Document:

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                                  EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

THIS AGREEMENT, made and entered into effective as of the close of business on
the 31st day of October, 2003, by and between Automation, Manufacturing &
Robotic Technologies, LLC, a Minnesota limited liability company ("Employer"),
and Raymond Carriere ("Carriere").

                              W I T N E S S E T H :

WHEREAS, Employer and Carriere mutually desire to establish an employment
arrangement on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt, sufficiency and mutuality of
which are hereby acknowledged, the parties agree as follows:

                                   ARTICLE 1.

                               EMPLOYMENT AND TERM

1.1.     EMPLOYMENT. On the terms herein contained, Employer hereby employs
Carriere as its President and Carriere hereby accepts such employment.

1.2.     TERM. Except as otherwise provided in this Agreement, this Agreement
shall be effective as of the date hereof and shall continue in full force and
effect through December 31, 2006, and shall then terminate.

                                   ARTICLE 2.

                                  COMPENSATION

2.1.     PRE-SIGNING BONUS. In consideration of past services rendered by
Carriere, it is acknowledged that prior to the execution of this Agreement,
Employer shall pay to Carriere a pre-signing bonus equal to Forty-Nine Thousand
Five Hundred Fifty-One and 31/100 Dollars ($49,551.31).

2.2.     ANNUAL SALARY. In exchange for the provision of services, Carriere
shall be paid salary at an annual rate of One Hundred Twenty-Five Thousand and
00/100 Dollars ($125,000.00), payable in accordance with the standard payroll
practices of Employer.

2.3.     NET SALES BONUS. As additional compensation, in exchange for the
provision of services, Carriere shall be paid a bonus based upon the "Net Sales"
of Employer in accordance with the following (the "Net Sales Bonus"):

         2.3.1.   DEFINITIONS. For purposes of calculating the Net Sales Bonus,
         the following definitions shall apply:

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                  a)       ASE. "ASE" means Aero Systems Engineering, Inc., a
                           Minnesota corporation.

                  b)       ASE ACCOUNTING POLICIES. "ASE Accounting Policies"
                           means the internal accounting policies and procedures
                           of ASE, where such internal policies and procedures
                           are consistently applied with respect to ASE and
                           Employer. ASE may, in its sole discretion, change its
                           internal accounting policies and procedures so long
                           as they remain in compliance with generally accepted
                           accounting principles and are uniformly applied to
                           ASE and Employer; provided, however, if such change
                           shall materially impact the Net Sales calculations,
                           there shall be an appropriate adjustment so that the
                           Net Sales as calculated after such change shall be
                           substantially the same as the Net Sales calculated
                           prior to such change.

                  c)       NET SALES. "Net Sales" for a given fiscal period
                           (fiscal quarter or fiscal year, as the case may be)
                           means the net revenues from product or services sales
                           (in the ordinary course of business) of Employer for
                           that fiscal period, calculated in accordance with
                           generally accepted accounting principles and the ASE
                           Accounting Policies, except that there shall not be a
                           reserve for doubtful accounts and instead Net Sales
                           for a given fiscal period shall be adjusted downward
                           for uncollected receivables as provided in Section
                           2.3.5 below.

                  d)       NET SALES - CARRIERE. "Net Sales - Carriere" for a
                           given fiscal period means the Net Sales of Employer
                           for that fiscal period where Carriere was the
                           principal party responsible for Employer obtaining
                           the sales.

                  e)       NET SALES - OTHERS. "Net Sales - Others" for a given
                           fiscal period means the Net Sales of Employer for
                           that fiscal period where Carriere was not the
                           principal party responsible for Employer obtaining
                           the sales.

         2.3.2.   APPLICABLE PERIODS. If and as provided in this Agreement, the
         Net Sales Bonus shall be paid to Carriere for fiscal year 2003, and for
         each of the fiscal quarters during calendar years 2004, 2005 and 2006,
         based upon the Net Sales of Employer for each such fiscal period.

