Exh. 10-35
                            SHARE EXCHANGE AGREEMENT

         This Share Exchange  Agreement  (this  "Agreement") is made and entered
into as of the ____ day of November,  1997, by and between  American  Physicians
Service Group, Inc., a Texas corporation ("APS") and Robert Casanova,  M.D. (the
"Shareholder").

                                R E C I T A L S:

         WHEREAS,  pursuant to that certain Agreement and Plan of Reorganization
(the "Merger  Agreement")  entered into by Shareholder more or less of even date
herewith and the other contracts and agreements to which Shareholder was, or was
to be, a party as contemplated in the Merger Agreement (the Merger Agreement and
all such other contracts and agreements are hereinafter referred to collectively
as the  "Acquisition  Documents"),  Shareholder  acquired 78,750 shares (the "PM
Shares")  of the  $0.001  par  value  per  share  common  stock of APS  Practice
Management,   Inc.,  a  Texas   corporation   ("Practice   Management")   for  a
consideration of $5.00 per PM Share (the "Exchange Value"); and

         WHEREAS,  APS has agreed,  on the terms and  subject to the  conditions
hereof, to exchange certain shares of its $0.10 par value per share common stock
("APS Common") for the PM Shares.
<PAGE>

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

         1.  CONDITIONS  TO EXCHANGE  RIGHT.  In addition to the other terms and
conditions  contained in this Agreement,  Shareholder  shall only be entitled to
exchange  the PM  Shares  for  shares  of APS  Common  if each of the  following
conditions has been satisfied:

                  (a) There shall not have been,  on or before  November 1, 1999
(the  "Determination  Date"), any registered public offering of the common stock
of Practice  Management,  or any other  transaction  or event  pursuant to which
shares of  Practice  Management  of the same  class as the PM Shares  shall have
become publicly traded.; and

                  (b) Shareholder  shall not be, or have been, at any time on or
prior to the date of the  closing  of any  exchange  of stock  pursuant  to this
Agreement (the "Closing Date"),  in breach of, or default under, this Agreement,
any of the  Acquisition  Documents  or any other  contract or agreement to which
Shareholder  and Practice  Management  and/or APS are parties,  and  Shareholder
shall not have threatened to breach or default under this Agreement,  any of the
Acquisition Documents or any such other contract or agreement; and

                  (c) At the Closing Date,  Shareholder  has all requisite legal
capacity  and  authority  to engage  in the  transactions  contemplated  by this
Agreement,  is the owner of all the PM Shares, and the PM Shares are free of any
and all liens, claims or encumbrances of any kind whatsoever; and
<PAGE>

                  (d) At or before the Closing Date,  Practice  Management shall
not  be,  or  have  been,  a  party  to  any  merger  consolidation  or  similar
transaction,  or agreement  with  respect  thereto,  pursuant to which  Practice
Management  was not or would  not be,  the named  surviving  entity  after  such
merger, consolidation or other transaction.

         2. EXCHANGE  NOTICE.  In the event all of the  conditions  described in
Section 1 are satisfied as of the Determination  Date and Shareholder  elects to
exercise  its  right  to  exchange  its PM  Shares  for  shares  of APS  Common,
Shareholder shall provide written notice thereof (the "Exchange Notice") to APS,
which  Exchange  Notice  must be  received  by APS not later  than the date (the
"Expiration  Date") which is ninety (90) calendar  days after the  Determination
Date.  In the event (i) any of the  conditions  required  for an  exchange to be
permissible,  as described in Section 1 above,  fail to be satisfied on or prior
to  the  Determination  Date,  or  (ii)  any  of  the  conditions  specified  in
subsections  (b),  (c) and (d) of Section 1 fail to be  satisfied on or prior to
the  Closing  Date,  or (iii) APS  fails to  receive  an  Exchange  Notice  from
Shareholder on or prior to the Expiration  Date;  then, in any such case, all of
Shareholder's  rights under this Agreement shall automatically  terminate and be
of no further force or effect whatsoever.
<PAGE>

