Document:

Exhibit 10.2

[LOGO]     WELLS FARGO BANK MINNESOTA,
WELLS      NATIONAL ASSOCIATION                            REVOLVING NOTE
FARGO
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$2,000,000.00                                              JULY ___, 2001

FOR VALUE RECEIVED, MedAmicus, Inc. (the "Borrower") promises to pay to the
order of Wells Fargo 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 TWO MILLION and 00/100 Dollars ($2,00,000.00)
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 on
the unpaid balance at the annual interest rate defined below. Absent manifest
error, the Bank's records will 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 0.0%, floating.

Base Rate means the rate of interest established by Wells Fargo Bank Minnesota,
National Association from time to time as its "base" or "prime" rate of interest
at its principal office in Minneapolis, Minnesota.

DEFAULT RATE OF INTEREST. The interest rate otherwise in effect under this
Revolving Note shall increase by 0.25% for the first 30 days following the
Bank's determination that an event of default under Section 8.1 of the Agreement
has occurred, and that any applicable grace period, if any, has elapsed. The
interest rate shall be increased by an additional 0.25% for each 30 day period
that occurs thereafter until either the indebtedness evidenced by this Revolving
Note is paid in full, the default has been cured to the Bank's satisfaction, or
this Revolving Note is accelerated and the interest after maturity rate
described below becomes effective. The interest rate in effect prior to default
will be reinstated by the Bank to be effective as of the date determined by the
Bank to be the date that the default was cured.

THE BANK'S ASSESSMENT OR ACCEPTANCE OF INTEREST PAID AT AN INCREASED RATE SHALL
NOT CONSTITUTE A WAIVER OF ANY DEFAULT UNDER THE TERMS OF SECTION 8.1 OF THE
AGREEMENT AND THIS REVOLVING NOTE, OR ANY WAIVER OF THE BANK'S RIGHT TO
ACCELERATE OR DEMAND PAYMENT OF THIS REVOLVING NOTE.

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 2.0%, floating.

REPAYMENT TERMS

INTEREST. Interest shall be payable on the first day of each month, beginning
September 1, 2001.

PRINCIPAL. Principal, and any unpaid interest, shall be due on August 1, 2002.

<PAGE>

ADDITIONAL TERMS AND CONDITIONS. This Revolving Note is issued pursuant to the
Credit Agreement between the Bank and the Borrower dated July __, 2001 (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.

MEDAMICUS, INC.

BY:  /s/ JAMES D. HARTMAN
     -------------------------
ITS:     CEO
     -------------------------Exhibit 10.3

[LOGO]     WELLS FARGO BANK MINNESOTA,
WELLS      NATIONAL ASSOCIATION                            ARBITRATION AGREEMENT
FARGO
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Wells Fargo Bank Minnesota,              MedAmicus, Inc.
  National Association                   15301 Highway 55 West
900 East Wayzata Boulevard               Plymouth, Minnesota 55447
Wayzata, Minnesota 55391                 (the "Customer") and (the "Borrower")
(the "Bank")

July __, 2001

1.       AGREEMENT TO ARBITRATE. The Bank and Borrower agree to submit to
         binding arbitration by the American Arbitration Association (the "AAA")
         of 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 Wayzata,
         Minnesota in accordance with 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. The institution and maintenance of an action for judicial
         relief or for any provisional or ancillary remedy shall not constitute
         a waiver of the right of any party, including the plaintiff, to submit
         the controversy or claim to arbitration if any other party contests
         such action for judicial relief.

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 cognovit 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.

<PAGE>

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.

  WELLS FARGO BANK MINNESOTA,              MEDAMICUS, INC.
    NATIONAL ASSOCIATION

  BY:  /s/ TERESA SHANNON EARL             BY:  /s/ JAMES D. HARTMAN
  ------------------------------------     ------------------------------------

  ITS  VICE PRESIDENT                      ITS  CEO
  ------------------------------------     ------------------------------------Exhibit 10.4

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[LOGO]                                                      SECURITY AGREEMENT
WELLS
FARGO
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---------------------------------------- ---------------------------------------
Date
7/31/01

