Document:

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                                                                   EXHIBIT 10.42

                              TERM LOAN AGREEMENT

     THIS TERM LOAN AGREEMENT ("Agreement") is dated as of October 14, 2003,
between HEI, INC., a Minnesota corporation ("Borrower"), located at 1495
Steiger Lake Lane, Victoria, MN 55386 and COMMERCE BANK, a Minnesota state
banking corporation ("Lender"), located at 7650 Edinborough Way, Suite 150,
Edina, MN 55435.

                                  WITNESSETH:

     WHEREAS, Borrower has applied to Lender for a loan of $1,200,000.00
secured by the Property (as hereinafter defined), the proceeds of which are to
be used solely for the purpose of prepaying the Whitebox Subordinated Note and
to fund the Payment Reserve Account; and

     WHEREAS, Lender is willing to make such loan on the terms hereof;

     NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements set forth herein, the parties hereto hereby agree as
follows:

                                   ARTICLE I

                                  DEFINITIONS

     1.  Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:

     "Affiliate" shall include, with respect to any party, any Person which
directly or indirectly controls, is controlled by, or is under common control
with such party and, in addition, in the case of Borrower, each officer,
director, shareholder, joint venturer and partner of Borrower. A Person shall
be deemed to control another Person if the controlling Person owns 10% or more
of any class of voting stock of the controlled Person or possesses, directly
or indirectly, the power to direct or cause the direction of the management and
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.

     "Borrower" has the meaning set forth in the preamble hereto.

     "Debt" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, (ii) obligations as lessee under leases
that have been or should be, in accordance with GAAP, recorded as capital
leases, including but not limited to that certain capital lease obligation of
Borrower to Lender evidenced by the certain Master Equipment Lease dated as of
October   , 2003 between Borrower, as lessee and Lender, as lessor, (iii)
obligations under direct of indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in (i) or (ii) above, and (vi) liabilities in
respect of unfunded vested benefits under plans covered by Title IV of ERISA.

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     "Debt Service Coverage Ratio" for any measurement period means a ratio the
numerator of which is (A)(i) the sum of (a) Borrower's after-tax net income (as
defined by GAAP); (b) depreciator, (c) amortization, and (d) interest expense
on Borrower's term debt; less (ii) any distributions or dividends paid to
shareholders and the denominator of which is (B) Borrower's aggregate payments
on Debt, including interest, on such Debt (including, without limitation, any
payments on capitalized leases allocable to principal and interest in
accordance with GAAP) scheduled to have been paid during such measurement
period.

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

     "Event of Default" has the meaning set forth in Article 8.

     "GAAP" means generally accepted accounting principles, consistently
applied.

     "Improvements" means the approximate 45,408 square foot
office/manufacturing/warehouse facility know as the HEI, Inc. corporate office
and manufacturing facility located upon the Property at 1495 Steiger Lake Lane,
Victoria, MN 55386.

     "Lender" has the meaning set forth in the preamble hereto.

     "Loan Documents" means this Agreement and the other documents listed in
Section 2.1(a)-(d) hereof, and any other document that now or hereafter
evidences or secures the Obligations.

     "Loan Year" means a period commencing on November 1, 2003, or any
anniversary thereof and ending on the 365th, or in the case of a leap year, the
366th day thereafter.

     "Mortgage" has the meaning provided in Section 2.1(c) hereof.

     "Note" has the meaning provided in Section 2.1(b) hereof.

     "Obligations" means the indebtedness evidenced by the Note and all other
advances, debts, liabilities, obligations, covenants and duties owing by
Borrower of any kind or nature, present or future, which arise under this
Agreement or any other Loan Document, whether or not evidenced by any note,
guaranty or other instrument, whether or not for the payment of money, whether
joint, several, or joint and several, direct or indirect (including those
acquired by assignment or purchase), absolute or contingent, due or to become
due, and however acquired. The term includes, but is not limited to, all
interest, fees, charges, expenses, attorneys' fees, and any other sum
chargeable to Borrower under this Agreement or any other Loan Document.

     "Payment Reserve Account" has the meaning provided in Section 6.9 hereof.

     "Person" means any natural person, corporation, firm, association,
government, governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity.

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     "Project" means the Improvements and the Property.

     "Property" means the real property located in the County of Carver, State
of Minnesota, legally described on Exhibit A attached hereto and made a part
hereof.

     "Title Company" means Stewart Title Company.

     "Whitebox Subordinated Note" means that certain Subordinated Promissory
Note issued by Borrower to Colorado MEDtech, Inc. in the original principal
amount of $2,600,000.00 dated as of January 24, 2003, and assigned to Whitebox
Hedged High Yield Partners on or about May 8, 2003.

                                   ARTICLE II

                                 LOAN DOCUMENTS

     2.  Documents Delivered Herewith. Prior to or contemporaneously with the
execution of this Agreement, Borrower has delivered to Lender the following
documents and/or instructions:

     2.1 The Loan Documents:

          (a) This Agreement properly executed and delivered on behalf of
              Borrower;

          (b) Promissory Note (the "Note") properly executed and delivered on
              behalf of Borrower in the amount of $1,200,000.00, made payable by
              Borrower to Lender's order;

          (c) Combination Mortgage, Security Agreement, Assignment of Rents and
              Fixture Financing Statement (the "Mortgage") in a form
              satisfactory to Lender executed by Borrower securing the Note and
              creating a lien upon the Property and the Project subject only to
              those encumbrances shown on Exhibit B hereto; and

          (d) UCC-1 Financing Statement.

     2.2 The Title Documents:

          (a) A title binder, in form and substance satisfactory to Lender,
              issued by Gibraltar Title Agency, LLC on behalf of Stewart Title
              Company, at Borrower's expense, with such title binder
              constituting a commitment by such title company to issue a
              mortgagee's title policy or policies in favor of Lender as
              mortgagee under the Mortgage in the amount of $1,200,000.00 that:

              (i) specifically insures that the Mortgage is a first lien on the
                  Project, subject only to those encumbrances shown on Exhibit
                  B of the Mortgage; and

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              (ii) contains a comprehensive endorsement, a usury endorsement, a
                   zoning endorsement, and such other endorsements as Lender may
                   require in form satisfactory to Lender.

          (b) Evidence of payment of all required real estate taxes and special
              assessments, mortgage registration tax, title insurance premiums
              and costs and recording fees.

     2.3 The Project Documents:

          (a) A FIRREA complying appraisal of the Project, showing an appraised
              value of not less than $2,200,000 and otherwise satisfactory to
              Lender, receipt and acceptance of which is hereby acknowledged;
              and

          (b) A Phase I environmental report in form and content acceptable to
              Lender in its sole and absolute discretion, showing no substantial
              environmental hazards on the Project, receipt and acceptance of
              which is hereby acknowledged; and

          (c) Evidence satisfactory to Lender of policies of insurance coverage
              on the Property and the Project in the amount required by the
              Mortgage;

          (d) A policy of flood insurance naming Lender as additional insured,
              covering the Property and the Improvements in the maximum amount
              available, or evidence satisfactory to Lender that the Property
              and Improvements are not located within a designated flood plain;

          (e) A letter from the appropriate governmental entity stating the
              zoning classification which is applicable to the Property and
              stating that the use of the Project is a permitted use under such
              zoning classification; and

     2.4 The Organization Documents:

          (a) A copy of the Articles of Incorporation of Borrower and all
              amendments thereto, certified by the Secretary of Borrower to be
              true, correct and complete;

          (b) A copy of the Bylaws of Borrower, certified by an officer of
              Borrower to be true, correct and complete;

          (c) A resolution of Borrower in form reasonably satisfactory to Lender
              regarding the execution by Borrower of the Loan Documents and all
              other documents or instruments required to be executed and
              delivered in connection herewith and the performance of the
              covenants and agreements required hereby; and, together with a
              certificate executed by the Secretary of Borrower indicating

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              the names and titles of persons authorized to execute the Loan
              Documents and other documents required hereunder;

          (d) Certificate of Good Standing of recent date for Borrower issued by
              the Secretary of State of Minnesota; and

          (e) An opinion of counsel for Borrower with respect to certain matters
              relating to the transactions contemplated by this Agreement.

                                  ARTICLE III

                                   TERM LOAN

     3.1.  Commitment for Term Loan. Subject to the terms and conditions hereof
and of the Loan Documents and the other documents delivered herewith, Lender
hereby lends to Borrower and Borrower hereby borrows from Lender, the amount of
$1,200,000.00 (the "Loan").

     3.2.  Use of Proceeds. The proceeds of the Loan shall be used solely by
Borrower to fund a portion of the prepayment of the Whitebox Subordinated Note
and to fund the Payment Reserve Account.

                                   ARTICLE IV

                             CONDITIONS OF LENDING

     4.1   Conditions Precedent to Term Loan Advance. Lender shall have no
obligation to make the Loan unless on or before the date of disbursement,
Lender shall have received the following or confirmation of completion of the
following events:

          (a) The documents for the Loan set forth in Article II of this
              Agreement properly executed and delivered to Lender;

          (b) Establishment of the Payment Reserve Account by Borrower;

          (c) Payment of the loan commitment fee in the amount of $12,000.00;
              and

          (d) Evidence satisfactory to Lender that the Whitebox Subordinated
              Note has been paid in full, or will be paid in full from the
              proceeds of the Note together with Borrower's funds from other
              sources.

