1


                             FACILITY USE AGREEMENT

         This   Facility  Use   Agreement   (hereinafter   referred  to  as  the
"Agreement")  is made and executed as of the close of business on the 1st day of
March,  2000 by and among  Caster  One,  L.L.C.,  a Delaware  limited  liability
company,  (hereinafter referred to as "Newco"), Andrew Caster, M.D. (hereinafter
referred to as  "Provider")  and Caster Eye Center  Medical  Group, a California
professional corporation (hereinafter referred to as "Caster PC").

                             Preliminary Statements:

         Provider,  a licensed  medical  professional,  together  with Caster PC
provides Refractive Surgery (as hereinafter defined) and related services in the
area of Los Angeles County, California.

         Newco owns  certain  equipment  and assets  (none of which  include the
practice of medicine) used in the performance of Refractive  Surgery and related
services.

         Provider  and  Caster  PC desire to use  Newco's  facilities  to render
medical services to their patients.

         Caster PC desires to employ certain  employees on behalf of Newco,  for
the purpose of rendering services at and using the facilities of Newco.

                             Statement of Agreement

         In  consideration  of  the  mutual  covenants  and  agreements   herein
contained,   and  other  good  and  valuable  consideration,   the  receipt  and
sufficiency  of which are hereby  acknowledged,  and on the terms and subject to
the conditions herein set forth, the parties hereto agree as follows:

                                    ARTICLE I

                              Certain Defined Terms

         Unless otherwise defined in Section 1.1 or elsewhere in this Agreement,
all capitalized terms used in this Agreement shall have the meanings ascribed to
them in that certain Contribution Agreement (the "Contribution Agreement") dated
as of March 1, 2000, among Prime Medical Services, Inc., a Delaware corporation,
Prime Refractive,  L.L.C., a Delaware limited liability company, Newco, Provider
and Caster PC.

                                   ARTICLE II

                           Relationship of the Parties

         The relationship  under this Agreement  between Newco, on the one hand,
and  Provider  and Caster PC, on the other  hand,  shall be that of  independent
contractors.  The provisions  hereof are not intended to create any partnership,
joint  venture,  agency or employment  relationship  between the parties.  Newco
acknowledges  and agrees that  Provider and Caster PC shall retain the exclusive
authority to direct the medical,  clinical professional,  and ethical aspects of
their respective  medical  practices.  Newco shall neither exercise control over
nor interfere with the physician-patient relationships of Provider or Caster PC,
which  shall be  maintained  strictly  between  Provider,  Caster  PC and  their
patients.

                                   ARTICLE III

                        Services to be Provided by Newco

         Section 3.1 General.  No party will act in a manner that would  prevent
the other parties from performing  their duties  hereunder,  and each party will
provide such  information  and  assistance  to each other party as is reasonably
required to enable such other party to perform  its  services  hereunder.  Newco
shall, and shall use its best efforts to cause its employees to, comply with all
applicable federal, state and local laws, rules and regulations in its provision
of services hereunder.

         Section 3.2  Facilities.  Newco shall make  available  to Caster PC and
Provider the real property located at 9100 Wilshire Blvd.,  Suite 265E,  Beverly
Hills,  California  90212, and the  improvements,  facilities and assets located
thereon,  including without limitation,  the Assets, the Business and personnel,
for the use of Caster PC and Provider in the  performance of Refractive  Surgery
and related  services  (together  with any  subsequent  property,  improvements,
facilities or assets  acquired by Newco in  replacement of or in addition to the
foregoing,  the  "Facilities").  Newco  agrees to maintain the  Facilities  in a
commercially reasonable manner in light of the intended use of the Facilities.

         Section 3.3 Newco  Management.  Newco shall manage and  administer  the
Facilities,   which  management  and  administration   shall  include,   without
limitation, all administration, accounting, purchasing, payroll, legal services,
record  keeping,   bookkeeping,   computer  services,   information  management,
printing, postage,  duplication services, hiring of personnel, quality assurance
programs, billing and collecting from, and contracting with, patients, insurance
companies,  managed care  payors,  governmental  entities and other  third-party
payors with respect to all professional,  medical and other services provided by
Caster PC or Provider, and management and administration of all other aspects of
the Business.

