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Exhibit 10.4  

  AMENDED AND RESTATED CREDIT AGREEMENT         

    THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 10, 2000, is by and between REUTER MANUFACTURING, INC., a corporation organized
under the laws of the State of Minnesota (the "Borrower"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association (the "Lender"). 

    WHEREAS,
Borrower and Lender have entered into a Financing Agreement dated December 3, 1997 as amended from time to time (the "Existing Agreement"); and 

    WHEREAS,
the Borrower and the Lender wish to make certain revisions to and restate in its entirety the Existing Agreement as hereinafter provided; 

    NOW,
THEREFORE, in consideration of the premises, the sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 

  ARTICLE I
       DEFINITIONS AND ACCOUNTING TERMS         

    Section 1.1  Defined Terms.  As used in this Agreement the following terms shall have the
following respective meanings: 

    "Accounts":  Each and every right to payment of Borrower, whether such right to payment arises out of a sale or lease of
goods by Borrower, or other disposition of goods or other property of Borrower, out of a rendering of services by Borrower, out of a loan by Borrower, out of damage to or loss of goods in the
possession of a railroad or other carrier or any other bailee, out of overpayment of taxes or other
liabilities of Borrower, or which otherwise arises under any contract or agreement, or from any other cause, whether such right to payment now exists or hereafter arises and whether such right to
payment is or is not yet earned by performance and howsoever such right to payment may be evidenced, together with all other rights and interest (including all liens and security interests) which
Borrower may at any time have by law or agreement against any account debtor (as defined in the Uniform Commercial Code in effect in the State of Minnesota) or other obligor obligated to make any such
payment or against any of the property of such account debtor or other obligor; specifically (but without limitation), the term includes all present and future instruments, documents, chattel papers,
accounts and contract rights of Borrower. 

    "Advance":  As defined in Section 2.1(a). 

    "Affiliate":  When used with reference to any Person, (a) each Person that, directly or indirectly, controls, is
controlled by or is under common control with, the Person referred to, (b) each Person which beneficially owns or holds, directly or indirectly, five percent or more of any class of voting
stock of the Person referred to (or if the Person referred to is not a corporation, five percent or more of the equity interest), (c) each Person, five percent or more of the voting stock (or
if such Person is not a corporation, five percent or more of the equity interest) of which is beneficially owned or held, directly or indirectly, by the Person referred to, and (d) each of such
Person's officers, directors, joint venturers and partners. The term control (including the terms "controlled by" and "under common control with") means the possession, directly, of the power to
direct or cause the direction of the management and policies of the Person in question. 

    "Borrowing Base":  As defined in Section 2.5. 

    "Borrowing Base Certificate":  As defined in Section 2.5. 

    "Business Day":  Any day (other than a Saturday, Sunday or legal holiday in the State of Minnesota) on which national
banks are permitted to be open at the location of the Lender. 

    "Change in Control":  The occurrence, after the Closing Date, of any one entity owning, directly or indirectly,
securities of the Borrower representing 10% of the securities of the Borrower entitled to vote in the election of directors. 

    "Closing Date":  Any Business Day between the date of this Agreement and September 30, 2000 selected by the
Borrower for the making of the initial Advance on the Revolving Loan hereunder; provided that all the conditions precedent to the obligation of the
Lender to make the initial Advance on the Revolving Loan, as set forth in Article III, have been, or, on such Closing Date, will be, satisfied. The Borrower shall give the Lender not less than
one Business Day's prior notice of the day selected as the Closing Date. 

    "Commitments":  The Revolving Commitment and the Term Loan Commitments. 

    "Default":  Any event which, with the giving of notice (whether such notice is required under Section 7.1, or
under some other provision of this Agreement, or otherwise) or lapse of time, or both, would constitute an Event of Default. 

    "Eligible Accounts":  Accounts owned by the Borrower which the Lender, in its sole and absolute discretion, deems
eligible for Advances, but which, at a minimum, are subject to a first priority perfected security interest in favor of the Lender and not subject to any assignment, claim or Lien other than the Lien
in favor of the Lender and other Liens consented to by the Lender in writing, but specifically excluding (a) Accounts which are not earned; (b) Accounts which are unpaid more than ninety
(90) days after the original invoice date; (c) Accounts owed by debtors 25% or more of whose Accounts owed are otherwise ineligible; (d) Accounts representing progress billings,
or retainages, or for work covered by any payment or performance bond; (e) Accounts owed by any of the Borrower's Affiliates; (f) Accounts owed by debtors not located in the United
States, unless supported by a letter of credit issued by a U.S. bank in favor of the Borrower which has been delivered to the Lender; (g) Accounts as to which any warranty or representation
contained in any security agreement or other agreement of the Borrower with or given to the Lender with respect to any such Account is untrue in any material respect; (h) Accounts as to which
the account debtor has disputed liability, or made any claim with respect to any other Account due from such account debtor to the Borrower; (i) Accounts subject to setoff; (j) Accounts
as to which the account debtor has filed a petition for bankruptcy or any other petition for relief under the Bankruptcy Code, assigned any assets for the benefit of creditors, or if any petition or
other application for relief under the Bankruptcy Code has been filed against the account debtor, or if the account debtor has failed, suspended business, become insolvent, or has had or suffered a
receiver or a trustee to be appointed for all or a significant portion of its assets or affairs; (k) Accounts owed by any government or government agency; (l) Accounts evidenced by a
promissory note or other instrument; and (m) Accounts as to which the Lender reasonably believes that collection of any such Account
is insecure or that any such Account may not be paid by reason of the account debtor's financial inability to pay. 

    "Event of Default":  Any event described in Section 7.1. 

    "GAAP":  Generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of any date of determination. 

    "Lien":  With respect to any Person, any security interest, mortgage, pledge, lien, charge, encumbrance, title retention
agreement or analogous instrument or device (including the interest of each lessor under any capitalized lease), in, of or on any assets or properties of such Person, now owned or hereafter acquired,
whether arising by agreement or operation of law. 

    "Loan Documents":  This Agreement, the Note, and any documents described in Section 3.1(a)(vii). 

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    "Mortgage":  A Security Agreement of even date executed by the Lender in form and substance satisfactory to Lender. 

    "Note":  As defined in Section 2.3 

    "Obligations":  shall mean (a) all indebtedness, liabilities and obligations of the Borrower to Lender of every
kind, nature or description under this Agreement, including the Borrower's obligation on any Note and any note or notes hereafter issued in substitution or replacement thereof, (b) all
liabilities of the Borrower under the Security Agreement, and (c) any and all other liabilities and obligations of the Borrower to the Lender of every kind, nature and description, whether
direct or indirect or hereafter acquired by the Lender from any Person, absolute or contingent, regardless of how such liabilities arise
or by what agreement or instrument they may be evidenced, and in all of the foregoing cases whether due or to become due, and whether now existing or hereafter arising or incurred. 

    "Person":  Any natural person, corporation, partnership, limited partnership, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. 

    "Reference Rate":  The rate of interest from time to time publicly announced by the Lender as its "reference rate." The
Lender may lend to its customers at rates that are at, above or below the Reference Rate. For purposes of determining any interest rate hereunder or under the Note which is based on the Reference
Rate, such interest rate shall change as and when the Reference Rate changes. 

    "Regulatory Change":  Any change after the date of this Agreement in federal, state or foreign laws or regulations or
the adoption or making after such date of any interpretations, directives or requests applying to a class of banks including the Lender under any federal, state or foreign laws or regulations (whether
or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. 

    "Revolving Commitment":  The obligation of the Lender to make Advances to the Borrower on the Revolving Loan in an
aggregate principal amount outstanding at any time not to exceed the Revolving Commitment Amount upon the terms and subject to the conditions and limitations of this Agreement. 

    "Revolving Commitment Amount":  As defined in Section 2.1(a). 

    "Revolving Credit Availability":  The lesser of all of the Revolving Commitment Amount minus outstanding Advances or
(b) the Borrowing Base minus outstanding Advances. 

    "Revolving Loan":  As defined in Section 2.1(a). 

    "Revolving Maturity Date":  As defined in Section 2.1(a). 

    "Security Agreement":  A Security Agreement of even date executed by the Lender in form and substance satisfactory to
Lender. 

    "Subsidiary":  Any corporation or other entity of which securities or other ownership interests having ordinary voting
power for the election of a majority of the board of directors or other Persons performing similar functions are owned by the Borrower either directly or through one or more Subsidiaries. 

    "Term Loan A":  As defined in Section 2.1(b). 

    "Term Loan B":  As defined in Section 2.1(c). 

    "Term Loan C":  As defined in Section 2.1(d). 

    "Term Loans":  Term Loan A, Term Loan B and Term Loan C. 

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    Section 1.2  Accounting Terms and Calculations.  Except as may be expressly provided to the
contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP. 

    Section 1.3  Other Definitional Terms, Terms of Construction.  The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. References to Sections, Exhibits,
Schedules and the like references are to Sections, Exhibits, Schedules and the like of this Agreement unless otherwise expressly provided. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." Unless the context in which used herein otherwise clearly requires, "or" has the inclusive meaning represented by the phrase "and/or." All
incorporations by reference of covenants, terms, definitions or other provisions from other agreements are incorporated into this Agreement as if such provisions were fully set forth herein, and
include all necessary definitions and
related provisions from such other agreements. All covenants, terms, definitions and other provisions from other agreements incorporated into this Agreement by reference shall survive any termination
of such other agreements until the obligations of the Borrower under this Agreement and the Note is irrevocably paid in full and the Revolving Commitment is terminated. 

  ARTICLE II
       TERMS OF LENDING         

    Section 2.1  The Commitments.  On the terms and subject to the conditions hereof, the Lender
agrees to make the following lending facilities available to the Borrower: 

    2.1(a)  Revolving Credit.  A revolving loan (the "Revolving Loan") to the Borrower available as advances
("Advances") at any time and from time to time from the Closing Date to October 1, 2002 (the "Revolving Maturity Date"), during which period the Borrower may borrow, repay and reborrow in
accordance with the provisions hereof, provided, that the unpaid principal amount of revolving Advances shall not at any time exceed $1,500,000 (the
"Revolving Commitment Amount"); and provided, further, that no revolving Advance will be made if, after giving effect thereto, the unpaid principal
amount of the Advances would exceed the Borrowing Base. 

    2.1(b)  Term Loan.  A term loan ("Term Loan A") from the Lender to the Borrower on the Closing Date in
the amount of $2,800,000 (the "Term Loan A Commitment Amount"). 

    2.1(c)  Term Loan B.  A term loan ("Term Loan B") from the Lender to the Borrower on the Closing Date in
the amount of $1,100,000 ("Term Loan B Commitment Amount"). 

    2.1(d)  Term Loan C.  A term loan ("Term Loan C") from the Lender to the Borrower on the Closing Date in
the amount of $1,400,000 ("Term Loan C Commitment Amount"). 

Notwithstanding
any provision hereof, this Agreement and the Revolving Commitment shall terminate and the Lender shall have no obligation hereunder if the Term Loan hereunder has not been made by
September 30, 2000, provided, however, that the obligations of the Borrower under Section 8.2 shall survive any such termination. 

    Section 2.2  Procedure for Advances and the Term Loans.  Any request by the Borrower for an
Advance on the Revolving Loan shall be in writing or by telephone and must be given so as to be received by the Lender not later than 10:00 (Minneapolis time) on the requested Advance date. Each
request for an Advance shall be irrevocable and shall be deemed a representation by the Borrower that on the requested Advance date and after giving effect to such Advance the applicable conditions
specified in Article III have been and will continue be satisfied. Each request for an Advance shall specify (i) the requested Advance date (which must be a Business Day) and
(ii) the amount of such Advance which shall be in a minimum amount of $10,000. Unless the Lender determines that any applicable condition specified in Article III has not been satisfied,
the Lender will make available to the Borrower at the Lender's principal office in 

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Minneapolis, Minnesota in immediately available funds not later than 5:00 PM (Minneapolis time) on the requested Advance date the amount of the requested Advance. 

    Section 2.3  The Note.  The Advances on the Revolving Loan and the Term Loans shall be evidenced
by a single amended and restated promissory note of the Borrower (the "Note"), substantially in the form of Exhibit 2.3 hereto. The Lender shall enter in its ledgers and records the payments
made on the Term Loans and the amount of each Advance made and the payments made thereon, and the Lender is authorized by the Borrower to enter on a schedule attached to the Note a record of
such Advances and payments. 

    Section 2.4  Interest Rates, Interest Payments and Default Interest.  Interest shall accrue and be
payable on the unpaid balance of the Advances at a floating rate per annum equal to the sum of the Reference Rate plus 0% (the latter being the "Applicable Revolving Margin");  provided, however, that
upon the happening of any Event of Default, then, at the option of the Lender, the Advances shall thereafter bear interest at a
floating rate equal to the sum of (a) the Reference Rate, plus (b) the Applicable Revolving Margin, plus (c) 4%. Interest shall accrue and be payable on the unpaid balance of Term
Loan A at a fixed rate equal to 10% per annum; provided, however, that upon the happening of any Event of Default, then, at the option of the Lender,
Term Loan A shall thereafter bear interest at a fixed rate equal to 12% per annum. Interest shall accrue and be payable on the unpaid balance of Term Loan B at a floating rate per annum equal to the
sum of the Reference Rate plus 1.0% (the latter being the "Applicable Term Margin"); provided, however, that upon the happening of any Event of Default,
then, at the option of the Lender, Term Loan B shall thereafter bear interest at a floating rate equal to the sum of (a) the Reference Rate, plus (b) the Applicable Term Margin, plus
(c) 2%. Term Loan C shall be non-interest bearing. Interest shall be payable monthly in arrears on the first day of
each month and upon final payment of the Advances. Interest on Term Loan A and Term Loan B shall be payable as provided in Term Loan A and Term Loan B. 

