NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
                              BROOKLYN PARK OFFICE
                             8041 BROOKLYN BOULEVARD
                         BROOKLYN PARK, MINNESOTA 55445

                                CREDIT AGREEMENT

                                      WITH

                              BIOSENSOR CORPORATION
                            13755 FIRST AVENUE NORTH
                            PLYMOUTH, MINNESOTA 55441

                         EFFECTIVE DATE OF APRIL 7, 1997

         Loan Documents:

[ ]      Section 1 - Credit Agreement (to be executed by Borrower and Bank)
                     Exhibit A-1 - Borrowing Base Definition
                     Exhibit A-2 - Borrowing Base Certificate
                     Exhibit B - Conditions Precedent and Security
                     Exhibit C - Representations and Warranties

[ ]      Section 2 - $150,000.00 Revolving Note (original to be executed by the
                     Borrower)

[ ]      Section 3 - Security Agreement (original to be executed by the
                     Borrower)

[ ]      Section 4 - UCC-1 Financing Statement (original to be executed by the
                     Borrower)

[ ]      Section 5 - Personal Guaranty of B. Steven Springrose (to be executed
                     by B. Steven Springrose)

[ ]      Section 6 - Arbitration Agreement (original to be executed by the
                     Borrower)

         Other Required Documents (Not Enclosed):

[ ]      Corporate Certificate of Authority

[ ]      Articles of Incorporation and By-Laws


<PAGE>

[LOGO]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION                                           CREDIT AGREEMENT

THIS CREDIT AGREEMENT (the "Agreement") dated as of April 7, 1997 (the
"Effective Date") is between Norwest Bank Minnesota, National Association (the
"Bank") and Biosensor Corporation (the "Borrower").

BACKGROUND

The Borrower has asked the Bank to provide a One Hundred Fifty Thousand and
00/100 Dollars ($150,000.00) line of credit to be used for financing accounts
receivable and inventory.

The Bank is agreeable to meeting the Borrower's request provided that the
Borrower agrees to the terms and conditions of this Agreement.

For purposes of this Agreement, all promissory notes that evidence indebtedness
of the Borrower to the Bank and which are documented under this Agreement and
defined below shall collectively be referred to as the "Notes."

The Revolving Note, this Agreement, and all "Security Documents" described in
Exhibit B shall be referred to collectively as the "Documents."

In consideration of the above premises, the Bank and the Borrower agree as
follows:

1.       LINE OF CREDIT

1.1      LINE OF CREDIT AMOUNT. During the Line Availability Period defined
         below, the Bank agrees to provide a conditional revolving line of
         credit (the "Line") to the Borrower. Outstanding amounts under the Line
         shall not, at any one time, exceed the lesser of the Borrowing Base or
         One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00). The
         Borrowing Base is defined in Exhibit A-1 to this Agreement. THIS IS A
         CONDITIONAL REVOLVING LINE OF CREDIT AND EACH ADVANCE UNDER THE LINE,
         IF MADE, SHALL BE AT THE SOLE DISCRETION OF THE BANK.

1.2      LINE AVAILABILITY PERIOD. The "Line Availability Period" shall mean the
         period of time from the Effective Date or the date on which all
         conditions precedent described in this Agreement have been met,
         whichever is later, to the Line Expiration Date of November 30, 1997.

1.3      THE REVOLVING NOTE. The Borrower's obligation to repay advances under
         the Line shall be evidenced by a single promissory note (the "Revolving
         Note") dated as of the Effective Date, and in form and content
         acceptable to the Bank. Reference is made to the Revolving Note for
         interest rate and repayment terms.

1.4      MANDATORY PREPAYMENT. If at any time the principal outstanding under
         the Revolving Note exceeds the lesser of the Borrowing Base or One
         Hundred Fifty Thousand and 00/100 Dollars ($150,000.00), the Borrower
         must immediately prepay the Revolving Note in an amount sufficient to
         eliminate the excess.


<PAGE>


2.       FEES AND EXPENSES

2.1      DOCUMENTATION EXPENSE. The Borrower agrees to reimburse the Bank for
         its reasonable expenses relating to the preparation of the Documents
         and any possible future amendments to the Documents, which
         reimbursement may include, but shall not be limited to, reimbursement
         of reasonable attorneys' fees, including the allocated costs, which
         shall not be in excess of $375.00, of the Bank's in-house counsel
         relating to the preparation of the Documents. 

         Despite such reimbursement the Borrower acknowledges that the Bank's
         counsel is engaged solely to represent the Bank and does not represent
         the Borrower.

2.2      COLLECTION EXPENSE. In the event the Borrower fails to pay the Bank any
         amounts due under this Agreement or under the Documents, the Borrower
         shall pay all costs of collection, including reasonable attorneys' fees
         and legal expenses incurred by the Bank.

2.3      MISCELLANEOUS EXPENSE. The Borrower agrees to reimburse the Bank for
         its expenses incurred in perfecting any security interest in property
         granted by the Borrower to the Bank.

3.       ADVANCES AND PAYMENTS

3.1      REQUESTS FOR ADVANCES. Any line advance requested under the terms of
         this Agreement shall be requested by telephone or in a writing
         delivered to the Bank (or transmitted via facsimile) by any person
         reasonably believed by the Bank to be authorized by the Borrower to do
         so. The Bank will not consider any such request following an event
         which is, or with notice or the lapse of time would be, an event of
         default under this Agreement. Proceeds shall be deposited into the
         Borrower's account at the Bank or disbursed in such other manner as the
         parties may agree.

3.2      PAYMENTS. All principal, interest and fees due under the Documents
         shall be paid in immediately available funds as contracted in this
         Agreement and no later than the payment due date set forth in the
         statement mailed to the Borrower by the Bank. Should a payment come due
         on a day other than a day on which the Bank is open for substantially
         all of its business (a "Banking Day"), then the payment shall be made
         no later than the next Banking Day and interest shall continue to
         accrue during the extended period.

4.       SECURITY

         During the time period that credit is available under this Agreement,
         and afterward until all amounts due under the Documents are paid in
         full, unless the Bank shall otherwise agree in writing, all amounts due
         under this Agreement and the Documents shall be secured at all times as
         provided in Exhibit B. The Borrower also hereby grants the Bank a
         security interest (independent of the Bank's right of set-off) in its
         deposit accounts at the Bank and in any other debt obligations of the
         Bank to the Borrower.


<PAGE>


5.       CONDITIONS PRECEDENT

         The Borrower must deliver to the Bank the documents described in
         Exhibit B, properly executed and in form and content acceptable to the
         Bank, prior to the Bank's initial advance or disbursement under this
         Agreement.

6.       REPRESENTATIONS AND WARRANTIES

         To induce the Bank to enter into this Agreement, the Borrower, to the
         best of its knowledge and upon due inquiry, makes the representations
         and warranties contained in Exhibit C.

7.       COVENANTS

7.1      FINANCIAL INFORMATION AND REPORTING 

         Except as otherwise stated in this Agreement, all financial information
         provided to the Bank shall be compiled using generally accepted
         accounting principles consistently applied.

