Document:

<PAGE>   1
September 27, 1999

Sam Humphries
7913 Wyoming Court
Bloomington, MN  55438

Dear Sam:

RE:  Revised Letter

This letter, with slight revisions from my letter of September 15, is to confirm
our recent discussions regarding the consulting business which you are
commencing and the relationship of this decision to your Separation Benefits
with AMS.

As you know, you have a signed and executed Separation Agreement and Release on
file with AMS which calls for the payment of Severance Pay and continuance of
Health Care and Welfare Benefits for a period of six months from your
Termination Date, April 23, 1999 to October 23, 1999. Additional base salary pay
would only apply if employment, including consultant/independent contractor
work, had not been obtained. You have informed me that you will soon be
establishing a consulting business which, per the Agreement, would cause the
curtailment of pay and benefits on October 23. However, you have requested an
extension of pay and benefits to provide assistance in the early stages of your
business.

In line with this, we agree to continue your regular base salary in effect as of
your Termination Date ($225,000 per annum) for a total period of 10 months from
April 23, 1999, which would be up to February 28, 2000. Additionally, we agree
to provide 12 months of Health Care and Welfare Benefits from April 23, 1999 up
to April 22, 2000. At the end of that period, you will be entitled to elect
continuance coverage for health care, dental (through COBRA) and life insurance
for 18 months, as if your employment with AMS had then terminated. Please be
aware that your contributions for these benefits in 2000 will be per the amount
charged to active employees (through April 22) and normal COBRA rates, both of
which will probably increase next year.

The above offering in no way alters the Separation Agreement and Release which
you have signed with the company; it merely provides an extension to your
Separation Benefits Summary as a means of goodwill. Also, your original
Employment Agreement with the Company still is in force. I call your attention
to Section 8. Secrecy and Non-

<PAGE>   2
Competition, items a., b., and c. As you discussed several weeks ago, we would
interpret the Agreement and have the expectation that you would not be providing
consulting work to companies which are in a competing business with AMS. Also,
if your consulting business entails recruitment and search work, that you would
not present any opportunities or entice any AMS employees to leave the Company
for any other position.

Please acknowledge your understanding and agreement with the above below and
return this to me as soon as possible. Certainly contact me if you have any
questions.

Sincerely,

/s/ Jan Dick

Jan Dick
Vice President, Human Resources

Cc:  Bess Weatherman, Warburg, Pincus

I HAVE READ, UNDERSTAND AND AGREE TO THE ABOVE

/s/ Sam B. Humphries                        9/29/99
--------------------------------            --------------------------
Sam B. Humphries                            Date<PAGE>   1

                                  NON-RECOURSE
                                 PROMISSORY NOTE

$208,250                                                   Minnetonka, Minnesota
                                             Effective Date:  September 25, 1998

         FOR VALUE RECEIVED, the undersigned, Sam B. Humphries (the "Maker"),
promises to pay to the order of WPAMS Acquisition Corp., a Delaware corporation,
its successors and assigns (the "Holder"), at its principal offices in
Minnetonka, Minnesota, or such other place as the Holder hereof may designate in
writing from time to time, the principal sum of TWO HUNDRED AND EIGHT THOUSAND,
TWO HUNDRED FIFTY DOLLARS ($208,250), in lawful money of the United States,
together with interest on the unpaid principal balance outstanding from time to
time from the date hereof at a fixed rate of five and fifty-four hundredths
percent (5.54%) per year, compounded annually. Interest hereon shall be computed
an the actual number of days elapsed and a 365-day year.

         Accrued interest shall be payable beginning on December 31, 1999 and on
December 31 of each year thereafter so long as any principal balance remains
outstanding under this Note.

         The principal sum set forth above, together with all accrued interest
thereon, shall be due and payable in full on September 25, 2001; provided,
however, that to the extent that the Maker sells any Pledged Shares (as defined
below) on or after the date hereof, one hundred percent (100%) of the net
proceeds from the sale of such stock, after the payment of any commission and
income taxes, shall be applied first to accrued interest, if any, and then to
any outstanding principal.