         2.3.3.   AMOUNT OF NET SALES BONUS. For a given fiscal period, the Net
         Sales Bonus to be paid by Employer to Carriere will be equal to the sum
         of the following:

                  a)       2% of the Net Sales - Carriere for that fiscal
                           period; plus

                  b)       1% of the Net Sales - Others for that fiscal period.

         Notwithstanding anything contained in this Agreement to the contrary,
         whenever a given Net Sale includes a large equipment component so that
         the gross margin percentage for that sale transaction is materially
         less than the projected gross margin percentages indicated in the
         financial projections for Employer as made available to and reviewed by
         the board of governors of Employer as of the date of this Agreement,
         the parties commit to negotiate in good faith to agree upon an
         appropriate commission for that order; provided in no event will the
         commission percentage on Net Sales - Carriere be less than

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         1% and in no event will the commission percentage on Net Sales - Others
         be less than 0.5%.

         2.3.4.   TERMS OF PAYMENT. Any Net Sales Bonus to be paid by Employer
         to Carriere shall be paid by no later than three (3) months following
         the end of each applicable fiscal period. For example, the Net Sales
         Bonus for calendar year 2003 shall be paid to Carriere by no later than
         March 31, 2004, and the Net Sales Bonus for the first fiscal quarter of
         calendar year 2004 shall be paid to Carriere by no later than June 30,
         2004. With each payment, Employer shall include a summary of its
         calculations for the Net Sales Bonus. It is agreed and understood that
         payments of the Net Sales Bonus to Carriere may be subject to offset
         and payment to the "Buyers" in connection with an indemnification claim
         brought by the Buyers against Carriere under Article 6 of that certain
         Membership Interest Purchase Agreement, dated October 31, 2003, entered
         into by and among ASE, Carriere, Richard A. Hoel, Laurence E. Gamst and
         Edward J. Drenttel (the "Purchase Agreement").

         2.3.5.   ACCOUNTS RECEIVABLE.

                  a)       UNCOLLECTED ACCOUNTS RECEIVABLE. Any accounts
                           receivable of Employer resulting from sales occurring
                           during a given fiscal period which are not collected
                           within three (3) months following the end of such
                           fiscal period shall be deemed uncollectible for the
                           purpose of calculating the Net Sales Bonus to be paid
                           to Carriere for the just completed fiscal period;
                           provided, however, that any account receivable deemed
                           uncollectible in accordance with the above for a
                           given fiscal period which is subsequently collected
                           shall increase the Net Sales in the fiscal period of
                           collection to the extent that Net Sales were
                           previously reduced as a result of the account
                           receivable previously being deemed uncollectible.
                           Additionally, for the fiscal quarter of Employer
                           ending December 31, 2006, Carriere shall receive an
                           additional Net Sales Bonus payment to the extent
                           accounts receivable, relating to the Net Sales Bonus
                           paid to Carriere for the fiscal quarter ending
                           December 31, 2006 and deemed uncollectible in
                           accordance with the above, are collected during the
                           period from April 1, 2007 through June 30, 2007.

                  b)       COLLECTION EFFORTS. Employer commits to utilize
                           commercially reasonable efforts to collect all
                           accounts receivable of Employer; provided, however,
                           that this shall not require Employer to initiate any
                           suit or other legal process or engage any collection
                           agency as part of its collection efforts.

                  c)       APPLICATION OF RECEIPTS. All sums received by
                           Employer from an account receivable account debtor
                           shall be applied by Employer to the oldest balance
                           first for each such account debtor; provided,
                           however, that (i) if the payment specifically
                           references an invoice, the payment shall be applied
                           to that invoice, (ii) if the account debtor contests
                           an invoice, the payment shall not be applied to that
                           invoice unless the account debtor specifically
                           requests that the payment be applied to such invoice,
                           and (iii) if the amount of the payment matches up
                           with the amount of a given

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                           invoice, the payment shall be applied to that
                           invoice. Employer shall attempt to give Carriere
                           reasonable notice of any contested invoice.

2.4.     BENEFITS. As additional compensation, in exchange for the provision of
services, Carriere shall receive, to the extent eligible, those same employee
benefits as are provided generally by Employer to other similarly situated
employees. It is understood that Employer may make changes to any such employee
benefits at its discretion, including the discontinuance of any such benefits,
so long as similar changes are made with respect to the employee benefits
provided to other similarly situated employees.

2.5.     VACATION. Carriere shall be entitled to four (4) weeks paid vacation
per year.

                                   ARTICLE 3.

                               DUTIES OF CARRIERE

3.1.     SERVICES. Carriere shall perform those duties and obligations as are
charged to Carriere by the Board of Governors of Employer, and will comply with
the policies adopted by the Board of Governors of Employer, as the same may be
determined from time to time; provided, however, it is expected that the duties
assigned to Carriere shall include the duties as described on attached Exhibit
A.

3.2.     TIME AND EFFORT. Carriere shall devote his full time and effort to the
business of Employer. Carriere shall perform the duties and obligations required
of Carriere hereunder in a competent, efficient and satisfactory manner at such
hours and under such conditions as the performance of such duties and
obligations may reasonably require.

3.3.     ARTICLES AND BYLAWS. Carriere shall act in accordance with and so as to
abide by the Articles of Incorporation and Bylaws of Employer.

                                   ARTICLE 4.

                                   TERMINATION

4.1.     TERMINATION FOR CAUSE. Employer shall have the right to terminate the
employment of Carriere upon the occurrence of any of the following events and
any such termination shall be considered "For Cause":

         4.1.1.   Carriere shall breach or otherwise fail to perform any of his
         material employment duties (other than as a result of his physical or
         mental impairment, which shall be covered under Section 4.4 below) and
         such breach or failure shall continue uncured for a period of thirty
         (30) days following receipt of written notice thereof from Employer
         (provided if such breach or failure is not reasonably capable of being
         cured within the 30-day cure period, the length of the cure period will
         be extended for up to an additional thirty days provided Carriere
         continuously throughout the cure period takes all action reasonably
         required to remedy the breach);

         4.1.2.   Carriere shall engage in any act constituting gross misconduct
         such as theft, embezzlement, fraud or material dishonesty, a judicial
         determination shall be made that Carriere has engaged in sexual
         harassment (or Employer shall have made a substantial

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         payment to settle a claim of sexual harassment against Carriere), or
         Carriere shall engage in misconduct involving moral turpitude (but
         specifically excluding a breach of or failure to perform employment
         duties under this Agreement, which shall be governed by Section 4.1.1
         above) which relates or is connected to Carriere's employment with
         Employer; or

         4.1.3.   Carriere shall be convicted of, or shall plead guilty or nolo
         contendere to, a felony (whether related or unrelated to Carriere's
         employment with Employer).

Where the employment of Carriere is terminated pursuant to this Section 4.1,
such termination shall be effective upon delivery of notice thereof to Carriere
(except in the case of Section 4.1.1, where termination shall only be effective
if not remedied within thirty (30) days as provided therein) and the effect of
such termination shall be as indicated in Section 4.5 below.

4.2.     TERMINATION WITHOUT CAUSE. Employer shall additionally have the right
to terminate the employment of Carriere other than "For Cause" upon delivery of
written notice thereof to Carriere. Where the employment of Carriere is
terminated pursuant to this Section 4.2, such termination shall be effective as
of the date indicated in the termination notice (it being acknowledged that such
termination may be effective immediately on the date of the notice) and the
effect of such termination shall be as indicated in Section 4.5 below.

4.3.     VOLUNTARY TERMINATION BY CARRIERE. Carriere shall have the right to
terminate his employment with Employer at any time upon delivery of at least six
(6) weeks' written notice thereof to Employer. Where the employment of Carriere
is terminated pursuant to this Section 4.3, such termination shall be effective
on the date indicated in the termination notice (provided, upon receipt of such
notice from Carriere, Employer shall have the right to require that Carriere's
employment be terminated effective as of any date prior to the effective date
indicated in such notice) and the effect of such termination shall be as
provided in Section 4.5 below.

