Document:

INVENTORY NOTE
                                  (ELECTRONICS)

$1,788,213.45, subject  to  adjustment                           June 1,  2001

     FOR VALUE RECEIVED, the undersigned ALTON DIVERSIFIED TECHNOLOGIES, INC., a
California  corporation  ("Alton"), hereby promises to pay to the order of I-PAC
MANUFACTURING,  INC.,  a  California  corporation  (including  its  successors,
transferees  and  assigns,  "Electronics"  or  "Payee"),  c/o  Celtic  Capital
Corporation  ("Celtic")  at  its  office  at 2951 28th Street, Suite 2030, Santa
Monica,  CA  90405  or at such other place as Payee may designate in writing, in
lawful money of the United States of America and in immediately available funds,
the  principal  amount of One  Million Seven Hundred Eighty Eight Thousand, Two
Hundred  Thirteen  and  45/100  Dollars  ($1,788,213.45)  (which  represents the
agreed  gross  inventory  value  of  Electronics'  inventory whether or not such
inventory is useable as of the date hereof and pursuant to the attached Schedule
1),  which  amount  is  subject to adjustment pursuant to the third paragraph of
this  Note  (the  "Loan"),  with  interest  thereon  from  the date hereof until
maturity,  at  a fluctuating rate per annum equal at all times to the sum of (a)
the  rate  of interest per annum announced by Wells Fargo Bank, N.A. at its head
office  in  San  Francisco,  California from time to time as its "prime rate" or
"reference  rate"  plus  (b)  one  and  one-quarter  percent  (1.25%) per annum.

     Interest  on the Loan shall be payable in arrears on the first business day
of  each  calendar  month,  commencing  on September 4, 2001, and on the date on
which  the  Loan  is paid in full.  Principal of the Loan shall be payable in
installments  as  follows:  June  18, 2001 - $130,000; September 1,
2001  - $25,000; October 1, 2001 - $75,000; November 1, 2001 - $75,000; December
1, 2001 - $75,000; 11 installments of $117,350.00 each, commencing on January 1,
2002  and  ending  on November 1, 2002, and a final installment of $117,363.45
(plus accrued but unpaid interest) payable  on  December  1,  2002.  If a
scheduled payment date is not a business day, the payment shall be due on the
first business day after the scheduled payment date.

If  and  so  long as the principal amount of the Loan does not exceed the amount
first  set  forth  above  (after adjusting for any repayments of principal), the
principal  amount  of  the  Loan  shall  be  adjusted  as  follows:

(1)     Interest  Adjustment.  On  September 4, 2001 the principal amount of the
Loan shall be increased by the amount equal to the amount of interest accrued on
the  Loan from and including the date of this Note to but excluding September 4,
2001.  Such  increase  shall  be  reflected  in  Addendum  No.  1  to this Note.
Addendum  No. 1 shall also set forth the new principal amortization schedule for
the  remaining  term  of  this  Loan.

(2)     Interim Adjustment. On  December 4, 2001, Alton and Electronics (even if
Electronics has assigned  this  Note  to Celtic) shall, acting in good faith and
using  their  reasonable  business  judgment,  adjust  and restate the remaining
balance  of the principal amount of the Loan to reflect the value as of the date
hereof  of  "Useable  Inventory"  remaining  from  the  inventory purchased from
Electronics as of the date hereof. "Useable Inventory" for purposes of this Note
will be inventory purchased from Electronics as of the date hereof which (i) was
actually  consumed  through  December 4, 2001, or (ii) is expected to be used in
products  for  current  customers  based on existing orders or customer forecast
requirements.  If  Useable  Inventory  at  December  4, 2001 is determined to be
greater  than  the agreed value of Useable Inventory as reflected on Schedule 1,
the principal amount of this Loan may be adjusted upward but not higher than the
initial  principal  amount  of  this  Note.  To  the  extent remaining inventory
purchased from Electronics is not determined to be Useable Inventory, it will be
revalued  downward to 5% of value used to determine the gross inventory value on
Schedule  1  hereof and the principal balance of this Note adjusted accordingly.
The  sum  of  the  value  of Useable Inventory at December 4, 2001 and 5% of the
value  of  the  unuseable  inventory will be the interim principal amount of the
Loan  and  the  Note will be adjusted and restated accordingly.  A new principal
amortization  schedule  (taking  into  account  prior  payments of principal and
interest)  will  be  determined  and  recorded  on  Addendum No. 2 to this Note,
provided  that  (i)  the total amount of principal to be paid on this Loan shall
never  exceed  the initial principal amount of this Note,  (ii) it is understood
and  agreed  that  certain  payments  that  may  originally have been applied to
interest  may  be  reapplied  to  principal,  and  (iii)  in  no  case will this
adjustment  cause  the  remaining  principal  to  fall  below  what  Alton  has
cumulatively  paid  to  the  date  of  the  adjustment.

