LOAN AGREEMENT

     This Loan Agreement  (this  "Agreement") is entered into as of the 1 day of
April, 2000, by and between Prime Medical Services, Inc., a Delaware corporation
and New York Laser Management, L.L.C., a Delaware limited liability company.

                                  Definitions:

EFFECTIVE DATE:                April 1, 2000

BORROWER:                      New York Laser Management, L.L.C.,
                                 a Delaware limited liability company

BORROWER'S ADDRESS:            1301 Capital of Texas Highway,
                                Suite C-300, Austin, Texas  78746

LENDER:                        Prime Medical Services, Inc.,
                                 a Delaware corporation

LENDER'S ADDRESS:              1301 Capital of Texas Highway,
                                 Suite C-300, Austin, Texas  78746

NOTES:

         Acquisition  Line  Notes:  Promissory  Notes in the  aggregate  maximum
         original  principal amount not to exceed  $10,000,000 (the "Acquisition
         Line Maximum  Principal  Amount"),  executed by Borrower and payable to
         the order of Lender as provided therein (the  "Acquisition  Line Notes"
         or "Notes").

SECURITY AGREEMENTS:  All documents,  agreements and instruments  hereinafter or
herewith executed by Borrower,  Ken Moadel,  M.D., P.C., a New York professional
corporation ("Moadel PC"), Ken Moadel, M.D.  ("Moadel"),  or any Target Location
securing this Agreement or the obligations under any of the Notes.

LOAN  DOCUMENTS:  This  Agreement,  the  Acquisition  Line Notes,  the  Security
Agreements,  and  all  other  documents,  agreements,  and  instruments  now  or
hereafter  existing,  evidencing,   securing,  or  otherwise  relating  to  this
Agreement and any  transactions  contemplated by this  Agreement,  as any of the
foregoing items may be modified or supplemented from time to time.

INDEBTEDNESS:  All present and future indebtedness,  obligations and liabilities
of Borrower to Lender,  all present  and future  indebtedness,  obligations  and
liabilities of any Target Location to Lender,  and all renewals,  extensions and
modifications  of either of the foregoing,  arising  pursuant to any of the Loan
Documents  and all  interest  accruing  thereon,  and  all  other  fees,  costs,
expenses, charges and attorneys' fees payable, and covenants performable,  under
any of the Loan Documents (including without limitation this Agreement).

DEFINED  TERMS:  Terms not  otherwise  defined  herein  shall  have the  meaning
provided in that certain  Contribution  Agreement dated effective April 1, 2000,
by and among Lender, Prime RVC, Inc., a Delaware corporation  ("Prime"),  Moadel
PC, Borrower, and Moadel (the "Contribution Agreement"). For the purposes hereof
the terms "Target  Locations" and "Target  Location"  shall have the meaning set
forth in the Contribution Agreement,  but shall include, upon the acquisition of
a Target  Location by Borrower or any  subsidiary or affiliate of Borrower,  the
subsidiary or affiliate utilized to make such acquisition.

                                   AGREEMENT:

         Borrower has requested from Lender the credit accommodations  described
below, and Lender has agreed to provide such credit  accommodations on the terms
and conditions contained herein. Therefore, for good and valuable consideration,
the receipt and sufficiency of which Lender and Borrower acknowledge, Lender and
Borrower hereby agree as follows:

                                    ARTICLE I

                           THE ACQUISITION LINE LOANS

         1.1 The  Acquisition  Line.  Subject  to the terms of the  Contribution
Agreement and the terms, conditions,  representations and warranties hereinafter
set  forth,  Lender  agrees  to lend  Borrower  from time to time,  the  amounts
necessary to acquire or develop Target Locations,  in an aggregate amount not to
exceed  the  Acquisition  Line  Maximum  Principal  Amount  (collectively,   the
"Acquisition Line Loans").

