Date of Instrument
____ __ Subordinated Note  No. _____


 


Integrity Mutual Funds,
Inc.


91⁄4%
Subordinated Corporate Note (the "Note" or "Notes")


 


Integrity Mutual Funds, Inc., a corporation
organized and existing under the laws of the State of North
Dakota (the "Corporation"), for value received, hereby promises
to pay to
                          
 ("Investor") the principal sum of   
               
 and no/100 Dollars ($ 
               
) - subject to the provisions of that certain Private
Placement Memorandum dated     
               
, 2005, which terms are incorporated herein by reference
- five (5) years from the date hereof, or on
               
               
, 2011; and to pay interest on such principal sum from the date
hereof at the rate of nine and one-quarter percent (91⁄4%)
per annum (based on a three hundred sixty five (365) day year) on
an annual basis beginning on
      
               
, 2006, and thereafter on
               
th of each year thereafter until the principal balance is
paid.  All payments will be applied first to interest and
any remainder to reduction of principal.


 


Unregistered Security.  This
Note is being issued by the Corporation pursuant to exemptions
and from federal registration.  No application to register
the Notes and no registration statement covering the Notes has
been filed with the United States Securities and Exchange
Commission.  There is no market for the Notes and there is
no assurance a market will develop.  The Corporation has no
obligation to register the Notes or any other security of the
Corporation.


 


Unsecured, Uninsured, and
Subordinated.  This Note is a general obligation of the
Corporation which is not secured by any bond, mortgage, sinking
fund, or any other security.  In addition, this Note is not
guaranteed or insured by any agency of any state or the United
States of America.  Creditors of the Corporation holding
mortgages or other security interests in specific Corporation
properties will have priority over the holder of this Note in the
event of the insolvency or liquidation of the Corporation. 
However, the holder of this Note, as a general creditor of the
Corporation, will have priority over the Corporation's owners and
would have an equal standing with all other general creditors of
the Corporation.


 


Default.  Without notice, except
as expressly provided herein, the following will be deemed to be
events of default:


 


a.   
Default in the payment of principal or interest under the Note as
and when the same becomes due and payable and the continuance of
such default for a period of more than ten (10) days after notice
as described in paragraph b below.


 


b.   
Failure on the part of the Corporation to duly observe or perform
any other of the covenants or agreements on the part of the
Corporation contained in this Note and written notice of such
failure, requiring the Corporation to remedy the same, has been
delivered by certified mail, return receipt requested, to the
Corporation (Attention: President) and the Corporation has
refused and failed to remedy the same within thirty (30) days of
the receipt of such notice.  Upon default, Investor is
entitled to acceleration of principal payment and payment of all
accrued interest on the Note.


 


Failure to Pay.  If the
Corporation fails to make payment to Investor as provided in the
preceding section, Investor will be entitled and empowered to
take such measures as may be appropriate to enforce Investor's
expectations under the Note, by judicial proceedings or
otherwise.


 


Governing Law.  This instrument
is to be construed under the laws of the State of North
Dakota.  Any legal proceeding with respect to this Note
shall be subject to the jurisdiction and venue of the U.S.
District Court, District of North Dakota.  Any action
brought with respect to this Note shall be venued in Fargo, North
Dakota.


 


This Note is issued in reliance on
exemptions from registration provided by provisions of the
Securities Act of 1933 providing exemptions for nonpublic sales
of securities.  Securities sold under exemption from
registration cannot be resold without registration under the
Securities Act of 1933 or an exemption thereof.  This Note
has not been registered under the Securities Act of 1933 and
therefore cannot be resold unless it is registered under the
Securities Act of 1933 or unless an exemption from registration
is available.  The Corporation has no intention or
obligation to register this Note.


 


 


Executed on  at Minot, North
Dakota.


 



INTEGRITY MUTUAL FUNDS, INC.



 



 



By:



 



Its: