-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LpMdSTT8ZMaYfpdUo2KVsC36UGZLbT1YUGxjtnKX+MxVQZ9atSh855w6eSD4nBpo 52ViwvTNguWhtRFHVC6J8Q== 0001047469-98-005667.txt : 19980218 0001047469-98-005667.hdr.sgml : 19980218 ACCESSION NUMBER: 0001047469-98-005667 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980213 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: OXBORO MEDICAL INTERNATIONAL INC CENTRAL INDEX KEY: 0000350557 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 411391803 STATE OF INCORPORATION: MN FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-39697 FILM NUMBER: 98536045 BUSINESS ADDRESS: STREET 1: 13828 LINCOLN ST N E CITY: HAM LAKE STATE: MN ZIP: 55304 BUSINESS PHONE: 6127559516 MAIL ADDRESS: STREET 1: 13828 LINCOLN STREET NE STREET 2: 13828 LINCOLN STREET NE CITY: HAM LAKE STATE: MN ZIP: 55304 FORMER COMPANY: FORMER CONFORMED NAME: LIFE CENTERS INC DATE OF NAME CHANGE: 19900516 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RASMUSSON LARRY CENTRAL INDEX KEY: 0000938703 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 13828 LINCOLN ST NE CITY: HAM LAKE STATE: MN ZIP: 55304 SC 13D 1 SC 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. _________)* OXBORO MEDICAL INTERNATIONAL, INC. (NAME OF ISSUER) COMMON STOCK $.01 PAR VALUE (TITLE OF CLASS OF SECURITIES) 691384 10 1 (CUSIP NUMBER) Larry A. Rasmusson 1485 - 139th Lane NW Andover, MN 55304 (612) 757-9738 --------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications) January 15, 1998 ---------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's filing on this form with respect the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 691384 10 1 Page 2 of 28 pages, including exhibits - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only) Larry A. Rasmusson - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) /x/ - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* SC - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) N/A - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 655,751 BENEFICIALLY --------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH REPORTING -0- PERSON --------------------------------------------------- WITH 9 SOLE DISPOSITIVE POWER 655,751 --------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 436,155 - ------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* /X/ 219,596 unvested shares held by the Employee Stock Ownership Plan over which Mr. Rasmusson, as Trustee, has sole voting and sole dispositive power. - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.4 percent. Based upon 2,658,942 shares outstanding, including the shares reported in Row 11 - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ------------------------------------------------------------------------------- 2 SCHEDULE 13D CUSIP No. 691384 10 1 Page 3 of 28 pages, including exhibits ITEM 1. SECURITY AND ISSUER State the title of the class of equity securities to which this statement relates and the name and address of the principal executive officers of the issuer of such securities. Common Stock, $.01 par value Oxboro Medical International, Inc. 13828 Lincoln Street N.E. Ham Lake, Minnesota 55304 ITEM 2. IDENTITY AND BACKGROUND (a) Name: Larry A. Rasmusson (b) Business address: 13828 Lincoln Street NE, Ham Lake, Minnesota 55304 (c) Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted: Chairman of Board, CEO & CFO of Oxboro Medical International, Inc., 13828 Lincoln Street NE, Ham Lake, Minnesota 55304 (d) Whether or not, during the last five years, such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give the dates, nature of conviction, name and location of court, and penalty imposed, or other disposition of the case: N/A (e) Whether or not, during the last five years, such person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws; and, if so, identify and describe such proceedings and summarize the terms of such judgment, decree or final order: N/A (f) Citizenship: United States 3 SCHEDULE 13D CUSIP No. 691384 10 1 Page 4 of 28 pages, including exhibits ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Mr. Rasmusson exercised options to purchase 220,364 shares of common stock of the Issuer effective January 15, 1998. The exercise price of $230,546 was paid by delivery of two nonrecourse promissory notes to the Issuer, one in the amount of $200,000 and one in the amount of $30,546, each providing for payment of the principal amount in five equal annual installments, commencing in January 1999, together with all interest accrued and unpaid as of the date of payment, and interest at an annual rate of 6%. The shares have been pledged to and are being held by the Issuer as security for the repayment of the note. ITEM 4. PURPOSE OF TRANSACTION The purpose of the acquisition was for investment and, secondarily, in response to the solicitation of proxies in opposition to management in connection with the 1998 Annual Meeting. Mr. Rasmusson intends to vote all shares (including shares acquired after the record date for the meeting, to the extent that he obtains proxies for such shares) in favor of management proposals and nominees to the Board of Directors. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) Aggregate number and percentage of the class of securities beneficially owned: 436,155 shares of Common Stock, representing 16.4% of the total shares of the Issuer outstanding as of January 16, 1998, as disclosed in the Issuer's definitive proxy statement dated February 4, 1998. In addition, under Section 13d-3(b) (under some interpretations) Mr. Rasmusson may be deemed to be the beneficial owner of 40,000 shares of the Issuer's common stock in which Dennis Mikkelson has a beneficial interest, 40,000 shares of the Issuer's common stock in which John R. Walter has a beneficial interest and 219,596 shares of the Issuer's common stock held by the Company's Employee Stock Ownership Plan over which Mr. Rasmusson, as Trustee, has sole voting power. (Each of the foregoing has reported his or its beneficial ownership on a Schedule 13D.) If combined. such shares would equal 27.7% of the Issuer's outstanding shares as of January 16, 1998. (b) Number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition: Mr. Rasmusson has sole power to vote and dispose of 655,751 shares (including 219,596 unvested shares held in the Employee Stock Ownership Plan of which Mr. Rasmusson is Trustee). (c) Transactions in the securities effected during the past sixty days: Mr. Rasmusson acquired 200,000 shares of the Common Stock of the Issuer on January 15, 1998 for a purchase price of $1.00 per share. Mr. Rasmusson also acquired 20,364 shares of the Common Stock of the Issuer on January 15, 1998 for a purchase price of $1.50 per share. (d) No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities. 