    Section 2.5  Borrowing Base and Mandatory Prepayment.  The Borrowing Base shall be equal to
(i) until September 30, 2002 the sum of 80% of the face value of Eligible Accounts plus $250,000 and (ii) if the Revolving Maturity Date is extended pursuant to
Section 2.10 from October   , 2002 and thereafter 80% of the face value of Eligible Accounts. The Borrower shall deliver borrowing base certificates in the form attached
hereto (a "Borrowing Base Certificate") to the Lender not less than weekly. Each such certificate shall state the amount of Eligible Accounts and the Borrowing Base as of the end of the previous month
or the date of the Lender's request, as appropriate. Any limitations on advances or required prepayments relating to the Borrowing Base shall be based on the latest borrowing base certificate the
Borrower shall have delivered to the Lender. If the principal balance of the Advances at any time exceeds the Borrowing Base, the Borrower shall immediately prepay the Advances by the amount of that
excess. 

    Section 2.6  Repayment and Prepayment.  

    2.6(a)  Repayment of the Advances.  Principal of the Advances shall be payable in full on the Revolving
Maturity Date. The Borrower may prepay the Advances, in whole or in part, at any time, without premium or penalty. Amounts prepaid on the Advances under this Section may be reborrowed upon the terms
and subject to the conditions and limitations of this Agreement. 

    2.6(b)  Repayment of Term Loan A.  Principal of Term Loan A is payable as provided in the Note. The
Borrower may prepay Term Loan A at any time without premium or penalty. Any such prepayment must be accompanied by accrued and unpaid interest on the amount prepaid. Amounts so prepaid cannot be
reborrowed. 

    2.6(c)  Repayment of Term Loan B.  Principal of Term Loan B is payable as provided in the Note. The
Borrower may prepay Term Loan B at any time without premium or penalty. Any such 

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prepayment must be accompanied by accrued and unpaid interest on the amount prepaid. Amounts so prepaid cannot be reborrowed. 

    2.6(d)  Repayment of Term Loan C.  Principal of Term Loan C is payable as provided in the Note. The
Borrower may prepay Term Loan C at any time without premium or penalty. Any such prepayment must be accompanied by accrued and unpaid interest on the amount prepaid. Amounts so prepaid cannot be
reborrowed. 

    Section 2.7  Computation.  Revolving Commitment Fees and interest on the Note shall be computed on
the basis of actual days elapsed and a year of 360 days. 

    Section 2.8  Capital Adequacy.  In the event that any Regulatory Change reduces or shall have the
effect of reducing the rate of return on the Lender's capital or the capital of its parent corporation (by an amount the Lender deems material) as a consequence of the Commitments and/or the Advances
to a level below that which the Lender or its parent corporation could have achieved but for such Regulatory Change (taking into account the Lender's policies and the policies of its parent
corporation with respect to capital adequacy), then the Borrower shall, within five days after written notice and demand from the Lender, pay to the Lender additional amounts sufficient to compensate
the Lender or its parent corporation for such reduction. Any determination by the Lender under this Section and any certificate as to the amount of such reduction given to the Borrower by the Lender
shall be final, conclusive and binding for all purposes, absent error. 

    Section 2.9  Use of Proceeds.  The proceeds of the initial Revolving Advance shall be used to
satisfy obligations to the Lender under the Existing Agreement. Any remaining balance of the initial Revolving Advance and the proceeds of any subsequent Revolving Advance shall be used for the
Borrower's general business purposes in a manner not in conflict with any of the Borrower's covenants in this Agreement. The proceeds of the Term Loans shall be used to satisfy obligations to the
Lender under the Existing Agreement. 

    Section 2.10  Extension of the Revolving Maturity Date.  The Borrower may, by written notice given
to the Lender, at least 30 days but not more than 60 days prior to the Revolving Maturity Date requests in writing an extension of the Revolving Maturity Date for an additional period of
one year. The Borrower may do a maximum of three times and if no Default or Event of Default then exists, the Revolving Maturity Date shall be extended for such year. In the case of any such
extension, the "Revolving Maturity Date" shall be the last day of the period to which such extension has been granted. 

  ARTICLE III
       CONDITIONS PRECEDENT         

    Section 3.1  Conditions of Initial Revolving Advance and Term Loans.  The obligation of the Lender
to make the initial Advance on the Revolving Loan and the Term Loans hereunder shall be subject to the prior or simultaneous fulfillment of each of the following conditions: 

    3.1(a)  Documents.  The Lender shall have received the following: 

     (i) The
Note executed by a duly authorized officer (or officers) of the Borrower and dated the Closing Date. 

    (ii) A
copy of the corporate resolutions of the Borrower authorizing the execution, delivery and performance of this Agreement and the Note and containing an incumbency
certificate showing the names and titles, and bearing the signatures of, the officers of the Borrower authorized to execute this Agreement and the Note, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Borrower and certifying that there has been no change to the Articles of Incorporation or Bylaws of the Borrower since true and correct copies were last
delivered to the Lender. 

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    (iii) The opinion of counsel to the Borrower covering such matters as the Lender may request. 

    (iv) The
Security Agreement. 

    (v) The
Mortgage. 

    (vi) The
initial Borrowing Base Certificate required under Section 2.5. 

   (vii) Evidence,
satisfactory to the Lender of an infusion of equity into the Borrower in an amount not less than $800,000. 

   (viii) A
copy of an executed stock purchase agreement between the Borrower and Richard McNamara, James R. Reissner, Michael Tate or Activar, Inc. 

    (ix) Evidence
of a restructuring of accounts payable with Borrower's trade vendors, satisfactory to the Lender in its sole discretion. 

    3.1(b)  Other Matters.  All organizational and legal proceedings relating to the Borrower and all
instruments and agreements in connection with the transactions contemplated by this Agreement shall be satisfactory in scope, form and substance to the Lender and its counsel, and the Lender shall
have received all information and copies of all documents, including records of corporate proceedings, which it may reasonably have requested in connection therewith, such documents where appropriate
to be certified by proper Borrower or governmental authorities. 

    3.1(c)  Fees and Expenses.  The Lender shall have received all fees and other amounts due and payable by
the Borrower on or prior to the Closing Date, including the reasonable fees and expenses of counsel to the Lender payable pursuant to Section 8.2. 

    3.1(d)  Perfection.  The Security Agreement (or financing statements with respect thereto) shall have
been appropriately filed to the satisfaction of the Lender and the priority and perfection of the Lien created thereby shall have been established to the satisfaction of the Lender. The Mortgage shall
have been appropriately filed to the satisfaction of the Lender and the priority and perfection of the Lien created thereby shall have been established to the satisfaction of the Lender. 

    Section 3.2  Conditions Precedent to all Advances.  The Lender shall not have any obligation to
make the Term Loans or any Advance on the Revolving Loan (including Advances after the initial Advance) hereunder unless all representations and warranties of the Borrower made in this Agreement
remain true and correct and no Default or Event of Default exists. 

  ARTICLE IV
       REPRESENTATIONS AND WARRANTIES         

    The Borrower represents and warrants to the Lender: 

    Section 4.1  Organization, Standing, Etc.  The Borrower is a corporation duly incorporated and
validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now conducted, to enter
into this Agreement and to issue the Note and to perform its obligations hereunder and thereunder. This Agreement and the Note have been duly authorized by all necessary corporate action and when
executed and delivered will be the legal and binding obligations of the Borrower. The execution and delivery of this Agreement and the Note will not violate the Borrower's Articles of Incorporation or
bylaws or any law applicable to the Borrower. No governmental consent or exemption is required in connection with the Borrower's execution and delivery of this Agreement and the Note. 

    Section 4.2  Financial Statements and No Material Adverse Change.  The Borrower's unaudited
financial statements as at December 31, 1999 (shall be substantially in agreement with its audited financial 

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statement not yet released for the period ending December 31, 1999) and its unaudited financial statements as at July 31, 2000, as heretofore furnished to the Lender, have been prepared
in accordance with GAAP. The Borrower has no material obligation or liability not disclosed in such financial statements, and there has been no material adverse change in the condition of the Borrower
since the dates of such financial statements. 

    Section 4.3  Litigation.  There are no actions, suits or proceedings pending or, to the knowledge
of the Borrower, threatened against or affecting the Borrower which, if determined adversely to the Borrower, would have, a material adverse effect on the condition of the Borrower. The Borrower is
not in violation of any law or regulation (including environmental laws and regulations and laws relating to employee benefit plans) where such violation could reasonably be expected to impose a
material liability on the Borrower. 

    Section 4.4  Taxes.  The Borrower has filed all federal, state and local tax returns required to
be filed and has paid or made provision for the payment of all taxes due and payable pursuant to such returns and pursuant to any assessments made against it or any of its property (other than taxes,
fees or charges the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on
the books of the Borrower). 

    Section 4.5  Subsidiaries.  The Borrower has no Subsidiaries except for EPR, Inc. and
Reuter Recycling of Florida, Inc. 

  ARTICLE V
       AFFIRMATIVE COVENANTS         

    Until the Revolving Commitment shall have expired or been terminated and the Note and all of the Borrower's other obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent in writing: 

    Section 5.1  Financial Statements and Reports.  The Borrower will furnish to the Lender: 

  5.1(a) As
soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, financial statements of the Borrower consisting
of at least statements of income, cash flow and changes in stockholders' equity, and a balance sheet as at the end of such year, setting forth in each case in comparative form corresponding figures
from the previous annual audit, certified without qualification by independent certified public accountants of recognized national standing selected by the Borrower and acceptable to the Lender. 

  5.1(b) As
soon as available and in any event within 30 days after the end of each month, unaudited financial statements for the Borrower for such month and for
the period from the beginning of such fiscal year to the end of such month, substantially similar to the annual audited statements. 

  5.1(c) As
soon as practicable and in any event within 30 days after the end of each month, a Compliance Certificate in the form of Exhibit 5.1(c) hereto
and a statement signed by the chief financial officer of
the Borrower stating that as at the end of such month there did not exist any Default or Event of Default or, if such Default or Event of Default existed, specifying the nature and period of existence
thereof and what action the Borrower proposes to take with respect thereto. 

  5.1(d) Immediately
upon any officer of the Borrower becoming aware of any Default or Event of Default, a notice describing the nature thereof and what action the
Borrower proposes to take with respect thereto. 

  5.1(e) Concurrently
with each request for an Advance, and in any event not less than weekly, a Borrowing Base Certificate. 

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  5.1(f) As
soon as practicable and in any event within fifteen days of the end of each month, (i) a listing of all Accounts, together with an aging of all
accounts and a reconciliation of such accounts against the listing submitted pursuant hereto for the immediately preceding month, and (ii) a listing of all accounts payable, together with an
aging of all accounts payable all in form and substance satisfactory to the Lender. 

  5.1(g) As
soon as practicable and in any event within thirty days of the end of each quarter, a customer listing including the contact person, addresses and phone
numbers of each account debtor. 

  5.1(h) Within
five days after the due date, proof of payment or deposit, when due, of all withholding and F.I.C.A. taxes owing by the Borrower from time to time, in
form and substance satisfactory to the Lender by a payroll service satisfactory to the Lender and whose services the Borrower shall at all times retain. 

  5.1(i) From
time to time, such other information regarding the business, operation and financial condition of the Borrower as the Lender may reasonably request. 

    Section 5.2  Corporate Existence.  The Borrower will maintain its corporate existence in good
standing under the laws of its jurisdiction of incorporation and its qualification to transact business in each jurisdiction where failure so to qualify would permanently preclude the Borrower from
enforcing its rights with respect to any material asset or would expose the Borrower to any material liability. 

    Section 5.3  Insurance.  The Borrower will maintain with financially sound and reputable insurance
companies such insurance as may be required by law and such other insurance in such amounts and against such hazards as is customary in the case of reputable corporations engaged in the same or
similar business and similarly situated. 

    Section 5.4  Payment of Taxes and Claims.  The Borrower will file all tax returns and reports
which are required by law to be filed by it and will pay before they become delinquent, all taxes, assessments and governmental charges and levies imposed upon it or its property and all claims or
demands of any kind
(including those of suppliers, mechanics, carriers, warehousemen, landlords and other like Persons) which, if unpaid, might result in the creation of a Lien upon its property. 

    Section 5.5  Inspection.  The Borrower will permit any Person designated by the Lender to visit
and inspect any of the properties, books and financial records of the Borrower, to examine and to make copies of the books of accounts and other financial records of the Borrower, and to discuss the
affairs, finances and accounts of the Borrower with its officers at such reasonable times and intervals as the Lender may designate. The Borrower shall also allow the Lender and its agents to conduct
periodic collateral audits of the Borrower's accounts and inventory at such intervals as the Lender may choose, and the Borrower shall pay the Lender's costs of such audits (provided that the Borrower
shall not be require to pay for more than two collateral audits in any calendar year). 

    Section 5.6  Maintenance of Properties.  The Borrower will maintain its properties in good
condition, repair and working order, and supplied with all necessary equipment, and make all necessary repairs, renewals, replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and advantageously conducted at all times. 

    Section 5.7  Books and Records.  The Borrower will keep adequate and proper records and books of
account in which full and correct entries will be made of its dealings, business and affairs. 

    Section 5.8  Compliance.  The Borrower will comply in all material respects with all laws, rules
and regulations to which it may be subject. 

    Section 5.9  Notice of Litigation.  The Borrower will give prompt written notice to the Lender of
the commencement of any action, suit or proceeding affecting the Borrower. 

9

    Section 5.10  Plans.  The Borrower will maintain any employee benefit plans in compliance with all
material requirements of applicable laws and regulations. 

    Section 5.11  Making of Payments; Application of Collections; Charging of Accounts.  

 5.11(a) All
payments hereunder (including payments with respect to any Note) shall be made without set-off or counterclaim and shall be made to the Lender in
immediately available funds (or as the Lender may otherwise consent) prior to 2:00 p.m., Minneapolis time, on the date due at its office at U.S. Bank Place, 601 Second Avenue South,
Minneapolis, MN 55402-4302, or at such other place as may be designated by Lender to the Borrower in writing from time to time. Unless Lender shall otherwise consent, all loan payments
shall be made by the Borrower through the Collateral Account (as that term is defined in the Security Agreement). Amounts on deposit in the Collateral Account at the end of each Business Day will be
applied to the Loans and the other Obligations by the Lender on the next succeeding Business Day in such order as the Lender, in its sole discretion, shall determine. Borrower acknowledges that
deposits made and other items credited to the Collateral Account are subject to applicable laws and regulations governing availability of funds and to Lender's funds availability requirements, and may
not be immediately available for application to the Loans or the other Obligations. 

