remainder to late charges and costs advanced by Lender. Interest shall be payable on the basis ofa year consisting of 360 days and charged for the number of days actually elapsed. The date of thefirst disbursement hereunder shall be the date upon which the first proceeds evidenced by this Noteare disbursed pursuant to the direction of the Borrower hereof.     The Borrower’s Obligations under this Note are secured by (the “Collateral”) (i) a Mortgageand Security Agreement (the “Mortgage”) on commercial property located in Cook County, Illinoiscommonly known as 2201 Landmeier Road, Elk Grove Village, Illinois (the “Premises”), (ii) anAssignment of Leases and Rents, and (iii) an Environmental Indemnity Agreement, each dated as ofNovember 17, 2003 from the Borrower to the Lender (which documents, together with the Mortgage andall other documents relating to this loan executed by Borrower, together with all amendments,modifications and restatements of any of the foregoing, are collectively referred to as the “LoanDocuments”). Borrower may also from time to time enter into certain Hedging Agreements at itselection which shall also constitute Loan Documents hereunder and constitute part of Borrower’sObligations. All of the agreements, conditions, covenants, provisions and stipulations containedin the Loan Documents, which are to be kept and performed by Borrower thereunder are hereby made apart of this Note to the same extent and with the same force and effect as if they were fully setforth herein, and Borrower covenants and agrees to keep and perform them or cause them to be keptand performed, strictly in accordance with their terms.     Provided that no Event of Default then exists hereunder, the Borrower may voluntarily prepaythe principal balance of this Note, in whole or in part, at any time on or after the date hereof,subject to the following conditions:     (A) Not less than thirty (30) days prior to the date upon which the Borrower desires tomake such prepayment, the Borrower shall deliver to the Bank written notice of its intentionto prepay this Note, which notice shall be irrevocable and state the prepayment amount andthe prepayment date (the “Term Loan Prepayment Date”);     (B) The Borrower shall pay to the Bank, concurrently with such prepayment, a prepaymentpremium (the “Term Loan Prepayment Premium”) equal to the lesser of (1) the Yield Amount (ashereinafter defined), and (2) the Fixed Amount (as hereinafter defined), provided, however,no Term Loan Prepayment Premium shall be owing if such prepayment is made on or after thedate which is ninety (90) days prior to the Maturity Date; and     (C) The Borrower shall pay to the Bank all accrued and unpaid interest on this Notethrough the date of such prepayment on the principal balance being prepaid. Each prepaymentof this Note shall be applied to the scheduled installments of this Note in inverse order ofmaturity.     The Borrower acknowledges that this Note was made on the basis and assumption that the Bankwould receive payments of principal and interest set forth herein for the full term thereof.Therefore, whenever the maturity hereof has been accelerated by the Bank by reason of theoccurrence of an Event of Default, there shall be due, in addition to the outstanding principalbalance, accrued interest and other sums due hereunder, the Term Loan Prepayment Premium. If priorto the Maturity Date, an Event of Default exists and the Bank elects to declare this Note
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immediately due and payable, the tender of payment by the Borrower prior to the exercise of theBank’s remedies against the Collateral shall be deemed to be an evasion of this prepaymentprovision, and such payment, to the extent permitted by law, must also include liquidated damagesin the amount of the Term Loan Prepayment Premium, it being acknowledged by the Borrower that theBank’s actual damages in the event of such evasion are now and will then be impossible toascertain. No principal prepayment shall extend or postpone the due date of any subsequentinstallment of principal or interest arising under this Note. The Borrower hereby expressly agreesto pay the Term Loan Prepayment Premium upon the voluntary or involuntary prepayment of this Note,and acknowledges the Bank’s agreement to make the loan hereunder on the terms contained hereinconstitutes adequate consideration for the Term Loan Prepayment Premium.     For purposes of this Note, the “Fixed Amount” shall mean Eighty-One Thousand Dollars($81,000), and the “Yield Amount” shall be the amount calculated as follows:     (A) The Bank shall first determine, as of the Term Loan Prepayment Date, the amount, ifany, by which the Interest Rate exceeds the yield to maturity percentage (the “CurrentYield”) for the United States Treasury Security closest in maturity to the Maturity Date aspublished in *The Wall Street Journal*on the fifth Business Day preceding the Term LoanPrepayment Date. If publication of (1) *The Wall Street Journal*, or (2) the Current Yield ofthe Treasury Security in *The Wall Street Journal*is discontinued, the Bank, in its solediscretion, shall designate another daily financial or governmental publication of nationalcirculation to be used to determine the Current Yield;     (B) The