4 SCHEDULE 13D CUSIP No. 691384 10 1 Page 5 of 28 pages, including exhibits (e) The date on which the reporting person ceased to be the beneficial owner of more than five percent of the class of securities: N/A. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Except as described above, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. 1 Stock Option Agreement dated August 17, 1995. Filed as Exhibit 10.7 to and incorporated by reference from the Issuer's Report on Form 10-KSB for the year ended September 30, 1995. 2 Stock Option Agreement dated October 1, 1997. Filed as Exhibit 10.7(b) to and incorporated by reference from the Issuer's Report on Form 10-KSB for the year ended September 30, 1997. 3 Stock Option Agreement dated October 1, 1997. Filed as Exhibit 10.7(c) to and incorporated by reference from the Issuer's Report on Form 10-KSB for the year ended September 30, 1997. 4 Stock Option Exercise and Loan Agreement dated January 15, 1998 for 200,000 Shares of Common Stock 5 Secured Promissory Note dated January 15, 1998 for $200,000. 6 Instrument Security Agreement dated January 15, 1998. 7 Stock Option Exercise and Loan Agreement dated January 15, 1998 for 20,356 Shares of Common Stock 8 Secured Promissory Note dated January 15, 1998 for $30,356. 9 Instrument Security Agreement dated January 15, 1998. 5 SCHEDULE 13D CUSIP No. 691384 10 1 Page 6 of 28 pages, including exhibits SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. February 10, 1998 /s/Larry A. Rasmusson - ------------------------ ------------------------- Date Signature 6 EX-99.1 2 STOCK OPTION EXERC. & LOAN AGMT FOR 200,000 SHARES STOCK OPTION EXERCISE AND LOAN AGREEMENT THIS STOCK PURCHASE AGREEMENT, by and between Oxboro Medical International, Inc., a Minnesota corporation (the "Company"), and Larry A. Rasmusson, an individual residing in the State of Minnesota ("Rasmusson"), effective the 15th day of January, 1998. RECITALS -------- WHEREAS, Rasmusson desires to exercise an outstanding option to purchase 100,000 shares of the Company's Common Stock, $.01 par value (the "Shares"), for a purchase price of $1.00 per Share; and WHEREAS, Rasmusson desires to exercise a deferred option to purchase 100,000 shares of the Company's Common Stock, $.01 a value (the "Shares") for a purchase price of $1.00 per Share; and WHEREAS, the Company desires to waive the terms of the deferred option to allow Rasmusson to exercise the deferred option as of the date hereof upon the terms and conditions set forth herein; and WHEREAS, the Company has agreed to lend funds to Rasmusson to pay the purchase price of the Shares under both options upon the terms and conditions set forth herein, NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein, the parties hereto agree as follows: 1. AGREEMENT FOR LOAN. The Company agrees to lend to Rasmusson $200,000 to purchase from the Company 200,000 Shares of the Company's Common Stock for $1.00 per share. 2. EXERCISE OF OPTIONS. Concurrently with the execution of this Agreement, Rasmusson will exercise the option to purchase the Shares by (a) delivery of notices of option exercise, (b) execution and delivery of a promissory note substantially in the form attached hereto as Exhibit A (the "Note"), in the aggregate amount of $200,000, and (c) execution and delivery of the Instruments Security Agreement attached hereto as Exhibit B (the "Security Agreement"), together with the Collateral (as defined in the Security Agreement). 3. FORFEITURE OF DEFERRED OPTION SHARES. In the event Rasmusson is not employed by the Company on October 1, 1998, and the deferred option would not have been otherwise exerciseable as provided in Paragraph a. of the Deferred Nonqualified Stock Option Agreement, then 100,000 Shares represented by said Deferred Option, of the total 200,000 Shares described herein, shall be returned to the Company. The Company shall hereby have the power of attorney to cancel said 100,000 Shares in such event, and $100,000.00 shall be deducted from the above-referenced loan. 4. REPRESENTATION AND WARRANTIES OF RASMUSSON. Rasmusson hereby represents and warrants to the Company as follows: (a) INFORMATION ABOUT THE COMPANY. Rasmusson has received and is familiar with the Company's Annual Report for the year ended September 30, 1997. Rasmusson has had the opportunity to receive any additional information concerning the Company he considers necessary or advisable in order to form a decision concerning this investment and has either received such information or waived such opportunity. (b) ABILITY TO BEAR THE RISK. Given Rasmusson's current and reasonably foreseeable future economic circumstances, Rasmusson can, for an indefinite period of time, bear the economic risk inherent in the acquisition of the Shares and can afford to sustain a complete loss of such investment. (c) BUSINESS SOPHISTICATION. Rasmusson is experienced and knowledgeable in financial and business matters and capable of evaluating the merits and risks of purchasing the Shares. (d) AFFILIATION WITH THE COMPANY. Rasmusson is a consultant to the Company and is a member of its Board of Directors. (e) HOLDING PERIOD UNDER RULE 144. Rasmusson understands that his ownership of the Shares for purposes of calculating the "holding period" required for resales pursuant to Rule 144 under the Securities Act of 1933 may not commence until the consideration for the particular Shares has been paid in full. 5. SECURITY FOR NOTE. The Note will be secured by Shares of the Company's Common Stock purchased by Rasmusson herein (the "Pledged Shares"). The Pledged Shares delivered or transferred to the Company shall be referred to herein as the "Collateral." To the extent that any portion of the Note is not paid in accordance with the terms thereof, the Company shall have the right to foreclose upon and redeem such portion of the Collateral as shall satisfy the unpaid installment or portion of the Note. Rasmusson agrees to execute and deliver any documents that may be required to establish the Company's security interest in the Collateral, including the certificates representing the Pledged Shares. This security interest shall not affect 2 Rasmusson's rights to vote the Pledged Shares or to receive dividends paid thereon. However, any dividends paid on Pledged Shares subject to this security interest shall be applied to the amounts due on the Note, in such order of application as shall be determined by the Company. The Company agrees to release its security interest in the Collateral, or the appropriate portion thereof, as the principal balance on the Note is paid. For purposes of releasing Pledged Shares from this Security Agreement, the Pledged Shares shall be valued at the then current market price. 