
<PAGE>   1
_______________________________________________________________________________
_______________________________________________________________________________




            INTELLECTUAL PROPERTY SECURITY AGREEMENT AND ASSIGNMENT


                           dated as of March 31, 1995

                                    Between

                              QUEST MEDICAL, INC.
                                   as Debtor

                                      and

                           NATIONSBANK OF TEXAS, N.A.
                                as Secured Party




_______________________________________________________________________________
_______________________________________________________________________________
<PAGE>   2
                               TABLE OF CONTENTS
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ARTICLE I.  ASSIGNMENT AND GRANT OF SECURITY INTEREST

         1.1     Assignment and Grant of Security Interest  . . . . . . . . . . . . . . . . . .            1
         1.2     Security for Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . .            1
         1.3     Validity and Priority of Security Interest . . . . . . . . . . . . . . . . . .            2
         1.4     Maintenance of Status of Security Interest, Collateral and Rights  . . . . . .            2
                 (a)      Required Action . . . . . . . . . . . . . . . . . . . . . . . . . . .            2
                 (b)      Protection of Collateral  . . . . . . . . . . . . . . . . . . . . . .            2
                 (c)      Authorized Action . . . . . . . . . . . . . . . . . . . . . . . . . .            2
                 (d)      State Registrations . . . . . . . . . . . . . . . . . . . . . . . . .            3
         1.5     Debtor Remains Obligated; Secured Party Not Obligated  . . . . . . . . . . . .            3
         1.6     Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            3
         1.7     Security Interest Absolute . . . . . . . . . . . . . . . . . . . . . . . . . .            3

ARTICLE II.  REPRESENTATIONS AND WARRANTIES

         2.1     Organization; Power  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            4
         2.2     Authorization; Enforceability; Required Consents; Absence of Conflicts . . . .            4
         2.3     Accuracy of Questionnaire  . . . . . . . . . . . . . . . . . . . . . . . . . .            4
         2.4     Rights of Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            4
         2.5     Perfection   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            4
         2.6     State Registrations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            5
         2.7     Other Property   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            5

ARTICLE III.  COVENANTS

         3.1     Certain Matters Relating to Preservation of Status of Security Interest  . . .            5
                 (a)      Chief Executive Office  . . . . . . . . . . . . . . . . . . . . . . .            5
                 (b)      Change of Name, Identity, etc.  . . . . . . . . . . . . . . . . . . .            5
         3.2     Preservation of Existence and Preservation of Enforceability . . . . . . . . .            5
         3.3     Requested Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . .            5
         3.4     No Disposition of Collateral . . . . . . . . . . . . . . . . . . . . . . . . .            6
         3.5     Additional Property  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            6

ARTICLE IV.  EVENT OF DEFAULT

         4.1     Application of Proceeds  . . . . . . . . . . . . . . . . . . . . . . . . . . .            6
         4.2     Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            7
                 (a)      Power of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . .            7
                 (b)      Receiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            7
                 (c)      Enforcement by Secured Party  . . . . . . . . . . . . . . . . . . . .            7


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<PAGE>   3
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<S>                                                                                                       <C>
                 (d)      Other Loan Papers; Laws . . . . . . . . . . . . . . . . . . . . . . .            7
                 (e)      Sale Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . .            8
         4.3     INDEMNITY AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8

ARTICLE V.  INTERPRETATION

         5.1     Definitional Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . .            8
                 (a)      Certain Terms Defined by Reference  . . . . . . . . . . . . . . . . .            8
                 (b)      Other Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . .            8
                 (c)      Other Definitional Provisions . . . . . . . . . . . . . . . . . . . .           11
         5.2     Power of Attorney  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           12

ARTICLE VI.  MISCELLANEOUS

         6.1     Expenses of Debtor's Agreements and Duties . . . . . . . . . . . . . . . . . .           12
         6.2     Secured Party's Right to Perform on Debtor's Behalf  . . . . . . . . . . . . .           12
         6.3     Secured Party's Right to Use Agents  . . . . . . . . . . . . . . . . . . . . .           12
         6.4     No Interference, Compensation or Expense . . . . . . . . . . . . . . . . . . .           12
         6.5     Limitation of Secured Party's Obligations With Respect to Collateral . . . . .           12
         6.6     Rights of Secured Party under UCC and Applicable Law . . . . . . . . . . . . .           13
         6.7     Waivers of Rights Inhibiting Enforcement . . . . . . . . . . . . . . . . . . .           13
         6.8     Notices and Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . .           13
                 (a)      Manner of Delivery  . . . . . . . . . . . . . . . . . . . . . . . . .           13
                 (b)      Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           13
                 (c)      Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . .           14
                 (d)      Designation of Notice . . . . . . . . . . . . . . . . . . . . . . . .           14
         6.9     Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . .           14
         6.10    Amendments; Waivers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           14
         6.11    Assignments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           15
         6.12    MANDATORY ARBITRATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . .           15
         6.13    GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           16
         6.14    WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           16
         6.15    Consent to Jurisdiction; Waiver of Immunities  . . . . . . . . . . . . . . . .           16
         6.16    Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . .           17
         6.17    Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           17
         6.18    Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . .           17
         6.19    Loan Papers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           17
         6.20    Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . .           17
         6.21    ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           18


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                                     - ii -
<PAGE>   4
                    INTELLECTUAL PROPERTY SECURITY AGREEMENT
                                 AND ASSIGNMENT


         INTELLECTUAL PROPERTY SECURITY AGREEMENT AND ASSIGNMENT, dated as of
March 31, 1995, between Quest Medical, Inc., a Texas corporation ("Debtor"),
and NationsBank of Texas, N.A., a national banking association ("Secured
Party").