         1.2 Acquisition Line Loans.  Each Acquisition Line Loan will finance up
to 100% of the purchase price (or  acquisition  cost) of a Target Location being
acquired (or developed) by Borrower.  The parties  acknowledge that the grant of
any  Acquisition  Line Loan does not create any obligation on the part of Lender
to extend further  Acquisition Line Loans.  Additionally,  each Acquisition Line
Loan is subject in all respects to Lender  obtaining prior written approval from
the bank  syndication  under its or its parent company's  outstanding  borrowing
facilities and the execution and delivery of such  guarantees by Borrower as may
be required by such bank  syndication.  Pursuant to the Contribution  Agreement,
each Acquisition Line Loan must be (a) evidenced by a separate  Acquisition Line
Note executed by Borrower,  (b) secured by all of Moadel's ownership interest in
Borrower as  evidenced  by an  Assignment  and  Security  Agreement  executed by
Moadel,  and (c) accompanied by Assignment and Security  Agreements  executed by
Borrower. In addition, if Borrower is acquiring,  directly or indirectly,  a one
hundred percent (100%) interest in a Target Location (hereinafter referred to as
a "100% Target Location"),  Borrower shall cause such Target Location to execute
a security  agreement,  acceptable in form and substance to Lender,  granting to
Lender or one of Lender's  subsidiaries the highest available  priority security
interest in all of the assets of such Target Location.

         1.3 Interest and Repayment.  Borrower and Target Location shall pay the
unpaid  principal amount under each Acquisition Line Note in accordance with the
terms of this Section 1.3 and the respective  Acquisition Line Note. Payments of
interest and  principal on each  Acquisition  Line Note shall be due and payable
quarterly  over a  seven  (7)  year  term.  Under  no  circumstances  shall  any
Acquisition Line Note bear interest at a rate less than fifteen percent (15%).

                                   ARTICLE II
                 CONDITIONS PRECEDENT TO ACQUISITION LINE LOANS

         In addition to the conditions precedent stated elsewhere herein, Lender
shall not be obligated to make any Acquisition Line Loan unless:

                  (a) the  representations  and warranties  contained in Article
         III are true and correct in all material respects on and as of the date
         of such  Acquisition  Line Loan,  as though made on and as of such date
         with such changes therein;

                  (b) on the  date of the  Acquisition  Line  Loan,  no Event of
         Default,  and no event which, with the lapse of time or notice or both,
         could become an Event of Default, has occurred and is continuing;

               (c)  there  shall  have  been  no  material  adverse  change,  as
          determined  by Lender in its  reasonable  judgment,  in the  financial
          condition or business of Borrower;

                  (d) there has been no breach or threatened  breach by Borrower
         under the Contribution  Agreement or any other Transaction Document (as
         such term is defined in the Contribution Agreement);

(e)      Borrower  executes the  respective  Acquisition  Line Note and Borrower
         executes an Assignment  and Security  Agreement in the form attached as
         Exhibit D4 to the  Contribution  Agreement,  and  otherwise in form and
         substance  acceptable to Lender  wherein Lender is granted a first lien
         perfected   security  interest  in  all  of  Borrower's  or  Borrower's
         subsidiaries'  ownership  interest in the Target  Location  and related
         acquisition documents;

(f)      Moadel shall have  previously  granted to Lender a first lien perfected
         security  interest  in all of Moadel's  ownership  interest in Borrower
         through the  execution  and  delivery of the  Assignment  and  Security
         Agreement  in the  form  attached  as  Exhibit  D2 to the  Contribution
         Agreement and Moadel shall be in compliance with all of its obligations
         thereunder;

                  (g) if Borrower is using a  Acquisition  Line Loan to acquire,
         directly or indirectly,  a 100% Target  Location,  Borrower shall cause
         such Target  Location to execute a security  agreement,  acceptable  in
         form and  substance  to Lender,  granting  to Lender or one of Lender's
         subsidiaries the highest available priority security interest in all of
         the assets of such Target Location; and

                  (h) Lender shall have received such other approvals, opinions,
         documents,  certificates or evidences as Lender may reasonably  request
         (in form and substance reasonably satisfactory to Lender). Each request
         for a  Acquisition  Line  Loan  shall  be  deemed a  representation  by
         Borrower that the conditions of this Section 2 have been met.

