UROPLASTY INC, 10SB12G, 1996-07-10

UROPLASTY INC
10SB12G, 1996-07-10
SURGICAL & MEDICAL INSTRUMENTS & APPARATUS

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-SB

GENERAL FORM FOR
REGISTRATION OF SECURITIES
OF
SMALL BUSINESS ISSUERS

Pursuant to Section 12(b) or (g) of
the Securities Exchange Act of 1934

------------------------------------------------------------------------

UROPLASTY, INC.

------------------------------------------------------------------------

Minnesota 41-1719250
--------- ----------
State of Incorporation IRS Employer Identification No.

2718 Summer Street NE, Minneapolis, Minnesota 55413
Address of Principal Executive Offices

TELEPHONE NUMBER: (612) 378-1180

Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:

COMMON STOCK, No Par Value

PART I

(Alternative 3 - Items 1-8)

Introduction

Uroplasty, Inc. is referred to herein as "Uroplasty" or the
"Registrant".

Item 1. Description of Business:

(a) General Development of Registrant's Business.

Uroplasty was incorporated on January 21, 1992, as a wholly-owned
subsidiary of Bioplasty, Inc., which was a public reporting company at the time.
In April 1993, Bioplasty, Inc. and Uroplasty, Inc. filed for protection from
creditors under Chapter 11 of the Federal Bankruptcy Code in Federal District
Court in Minneapolis, Minnesota. As of January 31, 1994 the Federal Bankruptcy
Court confirmed the joint plan of reorganization of the two companies. Pursuant
to the plan of reorganization, all equity interest held by Bioplasty, Inc.
shareholders prior to the Chapter 11 filing was canceled and new shares were
sold and issued to new investors, who became the shareholders of Bioplasty, Inc.
and Uroplasty, Inc. as two separate stand alone corporations.

Bioplasty, Inc. was comprised primarily of the assets making up the
breast implant business of the pre bankruptcy Bioplasty, Inc., including the
wholly-owned foreign subsidiaries. Uroplasty, Inc. received the urology business
and assets of the pre bankruptcy Bioplasty, Inc. relating to Macroplastique
Implants, a medical device implant designed to treat certain forms of urinary
incontinence in a minimally invasive procedure of injecting suspended
polydimethylsiloxane (solid silicone) particles into soft tissue as a bulking
agent in the bladder neck.

As a condition of the plan of reorganization, Bioplasty, Inc. was
required to dispose of the breast implant business, by sale or otherwise,
subsequent to the emergence from Chapter 11. Bioplasty, Inc. satisfied all the
related conditions and requirements of the plan of reorganization by selling the
assets making up the breast implant business in November 1994. Effective January
1995, Bioplasty, Inc. transferred to Uroplasty, Inc. in a tax free exchange all
its remaining operating assets and liabilities, including the stock of the
foreign subsidiaries, in satisfaction of obligations due Uroplasty, Inc.
generated in the normal course of business subsequent to confirmation of the
joint plan of reorganization of the two companies. At the time of the transfer
of the remaining operating assets and liabilities Uroplasty, Inc. and Bioplasty,
Inc. had the same shareholders who owned stock in each company in the same
percentage ownership. Since January 1995, Bioplasty, Inc. has been dormant with
no tangible or intangible assets or liabilities.

Currently there are approximately four hundred (400) shareholders of
the 3,472,525 shares of outstanding Uroplasty, Inc. common stock: 2,462,000
shares (71%) held by individual investors who bought shares at $.50 each;
640,000 shares (18%) held by a trust established in the bankruptcy to administer
claims of Bioplasty, Inc. breast implant recipients; and 370,525 shares (11%)
held by approximately 360 shareholders who received shares and cash in full
satisfaction of their creditor claims in the bankruptcy. In accordance with the
terms of the plan of reorganization, Uroplasty is obligated to make quarterly
payments of $16,000 to the trust established to administer breast implant claims
on a $640,000 non-interest bearing, unsecured note with a balloon payment due at
maturity in February 1999. The present value of the remaining payments due at
March 31, 1996 total approximately $507,000. Under the plan of reorganization,
Uroplasty is also obligated to pay a royalty to certain individuals, who are
former officers and directors and current shareholders of the Registrant, equal
to between 3% and 5% of net sales of certain products. Uroplasty has no other
obligations outside the normal course of business that relate to the Chapter 11
reorganization, and as of the date of the preparation of this document both
Bioplasty, Inc. and Uroplasty have satisfied or are satisfying all their
obligations pursuant to the terms and conditions of the joint plan of
reorganization.

(b) Business of Registrant.

The following paragraphs provide information about specific aspects of
the Registrant's business.

1. Principal Products, Services and Markets.

The urology business is currently composed of a
product called Macroplastique(TM) Implants, an injectable medical device implant
designed to treat certain forms of urinary incontinence in a minimally invasive
surgical procedure involving injection of the product material through a needle
into the soft tissue at the bladder neck to act as a tissue bulking agent.
Uroplasty also sells certain other products ancillary to the Macroplastique
injection procedure, such as needles, instrument lubricants and the injection
gun. Macroplastique is subject to manufacturing and marketing regulation by
governmental agencies in various countries including the Food and Drug
Administration ("FDA") in the United States. Macroplastique(TM) Implants contain
particles of heat vulcanized polydimethylsiloxane (solid silicone) suspended in
a biocompatible gel carrier solution containing polyvinylpyrrolidone and water.
The Macroplastique(TM) Implants are designed to minimize migration, and are
shelf-storable, sterile, injectable and chemically inert. Patents covering the
materials, process and applications have been issued to Uroplasty, Inc. by the
United States, United Kingdom and German Patent and Trademark Offices, and
applications are also currently pending in various other countries, including
Canada, Asia and other European countries. In January 1996, Uroplasty, Inc.
received a certificate of compliance for meeting all the requirements of Quality
Standards ISO 9001 and EN46001, and in June 1996, received a European Community
CE Mark on Macroplastique Implants.

Uroplasty manufactures the particle component of the
product in its Minneapolis, Minnesota facility, and then ships it to a contract
manufacturer in the Netherlands for further processing, formulation, packaging
and sterilization. Management believes this manufacturing arrangement will be
sufficient to meet the Registrant's demands for finished product for
distribution outside the U.S. in the near term, but that new manufacturing
capabilities may eventually become necessary.

Sales in the United States cannot commence until
Investigational Device Exemption ("IDE") and PMA authorization for the
Macroplastique(TM) Implants is received from the FDA. As of the date of this
document Uroplasty had not submitted an IDE application to the FDA to request
authority to commence human clinical studies in the United States.

2. Distribution Methods.

Uroplasty sells Macroplastique(TM) Implants and the
related ancillary products used in the injection procedure in countries outside
the United States using a direct sales force of three persons in the United
Kingdom and three persons in the Netherlands and Germany, and through a network
of some twenty or so distributors in other countries, primarily in Europe.
Uroplasty intends to apply for clinical study and marketing approval in the
United States, and during the duration of the clinical studies in the U.S. will
determine the mode of distribution in the U.S. as either through a direct sales
force, a distributor network, or pursuant to a strategic alliance with an
established medical products distribution company.

3. New Products.

Other than Macroplastique(TM) and items ancillary to
the urological application of the device, Uroplasty has not introduced any new
products in the urology market.

However, management believes other medical
applications for the augmentation of soft tissue using the Macroplastique
material as a bulking agent potentially exist and may warrant future
investigational research and development by the Registrant to evaluate
commercially profitable viability. As an example, management has recently begun
considering use of the material for use in repairing the function of damaged
vocal cords.

4. Competition.

Due to the very large potential market size, the
treatment of incontinence attracts many competing products and technologies.

Still by far the most common strategy for afflicted
individuals is mere maintenance or management of their incontinence. Since it is
estimated that vast numbers of patients have not seen a physician to
specifically address their conditions, the methods of maintenance tend to be
lower technology in nature, i.e.: disposable and reusable diapers and pads.
Larger companies like Proctor and Gamble, Inc. have entered the adult diaper
market and are bringing increasing numbers of patients towards these
manufactured products away from "homemade" aids, and through their mass
advertising increasing public consciousness about urinary incontinence.

It has also been estimated that a significant
percentage of all sanitary napkin sales are in fact the result of the products
being used to manage urinary incontinence.

Recently published Clinical Practice Guidelines for
urinary incontinence stress behavior modification and minimally invasive
therapy. Since some patients can be helped with pelvic floor exercises, these
exercises have gained increased acceptance. Weighted vaginal cones are available
to enhance these exercises. Pharmacologic therapies can beneficially affect the
patient by restoring a more youthful muscle tone and mucosal bladder lining.

The primary business of the OB/GYNs and urologists
who see more severe urinary incontinence patients is to perform various surgical
procedures which re-position the bladder to restore urinary control. These
procedures can by effective but are medically invasive, inherently risky to the
patient and are expensive.

Competition in the sale of urological medical devices
and products is intense. However, due to the less invasive and cost effective
nature of injectable soft tissue bulking agents for the treatment of certain
forms of incontinence, management believes significantly increased market
penetration of Macroplastique is possible. The current determining factor of
competition in regards to injectable incontinence materials is product
performance and price.

There are currently two injectable soft-tissue
bulking agent products that compete directly with Macroplastique(TM), both of
which are supplied by companies with considerably larger financial and other
resources than Uroplasty. These products are Urethrin, manufactured by Mentor
and available in foreign markets only, and Contigen, manufactured by Collagen,
which is available for sale in the United States and in foreign markets.
Management believes that other materials produced by other companies will be
made available for treating urinary incontinence by means of soft-tissue
injection therapy in the relatively near term. Management believes other soft
tissue bulking agent products will eventually enter the market to compete with
currently used products and that competition will continue to intensify.

5. Raw Materials.

Macroplastique(TM) Implants are composed of particles
of heat vulcanized polydimethylsiloxane (solid silicone) suspended in a
biocompatible gel carrier solution containing polyvinylpyrrolidone ("PVP") and
water. Although the Registrant has not received any such notice at this time,
supplies of the silicone material are subject to withdrawal by vendors due to
the controversies surrounding the use of silicone in certain medical devices.
The Registrant has one sole source of supply for the PVP used in Macroplastique,
but a limited number of other suppliers of silicone and PVP exist and management
believes those suppliers would likely supply it materials if existing suppliers
discontinued shipments. The Registrant has not experienced any shortage of
either silicone or PVP; however, no assurance can be made that shortages of
these or other materials will not be experienced in the future.

6. Dependence on One or a Few Major Customers.

Approximately 12% of the Registrant's total sales
during the twelve month period ended March 31, 1996 were made to ABS, the
distributor covering France. Other than being a contracted distributor of
Uroplasty's products, there exists no relationship between ABS and Uroplasty in
the form of ownership or otherwise.

7. Patents, Trademarks, Licenses, Franchises,
Concessions, Royalty Agreements, and Labor Contracts.

Multiple patents covering the Macroplastique Implants
material, process and applications have been issued to Uroplasty, Inc. by the
United States, United Kingdom and German Patent and Trademark Offices, and
applications are also currently pending in various other countries, including
Canada, Asia and other European countries.

Although Uroplasty intends to pursue additional
patents and vigorously defend issued patents, management believes that its
success as a business will depend primarily upon its development and marketing
skills, and the quality and economic value of its products, rather than on its
ability to obtain and defend patents.

The Registrant has a royalty agreement with three
individuals, two of whom are former officers and directors. Under such
agreement, the Registrant pays royalties, in the aggregate, of three to five
percent of net sales of Macroplastique through November, 2003. (The royalty
agreement is included as part of the Settlement Agreement and Release, which
appears as Exhibit 6.1 to this document.)

The Registrant has a royalty agreement with Collagen
Corp. pursuant to which a royalty of 5% of net sales of certain products in the
United States is payable, with a minimum of $50,000 per year.

8. Government Approval.

The Registrant needs authorization from the FDA
before it can sell its products in the United States. See the third paragraph
under Item 1(b)(1).

The Registrant's products are also subject to the
rules and jurisdiction of other foreign countries in which it sells its
products. In June 1996, the Registrant received its CE Mark on Macroplastique.
This has the effect of granting authorization to sell the product in the
countries belonging to the European Community, which currently are the primary
countries in which the Registrant sells its products. In addition, the
Registrant is subject to the rules and regulations of other countries not
belonging to the EC where it may also sell its products. The Registrant is
subject to periodic review by its "notified body" to maintain the CE Mark on
Macroplastique.

9. Government Contracts.

No portion of the Registrant's business is subject to
renegotiation of profits or termination of contracts at the election of the
Government.

10. Research and Development.

Expenditures for research and development relating to
Macroplastique(TM) totaled approximately $387,000 and $110,368 for the twelve
month periods ended March 31, 1996, and March 31, 1995, respectively. None of
these costs were borne directly by customers.

11. Environmental Compliance.

Compliance by the Registrant with applicable
environmental requirements is not expected to have a material effect upon the
capital expenditures, earnings or competitive position of the Registrant.

12. Employees.

As of March 31, 1996, the Registrant had twenty-two
employees. None of such employees has a collective bargaining agreement with the
Registrant.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations:

Liquidity and Capital Resources.

Uroplasty and its wholly-owned subsidiaries capital resources are
derived from existing sales of the companies products and from $1,000,000 in
cash generated in November and December 1995 in two transactions. In one
transaction the Registrant sold a patent unrelated to the Macroplastique implant
product line for $500,000 cash, and in the other transaction the Registrant sold
one million shares of its common stock for $500,000. As of March 31, 1996 the
Registrant had approximately $719,000 cash, and sales on a monthly basis are
approximately at break even level. Management believes that the success being
experienced with the Macroplastique product will continue to have an increasing
effect on the monthly sales level, however, in the event sales do not increase,
management believes that operating expenses can be reduced in order to limit
excessive use of its cash resources without significantly impairing its ability
to develop the Macroplastique implant market, which obviously would be slowed
under such circumstances.

There is currently no financing arrangement in place for Uroplasty's
working capital needs, and the Registrant has no material unused sources of
liquidity other than its cash reserves and its accounts receivable balances and
inventory. There exists no material capital equipment purchase commitments nor
are there any known material trends indicated for the Registrant's capital
resources and the effects on them.

Management of the Registrant believes that there are financing
opportunities available with potential corporate partners with vastly greater
capital resources than itself where certain services or equipment relating to
the sales and marketing of the Macroplastique products could be provided to the
Registrant to assist in the acceleration of market penetration and increase
sales. Management believes that the development of the market for Macroplastique
in various sales territories outside the United States has progressed to the
stage where such arrangements could provide significant advantages for
Macroplastique over competing products at this time, and management is currently
considering the cost benefit of exploiting these types of capital resources.

Results of Operations.

This discussion of results of operations is limited to an analysis of
sales and expenses of the urology business of Uroplasty, Inc. and Bioplasty,
Inc. based on the financial information and history of the companies set forth
in the financial statements in Part F/S and in Items 2 and 15 hereof. The
following is a discussion of the results of operations for the twelve months
ended March 31, 1996 and 1995.

Although total consolidated net sales of the Registrant decreased by
approximately $306,000 in 1996 from $2,604,000 (which figure is taken from the
unaudited internal financial statements of Uroplasty, Inc. and Bioplasty, Inc.
after elimination of all inter-company transactions and accounts) for the twelve
months ended March 31, 1995 to $2,297,000 for the twelve months ended March 31,
1996, dollar sales and unit sales of Macroplastique Implants, the companies
primary product, increased by approximately 17% and 28%, respectively. This
relationship represents the Registrant's success in reducing selling, general
and administrative expenses in 1996 by reducing its corporate structure and
expanding its network of experienced distributors. These changes have had the
effect of reducing per unit sales prices while at the same time increasing unit
sales and market penetration. Management anticipates that the investments made
in the distribution network will continue to result in dollar and unit sales
increases on a profitable basis.

Management believes there will be upward pressure on selling, general
and administrative expenses as efforts continue on increasing awareness and
acceptance for Macroplastique, and that alternative sources of financing other
than cash generated by product sales will be necessary upon approval of an
Investigational Devise Exemption application by the Food and Drug
Administration.

The Registrant sells Macroplastique and its related ancillary products
plus two other implantable medical products: Bioplastique Implants for use in
augmenting soft tissue in plastic surgery applications; and Chondroplast, a
bovine cartilage material implanted in plastic surgery applications.
Management's current objectives are to focus on growth in sales and market
penetration of the Macroplastique Implant line of products.

Item 3. Description of Property:

Uroplasty and its subsidiaries do not own any real estate. Uroplasty
and its subsidiaries lease office, warehouse and production space at 2718 Summer
Street NE, Minneapolis Minnesota 55413, and office and warehouse space at
Hertogsingel 54, 6214 AE Maastricht, The Netherlands, and at Unit 3, Woodside
business Park, Whitley Wood Lane, Reading, Berkshire RG2 8LW, United Kingdom.
Additionally, Uroplasty BV rents contract manufacturing services and office
space from an unrelated third party contract manufacturer in Nijmegen, The
Netherlands. The Registrant considers its current facilities to be adequate for
its current foreseeable needs.

Item 4. Security Ownership of Certain Beneficial Owners and Management:

(a) Security Ownership of Certain Beneficial Owners.

At March 31, 1996, Uroplasty had 3,472,525 shares of common
stock outstanding and had granted options to employees and directors to purchase
246,700 additional shares of Uroplasty's common stock.

The following table sets forth the number of shares of
Uroplasty's Common Stock beneficially owned, as of March 31, 1996, by each
person known to Uroplasty to be the beneficial owner of more than five percent
of Uroplasty's common stock:

Name and Address of Number of Shares
Beneficial Owner Beneficially Owned (1) Percent of Class

Bruce P. Mindich 1,100,000 31.7%
555 White Plains Road
Tarrytown, NY 10591

Bioplasty Product Claimants' 640,000 18.4% (2)
Trust
c/o Linquist & Vennum
4200 IDS Center
80 South Eighth Street
Minneapolis, MN 55402

Daniel G. Holman 295,685 8.4% (3)
2718 Summer Street NE
Minneapolis, MN 55413

Arthur A. Beisang 227,988 6.6%
5009 Lake Avenue, Unit 304
White Bear Lake, MN 55110

Continental Intervest 200,000 5.8%
630 West 34th Street, Suite 200
Austin, TX 78205

(1) To the Registrant's knowledge, the persons named have both
voting and investment power over the shares listed, except as indicated in note
(2).

(2) To the Registrant's knowledge, (a) the duration of this
Trust is indefinite until its assets are distributed, (b) the names and
addresses of the voting trustees at this time are Charles Zimmerman, c/o
Zimmerman, Reed, 5200 Norwest Center, Minneapolis, MN 55402; Sybil Goldrich,
same address as the Trust; and F.G. "Bud" Hamilton, same address as the Trust;
and (c) shares of the Registrant's Common Stock are voted according to the
discretion and judgment of the Trustees. The Registrant does not have a copy of
the trust document, and does not know to what extent the trustees have
investment power over the shares.

(3) Includes 45,000 shares held under options to buy common
stock.

(b) Security Ownership of Management.

The following table sets forth the number of shares, as of
March 31, 1996, of Uroplasty Common Stock beneficially owned by each director
and each executive officer of the Registrant, and by the directors and officers
as a group:

Name and Address Number of Shares
of Beneficial Owners Beneficially Owned Percent of Class

Daniel G. Holman 295,685 8.4%(1)
2718 Summer St. N.E.
Minneapolis, MN 55413

Donald A. Major (2) 109,162 3.1%(3)
2718 Summer St. N.E.
Minneapolis, MN 55413

Joel R. Pitlor 134,000 3.8%(4)
19 Chalk Street
Cambridge, MA 02139

R. Patrick Maxwell 15,307 .4%(4)
Templeton & Associates
10 South Fifth Street, Suite 990
Minneapolis, MN 55402

Susan Doherty 77,000 2.2%(3)
2718 Summer Street N.E.
Minneapolis, MN 55413

Directors and Executive 631,154 17.5%(5)(6)
Officers as a Group (5 persons)

(1) Includes 45,000 shares held under options to purchase Common Stock.

(2) Mr. Major resigned his position as CFO and Vice President of
Finance, effective May 24, 1996.

(3) Includes 25,000 shares held under options to purchase Common Stock.

(4) Includes 15,000 shares held under options to purchase Common Stock.

(5) Includes 125,000 shares held under options to purchase Common
Stock.

(6) To the Registrant's knowledge, the persons named have both voting
and investment power over the shares listed.

The Registrant is not aware of any arrangements which may result in a
change in control of the Registrant.

Item 5. Directors, Executive Officers, Promoters, and Control Persons:

(a) Directors and Executive Officers.

Uroplasty's Directors and Executive Officers as of March 31, 1996, the
last day of its 1996 fiscal year were as follows:

Name Age Position
---- --- --------
Daniel G. Holman 50 Chairman, President, CEO
Donald A Major 34 Chief Financial Officer (1)
Joel R. Pitlor 57 Director
R. Patrick Maxwell 51 Director
Susan Hartjes-Doherty 42 Vice President of Operations and
Regulatory Affairs

(1) Mr. Major resigned his position as CFO and Vice President of
Finance, effective May 24, 1996. Mr Holman is currently acting as interim CFO.

Mr. Holman and Mr. Pitlor have served as directors of Uroplasty, Inc.
since the Registrant emerged from Chapter 11 Reorganization in February 1994,
and Mr. Maxwell has served as a director since April, 1994.

The business experience of each director and officer follows:

Daniel G. Holman has served as Chairman of the Board, President and
Chief Executive Officer of Uroplasty since its emergence from Chapter 11
reorganization in February 1994.

Mr. Holman served Bioplasty as its Executive Vice President from 1973
to 1985, its President from 1985 to 1987, and Secretary from 1986 to March,
1992. Mr. Holman has served as Chairman of the Bioplasty Board since March,
1992, and President and CEO since February 22, 1993. Mr. Holman served as
Chairman of the Board and Chief Executive Officer of Bio-Vascular, Inc. from
June, 1988, to September, 1991, served as director of Genetic Laboratories Wound
Care, Inc. from January, 1988 until April 1993, and as Vice President from
January 1988 through January 19, 1993.

Mr. Holman holds a degree from the University of Minnesota (BA) and has
done post-graduate work there.

Donald A. Major holds a Bachelor of Arts degree from the College of
Business at Michigan State University, is a Certified Public Accountant and a
member of the American Institute of Certified Public Accountants and the
Minnestoa Society of CPAs. Prior to his joining Bioplasty, Inc. in January 1991
as Director of Finance, Mr. Major was an audit manager at Grant Thornton, an
international public accounting and management consulting firm. Mr. Major served
as CFO and Vice President of Finance of Bioplasty, Inc. from August 1991 until
it became dormant in late 1994, and served as CFO and Vice President of Finance
of Uroplasty, Inc. from late 1992 until May 24, 1996.

Joel R. Pitlor has been a director of Uroplasty since its emergence
from Chapter 11 reorganization in February 1994. Mr. Pitlor served as a director
of Bioplasty from January, 1989 until May 1996. For over sixteen years, he has
been the owner and manager of a management consulting firm. He previously served
as Director of HTC, Inc., and Julius Koch USA, Inc., privately held firms, and
Mountain High, Inc., United Medical, Inc. and Bio-Vascular, Inc., which are
publicly held. Mr. Pitlor is presently a Director of Precision Optics
Corporation, which is publicly-held. Mr. Pitlor holds a Bachelor of Science
degree from MIT and serves as Personal Advisor to several CEOs.

R. Patrick Maxwell was appointed a Director of Uroplasty in April 1994
pursuant to the terms of the plan of reorganization. Mr. Maxwell has been an
attorney since 1969 and an Officer/Director and owner of Templeton and
Associates, a legal personnel temporary employment firm based in Minneapolis,
Minnesota, since 1983. Mr. Maxwell also holds ownership and board positions in
various other private company ventures.

Susan Hartjes-Doherty joined Bioplasty, Inc. in September 1991 as
Director of Operations and was appointed the officer position of Vice President
of Operations in April 1993. Pursuant to the companies emergence from Chapter 11
reorganization, Ms. Doherty was appointed Vice President of Operations and
Regulatory Affairs of Uroplasty, Inc. Prior to commencement of her employment
with the companies, Ms. Doherty was the Director of Operations at Bio-Vascular,
Inc. in St. Paul, Minnesota from November 1989 to September 1991. Prior to that
time, she served at various other pharmaceutical and medical device companies in
management-oriented positions in production, quality assurance and research.

Ms. Doherty has Bachelor of Science degrees in Microbiology and
BioMedical Science from the University of Minnesota-St. Cloud, and has done
post-graduate work in biological science. Ms. Doherty is a Certified Quality
Auditor and a member of the American Society for Quality Control, American
society of Microbiology, Minnesota Inner Laboratory Microbiology Association,
Henrici Society for Microbiologists and Graduate Women in Science Professional
Sorority-University of Minnesota.

(b) Significant Employees. Not applicable.

There are no family relationships between or among any of
Uroplasty's directors and officers.

(d) Involvement in Certain Legal Proceedings. Not applicable.

Item 6. Executive Compensation:

(a) General.

(b) Summary Compensation Table.

The following table sets forth, in summary form, (1) the compensation
paid, for the years shown in the table, to Daniel G. Holman, the Registrant's
Chairman and CEO, and to the one other executive officer of the Registrant who
served as such on March 31, 1996 and whose annual compensation exceeded
$100,000; (2) the stock options and stock appreciation rights granted to such
individuals for the years shown; and (3) long-term payouts and other
compensation for the years shown:

<TABLE>
<CAPTION>
Summary Compensation Table

Long Term Compensation (1)
--------------------------
Annual Compensation Awards
- ------------------------------------------------------------------- -----------------------
(a) (b) (c) (d) (e) (f) (g)

Other Securities
Name Annual Restricted Under-
and Compen- Stock lying
Principal sation Awards Options
Position Year Salary($) Bonus($) ($) ($) SARs(#)
- -------- ---- --------- -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Daniel G. Holman 1996 146,534 -- 18,016 -- 15,000
CEO 1995 160,961 -- 14,000 -- 15,000
1994 163,462 -- 5,000 -- 15,000

Donald A. Major 1996 102,265 -- -- -- 10,000
CFO 1995 111,462 -- -- -- 15,000
1994 116,077 -- 4,000 -- --

All Executive Officers
For Fiscal Year 1996:
(Three Persons) 357,940

</TABLE>

(1) There were no payouts under a "long-term incentive plan" (called "LTIP") for
the years shown, nor was any other form of compensation paid or awarded (hence,
columns (h) and (i) of the table are omitted).

<TABLE>
<CAPTION>
Aggregated
Option Grants in Fiscal Year Ended March 31, 1996 Unexercised Options (1)
- -------------------------------------------------------------------------------- -----------------------
(a) (b) (c) (d) (e)

Number of Percent of
Securities Total Op-
Underlying tions/SARS Total No. Of
Options Granted to Exercise or Securities Underlying
/SARS Employees in Base Price Expiration Unexercised Options
Name Granted(#) Fiscal Year ($/Share) Date /SARs at 3/31/96
- ---- ---------- ----------- --------- ---- ----------------
<S> <C> <C> <C> <C> <C>
Daniel G. Holman 15,000 15.5%(2) $.50 3/27/01 45,000

Donald A. Major 10,000 10.3%(2) $.50 9/24/97 25,000

</TABLE>

(1) During the fiscal year ended March 31, 1996, no options were
exercised, and at March 31, 1996, since there was no public market for the
Registrant's Common Stock, the Registrant did not consider any of the
outstanding options to be "in the money."

(2) There were 96,800 options granted during the fiscal year ended
March 31, 1996.

Uroplasty, Inc. established an Incentive Stock Option Plan for the
benefit of all employees in May 1995. Options to purchase common stock are
granted to employees by the board of directors based on performance. Currently
no formal performance criteria have been established for the determination of
the number of options to be granted to employees. The plan allows for the
granting of options to purchase 350,000 shares of stock. At March 31, 1996 there
were approximately 246,700 options granted and outstanding under the plan.
Options are granted with exercise prices equal to or greater than the fair
market value of the stock at the time of the grant. At March 31, 1996 all
options have been granted at either $.50 or $.55 per share.

(d) Aggregated Option /SAR Exercises and Fiscal Year-End
Option/SAR Value Table.

No options were exercised during the period. There was no public
trading market in the Registrant's Common Stock at 3/31/96. See subparagraph (c)
above as to the total number of securities underlying unexercised options as of
3/31/96.

(e) Long Term Incentive Plan Awards Table.

None.

(f) Compensation of Directors.

Mr. Pitlor receives $2,000 per month consulting fee from the Registrant
under a month to month agreement. Additionally, non employee board members who
do not receive any other form of compensation from the Registrant receive $500
per board meeting attended. Other than these arrangements, there currently
exists no compensation plans for the benefit of Uroplasty, Inc. Board of
Director members.

(g) Employment Contracts and Termination of Employment and Change
in Control Arrangements.

Not applicable.

(h) Report on Repricing of Options/SARs.

Not applicable.

Item 7. Certain Relationships and Related Transactions:

(a) Transactions with Management and Others.

The Registrant has a royalty agreement with three individuals, two of
whom are former officers and directors of the Registrant. (See Item 1(b)7,
above). Such two individuals each hold more than 5% of the Registrant's
outstanding stock. Payments made to such three individuals during the past two
fiscal years were as follows.

Fiscal Year ended 3/31/96 Bioplasty,Inc. $ 1,000
Uroplasty, Inc. 64,695
-------

Total $65,695
=======

Fiscal Year ended 3/31/95 Bioplasty, Inc. $36,792
Uroplasty, Inc. 49,818
-------

Total $86,610
=======

(b) Certain Business Relationships.

Not applicable.

(d) Transactions with Promoters.

Not applicable.

Item 8. Description of Securities:

The Registrant's only authorized class of capital stock is $.01 par
value Common Stock. There are twenty million (20,000,000) shares authorized.

Each share of common stock entitles the holder thereof (a) to
participate pro rata in dividends and distributions upon liquidation, and (b) to
cast one vote for the election of directors and for all other purposes. There
are no pre-emptive or cumulative voting rights, nor are there conversion rights,
redemption provisions or sinking fund provisions relating to the Common Stock.
All outstanding shares of the Registrant's common stock are fully paid and
non-assessable. Shareholders are not liable under applicable Minnesota law for
any liabilities of the Registrant.

PART II

Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters:

(a) Market Information.

Uroplasty, Inc. common stock outstanding is not listed for
trading on any securities exchange registered under the Exchange Act.
As of the date hereof, there is no public trading market for the
Registrant's Common Stock.

(b) Holders

As of June 14, 1996, the Registrant had approximately 400
shareholders.

No cash or non cash dividends have been paid.

Item 2. Legal Proceedings

(a) The Registrant is not, as of the date hereof, a party to any
material pending legal proceedings.

(b) The Registrant is not aware of any material proceeding contemplated
by a governmental authority.

Item 3. Changes in and Disagreements with Accountants:

There have been no disagreements with the Registrant's public
accountants regarding accounting and financial disclosure matters covered by the
financial statements herein. In connection with the completion of the
Registrant's Bankruptcy plan of reorganization, it selected a new firm of public
accountants in early 1995.

Item 4. Recent Sales of Unregistered Securities:

Pursuant to the Joint Plan of Reorganization confirmed by the Federal
Bankruptcy Court in January 1994 all existing shares of the Registrant were
canceled and new shares were issued to claimants in the case in satisfaction for
claims and to persons investing cash to buy shares at that time. Subsequent
private sale transactions involving Uroplasty, Inc. common stock have been
consummated since the reorganization. Underwriters were not used in any of the
Registrant's stock sale transactions. The following summarizes the issuance of
all outstanding common shares of the Registrant's only class of stock.

Date Description No. of Shares Proceeds
---- ----------- ------------- --------
Jan. 1994 Shares for claims in Chapter 11 1,010,525 $ -0-(1)

Jan. 1994 Shares sold for cash in Chapter 11 980,000 $ 490,000(2)

May 1994 Shares sold in private placement 472,000 $ 236,000(2)
transaction

Aug. 1995 Shares issued pursuant to Option Plan 10,000 $ 5,000(3)

Dec. 1995 Shares sold in private placement 1,000,000 $ 500,000(2)
transaction

Total 3,472,525

Notes to the Stock Issuance table:

(1) Securities issued in satisfaction of claims in the Chapter 11
Reorganization in Federal Bankruptcy Court and thereby exempt
from registration under the bankruptcy exemption of the
Securities Act of 1933.

(2) Securities sold in private sale transactions and exempt from
registration under the Securities Act of 1933, as amended, by
virtue of the provisions of Section 4 (2) thereof, in that
such sales were made to a limited number of individuals for
investment purposes only.

(3) Securities issued pursuant to acceptance by the Registrant of
a note receivable to exercise stock option of retiring
employee.

Item 5. Indemnification of Directors and Officers:

Section 302A.521 of Minnesota Statutes requires a Minnesota corporation
(such as the Registrant) to indemnify any person against certain liabilities and
expenses if such person is sued or threatened with suit "by reason of the former
or present official capacity of the person" with the Registrant, unless such
corporation's Articles of Incorporation or Bylaws restrict such indemnification.
Article 7.1 of the Registrant's Bylaws require the Registrant to indemnify
persons as permitted by the aforementioned Section 302A.521. The effect of the
foregoing statutory and bylaw provisions is that the Registrant's directors and
officers will be indemnified by the Registrant against any liabilities they may
incur for acting in such capacities.

PART F/S

Financial Statements and Supplementary Data:

The Registrant has provided audited consolidated balance sheets as of
March 31, 1996, and March 31, 1995, and audited consolidated statements of
operations, cash flows and stockholders' equity for the fiscal year ended March
31, 1996.

Pursuant to the explanation, in Form 10-SB, for Part F/S, the
Registrant has included in this document audited consolidated financial
statements for only its March 31, 1996 fiscal year and a consolidated balance
sheet for March 31, 1995 because audited financial statements for any prior date
or period are not available.

The following Financial Statements have been included at the end of
this Registration Statement:

Uroplasty, Inc. and Subsidiaries Consolidated Balance Sheets as of
March 31, 1996 and 1995.

Uroplasty, Inc. and Subsidiaries Consolidated Statement of Operations
for the year ended March 31, 1996.

Uroplasty, Inc. and Subsidiaries Consolidated Statement of
Shareholders' Equity for the year ended March 31, 1996.

Uroplasty, Inc. and Subsidiaries Consolidated Statement of Cash Flows
for the year ended March 31, 1996. Uroplasty, Inc. and
Subsidiaries Notes to the Consolidated Financial Statements as
of March 31, 1996 and 1995, and for the year ended March 31,
1996.

Independent Auditors' Report re: Uroplasty, Inc. and Subsidiaries
Consolidated Balance Sheets as of March 31, 1996 and 1995 and
the related Consolidated Statements of Operations,
Shareholders' Equity and Cash Flows for the year ended March
31, 1996.

Financial schedules of the Registrant have been omitted because they
are not required or not applicable or because the required information is shown
in the Financial Statements or Notes thereto.

PART III

Item 1. Index to Exhibits:

The following Exhibits are numbered according to the requirements of
Part III of Form 1-A under the Securities Act of 1933:

Page Number
In Sequential
Number Description Numbering System

2.1 Articles of Incorporation of Uroplasty, Inc.

2.2 Bylaws of Uroplasty, Inc.

3.1 Form of Stock Certificate of the Registrant, representing
shares of the Registrant's common stock.

6.1 Settlement Agreement and Release dated November 30,
1993 by and between Bioplasty, Inc., Bio-Manufacturing,
Inc., Uroplasty, Inc., Arthur A. Beisang, Arthur A.
Beisang, III, MD and Robert A. Ersek, MD.

6.2 Purchase and Sale Agreement dated December 1, 1995 by
and among Bio-Vascular, Inc., Bioplasty, Inc. and Uroplasty,
Inc.

6.3 License Agreement dated December 1, 1995 by and among
Bio-Vascular, Inc. and Uroplasty, Inc.

6.4 Lease Agreement dated January 10, 1995 between Summer
Business Center Partnership and Uroplasty, Inc.

6.5 Unsecured $640,000 Promissory Note dated March 30,
1994 by and between Bioplasty, Inc., Uroplasty, Inc. and
Bioplasty Product Claimants' Trust.

6.6 Agreement and Satisfaction dated January 30, 1995 by and between
Bioplasty Product Claimants' Trust and Bioplasty, Inc.

6.7 Asset Sale and Satisfaction of Debt Agreement dated
June 23, 1995 by and between Bioplasty, Inc. and
Uroplasty, Inc.

6.8 Executory Contract Assumption Stipulation dated
December 28, 1993 by and between Bioplasty, Inc.,
Uroplasty, Inc. and Collagen Corporation.

6.9 Settlement and License Agreement dated July 23,
1992 by and between Collagen Corporation, Bioplasty,
Inc. and Uroplasty, Inc.

8.1 First Amended Joint Plan of Reorganization (Modified).*
* Additional exhibit

Item 2. Description of Exhibits:

The Registrant has included as Exhibits to this Form 10-SB those
documents required to be filed by sub-paragraphs 2, 3, 5, 6, and 7 of Item 2 of
Part III of Form 1-A, as called for by Item 2 of Part III of Form 10-SB, and has
voluntarily filed one additional exhibit, Number 8.1, as permitted by Item 2
(12) of Part III of Form 10-SB.

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.

UROPLASTY, INC.

Dated: July 5, 1996 By /s/ DANIEL G. HOLMAN
Daniel G. Holman
Chairman, President and CEO

UROPLASTY, INC. AND SUBSIDIARIES

Consolidated Financial Statements

March 31, 1996 and 1995

<TABLE>
<CAPTION>
UROPLASTY, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 1996 and 1995

Assets 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash $ 718,630 427,790
Accounts receivable, less allowance for doubtful accounts
of $144,000 in 1996 and $145,000 in 1995 336,148 438,249
Inventories 256,655 256,551
Prepaid expenses 93,563 131,131
Notes receivable 22,595 171,545
- ----------------------------------------------------------------------------------------------------------------------------------
Total current assets 1,427,591 1,425,266
- ----------------------------------------------------------------------------------------------------------------------------------

Property, plant, and equipment 200,799 209,508
Less accumulated depreciation (44,772) (80,433)
- ----------------------------------------------------------------------------------------------------------------------------------
Net property, plant, and equipment 156,027 129,075
- ----------------------------------------------------------------------------------------------------------------------------------

Intangible assets, net of accumulated amortization of
$28,500 in 1996 and $11,000 in 1995 88,768 55,903
- ----------------------------------------------------------------------------------------------------------------------------------

$ 1,672,386 1,610,244
- ----------------------------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity
- ----------------------------------------------------------------------------------------------------------------------------------

Current liabilities:
Current maturities of long-term debt 34,139 49,223
Note payable 15,000 0
Accounts payable 208,403 342,214
Accrued payroll and related costs 95,343 94,774
Accrued royalties 14,750 31,817
Accrued other 132,962 74,519
- ----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 500,597 592,547
- ----------------------------------------------------------------------------------------------------------------------------------

Long-term debt 437,847 465,426
- ----------------------------------------------------------------------------------------------------------------------------------

Total liabilities 938,444 1,057,973
- ----------------------------------------------------------------------------------------------------------------------------------

Shareholders' equity (notes 1 and 4):
Common stock of $.01 par value. Authorized 20,000,000
shares; 3,472,525 and 2,462,525 issued and outstanding
as of March 31, 1996 and 1995, respectively 34,725 24,625
Capital in excess of par value 1,811,830 1,325,870
Accumulated deficit (882,691) (595,312)
Cumulative translation adjustment (224,922) (202,912)
Note receivable (5,000) 0
- ----------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 733,942 552,271

Commitments and contingencies (note 5)
- ----------------------------------------------------------------------------------------------------------------------------------

$ 1,672,386 1,610,244
- ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to consolidated financial statements.

<TABLE>
<CAPTION>
UROPLASTY, INC. AND SUBSIDIARIES

Consolidated Statement of Operations

Year ended March 31, 1996
<S> <C>
Net sales $ 2,297,166
Cost of goods sold 804,638
- --------------------------------------------------------------------------------------------------------------------
Gross profit 1,492,528

Selling, general, and administrative expense 2,022,823
- --------------------------------------------------------------------------------------------------------------------
Operating loss (530,295)
- --------------------------------------------------------------------------------------------------------------------

Other income (expense)
Interest income 9,726
Interest expense (40,177)
Gain on sale of intangible asset 496,119
Other (2,393)
Foreign currency exchange loss (220,359)
- --------------------------------------------------------------------------------------------------------------------
Other income 242,916
- --------------------------------------------------------------------------------------------------------------------

Net loss $ (287,379)
- --------------------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to consolidated financial statements.

<TABLE>
<CAPTION>
UROPLASTY, INC. AND SUBSIDIARIES

Consolidated Statement of Shareholders' Equity

Year ended March 31, 1996

Capital in Cumulative Total
Common excess of Accumulated translation Note shareholders'
stock par value deficit adjustment receivable equity
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balances at March 31, 1996 $ 24,625 1,325,870 (595,312) (202,912) 0 552,271

Issuance of 1,000,000
shares of common
stock, net of $8,940
issue cost 10,000 481,060 0 0 0 491,060

Issuance of 10,000
shares of common
stock pursuant to
stock option exercise 100 4,900 0 0 (5,000) 0

Net loss 0 0 (287,379) 0 0 (287,379)

Translation adjustment 0 0 0 (22,010) 0 (22,010)
- --------------------------------------------------------------------------------------------------------------------------------

$ 34,725 1,811,830 (882,691) (224,922) (5,000) 733,942
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to consolidated financial statements.

<TABLE>
<CAPTION>
UROPLASTY, INC. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

Year ended March 31, 1996
<S> <C>
Cash flows from operating activities:
Net loss $ (287,379)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 62,778
Gain on sale of assets (496,119)
Changes in operating assets and liabilities:
Accounts receivable 102,101
Inventories (104)
Prepaid expenses 37,568
Accounts payable (133,811)
Accrued liabilities 41,945
- --------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (673,021)
- --------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
Payments for property, plant, and equipment (61,902)
Payments relating to intangible assets (45,693)
Proceeds from sale of intangible asset 496,119
- --------------------------------------------------------------------------------------------------------------------
Net cash provided from investing activities 388,524
- --------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
Repayment of long-term obligations (42,663)
Net proceeds from issuance of stock 491,060
Payments received on notes receivable 148,950
- --------------------------------------------------------------------------------------------------------------------
Net cash provided from financing activities 597,347
- --------------------------------------------------------------------------------------------------------------------

Exchange rate changes (22,010)
- --------------------------------------------------------------------------------------------------------------------
Net increase in cash 290,840

Cash at beginning of year 427,790
- --------------------------------------------------------------------------------------------------------------------

Cash at end of year $ 718,630
- --------------------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to consolidated financial statements.

UROPLASTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of March 31, 1996 and 1995 and for year ended March 31, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

Uroplasty, Inc. (the Company or UPI) is a manufacturer and distributor
of urological and plastic surgery implantable medical devices. The
primary focus of the Company's business is the marketing of an
implantable device for the management of stress urinary
incontinence and vesicoureteral reflux. Currently, all sales of
the Company's products are to customers outside the United States
by the Company's foreign subsidiaries. For the year ended March
31, 1996, approximately twelve percent of the Company's total
sales were to a European distributor.