         During the time period that credit is available under this Agreement,
         and afterward until all amounts due under the Documents are paid in
         full, unless the Bank shall otherwise agree in writing, the Borrower
         agrees to:

(a)      Annual Financial Statements. Provide the Bank within 120 days of the
         Borrower's fiscal year end, the Borrower's annual financial statements.
         The statements must be audited with an unqualified opinion by a
         certified public accountant acceptable to the Bank, and must be
         accompanied by a certificate of such accountants stating whether, in
         conducting their audit, they have become aware of any event of default
         under this Agreement, or of any event which might become such an event
         of default after the lapse of time or the giving of notice and the
         lapse of time, which has occurred and is continuing and specifying the
         nature and time period of its existence.

(b)      Interim Financial Statements. Provide the Bank within 45 days of each
         month end, the Borrower's interim financial statements for the interim
         period then ending. The statements must be current through the end of
         that period and must be certified as correct by an officer of the
         Borrower in form acceptable to the Bank.

(c)      Borrowing Base Certificate. Provide the Bank within 45 days of each
         month end, a Borrowing Base Certificate in the form of Exhibit A-2,
         current through the end of that period and certified as correct by an
         officer of the Borrower acceptable to the Bank.

(d)      Accounts Receivable Aging. Provide the Bank within 45 days of each
         month end, an accounts receivable aging report in form acceptable to
         the Bank, current through the end of that period and certified as
         correct by an officer of the Borrower acceptable to the Bank.

(e)      Guarantor Financial Statements. Provide the Bank within 120 days of the
         Borrower's fiscal year end with the annual financial statement of the
         Guarantor.


<PAGE>


(f)      Notices of Default. Provide the Bank prompt written notice of: 1) any
         event which has or might after the passage of time or the giving of
         notice, or both, constitute an event of default under any of the
         Documents; or 2) any future event that would cause the representations
         and warranties contained in this Agreement to be untrue when applied to
         the Borrower's circumstances as of the date of such event.

(g)      Additional Information. Provide the Bank with such other information as
         it may reasonably request, and permit the Bank to visit and inspect its
         properties and examine its books and records.

7.2      FINANCIAL COVENANTS

         During the time period that credit is available under this Agreement,
         and afterward until all amounts due under the Documents are paid in
         full, unless the Bank shall otherwise agree in writing, the Borrower
         agrees to comply with the financial covenants described below, which
         shall be calculated using generally accepted accounting principles
         consistently applied, except as they may be otherwise modified by the
         following capitalized definitions:

(a)      NET PROFIT. Achieve a minimum after-tax net profit of $40,000.00
         (excluding legal settlement expense) as of fiscal year end May 31,
         1997.

(b)      TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of at least
         $560,000 as of the end of fiscal year May 31, 1997.

         "Tangible Net Worth" means total assets less total liabilities and less
         the following types of assets: (1) leasehold improvements; (2)
         receivables and other investments in or amounts due from any
         shareholder, director, officer, employee or other person or entity
         related to or affiliated with the Borrower; (3) goodwill, patents,
         copyrights, mailing lists, trade names, trademarks, servicing rights,
         organizational and franchise costs, bond underwriting costs and other
         like assets properly classified as intangible.

(c)      Total Liabilities to Tangible Net Worth Ratio. Maintain a ratio of
         total liabilities to Tangible Net Worth of less than 1.5 to 1.0 as of
         fiscal year end May 31, 1997.

7.3      OTHER COVENANTS

         During the time period that credit is available under this Agreement,
         and afterward until all amounts due under the Documents are paid in
         full, unless the Bank shall otherwise agree in writing, the Borrower
         agrees to:

(a)      Additional Borrowings. Refrain from incurring any indebtedness except:

         (1) trade credit incurred in the ordinary course of business;

         (2) indebtedness expressly subordinated to the Bank in a writing
         acceptable to the Bank;

         (3) indebtedness in existence on the date of this Agreement and
         disclosed in advance to the Bank in writing;

         (4) indebtedness for business purposes which does not exceed a total
         principal amount of $25,000.00.


<PAGE>


(b)      Other Liens. Refrain from allowing any security interest or lien on
         property it owns now or in the future, except:

         (1) liens in favor of the Bank;

         (2) liens outstanding on the date of this Agreement and disclosed in
         advance to the Bank in writing;

         (3) liens for taxes not delinquent or which the Borrower is contesting
         in good faith;

         (4) liens which secure obligations in a total principal amount not
         exceeding $25,000.00.

(c)      Insurance. Cause its properties to be adequately insured by a reputable
         insurance company against loss or damage and to carry such other
         insurance as is required of or usually carried by persons engaged in
         the same or similar business. Such insurance must, with respect to the
         Bank's collateral security, include a lender's loss payable endorsement
         in favor of the Bank in form acceptable to the Bank.

(d)      Change in Management. Refrain from permitting or suffering any material
         change in its management personnel or management structure.

(e)      Collateral Audits. Permit the Bank to conduct audits of all collateral
         pledged to the Bank by the Borrower at such intervals as the Bank may
         reasonably require, but not in excess of one time each calendar year.
         In the event the Borrower is in default, collateral audits may be
         performed more frequently than once per calendar year. The audits may
         be performed by employees of the Bank or independent contractors
         retained by the Bank.

(f)      Nature of Business. Refrain from engaging in any line of business
         materially different from that presently engaged in by the Borrower.

(g)      Form of Organization and Mergers. Refrain from changing its legal form
         of organization, or consolidating, merging, pooling, syndicating or
         otherwise combining with any other entity.

(h)      Maintenance of Properties. Make all repairs, renewals or replacements
         necessary to keep its plant, properties and equipment in good working
         condition.

(i)      Books and Records. Maintain adequate books and records, refrain from
         making any material changes in its accounting procedures for tax or
         other purposes, and permit the Bank to inspect same upon reasonable
         notice.

(j)      Compliance with Laws. Comply in all material respects with all laws
         applicable to its form of organization, business, and the ownership of
         its property.

(k)      Preservation of Rights. Maintain and preserve all permits, licenses,
         rights, privileges, charters and franchises that it now owns.


<PAGE>


         These covenants were negotiated by the Bank and Borrower based on
         information provided to the Bank by the Borrower. A breach of a
         covenant is an indication that the risk of the transaction has
         increased. As consideration for any waiver or modification of these
         covenants, the Bank may require: additional collateral, guaranties or
         other credit support; higher fees or interest rates; and possible
         modifications to the Documents and the monitoring of the Agreement. The
         waiver or modification of any covenant that has been violated by the
         Borrower shall be made at the sole discretion of the Bank. These
         options do not limit the Bank's right to exercise its rights under
         Section 8 of this Agreement.

8.       EVENTS OF DEFAULT AND REMEDIES

8.1      DEFAULT

         The Line is a conditional line of credit, which means that the Bank is
         not obligated to make advances under the Line even if the Borrower is
         in compliance with the terms of this Agreement, and the Revolving Note
         evidencing borrowings under the Line shall be payable by the Borrower
         upon the earlier of DEMAND or November 30, 1997. Despite this
         reservation of rights, upon the occurrence of any one or more of the
         following events of default, or at any time afterward unless the
         default has been cured, the Bank may declare each revolving facility
         documented in this Agreement to be terminated and in its discretion
         accelerate and declare the unpaid principal, accrued interest and all
         other amounts payable under the and the Documents to be immediately due
         and payable:

(a)      Failure by the Borrower to make any payment of principal or interest
         due under the Revolving Note which continues for 10 days after its due
         date.

