<PAGE>   1
                                                                   EXHIBIT 10.2


           SECOND AMENDMENT TO LOAN AGREEMENT AND AMENDMENT TO LOAN 
                             DOCUMENTS AND RENEWAL
                             AND EXTENSION OF LOAN

       THIS SECOND AMENDMENT TO LOAN AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS
AND RENEWAL AND EXTENSION OF LOAN (the "AMENDMENT") is made and entered into to
be effective as of the 15th day of March, 1998, by and between PMC CAPITAL,
INC., a Texas corporation (herein referred to with its successors and assigns
as the "BORROWER") and BANK ONE, TEXAS, N.A., a national banking association
(herein referred to with its successors and assigns as the "LENDER").

                                   RECITALS:

       A.     Borrower and Lender executed that certain Loan Agreement, dated
as of May 15, 1996, as amended by that certain Modification to Loan Agreement
dated as of August 20, 1996, entered into by the Borrower and the Bank (the
"LOAN AGREEMENT") pursuant to which the Lender has made and may hereafter make
loans to the Borrower, as evidenced by that certain Promissory Note executed by
the Borrower and dated as of May 15, 1996, payable to the order of Lender in
the maximum principal amount of $15,000,000.00 (the "EXISTING REVOLVING CREDIT
NOTE").  Except as otherwise expressly provided herein, all capitalized terms
used herein shall have the same meanings assigned to such terms in the Loan
Agreement.

       B.     The Borrower and Lender have agreed, subject to the terms and
conditions outlined herein and subject to the Borrower's agreement with the
terms and provisions hereof and of each and every other instrument and
agreement executed in connection herewith, to restructure the credit facilities
made available pursuant to the Loan Agreement and Existing Revolving Credit
Note.

                                   AGREEMENTS

       In consideration of the premises, which are made a part hereof, and the
mutual covenants and agreements contained herein and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby amend the Loan Agreement and Loan
Documents as follows:

                                   SECTION I

                        AMENDMENTS TO THE LOAN AGREEMENT

       The Loan Agreement is hereby amended in the following respects:

       1.1    AMENDMENT TO PARAGRAPH 1.   PARAGRAPH 1 of the Loan Agreement
shall be and
<PAGE>   2
is hereby amended to add the following sentence to the end thereof:

              "Borrower agrees that for a period of not less than thirty (30)
       consecutive days during each calendar year, Borrower shall have repaid
       the entire outstanding principal balance of the Revolving Line of
       Credit, together with all accrued but unpaid interest thereon."

       1.2    AMENDMENT TO PARAGRAPH 2.   PARAGRAPH 2 of the Loan Agreement
shall be and is hereby  amended to delete the same in its entirety and to
substitute the following in lieu thereof:

              "2.    PROMISSORY NOTE.   The Loan shall be evidenced by that
       certain First Amended and Restated Revolving Credit Note dated as of
       March 15, 1998, executed by the Borrower and payable to the order of the
       Bank in the maximum principal amount of $15,000,000.00 (herein referred
       to with all renewals, extensions, increases, restatements, amendments
       and other modifications as the "REVOLVING CREDIT NOTE")".

       1.3    AMENDMENT TO PARAGRAPH 5.   PARAGRAPH 5 of the Loan Agreement
shall be and is hereby further amended to add the following as additional
subparagraphs thereto:

                     "(l)   Fees.  Subject to the limitations set forth in 
              PARAGRAPH 17 of the Revolving Credit Note, Borrower shall pay to
              Bank in arrears an unused facility fee (the "UNUSED FACILITY
              FEE").  The Unused Facility Fee shall be due and payable quarterly
              on the   15th day of each June, September, December and March of
              each calendar year which occurs prior to the Maturity Date of the
              Revolving Credit Note, with a final payment being due and payable
              on said Maturity Date.  The Unused Facility Fee due and payable on
              each Unused Facility Fee payment date shall be an amount equal to
              twenty-five percent (25%) of the product obtained by multiplying
              .00125 times the amount by which the sum of (a) $15,000,000.00
              exceeds the average daily principal balance outstanding on the
              Revolving Credit Note during the three (3) month period which ends
              on the applicable Unused Facility Fee payment date (the "AVERAGE
              BALANCE").  If any Unused Facility Fee payment date occurs prior
              to the lapse of three (3) full calendar months since the
              immediately preceding Unused Facility Fee Payment Date, the Unused
              Facility Fee shall be determined prorata, based upon the portion
              of the three (3) month period occurring prior to such date,
              prorated in accordance with the actual number of days elapsing
              during such period (including the first day of such period but
              excluding the last day).  In the event





                                       2
<PAGE>   3
              that interest accrued and paid on the Revolving Credit Note during
              the consecutive twelve (12) month period which follows March 15,
              1998 (or during any consecutive twelve (12) month period which
              follows any anniversary date of March 15, 1998) exceeds
              $250,000.00, provided that no Default [other than a Default
              described in SECTION 9(B)] or Event of Default is then existing,
              then the Bank shall within thirty (30) days following written
              request by Borrower, refund to Borrower the full amount of Unused
              Facility Fees paid by Borrower with respect to such twelve (12)
              month period."