                                   ARTICLE III

                    BORROWER'S REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Lender as follows:

         3.1 Good Standing. Borrower is a duly formed limited liability company,
duly  organized  and in good  standing,  under the laws of Delaware  and has the
power to own its property and to carry on its business in each  jurisdiction  in
which Borrower operates.

         3.2 Authority and Compliance.  Borrower has full power and authority to
enter into this  Agreement,  to make the  borrowing  hereunder,  to execute  and
deliver  the Loan  Documents  and to incur the  indebtedness  described  in this
Agreement,  all of which has been duly  authorized  by all proper and  necessary
action of its managers and members. No further consent or approval of any public
authority is required as a condition to the validity of any Loan  Document,  and
Borrower is in compliance with all laws and regulatory  requirements to which it
is subject.

         3.3 Binding  Agreement.  This  Agreement and other Loan  Documents when
issued and delivered  pursuant hereto for value received will constitute,  valid
and legally binding obligations of Borrower in accordance with their terms.

         3.4 Litigation.  There are no proceedings  pending or, to the knowledge
of Borrower,  threatened before any court or administrative agency which will or
may have a material  adverse effect on the financial  condition or operations of
Borrower or any  subsidiary,  except as disclosed to Lender in writing  prior to
the  date  of  this  Agreement.  To the  knowledge  of  Borrower,  there  are no
proceedings pending or threatened against any Target Location.

         3.5 No  Conflicting  Agreements.  There are no provisions of Borrower's
organizational documents and no provisions of any existing agreement,  mortgage,
indenture or contract binding on Borrower or affecting its property, which would
conflict with or in any way prevent the execution,  delivery, or carrying out of
the terms of the Loan Documents.

         3.6  Ownership  of  Assets.  Borrower  will at all times  maintain  its
tangible  property,  real and  personal,  in good order and repair  taking  into
consideration reasonable wear and tear.

         3.7 Taxes. All income taxes and other taxes due and payable through the
date of this Agreement have been paid prior to becoming delinquent.

                                   ARTICLE IV

                        BORROWER'S AFFIRMATIVE COVENANTS

         So long as Borrower may borrow under this  Agreement  and until payment
in full of all Acquisition Line Notes, and performance of all other  obligations
of Borrower and Target Locations hereunder or thereunder, Borrower covenants and
agrees to do the following:

         4.1      Financial Statements.
                  --------------------

                  (a) Maintain,  and cause each Target  Location to maintain,  a
         system of  accounting  satisfactory  to Lender and in  accordance  with
         generally accepted accounting principles consistently applied, and will
         permit  Lender's  officers or authorized  representatives  to visit and
         inspect  Borrower's  or Target  Location's  books of account  and other
         records  at such  reasonable  times and as often as Lender  may  desire
         during office hours and after  reasonable  notice to Borrower,  and pay
         the  reasonable  fees and  disbursements  of any  accountants  or other
         agents of Lender selected by Lender for the foregoing purposes.  Unless
         written notice of another location is given to Lender, Borrower's books
         and records will be located at Borrower's Address.

                  (b)  Furnish  to  Lender  year end  financial  statements,  of
         Borrower and each Target Location, to include balance sheet,  operating
         statement  and  surplus  reconciliation,  together  with  an  officer's
         certificate of compliance with this Agreement including computations of
         all quantitative covenants, within 90 days after the end of each annual
         accounting period.

                  (c)  Furnish  to Lender  quarterly  financial  statements,  of
         Borrower and each Target Location,  to include balance sheet and profit
         and  loss  statement,   together  with  an  officer's   certificate  of
         compliance   with  this  Agreement   including   computations   of  all
         quantitative  covenants,  within  45  days  of  the  end of  each  such
         accounting period.

                  (d) With each balance sheet delivered under subsections (b) or
         (c) of this Section 4.1, an aging of all Accounts Receivable.

                  (e) Promptly provide Lender with such additional  information,
         reports or statements  respecting the business operations and financial
         condition of Borrower or any Target Location,  as Lender may reasonably
         request from time to time.