 5.11(b) The
Borrower authorizes the Lender to, and the Lender will, subject to the provisions of this Section 5.11(b), apply the whole or any part of any amounts
received by the Lender (whether deposited in the Collateral Account or otherwise received by the Lender) from the collection of items of payment and proceeds of any Collateral against the principal
and/or interest of any Loans made hereunder and/or any other Obligations, whether or not then due, in such order of application as the Lender may determine, unless such payments or proceeds are, in
the Lender's sole and absolute discretion, released to the Borrower. No checks, drafts or other instruments received by the Lender shall constitute final payment to the Lender unless and until such
item of payment has actually been collected. All items or amounts which are delivered to the Lender by or on behalf of any Borrower or any obligor or any account debtor on account of partial or full
payment or otherwise as proceeds of any of the Collateral (including any items or amounts which may have been deposited to the Collateral Account) may from time to time, in the Lender's sole and
absolute discretion, be released to the Borrower or may be applied by the Lender towards such of the Obligations, whether or not then due, in such order of application as the Lender may determine.
Notwithstanding anything to the contrary herein, (i) solely for purposes of determining the occurrence of an Event of Default hereunder, all cash, checks, instruments and other items of payment
shall be deemed received upon actual receipt by the Lender unless the same is subsequently dishonored for any reason whatsoever, (ii) solely for purposes of determining whether there is
Revolving Credit Availability, all cash, checks, instruments and other items of payment shall be applied against the Obligations no later than the first Business Day following receipt thereof by the
Lender in Minneapolis, Minnesota or the first Business Day following the initiation by the Lender of an ACH transaction from the Collateral Account, and (iii) solely for purposes of interest
calculation hereunder, all cash, checks, instruments and other items of payment shall be deemed to have been applied against the Obligations no later than the second Business Day following receipt
thereof by the Lender in Minneapolis, Minnesota or the second Business Day following the initiation by the Lender of an ACH transaction from the Collateral Account. 

 5.11(c) The
Borrower hereby irrevocably authorize the Lender and the Lender may, in its sole and absolute discretion, at any time and from time to time, pay all or any
portion of any Obligations including, without limitation, interest, attorneys' fees and other fees, costs and expenses of the Lender for which any Borrower is liable pursuant to the terms of the Loan
Documents, by charging any bank account of any Borrower maintained with Lender or by advancing the amount thereof to the Borrower as an Advance and applying the proceeds of such Loan against such
Obligations; provided, however, that the provisions of this Section 5.11(c) shall not affect the Borrowers' obligation to pay when due 

10

all amounts payable by any Borrower under any of the Loan Documents whether or not there are sufficient funds therefor in any such bank account of any Borrower with Lender, or sufficient Revolving
Credit Availability. 

 5.11(d) Subject
to the rights granted to the Lender in paragraph 5 of the Security Agreements, all ledger sheets or cards, invoices, shipping records,
correspondence, and other writings relating to accounts shall, until delivered to the Lender or removed by the Lender from the Borrower's premises, be kept on the Borrower's premises without cost to
the Lender in appropriate containers in safe places. 

 5.11(e) Upon
the Lender's demand for payment, the Lender may remove from the Borrower's premises all books and records, correspondence, documents and files relating to
accounts; and the Lender may without cost or expense to the Lender use such of the Borrower's personnel, supplies, space and equipment at the Borrower's place of business as the Lender may desire for
the handling of collections. The Borrower will pay any and all out of pocket expenses and cost of collection (including reasonable attorney fees) incurred by the Lender in the Lender's handling of or
effort to enforce collections. 

 5.11(f) The
Borrower warrants that, except as may be disclosed in the lists of Accounts furnished to the Lender: each customer billing statement correctly states the
subject matter and terms of sale; the merchandise conforms thereto and is in all respects acceptable to the customer; the date of the billing statement is not prior to the date of shipment; the
Account is not subject to any dispute, defense, offset or counterclaim; the account debtor is not a subsidiary or affiliated company; and the Borrower has no reason to believe the Account will not be
paid in the regular course of business. The Borrower will notify the Lender promptly of any event, circumstance or communication with respect to any Account that is inconsistent with the foregoing
representation. 

  ARTICLE VI
       NEGATIVE COVENANTS         

    Until the Revolving Commitment shall have expired or been terminated and the Note and all of the Borrower's other obligations to the Lender under this
Agreement shall have been paid in full, unless the Lender shall otherwise consent in writing: 

    Section 6.1  Merger.  The Borrower will not merge or consolidate or enter into any analogous
reorganization or transaction with any Person or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) 

    Section 6.2  Sale of Assets.  The Borrower will not sell, transfer, lease or otherwise convey all
or any substantial part of its assets except for sales and leases of inventory in the ordinary course of business. 

    Section 6.3  Dividends.  The Borrower will not pay any dividends or otherwise make any
distributions on, or redemptions of, any of its outstanding stock. 

    Section 6.4  Payments to Investors and Affiliates.  The Borrower will not compensate, Richard
McNamara, James R. Reissner, Michael Tate or Activar, Inc., or any of their Affiliates(including without limitation, salary, bonus, management fees, consulting agreements and incentive
compensation of any type) in an amount in excess of $100,000 (excluding salary paid to Michael Tate) in the aggregate in any of Borrower's fiscal years. The Borrower will not enter into a transaction
with any Affiliate, officer of or investor in the Borrower (i) which requires the Borrower to pay more than $5,000 in the aggregate for management fees and (ii) except upon fair and
reasonable terms no less favorable than the Borrower would obtain in a comparable arm's-length transaction with a person not an Affiliate, officer of or investor in Borrower. 

11

    Section 6.5  Investments.  The Borrower will not make any loans, advances or extensions of credit
to any other Person (except for trade and customer accounts receivable for inventory sold or services rendered in the ordinary course of business and payable in accordance with customary trade terms)
or purchase
or acquire any stock or other debt or equity securities of or any interest in any other Person or any integral part of any business or the assets comprising such business or part thereof, except for: 

  6.5(a) Investments
in readily marketable direct obligations issued or unconditionally guaranteed by the United States government or any agency thereof and supported by
the full faith and credit of the United States. 

  6.5(b) Certificates
of deposit or bankers' acceptances issued by any commercial Bank organized under the laws of the United States or any State thereof which has
(i) combined capital and surplus of at least $100,000,000, and (ii) a credit rating with respect to its unsecured indebtedness from a nationally recognized rating service that is
satisfactory to the Lender. 

  6.5(c) Commercial
paper given the highest rating by a nationally recognized rating service. 

  6.5(d) Repurchase
agreements relating to securities of the kind described in subsection (a) of this Section. 

  6.5(e) Other
readily marketable investments in debt securities which are reasonably acceptable to the Lender. 

  6.5(f) Travel
advances to officers and employees in the ordinary course of business. 

Any
investments under clauses (a), (b), (c) or (d) above must mature within one year of the acquisition thereof by the Borrower. 

    Section 6.6  Indebtedness.  The Borrower will not borrow any money or issue any bonds, debentures
or other debt securities or otherwise become obligated on any interest-bearing indebtedness except (i) for the Term Loan and Advances under this Agreement and (ii) leases that require
aggregate monthly payments not to exceed $15,000. 

    Section 6.7  Liens.  The Borrower will not create, incur, assume or suffer to exist any Lien, or
enter into any arrangement for the acquisition of any property through conditional sale, lease-purchase or other title retention agreements except: 

  6.7(a) Liens
granted to the Lender. 

  6.7(b) Liens
existing on the date of this Agreement and disclosed on Exhibit 6.7 hereto. 

  6.7(c) Deposits
or pledges to secure payment of workers' compensation, unemployment insurance, old age pensions or other social security obligations arising in the
ordinary course of business of the Borrower. 

  6.7(d) Liens
for taxes, fees, assessments and governmental charges not delinquent. 

  6.7(e) Liens
of carriers, warehousemen, mechanics and materialmen, and other like Liens arising in the ordinary course of business, for sums not due. 

  6.7(f) Liens
incurred or deposits or pledges made or given in connection with, or to secure payment of, indemnity, performance or other similar bonds. 

  6.7(g) Encumbrances
in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property and landlord's Liens under leases
on the premises rented, which do not materially detract from the value of such property or impair the use thereof in the business of the Borrower. 

12

    Section 6.8  Contingent Obligations.  The Borrower will not guarantee or otherwise become liable
on the indebtedness of any other Person. 

    Section 6.9  Change of Control.  The Borrower will not permit a Change of Control to occur. 

    Section 6.10  Net Income.  The Borrower will not permit its net income for the fiscal year ending
December 31, 2002 to be less than $1.00. 

  ARTICLE VII
       EVENTS OF DEFAULT AND REMEDIES         

    Section 7.1  Events of Default.  The occurrence of any one or more of the following events shall
constitute an Event of Default: 

  7.1(a) The
Borrower shall fail to make when due, whether by acceleration or otherwise, any payment of principal of or interest on the Note or any other obligations of
the Borrower to the Lender pursuant to this Agreement. 

  7.1(b) Any
representation or warranty made by or on behalf of the Borrower in this Agreement or by or on behalf of the Borrower in any certificate, statement, report or
document herewith or hereafter furnished to the Lender pursuant to this Agreement shall prove to have been false or misleading in any material respect on the date as of which the facts set forth are
stated or certified. 

  7.1(c) The
Borrower shall fail to comply with Sections 5.2 or 5.3 or any Section of Article VI. 

  7.1(d) The
Borrower shall fail to comply with any other agreement, covenant, condition, provision or term contained in this Agreement (other than those hereinabove set
forth in this Section 7.1) and such failure to comply shall continue for ten calendar days after whichever of the following dates is the earliest: (i) the date the Borrower gives notice
of such failure to the Lender, (ii) the date the Borrower should have given notice of such failure to the Lender pursuant to Section 5.1, or (iii) the date the Lender gives notice
of such failure to the Borrower. 

  7.1(e) The
Borrower shall become insolvent or shall generally not pay its debts as they mature or shall apply for, shall consent to, or shall acquiesce in the
appointment of a custodian, trustee or receiver of the Borrower or for a substantial part of the property thereof or, in the absence of such application, consent or acquiescence, a custodian, trustee
or receiver shall be appointed for the Borrower or for a substantial part of the property thereof, or the Borrower shall make an assignment for the benefit of creditors. 

  7.1(f) Any
bankruptcy, reorganization, debt arrangement or other proceedings under any bankruptcy or insolvency law shall be instituted by or against the Borrower. 

  7.1(g) Any
dissolution or liquidation proceeding shall be instituted by or against the Borrower. 

  7.1(h) A
judgment or judgments for the payment of money in excess of the sum of $50,000 in the aggregate shall be rendered against the Borrower. 

  7.1(i) The
maturity of any material indebtedness of the Borrower (other than indebtedness under this Agreement) shall be accelerated, or the Borrower shall fail to pay
any such material indebtedness when due (after the lapse of any applicable grace period) or any event shall occur or condition shall exist and shall continue for more than the period of grace, if any,
applicable thereto and shall have the effect of causing, or permitting the holder of any such indebtedness to cause, such material indebtedness to become due prior to its stated maturity or to realize
upon any collateral given as security therefor. For purposes of this Section, indebtedness of the Borrower shall be deemed "material" if it exceeds $25,000 as to any item of indebtedness or in the
aggregate for all items of indebtedness with respect to which any of the events described in this Section has occurred. 

13

  7.1(j) Any execution or attachment shall be issued whereby any substantial part of the property of the Borrower shall be taken or attempted to be taken. 

  7.1(k) Any
default shall occur under any other Loan Document. 

    Section 7.2  Remedies.  If (a) any Event of Default described in Sections 7.1 (e),
(f) or (g) shall occur with respect to the Borrower, the Revolving Commitment shall automatically terminate and the Note and all other obligations of the Borrower to the Lender under
this Agreement shall automatically become immediately due and payable, or (b) any other Event of Default shall occur and be continuing, then the Lender may (i) declare the Revolving
Commitment terminated, whereupon the Commitment shall terminate, and (ii) declare the Note and all other obligations of the Borrower to the Lender under this Agreement to be forthwith due and
payable, whereupon the same shall immediately become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything
in this Agreement or in the Note to the contrary notwithstanding. Upon the occurrence of any of the events described in clauses (a) or (b) of the preceding sentence the Lender may
exercise all rights and remedies under this Agreement, the Note and any related agreements and under any applicable law. 

    Section 7.3  Offset.  In addition to the remedies set forth in Section 7.2, upon the
occurrence of any Event of Default and thereafter while the same be continuing, the Borrower hereby irrevocably authorizes the Lender to set off all sums owing by the Borrower to the Lender against
all deposits and credits of the Borrower with, and any and all claims of the Borrower against, the Lender. 

  ARTICLE VIII
       MISCELLANEOUS         

    Section 8.1  Modifications.  Notwithstanding any provisions to the contrary herein, any term of
this Agreement may be amended with the written consent of the Borrower; provided that no amendment, modification or waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be in writing and signed by the Lender, and then such amendment, modifications, waiver or consent shall be effective only in
the specific instance and for the purpose for which given. 

    Section 8.2  Costs and Expenses.  Whether or not the transactions contemplated hereby are
consummated, the Borrower agrees to reimburse the Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by the Lender (including filing and recording
costs and fees and expenses of Dorsey & Whitney LLP, counsel to the Lender) in connection with the negotiation, preparation, approval, review,
execution, delivery, amendment, modification, interpretation, collection and enforcement of this Agreement and the Note. The obligations of the Borrower under this Section shall survive any
termination of this Agreement. 

    Section 8.3  Waivers, etc.  No failure on the part of the Lender or the holder of either Note to
exercise and no delay in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude any other or further
exercise thereof or the exercise of any other power or right. The rights and remedies of the Lender hereunder are cumulative and not exclusive of any right or remedy the Lender otherwise has. 

    Section 8.4  Notices.  Except when telephonic notice is expressly authorized by this Agreement,
any notice or other communication to any party in connection with this Agreement shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address specified on the signature page hereof, or at such other address as such party shall have specified to the other party
hereto in writing. All periods of notice shall be measured from the date of delivery thereof if manually delivered, from the date of sending thereof if sent by telegram, telex or facsimile
transmission, from the first Business Day after the date of sending if 

14

sent by overnight courier, or from four days after the date of mailing if mailed; provided, however, that any notice to the Lender under Article II hereof shall be deemed to have been given
only when received by the Lender. 