difference calculated pursuant to clause (A) above shall be multiplied by theamount prepaid;     (C) The product calculated pursuant to clause (B) above shall be multiplied by thequotient, rounded to the nearest one-hundredth of one percent, obtained by dividing (1) thenumber of days from and including the Term Loan Prepayment Date to and including theMaturity Date, by (2) 365; and     (D) The product calculated pursuant to clause (C) above shall be discontinued at theannual rate of the Adjusted Current Yield (where the “Adjusted Current Yield” means theCurrent Yield adjusted to reflect the difference in timing of semi-annual payments ofinterest on the Treasury Security and monthly payments under this Note) to the present valuethereof as of the Term Loan Prepayment Date, on the assumption that such sum would bereceived in equal monthly installments on each monthly anniversary of the Term LoanPrepayment Date prior to the Maturity Date, with the final such installment to be deemedreceived on the Maturity Date;provided that the Borrower shall not be entitled in any event to a credit against, or a reductionof, the indebtedness being prepaid if the Adjusted Current Yield exceeds the Interest Rate or forany other reason.
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     Borrower covenants and agrees with Lender as follows: (i) Reporting Requirements. To maintain a system of accounting inaccordance with GAAP consistently applied with respect to all dealings or transactionsin relation to its business and activities, and Borrower shall furnish to Lender: (a) as soon as available and in any event within thirty (30) daysafter the end of each month, an internally prepared consolidated andconsolidating balance sheet of Borrower as at the end of such month and therelated consolidated and consolidating statements of net earnings andstockholders’ equity and consolidated and consolidating statements of cashflows of Borrower for such month and for the portion of the fiscal year endedat the end of such month, setting forth in each case in comparative form thefigures for the corresponding portion of the previous fiscal year, all inreasonable detail and certified (subject to normal year-end adjustments) as tofairness of presentation, in accordance with GAAP, by the Chief FinancialOfficer;  (b) as soon as available, copies of the periodic Form 10-Qquarterly report or comparable successor report filed by Borrower with theSecurities and Exchange Commission or any successor agency;  (c) as soon as available, copies of the Form 10-K Annual Report orcomparable successor report filed by Borrower with the Securities and ExchangeCommission or any successor agency; provided, that if such report is not madeavailable within ninety (90) days after the close of each fiscal year ofBorrower, Borrower shall immediately deliver to Lender a balance sheet and therelated consolidated and consolidating statements of operations andstockholders’ equity and consolidated and consolidating statements of cashflows of Borrower and its Subsidiaries on a consolidated and consolidatingbasis as of the end of such fiscal year, fairly and accurately presenting thefinancial condition of Borrower and its Subsidiaries on a consolidated basis asat such date and the results of operations of Borrower and its Subsidiaries forsuch fiscal year and setting forth in each case in comparative form thecorresponding figures for the corresponding period of the preceding fiscalyear, all in reasonable detail, prepared in accordance with GAAP consistentlyapplied, and audited by BDO Seidman or the successor independent accountingfirm responsible for auditing Borrower’s financial statements as reasonablyacceptable to Lender (the “Accountants”); and  (d) concurrently with the delivery of the reports and/or financialstatements referred to in Sub-paragraphs (b) and (c) above, acompliance certificate duly completed and executed by either the President orthe Chief Financial Officer of Borrower (a) stating that Borrower has observed and performed allof its covenants and other agreements and satisfied every condition,contained in this Note and all other Loan Documents to which Borrower is aparty to be observed, performed or satisfied by it and that such officer 
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   has no knowledge of any Event of Default except as specified in suchcertificate, (b) stating that, to the best of such officer’s knowledge, allsuch financial statements are complete and correct in all respects and havebeen prepared in accordance with GAAP consistently applied throughout theperiods reflected therein, subject to normal year-end adjustments, and (c)showing calculations of compliance with the financial covenants set forthbelow. (ii) Financial Covenants. To maintain the following financial covenants: (a) Maintain an Interest Coverage Ratio, tested quarterly at theend of each fiscal quarter on a year to date basis, of at least 2.25:1.0.  (b) Maintain a Leverage Ratio, tested quarterly at the end of eachfiscal quarter on a year to date basis, of not more than 2.15:1.00.  (c) Not permit the aggregate amount of Capital Expenditures toexceed (i) $4,700,000 for the fiscal year ended April 30, 2007 and (ii)$3,250,000 for each fiscal year ended thereafter (in each case, excluding anyCapital Expenditures associated with Borrower’s plant located in China).  (d) Maintain EBITDA of not less than $6,500,000 measured quarterlyon a rolling twelve month period. (iii) OFAC; Bank Secrecy Act. The Borrower shall (a) ensure, and cause eachsubsidiary to ensure, that no person who owns a controlling interest in or otherwisecontrols the Borrower or any subsidiary is or shall be listed on the SpeciallyDesignated Nationals and Blocked Person List or other similar lists maintained by theOffice of Foreign Assets Control (“OFAC”), the Department of the Treasury or includedin any Executive Orders, (b) not use or permit the use of the proceeds of the loans toviolate any of the foreign asset control regulations of OFAC or any enabling statute orExecutive Order relating thereto, and (c) comply, and cause each subsidiary to comply,with all applicable Bank Secrecy Act (“BSA”) laws and regulations, as amended.  (iv) Customer Identification — USA Patriot Act Notice. The Bank herebynotifies the Borrower that pursuant to the requirements of the USA Patriot Act (TitleIII of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the Bank’spolicies and practices, the Bank is required to obtain, verify and record certaininformation and documentation that identifies the Borrower, which information includesthe name and address of the Borrower and such other information that will allow theBank to identify the Borrower in accordance with the Act. The Borrower hereby agreesto cooperate with Bank in complying with the Act.     It shall be an event of default (“Event of Default”) if any one or more of the followingevents, conditions or acts shall occur:A. The Borrower defaults in the timely payment of any amount due hereunder; or
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B. The Borrower fails or neglects to comply with or to perform in accordance with anyrepresentation, warranty, covenant, condition or other provision contained hereunder (otherthan a payment default hereunder which is governed by paragraph A. above) and such defaultshall continue after 30 days’ prior written notice to Borrower; or C. The Borrower fails or neglects to comply with or to perform in accordance with anyrepresentation, warranty, covenant, condition or other provision contained herein or in any ofthe other Loan Documents and such default is not cured within any applicable cure or graceperiod if any; or D. Any statement, application or agreement furnished at any time or from time to time to theLender by the Borrower is false or incorrect in any material respect; or E. Any acceleration of any other indebtedness due and owing to Lender, its affiliates or anysyndicate of banks of which Lender is a party shall occur.     At any time after an Event of Default, the entire unpaid principal balance of this Note,together with interest accrued thereon, shall, at the election of the Lender, without notice ofsuch election and without demand or presentment, become immediately due and payable, anythingcontained herein or in the Loan Documents to the contrary notwithstanding, and the principalbalance so accelerated and declared due as aforesaid shall thereafter bear interest at the DefaultRate and in which event the Maturity Date shall be deemed to be the date of such acceleration.     The remedies of the holder hereof as provided in this Note, the Mortgage or any of the otherLoan Documents shall be cumulative and concurrent, and may be pursued singly, successively, ortogether against Borrower, any property given as collateral for the indebtedness evidenced hereby,and/or any other security at the sole discretion of the holder hereof.     Borrower and any endorsers, sureties or guarantors hereof, jointly and severally, waivepresentment for payment, demand, notice of protest, and protest of this Note and all other noticesin connection with the delivery, acceptance, performance, default, or enforcement of the payment ofthis Note, and they agree that the liability of each of them shall be joint and several and shallbe unconditional without regard to the liability of any other party and shall not in any manner beaffected by any indulgence, extension of time, renewals, waiver or modification granted orconsented to by the holder hereof; and Borrower and all endorsers, sureties and guarantors hereofconsent to any and all extensions of time, renewals, waivers, or modifications that may be grantedby the holder hereof with respect to the payment or other provisions of this Note, and to therelease of the collateral, or any part thereof, with or without substitution, and agree thatadditional makers, endorsers, guarantors, or sureties may become parties hereto without notice tothem or affecting their liability hereunder. Borrower hereby authorizes the Lender or anysubsequent holder of this Note, after any Event of Default hereunder or pursuant to the Mortgage orany of the other Loan Documents, to apply any money or other property which the Lender or theholder hereof may have or hold on deposit or otherwise for Borrower towards the payment of this Note, whether the same is due or not, and by execution hereof Borrower herebyspecifically pledges and grants to the Lender a security interest in any money or other propertywhich the Lender may have or hold on deposit for Borrower.
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     The Lender or any holder hereof shall not by any act of omission or commission be deemed towaive any of its rights or remedies hereunder unless such waiver be in writing and signed by theholder hereof, and then only to the extent specifically set forth therein. A waiver with respectto any one event shall not be construed as continuing or as a bar to or waiver of such right orremedy on a subsequent event.     Subject to the Mortgage, any sale, conveyance or transfer of any right, title or interest inthe Premises or any portion thereof, without the prior written approval of the Lender or the holderof this Note, or any sale, transfer or assignment of all or any part of the beneficial interest inany trust holding title to the Premises without the prior written approval of the Lender or theholder of this Note, or any financing which results in a lien upon the Premises without the priorwritten approval of the Lender or the holder of this Note, or the execution and delivery of anycontract or other agreement to do any of the aforesaid things, shall constitute an immediatedefault hereunder, and upon any such default, the Lender or the holder hereof may declare theentire indebtedness evidenced by this Note to be immediately due and payable and foreclose theMortgage and/or exercise any other remedies available to it under the Mortgage or any of the otherLoan Documents securing this Note immediately or at any time during the continuance of the default.The acceptance of any payment due hereunder after any such sale, transfer or assignment shall notbe deemed as the consent of the Lender to any such sale, transfer or assignment.     All rights, powers and remedies of Lender expressed herein shall be in addition to, and not inlimitation of, those provided by law relating to any of the Obligations or any security thereforeincluding, without limitation, the Premises. In addition to all other rights possessed by it,Lender may, except as specifically set forth below, whether before or after an Event of Default, atits sole discretion, and without notice to the Borrower grant any releases, compromises orindulgences with respect to the Obligations, or any extension or renewal thereof, or any securitytherefore, or to any obligor hereunder or thereunder.     In order to cause timely payment to be made to bank of all Borrower’s Obligations as and whendue, Borrower hereby authorizes and directs Lender, at Lender’s option, to debit the amount of suchObligations to any ordinary deposit account of Borrower.     The Borrower shall pay or reimburse Lender for all costs, fees, and expenses incurred byLender, or for which Lender becomes obligated, in connection with the negotiation, preparation, andclosing of this Note and the other Loan Documents, together with all reasonable attorneys’ fees andexpenses of Lender’s counsel, search fees and taxes payable in connection with any of theforegoing.     If at any time or times hereafter the Lender or the holder of this Note employs counsel tointervene, file a petition, answer, motion or other pleading in any suit or proceeding relating tothis Note, or to attempt to collect this Note from or to enforce this Note against the undersignedBorrower, then, in any such events, all reasonable attorneys’ fees arising from such services, and any expenses, costs and charges relating thereto, shall be an additional liability owinghereunder by the Borrower to the Lender or the holder of this Note payable on demand.     The proceeds of the loan evidenced by this Note will be used solely for the purposes specifiedin Section 205/4, Paragraph 1(c) of Chapter 815 of the Illinois Compiled Statutes, as
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amended, and the principal amount hereof is for a business loan which comes within the purview of such Section.Borrower agrees that the obligation evidenced by this Note is an exempted transaction under theTruth in Lending Act, 15 U.S.C., Section 1601, et seq.     Whenever possible, each provision of this Note and each of the Loan Documents shall beinterpreted in such manner as to be effective and valid under applicable law, but if any provisionof this Note, the Mortgage or any of the other Loan Documents shall be prohibited or invalid undersuch law, such provision shall be ineffective only to the extent of such prohibition or invalidity,without invalidating the remainder of the provisions of this Note, the Mortgage or the other LoanDocuments.     