(b)      Default by the Borrower in the observance or performance of any
         covenant or agreement contained in this Agreement, and continuance for
         more than 15 days.

(c)      Default by the Borrower in the observance or performance of any
         covenant or agreement contained in any of the Documents (excepting this
         Agreement), after giving effect to any applicable grace period.

(d)      Default by the Borrower with respect to any indebtedness or obligation
         owed to the Bank, which is unrelated to any loan or facility subject to
         the terms of this Agreement, or to any other creditor, which would
         allow the maturity of any such indebtedness or obligation to be
         accelerated.

(e)      Default by Springrose L.L.P. or the Guarantor in the payment of that
         certain term loan in the original principal amount of $1,100,000.00 by
         the Bank to Springrose L.L.P. or in the observance or performance of
         any term, covenant or agreement of such party in any agreement relating
         to said term loan.

(f)      Any representation or warranty made by the Borrower to the Bank is
         untrue in any material respect.

(g)      With the exception of the pending litigation with Cardiosoft (the
         "Cardiosoft Litigation") as previously disclosed to the Bank, any
         litigation or governmental proceeding against the Borrower seeking an
         amount in excess of $25,000.00 which is not insured or subject to
         indemnity by a solvent third party either 1 ) results in a judgment
         equal to or in excess of that amount against the Borrower or 2) remains
         unresolved on the 270th day following the date of service on the
         Borrower.


<PAGE>


(h)      A garnishment, levy or writ of attachment, or any local, state, or
         federal notice of tax lien or levy is made or issues against the
         Borrower, or any post judgment process or procedure is commenced or any
         supplementary remedy for the enforcement of a judgment is employed
         against the Borrower or the Borrower's property.

(i)      The Guarantor dies or attempts to revoke his Guaranty, or becomes
         insolvent or is the subject of a voluntary or involuntary petition
         under the United States Bankruptcy Code.

(j)      A material adverse change occurs in the Borrower's financial condition
         or ability to repay its obligations to the Bank.

8.2      IMMEDIATE DEFAULT

         If, with or without the Borrower's consent, a custodian, trustee or
         receiver is appointed for any of the Borrower's properties, or if a
         petition is filed by or against the Borrower under the United States
         Bankruptcy Code, or the Borrower is dissolved, liquidated, or winds up
         its business, then the unpaid principal, accrued interest, and all
         other amounts payable under the Revolving Note and the Documents shall
         become immediately due and payable without notice or demand.

9.       MISCELLANEOUS.

(a)      No Waiver; Cumulative Remedies. No failure or delay by the Bank in
         exercising any rights under this Agreement shall be deemed a waiver of
         those rights. The remedies provided for in the Agreement are cumulative
         and not exclusive of any remedies provided by law.

(b)      Amendments or Modifications. Any amendment or modification of this
         Agreement must be in writing and signed by the Bank and Borrower. Any
         waiver of any provision in this Agreement must be in writing and signed
         by the Bank.

(c)      Binding Effect: Assignment. This Agreement and the Documents are
         binding on the successors and assigns of the Borrower and Bank. The
         Borrower may not assign its rights under this Agreement and the
         Documents without the Bank's prior written consent. The Bank may sell
         participations in or assign this Agreement and the Documents and
         exchange financial information about the Borrower with actual or
         potential participants or assignees.

(d)      Minnesota Law. This Agreement and the Documents shall be governed by
         the substantive laws of the State of Minnesota.

(e)      Severability of Provisions. If any part of this Agreement or the
         Documents are unenforceable, the rest of this Agreement or the
         Documents may still be enforced.

(f)      Integration. This Agreement and the Documents describes the entire
         understanding and agreement of the parties and supersedes all prior
         agreements between the Bank and the Borrower relating to each credit
         facility subject to this Agreement, whether verbal or in writing.


<PAGE>


Address for notices to Bank:                 Address for notices to Borrower:

Norwest Bank Minnesota,
 National Association                        Biosensor Corporation
8041 Brooklyn Boulevard                      13755 First Avenue North
Brooklyn Park, Minnesota 55445               Plymouth, Minnesota 55441

Attention: Mona M. Krueger                   Attention: B. Steven Springrose


NORWEST BANK MINNESOTA,
 NATIONAL ASSOCIATION                        BIOSENSOR CORPORATION

BY: /s/ Mona M. Krueger                      BY: /s/ B. Steven Springrose
    MONA M. KRUEGER, VICE PRESIDENT              B. STEVEN SPRINGROSE, PRESIDENT


<PAGE>


                                  EXHIBIT A-1

                           BORROWING BASE DEFINITION

Borrowing Base means the sum of 70% of Eligible Accounts Receivable (as defined
below).

Eligible Accounts Receivable means all accounts receivable of the Borrower
except those which are:

         1)       Greater than 90 days past the invoice date.

         2)       Due from an account debtor, 10% or more of whose accounts owed
                  to the Borrower are more than 90 days past the invoice date.

         3)       Subject to offset or dispute.

         4)       Due from an account debtor who is subject to any bankruptcy
                  proceeding.

         5)       Owed by a shareholder, subsidiary, affiliate, officer or
                  employee of the Borrower.

         6)       Not subject to a perfected first lien security interest in
                  favor of the Bank.

         7)       Due from an account debtor located outside the United States
                  and not supported by a standby letter of credit acceptable to
                  the Bank.

         8)       Due from a unit of government, whether foreign or domestic.

         9)       Otherwise deemed ineligible by the Bank in its reasonable
                  discretion.


<PAGE>


                                   EXHIBIT A-2

                              BIOSENSOR CORPORATION

                           BORROWING BASE CERTIFICATE



TO:  Norwest Bank Minnesota,
       National Association
     8041 Brooklyn Boulevard
     Brooklyn Park, Minnesota 55445
     (the "Bank")

         Biosensor Corporation (the "Borrower") certifies that the following
computation of the Borrowing Base was performed as of in accordance with the
Borrowing Base definitions set forth in Exhibit A-1 to the Credit Agreement
entered into between the Bank and the Borrower dated

Total A/R                                $ _____________

     Less: 1) Greater than 90 days       $ _____________

           2) Other ineligibles          $ _____________

     Eligible A/R                        $ _____________

     70% of Eligible Accts. Receivable                         $
                                                                 ==============
     Total Borrowing Base                                      $
     (Lesser of $150,000 or 70% of Eligible Accts Receivable)    ==============

     Total Line Outstandings                                  ($               )
                                                                 ==============
     Excess (Deficit)                                          $
                                                                 ==============


BIOSENSOR CORPORATION

BY: _________________________

ITS: ________________________


<PAGE>


                                   EXHIBIT B

                       CONDITIONS PRECEDENT AND SECURITY

PLEASE NOTE: This Exhibit describes each Note, Security Document,
Authorizations, Organizational Documents, and all miscellaneous documents,
reports, certificates and other information required as a condition to each
advance or disbursement under the Agreement, whether or not they have previously
been delivered to the Bank. PLEASE REFER TO THE CLOSING CHECKLIST FOR A COMPLETE
DESCRIPTION OF WHICH OF THE FOLLOWING DOCUMENTS REMAIN TO BE DELIVERED TO THE
BANK.