4.4.     DEATH OR DISABILITY. The employment of Carriere shall additionally and
automatically terminate upon the death of Carriere or upon Carriere otherwise
becoming unable to perform his employment duties as the result of physical or
mental impairment for an aggregate of 180 days in any period of 360 consecutive
days. Where the employment of Carriere is terminated pursuant to this Section
4.4., such termination shall be effective upon the date of such death or
disability of Carriere and the effect of such termination shall be as provided
in Section 4.5 below.

4.5.     EFFECT OF TERMINATION. The effect of any termination of Carriere's
employment with Employer pursuant to this Agreement shall be as follows:

         4.5.1.   SALARY. If Carriere's employment is terminated pursuant to
         Section 4.1 (For Cause), Section 4.3 (Voluntary) or Section 4.4 (Death
         or Disability), Carriere shall receive payment of his Section 2.2
         salary prorated through the effective date of such termination. If
         Carriere's employment is terminated pursuant to Section 4.2 (Without
         Cause), Carriere shall continue to receive the full amount of his
         Section 2.2 salary through December 31, 2006 in the same manner as if
         his employment had not been terminated.

         4.5.2.   NET SALES BONUS. If Carriere's employment is terminated
         pursuant to Section 4.1 (For Cause), Section 4.3 (Voluntary) or Section
         4.4 (Death or Disability), he shall receive

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         payment of the Net Sales Bonus based upon Net Sales occurring on or
         prior to the effective date of his termination of employment with
         Employer, payable in accordance with Section 2.3 above. If Carriere's
         employment is terminated pursuant to Section 4.2 (Without Cause),
         Carriere shall continue to receive the full amount of the Net Sales
         Bonus in the same manner as if his employment had not been terminated.

         4.5.3.   EMPLOYEE BENEFITS. Upon the termination of Carriere's
         employment with Employer for any reason, whether voluntary or
         involuntary, for cause or without cause, all other employee benefits
         provided by Employer to Carriere will terminate effective as of the
         effective date of such termination of employment, subject to COBRA
         rights; provided, however, that any accrued benefits of Carriere under
         any employee benefit plans and any rights he may have under the Member
         Control Agreement of Employer shall be unaffected by such termination.

It is understood that the payments to be made to Carriere as provided above
where his employment has been terminated pursuant to Section 4.2 (Without Cause)
shall only be required to be made if Carriere first delivers to Employer a
release pursuant to which he releases Employer and ASE from all claims other
than claims relating to his right to receive the payments as provided above and
the right to receive additional payments of purchase price under the Purchase
Agreement.

4.6.     SURVIVING RIGHTS. Notwithstanding the termination of Carriere's
employment, the parties shall be required to carry out any provisions hereof
which contemplate performance subsequent to such termination, and such
termination shall not affect any liability or other obligation which shall have
accrued prior to such termination, including, but not limited to, any liability
for loss or damage on account of a prior default.

                                   ARTICLE 5.

                              EMPLOYMENT COVENANTS

5.1.     CONFIDENTIALITY. Carriere agrees that he shall not, during his
employment or thereafter, make use of, divulge or otherwise disclose, directly
or indirectly, any confidential information, trade secrets or business secrets
(including, without limitation, any customer lists, records, manuals or
financial information of ASE, Employer or any of their affiliates together with
any strategies or policies of ASE, Employer or any of their affiliates) which
Carriere may have learned from ASE, Employer or any of their affiliates, whether
as a result of his employment or otherwise, except to the extent such disclosure
is necessary for his performance under this Agreement or if the information has
otherwise become publicly available through no fault of his.