This Note shall be governed and controlled as to validity, enforcement, interpretation,construction, effect and in all other respects, by the statutes, laws, and decisions of the Stateof Illinois. This Note is submitted to the Lender at Chicago, Illinois and shall be deemed to havebeen made thereat.     All notices or other communications hereunder to either party shall be (a) in writing and, ifmailed, shall be deemed to be given on the third Business Day after the date when deposited in theUnited States Mail, by Registered or Certified Mail, postage prepaid, or if personally delivered,shall be deemed given upon delivery, addressed as provided hereinafter, or (b) sent by facsimile(effective upon confirmation of transmissions), and (c) addressed:   If to Borrower: Sigmatron International, Inc.  2201 Landmeier Road  Elk Grove Village, Illinois 60007  Attn: Gary R. Fairhead  Fax No. (847) 956-8709   with a copy to: Henry J. Underwood, Jr., Esq.  Defrees & Fiske  200 South Michigan Avenue, Suite 1100  Chicago, Illinois 60604  Telecopier No.: (312) 939-5617  Telephone No.: (312) 372-4000   If to Lender: LaSalle Bank National Association  135 South LaSalle Street  Chicago, Illinois 60603  Attn: Eileen Roethler  Telephone No. (312) 992-5292   with a copy to: Matthew T. O’Connor, Esq.  Vedder Price P.C.  222 N. LaSalle Street, Suite 2600  Chicago, Illinois 60601  Fax No.(312) 609-5005
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or to either party at such other addresses as such party may designate in a written notice to theother party. “Business Day” shall mean any day, when Lender is open for business other thanSaturday, Sunday or any other day on which national banks in Chicago, Illinois are not open forbusiness.     This Note may not be amended, modified or changed, except only by an instrument in writing,signed by the party against whom enforcement of any amendment, modification, change or discharge issought.     THE VALIDITY OF THIS NOTE, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTSOF BORROWER AND LENDER SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THEINTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. TO THEMAXIMUM EXTENT PERMITTED BY LAW, BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING INCONNECTION WITH THIS NOTE SHALL BE TRIED AND DETERMINED ONLY IN THE STATE AND FEDERAL COURTSLOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS, OR, AT THE SOLE OPTION OF LENDER IN ANY OTHERCOURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTERJURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWERHEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NONCONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITHTHIS PARAGRAPH.     TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH HEREBY EXPRESSLY WAIVE ANYRIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDEROR WITH RESPECT TO THIS NOTE, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THEDEALINGS OF BORROWER AND LENDER WITH RESPECT TO THIS NOTE, OR THE TRANSACTION RELATED HERETO, INEACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OROTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH HEREBY AGREE THAT ANYSUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUTA JURY AND THAT BORROWER OR LENDER MAY FILE A COPY OF THIS EXECUTED NOTE WITH ANY COURT OR OTHERTRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER AND LENDER TO THE WAIVER OF ITS RIGHT TOTRIAL BY JURY.     This Note replaces in its entirety and is in substitution for but not in payment of thatcertain Mortgage Note dated as of November 17, 2003 (the “Prior Note”) made by the Borrower infavor of the Bank in the original principal amount of $3,600,000 and does not and shall not bedeemed to constitute a novation thereof. Such Prior Note shall be of no further force and effectupon the execution of this Note; provided, however, that all outstandingindebtedness, including, without limitation, principal and interest under the Prior Note up to theamount of this Note as of
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the date of this Note is hereby deemed indebtedness evidenced by thisNote and is incorporated herein by this reference.**[SIGNATURE PAGE FOLLOWS]**
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**(Signature Page to Amended and Restated Mortgage Note)**     IN WITNESS WHEREOF, the Borrower has executed this Amended and Restated Mortgage Note as ofthe date and year first above stated.      SIGMATRON INTERNATIONAL, INC.