PRIME MEDICAL SERVICES INC /TX/
EX 10.121 PROMISSORY NOTE-IMT
<DOCUMENT>
<TYPE>EX-10.121
<SEQUENCE>34
<FILENAME>0034.txt
<DESCRIPTION>EX 10.121 PROMISSORY NOTE-IMT
<TEXT>



                                 PROMISSORY NOTE

                         Austin, Texas December 31, 2000

PROMISE TO PAY: For value  received,  the undersigned  Borrower  (whether one or
more) promises to pay to the order of Lender the Principal Amount, 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:   Innovative   Medical   Technologies,   Inc.,  an  exempted   company
incorporated in the Cayman Islands with limited liability

BORROWER'S ADDRESS FOR NOTICE:          Innovative Medical Technologies, Inc.
                                        c/o Daedalus Consulting Group
                                        P.O. Box 2932
                                        Spokane, Washington  99220
                                        Facsimile:  (509) 324-3364
                                        Attention: President

LENDER:  Prime Medical Services, Inc., a Delaware corporation

LENDER'S ADDRESS FOR PAYMENT:      Prime Medical Services, Inc.
                                   1301 Capital of Texas Highway, Suite C-300,
                                   Austin, Texas 78746
                                   Facsimile:  (512) 328-8510
                                   Attention: Chief Financial Officer

PRINCIPAL AMOUNT:  Nine Hundred Fifty Thousand Dollars ($950,000)

INTEREST RATE:  Initially  10.5%,  to be reset on the first business day of each
calendar quarter beginning on April 2, 2001 to equal 1.5% plus the prime rate of
interest as quoted on such date in the "Money Rates"  section of the Wall Street
Journal, Southwest Edition

PAYMENT TERMS: Interest shall begin accruing on the date of this Note, but there
shall be no payments  due under this Note until April 1, 2001.  On February  28,
2001 all accrued interest  outstanding  under this Note shall be capitalized and
treated  as  principal  hereunder.  On April 1,  2001,  Borrower  shall  pay all
interest that accrued  hereunder  from and including  March 1, 2001 to March 31,
2001. On each of May 1, 2001 and June 1, 2001,  Borrower  shall pay all interest
that has accrued hereunder. Beginning July 1, 2001, and continuing regularly and
monthly  thereafter  on or before the first day of each  calendar  month,  until
December 31, 2003 (the  "Maturity  Date"),  interest and principal on the unpaid
balance of this Note is due and payable in monthly  installments  calculated  on
the basis of a ten year  amortization  period from the date of this Note,  using
the  interest  rate in  effect  at the time the  calculation  is made.  Borrower
acknowledges and agrees that Lender shall  periodically  recalculate the payment
amounts for  periods  after July 1, 2001 to reflect the effect of changes in the
applicable  interest  rate.  Notwithstanding  the  amortization  period  used to
calculate  payment  amounts   hereunder,   on  the  Maturity  Date,  the  entire
outstanding  principal  balance and all accrued interest  hereunder shall become
immediately payable in full. Interest will be calculated on the unpaid principal
balance (giving effect to the  capitalization  of the first two month's interest
described  above).  Each payment will be credited first to the accrued  interest
and then to the reduction of principal.

SECURITY AGREEMENT:  Borrower's obligations under this Note are secured pursuant
to a certain Assignment and Security Agreement dated as of the close of business
on December 31, 2000, executed by Borrower and Lender (as amended, the "Security
Agreement").

1.       INTEREST PROVISIONS:

(a)      Rate:  The principal  balance of this Note from time to time  remaining
         unpaid prior to maturity  shall bear  interest at the Interest Rate per
         annum stated above.

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

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

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

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

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

2.       DEFAULT PROVISIONS:

(a)      EVENTS OF DEFAULT AND  ACCELERATION  OF MATURITY:  LENDER MAY,  WITHOUT
         NOTICE OR DEMAND, (except as otherwise required by statute), ACCELERATE
         THE  MATURITY  OF THIS NOTE AND  DECLARE  THE ENTIRE  UNPAID  PRINCIPAL
         BALANCE AND ALL ACCRUED INTEREST AT ONCE DUE AND PAYABLE IF:

(i)               Borrower fails to fulfill any payment obligation arising under
                  the  terms of this  Note or any of the Loan  Documents  (which
                  includes,  without  limitation,  any installment of principal,
                  interest,  or any other  sum  required  to be paid  hereunder)
                  within  fifteen (15)  calendar  days of the date on which such
                  payment is due; or

(ii)     There is a breach or default by Borrower under this Note or any of the
         Loan Documents.

(b)  WAIVER BY BORROWER: EXCEPT AS PROVIDED IN ANY OTHER LOAN DOCUMENT, BORROWER
     AND ALL OTHER PARTIES LIABLE FOR THIS NOTE WAIVE, DEMAND,  NOTICE OF INTENT
     TO DEMAND,  PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT,  PROTEST, NOTICE
     OF  PROTEST,  GRACE,  NOTICE OF  DISHONOR,  NOTICE OF INTENT TO  ACCELERATE
     MATURITY,  NOTICE OF ACCELERATION OF MATURITY, AND DILIGENCE IN COLLECTION.
     EACH MAKER, SURETY,  ENDORSER, AND GUARANTOR OF THIS NOTE WAIVES AND AGREES
     TO ONE OR MORE  EXTENSIONS  FOR ANY  PERIOD  OR  PERIODS  OF TIME,  AND ANY
     PARTIAL PAYMENTS, BEFORE OR AFTER MATURITY, WITHOUT PREJUDICE TO THE HOLDER
     OF THIS NOTE. EACH MAKER, SURETY,  ENDORSER, AND GUARANTOR WAIVES NOTICE OF
     ANY AND ALL RENEWALS, EXTENSIONS, REARRANGEMENTS, AND MODIFICATIONS OF THIS
     NOTE.

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

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

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

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

3.       MISCELLANEOUS PROVISIONS:

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

(b)      Transfer:  Borrower  acknowledges  and agrees that Lender may  transfer
         this Note or partial  interests in the Note to one or more  transferees
         or participants.  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.

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

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

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

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

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

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

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

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

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

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

4.       LOAN DOCUMENTS:

(a)      This Note.

(b)      The Security Agreement.

(c)      That certain Stock Purchase Agreement,  dated effective as of the close
         of business on December 31, 2000, between and among Borrower and Lender
         (the "Purchase Agreement") and each other Transaction Document (as such
         term is defined in the Purchase Agreement).

                            [Signature page follows]


<PAGE>


                                       S-1

                                EXECUTION PAGE TO

                                 PROMISSORY NOTE

EXECUTED as of this 31st day of December, 2000.

          BORROWER:

                     INNOVATIVE MEDICAL TECHNOLOGIES, INC., an exempted company
                     incorporated in the Cayman Islands with limited liability



                        By:   ________________________________________
                              Ronald Sorensen, M.D., President


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