                                  BACKGROUND.

         (1)     Secured Party and Debtor have entered into the First Amended
and Restated Credit Agreement dated as of March 31, 1995 (such agreement,
together with all amendments and restatements thereof, being the "Credit
Agreement").

         (2)     It is the intention of the parties hereto that this Agreement
create a first priority security interest securing the payment of the
obligations set forth in Section 1.2.

         (3)     It is a condition precedent to the effectiveness of the Credit
Agreement that Debtor shall have executed and delivered this Agreement.


                                   AGREEMENT.

         NOW, THEREFORE, in consideration of the premises set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and in order to induce Secured Party to make Advances
under the Credit Agreement, Debtor hereby agrees with Secured Party as follows:


ARTICLE I.  ASSIGNMENT AND GRANT OF SECURITY INTEREST

         1.1     Assignment and Grant of Security Interest.  Debtor hereby
assigns, pledges and grants to Secured Party a security interest in the entire
right, title and interest of Debtor in and to the Collateral.  Debtor is
assigning the marks in the above identified applications as part of the entire
business or portion thereof to which the marks pertain as required by 15 U.S.C.
Section  1060.

         1.2     Security for Obligations. This Agreement creates a first
priority security interest securing the payment and performance of any and all
obligations now or hereafter existing of Debtor and each other Obligor under
the Credit Agreement and the other Loan Papers, including any extensions,
modifications, substitutions, amendments and renewals thereof, whether for
principal, interest, fees, expenses, indemnification or otherwise (all such
obligations of Debtor and each other Obligor being the "Obligations").  Without
limiting the generality of the foregoing, this Agreement secures the payment,
of all amounts which constitute part of the Obligations and would be owed by
Debtor or any other Obligor to Secured Party under any Loan
<PAGE>   5
Papers, but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
Debtor or any other Obligor (including all interest accruing after, or that
would have accrued but for, the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding of Debtor or
any other Obligor).

         1.3     Validity and Priority of Security Interest.  Debtor agrees
that the Security Interest shall at all times be valid, perfected, continuing
and binding and enforceable against Debtor and all other Persons, in accordance
with the terms hereof, as security for the Obligations, and that the Collateral
shall not at any time be subject to any Lien, except as provided in the Loan
Papers.

         1.4     Maintenance of Status of Security Interest, Collateral and
Rights.

         (a)     Required Action.  Debtor shall take all action that may be
necessary or that Secured Party may reasonably request, so as at all times (i)
to maintain the validity, perfection, enforceability and priority of the
Security Interest in the Collateral in conformity with the requirements of
Section 1.3, and (ii) to protect and preserve, and to enable the exercise or
enforcement of, the rights of Secured Party hereunder, including (A)
immediately discharging all Liens, (B) executing and delivering the notice in
the form of Schedule 1.04(a)(ii)(B)-A, (C) executing and delivering the notice
in the form of Schedule 1.04(a)(ii)(B)-B, (D) executing and delivering the
notice in the form of Schedule 1.04(a)(ii)(B)-C and (E) executing and
delivering financing or continuation statements, instruments of pledge, notices
and instructions in each case in form and substance reasonably satisfactory to
Secured Party.

         (b)     Protection of Collateral.  Debtor shall protect, preserve,
renew and maintain, in each case in a manner consistent with reasonably
responsible business and legal practices all rights of Debtor in the
Collateral, including the duty to prosecute and/or defend against any and all
suits concerning infringement or dilution of the Collateral, any suits against
Debtor asserting the invalidity of the Collateral and any suits claiming injury
to the goodwill associated with any of the Collateral.  Any expenses incurred
in protecting, preserving, renewing and maintaining the Collateral shall be
borne by Debtor.  To the maximum extent permitted by Laws, if a Default or
Event of Default exists, Secured Party shall have the right, without taking
title to any Collateral, to bring suit to enforce any or all Collateral or its
Security Interest in any or all of the Collateral, in which event Debtor shall,
at the request of Secured Party, do any and all lawful acts and execute any and
all proper documents required by Secured Party in aid of such enforcement.  All
costs, expenses and other moneys advanced by Secured Party in connection with
the foregoing shall, whether or not there are then outstanding any amounts
under the Credit Agreement, be treated as Obligations, but the making of any
advances by Secured Party shall not relieve Debtor of any default hereunder.

         (c)     Authorized Action.  Secured Party is hereby authorized to file
one or more financing or continuation statements or amendments thereto and
instruments of pledge, notices and instructions without the signature of or in
the name of Debtor.  A carbon, photographic or





                                     - 2 -
<PAGE>   6
other reproduction of this Agreement or of any financing statement filed in
connection with this Agreement shall be sufficient as a financing statement.

         (d)     State Registrations.  Debtor shall renew or maintain, as
specified in any applicable Law and shall make any filings necessary to renew
or maintain each registration described in Section 2.6.

         1.5     Debtor Remains Obligated; Secured Party Not Obligated.  The
grant by Debtor to Secured Party of the Security Interest shall not relieve
Debtor from the performance of any term, covenant, condition or agreement on
its part to be performed or observed (including by virtue of the exercise by
Secured Party of any of its Rights hereunder), or from any liability to any
Person, under or in respect of any of the Collateral or impose any obligation
on Secured Party or impose any liability on Secured Party for any act or
omission on the part of Debtor relative thereto.

