PRIME MEDICAL SERVICES INC /TX/
EX 10.114 INTERCO. AGREEMENT-PRIME RVC
<DOCUMENT>
<TYPE>EX-10.114
<SEQUENCE>27
<FILENAME>0027.txt
<DESCRIPTION>EX 10.114 INTERCO. AGREEMENT-PRIME RVC
<TEXT>



                             INTERCOMPANY AGREEMENT

     This Intercompany  Agreement (this "Agreement"),  dated as of April 1, 2000
(the  "Effective  Date"),  is by and between  Prime Medical  Operating,  Inc., a
Delaware corporation  ("PMOI"),  Prime RVC, Inc., a Delaware corporation ("Prime
RVC"), Prime Refractive Management, L.L.C., a Delaware limited liability company
("Prime  Management"),  and Prime/BDR  Acquisition,  L.L.C.,  a Delaware limited
liability company ("Prime BDR").

                             Preliminary Statements

         All of the parties to this  Agreement  are wholly or  partially  owned,
direct or indirect  subsidiaries  of Prime  Medical  Services,  Inc., a Delaware
corporation ("PMSI").

         PMSI desires to restructure its direct or indirect ownership of certain
of the parties to this Agreement pursuant to (a) a transfer by Prime BDR to PMOI
of all of Prime BDR's ownership interest in Horizon,  Inc., a Nevada corporation
("Horizon"),  and (b) a transfer by PMOI to Prime RVC of all of PMOI's ownership
interest in Prime/BDEC Acquisition, L.L.C., a Delaware limited liability company
("Prime BDEC") and all of PMOI's  ownership  interest in Horizon  (collectively,
the "Transfers").

         In connection  with the Transfers,  the parties  mutually desire to (a)
terminate that certain loan  agreement,  dated as of September 1, 1999,  between
PMOI and Prime BDR (the "Loan  Agreement"),  (b)  cancel any and all  promissory
notes  or  other  evidences  of  indebtedness  arising  solely  under  the  Loan
Agreement,  (c) terminate any and all security agreements,  financing statements
and similar agreements that are related solely to the Loan Agreement,  (d) after
completing the foregoing,  have Prime BDR assign to Prime RVC all of Prime BDR's
contract  rights arising under  contracts  entered into in connection with Prime
BDR's acquisition of an interest in Horizon (the "Horizon Contracts"), in return
for Prime RVC's assumption of all liabilities and obligations of Prime BDR under
the Horizon Contracts,  (e) after completing the foregoing,  dissolve Prime BDR,
and  distribute  all of its  assets,  if any,  to  Prime  RVC,  (f)  have  Prime
Management cancel that certain Promissory Note, dated March 1, 2000,  originally
executed by Prime Refractive,  L.L.C., a Delaware limited liability company, and
subsequently  assumed by Prime RVC, in the principal  amount of $5,828,724  (the
"Promissory  Note"),  so that Prime RVC shall  thereupon  be  released  from any
obligation under the Promissory Note.

                             Statement of Agreement

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained  herein and for other good,  valuable and binding  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the parties hereto,
intending to be legally bound hereby, agree as follows:

                                   ARTICLE I.

                                   ASSIGNMENTS

         Section 1.1 Horizon Interest.  Prime BDR hereby conveys,  transfers and
assigns to PMOI, and PMOI hereby  acquires from Prime BDR, all right,  title and
interest  in and to any and all  rights  of  ownership  (or  rights  to  acquire
ownership) of Horizon (the "Horizon Interest"), such that on the Effective Date,
immediately  prior to the  transfers  described in Section  1.3,  PMOI shall own
sole,  exclusive  and  unencumbered  title to sixty  percent  (60%) of Horizon's
outstanding  capital  stock  (after  giving  effect  to any  and all  rights  or
securities  exercisable  or  exchangeable  for, or convertible  into,  ownership
interests of Horizon).