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Debtor                                    Secured Party
MedAmicus, Inc.                           Wells Fargo Bank Minnesota, National
                                          Association
---------------------------------------- ---------------------------------------
Street Address                            Street Address
15301 Highway 55                          900 East Wayzata Blvd
---------------------------------------- ---------------------------------------
City               State       Zip Code   City             State       Zip Code
Minneapolis, MN 55447                     Wayzata, MN 55391
---------------------------------------- ---------------------------------------

1.       SECURITY INTEREST AND COLLATERAL. To secure the payment and performance
         of each and every debt, liability and obligation of every type and
         description which Debtor may now or at any time hereafter owe to
         Secured Party (whether such debt, liability or obligation now exists or
         is hereafter created or incurred, whether it is currently contemplated
         by the Debtor and Secured Party, whether any documents evidencing it
         refer to this Security Agreement, whether it arises with or without any
         documents (e.g. obligations to Secured Party created by checking
         overdrafts), and whether it is or may be direct or indirect, due or to
         become due, absolute or contingent, primary or secondary, liquidated or
         unliquidated, or joint, several or joint and several; (all such debts,
         liabilities and obligations being herein collectively referred to as
         "Obligations"), Debtor hereby grants Secured Party a security interest
         (herein called the "Security Interest") in the following property
         (herein called the "Collateral") (check applicable boxes and complete
         information):
         (a)      INVENTORY:
                  X        All inventory of Debtor, whether now owned or
                           hereafter acquired and wherever located;
         (b)      EQUIPMENT, FARM PRODUCTS AND CONSUMER GOODS:
                  X        All equipment of Debtor, whether now owned or
                           hereafter acquired, including but not limited to all
                           present and future machinery, vehicles, furniture,
                           appliances, fixtures, manufacturing and processing
                           equipment, farm machinery and equipment, shop
                           equipment, office and record-keeping equipment,
                           computer hardware and software, parts and tools,
                           goods, and types of goods of every kind and
                           description.
                  |_|      The following equipment or types of equipment:

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

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

                           -----------------------------------------------------
                  |_|      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, all holding marks and
                           brands and branding irons of Debtor that at any time
                           cover any such livestock, and, if the livestock
                           includes sheep, all wool pulled, clipped or shorn
                           therefrom, (ii) all crops, whether annual or
                           perennial, and the products thereof (THIS SECURITY
                           AGREEMENT COVERS CROPS NOW GROWING. THIS SECURITY
                           AGREEMENT ALSO COVERS FUTURE CROPS TO BE GROWN IN THE
                           CURRENT YEAR OR ANY YEAR HEREAFTER), (iii) all feed,
                           seed, fertilizer, medicines and other supplies used
                           or produced by Debtor in farming operations, and (iv)
                           all rights to crop insurance payments and storage
                           payments and all rights to payments of any type under
                           any government agricultural diversion, assistance ,
                           support or incentive program, Farm Services Agency
                           program and any other government agricultural
                           program. The real estate concerned with the above
                           described crops growing or to be grown is:

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

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

                           -----------------------------------------------------
                           and the name of the record owner is:

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

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

<PAGE>

                  |_|      The following consumer goods or types of consumer
                           goods:

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

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

                           -----------------------------------------------------
         (c)      ACCOUNTS AND OTHER RIGHTS TO PAYMENT:
                  X        All accounts and each and every right of Debtor to
                           the payment of money, whether such right to payment
                           now exists or hereafter arises, whether such accounts
                           or other rights to payment arise 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 any 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,
                           accounts, contract rights, loans and obligations
                           receivable, tax refunds, unearned insurance premiums,
                           rebates, and negotiable documents.
         (d)      GENERAL INTANGIBLES:
                  X        All general intangibles of Debtor, whether now owned
                           or hereafter acquired, including, but not limited to,
                           certificates of deposit, applications for patents,
                           patents, copyrights, trademarks, trade secrets, good
                           will, tradenames, customer lists, permits and
                           franchises, and the right to use Debtor'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.
         (e)      OTHER:
                  |_|
                           -----------------------------------------------------