         1.6     Termination.

         (a)     In the event that (i) the License Agreement shall have been
terminated pursuant to a written termination by Secured Party delivered to
Debtor, and (ii) the Obligations shall have been finally paid in full, and all
commitments by Secured Party to extend credit shall have been terminated and
Secured Party shall have delivered to Debtor a written termination agreement,
then this Agreement shall also terminate and be of no further force and effect
(except as provided in Section 1.6(b)).

         (b)     Debtor agrees that, if at any time all or any part of any
payment theretofore applied by Secured Party to any of the Obligations is or
must be rescinded or returned by any Person for any reason whatsoever
(including the insolvency, bankruptcy or reorganization of Debtor or any other
Person), such Obligations shall, for the purposes of this Agreement, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by Secured Party, and
the Security Interest granted hereunder shall continue to be effective or be
reinstated, as the case may be, as to such Obligations, all as though such
application by Secured Party had not been made.

         1.7     Security Interest Absolute.  All Rights of Secured Party and
the Security Interest granted to Secured Party hereunder, and all obligations
of Debtor hereunder, shall, to the extent permitted by Laws, be absolute and
unconditional, irrespective of

         (a)     any lack of validity or enforceability of any Loan Papers;

         (b)     any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the Obligations or any
other amendment to or waiver of or any consent to departure from any Loan
Papers;





                                     - 3 -
<PAGE>   7
         (c)     any exchange, release or non-perfection of any collateral
(including the Collateral or any part thereof), or any release of or amendment
to or waiver of or consent to departure from any guaranty, for all or any of
the Obligations; or

         (d)     any other circumstances which might otherwise constitute a
defense available to, or a discharge of, Debtor, any other Obligor or any other
Person.


ARTICLE II.  REPRESENTATIONS AND WARRANTIES

         Debtor represents and warrants as follows:

         2.1     Organization; Power.  Debtor is a corporation duly organized,
validly existing and in good standing under the laws of Texas and has the
corporate power and authority to own its property and to carry on its business
as now being and hereafter proposed to be conducted.

         2.2     Authorization; Enforceability; Required Consents; Absence of
Conflicts.  Debtor has the power, and has taken all necessary action (including
any necessary corporate action) to authorize it, to execute, deliver and
perform in accordance with its terms this Agreement and to execute and deliver
all financing statements and other filings contemplated hereby.  This Agreement
has been duly executed and delivered by Debtor and is the legal, valid and
binding obligation of Debtor, enforceable in accordance with its terms.  The
execution, delivery and performance in accordance with its terms by Debtor of
this Agreement does not and (absent any change in any Law) will not (a) require
any Governmental Approval or any other consent or approval, including any
consent or approval of any partner of Debtor, other than those Governmental
Approvals, consents and approvals listed on Schedule 2.02 hereto which have
been duly obtained and remain in full force and effect, or (b) violate or
conflict with, result in a breach of, constitute a default under, or result in
or require the creation of any Lien (other than the Security Interest) upon any
assets of Debtor under any such contract or agreement or applicable Laws.

         2.3     Accuracy of Questionnaire.  The Questionnaire is, as of the
date hereof, complete and correct in all respects.

         2.4     Rights of Debtor.  Debtor is the legal and beneficial owner of
the Collateral free and clear of any Lien or other charge or encumbrance,
including, without limitation, pledges, assignments, licenses, shop rights and
covenants by Debtor not to sue any Person, except for the security interests
and assignment created by this Agreement.  No effective financing statement or
other instrument similar in effect naming Debtor as "debtor" covering all or
any part of the Collateral is on file in any recording office, except such as
may have been filed in favor of Secured Party relating to this Agreement.

         2.5     Perfection.  This Agreement will create in favor of Secured
Party valid and perfected security interests in the Collateral upon making the
filing of Schedules 1.04(a)(ii)(B)-





                                     - 4 -
<PAGE>   8
A,-B and-C and the financing statements described on Schedule 2.02 and such
security interests will be a first priority security interest.

         2.6     State Registrations.  Schedule 2.06 lists each and all
registrations and applications of Debtor with the applicable authority of each
indicated state with respect to any Trademarks, Goodwill, Patents, Copyrights
and Trade Secrets.

         2.7     Other Property.  On the date hereof, Debtor has no interest in
any Copyrights, which are registered or subject to any application for
registration and Debtor does not believe, after appropriate review of all
relevant facts and circumstances, that any registration or filing with respect
to any interest Debtor may have in any property which may constitute Copyrights
is necessary to the operation of Debtor's existing and anticipated business.


ARTICLE III.  COVENANTS

          3.1     Certain Matters Relating to Preservation of Status of
Security Interest.

         (a)     Chief Executive Office.  Debtor shall maintain its chief
executive office and the office where the books and records relating to the
Collateral are kept only at One Allentown Parkway, Allen, Texas  75002.

         (b)     Change of Name, Identity, etc.  Debtor shall not change its
name without (i) giving Secured Party thirty days' prior written notice thereof
and (ii) performing all acts required by Secured Party to preserve the Liens
herein granted and the priority and perfection thereof.

         3.2     Preservation of Existence and Preservation of Enforceability.
Debtor shall, so long as any of the Obligations remain outstanding, (a)
preserve and maintain its corporate existence and (b) take all action and
obtain all consents and Government Approvals required so that its obligations
under this Agreement will at all times be legal, valid and binding and
enforceable in accordance with its terms.

