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EXHIBIT 10.16
PROMISSORY NOTE
(Facility A Note)
$5,650,000.00 Dallas, Texas March 3, 1997
QUEST MEDICAL, INC., a Texas corporation, with its principal office
located at One Allentown Parkway, Allen, Texas 75002 ("Borrower"), for value
received, promises to pay to the order of NATIONSBANK OF TEXAS, N.A.
("Lender"), at its Dallas Banking Center at 901 Main Street, Dallas, Texas
75202, in immediately available funds and in lawful money of the United States
of America, the principal sum of Five Million Six Hundred and Fifty Thousand
and 00/100 Dollars ($5,650,000.00), or such lesser sum as shall be due and
payable from time to time hereunder, on January 31, 1998, or sooner, as
provided in the Credit Agreement referred to below. Borrower promises to pay
interest on the unpaid principal amount of the Facility A Advances (as defined
in the Credit Agreement) from the date made until such principal amount is paid
in full, at such interest rates, and payable at such times, as are specified in
the Credit Agreement.
For the purposes of this Note, the following terms have the respective
meanings assigned to them below:
"Applicable Law" means the laws of the United States of America
applicable to contracts made or performed in the State of Texas,
including, without limitation, 12 USC 86, as amended to the date hereof
and as the same may be amended at any time and from time to time
hereafter and any other statute of the United States of America now or at
any time hereafter prescribing maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas, including,
without limitation, Article 1.04, Title 79, Revised Civil Statutes of
Texas, 1925, as the same may be amended at any time and from time to time
hereafter ("Article 1.04") and any other statute of the State of Texas
now or at any time hereafter prescribing maximum rates of interest on
loans and extensions of credit provided that pursuant to Article
5069-15.10(b), Title 79, Revised Civil Statues, 1925, as amended,
Borrower agrees that the provisions of Chapter 15, Title 79, Revised
Civil Statutes of Texas, 1925, as amended, shall not apply to this Note.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, Lender is then
permitted to charge on the obligation hereunder. If the maximum rate of
interest which, under Applicable Law, Lender is permitted to charge on
the obligation hereunder shall change after the date hereof, the Highest
Lawful Rate shall be automatically increased or decreased, as the case
may be, from time to time as of the effective time of each change in the
Highest Lawful Rate without notice to Borrower. For purposes of
determining the Highest Lawful Rate under the Applicable Law of the State
of Texas, the applicable rate ceiling shall be (i) the indicated rate
ceiling described in and computed in accordance with the provisions of
Section (a)(1) of Article 1.04, Title 79, Revised Civil Statues of Texas
1925, as amended, or (ii) if the parties subsequently contract as allowed
by Applicable Law, the quarterly
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ceiling or the annualized ceiling computed pursuant to Section (d) of
said Article 1.04; provided, however, that if at any time the indicated
rate ceiling, the quarterly ceiling or the annualized ceiling, as
applicable, shall be less than 18% per annum or more than 24% per annum,
the provisions of Sections (b)(1) and (2) of said Article 1.04 shall
control for purposes of such determination, as applicable.
Notwithstanding the foregoing and all other provisions of this Note and
any documents and instruments executed in connection with this Note, in no
event shall the interest payable hereon, whether before or after maturity,
exceed the Highest Lawful Rate of interest which, under Applicable Law, Lender
is permitted to charge to Borrower.
All agreements between Borrower and Lender, or any subsequent holder of
this Note, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of the maturity of this Note or otherwise,
shall the amount paid or agreed to be paid to the holder of this Note for the
use, forbearance, or detention of the funds advanced pursuant to this Note or
for the performance or payment of any covenant or obligation contained herein
or in any other document evidencing, securing or pertaining to this Note,
exceed the maximum amount permissible under Applicable Law. If from any
circumstance whatsoever fulfillment of any provision hereof or of any such
other document, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by Applicable Law, then
ipso facto, the obligation to be fulfilled shall be reduced to the limit of
such validity, and if from any circumstance the holder hereof shall ever
receive anything of value deemed excess interest by Applicable Law, an amount
equal to any such excess interest shall be applied to the reduction of the
principal amount owing under this Note, and not to the payment of interest, or
if such excess interest exceeds the unpaid principal balance of this Note, such
excess interest shall be refunded to Borrower. All sums paid or agreed to be
paid to any holder of this Note for the use, forbearance or detention of any
funds advanced pursuant to this Note shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread throughout the
full term of this Note until payment in full so that the rate of interest on
account of the indebtedness evidenced by this Note is uniform throughout the
term hereof. The terms and provisions of this paragraph shall control and
supersede every other provision of all agreements between Borrower and any
holder of this Note.
This Note is issued pursuant to the Third Amended and Restated Credit
Agreement between Borrower and Lender dated as of March 3, 1997 (such
agreement, together with all amendments and restatements, the "Credit
Agreement"), to which reference is made for a statement of the rights and
obligations of Lender and the duties and obligations of Borrower in relation
thereto; but neither this reference to the Credit Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of
Borrower to pay unpaid principal of and interest on this Note when due. The
Credit Agreement among other things, contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified. If a breach of or default under
the Credit Agreement or any other Loan Paper (as defined in the Credit
Agreement) shall occur, unpaid principal of and
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interest on this Note may be declared due and payable without notice, at the
option of the holder of this Note, in the manner and with the effect provided
thereunder. Failure to exercise this option shall not constitute a waiver of
the right to exercise the same in the event of any subsequent default or event
of default. This Note is a renewal and restatement of the promissory note
(Facility A Note) dated February 9, 1996 made by Borrower and payable to the
order of Lender in the principal amount of $5,000,000.00, and is not a novation
or impairment of such note.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally agree
to pay reasonable attorneys' fees and collection costs to the holder hereof in
addition to the principal and interest payable hereunder.
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment for payment, protest, notice of protest,
notice of acceleration of and notice of intention to accelerate the maturity of
this Note, diligence in collecting, the bringing of any suit against any party
and any notice of or defense on account of any extensions, renewals, partial
payments or changes in any manner of or in this Note or in any of its terms,
provisions and covenants, or any releases or substitutions of any security, or
any delay, indulgence or other act of any trustee or any holder hereof, whether
before or after maturity.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE EXTENT THE SAME ARE
GOVERNED BY THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA APPLICABLE TO
NATIONAL BANKS. THE BOOKS AND RECORDS OF LENDER SHALL CONSTITUTE PRIMA FACIE
EVIDENCE OF ALL SUMS DUE LENDER HEREUNDER.
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REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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QUEST MEDICAL, INC.
By: /s/ F. ROBERT MERRILL III
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F. Robert Merrill III, Vice President
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N O T I C E O F F I N A L A G R E E M E N T
THIS NOTE AND THE OTHER WRITTEN LOAN PAPERS EXECUTED CONTEMPORANEOUSLY WITH
THIS NOTE REPRESENT 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.
BORROWER REPRESENTS THAT IT TODAY RECEIVED A COPY OF THIS NOTICE.
Borrower Lender
QUEST MEDICAL, INC. NATIONSBANK OF TEXAS, N.A.
By: /s/ F. ROBERT MERRILL III By: /s/ BRIAN K. SCHNEIDER
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F. Robert Merrill III, Vice President Brian K. Schneider, Vice President
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