of the maximum  lawful  amount),  late  charges (if
any), and costs of collection  (including  reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined  below);  (iii) any and all other sums  becoming  due and payable by
Debtor to  Creditor as a result of  advances  made by  Creditor  pursuant to the
terms of the Transaction  Documents,  including without limitation the repayment
of any future  advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's  security  pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements,  rearrangements,
substitutions,  or  modifications  of  all  or  any  part  of  the  Indebtedness
(collectively,  the  "Indebtedness"),  and  (b) the  performance  of any and all
obligations,  warranties,  representations,  covenants  and  agreements  made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").

         2. Transaction Documents.  The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor;  the Note (if and when executed pursuant to the terms of the Stock
Put  Agreement);  the  Warrant  executed  by  Debtor in favor of  Creditor;  the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996,  executed by and between Debtor and
Creditor,  and all other security agreements,  assignments,  and other documents
executed  by Debtor  for the  benefit of  Creditor  to secure  the  payment  and
performance of the Indebtedness and Obligations and creating a lien and security
interest  against  the  real  or  personal   property   described  therein  (the
"Collateral");  any other Guaranty  Agreements or surety agreements  executed in
favor of Creditor and guaranteeing the Note; and any other agreement,  document,
or instrument  executed by Debtor or any other  guarantor in connection with the
transaction evidenced by the Stock Put Agreement.

         3.       Nature of Guaranty.  Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of 
payment and performance of the Indebtedness and the Obligations.

         4.       Renewals and Extensions.  This Guaranty applies to, and the 
Indebtedness shall additionally mean and refer to, any and all renewals, 
extensions, modifications, alterations, refinancings and rearrangements of all 
or any part of the Indebtedness.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 1

                                                                       Initials

<PAGE>





         5.       Representations and Warranties.  Guarantor hereby represents 
and warrants the following to Creditor:

                  (a) Guarantor may  reasonably  expect to benefit,  directly or
indirectly,  from the making of this  Guaranty  and from and from each and every
renewal, extension, modification,  alteration, refinancing, and rearrangement of
all or any  part  of the  Indebtedness,  the  release  of  collateral  or  other
relinquishment  of legal  rights  made or  granted  or to be made or  granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations,  and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit,  directly or  indirectly,  from
the making of this Guaranty and has adopted resolutions stating the same; and

                  (b) Guarantor is familiar with, and has independently reviewed
the books and  records  regarding,  the  financial  condition  of Debtor  and is
familiar  with the value of any and all  collateral  intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations;  provided,  however, Guarantor is not relying on such
financial  condition or collateral as an inducement to enter into this Guaranty;
and

                  (c)  Guarantor  has adequate  means to obtain from Debtor on a
continuing basis  information  concerning the financial  condition of Debtor and
Guarantor  is not relying on Creditor to provide such  information  to Guarantor
either now or in the future; and

                  (d) Guarantor has the power and authority to execute, deliver,
and  perform  this  Guaranty  and any other  agreements  executed  by  Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty  and any  other  agreements  executed  by  Guarantor  contemporaneously
herewith do not and will not violate (i) any  agreement or  instrument  to which
Guarantor  is  a  party,  (ii)  any  law,  rule,  regulation  or  order  of  any
governmental  authority to which Guarantor is subject,  or (iii) its articles or
certificate of incorporation or bylaw; and

                  (e)      neither Creditor nor any other party has made any 
representation, warranty or statement to Guarantor in order to induce Guarantor 
to execute this Guaranty; and

                  (f) the financial  statements and other financial  information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material  respects and fairly  present the  financial
position of Guarantor as of the dates  thereof,  and no material  adverse change
has occurred in the financial  condition of Guarantor reflected in the financial
statements  and  other  financial  information  regarding  Guarantor  heretofore
delivered to Creditor since the date of the last statement thereof; and

                  (g) as of the date  hereof,  and after  giving  effect to this
Guaranty and the  obligations  evidenced  hereby,  (i)  Guarantor is and will be
solvent,  (ii) the fair saleable  value of  Guarantor's  assets exceeds and will
continue to exceed its liabilities (both fixed and contingent),  (iii) Guarantor
is and will  continue  to be able to pay its debts as they  mature,  and (iv) if
Guarantor  is not an  individual,  Guarantor  has  and  will  continue  to  have
sufficient  capital to carry on its business and all  businesses  in which it is
about to engage.