                   (m)    Pari Passu Rank.  Maintain the rank of the Revolving
              Line of Credit on a pari passu basis with other Senior Debt (as
              hereinafter defined).  In illustration, without implied
              limitation, of the foregoing agreement, Borrower covenants (i)
              that it will not voluntarily prepay any portion of principal or
              interest on the Senior Debt; and (ii) if Borrower creates or
              assumes a lien to secure any Senior Debt, Borrower will make
              effective provisions whereby the Revolving Credit Note will be
              secured by such lien equally and ratably with any other Senior
              Debt secured thereby.  As used herein, the term "SENIOR DEBT"
              shall mean (i) the Revolving Line of Credit, (ii) all obligations
              of Borrower issued to certain insurance companies per attached
              SCHEDULE "I", (iii) all other obligations of Borrower for borrowed
              money, and (iv) all liabilities of Borrower under any guarantee or
              endorsement of borrowed money."

       1.4    AMENDMENT TO PARAGRAPH 7.   PARAGRAPH 7 of the Loan Agreement is
hereby deleted and the following is substituted in lieu thereof:

              "(a)   Net Worth.   Borrower will maintain, at all times, Net
       Worth of not less than $68,000,000.00."





                                       3
<PAGE>   4
       1.5    AMENDMENT TO PARAGRAPH 11.   PARAGRAPH 11 of the Loan Agreement
shall be and is hereby amended to delete the definition of "MATURITY DATE" in
its entirety and to substitute the following in lieu thereof:

                    " 'MATURITY DATE' means May 15, 2000 (unless this Agreement
              is extended in accordance with PARAGRAPH 23, in which event, such
              date shall be the extended Maturity Date) or such earlier date on
              which the Revolving Credit Note, both principal and interest,
              shall become due and payable whether the same results from
              acceleration or otherwise."

       1.6    EXHIBITS.   The form of EXHIBIT "B" to the Loan Agreement is
hereby amended to delete the form of the Promissory Note attached thereto as
EXHIBIT "B" and to substitute the form of the Revolving Credit Note which is
attached to this Amendment as EXHIBIT "A" and made a part hereof for all
purposes, and said form of the Revolving Credit Note shall be, and hereby does
become, a part of the Loan Agreement.  SCHEDULE "I" which is attached to this
Amendment as EXHIBIT "B" and made a part hereof for all purposes, is hereby
added to the Loan Agreement.

                                   SECTION II

                     AMENDMENT TO THE REVOLVING CREDIT NOTE

       2.1    Third Amended and Restated Revolving Credit Note.
Contemporaneously with the execution hereof, Borrower shall execute and deliver
to Bank a First Amended and Restated Revolving Credit Note (herein so called)
dated as of March 15, 1998, in the maximum principal amount of $15,000,000.00
which shall, from and after March 15, 1998, constitute the "REVOLVING CREDIT
NOTE" contemplated by the Loan Agreement and Loan Documents.

                                  SECTION III

                          AMENDMENT TO LOAN DOCUMENTS

       3.1    Reference to the Loan Agreement.    Each of the Loan Documents is
hereby amended so that any reference in any Loan Document to the Loan Agreement
or to any other Loan Document shall mean a reference to the Loan Agreement or
such other Loan Document as amended hereby, and any reference in the Loan
Agreement or any other Loan Document to the Revolving Credit Note shall mean a
reference to the First Amended and Restated Revolving Credit Note executed
contemporaneously herewith.





                                       4
<PAGE>   5
                                   SECTION IV

                                 MISCELLANEOUS

       4.1    Authority.  The Borrower hereby represents and warrants that the 
execution, delivery and performance of this Amendment, all instruments,
agreements and other documents executed in connection herewith and all other
instruments, agreements and documents  executed in connection with the Loan
Agreement have been duly authorized by all necessary action of  the Borrower
and do not and will not: (a) violate any provisions of any agreement, law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award presently in effect to which Borrower is a party or to which it or any of
its assets may be subject; (b) result in, or require the creation or imposition
of any lien upon or with respect to any asset now owned by Borrower or any
collateral; or  (c) result in a breach of or constitute a default by Borrower
(and Borrower is not in default) under any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or
any of its assets is bound or affected.  Borrower further warrants and
represents that no approval, authorization, order, license, permit, franchise
or consent of or registration, declaration, qualification or filing with any
governmental authority is required in connection with the execution, delivery
or performance by Borrower of this Amendment or any other Loan Document.  Such
instruments and agreements constitute the legal, valid and binding obligations
of the Borrower, enforceable against Borrower in accordance with their
respective terms, subject only to the applicable debtor relief laws.

       4.2    Ratification.  Borrower hereby ratifies and confirms the Loan 
Agreement and Loan Documents, as renewed, extended, modified and otherwise
amended hereby, in all respects, and acknowledges and agrees that all of the
terms, provisions and covenants thereof, as renewed, extended, modified and
otherwise amended hereby and by the First Amended and Restated Revolving Credit
Note, do and shall remain and continue  in full force and effect, enforceable
against the Borrower and its assets in accordance with their terms.