    Section 8.5  Successors and Assigns; Disposition of Loans.  This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign its rights or delegate its obligations hereunder without the prior
written consent of the Lender. The Lender may at any time sell, assign, transfer, grant participations in, or otherwise dispose of any portion of the Revolving Commitment and the Term Loan and/or
Advances to banks or other financial institutions. The Lender may disclose any information regarding the Borrower in the Lender's possession to any prospective buyer or participant. 

    Section
8.6  Governing Law and Construction.  THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS
AGREEMENT AND THE Note SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED
STATES APPLICABLE TO NATIONAL BANKS. 

    Section
8.7  Consent to Jurisdiction.  AT THE OPTION OF THE LENDER, THIS AGREEMENT AND THE Note MAY BE
ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN OR RAMSEY COUNTY, MINNESOTA; AND THE BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY
ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY
FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER
CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE. 

    Section 8.8  Waiver of Jury
Trial.  EACH OF THE BORROWER AND THE LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE NOTE AND ANY OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

    Section 8.9  Captions.  The captions or headings herein and any table of contents hereto are for
convenience only and in no way define, limit or describe the scope or intent of any provision of this Agreement. 

    Section 8.10  Entire Agreement.  This Agreement and the other Loan Documents embody the entire
agreement and understanding between the Borrower and the Lender with respect to the subject matter hereof and thereof. This Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof. 

    Section 8.11  Counterparts.  This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart. 

15

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 

	 	 	REUTER MANUFACTURING, INC.
	 

 	 
 	 

By	 
 	 

/s/ Michael J. Tate

	 	 	Print	 	Name	 	Michael J. Tate

	 	 	Title	 	President

	Borrower's Address:

410 11th Avenue South

Hopkins, MN 55343	 	 	 	 	 	 
	 

 	 
 	 
 U.S. BANK NATIONAL ASSOCIATION
	 

 	 
 	 

By	 
 	 

/s/ William Sweeney

	 	 	Print	 	Name	 	William Sweeney

	 	 	Title	 	Vice President

	Lender's Address:

U.S. Bank National Association

601 Second Avenue South

Minneapolis, MN 55402-4302

Fax (612) 973-2851	 	 	 	 	 	 

16

 

EXHIBIT 2.3 TO

CREDIT AGREEMENT  

  AMENDED AND RESTATED NOTE         

	$6,800,000	 	October 10, 2000

Minneapolis, Minnesota

    FOR
VALUE RECEIVED, REUTER MANUFACTURING, INC., a corporation organized under the laws of the State of Minnesota, hereby promises to pay to the order of U.S. BANK NATIONAL
ASSOCIATION (the "Lender") at its main office in Minneapolis, Minnesota, in lawful money of the United States of America in immediately available funds the principal amount of SIX MILLION EIGHT
HUNDRED THOUSAND DOLLARS AND NO CENTS ($6,800,000), and to pay interest (computed on the basis of actual days elapsed and a year of 360 days) in like funds on the unpaid principal amount hereof
from time to time outstanding. 

    The
principal hereof and interest hereon is payable as follows: 

    (A) interest
on the Advances (as such term and each other capitalized term used herein are defined in the Credit Agreement hereinafter referred to) at the rates and
times set forth in the Credit Agreement. The Advances are payable on the Revolving Maturity Date; 

    (B) on
Term Loan A in consecutive installments of $27,020 each, beginning on November 1, 2000 and on the first day of each month thereafter through
September 1, 2005 and one final payment on October 1,
2005 in the amount of the entire remaining balance. Each such installment shall be applied first to interest and the balance to principal. 

    (C) on
Term Loan B (i) in payments of accrued interest only payable in arrears on November 1, 2000, December 1, 2000 and on January 1, 2001,
and (ii) principal and interest payments in consecutive installments of $36,500 each, beginning on February 1, 2001 and on the first day of each month thereafter through
December 1, 2003 and one final payment on January 1, 2004 in the amount of the entire remaining balance. Each such installment shall be applied first to interest and the balance to
principal. 

    (D) Term
Loan C is payable on September 30, 2003, provided however, that Term Loan C shall be forgiven in the event (i) the Advances, Term Loan A and Term
Loan B are all paid in full on or before September 30, 2003, or (ii) on October 1, 2003 if the Borrower has fully complied with the terms of the Credit Agreement and no Default or
Event of Default exists. 

    This
note is the Amended and Restated Note referred to in the Amended and Restated Credit Agreement dated as of October 10, 2000 (as the same may be hereafter from time to time
amended, restated or modified, the "Credit Agreement") between the undersigned and the Lender. This note is secured, it is subject to certain permissive and mandatory prepayments and its maturity is
subject to acceleration, in each case upon the terms provided in said Credit Agreement. This note is issued in combination, substitute and replacement but not in payment of indebtedness owed to the
Lender by the Borrower under that Financing Agreement dated as of December 3, 1997, a Term Note in the original principal amount of $2,400,000 dated as of December 3, 1997 (as amended
from time to time) from the Borrower to the Lender a Term Note in the original principal amount of $270,000 dated as of December 3, 1997 (as amended from time to time) from the Borrower to the
Lender. 

    In
the event of default hereunder, the undersigned agrees to pay all costs and expenses of collection, including reasonable attorneys' fees. The undersigned waives demand,
presentment, notice of nonpayment, protest, notice of protest and notice of dishonor. 

    THE
VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING 

17

EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS. 

	 	 	 	 	REUTER MANUFACTURING, INC.
	 

By	 
 	 

      
	 
 	 

 
	 

Title	 
 	 

      
	 
 	 

 
	 

 	 
 	 

 	 
 	 

 

18

BORROWING BASE CERTIFICATE  

  
      REUTER MANUFACTURING, INC.         

    Borrowing Base Certificate for the period ended            , 20 

    This
Borrowing Base Certificate is delivered in accordance with the Credit Agreement dated as of October 10, 2000 between U.S. Bank National Association (the "Lender") and
Reuter Manufacturing ("the Borrower"). Capitalized terms used herein which are defined in the Credit Agreement shall have the meanings set forth for such terms therein. All amounts are as of the date
shown above except as otherwise stated herein. 

    I
certify that the following amounts were correctly determined according to the Credit Agreement: 

	Total Receivables	 	 	 	 	$	 	(A)
	 	 	 	 	 	
	 
	 	Receivables 90 + Days	 	$	 	 	 	 	 
	 	 	
	 	 	 	 
	 	Other Ineligibles	 	$	 	 	 	 	 
	 	 	
	 	 	 	 
	Total Ineligible	 	 	 	 	$	 	(B)
	 	 	 	 	 	
	 
	Eligible Receivables (A) - (B)	 	 	 	 	$	 	(C)
	 	 	 	 	 	
	 
	Borrowing Base (80% of (C))	 	 	 	 	$	 	(D)
	 	 	 	 	 	
	 
	Receivables Over Advances	 	 	 	 	$	250,000.00	(E)
	 	 	 	 	 	
	 
	Total Borrowing Base (D) + (E)	 	 	 	 	$	 	(F)
	 	 	 	 	 	
	 
	Outstanding Advances	 	 	 	 	$	 	(G)
	 	 	 	 	 	
	 
	Availability (F) - (G)	 	 	 	 	$	 	(H)
	 	 	 	 	 	
	 

    I
hereby certify that all payroll and unemployment taxes are current as of this date. 

    For
the purpose of inducing the Lender to extend credit to the Borrower pursuant to the Credit Agreement, the Borrower hereby certifies that the foregoing information is true and
correct in all respects. The Borrower further certifies that all amounts outstanding under the Note were properly authorized for the benefit of the Borrower and constitute obligations of the Borrower
in accordance with the terms of the Credit Agreement. The Borrower further certifies that no circumstances or conditions exist at the date of the Borrowing Base Certificate which constitute an Event
of Default. 

	 	 	 	 	REUTER MANUFACTURING, INC.
	 

 	 
 	 

 	 
 	 

By	 
 	 

      

	Title	 	      
	 	 	 	 
	 

Dated	 
 	 

, 20  
	 
 	 

 	 
 	 

 

19

EXHIBIT 5.1(c) TO

CREDIT AGREEMENT  

  [FORM OF COMPLIANCE CERTIFICATE]         

To:
U.S. Bank National Association 

THE
UNDERSIGNED HEREBY CERTIFIES THAT: 

    (1) I
am the duly elected chief financial officer of REUTER MANUFACTURING, INC. (the "Borrower"); 

    (2) I
have reviewed the terms of the Amended and Restated Credit Agreement dated as of October 10, 2000 between REUTER MANUFACTURING, INC., a corporation
organized under the laws of the State of Minnesota, (the "Borrower"), and U.S. BANK NATIONAL ASSOCIATION (the "Lender") (the "Credit Agreement") and I have made, or have caused to be made under my
supervision, a detailed review of the transaction and conditions of the Borrower during the accounting period covered by the Attachment hereto; and 

    (3) The
examination described in paragraph (2) did not disclose, and I have no knowledge, whether arising out of such examinations or otherwise, of the existence
of any condition or event which constitutes a Default or an Event of Default (as such terms are defined in the Credit Agreement) during or at the end of the accounting period covered by Attachment
hereto or as of the date of this Certificate, except as described below (or on a separate attachment to this Certificate). The following exceptions set forth, in detail, the nature of the condition or
event, the period during which has existed and the action which the Borrower has taken, is taking or proposes to take with respect to each such condition or event. 

    The
foregoing certification, together with the computations in the Attachment hereto and the financial statements delivered with this Certificate in support hereof, are made and
delivered this      day of            ,      , pursuant to Section 5.1 (c) of the Credit Agreement. 

	 	 	REUTER MANUFACTURING, INC.
	 

 	 
 	 

By:	 
 	 

      

	 

 	 
 	 

Name:	 
 	 

      

20

  ATTACHMENT TO COMPLIANCE CERTIFICATE
  AS OF            ,
  WHICH PERTAINS TO THE PERIOD
  FROM
            ,      TO            ,
  FOR THE FISCAL YEAR ENDING     
       ,         

	 
	 	 
	 	 
	 	In Compliance

	Net Income (Minimum of $1 at fiscal year end December 31, 2002) (Section 6.10)	 	Actual	 	$	         	 	Yes	 	 	 	No	 	 

21

  CERTIFICATE OF SECRETARY OF
  REUTER MANUFACTURING, INC.         

    I,            , hereby certify to U.S. Bank National Association that I am the Secretary of Reuter Manufacturing, Inc., a corporation organized
under the laws of the State of Minnesota (the "Company") and that the following resolutions have been duly adopted by the Board of Directors of the Company in a manner authorized by the laws of the
State of Minnesota: 

    "WHEREAS, the Company wishes to borrow money from U.S. Bank National Association (the "Lender"), and for that purpose intends to enter
into a Credit Agreement with the Lender. 

    RESOLVED, the Company shall enter into an Amended and Restated Credit Agreement with the Lender under which the Company may obtain
loans up to $6,800,000; and the            or any            of the Company is hereby authorized at any time and from time to time
to execute and deliver to the Lender such
Amended and Restated Credit Agreement and any promissory notes, security agreements, mortgages, subordination agreements, pledge agreements, assignments of life insurance, reimbursement agreements, or
amendments to any of the foregoing as may be contemplated or required pursuant to such Amended and Restated Credit Agreement or otherwise, all in such form as such officer may determine and approve
(such determination and approval to be established conclusively by such officer's execution and delivery of such Amended and Restated Credit Agreement and any such related documents and instruments). 

    FURTHER RESOLVED, that the            or any            of the Company is hereby authorized at
any time and from time
to time to sell, assign, transfer, mortgage, create security interests in and pledge to the Lender the real property, goods, instruments, documents, securities, chattel paper, accounts, contract
rights and other intangibles and any other property now owned or hereafter acquired by the Company, either absolutely for such consideration as such officer may determine to be appropriate or as
security for the payment or performance of any or all debts, liabilities and obligations of every type and description now or at any time hereafter owed to the Lender by the Company, on such terms as
such officer may approve, and to do such other acts or things in connection therewith or pursuant thereto as such officer may determine to be appropriate (such determination and approval to be
established conclusively by the instrument executed or action taken by such officer). 

    FURTHER RESOLVED, it is hereby acknowledged that each and every note, guaranty, security agreement and other instrument made pursuant
to the foregoing resolutions is and will be made and given for the corporate purposes of this Company. 

    FURTHER RESOLVED, the Secretary or Assistant Secretary shall certify to the Lender the names and signatures of the persons who
presently are duly elected, qualified and acting as the officers authorized to act under the foregoing resolutions, and the Secretary or Assistant Secretary shall from time to time hereafter, upon a
change in the facts so certified, immediately certify to the Lender the names and signatures of the persons then authorized to sign or to act; the Lender shall be fully protected in relying on such
certificates and on the obligation of the Secretary or an Assistant Secretary immediately to certify to the Lender any change in any fact certified, and the Lender shall be indemnified and saved
harmless by the Company from any and all claims, demands, expenses, costs and damages resulting from or growing out of honoring or relying on the signature or other authority (whether or not properly
used) of any officer whose name and signature was so certified, or refusing to honor any signature or authority not so certified." 

    I
further certify that the foregoing resolutions have not been amended or revoked and are in full force and effect on the date hereof. 

22

    I further certify that the Articles of Incorporation and the Bylaws of the Company have not been amended since true and correct copies were last delivered to the Lender and are in
full force and effect on the date hereof. 

    I
further certify that the Board of Directors of the Company has, and at the time of adoption of the foregoing resolutions had, full power and lawful authority to adopt the foregoing
resolutions and to confer the powers therein granted upon the officers designated, and that such officers have full power and authority to exercise the same. 

    I
further certify that the officers whose names appear below have been duly elected to and now hold the offices in the Company set forth opposite their respective names and that the
signature appearing opposite the name of each of such officer is authentic and official: 

	Name	 	Title	 	Specimen Signature
	 

	 

 

	 

 

      

	 

 

 	 
 
 	 

 

 	 
 
 	 

 

 

    I
further certify that shareholder approval of the foregoing resolutions is not required and said resolutions are effective and binding on the Company without approval by its
shareholders. 