BASIS OF PRESENTATION

Uroplasty, Inc. was incorporated as a wholly owned subsidiary of
Bioplasty, Inc. in January 1992 for the purpose of developing the
urological implant product. The primary business of Bioplasty,
Inc. was the marketing of certain mammary prostheses products,
which as a result of extensive product liability litigation
brought in the United States against Bioplasty, Inc. and all other
manufacturers of certain mammary prostheses products,
caused Bioplasty, Inc. and Uroplasty, Inc. to file
petitions for relief from creditors under Chapter 11 of the
Federal Bankruptcy Code in April 1993.

On January 31, 1994, the U.S. Bankruptcy Court confirmed the
reorganization plan of Uroplasty, Inc. and Bioplasty, Inc.
Pursuant to the confirmed plan, all pre-petition claims against
Uroplasty, Inc. and Bioplasty, Inc. were discharged. As of March
31, 1996, Uroplasty, Inc. and Bioplasty, Inc., with the exception
of amounts payable under long-term debt (see note 5), have
satisfied all their obligations under the plan of reorganization.

The reorganization plan was effective for financial reporting purposes
as of January 31, 1994. In accordance with Statement of Position
No. 90-7 of the American Institute of Certified Public
Accountants, Uroplasty, Inc. and Bioplasty, Inc. accounted for the
reorganization using fresh-start reporting.

Effective January 31, 1995, assets and liabilities remaining in
Bioplasty, Inc. were transferred to Uroplasty, Inc. in
satisfaction of obligations due Uroplasty, Inc. Since Uroplasty,
Inc. and Bioplasty, Inc. have been under common control since the
emergence from Chapter 11, the balance sheet at March 31, 1995
reflects the combined financial condition of Uroplasty, Inc. and
Bioplasty, Inc. after giving effect to the adoption of fresh start
reporting by the combined companies as of January 31, 1994.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the
Company and its wholly owned foreign subsidiaries. All significant
intercompany accounts and transactions have been eliminated.

INCOME TAXES

Deferred tax assets and liabilities are recognized for future tax
consequences attributable to differences between the financial
carrying amounts of existing assets and liabilities and their
respective tax bases.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.

INVENTORIES

Inventories are stated at the lower of cost, (first-in, first-out
method), or market (net realizable value), and consist of the
following:

1996 1995
------------------------------------------------------------------

Raw materials $ 84,053 53,998
Work-in-process 69,437 99,930
Finished goods 103,165 102,623
------------------------------------------------------------------

$ 256,655 256,551
------------------------------------------------------------------

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consists principally of manufacturing
equipment, office equipment, and leasehold improvements.
Depreciation is provided for using both straight-line and
accelerated methods over useful lives ranging from four to seven
years. Maintenance and repairs are charged to expense as incurred.
Renewals and betterments are capitalized and depreciated over
their estimated useful service lives.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred.

FOREIGN CURRENCY TRANSLATION

The Company translates assets and liabilities of foreign subsidiaries
at current exchange rates and related revenues and expenses at
average rates of exchange in effect during the period. The
resulting translation adjustment is recorded as a separate
component of shareholders' equity.

NEW ACCOUNTING PRONOUNCEMENTS

For the year ending March 31, 1997, the Company is required to adopt
Statement of Financial Accounting Standards No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of, and SFAS No. 123, Accounting for Stock-Based
Compensation. SFAS No. 121 prescribes accounting and reporting
standards when circumstances indicate that the carrying amount of
an asset may not be recoverable. Initial application of SFAS No.
121 is not expected to result in recognition of a cumulative
effect of a change in accounting principle by the Company. SFAS
No. 123 prescribes accounting and reporting standards for all
stock-based compensation plans. Since the Company intends to elect
continued recognition of certain stock-based compensation using
the intrinsic value method prescribed under Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees, no
material effect on the Company's expense recognition is expected.

(2) NOTES RECEIVABLE

Notes receivable consist of the following at March 31, 1996 and 1995

1996 1995
------------------------------------------------------------------

Installment payments due from sale of
assets, discounted at 8% per annum $ 22,595 100,000

Installment payments due from sale of
assets, discounted at 8% per annum 0 71,545
------------------------------------------------------------------

$ 22,595 171,545
------------------------------------------------------------------

(3) LONG-TERM DEBT

Long-term debt consists of the following at March 31, 1996 and 1995:

1996 1995
- ----------------------------------------------------------------------------
Non-interest bearing, unsecured
promissory note payable,
discounted at 8% per annum,
$16,000 quarterly payments
beginning April 1995, remaining
balance due February 1999 $ 471,986 506,905 (1)

Payments due under capitalized lease,
effective interest rate of 15.5%
per annum, monthly payments of
$1,999, secured by computer
equipment and software, final
payment due in July 1995 0 7,744
- ----------------------------------------------------------------------------
471,986 514,649

Less current maturities 34,139 49,223
- ----------------------------------------------------------------------------

$ 437,847 465,426
- ----------------------------------------------------------------------------

(1) The promissory note is payable to the Trust established in the
Chapter 11 reorganization to administer the satisfaction of the
pre-petition product liability claims.

Maturities of long-term debt during ensuing years ending March 31 are
as follows:

1997 $ 34,139
1998 29,853
1999 407,994
------------------------------------------------------

$ 471,986
------------------------------------------------------

(4) SHAREHOLDERS' EQUITY

STOCK OPTIONS

Pursuant to the Uroplasty, Inc. Qualified Incentive Stock Option Plan,
the Company has reserved 350,000 shares of its common stock for
issuance to its employees and consultants. All options are
exercisable when granted and generally terminate five years from
date of grant. Options are granted at the discretion of the
directors and are exercisable in amounts equal to or greater than
the fair market value of the Company's common stock at date of
grant. The plans provide for the exercise of options during a
limited period following termination of employment, death, or
disability.

Options to purchase 84,700 and 176,000 shares of common stock were
granted during the years ended March 31, 1996 and 1995,
respectively, with exercise prices ranging from $.50 to $.55 per
share. Options for the purchase of 231,700 shares of common stock
were exerciseable at March 31, 1996. During the year ended March
31, 1996, options for the purchase of 10,000 shares of common
stock were exercised and 4,000 options expired.

Included in the options granted are 60,000 options awarded to the
members of the board of directors effective March 27, 1995. As a
result of one board member's retirement, 10,000 options were
canceled. These options vest over two years and are exercisable
for five years after vesting.

(5) COMMITMENTS AND CONTINGENCIES

LICENSE AGREEMENT

On December 7, 1995, the Company entered into an agreement as
licensee to obtain exclusive patent rights covering certain
injection-related instrumentation. Under this agreement, the
Company made a cash payment of approximately $30,000 to the
licensor and will make royalty payments at the rate of 10% of the
worldwide net sales for a period of 10 years.

SAVINGS AND RETIREMENT PLAN

The Company has a savings and retirement plan for eligible employees.
The plan was adopted pursuant to Section 401(k) of the Internal
Revenue Code. Contributions to the plan are discretionary for both
the Company and the employees. For the year ended March 31, 1996,
the Company made no contributions.

OPERATING LEASE COMMITMENTS

UPI leases office, warehouse, and production space under three
operating leases and leases various automobiles for its employees.
Future minimum lease payments under noncancelable operating leases
with an initial or remaining lease term in excess of one year for
the ensuing years ending March 31 are as follows:

1997 $ 185,631
1998 135,518
1999 108,938
2000 88,938
2001 43,435
-----------------------------------------------------

$ 562,460
-----------------------------------------------------

In addition to the above operating leases, the Company has
contracted for certain production activities, office space,
and production personnel for approximately $19,000 per month.
Currently the contract renews on a yearly basis in June.

ROYALTIES

Under the terms of an agreement with former officers and directors of
the Company, UPI pays royalties equal to between three percent and
five percent of the net sales of certain products, subject to a
specified monthly minimum of $4,500. As of March 31, 1996, the
royalties under the agreement are being accrued at a rate of
approximately two percent to four percent of total sales on a
monthly basis. Royalties under the agreement are payable through
November 2003.

Under the terms of a settlement agreement for a patent suit brought by
a competitor in 1991, UPI is obligated to pay the plaintiff a
royalty equal to five percent of the net sales of certain products
in the United States, or a minimum of $50,000 per year as long as
the products are being marketed abroad. The $50,000 payment due
May 1, 1994 was renegotiated and deferred during the Chapter 11
reorganization, of which $10,000 and $30,000 remain unpaid as of
March 31, 1996 and 1995, respectively.

(6) INCOME TAXES

The Company incurred a loss for both book and tax purposes for the
year ended March 31, 1996 and, accordingly, no income taxes were
provided. Effective tax rates differ from statutory federal income
tax rates for the year ended March 31, 1996 as follows:

Statutory federal income tax rate (34.0)%
Valuation allowance increase 36.0
State income taxes, net of federal (2.0)
benefit
------------------------------------------------------

0.0%
------------------------------------------------------

Deferred taxes as of March 31, 1996 consist of the following:

Deferred tax assets:
Inventory reserve $ 9,000
Allowance for doubtful accounts 51,000
Net operating loss carryforwards 315,000
-------------------------------------------------------
375,000

Less valuation allowance (375,000)
-------------------------------------------------------

$ 0
-------------------------------------------------------

At March 31, 1996, the Company had net operating loss carryforwards
(NOL) of approximately $880,000 for federal income tax purposes,
which begin to expire in 2010.

(7) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

During fiscal year 1996, the Company acquired $15,000 of fixed assets
that were paid for by issuance of a promissory note for $15,000.

During fiscal year 1996, the Company accepted a $5,000 promissory note
for the exercise of 10,000 stock options.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Uroplasty, Inc.:

We have audited the accompanying consolidated balance sheets of
Uroplasty, Inc. (the Company) and subsidiaries as of March 31, 1996 and 1995,
and the related consolidated statements of operations, shareholders' equity, and
cash flows for the year ended March 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Uroplasty,
Inc. and subsidiaries as of March 31, 1996 and 1995, and the results of their
operations and their cash flows for the year ended March 31, 1996, in conformity
with generally accepted accounting principles.

KPMG Peat Marwick LLP

May 17, 1996

State of Minnesota

SECRETARY OF STATE

CERTIFICATE OF INCORPORATION

I, Joan Anderson Growe, Secretary of State of Minnesota, do certify
that: Articles of Incorporation, duly signed and acknowledged under oath. have
been filed on this date in the Office of the Secretary of State, for the
incorporation of the following corporation, under and in accordance with the
provisions of the chapter of Minnesota Statutes listed below.

This corporation is now legally organized under the laws of Minnesota.

Corporate Name: Uroplasty, Inc.

Corporate Charter Number: 7H-346

Chapter Formed Under: 302A

This certificate has been issued on 01/21/1992.

(SEAL)

/s/ JOAN ANDERSON GROWE
Secretary of State

ARTICLES OF INCORPORATION
OF
UROPLASTY, INC.

The undersigned, being a natural person of full age, for the purpose of
forming a corporation under and pursuant to Chapter 302A of Minnesota Statutes,
as amended, hereby adopts the following Articles of Incorporation:

ARTICLE 1 - NAME

1.1 The name of the corporation shall be Uroplasty, Inc.

ARTICLE 2 - REGISTERED OFFICE

2.1 The location and office address of the registered office of the
corporation in this state shall be 1385 Centennial Drive, St. Paul, Minnesota
55113.

ARTICLE 3 - CAPITAL STOCK

3.1 Authorized Shares. The aggregate number of shares that the
corporation has authority to issue shall be One Hundred Thousand (100,000)
shares of common stock. Such shares shall not have any par value, except that
they shall have a par value of one cent ($.0l) per share solely for the purpose
of a statute or regulation imposing a tax or fee based upon the capitalization
of a corporation, and except that they shall have such par value as may be fixed
by the corporation's Board of Directors for the purpose of a statute or
regulation requiring the shares of the corporation to have a par value.

3.2 Issuance Of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscriptions for, issue, sell and
deliver shares of stock of any class or series of the corporation, and rights to
purchase securities of the corporation, to such persons, at such time, for such
consideration, and upon such terms and conditions as the Board shall determine.

ARTICLE 4 - RIGHTS OF SHAREHOLDERS

4.1 No Preemptive Rights. No shareholder of the corporation shall have
any preemptive right to subscribe for, purchase or acquire any shares of stock
of any class or series of the corporation now or hereafter authorized or issued
by the corporation.

4.2 No Cumulative Voting Rights. No shareholder shall have the right to
cumulate votes for the election of directors or for any other purpose.

ARTICLE 5 - WRITTEN ACTION BY DIRECTORS

5.1 Any action required or permitted to be taken at a Board meeting may
be taken by written action signed by all of the directors or, in cases where the
action need not be approved by the shareholders, by written action signed by the
number of directors that would be required to take the same action at a meeting
of the Board at which all directors were present.

ARTICLE 6 - LIMITATION OF DIRECTOR LIABILITY

6.1 A director shall not be personally liable to the corporation or to
its stockholders for monetary damages for any breach of fiduciary duty as a
director, except to the extent that elimination or limitation of liability is
not permitted under Section 302A.251, the Minnesota Business Corporation Act, as
the same exists or may hereafter be amended. Any repeal or modification of the
provisions of this Article shall not adversely affect any right or protection of
a director of the Corporation existing at the time of such repeal or
modification.

ARTICLE 7 - MERGER, EXCHANGE, SALE OF ASSETS AND DISSOLUTION

7.1 Where approval of shareholders is required by law, the affirmative
vote of the holders of at least a majority of the voting power of all shares
entitled to vote shall be required to authorize the corporation (i) to merge
into or with one or more other corporations, (ii) to exchange its shares for
shares of one or more other corporations, (iii) to sell, lease, transfer or
otherwise dispose of all or substantially all of its property and assets,
including its good will, or (iv) to commence voluntary dissolution.

ARTICLE 8 - AMENDMENT OF ARTICLES OF INCORPORATION

8.1 Any provision contained in these Articles of Incorporation may be
amended, altered, changed or repealed by the affirmative vote of the holders of
at least a majority of the voting power of the shares present and entitled to
vote at a duly held meeting or such greater percentage as may be otherwise
prescribed by the laws of the State of Minnesota.

ARTICLE 9 - INCORPORATOR

9.1 The name and post office address of the incorporator are as
follows:

Diane A. Stoffel 1615 American National Bank
St. Paul, Minnesota 55101

IN WITNESS WHEREOF, the undersigned incorporator has hereunto set his
hand this Twenty-First day of January, 1992.

/s/Diane A. Stoffel
Diane A. Stoffel

Subscribed and sworn to before me
this Twenty-First day of January, 1992.

/s/ CORRINE Y. ZILGE
Notary Public
STATE OF MINNESOTA
DEPARTMENT OF STATE
CORRINE Y. ZILGE FILED
NOTARY PUBLIC-MINNESOTA
WASHINGTON COUNTY JAN 21, 1992
My Comm. Expires Aug. 22. 1996 /s/ JOAN ANDERSON GROWE
SECRETARY OF STATE

ARTICLES OF AMENDMENT OF
ARTICLES OF INCORPORATION OF
UROPLASTY, INC.

I, the undersigned, Donald A. Major, Chief Financial Officer of
Uroplasty, Inc., a corporation subject to the provisions of Chapter 302A,
Minnesota Statutes, do hereby certify as follows:

Pursuant to said Chapter 302A Act and in accordance with its applicable
Articles of Incorporation and Bylaws, the holders of all of the outstanding
Common Stock of Uroplasty, Inc. entitled to vote thereon have, by Minutes of
Action dated as of August 19, 1992, approved and adopted the Restated Articles
of Incorporation of Uroplasty, Inc., which are attached hereto, and which
Restated Articles of Incorporation supersede the original Articles of
Incorporation and any and all amendments thereto, in their entirety.

IN WITNESS WHEREOF, I have subscribed my name this 1st day of October,
1992.

/s/ DONALD A. MAJOR
Donald A. Major, Chief Financial Officer

STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )

The foregoing Articles of Amendment of Articles of Incorporation of
Uroplasty,Inc. was acknowledged before me this 1st day of October, 1992, by
Donald A. Major, Chief Financial Officer of Uroplasty, Inc.

/s/ JUDY R. MCDONALD
Notary Public

JUDY R. MCDONALD
NOTARY PUBLIC-MINNESOTA
ANOKA COUNTY
MY COMM. EXP. 8-16-96

UPIAMEND.ART

RESTATED

ARTICLES OF INCORPORATION

UROPLASTY, INC.

ARTICLE I - NAME

1.1 The name of the corporation shall be Uroplasty, Inc.

ARTICLE 2 - REGISTERED OFFICE

2.1 The location and office address of the registered office of the
corporation in this state shall be l385 Centennial Drive, St. Paul, Minnesota
55113.

ARTICLE 3 - CAPITAL STOCK

3.1 Authorized Shares. The aggregate number of shares that the
corporation has authority to issue shall be Twenty Million (20,000,000) shares
of common stock. Such shares shall not have any par value, except that they
shall have a par value of one cent ($.01) per share solely for the purpose of a
statute or regulation imposing a tax or fee based upon the capitalization of a
corporation, and except that they shall have such par value as may be fixed by
the corporation's Board of Directors for the purpose of a statute or regulation
requiring the shares of the corporation to have a par value.

3.2 Issuance of Shares. The Board of Directors of the corporation is
authorized from time to time to accept subscriptions for, issue, sell and
deliver shares of stock of any class or series of the corporation, and rights to
purchase securities of the corporation, to such persons, at such time, for such
consideration, and upon such terms and conditions as the Board shall determine.

ARTICLE 4 - RIGHTS OF SHAREHOLDERS

4.2 No Cumulative Voting Rights. No shareholder shall have the right to
cumulate votes for the election of directors or for any other purpose.

ARTICLE 5 - DIRECTORS

5.1 Staggered Terms. The total number of directors shall be divided
into three classes with each class containing one-third of the total, as near as
may be, and the term of office of each class shall be until the third annual
shareholders meeting after their election; provided that the classes shall have
staggered terms and be initially elected to the following terms:

Class 1: Term expires at first annual shareholders meeting
following their election.

Class 2: Term expires at second annual shareholders meeting
following their election.

Class 3: Term expires at third annual shareholders meeting
following their election.

In the case of all three classes, the directors shall, in addition,
serve until their successors are elected and qualified. Vacancies which occur
during the year may be filled by the Board of Directors to serve for the
remainder of the full term.

5.2 Written Action by Directors. Any action required or permitted to be
taken at a Board meeting may be taken by written action signed by all of the
directors or, in cases where the action need not be approved by the
shareholders, by written action signed by the number of directors that would be
required to take the same action at a meeting of the Board at which all
directors were present.

ARTICLE 6 - LIMITATION OF DIRECTOR LIABILITY

6.1 A director shall not be personally liable to the corporation or to
its stockholders for monetary damages for any breach of fiduciary duty as a
director, except to the extent that elimination or limitation of liability is
not permitted under Section 302A.25l, the Minnesota Business Corporation Act, as
the same exists or may hereafter be amended. Any repeal or modification of the
provisions of this Article shall not adversely affect any right or protection of
a director of the Corporation existing at the time of such repeal or
modification.

ARTICLE 7 - MERGER EXCHANGE SALE OF ASSETS AND DISSOLUTION

ARTICLE 8 - AMENDMENT OF ARTICLES OF INCORPORATION

STATE OF MINNESOTA
DEPARTMENT OF STATE
FILED

OCT 5, 1992

/s/ JOAN ANDERSON GROWE
SECRETARY OF STATE

STATE OF MINNESOTA
SECRETARY OF STATE

NOTICE OF CHANGE OF REGISTERED OFFICE/
REGISTERED AGENT

Please read the instructions on the back before completing this form

1. Corporate Name:

UROPLASTY, INC.

2. Registered Office Address (No. & Street): List a complete street address or
rural route and rural route box number. A post office box is not acceptable.

623 HOOVER STREET N.E. MINNEAPOLIS MN 55413-2902
Street City State Zip Code

3. Registered Agent (registered agents are required for foreign corporations but
optional for Minnesota corporations):

NONE

If you do not wish to designate an agent, your must list "NONE" in this box.
DO NOT LIST THE CORPORATE NAME.

In compliance with Minnesota Statutes 302A.123, 303.10, 308A.025, 317A.123 or
322B.135 I certify that the above listed company has resolved to change the
company's registered office and/or agent as listed above.

I certify that I am authorized to execute this certificate and I further certify
that I understand that by signing this certificate I am subject to the penalties
of perjury as set forth in Minnesota Statutes Section 609.48 as if I had signed
this under oath.

/s/ DONALD A. MAJOR
Signature of Authorized Person

Name and Telephone Number of Contact Person: DONALD A. MAJOR 612-378-1180
Please Print legibly

Office Use Only

Filing fee: Minnesota Corporations, Cooperatives and

Limited Liability Companies: $35.00 STATE OF MINNESOTA
Non-Minnesota Corporations: $50.00. DEPARTMENT OF STATE
FILED

Make checks payable to Secretary of State OCT 25, 1994

Return to: Minnesota Secretary of State
180 State Office Bldg. Secretary of State
100 Constitution Ave.
St. Paul, MN 55155-1299
(612)296-2803

03930275 Rev 5/93

STATE OF MINNESOTA

SECRETARY OF STATE
NOTICE OF CHANGE OF REGISTERED OFFICE
REGISTERED AGENT

Please read the instructions on the back before completing this form.

1. Corporate Name

Uroplasty, Inc.

2. Registered Office Address (No. & Street): List a complete street address or
rural route and rural route box number. A post office box is not acceptable.

2718 Summer Street N.E. Minneapolis, MN 55413

Street City State Zip Code

3. Registered Agent (Registered agents are required for foreign corporations but
optional for Minnesota corporations)

NONE

If you do not wish to designate an agent, you must list "NONE" in this box.
DO NOT LIST THE CORPORATE NAME.

In compliance with Minnesota Statutes, Section 302A.123, 303.10, 308A.025,
317A.123 or 322B.135 I certify that the above listed company has resolved to
change the company's registered office and/or agent as listed above.

/s/ DONALD A. MAJOR
Signature of Authorized Person

Name and Telephone Number of Contact Person: Donald A. Major, CFO 612-378-1180
please print legibly

Office Use Only

Filing Fee: Minnesota Corporations Cooperatives and
Limited Liability Companies: $35.00.
STATE OF MINNESOTA
Non-Minnesota Corporations: $50.00. DEPARTMENT OF STATE

Make checks payable to Secretary of State FILED

AUG 07 1995

/s/ JOAN ANDERSON GROWE
SECRETARY OF STATE

Return to: Minnesota Secretary of State
180 State Office Bldg.
100 Constitution Ave.
St Paul. MN 55155-1299

(612)296-2803

03930275 Rev. 5/'93

NUMBER SHARES
0913

UROPLASTY, INC.

THIS CERTIFIES THAT __________________________________________ is the registered
holder of __________________________________ Shares transferable only on the
books of the Corporation by the holder hereof in person or by Attorney upon
surrender of the Certificate properly endorsed.

IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed this _______ day of __________________ A.D. 19 ____.

/s/ Donald A. Major /s/ Daniel G. Holman
President & Secretary Chief Executive Officer

EXIBIT 2.2

BYLAWS
OF
UROPLASTY, INC.

ARTICLE ONE
OFFICES

1.1 Offices. The principal executive office of the corporation shall
be 1385 Centennial Drive, St. Paul, Minnesota 55113, and the corporation may
have offices at such other places within or without the State of Minnesota as
the Board of Directors shall from time to time determine or the business of the
corporation requires.

ARTICLE TWO
MEETINGS OF SHAREHOLDERS

2.1 Regular Meetings. Regular meetings of the shareholders of the
corporation entitled to vote shall be held on an annual or other less frequent
basis as shall be determined by the Board of Directors or by the chief executive
officer; provided, that if a regular meeting has not been held during the
immediately preceding 15 months, a shareholder or shareholders holding 3% or
more of the voting power of all shares entitled to vote may demand a regular
meeting of shareholders by written notice of demand given to an officer of the
corporation. At each regular meeting, the shareholders, voting as provided in
the Articles of Incorporation and these Bylaws, shall elect qualified successors
for directors who serve for an indefinite term or whose terms have expired or
are due to expire within six months after the date of the meeting, and shall
transact such other business as shall come be fore the meeting. No meeting shall
be considered a regular meeting unless specifically designated as such in the
notice of meeting or unless all shareholders entitled to vote are present in
person or by proxy and none of them objects to such designation.

2.2 Special Meetings. Special meetings of the shareholders entitled to
vote may be called at any time by the Chairman of the Board, the chief executive
officer, the chief financial officer, two or more directors, or a shareholder or
shareholders holding ten percent (10%) or more of the voting power of all shares
entitled to vote.

2.3 Place of Meetings. Meetings of the shareholders shall be held at
the principal executive office of the corporation or at such other place, within
or without the State of Minnesota, as is designated by the Board of Directors,
except that a regular meeting called by or at the demand of a shareholder shall
be held in the county where the principal executive office of the corporation is
located.

2.4 Notice of Meetings. There shall be mailed to each holder of shares
entitled to vote, at his address as shown by the books of the corporation, a
notice setting out the place, date and hour of any regular or special meeting,
which notice shall be mailed not less than ten (10) days nor more than sixty
(60) days prior to the date of the meeting; provided, that notice of a meeting
at which there is to be considered a proposal (i) to dispose of all, or
substantially all, of the property and assets of the corporation or (ii) to
dissolve the corporation shall be mailed to all shareholders of record, whether
or not entitled to vote; and provided further, that notice of a meeting at which
there is to be considered a proposal to adopt a plan of merger or exchange shall
be mailed to all shareholders of record, whether or not entitled to vote, at
least fourteen (14) days prior thereto. Notice of any special meeting shall
state the purpose or purposes of the proposed meeting, and the business
transacted at all special meetings shall be confined to the purposes stated in
the notice, unless all of the shareholders are present in person or by proxy and
none of them objects to consideration of a particular item of business.
Attendance at a meeting by any shareholder, without objection by him, shall
constitute his waiver of notice of the meeting.

2.5 Quorum and Adjourned Meeting. The holders of a majority of the
voting power of the shares entitled to vote at a meeting, represented either in
person or by proxy, shall constitute a quorum for the transaction of business at
any regular or special meeting of shareholders. If a quorum is present when a
duly called or held meeting is convened, the shareholders present may continue
to transact business until adjournment, even though the withdrawal of a number
of shareholders originally present leaves less than the proportion or number
otherwise required for a quorum. In case a quorum is not present at any meeting,
those present shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until the requisite
number of shares entitled to vote shall be represented. At such adjourned
meeting at which the required amount of shares entitled to vote shall be
represented, any business may be transacted which might have been transacted at
the original meeting.

2.6 Voting. At each meeting of the shareholders, every shareholder
having the right to vote shall be entitled to vote in person or by proxy duly
appointed by an instrument in writing subscribed by such shareholder. Each
shareholder shall have one (l) vote for each share having voting power standing
in his name on the books of the corporation except as may be otherwise required
to provide for cumulative voting (if not denied by the Articles). Upon the
demand of any shareholder, the vote for directors or the vote upon any question
before the meeting shall be by ballot. All elections shall be determined and all
questions decided by a majority vote of the number of shares entitled to vote
and represented at any meeting at which there is a quorum except in such cases
as shall otherwise be required by statute, the Articles of Incorporation or
these Bylaws. Except as may otherwise be required to conform to cumulative
voting procedures, directors shall be elected by a plurality of the votes cast
by holders of shares entitled to vote thereon.

2.7 Record Date. The Board of Directors may fix a time, not exceeding
sixty (60) days preceding the date of any meeting of shareholders, as a record
date for the determination of the shareholders entitled to notice of and
entitled to vote at such meeting, notwithstanding any transfer of any shares on
the books of the corporation after any record date so fixed. In the absence of
action by the Board, only shareholders of record twenty (20) days prior to a
meeting may vote at such meeting.

2.8 Order of Business. The suggested order of business at any regular
meeting, and, to the extent appropriate, at all other meetings of the
shareholders shall, unless modified by the presiding chairman, be:

(a) Call of roll
(b) Proof of due notice of meeting or waiver of notice
(c) Determination of existence of quorum
(d) Reading and disposal of any unapproved minutes
(e) Reports of officers and committees
(f) Election of directors
(g) Unfinished business
(h) New business
(i) Adjournment.

ARTICLE THREE
DIRECTORS

3.1 General Powers. Except as authorized by the shareholders pursuant
to a shareholder control agreement or unanimous affirmative vote, the business
and affairs of the corporation shall be managed by or under the direction of a
Board of Directors.

3.2 Number, Term and Qualifications. The Board of Directors shall
consist of one or more members. The number of members of the first Board (if not
named in the Articles of Incorporation) shall be determined by the incorporators
or shareholders. Thereafter, at each regular meeting of shareholders, the
shareholders shall determine the number of directors; provided, that between
regular meetings of shareholders the authorized number of directors may be
increased or decreased by the shareholders or increased by the Board of
Directors. Each director shall serve for an indefinite term that expires at the
next regular meeting of shareholders, and until his successor is elected and
qualified, or until his earlier death, resignation, disqualification, or removal
as provided by statute.

3.3 Vacancies. Vacancies on the Board of Directors may be filled by the
affirmative vote of a majority of the remaining members of the Board, though
less than a quorum; provided, that newly created directorships resulting from an
increase in the authorized number of directors shall be filled by the
affirmative vote of a majority of the directors serving at the time of such
increase. Persons so elected shall be directors until their successors are
elected by the shareholders, who may make such election at the next regular or
special meeting of the shareholders.

3.4 Quorum and Voting. A majority of the directors currently holding
office shall constitute a quorum for the transaction of business. Except as
otherwise provided in the Articles of Incorporation or these Bylaws, the acts of
a majority of the directors present at a meeting at which a quorum is present
shall be the acts of the Board of Directors.

3.5 Board Meetings; Place and Notice. Meetings of the Board of
Directors may be held from time to time at any place within or without the State
of Minnesota that the Board of Directors may designate. In the absence of
designation by the Board of Directors, Board meetings shall be held at the
principal executive office of the corporation. Any director may call a Board
meeting by giving forty-eight (48) hours notice to all directors of the date and
time of the meeting. The notice need not state the purpose of the meeting, and
may be given by mail, telephone, telegram, or in person. If a meeting schedule
is adopted by the Board, or if the date and time of a Board meeting has been
announced at a previous meeting, no notice is required.

3.6 Absent Directors. A director may give advance written consent or
opposition to a proposal to be acted on at a Board meeting. If the director is
not present at the meeting, consent or opposition to a proposal does not
constitute presence for purposes of determining the existence of a quorum, but
consent or opposition shall be counted as a vote in favor of or against the
proposal and shall be entered in the minutes of the meeting, if the proposal
acted on at the meeting is substantially the same or has substantially the same
effect as the proposal to which the director has consented or objected.

3.7 Compensation. Directors who are not salaried officers of the
corporation shall receive such fixed sum per meeting attended or such fixed
annual sum or both as shall be determined from time to time by resolution of the
Board of Directors. Nothing herein contained shall be construed to preclude any
director from serving this corporation in any other capacity and receiving
proper compensation therefor.

3.8 Committees. The Board of Directors may, by resolution approved by
the affirmative vote of a majority of the Board, establish committees having the
authority of the Board in the management of the business of the corporation only
to the extent provided in the resolution. Each such committee shall consist of
one or more natural persons (who need not be directors) appointed by affirmative
vote of a majority of the directors present, and shall be subject at all times
to the direction and control of the Board. A majority of the members of a
committee present at a meeting shall constitute a quorum for the transaction of
business.

3.9 Committee of Disinterested Persons. The Board may establish a
committee composed of two or more disinterested directors or other disinterested
persons to determine whether it is in the best interests of the corporation to
pursue a particular legal right or remedy of the corporation and whether to
cause the dismissal or discontinuance of a particular proceeding that seeks to
assert a right or remedy on behalf of the corporation. For purposes of this
section, a director or other person is disinterested?1 if the director or other
person is not the owner of more than one percent of the outstanding shares of,
or a present or former officer, employee, or agent of, the corporation or of a
related corporation and has not been made or threatened to be made a party to
the proceeding in question. The committee, once established, is not subject to
the direction or control of, or termination by, the Board. A vacancy on the
committee may be filled by a majority vote of the remaining members. The good
faith determinations of the committee are binding upon the corporation and its
directors, officers and shareholders. The committee terminates when it issues a
written report of its determinations to the Board.

3.10 Order of Business. The suggested order of business at any meeting
of the Board of Directors shall, to the extent appropriate and unless modified
by the presiding chairman, be:

(a) Roll call
(b) Proof of due notice of meeting or waiver of notice, or unanimous
presence and declaration by presiding chairman
(c) Determination of existence of quorum
(d) Reading and disposal of any unapproved minutes
(e) Reports of officers and committees
(f) Election of officers
(g) Unfinished business
(h) New business
(i) Adjournment

ARTICLE FOUR
OFFICERS

4.1 Number and Designation. The corporation shall have one or more
natural persons exercising the functions of the offices of chief executive
officer and chief financial officer. The Board of Directors may elect or appoint
such other officers or agents as it deems necessary for the operation and
management of the corporation including, but not limited to, a Chairman of the
Board, a President, one or more Vice Presidents, a Secretary and a Treasurer,
each of whom shall have the powers, rights, duties and responsibilities set
forth in these Bylaws unless otherwise determined by the Board. Any of the
offices or functions of those offices may be held by the same person.

4.2 Election. Term of Office and Qualification. At the first meeting of
the Board following each election of directors, the Board shall elect officers,
who shall hold office until the next election of officers or until their
successors are elected or appointed and qualify; provided, however, that any
officer may be removed with or without cause by the affirmative vote of a
majority of the Board of Directors present (without prejudice, however, to any
contract rights of such officer).

4.3 Resignation. Any officer may resign at any time by giving written
notice to the corporation. The resignation is effective when notice is given to
the corporation, unless a later date is specified in the notice, and acceptance
of the resignation shall not be necessary to make it effective.

4.4 Vacancies in Office. If there be a vacancy in any office of the
corporation, by reason of death, resignation, removal or otherwise, such vacancy
shall be filled for the unexpired term by the Board of Directors.

4.5 Chief Executive Officer. Unless provided otherwise by a resolution
adopted by the Board of Directors, the chief executive officer (a) shall have
general active management of the business of the corporation; (b) shall, when
present and in the absence of the Chairman of the Board, preside at all meetings
of the shareholders and Board of Directors; (c) shall see that all orders and
resolutions of the Board are carried into effect; (d) shall sign and deliver in
the name of the corporation any deeds, mortgages, bonds, contracts or other
instruments pertaining to the business of the corporation, except in cases in
which the authority to sign and deliver is required by law to be exercised by
another person or is expressly delegated by the Articles, these Bylaws or the
Board to some other officer or agent of the corporation; (e) may maintain
records of and certify proceedings of the Board and shareholders; and (f) shall
perform such other duties as may from time to time be assigned to him by the
Board.

4.6 Chief Financial Officer. Unless provided otherwise by a resolution
adopted by the Board of Directors, the chief financial officer (a) shall keep
accurate financial records for the corporation; (b) shall deposit all monies,
drafts and checks in the name of and to the credit of the corporation in such
banks and depositories as the Board of Directors shall designate from time to
time; (c) shall endorse for deposit all notes, checks and drafts received by the
corporation as ordered by the Board, making proper vouchers therefor; (d) shall
disburse corporate funds and issue checks and drafts in the name of the
corporation, as ordered by the Board; (e) shall render to the chief executive
officer and the Board of Directors, whenever requested, an account of all of his
transactions as chief financial officer and of the financial condition of the
corporation; and (f) shall perform such other duties as may be prescribed by the
Board of Directors or the chief executive officer from time to time.

4.7 Chairman of the Board. The Chairman of the Board shall preside at
all meetings of the shareholders and of the Board and shall exercise general
supervision and direction over the more significant matters of policy affecting
the affairs of the corporation, including particularly its financial and fiscal
affairs.

4.8 President. Unless otherwise determined by the Board, the President
shall be the chief executive officer. If an officer other than the President is
designated chief executive officer, the President shall perform such duties as
may from time to time be assigned to him by the Board.

4.9 Vice President. Each Vice President shall have such powers and
shall perform such duties as may be specified in these Bylaws or prescribed by
the Board of Directors. In the event of absence or disability of the President,
the Board of Directors may designate a Vice President or Vice Presidents to
succeed to the power and duties of the President.

4.10 Secretary. The Secretary shall, unless otherwise determined by the
Board, be secretary of and attend all meetings of the shareholders and Board of
Directors, and may record the proceedings of such meetings in the minute book of
the corporation and, whenever necessary, certify such proceedings. The Secretary
shall give proper notice of meetings of shareholders and shall perform such
other duties as may be prescribed by the Board of Directors or the chief
executive officer from time to time.

4.11 Treasurer. Unless otherwise determined by the Board, the Treasurer
shall be the chief financial officer of the corporation. If an officer other
than the Treasurer is designated chief financial officer, the Treasurer shall
perform such duties as may be prescribed by the Board of Directors or the chief
executive officer from time to time.

4.12 Delegation. Unless prohibited by a resolution approved by the
affirmative vote of a majority of the directors present, an officer elected or
appointed by the Board may delegate in writing some or all of the duties and
powers of his office to other persons.

ARTICLE FIVE

INDEMNIFICATION

5.1 The corporation shall indemnify such persons, for such expenses and
liabilities, in such manner, under such circumstances, and to such extent, as
permitted by Minnesota Statutes, Section 302A.521, as now enacted or hereafter
amended.

ARTICLE SIX
SHARES AND THEIR TRANSFER

6.1 Certificate of Stock. Every owner of stock of the corporation shall
be entitled to a certificate, in such form as the Board of Directors may
prescribe, certifying the number of shares of stock of the corporation owned by
him. The certificates for such stock shall be numbered (separately for each
class) in the order in which they are issued and shall, unless otherwise
determined by the Board, be signed by the chief executive officer, the chief
financial officer, or any other officer of the corporation. A signature upon a
certificate may be a facsimile. Certificates on which a facsimile signature of a
former officer, transfer agent or registrar appears may be issued with the same
effect as if such person were such officer, transfer agent or registrar on the
date of issue.

6.2 Stock Record. As used in these Bylaws, the term "shareholder" shall
mean the person, firm or corporation in whose name outstanding shares of capital
stock of the corporation are currently registered on the stock record books of
the corporation. The corporation shall keep, at its principal executive office
or at another place or places within the United States determined by the Board,
a share register not more than one year old containing the names and addresses
of the shareholders and the number and classes of shares held by each
shareholder. The corporation shall also keep at its principal executive office
or at another place or places within the United States determined by the Board,
a record of the dates on which certificates representing shares were issued.
Every certificate surrendered to the corporation for exchange or transfer shall
be cancel led and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancel led (except as provided for in Section 6.4 of this Article Six).

6.3 Transfer of Shares. Transfer of shares on the books of the
corporation may be authorized only by the shareholder named in the certificate
(or his legal representative or duly authorized attorney-in-fact) and upon
surrender for cancellation of the certificate or certificates for such shares.
The shareholder in whose name shares of stock stand on the books of the
corporation shall be deemed the owner thereof for all purposes as regards the
corporation; provided, that when any transfer of shares shall be made as
collateral security and not absolutely, such fact, if known to the corporation
or to the transfer agent, shall be so expressed in the entry of transfer; and
provided, further, that the Board of Directors may establish a procedure whereby
a shareholder may certify that all or a portion of the shares registered in the
name of the shareholder are held for the account of one or more beneficial
owners.

6.4 Lost Certificate. Any shareholder claiming a certificate of stock
to be lost or destroyed shall make an affidavit or affirmation of that fact in
such form as the Board of Directors may require, and shall, if the directors so
require, give the corporation a bond of indemnity in form and with one or more
sureties satisfactory to the Board of at least double the value, as determined
by the Board, of the stock represented by such certificate in order to indemnify
the corporation against any claim that may be made against it on account of the
alleged loss or destruction of such certificate, whereupon a new certificate may
be issued in the same tenor and for the same number of shares as the one alleged
to have been destroyed or lost.

ARTICLE SEVEN
GENERAL PROVISIONS

7.1 Distributions; Acquisitions of Shares. Subject to the provisions of
law, the Board of Directors may authorize the acquisition of the corporation's
shares and may authorize distributions whenever and in such amounts as, in its
opinion, the condition and the affairs of the corporation shall render it
advisable.

7.2 Fiscal Year. The fiscal year of the corporation shall be
established by the Board of Directors.

7.3 Seal. The corporation shall have such corporate seal or no
corporate seal as the Board of Directors shall from time to time determine.

7.4 Securities of Other Corporations.

(a) Voting Securities Held by the Corporation. Unless otherwise ordered
by the Board of Directors, the chief executive officer shall have full power and
authority on behalf of the corporation (i) to attend and to vote at any meeting
of security holders of other companies in which the corporation may hold
securities; (ii) to execute any proxy for such meeting on behalf of the
corporation; and (iii) to execute a written action in lieu of a meeting of such
other company on behalf of this corporation; provided, however, that any vote
cast shall be in direct proportion to the way in which each director of the
corporation would have voted on the matter in question, if given the opportunity
so to vote. At such meeting, by such proxy or by such writing in lieu of
meeting, the chief executive officer shall, subject to the provisions of this
section, possess and may exercise any and all rights and powers incident to the
ownership of such securities that the corporation might have possessed and
exercised if it had been present. The Board of Directors may from time to time
confer like powers upon any other person or persons.

(b) Purchase and Sale of Securities. Upon unanimous approval of the
Board of Directors, the chief executive officer shall have full power and
authority on behalf of the corporation to purchase, sell, transfer or encumber
securities of any other company owned by the corporation which represent not
more than 10% of the outstanding securities of such issuer, and may execute and
deliver such documents as may be necessary to effectuate such purchase, sale,
transfer or encumbrance. The Board of Directors may from time to time confer
like powers upon any other person or persons.

ARTICLE EIGHT
MEETINGS

8.1 Waiver of Notice. Whenever any notice whatsoever is required to be
given by these Bylaws, the Articles of Incorporation or any of the laws of the
State of Minnesota, a waiver thereof given by the person or persons entitled to
such notice, whether before, at or after the time stated therein and either in
writing, orally or by attendance, shall be deemed equivalent to the actual
required notice.

8.2 Conference Meetings and Participation. A conference among directors
by any means of communication through which the directors may simultaneously
hear each other during the conference constitutes a Board meeting, if the same
notice is given of the conference as would be required for a meeting, and if the
number of directors participating in the conference would be sufficient to
constitute a quorum at a meeting. Participation in a meeting by that means
constitutes presence in person at the meeting. A director may participate in a
Board meeting not heretofore described in this paragraph, by any means of
communication through which the director, other directors so participating, and
all directors physically present at the meeting may simultaneously hear each
other during the meeting. Participation in a meeting by that means constitutes
presence in person at the meeting. The provisions of this section shall apply to
committees and members of committees to the same extent as they apply to the
Board and directors.

8.3 Authorization Without Meeting. Any action of the shareholders, the
Board of Directors, or any committee of the corporation which may be taken at a
meeting thereof, may be taken without a meeting if authorized by a writing
signed by all of the holders of shares who would be entitled to vote on such
action, by all. of the directors (unless less than unanimous action is permitted
by the Articles of Incorporation), or by all of the members of such committee,
as the case may be.