         3.3     Requested Information.  In addition to such other Information
as shall be specifically provided for herein, Debtor shall furnish to Secured
Party such other Information with respect to the Collateral as Secured Party
may reasonably request from time to time in connection with the Collateral, or
the protection, preservation, maintenance or enforcement of the Security
Interest or the Collateral including, without limitation, all documents and
things in Debtor's possession, or subject to its demand for possession, related
to the production and sale by Debtor, or any subsidiary, licensee or
subcontractor thereof, of products or services sold by or under the authority
of Debtor in connection with the Collateral, including by way of example,
without limiting the interest granted by this Agreement:  (i) all lists and
ancillary documents which identify and describe any of Debtor's customers, or
licensees, for products sold or services rendered under or in connection with
the Collateral, including without limitation, such existing lists and ancillary
documents which contain each customer's full name and address, the





                                     - 5 -
<PAGE>   9
full name and address of all of its warehouses and branches, the identity of
the Person or Persons having the principal responsibility on each customer's
behalf for ordering products or services of the kind supplied by Debtor, the
credit, payment, discount, delivery and other sale terms applicable to such
customer, together with detailed information setting forth the total purchases,
by brand, product, style and size, and the patterns of such purchases; (ii) all
product and service specification documents and production and quality of
services sold under or in connection with the Collateral; (iii) all documents
which reveal the names and addresses of all sources of supply, and all terms of
purchase and delivery, for all materials and components used in the production
or products or provision of services, sold under or in connection with the
Collateral; and (iv) all documents constituting or concerning the then current
or proposed advertising and promotion by Debtor, licensees or subcontractors of
products or services sold under or in connection with the Collateral,
including, by way of example and not in limitation, all documents which reveal
the media used or to be used and the cost for all such advertising conducted
within the described period or planned for such products or services.  In
connection with its enforcement of the Security Interest, Secured Party may use
such Information or transfer it to any assignee or sublicensee permitted
hereunder for such assignee's or sublicensee's use.

         3.4     No Disposition of Collateral.  Debtor shall not sell, transfer
or otherwise dispose of any of the Collateral or any interest therein, or grant
any license thereunder except for and as permitted by the License Agreement.

         3.5     Additional Property.  Prior to the application for, use or
acquisition or any interest in any property which is within the definition of
"Collateral" or modification, reformulation or other alteration to any such
interest (and, with respect to Collateral with respect to which Debtor's sole
interest is as a licensee, if allowed by the applicable license agreement),
Debtor shall execute and deliver to Secured Party all documents and instruments
Secured Party may require to grant to Secured Party a perfected first priority
Lien therein and to subject to all of such interest to this Agreement,
including but not limited to any new, supplementary or additional filings in
the form of Schedule 1.04(a)(ii)(B)-A,-B,or -C.  Debtor shall execute and
deliver to Secured Party such license agreements and amendments thereto as
Secured Party may require.


ARTICLE IV.  EVENT OF DEFAULT

         Upon the occurrence and during the continuance of an Event of Default:

         4.1     Application of Proceeds.  All cash proceeds received by
Secured Party upon any sale of, collection of, or other realization upon, all
or any part of the Collateral shall be applied as follows:

         First:  To the payment of all out-of-pocket costs and expenses
incurred in connection with the sale of, collection of or other realization
upon Collateral, including attorneys' fees and disbursements;





                                     - 6 -
<PAGE>   10
         Second:  To the payment of the Obligations as provided in the Credit
Agreement (with Debtor remaining liable for any deficiency); and

         Third:  To the extent of the balance (if any) of such proceeds, to the
payment to Debtor or other Person entitled thereto.

         4.2     Remedies.

         (a)     Power of Sale.  Secured Party (i) may sell the Collateral at
public or private sale, at any of its offices or elsewhere, for cash (including
for this purpose, should Secured Party be the successful purchaser at any such
sale, the cancellation of any of the Obligations) or on credit or for future
delivery, and at such price or prices and upon such other terms as it may deem
commercially reasonable, (ii) shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given, and (iii) may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned; provided, however,
that, if any item of the Collateral constituting a Trademark is assigned or
sold, rather than licensed, it shall be assigned or sold only as an entirety.
Secured Party may be the purchaser at any sale of the Collateral and may pay
all or any part of the purchase price thereof by canceling part or all of the
Obligations.  To the fullest extent permitted by applicable Law, Debtor hereby
waives the right to object to the manner of sufficiency of advertising,
refurbishing of the Collateral, or solicitation of bids in connection with any
sales or other disposition of the Collateral.  Debtor hereby expressly waives
and releases, to the fullest extent permitted by applicable Law, any right of
redemption on the part of Debtor.  If any notification of intended disposition
of any of the Collateral is required by law, such notification, if mailed,
shall be deemed reasonably and properly given if mailed at least ten days
before such disposition, postage prepaid, addressed to Debtor either at the
address shown below, or at any other address of Debtor appearing on the records
of Secured Party.

         (b)     Receiver.  Secured Party may obtain the appointment of a
receiver of the Collateral.

         (c)     Enforcement by Secured Party.  Secured Party may without
notice to Debtor (except that if no Event of Default exists Secured Party shall
give at least 10 days' notice) and at such time or times as Secured Party in
its sole discretion may determine, exercise any or all of Debtor's rights in,
to and under, or in any way connected with or related to, any or all of the
Collateral, including (i) enforcing the performance of, and exercising any or
all of Debtor's rights with respect to the Collateral, in each case by legal
proceedings or otherwise and (ii) settling, adjusting, compromising, extending,
renewing, discharging and releasing any or all of, and any legal proceedings
brought with respect to any or all of, Debtor's rights with respect to the
Collateral.