         3.       SHARE CONVERSION.

                  (a)  Shareholder's  right to exchange its PM Shares  hereunder
shall  apply as to all,  but not less  than  all,  of the PM  Shares  which  are
eligible for exchange as described in this  paragraph (a) of Section 3. Assuming
Shareholder  has complied  with all of the  conditions  allowing for an exchange
pursuant  to this  Agreement,  55,417 of the PM  Shares  shall be  eligible  for
conversion as provided in this Agreement; and the remaining 23,333 PM Shares, or
a portion thereof, will only be eligible for an exchange hereunder in the event,
and only to the extent,  the Clinic (as hereinafter  defined)  achieves  certain
Practice  Accrual  Earnings  (as  hereinafter   defined)  levels  prior  to  the
Determination  Date.  For  purposes of this  Agreement,  the terms  "Clinic" and
"Practice  Accrual  Earnings"  shall have the meanings set forth in that certain
Management  Agreement  which is one of the Acquisition  Documents.  The Practice
Accrual Earnings of Clinic for any twelve (12) consecutive monthly period ending
on or prior to the Determination Date is hereinafter  referred to as the "Clinic
PAE." The parties  acknowledge  and agree that in the event  Clinic PAE does not
exceed  $933,333  during any twelve (12)  consecutive  calendar  monthly  period
ending on or prior to the  Determination  Date, then no portion of the 23,333 PM
Shares  shall be subject to exchange  pursuant to this  Agreement.  In the event
that,  during any twelve (12)  consecutive  calendar monthly period ending on or
prior to the  Determination  Date,  the Clinic PAE  exceeds  $933,333,  then the
percentage of the 23,333 PM Shares which will be eligible for exchange  pursuant
to this Agreement (assuming compliance with all other conditions provided for in
this  Agreement)  will be determined by  multiplying  23,333 by a fraction,  the
numerator of which is the amount by which Clinic PAE exceeds  $816,666  (but not
greater than $233,333 in any event), and the denominator of which is $233,333.
<PAGE>

         EXAMPLE:  The following is provided  purely by way of example only, and
illustrates  the  calculation  of the number of PM Shares  eligible for exchange
under this Agreement, assuming satisfaction of all other conditions allowing for
an exchange pursuant to this Agreement.
                  Assume Clinic PAE is $933,333 for the 12 months ended December
                  31,  1998,  which is the  largest  twelve  (12) month level of
                  Clinic PAE  achieved  in any  period  ended on or prior to the
                  Determination Date.

                  Total PM  Shares  eligible  for  exchange  hereunder  would be
                  67,084 determined as follows:

                  $933,333 - $816,666    x     23,333         =        11,667
                  -------------------
                        $233,333                                       55,417
                                                                       ------
                                                                       67,084

         (b) In the event  Shareholder  has complied with all of the  conditions
allowing  for an exchange  pursuant to this  Agreement,  the closing of any such
exchange (the "Closing") shall occur at the offices of APS in Austin,  Texas, on
such day and at such time as the parties  hereto may mutually  agree upon, or in
the failure to so agree, at 10:00 a.m. Austin,  Texas time on the first business
day that falls thirty (30) days after the Expiration Date. The maximum number of
PM Shares which  Shareholder has the right to exchange pursuant to paragraph (a)
of this Section are hereinafter referred to as the "Exchangeable PM Shares"; and
the "Gross  Exchange  Value" for purposes of this  Agreement is the gross dollar
amount  determined by  multiplying  the  Exchangeable  PM Shares by the Exchange
Value.  For purposes of determining the number of shares of APS Common which may
be  received  upon  any  exchange,  no  consideration  will be  given  to  stock
dividends,  stock  splits,  reverse stock splits or  recapitalizations  to which
<PAGE>

Practice  Management or the PM Shares are subject after the date this  Agreement
was originally entered into as first above written. At the Closing,  Shareholder
shall be  entitled  to receive  such  shares of APS Common as is  determined  by
dividing the Gross  Exchange  Value by the average of the "bid" and "ask" prices
for APS  Common as quoted by the  National  Association  of  Securities  Dealers
Automated  Quotation System at the close of trading on each of the last five (5)
business days immediately preceding the Closing Date.

         (c) At the Closing,  Shareholder shall tender its share  certificate(s)
for all of the Exchangeable PM Shares, duly endorsed in blank, to APS, and shall
also  provide APS with an  executed  blank stock  power,  in form and  substance
reasonably acceptable to APS, wherein Shareholder represents and warrants to APS
(i) that  Shareholder has all necessary  legal capacity,  power and authority to
engage in the transactions  contemplated  hereby, and (ii) that Shareholder owns
all interests in and to the  Exchangeable PM Shares and that the Exchangeable PM
Shares  are  being  transferred  to APS free and clear of all  liens,  claims or
encumbrances of any kind  whatsoever.  The shares of APS Common that Shareholder
receives in the  exchange are  hereinafter  referred to as the "New APS Shares."
The parties  acknowledge and agree that Shareholder shall receive a whole number
of shares of APS Common only,  and that any fractional  share amounts  resulting
from the foregoing  conversion  calculation  shall be rounded up or down, as the
case  may be,  to the  next  whole  number  of  shares.  APS  shall  be under no
obligation to pay any cash or other amounts with respect to any fractional share
amounts,  or to issue  any  fractional  share  amounts  to  Shareholder.  At the
Closing,  Shareholder  shall either receive a share  certificate for all its New
APS Shares or, if APS' transfer  agent is unable to produce such  certificate by
the Closing  Date,  will receive a copy of a registered  letter sent from APS to
the transfer agent instructing the transfer agent to deliver such certificate in
the name of Shareholder directly to Shareholder or Shareholder's designee.
<PAGE>