       4.3    Further Assurances.   The Borrower covenants and agrees from time
to time to promptly execute, assign, endorse, and deliver to Lender all
documents, instruments, notices, agreements, assignments, pledges, statements,
and writings, and to do all other acts and things as the Lender may reasonable
request in order to more fully evidence and/or to carry out more fully the
intent and purposes of this Amendment, the Loan Agreement and other Loan
Documents.

       4.4    Multiple Counterparts.  Multiple counterparts of this Amendment 
may be signed by the parties, each of which shall be an original but all of
which together shall constitute one and the same instrument.


       4.5    Representations and Warranties.  The Borrower hereby represents 
and warrants that





                                       5
<PAGE>   6
all representations and warranties contained in the Loan Agreement and other
Loan Documents are and continue to be true and correct in all material
respects, as if made on the date hereof, and nothing is omitted therefrom that
would cause the same to be misleading in any material respect.

       4.6    Applicable Laws. THIS AMENDMENT SHALL BE CONSTRUED, INTERPRETED
AND ENFORCEABLE UNDER AND PURSUANT TO THE LAWS OF THE STATE OF TEXAS AND
APPLICABLE LAWS OF THE UNITED STATES.

       4.7    No Oral Agreements.  THIS WRITTEN LOAN AGREEMENT REPRESENTS THE
FINAL AGREEMENT AMONG 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 AMONG THE PARTIES.

       IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Amendment to be executed effective as of the date specified above.


                                   BORROWER:


                                   PMC CAPITAL, INC., a Texas corporation

                                   By:                                        
                                       ---------------------------------------
                                   Printed Name:                              
                                                 -----------------------------
                                   Title:                                     
                                          ------------------------------------
                                                                              
                                                                              
                                   LENDER:                                    

                                                                              
                                   BANK ONE TEXAS, N.A.                       
                                                                              
                                   By:                                          
                                       ---------------------------------------
                                   Printed Name:                              
                                                 -----------------------------
                                   Title:                                       
                                          ------------------------------------






                                       6
<PAGE>   7
                                  EXHIBIT "A"
                                       TO
                       SECOND AMENDMENT TO LOAN AGREEMENT
                  AND AMENDMENT TO LOAN DOCUMENTS AND RENEWAL
                             AND EXTENSION OF LOAN

                                  EXHIBIT "B"
                                       TO
                                 LOAN AGREEMENT

                           FIRST AMENDED AND RESTATED
                             REVOLVING CREDIT NOTE


$15,000,000.00                                                    March 15, 1998


       FOR VALUE RECEIVED, PMC CAPITAL, INC., a Texas corporation ("BORROWER"),
does hereby unconditionally promise to pay to the order of BANK ONE, TEXAS,
NATIONAL ASSOCIATION ("BANK"), at its offices in Dallas County, Texas at 1717
Main Street, Dallas, Texas 75201, Attention: Alan Miller.  The principal amount
of FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) ("TOTAL PRINCIPAL
AMOUNT"), or such amount less than the Total Principal Amount which is
outstanding from time to time if the total amount outstanding hereunder is less
than the Total Principal Amount, in lawful money of the United States of
America, together with interest on such portion of the Total Principal Amount
which has been drawn until paid at the rates per annum provided below.

       1.     Definitions.  For purposes of this Note, unless the context
otherwise requires, the following terms shall have the definitions assigned to
such terms as follows:

              "ADJUSTED BASE RATE" shall mean a rate equal to the remainder of
       (a) the Base Rate, less (b) one-half of one percent (.5%) per annum.

              "ADJUSTED LIBOR RATE" shall mean with respect to each Interest
       Period, on any day thereof, an amount equal to the sum of (a) one and
       three fourths percent (1.75%), plus, (b) the quotient of (i) the LIBOR
       Rate with respect to such Interest Period, divided by (ii) the remainder
       of 1.0 less the Reserve Requirement in effect on such day.  Each
       determination by Bank of the Adjusted LIBOR Rate shall, in the absence
       of manifest error, be conclusive and binding.

              "ADVANCE" shall mean an advance of Loan proceeds made by the Bank
       pursuant to the Loan Agreement.





                                       7
<PAGE>   8
              "BASE RATE" shall mean the Prime Rate of interest per annum as
       published from time to time in Money Rates in The Wall Street Journal
       (or if such Prime Rate is not published in The Wall Street Journal, such
       other comparable rate of interest selected by the Bank in its sole
       discretion and published in a comparable financial publication).

              "BASE RATE BALANCE" shall mean that portion of the principal
       balance of this Note bearing interest at a rate based upon the Adjusted
       Base Rate.

              "BUSINESS DAY" shall mean any day other than a Saturday, Sunday
       or any other day on which national banking associations are authorized
       to be closed.

              "CONSEQUENTIAL LOSS" shall mean, with respect to Borrower's
       payment of all or any portion of the then outstanding principal amount
       of any LIBOR Balance on a day other than the last day of the Interest
       Period related thereto, any loss, cost or expense incurred by Bank in
       redepositing such principal amount, including the sum of (a) the
       interest which, but for such payment, Bank would have earned in respect
       of such principal amount so paid, for the remainder of the Interest
       Period applicable to such sum, reduced, if Bank is able to redeposit
       such principal amount so paid for the balance of such Interest Period,
       by the interest earned by Bank as a result of so redepositing such
       principal amount plus (b) any expense or penalty incurred by Bank on
       redepositing such principal amount.