6. INVESTMENT PURPOSE IN ACQUIRING THE SHARES. Rasmusson and the Company acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or the securities laws of any state or foreign jurisdiction and will be issued to Rasmusson in reliance on exemptions from the registration requirements of the Act and of applicable state securities laws and in reliance on Rasmusson's representations and agreements contained herein. Rasmusson is acquiring the Shares for his own account for investment purposes only and not with a view to their resale or distribution. Rasmusson has no present intention to divide his participation with others or to resell or otherwise dispose of all or any part of the Shares. In making these representations, Rasmusson understands that in the view of the Securities and Exchange Commission, exemption of the Shares from the registration requirements of the Act would not be available, if, notwithstanding the representations of Rasmusson, Rasmusson has in mind merely acquiring the Shares for resale upon the occurrence or nonoccurrence of some predetermined event. 7. COMPLIANCE WITH SECURITIES ACT. Rasmusson agrees that if the Shares or any part thereof are sold or distributed in the future, Rasmusson shall sell or distribute them pursuant to the requirements of the Act and of appropriate state securities laws. Rasmusson agrees that he will not transfer any part of the Shares without either (a) obtaining an opinion of counsel satisfactory in form and substance to counsel for the Company stating that the proposed transaction does not require registration under the Act or applicable state securities laws or (b) such registration. 8. RESTRICTIVE LEGEND. Rasmusson agrees that the Company may place on the certificates representing the Shares a restrictive legend containing substantially the following language: The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, have not been registered under the securities laws of any state or foreign jurisdiction, and are subject to an investment letter. They may not be sold, offered for sale, or transferred in the absence of either an effective registration under the Securities Act of 1933, as amended, and under the applicable state securities laws or an opinion of counsel for the Company that such transaction does not require registration under the Act or applicable state securities laws. 3 9. STOP TRANSFER ORDER. Rasmusson agrees that the Company may place a stop transfer order with its registrar and stock transfer agent (if any) covering all certificates representing the Shares. 10. NO GUARANTEE OF CONTINUED SERVICE. This Agreement shall not enlarge or diminish any rights Rasmusson may have to serve as an officer or as a director of the Company. 11. BINDING EFFECT. Neither this Agreement nor any interest herein shall be assignable by Rasmusson without the prior written consent of the Company. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and assigns. 12. REPRESENTATIONS TO SURVIVE DELIVERY. The representations, warranties, and agreements of Rasmusson contained in this Agreement will remain operative and in full force and effect and will survive payment of the purchase price and delivery of certificates representing the Shares. 13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 14. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom it is given; or on the third day after mailing if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, postage prepaid, and properly addressed as follows: The Company: 13818 Lincoln Street N.E. Ham Lake, MN 55304 Rasmusson: 13818 Lincoln Street N.E. Ham Lake, MN 55304 IN WITNESS WHEREOF, the undersigned have duly executed this Agreement on the day and year first above written. /s/Larry A. Rasmusson ---------------------------- Larry A. Rasmusson Print Name: Larry A. Rasmusson ------------------------ Address: 1485 - 139th Lane NW ------------------------ Andover, Minnesota 55304 ------------------------ 4 OXBORO MEDICAL INTERNATIONAL, INC. By /s/Dennis L. Mikkelson ------------------------------------ Dennis L. Mikkelson Its Secretary and Director By /s/John R. Walter ------------------------------------ John R. Walter Its Director 5 EX-99.2 3 SECURED PROMISSORY NOTE SECURED PROMISSORY NOTE $30,546.00 Due January 15, 2003 Minneapolis, Minnesota January 15, 1998 The undersigned, for value received, promises to pay to the order of Oxboro Medical International, Inc., a Minnesota corporation (the "Lender"), at its main office in Ham Lake, Minnesota, in lawful money of the United States of America the principal sum of Thirty Thousand Five Hundred Forty-Six and No/100 Dollars ($30,546.00), together with interest (calculated on the basis of actual days elapsed and a 360-day year) on the unpaid principal hereof until this Note is fully paid at an annual rate of six (6%) percent. One-fifth of the original principal amount of this Note ($6,109.20) shall be paid on each of January 15, 1999, January 15, 2000, January 15, 2001, January 15, 2002 and January 15, 2003, together with all interest accrued and unpaid as of each payment date. This Note is initially secured by certain shares of Common Stock of the Lender ("Collateral") pursuant to and is subject to the terms of a Stock Option Exercise and Loan Agreement dated January 15, 1998, and an Instruments Security Agreement of even date herewith. If any interest hereon or any principal amount hereof is not paid when due, then, in such event, the holder hereof may, at its option, transfer a number of shares held as Collateral equal to $30,546.00 plus interest accrued to the installment payment date divided by the per-share market value of the Stock as of the close of trading on the installment payment date, as payment thereof. This Note may be prepaid without penalty. This Note shall become automatically due and payable (including unpaid interest accrued hereon) without notice or demand should the undersigned: (i) fail to pay any or all of the Obligations (as defined in the Instruments Security Agreement) when due or shall fail to observe or perform any covenant or agreement herein or therein binding on it; (ii) any representation or warranty by the undersigned made to the Lender in any financial statements or reports submitted to the Lender by or on behalf of the undersigned shall prove materially false or misleading; (iii) a garnishment summons or a writ of attachment shall be issued against or served upon the Lender for the attachment of any property of the undersigned or any indebtedness owing to the undersigned; or (iv) the undersigned shall (A) be or become insolvent (however defined); or (B) voluntarily file, or have filed against him involuntarily, a petition under the United States Bankruptcy Code; or (C) die. The undersigned agrees to pay all attorneys' fees and legal expenses as a result of the undersigned unsuccessfully contesting actions taken by the Lender hereunder in the event this Note is not paid. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned. This Note shall be governed by the substantive laws of the State of Minnesota, except insofar as the Lender may rely on the laws of the United States to justify the interest rate charged hereunder. The undersigned hereby irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth Division, and the Federal District Court, District of Minnesota, Fourth Division, over any action or proceeding arising our of or relating to this Note and agrees that all claims in respect of such action or proceeding may be heard and determined in any such court. /s/Larry A. Rasmusson --------------------------------- Larry A. Rasmusson 2 EX-99.3 4 INSTRUMENT SECURITY AGMT FOR 200,000 SHARES INSTRUMENTS SECURITY AGREEMENT DATE: January 15, 1998 DEBTOR SECURED PARTY Larry A. Rasmusson Oxboro Medical International, Inc. 13828 Lincoln Street N.E. 13828 Lincoln Street N.E. Ham Lake, MN 55304 Ham Lake, MN 55304 _______________________________________________________________________________ 1. SECURITY INTEREST AND COLLATERAL. To secure the debt, liability or obligation of the Debtor to secured party evidenced by the following: that certain Promissory Note dated January 15, 1998, and any extensions, renewals or replacements thereof (herein referred to as the "Obligations"), Debtor hereby grants Secured Party a security interest (herein called the "Security Interest") in the property owned by Debtor and held by Secured Party that is described as follows: Share Certificate Nos. A-10007 and A-10008 of Oxboro Medical International, Inc., each representing 100,000 shares, together representing 200,000 shares, with all rights in connection with such property (herein called the "Collateral"). 2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents, warrants and covenants that: (a) Debtor will duly endorse, in blank, each and every instrument constituting Collateral by signing on said instrument or by signing a separate document of assignment or transfer, if required by Secured Party. (b) Debtor is the owner of the Collateral free and clear of all liens, encumbrances, security interests and restrictions, except the Security Interest and any restrictive legend appearing on any instrument constituting Collateral. (c) Debtor will keep the Collateral free and clear of all liens, encumbrances and security interests, except the Security Interest. (d) Debtor will pay when due all taxes and other governmental charges levied or assessed upon or against any Collateral. (e) At any time, upon request by Secured Party, Debtor will deliver to Secured Party all notices, financial statements, reports or other communications received by Debtor as an owner or holder of the Collateral. (f) Debtor will upon receipt deliver to Secured Party in pledge as additional Collateral all securities distributed on account of the Collateral such as stock dividends and securities resulting from stock splits, reorganizations and recapitalizations. 3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at any time, whether before or after the occurrence of an Event of Default and without notice or demand of any kind, (a) notify the obligor on or issue of any Collateral to make payment to Secured Party of any amounts due or distributable thereon, (b) in Debtor's name or Secured Party's name enforce collection of any Collateral by suit or otherwise, or surrender, release or exchange all or any part of it, or compromise, extend or renew for any period any obligation evidenced by the Collateral, (c) receive all proceeds of the Collateral, and (d) hold any increase or profits received from the Collateral as additional security for the Obligations, except that any money received from the Collateral shall, at Secured Party's option, be applied in reduction of the Obligations, in such order of application as Secured Party may determine, or be remitted to Debtor. 4. EVENTS OF DEFAULT. Each of the following occurrences shall constitute an event of default under this Agreement (herein called "Event of Default"); (a) Debtor shall fail to observe or perform any covenant or agreement herein binding on him; (b) any representation or warranty by Debtor set forth in this Agreement shall prove materially false or misleading; (c) a garnishment summons or a writ of attachment shall be issued against or served upon the secured Party for the attachment of any property of the Debtor or any indebtedness owing to Debtor; or (d) Debtor shall (i) be or become insolvent (however defined); (ii) voluntarily file, or have filed against him involuntarily, a petition under the United States Bankruptcy Code; or (iii) die. 5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Secured Party may exercise any one or more of the following rights or remedies: (a) if any interest hereon or any principal amount hereof is not paid when due, then, in such event, the holder hereof may, at its option, transfer a number of shares held as Collateral equal to $40,000.00 plus interest accrued to the installment payment date divided by the per-share market value of the Stock as of the close of trading on the installment payment date, as payment thereof; (b) on January 15, 2003, declare all unmatured Obligations to be immediately due and payable, and the same shall thereupon be immediately due and payable, without presentment or other notice or demand; (c) exercise all voting and other rights as a holder of the Collateral; (d) exercise and enforce any or all rights and remedies available upon default to a secured party under the Uniform Commercial Code, including the right to offer and sell the Collateral privately to purchasers who will agree to take the Collateral for investment and not with a view to distribution and who will agree to the imposition of restrictive legends on the certificates representing the 2 Collateral, and the right to arrange for a sale which would otherwise qualify as exempt from registration under the