         4. NEW APS SHARES TRANSFERABILITY. APS will have registered the New APS
Shares with the Securities and Exchange Commission,  and made such other filings
and taken such other steps as necessary,  so that  Shareholder  may  immediately
sell, or otherwise  convey,  the New APS Shares without  restriction  (except as
otherwise  provided  below).  Shareholder  agrees to cooperate  fully and in all
respects  with  APS in  connection  with  any such  registration,  whether  such
cooperation  is requested  before or after the  Determination  Date.  Failure of
Shareholder to cooperate fully, including without limitation, promptly providing
complete and accurate information to APS, in connection with the registration of
any APS Common shares,  whether such cooperation and/or information is requested
before or after the Determination  Date or before or after Shareholder  delivers
any Exchange Notice,  shall automatically  terminate  Shareholder's rights under
this Agreement.  Notwithstanding  anything contained herein to the contrary,  in
the  event  that APS is in the  process,  either at the  Closing  Date or at the
Determination Date, of registering and/or selling any of its capital stock in or
pursuant to any underwritten  public  offering,  upon the written request of the
lead underwriter  involved therein,  Shareholder agrees, and shall then agree in
writing in form and substance reasonably acceptable to APS, to not sell, attempt
to sell, or solicit or accept any offers to sell or otherwise convey, any of the
New APS Shares for such period of time (not to exceed one hundred  eighty  (180)
days) as may be requested by such lead underwriter.
<PAGE>

         5.       MISCELLANEOUS.

                  (a) Fees and  Expenses.  Each party hereto  agrees to bear all
fees and expenses  (including  without  limitation all fees and expenses for its
legal counsel and any accountants or other  professional  advisors)  incurred in
connection with the transactions contemplated hereby.

                  (b) Governing Law and Venue.  This Agreement shall be governed
by, and  construed  and enforced in  accordance  with,  the laws of the State of
Texas  (except  the  laws  of  Texas  that  would  render  such  choice  of  law
ineffective).  Venue for any action  relating to this Agreement  shall be proper
only in Texas.

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

                  (d)  Inurement.  This  Agreement  shall  be  binding  upon the
parties hereto and their respective heirs, legal representatives, successors and
permitted  assigns.  No party hereto may assign this Agreement,  or any of their
rights or obligations  hereunder,  without the express prior written  consent of
all parties hereto in each instance.
<PAGE>

                  (e)  Notices.  Any notices  required or  permitted to be given
under this Agreement  shall be given in writing and shall be deemed received (a)
when  personally  delivered  to the  relevant  party at its address as set forth
below or (b) if sent by mail, on the third day following the date when deposited
in the United States mail, certified or registered mail, postage pre-paid to the
relevant party at its address indicated below:

                  APS:              American Physicians Service Group, Inc.
                                    1301 Capital of Texas Highway, Suite C-300
                                    Austin, Texas 78746-6550
                                    Attn: President

                  Shareholder:      Robert Casanova, M.D.
                                    11111 Research Blvd., Suite 450
                                    Austin, Texas 78759

Any party may change its address for purposes of this Agreement by proper notice
to the other party.

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Agreement,
intending to be legally bound hereby, as of the date first above written.

APS:                                     AMERICAN PHYSICIANS SERVICE GROUP, INC.

                                         By: /s/ Ken Shifrin

                                         Printed Name: Kenneth S. Shifrin

                                         Title:

SHAREHOLDER:
                                         /s/ Robert Casanova, M.D.
                                             Robert Casanova, M.D.


<PAGE>



                            SHARE EXCHANGE AGREEMENT


         This Share Exchange  Agreement  (this  "Agreement") is made and entered
into as of the ____ day of November,  1997, by and between  American  Physicians
Service  Group,  Inc., a Texas  corporation  ("APS") and Devin Garza,  M.D. (the
"Shareholder").

                                R E C I T A L S:

         WHEREAS,  pursuant to that certain Agreement and Plan of Reorganization
(the "Merger  Agreement")  entered into by Shareholder more or less of even date
herewith and the other contracts and agreements to which Shareholder was, or was
to be, a party as contemplated in the Merger Agreement (the Merger Agreement and
all such other contracts and agreements are hereinafter referred to collectively
as the  "Acquisition  Documents"),  Shareholder  acquired 78,750 shares (the "PM
Shares")  of the  $0.001  par  value  per  share  common  stock of APS  Practice
Management,   Inc.,  a  Texas   corporation   ("Practice   Management")   for  a
consideration of $5.00 per PM Share (the "Exchange Value"); and

         WHEREAS,  APS has agreed,  on the terms and  subject to the  conditions
hereof, to exchange certain shares of its $0.10 par value per share common stock
("APS Common") for the PM Shares.
<PAGE>

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

         1.  CONDITIONS  TO EXCHANGE  RIGHT.  In addition to the other terms and
conditions  contained in this Agreement,  Shareholder  shall only be entitled to
exchange  the PM  Shares  for  shares  of APS  Common  if each of the  following
conditions has been satisfied:

                  (a) There shall not have been,  on or before  November 1, 1999
(the  "Determination  Date"), any registered public offering of the common stock
of Practice  Management,  or any other  transaction  or event  pursuant to which
shares of  Practice  Management  of the same  class as the PM Shares  shall have
become publicly traded.; and

                  (b) Shareholder  shall not be, or have been, at any time on or
prior to the date of the  closing  of any  exchange  of stock  pursuant  to this
Agreement (the "Closing Date"),  in breach of, or default under, this Agreement,
any of the  Acquisition  Documents  or any other  contract or agreement to which
Shareholder  and Practice  Management  and/or APS are parties,  and  Shareholder
shall not have threatened to breach or default under this Agreement,  any of the
Acquisition Documents or any such other contract or agreement; and

                  (c) At the Closing Date,  Shareholder  has all requisite legal
capacity  and  authority  to engage  in the  transactions  contemplated  by this
Agreement,  is the owner of all the PM Shares, and the PM Shares are free of any
and all liens, claims or encumbrances of any kind whatsoever; and
<PAGE>

                  (d) At or before the Closing Date,  Practice  Management shall
not  be,  or  have  been,  a  party  to  any  merger  consolidation  or  similar
transaction,  or agreement  with  respect  thereto,  pursuant to which  Practice
Management  was not or would  not be,  the named  surviving  entity  after  such
merger, consolidation or other transaction.

         2. EXCHANGE  NOTICE.  In the event all of the  conditions  described in
Section 1 are satisfied as of the Determination  Date and Shareholder  elects to
exercise  its  right  to  exchange  its PM  Shares  for  shares  of APS  Common,
Shareholder shall provide written notice thereof (the "Exchange Notice") to APS,
which  Exchange  Notice  must be  received  by APS not later  than the date (the
"Expiration  Date") which is ninety (90) calendar  days after the  Determination
Date.  In the event (i) any of the  conditions  required  for an  exchange to be
permissible,  as described in Section 1 above,  fail to be satisfied on or prior
to  the  Determination  Date,  or  (ii)  any  of  the  conditions  specified  in
subsections  (b),  (c) and (d) of Section 1 fail to be  satisfied on or prior to
the  Closing  Date,  or (iii) APS  fails to  receive  an  Exchange  Notice  from
Shareholder on or prior to the Expiration  Date;  then, in any such case, all of
Shareholder's  rights under this Agreement shall automatically  terminate and be
of no further force or effect whatsoever.
<PAGE>

         3.       SHARE CONVERSION.

                  (a)  Shareholder's  right to exchange its PM Shares  hereunder
shall  apply as to all,  but not less  than  all,  of the PM  Shares  which  are
eligible for exchange as described in this  paragraph (a) of Section 3. Assuming
Shareholder  has complied  with all of the  conditions  allowing for an exchange
pursuant  to this  Agreement,  55,417 of the PM  Shares  shall be  eligible  for
conversion as provided in this Agreement; and the remaining 23,333 PM Shares, or
a portion thereof, will only be eligible for an exchange hereunder in the event,
and only to the extent,  the Clinic (as hereinafter  defined)  achieves  certain
Practice  Accrual  Earnings  (as  hereinafter   defined)  levels  prior  to  the
Determination  Date.  For  purposes of this  Agreement,  the terms  "Clinic" and
"Practice  Accrual  Earnings"  shall have the meanings set forth in that certain
Management  Agreement  which is one of the Acquisition  Documents.  The Practice
Accrual Earnings of Clinic for any twelve (12) consecutive monthly period ending
on or prior to the Determination Date is hereinafter  referred to as the "Clinic
PAE." The parties  acknowledge  and agree that in the event  Clinic PAE does not
exceed  $933,333  during any twelve (12)  consecutive  calendar  monthly  period
ending on or prior to the  Determination  Date, then no portion of the 23,333 PM
Shares  shall be subject to exchange  pursuant to this  Agreement.  In the event
that,  during any twelve (12)  consecutive  calendar monthly period ending on or
prior to the  Determination  Date,  the Clinic PAE  exceeds  $933,333,  then the
percentage of the 23,333 PM Shares which will be eligible for exchange  pursuant
to this Agreement (assuming compliance with all other conditions provided for in
this  Agreement)  will be determined by  multiplying  23,333 by a fraction,  the
numerator of which is the amount by which Clinic PAE exceeds  $816,666  (but not
greater than $233,333 in any event), and the denominator of which is $233,333.
<PAGE>

         EXAMPLE:  The following is provided  purely by way of example only, and
illustrates  the  calculation  of the number of PM Shares  eligible for exchange
under this Agreement, assuming satisfaction of all other conditions allowing for
an exchange pursuant to this Agreement.
                  Assume Clinic PAE is $933,333 for the 12 months ended December
                  31,  1998,  which is the  largest  twelve  (12) month level of
                  Clinic PAE  achieved  in any  period  ended on or prior to the
                  Determination Date.