         (d)     Other Loan Papers; Laws.  Secured Party may exercise any other
right or remedy available under any other Loan Paper or Laws.





                                     - 7 -
<PAGE>   11
         (e)     Sale Restrictions.  Debtor agrees that, in any sale of any of
the Collateral, Secured Party is authorized to comply with any limitation or
restriction in connection with such sale as counsel may advise Secured Party is
necessary in order to avoid any violation of applicable Law (including
compliance with such procedures as may restrict the number of prospective
bidders or purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to Persons who will represent and agree that they are purchasing for
their own account or investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchase by any governmental or regulatory authority or
official, and Debtor further agrees that such compliance shall not result in
such sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall Secured Party be liable or accountable to Debtor
for any discount allowed by reason of the fact that such Collateral was sold in
compliance with any such limitation or restriction.

         4.3     INDEMNITY AND EXPENSES.

         (a)     DEBTOR AGREES TO INDEMNIFY (WHICH SHALL BE PAYABLE FROM TIME
TO TIME ON DEMAND) SECURED PARTY FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES
AND LIABILITIES GROWING OUT OF OR RESULTING FROM THIS AGREEMENT (INCLUDING
ENFORCEMENT OF THIS AGREEMENT), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES, OR
LIABILITIES ARISING OUT OF NEGLIGENCE OF SECURED PARTY, EXCEPT CLAIMS, LOSSES
OR LIABILITIES RESULTING FROM SECURED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

         (b)     Debtor will upon demand pay to Secured Party the amount of any
and all reasonable expenses, including the reasonable fees and disbursements of
its counsel and of any experts and agents, which Secured Party may incur in
connection with (i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the Rights of Secured Party hereunder, or (iv) the failure by Debtor to
perform or observe any of the provisions hereof.


ARTICLE V.  INTERPRETATION

         5.1     Definitional Provision.

         (a)     Certain Terms Defined by Reference.  The terms "collateral",
"inventory", "rights", and "security interest" shall have the meanings ascribed
thereto in the UCC, or, when capitalized, the meanings specified in subsection
(b) below.

         (b)     Other Defined Terms.  For purposes of this Agreement:





                                     - 8 -
<PAGE>   12
         "Agreement" means this Agreement, including all schedules, annexes and
exhibits hereto.

         "Bankruptcy Code" means 11 U.S.C. Sections  101-1330 (1995), as
amended, or any successor statute.

         "Collateral" means Debtor's rights, title and interests (whatever they
may be), in each of the following, in each case whether now or hereafter
existing or now owned or hereafter acquired by Debtor and whether or not the
same is subject to Article 9 of the UCC, and wherever the same may be located:

              (i)         the Trademarks and Goodwill;

             (ii)         the Copyrights;

            (iii)         the Patents;

             (iv)         the Trade Secrets;

              (v)         each state registration and application listed on
         Schedule 2.06

             (vi)         any renewal, reissue, re-examination certificate,
         extension or the like with respect to the Trademarks, Patents,
         Copyrights and Trade Secrets (as applicable);

            (vii)         all rights to use the Trademarks as trade names or
         assumed names in all aspects of its business; and

           (viii)         all proceeds and products of the foregoing together
         with any license in favor of or from Debtor of any of the foregoing in
         whatever form.  The inclusion of "proceeds" of Collateral in the
         definition of "Collateral" shall not be deemed a consent by Secured
         Party to any sale or other disposition of any Collateral not otherwise
         specifically permitted by the terms hereof.

         "Copyright" means any copyright, copyright registration and
applications for such registration, including but not limited to the copyrights
listed on Annex C-1 attached hereto, all subject matter related to such
copyrights, in any and all forms, and all copyrights and applications for
copyrights related to such copyrights, including those copyrights and
applications listed in Annex C-2 attached hereto.

         "Credit Agreement" is defined in the Background.

         "Event of Default" means (i) those events described as a "Default" or
an "Event of Default" in the  Credit Agreement, or (ii) the Rejection of the
License Agreement.





                                     - 9 -
<PAGE>   13
         "Goodwill" means the goodwill of the businesses connected with the use
of (or associated with) and symbolized by the Trademarks, but not any other
goodwill.

         "Governmental Approval" means any authorization, consent, approval,
license or exemption of, registration or filing with, or report or notice to,
any Tribunal.

         "Information" means data, certificates, reports, statements (including
financial statements), documents and other information in form (including
electronic media) acceptable to Secured Party.

         "License Agreement" means the License Agreement dated March 31, 1995
between Debtor and Secured Party, including any renewal, extension,
modification or restatement thereof.

         "Lien" means, with respect to any property or asset (or any income or
profits therefrom) of any Person (in each case whether the same is consensual
or nonconsensual or arises by contract, operation of law, legal process or
otherwise) (i) any mortgage, lien, pledge, attachment, levy, priority or other
security interest or encumbrance of any kind thereupon or in respect thereof
and (ii) any arrangement, express or implied, under which the same is
subordinated, transferred, sequestered or otherwise identified so as to subject
the same, or make the same available for, the payment or performance of any
obligation in priority to the payment of the ordinary, unsecured creditors of
such Person.

         "Loan Papers" means the Credit Agreement and each agreement,
certificate and other documents delivered to any Person pursuant to the Credit
Agreement.

         "Obligations" is defined inSection 1.2.