         Section 1.2 Prime BDEC Interest.  As allowed by Section 2.5(i) of Prime
BDEC's Limited Liability Company Agreement,  PMOI hereby conveys,  transfers and
assigns to Prime RVC, and Prime RVC hereby acquires from PMOI, all right,  title
and  interest  in and to any and all rights of  ownership  (or rights to acquire
ownership) of Prime BDEC,  such that after the Effective  Date,  Prime RVC shall
own sole,  exclusive and unencumbered title to sixty percent (60%) of Prime BDEC
(after  giving  effect  to any and  all  rights  or  securities  exercisable  or
exchangeable for, or convertible into, ownership interests of Prime BDEC).

         Section 1.3 Subsequent  Transfer of Horizon Interest.  Immediately upon
its  receipt of the  Horizon  Interest  pursuant  to Section  1.1,  PMOI  hereby
conveys,  transfers and assigns to Prime RVC, and Prime RVC hereby acquires from
PMOI, all right, title and interest in and to the Horizon Interest.

         Section 1.4 Horizon  Contracts.  Prime BDR hereby  assigns to Prime RVC
all of Prime  BDR's  right,  title and  interest  in and to each of the  Horizon
Contracts,  and any rights arising thereunder  (including,  without  limitation,
rights  to  indemnification).  Prime  RVC  hereby  assumes  all of  Prime  BDR's
obligations and liabilities arising under the Horizon Contracts.

                                   ARTICLE II.

                  AGREEMENTS RELATED TO FINANCIAL RELATIONSHIPS

         Section 2.1  Termination  of Loan  Agreement.  Prime BDR,  PMOI and (as
applicable)  Prime RVC hereby  terminate the Loan Agreement,  cancel any and all
promissory  notes or other  evidences  of  indebtedness  arising  under the Loan
Agreement,  and terminate any and all security agreements,  financing statements
and similar  agreements  between or by Prime BDR, Prime RVC and/or PMOI that are
related to the Loan Agreement.

         Section 2.2 Cancellation of Promissory  Note.  Prime Management  hereby
cancels  the  Promissory  Note and  releases  Prime  RVC  from  all  obligations
thereunder,  regardless of whether such  obligations  were owed on or before the
Effective Date.

                                  ARTICLE III.

               DISSOLUTION OF pRIME BDR AND DISTRIBUTION OF ASSETS

         PMOI, in its capacity as the sole member of Prime BDR,  hereby consents
to the  dissolution  of  Prime  BDR  and the  distribution  of its  assets  upon
dissolution,  if any,  to Prime RVC.  PMOI  further  authorizes  and directs the
managers of Prime BDR to execute such  documents  and take such other actions as
may be necessary to give full effect to the provisions of this ARTICLE.

                                   ARTICLE IV.

                                  MISCELLANEOUS

         This  Agreement  shall be binding upon,  and shall inure to the benefit
of, the parties hereto and their respective  heirs,  executors,  administrators,
successors  and permitted  assigns.  This  Agreement may be executed in multiple
counterparts,  each of  which  shall  be an  original,  but all of  which  shall
constitute one and the same instrument.  There are no third-party  beneficiaries
to this Agreement. This Agreement may not be modified, altered or amended except
by a writing signed by all of the parties hereto.

                            [Signature page follows]


<PAGE>


S-1

                                 SIGNATURE PAGE

                                       TO

                             INTERCOMPANY AGREEMENT

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.

PMOI:                               PRIME MEDICAL OPERATING, INC.



                                            Teena Belcik, Treasurer

PRIME RVC:                          PRIME RVC, INC.



                                            Teena Belcik, Treasurer

PRIME MANAGEMENT:          PRIME REFRACTIVE MANAGEMENT, L.L.C.

                                            Teena Belcik, Treasurer

PRIME BDR:                          PRIME/BDR ACQUISITION, L.L.C.

                                            Teena  Belcik,  signing as a manager
                                            of Prime BDR,  and on behalf of PMOI
                                            as sole member of Prime BDR


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