(3)     Final  Adjustment.  On  June  4,  2002,  Alton  and Electronics (even if
Electronics has assigned  this  Note  to Celtic) shall, acting in good faith and
using  their  reasonable  business  judgment,  adjust  and restate the remaining
balance  of the principal amount of the Note to reflect the value as of the date
hereof of "Useable Inventory" remaining from that purchased from Electronics as
of the date hereof, which (i) was actually consumed through June 4, 2001, or ii)
is  expected  to  be  used  in  products for current customers based on existing
orders.  To  the  extent  remaining  inventory purchased from Electronics is not
determined  to be Useable Inventory, it will be revalued downward to 5% of value
used  to  determine  the gross inventory value on Schedule 1 hereof.  The sum of
the  value of Useable Inventory and 5% of the value the unuseable inventory will
be  the  final  principal  amount  of  the  Loan.  A  new principal amortization
schedule  (taking into account prior payments of principal and interest) will be
determined  and  recorded  on Addendum No. 3 to this Note, provided that (i) the
total amount of principal to be paid on this Loan shall never exceed the initial
principal  amount  of  this  Note, (ii) it is understood and agreed that certain
payments  that  may originally have been applied to interest may be reapplied to
principal  and  (iii)  in  no  case  will  this  adjustment  cause the remaining
principal  to  fall  below  what  Alton has cumulatively paid to the date of the
adjustment.

Any amount of principal or interest on this Note that is not paid when due shall
bear interest, payable on demand, until such amount is paid in full, at the rate
of  12%  per  annum.

This  Note  is entered into pursuant to the Asset Purchase Agreement dated as of
June  1,  2001  among  I-PAC  Manufacturing,  Inc.,  a  California  corporation
("Electronics"), Electronics, Alton and National Manufacturing Technologies,
Inc., a California  corporation, and evidences part of the purchase-price
obligations thereunder.

If an Event of Default (as defined in the Security Agreement dated as of June 1,
2001  made  by  Alton  in  favor  of  Electronics ) occurs and is continuing,
Payee  may,  by  notice  to  Alton,  declare the Loan, all interest
thereon  and  all  other amounts payable under this Note to be forthwith due and
payable,  whereupon the Loan, all such interest and all such other amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further  notice  of any kind, all of which are hereby expressly waived by Alton.
No  failure to exercise, or delay in exercising, any right hereunder on the part
of  Payee  shall  operate  as  a  waiver  of  any  such  rights.

Alton and Payee intend that the Loan be in strict compliance with any applicable
usury law.  In furtherance thereof, Alton and Payee agree that none of the terms
of this Note shall ever be construed to create a contract to pay interest or its
equivalent  at  a  rate  in  excess  of  the  maximum interest rate permitted by
applicable  law.  Accordingly,  if  a court determines that the usury law of any
jurisdiction  applies to the Loan:  (1) neither Alton nor any endorsers or other
parties  now or hereafter becoming liable for payment of this Note shall ever be
required  to  pay  interest  on  this  Note  at  a rate in excess of the maximum
interest  that  may be lawfully charged under applicable law, and the provisions
of  this  paragraph shall control over all other provisions of this Note; (2) if
the  maturity  of this Note is accelerated for any reason or if the principal of
this  Note  is  paid before the end of the term of this Note, and in either case
the  interest  received  for the actual period of existence of the Loan would be
unlawful,  Payee  will, at its option, either refund to Alton the amount of such
excess or credit the amount of such excess against the principal balance of this
Note  then  outstanding;  and (3) in the event that Payee collects money that is
deemed to constitute interest that would increase the effective interest rate on
this Note to a rate in excess of that permitted by applicable law, all such sums
deemed  to  constitute  interest  in  excess  of the legal rate shall, upon such
determination,  at  Payee's option, be immediately returned to Alton or credited
against  the  principal  balance  of  this  Note  then  outstanding.

Alton  will  reimburse  Payee  for  all  reasonable  attorneys'  fees, costs and
expenses  incurred by Payee in connection with the enforcement of Payee's rights
under  this  Note,  including,  without  limitation, for (1) trial and appellate
proceedings,  out-of-court  negotiations,  workouts  and  settlements  and  (2)
enforcement  of  Payee's  rights  under any state or federal statute, including,
without  limitation,  in  protecting  Payee's  security  and  in  bankruptcy and
insolvency  proceedings.

THIS  NOTE  SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE  LAWS  OF  THE  STATE  OF  CALIFORNIA.
ALTON  DIVERSIFIED  TECHNOLOGIES,  INC.

