INCIDENTAL REGISTRATION RIGHTS AGREEMENT

         THIS INCIDENTAL REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of March 1, 2000 (the "Effective Date"), by and among Prime Medical Services,
Inc., a Texas  corporation  (the "Company") and MBC Holding  Company,  L.L.C., a
Texas limited liability company (the "Holder").

         WHEREAS, the Company has issued a Warrant Certificate,  dated as of the
Effective Date (the "Warrant"),  pursuant to which the Company has issued to the
Holder,  a Warrant to purchase shares of the Company's  common stock,  $0.01 par
value (interchangeably, "Stock" or "Common Stock").

         WHEREAS,  in order to induce the Holder to purchase  the Common  Stock,
the parties  hereto have agreed to enter into this  Agreement  pursuant to which
the Company has agreed to grant  registration  rights with respect to the Common
Stock.

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

1.       Registration Rights.
         -------------------

1.1  Incidental  Registration  Rights.  If the  Company at any time  proposes to
register  any of its  Common  Stock  under  the  Securities  Act for sale to the
public, whether for its own account or for the account of other security holders
or both (except with respect to  registration  statements on Form S-4 or another
form not available for  registering  the Stock for sale to the public),  it will
give written  notice to the Holder of its intention so to do, which notice shall
include a list of the  jurisdictions  in which the Company intends to attempt to
qualify the Stock under the applicable  state  securities laws. Upon the written
request of the Holder, given within 10 days after receipt of any such notice, to
register  any of its or their  Stock  (including  Stock which the holder has the
right to acquire upon the exercise of the Warrant), the Company will, subject to
the limitations and conditions  contained herein,  use its best efforts to cause
the Stock as to which  registration  shall have been so  requested  (which shall
also be referred to as the "Covered Shares") to be included in the securities to
be covered by the  registration  statement  proposed to be filed by the Company,
all to the  extent  requisite  to permit  the sale or other  disposition  by the
Holder; provided, however, that:

(a)      The Holder shall have the right to request  inclusion of its Stock (and
         have such  Stock  included)  in two  registration  statements  that are
         declared effective by the Commission;

(b)      If, at any time after  giving such written  notice of its  intention to
         register  any  securities  and  prior  to  the  effective  date  of the
         registration statement filed in connection with such registration,  the
         Company shall determine for any reason not to register such securities,
         the  Company  may,  at  its  election,  give  written  notice  of  such
         determination to the Holder,  if a request as hereinabove  provided has
         been  made,  and  thereupon  the  Company  shall  be  relieved  of  its
         obligation  to  register  any  Common  Stock in  connection  with  such
         registration; and

(c)      If such registration involves an underwritten  offering, the Holder, if
         the Holder has requested to be included in the Company's  registration,
         must sell its Common Stock to the underwriters  selected by the Company
         on the same terms and  conditions  as apply to the  Company  (except as
         otherwise set forth herein).

         The number of Covered  Shares to be included in such an offering may be
reduced if and to the extent that the managing underwriter,  if any, shall be of
the opinion that such  inclusion  would  adversely  affect the  marketing of the
securities to be sold by the Company  therein.  Notwithstanding  anything to the
contrary  contained  in  this  Section  1.1,  in  the  event  that  there  is an
underwritten  public  offering  of  securities  of  the  Company  pursuant  to a
registration  covering  Stock and the Holder does not elect to sell its Stock to
the  underwriters of the Company's  securities in connection with such offering,
the  Holder  shall  refrain  from  selling  such  Stock  during  the  period  of
distribution  of the Company's  securities by such  underwriters,  the period in
which the underwriting syndicate participates in the after market and during any
lock-up  period  requested by such  underwriters;  provided,  however,  that the
Holder  shall,  in any event,  be entitled to sell its Stock  commencing  on the
180th day after the effective date of such registration statement.

     1.2 Registration Procedures. If and whenever the Company is required by the
provisions of Section 1 hereof to effect the  registration of any of the Covered
Shares under the Securities Act, the Company will, as expeditiously as possible:

(a)      prepare and file with the Commission a registration  statement  (which,
         in the case of an underwritten  public offering pursuant to Section 1.1
         hereof,   shall  be  on  Form  S-1,  SB-2  or  other  form  of  general
         applicability satisfactory to the managing underwriter) with respect to
         such  securities  and use its best  efforts to cause such  registration
         statement  to  become  and  remain  effective  for  the  period  of the
         distribution contemplated thereby (determined as hereinafter provided);

(b)      prepare and file with the Commission such amendments and supplements to
         such registration  statement and the prospectus in connection therewith
         as may be necessary to keep such registration  statement  effective for
         the period of  distribution  and as may be necessary to comply with the
         provisions of the Securities Act with respect to the disposition of all
         Common Stock covered by such registration  statement in accordance with
         the  sellers   intended   method  of  disposition  set  forth  in  such
         registration statement for such period;