5.2.     COVENANT NOT TO COMPETE. Carriere shall not, until two (2) years
following the termination of Carriere's employment with Employer, ASE and their
successors and affiliates, anywhere within North America (and any other
continent in which Employer has performed services or sold product within the 12
months preceding the termination of Carriere's employment), either directly or
indirectly:

         5.2.1.   Own, manage, finance, operate or control, or participate in
         the ownership, management, financing, operation or control of, or be
         employed by, or act as consultant or advisor to, or be connected in any
         manner with, any corporation, partnership, person, firm or other
         business that is engaged in (a) a business substantially similar to or

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         otherwise competitive with the current business of Employer, (b) a
         business substantially similar to or otherwise competitive with the
         business engaged in by Employer at the time of the termination of
         Carriere's employment or (c) a business of purchasing, selling or
         leasing robotics, providing services relating to the integration of
         robotics, or providing services relating to the development and
         integration of related software (collectively, the "AMR Tec Business");

         5.2.2.   Call upon, solicit, divert or attempt to take away or continue
         any business relationship with any customers or business of ASE or
         Employer for the purpose of selling any product or service competitive
         to ASE or Employer; or

         5.2.3.   Induce or attempt to induce any employee, agent or contractor
         of or consultant to ASE or Employer or their affiliates to do any of
         the foregoing or to discontinue such person's association with ASE or
         Employer or their affiliates.

5.3.     REMEDIES. Carriere agrees and understands that any breach of the
covenants or agreements set forth in this Article 5 will cause ASE and Employer
irreparable harm for which there is no adequate remedy of law and, in addition
to whatever rights ASE and Employer may otherwise have under applicable law,
Carriere consents to the issuance of an injunction in favor of ASE and Employer
enjoining the breach of any of the aforesaid covenants or agreements by any
court of competent jurisdiction. If any or all of the aforesaid covenants or
agreements are held to be unenforceable because of their scope or duration or
the subject matter covered thereby, the parties agree that the court making such
determination shall have the power to reduce or modify the scope, duration and
subject matter to the extent that allows the maximum scope, duration and subject
matter permitted by applicable law.

5.4.     DISCLOSURE AND ASSIGNMENT OF PROPRIETARY RIGHTS. Carriere shall
promptly disclose to Employer in writing all inventions, works of authorship,
technologies, processes, designs, products, modifications and improvements and
similar items that relate to ASE, Employer or either of their respective
businesses which are conceived, made, discovered, written or created by
Carriere, either alone or jointly with another person, group or entity, during
the term of this Agreement and all continuations or extensions thereof. Carriere
hereby assigns all rights to all such items to ASE and Employer. Carriere agrees
to execute all documents, take all actions and supply all information that ASE
or Employer considers necessary or desirable in order to transfer or record the
transfer of Carriere's entire right, title and interest in and to such items to
ASE and/or Employer and in order to enable ASE and Employer to obtain exclusive
patent, copyright or other legal protection for such items.

5.5.     DOCUMENTS AND TANGIBLE PROPERTY. All documents or other tangible
property relating in any way to the business of ASE and/or Employer which are
conceived of or generated by Carriere or come into Carriere's possession during
his employment by Employer shall be and remain the exclusive property of
Employer and Carriere agrees to return all such documents and tangible property
to Employer on termination of his employment or at such earlier time as Employer
may reasonably request him to do so.

                                   ARTICLE 6.

GENERAL PROVISIONS

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6.1.     NOTICES. All notices, requests and other communications shall be in
writing and, except as otherwise provided herein, shall be considered to have
been delivered (i) on the date of delivery if personally delivered, (ii) on the
first business day after the date of its mailing if sent by reputable overnight
courier addressed to the proper party at its address as set forth below, and
(iii) on the second business day after the date of its mailing if sent by United
States Mail, first class, certified or registered, postage prepaid, return
receipt requested, addressed to the proper party at its address as set forth
below, or to such other address as such party may hereafter designate by written
notice to the other party:

         6.1.1.   If to Employer, to:   Automation, Manufacturing & Robotic
                                        Technologies, LLC
                                        c/o Aero Systems Engineering, Inc.
                                        358 East Fillmore Avenue
                                        St. Paul, Minnesota 55107
                                        Attn: President of Aero Systems
                                        Engineering, Inc.

