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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)
Dennis L. Mikkelson
6520 - 162nd Avenue NW
Ramsey, Minnesota 55303
(612) 427-3630
---------------------------------------------
(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).
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SCHEDULE 13D
CUSIP No. 691384 10 1 Page 2 of ____Pages
--------- exhibits
- -------------------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
Dennis L. Mikkelson
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
SC
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(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF SHARES (7) SOLE VOTING POWER
BENEFICIALLY OWNED 40,000
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) SHARED VOTING POWER
-0-
--------------------------------------------------
(9) SOLE DISPOSITIVE POWER
40,000
--------------------------------------------------
(10) SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
40,000
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(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
N/A
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5 percent. Based upon 2,658,942 shares outstanding, including the
shares reported in Row 11.
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
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SCHEDULE 13D
CUSIP No. 691384 10 1 Page 3 of _____ 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 offices 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:
Dennis L. Mikkelson
(b) Business address:
6520 - 162nd Avenue NW, Ramsey, Minnesota 55303
(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:
Chief Executive Officer, Sharden Systems, Inc., 6520 - 162nd Avenue
NW, Ramsey, Minnesota 55303, a computer consulting firm.
(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
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SCHEDULE 13D
CUSIP No. 691384 10 1 Page 4 of _____ pages, including
exhibits
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Mr. Mikkelson exercised an option to purchase 40,000 shares of common stock
of the Company effective January 15, 1998. The exercise price of $45,000 was
paid by delivery of a nonrecourse promissory note to the Issuer that provides
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. Mikkelson 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:
40,000 shares of Common Stock, representing 1.5% 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.
Mikkelson may be deemed to be the beneficial owner of 436,155 shares
of the Issuer's Common Stock in which Larry Rasmusson has a beneficial
interest and 40,000 shares of Common Stock in which John R. Walter has
a beneficial interest. (Each of the foregoing (also directors of the
Issuer) has reported his beneficial ownership on a Schedule 13D.) If
combined, such shares would represent 19.4% 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. Mikkelson has sole power to vote and dispose of 40,000 shares.
(c) Transactions in the securities effected during the past sixty days:
Mr. Mikkelson acquired 40,000 shares of Common Stock of the Issuer on
January 15, 1998, for a purchase price of $1.125 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.
(e) The date on which the reporting person ceased to be the beneficiary
owner of more than five percent of the class of securities:
N/A.
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SCHEDULE 13D
CUSIP No. 691384 10 1 Page 5 of _____ pages, including
exhibits
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 October 30, 1996, filed as Exhibit 10.12
and incorporated by reference from the Company's Report on Form 10-KSB
for the year ended September 30, 1997.
2. Stock Option Exercise and Loan Agreement dated January 15, 1998.
3. Secured Promissory Note dated January 15, 1998.
4. Security Agreement dated January 15, 1998.
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/ Dennis L. Mikkelson
------------------- --------------------------
Date Signature
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STOCK OPTION EXERCISE AND LOAN AGREEMENT
THIS STOCK PURCHASE AGREEMENT, by and between Oxboro Medical International,
Inc., a Minnesota corporation (the "Company"), and Dennis L. Mikkelson, an
individual residing in the State of Minnesota ("Mikkelson"), effective the 15th
day of January, 1998.
RECITALS
WHEREAS, Mikkelson desires to exercise an outstanding option to purchase
40,000 shares of the Company's Common Stock, $.01 par value (the "Shares"), for
a purchase price of $1.125 per Share; and
WHEREAS, the Company has agreed to lend funds to Mikkelson 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 Mikkelson $45,000
to purchase from the Company 40,000 shares of the Company's Common Stock for
$1.125 per share.
2. EXERCISE OF OPTION. Concurrently with the execution of this
Agreement, Mikkelson 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 $45,000, 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. REPRESENTATION AND WARRANTIES OF MIKKELSON. Mikkelson hereby
represents and warrants to the Company as follows:
(a) INFORMATION ABOUT THE COMPANY. Mikkelson has received and is
familiar with the Company's Annual Report for the year ended September 30,
1997. Mikkelson 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 Mikkelson's current and
reasonably foreseeable future economic circumstances, Mikkelson can, for an
indefinite period of
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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. Mikkelson 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. Mikkelson is a consultant to the
Company and is a member of its Board of Directors.
(e) HOLDING PERIOD UNDER RULE 144. Mikkelson 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 Mikkelson 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. Mikkelson 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 Mikkelson'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.
5. INVESTMENT PURPOSE IN ACQUIRING THE SHARES. Mikkelson 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 b e issued to Mikkelson in reliance on exemptions from the
registration requirements of the Act and of applicable state securities laws and
in reliance on Mikkelson's representations and agreements contained herein.
Mikkelson is acquiring the Shares for his own account for investment purposes
only and not with a view to their resale or distribution. Mikkelson 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, Mikkelson 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
Mikkelson, Mikkelson has in
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mind merely acquiring the Shares for resale upon the occurrence or
nonoccurrence of some predetermined event.
6. COMPLIANCE WITH SECURITIES ACT. Mikkelson agrees that if the Shares
or any part thereof are sold or distributed in the future, Mikkelson shall sell
or distribute them pursuant to the requirements of the Act and of appropriate
state securities laws. Mikkelson 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.
7. RESTRICTIVE LEGEND. Mikkelson 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.
8. STOP TRANSFER ORDER. Mikkelson 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.
9. NO GUARANTEE OF CONTINUED SERVICE. This Agreement shall not enlarge
or diminish any rights Mikkelson may have to serve as a director of the Company.
10. BINDING EFFECT. Neither this Agreement nor any interest herein shall
be assignable by Mikkelson 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.
11. REPRESENTATIONS TO SURVIVE DELIVERY. The representations, warranties,
and agreements of Mikkelson 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.
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12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
13. 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
Mikkelson: 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/ Dennis L. Mikkelson
---------------------------------
Dennis L. Mikkelson
Print Name: Dennis L. Mikkelson
Address: 6520 - 162nd Avenue NW
Ramsey, Minnesota 55303
OXBORO MEDICAL INTERNATIONAL, INC.
By /s/Larry A. Rasmusson
-----------------------------------
Larry A. Rasmusson
Its Chief Executive Officer
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SECURED PROMISSORY NOTE
$45,000.00 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 Forty-Five Thousand and No/100 Dollars ($45,000.00),
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.
One-fifth of the original principal amount of this Note ($9,000.00) 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 $9,000.00 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;
or (iv) the undersigned shall (A) be or become insolvent (however defined); or
(B)
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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 if
suit is commenced 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/Dennis L. Mikkelson
-----------------------------------------
Dennis L. Mikkelson
2
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INSTRUMENTS SECURITY AGREEMENT
DATE: January 15, 1998
DEBTOR SECURED PARTY
------ -------------
Dennis L. Mikkelson Oxboro Medical International, Inc.
13828 Lincoln Street N.E. 13828 Lincoln Street N.E.
Ham Lake, MN 55304 Ham Lake, MN 55304
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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-10009 of Oxboro Medical International, Inc.,
representing 40,000 shares, together 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.
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(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 $9,000.00 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 therefore; (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
Collateral, and the right to arrange for a sale which would otherwise qualify as
exempt from
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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 the remaining principal and accrued interest outstanding
on January 15, 2003, then the sole remedy of the Secured Party shall be to
cancel the Certificate 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.
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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/Larry A. Rasmusson /s/Dennis L. Mikkelson
--------------------------------- --------------------------------
Larry A. Rasmusson Dennis L. Mikkelson
Title: Chief Executive Officer
4