ARTICLE NINE
AMENDMENTS OF BYLAWS

9.1 Amendments. Unless the Articles of Incorporation provide otherwise,
these Bylaws may be altered, amended, added to or repealed by the majority vote
of the members of the Board of Directors. Such authority in the Board of
Directors is subject to the power of the shareholders to change or repeal such
Bylaws, and the Board of Directors shall not make or alter any Bylaws fixing a
quorum for meetings of shareholders, prescribing procedures for removing
directors or filling vacancies on the Board, or fixing the number of directors
or their classifications, qualifications or terms of office, but the Board may
adopt or amend a Bylaw to increase the number of directors.

The undersigned, Secretary of Uroplasty, Inc. hereby certifies that the
foregoing Bylaws were duly adopted as the initial Bylaws of the corporation by
its Board of Directors as of January 21, 1992.

/s/ TIMOTHY P. LAWIN
Timothy P. Lawin, Secretary

EXHIBIT 6.1

SETTLEMENT AGREEMENT AND RELEASE

THIS AGREEMENT (the "Agreement") is entered into this 30th day of
November, 1993 by and between Bioplasty, Inc. ("Bioplasty"), Bio-Manufacturing,
Inc. ("Bio-Manufacturing"), and Uroplasty, Inc. ("Uroplasty") (collectively the
"Debtors"); and Arthur A. Beisang ("Beisang"), Arthur A. Beisang III, M.D.
("Beisang III"), and Robert A. Ersek, M.D. ("Ersek") (collectively referred to
as "Inventors").

WHEREAS, Debtors have filed Petitions for Reorganization under Chapter
11 of the U.S. Bankruptcy Code on April 29, 1993, currently pending in the
United States Bankruptcy Court, District of Minnesota, case numbers 4-93-2600,
4-93-2603 and 4-93-2604 (the "Cases"); and

WHEREAS, Arthur A. Beisang and Robert A. Ersek have commenced an
Adversary Action in the Cases against Bioplasty and Uroplasty, Action No. ADZ.
4-93-222-NCD ("Adversary Action") alleging that certain royalty and license
agreements were breached or have been terminated and seeking damages, injunctive
relief, an accounting, and reassignment of the patents which are a portion of
the subject of the disputed license and royalty agreements; and

WHEREAS, Bioplasty and Uroplasty answered and counterclaimed in the
Adversary Action seeking declaratory relief determining that Bioplasty and
Uroplasty hold all right, title and interest in the subject patents, and
alleging violation of Minn. Stat. ss.302.255, breach of fiduciary duty, failure
to turn over property of the estate, preferential transfer, fraudulent transfer
and equitable subordination; and

WHEREAS, the parties hereto have reached an agreement for resolution of
the issues raised in the Adversary Action, and other issues as set forth herein.

NOW, THEREFORE, in consideration of mutual covenants set forth herein
the parties agree as follows:

1. Terms. As used herein these terms will be defined as follows:

a. Consulting Agreements. "Consulting Agreements" refer to all
employment, consulting or termination agreements by and between Debtors
and Beisang, Beisang III, or Ersek.

b. Gel Patents. "Gel Patents" shall refer to United States
Patent No. 5,067,965, Bio-Oncotic Gel for Implant Protheses, any
foreign patents corresponding thereto, and/or any divisions,
continuations in part, reissues, renewals, extensions or additions
thereto.

c. Micro Implant Patents and Patent Applications. "Micro
Implant Patents and Patent Applications" refers to United States patent
Application Serial Number 07/232,671, an Application, allowed in part
and issued on November 2, l993, as Patent No. 5,258,028, United States
Patent for Textured Micro Implants, any foreign patents corresponding
thereto, and/or any divisions, continuations in part, reissues,
renewals, extensions or additions thereto.

d. Reflux Disorders Patent Application. "Reflux Disorders
Patent Application" refers to United States Patent Application Serial
Number 07/863,848, entitled Treatment of Urologic and Gastric Fluid
Reflux Disorders by Injection of Micro Particles, any patent issued
pursuant to such application, any foreign patents corresponding
thereto, and/or any divisions, continuations in part, reissues,
renewals, extensions or additions thereto.

e. Product. "Product" refers to any product sold by Bioplasty
or Uroplasty which is protected by the licensed technology including
the claims of the patents and/or any divisions, continuations in part,
reissues, renewals, extensions or additions thereto.

f. Patents. "Patents" include the above-described patents.

g. Licensee. "Licensee" means Bioplasty, Inc. or Uroplasty,
Inc.

h. Net Revenue. "Net Revenue" is the gross revenue received by
Licensee and its subsidiaries from sales invoices of Products to
independent customers, less returns, refunds, discounts and allocated
bad debts. When the Product is sold to a dealer, Net Revenue includes
only the amount of revenue derived from the sale to the dealer.

i. Plan. "Plan" refers to the Joint Plan of Reorganization
dated August 27, 1993 as amended, and filed by Debtors in the Case.

j. Royalty Agreements. "Royalty Agreements" refer to the
Royalty and License Agreements previously entered into by and between
Debtors and Inventors.

k. Royalty Claims. "Royalty Claims" are the claims by Beisang
and Ersek for all past unpaid royalties which have accrued prior to
October l, 1993, under the Royalty Agreements.

l. Shareholder Suit. "Shareholder Suit" refers to the
litigation entitled In Re: Bioplasty Securities Litigation, Case No.
4-91-689, currently pending in the United States District Court,
District of Minnesota, Fourth Division.

m. Stock. "Stock" refers to the "New Bioplasty Stock" as
defined in the Plan which will be issued on or after the Effective
Date, as that term is defined in the Plan.

n. Micro Implant Sublicense Agreement. "Micro Implant
Sublicense Agreement" refers to the license agreement dated July 17,
1992 between Uroplasty and Bioplasty wherein Uroplasty grants Bioplasty
the license to exclusively manufacture and market micro implant
products for all uses other than urology uses.

2. Rights and Obligations of Uroplasty. All rights and obligations
granted in this Agreement related to the Micro Implants Patent Application and
Ref lux Disorders Patent Application shall be the sole and separate property
and/or liability of Uroplasty, including but not limited to the right, title and
ownership interest of the patent and the liability for payment of royalties
except as to the obligation to pay royalties on the Micro Implant Products for
applications other than urology, which shall be the obligation of Bioplasty.

3. Rights and Obligations of Bioplasty. All rights and obligations
granted in this Agreement related to the Gel Patents shall be the sole and
separate property and/or liability of Bioplasty, including but not limited to
the right, title, and ownership interest in the application or any patent
granted thereupon, and the liability for payment of royalties. Bioplasty shall
also have the obligation for payment of royalties on the Micro Implant Products
for all applications other than urology.

4. Grant. Inventors hereby grant and Licensees hereby accept exclusive
licenses for the entire world to make, use and sell Products. Such licenses are
perpetual, subject to the payment of royalties as provided herein.

5. Payment of Royalties. Royalties will be paid on the following terms:

a. Bioplasty royalties shall be based on Net Revenue from
invoiced Product sales of Gel Patent Products and Net Revenue from
invoiced Product sales of Micro Implant Sub-licensed Products.

b. Uroplasty royalties shall be based on Net Revenue from
invoiced Product sales of Micro Implant Products, except those Products
manufactured, used and sold to or by Bioplasty under the Sublicense
Agreement.

c. The royalty rate shall be five percent (5%) of the Net
Revenue from Products designed or manufactured pursuant to the claims
of issued Patents. The 5% royalty rate is applicable only to sales of
Products in jurisdictions where the Products are protected by the
claims of the patents.

d. The royalty rate shall be three percent (3%) of Net Revenue
from Products designed or manufactured pursuant to the claims of Patent
Applications for which no patent has been issued.

e. The royalties payable pursuant to this Agreement will
continue for the longer of the term of the Patent or ten (10) years
from the date of this Agreement.

f. Minimum royalties shall be paid monthly no later than the
first day of the month in the total amount of $3,500 for royalties
payable by Bioplasty for Gel Patent Products, in the total amount of
$1,000 for royalties payable by Bioplasty for Micro Implant Products,
and in the total amount of $3,500 for royalties payable by Uroplasty
under this Agreement. Earned royalties payments shall be made monthly
and no later than the first day of the second month following the month
in which the sales were made. Earned royalty payments shall be equal
to the earned royalty minus the minimum royalty payment already paid.
The first minimum royalty payment shall be made on the first day of the
month following the month in which the Bankruptcy Court approval of
this Agreement is received and the earned royalty payment shall be made
on the first day of the third month following the first minimum royalty
payment and shall cover sales made between the date of approval of this
Agreement by the Bankruptcy Court and the end of the first full month.

g. Beginning with the first sale of licensed Product under
this Agreement after approval by the Bankruptcy Court, with each earned
royalty payment Licensees shall provide written reports of sales by
country upon which the royalties are computed.

h. For each royalty payment made, Licensees agree to keep and
maintain records regarding such royalty payment for a period of three
(3) years in sufficient detail to enable the royalties payable to be
determined. Licensees further agree to permit its books and records to
be examined by an independent certified public accountant selected by
Inventors at mutually agreed and reasonable times, but no more often
than quarterly, to verify such reports. Such examination is to be made
at Inventors' expense, except in the event that the results of the
examination reveal an under-reporting of royalties due of five percent
(5%) or more, then the costs of such examination shall be paid by
Licensees.

i. The royalties payable pursuant to this Agreement will
commence upon approval of this Agreement by the Bankruptcy Court.

6. Ownership of Patent and Patent Application Rights. Subject to the
terms of this Agreement, the Gel Patent will be the property of Bioplasty.
Bioplasty and Inventors shall execute a Conditional Assignment in the form
annexed hereto as Exhibit D which shall be filed with the United States Patent
and Trademark Office and with any other office in the discretion of Inventors.

Subject to the terms of this Agreement, the Micro Implant Patents and
Patent Applications and the Reflux Disorders Patents and Patent Applications
will be the properties of Uroplasty. Inventors and Uroplasty shall execute
Conditional Assignments in the forms annexed here to as Exhibits B and C which
shall be filed with the United States Patent Office and with any other office in
the discretion of Inventors.

Said Conditional Assignments shall not be deemed and are not intended
by the parties to be security interests but are designed to reconvey all right,
title and interest in said Patents, together with the rights to manufacture,
use, sell, develop and produce products thereunder in the event of a final
determination of default of this Agreement by a Licensee.

7. Documentation. Inventors and Debtors agree to execute any and all
documents to accomplish the goals and terms of this Agreement.

8. Cancellation of Prior Royalty and Licensing Agreement. All prior
Royalty Agreements by and between any of the parties hereto or their assignees
are canceled effective upon Bankruptcy Court approval of this Agreement. Unpaid
royalties arising under any canceled Royalty Agreement or accruing prior to the
Effective Date shall be satisfied by the consideration set forth in Section 14
hereof.

9. Cancellation of Consulting Agreements, Right to Consult in Future.
All prior Consulting Agreements are hereby canceled and void upon Bankruptcy
Court approval of this agreement; and there are no obligations for any party
hereto arising thereunder as a result of unpaid fees or any other benefit of
said Consulting Agreements.

Debtors and Inventors agree that Debtors may consult with one or more
of the Inventors. Inventors agree that they on reasonable notice will each
provide up to 5 hours of consulting services per month at a rate of $100.00 per
hour. All hours and work must be approved by Bioplasty or Uroplasty in writing
prior to being incurred as a condition of payment. Bioplasty or Uroplasty will
pay all expenses incurred by Inventors in connection with such consultation.

l0. Improvements. Inventors agree that they will provide Bioplasty and
Uroplasty all information, know-how, technical data, improvements and suggested
revisions to the Product. Bioplasty and Uroplasty will provide the Inventors
access to current manufacturing procedures, unpublished clinical data,
regulatory agency submissions, and Product complaint files for the purpose of
improving the Products. Inventors will submit all Product improvements to
Bioplasty and Uroplasty and royalties will be paid to Inventors for all improved
Products as contained in Section 5. Bioplasty and Uroplasty shall not be
responsible to pay for the time Inventors spend designing or developing the
improvement or Product revision, unless specifically requested under paragraph 9
as consulting services.

11. Patent Infringement Claims. Bioplasty and Uroplasty agree that they
will defend, hold harmless and indemnify Inventors on and from patent
infringement claims against Debtors and/or Inventors on Patents or Products
which are the subject of this Agreement. Inventors agree to provide technical
assistance, exclusive of the services they are providing under Section 9, to
assist in the defense of such actions.

12. Warranties. Inventors agree and warrant as follows:

a. Inventors have not transferred, disposed of or encumbered
the Patents.

b. Inventors have not filed, or caused to be filed, any other
Patent Applications or Patents for the same or similar products,
designs, or applications in their name or in any other name in the
United States or elsewhere with respect to the claims in the Micro
Implant Patent Application, Ref lux Disorders Patent Application, or
Gel Patent, or any related products, except as disclosed to Uroplasty
or Bioplasty.

c. In the event of Bankruptcy Court approval of this
Agreement, Inventors agree that they will not seek any recovery from
Debtors other than as provided herein for any claim arising prior to
the Case, or during the pendency of the Case, excepting paragraphs 11
and 16 hereof.

d. Inventors agree that for the term of the Patent, or any
Patent issued pursuant to an Application which is the subject of this
Agreement, or any Patent or Application assigned to Bioplasty or
Uroplasty pursuant to Sections 6 or 10 of this Agreement, that they
will not themselves manufacture or produce for the duration of the
Agreement any Product manufactured or produced pursuant to the claims
thereof, or enable or encourage third parties to do so, including any
improvements to the Products. Licensees agree Inventors may use
products manufactured by Licensees.

e. Inventors will exercise an affirmative vote in favor of
confirmation of the Plan.

f. Inventors have the right to enter into this Agreement and
may impair any right of recovery previously assigned to Renoble B.V. or
any other entity.

13. No Participation in Competing Plan. Inventors agree that they will
not submit information, participate, or encourage in any way any other plan for
reorganization or other disposition of assets, including a liquidation of assets
under Chapter 7 of the Federal Bankruptcy Code.

14. Consideration. In satisfaction of Royalty Claims, and in
consideration of claims released herein, Debtors agree to provide the following:

a. Bioplasty will, upon discharge by confirmation of the Plan
of any claims that CBI may have against Bioplasty, assign its claim
against CBI in the approximate amount of $296,000 plus accrued interest
to Inventors. Inventors may pursue recovery of said counterclaim to the
full extent permitted by law including accrued interest, penalty and
attorneys' fees which may be collected.

b. Debtors shall issue to Renoble B.V. the total amount of
60,000 shares of New Bioplasty Stock, without cost, in satisfaction of
Inventors' claims.

15. Indemnification Claims. Debtors agree that it will not dispute the
obligation to pay Allowed Claims, as defined by the Plan, filed by Inventors in
the Cases for indemnification of costs, disbursements, attorneys' fees, damages
and penalties, so long as such claims are in a total amount of $175,000 or less
for each Beisang and Ersek. The parties hereto agree that such Allowed Claims
are Class 3(a) General Unsecured Claims.

Licensees agree to indemnify, hold harmless and defend Inventors
against any and all claims for death, illness, personal injury, property damage,
or improper business practices arising out of the manufacture, use, sale or
other disposition of inventions, Patents, Licensed Products or technology by
Licensees or their customers, so long as such claim arise out of post-bankruptcy
conduct.

l6. Directors and Officers' Coverage. Debtors agree that to the extent
they have not on their own sought or recovered Directors and Officers' insurance
benefits for indemnity or defense of the Shareholder Suit, the action commenced
by CBI, or actions by the FDA or any other authority for alleged violations,
that Debtors will use their best efforts to assist Beisang and Ersek and all
other insureds to pursue and recover such coverage for their own claims, save
and except to the extent the rights of the insureds may be assigned to any third
parties in connection with any settlement of the Shareholder Litigation on
behalf of all defendants including Inventors.

17. Disclaimer of Warranties. Except as expressly set forth in this
Agreement, INVENTORS MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE
LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARR OR OTHER
RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

18. Infringement bv Others. Licensees shall promptly inform Inventors
of any suspected infringement of any Licensed Patents by a third party. During
the exclusive period of this Agreement, Inventors and Licensees each shall have
the right to institute an action for infringement of the Licensed Patents
against such third party in accordance with the following, provided that neither
party can settle such action without the consent of the other party, which
consent shall not be unreasonably delayed or withheld:

a. If Inventors and Licensees agree to institute suit joint1y,
the suit shall be brought in both their names, the out-of-pocket costs
thereof shall be borne equally, and any recovery or settlement shall be
shared equally. Licensees and Inventors shall agree to the manner in
which they shall exercise control over such action. Inventors may, if
they so desire, also be represented by separate counsel of their own
selection, the fees for which counsel shall be paid by Inventors.

b. In the absence of agreement to institute a suit jointly,
Inventors may institute suit and, at their option, join Licensees as a
plaintiff. If Inventors decide to institute suit, then it shall notify
Licensees in writing. Licensees' failure to notify Inventors in
writing, within fifteen (15) days after the date of the notice, that it
will join in enforcing the patent pursuant to the provisions hereof,
shall be and be deemed conclusively to be Licensee's assignment to
Inventors of all rights, causes of action, and damages resulting from
any such alleged infringement. Inventors shall bear the entire cost of
such litigation and shall be entitled to retain the entire amount of
any recovery or settlement.

c. In the absence of an agreement to institute a suit jointly
and if Inventors notify Licensees that they have decided not to join in
or institute a suit, as provided in (a) or (b) above, Licensees may
institute suit and, at its option, join Inventors as plaintiffs.
Licensees shall bear the entire cost of such litigation and shall be
entitled to retain the entire amount of any recovery or settlement;
provided, however, that any recover in excess of litigation costs shall
be deemed to be Net Sales and Licensee shall pay Inventors royalties
thereon at the rates specified herein.

20. Default. Inventors may terminate this Agreement as to a Licensee if
Licensee:

a. Is in default in payment of royalties;

b. Is in breach of any provision hereof.

Provided, however, that in the event of an alleged default Inventors
will provide written notice of the default to the defaulting party by certified
mail, return-receipt requested and the defaulting party shall have twenty (20)
days from receipt of the certified mail, returnreceipt requested to cure the
default.

Upon termination of the license, the Licensees shall promptly return to
the Inventors all product material, data, records, testing results, trade
secrets, know-how, trademarks, foreign patents, regulatory submissions, and
other proprietary information to the process, or an improvement thereof provided
by Inventors. If the Licensees shall be terminated by the Inventors, Inventors
shall thereafter be free to enter into any license assignment or to any
agreement which they deem appropriate in connection with the material or any
improvement thereof, and the Licensees shall not thereafter utilize the material
or otherwise process, condition, distribute or sell the material or any paft
thereof.

The rights and obligations of Bioplasty and Uroplasty hereunder shall
be separate and independent. A default by one Debtor shall only affect the
remedies herein as to the Patents held by that Debtor and such a default shall
not affect the rights and obligations of the non-defaulting Debtor hereunder.

21. Marketing Micro Implant Product. In the event Bioplasty defaults in
the payment of $1,000 minimum royalties on sales of the Micro Implant Product
pursuant to the Sublicense Agreement, Bioplasty agrees to assign to Inventors
all of its rights, title and interests under the Sublicense Agreement and
Uroplasty consents to said assignment.

22. Sublicense. Licensees shall not assign their rights and obligations
hereunder, except to the extent that they may assign any marketing and selling
obligations to a dealer, without the written consent of Inventors, which shall
not be unreasonably withheld.

23. Approval of Agreement. Debtors will immediately make an application
to the Bankruptcy Court to be heard no later than the confirmation date for
approval of this Agreement. The terms of this Agreement are not dependent on
Plan conf irmation to be effective.

24. General Release and Indemnity. Inventors and Debtors, for
themselves, their heirs, personal representatives, successors and assigns, do
hereby release and discharge each other of any and all manner of action and
actions, cause and causes of actions, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever, in law or in equity which they
hereafter can, shall or may have, for upon or by any reason of any matter, cause
or thing whatsoever arising out of or in connection with, the prior actions of
the parties hereto.

Beisang, Ersek and Beisang III do hereby release and discharge that
fraction, portion or percentage of their total cause of action or claims for
damages they now have or may hereafter possess against parties other than
Debtors which shall by trial or other disposition be determined to be the sum of
the fractions, portions or percentages of causal resp9nsibility of Debtors, or
for which Debtors are liable to any other person for contribution or indemnity.
If Beisang, Ersek, or Beisang III pursue any claim against any other person who
is entitled to contribution or indemnity from Debtors, or cause any person to
expend funds for which that person is entitled to contribution or indemnity,
Beisang, Ersek, and Beisang III agree to indemnify Debtors for all liability
Debtors may have for contribution or indemnity for all claims not released by
this section, including but not limited to costs of defense. The obligation of
Beisang, Ersek or Beisang Ill to indemnify Debtors as provided herein shall only
occur if Beisang, Ersek or Beisang III do not recover for the claims made
against any other person.

It is further expressly understood that this release shall operate
against that portion of liability assessed to Debtors. Except as to the
obligations set forth in this section, this release shall not affect any claim
which Beisang, Ersek, and Beisang III may have with respect to any other
defendants involved in the litigation identified above or in any other
litigation, including officers, directors, shareholders, etc. This release is
intended to be in accordance with Pierringer v. Hoger, 21 Wis.2d 182, 124 N.W.2d
106 (1963), and the principles stated therein.

25. Severability. If any of the terms of this Agreement are found
unenforceable for any reason, those provisions shall be severed from the
Agreement and all remaining provisions of the Agreement shall be deemed in full
force and effect, except to the extent that the provisions severed render the
substance or the effect of the Agreement impossible to carry out.

26. Arbitration. The parties hereto agree that any and all disputes as
to the validity or terms of this agreement, or any breach thereof will be
decided by binding arbitration. An arbitration may be commenced by either party
by making a written demand for arbitration and mailing such demand by first
class mail, postage prepaid, to the other parties. The parties shall attempt to
agree on an arbitrator, but if they are unable to do so after 30 days, then the
matter shall be referred to the American Arbitration Association ("AAA") for
resolution in accordance with the procedures of AAA. The arbitrator shall have
the right to assess damages, render declaratory relief, order specific
performance, and assess costs and disbursements, including the arbitrator's
fees.

27. Entire Agreement, Caption. This Agreement constitutes the entire
agreement between the parties and there are no additional agreements or
consideration offered or expected in support hereof. Captions included herein
are for convenience only and shall not be considered a term hereof.

28. Heirs and Assigns. This Agreement is binding on all current and
former officers, directors, employees, heirs and assigns of the parties hereto.

29. Applicable Law. This Agreement shall be construed according to the
laws of the State of Minnesota.

30. Renoble. The parties hereto agree that the royalties payable
hereunder shall continue to be paid to Renoble B.V., Inventors' assignee.

31. Verification of Comprehension of A greement. The parties executing
this Agreement verify that they have reviewed the terms hereof with lega1
counsel of choice and understand the terms and effect of this Agreement and will
execute any and all documentation necessary to carry out the goals, purposes and
terms of this Agreement.

Dated: November 30, 1993 BIOPLASTY, INC.

By: /s/ DANIEL G. HOLMAN
Its: CEO

Dated: November 30, 1993 BIO-MANUFACTURING, INC.

By: /s/ DANIEL HOLMAN
Its: CEO

Dated: November 30, 1993 UROPLASTY, INC.

By: /s/ DANIEL HOLMAN
Its: CEO

Dated: November 30, 1993 /s/ ARTHUR A BEISANG
ARTHUR A. BEISANG

Dated: November 30, 1993 /s/ ARTHUR A BEISANG, III M.D.
ARTHUR A BEISANG III, M.D.

Dated: November 31, 1993 /s/ ROBERT A ERSEK,
ROBERT A. ERSEK, M.D.

EXHIBIT B

CONDITIONAL ASSIGNNENT

Robert A. Ersek, M.D., Arthur A. Beisang and Arthur A. Beisang III,
M.D. hereby conditionally assign all right, title and interest, both legal and
equitable, in and to the United States Patent Application Serial Number
07/714,273 entitled Textured Micro Implants, and Application Serial Number
07/282,671, any patent issued pursuant thereto, United States Patent No.
5,258,028, all corresponding foreign patents, and all amendments and
continuations in part or in whole to the application or patent to Uroplasty,
Inc., a corporation organized and existing under the laws of the State of
Minnesota.

This conditional assignment is ef f ective unless and until there is a
final determination of default by Uroplasty, Inc. in the Settlement Agreement
and Release dated November 3O, 1993 between Uroplasty, Inc. and Robert A. Ersek,
M.D., Arthur A. Beisang and Arthur A. Beisang III, M.D. In the event of a final
determination of default by Uroplasty, Inc. of the af orestated Settlement
Agreement and Release, all right, title and interest shall revert to Robert A.
Ersek, M.D., Arthur A. Beisang and Arthur A. Beisang III, M.D.

Dated: November 30, 1993 UROPLASTY, INC.

By: /s/ DANIEL HOLMAN
Its: CEO

Dated: November 30, 1993 /s/ ARTHUR A. BEISANG
ARTHUR A BEISANG

Dated: November 30, 1993 /s/ ARTHUR A. BEISANG, III, M.D.
ARTHUR A BEISANG, III, M.D.

Dated: November 31, 1993 /s/ ROBERT A. ERSEK
ROBERT A. ERSEK,M.D.

EXHIBIT C

CONDITIONAL ASSIGNMENT

Robert A. Ersek, M.D., Arthur A. Beisang and Arthur A. Beisang III,
M.D. hereby conditionally assign all right, title and interest, both legal and
equitable, in and to the United States Patent Application Serial Number
07/863,848 entitled Treatment of Urologic and Gastric Fluid Ref lux Disorders by
Injection of Micro Particles, any patent issued pursuant thereto, all
corresponding foreign patents, and all amendments and continuations in part or
in whole to the application or patent to Uroplasty, Inc., a corporation
organized and existing under the laws of the State of Minnesota.

This conditional assignment is effective unless and until there is a
final determination of default by Uroplasty, Inc. in the Settlement Agreement
and Release dated November 30, 1993 between Uroplasty, Inc. and Robert A. Ersek,
M.D., Arthur A. Beisang and Arthur A. Beisang III, M.D. In the event of a final
determination of default by Uroplasty, Inc. of the af orestated Settlement
Agreement and Release, all right, title and interest shall revert to Robert A.
Ersek, M.D., Arthur A. Beisang and Arthur A. Beisang III, M.D.

Dated: November 30, 1993 UROPLASTY, INC.

By: /s/ DANIEL HOLMAN
Its: CEO

Dated: November 30, 1993 /s/ ARTHUR A. BEISANG
ARTHUR A. BEISANG

Dated: November 30, 1993 /s/ ARTHUR A BEISANG,III,M.D.
ARTHUR A. BEISANG III , M.D.

Dated: November 31, 1993 /s/ ROBERT A. ERSEK
ROBERT A. ERSEK, M.D.

EXHIBIT D

CONDITIONAL ASSIGNMENT

Bioplasty, Inc., a corporation organized and existing under the laws of
the State of Minnesota, hereby conditionally assign all right, title and
interest, both legal and equitable, in and to the United States Patent No.
5,067,965, entitled Bio-Oncotic Gel for Implant Prostheses and all amendments
and continuations in part or in whole to the application or patent, or any
foreign patent applications or patents to Robert A. Ersek, Arthur A. Beisang and
Arthur A. Beisang III.

Said conditional assignment is not effective unless and until there is
a final determination of default by Bioplasty in the Settlement Agreement and
Release dated November 30, 1993, between Bioplasty, Inc. and Robert A. Ersek,
M.D., Arthur A. Beisang and Arthur A. Beisang Ill, M.D. In the event of a final
determination of default by Bioplasty of the af orestated Settlement Agreement
and Release, the right, title and interest shall revert to Robert A. Ersek,
M.D., Arthur A. Beisang and Arthur A. Beisang III, M.D.

Dated: November 30, 1993 BIOPLASTY, INC.

By: /s/ DANIEL HOLMAN
Its: CEO

Dated: November 30, 1993 /s/ ARTHUR A. BEISANG
ARTHUR A. BEISANG

Dated: November 30, 1993 /s/ ARTHUR A. BEISANG, III, M.D.
ARTHUR A. BEISANG, III, M.D.

Dated: November 30, 1993 /s/ ROBERT A. ERSEK
ROBERT A. ERSEK, M.D.

EXHIBIT 6.2

PURCHASE AND SALE AGREEMENT

THIS AGREEMENT, made and entered into this 1st day of December, 1995, by and
among BIOVASCULAR, INC., a Minnesota corporation (hereinafter referred to as the
"Buyer"), BIOPLASTY, INC., a Minnesota corporation formerly known as Genetic
Laboratories, Inc. (hereinafter referred to as "Bioplasty"), and UROPLASTY,
INC., a Minnesota corporation (hereinafter referred to as "Uroplasty")
(Bioplasty and Uroplasty are sometimes collectively referred to herein as the
"Sellers").

BACKGROUND

FIRST. Pursuant to that certain Assignment dated June 23, 1995 (the "Patent
Assignment"), Bioplasty assigned to Uroplasty all right, title and interest in
and to United States Patent No. 4,456,589 (hereinafter more fully described and
defined as the "589 Patent") covering a process for treating animal tissue used
in connection with various medical products, including, but not limited to, the
Buyer's Pert-Guard product and the Sellers' Chondrnplast product. The Patent
Assignment has not yet been filed with the United States Patent and Trademark
Office. The records of the United States Patent and Trademark Office reflect
that Genetic Laboratories, Inc. is the owner of the 589 Patent.

SECOND. Bioplasty, Vascular Services Diversified, Inc., a Minnesota corporation
("VSD"), and the Buyer previously entered into that certain Agreement dated as
of July 31, 1985, regarding the rights of the various parties with respect to
certain tangible and intangible assets, including, certain biosynthetic surgical
implant products marketed under the trade names Pert Guard, Bioflow, Flo-Rester,
Cryoguard/Cardio-Cool, and Biocor (collectively the "Subject Products"), which
Agreement was amended by that certain Amendment effective as of September 25,
1985, and also amended by that certain Amendment No. 2 effective as of July 31,
1985 (such Agreement as amended is referred to hereafter as the "Acquisition
Agreement").

THIRD. Bioplasty and the Buyer entered into that certain License Agreement dated
as of September 25, 1985, which restated and clarified the grant of an exclusive
license to the Buyer to use, manufacture, apply, sell, market and commercialize
the Subject Products in consideration for payment by the Buyer to Bioplasty of a
3% royalty for sales of the Subject Products by the Buyer during the 1-year
term of the License Agreement, which Agreement was amended by that certain
Amendment to License Agreement between Bioplasty and the Buyer dated as of June
13, 1986 (such Agreement as amended is referred to hereafter as the "License
Agreement").

FOURTH. Bioplasty and the Buyer entered into that certain Purchase Agreement
dated as of February 17, 1986 (the "Purchase Agreement") (the Acquisition
Agreement, the License Agreement and the Purchase Agreement are referred to
herein, collectively, as the "Prior Agreements").

FIFTH. Bioplasty, VSD and the Buyer entered into that certain Debt and Royalty
Restatement Agreement dated as of June 16, 1986, which Agreement was amended by
that certain Agreement dated as of September 1, 1986, by and between Bioplasty
and the Buyer (such Debt and Royalty Restated Agreement as amended is referred
to hereafter as the "Royalty Agreement"), which Agreement superseded the Prior
Agreements to the extent it conflicts with the Prior Agreements.

SIXTH. Subject to the terms and conditions set forth herein, the Sellers desire
to sell, and the Buyer desires to purchase, all right, title and interest in and
to the 589 Patent.

NOW, THEREFORE, in consideration of the foregoing premises and further in
consideration of the mutual covenants, conditions, and agreements contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

ARTICLE I
PURCHASE OF UNITED STATES PATENT

1. PURCHASE AND SALE OF UNITED STATES PATENT. Subject to the further terms of
this Agreement, the Sellers agree to sell to the Buyer, and the Buyer agrees to
purchase from the Sellers, all right, title and interest in and to United States
Patent No. 4,456,589, dated June 26, 1984, together with any corresponding
patents or patent applications filed in other countries, any reissue
applications, continuation applications and continuation-in-part applications
filed thereon in the United States or any foreign country and any patents
issuing thereon (collectively, such rights are hereinafter referred to as the
"589 Patent").

2. CLOSING: TITLE. The purchase and sale referred to in Section 1 of this
Article I shall take place concurrently with the execution of this Agreement by
all parties hereto, which is the date first written above (such date is
hereinafter referred to as the "Closing" or the "Closing Date"). Title to the
589 Patent shall pass to the Buyer on the Closing Date. At C1osing, the Sellers
shall execute and deliver to the Buyer an Assignment of U.S. Patent in the form
attached hereto as Exhibit A (the "Assignment of Patent"). Additionally, at
Closing, the Sellers shall deliver to the Buyer (i) certified copies of the
Amendment to the Articles of Incorporation of Bioplasty evidencing the change of
name from Genetic Laboratories, Inc. to Bioplasty, Inc. (which document must be
filed with the United States Patent and Trademark Office for purposes of
clarifying the chain of title to the 589 Patent); (ii) an original of the
executed Patent Assignment from Bioplasty to Uroplasty; and (iii) all other
documents, notices and correspondence relating to the 589 Patent.

ARTICLE II
PURCHASE PRICE AND PAYMENT

1. PURCHASE PRICE. In consideration for the sale of the 589 Patent by the
Sellers to the Buyer pursuant to the terms of this Agreement, the Buyer shall
pay to Uroplasty the amount of Five Hundred Thousand and no/100 Dollars
($500,000.00) (the "Purchase Price") by cashier's check at Closing.

2. LIABILITIES OF THE SELLERS NOT ASSUMED. The Sellers and the Buyer each
acknowledge and agree that none of the Sellers' liabilities of any kind
whatsoever are being assumed, directly or indirectly, by the Buyer. The Sellers
warrant and represent, jointly and severally, that the Buyer shall not, as a
result of the transactions contemplated by this Agreement, acquire or be
responsible for any liabilities of or claims against the Sellers; and the
Sellers hereby agree, jointly and severally, to defend, hold harmless, and
indemnify the Buyer with respect to all such liabilities and/or claims,
including, without limitation, liabilities to creditors due to failure to comply
with any and all applicable fraudulent conveyance, bulk transfer, or similar
laws.

3. LIABILITIES OF THE BUYER NOT ASSUMED. The Buyer and the Sellers each
acknowledge and agree that none of the Buyer's liabilities of any kind are being
assumed, directly or indirectly, by the Sellers. The Buyer warrants and
represents that the Sellers shall not, as a result of the trai'sactions
contemplated by this Agreement, acquire or become responsible for any
liabilities of or claims against the Buyer; and the Buyer hereby agrees to
defend, hold harmless and indemnify the Sellers with respect to all such
liabilities and/or claims, including, without limitation, liabilities to
creditors due to failure to comply with any and all applicable fraudulent
conveyance, bulk transfer or similar laws.

ARTICLE III
MUTUAL RELEASE

The Sellers, on the one hand, and the Buyer, on the other hand, hereby release
and forever discharge the other, and their respective subsidiaries, affiliates,
insurers and their current and former officers, directors, employees, agents and
assigns, from any and all existing claims, demands, obligations, interests,
suits, actions or causes of action, at law or in equity, whether arising by
contract, statute, common law or otherwise, both direct and indirect, of
whatsoever kind or nature, existing as of Closing.

ARTICLE IV
LICENSE AGREEMENT

Concurrently with the execution of this Agreement by all parties hereto, the
Buyer and Uroplasty shall enter into a License Agreement in the form attached
hereto as Exhibit B (the "License Agreement").

ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS

1. REPRESENTATIONS. WARRANTIES. AND COVENANTS OF THE SELLERS. The Sellers
hereby, jointly and severally, represent, warrant, and covenant to the Buyer as
follows:

(a) Organization. Both Bioplasty and Uroplasty have been duly
organized and are validly existing and in good standing under the
laws of the State of Minnesota.

(b) Execution and Authority: Absence of Conflicts. This Agreement and
all other documents executed or to be executed by or on behalf of the
Sellers under or in connection with this Agreement have been or will
be duly executed and delivered, and constitute or will constitute
valid and binding obligations of the Sellers, enforceable (subject to
usual equity principles) in accordance with their terms (subject, as
to enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, or other laws affecting creditors' rights generally). The
sale by the Sellers of the 589 Patent hereunder and the performance
of the transactions contemplated hereby will not conflict with or
result in the breach of any of the terms or provisions of any note,
mortgage, loan agreement, or other agreement or instrument to which
either of the Sellers is a party or by which either of the Sellers
may be bound or any statute or order, rule, or regulation applicable
to either of the Sellers. No consent, approval, authorization,
registration, or qualification of or with any court, regulatory
agency, governmental body, or third person is required for the sale
of the 589 Patent and the performance of the transactions
contemplated by this Agreement.

(c) Litigation. As of the Closing Date, the Sellers have no actual
knowledge of (and do not undertake any obligation to determine the
existence of) any litigation or proceeding, pending or threatened,
contemplated against or relating to either of the Sellers or the 589
Patent by or before any court, arbitrator, or federal, state or other
governmental commission, board, or other agency, that would have a
material adverse affect on the 589 Patent.

(d) 589 Patent. As of the Closing Date, Uroplasty has good and
marketable title to the 589 Patent (except to the extent that neither
the Patent Assignment nor the name change of Bioplasty have been
filed with the United States Patent and Trademark Office) and shall
transfer title to the 589 Patent to the Buyer free and clear of all
mortgages, pledges, liens, conditional sales agreements, or other
encumbrances of any kind or nature whatsoever. The Sellers,
collectively, have the sole right to sell the 589 Patent and have
not, jointly or severally, heretofore sold or granted any rights in
the 589 Patent to any third party.

(e) Infringement. As of the Closing Date, the Sellers have no actual
knowledge of (and do not undertake any obligation to determine the
existence of) any facts or circumstances from which it could be
reasonably concluded that the 589 Patent materially infringes on any
patent, copyright, trademark, trade secret or other proprietary right
of any third party, nor any facts or circumstances from which it
could reasonably conclude that a third party is infringing the 589
Patent.

(f) Foreign Patents. With respect to the 589 Patent, as of the
Closing Date, the Sellers have no actual knowledge of (and do not
undertake any obligation to determine the existence of) any facts or
circumstances from which it could reasonably conclude that there are
any corresponding equivalent foreign patents, related foreign
patents, or any continuation or reissue foreign patents, or other
variations to or of the subject invention (collectively, "Foreign
Patents"). The Sellers shall, to the extent reasonably requested by
the Buyer and at Buyer's sole expense, assist the Buyer in the
procurernent of any Foreign Patents.

(g) Reliance. The foregoing representations, warranties, and
covenants are made by the Sellers with the knowledge and expectation
that the Buyer is relying thereon.

2. REPRESENTATIONS WARRANTIES AND COVENANTS OF THE BUYER. The Buyer represents,
warrants, and covenants to the Sellers as follows:

(a) Organization. The Buyer has been duly orgareed and is validly
existing and in good standing under the laws of the State of
Minnesota.

(b) Execution and Authority. This Agreement and all other documents
executed or to be executed by or on behalf of the Buyer under or in
connection with this Agreement have been or will be duly executed and
delivered and constitute or will constitute valid and binding
obligations of the Buyer, enforceable (subject to usual equity
principles) in accordance with their terms (subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, or other laws affecting creditors' rights generally). The
purchase by the Buyer of the 589 Patent hereunder and the performance
of the transactions contemplated hereby will not conffict with or
result in the breach of any of the terms or provisions of any note,
mortgage, loan agreement or other agreement or instrument to which
the Buyer is a party or to which the Buyer may be bound or any
statute or order, rule or regulation applicable to the Buyer. No
consent, approval, authorization, registration or qualification of or
with any court, regulatory agency, governmental body or third person
is required for the purchase of the 589 Patent by Buyer and the
performance of the transactions contemplated by this Agreement.

(c) Litigation. As of the Closing Date, the Buyer has no actual
knowledge of (and does not undertake any obligation to determine the
existence of) any litigation or proceeding pending, threatened or
contemplated relating to the Buyer or the 589 Patent by or before any
court, arbitrator or federal, state or other governmental commission,
board or agency, that would have a material adverse effect on the 589
Patent.

(d) Infringement. As of the Closing Date, the Buyer has no actual
knowledge of (and does not undertake any obligation to determine the
existence of) any facts or circumstances from which it could be
reasonably concluded that the 589 Patent materially infringes on any
patent, copyright, trademark, trade secret or other proprietary right
of any third party, nor any facts or circumstances from which it
could reasonably conclude that a third party is infringing the 589
Patent.

(e) Foreign Patents. With respect to the 589 Patent, as of the
Closing Date, the Buyer has no actual knowledge of (and does not
undertake any obligation to determine the existence of) any facts or
circumstances from which it could reasonably conclude that there are
any corresponding equivalent foreign patents, related foreign patents
or any continuation or reissue foreign patents or any other
variations to or of the subject invention.

(f) Validity of the 589 Patent. The Buyer waives any claim it may
have against either of the Sellers relating to the validity of the
589 Patent under United States Patent Law.

(g) Reliance. The foregoing representations, warranties, and
covenants are made by the Buyer with the knowledge and expectation
that the Sellers are relying thereon.

3. SURVIVAL OF REPRESENTATIONS. The representations, warranties and covenants of
all parties to this Agreement contained in or made pursuant to this Agreement
shall survive the consummation of the purchase and sale contemplated hereby, and
shall continue in full force and effect until expiration of the 589 Patent and
any continuations thereof.

4. INDEMNIFICATION. In addition to the indemnification set forth in Article ll,
Section 3, the Sellers, jointly and severally, agree to indemnify and hold
harmless the Buyer from and against any and all (i) liabilities, obligations,
damages, or deficiencies, for which the Buyer has not received reimbursement
from any other source, resulting from any misrepresentation, breach of warranty,
or nonfulfillment of any covenant or agreement on the part of either of the
Sellers under this Agreement; and (ii) actions, suits, proceedings, demands,
assessments, judgments, costs and expenses (including, without limitation,
attorneys' fees and court costs) incident to any of the foregoing, for which the
Buyer has not received reimbursement from any other source. The Sellers shall
reimburse the Buyer, on demand, for any payment made by the Buyer at any time in
respect of any liability, obligation, or claim to which the foregoing indemnity
by the Sellers relates.

ARTICLE VI
MISCELLANEOUS PROVISIONS

1. LEGAL RELATIONSHIP. The Sellers and the Buyer hereby acknowledge and agree
that nothing contained in this Agreement shall be deemed to create an
employment, agency, franchise, or other relationship between either of the
Sellers and the Buyer for any purpose whatsoever and that no relationship is
intended or created hereby other than the relationship of independent
contractors. No party to this Agreement shall have the right or authority to
assume or create any obligation or responsibility, express or implied, on behalf
of, on account of or in the name of any other party to this Agreement, or to
legally bind such party in any manner whatsoever.

2. BENEFIT. Except as otherwise provided herein, this Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
successors and assigns.

3. SURVIVING RIGHTS. Notwithstanding the termination of this Agreement, the
parties hereto shall be required to carry out any provision herecf that
contemplates performance subsequent to such termination, and such termination
shall not affect any liability or other obligation that shall have accrued prior
to such termination, including, but not limited to, any liability for loss or
damage on account of a prior default.

4. FURTHER ASSURANCES. The parties hereto agree to cooperate with the other
parties to effectuate this Agreement and to execute any and all additional
documents or take any additional action as may be reasonable, necessary or
appropriate to carry out the transactions contemplated hereby.