                                        With a copy to:

                                        Winthrop & Weinstine, P.A.
                                        225 South Sixth Street, Suite 3500
                                        Minneapolis, Minnesota 55402
                                        Attn: Mark T. Johnson

         6.1.2.   If to Carriere, to:   Raymond Carriere
                                        2333 Waters Drive
                                        Mendota Heights, MN  55120

                                        With a copy to:

                                        Best & Flanagan LLP
                                        225 South Sixth Street, Suite 4000
                                        Minneapolis, Minnesota 55402
                                        Attn: Scott Moen

6.2.     WAIVER, MODIFICATION OR AMENDMENT. No waiver, modification or amendment
of any term, condition or provision of this Agreement shall be valid or of any
effect unless made in writing, signed by the party to be bound or its duly
authorized representative and specifying with particularity the nature and
extent of such waiver, modification or amendment. Any waiver by any party of any
default of the other shall not affect, or impair any right arising from, any
subsequent default. Nothing herein shall limit the rights and remedies of the
parties hereto under and pursuant to this Agreement, except as hereinbefore set
forth.

6.3.     SECTION HEADINGS. Section headings as to the content of particular
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular sections to
which they refer.

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6.4.     ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties hereto concerning the employment of Carriere by Employer and
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

6.5.     INTERPRETATION AND SEVERANCE. The provisions of this Agreement shall be
applied and interpreted in a manner consistent with each other so as to carry
out the purpose and intent of the parties hereto, but if for any reason a
provision hereof is determined to be unenforceable or invalid, such provision or
such part thereof as may be unenforceable or invalid shall be deemed severed
from this Agreement and replaced by another provision which, being valid and
enforceable, most closely represents the original intentions of the parties, and
the Agreement as so modified shall be carried out with the same force and effect
as if the severed and replaced provision or part thereof had not been a part of
this Agreement.

6.6.     COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party.

6.7.     GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.

6.8.     SURVIVAL. The parties acknowledge and agree that certain provisions of
this Agreement which by their express or implied terms extend beyond the
termination of Carriere's employment hereunder or beyond the termination of this
Agreement shall continue in full force and effect notwithstanding Carriere's
termination of employment or the termination of this Agreement.

6.9.     ATTORNEYS' FEES AND COSTS. In the event that either party prevails in
legal action against the other arising under or relating to this Agreement, the
prevailing party shall be entitled to recover from the other party all of its
costs and expenses, including, without limitation, reasonable attorneys' fees.

6.10.    SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns; provided, however, that the obligations
of Carriere under this Agreement are personal to him and, as a consequence,
Carriere may not assign or otherwise transfer any of his obligations under this
Agreement; and provided further, however, that it is agreed Employer may assign
all of its rights and obligations under this Agreement to an affiliate of
Employer so long as Employer remains liable to pay all amounts otherwise
required to be paid by Employer to Carriere under this Agreement.

6.11     ARBITRATION. In the event of a dispute hereunder which cannot be
resolved by the parties among themselves, such dispute shall be settled by one
arbitrator selected in accordance with the Rules of the American Arbitration
Association and judgment on the award rendered pursuant to such arbitration may
be entered in any court or tribunal of competent jurisdiction. The parties
hereby agree that all arbitrations occurring under this Agreement shall be held
in Minneapolis, Minnesota. Notwithstanding the above, nothing contained herein
shall limit or restrict a party's ability to seek injunctive relief for a breach
or threatened breach of this Agreement in any court of competent jurisdiction.

         [THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.
                  SIGNATURES APPEAR ON THE FOLLOWING PAGE(s).]