         "Patents" means all patents, all inventions and subject matter related
to such patents, in any and all forms, and all patents and applications for
patents related to such patents, including but not limited to the patents
listed on Annex A-1 attached hereto, all inventions and all subject matter
related to such patents, in any and all forms, and all patents and applications
for patents related to such patents, including those patents and applications
listed on Annex A-2 attached hereto.

         "Person" means an individual, firm, corporation, partnership,
association, joint venture, trust or any other entity or organization or
Tribunal.

         "Questionnaire" means the Questionnaire in the form attached hereto as
Schedule 5.01 executed and delivered by Debtor to Secured Party in connection
with this Agreement.

         "Rejection" means, with respect to the License Agreement in respect of
any item of Collateral, the entry of an order in any proceeding authorizing the
rejection by Debtor (or a trustee for Debtor or Debtor as debtor-in-possession)
of the License Agreement or any analogous event in any proceeding under the
laws of any jurisdiction; provided, however, that nothing





                                     - 10 -
<PAGE>   14
contained in this Agreement shall be deemed to be an acknowledgment or an
agreement by any party hereto that the License Agreement may be rejected under
any Debtor Relief Law or subject to any analogous event under any similar law
of any jurisdiction other than the United States.

         "Security Interest" means the continuing security interest of Secured
Party and assignment to Secured Party in the Collateral intended to be effected
by the terms of this Agreement or any financing and continuation statements or
other filings contemplated hereby.

         "Trade Secrets" means those general intangibles (sometimes known as
"trade secrets").

         "Trademarks" means all trademarks, all designs and logotypes related
to such trademarks, in any and all forms, and all trademark registrations and
applications for registration related to such trademarks, including but not
limited to the trademarks listed on Annex B-1 attached hereto, all designs and
logotypes related to such trademarks, in any and all forms, and all trademark
registrations and applications for registration related to such trademarks,
including those registrations and applications listed on Annex B-2 attached
hereto.

         "UCC" means Chapter 9 of the Texas Business and Commerce Code as in
effect from time to time in the State of Texas.

         (c)     Other Definitional Provisions.

              (i)         Except as otherwise specified herein, all references
         herein (A) to any Person shall be deemed to include such Person's
         successors and assigns, (B) to any applicable Law referred to herein
         shall be deemed references to such applicable Law as the same may have
         been or may be amended or supplemented from time to time and (C) to
         this Agreement or other agreement defined or referred to herein shall
         be deemed a reference to this Agreement or other agreement as the
         terms thereof may have been or may be amended, supplemented, waived or
         otherwise modified from time to time.

             (ii)         Whenever the context so requires, the neuter gender
         includes the masculine or feminine, the masculine gender includes the
         feminine, and the singular number includes the plural, and vice versa.

            (iii)         Except as otherwise indicated, any reference herein
         to the "Collateral", the "Obligations" or any other collective or
         plural term shall be deemed to be a reference to each and every item
         included within the category described by such collective or plural
         term, so that a reference to the "Collateral" or the "Obligations"
         shall be deemed a reference to any or all of the Collateral or the
         Obligations, as the case may be.

             (iv)         Capitalized Terms not otherwise defined herein have
         the meaning specified in the Credit Agreement, and, to the extent of
         any conflict, terms as defined in the Credit Agreement shall control
         provided, that a more expansive or explanatory definition shall not be
         deemed a conflict).





                                     - 11 -
<PAGE>   15
         5.2     Power of Attorney.  Each power of attorney, license and other
authorization in favor of Secured Party or any other Person granted by or
pursuant to this Agreement shall be deemed to be irrevocable and coupled with
an interest.


ARTICLE VI.  MISCELLANEOUS

         6.1     Expenses of Debtor's Agreements and Duties.  Secured Party
shall not be liable for the costs and expenses of Debtor arising out of
Debtor's performance or observance of the terms, conditions, covenants and
agreements to be observed or performed by Debtor under this Agreement.

         6.2     Secured Party's Right to Perform on Debtor's Behalf.  If
Debtor shall fail to observe or perform any of the terms, conditions, covenants
and agreements to be observed or performed by it under this Agreement, Secured
Party may (but shall not be obligated to) do the same or cause it to be done or
performed or observed, either in its name or in the name and on behalf of
Debtor, and in the event that Debtor shall have failed to observe or perform
any of the terms, conditions, covenants and agreements to be observed or
performed by it under this Agreement, then Debtor hereby authorizes Secured
Party to do so, and Debtor hereby appoints Secured Party, and any other Person
Secured Party may designate, as Debtor's attorney-in-fact to do, or cause to be
done, in the name, place and stead of Debtor in any way in which Debtor itself
could do, or cause to be done, any or all things necessary to observe or
perform the terms, conditions, covenants and agreements to be observed or
performed by Debtor under this Agreement. In addition, Debtor hereby
irrevocably appoints Secured Party as Debtor's attorney-in-fact to execute and
deliver in Debtor's name and stead to any purchaser at any sale held under
Section 4.2 any and all documents and instruments of assignment, transfer and
conveyance necessary or appropriate to transfer to such purchaser the
Collateral sold at such sale.

         6.3     Secured Party's Right to Use Agents.  Secured Party may
exercise its rights under this Agreement through an agent or other designee.

         6.4     No Interference, Compensation or Expense.  Secured Party may
exercise its rights under this Agreement (a) without resistance or interference
by Debtor and (b) without payment of any rent, license fee or compensation of
any kind to Debtor.