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

                           -----------------------------------------------------
Regardless of which boxes are checked above, this Agreement 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 including, but not limited to, insurance proceeds and any rights of
subrogation resulting from the damage or destruction thereof, 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.
2.       REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Debtor represents, warrants
         and agrees that:
         (a)      Debtor is a corporation;
         (b)      The Collateral will be used primarily for |_| personal, family
                  or household purposes; |_| agricultural purposes; business
                  purposes;
         (c)      If any part or all of the tangible Collateral will become so
                  related to particular real estate as to become a fixture, the
                  real estate concerned is

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

                  --------------------------------------------------------------
                  and the name of the record owner is:

                  --------------------------------------------------------------
         (d)      Debtor's chief executive office is located at:

                  --------------------------------------------------------------
                  or, if left blank, at the address of Debtor shown at the
                  beginning of this Agreement. If Debtor is an individual, the
                  Debtor's residence is at the address of Debtor shown at the
                  beginning of this Agreement.

                                      -2-
<PAGE>
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ADDITIONAL PROVISIONS
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3.       ADDITIONAL REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Debtor
         represents, warrants and agrees that:
         (a)      Debtor has (or will have at the time Debtor acquires rights in
                  Collateral hereafter arising) absolute title to each item of
                  Collateral free and clear of all security interests, liens and
                  encumbrances, except the Security Interest, and will defend
                  the Collateral against all claims or demands of all persons
                  other than Secured Party. Debtor will not sell or otherwise
                  dispose of the Collateral or any interest therein without the
                  prior written consent of Secured Party, except that, until the
                  occurrence of an Event of Default and the revocation by
                  Secured Party of Debtor's right to do so, Debtor may sell any
                  inventory constituting Collateral to buyers in the ordinary
                  course of business and use and consume any farm products
                  constituting Collateral in Debtor's farming operation. If
                  Debtor is not an individual, this Agreement has been duly and
                  validly authorized by all necessary action of the Debtor's
                  governing body.
         (b)      Debtor will not permit any tangible Collateral to be located
                  in any state (and, if county filing is required, in any
                  county) in which a financing statement covering such
                  Collateral is required to be, but has not in fact been, filed
                  in order to perfect the Security Interest.
         (c)      Each account and right to payment and each instrument,
                  document, chattel paper and other agreement constituting or
                  evidencing Collateral is (or will be when arising or issued)
                  the valid, genuine and legally enforceable obligation, subject
                  to no defense, set-off or counterclaim (other than those
                  arising in the ordinary course of business) of the account
                  debtor or other obligor named therein or in Debtor's records
                  pertaining thereto as being obligated to pay such obligation.
                  Debtor will neither agree to any material modification or
                  amendment nor agree to any cancellation of any such obligation
                  without Secured Party's prior written consent, and will not
                  subordinate any such right to payment to claims of other
                  creditors of such account debtor or other obligor.
         (d)      Debtor will (i) keep all tangible Collateral in good repair,
                  working order and condition, normal depreciation excepted, and