	Dated	 	      
	 	 
	 

 	 
 	 

      
	 
 	 

 
	 

 	 
 	 

 	 
 	 

Secretary
	 

      
 Attest by a Director	 
 	 

 
	 

 	 
 	 

 	 
 	 

 

23

QuickLinks

AMENDED AND RESTATED CREDIT AGREEMENT

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

ARTICLE II TERMS OF LENDING

ARTICLE III CONDITIONS PRECEDENT

ARTICLE IV REPRESENTATIONS AND WARRANTIES

ARTICLE V AFFIRMATIVE COVENANTS

ARTICLE VI NEGATIVE COVENANTS

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES

ARTICLE VIII MISCELLANEOUS

AMENDED AND RESTATED NOTE

REUTER MANUFACTURING, INC.

[FORM OF COMPLIANCE CERTIFICATE]

ATTACHMENT TO COMPLIANCE CERTIFICATE AS OF , WHICH PERTAINS TO THE PERIOD FROM , TO , FOR THE FISCAL YEAR ENDING ,

CERTIFICATE OF SECRETARY OF REUTER MANUFACTURING, INC.Prepared by MERRILL CORPORATION www.edgaradvantage.com

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Exhibit 10.5  

  THIS INSTRUMENT WAS PREPARED BY,
  AND WHEN RECORDED SHOULD BE
  RETURNED TO:
  Dorsey & Whitney LLP (RMH)
  Pillsbury Center South
  220
South Sixth Street
  Minneapolis, Minnesota 55402-1498         

  AMENDED, RESTATED, AND CONSOLIDATED MORTGAGE,
  SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS
  AND FIXTURE FINANCING STATEMENT         

    THIS AMENDED, RESTATED, AND CONSOLIDATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FINANCING STATEMENT (this "Mortgage") is made
as of October 10, 2000, by REUTER MANUFACTURING, INC., a corporation organized under the laws of the State of Minnesota ("Borrower"), having its principal offices at Hopkins, Minnesota,
in favor of U.S. BANK NATIONAL ASSOCIATION, a national banking association ("Lender"), having an office at St. Paul, Minnesota. 

RECITALS  

    A.  As
of the date hereof, the Lender has made the following loans to the Borrower: 

    (a)  First Loan.  A $2,400,000 loan (the "First Loan"), evidenced and secured by: (i) a Financing
Agreement dated December 3, 1997 (the "Financing Agreement"); (ii) a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated December 3,
1997, and file December 12, 1997, as Document No. 2869161 in the office of the Registrar of Titles, Hennepin County, Minnesota (the "Original Mortgage"), (iii) a Promissory Note
dated December 3, 1997, in the stated
principal amount of $2,400,000, in favor of U.S. Bank National Association; and (iv) all other Loan Documents (as defined in the Financing Agreement) collateral thereto. 

    (b)  Second Loan.  A $970,000 loan (the "Second Loan"), evidenced and secured by (i) the Financing
Agreement; (ii) a Second Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated April 20, 2000, filed May 8, 2000, as Document
No. 3277844 in the office of the Registrar of Titles, Hennepin County, Minnesota (the "Second Mortgage"); (iii) a Borrower's Overline Note dated April 20, 2000, in the stated
principal amount of $500,000, in favor of Lender; (iv) a Term Note dated April 20, 2000, in the stated principal amount of $200,000; (v) a Promissory Note dated December 3,
1997, in the stated principal amount of $270,000; and (vi) all other Loan Documents (as defined in the Financing Agreement) collateral thereto. 

    (c)  Third Loan.  A $2,325,000 loan (the "Third Loan") evidenced and secured by: (i) the Financing
Agreement; (ii) a Third Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated July 21, 2000, and filed July 21, 2000, in the office of
the Registrar of Titles, Hennepin County, Minnesota, as Document No. 3298708 (the "Third Mortgage"); (iii) a Borrower's Demand Note in the stated principal amount of $325,000, in favor
of Lender; (iv) the sum of $2,000,000 which was previously advanced to Borrower under the terms of the Financing Agreement; and (v) all other Loan Documents (as defined in the Financing
Agreement) collateral thereto. 

THIS IS A MORTGAGE AMENDMENT AS DEFINED IN MINNESOTA STATUTES, SECTION 287.01, SUBDIVISION 2, AND AS SUCH, IT DOES NOT SECURE A NEW OR INCREASED AMOUNT OF DEBT.  

    The Lender and the Borrower have agreed to amend, restate, and consolidate the First Loan, the Second Loan, and the Third Loan (collectively, the "Loan")
pursuant to the Credit Agreement (as defined below). 

    B.  The
Loan shall be repaid with interest thereon, as evidenced by that certain Amended and Restated Note of even date herewith payable to the order of Lender (the
"Note", which term shall include any amendment, modification, supplement, extension, renewal, replacement, or restatement thereof) and is the subject of an Amended and Restated Credit Agreement of
even date herewith between Borrower
and Lender (the "Credit Agreement," which term shall include any amendment, modification, supplement, extension, renewal, replacement, or restatement thereof). The Note, the Credit Agreement, and any
other Loan Document (as defined in the Credit Agreement) are each dated the same date as this Mortgage, are hereby incorporated by reference, and, together with this Mortgage, as any of the same may
be amended, modified, supplemented, extended, renewed, replaced, or restated, are sometimes collectively referred to as the "Loan Documents." 

    C.  The
obligations secured by this Mortgage (the "Obligations") are as follows: 

     (i) the
principal amount of $5,695,000; plus 

    (ii) interest
on the amount advanced and unrepaid, at the interest rate or rates provided in the Notes; plus 

    (iii) all
other amounts payable by Borrower and all other agreements of Borrower under the Loan Documents as the same now exist or may hereafter be amended. 

    D.  The
Obligations shall mature on or before October 1, 2005 (the "Maturity Date"). 

    E.  The
maximum principal indebtedness secured hereby is $5,695,000 plus amounts which may be advanced by Lender in protection of the Mortgaged Property or this
Mortgage. 

    F.  Lender
and Borrower have agreed to consolidate and coordinate the liens of the Original Mortgage, Second Mortgage and Third Mortgage so that they shall together
constitute a single first lien of $5,695,000, with interest, to spread said lien over all of Borrower's right, title and interest, now or hereafter acquired, in the Mortgaged Property (as that term is
hereinafter defined) and to modify and restate in their entirety the Original Mortgage, Second Mortgage and Third Mortgage as if one mortgage covering the Mortgaged Property had been executed and
delivered by Borrower to Lender to secure the Obligations, all as set forth herein. 

    NOW,
THEREFORE, it is hereby agreed that (a) the lien of the Original Mortgage, the Second Mortgage and the Third Mortgage be and hereby is spread over all of the Borrower's
right, title and interest, now or hereafter acquired, in the Mortgaged Property so that same shall and now does constitute a valid first mortgage thereon, and (b) all terms and conditions of
the Original Mortgage, the Second Mortgage and the Third Mortgage shall be superseded by, and deemed to have been amended and restated in their entirety by, the terms and conditions set forth in this
Mortgage, and (c) the Original Mortgage, the Second Mortgage and the Third Mortgage are hereby combined and consolidated and made equal and coordinate in lien without priority of the one over
the other so that together they shall hereafter constitute in law but one mortgage, a single first lien on all of Borrower's right, title and interest, now or hereafter acquired, in the Mortgaged
Property, in the principal sum of the Obligations securing the Note with the same intent and with like effect as if one mortgage covering the Mortgaged Property had been executed and delivered by
Borrower to Lender to secure said Obligations, which shall be payable as provided in the Note, and (d) Borrower, in consideration of Lender making and amending the Loan, and to secure the Loan
and payment and performance of the Obligations, hereby grants, bargains, sells, conveys, and mortgages to Lender, its successors and assigns, forever, with power of sale, and grants to 

2

Lender, its successors and assigns, a security interest in the following, all of which is called the "Mortgaged Property": 

  A. LAND AND IMPROVEMENTS         

    The land described in Exhibit A attached hereto and all mineral rights, hereditaments, easements and appurtenances thereto (collectively the "Land"),
and all improvements and structures thereon (the "Improvements"); and 

  B. FIXTURES AND PERSONAL PROPERTY         

    All fixtures (the "Fixtures"), and all machinery, equipment and personal property (collectively the "Personal Property") now or hereafter located on, in or
under the Land and the Improvements, and necessary or useful in connection with the functioning of the Land or the Improvements for their general intended purposes (but not to the extent primarily
used in the operation of Borrower's specific business), and which are owned by Borrower or in which Borrower has an interest, including any construction and building materials stored on and to be
included in the Improvements, and also including those specific items, if any, described in Exhibit B attached hereto, plus any repairs, replacements and betterments to any of the foregoing and
the proceeds and products thereof; and 

  C. LEASES AND RENTS         

    All rights of Borrower with respect to tenants or occupants now or hereafter occupying any part of the Land or the Improvements, if any, including all leases
and licenses and rights in connection therewith, whether oral or written (collectively the "Leases"), and all rents, income, both from services and occupation, royalties, revenues and payments,
including prepayments and security deposits (collectively the "Rents"), which are now or hereafter due or to be paid in connection with the Land, the Improvements, the Fixtures or the Personal
Property; and 

  D. GENERAL INTANGIBLES         

    All general intangibles of Borrower which relate to any of the Land, the Improvements, the Fixtures, the Personal Property, the Leases or the Rents, including
proceeds of insurance and condemnation or conveyance of the Land and the Improvements, accounts, trade names, contract rights, accounts receivable and bank accounts; and 

  E. AFTER ACQUIRED PROPERTY AND PROCEEDS         

    All after acquired property similar to the property herein described and conveyed which may be subsequently acquired by Borrower and used in connection with
the Land, the Improvements, the Fixtures, the Personal Property and other property; and all cash and non-cash proceeds and products of all of the foregoing property. 

    TO
HAVE AND TO HOLD the same, and all estate therein, together with all the rights, privileges and appurtenances thereunto belonging, to the use and benefit of Lender, its successors
and assigns, forever. 

    PROVIDED
NEVERTHELESS, should Borrower pay and perform all the Obligations, then these presents will be of no further force and effect, and this Mortgage shall be satisfied by Lender,
at the expense of Borrower. 

    This
Mortgage constitutes an assignment of rents and profits within the meaning of Minnesota Statutes, §§ 559.17 and 576.01, and is intended to comply fully
with the provisions thereof, and to afford Lender, to the fullest extent allowed by law, the rights and remedies of a mortgage lender or secured lender pursuant thereto. 

3

    This Mortgage also constitutes a security agreement within the meaning of the Uniform Commercial Code as in effect in the State of Minnesota (the "UCC"), with respect to all property
described herein as to which a security interest may be granted and/or perfected pursuant to the UCC, and is intended to afford Lender, to the fullest extent allowed by law, the rights and remedies of
a secured party under the UCC. 

    BORROWER
FURTHER agrees as follows: 

  ARTICLE I
       AGREEMENTS         

    Section 1.1  Performance of Obligations; Incorporation by Reference.  Borrower shall pay and
perform the Obligations. Time is of the essence hereof. All of the covenants, obligations, agreements, warranties and representations of Borrower contained in the Note and the other Loan Documents and
all of the terms and provisions thereof, are hereby incorporated herein and made a part hereof by reference as if fully set forth herein. 

    Section 1.2  Further Assurances.  If Lender requests, Borrower shall sign and deliver and cause to
be recorded as Lender shall direct any further mortgages, instruments of further assurance, certificates and other documents as Lender reasonably may consider necessary or desirable in order to
perfect, continue and preserve the Obligations and Lender's rights, title, estate, liens and interests under the Loan Documents. Borrower further agrees to pay to Lender, upon demand, all costs and
expenses incurred by Lender in connection with the preparation, execution, recording, filing and refiling of any such documents, including attorneys' fees and title insurance costs. 

    Section 1.3  Sale, Transfer, Encumbrance.  If Borrower sells, conveys, transfers or otherwise
disposes of, or encumbers, any part of its interest in the Mortgaged Property, whether voluntarily, involuntarily or by operation of law, without the prior written consent of Lender, Lender shall have
the option to declare the Obligations immediately due and payable without notice. Included within the foregoing actions requiring prior written consent of Lender are: (a) sale by deed or
contract for deed; (b) mortgaging or granting a lien on the Mortgaged Property; and (c) a transfer which changes the persons in control of Borrower or which transfers more than 25% of
the beneficial interest in Borrower, except for transfers to related or affiliated entities. Borrower shall give notice of any proposed action to Lender at least thirty (30) days prior to
taking such action. Borrower shall pay all costs and expenses incurred by Lender in evaluating any such action. Lender may condition such consent upon modification of the Loan Documents or payment of
fees. No such action shall relieve Borrower from liability for the Obligations. The consent by Lender to any action shall not constitute a waiver of the necessity of such consent to any subsequent
action. 

    Section 1.4  Insurance.  Borrower shall obtain, maintain and keep in full force and effect (and
upon request of Lender shall furnish to Lender copies of) policies of insurance as described in, and meeting the requirements set forth in, Exhibit C attached hereto, and upon request of Lender
shall furnish to Lender proof of payment of all premiums for such insurance. At least ten (10) days prior to the termination of any such coverage, Borrower shall provide Lender with evidence
satisfactory to Lender that such coverage will be renewed or replaced upon termination with insurance that complies with the provisions of this Section. Borrower, at its sole cost and expense, from
time to time when Lender shall so request, will provide Lender with evidence, in a form acceptable to Lender, of the full insurable replacement cost of the Mortgaged Property. All property (including
boiler and machinery) and liability insurance policies maintained by Borrower pursuant to this Section shall (i) include effective waivers by the insurer of all claims for insurance premiums
against Lender, and (ii) provide that any losses shall be payable notwithstanding (a) any act of negligence by Borrower or Lender, (b) any foreclosure or other proceedings or
notice of foreclosure sale relating to the Mortgaged Property, or (c) any release from liability or waiver of subrogation rights granted by the insured. All insurance policies maintained by
Borrower pursuant to the foregoing provisions shall respond on a primary basis relative to any other insurance carried by Lender in 

4

the event of loss. Insurance terms not otherwise defined herein shall be interpreted consistent with insurance industry usage. 

