PROMISSORY NOTE




February 26, 1998

$2,334,764.13

Minneapolis, Minnesota




FOR VALUE RECEIVED, the undersigned, SHELDAHL, INC., a corporation 
organized and existing under the laws of the State of Minnesota (the 
"Borrower"), agrees and promises to pay to the order of RELATIONAL FUNDING 
CORPORATION, its endorsees, successors and assigns (the "Holder"), in lawful 
money of the United States at its principal office at 3701 Algonquin Road, 
Suite 450, Rolling Meadows, Illinois 60008-3118, or such other place as 
the Holder may from time to time designate, the principal sum of Two 
Million Three Hundred Thirty Four Thousand Seven Hundred Sixty Four 
Dollars and Thirteen Cents ($2,334,764.13), in installments, according 
to the schedule set forth below, together with interest on the unpaid 
principal balance at the annual rate of 9.69% used in computing the 
payment schedule below.

Commencing on February 26, 1998 and on the same day of each month 
thereafter for fifty-nine (59) months, Borrower shall pay this Note in lawful 
money of the United States in consecutive equal monthly installments of 
principal and interest in the amount of Forty Eight Thousand Eight Hundred 
Sixty Dollars ($48,860.00).

On February 25, 2003 ("Maturity Date"), the entire unpaid principal 
together with all accrued interest shall become due and payable in full.

All payments shall be applied first to interest and then to principal.

In the event that any payment required under this Note is not paid on its 
due date, the Borrower agrees to pay a late charge at the rate of one and one-
half percent (1.5%) of the unpaid payment per month until the date payment is 
received by the Holder to defray the cost of the Holder incident to collecting 
such late payment. This late charge shall not be deemed to excuse a late 
payment or be deemed a waiver of any other rights the Holder may have, 
including the right to declare the entire unpaid principal and interest 
under this Note immediately due and payable.

Upon ten (10) days advance written notice, this Note may be prepaid in 
whole at any time prior to the Maturity Date at the prepayment price, expressed 
as a percentage of the principal balance outstanding, together with interest 
accrued to the date of prepayment, as follows:

Prepayment Date			                            Prepayment Price

February 26, 1998 through January 25, 1999			      104%
February 26, 1999 through January 25, 2000			      103%
February 26, 2000 through January 25, 2001			      102%
February 26, 2001 through January 25, 2002			      101%
February 26, 2002 through January 25, 2003			      100%

This Note is made pursuant to the laws of the State of Minnesota and 
pursuant to the provisions of a Loan Agreement (the "Loan Agreement") of even 
date herewith between the Borrower and the Holder.  This Note is subject to the 
terms of the Loan Agreement.  This Note is secured by a first priority security 
interest in the PC's as defined in the Loan Agreement and in the Security 
Agreement dated as of February 26, 1998 between the Holder and the Borrower.

If an Event of Default occurs (as defined in the Loan Agreement), the 
entire unpaid principal balance together with accrued interest thereon shall 
become immediately due and payable at the option of the Holder hereof. Upon the 
occurrence of an Event of Default the Borrower agrees to pay the costs of 
collection including reasonable attorneys' fees.  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 one 
occasion shall not be construed as a bar to or waiver of any such right or 
remedy on a future occasion.

Presentment for payment, protest and notice of non-payment are waived. 
Consent is given to any extension or alteration of the time or terms of 
payment hereof, any renewal, any release of any or all part of the security 
given for the payment hereof, any acceptance of additional security of any 
kind, and any releases of, or resort to any party liable for payment hereof.

Executed as of the date first above written.

SHELDAHL, INC.


By: _________________________

Its: _________________________
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