                  will, from time to time, replace any worn, broken or defective
                  parts thereof; (ii) promptly pay all taxes and other
                  governmental charges levied or assessed upon or against any
                  Collateral or upon or against the creation, perfection or
                  continuance of the Security Interest; (iii) keep all
                  Collateral free and clear of all security interests, liens and
                  encumbrances except the Security Interest; (iv) at all
                  reasonable times, permit Secured Party or its representatives
                  to examine or inspect any Collateral, wherever located, and to
                  examine, inspect and copy Debtor's books and records
                  pertaining to the Collateral and its business and financial
                  condition and to discuss with account debtors and other
                  obligors requests for verifications of amounts owed to Debtor;
                  (v) keep accurate and complete records pertaining to the
                  Collateral and pertaining to Debtor's business and financial
                  condition and submit to Secured Party such periodic reports
                  concerning the Collateral and Debtor's business and financial
                  condition as Secured Party may from time to time reasonably
                  request; (vi) promptly notify Secured Party of any loss of or
                  material damage to any Collateral or of any adverse change,
                  known to Debtor, in the prospect of payment of any sums due on
                  or under any instrument, chattel paper, or account
                  constituting Collateral; (vii) if Secured Party at any time so
                  requests (whether the request is made before or after the
                  occurrence of an Event of Default), promptly deliver to
                  Secured Party any instrument, document or chattel paper
                  constituting Collateral, duly endorsed or assigned by Debtor;
                  (viii) at all times keep all tangible Collateral insured
                  against risks of fire (including so-called extended coverage),
                  theft, collision (in case of Collateral consisting of motor
                  vehicles) and such other risks and in such amounts as Secured
                  Party may reasonably request, with any loss payable to Secured
                  Party to the extent of its interest and with the commitment of
                  the issuer to notify Secured Party before cancellation (DEBTOR
                  HAS THE OPTION OF FURNISHING THE REQUIRED INSURANCE EITHER
                  THROUGH EXISTING POLICIES OF INSURANCE OWNED OR CONTROLLED BY
                  DEBTOR OR OF PROCURING AND FURNISHING EQUIVALENT INSURANCE
                  COVERAGES THROUGH ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT
                  BUSINESS IN THE STATE NAMED AS PART OF SECURED PARTY'S ADDRESS
                  ABOVE. IF DEBTOR FAILS TO FURNISH THE REQUIRED INSURANCE OR
                  MAINTAIN THE REQUIRED INSURANCE IN FORCE, SECURED PARTY MAY
                  (BUT NEED NOT) PROCURE THE REQUIRED INSURANCE AT DEBTOR'S
                  EXPENSE, AND THE COST OF THE REQUIRED AND THE COST OF THE
                  REQUIRED INSURANCE WILL BE ADDED TO THE OBLIGATIONS. IF
                  SECURED PARTY IS LOCATED IN TEXAS AND SHOULD PROCURE SUCH
                  REQUIRED INSURANCE AT A PREMIUM OR RATE OF CHARGE NOT FIXED OR
                  APPROVED BY THE STATE BOARD OF INSURANCE, SECURED PARTY SHALL
                  NOTIFY THE DEBTOR AND THE DEBTOR SHALL HAVE THE OPTION FOR A
                  PERIOD OF FIVE (5) DAYS FROM THE DATE OF THIS AGREEMENT OF
                  FURNISHING THE REQUIRED INSURANCE COVERAGE THROUGH ANY
                  INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS IN THE STATE
                  OF TEXAS); (ix) from time to time execute such financing
                  statements, and furnish lists of potential buyers of farm
                  products as Secured Party may reasonably require in order to
                  perfect the Security Interest and, if any Collateral consists
                  of a motor vehicle, execute such documents as may be required
                  to have the Security Interest properly noted on a certificate
                  of title; (x) pay when due or reimburse Secured Party on
                  demand for all costs of collection of any of the Obligations
                  and all other out-of-pocket expenses (including in each case
                  all reasonable attorney's fees) incurred by Secured Party