                  Total PM  Shares  eligible  for  exchange  hereunder  would be
                  67,084 determined as follows:

                  $933,333 - $816,666     x     23,333         =        11,667
                  -------------------
                            $233,333                                    55,417
                                                                        ------
                                                                        67,084

         (b) In the event  Shareholder  has complied with all of the  conditions
allowing  for an exchange  pursuant to this  Agreement,  the closing of any such
exchange (the "Closing") shall occur at the offices of APS in Austin,  Texas, on
such day and at such time as the parties  hereto may mutually  agree upon, or in
the failure to so agree, at 10:00 a.m. Austin,  Texas time on the first business
day that falls thirty (30) days after the Expiration Date. The maximum number of
PM Shares which  Shareholder has the right to exchange pursuant to paragraph (a)
of this Section are hereinafter referred to as the "Exchangeable PM Shares"; and
the "Gross  Exchange  Value" for purposes of this  Agreement is the gross dollar
amount  determined by  multiplying  the  Exchangeable  PM Shares by the Exchange
Value.  For purposes of determining the number of shares of APS Common which may
be  received  upon  any  exchange,  no  consideration  will be  given  to  stock
dividends,  stock  splits,  reverse stock splits or  recapitalizations  to which
<PAGE>

Practice  Management or the PM Shares are subject after the date this  Agreement
was originally entered into as first above written. At the Closing,  Shareholder
shall be  entitled  to receive  such  shares of APS Common as is  determined  by
dividing the Gross  Exchange  Value by the average of the "bid" and "ask" prices
for APS  Common as quoted by the  National  Association  of  Securities  Dealers
Automated  Quotation System at the close of trading on each of the last five (5)
business days immediately preceding the Closing Date.

         (c) At the Closing,  Shareholder shall tender its share  certificate(s)
for all of the Exchangeable PM Shares, duly endorsed in blank, to APS, and shall
also  provide APS with an  executed  blank stock  power,  in form and  substance
reasonably acceptable to APS, wherein Shareholder represents and warrants to APS
(i) that  Shareholder has all necessary  legal capacity,  power and authority to
engage in the transactions  contemplated  hereby, and (ii) that Shareholder owns
all interests in and to the  Exchangeable PM Shares and that the Exchangeable PM
Shares  are  being  transferred  to APS free and clear of all  liens,  claims or
encumbrances of any kind  whatsoever.  The shares of APS Common that Shareholder
receives in the  exchange are  hereinafter  referred to as the "New APS Shares."
The parties  acknowledge and agree that Shareholder shall receive a whole number
of shares of APS Common only,  and that any fractional  share amounts  resulting
from the foregoing  conversion  calculation  shall be rounded up or down, as the
case  may be,  to the  next  whole  number  of  shares.  APS  shall  be under no
obligation to pay any cash or other amounts with respect to any fractional share
amounts,  or to issue  any  fractional  share  amounts  to  Shareholder.  At the
Closing,  Shareholder  shall either receive a share  certificate for all its New
APS Shares or, if APS' transfer  agent is unable to produce such  certificate by
the Closing  Date,  will receive a copy of a registered  letter sent from APS to
the transfer agent instructing the transfer agent to deliver such certificate in
the name of Shareholder directly to Shareholder or Shareholder's designee.
<PAGE>

         4. NEW APS SHARES TRANSFERABILITY. APS will have registered the New APS
Shares with the Securities and Exchange Commission,  and made such other filings
and taken such other steps as necessary,  so that  Shareholder  may  immediately
sell, or otherwise  convey,  the New APS Shares without  restriction  (except as
otherwise  provided  below).  Shareholder  agrees to cooperate  fully and in all
respects  with  APS in  connection  with  any such  registration,  whether  such
cooperation  is requested  before or after the  Determination  Date.  Failure of
Shareholder to cooperate fully, including without limitation, promptly providing
complete and accurate information to APS, in connection with the registration of
any APS Common shares,  whether such cooperation and/or information is requested
before or after the Determination  Date or before or after Shareholder  delivers
any Exchange Notice,  shall automatically  terminate  Shareholder's rights under
this Agreement.  Notwithstanding  anything contained herein to the contrary,  in
the  event  that APS is in the  process,  either at the  Closing  Date or at the
Determination Date, of registering and/or selling any of its capital stock in or
pursuant to any underwritten  public  offering,  upon the written request of the
lead underwriter  involved therein,  Shareholder agrees, and shall then agree in
writing in form and substance reasonably acceptable to APS, to not sell, attempt
to sell, or solicit or accept any offers to sell or otherwise convey, any of the
New APS Shares for such period of time (not to exceed one hundred  eighty  (180)
days) as may be requested by such lead underwriter.
<PAGE>

         5.       MISCELLANEOUS.

                  (a) Fees and  Expenses.  Each party hereto  agrees to bear all
fees and expenses  (including  without  limitation all fees and expenses for its
legal counsel and any accountants or other  professional  advisors)  incurred in
connection with the transactions contemplated hereby.