         This Note is secured by a security interest in certain shares of common
stock of Optical Sensors Incorporated, a Delaware corporation ("OSI"), owned by
the Maker (the "Pledged Shares"), pursuant to Pledge Agreement of even date
herewith between the Maker and the Holder (the "Pledge Agreement"). This Note is
a nonrecourse note and anything herein to the contrary notwithstanding, the
Holder agrees for itself, its representatives, successors, endorsees, and
assigns that: (a) neither the Maker nor his, heirs, executors, representatives,
successors or assigns shall be personally liable on this Note, and (b) in the
event of default hereunder, the Holder (and any such representative, successor,
endorsee, or assign) shall look for payment solely to the Pledged Shares, and
will not make any claim or institute any action or proceeding against the Maker
(or any heir, executor, representative, successor or assign of the Maker),
except as may be necessary to foreclose the security interest under the Pledge
Agreement. The foregoing shall not be construed to release or impair the
indebtedness evidenced by this Note or the security interest under the Pledge
Agreement, or preclude the application of proceeds from the sale of the Pledged
Shares to the payment of this Note.

         This Note may be prepaid in full or in part at any time without premium
or penalty; provided, however, that any prepayments on this Note shall be
applied first to interest and then to principal.

         Upon a default in payment hereunder, the Holder may, without notice or
demands, declare this indebtedness immediately due and payable and the Holder
may immediately exercise

<PAGE>   2

any right of setoff and enforce any lien or security interest securing payment
hereof. The foregoing shall be in addition to any rights or remedies contained
in any agreement and/or other writing relating to the indebtedness evidenced
hereby. If this Note is placed with any attorneys for collection upon default,
Maker agrees to pay the Holder its reasonable attorneys' fees and all lawful
costs and expenses of collection, whether or not suit is commenced.

         Time is of the essence. No delay or omission on the part of the Holder
in exercising any right hereunder shall operate as a waiver of such right or of
any other remedy under this Note. A waiver on any occasion shall not be
construed as a bar to or waiver of any such right or remedy on a future
occasion.

         The makers, endorsers, sureties, guarantors and all other persons
liable for all or part of the indebtedness evidenced by this Note jointly and
severally waive presentment for payment, protest and notice of nonpayment. Such
parties hereby consent without affecting their liability to extension or
alteration of the time or terms of payment hereof, any renewal, any release of
all or any part of the security given for the payment hereof, any acceptance of
additional security of any kind, and any release of, or resort to, any party
liable for payment hereof and such parties shall remain bound in the same
capacities as prior thereto upon each such event.

         This Note shall be construed, interpreted and governed by the laws of
the State of Minnesota.

                                                  /s/ Sam B. Humphries
                                                  -----------------------------
                                                  Sam B. Humphries

                                      -2-<PAGE>   1
                                PLEDGE AGREEMENT

                  AGREEMENT entered into and effective this 25th day of
September, 1998, by Sam B. Humphries (the "Pledgor") and in favor of WPAMS
Acquisition Corp., a Delaware corporation (the "Company").

                                    RECITALS:

         A. Pledgor has issued a promissory note of even date herewith (the
"Note") payable to the order of the Company in the original principal amount of
Two Hundred and Eight Thousand, Two Hundred Fifty Dollars ($208,250) to borrow
cash to repay a promissory note dated September 1, 1995 payable to the order of
Optical Sensors Incorporated, a Delaware corporation ("OSI"), in the original
principal amount of $245,000.

         B. To secure the payment of the Note, the Company requires that the
Pledgor grant it a security interest in certain shares of common stock of OSI in
accordance with this Pledge Agreement, and the Pledgor agrees to grant the
Company such a security interest.

                                    AGREEMENT

                  For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor hereby agrees as
follows:

I.   TERMS OF THE PLEDGE.

     A.   The Pledge.

          Pledgor does hereby pledge and grant to the Company a security
          interest in all of the following described property (the
          "Collateral"):

          1.   105,062 shares of common stock of 051 owned by the Pledgor on the
               date hereof, subject to adjustment as provided in Section I.A.3.
               (as so adjusted, the "Pledged Shares").

          2.   The proceeds of any dividend or other distribution attributable
               to the Pledged Shares (payable other than in cash) or any shares
               of stock or securities of 051 or of another corporation payable
               with respect to the Pledged Shares in connection with any change
               in the corporate structure or shares of OSI pursuant to any
               merger or recapitalization or otherwise.