                                      -3-
<PAGE>

                  in connection with the creation, perfection, satisfaction,
                  protection, defense or enforcement of the Security Interest or
                  the creation, continuance, protection, defense or enforcement
                  of this Agreement or any or all of the Obligations, including
                  expenses incurred in any litigation or bankruptcy,
                  receivership or insolvency proceedings; (xi) execute, deliver
                  or endorse any and all instruments, documents, assignments,
                  security agreements and other agreements and writings which
                  Secured Party may at any time reasonably request in order to
                  secure, protect, perfect or enforce the Security Interest and
                  Secured Party's rights under this Agreement; (xii) not use the
                  Collateral for hire, use or keep any Collateral, or permit it
                  to be used or kept, for any unlawful purpose or in violation
                  of any federal, state or local law, statute, ordinance, or
                  insurance policy; (xiii) permit Secured Party at any time and
                  from time to time to send requests (both before and after the
                  occurrence of an Event of Default) to account debtors or other
                  obligors for verification of amounts owed to Debtor; (xiv) not
                  permit any tangible Collateral to become part of or to be
                  affixed to any real property without first assuring to the
                  reasonable satisfaction of Secured Party that the Security
                  Interest will be prior and senior to any interest or lien then
                  held or thereafter acquired by any mortgagee of such real
                  property or the owner or purchaser of any interest therein;
                  (xv) upon Secured Party's request, 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; and (xvi) if any Collateral consists of farm products,
                  if applicable, sell, cosign or transfer the Collateral only to
                  those persons whose names and addresses have been furnished to
                  Secured Party as potential buyers of farm products. If Debtor
                  at any time fails to perform or observe any agreement
                  contained in this Section, and if such failure shall continue
                  for a period of ten calendar days after Secured Party gives
                  Debtor written notice thereof (or, in the case of the
                  agreements contained in clauses (viii) and (ix) of this
                  Section, immediately upon the occurrence of such failure,
                  without notice or lapse of time), Secured Party may (but need
                  not) perform or observe such agreement on behalf and in the
                  name, place and stead of Debtor (or, at Secured Party's
                  option, in Secured Party's own name) and may (but need not)
                  take any and all other actions which Secured Party may
                  reasonably deem necessary to cure or correct such failure
                  (including, without limitation, the payment of taxes, the
                  satisfaction of security interests, liens, or encumbrances,
                  the performance of obligations under contracts or agreements
                  with account debtors or other obligors, the procurement and
                  maintenance of insurance, the execution of financing
                  statements, the endorsement of instruments, and the
                  procurement of repairs, transportation or insurance); and,
                  except to the extent that the effect of such payment would be
                  to render any loan or forbearance of money usurious or
                  otherwise illegal under any applicable law. Debtor shall
                  thereupon pay Secured Party on demand the amount of all moneys
                  expended and all costs and expenses (including reasonable
                  attorneys' fees) incurred by Secured Party in connection with
                  or as a result of Secured Party's performing or observing such
                  agreements or taking such actions, together with interest
                  thereon from the date expended or incurred by Secured Party at
                  the highest rate then applicable to any of the Obligations. To
                  facilitate the performance or observance by Secured Party of
                  such agreements of Debtor, Debtor hereby irrevocably appoints
                  (which appointment is coupled with an interest) Secured Party,
                  or its delegate, as the attorney-in-fact of Debtor with the
                  right (but not the duty) from time to time to create, prepare,
                  complete, execute, deliver, endorse or file, in the name and
                  on behalf of Debtor, any and all instruments, documents,
                  financing statements, applications for insurance and other
                  agreements and writings required to be obtained, executed,
                  delivered or endorsed by Debtor under this Section and the
                  Section entitled "Lock Box, Collateral Account." Unless not
                  permitted by applicable law, Debtor hereby irrevocably
                  authorizes Secured Party to create, prepare, complete, execute
                  and file, in the name and on behalf of Debtor, such financing
                  statements as may be required to perfect the Security
                  Interest.
4.       LOCK BOX, COLLATERAL ACCOUNT. If Secured Party so requests at any time
         (whether before or after the occurrence of an Event of Default), Debtor
         will direct each of its account debtors to make payments due under the
         relevant account or chattel paper directly to a special lock box to be
         under the control of Secured Party. Debtor hereby authorizes and
         directs Secured Party to deposit into a special collateral account to
         be established and maintained with Secured Party all checks, drafts and
         cash payments, received in said lock box. All deposits in said
         collateral account shall constitute proceeds of Collateral and shall
         not constitute payment of the Obligations. At its option, Secured Party
         may, at any time, apply finally collected funds on deposit in said
         collateral account to the payment of the Obligations in such order of
         application as Secured Party may determine, or permit Debtor to
         withdraw all or any part of the balance on deposit in said collateral
         account. If a collateral account is so established, Debtor agrees that
         Debtor will promptly deliver to Secured Party, for deposit into said
         collateral account, all payments on accounts and chattel paper received
         by Debtor. All such payments shall be delivered to Secured Party in the
         form received except for Debtor's endorsement where necessary. Until so
         deposited, all payments on accounts and chattel paper received by
         Debtor shall be held in trust by Debtor for and as the property of
         Secured Party and shall not be commingled with any funds or property of
         Debtor.
5.       COLLECTION RIGHTS OF SECURED PARTY. Notwithstanding Secured Party's
         rights under the Section entitled "Lock Box, Collateral Account" with
         respect to any and all debt instruments, chattel papers, accounts, and
         other rights to payment constituting Collateral (including proceeds),
         Secured Party may, at any time (both before and after the occurrence of
         an Event of Default) notify any account debtor, or any other person
         obligated to pay any amount due, that such chattel paper, account, or
         other right to payment has been assigned or transferred to Secured
         Party for security and shall be paid directly to Secured Party. If
         Secured Party so requests at any time, Debtor will so notify such
         account debtors and other obligors in writing and will indicate on all
         invoices to such account debtors or other obligors that the amount due
         is payable directly to Secured Party.

