Document:

PROMISSORY NOTE

Austin, Texas                                                 September 1, 1999

PROMISE TO PAY: For value  received,  the undersigned  Borrower  (whether one or
more) promises to pay to the order of Lender the Principal Amount, 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/BDR Acquisition, 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 Medical Operating, Inc., a Delaware corporation

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

PRINCIPAL  AMOUNT:  Ten  Million  Eight  Hundred  Thirty-Five  Thousand  Dollars
                    ($10,835,000)

INTEREST RATE:  Fifteen Percent (15%)

PAYMENT  TERMS:  Interest on the unpaid  balance of this Note is due and payable
quarterly,  beginning September 1, 1999, and continuing  regularly and quarterly
thereafter on or before the first day of March, June, September, and December of
each year, until September 1, 2006 (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.

LOAN AGREEMENT:  This Note is executed  pursuant to and is governed by the terms
of that certain Loan Agreement dated September 1, 1999, executed by Borrower and
Lender, as amended (collectively, the "Loan Agreement").

1.       INTEREST PROVISIONS:

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.

<PAGE>

     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.

     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.

     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.

     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.

     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

DEFAULT PROVISIONS:

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:

     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

     There is a  breach  or  default  (other  than by  Lender  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.

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.

     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.

     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.

     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.

     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:

     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.

     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.

     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.

     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.

     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.

     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.

     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.

     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.

     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.

     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.

     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.

     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:

This Note.

The Loan Agreement and the Loan Documents as defined therein.

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,
Lender,  Prime  Medical  Services,  Inc.,  a  Delaware  corporation,  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 (the  "Contribution  Agreement") and
each  Transaction  Document  (as  such  term  is  defined  in  the  Contribution
Agreement).

                                              [Signature page follows]

<PAGE>

                                EXECUTION PAGE TO
                                 PROMISSORY NOTE

EXECUTED this 1st day of September, 1999.

             BORROWER:

             PRIME/BDR ACQUISITION, L.L.C., a Delaware limited liability company

                                  By: /s/ David D. Dulaney, M.D.

                                  David D. Dulaney, M.D., Manager

<PAGE>LOAN AGREEMENT

         This Loan Agreement  (this  "Agreement") is entered into as of the 31st
day of January,  2000, by and between Prime  Refractive  Management,  L.L.C.,  a
Delaware limited liability  company,  and Prime  Refractive,  L.L.C., a Delaware
limited liability company.

                                  Definitions:

EFFECTIVE DATE:   January 31, 2000

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

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

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

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

NOTES:

         Working  Capital Note:  Promissory Note (Line of Credit) in the maximum
         principal  amount of $200,000 (the "Working  Capital Maximum  Principal
         Amount")  dated as of January  31,  2000,  executed  by  Borrower,  and
         payable  to the order of  Lender  as  provided  therein  (the  "Working
         Capital Note").

         Development Facility Notes:  Promissory Notes in substantially the form
         attached as Exhibit G2 to the  Contribution  Agreement (as  hereinafter
         defined),  in the aggregate  maximum  original  principal amount not to
         exceed   $29,165,000  (the  "Development   Facility  Maximum  Principal
         Amount"),  executed by  Borrower  and payable to the order of Lender as
         provided therein (the "Development Facility Notes").  Collectively, the
         Working Capital Notes and the  Development  Facility Notes are referred
         to herein as the "Notes."

SECURITY AGREEMENTS:  All documents,  agreements and instruments  hereinafter or
herewith  executed by Borrower,  LASIK  Investors,  L.L.C.,  a Delaware  limited
liability  company ("LASIK") or any Target Center securing this Agreement or the
obligations under any of the Notes.

LOAN  DOCUMENTS:  This  Agreement,  the Working  Capital Note,  the  Development
Facility 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 Center 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  September 1,
1999, by and among Barnet Dulaney Eye Center,  P.L.L.C., David D. Dulaney, M.D.,
Ronald W. Barnet, M.D., Mark Rosenberg,  Prime Medical Services,  Inc. ("PMSI"),
Prime Medical Operating,  Inc., Borrower,  LASIK, Prime/BDR Acquisition,  L.L.C.
and Prime/BDEC  Acquisition,  L.L.C. (as amended by that certain First Amendment
to  Contribution  Agreement  dated as of January 31, 2000,  among the  foregoing
parties,  the  "Contribution  Agreement").  For the  purposes  hereof  the terms
"Target  Centers"  and "Target  Center"  shall have the meaning set forth in the
Contribution  Agreement,  but shall  include,  upon the  acquisition of a Target
Center by Borrower or any subsidiary or affiliate of Borrower, the subsidiary or
affiliate utilized to make such acquisition.