Securities Act of 1933; and if notice to Debtor of any intended disposition of the Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given at lease 10 calendar days prior to the date of intended disposition or other action; (e) exercise or enforce any or all other rights or remedies available to Secured Party by law or agreement against the Collateral, against Debtor or against any other person or property. Upon the occurrence of the Event of Default described in Section 4(d)(ii), all Obligations shall be immediately due and payable without demand or notice thereof. Any disposition of the Collateral in the manner provided in this Section 5 shall be deemed commercially reasonable. In the event Debtor fails to pay principal and accrued interest outstanding on January 15, 2003, then the sole remedy of the Secured Party shall be to cancel the Certification or Certificates representing the remaining Collateral or to sell said Collateral to a third party and, in either event, such cancelation or sale shall be in full and complete satisfaction of said outstanding principal and accrued interest and Debtor shall have no further obligation or liability to Secured Party under the Obligations. 6. MISCELLANEOUS. This Agreement can be waived, modified, amended, terminated or discharged, and the Security Interest can be released, only explicitly in a writing signed by Secured Party. A waiver signed by Secured Party shall be effective only in the specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Secured Party's rights or remedies. All rights and remedies of Secured Party shall be cumulative and may be exercised singularly or concurrently, at Secured Party's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. All notices to be given to Debtor shall be deemed sufficiently given if delivered or mailed b registered or certified mail, postage prepaid, to Debtor at its address set forth above or at the most recent address shown on Secured Party's records. Secured Party's duty of care with respect to Collateral in its possession (as imposed by law) shall be deemed fulfilled if Secured Party exercises reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the custody of possession of a bailee or other third person, exercises reasonable care in the selection of the bailee or other third person, and Secured Party need not otherwise preserve, protect, insure or care for any Collateral. Secured Party shall not be obligated to preserve any rights Debtor may have against prior parties, to exercise at all or in any particular manner any voting rights which may be available with respect to any Collateral, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application. Debtor will reimburse Secured Party for all expenses (including reasonable attorneys' fees and legal expenses) incurred by Secured Party in the protection, defense or enforcement of the Security Interest, including expenses incurred in any litigation or bankruptcy or insolvency proceedings. 3 This Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their respective heirs, representatives, successors and assigns and shall take effect when signed by Debtor and delivered to Secured Party, and Debtor waives notice of Secured Party's acceptance hereof. This Agreement shall be governed by the substantive law of the State of Minnesota and, unless the context otherwise requires, all terms used herein which are defined in Articles 1 and 9 of the Uniform Commercial Code, as in effect in Minnesota, shall have the meanings therein stated. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation and payment of the Obligations. The Debtor hereby irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth Division, and the Federal District Court, District of Minnesota, Fourth Divisions, over any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of such action or proceeding may be heard and determined in any such court. SECURED PARTY DEBTOR OXBORO MEDICAL INTERNATIONAL, INC. By /s/Dennis L. Mikkelson /s/Larry A. Rasmusson -------------------------------- ------------------------------- Dennis L. Mikkelson Larry A. Rasmusson Title: Secretary and Director By /s/John R. Walter ------------------------------- John R. Walter Title: Director 4 EX-99.4 5 STOCK OPTION EXERC. & LOAN AGMT FOR 20,356 SHARES STOCK OPTION EXERCISE AND LOAN AGREEMENT THIS STOCK PURCHASE AGREEMENT, by and between Oxboro Medical International, Inc., a Minnesota corporation (the "Company"), and Larry A. Rasmusson, an individual residing in the State of Minnesota ("Rasmusson"), effective the 15th day of January, 1998. RECITALS -------- WHEREAS, Rasmusson desires to exercise an outstanding option to purchase 20,364 shares of the Company's Common Stock, $.01 per value (the "Shares"), for a purchase price of $1.50 per Share; and WHEREAS, the Company has agreed to lend funds to Rasmusson to pay the purchase price of the Shares upon the terms and conditions set forth herein, NOW, THEREFORE, in consideration of the foregoing and the mutual promises contained herein, the parties hereto agree as follows: 1. AGREEMENT FOR LOAN. The Company agrees to lend to Rasmusson $30,546.00 to purchase from the Company 20,364 shares of the Company's Common Stock for $1.50 per share. 2. EXERCISE OF OPTION. Concurrently with the execution of this Agreement, Rasmusson will exercise the option to purchase the Shares by (a) delivery of a notice of option exercise, (b) execution and delivery of a promissory note substantially in the form attached hereto as Exhibit A (the "Note"), in the aggregate amount of $30,546.00, and (c) execution and delivery of the Instruments Security Agreement attached hereto as Exhibit B (the "Security Agreement"), together with the Collateral (as defined in the Security Agreement). 