         Notwithstanding any provision of this Agreement to the contrary:

     (a) Newco shall not engage in the practice of medicine,  and Provider shall
at all times be responsible  for all activities  that constitute the practice of
medicine; and

                  (b) this Agreement shall not be construed to require Provider,
or any other  medically  trained or  licensed  medical  professionals  under the
direction  or  control  of  Provider,  to  perform  Refractive  Surgery  at  the
facilities  of, or use the equipment of,  Newco,  if in Provider's  professional
medical judgment, such use would be detrimental to Provider's patients.

                  (c)  although  Caster PC shall pay and  provide  all  required
salaries and benefits to all employees, said employees shall, to the extent they
work  on  the  Business  conducted  by  Newco,  and  except  as  limited  by the
Transaction  Documents,  be treated as employees of Newco, and Newco shall, only
in accordance with the provisions of Section 4.2 hereof,  provide Caster PC with
such funds as Caster PC requires to satisfy said payment obligation.

         Section  3.4  Events  Excusing  Performance.  In the event of  strikes,
lock-outs,  calamities,  acts of God, unavailability of supplies or other events
over which Newco has no control (hereinafter, with respect to any non-performing
party not having control over such event, a "Force Majeure Event"),  Newco shall
not be liable to  Caster  PC or  Provider  for  failure  to  provide  any of the
Facilities  hereunder,  and Caster PC and  Provider  shall not have the right to
terminate  this  Agreement,  for so  long  as  such  events  continue  and for a
reasonable  period of time thereafter;  provided,  however,  that if such events
continue and Newco is not able to provide any Facilities  hereunder for a period
of one hundred and eighty (180)  consecutive days or more,  Newco,  Caster PC or
Provider  may  terminate  this  Agreement  by  written  notice  to  the  others.
Notwithstanding any provision of the Transaction Documents to the contrary,  for
any portion of such periods  following a Force  Majeure  Event in excess of five
(5) business days during which Newco is unable to provide Facilities  sufficient
to allow Caster to perform Refractive  Surgery,  then Caster may perform medical
services, including Refractive Surgery at such other locations within or without
the Restricted  Area as he deems  appropriate and he shall be entitled to retain
all compensation receive therefrom.

                                   ARTICLE IV

                      Obligations of Caster PC and Provider

         Section  4.1  Facility  Fee.  Subject  to  modification  in the  manner
prescribed by Section 8.9 of Newco's Limited  Liability Company  Agreement,  the
fees  payable  to Newco by  Caster  PC and  Provider  in  return  for use of the
Facilities made available by Newco hereunder (the "Facility Usage Fee") shall be
determined  on a per  procedure  basis,  and shall be remitted  to Newco  weekly
following the  performance  of the procedure for which the Facility Usage Fee is
due, less any unreimbursed  reimbursable  expenses that have been incurred under
Section 4.2 up to that time.  The amount of the Facility  Usage Fee with respect
to  any  procedure   shall  be  determined  in  accordance  with  the  following
procedures.

                  (a) As long as Caster PC's standard,  undiscounted fee charged
to the patient  (determined  without reference to the fee charged for any single
procedure,  the  "Patient  Fee") has at all prior  times  remained  between  the
amounts of $2,400 per procedure and $2,275 per procedure, the Facility Usage Fee
shall equal (i) the amount  actually  collected  for such  procedure  minus (ii)
$400.

                  (b) At all times following any reduction of the Patient Fee to
an amount less than $2,275 per procedure,  or any increase in the Patient Fee to
an amount greater than $2,400 per procedure,  the Facility Usage Fee shall equal
(i) the amount actually  collected for such procedure minus (ii) an amount up to
seventeen and 58/100 percent  (17.58%) of such Patient Fee;  provided,  however,
that in no event shall the Facility  Usage Fee be below the fair market value of
the use of the Facilities in the aggregate.

                  (c) Notwithstanding  the foregoing  provisions of this Section
4.1, or any other contrary provision of any Transaction Document, Provider shall
be  entitled  to  perform  procedures  for  free  and  refund  amounts  paid for
procedures on a limited basis in a manner and to the extent Provider has done so
in the past, or as otherwise  consented to by Newco. The Facility Usage Fee with
respect  to such  procedures  shall  be  eliminated,  as  long as the  aggregate
Facility Usage Fee paid hereunder equals or exceeds the fair market value of the
use of the Facilities.