    Section 1.5  Taxes, Liens and Claims, Utilities.  Borrower, at least five (5) days before
any penalty attaches thereto, shall pay and discharge, or cause to be paid and discharged, all taxes, assessments and governmental charges and levies (collectively "Impositions") imposed upon or
against the Mortgaged Property or the Rents, or upon or against the Obligations, or upon or against the interest of Lender in the
Mortgaged Property or the Obligations, except Impositions measured by the income of Lender. Borrower shall provide evidence of such payment at Lender's request. Borrower shall keep the Mortgaged
Property free and clear of all liens, encumbrances, easements, covenants, conditions, restrictions and reservations (collectively "Liens") except those listed on Exhibit A attached hereto (the
"Permitted Encumbrances"). Borrower shall pay or cause to be paid when due all charges or fees for utilities and services supplied to the Mortgaged Property. Notwithstanding anything to the contrary
contained in this Section, Borrower shall not be required to pay or discharge any Imposition or Lien so long as Borrower shall in good faith, and after giving notice to Lender, contest the same by
appropriate legal proceedings. If Borrower contests any Imposition or Lien against the Mortgaged Property, Borrower shall provide such security to Lender as Lender shall reasonably require against
loss or impairment of Borrower's ownership of or Lender's lien on the Mortgaged Property and shall in any event pay such Imposition or Lien before loss or impairment occurs. 

    Section 1.6  Escrow Payments.  If requested by Lender, Borrower shall deposit with Lender monthly
on the same date as payments are due under the Note the amount reasonably estimated by Lender to be necessary to enable Lender to pay, at least five (5) days before they become due, all
Impositions against the Mortgaged Property and the premiums upon all insurance required hereby to be maintained with respect to the Mortgaged Property, provided, however, that Lender shall not request
such escrow deposits until after an Event of Default hereunder. All funds so deposited shall secure the Obligations. Such deposits shall be held by Lender, or its nominee, in a
non-interest bearing account and may be commingled with other funds. Such deposits shall be used to pay such Impositions and insurance premiums when due. Any excess sums so deposited shall
be retained by Lender and shall be applied to pay said items in the future, unless the Obligations have been paid and performed in full, in which case all excess sums so paid shall be refunded to
Borrower. Upon the occurrence of an Event of Default, Lender may apply any funds in said account against the Obligations in such order as Lender may determine. 

    Section 1.7  Maintenance and Repair; Compliance with Laws.  Borrower shall cause the Mortgaged
Property to be operated, maintained and repaired in safe and good repair, working order and condition, reasonable wear and tear excepted; shall not commit or permit waste thereof; except as provided
in any Loan Document, shall not remove, demolish or substantially alter the design or structural character of any Improvements without the prior written consent of Lender; shall complete or cause to
be completed forthwith any Improvements which are now or may hereafter be under construction upon the Land; shall comply or cause compliance with all laws, statutes, ordinances and codes, and
governmental rules, regulations and requirements, applicable to the Mortgaged Property or the manner of using or operating the same, and with any covenants, conditions, restrictions and reservations
affecting the title to the Mortgaged Property, and with the terms of all insurance policies relating to the Mortgaged Property; and shall obtain and maintain in full force and effect all consents,
permits and licenses necessary for the use and operation of the Mortgaged Property. 

    Section 1.8  Leases.  

    (a) Borrower
shall not enter into or amend any Lease without Lender's prior written consent, and shall furnish to Lender, upon execution, a complete and fully executed
copy of each Lease. Borrower shall provide Lender with a copy of each proposed Lease requiring the consent of Lender and with any information requested by Lender regarding the proposed Tenant
thereunder. Lender may declare each Lease to be prior or subordinate to this Mortgage, at Lender's option. 

5

    (b) Borrower shall, at its cost and expense, perform each obligation to be performed by the landlord under each Lease; not borrow against, pledge or further assign any
rents or other payments due thereunder; not permit the prepayment of any rents or other payments due for more than thirty (30) days in advance; and not permit any Tenant to assign its Lease or
sublet the premises covered by its Lease, unless required to do so by the terms thereof and then only if such assignment does not work to relieve the Tenant of any liability for performance of its
obligations thereunder. 

    (c) If
any Tenant shall default under its Lease, Borrower shall, in the ordinary course of business, exercise sound business judgment with respect to such default, but
may discount, compromise, forgive or waive claims or discharge the Tenant from its obligations under the Lease or terminate or accept a surrender of the Lease. 

    (d) If
Borrower fails to perform any obligations of Borrower under any Lease or if Lender becomes aware of or is notified by any Tenant of a failure on the part of
Borrower to so perform, Lender may, but shall not be obligated to, without waiving or releasing Borrower from any obligation in this Agreement or any of the other Loan Documents, remedy such failure,
and Borrower agrees to repay upon demand all sums incurred by Lender in remedying any such failure, together with interest thereon from the date incurred at the Default Rate (as defined in the Note). 

    (e) For
purposes of this Mortgage, the following terms shall have the following meanings: 

     (i) "Lease":  Any lease or other document or agreement, written or oral, permitting any Person to use or
occupy any part of the Mortgaged Property. 

    (ii) "Person":  Any natural person, corporation, partnership, limited partnership, joint venture, firm,
association, trust, unincorporated organization, government or governmental agency or political subdivision or any other entity, whether acting in an individual, fiduciary or other capacity. 

    (iii) "Tenant":  Any person or party using or occupying any part of the Mortgaged Property pursuant to a
Lease. 

    Section 1.9  Indemnity.  Borrower shall indemnify Lender and its directors, officers, agents and
employees (collectively the "Indemnified Parties") against, and hold the Indemnified Parties harmless from, all losses, damages, suits, claims, judgments, penalties, fines, liabilities, costs and
expenses (collectively a "Loss") by reason of, or on account of, or in connection with the construction, reconstruction or alteration of the Mortgaged Property, or any accident, injury, death or
damage to any person or property occurring in, on or about the Mortgaged Property or any street, drive, sidewalk, curb or passageway adjacent thereto, provided such Loss is not caused by the gross
negligence or willful misconduct of the Indemnified Parties. The indemnity contained in this Section shall include costs of defense of any such claim asserted against an Indemnified Party, including
reasonable attorneys' fees. The indemnity contained in this Section shall survive payment and performance of the Obligations and satisfaction and release of this Mortgage and any foreclosure thereof
or acquisition of title by deed in lieu of foreclosure. 

    Section 1.10  Appraisals.  Lender shall have the right from time to time, but not more often than
once during any twelve (12)-month period, to obtain an appraisal of the Mortgaged Property in form and substance satisfactory to Lender and prepared by an independent MAI appraiser selected by Lender.
Borrower shall reimburse Lender for the cost incurred for any such appraisal within ten (10) days following demand therefor by Lender, if Lender has reason to believe that the value of the
Mortgaged Property has declined materially, and such appraisal determines that the then current principal amount of the Note exceeds 75% of the value of the Mortgaged Property. 

6

 

  ARTICLE II
       REPRESENTATIONS AND WARRANTIES         

    Borrower makes the following representations and warranties: 

    Section 2.1  Ownership, Liens, Compliance with Laws.  Borrower owns the Mortgaged Property free
from all Liens, except the Permitted Encumbrances. All applicable zoning, environmental, land use, subdivision, building, fire, safety and health laws, statutes, ordinances, codes, rules, regulations
and requirements affecting the Mortgaged Property permit the current use and occupancy thereof, and Borrower has obtained all consents, permits and licenses required for such use. Borrower has
examined and is familiar with all applicable covenants, conditions, restrictions and reservations, and with all applicable laws, statutes, ordinances, codes and governmental rules, regulations and
requirements affecting the Mortgaged Property, and the Mortgaged Property complies with all of the foregoing. 

    Section 2.2  Use.  The Mortgaged Property is not homestead property nor is it agricultural
property or in agricultural use. 

    Section 2.3  Utilities; Services.  The Mortgaged Property is serviced by all necessary public
utilities, and all such utilities are operational and have sufficient capacity. There is no contract or agreement providing for services to or maintenance of the Mortgaged Property which cannot be
cancelled upon 30 days' or less notice. 

  ARTICLE III
       CASUALTY; CONDEMNATION         

    Section 3.1  Casualty, Repair, Proof of Loss.  If any portion of the Mortgaged Property shall be
damaged or destroyed by any cause (a "Casualty"), Borrower shall: 

    (a) give
immediate notice to the Lender; and 

    (b) promptly
commence and diligently pursue to completion (in accordance with plans and specifications approved by Lender) the restoration, repair and rebuilding of the
Mortgaged Property as nearly as possible to its value, condition and character immediately prior to the Casualty; and 

    (c) if
the Casualty is covered by insurance, immediately make proof of loss and collect all insurance proceeds, all such proceeds to be payable to Lender or as Lender
shall direct. If an Event of Default shall be in existence, or if Borrower shall fail to provide notice to Lender of filing proof of loss, or if Borrower shall not be diligently proceeding, in
Lender's reasonable opinion, to collect such insurance proceeds, then Lender may, but is not obligated to, make proof of loss, and is authorized, but is not obligated, to settle any claim with respect
thereto, and to collect the proceeds thereof. Borrower shall not accept any settlement of an insurance claim, the result of which shall be a payment which is $10,000 or more less than the full amount
of the claim, without the prior written consent of Lender. 

    Section 3.2  Use of Insurance Proceeds.  Lender shall make the net insurance proceeds received by
it (after reimbursement of Lender's out-of pocket costs of collecting and disbursing the same) available to Borrower to pay the cost of restoration, repair and rebuilding of the Mortgaged
Property, subject to the following conditions: 

    (a) There
shall be no Event of Default in existence at the time of any disbursement of the insurance proceeds. 

    (b) Lender
shall have determined, in its reasonable discretion, that the cost of restoration, repair and rebuilding is and will be equal to or less than the amount of
insurance proceeds and other funds deposited by Borrower with Lender. 

7

    (c) Lender shall have determined, in its reasonable discretion, that the restoration, repair and rebuilding can be completed in accordance with plans and specifications
approved by Lender (such approval not to be unreasonably withheld), in accordance with codes and ordinances and in accordance with the terms, and within the time requirements in order to prevent
termination, of any Lease, and in any event not less than six (6) months prior to the Maturity Date. 

    (d) All
funds shall be disbursed, at Lender's option, in accordance with Lender's customary disbursement procedures for construction loans. 

    (e) The
Casualty shall have occurred more than twelve (12) months prior to the Maturity Date. 

If
any of these conditions shall not be satisfied, then Lender shall have the right to use the insurance proceeds to prepay the Loan in accordance with the Note, and if the Loan is prepaid in full,
Borrower shall not be required to perform under Section 3.1(b) of this Mortgage. If any insurance proceeds shall remain after completion of the restoration, repair and rebuilding of the
Mortgaged Property, they shall be disbursed to Borrower, or at the Lender's discretion, used to prepay the Loan in accordance with the Note. 

    Section 3.3  Condemnation.  If any portion of the Mortgaged Property shall be taken, condemned or
acquired pursuant to exercise of the power of eminent domain or threat thereof (a "Condemnation"), Borrower shall: 

    (a) give
immediate notice thereof to Lender, and send a copy of each document received by Borrower in connection with the Condemnation to Lender promptly after receipt;
and 

    (b) diligently
pursue any negotiation and prosecute any proceeding in connection with the Condemnation at Borrower's expense. If an Event of Default shall be in
existence, or if Borrower, in Lender's reasonable opinion, shall not be diligently negotiating or prosecuting the claim, Lender is authorized, but not required, to negotiate and prosecute the claim
and appear at any hearing for itself and on behalf of Borrower and to compromise or settle all compensation for the Condemnation. Lender shall not be liable to Borrower for any failure by Lender to
collect or to exercise diligence in collecting any such compensation. Borrower shall not compromise or settle any claim resulting from the Condemnation if such settlement shall result in payment of
$10,000 or more less than Lender's reasonable estimate of the damages therefrom. All awards shall be paid to Lender. 

    Section 3.4  Use of Condemnation Proceeds.  Lender shall make the net proceeds of any Condemnation
received by it (after reimbursement of Lender's out-of-pocket costs of collecting and disbursing the same) available to Borrower for restoration, repair and rebuilding of the
Mortgaged Property, subject to the following conditions: 

    (a) There
shall be no Event of Default in existence at the time of any disbursement of the condemnation proceeds. 

    (b) Lender
shall determined, in its reasonable discretion, that the cost of restoration, repair and rebuilding is and will be equal to or less than the amount of
condemnation proceeds and other funds deposited by Borrower with Lender. 

    (c) Lender
shall have determined, in its reasonable discretion, that the restoration, repair and rebuilding can be completed in accordance with plans and specifications
approved by Lender (such approval not to be unreasonably withheld), in accordance with codes and ordinances and in accordance with the terms, and within the time requirements in order to prevent
termination, of any Lease, and in any event not less than six (6) months prior to the Maturity Date. 

    (d) All
funds shall be disbursed, at Lender's option, in accordance with Lender's customary disbursement procedures for construction loans. 

    (e) The
Condemnation shall have occurred more than twelve (12) months prior to the Maturity Date. 

8

If
any of these conditions shall not be satisfied, then Lender shall have the right to use the condemnation proceeds to prepay the Loan in accordance with the Note. If any condemnation proceeds shall
remain after completion of the restoration, repair and rebuilding of the Mortgaged Property, they shall be disbursed to Borrower, or at Lender's discretion, used to prepay the Loan in accordance with
the Note. 

  ARTICLE IV
       DEFAULTS AND REMEDIES         

    Section 4.1  Events of Default.  The occurrence of any one or more of the following events shall
constitute an Event of Default: 

  4.1(a) Borrower
shall fail to make when due, whether by acceleration or otherwise, any payment of principal of or interest on the Note or any other obligations of the
Borrower to the Lender pursuant to this Mortgage or any of the other Loan Documents. 

  4.1(b) Any
representation or warranty made by or on behalf of Borrower in this Mortgage or any of the other Loan Documents or by or on behalf of Borrower in any
certificate, statement, report or document herewith or hereafter furnished to the Lender pursuant to this Mortgage or any of the other Loan Documents shall prove to have been false or misleading in
any material respect on the date as of which the facts set forth are stated or certified. 