                  (b) Governing Law and Venue.  This Agreement shall be governed
by, and  construed  and enforced in  accordance  with,  the laws of the State of
Texas  (except  the  laws  of  Texas  that  would  render  such  choice  of  law
ineffective).  Venue for any action  relating to this Agreement  shall be proper
only in Texas.

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

                  (d)  Inurement.  This  Agreement  shall  be  binding  upon the
parties hereto and their respective heirs, legal representatives, successors and
permitted  assigns.  No party hereto may assign this Agreement,  or any of their
rights or obligations  hereunder,  without the express prior written  consent of
all parties hereto in each instance.

                  (e)  Notices.  Any notices  required or  permitted to be given
under this Agreement  shall be given in writing and shall be deemed received (a)
<PAGE>

when  personally  delivered  to the  relevant  party at its address as set forth
below or (b) if sent by mail, on the third day following the date when deposited
in the United States mail, certified or registered mail, postage pre-paid to the
relevant party at its address indicated below:

                  APS:      American Physicians Service Group, Inc.
                            1301 Capital of Texas Highway, Suite C-300
                            Austin, Texas 78746-6550
                            Attn: President

                  Shareholder:              Devin Garza, M.D.
                         11111 Research Blvd., Suite 450
                               Austin, Texas 78759

Any party may change its address for purposes of this Agreement by proper notice
to the other party.

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Agreement,
intending to be legally bound hereby, as of the date first above written.

APS:                                     AMERICAN PHYSICIANS SERVICE GROUP, INC.

                                         By: /s/ Ken Shifrin

                                         Printed Name: Kenneth S. Shifrin

                                         Title:

SHAREHOLDER:
                                          /s/ Devin Garza, M.D.
                                          Devin Garza, M.D.

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                            SHARE EXCHANGE AGREEMENT


         This Share Exchange  Agreement  (this  "Agreement") is made and entered
into as of the ____ day of November,  1997, by and between  American  Physicians
Service Group, Inc., a Texas corporation ("APS") and Shelley Nielson,  M.D. (the
"Shareholder").

                                R E C I T A L S:

         WHEREAS,  pursuant to that certain Agreement and Plan of Reorganization
(the "Merger  Agreement")  entered into by Shareholder more or less of even date
herewith and the other contracts and agreements to which Shareholder was, or was
to be, a party as contemplated in the Merger Agreement (the Merger Agreement and
all such other contracts and agreements are hereinafter referred to collectively
as the  "Acquisition  Documents"),  Shareholder  acquired 78,750 shares (the "PM
Shares")  of the  $0.001  par  value  per  share  common  stock of APS  Practice
Management,   Inc.,  a  Texas   corporation   ("Practice   Management")   for  a
consideration of $5.00 per PM Share (the "Exchange Value"); and

         WHEREAS,  APS has agreed,  on the terms and  subject to the  conditions
hereof, to exchange certain shares of its $0.10 par value per share common stock
("APS Common") for the PM Shares.
<PAGE>

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

         1.  CONDITIONS  TO EXCHANGE  RIGHT.  In addition to the other terms and
conditions  contained in this Agreement,  Shareholder  shall only be entitled to
exchange  the PM  Shares  for  shares  of APS  Common  if each of the  following
conditions has been satisfied:

                  (a) There shall not have been,  on or before  November 1, 1999
(the  "Determination  Date"), any registered public offering of the common stock
of Practice  Management,  or any other  transaction  or event  pursuant to which
shares of  Practice  Management  of the same  class as the PM Shares  shall have
become publicly traded.; and

                  (b) Shareholder  shall not be, or have been, at any time on or
prior to the date of the  closing  of any  exchange  of stock  pursuant  to this
Agreement (the "Closing Date"),  in breach of, or default under, this Agreement,
any of the  Acquisition  Documents  or any other  contract or agreement to which
Shareholder  and Practice  Management  and/or APS are parties,  and  Shareholder
shall not have threatened to breach or default under this Agreement,  any of the
Acquisition Documents or any such other contract or agreement; and

                  (c) At the Closing Date,  Shareholder  has all requisite legal
capacity  and  authority  to engage  in the  transactions  contemplated  by this
Agreement,  is the owner of all the PM Shares, and the PM Shares are free of any
and all liens, claims or encumbrances of any kind whatsoever; and
<PAGE>

                  (d) At or before the Closing Date,  Practice  Management shall
not  be,  or  have  been,  a  party  to  any  merger  consolidation  or  similar
transaction,  or agreement  with  respect  thereto,  pursuant to which  Practice
Management  was not or would  not be,  the named  surviving  entity  after  such
merger, consolidation or other transaction.