         4.2 Insurance.  Maintain,  and cause each Target  Location to maintain,
insurance  with  responsible  insurance  companies  on  such  of its  respective
properties,  in such amounts and against such risks as is customarily maintained
by similar businesses operating in the same vicinity,  specifically to include a
policy  of fire  and  extended  coverage  insurance  covering  all  assets,  and
liability  insurance,  all  to be  with  such  companies  and  in  such  amounts
satisfactory  to Lender and to contain a mortgage  clause  naming  Lender as its
interest may appear. Evidence of such insurance will be supplied to Lender.

         4.3 Existence and Compliance.  Maintain, and cause each Target Location
to maintain,  its organizational  existence in good standing and comply with all
laws,  regulations and governmental  requirements  applicable to it or to any of
its property,  business operations and transactions.  Borrower further agrees to
provide Lender with copies of all instruments filed with the Delaware  Secretary
of State amending and/or renewing Borrower's certificate of formation.

         4.4 Adverse Conditions or Events.  Promptly advise Lender in writing of
any  condition,  event or act which comes to its  attention  that would or might
materially  affect  Borrower's  or any Target  Location's  financial  condition,
Lender's  rights under this Agreement or any of the Loan  Documents,  and of any
litigation  filed  against  Borrower  or to its  knowledge  against  any  Target
Location.

         4.5      Taxes.  Pay all taxes as they become due and payable.
                  -----

         4.6 Maintenance.  Maintain, and cause each Target Location to maintain,
all of its respective tangible property in good condition and repair, reasonable
wear  and  tear  excepted,  and make all  necessary  replacements  thereof,  and
preserve and maintain all licenses, privileges, franchises, certificates and the
like necessary for the operation of its business.

         4.7  Application of Earnings.  Except as expressly  contemplated in the
Contribution  Agreement,  pay  all  available  funds  toward  repayment  of  any
Acquisition  Line Notes,  regardless of whether  payment of such amounts exceeds
the minimum required payments under the Acquisition Line Notes.

                                    ARTICLE V

                          BORROWER'S NEGATIVE COVENANTS

         So long as Borrower may borrow under this  Agreement  and until payment
in full of all Acquisition Line Notes, and performance of all other  obligations
of Borrower or Target Location  hereunder or thereunder,  Borrower will not, and
will  cause each of the  Target  Locations  to not,  without  the prior  written
consent of Lender:

         5.1  Transfer  of Assets.  Enter into any merger or  consolidation,  or
sell,  lease,  assign,  or otherwise dispose of or transfer any assets except in
the normal course of its business.

         5.2 Change in Ownership or Structure.  Dissolve or liquidate;  become a
party to any merger or consolidation;  reorganize as a professional corporation;
acquire by purchase,  lease or otherwise all or substantially  all of the assets
or capital stock of any corporation or other entity; or sell,  transfer,  lease,
or otherwise  dispose of all or any substantial part of its respective  property
or assets or business.

         5.3 Liens.  From and after the date  hereof  grant,  suffer,  or permit
liens on or security interests in its respective assets, or fail to promptly pay
all lawful  claims,  whether  for labor,  materials,  or  otherwise,  except for
purchase  money  security  interests  arising  in  the  ordinary  course  of its
respective business.

         5.4 Loans.  Make any loans,  advances or investments to or in any joint
venture,  corporation or other entity, except for the purchase of obligations of
Lender or U.S.  Government  obligations  or the  purchase  of  federally-insured
certificates of deposit.

         5.5 Borrowings. Except for borrowing or incurring open accounts payable
to unaffiliated third parties in the ordinary course of business, create, incur,
assume,  or liable in any  manner  for any  indebtedness  (for  borrowed  money,
deferred  payment  for the  purchase  of assets,  lease  payments,  as surety or
guarantor of the debt of another,  or otherwise)  other than to Lender in excess
of $10,000 without Lender's prior written consent.

         5.6  Violate  Other  Covenants.  Violate  or fail to  comply  with  any
covenants  or  agreements  regarding  other  debt  which  will or would with the
passage  of time or upon  demand  cause the  maturity  of any  other  debt to be
accelerated.