              "CONTRACT RATE" shall mean a rate of interest based upon the
       Adjusted LIBOR Rate or Adjusted Base Rate in effect at any time pursuant
       to an Interest Notice.

              "DEFAULT" shall mean an event which, with the giving of notice or
       the passage of time or both, would constitute an Event of Default.

              "DEFAULT RATE" shall mean the Base Rate plus five percent (5%)
       per annum.

              "DOLLARS" shall mean lawful currency of the United States of
       America.

              "EVENT OF DEFAULT" shall have the meaning ascribed to such term
       in the Loan Agreement.

              "EXCESS INTEREST AMOUNT" shall mean, on any date, the amount by
       which (a) the  amount of all interest which would have accrued prior to
       such date on the principal of this Note, had the applicable Contract
       Rate at all times been in effect without limitation by the Maximum





                                       8
<PAGE>   9
       Rate, exceeds (b) the aggregate amount or interest accrued on this Note
       on or prior to such date.

              "INTEREST NOTICE" shall mean a notice given by Borrower to Bank
       of an Interest Option selected hereunder.  Each Interest Notice shall
       specify the Interest Option selected, the amount of the unpaid principal
       balance of this Note to bear interest at the rate selected and, if the
       Adjusted LIBOR Rate is specified, the length of the applicable Interest
       Period.  An Interest Notice may be written or oral (if promptly
       confirmed thereafter in writing), and Bank is hereby authorized and
       directed to honor all telephonic Interest Notices from any person
       authorized to request advances hereunder.

              "INTEREST OPTION" shall have the meaning assigned to such term in
       PARAGRAPH 6 hereof.

              "INTEREST PAYMENT DATE" shall mean (a) in the case of the Base
       Rate Balance, the first day of each October, January, April and July
       occurring prior to the Maturity Date and (b) in the case of any LIBOR
       Balance, the last day of the corresponding Interest Period with respect
       to such LIBOR Balance and the Maturity Date.

              "INTEREST PERIOD" shall mean with respect to any LIBOR Balance, a
       period commencing: (a) on any date which, pursuant to an Interest
       Notice, the principal amount of such LIBOR Balance begins to accrue
       interest at the Adjusted LIBOR Rate, or (b) the Business Day following
       the last day of the immediately preceding Interest Period in the case of
       a rollover to a successive Interest Period and ending 30, 60 or 90 days
       thereafter as Borrower shall elect in accordance with the provisions
       hereof; provided, that: (i) any Interest Period which would otherwise
       end on a day which is not a LIBOR Business Day shall be extended to the
       succeeding LIBOR Business Day; and (ii) any Interest Period which would
       otherwise end after the Maturity Date shall end on the Maturity Date.

              "LIBOR BALANCE" shall mean any principal balance of this Note
       which, pursuant to an Interest Notice, bears interest at a rate based
       upon the Adjusted LIBOR Rate for the Interest Period specified in such
       Interest Notice.

              "LIBOR BUSINESS DAY" shall mean a day on which dealings in
       Dollars are carried out in the London interbank Eurodollar market.





                                       9
<PAGE>   10
              "LIBOR RATE" shall mean, with respect to each Interest Period,
       the offered rate for U.S. Dollar deposits of not less than $1,000,000.00
       as of 11:00 a.m. City of London, England time two (2) LIBOR Business
       Days prior to the first date of each Interest Period of this Note as
       shown on the display designated as "BRITISH BANKERS ASSOCIATION INTEREST
       SETTLEMENT RATES" on the Telerate System ("TELERATE"), Page 3750 or Page
       3740, or such other page or pages as may replace such pages on Telerate
       for the purposes of displaying such rate.  Provided, however, that if
       such rate is not available on Telerate then such offered rate shall be
       otherwise independently determined by Bank from an alternate,
       substantially similar independent source available to Bank or shall be
       calculated by Bank by a substantially similar methodology as that
       theretofore used to determine such offered rate in Telerate.

              "LOAN AGREEMENT" shall mean that certain Loan Agreement dated as
       of May 15, 1996, by and between Bank and Borrower, as amended by that
       certain Modification of Loan Agreement dated as of August 20, 1996, and
       that certain Second Amendment to Loan Agreement and Amendment to Loan
       Documents and Renewal and Extension of Loan dated to be effective as of
       March 15, 1998, each of which was entered into by the Bank and the
       Borrower, as the foregoing may, from time to time hereafter, be further
       renewed, extended, increased, restated, supplemented, amended or
       otherwise modified.

              "LOAN DOCUMENTS" shall have the meaning ascribed to such term in
       the Loan Agreement.

              "MATURITY DATE" shall have the meaning ascribed to such term in
       the Loan Agreement.