3. REPRESENTATION AND WARRANTIES OF RASMUSSON. Rasmusson hereby represents and warrants to the Company as follows: (a) INFORMATION ABOUT THE COMPANY. Rasmusson has received and is familiar with the Company's Annual Report for the year ended September 30, 1997. Rasmusson has had the opportunity to receive any additional information concerning the Company he considers necessary or advisable in order to form a decision concerning this investment and has either received such information or waived such opportunity. (b) ABILITY TO BEAR THE RISK. Given Rasmusson's current and reasonably foreseeable future economic circumstances, Rasmusson can, for an indefinite period of time, bear the economic risk inherent in the acquisition of the Shares and can afford to sustain a complete loss of such investment. (c) BUSINESS SOPHISTICATION. Rasmusson is experienced and knowledgeable in financial and business matters and capable of evaluating the merits and risks of purchasing the Shares. (d) AFFILIATION WITH THE COMPANY. Rasmusson is a consultant to the Company and is a member of its Board of Directors. (e) HOLDING PERIOD UNDER RULE 144. Rasmusson understands that his ownership of the Shares for purposes of calculating the "holding period" required for resales pursuant to Rule 144 under the Securities Act of 1933 may not commence until the consideration for the particular Shares has been paid in full. 4. SECURITY FOR NOTE. The Note will be secured by Shares of the Company's Common Stock purchased by Rasmusson herein (the "Pledged Shares"). The Pledged Shares delivered or transferred to the Company shall be referred to herein as the "Collateral." To the extent that any portion of the Note is not paid in accordance with the terms thereof, the Company shall have the right to foreclose upon and redeem such portion of the Collateral as shall satisfy the unpaid installment or portion of the Note. Rasmusson agrees to execute and deliver any documents that may be required to establish the Company's security interest in the Collateral, including the certificates representing the Pledged Shares. This security interest shall not affect Rasmusson's rights to vote the Pledged Shares or to receive dividends paid thereon. However, any dividends paid on Pledged Shares subject to this security interest shall be applied to the amounts due on the Note, in such order of application as shall be determined by the Company. 2 The Company agrees to release its security interest in the Collateral, or the appropriate portion thereof, as the principal balance on the Note is paid. For purposes of releasing Pledged Shares from this Security Agreement, the Pledged Shares shall be valued at the then current market price. 5. INVESTMENT PURPOSE IN ACQUIRING THE SHARES. Rasmusson and the Company acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or the securities laws of any state or foreign jurisdiction and will be issued to Rasmusson in reliance on exemptions from the registration requirements of the Act and of applicable state securities laws and in reliance on Rasmusson's representations and agreements contained herein. Rasmusson is acquiring the Shares for his own account for investment purposes only and not with a view to their resale or distribution. Rasmusson has no present intention to divide his participation with others or to resell or otherwise dispose of all or any part of the Shares. In making these representations, Rasmusson understands that in the view of the Securities and Exchange Commission, exemption of the Shares from the registration requirements of the Act would not be available, if, notwithstanding the representations of Rasmusson, Rasmusson has in mind merely acquiring the Shares for resale upon the occurrence or nonoccurrence of some predetermined event. 7. COMPLIANCE WITH SECURITIES ACT. Rasmusson agrees that if the Shares or any part thereof are sold or distributed in the future, Rasmusson shall sell or distribute them pursuant to the requirements of the Act and of appropriate state securities laws. Rasmusson agrees that he will not transfer any part of the Shares without either (a) obtaining an opinion of counsel satisfactory in form and substance to counsel for the Company stating that the proposed transaction does not require registration under the Act or applicable state securities laws or (b) such registration. 8. RESTRICTIVE LEGEND. Rasmusson agrees that the Company may place on the certificates representing the Shares a restrictive legend containing substantially the following language: The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, have not been registered under the securities laws of any state or foreign jurisdiction, and are subject to an investment letter. They may not be sold, offered for sale, or transferred in the absence of either an effective registration under the Securities Act of 1933, as amended, 3 and under the applicable state securities laws or an opinion of counsel for the Company that such transaction does not require registration under the Act or applicable state securities laws. 9. STOP TRANSFER ORDER. Rasmusson agrees that the Company may place a stop transfer order with its registrar and stock transfer agent (if any) covering all certificates representing the Shares. 10. NO GUARANTEE OF CONTINUED SERVICE. This Agreement shall not enlarge or diminish any rights Rasmusson may have to serve as a director of the Company. 11. BINDING EFFECT. Neither this Agreement nor any interest herein shall be assignable by Rasmusson without the prior written consent of the Company. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and assigns. 12. REPRESENTATIONS TO SURVIVE DELIVERY. The representations, warranties, and agreements of Rasmusson contained in this Agreement will remain operative and in full force and effect and will survive payment of the purchase price and delivery of certificates representing the Shares. 13. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 14. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom it is given; or on the third day after mailing if mailed to the party to whom notice is to be given, by first-class mail, registered or certified, postage prepaid, and properly addressed as follows: The Company: 13818 Lincoln Street N.E. Ham Lake, MN 55304 Rasmusson: 13818 Lincoln Street N.E. Ham Lake, MN 55304 4 IN WITNESS WHEREOF, the undersigned have duly executed this Agreement on the day and year first above written. /s/Larry A. Rasmusson ------------------------------- Larry A. Rasmusson Print Name: Larry A. Rasmusson -------------------------- Address: 1485 - 139th Lane NW -------------------------- Andover, Minnesota 55304 -------------------------- OXBORO MEDICAL INTERNATIONAL, INC. By /s/Dennis L. Mikkelson ------------------------------- Dennis L. Mikkelson Its Secretary and Director By /s/John R. Walter ------------------------------- John R. Walter Its Director 5 EX-99.5 6 SECURED PROMISSORY NOTE SECURED PROMISSORY NOTE $200,000.00 Due January 15, 2003 Minneapolis, Minnesota January 15, 1998 The undersigned, for value received, promises to pay to the order of Oxboro Medical International, Inc., a Minnesota corporation (the "Lender"), at its main office in Ham Lake, Minnesota, in lawful money of the United States of America the principal sum of Two Hundred Thousand and No/100 Dollars ($200,000.00), together with interest (calculated on the basis of actual days elapsed and a 360-day year) on the unpaid principal