NOTE

The Revolving Note

SECURITY DOCUMENTS

Each Security Document described below must continue in full force and effect at
all times in accordance with its terms during the time period that credit is
available under this Agreement, and afterward until all amounts due under the
Documents are paid in full. THE FAILURE OF ANY SECURITY DOCUMENT TO MEET THESE
REQUIREMENTS MAY RESULT IN AN EVENT OF DEFAULT UNDER THE AGREEMENT AND THE
ACCELERATION OF ALL OF THE BORROWER'S OBLIGATIONS TO THE BANK EVIDENCED BY THE
DOCUMENTS.

Personal Guaranty of B. Steven Springrose. The unconditional personal Guaranty
of B. Steven Springrose. Pursuant to the Guaranty, the Guarantor guarantees a
maximum of $150,000.00 principal indebtedness, plus interest and enforcement
expenses.

Security Agreement of Biosensor Corporation. A Security Agreement signed by the
Borrower, granting the Bank a first lien security interest in the Borrower's
accounts, inventory, equipment and general intangibles, described in that
Agreement, together with one or more UCC-1 Financing Statements sufficient to
perfect the security interest granted to the Bank in each jurisdiction where
such property is located.

AUTHORIZATION

Certificate of Authority of Borrower. A Certificate of Authority executed by
such person or persons authorized by the Borrower's organizational documents
and/or agreements to do so, certifying the incumbency and signatures of the
officers or other persons authorized to execute the Documents, and authorizing
the execution of the Documents and performance in accordance with their terms.

ORGANIZATION

Articles of Incorporation and By-Laws. A recently certified copy of the
Borrower's Articles of Incorporation and By-laws, and any amendments, if
applicable.

Certificate of Good Standing. A recently certified copy of the Borrower's
Certificate of Good Standing.


<PAGE>


OTHER

Arbitration Agreement. The Bank's standard form of Arbitration Agreement signed
by the Bank and Borrower, subjecting potential controversies between them to
binding arbitration, including but not limited to those relating to the
Documents and this Agreement.

Evidence of Insurance. Evidence that the Borrower has obtained all insurance
coverage required by this Agreement, and that the Bank has been named as the
beneficiary of such policy or policies of insurance.


<PAGE>


                                    EXHIBIT C

                         REPRESENTATIONS AND WARRANTIES

Organizational Status. The Borrower is a corporation duly formed and in good
standing under the laws of the State of Minnesota.

Authorization. This Agreement, and the execution and delivery of the Documents,
is within the Borrower's powers, has been duly authorized and does not conflict
with any of the Borrower's organizational documents or any other agreement by
which the Borrower is bound, and has been signed by all persons authorized and
required to do so under its organizational documents.

Financial Reports. The Borrower has provided the Bank with its annual audited
financial statement dated May 31, 1996 and its unaudited interim financial
statement dated 2/28/97, and these statements fairly represent the financial
condition of the Borrower as of their respective dates and were prepared in
accordance with generally accepted accounting principals consistently applied.

Litigation. There is no litigation or governmental proceeding pending or
threatened against the Borrower which could have a material adverse effect on
the Borrower's financial condition or business, with the exception of the
pending Cardiosoft litigation.

Taxes. The Borrower has paid when due all federal, state and local taxes.

No Default. There is no event which is, or with notice or the lapse of time
would be, an event of default under this Agreement.

ERISA. The Borrower is in compliance in all material respects with the Employee
Retirement Income Security Act of 1974 and has received no notice to the
contrary from the Pension Benefit Guaranty Corporation or any related
governmental entity.

Environmental Matters. 1) The Borrower is in compliance in all material respects
with all health and environmental laws applicable to the Borrower and its
operations and knows of no conditions or circumstances that could interfere with
such compliance in the future; 2) the Borrower has obtained all environmental
permits and approvals required by law for the operation of its business; and 3)
the Borrower has not identified any "recognized environmental conditions", as
that term is defined by the American Society for Testing and Materials in its
standards for environmental due diligence, which could subject the Borrower to
enforcement action if brought to the attention of appropriate governmental
authorities.


<PAGE>


[LOGO]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION                                             REVOLVING NOTE

$150,000.00                                                       April 7, 1997

FOR VALUE RECEIVED, Biosensor Corporation (the "Borrower") promises to pay to
the order of Norwest Bank Minnesota, National Association (the "Bank"), at its
principal office or such other address as the Bank or holder may designate from
time to time, the principal sum of ONE HUNDRED FIFTY THOUSAND and 00/100 Dollars
($150,000.00), or the amount shown on the Bank's records to be outstanding, plus
interest (calculated on the basis of actual days elapsed in a 360-day year)
accruing each day on the unpaid principal balance at the annual interest rate
defined below. Absent manifest error, the Bank's records shall be conclusive
evidence of the principal and accrued interest owing hereunder.

INTEREST RATE. The principal balance outstanding under this Revolving Note shall
bear interest at an annual rate equal to the Base Rate plus 1.00%, floating.
Base Rate means the rate of interest established by the Bank from time to time
as its "base" or "prime" rate of interest at its principal office in
Minneapolis, Minnesota.

INTEREST AFTER MATURITY. The unpaid principal balance and interest due under
this Revolving Note after maturity (whether this Revolving Note matures by
demand, acceleration or lapse of time) shall bear interest until paid at the
Base Rate plus 1.00%, floating.

REPAYMENT TERMS

INTEREST. Interest shall be payable on the last day of each month, beginning May
1, 1997.

PRINCIPAL. Principal, and any unpaid interest, shall be due on the earlier of
DEMAND or November 30, 1997.

ADDITIONAL TERMS AND CONDITIONS. This Revolving Note is issued pursuant to a
Credit Agreement of even date between the Bank and the Borrower (the
"Agreement"). The Agreement, and any amendments or substitutions, contains
additional terms and conditions, including default and acceleration provisions,
which are incorporated into this Revolving Note by reference. Capitalized terms
not expressly defined herein shall have the meanings given them in the
Agreement. The Borrower agrees to pay all costs of collection, including
reasonable attorneys' fees and legal expenses incurred by the Bank if this
Revolving Note is not paid as provided above. This Revolving Note shall be
governed by the substantive laws of the State of Minnesota.

WAIVER OF PRESENTMENT AND NOTICE OF DISHONOR. Borrower and any other person who
signs, guarantees or endorses this Revolving Note, to the extent allowed by law,
hereby waives presentment, demand for payment, notice of dishonor, protest, and
any notice relating to the acceleration of the maturity of this Revolving Note.

BIOSENSOR CORPORATION

BY: /s/ B. Steven Springrose
    B. STEVEN SPRINGROSE, PRESIDENT


<PAGE>


[LOGO]
NORWEST BANK MINNESOTA
NATIONAL ASSOCIATION                                         SECURITY AGREEMENT

Norwest Bank Minnesota,                           Biosensor Corporation
 National Association                             13755 First Avenue North
8041 Brooklyn Boulevard                           Plymouth, Minnesota 55441
Brooklyn Park, Minnesota 55445
(the "Bank")                                      (the "Borrower")

April 7 ,1997

1. SECURITY INTEREST AND COLLATERAL. To secure payment of the Obligations (as
defined below), the Borrower hereby enters into this Security Agreement (the
"Agreement") and grants to the Bank a security interest (the "Security
Interest") in the Collateral (defined below).

"Obligations" means the debt, liability, or obligation of the Borrower to the
Bank evidenced by the credit agreement of the same date and each promissory note
or other instrument evidencing each loan or debt incurred thereunder by the
Borrower, and any extensions, renewals, amendments, or replacements of any such
loan, debt, or obligation.

