<PAGE>

    THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER
    EITHER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
    SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED,
    PLEDGED OR OTHERWISE DISTRIBUTED FOR VALUE UNLESS THERE IS AN
    EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS COVERING
    SUCH SECURITIES, OR THE MAKER RECEIVES AN OPINION OF COUNSEL
    ACCEPTABLE TO THE MAKER STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT,
    OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE
    REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH
    LAWS.



                                   14% SUBORDINATED
                                     SECURED NOTE



$200,000                                                       February 18, 1997



    FOR VALUE RECEIVED, the undersigned, HARMONY BROOK, INC., a Minnesota
corporation (the "Maker"), hereby promises to pay to the order of Donald R.
Brattain (the "Payee," which term includes any subsequent holder hereof) at such
place as the Payee may from time to time hereafter designate to the Maker in
writing the principal sum of TWO HUNDRED THOUSAND DOLLARS ($200,000).

    The unpaid principal balance hereof from time to time outstanding shall
bear interest at a fixed rate of fourteen percent (14%) per annum.  Interest
shall be computed on the basis of actual days elapsed and a year of 360 days.
Interest shall be payable monthly in arrears on the first day of each month for
the preceding month commencing April 1, 1997, and at maturity.

    The principal hereof mature and is payable in full on March 1, 2000.

    This Note is secured pursuant to a Security Agreement of even date herewith
(as the same may hereafter be amended, modified or supplemented, or any
agreement entered into in substitution or replacement therefor, the "Security
Agreement") given by the Maker to the Payee.  This note is also subject to the
terms and conditions of the Subordination Agreement of even date herewith
between the Maker and First Bank National Association (the "Subordination
Agreement").

    For purposes of this Note, an Event of Default shall be deemed to have
occurred if:

    (i)  the Maker fails to pay when due the full amount of any scheduled
interest and principal payment on this Note;



<PAGE>

    (ii) the Maker makes an assignment for the benefit of creditors or admits
in writing its inability to pay its debts generally as they become due; or an
order, judgment or decree is entered adjudicating the Maker bankrupt or
insolvent; or any order for relief with respect to the Maker is entered under
the Federal Bankruptcy Code; or the Maker petitions or applies to any tribunal
for the appointment of a custodian, trustee, receiver or liquidator of the
Maker, or of any substantial part of the assets of the Maker, or commences any
proceeding (other than a proceeding for the voluntary liquidation and
dissolution of any subsidiary) relating to the Maker under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction; or any such petition or application is
filed, or any such proceeding is commenced, against the Maker and either (A) the
Maker by any act indicates its approval thereof, consent thereto or acquiescence
therein or (B) such petition, application or proceeding is not  dismissed within
60 days; or

    Subject to the terms of the Subordination Agreement, if an Event of Default
of the type described in (i) has occurred and continues for 10 days, the Payee
may demand (by written notice delivered to the Maker) immediate payment of all
or any portion of the outstanding principal amount of and interest accrued on
this Note.  If an Event of Default of the type described in (ii) has occurred,
the outstanding principal amount of this Note (plus accrued interest thereon)
shall become immediately due and payable without demand therefor or notice
thereof.  If the Payee demands immediate payment of all or any portion of this
Note or the principal amount of this Note becomes immediately due and payable,
the Maker shall promptly pay to Payee the principal amount of this Note
requested to be paid or which has become immediately due and payable (plus
accrued interest thereon).

    Subject to the provisions of the Subordination Agreement, the Payee shall
also have any other rights which he may have been afforded under any contract or
agreement at any time and any other rights which he may have pursuant to
applicable law.

    Except as otherwise expressly provided herein, the provisions of this Note
may be amended and the Maker may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Maker has
obtained the written consent of the Payee.

    After all principal and accrued interest at any time owed on this Note has
been paid in full, this Note shall be surrendered to the Maker for cancellation
and shall not be reissued.

    THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF.

    The Maker hereby waives presentment for payment, notice of dishonor,
protest and notice of protest.

    If this Note is not paid when due, the Maker shall pay all of the Payee's
costs of collection including reasonable attorneys' fees.



<PAGE>


    THE INDEBTEDNESS CREATED HEREBY IS EXPRESSLY MADE SUBORDINATE TO CERTAIN
SENIOR DEBT OF FIRST BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION
(THE "BANK"), PURSUANT TO THE PROVISIONS OF A SUBORDINATION AGREEMENT OF EVEN
DATE HEREWITH AMONG THE MAKER, THE PAYEE AND THE BANK.



                                       HARMONY BROOK, INC.



                                       By        /s/ JAMES C. HAWLEY
                                         -------------------------------------
                                              James C. Hawley, President