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

     5.   Representations and Warranties. In order to induce Lender to enter
into this Agreement, Borrower hereby represents and warrants that:

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     5.1  Organization and Good Standing. Borrower is a duly organized and
validly existing Minnesota corporation, in good standing and qualified and
licensed to do business under the laws of the State of Minnesota.

     5.2  Authority. Borrower has full power, right and authority to execute
and deliver the Loan Documents and the other documents required hereby, to
borrow the funds herein provided for, and to perform and observe each and all
of the matters and things provided for in said documents. The execution and
delivery of the Loan Documents and such other documents as are required hereby
and the performance or observance of the terms hereof and thereof have been
duly authorized by all necessary action of the board of directors of Borrower.

     5.3  Binding Obligation. This Agreement is, and the other Loan Documents
when delivered hereunder will be, legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms.

     5.4  Ownership of Property. Borrower is the owner of the Property in fee
simple and of all personal property described in the Mortgage and has no
knowledge of any unrecorded claims, liens, and encumbrances against the
Property or such personal property.

     5.5  Compliance with Laws. The Improvements have been approved, to the
extent required by any applicable law, statute, including, without limitation,
the ADA, ordinance, regulation, or effective restrictive covenant, by all
federal, state, regional and local authorities, and the anticipated use of the
Property and the Project comply with all applicable zoning and environmental
ordinances, regulations and restrictive covenants affecting the Property and
the Project and all requirements for such use have been satisfied. No violation
of any law, ordinance, regulation or requirement exists with respect to the
Property or the Project.

     5.6  ERISA. No plan (as that term is defined in the Employee Retirement
Income Security Act of 1974 ("ERISA")) of the Borrower (a "Plan") that is
subject to Part 3 of Subtitle B of Title 1 of ERISA had an accumulated funding
deficiency (as such term is defined in ERISA) as of the last day of the most
recent fiscal year of such Plan ended prior to the date hereof, or would have
had such an accumulated funding deficiency on such date if such year were the
first year of such Plan, and no material liability to the Pension Benefit
Guaranty Corporation has been, or is expected by the Borrower to be, incurred
with respect to any such Plan. No Reportable Event (as defined in ERISA) has
occurred and it continuing in respect to any such Plan.

     5.7  Litigation. Except as set forth on Schedule 5.7, there are no
actions, suits or proceedings pending, or to the knowledge of Borrower
threatened, against or affecting it in an amount in excess of $100,000, or
against or affecting the Property or the Project, or involving the validity or
enforceability of the Mortgage or the priority of the lien thereof, at law or
in equity, except actions, suits and proceedings fully covered by insurance; and

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Borrower is not in default with respect to any order, writ, injunction, decree
or demand of any court or any governmental authority.

     5.8  Compliance with Agreements. The consummation of the transaction
contemplated hereby and performance of the Loan Documents will not result in
any breach of, or constitute a default under, any mortgage, deed of trust,
lease, bank loan or credit agreement, corporate agreement, corporate charter,
by-law or other instrument to which Borrower is a party or by which it may be
bound or affected.

     5.9  Absence of Defaults. No Default or Event of Default has occurred and
is continuing as of the date hereof hereunder or under the Existing Loan
Documents.

     5.10 Availability of Utilities. All utility services necessary for the
operation of the Improvements for their intended purpose are available to the
Project, including water, storm and sanitary sewer, drainage, gas, electric and
telephone facilities.

     5.11 Accuracy of Financial Information. All financial statements of
Borrower heretofore delivered to Lender, are true and correct in all respects,
have been prepared in accordance with GAAP, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates
thereof; no materially adverse change has occurred in the financial conditions
reflected therein since the respective dates thereof, and no additional
borrowings have been made by Borrower since the date thereof other than the
borrowing contemplated hereby.

     5.12 Survival of Representations. All representations and warranties
contained in this Article 3 shall survive the delivery of the Loan Documents,
the making of the Loan, and no investigation at any time made by or on behalf
of Lender shall diminish its rights to rely thereon.

                                   ARTICLE VI

                       AFFIRMATIVE COVENANTS OF BORROWER

  6.   Affirmative Covenants. To further induce Lender to make the requested
loan, Borrower hereby covenants and agrees that it will:

     6.1. Maintenance of Insurance. At all times, insure the Property and the
Improvements in the manner set forth in Section 2.01 of the Mortgage, and from
time to time, upon Lender's request, furnish it evidence of such coverage in
form satisfactory to Lender and its counsel.

     6.1. Payment of Taxes, etc. Promptly pay and discharge all taxes,
assessments and other governmental charges imposed upon it or upon its income
and profits or upon the Project, and any and all claims for labor, material or
supplies or rental charges or charges of any other kind which, if unpaid,
might by law become a lien or charge upon any of its property, except as
Borrower shall contest in good faith and by appropriate proceedings,

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providing such reserves as appropriate by GAAP. Borrower shall make all
required withholding deposits.

     6.3  Maintenance of Properties. Maintain all of its properties in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make or cause to be made all needful renewals, replacements and
repairs so that at all times Borrower's business can be conducted efficiently.

     6.4  Accounting Records. Keep true and complete and accurate books of
record and account in accordance with sound accounting principles, and allow
Lender upon Lender's request to examine and take extracts from the books and
records of Borrower.

     6.5  Financial Information. Furnish to Lender:

          (a) As soon as available and in any event within ninety (90) days
              after the close of each of its fiscal years, a copy of the annual
              financial statements of Borrower, including balance sheet, related
              statements of earnings, stockholders' equity and statements of
              cash flow for such year, prepared in accordance with GAAP, and
              reviewed by an independent certified public accountant of
              recognized standing selected by Borrower and acceptable to Lender;

          (b) Within forty-five (45) days after the end of Borrower's fiscal
              quarters, financial statements of Borrower as of the end of each
              such calendar quarter which statements have been prepared in
              accordance with GAAP and certified by Borrower's chief financial
              officer; and

          (c) From time to time such other information pertaining to Borrower
              and its properties and financial condition as Lender may
              reasonably request.

Provision of the foregoing, as between Borrower and Lender, shall be at the
sole cost and expense of Borrower.

     6.6  Conduct of Business. Conduct the same general type of business as it
presently conducts, maintain its existence, and continue its compliance with
all valid, applicable statutes, laws, rules and regulations.

     6.7  Right of Inspection. Permit any person designated by Lender to visit
and inspect any of the properties, partnership books and financial records of
Borrower to discuss its affairs, finances and accounts with the officers of
Borrower, all at such reasonable times and as often as Lender may reasonably
request.

     6.8  Notices. As soon as practicable, but in no event later than five (5)
business days after Borrower obtains knowledge thereof, give notice to Lender
of:

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          (a) the commencement of any uninsured litigation relating to Borrower
              in which the damages claimed exceed $50,000.00 or relate to the
              Property or the Improvements or the operation thereof;

          (b) the commencement of any material arbitration or governmental
              investigation or proceeding not previously disclosed by Borrower
              to Lender which has been instituted or, to the knowledge of
              Borrower, is threatened against Borrower or to which any property
              of Borrower is subject which, if determined adversely to Borrower,
              would have a material adverse effect upon Borrower;

          (c) any adverse development which occurs in any litigation,
              arbitration or government investigation or proceeding previously
              disclosed by Borrower to Lender which, if determined adversely to
              Borrower, would have a material adverse effect upon Borrower; or

          (d) any Default or Event of Default.

     6.9  Payment Reserve Account. On the date hereof, establish an account
with Lender (the "Payment Reserve Account") in the amount of $100,000.00, which
account shall bear interest at a rate not less than the average yield of United
States Treasury obligations adjusted to a constant maturity of 30 days as
published in the Federal Reserve Board Release H.15 on the first business day
of each month. At any time after the occurrence and during the continuation of
any Event of Default, Lender may, at any time or from time to time, apply funds
in the Payment Reserve Account to cure any Event of Default hereunder, without
waiving such Event of Default, or any default, whether or not declared, under
any other Loan Document or to the payment of any amounts, in such order as
Lender may elect, as shall have become or shall become due and payable by
Borrower under this Agreement or any other Loan Document. If Lender so applies
funds in the Payment Reserve Account as provided in the preceding sentence,
Borrower shall pay to Lender, within ten (10) days after demand therefor, an
amount equal to the amount so applied in order to restore the funds in the
Payment Reserve Account to $100,000.00. Borrower's failure to restore the funds
in the Account to $100,000.00 as provided in this Section 6.9 shall be deemed
an Event of Default hereunder and shall entitle Lender to the exercise of all
of Lender's rights and remedies under the Loan Documents. No Person, including,
without limitation, Borrower, shall have any right to withdraw any of the funds
held in the Payment Reserve Account, except that upon payment of all amounts
payable by Borrower to Lender under this Agreement or under any other Loan
Document, any funds remaining in the Payment Reserve Account shall be returned
by Lender to Borrower or paid to whomever may be legally entitled thereto.

Notwithstanding the foregoing, provided that there is not then an Event of
Default (as defined in the Mortgage) which has occurred and is continuing under
the Loan, the amount held by Lender in the Payment Reserve Account will be
released by Lender to Borrower upon the earlier of (i) Borrower reporting four
consecutive fiscal quarterly periods of positive pre-tax earnings, (ii)
Borrower successfully raises additional capital of a least $7,500,000, or

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          (iii) the last day of the second Loan Year.

              6.10  Debt Service Coverage Ratio. Beginning as of Borrower's
          fiscal quarter ended February 28, 2005, and at all times thereafter
          during the term of the loan, maintain a Debt Service Coverage Ratio
          equal to or greater than 1.20:1, which ratio shall be calculated based
          on Borrower's 10-Q and 10-K Reporting and measured as of the last day
          of each fiscal quarter of Borrower for the immediately preceding
          twelve-month period.

                                  ARTICLE VII

                         NEGATIVE COVENANTS OF BORROWER

     7.  Negative Covenants. Borrower covenants and agrees that for so long as
it is indebted to Lender, it will not, without Lender's prior written consent:

               7.1  Liens. Create or suffer to exist any mortgage, pledge, lien,
          security interest or other lien or encumbrance of any kind, of or upon
          the Property or the Improvements, or of or upon the income or profits
          therefrom, except (i) those encumbrances made in favor of Lender, and
          (ii) a junior mortgage in the amount of $1,000,000.00 on the Property
          and Improvements in favor of Lender to secure a separate equipment
          lease financing transaction.

               7.2  Defaults. Default upon or fail to pay any contract or fail
          to pay any of its debts or obligations as the same mature.

               7.3  Leases of the Property. Enter into any oral or written
          leases of the Property or the Improvements without the prior written
          consent of Lender.

               7.4  Dividends, Distributions, etc. Pay any dividend or make any
          distribution of assets to shareholders of Borrower or any Affiliate of
          Borrower.

               7.5  Consolidation, Merger, Sale of Assets; etc. Consolidate with
          or merge into or with any other Person, or sell (other than sales in
          the ordinary course of business), transfer, lease or otherwise dispose
          of all or a substantial part of its assets.

                                  ARTICLE VIII

                                    DEFAULT

               8.1  Events of Default. The occurrence of any of the following
          events shall constitute an "Event of Default":

              (a)  If Borrower (i) fails to pay when due or, if payable on
                   demand, upon demand, any principal of the Note, or prepayment
                   premium (if applicable), or (ii) fails to pay when due or, if
                   payable on demand, upon demand, any interest on the Note or
                   fees under this Agreement, and, in the case of a default
                   under this clause such default continues for ten (10) days;
                   or

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               (b) If Borrower defaults in the due performance and observance of
                   any covenants set forth in this Agreement, the Mortgage, or
                   any other Loan Document and such default or breach shall
                   continue for a period of thirty (30) days after written
                   notice thereof to Borrower by Lender; or

               (c) If any financial statement, certificate, representation, or
                   warranty made by or on behalf of Borrower shall prove to have
                   been incorrect in any material respect or any representation
                   made herein is untrue when made or becomes untrue with the
                   passage of time; or

               (d) If Borrower (i) becomes insolvent or fails to pay its debts
                   generally as they become due, (ii) suspends business, (iii)
                   makes a general assignment for the benefit of creditors, (iv)
                   admits in writing its inability to pay its debts generally as
                   they mature, (v) files a petition in bankruptcy or a petition
                   or answer seeking liquidation of it or a reorganization,
                   arrangement with creditors or other similar relief under the
                   Federal bankruptcy laws or under any other applicable law of
                   the United States of America or any state thereof, whether
                   now or hereafter in effect, (vi) petitions for or applies to
                   any tribunal for, or consents to the appointment of a
                   trustee, custodian, liquidator, receiver or similar official
                   for it or for a substantial part of its property, (vii) is
                   adjudicated a bankrupt or has an involuntary petition in
                   bankruptcy, or a case commenced against it under the Federal
                   bankruptcy laws, as now or hereafter in effect, and an order
                   for relief entered therein, (viii) takes any action for the
                   purpose of effecting or consenting to any of the foregoing,
                   or (ix) has an order, judgment or decree entered appointing
                   without such entity's consent, a trustee, custodian,
                   liquidator, receiver or similar official for it or for a
                   substantial part of its property, or approving a petition in
                   any such proceeding or approving a petition filed or case
                   commenced against it seeking liquidation of it or a
                   reorganization, arrangement with creditors or other similar
                   relief under the Federal bankruptcy laws or under any other
                   applicable law of the United States of America or any State
                   thereof, whether now or hereafter in effect, which order,
                   judgment or decree shall not be vacated or set aside or
                   stayed within 60 days from the date of entry; or

               (e) If Borrower fails to pay any Debt (but excluding Debt
                   evidenced by the Note) of the Borrower, or any interest
                   thereon, when due (whether by scheduled maturity, required
                   prepayment, acceleration, demand or otherwise) and such
                   failure shall continue after the applicable grace period, if
                   any, specified in the agreement or instrument relating to
                   such Debt; or any other default under any agreement or
                   instrument relating to such Debt, or any such Debt shall be
                   declared to be due and payable or required to be prepaid
                   (other than by scheduled required prepayment), prior to the
                   stated maturity thereof; or

               (f) If judgment for the payment of money in excess of $100,000.00
                   is entered against Borrower and is not stayed, vacated,
                   bonded, paid, discharged or appealed in good faith within 60
                   day after the entry thereof; or

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     8.2 Rights and Remedies. If any Event of Default shall occur and be
continuing, Lender may, at its option (in addition to Lender's rights under the
Note, Mortgage, or any other Loan Document), exercise any or all of the
following rights and remedies:

          (a) Declare the Note, all interest thereon, and all other obligations
              under, or pursuant to, any Loan Document to be immediately due and
              payable, and upon such declaration such Note, interest and other
              obligations shall immediately be due and payable, without
              presentment, demand, protest or any notice of any kind, all of
              which are expressly waived; and/or

          (b) Exercise any right or remedy specified herein and in the other
              Loan Documents, including (without limiting the generality of the
              foregoing) the right to foreclose the Mortgage or any other right
              or remedy available to a mortgagee at law or in equity; and/or

          (c) Exercise any other right or remedy available to Lender at law, in
              equity or under statute; and/or

          (d) Cure the event of default on behalf of Borrower, and, in doing so,
              may enter upon the Project, and may expend such sums as it may
              reasonably deem desirable, including attorneys' fees, all of which
              shall be deemed to be advances hereunder, even though causing the
              Loan to exceed the face amount of the Note, shall bear interest at
              the Default Rate (as defined in the Note) and shall be payable by
              Borrower on demand.

                                   ARTICLE IX

                                 MISCELLANEOUS

     9.1  No Waiver; Cumulative Remedies. No failure or delay on the part of
Lender in exercising any right or remedy under, or pursuant to, any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy or power preclude other or further exercise
thereof, or the exercise of any other right, remedy or power. The remedies in
the Loan Documents are cumulative and are not exclusive of any remedies
provided by law.

     9.2  Amendments and Waivers. No amendment, change, waiver or modification
of this Agreement or any Loan Document shall be valid unless the same is in
writing and is signed by Lender, and no waiver by Lender of any breach or
default by Borrower of any of its obligations, agreements or covenants under
this Agreement or any Loan Document shall be deemed to be a waiver of any
subsequent breach of the same or any other obligation, agreement or covenants,
nor shall any forbearance by Lender to seek or enforce a remedy of such breach
be deemed a waiver of its rights and remedies with respect to such breach.

     9.3  Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by or on behalf of Borrower in
connection with the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the advances

                                      -12-
<PAGE>

hereunder. All statements contained in any certificate or other instrument
delivered by or on behalf of Borrower pursuant thereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by Borrower.

     9.4  Notices. All notices and other communications provided under this
Agreement shall be in writing (including telecopier communication) and mailed,
telecopied or delivered, if to Borrower, at its address stated in the preamble
hereof, Attention: CEO & CFO; and if to Lender, at its address stated in the
preamble hereof, Attention: James E. Senske; or, as to each party, at such
other address as shall be designated by such party in a written notice to the
other party. Any such notice shall be deemed effective (a) upon personal
delivery; (b) upon the third business day (as hereinafter defined) after the
placing thereof in the United States mail, postage prepaid, certified or
registered mail; or (c) upon the business day succeeding the day in which said
notice is deposited with a national overnight air carrier, fees prepaid.

     9.5  Costs and Expenses. Borrower agrees to pay on demand all reasonable
costs, expenses and disbursements of Lender in connection with Borrower's
application for the Loan, the preparation of the Loan Documents and closing of
the Loan, including reasonable attorneys' fees and legal expenses as well as all
costs and expenses of Lender in connection with Lender's enforcement of the
obligations of Borrower hereunder or under the Note or any other Loan Documents,
whether or not suit is commenced including, without limitation, reasonable
attorneys' fees and legal expenses in connection with any appeal of a lower
court's order or judgment. The obligations of Borrower under this Section 9.5
shall survive any termination of this Agreement.

     9.6  Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, Lender is hereby authorized at any time, and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Lender to or for the credit or
the account of Borrower against any and all of the obligations of Borrower, now
or hereafter existing under any Loan Document, irrespective of whether or not
Lender shall have made any demand under any Loan Document and although such
obligations may be unmatured. Lender agrees promptly to notify Borrower after
any such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
Lender under this Section 9.6 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that Lender may have.

