PROMISSORY NOTE

Austin, Texas                (LINE OF CREDIT)                   January 31, 2000



PROMISE TO PAY: For value  received,  the undersigned  Borrower  (whether one or
more) promises to pay to the order of Lender the Principal Amount, to the extent
advanced by Lender, together with interest on the unpaid balance of such amount,
in lawful  money of the United  States of America,  in  accordance  with all the
terms, conditions,  and covenants of this Note and the Loan Documents identified
below.

BORROWER:         Prime Refractive, L.L.C., a Delaware limited liability company

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

LENDER:                             Prime Refractive Management, L.L.C.,
                                      a Delaware limited liability company

LENDER'S ADDRESS FOR PAYMENT:       1301 Capital of Texas Highway, Suite C-300,
                                    Austin, Texas 78746
                                    Attention: Chief Financial Officer

PRINCIPAL AMOUNT:                   Two Hundred Thousand Dollars ($200,000)

INTEREST RATE:                      Fifteen Percent (15%)

PAYMENT  TERMS:  Interest on the unpaid  balance of this Note is due and payable
quarterly,  beginning  November 1, 1999, and continuing  regularly and quarterly
thereafter on or before the first day of February,  May, August, until September
1, 2000 (the "Maturity  Date"),  when the outstanding  principal balance and all
accrued  interest shall be due and payable in full.  Interest will be calculated
on the unpaid  principal  balance.  Each payment  will be credited  first to the
accrued interest and then to the reduction of principal.

REVOLVING  LINE OF  CREDIT:  This Note  evidences  a  revolving  line of credit.
Subject to the terms of the Loan Agreement  between  Borrower and Lender of even
date  herewith,  all or any portion of the Principal  Amount of this Note may be
borrowed, paid, prepaid, repaid, and reborrowed,  from time to time prior to the
Maturity  Date and in accordance  with the Loan  Documents.  Each  borrowing and
repayment  hereunder will be (i) endorsed on an attachment to this Note, or (ii)
entered  in the books and  records of  Lender.  The books and  records of Lender
shall be prima facie  evidence  of all sums due  Lender.  If an event of default
exists  under  this Note or any Loan  Document,  then  Lender  shall be under no
obligation to make any advance under this Note.

LOAN AGREEMENT:  This Note is executed  pursuant to and is governed by the terms
of the Loan Agreement of even date herewith, executed by Borrower and Lender, as
amended (collectively, the "Loan Agreement").

1.       INTEREST PROVISIONS:

(a)      Rate:  The principal  balance of this Note from time to time  remaining
         unpaid prior to maturity  shall bear  interest at the Interest Rate per
         annum stated above.  Interest shall be calculated on the amount of each
         advance of the Principal Amount of this Note from the date of each such
         advance.

(b)      Maximum  Lawful  Interest:  The term  "Maximum  Lawful  Rate" means the
         maximum rate of interest and the term "Maximum Lawful Amount" means the
         maximum amount of interest that is permissible  under  applicable state
         or  federal  law for the type of loan  evidenced  by this  Note and the
         other Loan  Documents.  If the  Maximum  Lawful  Rate is  increased  by
         statute or other  governmental  action  subsequent  to the date of this
         Note, then the new Maximum Lawful Rate shall be applicable to this Note
         from  the  effective  date  thereof,  unless  otherwise  prohibited  by
         applicable law.

(c)  Spreading of Interest:  Because of the  possibility  of irregular  periodic
     balances of principal or premature  payment,  the total  interest that will
     accrue  under this Note cannot be  determined  in advance.  Lender does not
     intend to contract  for,  charge,  or receive more than the Maximum  Lawful
     Rate or Maximum Lawful Amount permitted by applicable state or federal law,
     and to  prevent  such an  occurrence  Lender  and  Borrower  agree that all
     amounts of  interest,  whenever  contracted  for,  charged,  or received by
     Lender,  with respect to the loan of money evidenced by this Note, shall be
     spread,  prorated,  or allocated  over the full period of time this Note is
     unpaid,  including  the period of any renewal or extension of this Note. If
     demand for payment of this Note is made by Lender  prior to the full stated
     term, the total amount of interest  contracted for, charged, or received to
     the time of such demand shall be spread,  prorated, or allocated along with
     any  interest  thereafter  accruing  over the full period of time that this
     Note  thereafter  remains  unpaid for the  purpose of  determining  if such
     interest exceeds the Maximum Lawful Amount.

(d)  Excess Interest:  At maturity  (whether by acceleration or otherwise) or on
     earlier final  payment of this Note,  Lender shall compute the total amount
     of interest that has been contracted for, charged, or received by Lender or
     payable by Borrower  under this Note and compare such amount to the Maximum
     Lawful Amount that could have been contracted for, charged,  or received by
     Lender. If such computation reflects that the total amount of interest that
     has been  contracted  for,  charged,  or  received  by Lender or payable by
     Borrower  exceeds the Maximum Lawful  Amount,  then Lender shall apply such
     excess to the reduction of the principal  balance and not to the payment of
     interest;  or if such excess interest exceeds the unpaid principal balance,
     such excess shall be refunded to Borrower.  This  provision  concerning the
     crediting or refund of excess  interest  shall control and take  precedence
     over all other  agreements  between  Borrower  and  Lender so that under no
     circumstances shall the total interest contracted for, charged, or received
     by Lender exceed the Maximum Lawful Amount.