By: /S/ Lyle Jensen
    ---------------
Name:     Lyle  Jensen
Title:    Chief  Executive  OfficerASSIGNMENT
                                       OF
                NOTES, SECURITY AGREEMENT AND LANDLORD AGREEMENTS

     This  Assignment is made and entered into as of June 1, 2001 by and between
(1) each of I-PAC MANUFACTURING, INC., a California corporation ("Electronics"),
and  I-PAC  PRECISION MACHINING, INC., a California corporation ("Sheet Metal"),
and  (2)  CELTIC  CAPITAL  CORPORATION,  a  California  corporation  ("Celtic").

                                    Recitals

     A.     Alton  Diversified  Technologies,  Inc.,  a  California  corporation
("Alton"),  has  executed  the  following  promissory  notes  (the "Notes"):  an
Equipment  Note  (Electronics)  dated  May  31,  2001 in the principal amount of
$454,730  in  favor  of  Electronics  (the  "Electronics  Equipment  Note"),  an
Equipment  Note  (Sheet  Metal)  dated  May  31, 2001 in the principal amount of
$1,546,900  in  favor  of  Sheet  Metal  (the  "Sheet Metal Equipment Note"), an
Inventory  Note  (Electronics)  dated  May  31,  2001 in the principal amount of
$__________  in  favor  of Electronics (the "Electronics Inventory Note") and an
Inventory  Note  (Sheet  Metal)  dated  May  31, 2001 in the principal amount of
$__________  in  favor  of  Sheet  Metal  (the  "Sheet  Metal  Inventory Note").

     B.     Alton  has  executed  a  Security Agreement dated as of June 1, 2001
(the  "Security  Agreement")  in  favor of Electronics and Sheet Metal to secure
Alton's  obligations  to  Electronics  and  Sheet  Metal  under  the  Notes.

     C.     Alton, Electronics and Cabot Industrial Properties, L.P., a Delaware
limited  partnership  ("Cabot"),  have  executed a Landlord's Consent and Waiver
dated  as  of  May  __,  2001 (the "Electronics Landlord Agreement"), and Alton,
Sheet  Metal  and  Square  One Development Corporation, a California corporation
("Square One"), have executed a[n] [Agreement With Landlord] dated as of May __,
2001  (the  "Sheet  Metal  Landlord  Agreement"  and,  collectively  with  the
Electronics  Landlord  Agreement,  the  "Landlord  Agreements").

     D.     National  Manufacturing Technologies, Inc., a California corporation
("NMTI"),  Electronics,  Sheet  Metal, National Metal Technologies, a California
corporation ("NMT") and Celtic have entered into a Workout Agreement dated as of
June 1, 2001 (the "Workout Agreement"), pursuant to which Electronics has agreed
to  assign  to  Celtic the Electronics Equipment Note, the Electronics Inventory
Note,  the  Security  Agreement and the Electronics Landlord Agreement and Sheet
Metal  has  agreed to assign to Celtic the Sheet Metal Equipment Note, the Sheet
Metal  Inventory  Note,  the  Security  Agreement  and  the Sheet Metal Landlord
Agreement.  It  is  a  condition  precedent  to the effectiveness of the Workout
Agreement  that  Electronics  and Sheet Metal enter into, and that Alton consent
to,  this Assignment.  Accordingly, the parties hereby agree as set forth below.

     1.     Assignment  by  Electronics.  For value received, Electronics hereby
assigns,  grants  and  transfers  to Celtic all of Electronics' right, title and
interest  in  and  to  the Electronics Equipment Note, the Electronics Inventory
Note,  the Security Agreement and the Electronics Landlord Agreement, and Celtic
hereby  accepts  such  assignment.  Concurrently  with  the  execution  of  this
Assignment,  Electronics  has  delivered  to  Celtic  the  original  Electronics
Equipment  Note,  the  original  Electronics  Inventory Note, an original of the
Security  Agreement  and an original of the Electronics Landlord Agreement.  The
Electronics  Equipment  Note  and  the Electronics Inventory Note have been duly
endorsed  by  Electronics  to  Celtic,  in  a  form  acceptable  to  Celtic.

     2.     Assignment  by  Sheet Metal.  For value received, Sheet Metal hereby
assigns,  grants  and  transfers to Celtic all of Sheet Metal's right, title and
interest  in  and  to  the Sheet Metal Equipment Note, the Sheet Metal Inventory
Note,  the Security Agreement and the Sheet Metal Landlord Agreement, and Celtic
hereby  accepts  such  assignment.  Concurrently  with  the  execution  of  this
Assignment,  Sheet  Metal  has  delivered  to  Celtic  the  original Sheet Metal
Equipment  Note,  the  original  Sheet  Metal Inventory Note, an original of the
Security  Agreement  and an original of the Sheet Metal Landlord Agreement.  The
Sheet  Metal  Equipment  Note  and the Sheet Metal Inventory Note have been duly
endorsed  by  Sheet  Metal  to  Celtic,  in  a  form  acceptable  to  Celtic.

     3.     Rights  of  Celtic.  On  and  after the date hereof, Celtic shall be
entitled to exercise all of the rights, powers and privileges of Electronics and
Sheet  Metal  with respect to the Notes, the Security Agreement and the Landlord
Agreements,  and  neither  Electronics  nor  Sheet  Metal shall have any further
right,  title  or  interest in or to any of the Notes, the Security Agreement or
the  Landlord Agreements; provided, however, that, if all of the amounts owed to
Celtic  by  Electronics, Sheet Metal, NMTI and NMT, as referenced in the Workout
Agreement,  are  paid  in  full, then Celtic will assign the Notes, the Security
Agreement  and  the  Landlord  Agreements  back  to Electronics and Sheet Metal.

     4.     Covenants  of Assignors.  Each of Electronics and Sheet Metal hereby
covenants  that  it  will,  at  any  time  and  from time to time, upon Celtic's
reasonable  request  therefor, execute and deliver to Celtic or any successor or
assign  thereof  any  new  or  confirmatory instruments or documents, and do and
perform  any  and  all other acts that Celtic or any successor or assign thereof
may  reasonably  request,  in  order  to  (a) fully assign, transfer and vest in
Celtic  or any successor or assign thereof the Notes, the Security Agreement and
the  Landlord  Agreements, (b) protect Celtic's right, title and interest in and
to  the  Notes,  the  Security  Agreement  and  the  Landlord Agreements and (c)
otherwise  permit  Celtic to realize upon or enjoy its right, title and interest
in  and  to  the  Notes,  the  Security  Agreement  and the Landlord Agreements.

     5.     Binding.  This  Assignment  shall  be  binding upon and inure to the
benefit  of  the  parties  and  their  respective  successors  and  assigns.

     6.     Workout  Agreement.  This  Assignment is subject to the terms of the
Workout  Agreement.

     7.     Governing  Law.  This Assignment shall be governed by, and construed
and  enforced in accordance with, the laws of the State of California applicable
to  contracts  made  and  performed  in  the  State  of  California.

     8.     Counterparts.  This  Assignment  may  be  executed  in  two  or more
counterparts,  each  of  which  shall  be  deemed  an original and each of which
together  shall  constitute  the  same  instrument.

I-PAC  MANUFACTURING,  INC.

     By: /S/ Patrick W. Moore
         --------------------
Name: Patrick W. Moore
Title: Chief Executive Officer

I-PAC  PRECISION  MACHINING,  INC.

     By: /S/ Patrick W. Moore
         --------------------
Name: Patrick W. Moore
Title: Chief Executive Officer

CELTIC  CAPITAL  CORPORATION

By: /S/ Mark Hafner
    --------------------
Name: Mark Hafner
Title:

<PAGE>
                    CONSENT TO ASSIGNMENT OF NOTES, SECURITY
                        AGREEMENT AND LANDLORD AGREEMENTS

     As  of  the  date  first  written  above,  Alton  hereby  (1)  consents  to
Electronics'  and  Sheet Metal's assignment of the Notes, the Security Agreement
and  the Landlord Agreements to Celtic, (2) agrees to make all payments required
under  the  Notes directly to Celtic, unless and until notified by Celtic to the
contrary,  and  (3)  agrees  to  perform the Security Agreement and the Landlord
Agreements  for  the  benefit  of  Celtic  as  secured  party.

     ALTON  DIVERSIFIED  TECHNOLOGIES,  INC.

          By:
          Name:
          Title:

             CONSENT TO ASSIGNMENT OF ELECTRONICS LANDLORD AGREEMENT

     As  of  the  date  first  written  above,  Cabot  hereby  (1)  consents  to
Electronics'  assignment of the Electronics Landlord Agreement to Celtic and (2)
agrees  to  perform the Electronics Landlord Agreement for the benefit of Celtic
as  secured  party.

     CABOT  INDUSTRIAL  PROPERTIES,  L.P.

          By:
          Name:
          Title:

             CONSENT TO ASSIGNMENT OF SHEET METAL LANDLORD AGREEMENT

     As of the date first written above, Square One hereby (1) consents to Sheet
Metal's  assignment  of  the  Sheet  Metal  Landlord Agreement to Celtic and (2)
agrees  to  perform the Sheet Metal Landlord Agreement for the benefit of Celtic
as  secured  party.

SQUARE  ONE  DEVELOPMENT  CORPORATION

          By:
          Name:
          Title:

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