              "MAXIMUM RATE" shall mean, with respect to the holder hereof, the
       maximum nonusurious interest rate, if any, that at any time, or from
       time to time may be contracted for, taken, reserved, charged, or
       received on the indebtedness evidenced by this Note under the laws which
       are presently in effect in the United States and the State of Texas
       applicable to such holder and such indebtedness or, to the extent
       permitted by law, under such applicable laws of the United States and
       the State of Texas which may hereafter be in effect and which allow a
       higher maximum nonusurious interest rate than applicable laws now allow.
       To the extent that Chapter 303 of the Texas Finance Code is relevant to
       any holder of this Note for the purposes of determining the Maximum
       Rate, each such holder elects to determine such applicable legal rate
       pursuant to the "weekly ceiling," from time to time in effect, as
       specified in Chapter 303 and subject to any right such holder may have
       subsequently, under applicable law, to change the method of determining
       the Maximum Rate.  If no Maximum Rate is





                                       10
<PAGE>   11
       established by applicable law, then the Maximum Rate shall be equal to
       eighteen percent (18%) per annum.

              "REGULATION D" shall mean Regulation D of the Board of Governors
       of the Federal Reserve System from time to time in effect and shall
       include any successor or other regulation relating to reserve
       requirements applicable to member banks of the Federal Reserve System.





                                       11
<PAGE>   12
              "RESERVE REQUIREMENT" shall, on any day, mean that percentage
       (expressed as a decimal fraction) which is in effect on such day, as
       provided by the Board of Governors of the Federal Reserve System (or any
       successor governmental body) for determining the reserve requirements
       (including, without limitation, basic, supplemental, marginal and
       emergency reserves) under Regulation D with respect to "Eurocurrency
       liabilities" as currently defined in Regulation D, or under any similar
       or successor regulation.  For purposes of this definition, any LIBOR
       Balances hereunder shall be deemed "Eurocurrency liabilities" under
       Regulation D without benefit of or credit for prorations, exemptions or
       offsets under Regulation D.  Bank's determination of the Reserve
       Requirement shall be conclusive.

       2.     Payments of Interest and Principal.  Interest on the unpaid
principal balance of this Note shall be due and payable on each Interest
Payment Date as it accrues.  The entire unpaid principal balance of this Note,
and all accrued but unpaid interest hereon, shall be due and payable on the
Maturity Date.

       3.     Rates of Interest.  The unpaid principal of the Base Rate Balance
shall bear interest at a rate per annum which shall from day to day be equal to
the lesser of (a) the Adjusted Base Rate in effect from day to day, or (b) the
Maximum Rate.  The unpaid principal of each LIBOR Balance shall bear interest
at a rate per annum which shall from day to day be equal to the lessor of (i)
the Adjusted LIBOR Rate for the Interest Period in effect with respect to such
LIBOR Balance, or (ii) the Maximum Rate.  Each change in the interest rate
applicable to a Base Rate Balance shall become effective without prior notice
to Borrower automatically as of the opening of business on the date of such
change in the Adjusted Base Rate.  Interest on this Note shall be calculated on
the basis of the actual days elapsed in a year consisting of 365/366 days.

       4.     Interest Recapture.  If on each Interest Payment Date or any
other date on which interest payments are required hereunder, Bank does not
receive interest on this Note computed at the Contract Rate because such
Contract Rate exceeds or has exceeded the Maximum Rate, then Borrower shall,
upon the written demand of Bank, pay to Bank in addition to the interest
otherwise required to be paid hereunder, on each Interest Payment Date
thereafter, the Excess Interest Amount (calculated as of such later Interest
Payment Date); provided that in no event shall Borrower be required to pay, for
any Interest Period, interest at a rate exceeding the Maximum Rate effective
during such period.

       5.     Interest on Past Due Amounts.  Subject to the limitations on
interest, if applicable, set forth in this Note and the Loan Agreement, to the
extent any interest is not paid on or before the





                                       12
<PAGE>   13
fifth (5) day after it becomes due and payable, Bank may, at its option, add
such accrued but unpaid interest to the principal of this Note.
Notwithstanding anything herein to the contrary, all past due principal of this
Note and, to the extent permitted by applicable law, past due interest on this
Note shall, at the option of Bank, bear interest at the Default Rate until
paid.

       6.     Interest Option.  Subject to the provisions hereof, Borrower
shall have the option (an "INTEREST OPTION") of having designated portions of
the unpaid principal balance of this Note bear interest at a rate based upon
the Adjusted LIBOR Rate or Adjusted Base Rate as provided in PARAGRAPH 3
hereof; provided, however, that the selection of the Adjusted LIBOR Rate for a
particular Interest Period shall not be for less than $100,000.00 of unpaid
principal or an integral multiple thereof.  The Interest Option shall be
exercised in the manner provided below:

              a.     At Time of Borrowing.  Contemporaneously with each request
       for an advance by Borrower under PARAGRAPH 9 herein, Borrower shall give
       Bank an Interest Notice indicating the initial Interest Option selected
       with respect to the principal balance of such advance.

              b.     At Expiration of Interest Periods.  On or before the day
       of termination of any Interest Period, Borrower shall give Bank an
       Interest Notice indicating the Interest Option to be applicable to the
       corresponding LIBOR Balance upon the expiration of such Interest Period.
       If the required Interest Notice shall not have been timely received by
       Bank prior to the expiration of the then-relevant Interest Period,
       Borrower shall be deemed to have selected a rate based upon the Adjusted
       Base Rate to be applicable to such LIBOR Balance upon the expiration of
       such Interest Period and to have given Bank notice of such selection.

              c.     Conversion From Adjusted Base Rate.  During any period in
       which any portion of the principal hereof bears interest at a rate based
       upon the Adjusted Base Rate, Borrower shall have the right, on any
       Business Day (the "CONVERSION DATE"), to convert all or a portion of
       such principal amount from the Base Rate Balance to a LIBOR Balance by
       giving Bank an Interest Notice of such selection on or before such
       Conversion Date.

