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                                                                   EXHIBIT 10.16

                                PROMISSORY NOTE


$900,000.00                                                    November 16, 1998

         FOR VALUE RECEIVED, VSI Enterprises, Inc., a Delaware corporation
("Maker"), promises to pay to the order of Thomson Kernaghan & Co., Ltd.
(together with any other holder hereof, ("Payee"), at Payee's address at 75
Lowther Avenue, Toronto, Ontario, Canada M5R1C9 or at such other place as the
Payee may from time to time designate in writing, in lawful money of the United
States of America, the principal sum of NINE HUNDRED THOUSAND DOLLARS
($900,000.00) together with interest on so much thereof as is from time to time
outstanding and unpaid, at the rate hereinafter set forth, said principal and
all accrued but unpaid interest being due and payable as set forth below.

         Interest on the principal balance of this Note from time to time
outstanding and unpaid shall be computed on the basis of a 360-day year for the
actual number of days elapsed at a simple interest rate per annum equal to
fourteen percent (14%) commencing on November 16, 1998.

         Principal and all accrued interest hereunder shall be payable on May
16, 1999, except as hereinafter provided. Maker agrees to pay a Three Hundred
Thousand Dollar ($300,000.00) installment of principal hereunder on February
16, 1999; provided, however, that failure to pay such installment shall not
constitute a default under this Note. If Maker fails to pay such installment
when due, Maker shall pay Payee on February 16, 1999, and on the 16th day of
each month thereafter until either the installment is paid or this Note is paid
in full, liquidated damages in the amount of Thirty Thousand Dollars
($30,000.00). If Maker fails to make a Six Hundred Thousand Dollar
($600,000.00) principal payment on May 16, 1999, Maker shall pay Payee on May
16th 1999, and on the 16th day of each month thereafter until said $600,000 in
principal is paid or this Note is paid in full, liquidated damages in the
amount of Thirty Thousand Dollars ($30,000). If both installments are still
unpaid on May 16, 1999, Maker shall pay Payee on May 16, 1999, and on the 16th
day of each month thereafter Sixty thousand dollars ($60,000) as liquidated
damages. Said liquidated damages shall be reduced to Thirty Thousand Dollars
($30,000) once the principal balance is reduced down to SIX HUNDRED THOUSAND
DOLLARS ($600,000).

         Maker acknowledges that its failure to make the principal payment of
Three Hundred Thousand ($300,000) and Six Hundred Thousand ($600,000) when due
will cause the Payee to suffer damages in an amount that will be difficult to
ascertain. Accordingly, the parties agree that it is appropriate to include in
this Note a provision for liquidated damages. The parties acknowledge and agree
that the liquidated damages provision set forth in this section represents the
parties' good faith effort to qualify such damages and, as such, agree that the
form and amount of such liquidated damages are reasonable and will not
constitute a penalty.

         Maker may prepay this Note in whole or in part at any time without
penalty or premium.

         The obligations of Maker under this Note are secured under the
provisions of that certain Assignment of Security Interest in Patents, dated as
of the date of this Note, by and between Maker and Payee a copy of which is
attached hereto as Exhibit A. The maker does hereby represent to Payee that
until such time as this Note is paid in full, it will not further encumber the
collateral.

         Time is of the essence with respect to all of Maker's obligations and
agreements under this Note.

Events of Default.

         The following are Events of Default hereunder:

(a)               Any failure by the Maker to pay no later than June 16, 1999, 
all or any principal or interest or other payment hereunder or any breach of
any representation or covenant made by Maker in this Note which relates to any
security interests that may be granted by Maker to Payee;


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(b)               If the Maker (i) admits in writing its inability to pay 
generally its debts as they mature, or (ii) makes a general assignment for the
benefit of creditors, or (iii) is adjudicated a bankrupt or insolvent, or (iv)
files a voluntary petition in bankruptcy, or (v) takes advantage, as against
its creditors, of any bankruptcy law or statue of the United States of America
or any state or subdivision thereof now or hereafter in effect, or (vi) has a
petition or proceeding filed against it under any provision of any bankruptcy
or insolvency law or statute of the United States of America or any state or
subdivision thereof, which petition or proceeding is not dismissed within sixty
(60) days after the date of the commencement thereof, (vii) has a receiver,
liquidator, trustee, custodian, conservator, sequestrator or other such person
appointed by any court to take charge of its affairs or assets or business and
such appointment is not vacated or discharged within sixty (60) days
thereafter, or;

(c)               Any failure by the Maker to perform or observe any other 
agreement, covenant, term or condition contained in this Note or in any other
agreement between the Maker and the Payee, and the continuance of such failure
or non-performance for fifteen (15) days after receipt by Maker of written
notice of such failure.

Remedies on Default.