hereof until this Note is fully paid at an annual rate of six (6%) percent. On-fifth of the original principal amount of this Note ($40,000.00) shall be paid on each of January 15, 1999, January 15, 2000, January 15, 2001, January 15, 2002 and January 15, 2003, together with all interest accrued and unpaid as of each payment date. This Note is initially secured by certain shares of Common Stock of the Lender ("Collateral") pursuant to and is subject to the terms of a Stock Option Exercise and Loan Agreement dated January 15, 1998, and an Instruments Security Agreement of even date herewith. If any interest hereon or any principal amount hereof is not paid when due, then, in such event, the holder hereof may, at its option, transfer a number of shares held as Collateral equal to $40,000.00 plus interest accrued to the installment payment date divided by the per-share market value of the Stock as of the close of trading on the installment payment date, as payment thereof.. This Note may be prepaid without penalty. This Note shall become automatically due and payable (including unpaid interest accrued hereon) without notice or demand should the undersigned: (i) fail to pay any or all of the Obligations (as defined in the Instruments Security Agreement) when due or shall fail to observe or perform any covenant or agreement herein or therein binding on it; (ii) any representation or warranty by the undersigned made to the Lender in any financial statements or reports submitted to the Lender by or on behalf of the undersigned shall prove materially false or misleading; (iii) a garnishment summons or a writ of attachment shall be issued against or served upon the Lender for the attachment of any property of the undersigned or any indebtedness owing to the undersigned; (iv) the undersigned shall (A) be or become insolvent (however defined); or (B) voluntarily file, or have filed against it involuntarily, a petition under the United States Bankruptcy Code; or (C) die. The undersigned agrees to pay all attorneys' fees and legal expenses as a result of the undersigned unsuccessfully contesting actions taken by the Lender in the event this Note is not paid when due. Presentment or other demand for payment, notice of dishonor and protest are hereby waived by the undersigned. This Note shall be governed by the substantive laws of the State of Minnesota, except insofar as the Lender may rely on the laws of the United States to justify the interest rate charged hereunder. The undersigned hereby irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth Division, and the Federal District Court, District of Minnesota, Fourth Division, over any action or proceeding arising our of or relating to this Note and agrees that all claims in respect of such action or proceeding may be heard and determined in any such court. /s/ Larry A. Rasmusson ------------------------------------- Larry A. Rasmusson 2 EX-99.6 7 INSTRUMENT SECURITY AGMT FOR 20,364 SHARES INSTRUMENTS SECURITY AGREEMENT DATE: January 15, 1998 DEBTOR SECURED PARTY Larry A. Rasmusson Oxboro Medical International, Inc. 13828 Lincoln Street N.E. 13828 Lincoln Street N.E. Ham Lake, MN 55304 Ham Lake, MN 55304 ______________________________________________________________________________ 1. SECURITY INTEREST AND COLLATERAL. To secure the debt, liability or obligation of the Debtor to secured party evidenced by the following: that certain Promissory Note dated January 15, 1998, and any extensions, renewals or replacements thereof (herein referred to as the "Obligations"), Debtor hereby grants Secured Party a security interest (herein called the "Security Interest") in the property owned by Debtor and held by Secured Party that is described as follows: Share Certificate No. A-10005 of Oxboro Medical International, Inc., representing 20,364 shares, with all rights in connection with such property (herein called the "Collateral"). 2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents, warrants and covenants that: (a) Debtor will duly endorse, in blank, each and every instrument constituting Collateral by signing on said instrument or by signing a separate document of assignment or transfer, if required by Secured Party. (b) Debtor is the owner of the Collateral free and clear of all liens, encumbrances, security interests and restrictions, except the Security Interest and any restrictive legend appearing on any instrument constituting Collateral. (c) Debtor will keep the Collateral free and clear of all liens, encumbrances and security interests, except the Security Interest. (d) Debtor will pay when due all taxes and other governmental charges levied or assessed upon or against any Collateral. (e) At any time, upon request by Secured Party, Debtor will deliver to Secured Party all notices, financial statements, reports or other communications received by Debtor as an owner or holder of the Collateral. (f) Debtor will upon receipt deliver to Secured Party in pledge as additional Collateral all securities distributed on account of the Collateral such as stock dividends and securities resulting from stock splits, reorganizations and recapitalizations. 3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at any time, whether before or after the occurrence of an Event of Default and without notice or demand of any kind, (a) notify the obligor on or issue of any Collateral to make payment to Secured Party of any amounts due or distributable thereon, (b) in Debtor's name or Secured Party's name enforce collection of any Collateral by suit or otherwise, or surrender, release or exchange all or any part of it, or compromise, extend or renew for any period any obligation evidenced by the Collateral, (c) receive all proceeds of the Collateral, and (d) hold any increase or profits received from the Collateral as additional security for the Obligations, except that any money received from the Collateral shall, at Secured Party's option, be applied in reduction of the Obligations, in such order of application as Secured Party may determine, or be remitted to Debtor. 