         2. EXCHANGE  NOTICE.  In the event all of the  conditions  described in
Section 1 are satisfied as of the Determination  Date and Shareholder  elects to
exercise  its  right  to  exchange  its PM  Shares  for  shares  of APS  Common,
Shareholder shall provide written notice thereof (the "Exchange Notice") to APS,
which  Exchange  Notice  must be  received  by APS not later  than the date (the
"Expiration  Date") which is ninety (90) calendar  days after the  Determination
Date.  In the event (i) any of the  conditions  required  for an  exchange to be
permissible,  as described in Section 1 above,  fail to be satisfied on or prior
to  the  Determination  Date,  or  (ii)  any  of  the  conditions  specified  in
subsections  (b),  (c) and (d) of Section 1 fail to be  satisfied on or prior to
the  Closing  Date,  or (iii) APS  fails to  receive  an  Exchange  Notice  from
Shareholder on or prior to the Expiration  Date;  then, in any such case, all of
Shareholder's  rights under this Agreement shall automatically  terminate and be
of no further force or effect whatsoever.
<PAGE>

         3.       SHARE CONVERSION.

                  (a)  Shareholder's  right to exchange its PM Shares  hereunder
shall  apply as to all,  but not less  than  all,  of the PM  Shares  which  are
eligible for exchange as described in this  paragraph (a) of Section 3. Assuming
Shareholder  has complied  with all of the  conditions  allowing for an exchange
pursuant  to this  Agreement,  55,417 of the PM  Shares  shall be  eligible  for
conversion as provided in this Agreement; and the remaining 23,333 PM Shares, or
a portion thereof, will only be eligible for an exchange hereunder in the event,
and only to the extent,  the Clinic (as hereinafter  defined)  achieves  certain
Practice  Accrual  Earnings  (as  hereinafter   defined)  levels  prior  to  the
Determination  Date.  For  purposes of this  Agreement,  the terms  "Clinic" and
"Practice  Accrual  Earnings"  shall have the meanings set forth in that certain
Management  Agreement  which is one of the Acquisition  Documents.  The Practice
Accrual Earnings of Clinic for any twelve (12) consecutive monthly period ending
on or prior to the Determination Date is hereinafter  referred to as the "Clinic
PAE." The parties  acknowledge  and agree that in the event  Clinic PAE does not
exceed  $933,333  during any twelve (12)  consecutive  calendar  monthly  period
ending on or prior to the  Determination  Date, then no portion of the 23,333 PM
Shares  shall be subject to exchange  pursuant to this  Agreement.  In the event
that,  during any twelve (12)  consecutive  calendar monthly period ending on or
prior to the  Determination  Date,  the Clinic PAE  exceeds  $933,333,  then the
percentage of the 23,333 PM Shares which will be eligible for exchange  pursuant
to this Agreement (assuming compliance with all other conditions provided for in
this  Agreement)  will be determined by  multiplying  23,333 by a fraction,  the
numerator of which is the amount by which Clinic PAE exceeds  $816,666  (but not
greater than $233,333 in any event), and the denominator of which is $233,333.
<PAGE>

         EXAMPLE:  The following is provided  purely by way of example only, and
illustrates  the  calculation  of the number of PM Shares  eligible for exchange
under this Agreement, assuming satisfaction of all other conditions allowing for
an exchange pursuant to this Agreement.
                  Assume Clinic PAE is $933,333 for the 12 months ended December
                  31,  1998,  which is the  largest  twelve  (12) month level of
                  Clinic PAE  achieved  in any  period  ended on or prior to the
                  Determination Date.

                  Total PM  Shares  eligible  for  exchange  hereunder  would be
                  67,084 determined as follows:

                  $933,333 - $816,666     x      23,333         =        11,667
                  -------------------
                            $233,333                                     55,417
                                                                         ------
                                                                         67,084

         (b) In the event  Shareholder  has complied with all of the  conditions
allowing  for an exchange  pursuant to this  Agreement,  the closing of any such
exchange (the "Closing") shall occur at the offices of APS in Austin,  Texas, on
such day and at such time as the parties  hereto may mutually  agree upon, or in
the failure to so agree, at 10:00 a.m. Austin,  Texas time on the first business
day that falls thirty (30) days after the Expiration Date. The maximum number of
PM Shares which  Shareholder has the right to exchange pursuant to paragraph (a)
of this Section are hereinafter referred to as the "Exchangeable PM Shares"; and
the "Gross  Exchange  Value" for purposes of this  Agreement is the gross dollar
amount  determined by  multiplying  the  Exchangeable  PM Shares by the Exchange
Value.  For purposes of determining the number of shares of APS Common which may
be  received  upon  any  exchange,  no  consideration  will be  given  to  stock
dividends,  stock  splits,  reverse stock splits or  recapitalizations  to which
<PAGE>

Practice  Management or the PM Shares are subject after the date this  Agreement
was originally entered into as first above written. At the Closing,  Shareholder
shall be  entitled  to receive  such  shares of APS Common as is  determined  by
dividing the Gross  Exchange  Value by the average of the "bid" and "ask" prices
for APS  Common as quoted by the  National  Association  of  Securities  Dealers
Automated  Quotation System at the close of trading on each of the last five (5)
business days immediately preceding the Closing Date.