          3.   The number of Pledged Shares shall be adjusted on June 30 and
               December 31 of each year (the "Determination Date") so that, on
               each Determination Date during the term of this Agreement, the
               Fair Market Value, as defined below, of Pledged Shares is not
               more than 100% of the principal amount of the Note outstanding on
               such Determination Date. For purposes of this Agreement, the term
               Fair Market Value shall have the meaning set forth in the
               Company's 1998 Equity Incentive Plan. If the Fair Market Value of
               the Pledged Shares on a Determination Date is more than 100% of
               the

<PAGE>   2

                    principal amount of the Note outstanding on such
                    Determination Date, a number of Pledged Shares shall be
                    released from this Pledge Agreement and delivered to the
                    Pledgor such that the Fair Market Value of the Pledged
                    Shares is equal to 100% of the principal amount of the Note
                    on such Determination Date. If the Fair Market Value of the
                    Pledged Shares on a Determination Date is less than 100% of
                    the principal amount of the Note outstanding on such
                    Determination Date, the Pledgor shall deliver to the Company
                    an additional number of the shares that were previously
                    released from this Pledge Agreement (to the extent such
                    shares are then owned by the Pledgor and which shall again
                    become Pledged Shares) such that the Fair Market Value of
                    the Pledged Shares is equal to 100% of the principal amount
                    of the Note outstanding on such Determination Date.

          B.   Delivery of Collateral.

               The Company hereby acknowledges receipt of the certificate
               evidencing the Collateral together with a stock assignment
               therefor duly endorsed. Pledgor agrees to deliver promptly to the
               Company, in the exact form received, all securities and other
               property which come into the possession, custody or control of
               Pledgor which would be included within the definition of
               Collateral in Section I.A. above.

          C.   Actions Prior to an Event of Default.

               Until the occurrence of an Event of Default (as defined in
               Section III.A. below) the Pledgor shall have the sole right (a)
               to vote the securities constituting the Collateral and to give
               consents, waivers and ratifications in respect thereof, provided
               that no vote shall be cast, or consent, waiver or ratification
               given or action taken that would violate or not comply with any
               of the terms and provisions of this Pledge Agreement; and (b) to
               receive any and all cash dividends declared and paid on the
               securities constituting the Collateral that are not otherwise in
               violation of any of the terms and provisions of this Pledge
               Agreement.

          D.   Termination of Security and Return of Collateral.

               Upon such date as the entire principal sum and all accrued
               interest on the Note shall have been paid in full, (i) all of the
               Collateral shall automatically, and without any further action of
               the parties hereto, be released from the security interest of the
               Company created by this Pledge Agreement and (ii) the Company
               shall deliver the certificate or certificates representing the
               Collateral to the Pledgor.

                                      -2-

<PAGE>   3

II.  REPRESENTATIONS, WARRANTIES AND COVENANTS OF PLEDGOR.

          A.   Power and Authority to Pledge.

               Pledgor has full power and authority to execute and deliver this
               Pledge Agreement and to perform his obligations hereunder.

          B.   Enforceability.

               This Pledge Agreement is the valid and binding obligation of
               Pledgor, enforceable against Pledgor according to its terms,
               subject to applicable bankruptcy, insolvency, moratorium and
               other laws affecting creditors rights and remedies and the
               judicial limitations on the right to specific performance. Upon
               delivery of the Pledged Shares to the Company, this Pledge
               Agreement shall create a valid first lien upon, and perfected
               security interest in, the Pledged Shares.

          C.   Title to Collateral.

               Pledgor warrants and represents to the Company that it holds
               title to the Collateral free and clear of any liens,
               encumbrances, security interests and restrictions on transfer and
               assignment thereof, except for the security interest created by
               this Pledge Agreement, and as required by federal and state
               securities laws.

          D.   Taxes.

               Pledgor will promptly pay, when due, all taxes and other
               governmental charges levied or assessed upon or against the
               Collateral.

          E.   Preservation of Rights on Collateral.

               Pledgor will take any action necessary to preserve redemption,
               conversion, warrant, preemptive or other rights (and be aware of
               the dates limiting the exercise of such rights) concerning the
               Collateral.

          F.   Maintenance of Security Interest.

               The Pledgor will pay all expenses and, upon request, do and enact
               all things deemed necessary or appropriate by the Company from
               time to time to establish, determine priority of, perfect,
               continue perfection, terminate and enforce the Company's interest
               in the Collateral and the Company's rights under this Pledge
               Agreement.