     9.7  Governing Law. This Agreement and all other Loan Documents shall be
governed by, interpreted, and construed in accordance with the laws of the State
of Minnesota. Any term used in this Agreement and not otherwise defined shall
have the definition given that term in Uniform Commercial Code as in effect in
the State of Minnesota from time to time, and such definition automatically
shall change on the effective date of any amendment to the Uniform Commercial
Code that changes such definition. If any term in this Agreement shall be held
to be illegal or unenforceable the remaining portions of this Agreement shall
not be affected, and this Agreement shall be construed and enforced as if this
Agreement did not contain the term held to be illegal or enforceable The
Borrower hereby irrevocably submits to the jurisdiction of the Minnesota
District Court, Fourth District, and the Federal District Court, District of
Minnesota, Fourth Division,

                                      -13-
<PAGE>

over any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court.

     9.8  Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties hereto
except that Borrower's rights hereunder are not assignable.

     9.9  Execution in Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be an original,
but all of which shall constitute one agreement.

     9.10 Headings. Section headings contained in this Agreement are for
convenience only and shall not be used in construing any provision of this
Agreement.

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

                                           HEI, INC.

                                           By:   /s/ Douglas J. Nesbit
                                               ---------------------------------
                                               Its: Chief Financial Officer

                                           COMMERCE BANK

                                           By:   /s/ Jim E. Senske
                                               ---------------------------------
                                               Its:  President

                                      -14-<PAGE>
                                                                   EXHIBIT 10.43

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

     THIS COMBINATION MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
FIXTURE FINANCING STATEMENT dated as of October 14th, 2003 (the "Mortgage"), by
and between HEI, INC. a Minnesota corporation, whose address is 1495 Steiger
Lake Lane, Victoria, MN 55386 (the "Mortgagor"), and COMMERCE BANK, a Minnesota
state banking corporation, whose address is 7650 Edinborough Way, Suite 150,
Edina, MN 55435 (the "Mortgagee");

                                  WITNESSETH:

     WHEREAS, Mortgagor is justly indebted to Mortgagee in the principal amount
of One Million Two Hundred Thousand and No/100ths Dollars ($1,200,000.00) as
evidenced by a certain promissory note in said amount made by Mortgagor payable
to the order of Mortgagee dated of even date herewith (the "Note"), which Note
shall mature on or before November 1, 2009, and the principal of which Note
bears interest as provided therein, which Note is fully incorporated herein by
reference;

     WHEREAS, the total principal amount of the Note is to be advanced pursuant
to the terms and conditions of a certain Term Loan Agreement dated of even date
herewith by and between Mortgagor, as borrower Mortgagee as lender (the "Loan
Agreement"), which Loan Agreement is fully incorporated herein by reference
(capitalized terms used herein and not otherwise defined shall have the meaning
ascribed to them in the Loan Agreement);

     WHEREAS, Mortgagor has agreed to mortgage and grant a security interest in
the Mortgaged Property, as herein defined, to secure payment of the Note and
its obligations under the Loan Agreement, and this Mortgage;

     NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and to secure the due and punctual payment of the principal,
prepayment premium (if applicable) and interest on the Note, as it may be
extended, amended or renewed, all other sums due and owing on the Note and the
Loan Agreement, and the payment of all fees, sums, expenses and advances of
Mortgagee

                                      -1-
<PAGE>

made in accordance with the terms of this Mortgage, with interest thereon at
the rate equal to that specified in Note (collectively called the
"Indebtedness"), Mortgagor does hereby grant, bargain, sell, convey, release,
mortgage and warrant, grant a security interest in and pledge unto Mortgagee,
is successors and assigns, forever, the following:

                            A. LAND AND IMPROVEMENTS

     All of its right, title and interest in and to (i) the tracts, parcels and
interests in land, and any street or alleys adjoining said premises heretofore
or hereafter vacated, lying and being in the County of Carver, State of
Minnesota, as legally described on Exhibit A hereto and made a part hereof (the
"Land"); (ii) all of the buildings, including, without limitation, the existing
building, structures, fixtures, annexations and other improvements now standing
or at any time hereafter constructed or placed upon the Land (the
"Improvements"); (iii) all extensions, additions, improvements, betterments,
renewals and replacements of any of the foregoing; and (iv) all hereditaments,
easements, rights, privileges and appurtenances now or hereafter belonging,
attached or in any way pertaining to the Land or to any of the Improvements; and

                              B. PERSONAL PROPERTY

     All property now or hereafter affixed or attached to or incorporated upon
the Land or the Improvement; which is now or hereafter owned by Mortgagor or in
which Mortgagor now or hereafter has an interest, which to the fullest extent
permitted by law, shall be deemed fixtures and a part of the real property (the
"Personal Property"), including but not limited to (i) all building materials,
supplies and equipment now or hereafter located on the Land and suitable or
intended to be incorporated in any building, structure or other improvement
located or to be erected on the Land; (ii) all heating, plumbing and lighting
apparatus, screens, awnings, floor coverings, shrubbery, plants, landscaping,
motors, engines, machinery, elevators, electrical equipment, incinerator
apparatus, air conditioning equipment, water and gas apparatus, pipes, boilers,
furnaces, cleaning, communication and sprinkler systems, faucets, fire
extinguishing apparatus and equipment, and all other fixtures of every
description which are now or may hereafter be placed or used upon the Land or in
any building, structure or other improvement now or hereafter located thereon;
and (iii) all additions, accessions, increases, parts, fittings, accessories,
replacements, substitutions, betterments, repairs, products and proceeds to any
of any and all such Personal Property (but excluding therefrom the inventory and
removable personal property of the Mortgagor or any tenant of the Land or the
Improvements).

     TO HAVE AND TO HOLD the Land, Improvements and Personal Property
(collectively called the "Property" or the "Mortgaged Property"), together with
all privileges, hereditaments and appurtenances thereunto now or hereafter
belonging, or in any wise appertaining, and the proceeds thereof, unto
Mortgagee, forever;

     PROVIDED, NEVERTHELESS, that these presents are upon the express condition
that if Mortgagor shall pay or cause to be paid the Indebtedness, and if
Mortgagor shall duly and punctually perform and observe all of the terms,
covenants, agreements and conditions contained in this Mortgage, the Loan
Agreement, and the Note, then this Mortgage and the estate, right and interest
of Mortgagee in and to the Mortgaged Property shall cease and be and become
void and of

                                      -2-
<PAGE>

no force and effect, and shall be satisfied at Mortgagor's expense; otherwise
this Mortgage shall remain in full force and effect.

     Mortgagor and Mortgagee further agree as follows:

                                   ARTICLE I

                  GENERAL COVENANTS, AGREEMENTS AND WARRANTIES

     Section 1.01.  Warranty of Title; Permitted Encumbrances. Mortgagor
covenants, represents and warrants that (a) it is the lawful owner of and has
good right and lawful authority to grant, bargain, sell, convey, release,
mortgage, grant a security interest in, and pledge the Mortgaged Property as
provided herein, (b) it is and will continue to be well and truly seized of
good and marketable title to the Mortgaged Property, (c) the Mortgaged Property
is and will remain throughout the term of this Mortgage free and clear of all
mortgages, liens, pledges, charges and encumbrances, excepting only the lien of
this Mortgage and such Permitted Encumbrances as are listed on Exhibit B
attached hereto and made a part hereof, and (d) Mortgagor warrants and will
defend the title to the Mortgaged Property against all claims and demands
whatsoever not specifically excepted herein.

     Section 1.02.  Payment of Indebtedness; Observance of Terms and
Convenants. Mortgagor shall duly and punctually (a) pay each and every
installment of principal and interest on the Note and all other portions of
the Indebtedness, as and when the same shall become due, and (b) perform and
observe all of the terms, covenants, agreements and conditions contained in
this Mortgage, the Loan Agreement and the Note and all other documents and
instruments given as security for the payment of the Note.

     Section 1.03.  Validity; Enforceable Obligations. Mortgagor covenants,
represents and warrants that (a) the Note, this Mortgage, the Loan Agreement,
and all other documents and instruments executed and delivered by it in
connection with the execution and delivery of the Note have been duly executed
and delivered and are valid and enforceable obligations of Mortgagor in
accordance with the terms thereof and hereof, and (b) this Mortgage does not,
nor does the Note, nor does the Loan Agreement, nor does the performance or
observance by Mortgagor of any of the matters or things in this Mortgage or the
Loan Agreement provided for, contravene any covenant in any indenture or
agreement affecting Mortgagor or any of its properties.

     Section 1.04.  Additional Assurances. Mortgagor shall (a) do, execute,
acknowledge and deliver all and every further act, deed, conveyance, transfer
and assurance reasonably necessary or proper for the carrying out more
effectively of the purpose of this Mortgage and the Loan Agreement and, without
limiting the foregoing, for conveying, mortgaging, assigning, and confirming
unto Mortgagee all of the Mortgaged Property or property intended so to be,
whether now owned or hereafter acquired, including without limitation the
preparation, execution and filing of any documents, such as financing
statements and continuation statements, deemed advisable by Mortgagee for
maintaining its lien on any part of the Mortgaged Property, and (b) pay any and
all recording fees, filing fees, mortgage registry tax, stamp taxes or other
charges

                                      -3-

<PAGE>

arising out of or incident to the filing or recording of this Mortgage, such
further assurances and instruments and the issuance and delivery of the Note.