         6.       Inducement to Creditor.  Guarantor acknowledges that this 
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 2

                                                                        Initials

<PAGE>







         7. Terms of Guaranty and Indebtedness  and  Obligations.  This Guaranty
contains the entire  agreement  between  Guarantor  and Creditor with respect to
Guarantor's  guarantee of the Indebtedness and Obligations;  provided,  however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other  guaranty  executed by Guarantor  and now or hereafter  held by
Creditor   that   relates  to  Debtor  or  any  other   person  or  entity.   No
representations  or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty.  Guarantor has read and understands the implications
of this Guaranty.  Guarantor  agrees to the terms,  provisions and conditions of
the Note,  the  Transaction  Documents  which may have been or may  hereafter be
executed by Debtor or other persons evidencing,  securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected,  impaired or released by reason of any
term,  provision,  or condition of the Note, the Transaction Documents or by the
failure,  refusal,  or omission of Creditor to enforce or observe any of same or
by any action  taken or omitted to be taken by Creditor  pursuant  thereto or in
connection therewith.

         8. Payment and Performance by Guarantor.  In each event that all or any
portion of the  Indebtedness  shall  become due and remain  unpaid  (however the
maturity may have occurred),  Guarantor will, upon demand, pay the amount due to
Creditor  (other than any  interest  as may be in excess of the  maximum  lawful
amount),  without notice having been given to Guarantor  previous to such demand
of the  acceptance  by Creditor of this Guaranty or of the creating or incurring
of  such  indebtedness.  Guarantor  specifically  agrees  that it  shall  not be
necessary or required in order to enforce any  obligations  under this  Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented  same for payment by Debtor or any other person liable  thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness.  All amounts becoming
payable  by  Guarantor  to  Creditor  under  this  Guaranty  shall be payable at
Creditor's  address  stated  below,  or at such  other  address as  directed  by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor  that  Creditor
has been paid by Guarantor. Upon demand by Creditor,  Guarantor shall perform or
cause to be performed any or all of the Obligations.

         9. Suit on Guaranty.  Suit may be brought by Creditor against Guarantor
alone,  or jointly and  severally  against  Guarantor  and any one or more other
guarantors of the Indebtedness and/or Obligations,  without impairing the rights
of  Creditor  against  Debtor or other  guarantors  of the  Indebtedness  and/or
Obligations.

         10.      Costs of Collection.  Guarantor agrees to pay all costs of 
collection, including reasonable attorney's fees and expenses, if this Guaranty 
is placed in the hands of an attorney for collection or is collected through any
 court.

         11. Waiver by Guarantor.  Guarantor  specifically waives any notice (i)
of acceptance of this Guaranty by Creditor,  (ii) of the creation,  advancement,
increase,   existence,   renewal,  extension,   modification,   refinancing,  or
rearrangement  of  the  Indebtedness,  or any  indulgence  with  respect  to the
Indebtedness,  or any part  thereof,  (iii) of  nonpayment  thereof  or  default
thereon or in the  performance  of the  Obligations,  and (iv) of any amendment,
modification, or restatement of all or any of the Obligations.  Guarantor waives
grace,  demand,  protest,  presentment,  and notice of intent to accelerate  the
maturity of the  Indebtedness,  notice of  acceleration  of the  maturity of the
Indebtedness,  demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 3

                                                                        Initials

<PAGE>





maturity of the Indebtedness, or any part thereof, may be accelerated,  renewed,
extended,  modified,  refinanced,  or rearranged or any other  indulgence may be
granted  with  respect  thereto by  Creditor  at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time.  Guarantor
agrees that  Guarantor  shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.