"Collateral" means the following property, excluding consumer goods, in which
the Borrower now has or hereafter acquires an interest:

(a) "Inventory". All inventory held for sale or lease or supply under a service
contract, or which constitutes work in process or materials used or consumed in
the Borrower's business.

(b) "Equipment". All equipment including but not limited to all machinery,
vehicles, furniture, appliances, fixtures, manufacturing and processing
equipment, shop equipment, office and recordkeeping equipment, computer hardware
and software, and parts and tools.

(c) "General Intangibles". All general intangibles including but not limited to
applications for patents, patents, copyrights, trademarks, trade secrets,
goodwill, trade names, customer lists, permits, franchises, contracts, and the
right to use the Borrower's name, together with all other intangible property
rights such as the right to redeem or accept payment under an annuity contract
or a non-negotiable certificate of deposit issued by a bank.

(d) "Accounts and other Rights to Payment". All rights of the Borrower to the
payment of money, whether arising out of a sale, lease, or other disposition of
goods or other property by the Borrower, out of a rendering of services by or
loan from the Borrower, out of the overpayment of taxes or other liabilities of
the Borrower, or otherwise arising under any contract or agreement, whether
earned by performance or not, together with all other rights and interests
(including all liens and security interests) which the Borrower may at any time
have by law or agreement against the person or property of any account debtor or
obligor, including but not limited to all present and future debt instruments,
chattel papers, accounts, contract rights, loans and other obligation
receivable, unearned insurance premiums, rebates, and negotiable documents.

The Collateral shall also include, as applicable, all (i) products of the
Collateral; (ii) substitutions and replacements for the Collateral; (iii)
proceeds from the sale or disposition of the Collateral, including insurance
proceeds and any rights of subrogation resulting from the damage or destruction
of the Collateral; and (iv) for Collateral that is tangible, all additions,
increases, improvements, accessories, attachments, parts, equipment and repairs
now or in the future attached to or used in connection with such


<PAGE>


Collateral, and any warehouse receipts, bills of lading or other documents of
title now or in the future evidencing the Borrower's ownership of the
Collateral.

2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Borrower represents, warrants and
agrees that:

(a) Borrower is a corporation whose chief executive office is located at
Plymouth, Minnesota, and that this Agreement has been authorized by all
necessary corporate action.

(b) The Collateral will be primarily used for business purposes.

(c) Borrower has and will have title to each item of Collateral free and clear
of all security interests and other encumbrances, except:

         (i) the Security Interest;

         (ii) liens for taxes not delinquent or which the Borrower is contesting
in good faith;

         (iii) liens securing purchase money indebtedness to the extent
consented to in writing in advance by the Bank.

The Borrower will defend the Collateral against the claims of all persons except
the Bank. Borrower will not dispose of any interest in the Collateral without
the prior written consent of the Bank, except that, until the occurrence of an
Event of Default and the revocation by the Bank of Borrower's right to do so,
Borrower may sell Inventory in the ordinary course of business.

(d) Borrower will execute and deliver to the Bank financing statements and any
other documents that the Bank may require to perfect its Security Interest in
the Collateral, and will not permit any tangible Collateral to be located in any
state and/or county in which a financing statement perfecting such Collateral is
required to be but has not been filed. Borrower agrees that the Bank may
alternatively execute financing statements to perfect the Security Interest in
the Collateral where permitted by law.

(e) Each Account and each document is (or will be when arising or issued) the
valid and legally enforceable obligation, subject to no defense, set-off or
counterclaim (other than those arising in the ordinary course of business) of
the obligor shown by the Borrower's records to be obligated to pay such Account.
Borrower will not agree to the material modification or cancellation of any such
right to payment without the Bank's prior written consent, and will not
subordinate any such Account or right to payment to any other claim.

(f) Borrower will at all times:

         (i) keep all tangible Collateral in good working order and condition,
normal depreciation excepted;

         (ii) promptly pay all taxes and other governmental charges levied or
assessed upon Collateral;

         (iii) permit the Bank to examine or inspect any Collateral, wherever
located, and to examine, inspect and copy Borrower's books and records
pertaining to the Collateral and Borrower's business, and to request
verifications from account obligors of amounts owed to Borrower;

         (iv) keep accurate and complete records regarding the Collateral and
Borrower's business and financial condition and provide the Bank such periodic
reports of condition as the Bank may reasonably request;

         (v) promptly notify the Bank of any loss of or material damage to any
Collateral or of any adverse change known to Borrower regarding the prospect of
payment on any Account;


<PAGE>


         (vi) upon Bank's request, promptly deliver to the Bank any instrument,
document or chattel paper constituting Collateral, duly endorsed or assigned by
Borrower;

         (vii) keep all tangible Collateral insured against loss and damage,
including risks of fire (including extended coverage), theft, collision (in case
of Collateral consisting of motor vehicles) and such other risks in such amounts
as the Bank may reasonably request, with any loss payable to the Bank to the
extent of its interest and with the commitment of the insurer to notify the Bank
before cancellation;

         (viii) pay when due or reimburse the Bank on demand for all costs of
collection of the Obligations and all other out-of-pocket expenses (including in
each case all reasonable attorney's fees) incurred by the Bank in connection
with this Agreement and the Obligations, including expenses incurred in any
litigation or bankruptcy proceedings;

         (ix) prevent the Collateral from being used or kept in violation of all
applicable law;

         (x) obtain a waiver or consent from the owner and any mortgagee of any
real property where the Collateral may be located that provides that the
Security Interest will at all times be senior to any such interest or lien.

(g) If Borrower breaches any covenant or warranty in this Agreement, and the
breach or failure continues for a period of ten calendar days after the Bank
gives written notice (or, in the case of the agreement contained in clause (vii)
of Section 2(f), immediately upon the occurrence of such failure, without notice
or lapse of time), the Bank may in its discretion perform or observe such
agreements in the Borrower's or the Bank's name, and may take any other actions
which the Bank deems necessary to cure or correct such failure. Borrower shall
reimburse the Bank on demand for all costs and expenses (including reasonable
attorneys' fees) incurred by the Bank in performing or observing such
agreements. If the Borrower fails to reimburse the Bank upon demand, the Bank
may cause such amounts to be advanced or added to any of the Obligations secured
hereunder, which will bear interest at the highest rate provided under the note
designated for this purpose by the Bank at the time of the advance.

(h) Borrower irrevocably appoints the Bank or its delegate as attorney-in-fact
of Borrower with the right (but not the duty) to execute, deliver, endorse or
file, in the name and on behalf of Borrower, any instruments, documents,
financing statements, applications for insurance or other agreements required of
Borrower under Section 2 at any time following an Event of Default. Following an
Event of Default, the Bank may in its discretion enforce any rights of the
Borrower under any contract of insurance, and in the Borrower's or the Bank's
name, execute and deliver proofs of claim, receive payment of proceeds, endorse
checks and other instruments representing payment of such proceeds, and adjust,
litigate, compromise or release any claim against the issuer of any such policy.

3. EVENTS OF DEFAULT. Each of the following occurrences shall constitute an
event of default under this Agreement (each an "Event of Default"):

(a) Borrower defaults under the terms of any of the Obligations or any credit
agreement relating thereto; or

(b) Borrower materially fails to observe or perform any covenant contained in
this Agreement; or

(c) any representation or warranty made by the Borrower and set forth in this
Agreement is materially false or misleading.

4. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of Default
and at any time thereafter, the Bank may exercise any one or more of the
following rights and remedies:


<PAGE>


(a) declare all unmatured Obligations to be immediately due and payable, without
presentment or other notice or demand;

(b) exercise all rights available upon default to a secured party under the
Uniform Commercial Code. The Bank may require Borrower to make the Collateral
available to the Bank at a place to be designated by the Bank which is
reasonably convenient to both parties, and if notice to Borrower of any intended
disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given in the manner specified in this Agreement at least 10 calendar days prior
to the date of any public sale or disposition or the date after which any
private sale may occur;

(c) exercise any or all other rights available to the Bank by law or agreement
against the Collateral, the Borrower or any other person or property.

The Bank shall not be obligated to preserve any rights Borrower may have against
prior parties, to liquidate or realize on the Collateral at all or in any
particular manner or order, or apply any cash proceeds of Collateral in any
particular order.

5. OTHER PERSONAL PROPERTY. Unless at the time the Bank takes possession of any
tangible Collateral, or at any time within seven days thereafter, the Borrower
gives the Bank written notice of the existence of property belonging to the
Borrower that does not constitute Collateral, but which is located or found upon
or within such Collateral, together with a description of such property, the
Bank shall not be responsible or liable to the Borrower with respect to such
property unless it has actual knowledge of its existence and location upon or in
such Collateral.

6. LOCK BOX, COLLATERAL ACCOUNT. Upon the Bank's request following an Event of
Default, the Borrower will direct each obligor on an account to make payments to
a special lock box under the control of the Bank. Borrower authorizes and
directs the Bank to deposit into a special collateral account to be established
and maintained with the Bank all checks, drafts and cash payments, received in
said lock box. All deposits to this collateral account shall constitute
Collateral and shall not constitute payment of any Obligation. At its option,
the Bank may, at any time, apply collected funds on deposit in the collateral
account to the payment of the Obligations in such order of application as the
Bank may determine, or permit the Borrower to withdraw all or part of the
balance of the collateral account. If a collateral account is established,
Borrower agrees that it will promptly deliver to the Bank for deposit into the
collateral account all payments on Accounts. All such payments shall be
delivered to the Bank in the form received (except for Borrower's endorsement
where necessary). Until deposited, all payments on Accounts received by Borrower
shall be held in trust by the Borrower as the property of the Bank, and shall
not be commingled with any funds or property of the Borrower.

7. COLLECTION RIGHTS OF THE BANK. In addition to its rights under Sections 4 and
6, the Bank may, at any time following an Event of Default, notify any account
obligor or any other person obligated to pay any amount due with respect to an
Account to make payment directly to the Bank. Upon the Bank's request, Borrower
will notify such account obligors and other obligors in writing and will state
on all invoices to such account obligors or other obligors that the amount due
is payable directly to the Bank. At any time after the Bank or Borrower gives
such notice to an account obligor or other obligor, the Bank may, in its
discretion, and in its own name or in Borrower's name, demand, sue for, collect
or receive any money or property at any time payable or receivable on account
of, or securing, any such chattel paper, account, or other right to payment, or
grant any extension to, make any compromise or settlement with or otherwise
agree to waive or change the obligations (including collateral obligations) of
any such account obligor or other obligor.

8. AMENDMENTS. This Agreement can be waived, amended or terminated and the
Security Interest released, only in an express writing signed by the Bank. A
waiver signed by the Bank shall be effective only in the specific instance and
for the specific purpose given.


<PAGE>


9. NO WAIVER; CUMULATIVE REMEDIES. Delay or failure to act shall not preclude
the exercise or enforcement of any of the Bank's rights or remedies. All rights
of the Bank shall be cumulative and may be exercised singularly or concurrently,
at the Bank's option, and the exercise of any one such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other.

10. NOTICES. All notices to be given to Borrower shall be deemed sufficiently
given if delivered or mailed to the Borrower at the above address or at the most
recent address shown on the Bank's records.

11. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of Borrower and the Bank and their respective heirs,
representatives, successors and assigns and shall take effect when signed by
Borrower and delivered to the Bank. A photographic or other reproduction of this
Agreement or of any financing statement signed by the Borrower shall have the
same force and effect as the original.

12. APPLICABLE LAW; SEVERABILITY. Except to the extent otherwise required by
law, this Agreement shall be governed by the laws of the state in which the
Bank's main office is located. If any provision or application of this Agreement
is unenforceable in any respect, such unenforceability shall not affect other
provisions of this Agreement.

13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement shall survive the execution, delivery and
performance of this Agreement and the creation and payment of the Obligations.

14. INTEGRATION. This Agreement represents the entire understanding of the Bank
and Borrower with respect to the Collateral and supersedes all prior oral or
written agreements between the parties relating to the Collateral.

         IN WITNESS WHEREOF, this Agreement was executed the day and year first
above written.

                                   BIOSENSOR CORPORATION

                                   By: /s/ B. Steven Springrose
                                       B. Steven Springrose, President


<PAGE>


[LOGO/SEAL]                                                         For
                                                                    Filing
                                                                    Officer

                               STATE OF MINNESOTA
                            UCC-1 FINANCING STATEMENT

This statement is presented for filing pursuant to MINNESOTA UNIFORM COMMERCIAL
CODE MINNESOTA STATUTES CHAPTER 336 9-402 (TYPE IN BLACK INK)

1. Individual Debtor-Last Name              First Name          Middle I.


Social Security #                  Mailing Address


City                                             State          Zip Code



2. Individual Debtor-Last Name              First Name          Middle I.


Social Security #                  Mailing Address


City                                             State          Zip Code



3. Business Debtor-Last Name
BIOSENSOR CORPORATION

Fed ID #                                 Mailing Address
41 - 1427114                             13755 FIRST AVENUE NORTH

City                                         State               Zip Code
PLYMOUTH                                     MN                   55441


4. Secured Party - Last Name                   5. Assignee of Secured Party

NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

Mailing Address                                Mailing Address
8041 BROOKLYN BOULEVARD

City              State    Zip Code            City            State   Zip Code
BROOKLYN PARK     MN       55445

6. This financing statement covers the following types or items of property. (If
crops are covered describe the real estate and list the name of record owner.)
ALL PROPERTY DESCRIBED ON THE ATTACHED EXHIBIT A.






RETURN ACKNOWLEDGMENT COPY TO:
(name and address)                  BIOSENSOR CORPORATION

                                    By /s/ B. Steven Springrose  Its: 
                                    --------------------------------------------
[NORWEST BANK MINNESOTA, NATIONAL                Debtor's Signature
 ASSOCIATION
 8041 Brooklyn Boulevard            (Required in Most Cases - see instructions)

 Brooklyn Park, Minnesota 55445  ]  NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION

                                    By: /s/ Mona M. Krueger   Its: 
                                    --------------------------------------------
                                              Secured Party's Signature
   PLEASE DO NOT TYPE OUTSIDE
      THE BRACKETED AREA.


