<PAGE>

                           LOAN AND SECURITY AGREEMENT

BORROWER:                  DOTRONIX, INC.
ADDRESS:                   160 FIRST STREET, S.E.
                           NEW BRIGHTON, MINNESOTA 55112-7894

DATE:                      FEBRUARY 23, 2000

         THIS LOAN AND SECURITY AGREEMENT is entered into on the above date
between William S. Sadler ("Sadler"), with offices at 1370 Ryan Avenue West,
Roseville, Minnesota 55113, and the borrower(s) named above (the "Borrower"),
whose chief executive office is located at the above address ("Borrower's
Address"). The Schedule to this Agreement (the "Schedule") shall for all
purposes be deemed to be a part of this Agreement, and the same is an integral
part of this Agreement. (Definitions of certain terms used in this Agreement are
set forth in Section 1 below.)

         1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:

         "ACCOUNT DEBTOR" means the obligor on a Receivable or General
Intangible.

         "AFFILIATE" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

         "AUDIT" means to inspect, audit and copy Borrower's books and records
and the Collateral.

         "BORROWER" has the meaning set forth in the introduction to this
Agreement.

         "BORROWER'S ADDRESS" has the meaning set forth in the introduction to
this Agreement.

         "BUSINESS DAY" means a day which is not a Saturday, a Sunday, or a day
upon which national banks in St. Paul, Minnesota are required or authorized by
law to be closed.

         "CHANGE OF CONTROL" shall be deemed to have occurred at such time as a
"person" or "group" (within the meaning of Sections 12(d) and 14(d)(2) of the
Securities Exchange Act of 1934) (other than the current holders of the
ownership interests in any Borrower and their heirs) becomes the "beneficial
owner" (as defined in Rule 12d-3 under the Securities Exchange Act of 1934),
directly or indirectly, as a result of any single transaction, of more than
thirty-five percent (35%) of the total voting power of all classes of stock or
other ownership interests then outstanding of any Borrower normally entitled to
vote in the election of directors or analogous governing body.

         "CLOSING DATE" means the date of the initial funding under this
Agreement.


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         "CODE" means the Uniform Commercial Code as adopted and in effect in
the State of Minnesota from time to time.

         "COLLATERAL" has the meaning set forth in Section 4 hereof.

         "CREDIT LIMIT" means the maximum amount of Loans that Sadler may make
to Borrower pursuant to the amounts and percentages shown on the Schedule.

         "DEFAULT" means any event which with notice or passage of time or both,
would constitute an Event of Default.

         "DOLLARS OR $" means United States dollars.

         "EBIT" means, in any fiscal period, Borrower's consolidated net income
(other than extraordinary or non-recurring items of Borrower for such period)
plus (i) the amount of all interest expense and income tax expense of Borrower
for such period, on a consolidated basis, and plus or minus (as the case may be)
(ii) any other non-cash charges which have been added or subtracted, as the case
may be, in calculating Borrower's consolidated net income for such period.

         "ELIGIBLE INVENTORY" means Inventory which Sadler, in his sole
judgment, deems eligible for borrowing, based on such considerations as Sadler
may from time to time deem appropriate. Without limiting the fact that the
determination of which Inventory is eligible for borrowing is a matter of
Sadler's discretion, Inventory which does not meet the following requirements
will not be deemed to be Eligible Inventory: Inventory which (i) consists of
finished goods, in good, new and salable condition which is not perishable, not
obsolete or unmerchantable, and is not comprised of raw materials, work in
process, packaging materials or supplies; (ii) meets all applicable governmental
standards; (iii) has been manufactured in compliance with the Fair Labor
Standards Act; (iv) conforms in all respects to the warranties and
representations set forth in this Agreement; (v) is at all times subject to
Sadler's duly perfected, first priority security interest; and (vi) is situated
at a one of the locations set forth on the Schedule.

         "ELIGIBLE RECEIVABLES" means Receivables arising from the sale of goods
or rendition of services, which Sadler, in his sole judgment, shall deem
eligible for borrowing, based on such considerations as Sadler may from time to
time deem appropriate. Eligible Receivables shall not include the following:

         (a)      Receivables that the Account Debtor has failed to pay within
                  90 days of invoice date;

         (b)      Receivables owed by an Account Debtor or its Affiliates where
                  twenty-five percent (25%) or more of all Receivables owed by
                  that Account Debtor (or its Affiliates) are deemed ineligible
                  under clause (a) above;

         (c)      Receivables with respect to which the Account Debtor is an
                  employee, Affiliate, or agent of Borrower;


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         (d)      Receivables with respect to which goods are placed on
                  consignment, guaranteed sale, sale or return, sale on
                  approval, bill and hold, or other terms by reason of which
                  the payment by the Account Debtor may be conditional;

         (e)      Receivables, that are not payable in Dollars or with respect
                  to which the Account Debtor: (i) does not maintain its chief
                  executive office in the United States, or (ii) is not
                  organized under the laws of the United States or any State
                  thereof, or (iii) is the government of any foreign country or
                  sovereign state, or of any state, providence, municipality, or
                  other political subdivision thereof, or of any department,
                  agency, public corporation, or other instrumentality thereof;

         (f)      Receivables with respect to which the Account Debtor is either
                  (i) the United States or any department, agency, or
                  instrumentality of the United States (exclusive, however, of
                  Accounts with respect to which Borrower has complied, to the
                  satisfaction of Sadler, with the Assignment of Claims Act, 31
                  U.S.C. ss.3727), or (ii) any State of the United States
                  (exclusive, however, of Receivables owed by any State that
                  does not have a statutory counterpart to the Assignment of
                  Claims Act);

         (g)      Receivables with respect to which the Account Debtor is a
                  creditor of Borrower, has or has asserted a right to setoff,
                  has disputed its liability, or has made any claim with respect
                  to the Receivables;

         (h)      Receivables with respect to an Account Debtor whose total
                  obligations owing to Borrower exceed twenty-five percent (25%)
                  of all Eligible Receivables, to the extent of the obligations
                  owing by such Account Debtor in excess of such percentage;

         (i)      Receivables with respect to which the Account Debtor is
                  subject to any reorganization, bankruptcy, insolvency,
                  arrangement, readjustment of debt, dissolution or liquidation
                  proceeding, or becomes insolvent, or goes out of business;

         (j)      Receivables the collection of which Sadler, in his reasonable
                  credit judgment, believes to be doubtful by reason of the
                  Account Debtor's financial condition;

         (k)      Receivables with respect to which the goods giving rise to
                  such Receivable have not been shipped and billed to the
                  Account Debtor, the services giving rise to such Receivable
                  have not been performed and accepted by the Account Debtor, or
                  the Receivable otherwise does not represent a final sale;

         (l)      Receivables with respect to which the Account Debtor is
                  located in the states of New Jersey, Minnesota, Indiana, or
                  West Virginia (or any other state that requires a creditor to
                  file a Business Activity Report or similar document in order
                  to bring suit or otherwise enforce its remedies against such
                  Account Debtor in the courts or through any judicial process
                  of such state), unless Borrower has qualified to do business
                  in New Jersey, Minnesota, Indiana, West Virginia, or such
                  other states, or has filed a Notice of Business Activities
                  Report with the applicable division of taxation, the
                  department of


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                  revenue, or with such other state offices, as appropriate,
                  for the then-current year, or is exempt from such filing
                  requirement; and

         (m)      Receivables that represent progress payments or other advance
                  billings that are due prior to the completion of performance
                  by Borrower of the subject contract for goods or services.

         "EQUIPMENT" means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
fixtures, trade fixtures, motor vehicles, tools, parts, dies, jigs, goods and
other goods (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions, or improvements to any of the foregoing, wherever
located.

         "EVENT OF DEFAULT" means any of the events set forth in Section 10.1 of
this Agreement.

         "GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.

         "GENERAL INTANGIBLES" means all general intangibles of Borrower,
whether now owned or hereafter created or acquired by Borrower, including,
without limitation, all choses in action, causes of action, corporate or other
business records, Deposit Accounts, investment property, inventions, designs,
drawings, blueprints, patents, patent applications, trademarks, and the goodwill
of the business symbolized thereby, names, trade names, trade secrets, goodwill,
copyrights, registrations, licenses, franchises, customer lists, security and
other deposits, rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all judgments now
or hereafter arising therefrom, all claims of Borrower against Sadler, rights to
purchase or sell real or personal property, rights as licensor or licensee of
any kind, royalties, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation life
insurance, key man insurance, credit insurance, liability insurance, property
insurance and other insurance), tax refunds and claims, computer programs,
discs, tapes and tape files, claims under guaranties, security interests or
other security held by or granted to Borrower, all rights to indemnification and
all other intangible property of every kind and nature (other than Receivables).

         "INVENTORY" means all of Borrower's now owned and hereafter acquired
goods, merchandise or other personal property, wherever located, to be furnished
under any contract of service or held for sale or lease (including without
limitation all raw materials, work in process, finished goods and goods in
transit, and including without limitation all farm products), and all materials
and supplies of every kind, nature and description which are or might be used or
consumed in Borrower's business or used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods, merchandise
or other personal property, and all warehouse receipts, documents of title and
other documents representing any of the foregoing.


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         "INVESTMENT PROPERTY" has the meaning set forth in Section 336.9-115 of
the Code as in effect as of the date hereof.

         "LOAN DOCUMENTS" means this Agreement, the agreements and documents
listed on Section 5 of the Schedule, and any other agreement, instrument or
document executed in connection herewith or therewith.

         "LOANS" has the meaning set forth in Section 2.1 hereof.

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, assets, condition (financial or otherwise) or results of operations of
Borrower or any subsidiary of Borrower or any guarantor of any of the
Obligations, (ii) the ability of Borrower or any guarantor of any of the
Obligations to perform its obligations under this Agreement (including, without
limitation, repayment of the Obligations as they come due) or (iii) the validity
or enforceability of this Agreement or any other agreement or document entered
into by any party in connection herewith, or the rights or remedies of Sadler
hereunder or thereunder.

         "MATURITY DATE" means the date that this Agreement shall cease to be
effective, as set forth on the Schedule, subject to the provisions of Section
9.1 and 9.2 hereof.

         "MAXIMUM DOLLAR AMOUNT" has the meaning set forth in Section 2 of this
Schedule.

         "OBLIGATIONS" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Sadler under or in connection with this Agreement,
whether evidenced by this Agreement or any note or other instrument or document,
whether arising from an extension of credit, opening a letter of credit,
banker's acceptance, loan, guaranty, indemnification or otherwise, whether
direct or indirect (including, without limitation, those acquired by assignment
and any participation by Sadler in Borrower's debts owing to other), absolute or
contingent, due or to become due, including, without limitation, all interest,
charges, expenses, fees, attorneys' fees (including attorneys' fees and expenses
incurred in bankruptcy), expert witness fees, audit fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, termination fees,
minimum interest charges and any other sums chargeable to Borrower under this
Agreement.

         "PERMITTED LIENS" means the following:

         (a)      purchase money security interests in specific items of
                  Equipment;

         (b)      leases of specific items of Equipment;

         (c)      liens for taxes not yet payable;

         (d)      additional security interests and liens consented to in
                  writing by Sadler;

         (e)      security interests being terminated substantially concurrently
                  with this Agreement;

         (f)      liens incurred in connection with the extension, renewal or
                  refinancing of the


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                  indebtedness secured by liens of the type described above in
                  clauses (a) or (b) above, provided that any extension,
                  renewal or replacement lien is limited to the property
                  encumbered by the existing lien and the principal amount
                  of the indebtedness being extended, renewed or refinanced
                  does not increase; or

         (g)      liens in favor of customs and revenue authorities which secure
                  payment of customs duties in connection with importation of
                  goods.

         Sadler will have the right to require, as a condition to its consent
under subparagraph (d) above, that the holder of the additional security
interest or lien sign an intercreditor agreement on Sadler's then standard form,
acknowledge that the security interest is subordinate to the security interest
in favor of Sadler, and agree not to take any action to enforce its subordinate
security interest so long as any Obligations remain outstanding, and the
Borrower agrees that any uncured default in any obligation secured by the
subordinate security interest shall also constitute an Event of Default under
this Agreement.

         "PERSON" means any individual, sole proprietorship, general
partnership, limited partnership, limited liability partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, government, or agency or political division thereof,
or any other entity.

         "PRIME RATE" means the actual "Reference Rate" or the substitute
therefor of Norwest Bank whether or not that rate is the lowest interest rate
charged by said bank. If the Prime Rate, as defined, is unavailable, "Prime
Rate" shall mean the highest of the prime rates published in the Wall Street
Journal on the first business day of the applicable month, as the base rate on
corporate loans at large U.S. money center commercial banks.

         "REAL PROPERTY" means Borrower's real property located in 160 First
Street S.E., New Brighton, Minnesota 55112 and 3833 North White Avenue, Eau
Claire, Wisconsin 54703.

         "RECEIVABLES" means all Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), letters of credit, contract
rights, chattel paper, instruments, securities, documents, securities accounts,
security entitlements, commodity contracts, commodity accounts, investment
property and all other forms of obligations at any time owing to Borrower, all
guaranties and other security therefor, all merchandise returned to or
repossessed by Borrower, and all rights of stoppage in transit and all other
rights or remedies of an unpaid vendor, lien or secured party.

         "RENEWAL DATE" shall mean the Maturity Date if this Agreement is
renewed pursuant to Section 9.1 hereof, and each anniversary thereafter that
this Agreement is renewed pursuant to Section 9.1 hereof.

         "SCHEDULE" has the meaning set forth in the Introduction of this
Agreement.

         "SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) at fair


                                     -6-
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valuations, all of the properties and assets of such Person are greater than
the sum of the debts, including contingent liabilities, of such Person, (b)
the present fair salable value of the properties and assets of such Person is
not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such
Person is able to realize upon its properties and assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts beyond such Person's ability
to pay as such debts mature, and (e) such Person is not engaged in business
or a transaction, for which such Person's properties and assets would
constitute unreasonably small capital after giving due consideration to the
prevailing practices in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, it is intended
that liabilities will be computed at the amount that, in light of all of the
facts and circumstances existing at such time, represents the amount that
reasonably can be expected to become an actual or matured liability.

         "TANGIBLE NET WORTH" means consolidated Borrower's equity plus
subordinate debt otherwise permitted hereunder, less goodwill, patents,
trademarks, copyrights, franchises, formulas, leasehold interests, leasehold
improvements, non-compete agreements, engineering plans, deferred tax benefits,
organization costs, prepaid items, and any other assets of Borrower that would
be treated as intangible assets on Borrower's balance sheet prepared in
accordance with GAAP.

         "OTHER TERMS" All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with GAAP. All other terms contained in this Agreement unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such
terms are defined therein.

         2. CREDIT FACILITIES.

         2.1 Loans. Sadler will make loans to Borrower (the "Loans"), in amounts
and in percentages to be determined by Sadler in his good faith discretion, up
to the Credit Limit, provided no Default or Event of Default has occurred and is
continuing. In addition, Sadler may create reserves against or reduce his
advance rates based upon Eligible Receivables or Eligible Inventory without
declaring a Default or an Event of Default if he determines that there has
occurred a Material Adverse Effect.

         3. INTEREST AND FEES.

         3.1 Interest. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement. Interest shall be payable monthly, on the last
day of the month. Interest may, in Sadler's discretion, be charged to Borrower's
loan account, and the same shall thereafter bear interest at the same rate as
the other Loans.

         3.2 Fees. Borrower shall pay Sadler the Fee(s) shown on the Schedule,
which are in addition to all interest and other sums payable to Sadler and are
deemed fully earned and are nonrefundable.


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         4. SECURITY INTEREST.

         To secure the payment and performance of all of the Obligations when
due, Borrower hereby grants to Sadler a security interest in all of Borrower's
interest in the following, whether now owned or hereafter acquired, and wherever
located: All Receivables, Inventory, Equipment, Investment Property, and General
Intangibles, including, without limitation, all of Borrower's Deposit Accounts,
and all money, and all property now or at any time in the future in Sadler's
possession (including claims and credit balances), and all proceeds of any of
the foregoing together with a Mortgage on the Borrower's property at 3833 North
White Avenue, Eau Claire, Wisconsin 54703, (including proceeds of any insurance
policies, proceeds of proceeds, and claims against third parties), all products
of any of the foregoing, and all books and records related to any of the
foregoing (all of the foregoing, together with all other property in which
Sadler may now or in the future be granted a lien or security interest, is
referred to herein, collectively, as the "Collateral").