  4.1(c) A
sale, transfer, conveyance or encumbrance of the Mortgaged Property or any part thereof or of all or any part of Borrower's interest therein in violation of
Section 1.3 of this Mortgage shall occur. 

  4.1(d) Borrower
shall fail to comply with any other agreement, covenant, condition, provision or term contained in this Mortgage or any of the other Loan Documents
(other than those hereinabove set forth in this Section 4.1) and such failure to comply shall continue for thirty (30) calendar days after the date Lender gives notice of such failure to
the Borrower. 

  4.1(e) Borrower
shall generally not pay its debts as they mature or shall apply for, shall consent to, or shall acquiesce in the appointment of a custodian, trustee or
receiver of itself or for a substantial part of its property, or, in the absence of such application, consent or acquiescence, a custodian, trustee or receiver shall be appointed for Borrower or for a
substantial part of the property thereof and shall not be discharged within sixty (60) days, or Borrower shall make an assignment for the benefit of creditors. 

  4.1(f) Any
bankruptcy, reorganization, debt arrangement or other proceedings under any bankruptcy or insolvency law shall be instituted by or against Borrower and, if
instituted against Borrower, shall have been consented to or acquiesced in by Borrower or shall remain undismissed for sixty (60) days, or an order for relief shall have been entered against
Borrower. 

  4.1(g) Any
dissolution or liquidation proceeding shall be instituted by or against Borrower and, if instituted against Borrower, shall be consented to or acquiesced in
by Borrower or shall remain for sixty (60) days undismissed. 

  4.1(h) A
judgment or judgments for the payment of money in excess of the sum of $75,000 in the aggregate shall be rendered against Borrower and either (i) the
judgment creditor executes on such judgment or (ii) such judgment remains unpaid or undischarged for more than sixty (60) days from the date of entry thereof or such longer period during
which execution of such judgment shall be stayed during an appeal from such judgment. 

  4.1(i) A
default shall occur, and continue beyond any applicable grace or cure period, under any note or other evidence of indebtedness or credit or loan agreement, or
other document or instruments executed in connection therewith, including without limitation the Security Agreement and Financing Agreement both of even date herewith and all other documents or
instruments executed in connection 

9

therewith, all now or hereafter entered into between Lender and Borrower, as any of the same may be amended, modified, supplemented, extended, renewed or replaced. 

  4.1(j) The
maturity of any material indebtedness of Borrower (other than the Loan and any indebtedness referred to in the immediately preceding subsection) shall be
accelerated, or Borrower shall fail to pay any such material indebtedness when due (after the lapse of any applicable grace period) or any event shall occur or condition shall exist and shall continue
for more than the period of grace, if any, applicable thereto and shall have the effect of causing, or permitting the holder of any such indebtedness to cause, such material indebtedness to become due
prior to its stated maturity or to realize upon any collateral given as security therefor. For purposes of this Section, indebtedness shall be deemed "material" if it exceeds $50,000 as to any item of
indebtedness or in the aggregate for all items of indebtedness with respect to which any of the events described in this Section has occurred. 

  4.1(k) Any
execution or attachment shall be issued whereby any substantial part of the property of Borrower shall be taken or attempted to be taken and the same shall
not have been vacated or stayed within sixty (60) days after the issuance thereof. 

  4.1(l) Any
default shall occur under any other Loan Document, and shall continue beyond any grace or cure period provided therein with respect to such default. 

    Section 4.2  Remedies.  Upon and during the occurrence of an Event of Default described in
Sections 4.1(e), (f) or (g) of this Mortgage, all of the Obligations shall be accelerated and become immediately due and payable without notice or declaration to Borrower. Upon the
occurrence of one or more other Events of Default, all of the Obligations, at the option of Lender, shall be accelerated and become immediately due and payable upon notice to Borrower. In either
event, the Obligations shall be due and payable without presentment, demand or further notice of any kind. Lender shall have the right to proceed to protect and enforce its rights by one or more of
the following remedies: 

    (a) LENDER
SHALL HAVE THE RIGHT TO BRING SUIT either for damages, for specific performance of any agreement contained in any Loan Document, for the foreclosure of this
Mortgage, or for the enforcement of any other appropriate legal or equitable remedy. 

    (b) LENDER
SHALL HAVE THE RIGHT TO SELL THE MORTGAGED PROPERTY AT PUBLIC AUCTION AND CONVEY THE SAME TO THE PURCHASER IN FEE SIMPLE, as provided by law, Borrower to
remain liable for any deficiency. Said sale may be as one tract or otherwise, at the sole option of Lender. In the event 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, Lender, its 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 secured hereby and unpaid hereunder, in order that there may be credited as paid on the purchase price the total amount of the Obligations then due, including principal and
interest on the Note and all other sums, with interest, advanced or secured hereby and unpaid hereunder or under any of the other Loan Documents. 

    (c) LENDER
SHALL HAVE THE RIGHT TO OBTAIN THE APPOINTMENT OF A RECEIVER at any time after the occurrence of an Event of Default. Lender may apply for the appointment of
a receiver to the district court for the county where the Mortgaged Property or any part thereof is located, by an action separate from any foreclosure of this Mortgage pursuant to Minnesota Statutes
Chapter 580 or pursuant to Minnesota Statutes Chapter 581, or as a part of the foreclosure action
under said Chapter 581 (it being agreed that the existence of a foreclosure pursuant to said Chapter 580 or a foreclosure action pursuant to said Chapter 581 is not a prerequisite to any action for a
receiver hereunder). Lender shall be entitled to the appointment of a receiver without 

10

regard to waste, adequacy of the security or solvency of Borrower. The receiver, who shall be an experienced property manager, shall collect (until the Obligations are fully paid and satisfied and, in
the case of a foreclosure sale, during the entire redemption period) the Rents, and shall manage the Mortgaged Property, execute Leases within or beyond the period of the receivership if approved by
the court and apply all rents, profits and other income collected by him in the following order: 

     (i) to
the payment of all reasonable fees of the receiver, if any, approved by the court; 

    (ii) to
the repayment of tenant security deposits, with interest thereon, as required by Minnesota Statutes, Section 504.20; 

    (iii) to
the payment when due of delinquent or current real estate taxes or special assessments with respect to the Mortgaged Property, or the periodic escrow for the
payment of the same; 

    (iv) to
the payment when due of premiums for insurance of the type required by this Mortgage, or the periodic escrow for the payment of the same; 

    (v) to
the payment for the keeping of the covenants required of a lessor or licensor pursuant to Minnesota Statutes, Section 504.18, subdivision 1; 

    (vi) to
the payment of all expenses for normal maintenance of the Mortgaged Property; and 

   (vii) the
balance to Lender (a) if received prior to the commencement of a foreclosure, to be applied to the Obligations, in such order as Lender may elect and
(b) if received after the commencement of a foreclosure, to be applied to the amount required to be paid to effect a reinstatement prior to foreclosure sale, or, after a foreclosure sale to any
deficiency and thereafter to the amount required to be paid
to effect a redemption, all pursuant to Minnesota Statutes, Sections 580.30, 580.23 and 581.10, with any excess to be paid to Borrower. Provided, that if this Mortgage is not reinstated nor the
Mortgaged Property redeemed as provided by said Sections 580.30, 580.23 or 581.10, the entire amount paid to Lender pursuant hereto shall be the property of Lender together with all or any part of the
Mortgaged Property acquired through foreclosure. 

    Lender
shall have the right, at any time and without limitation, as provided in Minnesota Statutes, Section 582.03, to advance money to the receiver to pay any part or all of
the items which the receiver should otherwise pay if cash were available from the Mortgaged Property and sums so advanced, with interest at the Default Rate set forth in the Note, shall be secured
hereby, or if advanced during the period of redemption shall be part of the sum required to be paid to redeem from the sale. 

    (d) LENDER
SHALL HAVE THE RIGHT TO COLLECT THE RENTS from the Mortgaged Property and apply the same in the manner hereinbefore provided with respect to a receiver. For
that purpose, Lender may enter and take possession of the Mortgaged Property and manage and operate the same and take any action which, in Lender's judgment, is necessary or proper to collect the
Rents and to conserve the value of the Mortgaged Property. Lender may also take possession of, and for these purposes use, any and all of the Personal Property. The expense (including any receiver's
fees, attorneys' fees, costs and agent's compensation) incurred pursuant to the powers herein contained shall be secured by this Mortgage. Lender shall not be liable to account to Borrower for any
action taken pursuant hereto other than to account for any Rents actually received by Lender. Enforcement hereof shall not cause Lender to be deemed a mortgagee in possession unless Lender elects in
writing to be a mortgagee in possession. 

    (e) LENDER
SHALL HAVE THE RIGHT TO ENTER AND TAKE POSSESSION of the Mortgaged Property and manage and operate the same in conformity with all applicable laws and take
any action which, in Lender's judgment, is necessary or proper to conserve the value of the Mortgaged Property. 

11

    (f)  LENDER 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 separately from the real estate included within the Mortgaged Property, or to proceed as to all of the Mortgaged Property in accordance with
its rights and remedies in respect of said real estate. If Lender should elect to proceed separately as to such Personal Property, Borrower agrees to make such Personal Property available to Lender at
a place or places acceptable to Lender, and if any notification of intended disposition of any of such Personal
Property is required by law, such notification shall be deemed reasonably and properly given if given at least ten (10) days before such disposition in the manner hereinafter provided. 

    (g) LENDER
SHALL HAVE THE RIGHT TO FILE PROOF OF CLAIM and other documents as may be necessary or advisable in order to have its claims allowed in any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceedings affecting Borrower, its creditors or its property, for the entire amount due and payable by
Borrower in respect of the Obligations at the date of the institution of such proceedings, and for any additional amounts which may become due and payable by Borrower after such date. 

Each
remedy herein specifically given shall be in addition to every other right now or hereafter given or existing at law or in equity, and each and every right may be exercised from time to time and
as often and in such order as may be deemed expedient by Lender and the exercise or the beginning of the exercise of one right shall not be deemed a waiver of the right to exercise at the same time or
thereafter any other right. Lender shall have all rights and remedies available under the law in effect now and/or at the time such rights and remedies are sought to be enforced, whether or not they
are available under the law in effect on the date hereof. 

    Section 4.3  Expenses of Exercising Rights Powers and Remedies.  The reasonable expenses
(including any reasonable receiver's fees, attorneys' fees, appraisers' fees, environmental engineers' and/or consultants' fees, costs incurred for documentary and expert evidence, stenographers'
charges, publication costs, costs (which may be estimated as to items to be expended after entry of the decree of foreclosure) of procuring all abstracts of title, continuations of abstracts of title,
title searches and examinations, title insurance policies and commitments and extensions therefor, Torrens duplicate certificates of title, UCC and chattel lien searches, and similar data and
assurances with respect to title as Lender may deem reasonably necessary either to prosecute any foreclosure action or to evidence to bidders at any sale which may be had pursuant to any foreclosure
decree the true condition of the title to or the value of the Mortgaged Property, and agent's compensation) incurred by Lender after and during the occurrence of any Event of Default and/or in
pursuing the rights, powers and remedies contained in this Mortgage shall be immediately due and payable by Borrower, with interest thereon from the date incurred at the Default Rate set forth in the
Note, and shall be added to the indebtedness secured by this Mortgage. 

    Section 4.4  Restoration of Position.  In case Lender 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, Borrower and Lender shall be restored to their former positions and rights hereunder with respect to the Mortgaged Property subject to the lien hereof. 

    Section 4.5  Marshalling.  Borrower, for itself and on behalf of all Persons which may claim under
Borrower, hereby waives all requirements of law relating to the marshalling of assets, if any, which would be applicable in connection with the enforcement by Lender of its remedies for an Event of
Default hereunder, absent this waiver. Lender shall not be required to sell or realize upon any portion of the Mortgaged Property before selling or realizing upon any other portion thereof. 

    Section 4.6  Waivers.  No waiver of any provision hereof shall be implied from the conduct of the
parties. Any such waiver must be in writing and must be signed by the party against which such waiver is 

12

sought to be enforced. The waiver or release of any breach of the provisions set forth herein to be kept and performed shall not be a waiver or release of any preceding or subsequent breach of the
same or any other provision. No receipt of partial payment after acceleration of any of the Obligations shall waive the acceleration. No payment by Borrower or receipt by Lender of a lesser amount
than the full amount secured hereby shall be deemed to be other than on account of the sums due and payable hereunder, nor shall any endorsement or statement on any check or any letter accompanying
any check or payment be deemed an accord and satisfaction, and Lender may accept any check or payment without prejudice to Lender's right to recover the balance of such sums or to pursue any other
remedy provided in this Mortgage. The consent by Lender to any matter or event requiring such consent shall not constitute a waiver of the necessity for such consent to any subsequent matter or event. 

    Section 4.7  Lender's Right to Cure Defaults.  If Borrower shall fail to comply with any of the
terms of the Loan Documents with respect to the procuring of insurance, the payment of taxes, assessments and other charges, the keeping of the Mortgaged Property in repair, or any other term
contained herein or in any of the other Loan Documents, Lender may make advances to perform the same without releasing Borrower from any of the Obligations. Borrower agrees to repay upon demand all
sums so advanced and all sums expended by Lender in connection with such performance, including without limitation attorneys' fees, with interest at the Default Rate set forth in the Note from the
dates such advances are made, and all sums so advanced and/or expenses incurred, with interest, shall be secured hereby, but no such advance and/or incurring of expense by Lender, shall be deemed to
relieve Borrower from any default hereunder or under any of the other Loan Documents, or to release Borrower from any of the Obligations. 

    Section 4.8  Suits and Proceedings.  Lender shall have the power and authority, upon prior notice
to Borrower, to institute and maintain any suits and proceedings as Lender may deem advisable to (i) prevent any impairment of the Mortgaged Property by any act which may be unlawful or by any
violation of
this Mortgage, (ii) preserve or protect its interest in the Mortgaged Property, or (iii) restrain the enforcement of or compliance with any legislation or other governmental enactment,
rule or order that may be unconstitutional or otherwise invalid, if, in the sole opinion of Lender, the enforcement of or compliance with such enactment, rule or order might impair the security
hereunder or be prejudicial to Lender's interest. 