<PAGE>


                                                                       EXHIBIT A

[LOGO] NORWEST BANKS

SECURED PARTY               ADDRESS                      OFFICE
Norwest Bank Minnesota,     8041 Brooklyn Blvd.          Brooklyn Blvd. Office
National Association        Brooklyn Park, MN 55445

DEBTOR:        BIOSENSOR CORPORATION

UCC - 1 FINANCING STATEMENT DESCRIPTION:

This Financing Statement covers the following types of items of property:

[X]      (a)      All inventory of Debtor, whether now owned or hereafter
                  acquired and wherever located.

[X]      (b)      All equipment of Debtor, whether now owned or hereafter
                  acquired, including but not limited to all present and future
                  machinery, vehicles, furniture, fixtures, manufacturing
                  equipment, farm machinery and equipment, shop equipment,
                  office and recordkeeping equipment, parts and tools, and the
                  goods described in any equipment schedule or list furnished to
                  Secured Party by Debtor (but no such schedule or list need be
                  furnished in order for the security interest to be valid as to
                  all of Debtor's equipment).

[ ]      (c)      All farm products of Debtor, whether now owned or hereafter
                  acquired, including but not limited to (i) all poultry and
                  livestock and their young, products thereof and produce
                  thereof, (ii) all crops, whether annual or perennial, and the
                  products thereof, (iii) all feed, seed, fertilizer, medicines
                  and other supplies used or produced by Debtor in farming
                  operations, (iv) any crop insurance payments and any
                  government farm support payments, including any diversion or
                  deficiency payments. The real estate concerned with the above
                  described crops growing or to be grown is: __________________
                  and the name of the record owner is: ________________________

[X]      (d)      Each and every right of Debtor to the payment of money,
                  whether such right to payment now exists or hereafter arises,
                  whether such right to payment arises out of a sale, lease or
                  other disposition of goods or other property by Debtor, out of
                  a rendering of services by Debtor, out of a loan by Debtor,
                  out of the overpayment of taxes or other liabilities of
                  Debtor, or otherwise arises under any contract or agreement,
                  whether such right to payment is or is not already earned by
                  performance, and howsoever such right to payment may be
                  evidenced, together with all other rights and interests
                  (including all liens and security interests) which Debtor may
                  at any time have by law or agreement against any account
                  debtor or other obligor obligated to make such payment or
                  against any of the property of such account debtor or other
                  obligor; all including but not limited to all present and
                  future debt instruments, chattel papers, loans and obligations
                  receivable and tax refunds.

[X]      (e)      all general intangibles of Debtor, whether now owned or
                  hereafter acquired, including, but not limited to,
                  applications for patents, patents, copyrights, trademarks,
                  trade secrets, good will, trade name, customers lists, permits
                  and franchises, and the right to use Debtor's name.

[X]      (f)      All contract rights of the Debtor, whether now owned or
                  hereafter acquired.

                  Regardless of which boxes are checked above, this Financing
                  Statement also covers:

                  All substitutions and replacements for and products of any of
                  the foregoing property not constituting consumer goods and
                  proceeds of any and all of the foregoing property and, in the
                  case of all tangible collateral, together with all accessions
                  and, except in the case of consumer goods, together with (i)
                  all accessories, attachments, parts, equipment and repairs now
                  or hereafter attached or affixed to or used in connection with
                  any such goods, and (ii) all warehouse receipts, bills of
                  lading and other documents of title now or hereafter covering
                  such goods.


<PAGE>


[LOGO]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION                                          PERSONAL GUARANTY

Norwest Bank Minnesota,                      Biosensor Corporation
  National Association                       13755 First Avenue North
8041 Brooklyn Boulevard                      Plymouth, Minnesota 55441
Brooklyn Park, Minnesota 55445               (the "Borrower")
(the "Bank")

April 7, 1997

         FOR VALUABLE CONSIDERATION, and to induce the Bank in its sole
discretion to make loans or extend other accommodations to or for the account of
the Borrower, the undersigned gives this Personal Guaranty (the "Guaranty") and
absolutely and unconditionally guarantees to the Bank the full and prompt
payment of each and every debt, liability or obligation which the Borrower may
now or at any time in the future owe to the Bank (the "Indebtedness"). This
Guaranty is an absolute, unconditional and continuing guaranty of payment of the
Indebtedness and shall continue to be binding upon the undersigned, whether or
not all Indebtedness is paid in full, until this Guaranty is revoked
prospectively in writing as to future transactions. Such revocation shall not be
effective until actually received in writing by the Bank and then shall not be
effective as to Indebtedness existing or committed to at the time of revocation,
and shall not be effective as to renewals, extensions, or refinancings of
existing Indebtedness, whether such Indebtedness is renewed before or after
receipt of such notice of revocation. The death or incompetence of the
undersigned shall not revoke this Guaranty until written notice of such death or
incompetence is actually received by the Bank, and then only prospectively as to
future transactions as set forth above.

         The liability of the undersigned under this Guaranty shall include
accrued interest and all attorneys' fees, collection costs and enforcement
expenses incurred by the Bank in collecting on and enforcing its rights under
the Indebtedness, and all such costs and expenses incurred by the Bank in
connection with the protection, defense, or enforcement of this Guaranty in any
litigation or bankruptcy proceedings. The Bank may apply any sums received by or
available to the Bank on account of the Indebtedness from Borrower or any other
person (except the undersigned), or from the Borrower's or other such persons'
properties or any collateral security or other source of payment, and such
application of proceeds or receipts shall not reduce or impair the liability of
the undersigned under this Guaranty.

         Notwithstanding the preceding paragraph, the liability of the
undersigned under this Guaranty shall be limited to a principal amount of
$150,000.00, plus accrued interest and all attorneys' fees, collection costs and
enforcement expenses incurred by the Bank in collecting on and enforcing its
rights under the Indebtedness and incurred in connection with the protection,
defense or enforcement of this Guaranty in any litigation or bankruptcy
proceedings. The Indebtedness may be created and continued in any amount,
whether or not in excess of such principal amount, without reducing or impairing
the liability of the undersigned under this Guaranty. Any payment made by the
undersigned under this Guaranty shall be effective to reduce or discharge the
undersigned's liability only if accompanied by a written transmittal document,
received by the Bank and advising it that such payment is made under this
Guaranty for such purpose.

         The undersigned further acknowledges and agrees with Bank that:


<PAGE>


1. No act or event need occur to establish the liability of the undersigned
under this Guaranty, and no act or event, except full payment and discharge of
all Indebtedness, shall exonerate and discharge the liability of the undersigned
under this Guaranty.

2. If the undersigned dies or becomes insolvent (however defined) then the Bank
may declare immediately due and payable the obligations of the undersigned under
this Guaranty, and the undersigned shall immediately pay to the Bank the full
amount of all Indebtedness, whether due and payable or unmatured. If the
undersigned voluntarily commences or there is commenced involuntarily against
the undersigned a case under the United States Bankruptcy Code, the obligations
of the undersigned under this Guaranty shall immediately be due and payable
without the necessity of demand or notice.

3. The undersigned will not exercise or enforce any right of contribution,
reimbursement, recourse or subrogation available to the undersigned against the
Borrower or any person liable for payment of the Indebtedness, or as to any
collateral securing the Indebtedness, unless and until all of the Indebtedness
shall have first been fully paid and discharged.

4. The Bank may in its discretion enter into transactions resulting in the
creation or continuance of Indebtedness, without notice to or the consent or
approval of the undersigned, regardless of whether or not any existing
relationship between the Borrower and the undersigned has been revoked and
regardless of whether this Guaranty has been revoked.