         5. CONDITIONS PRECEDENT.

         The obligation of Sadler to make the Loans is subject to the
satisfaction, in the sole discretion of Sadler, at or prior to the first advance
of funds hereunder, of each, every and all of the following conditions:

         5.1 Status of Accounts at Closing. No account payable of Borrower shall
be due and unpaid ninety (90) days past its due date except for such accounts
payable being contested in good faith in appropriate proceedings and for which
adequate reserves have been provided.

         5.2 Minimum Availability. Borrower shall have minimum availability
immediately following the initial funding in the amount set forth on the
Schedule.

         5.3 Landlord Waiver. Sadler shall have received duly executed

                  (a) landlord waivers and access agreements in form and
substance satisfactory to Sadler, in Sadler's sole and absolute discretion, and,
when deemed appropriate by Sadler, in form for recording in the appropriate
recording office, with respect to all leased locations where Borrower maintains
any inventory or equipment.

                  (b) mortgagee waivers in form and substance satisfactory to
Sadler, in Sadler's sole and absolute discretion, and when deemed appropriate by
Sadler, in form for recording in the appropriate recording office, with respect
to all mortgaged locations where Borrower maintains any inventory or equipment.

                  (c) warehouse waivers in form and substance satisfactory to
Sadler, in Sadler's sole and absolute discretion, and when deemed appropriate by
Sadler, in form for recording in the appropriate recording office, with respect
to all warehouse locations where Borrower maintains any inventory or equipment.

         5.4 Executed Agreement. Sadler shall have received this Agreement duly
executed and


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in form and substance satisfactory to Sadler in his sole and absolute
discretion.

         5.5 Opinion of Borrower's Counsel. Sadler shall have received an
opinion of Borrower's counsel, in form and substance satisfactory to Sadler in
his sole and absolute discretion.

         5.6 Priority of Sadler's Liens. Sadler shall have received the results
of "of record" searches and a marked up Title Insurance Commitment, satisfactory
to Sadler in his sole and absolute discretion, reflecting his Uniform Commercial
Code filings against Borrower indicating that Sadler has a perfected, first
priority lien in and upon all of the Collateral, subject only to Permitted
Liens.

         5.7 Insurance. Sadler shall have received copies of the insurance
binders or certificates evidencing Borrower's compliance with Section 8.2
hereof, including lender's loss payee endorsements.

         5.8 Borrower's Existence. Sadler shall have received copies of
Borrower's articles or certificate of incorporation and all amendments thereto,
and a Certificate of Good Standing, each certified by the Secretary of State of
the state of Borrower's organization, and dated a recent date prior to the
Closing Date, and Sadler shall receive Certificates of Foreign Qualification for
Borrower from the Secretary of State of each state wherein the failure to be so
qualified could have a Material Adverse Effect.

         5.9 Organizational Documents. Sadler shall have received copies of
Borrower's By-laws and all amendments thereto, and Sadler shall have received
copies of the resolutions of the board of directors of Borrower, authorizing the
execution and delivery of this Agreement and the other documents contemplated
hereby, and authorizing the transactions contemplated hereunder and thereunder,
and authorizing specific officers of Borrower to execute the same on behalf of
Borrower, in each case certified by the Secretary or other acceptable officer of
Borrower as of the Closing Date.

         5.10 Taxes. Sadler shall have received evidence from Borrower that
Borrower has complied with all tax withholding and Internal Revenue Service
regulations, in form and substance satisfactory to Sadler in his sole and
absolute discretion.

         5.11 Other Documents and Agreements. Sadler shall have received such
other agreements, instruments and documents as Sadler may require in connection
with the transactions contemplated hereby, all in form and substance
satisfactory to Sadler in Sadler's sole and absolute discretion, and in form for
filing in the appropriate filing office, including, but not limited to, those
documents listed in Section 5 of the Schedule.

         6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.

         In order to induce Sadler to enter into this Agreement and to make
Loans, Borrower represents and warrants to Sadler as follows, and Borrower
covenants that the following


                                     -9-
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representations will continue to be true, and that Borrower will at all times
comply with all of the following covenants:

         6.1 Existence and Authority. Borrower is and will continue to be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Borrower is and will continue to be qualified
and licensed to do business in all jurisdictions in which any failure to do so
would have a Material Adverse Effect. The execution, delivery and performance by
Borrower of this Agreement, and all other documents contemplated hereby (a) have
been duly and validly authorized, (b) are enforceable against Borrower in
accordance with their terms (except as enforcement may be limited by equitable
principles and by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to creditors' rights generally), and (c) do not violate Borrower's
by-laws, or any law or any material agreement or instrument which is binding
upon Borrower or its property, and (d) do not constitute grounds for
acceleration of any material indebtedness or obligation under any material
agreement or instrument which is binding upon Borrower or its property.

         6.2 Name; Trade Names and Styles. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Sadler thirty (30) days' prior written notice before
changing its name or doing business under any other name. Borrower has complied,
and will in the future comply, with all laws relating to the conduct of business
under a fictitious business name.

         6.3 Place of Business; Location of Collateral. The address set forth in
the heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Sadler at least thirty (30) days'
prior written notice before opening any additional place of business, changing
its chief executive office, or moving any of the Collateral to a location other
than Borrower's Address or one of the locations set forth on the Schedule.

         6.4 Title to Collateral; Permitted Liens. Borrower is now, and will at
all times in the future be, the sole owner of all the Collateral, except for
items of Equipment which are leased by Borrower. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for Permitted Liens. Sadler now has, and
will continue to have, a first priority perfected and enforceable security
interest in all of the Collateral to the extent said security interests are
perfected pursuant to the documents entered into and notices given in connection
herewith, subject only to the Permitted Liens, and Borrower will at all times
defend Sadler and the Collateral against all claims of others. Borrower is not
and will not become a lessee under any real property lease pursuant to which the
lessor may obtain any rights in any of the Collateral and no such lease now
prohibits restrains, impairs or will prohibit, restrain or impair Borrower's
right to remove any Collateral from the leased premises. Whenever any Collateral
is located upon premises in which any third party has an interest (whether as
owner, mortgagee, beneficiary under a deed of trust, lien or otherwise),
Borrower shall, whenever requested by Sadler,


                                    -10-
<PAGE>
use its best efforts to cause such third party to execute and deliver to
Sadler, in form acceptable to Sadler, such waivers and subordinations as
Sadler shall specify, so as to ensure that Sadler's rights in the Collateral
are, and will continue to be, superior to the rights of any such third party.
Borrower will keep in full force and effect, and will comply with all of the
terms of, any lease of real property where any of the Collateral now or in
the future may be located.

         6.5 Maintenance of Collateral. Borrower will maintain the Collateral in
good working condition, and Borrower will not use the Collateral for any
unlawful purpose. Borrower shall file a patent application on all patentable
material and register any trademarks, copyright and copyrightable material which
compromises the Collateral and advise Sadler of the acquisition, existence,
filing and/or registration thereof. Borrower will immediately advise Sadler in
writing of any material loss or damage to the Collateral.

         6.6 Books and Records. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, compromising an
accounting system in accordance with GAAP.

         6.7 Financial Condition, Statements and Reports. All financial
statements now or in the future delivered to Sadler have been, and will be,
prepared in conformity with GAAP (except, in the case of unaudited financial
statements, for the absence of footnotes and subject to normal year-end
adjustments) and now and in the future will fairly reflect the financial
condition of Borrower, at the times and for the periods therein stated. Between
the last date covered by any such statement provided to Sadler and the date
hereof, there has been no Material Adverse Effect. Borrower is now and will
continue to be Solvent.

         6.8 Tax Returns and Payments; Pension Contributions. Borrower has
timely filed, and will timely file, all tax returns and reports required by
foreign, federal, state, and local law, and Borrower has timely paid, and will
timely pay, all foreign, federal, state and local taxes, assessments, deposits
and contributions now or in the future owed by Borrower. Borrower may, however,
defer payment of any contested taxes, provided that Borrower (i) in good faith
contests Borrower's obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted, (ii) notifies Sadler in
writing of the commencement of, any material development in, the proceedings,
and (iii) posts bonds or takes any other steps required to keep the contested
taxes from becoming a lien upon any of the Collateral. As of the date hereof,
Borrower is unaware of any claims or adjustments proposed for any of Borrower's
prior tax years which could result in additional taxes becoming due and payable
by Borrower. Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could result
in any liability of Borrower, including any liability to the Pension Benefit
Guaranty Corporation or its successor or any other governmental agency. Borrower
shall, at all times, utilize the services of an outside payroll service or
maintain internal procedures providing for the automatic deposit of all payroll
taxes payable by Borrower. In the event Borrower


                                    -11-
<PAGE>
maintains such internal procedures, Borrower shall provide Sadler with
documentary evidence, on a monthly basis, that all payroll taxes payable by
Borrower are current.

         6.9 Compliance with Law. Borrower has complied, and will comply, in all
material respects, with all provisions of all material foreign, federal, state
and local laws and regulations relating to Borrower, including, but not limited
to, the Fair Labor Standards Act, and those relating to Borrower's ownership of
real or personal property, the conduct and licensing of Borrower's business, and
environmental matters.

         6.10 Litigation. Except as disclosed in the Schedule, there is no
claim, suit, litigation, proceeding or investigation pending or (to the best of
Borrower's knowledge) threatened by or against or affecting Borrower in any
court or before any governmental agency (or any basis therefore known to
Borrower) which may result, either separately or in the aggregate, in a Material
Adverse Effect. Borrower will promptly inform Sadler in writing of any claim,
proceeding, litigation or investigation in the future threatened or instituted
by or against Borrower involving an amount set forth on the Schedule.

         6.11 Use of Proceeds. All proceeds of all Loans shall be used solely
for lawful business purposes. Borrower is not purchasing or carrying any "margin
stock" (as defined in Regulation G of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan will be used to purchase
or carry any "margin stock" or to extend credit to others for the purpose of
purchasing or carrying any "margin stock".

         (7) RECEIVABLES.

         7.1 Representations relating to Receivables. Borrower represents and
warrants to Sadler as follows: Each receivable with respect to which Loans are
requested by Borrower shall, on the date each Loan is requested and made,
represent an undisputed bona fide existing unconditional obligation of the
Account Debtor created by the sale, delivery and acceptance of goods or the
rendition of services in the ordinary course of Borrower's business.

         7.2 Representations Relating to Documents and Legal Compliance.
Borrower represents and warrants to Sadler as follows: All statements made and
all unpaid balances appearing in all invoices, instruments and other documents
evidencing the Receivables are and shall be true and correct and all such
invoices, instruments and other documents and all of Borrower's books and
records are and shall be genuine and in all respects what they purport to be.
All sales and other transactions underlying or giving rise to each Receivable
shall fully comply with all applicable laws and governmental rules and
regulations. All signatures and endorsements on all documents, instruments, and
agreements relating to all Receivables are and shall be genuine, and all such
documents, instruments and agreements are and shall be legally enforceable in
accordance with their terms.


                                    -12-
<PAGE>

         7.3 Schedules and Documents relating to Receivables. Borrower shall
deliver to Sadler via facsimile, unless otherwise directed by Sadler, at such
locations and at such intervals as Sadler may request, transaction reports and
loan requests, schedules of Receivables, and schedules of collections, all on
Sadler's standard forms; provided, however, that Borrower's failure to execute
and deliver the same shall not affect or limit Sadler's security interest and
other rights in all of Borrower's Receivables, nor shall Sadler's failure to
advance or lend against a specific Receivable affect or limit Sadler's security
interest and other rights therein. Loan requests received after 10:30 a.m. St.
Paul, Minnesota time, will not be considered by Sadler until the next Business
Day. Together with each such schedule, or later if requested by Sadler, Borrower
shall furnish Sadler with copies (or, at Sadler's request, originals) of all
contracts, orders, invoices, and other similar documents, and all original
shipping instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Receivables, and Borrower warrants the genuineness of all of the foregoing.
Borrower shall also furnish to Sadler an aged accounts receivable trial balance
in such form and at such intervals as Sadler shall request. In addition,
Borrower shall deliver to Sadler the originals of all instruments, chattel
paper, security agreements, guarantees and other documents and property
evidencing or securing any Receivables, upon receipt thereof and in the same
form as received, with all necessary endorsements, all of which shall be with
recourse. Borrower shall also provide Sadler with copies of all credit memos as
and when requested by Sadler.

         7.4 Collection of Receivables. Borrower shall have the right to collect
all Receivables, unless and until an Event of Default has occurred. Borrower
shall hold all payments on, and proceeds of, Receivables in trust for Sadler,
and Borrower shall deliver all such payments and proceeds to Sadler within one
(1) Business Day after receipt by Borrower, in their original form, duly
endorsed to Sadler, to be applied to the Obligations in such order as Sadler
shall determine. Sadler may, in his discretion, require that all proceeds of
Collateral be deposited by Borrower into a lockbox account, or such other
"blocked account" as Sadler may specify, pursuant to a blocked account agreement
in such form as Sadler may specify. Sadler or his designee may, at any time,
notify Account Debtors that Sadler has been granted a security interest in the
Receivables.

         7.5 Remittance of Proceeds. All proceeds arising from the disposition
of any Collateral shall be delivered to Sadler within one (1) Business Day after
receipt by Borrower, in their original form, duly endorsed to Sadler, to be
applied to the Obligations in such order as Sadler shall determine. Borrower
agrees that it will not commingle proceeds of Collateral with any of Borrower's
other funds or property, but will hold such proceeds separate and apart from
such other funds and property and in an express trust for Sadler. Nothing in
this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Agreement.

         7.6 Disputes. Borrower shall notify Sadler promptly of all disputes or
claims relating to Receivables. Borrower shall not forgive (completely or
partially), compromise or settle any Receivable for less than payment in full,
or agree to do any of the foregoing, except that Borrower may do so, provided
that: (a) Borrower does so in good faith, in a commercially reasonable manner,
in the ordinary course of business, and in arm's length transactions, which are
reported to Sadler on

                                     -13-

<PAGE>

the regular reports provided to Sadler; (b) no Default or Event of Default
has occurred and is continuing; and (c) taking into account all such
discounts, settlements and forgiveness, the total outstanding Loans will not
exceed the Credit Limit. Sadler may, at any time after the occurrence of an
Event of Default, settle or adjust disputes or claims directly with Account
Debtors for amounts and upon terms which Sadler considers advisable in its
reasonable credit Judgment and, in all cases, Sadler shall credit Borrower's
Loan account with only the net amounts received by Sadler in payment of any
Receivables.

         7.7 Returns. Provided no Event of Default has occurred and is
continuing, if any Account Debtor returns any Inventory to Borrower in the
ordinary course of its business, Borrower shall promptly determine the reason
for such return and promptly issue a credit memorandum to the Account Debtor in
the appropriate amount. In the event any attempted return occurs after the
occurrence of any Event of Default, Borrower shall (a) hold the returned
Inventory in trust for Sadler, (b) segregate all returned Inventory from all of
Borrower's other property, (c) conspicuously label the returned Inventory as
subject to Sadler's security interest, and (d) immediately notify Sadler of the
return of any Inventory, specifying the reason for such return, the location and
condition of the returned Inventory, and on Sadler's request deliver such
returned Inventory to Sadler.

         7.8 Verification. Sadler may, from time to time, verify directly with
the respective Account Debtors the validity, amount and other matters relating
to the Receivables, by means of mail, telephone or otherwise, either in the name
of Borrower or Sadler or such other name as Sadler may choose.

         7.9 No Liability. Sadler in his capacity as lender hereunder, shall not
under any circumstances be responsible or liable for any shortage or discrepancy
in, damage to, or loss or destruction of, any goods, the sale or other
disposition of which gives rise to a Receivable, or for any error, act, omission
or delay of any kind occurring in the settlement, failure to settle, collection
or failure to collect any Receivable, or for settling any Receivable in good
faith for less than the full amount thereof, nor shall Sadler be deemed to be
responsible for any of Borrowers' obligations under any contract or agreement
giving rise to a Receivable. Nothing herein shall, however, relieve Sadler from
liability for his own gross negligence or willful misconduct.

        (8)  ADDITIONAL DUTIES OF THE BORROWER.

         8.1 Other Covenants. Borrower shall at all times comply with the other
covenants set forth in Section 8 of the Schedule.

         8.2 Insurance. Borrower shall at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Sadler, in such form and amounts as Sadler may
reasonably require, and Borrower shall provide evidence of such insurance to
Sadler, so that Sadler is satisfied that such insurance is, at all times, in
full force and effect. All liability insurance policies of Borrower shall name
Sadler as an additional insured, and all property casualty and related insurance
policies of Borrower shall name Sadler as a loss

                                     -14-

<PAGE>

payee thereon and Borrower shall cause a lender's loss payee endorsement in
form reasonably acceptable to Sadler. Upon receipt of the proceeds of any
such insurance, Sadler shall apply such proceeds in reduction of the
Obligations as Sadler shall determine in his sole discretion, except that,
provided no Default or Event of Default has occurred and is continuing,
Sadler shall release to Borrower insurance proceeds with respect to Equipment
totaling less than the amount set forth in Section 8 of the Schedule, which
shall be utilized by Borrower for the replacement of the Equipment with
respect to which the insurance proceeds were paid. Sadler may require
reasonable assurance that the insurance proceeds so released will be so used.
If Borrower fails to provide or pay for any insurance, Sadler may, but is not
obligated to, obtain the same at Borrower's expense. Borrower shall promptly
deliver to Sadler copies of all reports made to insurance companies.

         8.3 Reports. Borrower, at its expense, shall provide Sadler with the
written reports set forth in Section 8 of the Schedule, and such other written
reports with respect to Borrower (including budgets, sales, projections,
operating plans and other financial documentation), as Sadler shall from time to
time reasonably specify.

         8.4 Access to Collateral, Books and Records. At reasonable times but
not less frequently than quarterly and on one (1) Business Day's notice, Sadler,
or his agents, shall have the right to perform Audits. Sadler shall take
reasonable steps to keep confidential all confidential information obtained in
any Audit, but Sadler shall have the right to disclose any such information to
his auditors, regulatory agencies, and attorneys, and pursuant to any subpoena
or other legal process. Sadler may, at his option charge Borrower for Audits.
The Audits shall be Seven Hundred Fifty Dollars ($750.00) per person per day (or
such higher amounts as shall represents Sadler's actual cost for the same), plus
reasonable out-of-pocket expenses. Borrower will not enter into any agreement
with any accounting firm, service bureau or third party to store Borrower's
books or records at any location other than Borrower's Address, without first
notifying Sadler of the same and obtaining the written agreement from such
accounting firm, service bureau or other third party to give Sadler the same
rights with respect to access to books and records and related rights as Sadler
has under this Loan Agreement.

         8.5 Negative Covenants. Borrower shall not without Sadler's prior
written consent, do any of the following:

         (a)      merge or consolidate with another entity, except in a
                  transaction in which (i) the owners of the Borrower hold at
                  least fifty percent (50%) of the ownership interest in the
                  surviving entity immediately after such merger or
                  consolidation, and (ii) the Borrower is the surviving entity;

         (b)      acquire any assets, except (i) in the ordinary course of
                  business, or (ii) in a transaction or a series of transactions
                  not involving the payment of an aggregate amount in excess of
                  the amount set forth in Section 8 of the Schedule;

         (c)      enter into any other transaction outside the ordinary course
                  of business;

         (d)      sell or transfer any Collateral, except for the sale of
                  finished Inventory in the

                                     -15-

<PAGE>

                  ordinary course of Borrower's business, and except for the
                  sale of obsolete or unneeded Equipment in the ordinary
                  course of business;

         (e)      store Inventory or other Collateral with any warehouseman or
                  other third party;

         (i)      sell any Inventory on a sale-or-return, guaranteed sale,
                  consignment, or other contingent basis;

         (j)      make any loan of any money or other assets, except (i)
                  advances to customer or suppliers in the ordinary course of
                  business, (ii) travel advances, employee relocation loans and
                  other employee loans and advances in the ordinary course of
                  business, (iii) loans to employees, officers and directors for
                  the purpose of purchasing equity securities of the Borrower,
                  and (iv) a loan in the principal amount of $110,000.00
                  previously made to Menuboard Marketing, L.P., a Delaware
                  limited partnership;

         (k)      incur any debts, outside the ordinary course of business,
                  which would have a Material Adverse Effect;

         (l)      guarantee or otherwise become liable with respect to the
                  obligations of another party or entity;

         (m)      pay or declare any dividends or distributions on the ownership
                  interests in Borrower (except for dividends or distributions
                  payable solely in stock form of ownership interests in
                  Borrower);

         (n)      make any change in Borrower's capital structure which would
                  have a Material Adverse Effect; or

         (o)      dissolve or elect to dissolve.

         Transactions permitted by the foregoing provisions of this Section are
only permitted if no Default or Event of Default is continuing or would occur as
a result of such transaction.

         8.6 Litigation Cooperation. Should any third-party suit or proceeding
be instituted by or against Sadler in his capacity as lender hereunder with
respect any Collateral or relating to Borrower, Borrower shall, without expense
to Sadler, make available Borrower and its officers, employees and agents and
Borrower's books and records, to the extent that Sadler may deem them reasonably
necessary in order to prosecute or defend any such suit or proceeding.

         8.7 Further Assurances. Borrower agrees, and its expense, on request by
Sadler, to execute all documents and take all actions, as Sadler, may deem
reasonably necessary or useful in order to perfect and maintain Sadler's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.

         8.8 Warrants. Borrower agrees to issue warrants for the purchase of
Borrower's common stock, at market value on the date of each principal advance
in the ratio of one (1) share of Borrower's common stock for each Four Dollars
($4.00) loaned to Borrower, up to the maximum principal amount outstanding
hereunder at any one time. If amounts are repaid and reborrowed hereunder,
Sadler shall not be entitled to additional warrants with respect to the
reborrowings unless,

                                     -16-

<PAGE>

and only to the extent that, such reborrowings increase the maximum amount
outstanding hereunder at any one time.

         (9) TERM.

         9.1 Maturity Date. This Agreement shall continue in effect until the
Maturity Date; provided that the Maturity Date may, at Sadler's option, in his
sole discretion be extended, and this Agreement shall then renew, for successive
additional terms of one year each. Sadler shall give written notice to Borrower,
not less than one hundred twenty (120) days prior to the Maturity Date or the
next Renewal Date, of his intention.

         9.2 Early Termination. This Agreement may be terminated prior to the
Maturity Date as follows: (a) by Borrower, effective three (3) Business Days
after written notice of termination is given to Sadler; (b) by Sadler at any
time after the occurrence of an Event of Default, without notice, effective
immediately; or (c) by Sadler upon the Change of Control of the Borrower.

         9.3 Payment of Obligations. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Notwithstanding any termination of this Agreement, all of Sadler's security
interest in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full; provided that, without limiting the fact that
Loans are subject to the discretion of Sadler, Sadler may, in his sole
discretion refuse to make any further Loans after termination. No termination
shall in any way affect or impair any right or remedy of Sadler, nor shall any
such termination relieve Borrower of any Obligation to Sadler, until all of the
Obligations have been paid and performed in full. Upon payment and performance
in full of all the Obligations and termination of this Agreement, Sadler shall
promptly delivery to Borrower termination statements, requests for reconveyances
and such other documents as may be required to fully terminate Sadler's security
interest.

         (10) EVENTS OF DEFAULT AND REMEDIES.

         10.1 Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default" under this Agreement, and Borrower shall
give Sadler immediate written notice:

         (a)      Any warranty, representation, statement, report or certificate
                  made or delivered to Sadler by Borrower or any of Borrower's
                  officers, employees or agents, now or in the future, shall be
                  untrue or misleading and results in a Material Adverse Effect;
                  or

         (b)      Borrower shall fail to pay when due any Loan or any interest
                  thereon or any other monetary Obligation; or

         (c)      the total Loans and other Obligations outstanding at any time
                  shall exceed the Credit Limit; or

                                     -17-

<PAGE>

         (d)      Borrower shall fail to deliver the proceeds of Collateral to
                  Sadler as provided in Section 7.5 above, or shall fail to give
                  Sadler access to its books and records or Collateral as
                  provided in Section 8.4 above, or shall breach any negative
                  covenant set forth in Section 8.5 above; or

         (e)      Borrower shall fail to comply with the financial covenants (if
                  any) set forth in the Schedule or shall fail to perform any
                  other non-monetary Obligation which by its nature cannot be
                  cured; or

         (f)      Borrower shall fail to perform any other non-monetary
                  Obligation, which failure is not cured within seven (7)
                  Business Days after the date due; or

         (g)      Any levy, assessment, attachment, seizure, lien or encumbrance
                  (other than a Permitted Lien) is made on all or any part of
                  the Collateral which is not cured within ten (10) days after
                  the occurrence of the same; or

         (h)      any default or event of default occurs under any obligation
                  secured by a Permitted Lien, which is not cured within any
                  applicable cure period or waived in writing by the holder of
                  the Permitted Lien; or

         (i)      Borrower breaches any material contract or obligation, which
                  has or may reasonably be expected to have a Material Adverse
                  Effect, which failure is not cured within five (5) Business
                  Days after the breach; or

         (j)      Dissolution, termination of existence, insolvency or business
                  failure of Borrower or any guarantor of any of Obligations; or
                  appointment of receiver, trustee or custodian for all or any
                  property of, assignment for the benefit of creditors by, or
                  the commencement of any proceeding by Borrower or any
                  guarantor of any of the Obligations under any reorganization,
                  bankruptcy, insolvency, arrangement, readjustment of debt,
                  dissolution or liquidation law or statute of any jurisdiction,
                  now or in the future in effect; or

         (k)      the commencement of any proceeding against Borrower or any
                  guarantor of any of the Obligations under any reorganization,
                  bankruptcy, insolvency, arrangement, readjustment of debt,
                  dissolution or liquidation law or statute of any jurisdiction,
                  now or in the future in effect, which is (i) not timely
                  controverted, or (ii) not cured by the dismissal thereof
                  within thirty (30) days after the date commenced; or

         (l)      revocation or termination of, or limitation or denial of
                  liability upon, any guaranty of the Obligations or any attempt
                  to do any of the foregoing, or commencement of proceedings by
                  any guarantor of any of the Obligations under any bankruptcy
                  or insolvency law; or

         (m)      revocation or termination of, or limitation or denial of
                  liability upon, any pledge of any certificate of deposit,
                  securities or other property or asset of any kind pledged by
                  any third party to secure any or all of the Obligations, or
                  any attempt to do any of the foregoing, or commencement of
                  proceedings by or against any such third party under any
                  bankruptcy or insolvency law; or

         (n)      Borrower or any guarantor of any of the Obligations makes any
                  payment on account of any indebtedness or obligation which has
                  been subordinated to the

                                     -18-

<PAGE>

                  Obligations, other than as permitted in the applicable
                  subordination agreement, or if any Person who has
                  subordinated such indebtedness or obligations terminates or
                  in any way limits his subordination agreement; or

         (o)      Except as permitted under Section 8.5 (a), Borrower shall
                  suffer or experience any Change of Control without Sadler's
                  prior written consent, which consent shall be in the
                  discretion of Sadler in the exercise of his reasonable
                  business judgment; or

         (p)      Borrower shall generally not pay its debts as they become due,
                  or Borrower shall conceal, remove or transfer any part of its
                  property, with intent to hinder, delay or defraud its
                  creditors, or make or suffer any transfer any of its property
                  which may be fraudulent under any bankruptcy, fraudulent
                  conveyance or similar law; or

         (q)      Borrower shall fail to file a patent application on any
                  patentable material or register any trademark, copyright or
                  copyrightable material which is part of the Collateral or
                  advise Sadler of the acquisition, creation, existence, filing
                  on or registration of any such Collateral; or

         (r)      there shall be any Material Adverse Effect; or

         (s)      Any Event of Default or Default shall occur in any mortgage
                  given by Borrower, including the mortgage granted to Sadler on
                  Borrower's property located at 3833 North White Avenue, Eau
                  Claire, Wisconsin 54703, and any Security Agreement or other
                  document executed in connection herewith.

                  Sadler may cease making any Loans or extending any credit
hereunder during any of the above cure periods.

         10.2 Remedies. Upon the occurrence, and during the continuance, of any
Event of Default, Sadler, at his option, and without notice or demand of any
kind (all of which are hereby expressly waived by Borrower), may do anyone or
more of the following:

         (a)      Cease making Loans or otherwise extending credit to Borrower
                  under this Agreement or any other document or agreement;

         (b)      Accelerate and declare all or any part of the Obligations to
                  be immediately due, payable and performable, notwithstanding
                  any deferred or installment payments allowed by any instrument
                  evidencing or relating to any Obligation;

         (c)      Take possession of any or all of the Collateral wherever it
                  may be found, and for that purpose Borrower hereby authorizes
                  Sadler without judicial process to enter onto any of
                  Borrower's premises without interference to search for, take
                  possession of, keep, store or remove any of the Collateral,
                  and remain on the premises or cause a custodian to remain on
                  the premises in exclusive control thereof, without charge for
                  so long as Sadler deems it reasonably necessary in order to
                  complete the enforcement of his rights under this Agreement or
                  any other agreement; provided, however, that should Sadler

                                     -19-

<PAGE>

                  seek to take possession of any of the Collateral by Court
                  process, Borrower hereby irrevocably waives:

                 (i)    any bond and any surety or security relating thereto
                        required by any statute, court rule or otherwise as an
                        incident to such possession;

                 (ii)   any demand for possession prior to the commencement of
                        any suit or action to recover possession thereof; and

                 (iii)  any requirement that Sadler retain possession of, and
                        not dispose of, any such Collateral until after trial
                        or final judgment;

         (d)      Require Borrower to assemble any or all of the Collateral and
                  make it available to Sadler at places designated by Sadler
                  which are reasonably convenient to Sadler and Borrower, and to
                  remove the Collateral to such locations as Sadler may deem
                  advisable;

         (e)      Complete the processing, manufacturing or repair of any
                  Collateral prior to a disposition thereof and, for such
                  purpose and for the purpose of removal, Sadler shall have the
                  right to use Borrower's premises, vehicles, hoists, lifts,
                  cranes, equipment and all other property without charge.
                  Sadler is hereby granted a license or other right to use,
                  without charge, Borrower's labels, patents, copyrights, right
                  of use of any name, trade secrets, trade names, trademarks,
                  service marks, and advertising matter, or any property of a
                  similar nature, as it pertains to the Collateral, in
                  completing production of, advertising for sale, and selling
                  any Collateral and Borrower's rights under all licenses and
                  all franchise agreements shall inure to Sadler's benefit;

         (f)      Sell, lease or otherwise dispose of any of the Collateral, in
                  its condition at the time Sadler obtains possession of it or
                  after further manufacturing, processing or repair, at one or
                  more public and/or private sales, in lots or in bulk, for
                  case, exchange or other property, or on credit, and to adjourn
                  any such sale from time to time without other than oral
                  announcement at the time scheduled for sale. Sadler shall have
                  the right to conduct such disposition on Borrower's premises
                  without charge, for such time or times as Sadler deems
                  reasonable, or on Sadler's premises, or elsewhere and the
                  Collateral need not be located at the place of disposition.
                  Sadler may directly or through any affiliated company purchase
                  or lease any Collateral at any such public disposition. Any
                  sale or other disposition, and if permissible under applicable
                  law, at any private disposition. Any sale or other disposition
                  of Collateral shall not relieve Borrower of any liability
                  Borrower may have if any Collateral is defective as to title
                  or physical condition or otherwise as the time of sale;

         (g)      Demand payment of, and collect any Receivables and General
                  Intangibles comprising Collateral and, in connection
                  therewith, Borrower irrevocably authorizes Sadler to endorse
                  or sign Borrower's name on all collections, receipts,
                  instruments and other documents, to take possession of and
                  open mail addressed to Borrower and remove therefrom payments
                  made with

                                     -20-

<PAGE>

                  respect to any item of the Collateral or proceeds thereof,
                  and, in Sadler's sole discretion, to grant extensions of
                  time to pay, compromise claims and settle Receivables and
                  the like for less than face value; and

         (h)      Demand and receive possession of any of Borrower's federal and
                  state income tax returns and the books and records utilized in
                  the preparation thereof or referring thereto.

         All attorneys' fees, expenses, costs, liabilities and obligations
incurred by Sadler (including attorneys' fees and expenses incurred in
connection with bankruptcy) with respect to the foregoing shall be due from the
Borrower to Sadler on demand. Sadler may charge the same to Borrower's loan
account, and the same shall thereafter bear interest at the same rate as is
applicable to the Loans. Without limiting any of Sadler's rights and remedies,
from and after the occurrence of any Event of Default, the interest rate
applicable to the Obligations shall be increased by an additional three percent
per annum.