                                      -4-
<PAGE>

         At any time after Secured Party or Debtor gives such notice to an
         account debtor or other obligor, Secured Party may (but need not), in
         its own name or in Debtor'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, modify, amend or change the
         obligations (including collateral obligations) of any such account
         debtor or other obligor.
6.       ASSIGNMENT OF INSURANCE. Debtor hereby assigns to Secured Party, as
         additional security for the payment of the Obligations, any and all
         moneys (including but not limited to proceeds of insurance and refunds
         of unearned premiums) due or to become due under, and all other rights
         of Debtor under or with respect to, any and all policies of insurance
         covering the Collateral, and Debtor hereby directs the issuer of any
         such policy to pay any such moneys directly to Secured Party. Both
         before and after the occurrence of an Event of Default, Secured Party
         may (but need not), in its own name or in Debtor's name, execute and
         deliver proofs of claim, receive all such moneys, endorse checks and
         other instruments representing payment of such moneys, and adjust,
         litigate, compromise or release any claim against the issuer of any
         such policy.
7.       EVENTS OF DEFAULT. Each of the following occurrences shall constitute
         an event of default under this Agreement (herein called "Event of
         Default"): (i) any amount payable under the Obligations is not paid
         when due, whether through lapse of time or acceleration, after giving
         effect to any applicable grace period therein; (ii) Debtor is otherwise
         in default under the terms of the Obligations; (iii) Grantor fails to
         observe or perform any of the covenants, agreements or conditions
         contained in this Agreement; or (iv) Any representation or warranty in
         this Agreement is false or materially misleading.
8.       REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of
         Default under the Section entitled "Events of Default" and at any time
         thereafter, Secured Party may exercise any one or more of the following
         rights and remedies: (i) declare all unmatured Obligations to be
         immediately due and payable, and the same shall thereupon be
         immediately due and payable, without presentment or other notice or
         demand; (ii) exercise and enforce any or all rights and remedies
         available upon default to a secured party under the Uniform Commercial
         Code, including but not limited to the right to take possession of any
         Collateral, proceeding without judicial process or by judicial process
         (without a prior hearing or notice thereof, which Debtor hereby
         expressly waives), and the right to sell, lease or otherwise dispose of
         any or all of the Collateral, and in connection therewith, Secured
         Party may require Debtor to make the Collateral available to Secured
         Party at a place to be designated by Secured Party which is reasonably
         convenient to both parties, and if notice to Debtor 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 the Section entitled
         "Miscellaneous") at least 10 calendar days prior to the date of
         intended disposition or other action; (iii) exercise or enforce any or
         all other rights or remedies available to Secured Party by law or
         agreement against the Collateral, against Debtor or against any other
         person or property. Secured Party is hereby granted a nonexclusive,
         worldwide and royalty-free license to use or otherwise exploit all
         trademarks, trade secrets, franchises, copyrights and patents of Debtor
         that Secured Party deems necessary or appropriate to the disposition of
         any Collateral.
9.       OTHER PERSONAL PROPERTY. Unless at the time Secured Party takes
         possession of any tangible Collateral, or within 7 days thereafter,
         Debtor gives written notice to Secured Party of the existence of any
         goods, papers or other property of Debtor, not affixed to or
         constituting a part of such Collateral, but which are located or found
         upon or within such Collateral, describing such property, Secured Party
         shall not be responsible or liable to Debtor for any action taken or
         omitted by or on behalf of Secured Party with respect to such property
         without actual knowledge of the existence of any such property or
         without actual knowledge that it was located or to be found upon or
         within such Collateral.