         12.  Guarantor's  Direct  Liability.  Creditor  shall not be  required,
before or as a condition of  enforcing  the  liability  of Guarantor  under this
Guaranty,  or requiring  payment of the  Indebtedness by Guarantor  hereunder or
performance  of the  Obligations,  or at any time  thereafter,  to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for  personal  judgment  against any
other party (including any maker, guarantor,  endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness  from any such
other party;  (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the  Indebtedness or Obligations or any
security or other  guaranty  therefor;  (e) assert or file any claim against the
assets  or  estate of Debtor or other  person  liable  for the  Indebtedness  or
Obligations,  or any part  thereof;  (f) take any action  against  Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral  or security,  or to resort to any balance of any deposit  account or
credit on the books of Creditor in favor of Debtor or any other  person;  or (g)
pursue any other remedies  Creditor may have in connection with the Indebtedness
or Obligations.

         13.  Obligations  Not  Impaired.  Guarantor's  obligations  under  this
Guaranty  shall not be released,  diminished,  impaired,  reduced,  or adversely
affected,  and Guarantor  waives any common law,  equitable,  statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:

                  (a) any full or partial  release of the  liability  of Debtor,
any other guarantor of the Indebtedness and/or Obligations,  or any other person
primarily or secondarily liable on the Indebtedness and/or  Obligations,  or any
part thereof (including any maker, endorser,  guarantor or surety), whether such
liability is direct or indirect,  joint, several, or joint and several, it being
recognized,  acknowledged  and agreed that  Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party,  and  Guarantor  has not been induced to enter into this  Guaranty on the
basis of an  understanding  or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other  parties  to pay the  Indebtedness  or  perform  the  Obligations;
provided,  however,  nothing in this  Guaranty  shall waive or  release,  either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that  Guarantor  may  have,  after  payment  in  full  of the  Indebtedness  and
performance of the Obligations,  against others liable under the Indebtedness or
for  performance of the  Obligations,  but  Guarantor's  rights of  subrogation,
reimbursement  and contribution  are secondary,  subordinate and inferior to the
rights and claims of Creditor;

                  (b) the voluntary or  involuntary  liquidation,  sale or other
disposition  of  all  or  substantially  all of the  assets  of  Debtor,  or any
receivership,   insolvency,   bankruptcy,   reorganization   or  other   similar
proceedings affecting Debtor or any of its assets;

                  (c) any  impairment,  modification,  release or  limitation of
liability  of  Debtor,   or  stay  of  foreclosure  or  other  lien  enforcement
proceedings  against  Debtor,  or  Debtor's  property,  or  Debtor's  estate  in
bankruptcy, or any modification, discharge or extension of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 4

                                                                        Initials

<PAGE>





resulting  from the operation of any present or future  provision of the Federal
Bankruptcy Code or other  bankruptcy laws, or from the decision of any court, it
being recognized,  acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might,  but for the  provisions  hereof,  otherwise  operate as a legal or
equitable discharge of Guarantor;

                  (d)      any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of 
the Indebtedness and performance of the Obligations, or of any part thereof;

                  (e)      Creditor's failure to use diligence or care in 
preserving the liability of any person on the Indebtedness or the Obligations, 
or in bringing suit to enforce collection of the Indebtedness or performance of 
the Obligations;

                  (f)      the addition of another guarantor or guarantors of 
the Indebtedness or Obligations;

                  (g)      the substitution or withdrawal of collateral or 
release of security;

                  (h)      any renewal, extension, modification, alteration, 
refinancing  or rearrangement of or any other indulgence with respect to the 
Indebtedness or Obligations, or any part thereof;

                  (i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty,  the Note, or any  Transaction  Document  evidencing,
securing or relating to the Note or by law or in equity;

                  (j)  Debtor's  not  being  liable  for  the   Indebtedness  or
performance of the Obligations  because the act of creating the  Indebtedness or
Obligations is ultra vires, or the officers or persons creating the Indebtedness
or  Obligations  acted in  excess  of their  authority,  or for any  reason  the
Indebtedness or Obligations cannot be enforced against Debtor;

                  (k) any payment by Debtor to Creditor if such  payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason  Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;

                  (l)      Guarantor's being or becoming liable for any 
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other 
than under this Guaranty; or

                  (m) the invalidity,  illegality or  unenforceability of all or
any part of the  Indebtedness,  for any  reason  whatsoever,  including  without
limitation the fact that the Note or other Transaction  Documents  pertaining to
the  Indebtedness or Obligations  have been forged or otherwise are irregular or
not genuine or authentic.