         10.3 Standards for Determining Commercial Reasonableness. Borrower and
Sadler agree that the sale or other disposition (collectively, "sale") of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable:

         (a)      Notice of the sale is given to Borrower at least seven (7)
                  days prior to the sale, and, in the case of a public sale,
                  notice of the sale is published at least seven (7) days before
                  the sale in a newspaper of general circulation in the county
                  where the sale is to be conducted;

         (b)      Notice of the sale describes the collateral in general,
                  non-specific terms;

         (c)      The sale is conducted at a place designated by Sadler, with or
                  without the Collateral being present;

         (d)      The sale commences at any time between 8:00 a.m. and 6:00 p.m.
                  St. Paul, Minnesota time;

         (e)      Payment of the purchase price in case or by cashier's check or
                  wire transfer is required; and

         (f)      With respect to any sale of any of the Collateral, Sadler may
                  (but is not obligated to) direct any prospective purchaser to
                  ascertain directly from Borrower any and all information
                  concerning the same.

         Sadler shall be free to employ other methods of noticing and selling
Collateral, in his discretion, if they are commercially reasonable.

         10.4 Power of Attorney. Borrower grants Sadler an irrevocable power of
attorney coupled with an interest, authorizing and permitting Sadler (acting
through any of his employees, attorneys or agents) at any time, at his option,
but without obligation, with or without notice to Borrower, and at Borrower's
expense, to do any or all of the following, in Borrower's name or otherwise, but
Sadler agrees to exercise the following powers in a commercially reasonable
matter:

                                     -21-

<PAGE>

         (a)      Execute on behalf of Borrower any documents that Sadler may,
                  in his sole discretion, deem advisable in order to perfect and
                  maintain Sadler's security interest in the Collateral, or in
                  order to exercise a right of Borrower or Sadler, or in order
                  to fully consummate all the transactions contemplated under
                  this Agreement, and all other present and future agreements;

         (b)      Upon an Event of Default, execute on behalf of Borrower any
                  document exercising, transferring or assigning any option to
                  purchase, sell or otherwise dispose of or to lease (as lessor
                  or lessee) any real or personal property which is part of
                  Sadler's Collateral or in which Sadler has an interest;

         (c)      Upon an Event of Default, execute on behalf of Borrower, any
                  invoices relating to any Receivable, any draft against any
                  Account Debtor and any notice to an Account Debtor, any proof
                  of claim in bankruptcy, any Notice of Lien, claim of
                  mechanic's, materialman's or other lien, or assignment or
                  satisfaction of mechanic's, materialman's or other lien;

         (d)      Take control in any manner of any cash or non-cash items of
                  payment or proceeds of Collateral; endorse the name of
                  Borrower upon any instruments, or documents, evidence of
                  payment or Collateral that may come into Sadler's possession;

         (e)      Endorse all checks and other forms of remittances received by
                  Sadler;

         (f)      Upon an Event of Default, pay, contest or settle any lien,
                  charge, encumbrance, security interest and adverse claim in
                  or to any of the Collateral, or any Judgment based thereon,
                  or otherwise take any action to terminate or discharge the
                  same;

         (g)      Grant extensions of time to pay, compromise claims and settle
                  Receivables and General Intangibles for less than face value
                  and execute all releases and other documents in connection
                  therewith;

         (h)      Pay any sums required on account of Borrower's taxes or to
                  secure the release of any liens therefor, or both;

         (i)      Settle and adjust, and give release of, any insurance claim
                  that relates to any of the Collateral and obtain payment
                  therefore;

         (j)      Instruct any third party having custody or control of any
                  books or records belonging to, or relating to, Borrower to
                  give Sadler the same rights of access and other rights with
                  respect thereto as Sadler has under this Agreement; and

         (k)      Take any action or pay any sum required of Borrower pursuant
                  to this Agreement and any other present or future agreements.

         Any and all sums paid and any and all costs, expenses, liabilities,
obligations and attorney's fees incurred by Sadler (including attorneys' fees
and expenses incurred pursuant to bankruptcy) with respect to the foregoing
shall be added to and become part of the Obligations, and shall be payable on
demand. Sadler may charge the foregoing to Borrower's loan account and the
foregoing shall thereafter bear interest at the same rate applicable to the
Loans. In no event shall Sadler's rights under the foregoing power of attorney
or any of Sadler's other rights under this Agreement be deemed to indicate that
Sadler is in control of the business, management or properties of

                                     -22-

<PAGE>

Borrower. Borrower shall pay, indemnify, defend, and hold Sadler and each of
his employees, counsel, agents, and attorneys-in-fact (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and against
any and all claims, damages, suits, actions, investigations, proceedings, and
damages, and all attorneys' fees and disbursements and other costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them in connection with or as a
result of or related to the execution, delivery, enforcement, performance,
and administration of this Agreement and any other Loan Documents or the
transactions contemplated herein, and with respect to any investigation,
litigation, or proceeding related to this Agreement, any other Loan
Documents, or the use of proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any
act, omission, event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). Borrower shall have
no obligation to any Indemnified Person hereunder with respect to any
Indemnified Liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct
of such Indemnified Person. This provision shall survive the termination of
this Agreement and the repayment of the Obligations.

         10.5 Application of Proceeds. All proceeds realized as a result of any
sale of the Collateral shall be applied by Sadler first to the costs, expenses,
liabilities, obligations and attorneys's fees incurred by Sadler in the exercise
of his rights under this Agreement, second to the interest due upon any of the
Obligations, and third to the principal of the Obligations, in such order as
Sadler shall determine in his sole discretion. Any surplus shall be paid to
Borrower or other persons legally entitled thereto; Borrower shall remain liable
to Sadler for any deficiency. If Sadler, in his sole discretion, directly or
indirectly enters into a deferred payment or other credit transaction with any
purchaser at any sale of Collateral, Sadler shall have the option, exercisable
at any time, in his sole discretion, of either reducing the Obligations by the
principal amount of purchase price or deferring the reduction of the Obligations
until the actual receipt by Sadler of the cash therefor.

         10.6 Remedies Cumulative. In addition to the rights and remedies set
forth in this Agreement, Sadler shall have all other rights and remedies
accorded a secured party in equity, under the Code, and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Sadler and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Sadler of one or more of his rights or remedies shall not be deemed an election,
nor bar Sadler from subsequent exercise or partial exercise of any rights or
remedies. The failure or delay of Sadler to exercise any rights or remedies
shall not operate as a waiver thereof, but all rights and remedies shall
continue in full force and effect until all of the Obligations have been
indefeasibly paid and performed.

         11.  GENERAL PROVISIONS.

         11.1 Interest Computation. In computing interest on the Obligations,
all checks, wire transfers and other items of payment received by Sadler
(including proceeds of Receivables and payment of the Obligations in full) shall
be deemed applied by Sadler on account of the Obligations

                                     -23-

<PAGE>

three (3) Business Days after receipt by Sadler of immediately available
funds, and, for purposes of the foregoing, any such funds received after
10:30 a.m. St. Paul, Minnesota time, on any day shall be deemed received on
the next Business Day. Sadler shall be entitled to charge Borrower's account
for such three (3) Business Days of "clearance" or "float" at the rate(s) set
forth in Section 3 of the Schedule on all checks, wire transfers and other
items received by Sadler, regardless of whether such three (3) Business Days
of "clearance" or "float" actually occur, and shall be deemed to be the
equivalent of charging interest on such collections. The across-the-board
three (3) Business Days clearance or float charge on all collections is
acknowledged by the parties to constitute an integral aspect of the pricing
of Sadler's financing of Borrower. Sadler shall, not, however, be required to
credit Borrower's account for the amount of any item of payment which is
unsatisfactory to Sadler in his sole discretion, and Sadler may charge
Borrower's loan account for the amount of any item of payment which is
returned to Sadler unpaid.

         11.2 Application of Payments. Subject to Section 10.5 hereof, all
payments with respect to the Obligations may be applied, and in Sadler's sole
discretion reversed and reapplied, to the Obligations, in such order and manner
as Sadler shall determine in his sole discretion.

         11.3 Charges to Accounts. Sadler may, in his discretion, require that
Borrower pay monetary Obligations in cash to Sadler or charge them to Borrower's
Loan account, in which event they will bear interest from the date due to the
date paid at the same rate applicable to the Loans.

         11.4 Monthly Accountings. Sadler shall upon Borrower's written request,
but not more frequently than monthly, provide an account of advances, charges,
expenses and payments made pursuant to this Agreement. Such account shall be
deemed correct, accurate and binding on Borrower and an account stated (except
for reverses and reapplications of payments made and corrections of errors
discovered by Sadler) unless Borrower notifies Sadler in writing to the contrary
with in thirty (30) days after each account is rendered, describing the nature
of any alleged errors or omissions.

         11.5 Notices. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, facsimile or certified mail return
receipt requested, addressed to Sadler or Borrower at the address shown on the
heading to this Agreement, or at any other address designated in writing by one
party to the other party. All notices shall be deemed to have been given upon
delivery in the case of notices personally delivered, faxed (at time of
confirmation of transmission), or at the expiration of one (1) Business Day
following delivery to the private delivery service, or two (2) Business Days
following the deposit thereof in the United States mail, with postage paid.

         11.6 Severability. Should any provision of this Agreement be held by
any court of competent jurisdiction to be void or unenforceable, such defect
shall not affect the remainder of this Agreement, which shall continue in full
force and effect.

         11.7 Integration. This Agreement and such other written agreements,
documents and

                                     -24-

<PAGE>

instruments as may be executed in connection herewith are the final, entire
and complete agreement between Borrower and Sadler and supersede all prior
and contemporaneous negotiations and oral representations and agreements, all
of which are merged and integrated in this Agreement. THERE ARE NO ORAL
UNDERSTANDINGS, REPRESENTATIONS, OR AGREEMENTS BETWEEN THE PARTIES WHICH ARE
NOT SET FORTH IN THIS AGREEMENT OR IN OTHER WRITTEN AGREEMENTS SIGNED BY THE
PARTIES IN CONNECTION HEREWITH.

         11.8 Waivers. The failure of Sadler at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Sadler shall not waive or
diminish any right of Sadler later to demand and receive strict compliance
therewith. Any waiver of any Default shall not waive or affect any other
Default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Sadler shall be deemed to have been waived
by any act or knowledge of Sadler or its agents or employees, but only by a
specific written waiver signed by Sadler and delivered to Borrower. Borrower
waives demand, protest, notice of protest and notice of default or dishonor,
notice of payment, and nonpayment, release, compromise, settlement, extension or
renewal of any commercial paper, instrument, account, General Intangible,
document or guaranty at any time held by Sadler on which Borrower is or any in
any way be liable, and notice of any action taken by Sadler, unless expressly
required by this Agreement.

         11.10 Amendment. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and Sadler.

         11.11 Time of Essence. Time is of the essence in the performance by
Borrower of each and every obligation under this Agreement.

         11.12 Attorneys' Fees, Costs and Charges. Borrower shall reimburse
Sadler for all reasonable attorneys' fees (including reasonable attorneys' fees
and expenses incurred pursuant to bankruptcy) and all filing, recording, search,
title insurance, appraisal, audit, and other costs incurred by Sadler, pursuant
to, or in connection with, or relating to this Agreement (whether or not a
lawsuit is filed), including, but not limited to, any reasonable attorneys' fees
and costs (including reasonable attorneys' fees and expenses incurred pursuant
to bankruptcy) Sadler incurs in order to do the following: prepare and negotiate
this Agreement and the documents relating to this Agreement; obtain legal advice
in connection with this Agreement or Borrower; enforce, or seek to enforce, any
of his rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower's books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
Sadler's security interest in, the Collateral; and otherwise represent Sadler in
any litigation relating to Borrower. If either Sadler or Borrower files any
lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its costs and
reasonable attorneys' fees (including reasonable attorneys' fees and costs
incurred pursuant to bankruptcy), including (but not limited to)

                                     -25-

<PAGE>

reasonable attorneys' fees and costs incurred in the enforcement of,
execution upon or defense of any order, decree, award or judgment. Borrower
shall also pay Sadler's reasonable costs for returned checks and for wire
transfers. All reasonable attorneys' fees, costs and charges (including
reasonable attorneys' fees and expenses incurred pursuant to bankruptcy) and
other fees, costs and charges to which Sadler may be entitled pursuant to
this Agreement may be charged by Sadler to Borrower's loan account and shall
thereafter bear interest at the same rate as the Loans.

         11.13 Benefit of Agreement. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Sadler; provided,
however, that Borrower may not assign or transfer any of its rights under this
Agreement without the prior written consent of Sadler, and any prohibited
assignment shall be void. No consent by Sadler to any assignment shall release
Borrower from its liability for the Obligations. Sadler may assign his rights
and delegate its duties hereunder by the sale of assignment or participation
interests, all without the consent of Borrower.

         11.14 Paragraph Headings; Construction. Paragraph headings are only
used in this Agreement for convenience. Borrower and Sadler acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the heading shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including" whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Sadler or Borrower under any rule
of construction or otherwise. The parties acknowledge and understand that Sadler
is currently affiliated with Borrower. Borrower acknowledges and agrees that
this transaction has been negotiated at arms length, and in good faith, and
offers Borrower advantages over alternatives available to Borrower. Therefore,
Borrower waives any defense arising from preference, conflict of interest or
similar claim result from Sadler's affiliation.

         11.15 Governing Law; Jurisdiction; Venue. This Agreement and all acts
and transactions hereunder and all rights and obligations of Sadler and Borrower
shall be governed by the internal laws of the State of Minnesota without regard
to its conflicts of law principles. As a material part of the consideration to
Sadler to enter into this Agreement, Borrower (a) agrees that all actions and
proceedings relating directly or indirectly to this Agreement shall, at Sadler's
option, be litigated in courts located within Minnesota or Wisconsin, (b)
consents to the jurisdiction and venue of any such court and consents to service
of process in any such action or proceeding by personal delivery or any other
method permitted by law; and (c) waives any and all rights Borrower may have to
object to the jurisdiction of any such court, or to transfer or change the venue
of any such action or proceeding.

         11.16 Mutual Waiver of Jury Trial. BORROWER AND SADLER EACH HEREBY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING
OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT, OR ANY CONDUCT, ACTS OR
OMISSIONS OF SADLER OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS

                                     -26-

<PAGE>

AFFILIATED WITH SADLER OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

BORROWER:

                                 DOTRONIX, INC.



                                 By:      /s/ Robert J. Andrews
                                          ------------------------------


                                 Title:   Vice  President, OPERATIONS
                                          ------------------------------


                                 By:      /s/ William S. Sadler
                                          ------------------------------
                                          William S. Sadler



                                     -27-

<PAGE>
                                   SCHEDULE TO
                           LOAN AND SECURITY AGREEMENT

BORROWER:         DOTRONIX, INC.

ADDRESS:          160 FIRST STREET, S.E.
                  NEW BRIGHTON, MINNESOTA  55112-7894

         This Schedule forms an integral part of the Loan and Security Agreement
between William S. Sadler and the above-borrower.

SECTION 2 - CREDIT FACILITIES

         SECTION 2.1 - CREDIT LIMIT:

         A.       Maximum Dollar Amount. The total amount outstanding on any
                  Loans at any time shall not exceed One Million Dollars
                  ($1,000,000.00) (the "Maximum Dollar Amount").

         B.       Release of Security. If the amount outstanding on the Loan
                  does not exceed Eighty Percent (80%) of the amount of
                  Borrower's Eligible Receivables (as defined in Section 1 of
                  the Agreement), which amount may be increased to Eighty-five
                  Percent (85%) of the amount of Borrower's Eligible Receivables
                  (as defined in Section 1 of the Agreement), in the event the
                  Borrower's Dilution Rate is less than Five percent (5%),
                  Sadler shall, upon Borrower's written request, release the
                  Mortgage on Borrower's property at 3833 North White Avenue,
                  Eau Claire, WI 54703, given to secure this Loan.

         C.       Maximum Loan Amount Reduction. If the Mortgage on the
                  Borrower's property at 3833 North White Avenue, Eau Claire, WI
                  54703, is released as described above, the Maximum Dollar
                  Amount shall not exceed the lesser of One Million Dollars
                  ($1,000,000.00) or Eighty percent (80%) of the amount of
                  Borrower's Eligible Receivables (as defined in Section 1 of
                  the Agreement), which amount may be increased to Eighty-five
                  (85%) of the amount of Borrower's Eligible Receivables (as
                  defined in Section 1 of Agreement) In the event the Borrower's
                  Dilution Rate is less than Five-percent (5%).