10.      MISCELLANEOUS. This Agreement does not contemplate a sale of accounts,
         or chattel paper. Debtor agrees that each provision whose box is
         checked is part of this Agreement. This Agreement can be waived,
         modified, amended, terminated or discharged, and the Security Interest
         can be released, only explicitly in a writing signed by Secured Party.
         A waiver signed by Secured Party shall be effective only in the
         specific instance and for the specific purpose given. Mere delay or
         failure to act shall not preclude the exercise or enforcement of any of
         Secured Party's rights or remedies. All rights and remedies of Secured
         Party shall be cumulative and may be exercised singularly or
         concurrently, at Secured Party's option, and the exercise or
         enforcement of any one such right or remedy shall neither be a
         condition to nor bar the exercise or enforcement of any other. All
         notices to be given to Debtor shall be deemed sufficiently given if
         delivered or mailed by registered or certified mail, postage prepaid,
         to Debtor at Debtor's address set forth above or at the most recent
         address shown on Secured Party's records. Secured Party's duty of care
         with respect to Collateral in its possession (as imposed by law) shall
         be deemed fulfilled if Secured Party exercises reasonable care in
         physically safekeeping such Collateral or, in the case of Collateral in
         the custody or possession of a bailee or other third person, exercises
         reasonable care in the selection of the bailee or other third person,
         and Secured Party need not otherwise preserve, protect, insure or care
         for any Collateral. Secured Party shall not be obligated to preserve
         any rights Debtor may have against prior parties, to realize on the
         Collateral at all or in any particular manner or order, or to apply any
         cash proceeds of Collateral in any particular order of application.
         This Agreement shall be binding upon and inure to the benefit of Debtor
         and Secured Party and their respective heirs, representatives,
         successors and assigns and shall take effect when signed by Debtor and
         delivered to Secured Party, and Debtor waives notice of Secured Party's
         acceptance hereof. Secured Party may execute this Agreement if
         appropriate for the purpose of filing, but the failure of Secured Party
         to execute this Agreement shall not affect or impair the validity or
         effectiveness of this Agreement. A photographic or other reproduction
         of this Agreement or of any financing statement signed by the Debtor
         shall have the same force and effects as the original for all purposes
         of a financing statement. Except to the extent otherwise required by
         law, this Agreement shall be governed by the internal laws of the state
         named as part of Secured Party's address above. If any provision or
         application of this Agreement is held unlawful or unenforceable in any
         respect, such illegality or unenforceability shall not affect other
         provisions or applications which can be given effect, and this
         Agreement shall be construed as if the unlawful or unenforceable
         provision or application had never been contained herein or prescribed
         hereby. All representations and warranties contained in this Agreement
         shall survive the execution, delivery and performance of this Agreement
         and the creation and payment of the Obligations. If this Agreement is
         signed by more than one person as Debtor, the term "Debtor" shall refer
         to each of them separately and to both or all of them jointly; all such
         persons shall be bound both severally and jointly with the other(s);
         and the Obligations shall include all debts, liabilities and
         obligations owed to Secured Party by any Debtor solely or by both or
         several or all Debtors jointly or jointly and severally, and all
         property described in the Section entitled "Security Interest and
         Collateral" shall be included as part of the Collateral, whether it is
         owned jointly or by both or all Debtors or is owned in whole or in part
         by one (or more) of them.

                                      -5-
<PAGE>

         THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
         PARTIES WITH RESPECT TO THE COLLATERAL AND MAY NOT BE CONTRADICTED BY
         EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
         THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
         WITH RESPECT TO THE COLLATERAL.

--------------------------------------------------------------------------------
Signatures
--------------------------------------------------------------------------------
Debtor's Name
MedAmicus, Inc.

------------------------------------------- ------------------------------------
Signature                                   Signature
/s/ James D. Hartman                        x
------------------------------------------- ------------------------------------
Name and Title (if applicable)              Name and Title (if applicable)

James D. Hartman, Pres & CEO
------------------------------------------- ------------------------------------
Signature                                   Signature
X                                           x
------------------------------------------- ------------------------------------
Name and Title (if applicable)              Name and Title (if applicable)

------------------------------------------- ------------------------------------
Bank's Name
Wells Fargo Bank Minnesota, National
Association
------------------------------------------- ------------------------------------
Signature
/s/ Teresa Shannon Earl
------------------------------------------- ------------------------------------
Title
Teresa Earl, Vice President
------------------------------------------- ------------------------------------

LND 12585 (3-00-24272-J)

                                       -6-

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