     Section 1.05.  Maintenance and Repairs. Mortgagor shall (a) cause the
Mortgaged Property and every part thereof to be maintained, preserved and kept
in safe and good repair, working order and condition, and will comply with all
laws and regulations of any governmental authority with reference to the
Mortgaged Property and the manner of using or operating the same, and with all
restrictive covenants, if any, affecting the title to the Mortgaged Property,
or any part thereof, (b) from time to time make all necessary and proper
repairs, renewals, replacements, additions and betterments to the Mortgaged
Property and every part thereof so that the value and efficient use thereof
shall be fully preserved and maintained and so that all laws and regulations as
aforesaid shall be complied with, and (c) promptly repair and restore the
Mortgaged Property and every part thereof which may become damaged or destroyed
by fire, casualty or otherwise to their condition prior to any such damage or
destruction.

     Section 1.06.  Removal of Mortgaged Property. Mortgagor shall not without
the prior written consent of Mortgagee (a) remove the Improvements or Personal
Property or any part thereof from the Land, except that as long as no Event of
Default, as herein defined, shall occur and be continuing, Mortgagor may remove
and dispose of any item or items of Personal Property which have become
inadequate, obsolete or worn out, provided Mortgagor immediately replaces said
item or items of Personal Property with like property such that the value of the
Mortgaged Property will not be materially diminished, which shall become a part
of the Mortgaged Property and subject to the lien of this Mortgage, (b)
demolish, alter or modify the Improvements or Personal Property or any part
thereof nor construct additional improvements on the Land, or (c) abandon or
vacate the Mortgaged Property or any part thereof.

     Section 1.07.  Payment of Operating Costs, Prior Mortgages and Liens.
Mortgagor shall pay all operating costs and expenses of the Mortgaged Property
and keep the same free from mechanics', materialmen's and other liens, levy,
execution or attachment. Mortgagor shall also pay when due all indebtedness
which may be secured by any mortgage, lien or charge on the Mortgaged Property
superior to or equal to the lien of this Mortgage, and upon request exhibit to
Mortgagee satisfactory evidence of such payment and discharge.

     Section 1.08.  Payment of Taxes. Mortgagor shall (a) pay when due and
before any penalty attaches thereto all taxes, assessments, water charges, sewer
charges, and other fees, taxes, charges and assessments of every kind and nature
whatsoever assessed or charged against or constituting a lien on the Mortgaged
Property or any interest therein, upon or against the Note or the Indebtedness
or upon or against the interest of Mortgagee in the Mortgaged Property or in the
Note or Indebtedness (the "Taxes"), and (b) upon demand furnish to Mortgagee
proof of the payment of any such Taxes. In the event of a court decree or an
enactment after the date hereof by any legislative authority of any law imposing
upon a mortgagee the payment of the whole or any part of the Taxes herein
required to be paid by Mortgagor, or changing in any way the laws relating to
the taxation of mortgages or debts secured by mortgages or a mortgagee's
interest in mortgaged premises, so as to impose such Tax on Mortgagee or on the
interest of Mortgagee in the Mortgaged Property, then, in any such event,
Mortgagor agrees that it shall bear and pay the full amount of such Tax.

                                      -4-

<PAGE>

     Section 1.09. Contest of Taxes and Liens. Notwithstanding any other
provision of this Mortgage to the contrary, Mortgagor will not be required to
pay, discharge or remove any Tax, or any lien against the Mortgaged Property or
any part thereof, including a mechanic's lien (a "Lien") so long as Mortgagor
shall in good faith contest the same or the validity thereof by appropriate
legal proceedings which shall operate to prevent the collection of the Tax or
Lien so contested and the sale of the Mortgaged Property, or any part thereof,
to satisfy the same, provided that Mortgagor shall, prior to the date such Tax
or Lien is due and payable, have given to Mortgagee cash or provided such other
reasonable security as may be required by Mortgagee to insure such payment and
interest and penalties thereon and prevent any sale or forfeiture of the
Mortgaged Property by reason of such nonpayment. Any such contest shall be
prosecuted with due diligence and Mortgagor shall promptly after final
determination thereof pay the amount of any such Tax or Lien so determined,
together with all interest and penalties thereon, which may be payable in
connection therewith. Notwithstanding the provisions of this Section, Mortgagor
shall (and if Mortgagor shall fail so to do, Mortgagee may, but shall not be
required to) pay any such Tax or Lien notwithstanding such contest if in the
reasonable opinion of Mortgagee the Mortgaged Property, or any part thereof,
shall be in jeopardy or in danger of being forfeited or foreclosed.

     Section 1.10. Protection of Security. Mortgagor shall promptly notify
Mortgagee of and appear in and defend any suit, action or proceeding that
affects the Mortgaged Property, the Indebtedness or the rights or interest of
Mortgagee hereunder. Mortgagee may elect to appear in or defend any such action
or proceeding and Mortgagor agrees to indemnify and reimburse Mortgagee from
any and all loss, damage, expense or cost arising out of or incurred in
connection with any such suit, action or proceeding, including without
limitation, all reasonable sums paid by Mortgagee to establish or defend the
rights and lien of this Mortgage or to protect the Mortgaged Property or any
part thereof, including costs of evidence of title and reasonable attorneys
fees, which amounts shall be paid by Mortgagor to Mortgagee upon demand
together with interest thereon from the date of payment by Mortgagee at the
rate equal to that specified in the Note.

     Section 1.11. Prohibition of Sale, Lease and Mortgage. In the event:

                    (a) Mortgagor sells, leases conveys, transfers, assigns,
               further mortgages or encumbers or disposes of the Mortgaged
               Property or any part thereof, or any interest therein, or agrees
               to do so, or except as otherwise provided in Section 1.06 hereof;
               or

                    (b) the Mortgaged Property, or any material part thereof, is
               condemned or the use or control thereof is taken in any
               proceedings involving the right of eminent domain;

whether occurring by voluntary or involuntary act or by operation of law or
otherwise, without the written consent of the Mortgagee being first obtained,
then at the sole option of the Mortgagee, Mortgagee may declare an Event of
Default to have occurred under this Mortgage, thereby entitling Mortgagee to
exercise any and all rights and remedies available to it as provided in this
Mortgage upon the occurrence of an Event of Default. In the event Mortgagor
shall request the consent of Mortgagee in accordance with this Section 1.11,
Mortgagor shall deliver a written request to Mortgagee together with complete
information regarding such a conveyance,

                                      -5-
<PAGE>

lease or encumbrance and shall allow Mortgagee 30 days from the date of receipt
thereof for evaluation of such request. Such approval may be subject to such
other modifications of the loan terms as may be deemed necessary by Mortgagee.
Consent as to any one transaction shall not be deemed to be a waiver of the
right to require consent to future or successive transactions.

     Section 1.12. Loan Agreement. This Mortgage is the Mortgage referred to in
and is also given as security for the due and punctual performance, observance
and payment by Mortgagor of the terms and conditions set forth in the Loan
Agreement and the Note. In the event Mortgagor fails to comply with any of such
terms and conditions, such failure shall be an Event of Default under this
Mortgage entitling Mortgagee to exercise any and all remedies available to it
as provided in this Mortgage upon the occurrence of an Event of Default. In
addition, Mortgagee may, but shall not be required to, avail itself of any or
all of the rights and remedies available to it under the Loan Agreement, and
any sums expended by Mortgagee in availing itself of such rights and remedies
shall bear interest thereon from the date of such expenditures at the rate
equal to that specified in the Note, shall constitute a portion of the
Indebtedness secured hereby, and shall be payable to Mortgagee immediately upon
demand, provided that, no such payment by Mortgagee shall be considered as
waiving the Event of Default.

                                   ARTICLE II

                             INSURANCE AND ESCROWS

     Section 2.01. Insurance. Mortgagor shall procure and keep in full force
and effect during the term of this Mortgage, at its sole cost and expense, the
following:

          (a) insurance covering the Mortgaged Property against all risks of
     loss or damage to the Mortgaged Property, including but not limited to loss
     or damage caused by fire and extended coverage perils, including the cost
     of debris removal, together with vandalism, malicious mischief, sprinkler
     leakage, and agreed amount endorsements, all in amounts of not less than
     the full replacement cost of the Improvements and Personal Property;

          (b) to the extent pressure fired boilers are located on the Mortgaged
     Property, insurance covering the Mortgaged Property against loss or damage
     by explosion, and providing for full repair and full replacement cost
     coverage;

          (c) such other insurance covering the Mortgaged Property against loss
     or damage by other casualties and contingencies as Mortgagee may from time
     to time reasonably require, all in such manner and for such amounts as may
     be satisfactory to Mortgagee;

          (d) flood insurance in the maximum amount obtainable, unless evidence
     is provided that the Mortgaged Property is not within a flood plain as
     defined by the Federal Insurance Administration;

          (e) use and occupancy insurance covering risk of loss due to the
     occurrence of any hazards described in the foregoing Subsections (a), (b),
     (c) and (d) in an amount equal to guaranteed income from the Mortgaged
     Property for a period of nine (9)

                                      -6-

<PAGE>

     months and based upon a reasonable estimate of annual income from
     Mortgagor's use of the Mortgaged Property; and

          (f) comprehensive general public liability insurance covering the
     liability of Mortgagor for claims for bodily injury, death or property
     damage occurring on, in or about the Mortgaged Property in amounts not less
     than Two Million Dollars ($2,000,000) per occurrence for bodily injury and
     Five Hundred Thousand Dollars ($500,000) per occurrence for property damage
     or such greater amounts as shall, from time to time, be required by
     Mortgagee.