SECTION 3 - INTEREST AND FEE

         SECTION 3.1 - INTEREST RATE:

                  A rate equal to the Prime Rate plus 3.0% per annum, calculated
                  on the basis of a 360-day year for the actual number of days
                  elapsed. The interest rate applicable to all Loans shall be
                  adjusted monthly as of the first day of each month, and the
                  interest to


                                      -28-

<PAGE>

                  be charged for each month shall be based on the highest
                  Prime Rate in effect during the prior month, but in no
                  event shall the rate of interest charged on any Loans in any
                  month be less than 9.0% per annum.

         SECTION 3.1 - MINIMUM MONTHLY INTEREST:

                  There shall be no minimum monthly interest.

         SECTION 3.2 - OTHER FEES:

                  None.

SECTION 5 - CONDITIONS PRECEDENT

         SECTION 5.2 - MINIMUM AVAILABILITY:

                  Five Hundred Thousand Dollars ($500,000.00) at funding.

         SECTION 5.12 - OTHER DOCUMENTS AND AGREEMENTS:

                  1.       UCC-1 financing statements, fixture filings and
                           termination statements;

                  2.       Security Agreements (including those covering
                           copyrights, patents and trademarks); and

                  3.       Combination Mortgage and Security Agreement and
                           Fixture Financing statement and Assignment of Lease
                           and Rents encumbering the property at 3833 North
                           White Avenue, Eau Claire, Wisconsin 54703.

SECTION 6 - REPRESENTATIONS, WARRANTIES AND COVENANTS

         SECTION 6.2 - PRIOR NAMES OF BORROWER:

                  Video Monitors, Inc. - a subsidiary merged into Borrower.

         SECTION 6.2 - PRIOR TRADE NAMES OF BORROWER:

                  None.

         SECTION 6.2 - EXISTING TRADE NAMES OF BORROWER:

                  None.


                                     -29-

<PAGE>

         SECTION 6.3 - OTHER LOCATIONS AND ADDRESSES:

                  3833 North White Avenue, Eau Claire, WI 54703.
                  50 Cleveland Avenue, New Brighton, MN 55112.
                  60 Cleveland Avenue, New Brighton, MN 55112.

         SECTION 6.10 - MATERIAL ADVERSE LITIGATION:

                  None.

         SECTION 6.10 - FUTURE CLAIMS AND LITIGATION:

                  Borrower will promptly inform Sadler in writing of any claim,
                  proceeding, litigation or investigation in the future
                  threatened or instituted by or against Borrower involving any
                  single claim of Fifty Thousand Dollars ($50,000.00) or more,
                  or involving One Hundred Thousand Dollars ($100,000.00) or
                  more in the aggregate.

SECTION 8 - ADDITIONAL DUTIES OF BORROWER

         SECTION 8.1 - OTHER PROVISIONS:

                  1.       Borrower shall have no accounts payable over ninety
                           (90) days from invoice date at the time of funding.

                  2.       All of Borrower's applicable taxes shall be paid and
                           current at the time of funding and at all times
                           during the Term of the Loan and Security Agreement.

                  3.       At his option, Sadler may require that daily
                           remittance be collected via a lockbox in form and
                           substance required by Sadler.

                  4.       Borrower shall ensure that Sadler is granted a first
                           priority perfected security interest on all of
                           Borrower's tangible and intangible assets to the
                           extent said security interests are perfected pursuant
                           to the documents entered into and notices given in
                           connection herewith, including, without limitation,
                           accounts receivables, inventory, machinery and
                           equipment, and all other tangible and intangible
                           assets including patents, trademarks and/or
                           copyrights.

                  5.       Satisfactory review of UCC searches.

                  6.       Borrower shall at funding, and at all times during
                           the term hereof, maintain a minimum Tangible Net
                           Worth (as defined in Section 1 above) of Two Million
                           Dollars ($2,000,000.00).


                                      -30-

<PAGE>

         SECTION 8.2 - INSURANCE:

                  Subject to the limitations set forth in Section 8.2 of the
                  Agreement, Sadler shall release to Borrower insurance proceeds
                  with respect to Equipment totaling less than Fifty Thousand
                  Dollars ($50,000.00).

         SECTION 8.3 - REPORTING:

                  Borrower shall provide Sadler with the following, upon
                  Sadler's written request and upon such conditions as Sadler
                  may require:

                  1.       Monthly Receivable agings, aged by invoice date.

                  2.       Monthly accounts payable agings, aged by invoice
                           date, and outstanding or held check registers.

                  3.       Monthly unaudited financial statements.

                  4.       Quarterly unaudited financial statements.

                  5.       Quarterly customer lists, including customer name,
                           address, and phone number.

                  6.       Annual CPA audited consolidated and consolidating
                           financial statements, including inventory review,
                           certified by independent certified public accountants
                           acceptable to Sadler.

                  7.       10Q and 10K filings or extensions thereof.

         SECTION 8.5 - NEGATIVE COVENANTS:

         (Acquired Assets):  Fifty Thousand Dollars ($50,000.00).

SECTION 9 - TERM

         SECTION 9.1 - MATURITY DATE:

         February 28, 2001, subject early termination as provided in Section 9.2
         of the Agreement.


                                     -31-

<PAGE>

                            COMBINATION MORTGAGE AND
                             SECURITY AGREEMENT AND
                         FIXTURE FINANCING STATEMENT AND
                         ASSIGNMENT OF LEASES AND RENTS

         THIS INDENTURE (hereinafter referred to as the "MORTGAGE"), made this
23rd day of February, 2000, between DOTRONIX, INC., a Minnesota corporation
("MORTGAGOR"), and WILLIAM S. SADLER ("SADLER").

         WITNESSETH, that the Mortgagor in consideration of the debt hereinafter
described and the sum of $1,000,000.00 to Mortgagor in hand paid by Mortgagee
and other good and valuable consideration, the receipt of which is hereby
acknowledged, does hereby MORTGAGE, GRANT, BARGAIN, SELL AND CONVEY to the
Mortgagee, his successors and assigns, forever, the following properties (all of
the following being hereafter collectively referred to as the "MORTGAGED
PROPERTY"):

                                GRANTING CLAUSE A
                                  REAL PROPERTY

         All of the tracts or parcels of real property (the "REAL PROPERTY")
lying and being in the County of Chippewa, State of Wisconsin, legally described
on attached EXHIBIT "A", together with all the estates and rights in and to the
Real Property and in and to lands lying in streets, alleys and roads adjoining
the Real Property and all buildings, structures, improvements, fixtures and
annexations, access rights, easements, rights of way or use, servitudes,
licenses, tenements, hereditaments and appurtenances now or hereafter belonging
or pertaining to the Real Property; and

                                GRANTING CLAUSE B
             IMPROVEMENTS, FIXTURES, EQUIPMENT AND PERSONAL PROPERTY

        Together with all buildings, equipment, fixtures, improvements, building
supplies and materials and personal property (the "FIXTURES AND PERSONAL
PROPERTY") now owned or hereafter acquired and now or hereafter attached to,
located in, placed in or necessary to the use of the improvements on the Real
Property including, but without being limited to all machinery, fittings,
fixtures, apparatus, equipment or articles used to supply heating, gas,
electricity, air conditioning, water, light, waste disposal, power,
refrigeration, ventilation, and fire and sprinkler protection, as well as all


                                      -32-

<PAGE>

elevators, escalators, overhead cranes, hoists and assists, and the like, and
all furnishings, supplies, draperies, maintenance and repair equipment, floor
coverings, appliances, screens, storm windows, blinds, awnings, shrubbery and
plants (it being understood that the enumeration of any specific articles of
property shall in no way be held to exclude any items of property not
specifically enumerated), as well as renewals, replacements, proceeds,
additions, accessories, increases, parts, fittings and substitutes thereof,
together with all interest of Mortgagor in any such items hereafter acquired,
all of which personal property mentioned herein shall be deemed fixtures and
accessory to the Real Property and not severable in whole or in part without
material injury to the Real Property, together with the trade fixtures,
inventory, business equipment and removable personal property owned by Mortgagor
or in which Mortgagor has an interest which may be located on the Real Property,
specifically excepting therefrom, however, any such trade fixtures, inventory,
business equipment and removable property which is owned by any tenant occupying
the Mortgaged Property or any contractor furnishing labor or materials to the
Mortgaged Property; and

                                GRANTING CLAUSE C
                          RENTS, LEASES, PROFITS, ETC.

         Together with all rents, leases, amounts, and profits now due or which
may hereafter become due under or by virtue of any lease, license, sublease, or
agreement, whether written or oral, for the use or occupancy of the Mortgaged
Property or any part thereof.

                                GRANTING CLAUSE D
                              JUDGMENTS AND AWARDS

         Together with any and all awards or compensation made by any
governmental or other lawful authorities for the taking or damaging by eminent
domain of the whole or any part of the Mortgaged Property, including any awards
for a temporary taking, change of grade of streets or taking of access.

         AND THE SAID MORTGAGOR for itself, its successors and assigns, does
covenant with the Mortgagee, his successors and assigns, that Mortgagor is
lawfully seized of the Mortgaged Property and has good right to sell and convey
the same; that the Mortgaged Property is free from all encumbrances except as
may be further stated in EXHIBIT "B" of this Mortgage; that the Mortgagee, his
successors and assigns, shall quietly enjoy and possess the Mortgaged Property;
and that the Mortgagor will WARRANT AND DEFEND the title to the same against all
lawful claims not specifically excepted in this Mortgage.

         TO HAVE AND TO HOLD THE SAME, together with possession and right of
possession of the Mortgaged Property, unto the Mortgagee, his successors and
assigns, forever.

         PROVIDED, NEVERTHELESS, that if the Mortgagor, its successors or
assigns, shall pay to the Mortgagee, his successors or assigns, the sum of
$1,000,000.00 according to the terms of that certain Loan and Security Agreement
and promissory note or notes executed pursuant thereto (which Loan and Security
Agreement and Promissory Note or notes are sometimes referred to herein as the


                                       -33-

<PAGE>

"Note") of even date herewith, the terms and conditions of which are
incorporated herein by reference and made a part hereof, together with any
extensions or renewals thereof, due and payable with simple interest thereon as
provided for in the Note, the balance of said principal sum, together with
interest thereon, being due and payable in any event no later than February 28,
2001, and the Mortgagor shall repay to the Mortgagee, his successors or assigns,
at the times demanded and with interest thereon at the same rate specified in
the Note, all sums advanced in protecting the lien of this Mortgage, in payment
of taxes on the Mortgaged Property, in payment of insurance premiums covering
improvements thereon, in payment of principal and interest on prior liens, in
payment of expenses and attorney's fees herein provided for and all sums
advanced for any other purpose authorized herein (the Note and all such sums,
together with interest thereon, being collectively referred to as the
"INDEBTEDNESS SECURED HEREBY"), and shall keep and perform all of the covenants
and agreements herein contained, then this Mortgage shall become null and void,
and shall be released at Mortgagor's expense.

         The maximum principal indebtedness secured by this mortgage is
$1,000,000.00.

         AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:

                                   ARTICLE 1.

                  GENERAL COVENANTS, AGREEMENTS, AND WARRANTIES

     SECTION 1.1 GENERAL COVENANTS OF TITLE, AUTHORITY AND PERFORMANCE.
Mortgagor represents, warrants, covenants, and agrees as follows:

         a.       That it is the lawful owner of the Mortgaged Property;

         b.       That the Mortgaged Property is free from any and all liens and
                  encumbrances excepting only those that are listed on EXHIBIT
                  "B" (the "PERMITTED ENCUMBRANCES");

         c.       That it will defend the title to the Mortgaged Property
                  against all claims and demands whatsoever not specifically
                  excepted herein;

         d.       That, with the exception of real estate taxes and installments
                  of special assessments not currently due and payable, it will
                  not allow to exist any lien or encumbrance against the
                  Mortgaged Property which is superior to the lien of the
                  Mortgage, and that in the event of any such lien or
                  encumbrance that it will pay and satisfy the same within
                  thirty (30) days of the existence thereof and specifically, no
                  fixtures will be installed by the Mortgagor or any occupant of
                  the Real Property which will be subject to a purchase money
                  security interest or other vendor's lien;


                                       -34-
<PAGE>

         e.       That neither the Loan Documents (defined below), nor the
                  performance or observance by Mortgagor of any of the matters
                  or things provided for therein, violate any court order,
                  judgment, decree or agreement to which Mortgagor is a party,
                  or by which Mortgagor or his property may be bound or
                  affected;

         f.       That no approval, consent or authorization of, or filing or
                  registration with, any governmental or regulatory authority or
                  agency is required in connection with the execution, delivery
                  and performance of this Mortgage and the Note other than the
                  recordings and filings necessary to perfect the liens created
                  hereby and thereby;

         g.       That all applicable zoning laws, ordinances and regulations
                  affecting the Mortgaged Property permit the use and occupancy
                  thereof and that Mortgagor has obtained the necessary
                  consents, permits and licenses to construct, occupy and
                  operate the Mortgaged Property for its intended purposes;

         h.       That each and every representation, warranty, or other matter
                  contained in any of the Loan Documents and all material
                  submitted to the Mortgagee relative to the Loan, specifically
                  including all financial statements and projections, are true,
                  correct and accurate and can be and are meant to be relied
                  upon by the Mortgagee;

         i.       That it will perform all of his obligations pursuant to the
                  Loan Documents, and specifically that Mortgagor shall promptly
                  pay the Note and all other indebtedness secured by this
                  Mortgage and other Loan Documents in accordance with the terms
                  and conditions of the Note and this Mortgage and other Loan
                  Documents;

         j.       That it shall comply with all of the terms, provisions, and
                  requirements of any other document or agreement which is or
                  may become a lien or encumbrance on the Mortgaged Property,
                  whether subordinate or prior to this Mortgage.

         The Loan and Security Agreement, any note or notes executed pursuant
thereto, this Mortgage, and all other documents given in connection herewith are
sometimes referred to herein as the "LOAN DOCUMENTS".

         SECTION 1.2 FIXTURES AND PERSONAL PROPERTY. Upon the request of
Mortgagee, Mortgagor shall deliver to Mortgagee an inventory showing make,
model, serial number and location of all Fixtures and Personal Property,
together with a certification by Mortgagor that said inventory is a true and
complete schedule of the Fixtures and Personal Property and that the items
specified in said inventory constitute all of the Fixtures and Personal Property
required for the proper management, maintenance and operation of the Mortgaged
Property and that all of said items are owned by Mortgagor free and clear of
conditional sales contracts, title retention arrangements or other security
interests except as specifically permitted herein.


                                       -35-
<PAGE>

         SECTION 1.3 DELIVERY OF DOCUMENTS. Upon the request of Mortgagee,
Mortgagor shall make, execute and deliver or cause to be made, executed and
delivered to Mortgagee and, where appropriate, shall cause to be recorded or
filed and from time to time thereafter to be re-recorded or re-filed, at such
time and in such offices and places as shall be deemed desirable by Mortgagee,
any and all further mortgages, instruments of further assurance, certificates,
UCC filings and other documents as Mortgagee may consider necessary or desirable
in order to effectuate, complete or perfect or to continue and preserve the
obligations of Mortgagor under the Loan Documents, and the lien of this Mortgage
as a lien upon all of the Mortgaged Property as provided herein, whether now
owned or hereafter acquired by Mortgagor. Upon any failure by Mortgagor to do
so, Mortgagee may (but shall not be obligated to) make, execute, record, file,
re-record or re-file any and all such mortgages, instruments, certificates and
documents for and in the name of Mortgagor, and Mortgagor hereby irrevocably
appoints Mortgagee the agent and attorney-in-fact of Mortgagor to do so.
Mortgagor further agrees to pay to Mortgagee, upon demand, all costs and
expenses incurred by Mortgagee in connection with the preparation, execution,
recording, filing and re-filing of any such documents, including the charges for
examining title and the attorneys' fees incurred in connection therewith.
However, neither a request so made by Mortgagee nor the failure of Mortgagee to
make such a request shall be construed as a release of the Mortgaged Property,
or any part thereof, from the lien of this Mortgage, it being understood and
agreed that this covenant and any mortgage or security instrument delivered to
Mortgagee are cumulative and given as additional security.