5. The liability of the undersigned shall not be reduced or impaired by any of
the following acts or events (which the Bank is expressly authorized to do, omit
or suffer from time to time, both before and after revocation of this Guaranty,
without notice to or the consent or approval of the undersigned): (i) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all of the Indebtedness; (ii) any one or more extensions or renewals
of Indebtedness (whether or not for a period longer than the original period) or
any modification of the interest rate, maturity or other contractual terms
applicable to all or part of the Indebtedness; (iii) any waiver or indulgence
granted to Borrower, any delay or lack of diligence in the enforcement of the
Indebtedness, or any failure to institute proceedings, file a claim, give any
required notices or otherwise protect any of the Indebtedness; (iv) any full or
partial release of, settlement with, or agreement not to sue, Borrower or any
other guarantor or other person liable with respect to any of the Indebtedness;
(v) any discharge of any evidence of Indebtedness or the acceptance of any
instrument renewing or refinancing the Indebtedness; (vi) any failure to obtain
collateral security (including rights of setoff) for the Indebtedness, or to
assure its proper or sufficient creation, perfection, or priority, or to
protect, insure, or enforce any collateral security; or any modification,
substitution, discharge, impairment, or loss of such collateral security; (vii)
any foreclosure or enforcement of any collateral security by the Bank or any
other creditor of the Borrower with a security interest in the collateral
security; (viii) any assignment or transfer of any Indebtedness or documentation
evidencing the Indebtedness; (ix) any order of application of any payments or
credits upon the Indebtedness from the Borrower, the undersigned, or any other
person; and (x) any election by the Bank under ss. 1 1 1 1 (b)(2) of the United
States Bankruptcy Code

6. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of the
preceding sentence, the undersigned will not assert, plead or enforce against
the Bank any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds, anti-deficiency statute,
misrepresentation or fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to Borrower or any other party liable
for payment of any of the Indebtedness, or any setoff available against the Bank
to Borrower or any such other person, whether or not on account of a related
transaction. The undersigned shall be liable for any deficiency remaining after
foreclosure of any mortgage, deed of trust or security interest securing the
Indebtedness, whether or not the liability of the Borrower or any other obligor
for such deficiency is discharged pursuant to statute or judicial decision.


<PAGE>


7. The Bank may in its sole discretion demand that the undersigned discharge its
obligations under this Guaranty at any time, whether at the time of the
scheduled or accelerated maturity of the Indebtedness or at any earlier or later
time, and regardless of whether there has been a default with respect to the
Indebtedness. The Bank shall not be required to first resort for payment of the
Indebtedness to the Borrower or to any other person or their properties, or to
first enforce, realize upon, or exhaust any collateral security given to secure
the Indebtedness before enforcing this Guaranty. The undersigned waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.

8. If any payment applied by the Bank to the Indebtedness is later set aside,
recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of the Borrower
or any other obligor), the Indebtedness to which such payment was applied shall
for the purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such Indebtedness as fully as if such application had never been made.

9. The liability of the undersigned under this Guaranty is in addition to and
cumulative with all other liabilities of the undersigned to the Bank as a
guarantor or otherwise, without limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.

10. This Guaranty shall be enforceable regardless of the failure of other
persons to sign other guaranties of the Indebtedness. This Guaranty shall be
effective upon delivery to the Bank, without further act, condition or
acceptance by the Bank, shall be binding upon the undersigned and the heirs,
representatives, successors and assigns of the undersigned for the benefit of
the Bank and its participants, successors and assigns. Any invalidity or
unenforceability of any provision or application shall not affect other lawful
provisions and applications of this Guaranty, which is severable. This Guaranty
may not be waived, modified, amended, terminated, released or otherwise changed
except by a writing signed by both the undersigned and the Bank. This Guaranty
is issued in and shall be governed by the laws of the State of Minnesota.


                        WAIVER OF RIGHT TO TRIAL BY JURY

The undersigned hereby waives the right to a trial by jury in any action
relating to this Guaranty


         IN WITNESS WHEREOF, this Guaranty has been duly executed on the above
date by the undersigned.



                                              /s/ B. STEVEN SPRINGROSE
                                              B. STEVEN SPRINGROSE

                                              Address:
                                              12505 58th Av N
                                              Plymouth    MN  55442


<PAGE>


[LOGO]
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION                                      ARBITRATION AGREEMENT

Norwest Bank Minnesota,                      Biosensor Corporation
  National Association                       13755 First Avenue North
8041 Brooklyn Boulevard                      Plymouth, Minnesota 55441
Brooklyn Park, Minnesota 55445               (the "Borrower")
(the "Bank")

April 7, 1997

1. AGREEMENT TO ARBITRATE. The Bank and Borrower agree to submit to binding
arbitration all claims, disputes and controversies (whether in tort, contract,
or otherwise, except "core proceedings" under the U.S. Bankruptcy Code) arising
between themselves and their respective employees, officers, directors,
attorneys and other agents, which relate in any way without limitation to
existing and future loans and extensions of credit or requests for additional
credit, including by way of example but not by way of limitation the
negotiation, collateralization, administration, repayment, modification,
default, termination and enforcement of such loans or extensions of credit.

2. RULES GOVERNING ARBITRATION. Arbitration under this Agreement will be
governed by the Federal Arbitration Act and proceed in Minneapolis, Minnesota in
accordance with the American Arbitration Association's commercial arbitration
rules ("AAA Rules").

3. SELECTION OF ARBITRATOR. Arbitration will be conducted before a single
neutral arbitrator selected in accordance with AAA Rules and who shall be an
attorney who has practiced commercial law for at least ten years.

4. STATUTES OF LIMITATION AND PROCEDURAL ISSUES. The arbitrator will determine
whether an issue is arbitratable and will give effect to applicable statutes of
limitation. Judgment upon the arbitrator's award may be entered in any court
having jurisdiction. The arbitrator has the discretion to decide, upon documents
only or with a hearing, any motion to dismiss for failure to state a claim or
any motion for summary judgment.

5. DISCOVERY. Discovery will be governed by the Minnesota Rules of Civil
Procedure. Discovery must be completed at least 20 days before the hearing date
and within 180 days of the commencement of arbitration. Each request for an
extension and all other discovery disputes will be determined by the arbitrator
upon a showing that the request is essential for the party's presentation and
that no alternative means for obtaining information are available during the
initial discovery period.

6. EXCEPTIONS TO ARBITRATION. This Agreement does not limit the right of either
party to a) foreclose against real or personal property collateral; b) exercise
self-help remedies such as setoff or repossession; c) obtain provisional
remedies such as replevin, injunctive relief, attachment or the appointment of a
receiver during the pendency or before or after any arbitration proceeding; or
d) obtain a cognitive judgment, if available. These exceptions do not constitute
a waiver of the right or obligation of either party to submit any dispute to
arbitration, including those arising from the exercise of these remedies.

7. ARBITRATION COSTS AND FEES. The arbitrator will award costs and expenses in
accordance with the provisions of the documents evidencing each loan or
extension of credit.


NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION                    BIOSENSOR CORPORATION

By: /s/ Mona M. Krueger                 By: /s/ B. Steven Springrose
    Mona M. Krueger, Vice President         B. Steven Springrose, President