5. WAIVER. MODIFICATION OR AMENDMENT. Unless otherwise expressly provided in
this Agreement and any documents expressly referred to herein, no waiver,
modification, or amendment of any term, condition, 9r provision of this
Agreement shall be valid, binding, or of any effect unless made in writing,
signed by the parties hereto or their duly authorieed representatives and
specifying with particularity the nature and extent of such waiver,
modification, or amendment. Any waiver by any party of any provision hereof
shall not affect or impair any other provision hereof. The failure of any party
to enforce at any time any of the provisions of this Agreement shall not be
construed to be a waiver of the right of such party to subsequently enforce any
such provisions.

6. NOTICES. All notices, requests, or other communications from one party to the
other shall be in writing and shall be considered to be delivered or served if
sent by first class certified or registered mail, return receipt requested,
postage prepaid to the party at its address as set forth below, or to such other
address as such party may hereafter designate by written notice to the other
party:

If to the Buyer, to:

Bio-Vascular, Inc.
2575 University Avenue
St. Paul, Minnesota 55114
Attn: John T. Karcanes

If to the Sellers, to:

Uroplasty, Inc.
2718 Summer Street, N.E.
Minneapolis, Minnesota 55413
Attn: Donald A. Major

7. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but together which shall constitute
one and the same instrument.

8. HEADINGS. Section headings used herein are for convenience purposes only and
shall in no way be construed to be a part of this Agreement or as a limitation
of the scope of the particular sections to which such headings refer.

9. INTERPRETATION AND SEVERANCE. The provisions of this Agreement shall be
applied and interpreted in a manner consistent with each other so as to carry
out the purposes and intent of the parties hereto, but if for any reason any
provision hereof, except those related to the payment of monies, is determined
to be unenforceable or invalid, such provision or such part hereof as may be
unenforceable or invalid shall be deemed severed from this Agreement, and the
remaining provisions shall be carried out with the same force and effect as if
the provision or part thereof had not been a part of this Agreement.

10. ARBITRATION. Any dispute, controversy or claim arising out of or in
connection with this Agreement shall be settled by binding arbitration in
accordance with the then-existing Commercial Rules of the American Arbitration
Association, which arbitration shall take place in the Minneapolis/St. Paul,
Minnesota metropolitan area. Each party shall select an arbitrator within thirty
(30) days of the receipt of any demand for arbitration and each shall be
responsible for compensation of its own arbitrator. The two arbitrators shall
confer and select by mutual agreement (and at the parties' joint expense) a
neutral third arbitrator within sixty (60) days of the filing of the demand for
arbitration. If the parties fail to appoint their own arbitrator or if the
party-appointed arbitrators are unable to agree upon the neutral arbitrator, the
vacancies in the arbitration panel will be appointed in accordance with the
rules of the American Arbitration Association. The party-appointed arbitrators
(but not the neutral arbitrator) shall have the right to consult with the party
appointing them in advance of the arbitration hearing. It is the intention of
the parties that the arbitration be speedily conducted with the hearing to take
place and awards to be made if possible within ninety (90) days of the filing of
the demand for arbitration. Judgement upon the award of all or a majority of the
arbitrators shall be binding upon the parties hereto and may be entered in any
court having jurisdiction. Specific performance and injunctive relief may be
ordered by the award. Costs and attorneys' fees shall be paid in accordance with
the arbitration award.

11. GOVERNING LAW ENFORCEMENT. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.

ARTICLE VII
ENTIRE AGREEMENT

This Agreement, including any exhibits attached hereto or documents expressly
referred to herein, contains the entire agreement among the Sellers and the
Buyer and supersedes and cancels any and all other agreements, whether oral or
in writing, among the Sellers and the Buyer with respect to the matters referred
to herein, including, without limitation, the Royalty Agreement, the Prior
Agreements and any other agreements or dealings related to or arising out of the
589 Patent.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date and year first above written.

BUYER: SELLERS:
BIO-VASCULAR, INC. BIOPLASTY, INC.

By: /s/ JOHN T. KARCANES By: /s/ DONALD A. MAJOR
John T. Karcanes, President and Chief Donald A. Major, Chief
Executive Officer Financial Officer

UROPLASTY,INC.

By: /s/ DONALD A. MAJOR
Donald A. Major, Chief
Financial Officer

EXHIBIT 6.3

LICENSE AGREEMNT

THIS LICENSE AGREEMENT, made and entered into this 1st day of December, 1995, by
and between BIO-VASCULAR, INC., a Minnesota corporation ("Bio-Vascular"), and
UROPLASTY, INC., a Minnesota corporation ("Licensee").

BACKGROUND

FIRST. Bio-Vascular is the owner of certain proprietary rights under and related
to United States Patent No. 4,456,589 (hereinafter more fully described and
defmed as the "Patent Rights"), which Patent Rights were acquired by
Bio-Vascular from Licensee in accordance with that certain Purchase and Sale
Agreement of even date herewith by and among Bio-Vascular, Bioplasty, Inc. and
Licensee.

SECOND. Uroplasty has been and continues to be in possession of certain
proprietary rights of Bio-Vascular relating to Bio-Vascular's Supple Pert-Guard
product (hereinafter more fully described and defined as the "Licensed
Know-How").

THIRD. Subject to the terms and upon conditions herein contained, Licensee
desires to make, have made, use, market, and sell certain proprietary products,
and Bio-Vascular is wiliing to grant Licensee a license under the Patent Rights
and the Licensed Know-How for such purposes.

NOW, THEREFORE, in consideration of the foregoing premises and further in
consideration of the mutual covenants, conditions and agreements contained in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree and undertake as follows:

ARTICLE I
DEFINITIONS

1. DEFINITIONS. As used herein, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

(a) Agreement. "Agreement" shall mean this Agreement (together with
all exhibits, schedules, attachments, appendices and addenda) as the
same may be amended, modified or supplemented from time to time.

(b) Effective Date. "Effective Date" shall mean the date first
written above.

(c) Licensed Know-How. "Licensed Know-How" shall mean the
speciallzed, novel and unique techniques, practices, kn6wledge,
expertise and other proprietary information relating to BioVascular's
Supple Pert-Guard product that is in the possession of Uroplasty as
of the Effective Date, together with any future improvements,
enhancements, updates or other variations of such know-how developed
or acquired by Uroplasty.

(d) Patent Rights. "Patent Rights" shall mean the United States
Patent No. 4,456,589, dated June 26, 1984, any corresponding patents
or patent applications filed in other countries, any reissue
applications, continuation applications, and continuation-in-part
applications filed thereon in the United States or any foreign
country and any patents issuing thereon.

(e) Permitted Uses. "Permitted Uses" shall mean use of the Patent
Rights and/or the Licensed Know-How by Licensee to make, have made,
use, market and sell (i) proprietary products used in connection with
urology, gynecology or uro-gyneeology; and (ii) Licensee's
aLondrnplast product, all subject to the terms and conditions set
forth herein.

2. RELATED DOCUMENTS. All of the terms defined in this Agreement shall have the
defined meanings when used in any exhibit, schedule, attachment, appendix or
addendum hereto or in any document made or otherwise delivered pursuant to this
Agreement, unless the context otherwise requires.

ARTICLE II
GRANT OF LICENSE

1. LICENSE. Upon the terms and conditions set forth herein, Bio-Vascular hereby
grants to Licensee, and Licensee hereby accepts, a nonexclusive, worldwide,
royalty-free, nontransferable (subject only to assignment in accordance with
Article VII, Section 1 hereof), perpetual (subject only to termination in
accordance with Article VI hereof) license to use the Patent Rights and the
Licensed Know-How for Permitted Uses.

2. USES OTHER THAN PERMITTED USES. Licensee acknowledges and agrees that any and
all uses of the Patent Rights and/or the Licensed Know-How other than Permitted
Uses are strictly prohibited.

3. NONEXCLUSIVITY. Licensee acknowledges that Licensee is not the exclusive
licensee of the Patent Rights or the Licensed Know-How and that Bio-Vascular may
use the Patent Rights and/or the Licensed Know-How for Permitted Uses or
otherwise and grant licenses for the use of the Patent Rights and/or the
Licensed Know-How to third parties for Permitted Uses or otherwise.

4. NO FURTHER DISCLOSURE OBLIGATION. Notwithstanding anything contained herein
to the contrary, Licensee acknowledges and agrees that Bio-Vascular has no
obligation to disclose to Licensee or any third party any information,
technology or know-how relating to its Supple Pert-Guard product, nor shall
Bio-Vascular have any obligation to train any employees or other representatives
of Uroplasty relating to use of the Patent Rights or the Licensed Know-How.

ARTICLE III
OBLIGATIONS OF LICENSEE

1. PATENT MARKING. Licensee shall mark every product produced or sold by it
under this Agreement in accordance with the statutes of the United States (or
foreign countries, if applicable) relating to the marking of patented articles,
if applicable.

2. PRODUCT INDEMNITY BY LICENSEE. Licensee shall be solely responsible for the
production of its proprietary products under this Agreement. Licensee shall
indemnify, defend and hold Bio-Vascular, its agents, officers, and employees
harmless from and against any and all liability, damages, cost and expenses,
including attorneys' fees, incurred by Bio-Vascular, its agents, officers, and
employees, as a result of Licensee's production of proprietary products under
the Patent Rights and/or the Licensed Know-How, including specifically, without
limitation, liability, damages, costs and expenses, including attorneys' fees,
incurred by BioVascular, its agents, officers, and employees, by reason of any
claim, alleged or actual defects in the proprietary products produced by
Licensee under the Patent Rights and/or the Licensed Know-How, directly or
indirectly, or by reason of any damage to any person or property resulting from
any claim, alleged or actual defect or insufficient design, materials or
workmanship in the production of proprietary products by Licensee.

3. PRODUCT INDEMNITY BY BIO-VASCULAR. Bio-Vascular shall indemnify, defend and
hold Licensee, its agents, officers and employees, harmless from and against any
and all liability, damages, costs and expenses, including attorneys' fees
incurred by Licensee, its agents, officers, and employees, as a result of
Bio-Vascular's production of proprietary products, including specifically,
without limitation, liability, damages, costs and expenses, including attorneys'
fees, incurred by Licensee, its agents, officers and employees, by reason of any
claim, alleged or actual defects in the proprietary products produced by
Bio-Vascular or by reason of any damage to any person or property resulting from
any claim alleged or actual defect or insufficient design, materials or
workmanship in production of proprietary products produced by Bio-Vascular.

ARTICLE IV
PROPRIETARY RIGHTS

1. RIGHTS RESERVED. All rights in the Patent Rights and the Licensed Know-How,
other than those granted to Licensee by this Agreement, are hereby reserved by
Bio-Vascular.

2. PROTECTION OF PROPRIETARY RIGHTS. Licensee shall assist Bio-Vascular, to the
extent reasonably requested by Bio-Vascular, in the procurement of any
protection or defense of any of BioVascular's rights to the Patent Rights and/or
the Licensed Know-How. Licensee shall immediately disclose to Bio-Vascular any
facts or circumstances from which it could be reasonably concluded that a third
party is infringing on the Patent Rights and/or the Licensed Know-How.
Bio-Vascular shall have the right, at its own expense and in its sole and
absolute discretion, to prosecute all infringements of the Patent Rights and/or
the Licensed Know-How. If the infringement claim is one that cannot by its
nature be prosecuted solely by Bio-Vascular, licensee shall make available, or
cause to be made available, all information and assistance that Bio-Vascular may
reasonably request. Bio-Vascular shall be entitled to retain any and all
recoveries or settlements realieed in connection with its defense of the Patent
Rights and/or Licensed Know-How. In the event Bio-Vascular fails, for whatever
reason, to commence prosecution of all claims of infringement of the Patent
Rights and/or the Licensed KnowHow within ninety (90) days following receipt of
written notice of such infringement from Licensee, then Licensee shall be
entitled to prosecute such claims in its own name, at its own expenses and
License shall be entitled to retain all recoveries from said prosecution,
whether by judgment, settlement or otherwise.

3. TRADEMARK. Notwithstanding anything contained herein to the contrary,
Licensee acknowledges and agrees that Bio-Vascular is the sole and absolute
owner of the Pert-Guard and Supple Pert-Guard trademarks and that Licensee has
no right whatsoever to use such trademarks or any other trademarks currently
owned by Bio-Vascular for any purpose whatsoever without the prior written
consent of BioVascular.

4. RIGHTS ARE "INTELLECTUAL PROPERTY" UNDER BANKRUPTCY-CODE. All rights and
licenses granted by Bio-Vascular to Licensee under or pursuant to this Agreement
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code (the "Code"), or any replacement provision
therefor, licenses to rights to "intellectual property" as defined by the Code.
The parties further agree that, in the event of the commencement of bankruptcy
proceedings by or against Bio-Vascular under the Code, that Licensee, as
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the Code.

ARTICLE V
WARRANTIES

1. WARRANTIES OF BIO-VASCULAR. Bio-Vascular hereby represents and warrants to
Licensee that:

(a) Bio-Vascular has the right to enter into this Agreement, to grant
to Licensee the rights and licenses set forth herein, and to perform
all obligations of this Agreement;

(b) Execution, delivery, and performance of this Agreement by
Bio-Vascular will not constitute a breach of aiiy agreement,
judgment, award, law, rule, or regulation to which BioVascular is
bound; and

(c) Bio-Vascular has not previously granted any rights under the
Patent Rights that would interfere with any rights granted Licensee
under this Agreement.

2. WARRANTIES OF LICENSEE. Licensee hereby represents and warrants to
Bio-Vascular that:

(a) Licensee has the full right, power and authority to enter into
and perform its obligations under this Agreement; and

(b) Execution, delivery, and performance of this Agreement by
Licensee will not constitute a breach of any agreement, judgment,
award, law, rule, or regulation to which Licensee is bound.

ARTICLE VI
TERMINATION

1. TERMINATION. This Agreement and the licenses granted hereunder may be
terminated upon the occurrence of one or more of the following events, and the
terminating party shall not be liable to the other party for the proper exercise
of such right:

(a) Option to Terminate. This Agreement shall be terminated at the
option of the nonlefaulting party upon the material breach of one of
the parties of their obligation to perform or comply with the terms
and conditions of this Agreement and/or that certain Purchase and
Sale Agreement of even date herewith among Licensee, Bioplasty, Inc.
and Bio-Vascular, Inc. (the "Purchase Agreement"). In the event one
of the parties finds the other in material breach of this Agreement
and/or the Purchase Agreement, notice of such breach shall be sent to
the defaulting party in writing. If the breach continues for twenty
(20) days after receipt by the defaulting party of the notice, this
Agreement shall be automatically terminated.

(b) Events of Automatic Termination. This Agreement and the licenses
granted hereunder shall terminate immediately and automatically upon
the happening of any of the following events:

(i) any proceeding under any bankruptcy, reorganization,
insolvency, readjustment of debt, dissolution, liquidation
or any similar law or statute of any jurisdictions
commenced by or against the Licensee; or

(ii) a temporary or permanent receiver is appointed for
all or any portion of the Licensee's business and/or
property.

2. EFFECT OF TERMINATION. Upon termination or expiration of this Agreement, for
whatever reason, all provisions relating to proprietary property, patents or
other intellectual property rights shall remain in full force and effect.
Notwithstanding the termination or expiration of this Agreement, -each of the
parties hereto shall be required to carry out any provision hereof that
contemplates performance subsequent to such termination; and such termination
shall not affect any liability or other obligation that shall have accrued prior
to such termination, including, but not limited to, any liability for loss or
damage on account of a prior default. Any rights and remedies provided in this
Agreement shall be cumulative and in addition to all rights and remedies
available at law and in equity.

ARTICLE VII
MISCELLANEOUS PROVISIONS

1. NO ASSIGNMENT OR SUBLICENSE. This Agreement and all rights and licenses
granted or obligations incurred hereunder may not be assigned, sublicensed or
transferred by either party without the prior written consent of the other
party; provided, however, that either party shall have the right to assign its
rights and licenses granted or obligations incurred hereunder to wholly owned
subsidiaries or any third party purchasing all or substantially all of the
business assets of the applicable party hereto or to any third party through
merger with the applicable party hereto.

2. BENEFIT. Except as otherwise provided herein, this Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
successors and assigns.

3. EOUITABLE RELIEF. The parties agree that any breach of the terms or covenants
of this Agreement will cause the other party irreparable harm for which there is
no adequate remedy at law, and the parties consent to the issuance of any
injunction or other equitable relief in favor of the other party enjoining the
breach of any such covenant or term. In no manner or effect shall this provision
of this Agreement preclude either party from exercising any right or remedy to
which such party may be entitled, at law or in equity, by reason of a breach by
the other party of any term or covenant of this Agreement.

4. ARBITRATION. Except for any claim by either party for equitable relief in
accordance with Article VII, Section 3 above, any dispute, controversy or claim
arising out of or in connection with this Agreement shall be settled by binding
arbitration in accordance with the then existing Commercial Rules of the
American Arbitration Association, which arbitration shall take place in the
Minneapolis/St. Paul, Minnesota metropolitan area. Each party shall select an
arbitrator within thirty (30) days of the receipt of any demand for arbitration
and each shall be responsible for compensation of its own arbitrator. The two
arbitrators shall confer and select by mutual agreement (and at the parties'
joint expense) a neutral third arbitrator within sixty (60) days of the filing
of the demand for arbitration. If the parties fail to appoint their own
arbitrator or if the party-appointed arbitrators are unable to agree upon the
neutral arbitrator, the vacancies in the arbitration panel will be appointed in
accordance with the rules of the American Arbitration Association. The
party-appointed arbitrators (but not the neutral arbitrator) shall have the
right to consult with the party appointing them in advance of the arbitration
hearing. It is the intention of the parties that the arbitration be speedily
conducted with the hearing to take place and awards to be made if possible
within ninety (90) days of the filing of the demand for arbitration. Judgement
upon the award of all or a majority of the arbitrators shall be binding upon the
parties hereto and may be entered in any court having jurisdiction. Specific
performance and injunctive relief may be ordered by the6award. Costs and
attorneys' fees shall be paid in accordance with the arbitration award.

5. WAIVER MODIFICATION OR AMENDMENT. Unless otherwise expressly provided in this
Agreement and any dpcuments expressly referred to herein, no waiver,
modification or amendment of any term, condition or provision of this Agreement
shall be valid, binding or of any effect unless made in writing, signed by the
parties hereto or their duly authorized representatives and specifying with
particularity the nature and extent of such waiver, modification, or amendment.
Any waiver by any party of any provision hereof shall not affect or impair any
other provision hereof. The failure of any party to enforce at any time any of
the provisions of this Agreement shall not be construed to be a waiver of the
right of such party to subsequently enforce any such provisions.

6. NOTICES. All notices, requests or other communications from either party
hereto to the other shall be in writing and shall be considered to be delivered
or served if sent by a nationally recognieed express delivery service or by
first class certified or registered mail, return receipt requested, postage
prepaid to the party at its address as set forth on the signature page hereto,
or to such other address as such party may hereafter designate by written notice
to the other party.

7. LEGAL RELATIONSHIP. Licensee and Bio-Vascular hereby acknowledge and agree
that nothing contained in this Agreement shall be deemed to create an
employment, agency, franchise, or other relationship between Licensee and
Bio-Vascular for any purpose whatsoever and that no relationship is intended or
created hereby other than the relationship of independent contractors.

8. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but together which shall constitute
one and the same instrument.

9. HEADINGS. Section headings used herein are for convenience purposes only and
shall in no way be construed to be a part of this Agreement or as a limitation
of the scope of the particular sections to which such headings refer.

10. INTERPRETATION AND SEVERANCE. The provisions of this Agreement shall be
applied and interpreted in a manner consistent with each other so as to carry
out the purposes and intent of the parties hereto, but if for any reason any
provision hereof is determined to be unenforceable or invalid, such provision or
such part hereof as may be unenforceable or invalid shall be deemed severed from
this Agreement, and the remaiiting provisions shall be carried out with the same
force and effect as if the provision or part thereof had not been a part of this
Agreement.

11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

12. ENTIRE AGREEMENT. This Agreement, including any appendices or exhibits
attached hereto or documents expressly referred to herein, contains the entire
agreement between Licensee and BioVascular and supersedes and cancels any and
all other agreements, whether oral or in writing, between Licensee and
Bio-Vascular with respect to the matters referred to herein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

LICENSOR: LICENSEE:
BIO-VASCULAR, INC UROPLASTY, INC.
By: /s/ JOHN T. KARCANES By: /s/ DONALD A. MAJOR
John T. Karcanes, President and Chief Donald A. Major, Chief
Executive Officer Financial Executive Officer

Address: Address:

Bio-Vascular, Inc. Uroplasty, Inc.
2575 University Avenue 2718 Summer Street, N.E.
St. Paul, Minnesota 55114 Minneapolis, Minnesota 55413
Attn: John T. Karcanes Attn: Donald A. Major

EXHIBIT 6.4

LEASE AGREEMENT

This Lease Agreement, made this 10th day of January , 1995, between
SUMMER BUSINESS CENTER PARTNERSHIP, A Minnesota General Partnership (hereinafter
called "Landlord"), and UROPLASTY, INCORPORATED, (hereinafter called "Tenant");

Witnesseth, That:

1. DEMISED PREMISES. Landlord, subject to the terms and conditions
hereof, hereby leases to Tenant the premises (hereinafter referred to as the
"Demised Premises") shown outlined in red on the floor plan attached hereto as
Exhibit A and comprising approximately -- square feet of Office and -- square
feet of Warehouse, for a total of 6,205 square feet in the building known as
Summer Business Center located at 2718 Summer Street N.E. in Minneapolis,
Minnesota (hereinafter referred to as the "Building"), to be used by Tenant for
general office, showroom, light manufacturing of medical products and/or
warehouse uses and purposes and for no other use or purpose, together with a
right of access over and across all common areas of the Project. The Building,
parcel or parcels of land on which they are built, which are legally described
on Exhibit B, and all improvements thereon, are hereinafter referred to as the
"Project".

2. TERM. Tenant takes the Demised Premises from Landlord, upon the
terms and conditions herein contained, to have and to hold the same for the term
("Lease Term") of five (5) years and zero (0) months commencing on the first
(lst) day of March , 1995 , and ending on the twenty-ninth day of February,
2000, unless sooner terminated as herein provided.

a. If the Landlord, for any reason whatsoever, cannot deliver
possession of the said Demised Premises to the Tenant at the commencement of the
Lease Term hereof, this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom, nor shall the
expiration date of the above Lease Term be in any way extended, but in that
event, all rent shall be abated during the period between the commencement of
said Lease Term and the time when Landlord delivers possession.

b. In the event that Landlord shall permit Tenant to occupy the Demised
Premises prior to the commencement date of the Lease Term, such occupancy shall
be subject to all the provisions of this Lease. Said early possession shall not
advance the termination date hereinabove provided.

c. IN THE EVENT LANDLORD IS UNABLE TO PROVIDE SAID OCCUPANCY BY APRIL
20, 1995, TENANT HAS THE RIGHT TO TERMINATE THE LEASE AND ITS OBLIGATIONS
HEREUNDER. IN THE EVENT OF SAID TERMINATION, LANDLORD SHALL HAVE NO OBLIGATIONS
TO TENANT AND NO LIABILITY FOR ANY LOSSES SUFFERED BY TENANT DUE TO SUCH DELAY
AND SUBSEQUENT TERMINATION. THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY IF
THE DELAY IN OCCUPANCY RESULTED FROM FORCE MAJEURE OR A LABOR STRIKE.

3. BASE RENT. Tenant shall pay to Landlord during the Lease Term
monthly base rent as follows:

PERIOD MONTHLY RENT PAYMENT

YEARS 1-2 $ 3,361.04
YEAR 3 $ 3,748.85
YEARS 4-5 $ 4,L36.67

Said Base Rent is payable on or before the first day of each month in advance at
the office of Landlord at 50 Groveland Terrace, Minneapolis, Minnesota
55403-3696, or at such other place as may from time to time be designated by
Landlord.

4. OPERATING COSTS. Tenant shall, for the entire Lease Term, pay to
Landlord as additional rent, without any set-off or deduction therefrom,
Tenant's share of all costs which Landlord may incur in owning, maintaining and
operating the Project for each calendar year during the Lease Term. Said costs
are referred to herein as "Operating Costs" and are hereby defined to include,
but shall not be limited to, all real estate taxes and annual installments of
special assessments payable with respect to the Project, maintenance, repair,
replacement and care of all heating, lighting, plumbing and air conditioning
fixtures, equipment and systems serving the common areas, parking and landscape
areas, signs, snow removal, non-structural repair and maintenance of the
exterior of the Building (including the costs of equipment purchased and used
for such purposes) , management fees, insurance premiums, utility costs, costs
of wages, services, equipment and supplies, and all other costs of any nature
whatsoever which for federal tax purposes may be expended rather than
capitalized, but exclusive only of leasing commissions, depreciation, costs of
tenant improvements, and payments of principal and interest on any mortgages
covering the Project. Operating Costs shall also include any expenses or the
yearly amortization of capital costs incurred by Landlord for improvements or
structural repairs to the Project required to comply with any change in the
laws, rules or regulations of any governmental authority having jurisdiction, or
for purpose of reducing Operating Costs, which costs shall be amortized over the
useful life of such improvements or repairs, as reasonably estimated by
Landlord. Tenant's proportionate share of operating expenses shall be that
fraction, the numerator of which is the area of Tenant's Demised Premises and
the denominator of which is the total area of the Building.

As soon as reasonably practicable prior to the commencement of each
calendar year during the Lease Term, Landlord shall furnish to Tenant an
estimate of Tenant's share of Operating Costs for the ensuing calendar year, and
Tenant shall pay, as additional rent hereunder together with each installment of
monthly base rent, one-twelfth (l/l2th) of its estimated annual share of such
Operating Costs. As soon as reasonably practicable after the end of each
calendar year during the Lease Term, Landlord shall furnish to Tenant a
statement of the actual Operating Costs for the previous calendar year,
including Tenant's share of such amount, and within thirty (30) days thereafter,
Tenant shall pay to Landlord, or Landlord to Tenant as the case may be, the
difference between such actual and estimated excess Operating Costs paid by
Tenant. Tenant's share of such excess Operating Costs for the years in which
this Lease commences and terminates shall be prorated based upon the dates of
commencement and termination of the Lease Term.

5. ADDITIONAL TAXES. Tenant shall pay as additional rent to Landlord,
together with each installment of monthly base rent, the amount of any gross
receipts tax, sales tax or similar tax (but excluding therefrom any income tax)
payable, or which will be payable, by Landlord, by reason of the receipt of the
monthly base rent and adjustments thereto.

6. UTILITIES. Landlord shall provide mains and conduits to supply
water, gas, electricity and sanitary sewer service to the Demised Premises.
Tenant shall pay, when due, either directly to the utility company if billed
individually, or to Landlord if billed as an operating expense, all charges for
sewer usage or rental, garbage disposal, refuse removal, water, electricity,
gas, telephone and/or other utility services or energy source furnished to the
Demised Premises during the term of this Lease, or any renewal or extension
thereof. Landlord shall not exceed the rate Tenant would be required to pay to a
utility company or service company furnishing any of the foregoing utilities or
services. The charges thereof shall be deemed operating costs in accordance with
Section 4 if the charges are not billed directly to Tenant by the utility
company.

Tenant agrees that if it uses water in its Demised Premises for any use
other than for toilets and lavatories in number comparable to typical
office/showroom/warehouse tenants, it will allow Landlord to submeter its water
usage and bill Tenant directly therefor.

7. CARE AND REPAIR OF DEMISED PREMISES. Tenant shall, at all times
throughout the terms of this Lease, including renewals and extensions, and at
its sole expense, keep and maintain the Demised Premises in a clean, safe,
sanitary and first-class condition, and in compliance with all applicable laws,
codes, ordinances, rules and regulations. Tenant's obligations hereunder shall
include but not be limited to the maintenance, repair and replacement, if
necessary, of all lighting and plumbing fixtures and equipment, HVAC equipment
serving the Demised Premises (except that Landlord warrants the existing two
HVAC rooftop units to be in good working condition through July, 1995 and Tenant
shall assume maintenance and repair thereafter), and other equipment, fixtures,
motors and machinery, all interior walls, partitions, doors and windows,
including the regular painting thereof, all exterior entrances, windows, doors,
and docks and the replacement of all broken glass. When used in this provision,
the term "repairs" shall include replacements or renewals when necessary, and
all such repairs made by Tenant shall keep and maintain all portions of the
Demised Premises and the sidewalks and areas adjoining the same in a clean and
orderly condition, free of accumulation of dirt, rubbish and snow.

If Tenant fails, refuses or neglects to maintain or repair the Demised
Premises as required in this Lease after notice shall have been given to Tenant,
Landlord may make such repairs without liability to Tenant for any loss or
damage that may accrue to Tenant's merchandise, fixtures or other property or to
Tenant's business by reason thereof, and upon completion thereof, Tenant shall
pay to Landlord all costs plus fifteen percent (l5%) for overhead incurred by
landlord in making such repairs upon presentation to Tenant of bill therefor.
Landlord shall keep the foundation, exterior walls (except plate glass or glass
or other breakable materials used in structural portions) and roof in good
repair and, if necessary or required by proper governmental authority, make
modifications or replacements thereof, except that Landlord shall not be
required to make any such repairs, modifications or replacements which become
necessary or desirable by reason of the negligence of Tenant, its agents,
servants or employees, or by reason of anyone illegally entering in or upon the
Premises.

LANDLORD SHALL MANAGE ALL OUTSIDE MAINTENANCE OF THE PROJECT, INCLUDING
GROUNDS AND PARKING AREAS. THE COST OF SUCH MAINTENANCE SHALL BE PRORATED IN
ACCORDANCE WITH SECTION 4 OF THIS LEASE. ALL SUCH MAINTENANCE WHICH IS PROVIDED
BY LANDLORD SHALL BE PROVIDED AS REASONABLY NECESSARY FOR THE COMFORTABLE USE
AND OCCUPANCY OF DEMISED PREMISES DURING BUSINESS HOURS, EXCEPT SATURDAYS,
SUNDAYS, AND HOLIDAYS, UPON THE CONDITION THAT LANDLORD SHALL NOT BE LIABLE FOR
DAMAGES FOR FAILURE TO DO SO DUE TO CAUSES BEYOND ITS CONTROL.

8. CONSTRUCTION OF DEMISED PREMISES. Landlord agrees to construct
Tenant's space in accordance with the attached Exhibits C-l and C-2 using
building standard materials and finishes, at no cost to Tenant. Tenant may make
changes or alterations to the attached floor plan prior to construction provided
such changes or alterations do not substantially change the construction costs
of the Demised Premises. Should such changes substantially increase the
construction costs in the opinion of Landlord, such costs shall be borne by
Tenant.

Landlord shall provide Tenant with the exclusive use of one (l) 4' dock
door.

9. OBLIGATIONS OF TENANT. Tenant agrees that it shall:

a. Observe such rules and regulations as from time to time may be put
in effect by Landlord for the general safety, comfort and convenience of
Landlord, occupants and tenants of said Building.

b. Give Landlord access to the Demised Premises at all reasonable
times, without charge or diminution of rent, to enable Landlord to examine the
same and to make such repairs, additions and alterations as Landlord may deem
advisable.

c. Keep the Demised Premises in good order and condition and replace
all glass broken by Tenant with glass of the same quality as that broken, save
only glass broken by fire and extended coverage type risks, and commit no waste
on the Demised Premises.

d. Pay for all electric lamps, starters and ballasts as replaced in the
Demised Premises.

e. Upon the termination of this Lease in any manner whatsoever, remove
Tenant's goods and effects and those of any other person claiming under Tenant,
and quit and deliver up the Demised Premises to Landlord peaceably and quietly
in as good order and condition as the same are now in or hereafter may be put in
by Landlord or Tenant, reasonable use and wear thereof and repairs which are
Landlord1s obligation excepted. Goods and effects not removed by Tenant at the
termination of this Lease, however terminated, shall be considered abandoned and
Landlord may dispose of the same as it deems expedient.

f. Not either voluntarily or by operation of law, assign, transfer,
mortgage, pledge, hypothecate or encumber this Lease or any interest therein,
and shall not sublet the Demised premises or any part thereof, or any right or
privilege appurtenant thereto, or suffer any other person (the employees,
agents, servants and invitees of Tenant excepted) to occupy or use the Demised
premises or any portion thereof, without the prior written consent of Landlord,
which consent may not be unreasonably withheld. Notwithstanding the foregoing,
any subtenant or assignee must have at least the financial strength of the
original Tenant. Consent to one assignment, subletting, occupation or use by any
other person shall not be deemed to be a consent to any subsequent assignment,
subletting, occupation or use by another person. Any such assignment or
subletting without such consent shall be void, and shall, at the option of
Landlord, constitute a default under this Lease. Regardless of Landlord's
consent, no subletting or assignment shall release Tenant of Tenant's obligation
to pay the rent and perform all other obligations to be performed by Tenant
hereunder for the term of this Lease. The acceptance of rent by Landlord from
any other person shall not be deemed to be a waiver by Landlord of any provision
hereof or any right hereunder. Any subrent charged to subtenant by Tenant which
is in excess of the rent charged by Landlord to Tenant shall be passed on in
full to Landlord. Any such subrent, in no event, may be based on net income.

g. Not place signs on or about the Demised Premises without first
obtaining Landlord's written consent thereto. Tenant's signs on exterior of
Building shall conform to sign criteria attached hereto as Exhibit D.

h. Not overload, damage or deface the Demised Premises or do any act
which may make void or voidable any insurance on the Demised Premises or the
Building or which may render an increased or extra premium payable for
insurance.

i. Not make any alteration of or addition to the Demised Premises
without the written approval of the Landlord, and all alterations, additions or
improvements which may be made by either of the parties hereto upon the Demised
Premises, except movable office furnishings, shall be the property of the
Landlord, and shall remain upon and be surrendered with the Demised Premises, as
a part thereof, at the termination of this Lease or any extension thereof.

j. Keep the Demised Premises and the property in which the Demised
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Landlord may require, at
Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole
cost and expense, a lien and completion bond in an amount equal to one and
one-half (1-1/2) times any and all estimated costs of any improvements,
additions, or alterations in the Demised Premises, to insure Landlord against
any liability for mechanics' and materialmen's liens and to insure completion of
the work.

k. Cause to be performed by a competent service company, preventative
maintenance of all rooftop HVAC units and warehouse unit heaters serving the
Demised Premises, as recommended by the equipment manufacturer, unless performed
by Landlord at Landlord's option.

l. Not place any additional locks on any of Tenant's doors without the
written consent of Landlord. Landlord shall have the right to keep pass keys to
the Demised Premises.

m. Tenant agrees and acknowledges that it shall be the sole
responsibility of the Tenant to comply with any and all provisions of the
Americans with Disabilities Act of 1990 (hereinafter "ADA"), as such compliance
may be required to operate the Demised Premises. The Tenant further agrees to
indemnify and hold the Landlord harmless against any claims which may arise out
of Tenant's failure to comply with the ADA. Such indemnification shall include,
but not necessarily be limited to reasonable attorney's fees, court costs and
judgments as a result of said claims.

Tenant's obligations under this Section 9 to do or not to do see to it
that Tenant's employees, agents and invitees shall do or shall not do such acts,
as the case may be.

10. PARKING AND DRIVES. Tenant, its employees, and invitees shall have
the non-exclusive right to use the common driveways and parking lots along with
the other tenants and customers of the Building. The use of such driveways and
parking facilities are subject to such reasonable rules and regulations as
Landlord may impose. Tenant further agrees not to use, or permit the use by its
employees, the parking areas for the overnight storage of automobiles or other
vehicles without the written consent of Landlord.

ll. CASUALTY LOSS. In case of damage to the Demised Premises or the
Building by fire or other casualty, Tenant shall give immediate notice to
Landlord who shall thereupon cause the damage to be repaired with reasonable
speed at the expense of the Landlord, subject to delays which may arise by
reason of adjustment of loss under insurance policies and for delays beyond the
reasonable control of Landlord, and to the extent that the Demised Premises are
rendered untenantable, the rent shall proportionately abate, except in the event
such damage resulted from or was contributed to by the act, fault or neglect of
Tenant, Tenant's employees or agents, in which event there shall be no abatement
of rent. In the event the damage shall be so extensive that the Landlord, in its
sole discretion, shall decide not to repair or rebuild, this Lease shall, at the
option of Landlord, be terminated as of the date of such damage by written
notice from the Landlord to the Tenant, and the rent shall be adjusted to the
date of such damage and Tenant shall thereupon promptly vacate the Demised
Premises.

12. INDEMNITY AND INSURANCE. Tenant agrees to indemnify and save
harmless Landlord from and against all claims of whatever nature arising from
any act, omission or negligence of Tenant, or Tenant's officers, agents,
servants, licensees or contractors, or arising from any accident, injury or
damage whatsoever caused to any person or to the property of any person during
the term hereof in or about the Demised Premises. This indemnity and hold
harmless agreement shall include indemnity against all costs, expenses, and
liabilities incurred in connection with any such claim or proceeding brought
thereon and the defense thereof.

Tenant agrees to use and occupy the Demised Premises and to use all
other portions of the project at its own risk, and further agrees that Landlord
shall have no responsibility or liability for any loss or damage to fixtures,
equipment, merchandise or other personal property of Tenant.

Tenant shall not carry any stock of goods or do anything in or about
said Demised Premises which will in any way tend to increase insurance rates on
said Demised Premises or the Building in which the same are located. If Landlord
shall consent to such use, Tenant agrees to pay as additional rental any
increase in premiums for insurance against loss by fire or extended coverage
risks resulting from the business carried on in the Demised Premises by Tenant.
If Tenant installs any electrical equipment that overloads the power lines to
the Building or if any insurance company insuring the Building or the Demised
Premises makes any safety recommendations regarding the Demised Premises, Tenant
shall, at its own expense, make whatever changes are necessary to comply with
the requirements of insurance underwriters and insurance rating bureaus, loss
control specialists and governmental authorities having jurisdiction.

Tenant agrees to procure and maintain a policy or policies of
insurance, at its own cost and expense, insuring Landlord and Tenant from all
claims, demands, or actions made by or on behalf of any person or persons, firm,
or corporation arising from, related to, or connected with the conduct and
operation of Tenant's business in the Demised Premises for injury to or death of
one or more persons and for damage to property in the combined single limit of
not less than $l,000,000 each occurrence. Tenant shall carry like coverage
against loss or damage by boiler or internal explosion by boilers, if there is a
boiler in the Demised Premises. Said insurance shall not be subject to
cancellation except after at least thirty (30) days' prior written notice to
Landlord, and the policy or policies, or duly executed certificate or
certificates for the same, together with satisfactory evidence of the payment of
premium thereon, shall be deposited with Landlord at the commencement of the
term and renewals thereof no less than thirty (30) days prior to the expiration
of the term of such coverage. If Tenant fails to comply with such requirement,
Landlord may obtain such insurance and keep the same in effect, and Tenant shall
pay Landlord the premium cost thereof upon demand.

Landlord shall procure at its own expense during the term of this Lease
fire, windstorm, extended coverage, such other insurance as Landlord may obtain,
and rental loss insurance on the Project provided, however, Tenant shall
reimburse Landlord for its share of the actual net cost and expense to Landlord
of such fire, windstorm, extended coverage, and rental loss insurance.

Tenant shall procure at its own expense from the time Tenant takes
possession until the end of the Lease Term, fire, extended coverage, vandalism,
and sprinkler leakage insurance on the Demised Premises. This property insurance
shall include floor coverings and/or any improvements and fixtures and signs
installed by Landlord.

Each of Landlord and Tenant hereby releases the other from any and all
liability or responsibility (to the other or anyone claiming through or under
them by way of subrogation or otherwise) for any loss or damage to property
caused by fire or any other insured peril, even if such fire or other casualty
shall have been caused by the fault or negligence of the other party or anyone
for whom such party may be responsible. Tenant also agrees to obtain a waiver of
subrogation from its insurer, subject to availability.

l3. EMINENT DOMAIN. If the entire Demised Premises are taken by eminent
domain, this Lease shall automatically terminate as of the date of taking. If a
portion of the Demised Premises is taken by eminent domain, Landlord shall have
the right to terminate this Lease as of the date of taking by giving written
notice thereof to Tenant within ninety (90) days after such date of taking If
Landlord does not elect to terminate this Lease, it shall, at its expense,
restore the Demised Premises, exclusive of any improvements or other changes
made therein by Tenant, to as near the condition which existed immediately prior
to the date of taking as reasonably possible, and to the extent that the Demised
Premises are rendered untenantable, the rent shall proportionately abate. All
damages awarded for a taking under the power of eminent domain shall belong to
and be the exclusive property of Landlord, whether such damages be awarded as
compensation for diminution in value of the leasehold estate hereby created, or
to the fee of the Demised Premises provided, however, that Landlord shall not be
entitled to any separate award made to Tenant for the value and cost of removal
of its personal property and fixtures.

14. DEFAULT. Tenant hereby agrees that in case Tenant shall default in
making its payments hereunder or in performing any of the other agreements,
terms and conditions of this Lease AND REMAINS IN DEFAULT AFTER FIVE (5) DAYS
WRITTEN NOTICE THEREOF FROM LANDLORD, IN TILE CASE OF MONETARY DEFAULT, OR
FIFTEEN (L5) DAYS WRITTEN NOTICE FROM LANDLORD (OR SUCH LONGER PERIOD AS MAY BE
REASONABLY NECESSARY TO CURE THE DEFAULT, IF THE TENANT HAS COMMENCED AND IS
DILIGENTLY PURSUING A CURE), IN THE CASE OF A NON-MONETARY DEFAULT, then, in any
such event, Landlord, in addition to all other rights and remedies available to
Landlord, by law or by other provisions hereof, may without process re-enter
immediately into the Demised Premises and remove all persons and property
therefrom and, at Landlord's option, annul and cancel this Lease as to all
future rights of Tenant. Landlord, in addition to the foregoing, may also
accelerate rent due and owing for the remainder of the term. Tenant further
agrees that in case of any such termination, Tenant will indemnify the Landlord
against all loss of rents and other damage which Landlord may incur by reason of
such termination including, but not limited to, costs of restoring and repairing
the Demised Premises and putting the same in rentable condition, REASONABLE
costs of renting the Demised Premises to another tenant, loss or diminution of
rents and other damage which Landlord may incur by reason of such termination,
and all reasonable attorney's fees and expenses incurred in enforcing any of the
terms of this Lease. Neither acceptance of rent by Landlord, with or without
knowledge of breach, nor failure of Landlord to take action on account of any
breach hereof or to enforce its rights hereunder, shall be deemed a waiver of
any breach, and absent written notice or consent, said breach shall be a
continuing one.

Tenant further agrees that if (I) Tenant is declared bankrupt or
insolvent, (ii) Tenant petitions for, or consents to, the appointment of a
receiver of all or substantially all of Tenant's assets, (iii) Tenant petitions
or consents to be declared a bankrupt or an insolvent, or (iv) a petition if
filed by a third person to have Tenant declared bankrupt or insolvent or to have
a receiver appointed with respect to all or substantially all of Tenant's assets
and such petition is not discharged within sixty (60) days after service thereof
is made on Tenant, then, at Landlord's option, without limiting Landlord's other
rights and remedies to which Landlord is entitled under law and/or equity by
reason of any of the aforesaid occurrences and without relieving Tenant of
Tenant's obligations under this Lease, Landlord may terminate this Lease and,
whether or not this Lease is terminated, may re-enter the Demised Premises and
remove all persons therefrom, all as set forth in the foregoing paragraph of
this Section l.