An Interest Notice may be in writing.  All written Interest Notices are
effective only upon receipt by Bank.  Each Interest Notice shall be irrevocable
and binding upon Borrower.

       7.     Special Provisions For LIBOR Pricing.

              a.     Inadequacy of LIBOR Loan Pricing.  If Bank determines
       that, by reason of





                                       13
<PAGE>   14
       circumstances affecting the interbank Eurodollar market generally,
       deposits in Dollars (in the applicable amounts) are not being offered to
       United States financial institutions in the interbank Eurodollar market
       for such Interest Period, or that the rate at which such Dollar deposits
       are being offered will not adequately and fairly reflect the cost to
       Bank of making or maintaining a LIBOR Balance for the applicable
       Interest Period.  Bank shall forthwith give notice thereof to Borrower,
       whereupon until Bank notifies Borrower that the circumstances giving
       rise to such suspension no longer exist, (i) the right of Borrower to
       select an Interest Option based upon the LIBOR Rate shall be suspended,
       and (ii) Borrower shall be deemed to have converted each LIBOR Balance
       to the Base Rate Balance in accordance with the provisions hereof on the
       last day of the then- current Interest Period applicable to such LIBOR
       Balance.

              b.     Illegality.  If the adoption of any applicable law, rule,
       regulation, or any change therein, or any change in the interpretation
       or administration thereof by any GOVERNMENTAL AUTHORITY (as such term is
       defined in the Loan Agreement), central bank or comparable agency
       charged with the interpretation or administration thereof, or compliance
       by Bank with any request or directive (whether or not having the force
       of law) of any such authority, central bank or comparable agency shall
       make it unlawful or impossible for Bank to make or maintain a LIBOR
       Balance, Bank shall notify Borrower.  Upon receipt of such notice,
       Borrower shall be deemed to have converted any LIBOR Balance to the Base
       Rate Balance, on either (i) the last day of the then-current Interest
       Period applicable to such LIBOR Balance if Bank may lawfully continue to
       maintain and fund such LIBOR Balance to such day, or (ii) immediately,
       if Bank may not lawfully continue to maintain such LIBOR Balance to such
       day.

       8.     Extension, Place and Application of Payments.  Should the
principal of, or any interest on, this Note become due and payable on any day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable with respect to such
extension.  All payments of principal of, and interest on, this Note shall be
made in lawful money of the United States of America in immediately available
funds.  Payments made to Bank by Borrower hereunder shall be applied in such
order of priority as Bank, in its sole discretion, may elect including, without
limitation, first to accrued but unpaid interest and then to outstanding
principal.

       9.     Advances.  Subject to the terms of this Note and the Loan
Agreement, Borrower may request Advances hereunder and make payments from time
to time during the term of this Note.  The unpaid balance of this Note shall
increase and decrease with each new Advance or payment





                                       14
<PAGE>   15
hereunder as the case may be. This Note shall not be deemed terminated or
cancelled prior to the Maturity Date although the entire principal balance
hereof may from time to time be paid in full.  Subject to the provisions of
this Note and the Loan Agreement, Borrower may borrow, repay and reborrow
hereunder from the date hereof until the Maturity Date.  Each Advance hereunder
shall be in an amount not less than $100,000.00 or an integral multiple
thereof.  Requests for Advances shall be submitted to Bank in accordance with
the Loan Agreement.  In addition to the Request for Advance (as such term is
defined in the Loan Agreement) required by the Loan Agreement, each request for
an Advance hereunder must be accompanied by an Interest Notice for the funds to
be advanced hereunder; provided, however, if an Interest Notice does not
accompany an Advance request, Borrower shall be deemed to have designated the
Adjusted Base Rate.  Each request for an Advance by Borrower hereunder shall be
irrevocable and binding on Borrower.

       10.    Loan Agreement.  This Note is subject to the terms and provisions
of the Loan Agreement, which is incorporated herein by reference for all
purposes.  The holder of this Note is entitled to the benefits provided in the
Loan Agreement and to all of the liens, benefits, rights and privileges set
forth in or otherwise arising under any and all Loan Documents.  Unless
otherwise expressly defined herein, terms that are used in this Note which
begin with an initial capital letter (including, without limitation, the term
"LOAN DOCUMENTS") shall have the meanings ascribed to such terms in the Loan
Agreement.  Reference is made to the Loan Agreement for a statement of certain
of the rights of the holder of this Note and for other purposes provided
herein.  Reference is also made to the Loan Agreement for a statement of
certain terms and provisions relevant to this Note but not contained herein,
including, without limitation, Events of Default.  Neither the reference to the
Loan Agreement nor the reference to any terms or provisions thereof shall,
however, affect or impair the absolute and unconditional obligation of the
Borrower to pay the principal of and interest on this Note when due and
payable.