4. EVENTS OF DEFAULT. Each of the following occurrences shall constitute an event of default under this Agreement (herein called "Event of Default"); (a) Debtor shall fail to observe or perform any covenant or agreement herein binding on him; (b) any representation or warranty by Debtor set forth in this Agreement shall prove materially false or misleading; (c) a garnishment summons or a writ of attachment shall be issued against or served upon the secured Party for the attachment of any property of the Debtor or any indebtedness owing to Debtor; or (d) Debtor shall (i) be or become insolvent (however defined); (ii) voluntarily file, or have filed against him involuntarily, a petition under the United States Bankruptcy Code; or (iii) die. 5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Secured Party may exercise any one or more of the following rights or remedies: (a) if any interest hereon or any principal amount hereof is not paid when due, then, in such event, the holder hereof may, at its option, transfer a number of shares held as Collateral equal to $6,190.20 plus interest accrued to the installment payment date divided by the per-share market value of the Stock as of the close of trading on the installment payment date, as payment thereof; (b) on January 15, 2003, declare all unmatured Obligations to be immediately due and payable, and the same shall thereupon be immediately due and payable, without presentment or other notice or demand; (c) exercise all voting and other rights as a holder of the Collateral; (d) exercise and enforce any or all rights and remedies available upon default to a secured party under the Uniform Commercial Code, including the right to offer and sell the Collateral privately to purchasers who will agree to take the Collateral for investment and not with a view to distribution and who will agree to the imposition of restrictive legends on the certificates representing the 2 Collateral, and the right to arrange for a sale which would otherwise qualify as exempt from registration under the Securities Act of 1933; and if notice to Debtor of any intended disposition of the Collateral or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given at lease 10 calendar days prior to the date of intended disposition or other action; (e) exercise or enforce any or all other rights or remedies available to Secured Party by law or agreement against the Collateral, against Debtor or against any other person or property. Upon the occurrence of the Event of Default described in Section 4(d)(ii), all Obligations shall be immediately due and payable without demand or notice thereof. Any disposition of the Collateral in the manner provided in this Section 5 shall be deemed commercially reasonable. In the event Debtor fails to pay principal and accrued interest outstanding on January 15, 2003, then the sole remedy of the Secured Party shall be to cancel the Certification or Certificates representing the remaining Collateral or to sell said Collateral to a third party and, in either event, such cancelation or sale shall be in full and complete satisfaction of said outstanding principal and accrued interest and Debtor shall have no further obligation or liability to Secured Party under the Obligations. 6. MISCELLANEOUS. This Agreement can be waived, modified, amended, terminated or discharged, and the Security Interest can be released, only explicitly in a writing signed by Secured Party. A waiver signed by Secured Party shall be effective only in the specific instance and for the specific purpose given. Mere delay or failure to act shall not preclude the exercise or enforcement of any of Secured Party's rights or remedies. All rights and remedies of Secured Party shall be cumulative and may be exercised singularly or concurrently, at Secured Party's option, and the exercise or enforcement of any one such right or remedy shall neither be a condition to nor bar the exercise or enforcement of any other. All notices to be given to Debtor shall be deemed sufficiently given if delivered or mailed b registered or certified mail, postage prepaid, to Debtor at its address set forth above or at the most recent address shown on Secured Party's records. Secured Party's duty of care with respect to Collateral in its possession (as imposed by law) shall be deemed fulfilled if Secured Party exercises reasonable care in physically safekeeping such Collateral or, in the case of Collateral in the custody of possession of a bailee or other third person, exercises reasonable care in the selection of the bailee or other third person, and Secured Party need not otherwise preserve, protect, insure or care for any Collateral. Secured Party shall not be obligated to preserve any rights Debtor may have against prior parties, to exercise at all or in any particular manner any voting rights which may be available with respect to any Collateral, to realize on the Collateral at all or in any particular manner or order, or to apply any cash proceeds of Collateral in any particular order of application. Debtor will reimburse Secured Party for all expenses (including reasonable attorneys' fees and legal expenses) incurred by Secured Party in the protection, defense or enforcement of the Security Interest, including expenses incurred in any litigation or bankruptcy or insolvency proceedings. 3 This Agreement shall be binding upon and inure to the benefit of Debtor and Secured Party and their respective heirs, representatives, successors and assigns and shall take effect when signed by Debtor and delivered to Secured Party, and Debtor waives notice of Secured Party's acceptance hereof. This Agreement shall be governed by the substantive law of the State of Minnesota and, unless the context otherwise requires, all terms used herein which are defined in Articles 1 and 9 of the Uniform Commercial Code, as in effect in Minnesota, shall have the meanings therein stated. If any provision or application of this Agreement is held unlawful or unenforceable in any respect, such illegality or unenforceability shall not affect other provisions or applications which can be given effect, and this Agreement shall be construed as if the unlawful or unenforceable provision or application had never been contained herein or prescribed hereby. All representations and warranties contained in this Agreement shall survive the execution, delivery and performance of this Agreement and the creation and payment of the Obligations. The Debtor hereby irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth Division, and the Federal District Court, District of Minnesota, Fourth Divisions, over any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of such action or proceeding may be heard and determined in any such court. SECURED PARTY DEBTOR OXBORO MEDICAL INTERNATIONAL, INC. By /s/Dennis L. Mikkelson /s/Larry A. Rasmusson ---------------------------------- ------------------------------ Dennis L. Mikkelson Larry A. Rasmusson Title: Secretary and Director By /s/John R. Walter ---------------------------------- John R. Walter Title: Director 4 -----END PRIVACY-ENHANCED MESSAGE-----