15. NOTICES. All bills, statements, notices, or communications which
Landlord may desire or be required to give to Tenant shall be deemed
sufficiently given or rendered if in writing and either delivered to Tenant
personally or sent by registered or certified mail addressed to Tenant at the
Building, and the time of rendition thereof or the giving of such notice or
communication shall be deemed to be the time when the same is delivered to
Tenant or deposited in the mail as herein provided. Any notice by Tenant to
Landlord must be served by registered or certified mail addressed to Landlord at
the address where the last previous rental hereunder was payable, or in case of
subsequent change upon notice given, to the latest address furnished.

l6. HOLDING OVER. Should Tenant continue to occupy the Demised Premises
after expiration of said Lease Term or any renewal or renewals thereof, or after
a forfeiture incurred, such tenancy shall be from month-to-month, and in no
event from year-to-year or for any longer term. The monthly base rent during
such month-to-month tenancy shall be two (2) times the amount of the monthly
base rent set forth in paragraph 3 of this Lease.

l7. SUBORDINATION. The rights of Tenant shall be subordinate to the
lien of any first mortgage now or hereafter in force against the real estate on
or in which the Demised Premises are located, and Tenant shall execute such
further instruments subordinating this Lease to the lien or liens of any such
mortgage or mortgages as shall be requested by Landlord. Notwithstanding the
foregoing provisions, Tenant agrees that any First Mortgagee shall have the
right at any time to subordinate any rights of such First Mortgagee to the
rights of Tenant under this Lease on such terms and subject to such conditions
as such First Mortgagee deems appropriate.

l8. ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to
time upon not less than ten (10) days' prior written notice from Landlord,
execute, acknowledge and deliver to Landlord a statement in writing Certifying
(I) that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease as so
modified, is in full force and effect); (ii) the date of commencement of the
term of this Lease; (iii) that rent is paid currently without any offset or
defense thereto; (iv) the amount of rent, if any, paid in advance; and (v) that
there are no uncured defaults by Landlord or stating those claimed by Tenant,
provided that, in fact, such facts are accurate and ascertainable. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the real property of which the Demised Premises are a part.
Failure to sign the statement or failure to specify any default claimed shall be
deemed approval of the statement submitted to Tenant by Landlord.

19. MORTGAGEE PROTECTION. Tenant agrees to give any mortgagees and/or
trust deed holders, by registered mail, a copy of any notice of default served
upon Landlord, provided that prior to such notice Tenant has been notified, in
writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of
the address of such mortgagees and/or trust deed holders. Tenant further agrees
that if Landlord shall have failed to cure such default within the term provided
for in this Lease, then the mortgagees and/or trust deed holders shall have an
additional thirty (30) days within which to cure such default or, if such
default cannot be cured within that time, then such additional time as may be
necessary, if within such thirty (30) days any mortgagee and/or trust deed
holder has commenced and is diligently pursuing the remedies necessary to cure
such default (including, but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure), in which event this Lease shall
not be terminated while such remedies are being so diligently pursued.

20. SERVICE CHARGE. Tenant agrees to pay a service charge equal to
twelve percent (l2%) per annum on any portion thereof of any payment of monthly
base rent or additional charge payable by Tenant hereunder which is not paid
within ten (10) days from the date due, or $25.00 per month or portion thereof,
whichever is greater.

21. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of
three thousand three hundred-sixty-one and 04/lOO Dollars ($ 3,361.04). Said
sum shall be held by Landlord as security for the faithful performance by Tenant
of all the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to
any provisions of this Lease including, but not limited to, the provisions
relating to the payment of rent, Landlord may (but shall not be required to)
use, apply or retain all or any part of this security deposit for the payment of
any amount which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
security deposit is so used or applied, Tenant shall within five (5) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount, and Tenant's failure to do
so shall be a material breach of this Lease. Landlord shall not be required to
keep this security deposit separate from its general funds, and Tenant shall not
be entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest hereunder) at the expiration
of the Lease Term. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer said deposit to Landlord's successor in interest.

22. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Demised Premises except
that which has been paid for by Landlord and is the standard of the Building. In
the event any or all of the Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property shall be assessed and taxed with the
Building, Tenant shall pay to Landlord its share of such taxes within ten (10)
days after delivery to Tenant by Landlord of a statement in writing setting
forth the amount of such taxes applicable to Tenant's property.

23. NOVATION IN EVENT OF SALE OR TRANSFER. In the event of the sale of
the Building or the transfer of the title thereto, Landlord shall be relieved of
all of the covenants and obligations created by this Lease, except as to
breaches thereof occurring prior to such sale or transfer, and such sale or
transfer shall automatically result in the purchaser or transferee assuming and
agreeing to carry out all of the covenants and obligations of Landlord herein
from and after such sale or transfer.

24. DISPLAYS. Tenant shall not display or suffer to be displayed on the
outside of the Demised Premises, on the outside of the Building or on the
sidewalks, driveways, or parking areas adjoining the Building, any goods or
merchandise whatsoever, except with Landlord's written consent.

25. INTERRUPTION OF SERVICES. No liability shall attach to Landlord for
any inconvenience, loss, or damage sustained by Tenant or any other person, or
to the property of Tenant or such other person, due to interruption of electric
power, water, or gas to the Building or to the Demised Premises or by reason of
the failure of any piping, wiring, or apparatus in the Building or for any
inconvenience, loss, or damage sustained by Tenant as a result of any of the
causes set forth in Section 12 or caused by any act or thing done or suffered to
be done by any other tenant of the Building or any servant, employee, agent,
invitee, or customer of Tenant. However, Landlord shall make all reasonable
effort to remedy such interruption of services.

26. ZONING. Tenant covenants that it has satisfied itself prior to
execution of this Lease that the Demised Premises are properly zoned to permit
Tenant's intended use of the Demised premises. Any changes with respect to the
interior finishing of the premises in order to comply with any local or
municipal by-laws shall be at the sole expense of Tenant.

27. QUIET ENJOYMENT. Conditional upon the faithful performance of the
terms, covenants and provisions herein contained by Tenant, Landlord covenants
that Tenant shall quietly have, hold and enjoy the Demised Premises for the term
hereof except or otherwise herein provided.

28. JANITORIAL SERVICES. Tenant shall provide all janitorial and, at
the option of Landlord, all refuse removal services for the Demised Premises, at
the expense of Tenant.

29. HAZARDOUS MATERIALS. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of any biologically
or chemically active or other hazardous substances, or materials nor allow the
storage or use of such substances or materials in any manner not sanctioned by
law or by the highest standards prevailing in the industry for the storage and
use of such substances or materials, nor allow to be brought into the Project
any such materials or substances except to use in the ordinary course of
Tenant's business, and then only after written notice is given to Landlord of
the identity of such substances or materials. Without limitation, hazardous
substances and materials shall include those described in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 690l et seq., any applicable state or local laws and
the regulations adopted under these acts. If any lender or governmental agency
shall ever require testing to ascertain whether or not there has been any
release of hazardous materials, then the reasonable costs thereof shall be
reimbursed by Tenant to Landlord upon demand as additional charges if such
requirement applies to the Premises. In addition, Tenant shall execute
affidavits, representations and the like from time to time at Landlord's request
concerning Tenant's best knowledge and belief regarding the presence of
hazardous substances or materials on the Premises. In all events, Tenant shall
indemnify Landlord from any release of hazardous materials on the Premises
occurring while Tenant is in possession or elsewhere if caused by Tenant or
persons acting under Tenant. The within covenants shall survive the expiration
or earlier termination of the lease term.

30. EARLY TERMINATION PROVISION. NOTWITHSTANDING ANYTHING CONTAINED IN
THIS LEASE TO THE CONTRARY, TENANT MAY TERMINATE THIS LEASE PRIOR TO THE STATED
EXPIRATION DATE UNDER TILE FOLLOWING TERMS AND CONDITIONS:

a. AT THE TIME HEREINAFTER SET FORTH FOR THE EXERCISE OF TENANT'S
OPTION TO TERMINATE TILE LEASE, THE LEASE SHALL BE IN FULL FORCE AND EFFECT AND
TENANT SHALL NOT BE IN DEFAULT IN THE PERFORMANCE OF ANY OF THE TERMS, COVENANTS
AND CONDITIONS HEREIN CONTAINED WHICH HAVE NOT BEEN REMEDIED WITHIN ANY
APPLICABLE CURE PERIOD.

b. TENANT MAY TERMINATE THIS LEASE EFFECTIVE ANY TIME AFTER THE 36TH
MONTH OF THE LEASE TERM BY:

L) PROVIDING LANDLORD WITH WRITTEN NOTIFICATION OF ITS
ELECTION TO TERMINATE THE LEASE ON OR BEFORE 180 DAYS PRIOR TO THE
TERMINATION DATE, AND

2) PAYING TO LANDLORD THE SUM OF THE UNAMORTIZED AMOUNT OF
TENANT IMPROVEMENTS USED BY TENANT CONTRIBUTED BY ANY LEASING COSTS
INCURRED BY LANDLORD, INCLUDING COMMISSIONS, AND RENT PAY-BACK FROM
YEARS L AND 2. THE BALANCE REMAINING UNAMORTIZED AT THE TIME OF SAID
EARLY TERMINATION AS SHOWN ON EXHIBIT E HEREOF SHALL BE PAYABLE IN FULL
AS A TERMINATION FEE. SUCH TERMINATION FEE SHALL NOT BE DEEMED RENT
PAYABLE HEREUNDER, BUT RATHER A TERMINATION FEE PAID BY TENANT TO THE
LANDLORD IN CONSIDERATION OF LANDLORD'S AGREEMENT TO TERMINATE THIS
LEASE AND ACCEPT THE SURRENDER OF THE DEMISED PREMISES AS PROVIDED
HEREIN.

31. MEMORANDUM. Upon the request of either Landlord or Tenant, the
parties shall enter into a memorandum, in recordable form, setting forth a
summary of the terms hereof relating only to the description of the Demised
Premises, the term hereof, and the conditions of assignment or subletting.

32. GENERAL. This Lease does not create the relationship of principal
and agent or of partnership or of joint venture or of any association between
Landlord and Tenant, the sole relationship between Landlord and Tenant being
that of lessor and lessee. No waiver of any default of Tenant hereunder shall be
implied from any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect any default other than the default specified in the express waiver and
that only for the time and to the extent therein stated. Each term and each
provision of this Lease performable by Tenant shall be construed to be both a
covenant and a condition. The topical headings of the several paragraphs and
clauses are for convenience only and do not define, limit or construe the
contents of such paragraphs or clauses.

All preliminary negotiations are merged into and incorporated in this
Lease. This Lease can only be modified or amended by an Agreement in writing
signed by the parties hereto. All provisions hereof shall be binding upon the
heirs, successors and assigns of each party hereto.

33. ENTIRE AGREEMENT. This Lease Agreement, as well as Exhibit(s) A, B,
C-l, C-2, D and E contain the entire understanding of the parties hereto with
respect to the transaction contemplated thereby and supersedes all prior
agreements and understandings between the parties with respect to the subject
matter. No representations, warranties, undertakings or promises, whether oral,
implied, written or otherwise, have been made by either party hereto to the
other unless expressly stated in this Lease or unless mutually agreed to in
writing between the parties hereto and after the date hereof, and neither party
has relied on any verbal representation, agreements, or understandings not
expressly set forth herein.

In Witness Whereof, the parties hereto have executed this Lease the day
and year first above written.

LANDLORD: SUMMER BUSINESS CENTER
PARTNERSHIP, A MINNESOTA
GENERAL PARTNERSHIP

BY: LAKE WEST, A Minnesota
General Partnership, and
General Partner

BY: Klodt Construction
Corporation, Its Partner

BY:
ITS:

TENANT: UROPLASTY, INCORPORATED

BY: /s/ DONALD A MAJOR

ITS: Vice President of Finance/CFO

EXHIBIT A

SITE PLAN

[GRAPHIC]

EXHIBIT B
LEGAL DESCRIPTION

Lot 3, Block 2, Harding Addition to Mid-City Industrial Center except that part
lying Northerly of the Easterly extension of the South line of Summer Street as
dedicated in the plat of Harding Addition to Mid-City Industrial Center and
except that part lying South of a line drawn parallel with and 399.0 feet North
of, measured at right angles to the South line of said Lot 3, according to the
plat thereof on file or of record in the office of the Registrar of Titles in
and for said County of Hennepin, State of Minnesota.

The West 272.00 feet of that part of Lot 3, Block 2, Harding Addition to
Mid-City Industrial Center lying South of a line drawn parallel with and 399.00
feet North of, measured at right angles to the South line of said Lot 3,
according to the recorded plat thereof, and situated in Hennepin County,
Minnesota.

OUTLINE SPECIFICATION FOR

UROPLASTY, INC. LEASE

FOR

SUMMER BUSINESS CENTER

Landlord provided improvements:

A. Demolition:

All interior partitions, carpet, doors, electrical and mechanical items
as necessary per referenced plan, including haul and trash disposal.
Floor cutting and repouring as necessary for plumbing.

B. Drvwall Construction:

l. New, 9' partitions, per the referenced plan.

2. New, deck high partitions, per referenced plan including
demising wall, warehouse wall, & walls around production lab,
QC lab, and package lab.

3. Sheet rock ceiling in corridor outside the three production
rooms.

4. Infills, cut-ins, headers, and patch as necessary per Plan.

5. Return air shafts in new walls of QC lab will be provided with
foil backed rock and taped openings.

C. Doors and Millwork:

l. Office area - new and rehung, 3'-O", solid core oak doors with
hardware in oak frames provided per plan

2. Lab and Warehouse areas- 3'-O" and 3'-6" hollow metal doors in
hollow metal frames with hardware.

3. Four aluminum window frame and glass between lab areas.

4. Four hollow metal and one wood door shall have a vision glass
panel.

5. Existing kitchen cabinets, base and new counter shall be
relocated in new lunch room, cleaned and refinished as
necessary.

6. One bifold closet door with rod and shelf, plus rod and shelf
in lunchroom.

D. Ceilings:

l. Q.C. lab, production lab, packaging room, airlock and dressing
room shall have new vinyl rock ceiling tile pads placed in
existing or new grid.

2. All other office areas shall have existing dropped ceilings.
All damaged, stained and discolored tile shall be replaced.

3. Warehouse and dock vestibule area will have exposed bar joist.

E. Floorings:

l. Production lab, lunch room, packaging room, Q.C. lab, air lock
and change room shall receive new sealed vinyl composition~
tile finish waxed with final cleaning.

2. Vestibule and bathroom shall have quarry and ceramic tile.

3. Warehouse and dock vestibule shall be exposed concrete.

4. All other areas (offices) shall receive new carpet.

5. All VCT and carpeted areas shall receive new 4" coved vinyl
base.

F. Finishes:

l. All office walls shall receive satin finish painted walls.

2. All lab area walls shall receive semi-gloss scrubable painted
walls.

3. All doors shall be revarnished or painted as required.

G. Specials: Existing window blinds to remain in place.

H. Plumbing:

l. Two new ADA compliant bathrooms with one toilet each. Wall
hung lav. sinks shall be supplied.

2. Remove existing kitchen sink - cap plumbing and relocated in
new lunch room.

3. Install two lab sinks - one deep stainless steel, one double
basin cast iron in 10 foot plastic laminate counter top with
sealed underside- verify locations.

4. Install laundry tub in warehouse with supply and waste lines.

5. Provide laundry hook-ups in warehouse area and floor drain.

I. Fire Protection: Alter sprinkler heads as necessary to conform with the
plan per applicable codes.

J. HVAC: Clean, service and reduct as necessary two 5-ton roof top units.

K. Electrical:

l. Provide 110/208 volt service distribution panel as needed in
the entire space.

2. Rearrange & repair existing, and provide new 2' x 4' lay-in
light fixtures as necessary

3. Provide the-following new fixtures:
Switches - 18
Duplex outlets - 36
Phone rough-in - 15

4. Provide exit lights

5. Provide 2-6oamp 208, 3 phase single outlet electrical leads to
Tenant supplied disconnects for their ovens.

6. Provide 208 outlets for compressor and clothes dryer.

L. Miscellaneous:

l. Existing window treatment.

2. Exterior signage.

3. Re-key, final cleaning and trash removal.

Exclusions-the following items are specifically not provided by Landlord at the
quoted lease rate.

l. Return air shafts other than those within new walls on
referenced plan are not included.

2. Counter tops and cabinetry other than that specified. If other
existing counters and cabinets are reused and reset, Tenant
shall pay for the cost of labor to install.

3. Lab area counters and cabinets.

4. Deionized water system.

5. HVAC far production lab, QC lab, change room and air lock
shall be by Tenant. This includes any new roof top units,
exhaust, make up air, filters, ducting and related electrical
(other than upgrading service beyond existing 200 amps) and
roofing requirements.

6. Appliances.

Note: above items can be provided at a cost to the Tenant

The referenced plan is "Uroplasty at Summer Business Center" Revised to 1/25/95.

UROPLASTY INCORPORATED
BUY-OUT SCHEDULE

1-24 @ $3,361.04 80,664.96
25-36 @ $3,748.45 44,986.20
37-60 @ $4,136.67 99,280.08
------------
5 YRS RENT 224,931.24
/60 MONTHS 60
------------
STRAIGHT-LINE MONTHLY AMT 3,748.85

<TABLE>
<CAPTION>
STRAIGHT-LINE AS PER LEASE DIFFERENCE UNAMORTIZED
MONTHLY CUMMULATIVE MONTHLY CUMMULATIVE CUMMULATIVE + TI'S/Leasing Com TOTAL BUY-OUT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,748.85 3,748.85 3,361.04 3,361.04 387.81 101,431.68 101,819.49
2 3,748.85 7,497.71 3,361.04 6,722.08 775.63 100,093.62 100,869.25
3 3,748.85 11,246.56 3,361.04 10,083.12 1,163.44 98,744.41 99,907.85
4 3,748.85 14,995.42 3,361.04 13,444.16 1,551.26 97,383.96 98,935.22
5 3,748.85 18,744.27 3,361.04 16,805.20 1,939.07 96,012.17 97,951.24
6 3,748.85 22,493.12 3,361.04 20,166.24 2,326.88 94,628.95 96,955.83
7 3,748.85 26,241.98 3,361.04 23,527.28 2,714.70 93,234.20 95,948.90
8 3,748.85 29,990.83 3,361.04 26,888.32 3,102.51 91,827.83 94,930.34
9 3,748.85 33,739.69 3,361.04 30,249.36 3,490.33 90,409.74 93,900.07
10 3,748.85 37,488.54 3,361.04 33,610.40 3,878.14 88,979.83 92,857.97
11 3,748.85 41,237.39 3,361.04 36,971.44 4,265.95 87,538.01 91,803.96
12 3,748.85 44,986.25 3,361.04 40,332.48 4,653.77 86,084.17 90,737.94
13 3,748.85 48,735.10 3,361.04 43,693.52 5,041.58 84,618.22 89,659.80
14 3,748.85 52,483.96 3,361.04 47,054.56 5,429.40 83,140.05 88,569.45
15 3,748.85 56,232.81 3,361.04 50,415.60 5,817.21 81,649.56 87,466.77
16 3,748.85 59,981.66 3,361.04 53,776.64 6,205.02 80,146.65 86,351.67
17 3,748.85 63,730.52 3,361.04 57,137.68 6,592.84 78,631.22 85,224.06
18 3,748.85 67,479.37 3,361.04 60,498.72 6,980.65 77,103.16 84,083.81
19 3,748.85 71,228.23 3,361.04 63,859.76 7,368.47 75,562.37 82,930.84
20 3,748.85 74,977.08 3,361.04 67,220.80 7,756.28 74,008.74 81,765.02
21 3,748.85 78,725.93 3,361.04 70,581.84 8,144.09 72,442.16 80,586.25
22 3,748.85 82,474.79 3,361.04 73,942.88 8,531.91 70,862.52 79,394.43
23 3,748.85 86,223.64 3,361.04 77,303.92 8,919.72 69,269.72 78,189.44
24 3,748.85 89,972.50 3,361.04 80,664.96 9,307.54 67,663.65 76,971.19
25 3,748.85 93,721.35 3,748.85 84,413.81 9,307.54 66,044.19 75,351.73
26 3,748.85 97,470.20 3,748.85 88,162.68 9,307.54 64,411.24 73,718.78
27 3,748.85 101,219.06 3,748.85 91,911.51 9,307.55 62,764.68 72,072.23
28 3,748.85 104,967.91 3,748.85 95,660.36 9,307.55 61,104.40 70,411.95
29 3,748.85 108,716.77 3,748.85 99,409.21 9,307.56 59,430.28 68,737.84
30 3,748.85 112,465.62 3,748.85 103,158.06 9,307.56 57,742.21 67,049.77
31 3,748.85 116,214.47 3,748.85 106,906.91 9,307.56 56,040.06 65,347.84
32 3,748.85 119,963.33 3,748.85 110,655.76 9,307.57 54,323.76 63,631.33
33 3,748.85 123,712.18 3,748.85 114,404.61 9,307.57 52,593.14 61,900.71
34 3,748.85 127,461.04 3,748.85 118,153.46 9,307.58 50,848.10 60,155.68
35 3,748.85 131,209.89 3,748.85 121,902.31 9,307.58 49,088.51 58,396.09
36 3,748.85 134,958.74 3,748.85 125,651.16 9,307.58 47,314.26 56,621.84
37 3,748.85 138,707.60 4,136.67 129,787.83 8,919.77 45,525.23 54,445.00
38 3,748.85 142,458.45 4,136.67 133,924.50 8,531.95 43,721.29 52,253.24
39 3,748.85 146,205.31 4,136.67 138,061.17 8,144.14 41,902.31 50,048.45
40 3,748.85 149,954.16 4,136.67 142,197.84 7,758.32 40,068.18 47,824.50
41 3,748.85 153,703.01 4,136.67 146,334.51 7,368.50 38,218.76 45,587.26
42 3,748.85 157,451.87 4,136.67 150,471.18 6,980.69 36,353.93 43,334.62
43 3,748.85 161,200.72 4,136.67 154,607.85 6,592.87 34,473.56 41,066.43
44 3,748.85 164,949.58 4,136.67 158,744.52 6,205.06 32,577.52 38,782.58
45 3,748.85 168,696.43 4,136.67 162,881.19 5,817.24 30,665.68 36,482.92
46 3,748.85 172,447.28 4,136.67 167,017.86 5,429.42 28,737.91 34,167.33
47 3,748.85 176,196.14 4,136.67 171,154.53 5,041.61 26,794.07 31,835.68
48 3,748.85 179,944.99 4,136.67 175,291.20 4,853.79 24,834.03 29,487.82
49 3,748.85 183,893.85 4,136.67 179,427.87 4,265.96 22,857.66 27,123.64
50 3,748.85 187,442.70 4,136.67 183,564.54 3,878.16 20,864.65 24,743.01
51 3,748.85 191,191.55 4,136.67 187,701.21 3,490.34 18,855.37 22,345.71
52 3,748.85 194,940.41 4,136.67 191,837.88 3,102.53 16,829.18 19,931.71
53 3,748.85 196,889.26 4,136.67 195,974.55 2,714.71 14,786.10 17,500.61
54 3,748.85 202,438.12 4,136.67 200,111.22 2,326.90 12,726.00 15,052.90
55 3,748.85 206,188.97 4,136.67 204,247.89 1939.06 10,646.73 12,587.81
56 3,748.85 209,935.82 4,136.67 206,384.56 1,551.26 8,554.15 10,105.41
57 3,748.85 213,684.68 4,136.67 212,521.23 1,183.45 6,442.11 7,605.58
58 3,748.85 217,433.53 4,136.67 216,657.90 775.63 4,312.47 5,088.10
59 3,748.85 221,182.39 4,136.67 220,794.57 387.82 2,165.09 2,552.91
60 3,748.85 224,931.24 4,136.67 224,931.24 0.00 0.00 0.00

</TABLE>

EXHIBIT D

EXTERIOR SIGN CRITERIA

It is intended that the signing of the building shall have a sense of continuity
and be developed in an attractive and innovative manner, and, in keeping
therewith, Landlord shall maintain control of all Tenant's signs, which shall be
designed and fabricated by Landlord (if it so chooses) in a uniform manner and
shall be mounted in specifically designated areas. The cost of sign fabrication
and installation shall be borne exclusively by the Landlord.

The wording of signs shall be limited to the Tenant's business identification
name only and shall not include items sold or services provided. The use of
corporate logos or insignias shall be permitted provided that the height of such
logos or insignias shall not exceed the allowable height for sign letters.

EXHIBIT 6.5

PROMISSORY NOTE

This promissory note "Note") is entered into this 30 day of March,
1994, by and between Bioplasty, Inc. ("Bioplasty"), Uroplasty, Inc.
("Uroplasty"), both located at 623 Hoover Street, Minneapolis, Minnesota, 55413,
and Bioplasty Product Claimants' Trust, ("Trust") c/o Lindquist & Vennum,4200
IDS Center, 80 South Eighth Street, Minneapolis, Minnesota, 55402.

WHEREAS, Bioplasty, Uroplasty and BioManufacturing, Inc.(collectively
"Debtors") were debtors in a jointly administered reorganization under Chapter
11 of the bankruptcy code in the United States Bankruptcy Court, District of
Minnesota, Fourth Division, bankruptcy cases 4-93-02600 (Bioplasty), 4-93-02604
(Bio-Manufacturing, Inc.), and 4092-02604 (Uroplasty); and

WHEREAS, on February 4, 1994 the bankruptcy court entered an order
confirming the First Amended Joint Plan of Reorganization (Modified), dated
January 31, 1994, proposed by Debtors (the "Plan"); and

WHEREAS, the Plan provides for the satisfaction of claims in Class
3(b), as defined in the Plan, in part from the payment of an unsecured
non-interest bearing promissory note payable to the Trust, the terms thereof set
forth in the Plan;

NOW THEREFORE, pursuant to the terms of the Plan and in consideration
of covenants contained in the Plan, the parties hereto agree to as follows:

1. Bioplasty and Uroplasty agree to pay to the order of the Trust, on
the terms set forth herein, ,the principal sum of Nine Hundred and Sixty
Thousand and no/lOO dollars ($960,000,00).

2. The obligations hereunder shall not bear interest, except that past
due and unpaid installments of principal shall bear interest as provided in
section 7 of this Note.

3. The payment obligations shall be amortized over ten years, with a
"balloon" payment of the then unpaid principal balance on the fifth anniversary
of the Effective Date of the Plan.

4. Except as modified by section 8 of this Note, Bioplasty and
Uroplasty shall repay the principal amount of the loan as follows:

a. Bioplasty and Uroplasty shall commence making quarterly
payments on the thirteenth (13) month following the Effective
Date , unless the conditions set forth in paragraphs 4(b) or
4(c) occur, in which case the provisions of the applicable
paragraph shall dictate when payments shall begin.

b. Quarterly payments shall commence on the first day of the
ninth (9th) month after the Effective Date, as defined in the
Plan, and continue every three months thereafter until the
Note is paid in full, if, during the first six (6) calender
months following the Effective Date (i) Bioplasty's and
Uroplasty's consolidated revenues (exclusive of proceeds from
the Implant Liquidation, as defined in the Plan) exceed Two
Million Seven Hundred Thousand and no/I 00 Dollars
($2,700,000.00) and Bioplasty's and Uroplasty's consolidated
operating income (exclusive of proceeds from the Implant
Liquidation, as defined in the Plan) exceeds Three Hundred and
Fifty Thousand and no/I 00 Dollars ($350,000.00); or (ii) on
the last business day of the sixth (6) calender month
following the Effective Date, Bioplasty's and Uroplasty's
consolidated cash balance (exclusive of proceeds from the
Implant Liquidation, as defined in the Plan) exceeds Six
Hundred and Fifty Thousand and no/lOO Dollars ($650,000.00).

c. Quarterly payments shall commence on the first day of the
twelfth month and continue every three months thereafter until
the Note is paid in full if during the first nine (9) calender
months following the Effective Date (i) Bioplasty's and
Uroplasty's cumulative revenues (exclusive of revenues arising
from the Implant Liquidation, as defined in the Plan) exceeds
four Million five Hundred Thousand and no/lOO dollars
($4,500,000.00), and Bioplasty's and Uroplasty's cumulative
operating income (exclusive of revenues arising from the
Implant Liquidation, as defined in the Plan) exceeds Six
Hundred and Fifty Thousand and no/lOO ($650,000.00); or (ii)
Bioplasty's and Uroplasty's cumulative cash balance exceeds
Five Hundred and Fifty Thousand and no/lOO Dollars
($550,000.00) on the last business day of the ninth (9)
calender month following the Effective Date..

5. The obligations hereunder may be prepaid at any time without
penalty.

6. Repayment of the Note is secured by Bioplasty's and Uroplasty's
accounts receivable, as that term is defined in Section 336.9-106 of the Uniform
Commercial Code as currently enacted in the State of Minnesota, subject, upon
the request of Uroplasty or Bioplasty to subordination to any security interest
of any future working capital lender.

7. In the event that Bioplasty or Uroplasty does not make a principal
payment within fifteen (15) days of the date such payment is due, said payment,
and only said payment shall accrue interest on a floating basis at a rate equal
to the Reference Rate as publicly announced from time to time by First Bank
National Association in Minneapolis, Minnesota until said past due payment is
made.

8. Notwithstanding any other provision of the Note, at such time as the
Implant Liquidation, as defined in the Plan, shall occur, the Net Liquidation
Proceeds therefrom shall be used to prepay the Note within 20 days after receipt
of the funds. Regardless of the aggregate amount of Net Liquidation Proceeds
available to prepay the Note, the principal amount of the Note shall be reduced
to Six Hundred and Forty Thousand Dollars ($640,000.00). Any Net Liquidation
Proceeds remaining after application thereof to reduce the Note, shall be used
to pay the Court approved but unpaid fees of Leonard, Street and Deinard,
Lindquist & Vennum, Ernst & Young, and Zimmerman Reed, if any. All Net
Liquidation Proceeds remaining after such fee payments, shall be paid to reduce
the Note. Even if Net Liquidation Proceeds applied to prepay the Note from the
Implant Liquidation are less than Three Hundred and Twenty Thousand and no/lOO
Dollars ($320,000.00), the principal amount of the Note shall be reduced to Six
Hundred and Forty Thousand and no/100 Dollars ($640,000.00) at the time of the
Implant Liquidation. Notwithstanding any other provisions of this Note, after
the Implant Liquidation, Bioplasty, its successors or assigns, shall have no
further obligations for payments under this Note and the Note shall not be
secured by the accounts receivable of Bioplasty, and the Test shall provide such
documents of release as shall reasonably be requested.

9. The terms of this note shall be governed by the laws of the State of
Minnesota.

10. To the extent not defined herein, all terms used herein shall have
the meaning assigned to them in the Plan.

UROPLASTY, INC.

/s/ DANIEL HOLMAN

Daniel Holman, Chief Executive Officer

BIOPLASTY, INC.

/s/ DANIEL HOLMAN

Daniel Holman, Chief Executive Officer

AGREEMENT and SATISFACTION

This Agreement and Satisfaction ("Agreement") is entered into by and
between Bioplasty Product Claimants' Trust ("Trust") and Bioplasty, Inc.
("Bioplasty").

In consideration of the agreements set forth herein, the parties agree
as follows:

1. Definitions: As used herein the following terms shall be defined as
set forth:

1.1 Bioplasty, Inc. ("Bioplasty"): "Bioplasty" shall mean Bioplasty,
Inc., all foreign subsidiaries thereof, and their officers, directors,
and employees.

1.2 Uroplasty, Inc. ("Uroplasty"): "Uroplasty" shall mean Uroplasty,
Inc. all foreign subsidiaries thereof, and their officers, directors
and employees.

1.3 Bioplasty Product Claimant's Trust ("Trust"): "Trust" shall mean
the Product Claimants' trust established by the confirmation of the
First Amended Joint Plan of Reorganization (Modified) dated January 31,
1994 and confirmed by an order of the United States Bankruptcy Court
dated February 4, 1994, its trustees, beneficiaries, assigns,
successors, and transferees. If any assets or liabilities of the Trust
are assigned or transferred, including the assignment or transfer of
the liquidation of any claims, to the settlement fund, trust or other
liquidating entity established to liquidate the settlement of the class
action in re: SILICONE BREAST IMPLANT PRODUCTS LIABILITY LITIGATION
(MDL 926), Master File No. CZ92-P-1O,O0O-S, Heidi Lindsey v. Dow
Corning Corp., et al, United States District Court, Northern District
of Alabama, Southern Division, Civil Action No. CV94-P-1 1558-5, (the
"Global Settlement") such assignment or transfer is subject to the
terms, conditions and effects of this Agreement. The Global Settlement,
or other assignee of any assets or liabilities of the Trust, will not
attempt to Void or renegotiate the terms, conditions, or effect of this
Agreement.

1.4 Note: "Note" shall refer to the Promissory Note from Bioplasty,
Inc. and Uroplasty, Inc. in favor of the Product Claimants' Trust dated
March 30, 1994, and the terms and conditions of the promissory note as
set forth in the First Amended Joint Plan of Reorganization (Modified)
dated January 31 1994, confirmed by an order of the United States
Bankruptcy Court dated February 4, 1994.

1.5 Wiese: "Wiese" shall refer to Wolf Wiese, individually, Novum
Medical, Inc., Novum Plasty, Inc., and their related corporations, and
the assignees or transferees of the assets acquired by Wolf Wiese from
Bioplasty pursuant to the Agreement for Purchase of Assets dated the
19th day of October, 1994.

1.6 Sale of Breast Implant Assets: "Sale of Breast Implant Assets"
refers to the sale of certain assets, intellectual property and
transfer of certain leases to Wolf Wiese pursuant to the Agreement for
Purchase of Assets dated the 19th day of October, 1994 by and between
Wolf Wiese and Bioplasty, Inc.

2. Assignment Bioplasty shall assign to the Trust its right title and
interest to the obligation to pay the sum of seventy five thousand dollars and
00/100 ($75,000) (the "Assigned Payment") due by a bank cashier's or certified
check from Wiese on July 1, 1995 pursuant to the Agreement for Purchase of
Assets dated the 19th day of October, 1994 by and between Wolf Wiese and
Bioplasty, Inc., section 1.3 (d) (the "Assignment").

2.1 Bioplasty shall also assign to the Trust a security interest, to
the extent such security interest secures the Assigned Payment, in
cash, inventory, equipment, raw materials, work in progress, assets of
the "Implant Business", lease, leasehold improvements, the Settlement
Agreement and all of the receivables derived from sales of breast
implant products of Wiese pursuant to Article B, SELLER'S SECURITY
INTEREST, of the Agreement for Purchase of Assets. The security
interest and the Assigned Payment assigned to the Trust shall be pari
passu with the payments and security interest securing such payments to
be received by Bioplasty from Wiese, without priority or assurance of
adequacy or availability of the security.

2.2 Bioplasty shall also assign to the Trust the rights under Article
VI, DEFAULT, of the Agreement for Purchase of Assets to the extent such
remedies are available to assure payment of the Assigned Payment. This
assignment of other rights under the Purchase Agreement shall be pari
passu with the rights of Bioplasty under Article IV, DEFAULT, without
priority or assurance of adequacy or availability of the remedies. The
Trust agrees it will not seek to recover from Bioplasty any costs of
enforcing or collecting the Assigned Payment.

2.3 Bioplasty will notify Wiese of the Assignment and will direct Wiese
to pay the designated payment in accord with the Assignment. In the
event of acceleration of the payments pursuant to section 6.4(a) of the
Agreement for Purchase of Assets, Bioplasty will direct Wiese to remit
the Assigned Payment directly to the Trust, or its designee at the time
the full amount of the accelerated balance is due.

2.4 Contemporaneously with the execution of this Agreement, Bioplasty
will execute and deliver to the Trust an Assignment in the form
attached as Exhibit A hereto evidencing the Assignment.

3. Payment to the Trust. Bioplasty shall pay the Trust the sum of five
hundred dollars ($500.00) on the first day of each month beginning the later of
December, 1, 1994, or the date the Agreement is executed, and ending June 1,
1995. lf this Agreement is not executed by the Trust before December 15, 1994,
the payment due for the month of December, 1994 shall be reduced to the sum of
two hundred and fifty dollars ($250.00). This payment obligation shall not be
altered by the acceleration or delay of the assigned obligation from Wiese Any
such payment not paid within 10 business days of notice of a late payment shall
be deemed a breach of this agreement.

4. Release and Satisfaction of Claims against Bioplasty. The Trust
agrees as follows, and waives, releases, settles, Compromises, dismisses and
satisfies all claims it now has, or may have in the future against Bioplasty,
including its officers, directors, and employees as set forth:

4.1 The Sale of Breast Implant Assets to Wiese conforms to the terms
and conditions of the First Amended Joint Plan of Reorganization
(Modified) dated January 31, 1994 and confirmed by an order of the
United States Bankruptcy Court dated February 4, 1994. The Trust
waives, releases, settles, compromises, dismisses and satisfies any and
all claims it may have against Bioplasty that the Sale of Breast
Implant Assets violates the terms and conditions of the First Amended
Joint Plan Of Reorganization (Modified) dated January 31, 1994.

4.2 The Sale of Breast Implant Assets to Wiese constitutes a
"liquidation of the implant business" as that term is used in the First
Amended Joint Plan of Reorganization (Modified) dated January 31, 1994.

4.3 Pursuant to the terms of the Note and the First Amended Joint Plan
of Reorganization (Modified) dated January 31, 1994 the principle
balance of the Note is satisfied and reduced to six hundred forty
thousand dollars and 00/100 ($640,000).

4.4 By an affirmative vote of a majority of the votable shares on or
about October 4, 1994, and an affirmative unanimous vote of the
directors of Bioplasty on or about October 7, 1994, Bioplasty had
authority to enter into and consummate the Sale of Breast Implant
Assets to Wiese. The Trust waives, releases, settles, compromises,
dismisses and satisfies any and all claims it may have against
Bioplasty that it lacked authority to enter into the transaction for
the Sale of the Breast Implant Assets.

4.5 The Trust has no claim to the title of any asset transferred to
Wiese pursuant to the Sale of Breast Implant Assets and waives,
releases, settles, compromises, dismisses and satisfies any and all
claims it may have against Bioplasty for any right to the title of any
asset transferred.

4.6 The Trust waives, dismisses, releases, settles, compromises
dismisses and satisfies any and all claims it may have against
Bioplasty arising from, or related in any way to the Sale of Breast
Implant Assets to Wiese.

4.7 Other than the right to the Assignment, the Trust has no claim
against Bioplasty for any proceeds from the sale of breast implant
assets to Wiese and waives, dismisses, releases and satisfies any and
all claims now existing, or which may arise in the future against
Bioplasty arising out of the obligation of Bioplasty under the First
Amended Joint Plan of Reorganization (Modified) dated January 31, 1994
to remit "Net Proceeds" from the sale of the breast implant business to
the Trust in partial satisfaction of the Note.

4.8 The Assignment satisfies the obligation of Bioplasty under the Note
and the First Amended Joint Plan of Reorganization (Modified) dated
January 31, 1994 to remit "Net Proceeds" of the sale of the breast
implant business to the Trust in partial satisfaction of the Note.

4.9 The releases herein will run in favor of Uroplasty.

5. Release and Satisfaction of Claims against Wiese. The Trust agrees,
and releases, settles, compromises, dismisses and satisfies all claims it now
has, or may have in the future against Wiese as follows:

5.1 The Sale of Breast Implant Assets to Wiese conforms to the terms
and conditions of the First Amended Joint Plan of Reorganization
(Modified) dated January 31, 1994 and confirmed by an order of the
United States Bankruptcy Court dated February 4, 1994. The Trust
waives, releases, settles, compromises, dismisses and satisfies any and
all claims it may have against Wiese that The sale violates the terms
and conditions of the First Amended Joint Plan of Reorganization
(Modified) dated January 31, 1994.

5.2 The Trust waives, releases, settles, compromises, dismisses and
satisfies any and all claims to the title of any asset transferred to
Wiese pursuant to the Sale of Breast Implant Assets.

5.3 The Trust agrees it will not take any action which has as its
purpose, or effect, to void, or materially breach of Agreement for
Purchase of Assets dated the 19th day of October, 1994 by and between
Wolf Wiese and Bioplasty, Inc.

5.4 In the event the Trust breaches any provision of this Agreement, or
brings an action, or asserts a claim which has been released by this
Agreement, Wiese may recover all reasonable costs disbursements and
attorney's fees expended in curing the breach and/or defending or
responding to the action or claim.

5.5 The Trust agrees that it will execute a Release in the form
attached hereto as Exhibit B in favor of Wiese, incorporating the terms
of the release of Wiese.

6. Affidavit. Bioplasty agrees it will provide an affidavit to the
Trust confirming that the Sale of Breast Implant Assets is at "arms length" and
that none of the officers or directors have been offered, or will be accepting
any position with Wiese or the companies formed to undertake the breast implant
business purchased by Wiese, and that none of the officers or directors have or
will receive any economic benefit from the sale transaction.

7. Warranties from Trust. The Trust warrants:

7.1 It has the power and authority to enter into this agreement and to
negotiate the terms of the Note.

7.2 It has not pledged, collateralized, factored, assigned, or
otherwise encumbered the Note, or any portion thereof, or any proceeds
thereof.

7.3 The Trust has reviewed the terms and conditions of the Agreement
for Purchase of Assets dated the 19th day of October, 1994 by and
between Wolf Wiese and Bioplasty, Inc. and has received and reviewed
all other available information and documents requested from Bioplasty
in connection with this Agreement, and has conducted an adequate
inquiry, review and consultation with counsel to enter into this
Agreement.

8. Warranties from Bioplasty. Bioplasty warrants:

8.1 That the Agreement for Purchase of Assets dated October 19, 1994 by
and between Wiese and Bioplasty constitutes the full agreement between
the parties thereto, and that Bioplasty is not receiving any economic
gain or incentive related to the sale transaction other than as
described therein.

8.2 That it will not cause a breach of the Agreement for Purchase of
Assets or take any action that would cause or result in a set off or
reduction of the sums due to the Trust pursuant to the Assignment.

8.3 Bioplasty does not warrant:

8.3.1 That the security interest assigned herein is adequate
to secure the obligation assigned, or that the security will
be available for execution in the event of a default by Wiese
in the payment of the obligation assigned to the Trust.

8.3.2 Performance of the obligations assigned pursuant to the
Assignment.

9. Breach. ln addition to the remedies available at law, the Trust and
Bioplasty agree as follows:

9.1 In the event the Trust breaches any provision of this Agreement,
or brings an action, or asserts a claim which has been released,
settled, or resolved by this Agreement, Bioplasty may recover from the
Trust, or its transferees, assignees, or successors, all costs,
disbursements and attorney's fees expended in curing the breach, Or the
defense, indemnification, contribution, settlement, and/or any other
Cost or resource expended in responding to the action, claim or breach.

9.2 In the event Bioplasty breaches any provision of this Agreement,
the Trust may recover all costs, disbursements and attorney's fees
expended in curing the breach and/or defending or responding to any
action or claim arising from the breach.

9.3 In the event the Trust defaults in any provision relating to the
release of claims against Wiese, or against any other person or entity
for which Bioplasty is requested or is required to defend, contribute
or indemnify, Bioplasty may recover from the Trust or its transferees,
assignees, or successors, all costs, disbursement and attorney's fees
incurred in the defense, indemnification contribution, settlement or
resolution of the breach.