          G.   Actions on Behalf of the Pledgor.

               If the Pledgor fails at any time to comply with the requirements
               of this Article II, or to do any other acts or things which the
               Pledgor is required to do under this Pledge Agreement, the
               Company shall have the right to do such acts and things, or any
               of them, at the Company's option (and the Pledgor appoints the
               Company

                                      -3-

<PAGE>   4

               as the Pledgor's attorney and agent with the right, but not the
               duty, to do any such acts or things). If the Company does any
               such acts or things, the Pledgor shall, on demand by the Company,
               pay to the Company the amount of all costs and expenses incurred
               or to be the rate specified in the Note from the date the same
               were paid or incurred by the Company, and shall indemnify and
               save harmless the Company from and against any other liability or
               damage which it may incur in good faith and without gross
               negligence, in the exercise and performance of any such acts or
               things.

III. EVENTS OF DEFAULT AND REMEDIES.

          A.   Events of Default.

               The occurrence of one or more of the following shall constitute
               an "Event of Default" hereunder:

               1.   The Pledgor defaults in the performance or observance of any
                    of the terms or covenants in this Pledge Agreement;

               2.   Any representation or warranty made by the Pledgor in this
                    Pledge Agreement is untrue in any material respect;

               3.   The Pledgor defaults in the payment of any amounts due under
                    the Note; or

               4.   The Pledgor shall become a bankrupt or insolvent, or admit
                    in writing inability to pay debts as they mature, or make an
                    assignment for the benefit of creditors; the Pledgor shall
                    apply for or consent to the appointment of any receiver,
                    trustee or similar officer for him or for all or any
                    substantial part of his property; such receiver, trustee or
                    similar officer shall be appointed without the application
                    or consent of the Pledgor and such appointment shall
                    continue undischarged for a period of 30 days; the Pledgor
                    shall institute (by petition, application, answer, consent
                    or otherwise) any bankruptcy, insolvency, adjustment of debt
                    or similar proceeding under the laws of any jurisdiction;
                    any such proceeding shall be instituted (by petition,
                    application or otherwise) against the Pledgor and shall
                    remain undismissed for a period of 30 days; or any judgment,
                    writ, warrant of attachment or execution or similar process
                    shall be issued or levied against a substantial part of the
                    property of the Pledgor, and such judgment, writ or similar
                    process shall not be released, vacated or fully bonded
                    within 30 days after its issue or levy.

          B.   Company's Right to Sell Collateral.

               Upon the occurrence of an Event of Default, the Collateral shall
               be forfeited by the Pledgor to the Company unless the Company, in
               its sole discretion, permits the Pledgor to continue to make
               payments under the Note and to retain his rights and interest in
               the Collateral under this Pledge Agreement. The Company shall be

                                      -4-

<PAGE>   5

                    entitled to sell the Collateral upon 10 business days'
                    written notice to Pledgor, at public auction or private
                    sale. Thereafter, the Collateral shall be held by the
                    Company for its own account and the Company may cause the
                    Collateral to be registered in its name and may vote the
                    Collateral (whether or not transferred or registered in the
                    name of the Company) and give all consents, waivers and
                    ratifications in respect thereof, and may receive all
                    dividends, interest and other distributions thereon. The
                    Company may limit sales to purchasers who are acquiring for
                    investment and not with any view to distribution and may
                    condition any sale or sales upon restriction against future
                    transfers to the extent that the Company or counsel for the
                    Company shall deem necessary to protect the Company from any
                    liability under the Securities Act of 1933, the Securities
                    Exchange Act of 1934, state securities laws, and any like or
                    similar laws now or hereafter in effect.

               C.   Power of Attorney.

                    For the purposes of this Article III, the Pledgor
                    constitutes and appoints the Company as the Pledgor's true
                    and lawful attorney and agent, on behalf of and in the name,
                    place and stead of the Pledgor, with the right, but not the
                    duty, to endorse the Pledgor's name on all applications,
                    documents, papers and instruments necessary for the Company
                    to sell, assign, transfer, pledge, encumber or otherwise
                    transfer title in the Collateral or dispose of the
                    Collateral to any third party. The Pledgor hereby grants to
                    the Company, as such attorney and agent, full power and
                    authority to do, take and perform all and every act and
                    thing whatsoever required, proper or necessary to be done,
                    in the exercise of the rights and powers granted above, as
                    fully to all intents and purposes as the Pledgor might or
                    could do if personally present, ratifying all that such
                    attorney and agent shall lawfully do or cause to be done by
                    virtue hereof. This power of attorney shall be irrevocable
                    for the life of this Pledge Agreement, and until the Note is
                    fully paid or satisfied or the collateral is forfeited to
                    the Company.