(c)      furnish to the Holder, as applicable,  and each underwriter such number
         of copies of the  registration  statement and the  prospectus  included
         therein (including each preliminary  prospectus) as they may reasonably
         request in order to facilitate the public sale or other  disposition of
         the Covered Shares covered by such registration statement;

(d)      use its best efforts to register or qualify the Covered  Shares covered
         by such registration statement under the securities or blue sky laws of
         such  jurisdictions  as the Holder  or, in the case of an  underwritten
         public offering,  the managing  underwriter,  shall reasonably  request
         (provided  that  the  Company  will  not be  required  to  (1)  qualify
         generally  to do  business  in any  jurisdiction  where  it  would  not
         otherwise be required to qualify but for this  subsection,  (2) subject
         itself to taxation in any such  jurisdiction  or (3) consent to general
         service of process in any such jurisdiction);

(e)      promptly notify the Holder under such  registration  statement and each
         underwriter, at any time when a prospectus relating thereto is required
         to be delivered  under the  Securities Act when it becomes aware of the
         happening of any event as a result of which the prospectus contained in
         such  registration  statement,  as then in effect,  includes  an untrue
         statement  of a  material  fact or  omits to state  any  material  fact
         required  to be stated  therein  or  necessary  to make the  statements
         contained  therein not  misleading in light of the  circumstances  then
         existing;

(f)  use its best efforts (if the offering is underwritten)  to furnish,  at the
     request of the Holder on the date that the Covered  Shares are delivered to
     the  underwriters  for sale pursuant to such  registration:  (1) an opinion
     dated such date of counsel  representing  the Company  for the  purposes of
     such registration,  addressed to the underwriters and in customary form and
     covering such matters as are customarily  covered by opinions of counsel in
     similar registrations and as may be required in the underwriting  agreement
     relating thereto,  as may reasonably be requested by the underwriters or by
     the Holder,  as  applicable;  and (2) a comfort letter dated such date from
     the independent  public accountants  retained by the Company,  addressed to
     the  underwriters,  in  customary  form and  covering  such  matters as are
     customarily covered by such comfort letters in similar registrations and as
     may be required in the underwriting  agreement  relating  thereto,  as such
     underwriters or the Holder, as applicable, may reasonably request; and

(g)      make   available  for  inspection  by  the  Holder,   any   underwriter
         participating  in  any  distribution   pursuant  to  such  registration
         statement, and any attorney, accountant, or other agent retained by the
         Holder,  or  underwriter,  all financial and other  records,  pertinent
         corporate  documents,  and  properties  of the  Company,  and cause the
         Company's officers,  directors, and employees to supply all information
         reasonably  requested  by  any  such  seller,  underwriter,   attorney,
         accountant, or agent in connection with such registration statement.

         For  purposes  of  paragraphs  (i)  and  (ii)  above,   the  period  of
distribution  of Covered  Shares in an  underwritten  public  offering  shall be
deemed to extend until each  underwriter  has completed the  distribution of all
securities  purchased by it, and the period of distribution of Covered Shares in
any other  registration  shall be deemed to extend until the earlier of the sale
of all Covered Shares or 180 days after the effective date thereof.

         In connection with each registration hereunder, the Holder will furnish
to the  Company  in  writing  such  information  with  respect to itself and the
proposed  distribution  by it as shall be  requested  by the Company in order to
assure compliance with federal and applicable state securities laws.

         In connection with each  registration  covering an underwritten  public
offering, the Company agrees to enter into a written agreement with the managing
underwriter  selected in the manner herein  provided in such form and containing
such  provisions  as are  customary  in the  securities  business  for  such  an
arrangement  between major  underwriters and companies of the Company's size and
investment  stature;  provided  that such  agreement  shall not contain any such
provision  applicable to the Company that is  inconsistent  with the  provisions
hereof and, further,  provided that the time and place of the closing under such
agreement shall be as mutually agreed upon between the Company and such managing
underwriter.

         The Company  will not be obligated to include any shares of Stock owned
by the Holder upon the  Holder's  request that a proposed  registration  include
such Stock if the Company  delivers  to the Holder the opinion of the  Company's
counsel to the effect that the requested  registration is not required to permit
the proposed  disposition  or any resale of such Stock without  restrictions  on
transfer under the Securities  Act, which opinion may be furnished to and relied
upon by any broker through which the Holder intends to sell shares of Stock.

1.3  Conditions  to  Obligation to Register  Shares.  The Company's  obligations
     under  this  Section 1 shall be subject to the  following  limitations  and
     conditions:

(a)      Information.  The Company  shall have received from the Holder all such
         information  as the  Company  may  reasonably  request  from the Holder
         concerning  itself  and its  methods of  distribution  of the shares of
         Stock to enable the  Company to include in the  registration  statement
         all material facts required to be disclosed therein.