SUBORDINATION:  Certain liens arising in connection with this Agreement in favor
of Lender are  subordinate  to liens in favor of lenders under that certain Loan
Agreement for a $14,000,000  advancing term loan (as  hereinafter  supplemented,
modified,  or replaced,  the  "$14,000,000  Facility"),  entered into by Secured
Party, Bank of America,  N.A., as  administrative  agent,  BankBoston,  N.A., as
documentation agent and such lenders.

                                   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 WORKING CAPITAL LOAN

         1.1 The Working Capital Loan. Lender agrees to lend and Borrower agrees
to borrow an amount not to exceed the Working Capital Maximum  Principal  Amount
on the terms and conditions set forth herein (the "Working  Capital Loan").  The
Working Capital Loan will be evidenced by the Working Capital Note.

         1.2  Revolving  Line of  Credit.  Subject to and in  reliance  upon the
terms, conditions,  representations and warranties hereinafter set forth, Lender
agrees to make advances (the "Working  Capital  Advances") to Borrower from time
to time during the period from the Effective Date to and including  September 1,
2000 (the  "Maturity  Date"),  in an aggregate  amount not to exceed the Working
Capital Maximum  Principal  Amount.  Each Working Capital Advance must be either
$10,000 or a higher integral multiple of $10,000.  Funds borrowed and repaid may
be reborrowed,  so long as all conditions  precedent to Working Capital Advances
are met.  The purpose of the  Working  Capital  Advances is to provide  funds to
Borrower  for  working  capital  and for  other  general  business  purposes  of
Borrower.

         1.3 Interest and  Repayment.  Borrower  shall pay the aggregate  unpaid
principal amount of all Working Capital Advances in accordance with the terms of
the Working Capital Note evidencing the indebtedness resulting from such Working
Capital  Advances.  Interest on the Working  Capital  Advances  shall be due and
payable in the manner and at the times set forth in the  Working  Capital  Note,
with final maturity of the Working  Capital Note being on or before the Maturity
Date.

         1.4 Making Advances.  Each Working Capital Advance shall be made within
two business days of written notice (or telephonic  notice confirmed in writing)
given by noon  (Austin,  Texas time) on a business  day of Lender by Borrower to
Lender  specifying  the amount and date thereof  (which may be the same business
day) and if sent by wired funds, at Lender's option, the wiring  instructions of
the deposit  account of Borrower to which such Working  Capital Advance is to be
deposited.

         1.5  Payments  and  Computations.  Borrower  shall  make  each  payment
hereunder and under the Working Capital Note on the day when due in lawful money
of the United  States of America to Lender at  Lender's  Address  for Payment in
same day funds. All repayments of principal on the Working Capital Note shall be
in a minimum  amount of $1,000,  or a higher  integral  multiple of $1,000.  All
computations  of  interest  shall be made by Lender  on the basis of the  actual
number of days  (including the first day but excluding the last day) in the year
(365 or 366,  as the  case  may be)  elapsed,  but in no  event  shall  any such
computation  result in an amount  of  interest  that  would  cause the  interest
contracted for, charged or received by Lender to be in excess of the amount that
would be payable at the Highest Lawful Rate, as herein defined.

                                   ARTICLE II

                         THE DEVELOPMENT FACILITY LOANS

         2.1 The Development Facility.  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  Centers,  in an aggregate  amount not to
exceed the Development  Facility  Maximum  Principal Amount  (collectively,  the
"Development Facility Loans").