The policy or policies of such insurance shall (i) be written on forms and with
insurance companies satisfactory to Mortgagee, (ii) as to property insurance,
contain agreed amount endorsements for not less than the full replacement cost
of the Improvements and Personal Property, (iii) as to liability insurance,
name as the insured parties Mortgagor and Mortgagee as their interests may
appear, (iv) bear a mortgagee clause in favor of Mortgagee in form satisfactory
to Mortgagee, all with loss proceeds under such policies to be made payable to
Mortgagee; and (v) be in such amounts as Mortgagee from time to time may
require.

     All policies of insurance shall specifically provide that Mortgagee shall
receive 30 days prior written notice before cancellation of any such policies.
In the event of a foreclosure of this Mortgage or any acquisition of the
Mortgaged Property by Mortgagee all such policies and any proceeds payable
therefrom, whether payable before or after a foreclosure sale, or during the
period of redemption, if any, shall become the absolute property of Mortgagee
to be utilized at its discretion. In the event of foreclosure or the failure to
obtain and keep any insurance required herein, Mortgagor empowers Mortgagee to
effect insurance upon the Mortgaged Property at Mortgagor's expense and for the
benefit of Mortgagee in the amounts and types aforesaid for a period of time
extending through the time of redemption from foreclosure sale, and if
necessary therefore, to cancel any or all existing insurance policies.
Mortgagor agrees to furnish Mortgagee copies of all inspection reports and
insurance recommendations received by Mortgagor from any insurer.

     Section 2.02.  Escrows. From and after the occurrence of any Event of
Default, Mortgagor shall deposit with Mortgagee on the first day of each and
every month hereafter, an amount equal to one-twelfth (1/12th) of the annual
taxes and assessments (the "Charges") due on or relating to the Mortgaged
Property as estimated by Mortgagee. From time to time out of such deposits and
to the extent such deposits are sufficient Mortgagee will, upon presentation to
Mortgagee by Mortgagor of bills therefor, pay the Charges or will upon
presentation of receipted bills therefor, reimburse Mortgagor for such payments
made by Mortgagor. In the event (a) the deposits on hand are not sufficient to
pay all of the Charges when the same become due from time to time, or (b)
Mortgagee estimates that the current monthly deposits are less than the
estimated monthly amounts necessary to pay the Charges as they become due from
time to time, then Mortgagor shall pay to Mortgagee on demand the amount
necessary to make up the deficiency. The excess of any such deposits shall be
credited to subsequent payments to be made for such items. If an Event of
Default, as herein defined, shall occur under the terms of this Mortgage, the
Loan Agreement, or the Note, Mortgagee may, at its option, without being
required to do so, apply any deposit on hand to the Indebtedness in such order
and manner as Mortgagee may elect.

                                      -7-

<PAGE>

When the Indebtedness has been fully paid any remaining deposits shall be
returned to Mortgagor or other person entitled thereto. All deposits are hereby
pledged as additional security for the Indebtedness and shall be held for the
purposes for which made as herein provided. Such deposits may be held by
Mortgagee, or its agent, and shall be held without any allowance of interest
thereon and shall not be subject to the decision or control of Mortgagor. The
enforceability of the covenants relating to taxes and assessments provided in
Section 1.08 hereof and the payment of premiums for insurance provided in
Section 2.01 hereof shall not be affected except insofar as those obligations
have been met by compliance with this Section. Mortgagee may from time to time,
at its option, waive, and after such waiver, reinstate any and all of the
provisions contained in this Section. While such waiver is in effect, Mortgagor
shall pay taxes and assessments and premiums for insurance as herein provided.

                                   ARTICLE III

                       APPLICATION OF INSURANCE AND AWARDS

         Section 3.01. Damage to or Destruction of the Mortgaged Property.
Mortgagor shall give Mortgagee prompt notice of any damage to or destruction of
the Mortgaged Property or any part thereof (each such occurrence of damage or
destruction shall be known as a separate and distinct "Casualty"), and in case
of loss covered by policies of insurance, Mortgagee and Mortgagor jointly shall
settle and adjust any claim arising out of such policies and collect and receipt
for the proceeds payable therefrom, provided, that Mortgagor may itself adjust
and collect for any losses arising out of a single occurrence aggregating not in
excess of $25,000. Any expense incurred by Mortgagee in the adjustment and
collection of insurance proceeds (including without limitation the cost of any
independent appraisal of the loss or damage on behalf of Mortgagee) shall be
reimbursed to Mortgagee first out of any proceeds.

         Section 3.02. Condemnation. Mortgagor shall give Mortgagee prompt
notice of any action, actual or threatened, in condemnation or eminent domain
and hereby assigns, transfers and sets over to Mortgagee the entire proceeds of
any award or claim for damages for all or any part of the Mortgaged Property
taken or damaged under the power of eminent domain or condemnation. Mortgagee is
hereby authorized to intervene in any such action in the name of Mortgagor, to
compromise and settle any such action or claim, and to collect and receive from
the condemning authorities and give proper receipts and acquittances for such
proceeds. Any expenses incurred by Mortgagee in intervening in such action or
compromising and settling such action or claim, or collecting such proceeds
shall be reimbursed to Mortgagee first out of the proceeds.

         Section 3.03. Disbursement of Insurance and Condemnation Proceeds. If
(i) in the sole opinion of Mortgagee, the proceeds from any insurance claim or
condemnation award received pursuant to Section 3.01 or 3.02 (after payment of
expenses as contemplated by such Sections), together with any monies deposited
by Mortgagee with Mortgagor for the purposes of restoration or repair as
hereinafter set forth are sufficient to repair and restore the Mortgaged
Property to substantially the same condition as existed immediately prior to
such damage, destruction or condemnation, and (ii) Mortgagor is not then in
default under the Note, the Loan Agreement or

                                      -8-

<PAGE>

this Mortgage, and (iii) such repair or restoration shall not result in the
creation of any lien or encumbrance on the Mortgaged Property, other than
Permitted Encumbrances, and (iv) Mortgagor pays Mortgagee's expenses in
connection with the foregoing, and (v) the Casualty occurs at least twelve (12)
months prior to the expiration of the Note, then Mortgagor shall have the right
to use such proceeds to repair and restore the Mortgaged Property; provided,
however, that Mortgagee shall have the right to approve (which approval shall
not be unreasonably withheld) the plans for such repair and restoration. In the
event that any insurance or condemnation proceeds are so applied to the
restoration or repair of the Mortgaged Property, the restoration or repair shall
be done under the supervision of an architect acceptable to Mortgagee and
pursuant to plans and specifications approved by Mortgagee and subject to such
other terms, provisions, requirements, safeguards and disbursement procedures as
Mortgagee may require. In such case the proceeds shall be held by Mortgagee for
such purposes and will from time to time be disbursed by Mortgagee to defray the
costs of such restoration or repair under such safeguards and controls as
Mortgagee may require to assure completion in accordance with the approved plans
and specifications and free of liens or claims. Any insurance or condemnation
proceeds which are not applied to repair or restoration of the Mortgaged
Property and any surplus which may remain after payment of all costs of
restoration or repair may at the option of Mortgagee be applied to reduction of
that portion of the Indebtedness then most remotely to be paid, whether due or
not, or returned to Mortgagor or other person entitled thereto, the choice of
application to be solely at the discretion of Mortgagee.

                                   ARTICLE IV

                                LEASES AND RENTS

         Section 4.01. Mortgagor to Comply with Leases. Mortgagor shall, at its
own cost and expense, (a) perform, comply with and discharge all of the
obligations of Mortgagor under any leases or agreements for the use of the
Mortgaged Property or any part thereof, (b) use its best efforts to enforce or
secure the performance of each obligation and understanding of the respective
tenants under any such leases, and (c) appear in and defend, any action or
proceeding arising out of or in any manner connected with Mortgagor's interest
in any leases of the Mortgaged Property or any part thereof. Mortgagor shall
permit neither surrender nor assignment of any tenant's interest under said
leases unless the right to assign or surrender is expressly reserved under the
lease. Mortgagor shall not anticipate any installment of rent for more than one
(1) month in advance of its due date, nor execute any mortgage or create or
permit a lien which may be or become superior to any such leases, nor permit a
subordination of any lease to such mortgage or lien. Mortgagor shall not modify
or amend the terms of any such leases, nor borrow against or pledge the rentals
from such neither leases nor exercise or waive any default of the tenant
thereunder without the prior written consent of the Mortgagee.

         Section 4.02. Mortgagee's Right to Perform Under Leases. In the event
Mortgagor fails to perform, comply with or discharge any obligations of
Mortgagor under any lease or should Mortgagee become aware of or be notified by
any tenant under any lease of a failure on the part of Mortgagor to so perform,
comply with or discharge its obligations under said lease, Mortgagee may, but
shall not be obligated to, and without demand upon Mortgagor, and without
waiving or releasing Mortgagor from any obligation contained in this Mortgage,
remedy such failure.

                                      -9-

<PAGE>

Mortgagor shall pay to Mortgagee upon demand all sums incurred by Mortgagee in
remedying any such failure together with interest from the date of advance by
Mortgagee at the rate equal to that as specified in the Note. No such advance
shall be deemed to relieve Mortgagor from any default hereunder.