         SECTION 1.4 REPAIR, MAINTENANCE, AND OPERATION. Mortgagor represents,
warrants, covenants, and agrees that it will:

         a.       Cause the Mortgaged Property and every part thereof to be
                  maintained, preserved and kept in safe and good repair,
                  working order and condition;

         b.       Not commit or permit waste thereon;

         c.       Not remove, demolish or alter the design or structural
                  character of any building now or hereafter erected upon all or
                  any part of the Mortgaged Property without the prior written
                  consent of Mortgagee;

         d.       Complete or cause to be completed forthwith any improvements
                  which may hereafter be under course of construction upon the
                  Mortgaged Property;

         e.       Comply or cause compliance with all laws and regulations of
                  any governmental authority with reference to the Mortgaged
                  Property and the manner of using or operating the same, and
                  with all restrictive covenants, if any, affecting the title to
                  the Mortgaged Property, or the use thereof;

         f.       Make or cause to be made all necessary and proper repairs,
                  renewals, replacements, additions and betterments thereto, so
                  that the value and efficient use thereof shall be


                                       -36-
<PAGE>

                  fully preserved and maintained and so that all laws and
                  regulations as aforesaid shall be complied with;

         g.       Not remove from the Mortgaged Property any of the Fixtures or
                  Personal Property included in the Mortgaged Property without
                  the prior written consent of the Mortgagee;

         h.       Pay all charges made by utility companies, whether public or
                  private, for electricity, gas, heat, water, air conditioning
                  or sewer services furnished or used in connection with the
                  Mortgaged Property and will, upon request by Mortgagee,
                  furnish proper receipts showing such payments.

         SECTION 1.5 PAYMENT OF GOVERNMENTAL CHARGES AND INSURANCE PREMIUMS;
ESCROW. Mortgagor, before any penalty attaches thereto, shall pay all taxes,
assessments and governmental charges or levies imposed upon or against Mortgagor
or the Mortgaged Property ("GOVERNMENTAL CHARGES"), and will not allow to exist
any mechanic's, statutory or other lien on the Mortgaged Property or any part
thereof except those which are expressly allowed by the Loan Documents. Receipts
evidencing payment by Mortgagor of the payments of such Governmental Charges
shall be furnished promptly to Mortgagee.

         In the event of any legislative action or judicial enactment after the
date hereof imposing upon Mortgagee the obligation to pay any such Governmental
Charge, or deducting the lien of the Mortgage from the value of the Mortgaged
Property for the purpose of taxation, or changing in any way the laws now in
force for the taxation of mortgages, or debts secured thereby, for state or
local purposes, or the manner of the operation of any such Governmental Charge
so as to affect the interest of Mortgagee, then, and in such event, Mortgagor
shall bear and pay the full amount of such Governmental Charge before penalty
attaches for nonpayment thereof. If for any reason payment by Mortgagor of any
such Governmental Charges would be unlawful, or if the payment thereof would
constitute usury or render the Indebtedness Secured Hereby wholly or partially
usurious or uncollectible under any of the terms or provisions of the Loan
Documents then Mortgagee, at its option, may declare the Indebtedness Secured
Hereby, with interest thereon, to be immediately due and payable, or Mortgagee,
at its option, may pay such amount or portion of such Governmental Charges as
renders the Loan or Indebtedness Secured Hereby unlawful or usurious or
uncollectible, in which event Mortgagor will, concurrently therewith, pay the
remaining portion or balance of said Governmental Charges.

         In the alternative to direct payment of the Governmental Charges by
Mortgagor, if an Event of Default occurs Mortgagee may require, at its option,
that Mortgagor make monthly deposits with Mortgagee, together with and in
addition to payments of principal and interest on the Note, of a sum equal to
one-twelfth (1/12) of the annual Governmental Charges, together with one-twelfth
(1/12) of the annual insurance premiums described in Section 1.6 below. Said
deposits shall be placed in an account with Mortgagee or its designated agent
and Mortgagor shall be responsible for all fees and charges incurred in
connection therewith. The amount of Governmental Charges, when


                                       -37-
<PAGE>

unknown, shall be estimated by Mortgagee. Such deposits, when made, shall be
used by Mortgagee to pay the Governmental Charges and insurance premiums when
due. In the event of any deficiency in any such account to pay the
Governmental Charges, and insurance premiums when due, Mortgagor shall pay
such deficiency to Mortgagee upon written demand. If Mortgagee declares all
Indebtedness Secured Hereby to be due and payable immediately pursuant to any
other provision of the Loan Documents, Mortgagee may then apply any funds in
said account against the entire Indebtedness Secured Hereby.

         SECTION 1.6 INSURANCE. Mortgagor shall, at its sole expense obtain for,
deliver to and maintain for the benefit of Mortgagee, during the term of this
Mortgage, insurance policies issued by an insurer or insurers acceptable to
Mortgagee in such amounts as set forth below, insuring Mortgagor and the
Mortgaged Property against loss from:

         a.       Fire, windstorm and perils generally included in the term
                  "extended coverage". The policy or policies of such insurance
                  shall (i) be written on forms and with insurance companies
                  satisfactory to Mortgagee, (ii) contain deductible limits and
                  co-insurance provisions (which shall in no event be less than
                  90% of full replacement cost of the Mortgaged Property), (iii)
                  name as the insured parties Mortgagor and Mortgagee as their
                  interests may appear, (iv) be in amounts sufficient to prevent
                  Mortgagor from becoming a co-insurer of any loss thereunder,
                  and (v) bear a mortgagee clause in favor of Mortgagee in form
                  satisfactory to Mortgagee, all with loss proceeds under all
                  such policies to be made payable to Mortgagee. The full
                  replacement cost of the Mortgaged Property shall be determined
                  from time to time (but not more frequently than once in every
                  twenty-four (24) month period) at the request of Mortgagee by
                  an architect, contractor, appraisal company or one of the
                  insurers selected and acceptable to Mortgagee. Mortgagee shall
                  bear any cost resulting from said determination.

         b.       Claims for bodily injury, death, or property damage occurring
                  in, on or about the Mortgaged Property specifically including
                  public liability insurance affording protection to the limit
                  of not less than One Million Dollars ($1,000,000.00) in
                  respect to the injury or death of a single person, and to the
                  limit of not less than One Million Dollars ($1,000,000.00) in
                  respect to any one occurrence, and to the limit of not less
                  than Three Hundred Thousand Dollars ($300,000.00) with respect
                  to property damage per occurrence.

         c.       Workers' compensation claims.

         d.       Perils generally included in the term "builder's risk
                  insurance" in the amount of one hundred percent (100%)
                  completed value non-reporting form during any period of
                  construction on the Mortgaged Property;

         e.       Sprinkler damage, if the Mortgaged Property contains a
                  sprinkler system; and


                                       -38-
<PAGE>

         f.       Such other insurable hazards, casualties and contingencies as
                  Mortgagee may reasonably require.

         Each of said policies and renewals thereof shall be held by Mortgagee
and shall contain a non-contributory mortgagee endorsement making losses payable
to Mortgagee and an agreement by the insurer that the same shall not be canceled
without at least thirty (30) days prior written notice to Mortgagee. At least
thirty (30) days prior to the expiration date of all such policies, renewals
thereof satisfactory to Mortgagee shall be delivered to Mortgagee.

         Mortgagor shall also deliver to Mortgagee receipts evidencing the
payment of all premiums on such insurance policies and renewals. Delivery of the
insurance policies and renewals thereof shall constitute an assignment to
Mortgagee, as further security, of all unearned premiums. In the event of
foreclosure of this Mortgage or any other transfer of title to the Mortgaged
Property in extinguishment of the indebtedness and other sums secured hereby,
all right, title and interest of Mortgagor in and to all insurance policies and
renewals thereof then in force shall pass to the purchaser or grantee.

         Mortgagor shall give Mortgagee prompt notice of any damage to or
destruction of the Mortgaged Property or any part thereof, and in case of loss
covered by policies of insurance which are not being prosecuted with due
diligence by Mortgagor, or if an Event of Default exists and is continuing
during such time as said loss is unsettled, Mortgagee (whether before or after
foreclosure sale) is hereby authorized at its option and without the consent of
Mortgagor to settle and adjust any claim arising out of such policies and
collect and receipt for the proceeds payable therefrom, provided, that Mortgagor
may himself adjust and collect for any losses arising out of a single occurrence
aggregating not in excess of $25,000.00. No loss in excess of $25,000.00 shall
be settled by Mortgagor without the prior consent of Mortgagee. Any expense
incurred by Mortgagee in the adjustment and collection of insurance proceeds
(including without limitation the cost of any independent appraisal of the loss
or damage on behalf of Mortgagee) shall be reimbursed to Mortgagee first out of
any proceeds. The remaining proceeds or any part thereof shall be applied to
reduction of that portion of Indebtedness then most remotely to be paid, whether
due or not, or to the restoration or repair of the Mortgaged Property, the
choice of application to be at the discretion of Mortgagee. Mortgagee is hereby
authorized to collect and receive the proceeds from any such policy or policies.
Each insurance company is hereby authorized and directed to make payment for all
such losses to Mortgagor and Mortgagee jointly.

         Mortgagee shall not be responsible for any failure to collect any
insurance proceeds due under the terms of any policy regardless of the cause of
such failure. Mortgagee specifically reserves the right to approve any
settlement by Mortgagor of any claim in excess of $25,000.00 under such
insurance policies, which approval shall not be unreasonably withheld.

         SECTION 1.7 ACCESS TO MORTGAGED PROPERTY. Mortgagor shall grant to
Mortgagee access to and the right to inspect the Mortgaged Property at all
reasonable times, after prior notice to Mortgagor, without becoming liable to
Mortgagor or any person, provided, however


                                       -39-
<PAGE>

that the Mortgagee shall not by virtue of the existence or exercise of this
right be obligated to perform any other act. In the event the inspection is
in response to a suspected default or other problem with the Mortgaged
Property, if the inspection confirms the existence of such default, Mortgagor
shall reimburse Mortgagee for the cost of the inspection.

         SECTION 1.8 PERFORMANCE UNDER LEASES. Mortgagor shall, at its cost and
expense, perform and discharge, or cause to be performed and discharged, all of
the obligations and undertakings of Mortgagor or its agents under any leases or
use agreements of the Mortgaged Property in which Mortgagor is lessor (the
"LEASES") and will use its best efforts to enforce or secure, or cause to be
enforced or secured, the performance of each and every obligation and
undertaking of the respective tenants under the Leases and will appear in and
defend, at its cost and expense, any action or proceeding arising under or in
any manner connected with the Leases or the obligations and undertakings of any
tenant thereunder. Mortgagor shall not assign or otherwise encumber future
rental payments under the Leases, collect or accept any rentals or payments
thereunder in advance of the time the same become due without, in each instance,
obtaining the prior written consent of Mortgagee.

         SECTION 1.9 MORTGAGEE'S RIGHT TO PROTECT HIS INTEREST. Mortgagee shall
have the power and authority to institute and maintain any suits and
proceedings, and Mortgagor shall cooperate therewith, as Mortgagee may deem
advisable:

         a.       To prevent any impairment of the Mortgaged Property by any
                  acts which may be unlawful or in violation of this Mortgage;

         b.       To preserve or protect his interest in the Mortgaged Property;
                  and

         c.       To restrain the enforcement of or compliance with any
                  legislation or other governmental enactment, rule or order
                  that may be unconstitutional or otherwise invalid, if the
                  enforcement of or compliance with such enactment, rule or
                  order might impair the security hereunder or be prejudicial to
                  Mortgagee's interest.

         SECTION 1.10 RIGHT OF MORTGAGEE TO PERFORM. If Mortgagor fails to
comply with any of the terms, covenants and conditions herein, specifically
including those with respect to the procuring of insurance, the payment of
taxes, assessments and other charges, the keeping of the Mortgaged Property in
repair, upon prior notice to Mortgagor, Mortgagee may make advances to perform
the same, and where necessary, enter the Mortgaged Property for that purpose.
Mortgagor shall repay all sums so advanced upon demand, with interest from the
dates such advances are made, at the same rate of interest borne by the
indebtedness evidenced by the Note, and all sums so advanced, with interest,
shall become Indebtedness Secured Hereby in priority to the indebtedness
evidenced by the Note, but no such advance shall be deemed to relieve Mortgagor
from any default hereunder. The Mortgagee shall not be, by virtue of the
existence or exercise of this right, obligated to perform any such act or cure
any default.


                                       -40-
<PAGE>

         SECTION 1.11 RESTRICTION ON TRANSFER AND ENCUMBRANCE. Mortgagor shall
not sell, transfer, lease, encumber or convey, voluntarily or involuntarily, all
or any part of the Mortgaged Property without the prior written consent of the
Mortgagee, which consent may be given or denied in the Mortgagee's sole
discretion.

         SECTION 1.12 EMINENT DOMAIN. If the Mortgaged Property, or any part
thereof, or any interest therein, or any rights appurtenant thereto, including,
but not limited to, access, light, air and view, are condemned under any power
of eminent domain or acquired for any public use or quasi-public use, the
damages, proceeds and consideration for such condemnation or acquisition to the
extent of the full amount of indebtedness upon this Mortgage and obligations
secured hereby remaining unpaid, are hereby assigned by Mortgagor to Mortgagee,
as his interest may appear. All such damages, proceeds and considerations shall
be paid to Mortgagee and applied by Mortgagee, at his option, after deduction of
all its expenses (including reasonable attorneys' fees) incurred in obtaining
such damages, proceeds and consideration, to the reduction of the Indebtedness
Secured Hereby, whether or not then due and payable. Any surplus remaining after
payment of all Indebtedness Secured Hereby to be paid over to Mortgagor.
Mortgagor shall immediately furnish to Mortgagee true and correct copies of any
process papers or documents delivered to or served upon Mortgagor in connection
with any such eminent domain proceedings.

         SECTION 1.13 HAZARDOUS SUBSTANCES. Mortgagor warrants, covenants and
represents to Mortgagee that the Mortgaged Property is free of Hazardous
Substances (defined below). Mortgagor further warrants, covenants and represents
that the Mortgaged Property is not subject to "superfund" type liens or claims
by regulatory agencies or other party arising from the actual or threatened
release, deposit, or existence of hazardous substances in, on or about the
Mortgaged Property. Mortgagor agrees to indemnify, defend and hold Mortgagee
harmless from and against any and all claims, penalties, forfeitures, suits or
liabilities of any type or nature (including cost of defense, settlement and
reasonable attorneys' fees) incurred by Mortgagee hereafter or for which
Mortgagee shall become responsible for or pay as a result of any or all of the
following:

         a.       Death or bodily injury to any person;

         b.       Damage to any property;

         c.       Contamination of or detrimental effect upon environment;

         d.       Violation of governmental laws, orders or regulations;

which shall have resulted from or be due to the actual or threatened release of
Hazardous Substances claimed or alleged to have been deposited, stored, disposed
of, placed or otherwise located in, on or about the Mortgaged Property.


                                       -41-
<PAGE>

         Mortgagor shall not store, process or dispose of any Hazardous
Substances or toxic materials on the Mortgaged Property, nor permit the storage,
processing or disposal unless such storage, processing or disposal shall be done
in compliance with all applicable laws and regulations.

         As used in this Mortgage, the term "Hazardous Substances" is defined to
include any substances, wastes, contaminants or pollutants which are now or
hereafter shall be included within the definition of such term, or similar
replacement term, under any federal, state or local statute, ordinance, code or
regulation now existing or hereafter enacted or amended including, but not
limited to, the Wisc. Stat. ss.144.442 et seq; Wisc. Stat. ss.144.75 et seq;
Hazardous Waste Management Act, Wisc. Stat. ss.144.60 se seq; Wisconsin
Petroleum EnvironmenTal Clean Up Fund ss.101.143 eq seq; and Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sec 9601, et
seq., as amended by Superfund Amendments and Reauthorization Act of 1986.

         Mortgagee shall have the right, upon prior notice to Mortgagor, to
conduct at any time an environmental audit, including soil samplings and borings
and Mortgagor shall cooperate with Mortgagee in conducting such audit. In the
event that such audit confirms the existence of Hazardous Substances or toxic
materials upon the property, or Mortgagee was in possession of information from
which Mortgagee reasonably suspected the existence of said substances and
materials, all costs incurred by Mortgagee in obtaining the audit shall become
additional indebtedness secured by this Mortgage. Nothing herein shall be
construed to obligate Mortgagee to conduct an environmental audit and it is
expressly agreed that Mortgagee is relying upon Mortgagor's representations that
the Mortgaged Property is free of Hazardous Substances in making its loan to
Mortgagor.