         14. Application of Payments.  If Creditor should collect or receive any
payments  from  any  person  other  than  Guarantor,  or  funds  which  are  not
specifically  required by law or  agreement  to be applied to the  Indebtedness,
then  Creditor may, in Creditor's  sole  discretion,  apply such payments to any
indebtedness  of Debtor  other  than the  Indebtedness.  Guarantor  agrees  that
Creditor  may apply  payments or other funds  received by Creditor  from Debtor,
from any other party obligated on the Indebtedness,  from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 5

                                                                        Initials

<PAGE>





condemnation,  to the  Indebtedness  in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.

         15. Collection of Indebtedness. Guarantor expressly waives any right to
the  benefit  of or to require or control  application  of any  security  or the
proceeds  of any  security  now  existing or  hereafter  obtained by Creditor as
security for the  Indebtedness,  or any part  thereof,  and agrees that Creditor
shall have no duty to apply to the  Indebtedness  any monies,  payments or other
property at any time  received by or paid to or in the  possession  of Creditor,
except  as  Creditor  shall   determine  in  its  sole   discretion.   Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the  Indebtedness  or  Obligations,  the  collection of any sums or amounts
herein  mentioned,  or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.

         16.  Subordination.  Guarantor  subordinates all indebtedness  owing to
Guarantor from Debtor to the Indebtedness.  Guarantor  further  subordinates any
liens or security  interest it may have in the  collateral or security of Debtor
(or any other  party) to the liens and  security  interests in favor of Creditor
securing the Indebtedness  and the  Obligations.  Guarantor agrees not to accept
any  payments  or  satisfaction  of any kind of any  indebtedness  of  Debtor to
Guarantor.  If Guarantor  should  receive any such payment or  satisfaction  for
indebtedness  of Debtor to Guarantor in violation of the above terms,  Guarantor
agrees to deliver the payment or satisfaction to Creditor,  and until delivered,
Guarantor agrees to hold the same in trust for Creditor.

         17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly  inform Creditor of any litigation  against  Guarantor or affecting any
security for the  Indebtedness or Obligations  which,  if determined  adversely,
might have a material  adverse effect upon the financial  condition of Guarantor
or upon  such  security  or might  cause a default  under  any of the  documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy  which might  become the  subject of  litigation,  and any  material
adverse change in the financial condition of Guarantor.

         18. Usury  Disclaimer.  No provision  herein or in any promissory note,
security  instrument,  or any other  Transaction  Document executed by Debtor or
Guarantor  evidencing the  Indebtedness  shall be construed to be or to create a
contract by  Guarantor to pay, as  consideration  for the use,  forbearance,  or
detention of money,  interest in excess of the rate or amount allowed by law. If
any excess of  interest in such  respect is  provided  for herein or in any such
promissory note, security  instrument,  or any other Transaction  Document,  the
provisions of this Section shall govern,  and neither Debtor nor Guarantor shall
be  obligated  to pay the amount of such  interest  to the extent  that it is in
excess of the amount  permitted by applicable  law. The intention of the parties
is to conform  strictly to the usury laws now in force, and all Promissory Notes
and  Transaction  Documents  executed  by Debtor  or  Guarantor  evidencing  the
Indebtedness  or  Obligations  shall be held  subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.