         Section 4.03. Assignment of Leases and Rents. As additional security
for the payment of the Indebtedness, Mortgagor does hereby bargain, sell, assign
and transfer unto Mortgagee, its successors and assigns, all of the leases which
now or hereafter may affect the Mortgaged Property, or any part thereof, during
the term of this Mortgage and all of the rents, profits, and other income of any
kind now due and which may hereafter become due under or by virtue of any lease
or agreement, whether written or verbal, for the use or occupancy of the
Mortgaged Property, or any part thereof, whether presently existing or entered
into at any time during the term of this Mortgage, whether before or after
foreclosure or during the period of redemption. It is the expressed intention of
Mortgagor and Mortgagee to establish an absolute transfer and assignment of all
such leases and agreements and all of the rents, profits and other income of any
kind from the Mortgaged Property unto Mortgagee, its successors and assigns, and
Mortgagor does hereby appoint irrevocably Mortgagee its true and lawful attorney
in its name and stead, which appointment is coupled with an interest, to collect
all of said rents, profits and other income; provided that, unless and until an
Event of Default, as herein defined, occurs under this Mortgage, Mortgagor shall
have the right to collect and retain said rents, profits and other income. The
assignment of rents shall be effective until the payment of all money secured by
this Mortgage, or in the event of foreclosure, until the period of redemption
expires. Regardless of the extinguishment of the debt by a foreclosure sale,
this benefit shall continue for the benefit of the purchaser at such sale.

         The entering upon and taking possession of the Mortgaged Property and
the collection of such rents, profits and other income shall not cure or waive
any defaults under this Mortgage nor in any way operate to prevent Mortgagee
from pursuing any other remedy which it may now or hereafter have under the
terms of this Mortgage nor shall it in any way be deemed to constitute Mortgagee
a mortgagee-in-possession.

                                    ARTICLE V

                             UNIFORM COMMERCIAL CODE

         Section 5.01. Security Agreement; Fixture Filing. This Mortgage shall
constitute a security agreement as defined in the Minnesota Uniform Commercial
Code and all acts amendatory thereof and any similar or replacement statute
hereafter enacted (the "Code"), and as to those items of Personal Property
described in this Mortgage that are, or are to become fixtures related to the
real estate mortgaged herein, it is intended as to those items that this
Mortgage shall be effective as a financing statement filed as a fixture filing
from the date of its filing in the real estate records of the County where the
Mortgaged Property is situate. A photographic or other reproduction of this
Mortgage may also be filed as a financing statement. The name of the record
owner of said real estate is the Mortgagor as set forth in page one of this
Mortgage. Information concerning the security interest created by this
instrument may be obtained from Mortgagee, as secured party, at its address as
set forth in page one of this Mortgage. The address of Mortgagor,

                                      -10-

<PAGE>

as debtor, is as set forth in page one of this Mortgage. This document covers
goods which are or are to become fixtures and other personal property.

                                   ARTICLE VI

                           CERTAIN RIGHTS OF MORTGAGEE

         Section 6.01 Right to Cure Default. If Mortgagor shall fail to comply
with any of the terms, covenants, agreements or conditions of this Mortgage, the
Note, the Loan Agreement or the other Loan Documents (as defined in the Loan
Agreement), Mortgagee may, but shall not be obligated to, without demand upon
Mortgagor, and without waiving or releasing Mortgagor from any obligation in
this Mortgage or in the Loan Agreement contained, remedy such failure, and
Mortgagor agrees to pay upon demand all sums incurred and the cost of
performance by Mortgagee in remedying any such failure together with interest on
all such sums and the costs of such performance from the date of such advance
and performance at the rate equal to that specified in the Note. All such sums
and costs, together with interest as aforesaid, shall constitute a portion of
the Indebtedness, but no such advance or performance shall be deemed to relieve
Mortgagor from any failure hereunder.

         Section 6.02 Inspection. Mortgagor shall permit Mortgagee's authorized
representatives to enter the Mortgaged Property at all reasonable times for the
purpose of inspecting the same; however, Mortgagee shall have no duty to make
such inspections and shall not incur any liability or obligation for making or
not making any such inspections.

         Section 6.03 Waivers; Releases; Resort to Other Security. Without
affecting the liability of Mortgagor for payment of the Indebtedness or
performance of any obligation contained herein, and without affecting the rights
of Mortgagee with respect to any security not expressly released in writing,
Mortgagee may, at any time, and without notice to or the consent of Mortgagor
(a) make any agreement extending the time or otherwise altering the terms of
payment of all or any part of the Indebtedness or modifying or waiving any
obligation, or subordinating, modifying or otherwise dealing with the lien or
charge hereof, (b) accept any additional security, (c) release or otherwise deal
with any property, real or personal, including any or all of the Mortgaged
Property, including making partial releases of the Mortgaged Property; or (d)
resort to any security agreements, pledges, contracts of guarantee, assignments
of rents and leases or other securities, and exhaust any one or more of said
securities and the security hereunder, either concurrently or independently and
in such order as it may determine.

         Section 6.04 Rights Cumulative. Each right, power or remedy herein
conferred upon Mortgagee is cumulative and in addition to every other right,
power or remedy, express or implied, now or hereafter arising, available to
Mortgagee, at law or in equity, or under the Code, or under any other agreement,
and each and every right, power and remedy herein set forth or otherwise so
existing may be exercised from time to time as often and in such order as may be
deemed expedient by Mortgagee and shall not be a waiver of the right to exercise
at any time thereafter any other right, power or remedy. No delay or omission by
Mortgagee in the exercise of any right, power or remedy arising hereunder or
arising otherwise shall impair any such right, power or remedy or the right of
Mortgagee to resort thereto at a later date or be construed to be a

                                      -11-

<PAGE>

waiver of any default or Event of Default, as herein defined, under this
Mortgage, the Note, the Loan Agreement or any other Loan Document.

         Section 6.05 Subsequent Agreements. Any agreement hereafter made by
Mortgagor and Mortgagee pursuant to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance.

         Section 6.06 Waiver of Appraisement, Marshaling. Mortgagor hereby
waives to the full extent lawfully allowed the benefit of any appraisement,
evaluation, stay and extension laws now or hereinafter in force. Mortgagor
hereby waives any rights available with respect to marshaling of assets and
Mortgagee shall not be required to separately sell any portion of the Mortgaged
Property, and Mortgagee shall not be required to exhaust its remedies against a
specific portion of the Mortgaged Property before proceeding against the other.
Mortgagor does hereby expressly consent to and authorize the sale of the
Mortgaged Property or any part thereof as a single unit or parcel or in such
other manner as Mortgagee may determine.

                                   ARTICLE VII

                         EVENTS OF DEFAULT AND REMEDIES

         Section 7.01 Events of Default. An "Event of Default" as defined in the
Loan Agreement shall constitute an "Event of Default" under this Mortgage.

         Section 7.02 Certain Remedies; Acceleration, Prepayment Premium and
Foreclosure. If an Event of Default shall occur, Mortgagee may immediately
declare the entire unpaid principal balance of the Note together with all other
portions of the Indebtedness to be immediately due and payable and thereupon all
such unpaid principal balance of the Note together with all accrued interest
thereon, prepayment premium and all other portions of the Indebtedness secured
hereby shall be and become immediately due and payable. If an Event of Default
shall occur, then in every such case Mortgagee may (a) proceed to protect and
enforce its rights by a suit or suits in equity or at law, either for the
specific performance of any term, covenant, agreement or condition contained
herein or in the Note or in the Loan Agreement or in any other Loan Document, or
in aid of the execution of any power herein or therein granted for collection of
the Note or the Indebtedness or for the foreclosure of this Mortgage, or for the
enforcement of any other appropriate legal or equitable remedy, and/or (b)
foreclose this Mortgage; and Mortgagor hereby authorizes and fully empowers
Mortgagee to foreclose the lien of this Mortgage in the manner prescribed by
applicable law, and out of the proceeds arising from sale and foreclosure to
retain the principal of the Note and interest on the Note and all other portions
of the Indebtedness together with all such sums of money as Mortgagee shall have
expended or advanced pursuant to this Mortgage or pursuant to statute together
with interest thereon as herein provided and all costs and expenses of such
foreclosure, including lawful attorneys' fees, with the balance, if any, to be
paid to the persons entitled thereto by law. In case of any sale of the
Mortgaged Property, or any part thereof, pursuant to any judgment or decree of
any court or otherwise in connection with the enforcement of any of the terms of
this Mortgage, Mortgagee may become the purchaser, and for the purpose of making
settlement for or payment of the purchase price, shall be entitled to deliver
and use the Note and any claims for interest and prepayment premium matured and
unpaid

                                      -12-

<PAGE>

thereon, together with all other portions of the Indebtedness, in order that
there may be credited as paid on the purchase price the sum then due under the
Note, including the principal of the Note and prepayment premium and interest
thereof and all other portions of the Indebtedness.