         6.5     Limitation of Secured Party's Obligations With Respect to
Collateral.

         (a)     Except as provided in the License Agreement, Secured Party
shall not have any duty or liability to protect or preserve any Collateral or
to preserve rights pertaining thereto.

         (b)     Nothing contained in this Agreement shall be construed as
requiring or obligating Secured Party, and Secured Party shall not be required
or obligated, to (i) present or file any claim or notice or take any action,
with respect to any Collateral or in connection therewith or (ii) notify Debtor
of any decline in the value of any Collateral.





                                     - 12 -
<PAGE>   16
         6.6     Rights of Secured Party under UCC and Applicable Law.  Secured
Party shall have, with respect to the Collateral, in addition to all of its
rights under this Agreement, (a) the rights of a secured party under the UCC,
whether or not the UCC would otherwise apply to the collateral in question, and
(b) the rights of a secured party under all other applicable Laws.

         6.7     Waivers of Rights Inhibiting Enforcement.  Debtor waives (a)
any claim that, as to any part of the Collateral, a public sale, should Secured
Party elect so to proceed, is, in and of itself, not a commercially reasonable
method of sale for such Collateral, (b) except as otherwise provided in this
Agreement, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE OR JUDICIAL
HEARING IN CONNECTION WITH SECURED PARTY'S DISPOSITION OF ANY OF THE COLLATERAL
INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH
RESPECT TO THE ENFORCEMENT OF SECURED PARTY'S RIGHTS HEREUNDER and (c) all
rights of redemption, appraisement or valuation.

         6.8     Notices and Deliveries.

         (a)     Manner of Delivery.  All notices, communications and materials
(including all Information) to be given or delivered pursuant to this Agreement
shall, except in those cases where giving notice by telephone is expressly
permitted, be given or delivered in writing.  All written notices,
communications and materials shall be sent by registered or certified mail,
postage prepaid, return receipt requested, by telecopier, or delivered by hand.
In the event of a discrepancy between any telephonic notice and any written
confirmation thereof, such written confirmation shall be deemed the effective
notice except to the extent Secured Party or Debtor has acted in reliance on
such telephonic notice.

         (b)     Addresses.  All notices, communications and materials to be
given or delivered pursuant to this Agreement shall be given or delivered at
the following respective addresses and telecopier and telephone numbers and to
the attention of the following individuals or departments:

         (i)     if to Debtor, to it at:

                 Quest Medical, Inc.
                 One Allentown Parkway
                 Allen, Texas  75002

                 Telephone No: (214) 390-9800
                 Telecopier No: (214) 390-9687

                 Attention:  F. Robert Merrill III





                                     - 13 -
<PAGE>   17
         (ii)    if to Secured Party, to it at:

                 NationsBank of Texas, N.A.
                 NationsBank Plaza
                 901 Main Street
                 7th Floor
                 Dallas, Texas 75202

                 Telephone No: (214) 508-1389
                 Telecopier No: (214) 508-3139

                 Attention:  Commercial Banking

or at such other address, telecopier or telephone number or to the attention of
such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".

         (c)     Effectiveness.  Each notice, communication and any material to
be given or delivered to Secured Party or Debtor pursuant to this Agreement
shall be effective or deemed delivered or furnished (i) if sent by mail, on the
fifth Business Day after such notice, communication or material is deposited in
the mail, addressed as above provided, (ii) if sent by telecopier, when such
notice, communication or material is transmitted to the appropriate number
determined as above provided in this Section 6.8 and the appropriate receipt is
received or acknowledged, (iii) if sent by hand delivery or overnight courier,
when left at the address of the addressee addressed as above provided and the
appropriate receipt is received or acknowledged, and (iv) if given by
telephone, when communicated to the individual or any member of the department
specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered except that notices
of a change of address, telecopier or telephone number or individual or
department to whose attention notices, communications and materials are to be
given or delivered shall not be effective until received.

         (d)     Designation of Notice.  No notice shall be effective under
Section 3.1(a) or (b) unless it is specifically designated and, in the case of
a notice under Section 3.1(a), "Notice of Change of Executive Office and Books
and Records."

         6.9     Rights and Remedies Cumulative.  Each of Secured Party's
rights and remedies under this Agreement shall be in addition to all of its
other rights and remedies under this Agreement and applicable Law, and nothing
herein shall be construed as limiting any such rights or remedies.

         6.10    Amendments; Waivers.  Any term, covenant, agreement or
condition of this Agreement may be amended, and any right under this Agreement
may be waived, if, but only if, such amendment or waiver is in writing and is
signed by Secured Party and, in the case of an amendment, by Debtor.  Unless
otherwise specified in such waiver, a waiver of any right





                                     - 14 -
<PAGE>   18
under this Agreement shall be effective only in the specific instance and for
the specific purpose for which given.  No election not to exercise, failure to
exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Secured Party under
this Agreement or applicable Law, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right of Secured Party under this Agreement or applicable Law.

         6.11    Assignments.

         (a)     Debtor may not assign any of its rights or obligations under
this Agreement without the prior written consent of Secured Party.

         (b)     Secured Party may, in connection with any assignment under and
in accordance with the License Agreement to any Person of any or all of the
licensee's rights and obligations under such License Agreement, assign to such
Person, or any agent(s) or representative(s) on behalf of such licensee and its
sublicenses, any or all of Secured Party's rights and obligations under this
Agreement and any other document or instrument, including financing and
continuation statements and other filings, contemplated hereby and with respect
to the Collateral without the consent of Debtor.  In addition, Secured Party
may assign or otherwise transfer (in whole or in part) to any other Person all
of its rights and obligations under any Loan Papers (including this Agreement)
or otherwise.