       11.    Prepayments; Consequential Loss.  Any prepayment made hereunder
shall be made together with all interest accrued but unpaid on this Note
through the date of such prepayment.  Contemporaneously with each prepayment of
principal, Borrower shall give Bank written notice indicating whether such
prepayment is to be applied to the Base Rate Balance or a particular LIBOR
Balance.  If such notice is not timely received by Bank, Borrower shall be
deemed to have selected to prepay the Base Rate Balance and, if any sums remain
after satisfying all of the Base Rate Balance, the remaining sums shall be
applied to any LIBOR Balance(s) that Bank determines in its sole discretion.
If Borrower makes any payment of principal with respect to any LIBOR Balance on
any day prior to the last day of the Interest Period applicable to such LIBOR
Balance, Borrower shall reimburse Bank on demand for the Consequential Loss
incurred by Bank as a result of the timing of such payment.  A certificate of
Bank setting forth the basis for the determination of a





                                       15
<PAGE>   16
Consequential Loss shall be delivered to Borrower and shall, in the absence of
manifest error, be conclusive and binding as to such determination and amount.

       12.    Additional Costs.  Borrower agrees to pay to Bank all Additional
Costs within ten (10) days of receipt by Borrower from Bank of a statement
setting forth the amount or amounts due and the basis for the determination
from time to time of such amount or amounts, which statement shall be
conclusive and binding upon Borrower absent manifest error.  Failure on the
part of Bank to demand compensation for any Additional Costs in any Interest
Period shall not constitute a waiver of Bank's right to demand compensation for
any Additional Costs incurred during any such Interest Period or in any other
subsequent or prior Interest Period.  The term "ADDITIONAL COSTS" shall mean
such additional amount or amounts as Bank shall reasonably determine will
compensate Bank for actual costs incurred by Bank in maintaining LIBOR Rates on
the LIBOR Balances or any portion thereof as a result of any change after the
date of this Note in any applicable law, rule or regulation or in the
interpretation or administration thereof by, or the compliance by Bank with any
request or directive from any domestic or foreign court changing the basis of
taxation of payments to Bank of the LIBOR Balances or interest on the LIBOR
Balances or any portion thereof at an Adjusted LIBOR Rate or any other fees or
amounts payable under this Note or the Loan Agreement (other than taxes imposed
on all or any portion of the overall net income of Bank by the State of Texas
or the Federal government), or imposing, modifying or applying any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, credit extended by, or any other acquisition of funds for loans
by Bank, or imposing on Bank, as the case may be, or on the London interbank
market any other condition affecting this Note, the Loan Agreement or the LIBOR
Balances so as to increase the cost of Bank making or maintaining Adjusted
LIBOR Rates with respect to the LIBOR Balances or any portion thereof or to
reduce the amount or any sum received or receivable by Bank under this Note or
the Loan Agreement (whether of principal, interest or otherwise), by an amount
deemed by Bank in good faith to be material, but without duplication for
Reserve Requirement.

       13.    Notices.   Except as otherwise specified herein, all notices and
requests required or permitted hereunder shall be given in accordance with
SECTION 9.1 of the Loan Agreement.


       14.    Legal Fees.  If this Note is placed in the hands of any attorney
for collection, or if it is collected through any legal proceeding at law or in
equity or in bankruptcy, receivership or other court proceedings, Borrower
agrees to pay all costs of collection including, but not limited to, court
costs and reasonable attorneys' fees.





                                       16
<PAGE>   17
       15.    Waivers.  Borrower and each surety, endorser, guarantor and any
other party ever liable for payment of any sums of money payable on this Note,
jointly or severally, waive presentment and demand for payment, protest, notice
of protest, intention to accelerate, acceleration and non-payment, or other
notice of default, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of
this Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes, regardless of the number of such renewals, extensions,
indulgences, releases or changes; provided, however, this Note may not be
amended or modified except by a written instrument signed by the Borrower and
the holder hereof.  No waiver by Bank of any of its rights or remedies
hereunder or under any other Loan Document or otherwise shall be considered a
waiver of any other subsequent right or remedy of Bank; no delay or omission in
the exercise or enforcement by Bank of any rights or remedies shall ever be
construed as a waiver of any right or remedy of Bank, and no exercise or
enforcement of any such rights or remedies shall ever be held to exhaust any
right or remedy of Bank.





                                       17
<PAGE>   18
       16.    Remedies.  Upon the occurrence of any Event of Default or event
which, with the giving of notice or the passage of time or both, would
constitute an Event of Default ("DEFAULT") that is not cured within the time,
if any, provided for in the Loan Documents, the holder hereof shall be entitled
to exercise any or all rights and remedies available to the holder under the
Loan Agreement and other Loan Documents and at law and in equity including,
without limitation, at its option, (a) following the occurrence of an Event of
Default, the right to declare the entire unpaid balance of principal and
accrued but unpaid interest on this Note to be immediately due and payable, and
(b) following the occurrence of a Default, the right to refuse to advance
additional amounts under this Note.