         Section 4.2 Budgeted  Expenses.  Caster PC acknowledges that certain of
its employees have in the past performed  services utilizing the assets acquired
by Newco pursuant to the Contribution Agreement (the "Remaining Employees"), and
that the continued  availability of the Remaining Employees to Newco is critical
to the  business  of  Newco.  Caster  PC  hereby  agrees  to make the  Remaining
Employees   exclusively  available  to  Newco,  unless  prohibited  by  law,  in
accordance with the  instructions of a majority of the Managers of Newco, and to
incur certain budgeted  expenses,  including without  limitation the expenses of
maintaining  and  administering  the existing  retirement  plan of Caster PC, in
connection  with the  operations  of Newco and those  operations of Caster PC or
Provider for which Newco will reimburse Caster PC or Provider as contemplated in
Sections 4.4 and 4.5;  provided that such  availability and use of the Remaining
Employees,   and  expenses  related  to  Newco's,  Caster  PC's  and  Provider's
operations,  shall be  consistent  with the  practices of Caster PC prior to the
Effective  Time  (as  defined  in  the  Contribution   Agreement),   subject  to
appropriate adjustment for any growth in the volume of procedures done using the
Facilities  during the term of this  Agreement.  Newco agrees that it shall bear
the actual,  out-of-pocket costs of employing the Remaining  Employees,  and any
other actual, out-of-pocket expenses incurred by Caster PC and related solely to
the operations of Newco,  but only to the extent (a) such costs or expenses are,
individually and collectively,  not in excess of amounts reflected in the budget
agreed upon pursuant to the other provisions of this Section (collectively,  the
"Budgeted  Costs") or (b) such costs or expenses are  specifically and by amount
agreed to in writing by any one (1) of the Prime  designated  managers of Newco.
All costs or expenses to be reimbursed by or charged or netted from amounts owed
to Newco  must be  specifically  reflected  in an  annual  budget  prepared  and
delivered by Caster PC to Newco, that has been agreed upon in form and substance
by a majority of the managers of Newco. Such budgets shall be delivered not less
than sixty (60) days  prior to the  beginning  of the period to which the budget
applies;  provided,  however,  that the initial  budget for the remainder of the
year 2000 shall be delivered on the date of this Agreement.

                  Newco  shall  have the right to audit and  inspect  all of the
records of Caster PC as they relate to Caster PC's costs and  expenses  pursuant
to this Section.  Caster PC and Provider  shall  cooperate and provide access to
all relevant  books and records in  connection  with the exercise of such right.
Newco must give at least ten (10) days prior written  notice to Caster PC of its
intent to exercise  its  auditing  rights,  and Newco will bear the costs of any
such audit,  unless the audit reveals that Budgeted Costs were overpaid by Newco
by more than five percent (5%), in which case Caster PC will promptly  reimburse
Newco for all  reasonable  out-of-pocket  costs and  expenses  incurred by it in
connection with such audit.  Unless  otherwise  agreed by the parties  involved,
such audit shall be conducted  during  normal  business  hours at the offices of
Caster PC. Any  overpayments  by Newco for Budgeted Costs shall be paid to Newco
by Caster PC,  together  with interest  accrued  thereon at the rate of eighteen
percent  (18%) per  annum  from the date of  overpayment  until the date paid by
Caster PC. Any underpayments by Newco for Budgeted Costs shall be paid to Caster
PC by Newco,  together  with  interest  accrued  thereon at the rate of eighteen
percent  (18%) per annum  from the date of  underpayment  until the date paid by
Newco.

         Section 4.3 Compliance With Laws.  Caster PC and Provider shall provide
professional  services to patients in  compliance  at all times with,  and shall
otherwise  comply  with,  all ethical  standards,  laws,  rules and  regulations
applicable to the  operations of Caster PC and Provider.  Caster PC and Provider
shall use reasonable efforts to ensure that Provider and the employees of Caster
PC and Provider  have all  required  licenses,  credentials,  approvals or other
certifications  to  perform  his or her duties  and  services  for Caster PC and
Provider.  In the event that any  disciplinary  actions  or medical  malpractice
actions are initiated against Provider or any employee of Provider or Caster PC,
Caster PC and  Provider  shall  promptly  inform  Newco of such  action  and the
underlying facts and circumstances.

