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                                                                   EXHIBIT 10.12

                                 PROMISSORY NOTE

$2,000,000                                                      December 7, 1991

        FOR VALUE RECEIVED, the undersigned, PI MEDICAL CORPORATION (the
"Company"), hereby promises to pay to the order of RICHARD G. SASS (the
"Lender"), the principal sum of $2,000,000 (or such lesser amount as shall equal
the aggregate unpaid principal amount of the advances noted on the attached
Schedule A), in lawful money of the United States of America on December 7, 2001
(the "Final Payment Date"), along with any remaining unpaid interest. The
interest rate on the amounts borrowed shall be equal to the federal long term
rate as defined in Internal Revenue Code Section 1274(d). Interest shall be
payable annually, on December 1 of each year, but may be deferred and added to
principal if certain cash flow requirements are not met, as set forth in a Loan
Agreement between Lender and the Company, dated as of the date hereof, the terms
of which are incorporated herein.

        The amount and date of each advance made by Lender to the Company, and
each payment or prepayment made on account of the principal of this Note, shall
be recorded by Lender and endorsed by Lender on the attached Schedule A.

        The Company may repay any amount of principal at any time prior to the
Final Payment Date, without penalty.

        If the Company fails to pay principal or interest when due, the Company
will pay Lender such further amounts as shall be sufficient to cover the costs
and expenses of collection, including, without limitation, reasonable attorneys'
fees, expenses and disbursements.

        This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of Oregon, without regard to choice of law rules.

        The debt evidenced by this Note is secured by a security interest in the
Company's assets pursuant to a Security Agreement dated as of the date hereof.
Failure to pay principal or interest when due, or the occurrence or existence of
an event of default under the Security Agreement or in any other instrument
securing and/or evidencing this indebtedness, shall constitute an event of
default under this Note and shall entitle Lender, at its option, to accelerate
the then outstanding indebtedness hereunder and take such other action as may be
provided for in the Loan Agreement or the Security Agreement. Failure to
exercise such option on the occurrence of any event of default shall not prevent
the exercise of such option upon the reoccurrence of such event of default or
upon the occurrence of any other event of default. In the event of default in
payment of indebtedness under this Note, Lender shall be entitled to all rights
and remedies available to a lender under the Oregon Uniform Commercial Code.

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        To the extent permitted by applicable law, the Company, for itself and
its legal representatives, successors and assigns, expressly waives presentment,
demand, protest, notice of dishonor, notice of nonpayment, notice of protest,
diligence in collection and the benefit of any exemption or insolvency laws. The
Company also waives any rights to any stay of execution as well as all rights to
setoff.

                                      PI MEDICAL CORPORATION



                                      By:    /s/ RICHARD MURIE
                                             ---------------------------------
                                      Name:
                                      Title:  Vice President and
                                              General Manager