         Section 7.03 Receiver. If an Event of Default shall occur hereunder, it
is further covenanted and agreed that if at any time in the opinion of Mortgagee
a receivership may be necessary to protect the Mortgaged Property, whether
before or after maturity of the Indebtedness or at the time of or after the
institution of suit to collect the Indebtedness, or to enforce this Mortgage,
Mortgagee shall, as a matter of strict right and regardless of the value of the
mortgage security for the amounts due hereunder or secured hereby, or of the
solvency of any party bound for the payment of the Indebtedness, have the right
to the appointment on ex parte application, and without notice to anyone, by any
Court having jurisdiction, of a receiver to take charge of, manage, preserve,
protect, operate the Mortgaged Property and to collect the rents, to make all
necessary and needed repairs, and to pay all taxes and assessments against the
Mortgaged Property and insurance premiums for insurance thereon and after the
payment of the expenses of the receivership and management of the Mortgaged
Property to apply the net proceeds in reduction of the Indebtedness hereby
secured or in such manner as the Court shall direct. Such receivership shall, at
the option of Mortgagee, continue until full payment of all sums hereby secured,
or until title to said Mortgaged Property shall have passed by sale under this
Mortgage, as further provided in any assignment of rents executed by Mortgagor
to Mortgagee (whether contained in this Mortgage or in a separate instrument).

         Section 7.04 Rights Under Uniform Commercial Code. In addition to the
rights available to a mortgagee of real property, Mortgagee shall also have all
the rights, remedies and recourse available to a secured party under the Code
including the right to proceed under the provisions of the Code governing
default as to any Collateral which may be included in the Mortgaged Property or
which may be deemed non-realty in a foreclosure of this Mortgage or to proceed
as to such Collateral in accordance with the procedures and remedies available
pursuant to a foreclosure of real estate.

         Section 7.05 Right to Discontinue Proceeding. In the event Mortgagee
shall have proceeded to invoke any right, remedy or recourse permitted under
this Mortgage and shall thereafter elect to discontinue or abandon the same for
any reason, Mortgagee shall have the unqualified right to do so and in such
event Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Indebtedness. This Mortgage, the Mortgaged Property and all
rights, remedies and recourse of Mortgagee shall continue as if the same had not
been invoked.

         Section 7.06 Acknowledgment of Waiver of Hearing Before Sale. Mortgagor
understands and agrees that if an Event of Default occurs under the terms of
this Mortgage, Mortgagee has the right, inter alia, to foreclose this Mortgage
by advertisement in accordance with applicable law. Mortgagor further
understands that in the event of such default Mortgagee may also elect its
rights under the Code and take possession of the Collateral, or any part
thereof, and dispose of the same by sale or otherwise in one or more parcels
provided that at least ten (10) days' prior notice of such disposition must be
given, all as provided for by the Code, as hereafter amended or by any similar
or replacement statute hereafter enacted. MORTGAGOR HEREBY RELINQUISHES, WAIVES
AND GIVES UP ANY CONSTITUTIONAL RIGHTS IT MAY HAVE TO NOTICE

                                      -13-

<PAGE>

AND HEARING EXCEPT AS PROVIDED HEREIN BEFORE SALE OF THE MORTGAGED PROPERTY AND
EXPRESSLY CONSENTS AND AGREES THAT THE MORTGAGED PROPERTY MAY BE FORECLOSED BY
ADVERTISEMENT AND THAT THE COLLATERAL MAY BE DISPOSED OR PURSUANT TO THE CODE,
ALL AS DESCRIBED ABOVE. MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL
COUNSEL; THAT BEFORE SIGNING THIS DOCUMENT THIS SECTION AND MORTGAGOR'S
CONSTITUTIONAL RIGHTS WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT MORTGAGOR
UNDERSTANDS THE NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT OF
SUCH WAIVER.

                                  ARTICLE VIII

                            ENVIRONMENTAL PROVISIONS

                  Section 8.01 Environmental Concerns.

                  (a) To the best of Mortgagor's knowledge, after the
         investigation performed in accordance with the letter attached hereto
         as Exhibit C and made a part hereof, the Mortgaged Property, has never
         been used by previous owners and/or operators to refine, produce,
         store, handle, transfer, process or transport "Hazardous Substances",
         as such term is defined by applicable federal law, except in compliance
         with applicable laws, and the Mortgagor has not in the past, nor does
         Mortgagor intend in the future, to use the Mortgaged Property, for the
         purpose of refining, producing, storing, handling, transferring,
         processing or transporting said "Hazardous Substances", except in
         compliance with applicable laws.

                  (b) Mortgagor has not received a summons, citation, directive,
         letter or other communication, written or oral, from any applicable
         governmental agency concerning any intentional or unintentional action
         or omission on Mortgagor's part resulting in the releasing, spilling,
         leaking, pumping, pouring, emitting, emptying or dumping of Hazardous
         Substances into the waters or onto the lands of the State, or into the
         waters outside the jurisdiction of the State resulting in damage to the
         lands, waters, fish, shellfish, wildlife, biota, air and other
         resources owned, managed, held in trust or otherwise controlled by the
         State.

                  (c) Mortgagor shall operate the Mortgaged Property or cause it
         to be operated in material compliance with all applicable rules and
         regulations promulgated by all applicable governmental environmental
         authorities and agencies. Mortgagor shall have the right in good faith
         to contest or appeal from such laws, ordinances and regulations and any
         decision adverse to the Mortgagor based thereon, but all costs, fees
         and expenses incurred in connection with such proceedings shall be
         borne by the Mortgagor.

                  (d) Mortgagor shall not cause or permit to exist, as a result
         of an action or omission on its part, a releasing, spilling, leaking,
         pumping, emitting, pouring, emptying or dumping of a Hazardous
         Substance into waters of the State or onto the lands from which it
         might flow or drain into said waters, or into waters outside the
         jurisdiction of the State where damage may result to the lands, waters,
         fish, shellfish, wildlife, biota, air and other resources owned,
         managed, held in trust or otherwise controlled by the State, unless
         said release, spill, leak,

                                      -14-

<PAGE>

         pumping, emitting, pouring, emptying or dumping is pursuant to and in
         compliance with the conditions of a permit issued by the appropriate
         federal or state governmental authorities or other applicable laws.

                  (e) Should Mortgagor cause or permit any action or omission
         resulting in the releasing, spilling, leaking, pumping, pouring,
         emitting, emptying or dumping of Hazardous Substances into the waters
         or onto the lands of the State, or into the waters outside the
         jurisdiction of the State, resulting in damage to the lands, waters,
         fish, shellfish, wildlife, biota, air or other resources owned, managed
         or held in trust or otherwise controlled by the State, without having
         obtained a permit issued by the appropriate governmental authorities,
         Mortgagor shall promptly clean up the same in accordance with the
         provisions of applicable State or Federal law.

                  (f) Notwithstanding anything in this Article VIII to the
         contrary, Mortgagor may store and use on the Mortgaged Property
         supplies which are used in the normal course of Mortgagor's business.
         Mortgagor covenants and agrees that it will use and dispose of all such
         supplies in compliance with all applicable laws and regulations.

                                   ARTICLE IX

                                  MISCELLANEOUS

         Section 9.01 Applicable Law. This Mortgage shall be interpreted,
construed and enforced according to the laws of the State of Minnesota.

         Section 9.02 No Implied Waiver. Any delay by Mortgagee in exercising or
any failure by Mortgagee to exercise any right or remedy hereunder or afforded
by law shall not be a waiver of nor preclude the exercise of any right or remedy
hereunder, whether on such occasion or any future occasion.

         Section 9.03 Successors and Assigns. This Mortgage and each and every
term, covenant, agreement, condition and other provision hereof shall be binding
upon Mortgagor and its successors and assigns including without limitation each
and every from time to time record owner of the Mortgaged Property or any other
person having an interest therein, shall run with the land and shall inure to
the benefit of Mortgagee and its successors and assigns. As used herein the
words "successors and assigns" shall also be deemed to include the heirs,
representatives, administrators and executors of any natural person who is a
party to this Mortgage.

         Section 9.04 Notices. Any notice which any party hereto may desire or
may be required to give to any other party shall be in writing and the mailing
thereof by certified mail to their respective addresses as set forth in page one
of this Mortgage, or to such other places any party hereto may hereafter by
notice in writing designate, shall constitute service of notice hereunder.

         Section 9.05 Captions and Headings. The captions and headings of the
various sections of this Mortgage are for convenience only and are not to be
construed as confining or limiting in any way the scope or intent of the
provisions hereof.

                                      -15-

<PAGE>

         Section 9.06 Severability and Survival. The unenforceability or
invalidity of any provision or provisions hereof shall not render any other
provision or provisions herein contained unenforceable or invalid, and all
provisions hereof, in all other respects, shall remain valid and enforceable.

         IN WITNESS WHEREOF, Mortgagor has caused these presents to be executed
as of the date first above written.

                                       HEI, INC.

                                       By: /s/ Douglas J. Nesbit
                                           -----------------------
                                        Its: Chief Financial Officer

STATE OF MINNESOTA        )
                          ) ss:
COUNTY OF HENNEPIN        )

         The foregoing instrument was acknowledged before me this 14th day of
October, 2003, by Douglas J. Nesbit, the Chief Financial Officer of HEI, Inc.,
on behalf of the corporation.

                                      My Commission expires on January 31, 2005

                                                  Mary Joel Makepeace
                                                  ------------------------------
                                                  Notary Public

This instrument prepared by:                       [SEAL OF MARY JOEL MAKEPEACE]
COMMERCE BANK
7650 Edinborough Way, Suite 150
Edina, MN  55435

                                      -16-

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