(e)      Interest  After  Default:  At  Lender's  option,  the unpaid  principal
         balance shall bear interest after maturity  (whether by acceleration or
         otherwise) at the "Default  Interest  Rate." The Default  Interest Rate
         shall be, at Lender's  option,  (i) the Maximum  Lawful  Rate,  if such
         Maximum  Lawful  Rate is  established  by  applicable  law; or (ii) the
         Interest  Rate  stated  on the  first  page of this  Note plus five (5)
         percentage  points,  if  no  Maximum  Lawful  Rate  is  established  by
         applicable law; or (iii) eighteen percent (18%) per annum; or (iv) such
         lesser rate of interest as Lender in its sole  discretion may choose to
         charge;  but never more than the Maximum  Lawful Rate or at a rate that
         would cause the total interest  contracted for, charged, or received by
         Lender to exceed the Maximum Lawful Amount.

(f)      Daily  Computation of Interest:  To the extent  permitted by applicable
         law,  Lender at its option will calculate the per diem interest rate or
         amount  based on the actual  number of days in the year (365 or 366, as
         the case may be), and charge that per diem interest rate or amount each
         day. In no event  shall  Lender  compute the  interest in a manner that
         would cause Lender to contract for,  charge,  or receive  interest that
         would exceed the Maximum Lawful Rate or the Maximum Lawful Amount

2.       DEFAULT PROVISIONS:

(a)      EVENTS OF DEFAULT AND  ACCELERATION  OF  MATURITY:  LENDER  MAY,  AFTER
         THIRTY (30) DAYS' WRITTEN NOTICE TO BORROWER AND BORROWER'S  FAILURE TO
         CURE WITHIN SUCH 30-DAY  PERIOD AND WITHOUT  FURTHER  NOTICE OR DEMAND,
         (except as otherwise  required by statute),  ACCELERATE THE MATURITY OF
         THIS NOTE AND  DECLARE  THE ENTIRE  UNPAID  PRINCIPAL  BALANCE  AND ALL
         ACCRUED INTEREST AT ONCE DUE AND PAYABLE IF:

(i)  There is default in the payment of any installment of principal,  interest,
     or any other sum required to be paid under the terms of this Note or any of
     the Loan Documents; or

(ii) There  is a  breach  or  default  (other  than  by  Lender,  Prime  Medical
     Operating,  Inc. or Prime Medical Services, Inc.) under this Note or any of
     the Loan Documents,  including any instrument  securing the payment of this
     Note or any loan agreement relating to the advance of loan proceeds.

(b)      WAIVER BY BORROWER:  EXCEPT AS PROVIDED IN PARAGRAPH 2(a) HEREOF AND IN
         ANY OTHER LOAN DOCUMENT, BORROWER AND ALL OTHER PARTIES LIABLE FOR THIS
         NOTE  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.  EACH MAKER,
         SURETY,  ENDORSER,  AND GUARANTOR OF THIS NOTE WAIVES AND AGREES TO ONE
         OR MORE  EXTENSIONS  FOR ANY PERIOD OR PERIODS OF TIME, AND ANY PARTIAL
         PAYMENTS, BEFORE OR AFTER MATURITY,  WITHOUT PREJUDICE TO THE HOLDER OF
         THIS NOTE. EACH MAKER, SURETY, ENDORSER, AND GUARANTOR WAIVES NOTICE OF
         ANY AND ALL RENEWALS, EXTENSIONS,  REARRANGEMENTS, AND MODIFICATIONS OF
         THIS NOTE.

(c)      Non-Waiver  by Lender:  Any previous  extension  of time,  forbearance,
         failure  to  pursue  some  remedy,  acceptance  of  late  payments,  or
         acceptance of partial payment by Lender, before or after maturity, does
         not constitute a waiver by Lender of its  subsequent  right to strictly
         enforce the collection of this Note according to its terms.

(d)  Other  Remedies  Not  Required:  Lender shall not be required to first file
     suit,  exhaust all remedies,  or enforce its rights against any security in
     order to enforce payment of this Note.

(e)      Joint and Several Liability: Each Borrower who signs this Note, and all
         of the other  parties  liable for the  payment  of this  Note,  such as
         guarantors,  endorsers,  and sureties, are jointly and severally liable
         for the payment of this Note.

(f)      Attorney's  Fees:  If Lender  requires  the  services of an attorney to
         enforce the payment of this Note or the  performance  of the other Loan
         Documents,  or if this Note is collected through any lawsuit,  probate,
         bankruptcy, or other judicial proceeding, Borrower agrees to pay Lender
         an amount equal to its reasonable  attorney's fees and other collection
         costs.  This  provision  shall be limited by any  applicable  statutory
         restrictions relating to the collection of attorney's fees.

3.       MISCELLANEOUS PROVISIONS:

(a)  Subsequent  Holder:  All references to Lender in this Note shall also refer
     to any  subsequent  owner or holder of this Note by  transfer,  assignment,
     endorsement, or otherwise.