         Mortgagor shall promptly provide Mortgagee with copies of all notices
or reports received or submitted by him to or from any governmental agency or
other third party with respect to the storage, processing, disposal, release or
threatened release of Hazardous Substances into or onto the Mortgaged Property
or any adjacent property.

         Mortgagor shall indemnify, defend, and hold harmless Mortgagee from and
against any claim, loss or damage to which Mortgagee may be subjected from past,
present, or future use, handling, storage, transportation or disposal of
Hazardous Substances or toxic materials upon the property herein mortgaged. This
indemnification shall survive the foreclosure of this Mortgage, but shall not
cover or apply to any disposal, storage or deposit of Hazardous Substances or
toxic materials first occurring after the date on which Mortgagee first becomes
the fee owner and obtains possession of the Mortgaged Property.

         SECTION 1.14  PERMITTED CONTESTS.  Mortgagor shall not be required to:

         a.       Pay any tax, assessment, or other charge referred to in
                  Paragraph 1.5 hereof;


                                       -42-
<PAGE>

         b.       Discharge or remove any lien, encumbrance, or charge referred
                  to in Paragraph 1.1d herein; or

         c.       Comply with any statute, law, rule, regulation, or ordinance
                  referred to Paragraph 1.4e herein;

         so long as Mortgagor:

         aa.      Shall contest in good faith the existence or amount thereof,
                  the amount of damages caused thereby, the extent of its
                  liability therefor, by appropriate proceedings which shall
                  operate during the pendency thereof to prevent:

                  i.       The collection of or other realization upon the tax,
                           assessment, charge or lien, encumbrance, or charge so
                           contested;

                  ii.      The sale, forfeiture, or loss of the Mortgaged
                           Property or any part thereof; and

                  iii.     Any interference with the use or occupancy of the
                           Mortgaged Property or any part thereof; and

         bb.      Shall give such security to the Mortgagee as may be demanded
                  by Mortgagee to insure compliance with the foregoing
                  provisions and other provisions of the Loan Documents.
                  Mortgagor shall give prompt written notice to Mortgagee of the
                  commencement of any contest referred to in this section.

         SECTION 1.15 SUBROGATION. If Mortgagee pays any prior lien from the
proceeds of the loan secured by this Mortgage, he shall be subrogated to the
rights of the holder of such prior lien as fully as if such lien had been
assigned to Mortgagee.

         SECTION 1.16 INDEMNIFICATION BY MORTGAGOR. Mortgagor will protect,
indemnify, save and hold harmless Mortgagee from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, attorney's fees and expenses) imposed upon or
incurred by or asserted against Mortgagee by reason of any of the following:

         a.       Ownership of the Mortgaged Property, or any interest therein,
                  or receipt of any rent or other sum therefrom;

         b.       Any accident, injury to or death of persons or loss of or
                  damage to property occurring on or about the Mortgaged
                  Property or any part thereof or the adjoining sidewalks,
                  curbs, vaults and vault space, if any;


                                       -43-
<PAGE>

         c.       Any use, non-use or condition of the Mortgaged Property or any
                  part thereof or the adjoining sidewalks, curbs, vaults and
                  vault space, if any;

         d.       Any failure on the part of Mortgagor to perform or comply with
                  any of the terms of this Mortgage;

         e.       Performance of any labor or services or the furnishing of any
                  materials or other property in respect of the Mortgaged
                  Property or any part thereof;

         f.       Any negligence or tortious act on the part of Mortgagor or any
                  of its agents, contractors, sublessee, licensees or invitees;
                  or,

         g.       Exercise by Mortgagee of any remedy provided hereunder or at
                  law or equity.

         If any action, suit or proceeding is brought against Mortgagee by
reason of any such occurrence for which Mortgagor must indemnify Mortgagee
pursuant to this paragraph, Mortgagor upon Mortgagee's request will at
Mortgagor's expense resist and defend such action, suit or proceeding or will
cause the same to be resisted and defended by counsel for the insurer of the
liability or by counsel designated by Mortgagor and approved by Mortgagee. Any
amounts paid by Mortgagee in connection with any of the matters referred to in
this Section shall become part of the Indebtedness Secured Hereby.

         The terms and provisions contained in this Section shall survive the
termination, release or satisfaction of the Loan Documents, but shall not apply
to any act or omission first occurring after Mortgagee acquires fee title to and
possession of the Mortgaged Property.

         SECTION 1.17 MISCELLANEOUS RIGHTS OF MORTGAGEE. Mortgagee may at any
time and from time to time, without notice, release any person liable for
payment of any of the Indebtedness Secured Hereby, extend the time or alter the
terms of payment of any of the Indebtedness Secured Hereby, accept additional
security of any kind, release any property securing the Indebtedness Secured
Hereby, consent to or join in the making of any plat or map of the Mortgaged
Property or the creation of any easement thereon or any covenants restricting
use or occupancy thereof. No such release, modification, addition, or change
shall affect the liability of any person for payment of the Indebtedness Secured
Hereby, other than a person specifically released by Mortgagee in writing, nor
shall it affect the priority and first lien status of this Mortgage upon any
property not so released.

         SECTION 1.18 COSTS OF ADMINISTRATION. If Mortgagor shall request any
consent, agreement, modification, release, or information from Mortgagee
concerning the Mortgaged Property, or any of the Loan Documents, or any other
agreement securing the Indebtedness Secured Hereby, Mortgagor shall pay to the
Mortgagee on demand a reasonable fee for considering the request along with any
expenses such as appraisal fees, attorneys' fees, or credit report charges,


                                       -44-

<PAGE>

whether or not the request is ultimately granted by Mortgagee. Such amounts
shall become additional Indebtedness Secured Hereby.

         SECTION 1.19 USE OF THE PREMISES. The Premises shall be used for light
manufacturing and office purposes in connection therewith and other uses
reasonably similar thereto which are permitted under applicable zoning and
building codes and ordinances.


                                   ARTICLE 2.

                          DEFAULT AND REMEDIES THEREFOR

         SECTION 2.1 EVENTS OF DEFAULT; ACCELERATION. The occurrence of any one
or more of the following shall be considered an "EVENT OF DEFAULT":

         a.       Failure by Mortgagor to pay when due any installments of
                  principal or interest due under the Note or any other Loan
                  Document;

         b.       Failure by Mortgagor to duly keep, perform and observe any
                  other covenant, condition or agreement in the Note or any
                  other Loan Document, after any cure period provided in the
                  Note or any other Loan Document;

         c.       If Mortgagor shall:

                  1.       Apply for or consent to the appointment of a
                           receiver, trustee or liquidator of Mortgagor or his
                           property;

                  2.       Admit in writing its inability to pay his debts as
                           they mature;

                  3.       Make a general assignment for the benefit of
                           creditors;

                  4.       Be adjudicated a bankrupt or insolvent; or

                  5.       File a voluntary petition in bankruptcy or a petition
                           or answer seeking reorganization or an arrangement
                           with creditors or take advantage of any insolvency
                           law or any answer admitting the material allegations
                           of a petition filed against it in any bankruptcy,
                           reorganization or insolvency proceeding;

         d.       An order, judgment or decree shall be entered, without the
                  application, approval or consent of Mortgagor, by any court or
                  governmental agency of competent jurisdiction, approving the
                  petition seeking reorganization of Mortgagor or appointing a
                  receiver, trustee, liquidator, intervener or the like of
                  Mortgagor, and such order, judgment or decree shall continue
                  unstayed and in effect for any period of thirty (30)
                  consecutive days; or


                                      -45-
<PAGE>

         e.       Material breach of any warranty or covenant or the material
                  untruth of any representation of Mortgagor contained in any of
                  the Loan Documents; or

         f.       Mortgagor shall default under the terms of any other loan or
                  indebtedness owing from Mortgagor to Mortgagee and such
                  default is not cured within any applicable cure period
                  provided for under the terms of the loan.

         SECTION 2.2 REMEDIES. In the event of the happening of any Event of
Default, hereunder, then, and in any such case, Mortgagee may declare the
principal of and the accrued interest on the Note, including all sums advanced
or otherwise owing pursuant to any other Loan Document, with interest thereon at
the rate stated in the Loan Document, to be forthwith due and payable. Thereupon
the Note, including both principal and interest accrued thereon, and including
all sums advanced pursuant to any Loan Document and secured hereby, and interest
thereon, shall be and become immediately due and payable without presentment,
demand or further notice of any kind.

         If the principal of the Note shall have become due and payable, whether
by lapse of time or by acceleration, then and in every such case Mortgagor
confer upon Mortgagee the authority and power to proceed to protect and enforce
its rights by a suit or suits in equity or at law, either for the specific
performance of any covenant or agreement contained herein or in the Note, or in
aid of the execution of any power herein or therein granted, or for the
foreclosure of this Mortgage in any manner permitted by law, including, but not
limited to foreclosure by advertisement, if permitted by law or action, or for
the enforcement of any other appropriate legal or equitable remedy. In
furtherance thereof, and not by way of limitation, Mortgagee:

         a.       Shall be entitled to the immediate appointment of a receiver
                  to operate, collect rents from and protect the Mortgaged
                  Property.

         b.       May sell the Mortgaged Property as one tract or otherwise at
                  public auction and convey the same to the purchaser, in
                  accordance with any applicable statute in such case made and
                  provided. Mortgagor and any guarantor of the Note shall remain
                  liable for any deficiency resulting from such sale.

         c.       Shall also have, without limitation, the right to enter upon
                  any Mortgaged Property where the Personal Property included in
                  the Mortgaged Property is located and take possession of said
                  Personal Property.

         d.       Shall have all of the rights and remedies provided in the
                  Uniform Commercial Code, including the right to proceed under
                  the Uniform Commercial Code provisions governing default as to
                  any Personal Property which may be included in the Mortgaged
                  Property separately from the Real Property included therein,
                  or to proceed as to all of the Mortgaged Property in
                  accordance with its rights and remedies with respect to the
                  Mortgaged Property. If Mortgagee should elect to proceed
                  separately


                                      -46-
<PAGE>

                  as to such Personal Property, Mortgagor agrees to
                  make such Personal Property available to Mortgagee at a place
                  or places acceptable to Mortgagee, and if any notification of
                  intended disposition of the Personal Property is required by
                  law, such notification shall be deemed reasonably and properly
                  given if given at least seven (7) days before such disposition
                  in the manner below provided.

         e.       Mortgagor agrees to the provisions of Section 864.101 and
                  846.103)2) of the Wisconsin Statutes, as may apply to the
                  property and as may be amended, permitting Mortgagee in the
                  event of foreclosure to waive the right to judgment for
                  deficiency and to hold the foreclosure sale within the time
                  provided in such applicable Section.

         SECTION 2.3 FILING PROOFS OF CLAIM. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceedings affecting Mortgagor or any person, partnership or
corporation guaranteeing or endorsing any of Mortgagor's obligations, their
creditors or their property, Mortgagee, to the extent permitted by law, shall be
entitled to file such proofs of claim and other documents as may be necessary or
advisable in order to have his claims allowed in such proceedings for the entire
amount due and payable by Mortgagor under the Note, this Mortgage and any other
instrument securing the Note, at the date of the institution of such proceedings
and for any additional amounts which may become due and payable by Mortgagor
after such date.

         SECTION 2.4 MORTGAGEE AS PURCHASER. In case of any sale of the
Mortgaged Property pursuant to any judgment or decree of any court or at public
auction or otherwise in connection with the enforcement of any of the terms of
this Mortgage, Mortgagee, his successors or assigns, may become the purchaser,
and for the purpose of making settlement for or payment of the purchase price,
shall be entitled to deliver over and use the Note and any claims for interest
accrued and unpaid thereon, together with all other sums, with interest,
advanced or otherwise owing pursuant to any Loan Document, or secured hereby and
unpaid hereunder, in order that there may be credited as paid on the purchase
price all or the appropriate part of the sum then due under the Note, including
principal and interest thereon and all other sums, with interest, advanced or
owing pursuant to any Loan Document or secured hereby and unpaid hereunder.

         SECTION 2.5 NON-EXCLUSIVE NATURE OF REMEDIES; NON-WAIVER, ETC. Each and
every power or remedy herein specifically given shall be in addition to every
other power or remedy, existing or implied, now or hereafter given or existing
at law or in equity, or in any other Loan Document. Each and every power and
remedy herein specifically given or otherwise so existing or given may be
exercised from time to time and as often and in such order as may be deemed
expedient by Mortgagee. The exercise or the beginning of the exercise of one
power or remedy shall not be deemed a waiver of the right to exercise at the
same time or thereafter any other power or remedy. No delay or omission of
Mortgagee to exercise any right, power or remedy accruing upon any Event of
Default shall exhaust or impair any such right, power or remedy or shall be
construed to waive any such Event of Default or to constitute acquiescence
therein. Every right, power, and remedy given to Mortgagee may be exercised from
time to time and as often as may be


                                      -47-
<PAGE>

deemed expedient by Mortgagee. No waiver of any Event of Default hereunder
shall extend to, impair or affect any Event of Default then existing or
occurring subsequent thereto, or impair any rights, powers or remedies
consequent thereon.

     If Mortgagee:

         a.       Grants forbearance or an extension of time for the payment of
                  any Indebtedness Secured Hereby;

         b.       Takes other additional security for the payment thereof;

         c.       Waives or does not exercise any right granted in the Note;

         d.       Releases any part of the Mortgaged Property from the lien of
                  this Mortgage or otherwise changes any of the terms of the
                  Note, this Mortgage or any other instrument securing the Note;

         e.       Consents to the filing of any map, plat or replat of the
                  Mortgaged Property;

         f.       Consents to the granting of any easement on the Mortgaged
                  Property;

         g.       Makes or consents to any agreement changing the terms of this
                  Mortgage or subordinating the lien or any charge hereof;

no such act or omission shall release, discharge, modify, change or affect the
original liability under the Note, this Mortgage or otherwise of Mortgagor, or
any subsequent purchaser of the Mortgaged Property or any part thereof or any
maker, cosigner, surety or Personal Guarantor. No such act or omission shall
preclude Mortgagee from exercising any right, power or privilege herein granted
or intended to be granted in case of any Event of Default then existing or of
any subsequent Event of Default, nor, shall the lien of this Mortgage be altered
thereby.

         SECTION 2.6 PROCEEDS OF SALE. The proceeds and avails of any sale or
disposition, of the Mortgaged Property or any part thereof, and the proceeds and
avails of any remedy hereunder, shall be paid and applied as follows:

         1.       First to the payment of costs and expenses of collection of
                  the Indebtedness Secured Hereby, specifically those relative
                  to foreclosure (if foreclosure is elected by Mortgagee) and of
                  such sale and of all proper expenses, including attorneys'
                  fees; and

         2.       Second to Indebtedness Secured hereby attributable to
                  liability incurred, advances incurred or made hereunder by
                  Mortgagee, and of all taxes, assessments or liens superior to
                  the lien of this Mortgage; and


                                      -48-
<PAGE>

         3.       Third to the payment to Mortgagee of the amount then owing or
                  unpaid under the Note for principal and interest and in case
                  any such proceeds shall be insufficient to pay the whole
                  amount so due then first to the payment of such interest; and

         4.       Fourth to the payment to Mortgagor, his successors and
                  assigns, or to whomsoever may be lawfully entitled to receive
                  the same.

         SECTION 2.7 TERMINATION OF PROCEEDINGS. In case Mortgagee shall have
proceeded to enforce any right under this Mortgage by foreclosure, sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, and in every such
case, Mortgagor and Mortgagee shall be restored to their former positions and
rights hereunder with respect to the Mortgaged Property subject to the lien
hereof. Thereafter, Mortgagee shall be permitted to select any of his remedies
in the event of a continuing or subsequent Event of Default.

                                   ARTICLE 3.

                         ASSIGNMENT OF LEASES AND RENTS

         SECTION 3.1 NO OBLIGATION TO ASSUME OBLIGATIONS. The assignment of
rents, income and profits herein shall not be deemed or construed to obligate
Mortgagee to take any action or to incur expenses or perform or discharge any
obligation, duty or liability.