(b)  Notice  Requirements.  Any request by the Holder pursuant to this Agreement
     for  registration  of the  offering,  sale and  delivery of shares of Stock
     shall  provide  that the  Holder (i) has a present  intention  to sell such
     shares; (ii) agrees to execute all consents,  powers of attorneys and other
     documents required in order to cause such registration  statement to become
     effective;  (iii)  agrees,  if the  offering is at the market,  to give the
     Company  written  notice of the first bona fide offering of such shares and
     to use the prospectus  forming a part of such  registration  statement only
     for a  period  of 90 days  after  the  effective  date of the  registration
     statement  unless the  offering is pursuant  to a  continuous  registration
     pursuant to Rule 415 promulgated  under the Securities Act; (iv) subject to
     adverse events regarding the selling price of the shares, agrees to utilize
     the  proposed  method of  distribution  of the  shares;  and (v)  agrees to
     promptly  notify the Company and each  underwriter,  if any, with regard to
     any  registration  statement,  at any  time  when it  becomes  aware of the
     happening  of any event as a result of which any  prospectus  contained  in
     such  registration  statement that has been provided to the Holder includes
     an untrue  statement of a material  fact  regarding  the Holder or omits to
     state a material fact regarding the Holder required to be stated therein or
     necessary to make the statements contained therein regarding the Holder not
     misleading in light of the circumstances then existing.

1.4  Distribution  Arrangements.  The Holder  agrees  that,  in disposing of the
shares of Stock owned by it in the registered  public  offering,  it will comply
with Rules 10b-2,  10b-6 and 10b-7 and any other applicable rules promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of 1934
(the "1934 Act").

1.5  Expenses.  All  expenses  incurred  by  the  Company  in  complying  with a
registration covering Stock,  including,  without limitation,  all registration,
qualification,  and filing fees, blue sky fees and expenses,  printing expenses,
fees and disbursements of legal counsel and independent  public  accountants for
the Company,  the reasonable  fees and expenses of one law firm serving as legal
counsel for the Holder, fees of the National  Association of Securities Dealers,
Inc., transfer taxes,  escrow fees, fees of transfer agents and registrars,  and
costs of  insurance,  but  excluding  any Selling  Expenses,  are herein  called
"Registration  Expenses." All underwriting  discounts,  and selling  commissions
applicable to the sale of Covered Shares are herein called "Selling Expenses."

         The Company shall pay all Registration  Expenses in connection with any
registration statement filed pursuant to this Section 1. All Selling Expenses in
connection  with any  registration  statement  filed  pursuant to this Section 1
shall be borne by the Holder,  or by such persons other than the Company (except
to the extent the Company shall be a seller), as they may agree.

1.6      Miscellaneous.
         -------------

                  1.6.1   Registration   Rights   are   Exclusive.   The  Holder
         understands  that it has certain  registration  rights pursuant to this
         Agreement  with  respect  to its  shares  of Stock,  but other  than as
         specifically  set  forth  in  this  Agreement,   the  Company  has  not
         covenanted  and is not  obligated  to finish a  registration  statement
         under the  Securities  Act  covering  any  shares  of Stock,  to file a
         notification  under  Regulation A promulgated  under the Securities Act
         with respect to shares of Stock, or to take any other action that would
         make available an exemption from registration.

                  1.6.2  No  Requirement.  In no  event  shall  the  Company  be
         required to amend any  registration  statement  filed  pursuant to this
         Agreement  after it has become  effective or to amend or supplement any
         prospectus  to permit  the  continued  disposition  of shares of Common
         Stock registered under any registration statement in either case beyond
         the period initially contemplated therein.

1.7 Indemnification. In the event of a registration of any of the Covered Shares
under the  Securities  Act, the Company  shall  indemnify  and hold harmless the
Holder  thereunder,  and each  underwriter  and each  associate,  if any, of the
Holder, as applicable,  or underwriter,  against any losses, claims, damages, or
liabilities,  joint or several, to which the Holder, or underwriter or associate
thereof may become  subject under the  Securities  Act or otherwise,  insofar as
such losses,  claims,  damages,  or liabilities (or actions in respect  thereof)
arise out of or are based upon any untrue  statement or alleged untrue statement
of any material fact contained in any  registration  statement  under which such
Covered  Shares  were  registered  under the  Securities  Act,  any  preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof,  or arise out of or are based upon the omission or alleged  omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not  misleading,  or any violation by the Company of any
rule or  regulation  promulgated  under the  Securities  Act  applicable  to the
Company and relating to action or inaction by the Company in connection with any
such  registration,  and shall  reimburse the Holder,  each  underwriter  and/or
associate thereof for any legal or other expenses reasonably incurred by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability, or action; provided,  however, that the Company will not be liable in
any such  case if and to the  extent  that  any such  loss,  claim,  damage,  or
liability  arises out of or is based upon an untrue  statement or alleged untrue
statement or omission or alleged  omission made in conformity  with  information
furnished by the Holder,  each underwriter  and/or associate  thereof in writing
specifically for use in such registration statement or prospectus.

         In the event of a  registration  of any of the Covered Shares under the
Securities  Act, the Holder will indemnify and hold harmless the Company and its
affiliates,  if any, and each  underwriter and each associate of any underwriter
against all losses, claims,  damages or liabilities,  joint or several, to which
the  Company or such  underwriter  or  associate  may become  subject  under the
Securities  Act or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
untrue  statement or alleged untrue  statement of any material fact contained in
the registration statement under which such Covered Shares were registered under
the Securities Act, any  preliminary  prospectus or final  prospectus  contained
therein,  or any amendment or supplement  thereof,  or arise out of or are based
upon the omission or alleged  omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company,  each underwriter  and/or associate  thereof for
any legal or other  expenses  reasonably  incurred  by them in  connection  with
investigating or defending any such loss,  claim,  damage,  liability or action;
provided,  however, that the Holder will be liable hereunder in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue  statement or alleged untrue statement or omission
or alleged  omission made in reliance upon and in  conformity  with  information
pertaining  to the Holder as such,  furnished  in writing to the  Company by the
Holder  specifically for use in such registration  statement or prospectus;  and
provided  further,  however,  that the liability of each of the Holder hereunder
shall be limited to the proportion of any such loss, claim, damage, liability or
expense that is equal to the proportion that the public offering price of shares
sold by the Holder under such  registration  statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
received  by the  Holder,  from  the  sale  of  Common  Stock  covered  by  such
registration statement.

         Promptly after receipt by an indemnified  party  hereunder of notice of
the  commencement  of any action,  such  indemnified  party shall, if a claim in
respect thereof is to be made against the indemnifying  party hereunder,  notify
the  indemnifying  party in writing  thereof,  but the omission so to notify the
indemnifying  party shall not relieve it from any  liability  it may have to any
indemnified  party  other than under this  Section  1.7. In case any such action
shall  be  brought  against  any  indemnified  party  and it  shall  notify  the
indemnifying party of the commencement  thereof, the indemnifying party shall be
entitled  to  participate  in and,  to the extent it shall  wish,  to assume and
undertake  the defense  thereof with  counsel  reasonably  satisfactory  to such
indemnified  party,  and,  after  notice  from  the  indemnifying  party to such
indemnified  party of its  election  so to  assume  and  undertake  the  defense
thereof,  the indemnifying  party shall not be liable to such indemnified  party
under this  Section  1.7 for any legal  expenses  subsequently  incurred by such
indemnified  party in connection  with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so elected; provided, however
that, if the  defendants in any such action include both the  indemnified  party
and  the  indemnifying  party  and if the  interests  of the  indemnified  party
reasonably  may be deemed to conflict  with the  interests  of the  indemnifying
party, the indemnified party shall have the right to select separate counsel and
to assume its  defense  and  otherwise  to  participate  in the  defense of such
action,  with the expenses and fees of such separate  counsel and other expenses
related to such  participation  to be  reimbursed by the  indemnifying  party as
incurred.  The  indemnifying  party will not be subject to any  settlement  made
without its consent,  which  consent  shall not be  unreasonably  withheld.  The
indemnifying  party  will pay to the  indemnified  party all sums due  hereunder
within 10 days of a final non-appealable  judgment or pursuant to the terms of a
settlement agreement.

1.8  Limitation on Subsequent  Registration  Rights.  From and after the date of
this Agreement,  without the prior written consent of Holder,  the Company shall
not  enter  into any  agreement  with any  holder or  prospective  holder of any
securities  of the Company  (nor shall the  Company,  in the absence of any such
prior agreement,  permit any such holder or prospective  holder) to include such
securities  in any  registration  contemplated  by  this  Agreement  other  than
"piggyback"  registration  rights with terms which are less favorable than those
granted in this Agreement.

                            [Signature page follows]


<PAGE>



S-1

                                 SIGNATURE PAGE

                                       TO

                    INCIDENTAL REGISTRATION RIGHTS AGREEMENT

         IN WITNESS  WHEREOF,  the  Company  and the  Holder  have  caused  this
Agreement  to be  signed  and  delivered  by  its  duly  authorized  officer  or
representative as of the Effective Date.

                                               PRIME MEDICAL SERVICES, INC.

                                            By:  _____________________________
                                            Printed Name: _____________________
                                            Title:  ____________________________



                                                MBC HOLDING COMPANY, L.L.C.

                                            By:  _____________________________
                                            Printed Name: _____________________
                                            Title:  ____________________________