  ARTICLE V
       MISCELLANEOUS         

    Section 5.1  Binding Effect; Survival; Number; Gender.  This Mortgage shall be binding on and
inure to the benefit of the parties hereto, and their respective heirs, legal representatives, successors and assigns. All agreements, representations and warranties contained herein or otherwise
heretofore made by Borrower to Lender shall survive the execution, delivery and foreclosure hereof. The singular of all terms used herein shall include the plural, the plural shall include the
singular, and the use of any gender herein shall include all other genders, where the context so requires or permits. 

    Section 5.2  Severability.  The unenforceability or invalidity of any provision of this Mortgage
as to any person or circumstance shall not render that provision unenforceable or invalid as to any other person or circumstance. 

    Section 5.3  Notices.  Any notice or other communication to any party in connection with this
Mortgage shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid) addressed to such party at the
address specified below, or at such other address as such party shall have specified to the other party hereto in writing. All periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by telegram, telex or facsimile transmission, from the first Business Day (as defined in the Loan Agreement) after the date of sending if
sent by overnight courier, or from four days 

13

after the date of mailing if mailed. Notices shall be given to or made upon the respective parties hereto at their respective addresses set forth below: 

	If to Borrower:	 	REUTER MANUFACTURING, INC.

410 - 11th Avenue South

Hopkins, Minnesota 55343
	 

If to Lender:	 
 	 

U.S. Bank National Association

U.S. Bank Place

Minneapolis, Minnesota 55402

Either
party may change its address for notices by a notice given not less than five (5) Business Days prior to the effective date of the change. 

    Section 5.4  Applicable Law.  This Mortgage and the other Loan Documents shall be construed and
enforceable in accordance with, and be governed by, the laws of the State of Minnesota, without giving effect to conflict of laws or principles thereof, but giving effect to federal laws of the United
States applicable to national banks. Whenever possible, each provision of this Mortgage and any other statement, instrument or transaction contemplated hereby or relating hereto, shall be interpreted
in such manner as to be effective and valid under such applicable law, but, if any provision of this Mortgage or any other statement, instrument or transaction contemplated hereby or relating hereto
shall be held to be prohibited or invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Mortgage or any other statement, instrument or transaction contemplated hereby or relating hereto. 

    Section 5.5  Waiver of Jury Trial.  Borrower and Lender each irrevocably waives any and all right
to trial by jury in any legal proceeding arising out of or relating to this Mortgage or any of the other Loan Documents or the transactions contemplated hereby or thereby. 

    Section 5.6  Effect.  This Mortgage is in addition and not in substitution for any other
guarantees, covenants, obligations or other rights now or hereafter held by Lender from any other person or entity in connection with the Obligations. 

    Section 5.7  Assignability.  Lender shall have the right to assign this Mortgage, in whole or in
part, or sell participation interests herein, to any person obtaining an interest in the Obligations. 

    Section 5.8  Headings.  Headings of the Sections of this Mortgage are inserted for convenience
only and shall not be deemed to constitute a part hereof. 

14

    Section 5.9  Fixture Filing.  This instrument shall be deemed to be a Fixture Filing within the
meaning of the Minnesota Uniform Commercial Code, and for such purpose, the following information is given: 

	(a)	 	Name and address of Debtor:	 	REUTER MANUFACTURING, INC.

410 - 11th Avenue South

Hopkins, Minnesota 55343

Federal Tax I.D. No.: 41-0780999
	 

(b)	 
 	 

Name and address of Secured Party:	 
 	 

U.S. BANK NATIONAL ASSOCIATION

U.S. Bank Place

Minneapolis, Minnesota 55402
	 

(c)	 
 	 

Description of the types (or items) of property covered by this Fixture Filing:	 
 	 

See granting clause on pages 2 and 3 hereof.
	 

(d)	 
 	 

Description of real estate to which the collateral is attached or upon which it is or will be located:	 
 	 

See Exhibit A hereto.
	 

 	 
 	 

 	 
 	 

 

Some
of the above-described collateral is or is to become fixtures upon the above-described real estate, and this Fixture Filing is to be filed for record in the public real estate records. 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

15

    IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the date first written above. 

	 	 	REUTER MANUFACTURING, INC.
	 

 	 
 	 

By:	 
 	 

/s/ Michael J. Tate

	 

 	 
 	 

Name:	 
 	 

Michael J. Tate

	 

 	 
 	 

Title:	 
 	 

President

	 

 	 
 	 

 	 
 	 

 

	STATE OF MINNESOTA	 	)	 	 
	 	 	)	 	ss.
	COUNTY OF HENNEPIN	 	)	 	 

    The
foregoing instrument was acknowledged before me this 10th day of October, 2000, by Michael J. Tate, the President of REUTER MANUFACTURING, INC., a corporation organized
under the laws of the State of Minnesota, on behalf of the corporation. 

	 	 	/s/ Pamela H. Voss
 Notary Public

16

 

  EXHIBIT A

  Legal Description (Granting Clause A)

    Lot
3, Auditor's Subdivision Number 195, Hennepin County, Minnesota, together with all that part of vacated 31/2 Street South lying between the Easterly and Westerly
boundary lines of said Lot 3 extended Northerly. 

  Permitted Encumbrances (Section 2.1)

	1.
	Unpaid
1999 real estate taxes and installments of special assessments, plus penalty and interest.

	2.
	Real
estate taxes and installments of special assessments for 2000 not yet due and payable.

	3.
	Drainage
Ditch Easement recorded as Torrens Document No. 1396934.

	4.
	Underground
Utility Easement recorded as Torrens Document No. 890732.

	5.
	Roadway
and Utility Easement recorded with the County Recorder as Document No. 6730545.

	6.
	Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement in the original principal amount of $2,400,000 recorded as Document No. 2869161.

	7.
	Financing
Statement by and between Hydro Engineering International Inc., as debtor, and R. A. Marsteller, as Collateral Agent, as secured party, recorded as Document
No. 3260211.

	8.
	Second
Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement in the original principal amount of $970,000.00 recorded as Document
No. 3277844.

	9.
	Third
Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement in the original principal amount of $2,325,000.00 recorded as Document
No. 3298708. 

A-1

  EXHIBIT B

  List of Personal Property (Granting Clause B)

    All
fixtures, machinery, equipment and personal property now or hereafter located on, in or under the land, hereafter described ("Land") and the improvements constructed thereon
("Improvements") or which are necessary or useful in connection with the functioning of the Land or Improvements for their general intended purposes (but not to the extent primarily used in the
operation of Borrower's specific business) and which are owned by Borrower including any construction and building materials stored on and to be included in the Improvements plus any repairs,
replacements, and betterments thereto and proceeds and products thereof (the "Fixtures and Personal Property"); and all rights of the Borrower with respect to tenants or occupants now or hereafter
occupying any part of the Land or Improvements, if any, whether oral or written, including all leases and licenses and rights in connection
therewith (the "Leases"), and all rents, income, both from services and occupation, royalties, revenues and payments, including prepayments and security deposits (collectively, the "Rents"), which are
now or hereafter due or to be paid in connection with the Land, Improvements, Fixtures, or Personalty; and all general intangibles of Borrower which relate to any of the Land, Improvements, Fixtures,
Personal Property or Leases as related to the functioning of the Land or Improvements for their general intended purposes (but not to the extent primarily used in the operation of Borrower's specific
business), including proceeds of insurance and condemnation or conveyance of the Land and Improvements, accounts, trade names, contract rights, accounts receivable, and bank accounts as related to the
functioning of the Land or Improvements for their general intended purposes (but not to the extent primarily used in the operation of Borrower's specific business); and all after acquired property
similar to the property herein described and conveyed which may be subsequently acquired by Borrower and used in connection with the Land, Improvements, Fixtures, Personal Property, Leases or Rents as
related to the functioning of the Land or Improvements for their general intended purposes (but not to the extent primarily used in the operation of Borrower's specific business); and all cash and
noncash proceeds and products of all of the foregoing property ("Proceeds"). 

B-1

  EXHIBIT C

  (Insurance Requirements)         

I.  PROPERTY INSURANCE

 As to Improvements while under construction:  

    An
ORIGINAL (or evidence acceptable to Lender of) Builder's Risk "All-Risk", Completed Value (Non-Reporting) Form POLICY naming Borrower as an insured, and
covering the interests of all contractors (of all tiers) in the Mortgaged Property, reflecting coverage of 100% of the insurable replacement cost, and written by a carrier approved by Lender with a
current A.M. Best Company rating of at least A:VII (which is authorized to do business in the State of Minnesota), that includes: 

	•
	Lender's
Loss Payable Endorsement naming U.S. Bank National Association as Mortgagee

	•
	30-day
notice to Lender in the event of cancellation or non-renewal by either party or material adverse change

	•
	Replacement
Cost Measure of Recovery

	•
	Stipulated
Value/Agreed Amount Endorsement (No Coinsurance)

	•
	Coverage
for Foundations, Off-site (Unscheduled and Temporary Locations), Transit, Testing, Flood, Earthquake, Collapse, and Boiler and
Machinery/ Mechanical and Electrical Breakdown, in such amounts as Lender and Borrower mutually agree is appropriate

	•
	Coverage
for indirect loss exposures (customarily referred to as "soft cost" exposures), "Contingent Liability from Operation of Building Laws" coverage,
"Demolition Costs" coverage, "Increased Cost of Construction" coverage, and "Increased Time to Rebuild" coverage, with such additional limits for such coverages as Lender may reasonably require

	•
	Policy
to permit partial occupancy

	•
	No
insurer subrogation action or recovery against any party whose interests are covered under the policy

	•
	Deductible
not to exceed $5,000

	•
	Coverage
to become effective upon the date of the Notice to Proceed, the date of site mobilization, or the start of any shipment of materials, machinery or
equipment to the site, whichever is earlier, and to remain in effect until replaced by the permanent All Risk Property Insurance described below, or until such other time as may be mutually agreed
upon by Lender and Borrower 

 As to completed Improvements:  

    An
ORIGINAL (or evidence acceptable to Lender of) Special Form (or so-called All Risk) Hazard Insurance POLICY naming Borrower as an insured, reflecting coverage of 100%
of the replacement cost, and written by a carrier approved by Lender with a current A.M. Best Company rating of at least A:VII (which is authorized to do business in the State of Minnesota),
that includes: 

	•
	Lender's
Loss Payable Endorsement naming U.S. Bank National Association as Mortgagee

	•
	30-day
notice to Lender in the event of cancellation or non-renewal by either party or material adverse change

	•
	Replacement
Cost Measure of Recovery

	•
	Stipulated
Value/Agreed Amount Endorsement (No Coinsurance)

	•
	Boiler
and Machinery Coverage (including business income, extra expense coverage) 

C-1

	•
	Flood
Insurance

	•
	One
(1) year's business interruption, leasehold interest and/or rent loss insurance in an amount acceptable to Lender

	•
	Extra
expense coverage in an amount acceptable to Lender

	•
	"Contingent
Liability from Operation of Building Laws" coverage, "Demolition Costs" coverage, "Increased Cost of Construction" coverage, and "Increased
Time to Rebuild" Coverage, with such additional limits for such coverages as Lender may reasonably require

	•
	No
exclusion for "Collapse"

	•
	Deductible
not to exceed $5,000 

II.  LIABILITY INSURANCE

    An
ORIGINAL (or evidence acceptable to Lender of) Commercial General Liability Insurance POLICY (Insurance Services Offices policy form title) naming Borrower as an insured, providing
coverage on an "occurrence" rather than a "claims made" basis, and written by a carrier approved by Lender with a current A.M. Best Company rating of at least A:VII (which is authorized to do
business in the State of Minnesota), that includes: 

	•
	Combined
general liability policy limit of at least $2,000,000.00 each occurrence, applying to liability for Bodily Injury, Personal Injury and Property
Damage, which combined limit may be satisfied by the limit afforded under the Commercial General Liability Policy, or by such Policy in combination with the limits afforded by an Umbrella or Excess
Liability Policy (or policies); provided, that the coverage afforded under any such Umbrella or Excess Liability Policy is at least as broad in all material respects as that afforded by the underlying
Commercial General Liability Policy

	•
	Coverage
for Bodily Injury, Property Damage, Personal Injury, Contractual Liability, Independent Contractors and Products-Completed Operations Liability

	•
	Automobile
Liability insurance covering liability for Bodily Injury and Property Damage arising out of the ownership, use, maintenance or operation of all
owned, nonowned and hired automobiles and other motor vehicles utilized by Borrower in connection with the Mortgaged Property, which coverage may be provided under a separate policy

	•
	Dram
shop coverage if liquor is sold or served at or in the Mortgaged Property, which coverage may be provided under a separate policy

	•
	Deductible
not to exceed $5,000

	•
	Additional
Insured Endorsement naming U.S. Bank National Association and a Severability of Interest provision

	•
	30-day
notice to Lender in the event of cancellation or non-renewal by either party or material adverse change 

III. WORKER'S COMPENSATION

    An
ORIGINAL CERTIFICATE of Worker's Compensation coverage in the statutory amount, naming Borrower as an insured, written by a carrier approved by Lender. 

C-2

QuickLinks

THIS INSTRUMENT WAS PREPARED BY, AND WHEN RECORDED SHOULD BE RETURNED TO: Dorsey & Whitney LLP (RMH) Pillsbury Center South 220 South Sixth Street Minneapolis, Minnesota
55402-1498

AMENDED, RESTATED, AND CONSOLIDATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FINANCING STATEMENT

A. LAND AND IMPROVEMENTS

B. FIXTURES AND PERSONAL PROPERTY

C. LEASES AND RENTS

D. GENERAL INTANGIBLES

E. AFTER ACQUIRED PROPERTY AND PROCEEDS

ARTICLE I AGREEMENTS

ARTICLE II REPRESENTATIONS AND WARRANTIES

ARTICLE III CASUALTY; CONDEMNATION

ARTICLE IV DEFAULTS AND REMEDIES

ARTICLE V MISCELLANEOUS

EXHIBIT A

Legal Description (Granting Clause A)

Permitted Encumbrances (Section 2.1)

EXHIBIT B

List of Personal Property (Granting Clause B)

EXHIBIT C

(Insurance Requirements)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]