         SECTION 3.2 MORTGAGOR TO COMPLY WITH LEASES. Mortgagor will, at its own
cost and expense, perform, comply with and discharge all of the obligations of
Mortgagor under any leases or agreements for the use of the Mortgaged Property
whether in existence now or entered into subsequent to the date hereof (the
"LEASES") and use its best efforts to enforce or secure the performance of each
obligation and undertaking of the respective tenants under the Leases and will
appear in and defend, at its own cost and expense, any action or proceeding
arising out of or in any manner connected with the Mortgagor's interest in the
Leases. In connection with the leasing or rental of the Mortgaged Property, or
any part or portion thereof, the Mortgagor covenants and agrees that: (i) all
Leases shall be in writing; (ii) upon request of Mortgagee, Mortgagor will
provide Mortgagee with a current tenant list and rent roll, certified to by the
Mortgagor, not less frequently than each anniversary of the Note. Mortgagor will
not borrow against, pledge or assign any rentals due under the Leases; nor
borrow against, pledge or assign any rentals due under the Leases nor consent to
a subordination or assignment of the interest of the tenants thereunder to any
party other than the Mortgagee, nor anticipate the rents thereunder for more
than one (1) month in advance, without the prior written consent of the
Mortgagee.

         SECTION 3.3 MORTGAGEE'S RIGHT TO PERFORM UNDER LEASES. Should the
Mortgagor fail to perform, comply with or discharge any obligations of Mortgagor
under any lease or should the Mortgagee become aware of or be notified by any
tenant under a Lease of a failure on the part of Mortgagor to so perform, comply
with or discharge its obligations under said


                                      -49-
<PAGE>

Lease, Mortgagee may, but shall not be obligated to, and without further
demand upon the Mortgagor, and without waiving or releasing Mortgagor from
any obligation in this Mortgage contained, remedy such failure, and the
Mortgagor agrees to repay upon demand all sums incurred by the Mortgagee in
remedying any such failure together with interest at the rate then in effect
under the terms of the Note. All such sums, together with interest as
aforesaid shall become so much additional Indebtedness Secured Hereby, but no
such advance shall be deemed to relieve the Mortgagor from any default
hereunder.

         SECTION 3.4 ASSIGNMENT OF LEASES AND RENTS. The Mortgagor does hereby
sell, assign and transfer unto Mortgagee all of the Leases and all of the rents
and profits now due and which hereafter become due under or by virtue of any
Lease, whether written or verbal, it being the intention of this Mortgage to
establish an absolute transfer and assignment of the Leases and all of the rents
and profits from the Mortgaged Property unto the Mortgagee and the Mortgagor
does hereby appoint irrevocably the Mortgagee its true and lawful attorney in
its name and stead, which appointment is coupled with an interest, to collect
all of said rents and profits; provided, Mortgagor shall have the right to
collect and retain such rents and profits unless and until an Event of Default
exists under this Mortgage. Upon an Event of Default and whether before or after
the institution of legal proceedings to foreclose the lien hereof or before or
after sale thereunder or during any period of redemption the Mortgagee, and
without regard to waste, adequacy of the security or solvency of the Mortgagor,
may revoke the privilege granted Mortgagor hereunder to collect the rents and
profits, and may, at his option, without notice, either (a) in person or by
agent, with or without taking possession of or entering the Mortgaged Property,
with or without bringing any action or proceeding, give, or require Mortgagor to
give, notice to any or all tenants under any Lease authorizing and directing the
tenant to pay such rents and profits to Mortgagee; collect all of the rents and
profits; enforce the payment thereof and exercise all of the rights of the
Mortgagor under the Leases and all of the rights of Mortgagee hereunder; may
enter upon, take possession of, manage and operate said Mortgaged Property, or
any part thereof; may cancel, enforce or modify the Leases, and fix or modify
rents, and do any acts which the Mortgagee deems proper to protect the security
hereof with or without taking possession of said Mortgaged Property; or (b)
apply for the appointment of a receiver in accordance with the statutes and law
made and provided for, which receivership Mortgagor hereby consents to, who
shall collect the rents and profits, and all other income of any kind; manage
the Mortgaged Property so to prevent waste; execute Leases within or beyond the
period of receivership, and perform the terms of this Mortgage and apply the
rents and profits hereinafter provided. Any such rents shall be applied in the
following order: (i) to payment of all reasonable fees of any receiver appointed
hereunder, (ii) to application of tenant's security deposits if required by law,
(iii) to payment when due of prior or current real estate taxes or special
assessments with respect to the Mortgaged Property or, if the Mortgage so
requires, to the periodic escrow for payment of the taxes or special assessments
then due, (iv) to payment when due of premiums for insurance of the type
required by the Mortgage or, if the Mortgage so requires, to the periodic escrow
for the payment of premiums then due, and (v) to payment of all expenses for
normal maintenance of the Mortgaged Property. Any rents remaining after
application of the above items shall be applied to the Indebtedness Secured
Hereby. If the Mortgaged Property shall be foreclosed and sold pursuant to a
foreclosure sale, then:


                                      -50-
<PAGE>

         (a)      If the Mortgagee is the purchaser at the foreclosure sale, the
                  rents shall be paid to the Mortgagee to be applied to the
                  extent of any deficiency remaining after the sale, the balance
                  to be retained by the Mortgagee, and if the Mortgaged Property
                  be redeemed by the Mortgagor or any other party entitled to
                  redeem, to be applied as a credit against the redemption price
                  with any remaining excess rents to be paid to the Mortgagor,
                  provided, if the Mortgaged Property not be redeemed, any
                  remaining excess rents to belong to the Mortgagee, whether or
                  not a deficiency exists;

         (b)      If the Mortgagee is not the purchaser at the foreclosure sale,
                  the rents shall be paid to the Mortgagee to be applied first,
                  to the extent of any deficiency remaining after the sale, the
                  balance to be retained by the purchaser, and if the Mortgaged
                  Property be redeemed by the Mortgagor or any other party
                  entitled to redeem, to be applied as a credit against the
                  redemption price with any remaining excess rents to be paid to
                  the Mortgagor, provided, if the Mortgaged Property not be
                  redeemed any remaining excess rents shall be paid first, to
                  the purchaser at the foreclosure sale in an amount equal to
                  the interest accrued upon the sale price, then to the
                  Mortgagee to the extent of any deficiency remaining unpaid and
                  the remainder to the purchaser.

The entering upon and taking possession of the Mortgaged Property, the
collection of such rents and profits and the application thereof as aforesaid
shall not cure or waive any defaults under this Mortgage nor in any way operate
to prevent the Mortgagee from pursuing any other remedy which it may now or
hereafter have under the terms of this Mortgage nor shall it in any way be
deemed to constitute the Mortgagee a mortgagee-in-possession. The rights and
powers of the Mortgagee hereunder shall remain in full force and effect both
prior to and after any foreclosure of the Mortgage and any sale pursuant thereto
and until expiration of the period of redemption from said sale, regardless of
whether a deficiency remains from said sale. The purchaser at any foreclosure
sale, including the Mortgagee, shall have the right, at any time and without
limitation, to advance money to any receiver appointed hereunder to pay any part
or all of the items which the receiver would otherwise be authorized to pay if
cash were available from the Mortgaged Property and the sum so advanced, with
interest at the rate provided for in the Note, shall be a part of the sum
required to be paid to redeem from any foreclosure sale. The rights hereunder
shall in no way be dependent upon and shall apply without regard to whether the
Mortgaged Property is in danger of being lost, materially injured or damaged
whether the Mortgaged Property is adequate to discharge the Indebtedness Secured
Hereby.

                                   ARTICLE 4.

                                  MISCELLANEOUS

         SECTION 4.1 USE OF PRONOUNS; MORTGAGOR/MORTGAGEE. Whenever used in this
Mortgage, the singular number shall include the plural, the plural the singular,
and the neuter shall include the masculine and the feminine. The words
"Mortgagor" and Mortgagee" shall be


                                      -51-
<PAGE>

deemed to include Mortgagor and Mortgagee named in the opening paragraph of
this Mortgage and their respective heirs, personal representatives,
successors and assigns.

         SECTION 4.2 BINDING EFFECT. Whenever any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party. All covenants, promises and agreements by or on behalf of
Mortgagor in this Mortgage contained shall bind Mortgagor, and also its
successors and assigns, and shall inure to the benefit of Mortgagee, and his
successors and assigns, whether so expressed or not.

         SECTION 4.3 SEVERABILITY. The unenforceability or invalidity of any
provision of this Mortgage as to any persons or circumstances shall not render
that provision unenforceable or invalid as to any other persons or
circumstances, and all provisions hereof, in all other respects, shall remain
valid and enforceable.

         SECTION 4.4 NOTICES. All notices provided for herein shall be in
writing and shall be deemed to have been given (unless otherwise required by the
specific provisions hereof in respect to any matter) as provided in the Loan
Documents.

         SECTION 4.5 COSTS AND EXPENSES. Mortgagor shall reimburse Mortgagee for
all costs, charges and expenses, including reasonable attorneys' fees (including
but not limited to attorneys' fees incurred in successful defense or prosecution
of an appeal) and disbursements and costs incurred or paid by Mortgagee in any
threatened, pending or completed action, proceeding or dispute to which
Mortgagee is or might be made a party or appears as a party and which affects or
might affect the Note, this Mortgage, any other Loan Document, or the Mortgaged
Property or any part thereof, or the interests of Mortgagor or Mortgagee
therein, including but not limited to the foreclosure of this Mortgage,
condemnation involving all or part of the Mortgaged Property or any action to
protect the security hereof. All costs, charges and expenses so incurred or paid
by Mortgagee shall become due and payable immediately, whether or not there be
notice, demand, attempt to collect or suit pending, together with interest from
the dates such advances are made, or costs, charges or expenses are incurred, at
the same rate of interest borne by the indebtedness evidenced by the Note. Any
such sum or sums and the interest thereon shall be secured hereby in priority to
the indebtedness evidenced by the Note.

         SECTION 4.6 FINANCING STATEMENT. From the date of its recording, this
Mortgage shall be effective as a financing statement filed as a fixture filing
with respect to all goods constituting a part of the Mortgaged Property which
are or are to become fixtures related to the real estate described herein. For
this purpose, the following information is set forth:

         1.       Name and Address of Mortgagor:

                  Dotronix, Inc.
                  160 First Street, S.E.
                  New Brighton, MN 55112-7894


                                      -52-
<PAGE>

         2.       Name and Address of Mortgagee:

                  William S. Sadler
                  1370 Ryan Avenue West
                  Roseville, MN 55113

         3.       This document covers goods which are or are to become
                  fixtures.

         4.       The security interest includes the proceeds of collateral.

         SECTION 4.7 CONSTRUCTION. This Mortgage is made and is to be construed
under the laws of the State of Wisconsin. No term or provision contained in the
Note or any other Loan Document shall be construed against either party by
virtue of that party having been deemed to have drafted or otherwise provided
such term or provision.

         SECTION 4.8 WAIVER OF MARSHALING, ETC. If this Mortgage is foreclosed,
Mortgagor hereby waives and releases any right to have the Mortgaged Property
marshaled or sold as separate parcels.

         SECTION 4.9 CAPTIONS AND HEADINGS. The captions and headings of the
various sections of this Mortgage or any other Loan Document are for convenience
only and are not to be construed as confining or limiting in any way the scope
or intent of the provisions thereof.

         SECTION 4.10 NOTICE. MORTGAGOR UNDERSTANDS AND AGREES THAT IF AN EVENT
OF DEFAULT (AS DEFINED IN SECTION 3.1 OF THIS MORTGAGE) SHALL OCCUR, MORTGAGEE
HAS AMONG ITS RIGHTS THE RIGHT TO FORECLOSE THIS MORTGAGE PURSUANT TO WISCONSIN
STATUTES, AS HEREAFTER AMENDED OR PURSUANT TO ANY SIMILAR OR REPLACEMENT STATUTE
HEREAFTER ENACTED;

         MORTGAGOR FURTHER UNDERSTANDS AND AGREES THAT IN THE EVENT OF SUCH
DEFAULT MORTGAGEE MAY TAKE POSSESSION OF ANY PERSONAL PROPERTY SECURED BY THE
MORTGAGE AND DISPOSE OF THE SAME BY SALE OR OTHERWISE IN ONE OR MORE PARCELS
PROVIDED THAT AT LEAST SEVEN (7) DAYS PRIOR NOTICE OF SUCH DISPOSITION MUST BE
GIVEN TO MORTGAGOR, ALL AS PROVIDED FOR BY THE WISCONSIN UNIFORM COMMERCIAL
CODE, AS HEREAFTER AMENDED OR BY ANY SIMILAR OR REPLACEMENT STATUTE HEREAFTER
ENACTED.

         MORTGAGOR FURTHER UNDERSTANDS THAT UNDER THE CONSTITUTION OF THE UNITED
STATES IT MAY HAVE THE RIGHT TO NOTICE AND A HEARING BEFORE THE MORTGAGED
PREMISES MAY BE SOLD AND THAT THE PROCEDURE FOR FORECLOSURE DESCRIBED ABOVE DOES
NOT ENSURE THAT


                                      -53-
<PAGE>

NOTICE WILL BE GIVEN TO MORTGAGOR, AND THE UNIFORM COMMERCIAL CODE DOES NOT
REQUIRE ANY HEARING OR OTHER JUDICIAL PROCEEDING.

         MORTGAGOR FURTHER UNDERSTANDS THAT IT MAY BE ENTITLED TO A JURY TRIAL
UNDER THE CONSTITUTION OF THE UNITED STATES OR WISCONSIN LAW.

     MORTGAGOR HEREBY RELINQUISHES, WAIVES AND GIVE UP ANY CONSTITUTIONAL RIGHT
TO NOTICE AND A HEARING BEFORE THE SALE OF THE MORTGAGED PREMISES AND EXPRESSLY
CONSENTS AND AGREES THAT THE MORTGAGED PREMISES MAY BE FORECLOSED AND THAT ANY
PERSONAL PROPERTY MAY BE DISPOSED OF PURSUANT TO THE UNIFORM COMMERCIAL CODE,
ALL AS DESCRIBED ABOVE. MORTGAGOR FURTHER WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY ACTION, OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO,
THIS MORTGAGE OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
MORTGAGOR OR MORTGAGEE OR ANY CONDUCT, ACTS OR OMISSIONS OF MORTGAGOR OR
MORTGAGEE OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, OR
ANY OTHER PERSONS AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN ALL OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

         MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY COMPETENT LEGAL
COUNSEL; THAT BEFORE MORTGAGOR SIGNED THIS DOCUMENT, THIS SECTION 4.10 AND
MORTGAGOR'S CONSTITUTIONAL RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT
MORTGAGOR UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE
EFFECT OF SUCH WAIVER.

         IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the
above date.

MORTGAGOR:

                                 DOTRONIX, INC.



                                 By:      /S/ ROBERT J. ANDREWS
                                         -----------------------------

                                 Title:   Vice President, OPERATIONS
                                         -----------------------------


                                      -54-
<PAGE>


STATE OF MINNESOTA      )
                        )ss.
COUNTY OF RAMSEY        )

The foregoing instrument was acknowledged before me this 23 day of February,
2000, by Robert J. Andrews the V.P. of operations of Dotronix, Inc., a
Minnesota corporation, or Assigns on behalf of the corporation.

                                  /s/ Jean C. Afrooz
                                 ----------------------------
[SEAL]                            Notary Public



THIS INSTRUMENT WAS                         Tax Statements for the
DRAFTED BY:                                 mortgaged premises should
                                            be sent to:

PETERSON, FRAM & BERGMAN                    Dotronix, Inc.
a Professional Association                  160 First Street, S.E.
50 East 5th Street, Suite 300               New Brighton, MN 55112
St. Paul MN 55113-2602
Phone: (651) 291-8955


                                      -55-
<PAGE>


                                   EXHIBIT "A"
                                 to that certain
                   COMBINATION MORTGAGE AND SECURITY AGREEMENT
                         AND FIXTURE FINANCING STATEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS
                                 by and between
                            Dotronix, Inc., Mortgagor
                                       and
                          William S. Sadler, Mortgagee

                               [LEGAL DESCRIPTION]

          Lots 1, 2, 3, 4 and 5, Block 1, Chamber of Commerce Addition
              to the City of Eau Claire, Chippewa County, Wisconsin


                                      -56-

<PAGE>


                                   EXHIBIT "B"
                                 to that certain
                   COMBINATION MORTGAGE AND SECURITY AGREEMENT
                         AND FIXTURE FINANCING STATEMENT
                       AND ASSIGNMENT OF LEASES AND RENTS
                                 by and between
                            Dotronix, Inc. Mortgagor
                                       and
                          William S. Sadler, Mortgagee

                             PERMITTED ENCUMBRANCES








                                       -57-