         Section 4.4 Caster PC's and Provider's Internal Matters.  Caster PC and
Provider shall be responsible for matters  involving their respective  corporate
governance,  employees and similar internal matters,  including, but not limited
to,  preparation  and contents of such reports to regulatory and tax authorities
governing  Caster PC and Provider that Caster PC or Provider are required by law
to  provide,  distribution  of  professional  fee income  among  Provider or the
shareholders  of Caster PC,  disposition of Caster PC's and Provider's  property
and stock and hiring and firing of their  employees  and  licensing.  The legal,
accounting and other  professional  services fees incurred by Provider or Caster
PC in connection with the internal matters of Caster PC, the distribution of the
fee  income  among  Provider  or  shareholders  of  Caster  PC and the  personal
accounting of Caster PC and Provider and similar internal and personal  matters,
shall be borne  exclusively by Caster PC and/or  Provider,  except to the extent
included  as  reimbursable  by Newco in the  budget  prepared  pursuant  to,  or
otherwise approved for reimbursement in accordance with, Section 4.2 above.

         Section 4.5 Personal  Expenses.  Except as expressly  provided above in
Section 4.2,  Provider  agrees that Personal  Expenses of Provider  shall not be
considered  expenses  of Newco and shall be borne  solely  by  Provider,  unless
agreed  otherwise by the  unanimous  vote or written  consent of the managers of
Newco. For purposes of this Section, the term "Personal Expenses" shall mean all
liabilities,  obligations,  costs and  expenses  of Caster  that arise after the
Closing Date that are not directly and  exclusively  related to the provision or
operation of the  Facilities,  the conduct of the  Business,  or the  employees,
excluding  expenses  included as  reimbursable  by Newco in the budget  prepared
pursuant to, or otherwise approved for reimbursement in accordance with, Section
4.2 above.

         Section  4.6  Events  Excusing  Performance.  In the  event  of a Force
Majeure Event that prevents  Caster PC's or  Provider's  performance  under this
Agreement,  Caster PC and/or  Provider  (as  applicable)  shall not be liable to
Newco for  failure  to  perform  any  covenants  hereunder  to the  extent  such
performance is prevented or impeded by such Force Majeure Event, and Newco shall
not have the  right to  terminate  this  Agreement,  for so long as such  events
continue and for a reasonable period of time thereafter; provided, however, that
if such events continue and Caster PC and/or Provider is not able to perform its
obligations  hereunder for a period of one hundred and eighty (180)  consecutive
days or more,  Newco,  Caster PC or Provider  may  terminate  this  Agreement by
written notice to the others.  Notwithstanding  any provision of the Transaction
Documents to the  contrary,  for any portion of such  periods  following a Force
Majeure  Event in excess of five (5) business days during which Caster PC and/or
Caster is unable to perform its obligations hereunder, then Newco may enter into
agreements  with other  physicians  regarding use of the  Facilities,  upon such
terms and  conditions as a simple  majority of Newco's  managers may agree,  not
subject to any specific  approval  rights in favor of any particular  manager or
member of Newco,  and each of the parties  hereto agrees to cast any vote it may
have as a manager or member of Newco as  necessary  to give full  effect to this
sentence.

                                    ARTICLE V

                              Term and Termination

         This  Agreement  shall  commence on the date hereof and shall expire on
the  earlier  of (a)  the  40th  anniversary  hereof  or (b) the  expiration  or
termination of the Restricted Period (as defined in the Contribution Agreement);
provided,  however,  that (y)  Prime  may  elect to have  Newco  terminate  this
Agreement  at any time  following  any breach by Provider of the  provisions  of
ARTICLE  VIII or  ARTICLE IX of the  Contribution  Agreement  (with the  further
understanding  that no breach by Provider of Section 9.3(b) of the  Contribution
Agreement  can be cured) and (z)  Provider  or Caster PC may elect to  terminate
this Agreement at any time following any material breach by PMSI or Prime of the
provisions of ARTICLE VIII or ARTICLE IX of the Contribution Agreement.

                                   ARTICLE VI

                               General Provisions

         Section  6.1  Collateral  Agreements,  Amendments,  and  Waivers.  This
Agreement (together with the Contribution  Agreement and all documents delivered
pursuant  to  the  Contribution   Agreement)  supersedes  all  prior  documents,
understandings,  and agreements,  oral or written,  relating to this transaction
and constitutes the entire  understanding  among the parties with respect to the
subject  matter  hereof.  Any  modification  or amendment  to, or waiver of, any
provision  of  this  Agreement  (or  any  document  delivered  pursuant  to this
Agreement unless otherwise  expressly  provided  therein) may be made only by an
instrument in writing executed by each party thereto.

         Section 6.2  Successors  and Assigns.  No party's rights or obligations
under this  Agreement may be assigned  without the prior written  consent of all
parties  hereto.  Any assignment in violation of the foregoing shall be null and
void. Subject to the preceding sentences of this Section, the provisions of this
Agreement (and, unless otherwise  expressly  provided  therein,  of any document
delivered  pursuant to this  Agreement)  shall be binding  upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors, and assigns.

         Section 6.3 Invalid  Provisions.  If any provision of this Agreement is
held to be illegal, invalid, or unenforceable under present or future laws, such
provision  shall be fully  severable,  this  Agreement  shall be  construed  and
enforced as if such  illegal,  invalid,  or  unenforceable  provision  had never
comprised  a part  of  this  Agreement,  and the  remaining  provisions  of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal,  invalid,  or  unenforceable  provision or by its  severance  from this
Agreement.

         Section  6.4  Waiver.  No  failure or delay on the part of any party in
exercising  any  right,  power,  or  privilege  hereunder  or  under  any of the
documents  delivered in connection with this Agreement shall operate as a waiver
of such right, power, or privilege;  nor shall any single or partial exercise of
any such  right,  power,  or  privilege  preclude  any other or future  exercise
thereof or the exercise of any other right, power or privilege.

         Section 6.5 Notices. Unless specifically provided otherwise herein, any
notices  required or permitted to be given under this  Agreement  shall be given
and deemed received in the manner provided in the Contribution Agreement.

         Section 6.6 Survival of  Representations,  Warranties,  and  Covenants.
Regardless  of any  investigation  at any time made by or on behalf of any party
hereto  or of any  information  any  party  may  have in  respect  thereof,  all
covenants,  agreements,   representations,  and  warranties  made  hereunder  or
pursuant hereto or in connection with the transactions contemplated hereby shall
survive the execution of this Agreement.

         Section  6.7   Construction.   This  Agreement  and  any  documents  or
instruments  delivered  pursuant  hereto  or in  connection  herewith  shall  be
construed  without  regard to the identity of the person who drafted the various
provisions  of the same.  Each and every  provision of this  Agreement  and such
other documents and instruments  shall be construed as though all of the parties
participated  equally in the  drafting  of the same.  Consequently,  the parties
acknowledge  and agree that any rule of  construction  that a document  is to be
construed  against the  drafting  party shall not be  applicable  either to this
Agreement or such other documents and instruments.

         Section  6.8  Other  Agreements.  Each  party  hereto  agrees  that any
material breach by it of any of the terms and provisions of another  Transaction
Document (as defined in the Contribution Agreement) to which it is a party shall
also be deemed to have been a material breach by it of this  Agreement,  for all
purposes. The remedy provided in Section 9.7 of the Contribution Agreement,  and
termination of this Agreement,  shall in all events be the exclusive  remedy for
any and all acts or omissions of Caster that result in a material  breach of any
of the  provisions of ARTICLE VIII or ARTICLE IX thereof,  regardless of whether
such acts or omissions,  in the absence of this  sentence,  would give rise to a
claim under any of the Transaction Documents, including this Agreement.

     Section  6.9  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance with the laws of the State of Texas.

         Section 6.10 Arbitration. Any controversy between the parties regarding
this Agreement or any other Transaction Document,  any claims arising out of any
breach or alleged  breach of this Agreement or any other  Transaction  Document,
and any claims  arising out of the  relationship  between  the  parties  created
hereunder,  shall be submitted to binding arbitration by all parties involved in
accordance with the terms of the Contribution Agreement.

         Section 6.11  Counterparts.  This  Agreement may be executed in several
counterparts,  each of  which  shall  constitute  an  original  and all of which
together  shall  constitute  one and the same  instrument.  Any party hereto may
execute this Agreement by signing any one counterpart.

                            [Signature page follows]


<PAGE>


S-1

                                 SIGNATURE PAGE

                                       TO

                             FACILITY USE AGREEMENT

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

Newco:                              Caster One, L.L.C.

                        Teena Belcik, signing as a manager of Newco
                                 and on behalf of Prime, as a member of Newco



                        Andrew Caster, signing as both a manager
                                 and on behalf of Seller, as a member of Newco



Caster:                     _______________________________________________
                                            Andrew Caster, M.D.

Seller:                                     Caster Eye Center Medical Group

                                            By:
                         Andrew Caster, M.D., President