         6.12    MANDATORY ARBITRATION.

         (a)     ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR
ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC.
("JAMS"), AND THE "SPECIAL RULES" SET FORTH BELOW.  IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.  JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION.  ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.

         (b)     Special Rules.  The arbitration shall be conducted in Dallas,
Texas and administered by JAMS who will appoint an arbitrator; if JAMS is
unable or legally precluded from administering the arbitration, then the
American Arbitration Association will serve.  All





                                     - 15 -
<PAGE>   19
arbitration hearings will be commenced within ninety days of the demand for
arbitration; further, the arbitrator shall only, upon a showing of cause, be
permitted to extend the commencement of such hearing for up to an additional
sixty days.

         (c)     Reservations of Rights.  Nothing in this Agreement or any
other Loan Paper shall be deemed to (i) limit the applicability of any
otherwise applicable statutes of limitation or repose and any waivers contained
in this Agreement; or (ii) be a waiver by Secured Party of the protection
afforded to it by 12 U.S.C. Section  91 or any substantially equivalent state
law; or (iii) limit the right of Secured Party hereto (A) to exercise self help
remedies such as (but not limited to) setoff, or (B) to foreclose against any
real or personal property collateral, or (C) to obtain from a court provisional
or ancillary remedies such as (but not limited to) injunctive relief or the
appointment of a receiver.  Secured Party may exercise such self help rights,
foreclose upon such property, or obtain such provisional or ancillary remedies
before, during or after the pendency of any arbitration proceeding brought
pursuant to this Agreement.  At Secured Party's option, foreclosure under a
deed of trust or mortgage may be accomplished by any of the following:  the
exercise of a power of sale under the deed of trust or mortgage, or by judicial
sale under the deed of trust or mortgage, or by judicial foreclosure.  Neither
this exercise of self help remedies nor the institution or maintenance of an
action for foreclosure or provisional or ancillary remedies shall constitute a
waiver of the right of any party, including the claimant in any such action, to
arbitrate the merits of the controversy or claim occasioning resort to such
remedies.

         6.13    GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS (WITHOUT
REFERENCE TO PRINCIPALS OF CONFLICTS OF LAWS), EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE REQUIRED TO GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

         6.14    WAIVER OF JURY TRIAL.  SECURED PARTY AND DEBTOR HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.

         6.15    Consent to Jurisdiction; Waiver of Immunities.

         (a)     Debtor hereby irrevocably submits to the non-exclusive
jurisdiction of any United States Federal or Texas State courts sitting in
Dallas County in any action or proceeding arising out of or relating to this
Agreement, and Debtor hereby irrevocably waives any objection it may now or
hereafter have as to the venue of any such suit, action or proceeding brought
in such court or that such court is an inconvenient forum.





                                     - 16 -
<PAGE>   20
         (b)     Nothing in this section shall limit the right of Secured Party
to bring any action or proceeding against Debtor or its property in the courts
of any other jurisdictions.

         (c)     Any judicial proceeding by Debtor against Secured Party
involving, directly or indirectly, any matter in any way arising out of,
related to, or connected with this Agreement shall be brought only in a court
in Dallas County, Texas to the extent that jurisdiction may be effected against
such Person in Dallas County, Texas.

         6.16    Severability of Provisions.  Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.  In the event that any change in applicable Law would
render invalid or unenforceable any provision of this Agreement, Debtor agrees
to enter into such amendments or modifications to this Agreement to provide
Secured Party with benefits intended to be granted by such provision.

         6.17    Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto were upon the same instrument.

         6.18    Successors and Assigns.  All of the provisions of this
Agreement shall be binding and inure to the benefit of the parties thereto and
their respective successors and assigns; provided, Debtor may not assign its
rights or obligations under this Agreement.

         6.19    Loan Papers.  This Agreement is a Loan Papers executed
pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.

         6.20    Obligations Not Affected.  To the fullest extent permitted by
applicable Law, the obligations of Debtor under this Agreement shall remain in
full force and effect without regard to, and shall not be impaired or affected
by:

         (a)     any amendment or modification or addition or supplement to any
Loan Papers or any instrument delivered in connection therewith or any
assignment or transfer thereof;

         (b)     any exercise, non-exercise, or waiver by Secured Party of any
right, remedy, power or privilege under or in respect of, or any release of any
guaranty or the Collateral or any part thereof provided pursuant to, this
Agreement or any Loan Papers;

         (c)     any waiver, consent, extension, indulgence or other action or
inaction in respect of this Agreement, any Loan Papers or any assignment or
transfer of any thereof; or





                                     - 17 -
<PAGE>   21
         (d)     any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of Debtor or any other
Person, whether or not Debtor shall have notice or knowledge of any of the
foregoing.

         6.21    ENTIRE AGREEMENT.  THIS WRITTEN AGREEMENT, TOGETHER WITH THE
OTHER LOAN PAPERS, 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.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers all as of the date first above
written.


                           DEBTOR:                                       
                                                                         
                           QUEST MEDICAL, INC.                           
                                                                         
                                                                         
                           By: __________________________________________
                                    F. Robert Merrill III, Vice President
                                                                         
                                                                         
                           SECURED PARTY:                                
                                                                         
                           NATIONSBANK OF TEXAS, N.A.                    
                                                                         
                                                                         
                           By: __________________________________________
                                    Jay C. Henry, Vice President
            







                                     - 18 -
<PAGE>   22

                             "SCHEDULES OMITTED"