10. No Excess Net Proceeds. The Trust and Bioplasty agree that the
Assignment resolves and settles in full the obligation for payment of "Net
Proceeds" from the sale of the breast implant business as that term is used in
the First Amended Joint Plan of Reorganization (Modified) dated January 31,
1994, and that there are no "Net Proceeds" from the sale of the breast implant
business available for payment of authorized but unpaid fees of counsel
compromised in the bankruptcy proceedings as required by the First Amended Joint
Plan of Reorganization (Modified) dated January 31, 1994.

11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and resolves all issues between the parties hereto and their
assigns, transferees, successors employees, officers and directors relating to
the Sale of Breast Implant Assets, and obligations for payment of "Net Proceeds"
from the sale to the Trust in partial satisfaction of the Note. No other
promise, inducement, or incentive has been offered by the parties which is not
set forth in this Agreement.

12. No Release of Future Product Liability Claims Against Wiese. The
terms of this Agreement do not release, dismiss, settle, or in any way impair
future product liability claims from the Trust or its beneficiaries, assignees
successors, or transferees against Wiese or his assignees, successors or
transferees.

13. Applicable Law. This Agreement shall be construed according to the
laws of the state of Minnesota.

14. Binding Effect. The terms and conditions of this Agreement are
binding on the assignees, transferees, successors, beneficiaries, employees,
officers, directors, employees, and trustees of the parties hereto. It is agreed
that if the Trust transfers to the Global Settlement the liquidation of any
claims of any beneficiaries of the Trust or any rights to the Assigned Payment
or the Note that such assignment is subject to the terms and conditions of this
Agreement. The Global Settlement, or other assignee of any assets or liabilities
of the Trust, will not attempt to void or renegotiate the terms, conditions, or
effect of this Agreement. It is also agreed that to the extent that Uroplasty
may be an transferee of certain assets of Bioplasty, that the releases herein
will run in favor of Uroplasty.

15. Modification of this Agreement. This Agreement may only be modified
in writing executed by authorized designees of the parties hereto.

16. Waiver of Provisions: The waiver or failure to enforce any
provision hereof shall not be deemed to be a waiver or release of any other
provision of this Agreement.

17. Notices. Any notices to the parties shall be provided by first
class mail, postage prepaid to the following addresses, or at such addresses as
may be designated in writing by the parties:

Bioplasty: Bioplasty, Inc.
623 Hoover Street Northeast
Minneapolis, MN 55413
Attention: CEO, President or Chief Financial Officer

Trust: Bioplasty Product Claimants' Trust
C/O Lindquist & Vennum
4200 lDS Center
Minneapolis, MN 55402
Attention: Mr. Hamilton

Mr. Charles Zimmerman
Zimmerman Reed
5100 Norwest Center
Minneapolis, MN 55402

Notices required by the Assignment shall be governed by the notice
requirements of the Agreement for Purchase of Assets.

18. Severability. If any provision hereof is deemed or found void,
voidable, unenforceable or in violation of public policy all remaining
provisions shall remain in force and effect.

19. Counterparts. This Agreement may be executed in duplicate and each
executed copy shall be deemed an original and all copies shall be treated as the
entire Agreement.

Dated: Jan 30 1995

Bioplasty, Inc.

/s/ DANIEL HOLMAN
by: Daniel Holman, CEO and President

Bioplasty Product Claimants' Trust

/s/ F.G. HAMILTON
by: F.G. Hamilton,Trustee

/s/ CHARLES ZIMMERMAN,TRUSTEE
by: Charles Zimmerman, Trustee

/s/ SYBIL GOLDRICH, TRUSTEE
by: Sybil Goldrich, Trustee

ASSIGNMENT

Bioplasty, Inc. ("Bioplasty") makes this assignment (the "Assignment")
on this ____ day of January, 1995 in favor of the Bioplasty Product Claimants'
Trust ("Trust").

1. Bioplasty hereby assigns to the Trust all of its right, title and
interest in the payment in the amount of seventy five thousand dollars and
00/100 ($75,000) due by a bank cashier's or certified check from Wolf Wiese
("Wiese") to Bioplasty on July 1, 1995 pursuant to the Agreement for Purchase of
Assets dated the 19th day of October, 1994 by and between Wiese and Bioplasty
("Purchase Agreement"), section 1.3 (d), effective upon execution of this
Assignment (hereafter referred to as the "Assigned Payment").

(a). Bioplasty shall notify Wiese of this Assignment and will direct
Wiese to pay the Assigned Payment to the Trust or its designee at the
address set forth in this Assignment or such other location as the
Trust shall designate in writing.

(b). In the event of acceleration of the payments pursuant to section
6.4(a) of the Agreement for Purchase of Assets, Bioplasty will direct
Wiese to remit the Assigned Payment at the time the full amount of the
accelerated balance is due directly to the Trust, or its designee at
the address set forth in this Assignment or such other location as the
Trust shall designate in writing.

2. Bioplasty assigns to the Trust the security interest which was
granted to Bioplasty by Wiese under ARTICLE V, SELLER'S SECURITY INTEREST of the
Purchase Agreement in cash, inventory, equipment, raw materials, work in
progress, assets of the "Implant Business", lease, leasehold improvements, the
Settlement Agreement and all of the receivables derived from sales of breast
implant products of Wiese to the extent such security interest secures the
Assigned Payment. The security interest and the Assigned Payment assigned to the
Trust shall be pari passu with the payments and security interest securing such
payments to be received by Bioplasty from Wiese, without priority or assurance
of adequacy or availability of the security.

Bioplasty will execute such documents or instruments (including a
Minnesota UCC-3 form) as may be reasonably requested and supplied by the Trust
to document the assignment of rights and interest to security.

3. Bioplasty assigns to the Trust its rights under Article VI, DEFAULT,
to the Purchase Agreement to the extent such remedies are available to assure
payment of the Assigned Payment. This assignment of other rights under the
Purchase Agreement shall be pari passu with the rights received by Bioplasty
under Article IV, DEFAULT, without priority or assurance of adequacy or
availability of the remedies.

4. Bioplasty is not responsible for the costs of any action taken to
enforce this Assignment. The Trust agrees it will not seek to recover from
Bioplasty any costs of enforcing or collecting the Assigned Payment.

5. The terms and conditions of this Assignment are binding on the
assignees, transferees, successors, beneficiaries, employees, officers,
directors, employees, and trustees of the parties hereto. It is agreed that if
the Trust transfers any assets or liabilities to the settlement fund, trust or
other liquidating entity in re: SILICONE BREAST IMPLANT PRODUCTS LIABILITY
LITIGATION (MDL 926), Master File No. CZ92-P-10,000-S, Heidi Lindsey v. Dow
Corning Corp., et al, United States District Court, Northern District of
Alabama, Southern Division, Civil Action No. CV94-P-1 1558-S, (the "Global
Settlement") such transfer shall be subject to the terms and conditions of this
Assignment and the Agreement and Satisfaction entered into by and between the
parties hereto.

6. This Assignment may only be modified in writing executed by
authorized designees of the parties hereto.

7. If any provision hereof is deemed or found void, voidable,
unenforceable or in violation of public policy, all remaining provisions shall
remain in force and effect.

8. This Assignment may be executed in duplicate and each executed copy
shall be deemed an original and all copies shall be treated as the entire
Assignment.

Bioplasty, Inc

/s/ DANIEL HOLMAN
by: Daniel Holman, CEO and President

Exhibit A

RELEASE

The Bioplasty Product Claimants' Trust ("Trust) agrees and provides
this release on the _______ day of December, 1994, of the following claims it
may now have, or which may arise in the future against Wolf Wiese, individually,
Novum Medical, Inc., Novum Plasty, Inc., and their related corporations, and the
assignees or transferees of the assets acquired by WOLF Wiese (all referred to
as "Wiese") from Bioplasty pursuant to the Agreement for Purchase of Assets
dated the 19th day of October, 1994 ("Sale of Breast Implant Assets").

1. Consideration. The Trust agrees and acknowledges that this release
is supported by good and valuable consideration, receipt of which is
acknowledged.

2. Release and Satisfaction of Claims against Wiese. The Trust agrees,
and releases, settles, compromises, dismisses and satisfies all claims it now
has, or may have in the future against Wiese as follows:

2.1 The Sale of Breast Implant Assets to Wiese conforms to the terms
and conditions of the First Amended Joint Plan of Reorganization
(Modified) dated January 31, 1994 and confirmed by an order of the
United States Bankruptcy Court dated February 4, 1994. The Trust
wolves, releases, settles, compromises, dismisses and satisfies any and
all claims it may have against Wiese that the sale violates the terms
and conditions of the First Amended Joint Plan of Reorganization
(Modified) dated January 31, 1994.

2.2 The Trust waives, releases, settles, compromises, dismisses and
satisfies any and all claims to the title of any asset transferred to
Wiese pursuant to the Sale of Breast Implant Assets.

2.3 The Trust agrees it will not take any action which has as its
purpose, or effect, to void, or materially breach of Agreement for
Purchase of Assets dated the 19th day of October, 1994 by and between
Wolf Wiese and Bioplasty, Inc.

4. No Release of Future Product Liability Claims Against Wiese. The
terms of this Agreement do not release, dismiss, settle, or in any way impair
future product liability claims from the Trust or its beneficiaries, assignees,
successors, or transferees against Wiese or his assignees successors or
transferees.

Bioplasty Product Claimants' Trust

/s/ F.G. HAMILTON
by: F.G. Hamilton, Trustee

/s/ CHARLES ZIMMERMAN, TRUSTEE
by: Charles Zimmerman, Trustee

/s/ SYBIL GOLDRICH
by : Sybil Goldrich, Trustee

AFFIDAVIT OF DONALD A. MAJOR

Being duly sworn, Donald A. Major states and alleges as follows:

1. I am the Chief Financial Officer for Bioplasty, Inc. and have held this
position since August 1, 1991. ln my position as Chief Financial Officer l am
familiar with the transaction selling certain breast implant related assets,
technology and leasehold interests to Wolf Wiese ("Wiese") pursuant to the
Agreement for Purchase of Assets dated October 19, 1994 by and between
Bioplasty, Inc. and Wiese ("Sale of Breast Implant Assets").

2. Wiese is not related in any way to Bioplasty, Inc. He has never been an
employee, customer, officer, director, creditor, or had any other connection
with Bioplasty, Inc. or its subsidiaries. To the best of my knowledge he has
never been a shareholder or investor in Bioplasty, Inc., and is not currently a
shareholder or investor of Bioplasty, Inc. None of the officers or directors of
Bioplasty, Inc. had any relationship with Wiese or knew Wiese prior to
negotiations related to the Sale of Breast Implant Assets.

3. None of the officers or directors of Bioplasty, Inc. have been offered or
will be taking positions with Wiese or the companies he sets up to manufacture
and sell breast implants. None of the officers or directors of Bioplasty, Inc.
will receive any economic benefit from the Sale of Breast Implant Assets.

4. The Agreement for Purchase of Assets dated October 19, 1994 by and between
Bioplasty, Inc. and Wiese constitutes the entire agreement between Bioplasty,
Inc and Wiese and there are no other terms, incentives, or considerations in
favor of Bioplasty, Inc. arising from the Sale of the Breast Implant Assets.

Further your affiant say not.

/s/ DONALD A MAJOR
Donald A. Major

Subscribed and sworn before me
this 1 day of Dec, 1994.

/s/ SANDRA FERRIAN
Notary Public

SANDRA S. FERRIAN
NOTARY PUBLIC-MINNES0TA
HENNEPIN COUNTY
My Comm. Exp. Aug. 8, 1996

AFFIDAVIT OF SANDRA S. FERRIAN

Being duly sworn, Sandra S. Ferrian states and alleges as follows:

1. I am the General Counsel for Bioplasty, Inc. and have held a position as
counsel for Bioplasty, Inc. since February 1992. In my position as General
Counsel I am familiar with the transaction selling certain breast implant
related assets, technology and leasehold interests to Wolf Wiese ("Wiese")
pursuant to the Agreement for Purchase of Assets dated October 19, 1994 by and
between Bioplasty, Inc. and Wiese ("SALE of Breast Implant Assets").

Further your affiant say not.

/s/ SANDRA S. FERRIAN
Sandra S. Ferrian

Subscribed and sworn before me
this 3RD day of Feb, 1995

/s/ LORI ZYCH
NOTARY PUBLIC

LORI A. ZYCH
NOTARY PUBLIC - MINNESOTA
My Commission Expires Jan. 31, 2000

EXHIBIT 6.7

ASSET SALE AND SATISFACTION OF DEBT AGREEMENT

This Agreement is entered into by and between Bioplasty, Inc.
("BIOPLASTY") and Uroplasty, Inc. ("Uroplasty"), both located at 623 Hoover
Street N.E., Minneapolis, Minnesota, 55413 ("AGREEMENT").

RECITALS

WHEREAS, Bioplasty and Uroplasty wish to reorganize the companies, and
are owned by the same shareholders, who each own the same percent interest in
Bioplasty, Inc. and Uroplasty, Inc.;

WHEREAS, Bioplasty has sold the assets of the breast implant business
pursuant to the terms of the Confitmed First Amended Joint Plan of
Reorganization (Modified), and by entering into the Agreement and Satisfaction
dated January 30, 1995 with the Bioplasty Product Claimants' Trust, Bioplasty
has satisfied its obligations relating to the $320,000 portion of a note payable
to the Trust.

WHEREAS, Bioplasty owes Uroplasty approximately $311,000 as of the date
of this Agreement arising from funding of operations and debts, and as a result
of the commercial activity between Bioplasty and Uroplasty;

WHEREAS, Bioplasty seeks to transfer substantially all its assets to
Uroplasty in satisfaction of the Debt, and obtained shareholder approval for the
transfer at a Special Shareholders' Meeting on October 4, 1994 by a vote of more
than an absolute majority of the outstanding shares of voting stock;

WHEREAS, Bioplasty will be statutorily dissolved after the
reorganization;

WHEREAS, Uroplasty wishes to transfer the Stock of the foreign
subsidiaries to Uroplasty BV;

NOW THEREFORE, in consideration of the covenants herein, Bioplasty and
Uroplasty agree as follows:

AGREEMENT

1. DEFINITIONS:

DEBT: "Debt" refers to the $311,000 obligation of Bioplasty to
Uroplasty at January 31, 1995 arising from Uroplasty's funding of
Bioplasty's operations and debts, and as a result of the commercial
activity between Bioplasty and Uroplasty.

NET ASSETS: "Net Assets" refers to substantially all the assets and
liabilities of Bioplasty, including equipment, intellectual property,
cash, receivables, inventory, accounts payable and accrued liabilities,
etc., as set forth on Exhibits A and B which are transferred to
Uroplasty, Inc. pursuant to this Agreement.

STOCK: "Stock" refers to the stock of the wholly-owned foreign
subsidiaries of Bioplasty, comprised of the stock of Bioplasty SARL,
Bioplasty Ltd, Bioplasty BVBA and Bioplasty BV being transferred by
Bioplasty to Uroplasty pursuant to this agreement, and by Uroplasty to
Uroplasty BV thereafter.

EFFECTIVE DATE: The "Effective Date" of this agreement is January 31,
1995, after which time gains and losses resulting from the operation
and ownership of the assets shall inure to the benefit and detriment of
Uroplasty, Inc.

2. TRANSFER OF NET ASSETS TO UROPLASTY, INC.: As of the Effective Date,
Bioplasty shall transfer to Uroplasty, Inc. the Net Assets as set forth
in Exhibit A, free and clear of all liens, encumbrances or other
obligations. Bioplasty shall also transfer to Uroplasty the Stock of
the wholly-owned foreign subsidiaries. The parties agree that the Stock
is transferred with all existing liabilities, debts, contractual rights
and obligations.

3. SATISFACTION OF DEBT. At the time of the transfer of Net Assets and
Stock, Uroplasty shall discharge and reduce to zero the Debt owed from
Bioplasty.

4. DISSOLUTION OF BPI. The parties agree that after the execution of the
reorganization outlined in this agreement, Bioplasty will be
statutorily dissolve

5. NO WARRANTIES. The parties hereto agree that neither Bioplasty nor its
subsidiaries provide any express or implied warranty of fitness,
merchantability or competent performance of any Assets transferred
pursuant to this Agreement

6. BINDING ON SUCCESSORS AND TRANSFERS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns
of the parties hereto.

7. ENTIRE AGREEMENT: This Agreement and the Exhibits A through E hereto
constitute the entire agreement between the parties pertaining to the
subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties. All modifications to this agreement must be in writing.

8. GOVERNING LAW: This Agreement shall be construed according to the laws
of the State of Minnesota, U.S.A.

IN WITNESS WHEREOF, the parties have duly executed this Agreement for
Purchase of Assets and Satisfaction of Debt.

BIOPLASTY, INC. UROPLASTY, INC.

/s/ DONALD A. MAJOR /s/ DANIEL G. HOLMAN
By: Vice President By: President
Its: Donald A. Major Its: Daniel G. Holman
Date: June 23, 1995 Date: June 23, 1995

EXHIBIT A
NET ASSETS

(IN U.S. DOLLARS)

The following are the Net Assets and related net book value of Bioplasty, Inc.
being transferred to Uroplasty, Inc. effective January 31, 1995.

Description Net Book Value
----------- --------------
All accounts receivable 850

Prepaid assets 2,000

Notes Receivable-Ayden Dogan for GmbH, and
Wolf Wiese for breast implant assets 238,000

All fixed assets 0

Any and all intellectual property rights to Macroplastique
Implants, Bioplastique Implants, Chondroplast, and Suture
Strip and all ancillary products, trade names,
copyrights and distribution rights. 0

Any and all interests in the Settlement Agreement and Release
dated November 30, 1993 between Bioplasty, Inc., Uroplasty,
Inc., Robert A. Ersek, MD, Arthur A. Beisang and
Arthur A. Beisang III, MD 0

All outstanding stock of Bioplasty BV, Bioplasty Ltd.,
Bioplasty BVBA and Bioplasty SARL 0

All amounts due to Bioplasty, Inc. from Bioplasty BV
($802,000),Bioplasty Ltd. ($197,000), Bioplasty BVBA
($304,000), and Bioplasty SARL ($273,000) 1,576,000

Any and all interest in the Purchase Agreement and License
Agreement between Bioplasty, Inc. (formerly
Genetic Laboratories, Inc.) and BioVascular, Inc.
dated February, 17, 1986 and September 25, 1985,
respectively. 0

Any and all amounts owing to Bioplasty, Inc. from Federal
and State taxing authorities Unknown

Accounts payable (78,000)

Note Payable to IBM (12,000)

EXHIBIT B
BILL OF SALE

For value received, Bioplasty, Inc. ("Seller") hereby sells, conveys and
transfers all right, tide and interest in the following personal property to
Uroplasty, Inc. ("Buyer"), subject to the following terms and conditions:

(1) The property is transferred pursuant and subject to the terms and
conditions of the Asset Sale and Satisfaction of Debt agreement between
Bioplasty, Inc. and Uroplasty, Inc. effective January 31, 1995.

(2) The property is transferred free and clear of all liens,
encumbrances, or rights of any parties.

PERSONAL PROPERTY

a) Rights, title and interest in any and all cash, accounts receivable,
prepaid assets, office furniture, fixtures and equipment, all
production equipment and all record keeping and administrative
documentation owned by Bioplasty, Inc.

b) Rights, title and interest in any and all raw material, work-in-process
and supplies inventory owned by Bioplasty, Inc.

c) Rights, title and interest in any and all research, development and
documentation relating to the development, manufacturing or sale of
Macroplastique, Bioplastique, Chondroplast and Suture Strip products.

d) Rights, title and interest in any and all intellectual property rights,
trademarks, copyrights and promotional material relating to the
products named in c) above.

e) Rights, title and interest in any and all contractual relationships
with distributors, customers, and suppliers relating to the products
named in c) above.

f) Rights, title and interest in the Settlement Agreement and Release
dated November 30, 1994 by and between Bioplasty, Inc.,
BioManufacturing, Inc., Uroplasty, Inc., Arthur A. Beisang, Arthur A.
Beisang III, M.D., and Robert A. Ersek, M.D.

f) Rights, title and interest in the Executory Contract Assumption
Stipulation dated December 28, 1993 by and between Bioplasty, Inc.
Uroplasty, Inc. and Collagen Corporation, and the Settlement and
License Agreement dated July 23, 1992 between Collagen Corporation,
Bioplasty, Inc. and Uroplasty, Inc.

g) Rights, title and interest in the Agreement for Purchase of Assets
dated October 19, 1994 between Wolf Wiese and Bioplasty, Inc.,
including amounts owing Bioplasty, Inc. from Wolf Wiese pursuant to
Article I, paragraph 1.2 Purchase Price.

h) Rights, title and interest in Purchase Agreement and Agreement for
Satisfaction of Debt both dated August 11, 1994 between Ayden Dogan,
Bioplasty, Inc. and Bioplasty GmbH, including amounts owing Bioplasty,
Inc. pursuant to paragraph 2. of the Agreement for Satisfaction of
Debt.

i) Rights, title and interest in all the stock of and amounts owing from
Bioplasty Ltd (United Kingdom), Bioplasty BVBA (Belgium), Bioplasty BY
(Holland), and Bioplasty SARL (France).

Dated this 23 day of June, 1995.

BIOPLASTY, INC.

/s/ DONALD A. MAJOR

Print Name: Donald A. Major
Title: Vice President

State of Minnesota )
:SS.
County of Hennepin )

On this 23rd day of June, 1995, personally appeared before me, a
notary, Donald A. Major who is known to me to be the Vice President of
BIOPLASTY, INC. and as such officer signed the above document for said company.

Seal
LORI A. ZYCH
NOTARY PUBLIC - MINNESOTA /s/ LORI A. ZYCH
My Commission Expires Jan. 31, 2000 Notary

EXHIBIT C

ASSIGNMENT

For value duly acknowledged as received and pursuant to the Sale of Assets and
Satisfaction of Debt Agreement dated May , 1995 between Bioplasty, Inc.
("Bioplasty") and Uroplasty, Inc. ("Uroplasty"), Bioplasty hereby assigns and
conveys to Uroplasty any and all its rights, title, interest and obligations in
the following:

a) Research, development and documentation relating to the development,
manufacturing or sale of Macroplastique, Bioplastique, Chondroplast and
Suture Strip products.

b) Intellectual property rights, trademarks, copyrights and promotional
material relating to the products named in a) above.

c) Contractual relationships with distributors, customers, and suppliers
relating to the products named in a) above.

d) Settlement Agreement and Release dated November 30, 1994 by and between
Bioplasty, Inc., BioManufacturing, Inc., Uroplasty, Inc., Arthur A.
Beisang, Arthur A. Beisang III, M.D., and Robert A. Ersek, M.D.

e) Executory Contract Assumption Stipulation dated December 28, 1993 by
and between Bioplasty, Inc. Uroplasty, Inc. and Collagen Corporation,
and the Settlement and License Agreement dated July 23, 1992 between
Collagen Corporation, Bioplasty, Inc. and Uroplasty, Inc.

f) Agreement for Purchase of Assets dated October 19, 1994 between Wolf
Wiese and Bioplasty, Inc., including amounts owing Bioplasty, Inc. from
Wolf Wiese pursuant to Article I, paragraph 1.2 Purchase Price.

g) Purchase Agreement and Agreement for Satisfaction of Debt both dated
August 11, 1994 between Ayden Dogan, Bioplasty, Inc. and Bioplasty
GmbH, including amounts owing Bioplasty, Inc. pursuant to paragraph 2.
of the Agreement for Satisfaction of Debt.

h) Amounts owing from Bioplasty Ltd (United Kingdom), Bioplasty BVBA
(Belgium), Bioplasty BV (Holland), and Bioplasty SARL (France).

Dated this 23 day of June, 1995.

BIOPLASTY, INC

Name: /s/ DONALD A. MAJOR Title: Vice President

*************************

State of Minnesota )
: ss.
County of Hennepin )

On this 23rd day of June, 1995, personally appeared before me, a notary, Donald
A. Major who is known to me to be the Vice President of BIOPLASTY, INC. and as
such officer signed the above document for said company.

Seal
LORI A. ZYCH
NOTARY PUBLIC - MINNESOTA /s/ Lori A. Zych
My Commission Expires Jan. 31, 2000 Notary

EXHIBIT D

ASSUMPTION

Pursuant to the Sale of Assets and Satisfaction of Debt agreement effective
january 31, 1995, entered into by Bioplasty, Inc. and Uroplasty, Inc.,
Uroplasty, Inc. hereby assumes all of Bioplasty's obligations and liabilities
under the following transferred andlor assigned items:

a) Contractual relationships with distributiors, customers, and suppliers
relating to Macroplastique Implants, Bioplastique Implants,
Chondroplast and Suture Strip.

b) Settlement Agreement and Release dated November 30, 1994 by and between
Bioplasty, Inc., BioManufacturing, Inc., Uroplasty, Inc., Arthur A.
Beisang, Arthur A. Beisang III, M.D., and Robert A. Ersek, M.D.

c) Executory Contract Assumption Stipulation dated December 28, 1993 by
and between Bioplasty, Inc. Uroplasty, Inc. and Collagen Corporation,
and the Settlement and License Agreement dated July 23, 1992 between
Collagen Corporation, Bioplasty, Inc. and Uroplasty, Inc.

d) Trade accounts payable and accrued liabilities of Bioplasty, Inc., and
its obligation under the RISK 6000 computer lease agreement with IBM,
any and all accumulated compensation and employee benefit obligations
to currently employed employees, and all amounts owing on the Note
Payable to the Bioplasty Product Claiinants' Trust.

Dated this 23 day of June, 1995.

UROPLASTY, INC.

/s/ DANIEL G. HOLMAN
Print Name: Daniel G. Holman
Title: President

State of Minnesota )
:ss.
County of Hennepin )

On this 23rd day of June, 1995, personally appeared before me, a notary,Daniel
G. Holman who is known to me to be the President of UROPLASTY, INC. and as such
officer signed the above document for said company.

Seal
LORI A. ZYCH
NOTARY PUBLIC - MINNESOTA /s/ LORI A. ZYCH
My Commission Expires Jan. 31, 2000 Notary

EXHIBIT E
ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, Bioplasty, Inc. hereby sells, assigns and transfers unto
Uroplasty, Inc. pursuant to the Sale of Assets and Satisfaction of Debt
Agreement effective January 31, 1995, all the outstanding stock of the following
wholly-owned foreign subsidiaries and does hereby irrevocably constitute and
appoint Donald A. Major, Secretary of Bioplasty, Inc. and Uroplasty, Inc.,
attorney-in-fact to transfer the said stock on the books of the within named
company will full power of substitution in the premises:

Subsidiary Name and Location
----------------------------
Bioplasty Ltd. (United Kingdom)

Bioplasty BV (Netherlands)

Bioplasty BVBA (Belgium)

Bioplasty SARL (France)

Dated this 23 day of June, 1995.

BIOPLASTY, INC.

/s/ DONALD A. MAJOR
Print Name: Donald A. Major
Title: Vice President

***************************************************

State of Minnesota )
:ss.
County of Hennepin )

On this 23rd day of June, 1995, personally appeared before me, a notary, Donald
A. Major who is known to me to be the Vice President of BIOPLASTY, INC. and as
such officer signed the above document for said company.

Seal
LORI A. ZYCH
NOTARY PUBLIC - MINNESOTA /s/ LORI A. ZYCH
My Commission Expires Jan. 31, 2000 NOTARY

EXHIBIT 6.8

EXECUTORY CONTRACT ASSUMPTION STIPULATION

This stipulation (the "STIPULATION") is made and entered into as of
this 28TH day of December, 1993 by and between Bioplasty, Inc. ("BIOPLASTY"),
Uroplasty, Inc.("UROPLASTY")(collectively the "DEBTORS") and Collagen
Corporation ("Collagen").

RECITALS

FIRST: Collagen is the owner by assignment of U.S. Patent No. 4,803,075 issued
on February 7, 1989 (the "PATENT"). The Patent is entitled "Injectable
Implant Composition Having Improved Intrudability". The Patent claims
are to a generic composition of matter which includes an injectable
aqueous suspension of a paniculate bio-compatible material which
contains a bio-compatible lubricant.

SECOND: The Debtors manufacture and distribute products under the trade name of
Macroplastique and Bioplastique.

THIRD: On May 1, 1991, Collagen filed a lawsuit in the United States District
Bankruptcy court for the Northern District of California alleging that
the Debtors were infringing upon the Patent through the manufacture and
distribution of Bioplastique and Macroplastique (the "ACTION"). The
Debtors filed an Answer denying the allegations assened in the Action.

FOURTH: Subsequent to the filing of the Action, the Debtors and Collagen
negotiated and executed a Settlement and License Agreement (the
"AGREEMENT"). A true and correct copy of the Agreement is attached
hereto as EXHIBIT A.

FIFTH: Collagen has filed a motion in the Debtors' bankruptcy cases seeking to
compel the Debtors to assume the Agreement and payment of
administrative expenses. The Debtors and Collagen now wish to
memorialize their understanding regarding the assumption of the
Agreement.

NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions contained herein, and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Debtors and
Collagen agree as follows:

1. Subject to bankruptcy court approval of this Stipulation, the Debtors
do hereby assume the Agreement. The Debtors agree they shall modify the
Plan of Reorganization and Disclosure SLatement currently on file with
the Bankruptcy court to reflect that the Debtors shall fully assume the
Agreement.

2. Upon bankruptcy court approval of this Stipulation, all payments
required by the Agreement which have come due, or which may come due in
the future, shall be considered and treated as administrative priority
expenses in the joint Chapter 11 Plan of the Debtors currently on file
with the bankruptcy court.

3. Upon bankruptcy court approval of this Stipulation, the Fifty Thousand
Dollar ($50,000.00) that is currently due and owing under the Agreement
shall be paid as follows:

(a) Ten Thousand Dollars ($10,000.00) shall be paid on or before
May 1, 1994;

(b) Ten Thousand Dollars ($10,000.00) shall be paid on or before
November 1, 1994;

(d) Ten Thousand Dollars ($10,000.00) shall be paid on or before
November 1, 1995; and

(e) A final payment of Ten Thousand Dollars ($10,000.00) shall be
paid on or before May 1, 1996.

4. Upon bankruptcy court approval of the Stipulation, the Debtors shall
resume making all payments required under the Agreement on May 1, 1994,
and shall make each payment due thereunder in a timely manner pursuant
to the terms of the Agreement. The Debtors shall modify the Plan of
Reorganization currently on file with the Bankruptcy court to reflect
that neither the Plan of Reorganization nor the Bankruptcy Code shall
in any way prohibit Collagen from pursuing any subsequent patent
infringement action which is not covered by the Agreement. Furthermore,
any subsequent breach of the Agreement shall be handled according to
the terms of the Agreement and shall not be stayed by confirmation of
the Plan of Reorganization currently on file with the bankruptcy court.

5. Collagen agrees, upon bankruptcy court approval of the Stipulation and
subject to the modifications contained herein, to withdraw its
objection to the Plan of Reorganization currently on file with the
bankruptcy court, and vote in favor of said Plan of Reorganization.

6. Collagen and the Debtors will use their best efforts to obtain all
approvals necessary or required to effectuate the terms of this
Stipulation.

7. It is mutually acknowledge, understood and agreed by and between
Collagen and the Debtors that neither party intends anything herein as
an admission of fault or liability, and nothing herein shall be
construed as an admission of fault or liability.

8. This Stipulation may be executed in counterparts, any or all of which
may contain the signatures of less than all of the parties and all of
which shall be construed together as but a single instrument.

9. The Stipulation, in conjunction with the Agreement, contains the entfre
understanding by and between Collagen and the Debtors. This Stipulation
may be amended or modified only by a subsequent written instrument
executed by all parties effected by the amendment or modification.

10. The language used in this Stipulation is that of all of the parties and
shall not provide the basis for a construction of language that is
adverse to one party solely because that party or its legal counsel may
have drafted such language initially.

11. The parties to this Stipulation shall bear and pay all costs and
expenses incurred by it in connection with the negotiations, execution
and approval of the Stipulation, including without limitation, fees and
expenses for its own legal counsel.

IN WITNESS WHEREOF, each of the parties hereto have executed this Agreement.

BIOPLASTY, INC.

By /s/ DANIEL G. HOLMAN
Its President

UROPLASTY,INC.

By /s/ DANIEL G. HOLMAN
Its President

COLLAGEN CORPORATION

By /s/ JOHN STOET
Its Attorney

EXHIBIT 6.9

EXHIBIT "A"

SETTLEMENT AND LICENSE AGREEMENT

This Settlement and License Agreement ("Agreement") is made and entered
into as of the ___ day of ______ 1992, by and between Collagen Corporation
("Collagen"), a Delaware corporation, on the one hand; and Bioplasty, Inc.
("Bioplasty") and Uroplasty, Inc. ("Uroplasty") (hereinafter, collectively,
"Defendants"), businesses organized under the laws of Minnesota, on the other
hand.

I. Recitals

1. Collagen is the owner of United States Patent No. 4,803,075,
entitled "Injectable Implant Composition Having Improved Intrudability" ("the
Patent").

2. Collagen is the Plaintiff and Bioplasty is the Defendant in Civil
Action No. C 91-13l4 RFP, entitled Collagen Corporation v. Bioplasty. Inc., now
pending in the United States District Court for the Northern District of
California (the "Lawsuit").

3. Uroplasty, a proposed spin off from Bioplasty, was incorporated on
January 2l, l992. It is intended that a urologic product currently owned by
Bioplasty will be transferred to Uroplasty, including all rights, title and
interest in the development, manufacturing, distribution and sales of the
product formerly known as Uroplastique, now known as Macroplastique.
Macroplastique is a product of Bioplasty and alleged to be an issue in this
litigation.

4. Collagen and Defendants desire fully to resolve all differences
between them that were raised, or could have been raised, in the Lawsuit. it is
the intention of the parties to this Agreement to settle and dispose of, fully
and completely, any and all claims, demands and causes of action heretofore or
hereafter arising out of, connected with or incidental to any of the facts and
circumstances giving rise to the Lawsuit (including, without limiting the
generality of the foregoing, any and all claims, demands and causes of action
which are, or could be, through amendment of the pleadings or otherwise up to
and including trial, reflected in the Lawsuit). Accordingly, all parties to this
Agreement have agreed to settle and not to proceed with any and all claims,
known or unknown, which any party may have, or could have had against each other
in this regard. Thus, Collagen and Defendants have each agreed to settle and not
to proceed against each other for any claim arising out of or in connection with
the Patent.

II. Agreement

In consideration of the foregoing recitals and mutual promises of the
parties contained herein, the parties agree as follows:

l. Payments. Within five (5) days of the signing of this Agreement, Defendants
shall pay to Collagen the sum of Fifty Thousand Dollars ($50,000) in United
States currency, in cashier's or certified funds. This amount is non-refundable
and is not an advance against royalties payable pursuant to Section 2. In
addition, on May 1 of each year, commencing May 1, 1993, and continuing through
and including May 1, 2006, Defendants shall pay to Collagen the sum of Fifty
Thousand Dollars ($50,000) in United States currency, in cashier's or certified
funds. The annual $50,000 payment provided for in the preceding sentence shall
constitute a credit against royalties that would otherwise be payable pursuant
to Section 2.3 with respect to Licensed Products sold during the twelve months
(ending April 30) following the date the payment is due; provided, however, that
the annual payment shall not be credited against royalties payable with respect
to Licensed Products sold more than twelve months after the date the payment is
due. Accordingly, the $50,000 payment shall be due each year commencing May l,
l993 through and including May 1, 2006, even if no Licensed Products are sold,
no royalties are due pursuant to Section 2.3, and/or the license granted in
Section 2 is no longer in effect. The sole circumstance under which the annual
$50,000 payment referred to herein shall not be due is if Defendants have
discontinued all development and sales efforts worldwide of products using the
technology covered by the license granted in Section 2. Such annual $50,000
payment shall cease only during the time Defendants cease such development and
sales of the products using the technology covered by the license; it shall
resume immediately, prorated for any partial year, upon recommencement of such
development and sales.

2. License.

2.1 Definitions.

2.1.1 "Patent Rights" means rights to any subject matter
claimed in or covered by U.S. Patent No. 4,B02,075.

2.1.2 "Licensed Products" means (i) any injectable aqueous
suspension of a particulate biocompatible material which contains a
lubricant, and (ii) any other product, apparatus, kit or component part
thereof, or other subject matter, whose manufacture, use or sale would,
absent the license granted in this Section 2, infringe any claim or
claims included within the Patent eights. It is understood and agreed
that the products currently known as Bioplastique, Bioplastique
Micro-implants, Uroplastique, Uroplastique Micro-implants, and
Macroplastique constitute Licensed Products.

2.1.3 "Licensed Method" means any method, procedure, process
or other subject :natter whose use or practice would, absent the
license granted in this Section 2, infringe any claim or claims
included within the Patent Rights.

2.1.4 "Net Sales" means the gross invoice price of Licensed
Products sold in the United States, less the sum of the following
deductions where applicable: quantity discounts; returns; sales taxes
or import/export duties; and transportation charges.

2.l.5 "Licensee" means each of Bioplasty and Uroplasty and
their respective successors and permitted assigns.

2.1.6 "Licensor" means Collagen and its successors and
assigns.

2.2 Grant.

2.2.1 Subject to the terms and conditions contained in this
Section 2, Licensor hereby grants to Licensee a nonexclusive,
nontransferable license, without the right to sublicense, under the
Patent Rights to make, have made, use and sell Licensed Products and to
practice and have practiced the Licensed Methods within the United
States.

2.2.2 Licensee shall have the right to authorize third parties
to make Licensed Products and to practice Licensed Methods in
connection therewith, but solely for purposes of the sale of such
Licensed Products directly to Licensee for its use and resale. Any such
manufacturing agreement shall include all of the restrictions contained
herein that are applicable to the manufacture, use and sale of Licensed
Products, and Licensor shall be expressly entitled to enforce such
restrictions against the manufacturer. Licensee shall not otherwise
sublicense or dispose of its license rights granted under this Section
2. Licensee shall provide to Licensor a copy of each agreement entered
into by Licensee pursuant to this Section 2.2.2 at the time such
agreement is executed.

2.2.3 It is agreed that U.S. Patent No. 4,803,075 was issued
by the U.S. Patent and Trademark Office to Licensor, that Licensor is
the owner of all right, title and interest in and to the foregoing
patent and of all rights of recovery thereunder, and that Licensee
shall not challenge or cause others to challenge the validity of U.S.
Patent No. 4,803,075.

2.3 Royalties.

2.3.l As consideration for the license granted under this
Section 2, Licensee shall pay to Licensor an earned royalty of five
percent (5%) of the Net Sales of Licensed Products. Earned royalties
shall accrue at the aforementioned rate for the duration of the Patent
Rights with respect to all Licensed Products made, used or sold in the
united States.

2.3.2 Licensed Products shall be considered sold o when
invoiced or, if not invoiced, when delivered to a third party.
Notwithstanding the foregoing, in order to assure that the full royalty
payments contemplated by this Agreement are paid to Licensor, Licensee
agrees that in the event any Licensed Products are sold for purposes of
resale either (i) to a corporation other entity in which Licensee
(including its affiliates) owns or controls, directly or indirectly, a
majority of the outstanding shares entitled to vote in the election of
directors, or (ii) to a corporation or other entity which (together
with its affiliates) owns or controls, directly or indirectly, a
majority of the outstanding shares of Licensee entitled to vote in the
election of directors, the royalties to be paid in respect of such
Licensed Products shall be computed based upon the Net Sales of the
purchaser for resale rather than upon the Net Sales of Licensee;
provided however, that the foregoing shall not apply if it would result
in lower Net Sales than if Licensee#s Net Sales were utilized for the
computation. When Licensed Products are not sold but are otherwise
disposed of, the Net Sales of such Licensed Products for the purposes
of computing royalties shall be the Net Sales recognized by Licensee on
contemporaneous sales of similar quantities of the same or similar
products.

2.3.3 Royalties payable to Licensor shall be paid within fifty
(50) days following the end of the calendar quarter in which Licensed
Products were sold or otherwise disposed of.

2.3.4 All monies due to Licensor shall be paid in U.S.
dollars. When Licensed Products are sold for monies other than U.S.
dollars, the Net Sales of such Licensed Products will first be
determined in the currency of the country in which such Licensed
Products were sold and then converted into equivalent U.S. funds at the
rate determined by averaging the rates for that foreign currency
published by Chase Manhattan bank for the last business day of each
month of the calendar quarter in question. All royalties payable to
Licensor shall be payable in full without deduction for taxes or levies
against such royalty payments by any foreign government, other than
sales taxes as specified in Section 2.1.4.

2.3.5 in the event that any claim included within the Patent
Rights shall be held invalid in a decision by a court of competent
jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based on such claim shall cease
as of the date of such decision. Licensee shall not, however, be
relieved from paying any royalties attributable to such claim which
accrued before such decision or which are based on another claim
included within the Patent Rights and not involved in such decision.
The foregoing shall only apply to actions brought by third parties, as
Licensee has agreed in Section 5.1 below, among other things, not to
file any request for re-examination or other challenge to the validity
of the Patent.

2.4 Quarterly Reports.

2.4.1 Beginning with the calendar quarter during which
occurred the first commercial sale of Licensed Products, Licensee shall
provide Licensor with written quarterly reports showing all sales made
of Licensed Products during the quarter. if no sales of Licensed
Products has occurred during a quarter, a statement to this effect
shall be provided. Such reports shall be made no later than fifty (50)
days following the end of each calendar quarter and shall be
accompanied by payment in full of the royalties due on Net Sales for
the preceding quarter.

2.4.2 Licensee shall keep books and records accurately showing
all Licensed Products sold. At least one complete set of such books and
records shall be maintained by Licensee in the United States, in
Bioplasty's headquarters. (At this time, such headquarters are at 1385
Centennial Drive, St. Paul, Minnesota.) In the event U.S. headquarters
cease to exist, such books and records shall be maintained at an
accessible place in the United States, to be agreed upon by the
parties. Such books and records shall be open to inspection by
representatives or agents of Licensor at reasonable times for the
purpose of verifying the accuracy of the quarterly reports and
royalties due. The fees and expenses of the representatives or agents
of Licensor performing such an examination shall be borne by Licensor.
Licensee shall be responsible for its own errors by remitting royalties
found owing.

2.4.3 The books and records required by Section 2.4.2 above
shall be preserved by Licensee for five (5) years from she date of the
royalty payment to which they pertain.

2.5 Term and Termination.

2.5.1 The license under this Section 2 shall be in full force
and effect from the date first herein written and shall remain in
effect for the life of the last to expire of the Patent Rights, unless
otherwise terminated in accordance with the terms of this Agreement.

2.5.2 If Licensee shall fail to deliver to Licensor any
statement or report or fail to pay any royalty when due, or if Licensee
shall breach or otherwise fail to perform any term or condition of this
Agreement, Licensor may provide written notice of such default to
Licensee. If Licensee fails to cure such default within thirty (30)
days (ten (10) days in the case of failure to pay royalties or provide
reports) from its receipt of such notice, Licensor may terminate the
license granted in this Section 2 by providing written notice to
Licensee. Upon delivery of such notice of termination, the license
granted in this Section 2 shall automatically terminate and be of no
further force or effect. The license granted in this Section 2 shall
also automatically terminate and be of no further force or effect in
the event of the bankruptcy or insolvency of Licensee, or if any
proceeding in bankruptcy, whether voluntary or involuntary, is
instituted by or against Licensee, or if a receiver is appointed for
all or substantially all of Licensee's assets, or if Licensee makes an
assignment for the benefit of creditors; provided, however, that the
foregoing shall only apply with respect to the Licensee that is the
subject of the proceeding or condition described above. Any termination
shall not relieve Licensee of the obligation to pay any royalty or
other fees due or owing as of the date of such termination or otherwise
relieve Licensee of any obligation or liability accrued hereunder, and
such termination shall not affect in any manner any rights of Licensor
arising under this Agreement prior or subsequent to such termination.