     5.7 Equity  Redemptions  or  Restructurings.  Apply any of its  property or
assets to the purchase,  retirement or redemption of any of its equity interests
or in any way amend its capital structure.

         5.8 Character of Business.  Change the general character of business as
conducted at the date hereof,  or engage in any type of business not  reasonably
related to its business as presently and normally conducted.

                                   ARTICLE VI

                     EVENTS OF DEFAULT; NOTICE; ACCELERATION

         6.1  Events  of  Default.  If one or more of the  following  events  of
default  shall occur and  continue  after  thirty (30) days'  written  notice to
Borrower,  all outstanding  principal plus unpaid  interest of each  Acquisition
Line Note, and any other indebtedness of Borrower to Lender, shall automatically
be due and payable  immediately  and Lender shall have no further  obligation to
fund under this Agreement.

                  (a) There shall be any breach or default  shall be made in the
         payment  of  any   installment   of  principal  or  interest  upon  any
         Acquisition  Line Note,  when due and  payable,  whether at maturity or
         otherwise; or

                  (b) There shall be any breach or default (other than by Lender
         or Prime) under any Loan Document, the Contribution  Agreement,  or any
         other  Transaction  Document,  or any other  certificate,  agreement or
         document contemplated hereby or thereby; or

                  (c) Any  representation  or  warranty  of  Borrower  contained
         herein or in any financial  statement,  certificate,  report or opinion
         submitted to Lender in connection with any Acquisition Line Loan, or by
         Borrower pursuant to the requirements of this Agreement, shall prove to
         have been incorrect or misleading in any material respect when made; or

                  (d) Any judgment  against  Borrower or any attachment or other
         levy  against  the  property  of  Borrower  with  respect  to  a  claim
         materially   affecting  Borrower's  financial  status  remains  unpaid,
         unstayed on appeal,  undischarged,  not bonded or not  dismissed  for a
         period of thirty (30) days; or

     (e)  The  bankruptcy,  death,  or  dissolution  of  any  guarantor  of  the
Indebtedness; or
                  (f) Borrower makes an assignment for the benefit of creditors,
         admits in writing  its  inability  to pay its debts  generally  as they
         become due, files a petition in bankruptcy, is adjudicated insolvent or
         bankrupt,  petitions or applies to any tribunal for any receiver or any
         trustee  of  Borrower  or any  substantial  part  of  their  respective
         property,   commences  any  action   relating  to  Borrower  under  any
         reorganization,  arrangement,  readjustment  of  debt,  dissolution  or
         liquidation  law  or  statute  of  any  jurisdiction,  whether  now  or
         hereafter in effect, or if there is commenced against Borrower any such
         action,  or Borrower by any act indicates its consent to or approval of
         any trustee for Borrower or any  substantial  part of its property,  or
         suffers any such receivership or trustee to continue undischarged.

         6.2  Lender's  Remedies.  Upon the  occurrence  of an Event of Default,
Lender,  without notice of any kind,  except for any notice  required under this
Agreement or any other Loan Document, may, at Lender's option: (i) terminate its
obligation  to fund any  Acquisition  Line  Loan  hereunder;  (ii)  declare  the
Indebtedness,  in whole or in part,  immediately  due and payable;  and/or (iii)
exercise any other rights and remedies available to Lender under this Agreement,
any other Loan Document,  or applicable laws; except that upon the occurrence of
an Event of Default described in subsection  6.1(f),  all the Indebtedness shall
automatically  be immediately due and payable,  and Lender's  obligation to fund
any  Acquisition  Line Loan hereunder  shall  automatically  terminate,  without
notice of any kind (including  without limitation notice of intent to accelerate
and notice of acceleration) to Borrower or to any Target Location, guarantor, or
to any surety or endorser of any of the Notes, or to any other person. Borrower,
each Target  Location,  and each guarantor,  surety,  and endorser of any of the
Notes,  and any and all other parties  liable for the  Indebtedness  or any part
thereof,  waive  demand,  notice of intent to demand,  presentment  for payment,
notice of nonpayment,  protest,  notice of protest,  grace,  notice of dishonor,
notice of intent to accelerate maturity, notice of acceleration of maturity, and
diligence in collection.