         If any Event of Default shall occur and be continuing, the holder
hereof shall, in addition to any and all other available rights and remedies,
have the right, at its option (except for an Event of Default under paragraph
3(b) above, the occurrence of which shall automatically effect acceleration
hereunder), (a) to declare the entire unpaid principal balance of this Note,
together with all accrued interest hereunder, to be immediately due and
payable, and (b) to pursue any and all available remedies for the collection of
such principal, interest, and liquidated damages including but not limited to
the exercise of all rights and remedies against the Maker and the Patents
securing this note.

Waivers and Amendments.

         Neither any provision of this Note nor any performance hereunder may
be amended or waived orally, but only by an agreement in writing and signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought.

Cumulative Remedies.

         No right or remedy conferred upon the Payee under this Note is
intended to be exclusive of any other right or remedy contained herein or in
any instrument or document delivered in connection herewith, and every such
right or remedy shall be cumulative and shall be in addition to every other
such right or remedy contained herein and/or now or hereafter existing at law
or in equity or otherwise.

Waivers; Course of Dealing.

         No course of dealing between the Maker and the Payee, or any failure
or delay on the part of the Payee in exercising any rights or remedies, or any
single or partial exercise of any rights or remedies, shall operate as a waiver
or preclude the exercise of any other rights or remedies available to the
Payee.

Governing Law:  Consent to Jurisdiction:  Waiver of Jury Trial.

         This Note shall be deemed to be a contract made under the laws of the
State of Delaware and shall be governed by, and construed in accordance with,
the laws of the State of Delaware. The Maker hereby irrevocably consents to the
jurisdiction of all courts (state and federal) sitting in the State of Delaware
in connection with any claim, action or proceeding relating to or for the
collection or enforcement of this Note, and hereby waives any defense of forum
non conveniens or other claim or defense in respect of the lodging of any such
claim, action or proceeding in any such court. THE MAKER HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY CLAIM, ACTION OR PROCEEDING RELATING
TO OR FOR THE COLLECTION OR ENFORCEMENT OF THIS NOTE.

Collection Costs.


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         In the event that the Payee shall, after the occurrence of an Event of
Default, turn this Note over to an attorney for collection, the Maker shall
further be liable for and shall pay to the Payee all collection costs and
expenses incurred by the Payee, including reasonable attorneys' fees and
expenses; and the Payee may take judgment for all such amounts in addition to
all other sums due hereunder.

         Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
or sent by registered mail, return receipt requested, addressed: (i) if to the
Maker, at its executive offices and (ii) if to the Payee, c/o William S.
Hechter, at 75 Lowther Avenue, Toronto, Ontario, Canada M5R 1C9.

         THE BORROWER ACKNOWLEDGES THAT THE TRANSACTIONS IN CONNECTION WITH
WHICH THIS NOTE WAS EXECUTED AND DELIVERED AND WHICH ARE CONTEMPLATED BY THE
TERMS OF THE AGREEMENT ARE, IN ALL CASES, COMMERCIAL TRANSACTIONS; AND THE
BORROWER HEREBY EXPRESSLY WAIVES ANY AND ALL CONSTITUTIONAL RIGHTS IT MAY HAVE
AS NOW CONSTITUTED OR HEREAFTER AMENDED, WITH REGARD TO NOTICE, ANY JUDICIAL
PROCESS AND ANY AND ALL OTHER RIGHTS IT MAY HAVE, AND THE LENDER MAY INVOKE ANY
PREJUDGMENT REMEDY AVAILABLE TO IT OR ITS SUCCESSORS OR ASSIGNS.

         MAKER, FOR ITSELF AND ITS SUCCESSORS OR ASSIGNS AND ALL OTHER PERSONS
LIABLE FOR THE PAYMENT OF THIS NOTE, WAIVES PRESENTMENT FOR PAYMENT, DEMAND,
PROTEST, AND NOTICE OF DEMAND, DISHONOR, PROTEST, AND NONPAYMENT, AND CONSENTS
TO ANY AND ALL RENEWALS, EXTENSIONS OR MODIFICATIONS THAT MIGHT BE MADE BY
PAYEE AS TO THE TIME OF PAYMENT OF THIS NOTE FROM TIME TO TIME, AND FURTHER
AGREES THAT THE SECURITY, IF ANY, FOR THIS NOTE OR ANY PORTION THEREOF MAY FROM
TIME TO TIME BE MODIFIED OR RELEASED IN WHOLE OR IN PART WITHOUT AFFECTING THE
LIABILITY OF ANY PARTY LIABLE FOR THE PAYMENT OF THIS NOTE.

         IN WITNESS WHEREOF, Maker has caused this Note to be executed and its
seal to be affixed on the date first above written.



                                      MAKER:

                                      VSI ENTERPRISES, INC.



                                      By:    /s/ Julia B. North
                                             ------------------
                                      Name:  Julia B. North
                                      Title: President & CEO


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