         (c) At the Closing,  Shareholder shall tender its share  certificate(s)
for all of the Exchangeable PM Shares, duly endorsed in blank, to APS, and shall
also  provide APS with an  executed  blank stock  power,  in form and  substance
reasonably acceptable to APS, wherein Shareholder represents and warrants to APS
(i) that  Shareholder has all necessary  legal capacity,  power and authority to
engage in the transactions  contemplated  hereby, and (ii) that Shareholder owns
all interests in and to the  Exchangeable PM Shares and that the Exchangeable PM
Shares  are  being  transferred  to APS free and clear of all  liens,  claims or
encumbrances of any kind  whatsoever.  The shares of APS Common that Shareholder
receives in the  exchange are  hereinafter  referred to as the "New APS Shares."
The parties  acknowledge and agree that Shareholder shall receive a whole number
of shares of APS Common only,  and that any fractional  share amounts  resulting
from the foregoing  conversion  calculation  shall be rounded up or down, as the
case  may be,  to the  next  whole  number  of  shares.  APS  shall  be under no
obligation to pay any cash or other amounts with respect to any fractional share
amounts,  or to issue  any  fractional  share  amounts  to  Shareholder.  At the
Closing,  Shareholder  shall either receive a share  certificate for all its New
APS Shares or, if APS' transfer  agent is unable to produce such  certificate by
the Closing  Date,  will receive a copy of a registered  letter sent from APS to
the transfer agent instructing the transfer agent to deliver such certificate in
the name of Shareholder directly to Shareholder or Shareholder's designee.
<PAGE>

         4. New APS Shares Transferability. APS will have registered the New APS
Shares with the Securities and Exchange Commission,  and made such other filings
and taken such other steps as necessary,  so that  Shareholder  may  immediately
sell, or otherwise  convey,  the New APS Shares without  restriction  (except as
otherwise  provided  below).  Shareholder  agrees to cooperate  fully and in all
respects  with  APS in  connection  with  any such  registration,  whether  such
cooperation  is requested  before or after the  Determination  Date.  Failure of
Shareholder to cooperate fully, including without limitation, promptly providing
complete and accurate information to APS, in connection with the registration of
any APS Common shares,  whether such cooperation and/or information is requested
before or after the Determination  Date or before or after Shareholder  delivers
any Exchange Notice,  shall automatically  terminate  Shareholder's rights under
this Agreement.  Notwithstanding  anything contained herein to the contrary,  in
the  event  that APS is in the  process,  either at the  Closing  Date or at the
Determination Date, of registering and/or selling any of its capital stock in or
pursuant to any underwritten  public  offering,  upon the written request of the
lead underwriter  involved therein,  Shareholder agrees, and shall then agree in
writing in form and substance reasonably acceptable to APS, to not sell, attempt
to sell, or solicit or accept any offers to sell or otherwise convey, any of the
New APS Shares for such period of time (not to exceed one hundred  eighty  (180)
days) as may be requested by such lead underwriter.
<PAGE>

         5.       MISCELLANEOUS.

                  (a) Fees and  Expenses.  Each party hereto  agrees to bear all
fees and expenses  (including  without  limitation all fees and expenses for its
legal counsel and any accountants or other  professional  advisors)  incurred in
connection with the transactions contemplated hereby.

                  (b) Governing Law and Venue.  This Agreement shall be governed
by, and  construed  and enforced in  accordance  with,  the laws of the State of
Texas  (except  the  laws  of  Texas  that  would  render  such  choice  of  law
ineffective).  Venue for any action  relating to this Agreement  shall be proper
only in Texas.

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

                  (d)  Inurement.  This  Agreement  shall  be  binding  upon the
parties hereto and their respective heirs, legal representatives, successors and
permitted  assigns.  No party hereto may assign this Agreement,  or any of their
rights or obligations  hereunder,  without the express prior written  consent of
all parties hereto in each instance.
<PAGE>

                  (e)  Notices.  Any notices  required or  permitted to be given
under this Agreement  shall be given in writing and shall be deemed received (a)
when  personally  delivered  to the  relevant  party at its address as set forth
below or (b) if sent by mail, on the third day following the date when deposited
in the United States mail, certified or registered mail, postage pre-paid to the
relevant party at its address indicated below:

                  APS:               American Physicians Service Group, Inc.
                                     1301 Capital of Texas Highway, Suite C-300
                                     Austin, Texas 78746-6550
                                     Attn: President

                  Shareholder:       Shelley Nielson, M.D.
                                     11111 Research Blvd., Suite 450
                                     Austin, Texas 78759

Any party may change its address for purposes of this Agreement by proper notice
to the other party.

         IN WITNESS  WHEREOF,  the parties hereto have executed this  Agreement,
intending to be legally bound hereby, as of the date first above written.

APS:                                     AMERICAN PHYSICIANS SERVICE GROUP, INC.

                                         By: /s/ Ken Shifrin

                                         Printed Name: Kenneth S. Shifrin

                                         Title:

SHAREHOLDER:
                                         /s/ Shelley Nielson, M.D.
                                         Shelley Nielson, M.D.

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