         19.  Transferability.  This Guaranty is intended for and shall inure to
the benefit of Creditor  and each and every other  person who shall from time to
time be or become the owner or holder of any of the  Indebtedness,  and each and
every  reference  herein to  Creditor  shall also  include and refer to each and
every  successor  or assignee of Creditor at any time holding or owning any part
of or  interest  in any  part  of  the  Indebtedness.  This  Guaranty  shall  be
transferable  and  negotiable,  with the same  force and  effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness

APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 6

                                                                        Initials

<PAGE>





the legal  holder or owner of the  Indebtedness  (or part  thereof  or  interest
therein  transferred  or  assigned by  Creditor)  shall  also,  unless  provided
otherwise by Creditor in its transfer or  assignment,  have and may exercise all
of the rights  granted to Creditor under this Guaranty to the extent of the part
of or  interest in the  Indebtedness  assigned or  transferred  to said  person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part  thereof,  or of the rights of Creditor  hereunder.  Notwithstanding
anything in this Section to the contrary,  all  Indebtedness  and Obligations to
Creditor  shall be paid and  performed  in full  first,  before any  assignee or
transferee shall receive any benefits of this Guaranty.

         20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial  interests therein to one
or  more  transferees  or  participants.   Guarantor   authorizes   Creditor  to
disseminate  any  information  Creditor  has  pertaining  to  the  Indebtedness,
including,  without  limitation,  credit  information on Guarantor,  to any such
transferee or participant or prospective transferee or participant.

         21.      Binding on Others.  This Guaranty shall be binding upon 
Guarantor and Guarantor's heirs, legal representative, personal representatives,
 executors, administrators, successors and assigns.

         22. Modification or Consent. No modification,  consent or waiver of any
provision of this Guaranty shall be effective unless the  modification,  consent
or waiver is in writing and signed by an officer of Creditor,  and then shall be
effective only in the specific  instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other  circumstances.  No
delay or  omission  by  Creditor  in  exercising  any power or right  under this
Guaranty  shall  impair  any such  right or  power or be  construed  as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further  exercise  thereof,  or the exercise of
any other  right or power  under  this  Guaranty.  All rights  and  remedies  of
Creditor  under this  Guaranty are  cumulative  of each other and of every other
right or remedy which  Creditor may otherwise  have at law or in equity or under
any other  contract  or  document,  and the  exercise  of one or more  rights or
remedies shall not prejudice or impair the concurrent or subsequent  exercise of
other rights or remedies.

         23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which  Guarantor  may be or might  otherwise  become  entitled to with
respect to the  provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended,  and agrees that the rights of Guarantor  pursuant to
the  provisions  of Section  34.04 of the Texas  Business and Commerce  Code, as
amended,  shall be  subject  to,  secondary,  subordinate  and  inferior  in all
respects to the rights of Creditor pursuant to this Guaranty.

         24.  Notices.  Any notice or demand to Guarantor may be given and shall
conclusively  be deemed and  considered to have been given and received upon the
deposit  thereof,  in  writing,  in the United  States  mail,  duly  stamped and
addressed to Guarantor at Guarantor's  address stated below,  but actual notice,
however  given or  received,  shall  always  be  effective.  The last  preceding
sentence  shall not be  construed  in  anywise to affect or impair any waiver of
notice or demand herein  provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason.  Creditor's  and  Guarantor's
respective addresses are:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 7

                                                                        Initials

<PAGE>




                           Creditor:   American Physicians Service Group, Inc.
                                       Attn: Mr. Duane K. Boyd
                                       1301 Capital of Texas Hwy., Suite C-300
                                       Austin, Texas, 78746

                           Guarantor:  7-7 Merger, Inc.
                                       Attn:
                                       1401 South Waldron, Suite 201
                                       Fort Smith, Arkansas 72903

         25.      Governing Law and Place of Performance.  GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF 
TEXAS.  This Guaranty is performable in Travis County, Texas, and Guarantor 
hereby waives the right to be sued elsewhere.

         26.      Headings.  Section headings of this Guaranty are inserted for 
convenience of reference only, and shall not alter, define, or be used in 
construing the text of such sections.

         27.  Pronouns.  As used herein and when  required by the context,  each
number  (singular and plural)  shall include all numbers,  and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or  "party"  shall  include   "person,   corporation,   firm,   partnership   or
association".

         28.     Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR  SUBSEQUENT  ORAL  AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED this 30th day of September, 1996.

                                       GUARANTOR:

                                       7-7 Merger, Inc.
                                       (an Arkansas corporation)



                                       By:
                                      Name:
                                     Title:


APSGI/Exsorbet
GUARANTY AGREEMENT                                   Page 8