         6.3 Right of Set-Off. Borrower hereby authorizes Lender, to the maximum
extent permitted under and in accordance with applicable laws, at any time after
the occurrence of an Event of Default which  continues  uncured,  to set-off and
apply  any and all  deposits,  funds or  assets at any time held and any and all
other  indebtedness  at any time  owing by  Lender  to or for the  credit or the
account of  Borrower  against  any and all  Indebtedness,  whether or not Lender
exercises  any  other  right  or  remedy  hereunder  and  whether  or  not  such
Indebtedness are then matured.

                                   ARTICLE VII

                          GENERAL TERMS AND CONDITIONS

         7.1  Notices.  All  notices,  demands,  requests,  approvals  and other
communications  required or permitted hereunder shall be in writing and shall be
deemed to have been given when (a) presented  personally,  or (b) three (3) days
after  deposited in a regularly  maintained mail receptacle of the United States
Postal Service,  postage prepaid,  certified,  return receipt requested,  or (c)
upon receipt of confirmation after sending by facsimile transmission,  addressed
to  Borrower  or  Lender,  as the case may be, at the  respective  addresses  or
facsimile  number for notice set forth on the first page of this  Agreement,  or
such other  address or  facsimile  number as Borrower or Lender may from time to
time designate by written notice to the other.

         7.2 Entire Agreement and  Modifications.  The Loan Documents,  together
with the Contribution Agreement and any other Transaction Documents,  constitute
the entire  understanding  and agreement between the undersigned with respect to
the  transactions  arising in connection  with the Acquisition  Line Loans,  and
supersede all prior written or oral  understandings  and agreements  between the
undersigned in connection therewith. No provision of this Agreement or the other
Loan Documents may be modified,  waived,  or terminated  except by instrument in
writing  executed  by  the  party  against  whom  a  modification,   waiver,  or
termination is sought to be enforced,  and, in the case of Lender, executed by a
Vice President or higher level officer of Lender.

         7.3 Severability. In case any of the provisions of this Agreement shall
for  any  reason  be  held  to  be  invalid,  illegal,  or  unenforceable,  such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof,  and this Agreement shall be construed as if such invalid,  illegal,  or
unenforceable provision had never been contained herein.

         7.4  Cumulative  Rights  and No  Waiver.  Lender  shall have all of the
rights and remedies  granted in the Loan  Documents  and  available at law or in
equity,  and these  same  rights and  remedies  shall be  cumulative  and may be
pursued separately,  successively, or concurrently against Borrower, at the sole
discretion of Lender.  Lender's  delay in exercising any right shall not operate
as a waiver thereof,  nor shall any single or partial  exercise by Lender of any
right preclude any other or future exercise thereof or the exercise of any other
right.  Any of Borrower's  covenants and  agreements may be waived by Lender but
only in  writing  signed by an  authorized  officer of Vice  President  level or
higher of Lender or any subsequent  owner or holder of any of the Notes.  Except
as otherwise  expressly  provided in this  Agreement  and in any Note,  Borrower
expressly waives any presentment,  demand, protest, notice of default, notice of
intent  to  accelerate,  notice  of  acceleration,  notice  of  intent to demand
payment,  or other notice of any kind. No notice to or demand on Borrower in any
case shall, of itself, entitle Borrower to any other or further notice or demand
in similar or other circumstances.  No delay or omission by Lender in exercising
any  power  or  right  hereunder  shall  impair  any  such  right or power or be
construed  as a waiver  thereof,  or the  exercise  of any other  right or power
hereunder.

         7.5  Form  and  Substance.  All  documents,   certificates,   insurance
policies,  and other items required  under this Agreement to be executed  and/or
delivered to Lender shall be in form and substance  reasonably  satisfactory  to
Lender.