         2.2 Development  Facility Loans.  Each  Development  Facility Loan will
finance  up to 100% of the  purchase  price  (or  development  cost) of a Target
Center being acquired (or developed) by Borrower.  The parties  acknowledge that
the grant of any Development Facility Loan does not create any obligation on the
part of Lender to extend further Development Facility Loans. Additionally,  each
Development  Facility Loan is subject in all respects to Lender  obtaining prior
written  approval  from the lenders under (but only if such approval is required
under)  either the  $14,000,000  Facility or that certain Loan  Agreement  for a
$86,000,000  revolving credit loan entered into by PMSI, Bank of America,  N.A.,
as  administrative  agent,  BankBoston,  N.A., as documentation  agent and other
lenders  named  therein and the  execution  and  delivery of such  documents  by
Borrower as may be required under the Contribution Agreement,  this Agreement or
any  Transaction   Document  (as  such  term  is  defined  in  the  Contribution
Agreement).  Pursuant to the Contribution  Agreement,  each Development Facility
Loan must be (a) evidenced by a separate  Development  Facility Note executed by
Borrower,  (b)  secured by all of LASIK's  ownership  interest  in  Borrower  as
evidenced by an  Assignment  and Security  Agreement  between  Lender and LASIK,
dated as of the date of this  Agreement,  and (c)  accompanied by Assignment and
Security  Agreements  executed by Borrower in the form attached as Exhibit G1 to
the Contribution Agreement.  In addition, if Borrower is acquiring,  directly or
indirectly,   a  one  hundred   percent  (100%)  interest  in  a  Target  Center
(hereinafter  referred to as a "100% Target Center"),  Borrower shall cause such
Target Center 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 Center.

         2.3 Interest and  Repayment.  Borrower and Target  Center shall pay the
unpaid principal amount under each Development  Facility Note in accordance with
the terms of the respective  Development Facility Note. Payments of interest and
principal  on each  Development  Facility  Note shall be due and  payable in the
manner and at the times set forth in the respective Development Facility Note.

                                   ARTICLE III
      CONDITIONS TO WORKING CAPITAL ADVANCES AND DEVELOPMENT FACILITY LOANS

         3.1  Conditions  Precedent  to Initial  Working  Capital  Advance.  The
obligation of Lender to make its initial  Working  Capital Advance is subject to
the condition  precedent that Lender shall have received on or before the day of
such  Working  Capital  Advance  the  following,  each  in  form  and  substance
satisfactory  to Lender and properly  executed by Borrower or other  appropriate
parties:  (a) the Working  Capital Note duly executed by Borrower,  and (b) such
other documents,  opinions,  certificates and evidences as Lender may reasonably
request.

         3.2 Conditions  Precedent to Each Working  Capital  Advance/Development
Facility Loan. In addition to the conditions  precedent stated elsewhere herein,
Lender  shall  not be  obligated  to make any  Working  Capital  Advance  or any
Development Facility Loan unless:

                  (a) the representations and warranties contained in Article IV
         are true and correct in all material  respects on and as of the date of
         such Working  Capital  Advance or Development  Facility Loan, as though
         made on and as of such date with such changes therein;

                  (b) on the date of the Working  Capital Advance or Development
         Facility 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 Transaction Document (as such
          term is defined in the Contribution Agreement);

(e)      with respect to each Development  Facility Loan,  Borrower executes the
         respective   Development   Facility  Note  and  Borrower   executes  an
         Assignment and Security Agreement in the form attached as Exhibit G1 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  Center  and  related  acquisition
         documents;

(f)      LASIK shall have acknowledged in writing its prior grant to Lender of a
         first  lien  perfected  security  interest  (subordinate  only to liens
         granted  as of the  date of this  Agreement  by  LASIK  in favor of the
         lenders  under the  $14,000,000  Facility) in all of LASIK's  ownership
         interest in Borrower, evidenced by that certain Assignment and Security
         Agreement  between  LASIK  and  Borrower  dated  as of the date of this
         Agreement, and LASIK shall be in compliance with all of its obligations
         thereunder;

                  (g) if  Borrower  is  using  a  Development  Facility  Loan to
         acquire,  directly or indirectly,  a 100% Target Center, Borrower shall
         cause such Target Center 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 Center; 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 an Working  Capital  Advance or Development  Facility Loan shall be
         deemed a representation by Borrower that the conditions of this Section
         3.2 have been met.

                                   ARTICLE IV

                    BORROWER'S REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Lender as follows:

         4.1 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.

         4.2 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.

         4.3 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.

         4.4 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 Center.

         4.5 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.

         4.6  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.