               D.   Waiver of Redemption; No Liability for Value Decline.

                    Any and all sale(s) of Collateral held by the Company
                    pursuant to Section III.B. above shall be free from any
                    right of redemption, which is hereby expressly waived by
                    Pledgor. In addition, the Company shall have no liability
                    for any increase or decrease in the value of any of the
                    Collateral at any time.

               E.   Rights Cumulative.

                    All rights and remedies of the Company hereunder are in
                    addition to rights and remedies afforded the Company under
                    the Note, any other document or under law. All remedies are
                    cumulative any may be exercised by the Company concurrently
                    or consecutively. No failure or omission of the Company to
                    exercise any such right or remedy shall constitute a waiver
                    thereof.

                                      -5-

<PAGE>   6

IV.  MISCELLANEOUS.

               A.   Agreement Binding.

                    This Pledge Agreement shall be binding upon and inure to the
                    benefit of the successors and assigns of the Pledgor and the
                    Company.

               B.   Severability.

                    In the event that one or more provisions of this Pledge
                    Agreement should be declared to be invalid, illegal or
                    unenforceable in any respect by a court of competent
                    jurisdiction, the validity, legality and enforceability of
                    the remaining provisions herein shall not in any way be
                    affected or impaired thereby.

               C.   Survival of Representations.

                    All representations and warranties made herein are, and
                    shall continue to be, true and correct in all material
                    respects until the Note is paid in full.

               D.   Notices.

                    All notices and other communications required or permitted
                    to be given hereunder shall be given and become effective
                    when deposited in the U. S. Mail, postage prepaid, return
                    receipt requested, addressed to the parties at the Company's
                    offices in Minnetonka, Minnesota, or such other address as
                    the parties may designate from time to time.

               E.   Governing Law.

                    This Pledge Agreement shall be construed, interpreted and
                    governed according to the laws of the State of Minnesota.

               F.   Nature of Obligations.

                    The obligations of the Pledgor under this Pledge Agreement
                    shall be absolute and unconditional and shall remain in full
                    force and effect without regard to, and shall not be
                    released, suspended, discharged, terminated, lessened or
                    otherwise affected by, any circumstance or occurrence
                    whatsoever, whether or not the Pledgor shall have notice or
                    knowledge, including, without limitation, (a) any renewal,
                    extension, substitution, amendment or modification of or
                    addition or supplement to or deletion from the Note, this
                    Pledge Agreement or an assignment or transfer of any
                    thereof; (b) any waiver, consent, extension, indulgence or
                    other action or inaction under or in respect of the Note,
                    this Pledge Agreement, or any exercise or nonexercise of any
                    right, remedy, power or privilege under or in respect of the
                    Note or this Pledge Agreement, (c) any furnishing of any
                    additional collateral or security to the Company or its
                    assignee or any acceptance thereof or any release of any
                    collateral or security in whole or in part by the Company or
                    its assignee under this Pledge Agreement or otherwise, (d)
                    any limitation on any party's

                                      -6-

<PAGE>   7

                    liability or obligations under the Note or under this Pledge
                    Agreement or any invalidity or unenforceability, in whole or
                    in part, or any such instrument or any term thereof, or (e)
                    any bankruptcy insolvency, reorganization, composition,
                    adjustment, dissolution, liquidation or other like
                    proceeding relating to the Pledgor, or any action taken with
                    respect to this Pledge Agreement or the Note by any trustee
                    or receiver, or by any court, in any such proceeding.

                    IN WITNESS WHEREOF, Pledgor has executed this Pledge
Agreement as of the day and year first above written.

                                                 Pledgor:

                                                 /s/ Sam B. Humphries
                                                 ---------------------------
                                                 Sam B. Humphries

Accepted:

WPAMS ACQUISITION CORP.

By: /s/ Elizabeth Weatherman
   -----------------------------------------
   Name:  Elizabeth Weatherman
   Title: Director and Benefits Committee
          Member

                                      -7-

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