2.5.3 Licensee shall have no right to terminate the license
granted in this Section 2.

2.6 Patents and Trademarks.

2.6.l Licensor shall have no obligation to maintain the Patent
Rights or file any applications or other instruments in connection
therewith.

2.6.2 Nothing contained in this Section 2 shall be construed
as conferring any right to use in advertising, publicity or other
promotional activities or otherwise any name, trade name, trademark or
other designation of any party hereto (including any contraction,
abbreviation or simulation of any of the foregoing). No party to this
Agreement shall take any action, including without limitation
registration anywhere in the world, inconsistent with any other party's
ownership of its trade names or trademarks.

2.7 Warranty.

2.7.l Licensor warrants that it has the right to grant the
license granted hereunder.

2.7.2 Nothing in this Agreement shall be construed as:

(a) A warranty or representation by Licensor as to
the validity or scope of any of the Patent Rights;

(b) A warranty or representation by Licensor that
anything made, used, sold or otherwise disposed under the
license granted in this Section 2 is or will be free from
infringement of patents or other intellectual property rights
of third parties;

(c) An obligation on the part of Licensor to bring or
prosecute actions or suits against third parties for patent
infringement;

(d) Conferring by implication, estoppel or otherwise
any license or rights under any patents or other intellectual
property rights of Licensor, other than the Patent Rights; or

(e) Any obligation on the part of Licensor to furnish
any material, know-how or assistance to Licensee.

2.7.3 EXCEPT AS SET FORTH IN SECTION 2.7.1, LICENSOR MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR NONINFRINGEMENT.

2.8 Infringement.

2.8.l In the event that Licensee shall become aware of the
infringement by a third party of any of the Patent Rights, Licensee
shall promptly notify Licensor in writing and shall provide Licensor
with all information in its possession regarding such infringement.
Licensee shall not have any right to bring an action for infringement
of any of the Patent Rights against any third party.

2.9 Indemnity.

2.9.1 Licensee shall indemnify, defend and hold harmless
Licensor against and in respect of any and all claims, losses,
liabilities, costs, expenses and damages, including without limitation
interest, penalties and attorneys' fees, suffered or incurred by
Licensor which arise, result from or relate to Licensee's manufacture,
sale or use of Licensed Products or practice of Licensed methods.

2.10 Miscellaneous.

2.10.1 Licensee shall not sublicense, assign, transfer or
otherwise dispose of any of its license rights under this Section 2,
including any assignment or transfer by operation of law, and any
attempt to do so shall be null and void. The foregoing shall not apply
to any assignment in connection with the acquisition of all of the
assets or capital stock of Bioplasty or Uroplasty.

3. Arbitration.

3.1 Any controversy or claim arising out of the provisions of this
Agreement shall be finally settled by binding arbitration in the County of Santa
Clara, California, in accordance with the commercial arbitration rules of the
American Arbitration Association then in effect.

3.2 The parties shall be entitled to conduct discovery proceedings in
accordance with the provisions of Section 1283.05 of the California Code of
Civil Procedure and each party may serve a single request for production of
documents.

3.3 Any arbitration shall be conducted before a single arbitrator
mutually acceptable to Collagen and Defendants. if such parties cannot agree
upon the selection of a single arbitrator within ten (10) business days of the
initiation of the arbitration, Collagen and Defendants shall each appoint an
arbitrator within five (5) business days after the end of the preceding ten-day
period and the two arbitrators so chosen shall mutually agree upon the selection
of a third arbitrator. If either Collagen or Defendants fail to appoint an
arbitrator within the foregoing period, the arbitrator chosen by the other shall
be the sole arbitrator for the proceeding. if the two arbitrators chosen by
Collagen and Defendants cannot agree on the appointment of a third arbitrator
within fifteen (15) days after the end of the preceding five-day period, the
third arbitrator will be chosen by the American Arbitration Association with all
parties hereto agreeing that such appointment shall be made on as expeditious a
basis as possible. for purposes of this Section 3.3 and Section 4.1 below,
Bioplasty and Uroplasty shall, together, be entitled to appoint a single
arbitrator.

3.4 The arbitrator(s) so chosen shall render a decision within thirty
(30) days of the termination of the presentation of evidence. The decision of a
majority of the arbitrators (if there be more than one) shall be final and
binding on the parties. The arbitrator(s) shall have the power (by majority vote
in the case of multiple arbitrators) to grant injunctive or other equitable
relief prior to rendering a final decision.

3.5 Any judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction of the subject matter. The
arbitrator(s) shall have the authority to grant any equitable and legal
remedies. The parties hereby submit to the in personam jurisdiction of the
Superior Court of the State of California for Santa Clara County and the Federal
District Court for the Northern district of California for purposes of
confirming any such award and entering judgment thereon.

4. Expedited Arbitration Applicable Solely to Advertising Restriction. At the
request of any party at issue in an Advertising Restriction dispute, any
controversy or claim arising out of an alleged violation of Section 8
"Advertising Restriction" shall be subject to an expedited arbitration
proceeding prior to the arbitration proceedings set forth in Section 3. The
purpose of this expedited proceeding is to permit a quick and expeditious
"resolution of every dispute regarding the Advertising Restriction before the
expenditure of time and money and before it is too late to stop the damage
arising from the violation, if there is one.

4.1 The arbitration shall be conducted before a single arbitrator
mutually acceptable to Collagen and Defendants. If such parties cannot agree
upon the selection of a single arbitrator within five (5) days of the initiation
of the arbitration (including weekends and holidays), Collagen and Defendants
shall each appoint an arbitrator within two (2) days of the end of the preceding
period and the two arbitrators so chosen shall mutually agree upon the selection
of a third arbitrator within two (2) days. if either Collagen or Defendants
fail to appoint an arbitrator within the foregoing period, the arbitrator chosen
by the other snail be the sole arbitrator for the expedited proceeding. The
following procedures shall govern the expedited proceeding:

4.1.1 Evidentiary Hearing. Each party shall use its best
efforts to present its evidence in less than ten (lO) hours. The first
party to present its evidence shall be the one claiming violation of
Section 8. immediately following the presentation of evidence by one
party, the other party shall proceed to present its evidence. Only the
parties at issue in the dispute shall present evidence. Thus, if the
advertising in dispute relates to a Bioplasty product and not a
Uroplasty product, only Collagen and Bioplasty would be parties
entitled to present evidence. Similarly, if the advertising in dispute
relates to a Uroplasty product, only Collagen and Uroplasty would be
parties entitled to present evidence.

4.2 In furtherance of the goal to expedite this proceeding, the parties
desire no discovery, formal or informal, yet leave this up to the arbitrator.
The parties may agree to exchange information, but this is not required and
shall not be ordered.

4.3 The evidence at the evidentiary hearing may consist of:

(i) sworn declarations provided each declaration is
accompanied by a current curriculum vitae;

(ii) testimony taken by telephone, provided the witness has
provided a current curriculum vitae;

(iii) hearsay evidence (oral and documentary) whose weight
shall be determined by the arbitrator(s);

(iv) faxed signatures and declarations; and

(v) other evidence admissible pursuant to the Federal Rules of
Evidence.

4.4 The arbitrator(s) shall use it(s) best efforts to render a decision
as soon as possible, before the decision would be moot by the alleged damage, if
any.

4.5 Upon a finding of a reasonable probability that there has been a
violation of Section 8, the arbitrator(s) have the power to render orders
sufficient to compensate the prevailing party. Such orders may include, but are
not limited to, an order that:

(i) the comparative advertising at issue cease immediately.

(ii) the party in violation of the Advertising Restriction
take all reasonable steps to recall the materials in dispute
immediately.

(iii) fines be invoked in the event steps (i) and (ii) above
are not undertaken immediately.

(iv) proof of compliance within the time set by the
arbitrator's order.

4.6 Subsequent to this expedited proceeding, if any party determines to
contest the decision, resolution of the contested order shall be governed by the
general arbitration proceedings in Section 2 above. However, the expedited
decision shall remain in full force and effect throughout the time it is
rendered and the time a final arbitration decision is rendered pursuant to
Section 3 above.

4.7 The losing party in an arbitration proceeding under Sections 3 and
4 shall be liable for the other party's reasonable costs and attorneys' fees,
which shall be determined by the arbitrators.

5. Covenant Not to Sue or File Any Claim or Request. Defendants and Collagen
specifically covenant never to institute or to participate in any suit-or
action, at law or in equity, (including but not limited to an action for
declamatory relief) against each other by reason of any claim, demand, action or
cause of action described in paragraph 11 of this Agreement.

5.l Defendants have not filed or caused to be filed and will not file
or cause to be filed at any time in the future, any statutory, civil, or
administrative claim or request of any kind (including a request for
re-examination of the Patent) with any federal court, administrative agency or
tribunal of any kind whatever, concerning any subject matter connected with, or
pertaining or relating to the issues referred to in paragraphs 2-4 above and 11
below. All parties agree that this Agreement is contingent upon this promise not
to file or cause to be filed any such claim or request of any kind whatsoever.
This paragraph does not relate to the action referenced in paragraphs 2, 3 to
3.5, and 4 to 4.7 above.

6. Authority and Nonassignment. The parties to this Agreement expressly warrant
to each other that each party has authority to enter into this Agreement, that
the representatives of each party signing this Agreement are duly authorized to
take such action, and that no party has sold, assigned, granted or transferred
to any other person, corporate or natural, any claim, action, demand or cause of
action encompassed by this Agreement.

7. No Reliance. The parties to this Agreement expressly assume any and all risk
that the facts and law may be, or become, different from the facts and law as
known to, or believed to exist by any of the parties as of the date of this
Agreement, and that, in executing this Agreement, no party has relied upon any
information supplied by any other, or upon any obligation or alleged obligation
of any other party or its counsel to disclose information relevant to this
Agreement.

7.1 The parties hereto agree and acknowledge that they may hereafter
discover facts different from or in addition to those which they now know or
believe to be true with respect to the matters released herein and the parties
agree that this Agreement shall be and will regain effect(pound)ve in all
respects notwithstanding tee discovery of such different or additional facts. It
is the intention hereby to fully, finally and forever settle and release all
matters released herein, and all claims relating thereto, pertaining in any way
to any acts, omissions or occurrences prior to the date hereof. In furtherance
of such intention, the release given herein shall remain in effect as a full and
complete release of any such matters notwithstanding the discovery or existence
of any additional claims or facts.

8. Advertising Restriction.

8.1 Definitions. As used in this Section 8, "Bioplasty" means each of
Bioplasty and Uroplasty and their respective successors and assigns.

8.2 Restriction. Bioplasty shall not, anywhere in the world, engage in
any advertising, sales or other promotional activity, directly or indirectly,
that compares any of Bioplasty's Licensed Products with any of those of
Collagen, whether expressly or by implication. Thus, Bioplasty cannot compare
its Licensed Products to Contigen implants, Zyderm implants, Zyplast implants or
any other product of Collagen. Similarly, with respect to the prohibited
Licensed Product comparisons, Bioplasty shall not compare itself with Collagen.
Without limiting the generality of the foregoing, Bioplasty shall not (i)
prepare or utilize, or participate or assist in the preparation or utilization
of, any marketing or sales literature, research reports or other material chat
makes the comparisons prohibited herein, (ii) fund, promote or otherwise
encourage any third party to prepare materials described in clause (i) or to
engage in such comparisons. By way of illustration but not limitation,
Bioplasty's prior comparisons of (x) BIOPLASTIQUE implants, on the one hand,
with ZYDERM implants and ZYPLAST implants, on the other hand, and (y)
UROPLASTIQUE and MACROPLASTIQUE implants with CONTIGEN implants would, if
continued, violate the foregoing restriction.

8.3 Enforcement. Bioplasty shall enforce the foregoing restrictions
against its employees, agents, sales representatives, distributors, public
relations farms and other persons and entities with which it deals. Without
limiting the generality of the foregoing, Bioplasty shall use reasonable efforts
to notify all persons involved in the marketing or distribution of its products
of the foregoing restrictions. Bioplasty shall use best efforts to enforce
compliance with the restrictions. Bioplasty shall be jointly and severally
liable to Collagen in the event of any breaches of the terms of the
restrictions.

8.4 Reports. Within thirty (30) days of the execution of this
Agreement, Bioplasty shall provide to Collagen copies of all sales literature,
research reports and other material, whether in tangible or electronic form,
currently being used by Bioplasty in connection with such marketing and
distribution. Within thirty (30) days of the end of each calendar quarter,
Bioplasty will provide to Collagen an update of the advertising materials and
any additional materials being used by Bioplasty.

9. Breach of Covenants and Warranties. This Agreement shall be deemed breached,
and a cause of action accrued thereon immediately upon the commencement or
continuation of any action based upon any claim, demand, action or cause of
action subject to paragraphs 5 and 5.1. In any such action this Agreement may be
pleaded as a defense, or by way of counterclaim or cross-claim, and shall be
admissible in evidence without any foundation testimony. Unconditionally,
immediately and on demand, the party in breach of this Agreement shall hold and
save harmless all other parties from and against any and all action, causes of
action, claims, demands, counterclaims, liabilities, losses, damages and
expenses, including costs and attorneys' fees, that may be sustained or incurred
by reason of any breach of this Agreement.

10. Dismissal with Prejudice. Simultaneously with the execution of this
Agreement, the parties, by their counsel of record in the Lawsuit, shall execute
the stipulation for dismissal with prejudice attached as Exhibit A hereto. Any
tinge after signing this Agreement, any party may thereafter present to the
Court, without notice, the stipulation for dismissal with prejudice, together
with an order of dismissal, in the form of Exhibit B hereto, and no party shall
oppose entry of an order by the Court in the form of Exhibit B.

1l. Mutual Release. in consideration of the actions of Defendants required by
paragraphs l and 2 above, the releases contained in this paragraph, and the
other provisions of this Agreement, the receipt and sufficiency of which are
hereby acknowledged, Collagen and Defendants, for themselves, their successors
and assigns, and all persons claiming under them, hereby fully and forever
mutually release and discharge each other, their subsidiaries, affiliates,
divisions, insurers, and all of their past and present employees, agents and
assigns, of and from any and all claims, demands, actions, obligations,
liabilities and damages of every kind and nature whatsoever, in law or in
equity, whether known or unknown, which Collagen or Defendants or any person
acting under any of them, may now have, or claim at any future time to have,
arising from, or based in whole or in part upon, any act, omission, event,
transaction, matter or thing involved, alleged or referred to, or appearing
directly or indirectly, in the pleadings or any other court filings in the
Lawsuit.

12. California Civil Code 1542. Each of the parties hereto acknowledges that it
has read and fully understands the language of California Civil Code Section
1542, which provides:

A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him, must have materially affected his
settlement with the debtor.

Each of the parties elects to and does assume all risks of claims, known or
unknown, heretofore or hereafter arising from this Agreement, and specifically
waives any benefit or right under California Civil Code Section l542. Thus, no
party to this Agreement may invoke the benefits of Section 1542 or any similar
provision in order to prosecute or assert in any manner any claims released
under this Agreement.

13. Acknowledgment of Parties. The parties hereto acknowledge that they have
fully read and considered the contents of this Agreement, that they have
received independent legal advice from counsel of their choice regarding the
advisability hereof, and that they fully, completely and totally comprehend the
provisions hereof and are in full agreement with each and every one of its
terms, conditions and provisions.

14. Confidentiality. Except as provided in this paragraph, Collagen and
Defendants agree that the existence, fact, terms, or provisions of or
information concerning this Agreement shall remain confidential and shall not be
disclosed to: the mass media or the press; or to any person, including any
current, former or future employee of Collagen or Defendants with the soled and
exclusive exception of Collagen's and Defendants' accountants or attorneys, but
only to the extent required for the rendition of professional services, so long
as any such attorney or accountant is informed of the confidentiality of this
Agreement and agrees to retain the confidentiality of this Agreement. This
instruction of confidentiality shall be given by the party who has retained the
accountant or attorney. The foregoing shall not apply to disclosure in
connection with an action to enforce the terms of this Agreement or to
disclosure to each party's sales persons, distributors and the like for purposes
of monitoring compliance with section 8 above.

l4.1 Notwithstanding paragraph 14 above, Collagen and Defendants, if
asked by anyone about the Lawsuit, the Patent, or this Agreement, may state: (a)
there was a Lawsuit between Collagen and Bioplasty that has been resolved
confidentially; and (b) Bioplasty has received a non-exclusive license under the
Patent. In addition, Bioplasty shall have the right to issue a single press
release, in form and substance reasonably acceptable to Collagen containing the
statements in (a) and (b) above. No other details of the Lawsuit or the terms
and conditions of this Agreement shall be discussed. Notwithstanding this
provision, Bioplasty may comply with regulatory requirements.

15. Integration. This Agreement and all exhibits or attachments hereto
constitute a single, integrated written contract expressing the entire agreement
of the parties to this Agreement concerning the subject matter referred to
herein. No covenants, agreements, representations, or warranties of any kind
whatsoever, whether express or implied in law or fact, have been made by any
party to this Agreement, except as specifically set forth in this Agreement. All
prior and contemporaneous discussions and negotiations have been and are merged
and integrated into, and are superseded by, this Agreement.

16. Modifications. No modification, amendment or waiver of (any of the
provisions contained in this Agreement, or any future representation, promise,
or condition in connection with the subject matter of this Agreement, shall be
binding upon any party to this Agreement unless made in writing and signed by
such party or by a duly authorized officer or agent of such party.

l7. Severability. In the event that any provision of this Agreement should be
held to be void, voidable, unlawful or for any reason unenforceable, the
remaining provisions or portions of this Agreement shall remain in full force
and effect. Any request that any provision of this Agreement be held
unenforceable for any reason, including public policy grounds, shall be
arbitrated pursuant to paragraph 3.

18. Attorneys' bees. Each party is to bear its own attorneys' fees, expert and
consultant fees, if any, costs, and any other expenses to date.

19. Governing Law. This Agreement shall be interpreted, construed and enforced
in accordance with the laws of the State of California applicable to contracts
made and to be performed entirely within the State of California by and between
California residents.

20. Joint and Several Liability. Bioplasty and Uroplasty shall each be jointly
and severally liable for the performance of all obligations of Defendants and
Licensee hereunder, and each of Bioplasty and Uroplasty hereby guarantees the
performance of tee other for all purposes of this Agreement. Without limiting
the generality of the forgoing, in the event any payment made by Bioplasty or
Uroplasty hereunder is rescinded or recovered by or on behalf of the payor,
whether by operation of law or otherwise, the non-payor as between Bioplasty and
Uroplasty shall promptly make a payment to Collagen in the amount of the payment
so rescinded or recovered.

21. Miscellaneous Terms. The parties to this Agreement further represent,
warrant, and agree as follows:

21.1 Each of the parties gas received prior independent legal advice
from legal counsel of his or its choice with respect to the advisability of
making the settlement provided for in this Agreement and with respect to the
advisability of executing this Agreement. Each party's attorney has reviewed the
Agreement to indicate that the attorney approved the Agreement as to form.

21.2 Except with respect to statements expressly set forth in this
Agreement, no party has made any statement or representation to any other party
regarding a fact relied upon by the other party in entering into this Agreement
and no party has relied upon any statement, representation, or promise of any
other party, or of any representative or attorney or any other party, in
executing this Agreement or in making the settlement provided for in this
Agreement.

21.3 Each of the parties has read the Agreement carefully, knows and
understands the contents of this Agreement, and has made such investigation of
the facts pertaining to the settlement and this Agreement and of all matters
pertaining to this Agreement as he or it deems necessary or desirable.

2l.4 The terms of this Agreement (including without limitation
paragraphs 5 and 6) are contractual, not a mere recital, are the result of
negotiations between the parties, and shall survive the closing of this
Agreement.

21.5 This Agreement shall be construed without regard to the party
responsible for its preparation and will be deemed as prepared jointly by the
parties hereto. In resolving any ambiguity or uncertainty existing herein, the
parties expressly agree that no consideration or weight shall be given to the
identity of the party drafting this document.

2l.6 The headings and captions used in this Agreement are for
convenience only and shall not be deemed to affect in any way the language of
the provisions to which they refer.

2l.7 Each party agrees that such party will not take any action which
would interfere with the performance of this Agreement by any of the parties to
this Agreement or which would adversely affect the rights provided for in this
Agreement.

21.8 In entering into this Agreement and the settlement provided for in
this Agreement, the parties, and each of them, recognize that no facts or
representations are ever absolutely certain. This Agreement is intended to be
final and binding between Collagen and Defendants, and is further intended to be
effective as a full and final accord and satisfaction between them. Each party
relies on the finality of this Agreement as a material factor inducing that
party's execution of this Agreement.

21.9 Whenever the context so requires, the masculine gender shall
include the feminine or neuter gender, and the singular number shall include the
plural number, and vice versa.

21.10 immediately upon execution of this Agreement each party shall
return to the other documents subject to the Protective Order governing the
Lawsuit.

IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto and their respective attorneys of record have approved and executed this
Agreement on the dates set forth below to be effective as of the date first
written above.

Dated: 7/21/92 COLLAGEN CORPORATION

By:
Title: Sr. Vice President

Dated: 7/23/92 BIOPLASTY, INC.

By: /s/DONALD A MAJOR
Title: Vice President of Finance

Dated: 7/23/92 UROPLASTY, INC.

By:
Title: Secretary

APPROVED AS TO FORM:

FLEHR, HOBACH, TEST,
ALBRITTON & HERBERT

By: /s/ THOMAS O HERBERT
Thomas O. Herbert
Attorney for Bioplasty, Inc.
and Uroplasty, Inc.

ARNOLD, WHITE & DURKEE

By: /s/ EDWARD W. GOLDSTEIN
Edward W. Goldstein
Attorney for Bioplasty, Inc.
and Uroplasty, Inc.

MORRISON & FOERSTER

By: /s/ VICKI E. BAER
Vicki E. Baer
Attorney for Collagen Corporation

l MORRISON & FOERSTER
Vicki E. Baer, Esq.
2 755 Pace Mill Road
Palo Alto, California 94204-1018
3 (415) 813-5720

5 Attorneys for Plaintiff

8 IN THE UNITED STATES DISTRICT COURT

9 FOR THE NORTHERN DISTRICT OF CALIFORNIA

11 COLLAGEN CORPORATION, )
a California corporation, ) No. C 91-1214 RFP

12 )
Plaintiff ) STIPULATION FOR DISMISSAL WITH
13 ) PREJUDICE
v. )
14 )
BIOPLASTY, INCORPORATED )
l5 a Minnesota corporation, )

16 __________________________________________)

19 Plaintiff Collagen Corporation ("Collagen") and~Defendant

20 Bioplasty, Incorporated ("Bioplasty1") by their undersigned counsel

21 of record, hereby stipulate that the within action, with respect

22 to Collagen and Bioplasty, including all claims, counterclaims or

23 cross-claims that were made, or could have been made with respect

24 to any act, omission, event; transaction, mater or thing

25 concerning, involved, alleged or referred to, or appearing

26 directly or indirectly in the pleadings or any other court filings

27 herein, shall be dismissed, with prejudice, each party to bear its

28 own costs and attorneys' fees, on the ground that a settlement has

STIPULATION FOR DISMISSAL EXHIBIT A

1 been reached. Accordingly, all claims asserted by Collagen

2 against Bioplasty, and all counter-claims asserted by Bioplasty

3 against Collagen, shall be dismissed with prejudice, each party to

4 bear its own costs and attorneys' fees.

5 Dated July 14, 1992

6 MORRISON & FOERSTER

8 By: /s/ VICKI E. BAER
Vicki Baer
Attorney for Plaintiff
9 Collagen Corporation

10
755 Page Mill Road
11 Palo Alto, CA 94304-1018
(415) 813-5600
l2

13 FLEHR, HOHBACH, TEST,
ALBRITTON & HERBERT
14

15
By: /s/ THOMAS O. HERBERT
l6 Thomas 0. Herbert
Attorneys for Defendant
l7 Bioplasty, Incorporated

23 43156

STIPULATION FOR DISMISSAL EXHIBIT A

EXHIBIT 8.2

UNITED STATES BANKRUPTCY COURT
DISTRICT OF MINNESOTA

FOURTH DIVISION

In re: Bky Case No.: 4-93-02600

Bioplasty, Inc., a
Minnesota corporation,

Debtor.

In re: Bky Case No.: 4-93-02604

Uroplasty, Inc. a
Minnesota corporation,

Debtor.

In re: Bky Case No.: 4-93-02603

Bio-Manufacturing, Inc., a
Minnesota corporation,

Debtor.

FIRST AMENDED JOINT PLAN OF REORGANIZATION
(MODIFIED)

Bioplasty, Inc. ("BIOPLASTY"), Bio-Manufacturing, Inc.
("BIO-MANUFACTURING"), and Uroplasty, Inc. ("UROPLASTY"), (collectively the
"DEBTORS") propose the following First Amended Joint Plan of Reorganization
(Modified) (the "PLAN") pursuant to Chapter 11 of Title 11 of the United States
Code (the "CODE") in the Debtors' Chapter 11 Bankruptcy Cases (the "CASES") now
pending before the United States Bankruptcy Court for the District of Minnesota
(the "COURT").

ARTICLE I
DEFINITIONS

1.01 Administrative Claim. "Administrative Claim" means a Claim for the
payment of an administrative expense of a kind specified in Section 503 of the
Code, Section 507(a)(1) of the Code, and all fees and charges assessed against
the Debtors' estates under Sections 123 and 1930 of Title 28, United States
Code.

1.02 Allowed Administrative Claim. "Allowed Administrative Claim" means
that portion of any Administrative Claim which either (a) has been allowed by a
Final Order; or (b) was incurred by the Debtors in the ordinary course of
business during the Cases.

1.03 Allowed Claim. "Allowed Claim" means a Claim, other than an
Administrative Claim that is either (a) scheduled by the Debtors pursuant to the
Code, other than a Claim scheduled as disputed, contingent or unliquidated, or
(b) proof of which has been timely filed with the Court pursuant to the Code and
any order of the Court; and either (i) no timely objection has been filed to
said Claim; (ii) any objection to the Claim has been overruled by a Final Order;
or (iii) which has otherwise been allowed by a Final Order.

1.04 Authorized Shares. "Authorized Shares" means the five (5) million
shares of New Bioplasty Stock and the five (5) million shares of New Uroplasty
Stock authorized pursuant to New Bioplasty's and New Uroplasty's respective
Amended Articles of Incorporation.

1.05 Avoidance Actions. "Avoidance Actions" means an action initiated
by or on behalf of the Debtors to avoid any transfer of property that occurred
prior to the Petition Date under Sections 542, 543, 544, 547, 548, or 550 of the
Code.

1.06 Bar Date. "Bar Date" is the date established by the Court as the
last day for filing proofs of claim or interest in the Cases.

1.07 Cases. "Cases" means the voluntary bankruptcy cases filed by the
Debtors under Chapter 11 of Title 11 of the United States Code on April 29,
1993.

1.08 Cigna Insurance Coverage. "Cigna Insurance Coverage" refers to the
rights and benefits conferred by the insurance policy issued by Cigna Casualty
and Property Insurance Company, a Connecticut Corporation, International
Advantage Commercial insurance Policy, Policy No. CX CO 28535, with a policy
period of April 1, 1992 through April 1. 1993.

1.09 Claim. "Claim" means the right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured; or the right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.

l.10 Class Action. "Class Action" refers to the certified class action
In Re Bioplasty Securities Litigation, currently pending in the United States
District Court, District of Minnesota, Fourth Division, as Case No. 4-91~89.

1.11 Class Members. "Class Members" are those Persons who are defined
as follows: All persons who purchased Bioplasty common stock on the open market
during the period August 30, 1990 to July 30, 1991. inclusive, and who suffered
damages thereby. Excluded from the class are the defendants, [Daniel Holman,
Joel Pitlor, Arthur Beisang, Robert Ersek, John Olson, Richard Bennett,
Frederick Kalfon, and Timothy Lawin,] members of the individual defendants'
families, and any entity in which any defendant has other than an insubstantial
interest or which is a parent or subsidiary of, or is controlled by Bioplasty,
or the officers, directors, employees, affiliates, legal representatives, heirs.
predecessors, successors and assigns of any of the defendants.

1.12 Class 3 Stock Distribution. "Class 3 Stock Distribution" means
forty percent (40%) of the Newly Issued Stock to be issued on or about the
Effective Date. The number of shares available for the Class 3 Stock
Distribution as of the Effective Date shall be 800,000 Stock Units. All Newly
Issued Stock shall have the same demand stock registration rights to the extent
permitted by applicable law. New Bioplasty and New Uroplasty will exercise their
best efforts to register all Class 3 Stock on or before the third anniversary of
the Effective Date. To the extent the recipients of the Class 3 Stock
Distribution are "underwriters", as that term is defined by Section 1145(b) of
the Bankruptcy Code, restrictions may apply to the resale of such recipients'
Class 3 Stock.

1.13 Code. "Code" means Title 11 of the United States Code.

1.14 Common Stock Interests. "Common Stock Interests" shall include the
interests held on the Record Date by actual or beneficial holders of the common
stock of Bioplasty, BioManufacturing or Uroplasty or Common Stock Options
regardless of whether such interests have been exercised or there are any
restrictions on the purchase or sale of such stock.

1.15 Common Stock Options. "Common Stock Options" means any option,
warrant or other right to purchase Bioplasty or Bio-Manufacturing common stock.
whether granted pursuant to a stock option plan, or otherwise restricted, which
option. warrant, or other right had not expired before the commencement of the
Cases.

1.16 Confirmation Date. "Confirmation Date" means the date of entry of
the Confirmation Order on the Court's docket.

1.17 Confirmation Order. "Confirmation Order" means an Order of the
Court confirming the Plan in accordance with the provisions of Chapter 11.

l.18 Court. "Court" means the United States Bankruptcy Court, District
of Minnesota, Fourth Division that is presiding over the Cases.

1.19 Disallowed Claim. "Disallowed Claim" means any Claim or portion
thereof which has been disallowed by a Final Order, or which has been determined
not to be compensable by the Trust.

1.20 Disputed Claim. "Disputed Claim" means any Claim. or portion
thereof which has been (a) either (i) scheduled by the Debtors as disputed,
contingent or unliquidated, or (ii) proof of which has been filed with the Court
and an objection to the allowance of which has been timely filed; and (b) with
respect to which such dispute or objection has not been settled or determined by
a Final Order allowing or disallowing such Claim or portion thereof.

1.21 Effective Date. "Effective Date" means the first business day 15
days after the Confirmation Order becomes a Final Order.

1.22 Employee Stock. "Employee Stock" means the Stock Units to be
collectively issued by New Bioplasty and New Uroplasty on the Effective Date and
distributed to the employees under the Employment Agreements. Additional Stock
Units that will not reduce the Class 3 Stock Distribution may be issued as
Employee Stock in satisfaction of allowed administrative priority claims of
employees. To the extent the recipients of the Employee Stock are
"underwriters", as that term is defined by Section 1145(b) of the Bankruptcy
Code, restrictions may apply to the resale of such recipients' Employee Stock.
Issuance of the Employee Stock shall not dilute the Class 3 Stock Distribution.

1.23 Equity Holders. "Equity Holders" mean holders of Common Stock
Interests including the Class Members.

1.24 Fee Claims. "Fee Claims" are Administrative Claims for payment of
professional fees.

1.25 Final Order. "Final Order" means a Court Order, in connection with
which the time to appeal or seek review or rehearing of which has expired, and
as to which no appeal or petition for review or rehearing has been taken or is
pending.

1.26 General Star. "General Star" includes General Star Management
Company and General Star Indemnity Company, collectively and individually.

1.27 General Star insurance Coverage. "General Star Insurance Coverage"
refers to the indemnity rights and benefits conferred by the insurance policy
issued by General Star Indemnity Company, Commercial Liability Policy, Products
Completed Operation Liability Coverage, Policy No. IYG3011667. Policy period
February 1, 1991 though February 1, 1992, with notice provisions extended
through April 1, 1992, excluding benefits related to defense.

1.28 General Unsecured Claims. "General Unsecured Claims" are all
unsecured claims except Product Claims, including, but not limited to. Unsecured
Trade Claims, Indemnity Claims, Claims for provision of professional services
prior to filing the Cases (except Administrative Claims by approved counsel),
royalties, and all other unsecured Claims not otherwise categorized.

1.29 General Unsecured Creditors. "General Unsecured Creditors" are
creditors with Allowed General Unsecured Claims, or Allowed Product Claimants.

1.30 Implant Liquidation. "Implant Liquidation" means the liquidation,
by sale or otherwise, of the implant business of Bioplasty, which liquidation
shall occur within six (6) months of the Effective Date.

1.31 Indemnity Claims. "Indemnity Claims" mean those claims made by any
current or former officer, director, or other employee of the Debtors for
contribution, indemnity, or any other recovery of costs, disbursements,
attorneys fees, fines or damages alleged to have been related to or arising out
of their employment, title, or position with the Debtors.

1.32 Net Liquidation Proceeds. "Net Liquidation Proceeds" means the
amount of gross proceeds realized from the Implant Liquidation, minus all costs
relating to the Implant Liquidation and minus any liabilities of New Bioplasty.

1.33 Net Private Placement Fund. "Net Private Placement Fund" means the
proceeds generated from the Private Placement, less the expenses of such
placement. and less proceeds thereof utilized to fund Working Capital.

1.34 New Bioplasty. "New Bioplasty" refers to the reorganized Debtor,
Bioplasty, on and after the Effective Date.

1.35 New Bioplasty Stock. "New Bioplasty Stock" means the stock of the
reorganized Bioplasty which shall partially constitute the Newly Issued Stock.
The Amended Articles of Incorporation of New Bioplasty shall authorize five (5)
million shares of New Bioplasty Stock.

1.36 New Uroplasty. "New Uroplasty" refers to the reorganized Debtor,
Uroplasty, on and after the Effective Date.

1.37 New Uroplasty Stock. "New Uroplasty Stock" means the stock of the
reorganized Uroplasty which shall partially constitute the Newly Issued Stock.
The Amended Articles of Incorporation of New Uroplasty shall authorize five (5)
million shares of New Uroplasty Stock.

1.38 Newly Issued Stock. "Newly issued Stock" means those Stock Units
distributed as Class 3 Stock Distribution, Employee Stock, Settlement Stock, and
the Private Placement Stock. The Newly Issued Stock is subject to dilution.

1.39 Persons. "Persons" means individuals, partnerships, and
corporations, but does not include governmental units, provided, however, that
any governmental unit that acquires an asset from a person as a result of
operation of a loan guarantee agreement, or as receiver or liquidating agent of
a person, will be considered a person for purposes of section 1102 of the Code.

1.40 Plan. "Plan" means this Plan of Reorganization submitted by the
Debtors in the Cases.

1.41 Private Placement. "Private placement" means the collective
offering by Bioplasty and Uroplasty of up to Nine Hundred And Eighty Thousand
(980,000) Stock Units at $.50 per Stock Unit.

1.42 Private Placement Stock. "Private Placement Stock" means the Newly
Issued Stock, if any, offered and purchased under the Private Placement. The
Private Placement Stock will be sold to accredited investors and a limited
number of non-accredited investors under an exemption to registration under the
Securities Act of 1933 or the securities laws of any state in reliance upon an
exemption from registration contained in the Securities Act of 1933 and in
accordance with the restrictions relating to such exemption. The Private
Placement Stock may not be resold by the purchasers of said stock absent (i) the
registration of the Private Placement Stock; (ii) an exemption to the
registration requirements of the Securities Act, as noted above, is available;
or (iii) the sale is made in compliance with the provisions of Rule 144 of the
Securities Act.

1.43 Product Claims. "Product Claims" means all Claims, demands, suits,
causes of action, proceedings or any other rights or asserted rights to payment,
whether liquidated or unliquidated, whether mature or not, known or unknown, now
or hereafter asserted against the Debtors, or any subsidiary thereof, or their
affiliates, or the Product Claimants Trust, based upon or in any manner arising
from or related to the actual or contemplated design. manufacture. or sale of
any product sold by Debtors, prior to filing the Cases, including claims related
to any such product for breach of warranty, strict liability, failure to warn,
negligence, conspiracy, state or federal statutory or regulatory violations,
consumer liability, fraud or misrepresentation, or any other theory of product
liability, and including all claims, and all damages including damages that are
not actual pecuniary loss suffered by the holder of such Claim, permitted under
any such theory and certified as being part of the Class Action certified by the
Bankruptcy Court. Product Claims shall include all such claims, whether
currently identified or not, which may arise from activities or products of
debtors manufactured or sold prior to the filing of the Debtors' Cases. Product
Claims shall also include liquidated or unliquidated claims of any other person,
partnership, corporation, or other entity for indemnity. contribution,
subrogation or reimbursement, or attorneys fees and other expenses, fees or
costs, whether contractual or otherwise, whether mature or not, other than
Indemnity Claims. The Debtors believe the aggregate amount of the Product Claims
exceeds four million dollars. The Committee believes the aggregate value of the
Product Claims exceeds one hundred million dollars.

1.44 Product Claimants. "Product Claimants" means all persons or
entities who hold a Product Claim.

1.45 Product Claimants Trust. "Product Claimants Trust" means the trust
established pursuant to the Product Claimants Trust Agreement referred to in
Section 6.01(B) hereof. The Product Claimants Trust is sometimes referred to as
the "Trust".

1.46 Product Claimants Trust Agreement. "Product Claimants Trust
Agreement" means the agreement creating and governing the Product Claimants
Trust, a form of which is attached hereto as Exhibit A, as may be amended from
time to time.

1.47 Restrictive Transfer Legend. "Restrictive Transfer Legend" means
the restrictions on the transfer of the Newly Issued Stock, if any.

1.48 Settlement Stock. "Settlement Stock" means Newly Issued Stock not
in excess of 30,000 Stock Units, issued in exchange for a Class 3(a) or Class
3(b) Claim in connection with any settlement of adversary proceedings commenced
against the Debtors during the Cases. To the extent the recipients of the
Settlement Stock are "underwriters", as that term is defined by Section 1145(b)
of the Bankruptcy Code. restrictions may apply to the resale of such recipients'
Settlement Stock.

1.49 St. Paul Companies Insurance Coverage. "St. Paul Companies
Insurance Coverage" refers to the rights and benefits conferred by the policies
of insurance issued by St Paul Surplus Lines Insurance Company, Products Policy,
Policy No. LCO 55 21344, Policy Period February 1, 1992 to February 1, 1993; and
the St. Paul Surplus Lines Insurance Company Excess Liability Policy, Policy No.
LCO 55 202502, Policy Period February 1. 1991 to February 1, 1992.

1.50 Sphere Drake Insurance coverage. "Sphere Drake Insurance Coverage"
refers to the rights and benefits conferred by the policy of insurance issued by
Sphere Drake Insurance p.l.c., Excess Coverage, Policy Period February 1, 1992
to February 1, 1993, Policy No. SD 1131-92.

1.51 Stock Unit. "Stock Unit" means one share of New Bioplasty Stock
and one share of New Uroplasty Stock distributed as one stock unit under the
Plan. The Private Placement Stock, Class 3 Stock Distribution, Settlement Stock,
and Employee Stock distributions shall be made as Stock Units.

1.52 Tax Claims. "Tax Claims" are Allowed Claims entitled to priority
under Section 507(a)(7) of the Code.

1.53 Trust Assets. "Trust Assets" means the consideration delivered or
to be delivered to the Product Claimants Trust pursuant to the Plan.

1.54 Unsecured Creditors Committee. "Unsecured Creditors Committee"
means the committee appointed to represent the unsecured creditors of the
Debtors in the Cases.

1.55 Unsecured Trade Claims. "Unsecured Trade Claims" are any Allowed
Claims based on the Debtors purchase of goods or services for operations or
manufacturing. the invoiced return or credit for any goods purchased, or related
to any financial accommodation for debt.

1.56 Unsecured Trade Creditors. "Unsecured Trade Creditors" are
creditors with Allowed Unsecured Trade Claims.

1.57 Working Capital. "Working Capital" means those sums retained by
New Bioplasty and New Uroplasty from the proceeds of the Private Placement or
from funds made available from adversary or avoidance actions, settlements or
General Star defense funds to fund future operations. Working Capital shall be
an amount not less than Six Hundred Thousand and 00/100s Dollars ($600,000.00).
The Working Capital will be divided between New Bioplasty and New Uroplasty in
amounts to be reasonably determined by the boards of directors of New Bioplasty
and New Uroplasty.

ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS

UNCLASSIFIED CLAIMS

2.01 Administrative Claims. Although not specifically classified,
Allowed Administrative Claims and fees payable as general administrative
expenses under 28 U.S.C. Section 1930, are treated as if they constitute a class
in all respects other than for purposes of voting.

2.02 Tax Claims. Although not specifically classified, Allowed Tax
Claims entitled to priority under Section 507(a)(7)of the Code are treated as if
they constitute a class in all respects other than for purposes of voting.

2.03 Priority Claims. Although not specifically classified, Allowed
Priority Claims under Section 507 are treated as if they constitute a class in
all respects other than for purposes of voting.

CLASSIFIED CLAIMS

2.04 Class 1 Claims. Class 1 Claims consist of all Allowed Secured
claims.

2.05 Class 2 Claims. Not used.

2.06 Class 3(a) Claims. Class 3(a) Claims consist of all Allowed
General Unsecured Claims.

2.07 Class 3(b) Claims. Class 3(b) Claims consist of all Allowed
Product Claims.

2.07 Class 4(a) Interests. Class 4(a) interests consist of the Allowed
Common Stock Interests.

2.08 Class 4(b) Claims. Class 4(b) Claims consist of the Allowed Claims
of the Class Members that are required by Section 510(b) of the Code to be
treated with the same priority as holders of Class 4(a) interests.

ARTICLE III
UNIMPAIRED CLAIMS AND INTERESTS

3.01 Unimpaired Claims and Interests. The Unclassified Claims and Class
1 Claims are not impaired under the Plan.

ARTICLE IV
TREATMENT OF CLASSES NOT IMPAIRED UNDER PLAN

4.01 Administrative Expenses. Except as provided in this Section 4.01,
the holders of Allowed Administrative Claims shall be paid in full and in cash
on. or within 10 business days after the Effective Date, unless otherwise agreed
by the holders of such Allowed Claims or ordered by the Court; provided,
however, that Allowed Administrative Claims that represent liabilities incurred
by the Debtors in the ordinary course of their business during the Case shall be
assumed by the Debtors and paid in the ordinary course of business in accordance
with the terms and conditions of any agreements relating thereto; and provided
further that interim First Amended Joint Plan of Reorganization (Modified)
January 31. ]994 9 payments for Fee Claims may be made in accordance with any
order of the Court. Any aggregate Allowed Administrative Claims of Leonard
Street and Deinard, Lindquist & Vennum, Ernst & Young and Zimmerman & Reid shall
not be paid by New Bioplasty or New Uroplasty in an amount in excess of Two
Hundred Seventy-Five Thousand Dollars ($275,000.00) except as provided in
Section 6.02 below. All Allowed Administrative Claims arising as bonuses to be
paid to employees under their respective employment agreements shall be paid
entirely in Stock Units as Employee Stock.