         7.6 Limitation on Interest: Maximum Rate. Lender and Borrower intend to
contract in strict  compliance  with  applicable  usury law from time to time in
effect.  To effectuate this intention,  Lender and Borrower  stipulate and agree
that none of the terms and provisions of any Note and any other  agreement among
such parties, whether now existing or arising hereafter, shall ever be construed
as a contract to pay interest for the use,  forbearance or detention of money in
excess of the Maximum Rate. If, from any possible  construction of any document,
interest would otherwise be payable to Lender in excess of the Maximum Rate, any
such  construction  shall be subject to the  provisions of this Section and such
document  shall be  automatically  reformed and the  interest  payable to Lender
shall be  automatically  reduced to the Maximum Rate permitted under  applicable
law,  without the  necessity of the  execution of any amendment or new document.
Neither  Borrower,  endorsers or other persons now or hereafter  becoming liable
for payment of any portion of the  principal  or interest of any Note shall ever
be liable for any  unearned  interest on the  principal  amount or shall ever be
required  to pay  interest  thereon  in excess of the  Maximum  Rate that may be
lawfully  charged under  applicable law from time to time in effect.  Lender and
any subsequent  holder of any Note expressly  disavow any intention to charge or
collect  unearned  or  excessive  interest  or finance  charges in the event the
maturity of any Note, is accelerated. If the maturity of any Note is accelerated
for any reason, whether as a result of a default under any Note, or by voluntary
prepayment,  or otherwise,  any amounts constituting interest, or adjudicated as
constituting  interest,  which  are  then  unearned  and  have  previously  been
collected  by Lender or any  subsequent  holder of any Note  shall be applied to
reduce the principal balance thereof then outstanding, or if such amounts exceed
the unpaid  balance of principal,  the excess shall be refunded to Borrower (and
Target Location, as applicable). In the event Lender or any subsequent holder of
any Note ever receives, collects or applies as interest any amounts constituting
interest or adjudicated as constituting  interest which would otherwise increase
the  interest to an amount in excess of the amount  permitted  under  applicable
law,  such amount  which  would be  excessive  interest  shall be applied to the
reduction of the unpaid  principal  balance of such Note,  and, if the principal
balances of such Note is paid in full,  any  remaining  excess  shall be paid to
Borrower (and Target Location, as applicable). In determining whether or not the
interest  paid or payable under the specific  contingencies  exceeds the Maximum
Rate allowed by applicable law, Borrower and Lender shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal payment as an
expense,  fee or  premium,  rather  than as  interest;  (ii)  exclude  voluntary
prepayments  and the effect  thereof;  (iii)  amortize,  prorate,  allocate  and
spread,  in equal  parts,  the total  amount of interest  throughout  the entire
contemplated  term of the applicable Note (as it may be renewed and extended) so
that the interest rate is uniform  throughout  the entire term of such Note. The
terms and  provisions of this section  shall  control and supersede  every other
provision of all existing and future agreements between Lender and Borrower (and
Target Location, as applicable). As used in this Agreement, "Maximum Rate" means
the maximum non-usurious interest rate that at any time or from time to time may
be contracted for, taken, reserved,  charged or received on the unpaid principal
or accrued past due interest  under  applicable  law and may be greater than the
applicable  rate,  the parties hereby  stipulating  and agreeing that Lender may
contract for, take,  reserve,  charge or receive interest up to the Maximum Rate
without penalty under any applicable law; and "applicable law" means the laws of
the State of Texas or the laws of the United States of America,  whichever  laws
allow the greater interest,  as such laws now exist or may be changed or amended
or come into effect in the future.  In the event  applicable law provides for an
interest  ceiling under  Chapter One of Title 79, Texas  Revised Civil  Statutes
Annotated, as amended, that ceiling shall be the indicated rate ceiling, subject
to any right  Lender may have in the future to change the method of  determining
the Maximum Rate.

     7.7  Third  Party   Beneficiary.   Borrower   acknowledges  that  the  bank
syndication under the senior credit facility of Prime Medical Services, Inc. (as
hereinafter supplemented, modified, or replaced) is a third party beneficiary to
this  Agreement.  Except for the preceding  sentence,  this Agreement is for the
sole  benefit of Lender  and  Borrower  and is not for the  benefit of any third
party.