       17.    Spreading.  Any provision herein, or in any document securing
this Note, or any other document executed or delivered in connection herewith,
or in any other agreement or commitment, whether written or oral, expressed or
implied, to the contrary notwithstanding, neither Bank nor any holder hereof
shall in any event be entitled to receive or collect, nor shall or may amounts
received hereunder be credited, so that Bank or any holder hereof shall be
paid, as interest, a sum greater than the maximum amount permitted by
applicable law to be charged to the person, partnership, firm or corporation
primarily obligated to pay this Note at the time in question.  If any
construction of this Note or any document securing this Note, or any and all
other papers, agreements or commitments, indicate a different right given to
Bank or any holder hereof to ask for, demand or receive any larger sum as
interest, such is a mistake in calculation or wording which this clause shall
override and control, it being the intention of the parties that this Note, and
all other instruments securing the payment of this Note or executed or
delivered in connection herewith shall in all things comply with the applicable
law and proper adjustments shall automatically be made accordingly.  In the
event that Bank or any holder hereof ever receives, collects or applies as
interest, any sum in excess of the Maximum Rate, if any, such excess amount
shall be applied to the reduction of the unpaid principal balance of this Note,
and if this Note is paid in full, any remaining excess shall be paid to
Borrower.  In determining whether or not the interest paid or payable, under
any specific contingency, exceeds the Maximum Rate, if any, Borrower and Bank
or any holder hereof shall, to the maximum extent permitted under applicable
law: (a) characterize any non-principal payment as an expense or fee rather
than as interest; (b) exclude voluntary prepayments and the effects thereof;
(c) "spread" the total amount of interest throughout the entire term of this
Note; provided that if this Note is paid and performed in full prior to the end
of the actual period of existence thereof exceeds the Maximum Rate, if any,
Bank or any holder hereof shall refund to Borrower (or to such other person who
may be entitled thereto by law) the amount of such excess, or credit the amount
of such excess against the aggregate unpaid principal balance of all advances
made by the Bank or any holder hereof under this Note at the time in question.





                                       18
<PAGE>   19
       18.    CHOICE OF LAW.  THIS NOTE IS BEING EXECUTED AND DELIVERED, AND IS
INTENDED TO BE PERFORMED IN THE STATE OF TEXAS.  EXCEPT TO THE EXTENT THAT THE
LAWS OF THE UNITED STATES MAY APPLY TO THE TERMS HEREOF, THE SUBSTANTIVE LAWS
OF THE STATE OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS NOTE.  IN THE EVENT OF A DISPUTE INVOLVING THIS NOTE OR
ANY OTHER LOAN DOCUMENT, THE UNDERSIGNED IRREVOCABLY AGREES THAT VENUE FOR SUCH
DISPUTE SHALL LIE IN ANY COURT OF COMPETENT JURISDICTION IN DALLAS COUNTY,
TEXAS.

       19.    Amendment and Restatement.  This Note renews and extends the
principal and accrued unpaid interest as of the date hereof under that certain
Promissory Note dated May 12, 1996, executed by Borrower and payable to the
order of Bank in the maximum  principal amount of $15,000,000 (the "PRIOR
NOTE").  The first payment of interest under this Note shall include accrued
and unpaid interest which accrued prior to the date hereof under the Prior
Note.  This Note amends and restates and is given in substitution and
replacement for the Prior Note but not in extinguishment of or as a novation of
the indebtedness evidenced by the Prior Note.



                                   PMC CAPITAL, INC., a Texas corporation

                                   By:                                        
                                      ----------------------------------------
                                   Name:                                      
                                        --------------------------------------
                                   Title:                                     
                                         -------------------------------------
                                                                              




                                       19
<PAGE>   20
                                  EXHIBIT "B"
                                       TO
                       SECOND AMENDMENT TO LOAN AGREEMENT
                      AND AMENDMENT TO LOAN DOCUMENTS AND
                         RENEWAL AND EXTENSION OF LOAN

                                  SCHEDULE "I"
                               TO LOAN AGREEMENT


       Senior Note dated July 19, 1993, for $6,000,000.00 with Columbine Life
       Insurance Company.

       Senior Note dated July 19, 1993, for $9,000,000.00 with Columbine Life
       Insurance Company.

       Senior Note dated July 19, 1993, for $5,000,000.00 with SouthLand Life
       Insurance Company.

       Senior Note dated December 15, 1993, for $2,000,000.00 with Peerless
       Insurance Company.

       Senior Note dated December 15, 1993, for $3,000,000.00 with Security
       Life of Denver Insurance Company.

       Senior Note dated April 19, 1995, for $5,000,000.00 with Security Life
       of Denver Insurance Company.

       Senior Note dated April 19, 1995, for $2,000,000.00 with Peerless 
       Insurance Company.

       Senior Note dated April 19, 1995, for $2,000,000.00 with Indiana
       Insurance Company.

       Senior Note dated April 19, 1995, for $1,000,000.00 with Security Life
       of Denver Insurance Company.





                                       20