(b)      Transfer:  Borrower  acknowledges  and agrees that Lender may  transfer
         this Note or partial  interests in the Note to one or more  transferees
         or participants, including without limitation transfers provided for in
         Section  8.10 of the Loan  Agreement.  Borrower  authorizes  Lender  to
         disseminate  to any  such  transferee  or  participant  or  prospective
         transferee or participant any information it has pertaining to the loan
         evidenced  by  this  Note,   including,   without  limitation,   credit
         information  on Borrower and any  guarantor of this Note and any of the
         type of information described in Section 8.10 of the Loan Agreement.

(c)      Other Parties Liable: All promises, waivers, agreements, and conditions
         applicable to Borrower shall likewise be applicable to and binding upon
         any other parties  primarily or  secondarily  liable for the payment of
         this Note, including all guarantors, endorsers, and sureties.

(d)      Successors  and Assigns:  The  provisions of this Note shall be binding
         upon and for the benefit of the successors,  assigns, heirs, executors,
         and administrators of Lender and Borrower.

(e)      No Duty or Special Relationship:  Borrower acknowledges that Lender has
         no duty of good faith to Borrower,  and Borrower  acknowledges  that no
         fiduciary,  trust, or other special  relationship exists between Lender
         and Borrower.

(f)      Modifications:  Any  modifications  agreed to by Lender relating to the
         release of  liability of any of the parties  primarily  or  secondarily
         liable for the  payment  of this  Note,  or  relating  to the  release,
         substitution,  or subordination of all or part of the security for this
         Note, shall in no way constitute a release of liability with respect to
         the other parties or security not covered by such modification.

(g)      Entire  Agreement:  Borrower  warrants  and  represents  that  the Loan
         Documents  constitute the entire agreement  between Borrower and Lender
         with  respect to the loan  evidenced  by this Note and  agrees  that no
         modification,  amendment,  or additional agreement with respect to such
         loan  or  the  advancement  of  funds  thereunder  will  be  valid  and
         enforceable unless made in writing signed by both Borrower and Lender.

(h)      Borrower's  Address  for  Notice:  All  notices  required to be sent by
         Lender to Borrower  shall be sent by U.S.  Mail,  postage  prepaid,  to
         Borrower's  Address  for Notice  stated on the first page of this Note,
         until Lender shall receive written  notification from Borrower of a new
         address for notice.

(i)      Lender's  Address for  Payment:  All sums payable by Borrower to Lender
         shall be paid at Lender's  Address for Payment stated on the first page
         of this Note, or at such other address as Lender shall  designate  from
         time to time.

(j)  Business Use:  Borrower warrants and represents to Lender that the proceeds
     of this Note will be used solely for business or commercial  purposes,  and
     in no way will the  proceeds be used for  personal,  family,  or  household
     purposes.

(k)      Chapter 15 Not  Applicable:  It is  understood  that  Chapter 15 of the
         Texas Credit Code  relating to certain  revolving  credit loan accounts
         and tri-party accounts is not applicable to this Note.

(l)      APPLICABLE  LAW: THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN TEXAS AND
         SHALL BE CONSTRUED IN ACCORDANCE  WITH THE APPLICABLE LAWS OF THE STATE
         OF TEXAS AND THE LAWS OF THE  UNITED  STATES OF AMERICA  APPLICABLE  TO
         TRANSACTIONS IN TEXAS.

4.       LOAN DOCUMENTS:

(a)      This Note.

(b)      The Loan Agreement and the Loan Documents as defined therein.

(c)  All other  documents  signed in connection  with the Loan  Agreement or the
     loan evidenced by this Note,  including,  without limitation,  that certain
     Contribution  Agreement,  dated  effective  September 1, 1999,  between and
     among Borrower, Prime Medical Services, Inc., a Delaware corporation, Prime
     Medical Operating,  Inc., a Delaware  corporation,  Prime/BDR  Acquisition,
     L.L.C.,  a Delaware  limited  liability  company,  Prime/BDEC  Acquisition,
     L.L.C., a Delaware limited  liability  company,  Barnet Dulaney Eye Center,
     P.L.L.C.,   an  Arizona  professional  limited  liability  company,   LASIK
     Investors,  L.L.C., a Delaware limited liability company, David D. Dulaney,
     M.D.,  Ronald W.  Barnet,  M.D.,  and Mark  Rosenberg  (as  amended by that
     certain First Amendment to  Contribution  Agreement dated as of January 31,
     2000, among the foregoing parties,  the "Contribution  Agreement") and each
     Transaction   Document  (as  such  term  is  defined  in  the  Contribution
     Agreement).

                            [Signature page follows]


<PAGE>


                                       S-1



                                SIGNATURE PAGE TO

                                 PROMISSORY NOTE

EXECUTED as of the 31st day of January, 2000.

       BORROWER:

                  PRIME REFRACTIVE, L.L.C., a Delaware limited liability company


                   By: /s/ Teena E. Belcik

                   Printed Name:  Teena E. Belcik

                   Title: Treasurer