         7.8  Borrower  In  Control.  In no  event  shall  Lender's  rights  and
interests  under the Loan Documents be construed to give Lender the right to, or
be deemed to indicate that Lender is in control of the  business,  management or
properties  of  Borrower  or any  Target  Location  or has power  over the daily
management  functions  and  operating  decisions  made by Borrower or any Target
Location.

         7.9 Use of Financial and Other Information. Borrower agrees that Lender
shall be  permitted  to  investigate  and  verify  the  accuracy  of any and all
information furnished to Lender in connection with the Loan Documents, including
without limitation financial  statements,  and to disclose such information,  or
provide  copies of such  information,  to  representatives  appointed by Lender,
including  independent  accountants,  agents,  attorneys,  asset  investigators,
appraisers   and  any  other  persons   deemed   necessary  by  Lender  to  such
investigation.

         7.10  Collateral  Assignment of Loan  Documents.  Lender shall have the
right to  collaterally  assign all of its rights  under this  Agreement  and the
other Loan Documents to the third party beneficiaries  described in Section 7.7.
Lender shall have the right to disclose in confidence such financial information
regarding  Borrower as may be  necessary  to  complete  any such  assignment  or
attempted  assignment,  including without limitation,  all financial statements,
projections,  internal memoranda,  audits, reports, payment history,  appraisals
and any and all other  information and  documentation in Lender's files relating
to Borrower.  This  authorization  shall be irrevocable in favor of Lender,  and
Borrower  waives any claims  against Lender or the party  receiving  information
from Lender  regarding  disclosure of information in Lender's files, and further
waive any  alleged  damages  which may  result  from such  disclosure.  Borrower
acknowledges  that Lender intends to make a collateral  assignment of its rights
under this  Agreement  and the Loan  Documents for the benefit of one or more of
its or its  parent  company's  lenders  and will not be  authorized  to amend or
modify this  Agreement  or the Loan  Documents,  or grant  waivers of any of its
rights  thereunder  without  the prior  written  consent  of some or all of such
lenders.

         7.11 Further  Assurances.  Borrower agrees to execute and deliver,  and
cause each Target  Location to execute and  deliver,  to Lender,  promptly  upon
request  from  Lender,  such other and further  documents  as may be  reasonably
necessary or appropriate to consummate the transactions contemplated herein.

         7.12 Number and Gender. Whenever used herein, the singular number shall
include the plural and the plural the singular,  and the use of any gender shall
be applicable to all genders. The duties, covenants, obligations, and warranties
of Borrower in this Agreement shall be joint and several obligations of Borrower
and of each Borrower if more than one.

         7.13 Captions.  The captions,  headings,  and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit, amplify,
or modify the terms and provisions hereof.

         7.14  Continuing  Agreement.  This is a  continuing  agreement  and all
rights,  powers,  and remedies of Lender under this Agreement and the other Loan
Documents  shall  continue  in full force and effect  until each Note is paid in
full as the same becomes due and payable and all other  Indebtedness is paid and
discharged, until Lender has no further obligation to advance moneys to Borrower
under this Agreement, and until Lender, upon request of Borrower, has executed a
written termination statement.  Furthermore,  the parties contemplate that there
may be times when no Indebtedness is owing, but notwithstanding such occurrence,
this Agreement (and all other Loan Documents) shall remain valid and shall be in
full force and effect as to subsequent Indebtedness and Advances,  provided that
Lender has not executed a written termination statement.

     7.15  Applicable  Law.  This  Agreement  and the  Loan  Documents  shall be
governed by and construed in accordance  with the laws of the State of Texas and
the laws of the United States applicable to transactions within such state.

         7.16   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.

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



                            [SIGNATURE PAGE FOLLOWS]


<PAGE>


S-1

                                SIGNATURE PAGE TO

                                 LOAN AGREEMENT

         IN WITNESS WHEREOF, the undersigned has executed this consent as of the
date first above written.

BORROWER:                               New York Laser Management, L.L.C.



                                        --------------------------------
                                        Ken Moadel, M.D., Manager

LENDER:                                 Prime Medical Services, Inc.



                                        --------------------------------
                                        Teena Belcik, Treasurer