4.02 Tax Claims. The holders of Allowed Tax Claims shall be paid in
full and in cash to the extent permitted under Section 507 of the Code, on, or
within 10 business days after the Effective Date, unless prior thereto Debtors
shall have filed an objection to the Claim of any such holder. If an objection
to any such Claim is filed, the Claim shall be paid when either agreed upon by
the Debtors and the holder or ordered by the Court.

4.03 Priority Claims of Current or Former Employees. The holders of
Allowed Priority Claims shall be paid in full and in cash or Stock Units at the
election of the employee to the extent permitted under Section 507 of the Code,
on, or within 10 business days after the Effective Date, unless prior thereto
Debtors shall have filed an objection to the claim of any such holder. If an
objection to any such claim is filed, the claim shall be paid when either agreed
upon by the Debtors and the holder or ordered by the Court.

4.04 Class 1 Claims. The legal, equitable and contractual rights of
Persons holding Allowed Claims in Class 1 will not be altered under the Plan.
Holders of Class 1 claims will be paid any accrued. but unpaid amount due, on
the Effective Date. New Bioplasty shall satisfy all future obligations to Class
1 Claim holders as they come due in the ordinary course of business and in
accordance with the terms of the documents and instruments relating thereto.

4.05 Class 2 Claims. Not used.

ARTICLE V
IMPAIRED CLAIMS AND INTERESTS

5.01 Impaired Claims and Interests. Class 3 and Class 4 are impaired
under the Plan.

ARTICLE VI
TREATMENT OF CLASSES IMPAIRED UNDER PLAN

6.01 Class 3(a) Claims. Unless a holder of a Class 3(a) Allowed Claim
shall elect in writing to accept a different treatment, and such treatment shall
be approved by the Court as containing terms no more favorable that the terms
applicable otherwise to holders of Class 3(a) Claims, holders of Allowed Claims
in Class 3(a) shall be satisfied in accordance with this section (it should be
noted, however, that the Debtors do not intend to propose different treatment to
holders of Class 3(a) Claims). An initial distribution shall be made on the
later of 10 Business Days after the Effective Date or, as to any Disputed
Claims, on or before 10 Business Days after the Disputed Claim becomes an
Allowed Claim. Debtors shall reserve from the first distribution to those
Persons entitled to a Class 3(a) distribution a sufficient sum as estimated by
Debtors to be required to satisfy distributions to be made on Disputed Class
3(a) Claims if such Disputed Claims were to be allowed in full. A subsequent
distribution, if required, will be made by Debtors no less than every six months
provided however, that funds totaling at least 20% of disputed Class 3(a) Claims
are available for distribution since the prior distribution, until at such time
as all Disputed Claims are resolved. In full satisfaction of the Allowed Class
3(a) Claims, the holders thereof will receive a Pro Rata distribution of the
following:

(a) $240,000; and

(b) Twenty percent (20%) of the Class 3 Stock Distribution (only whole
shares of Stock will be distributed with the largest fractions
receiving whole Shares until all shares have been distributed).

Holders of Allowed Class 3(a) Claims will receive a Pro Rata
distribution of the foregoing. To receive a Pro Rata share of Newly Issued Stock
included in the Class 3 Stock Distribution in satisfaction of an Allowed Class
3(a) Claim, the holder of a Class 3(a) Claim must confirm that he, she or it is
the original holder of the Claim, or waive the right to receive that portion of
recovery, and such waiver shall not affect the discharge of the Claim. Assignees
of Class 3(a) Claims may not be entitled to a distribution of Newly Issued Stock
under the Plan. The shares of Class 3 Stock Distribution distributed on account
of Allowed Class 3(a) Claims may be subject to dilution.

6.02 Class 3(b) Claims. Unless a holder of a Class 3(b) Allowed Claim
shall elect in writing to accept a different treatment, and such treatment shall
be approved by the Court as containing terms no more favorable that the terms
applicable otherwise to holders of Class 3(b) Claims (it should be noted,
however, that the Debtors do not intend to propose different treatment to
holders of Class 3(a) Claims), the holders thereof shall receive the following:

Within ten (10) Business Days of the Effective Date:

(i) Debtors will execute and deliver the Product Claimants Trust
Agreement, thereby establishing the Trust, attached to the Plan as
Exhibit A. The Trust permits the Trustees appointed thereunder to do,
among other things, the following:

1. Devise, implement, and modify procedures for the liquidation
of the Product Claims;

2. Satisfy the Product Claims in accordance with such provisions;

3. Participate in the process relating to objections to Claims;
and

4. Merge, transfer, or consolidate the Trust, or any portion
thereof, with any other trust, including any trust or fund
established through a nationwide settlement of breast implant,
Product and other similar Claims (a "Global Settlement").

Reference should be made to the Product Claimants Trust Agreement to
review all terms and conditions therein. Certain breast implant
manufacturers (other than Debtors) have entered into an agreement in
principal with certain plaintiffs' counsel for a "Global Settlement" of
an opt out class of all breast implant recipients and breast implant
related claims. At this time it cannot be determined whether the
settlement will be accepted by the manufacturers and sellers of mammary
implants, or their successors, and a sufficient number of plaintiffs to
render the settlement feasible; whether the settlement will be approved
by the court; or whether the manufacturers and sellers of mammary
implants will be able to fund the settlement. Additionally, it is
uncertain whether the amount allocated to the settlement will be
sufficient to pay the claims and costs of administration of a Global
Settlement. Debtors are not parties to the agreement in principle for a
Global Settlement and there is no assurance that Debtors or the Trust
will be entitled to participate in the Global Settlement. Debtors are
seeking an agreement to distribute all or a portion of the Trust assets
to a Global Settlement fund and assign the liquidation of breast
implant related claims to a Global Settlement fund.

(ii) Debtors will transfer and assign to the Trust all rights, claims,
benefits and liquidated or unliquidated unused indemnity proceeds
available under the following policies of insurance and all other
benefits available under said policies:

(1) St. Paul Companies Insurance Coverage;

(2) Sphere Drake Insurance Coverage; and

(3) Cigna Insurance Coverage, to the extent coverage is provided
for any claimant;

(iii) Provided that the terms of that certain stipulation by and among,
inter alia, the Debtors and General Star (the "Stipulation") shall have
been met, General Star shall:

(a) pay to the Trust the sum of FIVE HUNDRED THOUSAND DOLLARS
($500,000) on the Effective Date;

(b) pay to the Debtors the sum of SEVEN HUNDRED THOUSAND
DOLLARS ($700,000) on the Effective Date;

(c) pay FIVE THOUSAND DOLLARS ($5,000.00) to the Debtors as a
fixed liquidated expense of notifying defense counsel of this
settlement and all other expenses or costs related to or
arising out of this settlement and its effect on the
administration and defense of the litigation of claims under
the Policy (as defined in the Stipulation), whether the same
were or were not being defended under a reservation of rights,
and whether or not they arose from breast implants or
otherwise: and

(d) pay all legal fees, costs, and expenses incurred in the
defense of claims against the Debtors and General Star to the
extent provided for under the Policy incurred prior to the
Implementation Date, including approximately $30,000 or more
of fees, costs, and expenses of defense that have been the
subject of a certain dispute among General Star and the
Debtors.

In consideration of the foregoing, and notwithstanding any provision of
this Plan to the contrary, on the Effective Date, the Debtors shall be
deemed to have released General Star, their affiliates, parents,
subsidiaries, agents. representatives, successors, assigns. employees,
attorneys, officers, and directors from all Claims, Product Claims, or
other claims (including claims arising under or related to the Policy
or pursuant to the Bankruptcy Code, state law, or otherwise), demands,
debts, liabilities, accounts. obligations, costs, expenses, liens,
counterclaims. actions, causes of action, rights (of any kind,
including without limitation, demands, debts, liabilities, accounts,
obligations, costs, expenses, liens, counterclaims, actions, causes of
action, rights arising under or related to the Policy or rights to
avoid any transfer or payment pursuant to the Bankruptcy Code, state
law, or otherwise), and remedies of any nature whatsoever whether
merged with a judgment or otherwise. that the Debtors had, now have, or
hereinafter may have, arising under or related to the Policy or based
upon any act or omission of General Star or any affiliate thereof, or
payment by any or all of the Debtors to General Star or any affiliate
thereof prior to the date hereof respecting any transactions or
agreements between the parties, including without limitation, any claim
arising before the date hereof based upon, related to, or arising out
of or in any manner related to the Policy. Upon payment under the Plan,
General Star shall be deemed to have tendered all coverage available
under its Policy.

(iv) Debtors will distribute eighty percent (80%) of the Class 3 Stock
Distribution to the Trust. All Share Units distributed to the Trust
will bear the Restrictive Transfer Legend prohibiting the sale or
transfer of the New Bioplasty Stock and the New Uroplasty Stock
distributed to the Trust under the Class 3 Stock Distribution until the
first business day after the third (3rd) anniversary of the Effective
Date only to the extent such sale or transfer may impair or limit the
ability of New Bioplasty or New Uroplasty to utilize net operating loss
carry forwards or similar tax attributes or to the extent such sale or
transfer may be limited by applicable securities laws or regulations.
The voting rights of the New Bioplasty Stock and the New Uroplasty
Stock distributed to the Trust under the Class 3 Stock Distribution
will be proxied to those members of the New Bioplasty and New Uroplasty
board of directors that are appointed on behalf of the General
Unsecured Creditors and the Product Claimants Trust. The Trust will
provide New Bioplasty and New Uroplasty with written notice three (3)
business days prior to any attempt to sell any amount of the New
Bioplasty Stock or New Uroplasty Stock distributed to the Trust under
the Class 3 Stock Distribution.

(v) Debtors will execute and deliver to the Trust an unsecured
non-interest hearing promissory note in the original principal amount
of Nine Hundred And Sixty Thousand and no/100 Dollars ($960,000.00)
(the "Note") repayment of which is secured by New Bioplasty and New
Uroplasty's accounts receivables as that term is defined in Section
336.9-106 of the Uniform Commercial Code as currently enacted in the
State of Minnesota. Such security interest in favor of the Trust shall
be subject, upon the request of New Uroplasty or New Bioplasty, to
subordination to any security interest of any future working capital
lender, the Note delivered pursuant hereto will be amortized over ten
years, with a "balloon" payment of the then unpaid principal balance on
the fifth anniversary of the Effective Date. The Debtors shall commence
making quarterly principal payments on the first business day of the
thirteenth (13th) month following the Effective Date.

(1) Quarterly payments shall commence on the first day of the ninth
(9th) month after the Effective Date and continue every three months
thereafter until the Note is paid full, if, during the first six (6)
months following the Effective Date (i) New Bioplasty's and New
Uroplasty's consolidated revenues (exclusive of proceeds from the
Implant Liquidation) exceed Two Million Seven Hundred Thousand and
no/100 Dollars ($2,700,000.00), and New Bioplasty's and New Uroplasty's
consolidated operating income (excluding of proceeds from the Implant
Liquidation) exceeds Three Hundred and Fifty Thousand and no/100
Dollars ($350,000.00); or (ii) on the last business day of the sixth
(6) month following the Effective Date, New Bioplasty's and New
Uroplasty's consolidated cash balance (exclusive of proceeds from the
Implant Liquidation) exceeds Six Hundred and Fifty Thousand and no/100
Dollars ($650,000.00).

(2) Quarterly payments shall commence on the first day of the twelfth
month and continue every three months thereafter until the Note is paid
in full if during the first nine (9) months following the Effective
Date (I) New Bioplasty's and New Uroplasty's cumulative revenues
(exclusive of revenues arising from the Implant Liquidation) exceeds
Four Million Five Hundred Thousand and no/ 100 Dollars ($4,500,000.00),
and New Bioplasty's and New Uroplasty's cumulative operating income
(exclusive of revenues arising from the Implant Liquidation) exceeds
Six Hundred and Fifty Thousand and no/100 Dollars ($650,000.00); or
(ii) New Bioplasty's and New Uroplasty's cash balance exceeds Five
Hundred and Fifty Thousand and no/100 Dollars ($550,000.00).

The Note may be prepaid at any time without penalty. In the event that
New Bioplasty or New Uroplasty does not make a principal payment within
fifteen (15) days of the date such payment is due, said payment, and
only said payment, shall accrue interest on a floating basis at a rate
equal to the Reference Rate as publicly announced from time to time by
First Bank National Association in Minneapolis, Minnesota until said
past due payment is made.

The Implant Liquidation shall occur within six (6) months of the
Effective Date. Upon receipt by New Bioplasty. the first Three Hundred
Twenty Thousand and no/l00 Dollars ($320,000.00) of Net Liquidation
Proceeds from the Implant Liquidation will be used to make a partial
prepayment of principal on the Note. Any Net Liquidation Proceeds
remaining after such prepayment will be used to pay any Court approved
but unpaid fees of Leonard Street and Deinard, Lindquist & Vennum,
Ernst & Young, and Zimmerman & Reed. All Net Liquidation Proceeds
remaining after such payments shall be paid to reduce the Note. Even if
Net Liquidation Proceeds from the Implant Liquidation applied to prepay
the Note are less than Three Hundred and Twenty Thousand and no/100
Dollars ($320,000.00), the principal amount of the Note shall be deemed
to have been reduced to Six Hundred and Forty Thousand and no/100
Dollars ($640,000.00) at the time of the Implant Liquidation.

(vi) Debtors will distribute Fifty percent (50%) of the proceeds of the
Avoidance Actions, if any.

6.03 Class 4(a) Interests. On the Effective Date, all Common Stock
Interests shall be canceled and the assets of Bio-Manufacturing shall become
assets of New Bioplasty.

6.04 Class 4(b) Claims. The holders of Class 4(b) Claims will receive
nothing on account of their Claims.

ARTICLE VII
MEANS FOR EXECUTION OF THE PLAN AND

POST CONFIRMATION OPERATIONS

7.01 Funding of Plan and Creditor Payments. Payments made pursuant to
the Plan for Allowed Claims, or to the Trust, will be from the Net Private
Placement Fund, proceeds of Avoidance Actions or otherwise available to the
Debtors, and proceeds from General Star attributable to defense obligations that
will be received by the Debtors under that certain Stipulation dated as of
January 31, 1994.

7.02 Consolidation of Cases. Maintenance of Bio-Manufacturing and
Uroplasty. The Plan contemplates and is predicated upon the joint administration
of the Cases into a single Chapter 11 case for the purposes of resolving the
Cases and all actions with respect to confirmation, consummation and
implementation of the Plan. This Plan however, does not contemplate substantive
consolidation of the wholly owned subsidiary, Uroplasty. On the Effective Date
the equity interest in Bio-Manufacturing held by Bioplasty shall be canceled and
the assets of Bio-Manufacturing shall become assets of New Bioplasty. From and
after the Effective Date. New Uroplasty will be a separate corporation from New
Bioplasty. As of the Effective Date, New Bioplasty and New Uroplasty will have
identical shareholders, but will otherwise be unaffiliated except as
contemplated in the Plan.

Pursuant to the administrative consolidation, on the Effective Date;

(a) Any Claims against any Debtor will be deemed filed against the
Debtors in the consolidated Case; and

(b) Discharge of creditors in the consolidated Case will discharge
creditor Claims against any and all of the Debtors.

7.03 Post Confirmation Business Operations. In general, the Plan
envisions continuation of the business operations of the Debtors other than the
breast implant business of Bioplasty. The Implant Liquidation will occur within
six (6) months of the Effective Date. The Plan is funded by the proceeds from
the Private Placement. proceeds from Avoidance Actions or otherwise available to
the Debtors, and proceeds from General Star that are attributable to defense
obligations to be received from General Star under that certain Stipulation
dated as of January 31, 1994 approved by the Court.

New Bioplasty will be composed of a domestic parent company, and five
wholly-owned foreign subsidiaries. New Bioplasty's foreign subsidiaries will
manufacture and market Chondroplast and MISS GOLD ll, and market Bioplastique
and Macroplastique under an agreement with New Uroplasty. New Uroplasty will be
a separate domestic corporation with one wholly owned foreign subsidiary. New
Uroplasty's foreign subsidiary will manufacture Macroplastique and Bioplastique
under an agreement with New Uroplasty. In addition, New Uroplasty anticipates
that Investigational Device Exception ("IDE") submissions will be made to the
FDA seeking authority to begin clinical studies of Macroplastique in the United
States, the first step in gaining regulatory clearance to market the products
domestically. New Bioplasty and New Uroplasty will allocate joint overhead
expenses on a pro rata basis.

On the Effective Date, New Bioplasty will retain the name "Bioplasty,
Inc.", and all assets of Bioplasty surviving the Effective Date, including the
assets of Bio-Manufacturing, will be revested and assumed by New Bioplasty.
Executory contracts will be assumed or rejected by Debtors as provided in the
Plan. The Debtors shall cause their corporate charters to be amended to prohibit
the issuance of non-voting equity securities in accordance with the provisions
of 11 U.S.C. ss. 1123(a)(6).

On the Effective Date, New Uroplasty will retain the name "Uroplasty,
Inc.", and all assets and liabilities of Uroplasty surviving the Effective Date
will be revested and assumed by New Uroplasty. Executory contracts will be
assumed or rejected by Debtors as provided in the Plan. The Debtors shall cause
their corporate charters to be amended to prohibit the issuance of non-voting
equity securities in accordance with the provisions of 11 U.S.C. ss. 1
123(a)(6).

On the Effective Date, the Common Stock Interests and the Common Stock
Options will be canceled and the assets of Bio-Manufacturing shall become assets
of New Bioplasty. New Bioplasty and New Uroplasty shall issue the Newly Issued
Stock. The Newly Issued Stock shall consist of two million shares of New
Bioplasty Stock, and two million shares of New Uroplasty Stock.

The Stock Units shall be distributed as follows:

(i) Up to 980,000 Stock Units will be sold under the Private Placement.

(ii) 90,000 Stock Units (defined as the Employee Stock) shall be
distributed to the employees under the Employment Agreements; up to an
additional 100,000 shares of Employee Stock may, in an amount such that
the total units do not exceed 2,000,000, be issued in satisfaction of
administrative and priority claims of employees. The Employee Stock
shall be valued at no less than $.50 per share;

(iii) Up to 30,000 Stock Units (defined as the Settlement Stock) shall
be distributed as required to settle adversary proceedings brought
against the Debtors in the Cases and in exchange for the Claims held by
parties commencing these adversary proceedings;

(iv) Twenty percent (20%) of the Class 3 Stock Distribution shall be
distributed Pro-Rata to holders of Allowed Class 3(a) Claims
(approximately 160,000 Stock Units); and

(v) Eighty percent (80%) of the Class 3 Stock Distribution shall be
distributed to the Trust (approximately 640,000 Stock Units).

In addition to the stock allocations referenced above. the Plan also
contemplates that the Debtors shall distribute or retain:

(a) $240,000 to the holders of Allowed Class 3(a) Claims;

(b) Approximately $550,000 will be distributed on account of
Administrative and Priority Claims; and.

7.04 Recovery and Distribution of Insurance Benefits and Recovery in
Adversary Actions. Subject to the terms contained herein, New Bioplasty and New
Uroplasty shall be entitled to pursue any insurance coverage claims, rights,
remedies, or other recovery otherwise not assigned, and available to New
Bioplasty or New Uroplasty, respectively, after the Effective Date, regardless
of whether such coverage was pursued or asserted prior to or during the Case.
Either New Bioplasty or New Uroplasty will be assigned all rights of recovery in
any adversary action or Proceeding as may be appropriate under the
circumstances. with net proceeds there being distributed pursuant to the Plan.
New Bioplasty or New Uroplasty, as warranted, will be responsible for the
distribution of funds recovered after the Effective Date in accordance with -the
Plan.

7.05 Continuation of Business. After the Effective Date, New Bioplasty
shall continue to engage in the business operations of Bioplasty and
Bio-Manufacturing. After the Effective Date, New Uroplasty shall continue to
engage in the business operations of New Uroplasty.

7.06 Directors. The Board of Directors of New Bioplasty and New
Uroplasty shall each have five members for two years following the Effective
Date, and thereafter will have three members. Commencing on the Effective Date
the Board will consist of Daniel Holman, Joel Pitlor, and the following Board
Members with the terms designated:

(a) General Unsecured Creditors Holding Class 3 Claims: 1 member to
serve for two years;

(b) Product Claimants Trust: 1 member to serve for two years.

(c) At Large: 1 member. At large directors will be directors not
affiliated with the Product Claimants Trust or the General Unsecured
Creditors. The At Large director shall be elected with the mutual
consent of the directors appointed by the Trust, by the General
Unsecured Creditors, and by Mssrs. Holman and Pitlor.

At the expiration of the two year terms of members elected by the Trust
and the General Unsecured Creditors, two new Board members will be elected at
large. After the Effective Date directors shall be compensated by New Bioplasty
and New Uroplasty in an amount not to exceed $500.00 per meeting plus out of
pocket expenses associated with attendance.

7.07 Officers and Directors. (a) At the time the Disclosure Statement
was approved there were three members on the Board of Directors of Bioplasty and
Uroplasty: Daniel Holman, Chairman; Joel Pitlor; and Timothy Lawin. The officers
of the Debtors were as follows:

Bioplasty: Daniel Holman, President and Chief Executive
Officer

Donald Major, Vice President of Finance,
Chief Financial Officer, and Secretary

Susan Harties-Doherty, Vice President, Operations

Uroplasty: Daniel Holman, Chief Executive Officer
W. Allen Putnam. President of Uroplasty, Chief
Operating Officer
Donald Major, Vice President of Finance, Chief
Financial Officer, and Secretary
Daniel A. White, Vice President of Sales and
Marketing

(i) There were no officers or directors of Bio-Manufacturing.

(b) New Officers and Directors. The existing officers and directors
(other than W. Allen Putnam and Timothy Lawin)will undertake positions with New
Bioplasty on the Effective Date. On the Effective Date, the officers and
directors will have the following positions:

Bioplasty: Daniel Holman, President and Chief Executive
Officer and Director
Donald Major, Vice President of Finance, Chief
Financial Officer, and Secretary
Susan Hartjes-Doherty, Vice President, Operations
Joel Pitlor, Director

Uroplasty: Daniel Holman, Chief Executive Officer and
Director
Donald Major, President, Chief Operating Officer
Daniel A. White. Vice President of Sales and
Marketing
Joel Pitlor, Director

(i) There will not be any officers or directors of Bio-Manufacturing.

(c) The following individuals have employment agreements which are
assumed by New Bioplasty under the Plan: Mr. Pitlor, Mr. Holman. Ms.
Hartjes-Doherty. and Ms. Ferrian. The employment agreement with Donald Major
will be assumed by New Uroplasty. The employment agreements for these
individuals provide for cenain benefits and bonuses to be paid in addition to
their base salary. All such bonuses arising from the employment agreements shall
be paid in the form of Stock Units as Employee Stock. The New Bioplasty and the
New Uroplasty Board of Directors may authorize issuance of stock or options as
additional compensation or bonuses for directors and officers. subject to and in
accordance with applicable non-bankruptcy law.

ARTICLE VIII
REJECTION OF UNEXPIRED LEASES AND

EXECUTORY CONTRACTS

8.01 Rejection of Executory Contracts and Unexpired Leases. Unless
assumed prior to the Effective Date, assumed in this Plan or any modification
thereof, or modified by any Plan, on the Effective Date, the Debtors shall be
deemed to have rejected all executory contracts and unexpired leases entered
into prior to the filing of the Cases. Unless otherwise ordered by the Court,
any claim arising from the rejection of an executory contract or unexpired lease
must be filed before the Bar Date established by the Court for filing of claims.
Any Claim not filed by such a Bar Date shall not be entitled to distribution
under the Plan.

8.02 Assumption of Executory Contracts and Unexpired Leases. In
addition to those contracts assumed during the Case, the following executory
contracts are expressly assumed by Debtors:

(a) BioVascular. Inc. Agreement for payment of royalty to Bioplasty for
transfer of development and rights in vascular graft product.

(b) Compens. and Capital. Inc. Agreement for administration of 4o1-K
account plan for Debtor's employees.

(d) ITT Hartford. Contract for Multi-Flex comprehensive general
liability, property, fire, boiler and machinery, inland marine, commercial auto,
employee benefits, and commercial crime coverage, policy no. 41 UUN EP2266,
policy period November 1, 1992 to November 1, 1993.

(e) Hartford Casualty Insurance. Contract for Umbrella Liability
Policy, policy no. 41-RHU EQ5567, policy period November 1, 1992 to November 1,
1993.

(f) Twin Citv Fire Insurance. Contract for Employee Benefits Liability
Coverage (modifies umbrella liability policy), policy no. 41 UN EP1462, policy
period November 1, 1992 to November 1, 1993.

(g) State Fund Mutual Insurance Companv. Contract to provide Workers
Compensation and Employers Liability Insurance coverage, policy no. 008824.203.
policy period November 1, 1993 to November 1, 1994.

(h) Kenneth Kredovski. Agreement for deferred compensation providing
for funding a whole life insurance policy to fund retirement annuity.

(i) Medica Choice. Agreement for providing employee health insurance
benefits.

(j) Phoenix Home Life. Agreement for providing employee life and dental
insurance benefits.

(k) United Health and Life Insurance Company. Agreement for providing
employee health insurance benefits for employees outside Minnesota.

(l) UNUM Life Insurance Company of America. Agreement for providing
group employee long term disability insurance coverage.

(m) UNUM Life Insurance Company of America. Agreement for employee
optional life insurance coverage for dependents and amounts of coverage in
excess of $25,000.

(n) Employment Agreements as follows:

(i) Daniel Holman. Agreement for employment as Bioplasty
President and Chief Executive Officer.

(ii) Donald Major. Agreement for employment as Vice President
of Finance of Bioplasty.

(iii) Susan Hartjes-Doherty. Agreement for employment as
Bioplasty Vice President of Operations.

(iv) Sandra Ferrian. Agreement for employment as Bioplasty
General Counsel.

(v) Joel Pitlor. Agreement for Consulting as Director of
Bioplasty.

(o) Genetic Laboratories Wound Care. Inc. Sales and Marketing
Agreement.

(p) Mentor Corporation. Cross License Agreements for nonexclusive
royalty free patent licenses of Mentor patent 4,960,425 and Bioplasty patent
4,955,909.

(q) Co1lagen Corporation. Agreement dated as of July 14, 1992, as
amended by that certain Stipulation approved by the Court on December 28, 1993.
Collagen will retain all intellectual property rights under said Agreement and
Stipulation. including the right to pursue any post confirmation patent
infringement action which is not covered by said Agreement. Furthermore, any
subsequent breach of the Agreement shall be handled according to the terms of
the Agreement and shall not be stayed by confirmation of the Plan.

ARTICLE IX
CONDITIONS PRECEDENT TO CONSUMMATION OF PLAN

9.01 Conditions Precedent to the Consummation of the Plan on Effective
Date. The following conditions must be satisfied or waived in writing by the
Debtors as conditions precedent to the consummation of the Plan on the Effective
Date or the Plan will be null and void.

(a) Order of Court. The Court sha!l have entered a Confirmation Order,
which Order shall have become a final order, and shall provide:

(i) That any Person or entity now or hereafter asserting any right to
payment against the Debtors based upon, or in any manner arising from
any Product Claims, including without limitation claims of injury and
damages by users of the product; persons who were damaged by an alleged
conspiracy in which one or more Debtors were involved; spouses,
dependents or others entitled to assert related claims; and
co-defendants, sales representatives, distributors, clinics,
physicians. or any other entity alleging a right to recover for their
own injury or damage or for any claim for contribution or indemnity
arising in any way out of the design, manufacture, sale, warranty,
promotion, warnings, or industry practices consumer liabilities, fraud
or n1isrepresentation or any other theory of liability related to any
product sold by Debtors regardless of whether such Claim has matured,
held a dischargeable Claim against Debtors at the commencement of the
Case if the product sale or practice giving rise to the claim occurred
prior to the commencement of the Case;

(ii) That the claims of Product Claimants who failed to file with the
Court a timely and proper written notice of Claim prior to the Bar Date
are Disallowed Claims uniess reinstated by Order of the Court;

(iii) That on the Confirmation Date:

(1) Debtors are discharged from any Claim or Debt, and the
Debtors' liability in respect thereof is extinguished
completely, whether reduced to judgement or not, liquidated or
uniiquidated, contingent or non-contingent, asserted or
unasserted, fixed or not, matured or unmatured, disputed or
undisputed, legal or equitable, known or unknown that arose
from any agreement of the debtors entered into or obligations
of Debtors incurred before the Confirmation Date, including,
without limitation, all interest. if any, on any such debts,
whether such interest accrued before or after the date of
commencement of the Case, and including, without limitation,
all Debts based upon or arising out of Product Claims, and
from any liability of a kind specified in sections 502(g),
502(h) and 502(i) of the Code, whether or not a proof of claim
is filed or deemed filed under section 501 of the Code, such
Claim is allowed under section 502 of the Code, or the holder
of such Claim has accepted the plan, and including all Claims
under any theory of recovery asserted against Debtors in the
actions CBI v. Bioplasty, et al., State Court of Texas, County
of Travis. 201st Judicial District. Cause No. 91-14486; as
subsequently transferred; or the Class Action;

(2) the Debtors' liability for all such Claims and Debts. and
for the costs and expenses of the Trust, is limited to the
amounts that Debtors are to pay or cause to be paid pursuant
to the Plan;

(3) the amount paid into the Trust provided for under the Plan
shall satisfy all Allowed Products Claims and costs and
expenses of the Trust;

(4) That any portion of any Claim for punitive damages is a
Disallowed Claim;

(5) For the releases of all Claims discharged;

(6) That the transfers of the Newly Issued Stock to purchasers
thereof will be valid and effective transfers of property;
that the transfers do not constitute fraudulent transfers or
conveyances under the Code or under the laws of the United
States, any State, territory, possession or the District of
Columbia;

(7) That the provisions of the Confirmation Order shall be
non-severable and mutually dependent;

(8) That all executory contracts and unexpired leases assumed
by the Debtors during the Case or under the Plan shall remain
in full force and effect for the benefit of New Bioplasty
notwithstanding any provision in such contracts or leases
prohibits such assignment or transfer;

(9) For the establishment of the Trust and the transfers to
the Trust pursuant to the Plan;

(10) That the Newly Issued Stock being issued to the Class 3
Stock Distribution, the Employee Stock, and the Settlement
Stock are excepted under Section 1145 of the Code from
requirements of the Securities Act of 1933 and any State or
local law requiring registration or licensing of an issuer,
underwriter, broker, or dealer for an offer or sale of a
security. Furthermore, that the Private Placement Stock is
being offered under an exception to registration under the
Securities Act of 1933 or the securities laws of any state in
reliance upon an exemption from registration contained in the
Securities Act of 1933 and in accordance with the restrictions
relating to such exemption.

(11) That the Debtors provided adequate notice of the Case to
all potential Claimants by providing notice as follows:

(A) By mail to known creditors and co-defendants.

(B) By Publication of the Bar Date Notice in the
Breast Implant Litigation Reporter, the Multidistrict
Breast Implant Litigation Reporter, Mealey's
Litigation Reports, Andrews Breast Implant Reporter.
and USA Today on three consecutive Mondays; and

9.02 Waiver of Conditions. Debtors shall have the exclusive right to
waive nonfulfillment of any of the conditions set forth in this Anicle. Waiver
of any condition shall be in writing and on file with the Coun. Waiver of any
condition shall not be considered waiver of any other condition set forth
herein.

ARTICLE X
EFFECTS OF PLAN CONFIRMATION

10.01 Discharge. Except as otherwise expressly provided in the Plan,
the confirmation of the Plan shall discharge Debtors effective immediately from
any Claim or debt, and the Debtors' liability in respect thereof is extinguished
completely, whether reduced to judgement or not, liquidated or unliquidated,
contingent or noncontingent. asserted or unasserted, fixed or not, matured or
unmatured, disputed or undisputed, legal or equitable, known or unknown, that
arose from any agreement of Debtors entered into or obligation of the Debtors
incurred before the Confirmation Date, or from any conduct of the Debtor prior
to the Confirmation Date, or that otherwise arose before the Confirmation Date,
including, without limitation, all interest if any, on such debts, whether such
interest accrued before or after the date of commencement of the Case, and
including, without limitation, all Debts based upon or arising out of Product
Claims or Indemnity Claims, and from any liability of a kind specified in
Sections 502(g), 502(h), or 502(i) of the Code, whether or not a proof of claim
is filed or deemed filed under Section 501 or the Code, such Claim is allowed
under Section 502 of the Code, or the holder of such Claim has accepted the
Plan.

10.02 Revesting. Except as otherwise provided in the Plan, on the
Effective Date the Debtors will be vested with all property of the estate free
and clear of all claims or other interests of creditors and equity security
holders and may operate its business free of any restrictions imposed by the
Code or the Coun; provided, however, that the Debtors shall continue as debtor
in possession under the Code until the Effective Date. and thereafter the
Debtors may operate the business free of any restriction imposed by the Code or
the Court.

10.03 Release.

(a) Release of Debtors bv Claimants. Except as otherwise provided in
the Plan, on the Confirmation Date, all Persons who have held, hold, or may hold
Claims, including, but not limited to General Unsecured Claims and Product
Claims ("Releasors"), in consideration of the covenants and obligations of the
Debtors under the Plan, including the establishment and funding of the Trust,
will be deemed to have forever waived, released and discharged all rights or
claims, whether based upon tort, fraud. contract or otherwise which they
heretofore, now or hereafter possess or may possess against any Debtor including
claims based upon or in any manner arising from or related to the research,
development, manufacture, distribution, sale, provision, recommendation,
industry practice in which Debtors are alleged to have participated or
acquiesced, warranty, instructions, wart1ings, or the marketing of any product
manufactured or sold by Debtors prior to the Confirmation Date; the processing.
adjustment, settlement, payment negotiation, or handling of any claims, demands,
suits, causes of action or proceedings, based upon or relating in any way to any
product manufactured or sold by Debtors prior to the Confirmation Date, or for
contribution, subrogation, reimbursement or indemnity, whether contractual or
otherwise with respect to any claim, demand, proceeding, suit or cause of action
that has been or may be asserted against Debtors based upon or in any manner
arising from or relating to any of the matters set forth in this section, and
for all injuries or damages, including wrongful death, derivative claims,
emotional distress, economic losses, damage to reputation, any other legal or
equitable remedy available to Claimants, and punitive damages. It is the
Debtors' intention that this release effectuate the discharge provisions of 11
U.S.C. ss. 1141, and be construed to have the same scope and effect as said
provision.

(b) Claims Retained bv Releasor. Releasors specifically retain all
Claims based on any theory against any other Person, provided, however, that the
Debtors reserve the right to seek an extension of the permanent injunction
provided by 11 U.S.C. ss. 524(a) to non-debtor codefendants. Debtors will seek
any such extension by filing a motion on or before the Effective Date.

(c) Indemnification of Debtors. Releasors agree that in the event (i)
they pursue any other Person for any Claim reserved in Section 10.03(b) hereof
related to any product designed, manufactured. or sold by Debtors, or any
industry practice in which Debtors are alleged to have participated or
acquiesced; and (ii) it is determined, decided, or stipulated that, but for this
Case and the release of Claims herein, Debtors would otherwise be liable to
Releasors, or to said other Persons for contribution, indernnity, subrogation or
reimbursement. for all or some portion of Releasor's recovery from said other
Persons, then Releasor shall reduce its recovery from said other Persons by the
value of any property actually received by Releasor from Debtors under this
Plan.

(d) Limitation of Liabilitv of Debtors and Agents. Debtors shall be
entitled to rely in good faith upon the advice of counsel concerning any and all
matters coming before Debtors relating to the Cases, the Plan, the Unsecured
Creditors' Committee, Creditors, holders of Common Stock Interests, or any other
matters properly brought before Debtors. Debtors shall not be liable to the
Unsecured Creditors' Committees, any member of the Unsecured Creditors'
Committees, any Creditor or Common Stock Holder, or any other person for any
action taken or any omission to act in reliance upon such advice of counsel.
Likewise, Debtors and their attorneys shall be entitled to rely in good faith
upon any reports prepared by the Unsecured Creditors' Committees, its members,
and any and all information supplied to Debtor by the -Unsecured Creditors'
Committees and its members concerning the administration of the Cases, the Plan,
or any Claim of any Creditor, Common Stock Interest holder, or other person or
entity. Debtors shall not be liable to the Creditors' Committee, any member of
the Unsecured Creditors' Committee, any Creditor of equity interest holder or
any other person for any action taken or omission to act in reliance upon such
reports or infortnation. Further, Debtors shall not be liable to any person for
any actions or any omission or refusals to act, including, but not limited to,
errors in business judgment, except in the case of willful misconduct.

10.04 Injunction. Except as otherwise expressly provided in the Plan,
the Confirmation Order will provide that all persons or entities who have held,
hold, or may hold Claims, including without limitation, Product Claims; or who
have held, hold, or may hold Common Stock Interests; or who have held, hold, or
may hold Indemnity Claims, and the Debtors, New Bioplasty and any of their
Affiliates, are permanently enjoined from and after the Confirmation Date:

(a) from commencing or continuing in any manner any action or other
proceeding of any kind with respect to any such Claim or any Product
Claim against Debtors, New Bioplasty, New Uroplasty, or General Star,
the property of the Debtors, New Bioplasry, New Uroplasty, or General
Star, except those causes of action specifically reserved in Section
10.03(b) hereof against parties not released or discharged herein or by
subsequent court order;

(b) from the enforcement, attachment, collection or recovery by any
manner or means of any judgment, award, decree, or order against the
Debtors, New Bioplasty, New Uroplasty, or General Star, with respect to
any reserved Claim under Section 10.03(b) hereof or any Product Claim;

(c) from creating, perfecting or enforcing any encumbrance of any kind
against the Debtors, New Bioplasty, New Uroplasty, or General Star. or
any property of the Debtors, New Bioplasty, New Uroplasty, or General
Star, with respect to any reserved Claim under Section 10.03(b) hereof,
or Product Claim:

(d) from asserting any setoff, right of subrogation or recoupment of
any kind against any obligation due the Debtors, or New Bioplasty, or
against the property of the Debtors or New Bioplasty, with respect to
any reserved Claim under Section 10.03(b) hereof, or Product Claim;

(e) From commencing or continuing in any manner any action against or
other proceeding of any kind with respect to any Claim, Product Claim,
suits, demands, claims, or causes of action of any type whatsoever,
whether merged with a judgment or otherwise, against General Star,
arising under or related in any way to the General Star Insurance
Coverage, or arising from or related to any products manufactured, sold
or distributed by the Debtors, or arising as a result of General Star's
relationship to, or conduct in connection with, Debtors;

(f) from any act, in any manner, in any place whatsoever, that does not
conform to or comply with the provisions of the Plan, or the Trusts;
provided, however, that unless the Debtors shall obtain an Order of the
Court extending the permanent injunction provided by 11 U.S.C.
ss.524(a) to non-Debtor Defendants pursuant to a motion made by the
Debtor on or before the Effective Date, such injunction shall not
impair the rights of Claimants including those with Product Claims from
asserting reserved Claim under Section 10.03(b) hereof.

ARTICLE XI
MODIFICATION OF PLAN AND DISCLOSURE STATEMENT

11.01 Modification Prior to Confirmation. Debtors may propose
amendments or modifications to the Plan or Disclosure Statement at any time
prior to the Confirmation Date in accordance with U.S.C. ss. 1127.

11.02 Modification After Confirmation. After confirmation, Debtors may,
with approval of the Court, and so long as it does not materially affect the
interests of the creditors, remedy any defect or omission or reconcile any
inconsistencies within the Plan or Disclosure Statement or the Confirmation
Order in any such manner as may be necessary to carry out the purpose and effect
of the Plan.

ARTICLE XII
RETENTION OF JURISDICTION

12.01 Jurisdiction. The Court shall retain jurisdiction over the Cases
pursuant to and for the purposes set forth in Section 1127(b) of the Code; and

(a) determine the disallowance or allowance of Claims and Interests;

(b) determine Claim or Interest objections;

(d) determine or resolve any defaults, disputes, ambiguities or similar
matters under the Plan, including the effect of claimed secured
interests in assets of the Debtors;

(e) to determine the value of secured claims under Section 506 of the
Code;

(f) to resolve issues relating to the Product Claimants Trust as well
as with respect to any disputes which may arise concerning dispositions
from the Products Claimants Trust as well as with respect to certain
other matters relating to the Products Claimants Trust, including any
modifications to the Products Claimants Trust; and

(g) to determine such other matters as may be set forth in the
Confirmation Order.

ARTICLE XIII
MISCELLANEOUS PROVISIONS

13.01 Tax Consequences. No information is set forth herein with respect
to the tax impact, if any, of the Plan upon any creditor, the Debtors, or
holders of interests in Debtors. Consultation with a tax advisor regarding these
matters is urged.

13.02 Committees, Termination. Effective on the Confirmation Date, the
duties of the Creditors' Committee will terminate, except with respect to any
appeal of an Order in the Cases, fee applications, or any matters related to any
proposed modifications of the Plan or Disclosure Statement.

13.03 Notices. All notices or requests in connection with the Plan
shall be in writing and will be deemed to have been given when received by mail
addressed to:

Bioplasty, Inc.
623 Hoover Street Northeast
Minneapolis, Minnesota 55413
Attention: Daniel Holman, President

with copies to:

Holper, Welsh, Mitchell & Andersen
750 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
Attention: Richard Holper, Esq.

and:

Kampf & Associates, P.A.
Suite 900
Foshay Tower
Minneapolis, Minnesota 55402
Attention: William I. Kampf, Esq.

All notices and requests to persons or entities holding any Claim or interest in
any Class shall be sent to them at their last known address or to the last known
address of their attorney of record. The Debtors and any such holder of a Claim
or interest may designate in writing any other address for purposes of this
Plan, which designation will be effective upon receipt.

13.04 Headings, Interpretation and Inconsistent Provisions. The
headings used in this Plan are inserted for convenience only and neither
constitute a portion of the Plan nor in any manner affect the provisions of the
Plan. To the extent possible, the Plan and the Disclosure Statement are intended
to be and shall be interpreted to provide for consistent disclosure and
treatment. To the extent inconsistencies may exist between the provisions of the
Disclosure Statement and the provisions of the Plan, the provisions of the Plan
slla1I govern.

13.05 Successors and Assigns. The rights, benefits and obligations of
any person or entity named or referred to in the Plan will be binding upon and
will inure to the benefit of their heirs, executors, administrators, successors,
or assigns.

Dated: January 31, 1994

BIOPLASTY, INC.

By /s/ DANIEL G. HOLMAN
Daniel G. Holman
President and Chief Executive Officer

BIO-MANUFACTURING, INC.

By /s/ DANIEL G. HOLMAN
President and Chief Executive Officer of
Bioplasty, Inc., sole shareholder of Bio-
Manufacturing, Inc.

UROPLASTY, INC.

By /s/ DANIEL G. HOLMAN
Chairman of the Board and Chief
Executive Officer

HOLPER, WELSH, MITCHELL & ANDERSEN
Richard Holper
Robert Andersen
750 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
Attorneys for Bioplasty, Inc. and Bio-Manufacturing, Inc.

KAMPF & ASSOCIATES
William I. Kampf
900 Foshay Tower
Minneapolis, Minnesota 55402
Attorneys for Uroplasty, Inc.

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF UROPLASTY, INC. AND SUBSIDIARIES AS OF AND
FOR THE YEAR ENDED MARCH 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

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