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

                                    ARTICLE V

                        BORROWER'S AFFIRMATIVE COVENANTS

         So long as Borrower may borrow under this  Agreement  and until payment
in full of the Working  Capital Note and all  Development  Facility  Notes,  and
performance of all other obligations of Borrower and Target Centers hereunder or
thereunder, Borrower covenants and agrees to do the following:

         5.1      Financial Statements.
                  --------------------

                  (a)  Maintain,  and cause each Target  Center 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  Center'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 Center,  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  Center,  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 5.1, 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  Center,  as Lender may  reasonably
         request from time to time.

         5.2  Insurance.  Maintain,  and cause each Target  Center 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.

         5.3 Existence and Compliance. Maintain, and cause each Target Center 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.

         5.4 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  Center'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 Center.

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

         5.6  Maintenance.  Maintain,  and cause each Target Center 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.

         5.7  Application  of  Earnings.  Except as  expressly  contemplated  in
Section 4.3(e) of the  Contribution  Agreement,  pay all available  funds toward
repayment  of the  Working  Capital  Note and any  Development  Facility  Notes,
regardless  of whether  payment of such  amounts  exceeds the  minimum  required
payments under the Working Capital Note and the Development Facility Notes.

                                   ARTICLE VI

                          BORROWER'S NEGATIVE COVENANTS

         So long as Borrower may borrow under this  Agreement  and until payment
in full of the Working  Capital Note and all  Development  Facility  Notes,  and
performance of all other  obligations of Borrower or Target Center  hereunder or
thereunder, Borrower will not, and will cause each of the Target Centers to not,
without the prior written consent of Lender:

         6.1  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.

         6.2 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.

         6.3 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.

         6.4 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.

         6.5 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 $25,000 without Lender's prior written consent.

         6.6  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.

     6.7 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.

         6.8 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 VII

                     EVENTS OF DEFAULT; NOTICE; ACCELERATION

         7.1  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 the Working Capital
Note and each Development  Facility 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 the Working
         Capital Note or any  Development  Facility Note,  when due and payable,
         whether at maturity or otherwise; or

               (b) There  shall be any breach or default  (other than by Lender,
          Prime Medical Operating,  Inc. or Prime Medical Services,  Inc.) under
          any Loan Document,  the  Contribution  Agreement,  or any  Transaction
          Document  (other than those  certain  Consulting  Agreements  with Dr.
          Dulaney,  Dr.  Barnet and Mark  Rosenberg as required  pursuant to the
          Contribution  Agreement),  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 the Working Capital Loan or any
         Development  Facility 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 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.

         7.2  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 Working Capital Advance or any Development  Facility 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  7.1(f),
all the Indebtedness  shall  automatically  be immediately due and payable,  and
Lender's  obligation  to fund any  Working  Capital  Advance or any  Development
Facility 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 Center,  guarantor,  or to any surety
or endorser of any of the Notes, or to any other person.  Borrower,  each Target
Center,  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.

         7.3 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 VIII

                          GENERAL TERMS AND CONDITIONS

         8.1  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.

         8.2 Entire Agreement and  Modifications.  The Loan Documents,  together
with the Contribution Agreement and Transaction Documents, constitute the entire
understanding  and  agreement  between  the  undersigned  with  respect  to  the
transactions  arising  in  connection  with  the  Working  Capital  Loan and the
Development   Facility   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.

         8.3 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.

         8.4  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.

         8.5  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.

         8.6 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 Center,  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 Center, 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 Center, 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.

     8.7 Third Party Beneficiary.  Borrower  acknowledges that the lenders under
the $14,000,000 facility are third party beneficiaries 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.

         8.8  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  Center  or has  power  over the  daily
management  functions  and  operating  decisions  made by Borrower or any Target
Center.

         8.9 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.

         8.10  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 8.7.
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.

         8.11 Further  Assurances.  Borrower agrees to execute and deliver,  and
cause each  Target  Center 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.

         8.12 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.

         8.13 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.

         8.14  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.

     8.15  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.

     8.16 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>
                                SIGNATURE PAGE TO

                                 LOAN AGREEMENT

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

                           BORROWER:

                           PRIME REFRACTIVE, L.L.C.

                           By: /s/ Cheryl Williams
                           Name:  Cheryl Williams
                           Title: Chief Financial Officer

                           LENDER:

                           PRIME REFRACTIVE MANAGEMENT, L.L.C.

                           By: /s/ Cheryl Williams
                           Name:  Cheryl Williams
                           Title: Chief Financial Officer

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