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[SIGNATURE PAGE TO THAT CERTAIN EMPLOYMENT AGREEMENT, DATED OCTOBER 31, 2003.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

EMPLOYER:                                           CARRIERE:

Automation, Manufacturing & Robotic
Technologies, LLC                                       /s/ Raymond Carriere
                                                    ----------------------------
                                                    Raymond Carriere

By: /s/ Steven R. Hedberg
   -----------------------------------------
   Steven R. Hedberg, Chief Financial Officer

                                       10<PAGE>
                                  EXHIBIT 10.13

                             REIMBURSEMENT AGREEMENT

THIS AGREEMENT, made and entered into effective as of this 31st day of October,
2003, by and among Richard A. Hoel ("RAH"), Laurence E. Gamst ("LEG"), and
Edward J. Drenttel ("EJD") (RAH, LEG and EJD are collectively referred to as the
"Members"), and Aero Systems Engineering, Inc., a Minnesota corporation ("ASE").

                              W I T N E S S E T H:

WHEREAS, the Members own 9% and ASE owns 51% of the issued and outstanding
membership interest units of Automation, Manufacturing & Robotic Technologies,
LLC, a Minnesota limited liability company (the "Company"), in accordance with
the following:

<TABLE>
<CAPTION>
                             MEMBERSHIP INTEREST
NAME OF MEMBER                   UNITS OWNED        OWNERSHIP PERCENTAGE
                                 -----------
<S>                          <C>                    <C>
ASE                                  510                       51%
RAH                                   30                        3%
LEG                                   30                        3%
EJD                                   30                        3%
                                     ---                       --

TOTAL:                               600                       60%
</TABLE>

WHEREAS, the Company has executed documents to obtain a loan in the amount of up
to $500,000 from M&I Marshall & Ilsley Bank (the "Lender");

WHEREAS, as a condition to making such loan, the Lender has required that ASE
execute a corporate guaranty in a form acceptable to the Lender (the "ASE
Guaranty"); and

WHEREAS, as a condition to ASE's execution of the ASE Guaranty, ASE has required
that the Members commit to reimburse ASE for any payments made by ASE pursuant
to and as a result of its execution of the ASE Guaranty, in proportion to their
ownership percentages in the Company, as more specifically provided below.

NOW, THEREFORE, as a condition to ASE's execution of the ASE Guaranty, and in
consideration of the above recitals and the mutual promises and covenants stated
below, the parties agree as follows:

1.       MEMBER REIMBURSEMENT OBLIGATION. Upon ASE making any payment under the
ASE Guaranty, ASE shall provide written notice thereof to each Member in the
form specified in Section 4. Each Member shall, as promptly as possible and in
any event within thirty (30) days from receipt of such written notice, reimburse
and pay to ASE an amount equal to the product of (i) the amount paid by ASE,
multiplied by (ii) a percentage equal to a fraction, the numerator of which is
the number of membership interest units in the Company owned by that Member and
the denominator of which is the number of membership interest units owned by all
of the Members and ASE. For example, assuming ownership of the Company as
provided in the table

                                      - 1 -
<PAGE>

under the first recital above, if ASE makes a $100,000 payment under the ASE
Guaranty, the Members would reimburse ASE in the following amounts:

<TABLE>
<CAPTION>
MEMBER                                      REIMBURSEMENT AMOUNT
------                                      --------------------
<S>                                         <C>
RAH                                             $    5,000
LEG                                             $    5,000
EJD                                             $    5,000
                                                ----------

TOTAL:                                          $   15,000
</TABLE>

2.       MEMBER NONPERFORMANCE. If for any reason one or more of the Members
does not perform his obligation under Section 1, the amount of the Section 1
reimbursement obligation for each of the performing Members shall be readjusted
so that the amount of the nonperforming Member's reimbursement obligation is
allocated among the performing Members and ASE based upon the percentage of the
Company owned by each. For example, again assuming ownership of the Company as
provided in the table under the first recital above, if ASE makes a $100,000
payment under the ASE Guaranty and if RAH is not able to perform any of his
Section 1 reimbursement obligation, then the reimbursement obligation of the
performing Members shall be as follows:

<TABLE>
<CAPTION>
MEMBER                             REIMBURSEMENT AMOUNT
------                             --------------------
<S>                                <C>
LEG                                     $   5,263
EJD                                     $   5,263
                                        ---------

TOTAL:                                  $  10,526
</TABLE>

Notwithstanding the provisions of this Section 2, a nonperforming Member
nevertheless remains primarily and absolutely liable for payment of the
reimbursement obligation set forth in Section 1. Any payment subsequently made
by the nonperforming Member shall be allocated among the performing Members and
ASE based upon the amounts paid by each and not previously reimbursed. For
example, assuming the facts as indicated in this Section 2 above, if Hoel
subsequently made a $2,500 reimbursement payment, the payment would be allocated
$2,237 to ASE and $131.50 each of LEG and EJD.

3.       OBLIGATIONS LIMITED TO ASE GUARANTY. The provisions of this Agreement
apply only to payments made by ASE under the ASE Guaranty.

4.       FORM OF NOTICE. The notice required to be furnished by ASE shall
include: (i) a copy of the demand letter or other documents received from the
Lender relating to the payment by ASE under the ASE Guaranty; (ii) a copy of the
payment check; (iii) the date on which payment was made; (iv) a calculation of
the reimbursement amount due from each Member; and (v) a statement signed by ASE
confirming the accuracy of the information contained in such notice.

                                        2
<PAGE>

5.       NOTICES. All notices hereunder shall be deemed to have been given when
personally delivered or deposited in the United States mail, mailed first class,
registered or certified, postage prepaid, addressed as follows:

         a.       If to ASE:                 Aero Systems Engineering, Inc.
                                             358 East Fillmore Avenue
                                             St. Paul, MN 55107
                                             Attn: President

         or at such other address as ASE shall have advised the Members in
         writing;

         b.       If to RAH:                 Richard A. Hoel
                                             600 Birchwood Avenue
                                             White Bear Lake, MN 55110

         or at such other address as RAH shall have advised ASE and the other
         Members in writing;

         c.       If to LEG:                 Laurence E. Gamst
                                             c/o Divine, Scherzer & Brody, Ltd.
                                             3000 Piper Jaffray Tower
                                             222 South Ninth Street
                                             Minneapolis, MN 55402

         or at such other address as LEG shall have advised ASE and the other
         Members in writing;

         d.       If to EJD:                 Edward J. Drenttel
                                             4291 Westchester Circle
                                             Eagan, MN 55123

         or at such other address as EJD shall have advised ASE and the other
         Members in writing.

6.       WAIVER, MODIFICATION OR AMENDMENT. No waiver, modification or amendment
of any term, condition or provision of this Agreement shall be valid or of any
effect unless made in writing, signed by the party to be bound or its duly
authorized representative and specifying with particularity the nature and
extent of such waiver, modification or amendment. Any waiver by any party of any
default of the other shall not effect, or impair any right arising from, any
subsequent default. Nothing herein shall limit the rights and remedies of the
parties hereto under and pursuant to this Agreement, except as specifically set
forth.

7.       SECTION HEADINGS. Section headings as to the content of particular
sections are for convenience only and are in no way to be construed as part of
this Agreement or as a limitation of the scope of the particular sections to
which they refer.

8.       ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties hereto in respect of transactions contemplated hereby and supersedes
all prior agreements and understandings between the parties with respect to such
subject matter.

                                        3
<PAGE>

9.       COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.

10.      GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota, and any proceeding for the
enforcement hereof shall be brought in federal or state courts located in
Minnesota. Both parties consent and submit to the jurisdiction of said courts
and agree that service of process may be made by publication, by registered or
certified mail, or in any manner provided under Minnesota or applicable federal
law.

11.      BENEFIT. Except as herein otherwise provided, this Agreement shall
inure to the benefit of, and shall be binding upon, the parties and their
personal representatives, heirs, successors and assigns.

12.      SEVERABILITY. In the event any part of this Agreement is found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.

         [THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.
                  SIGNATURES APPEAR ON THE FOLLOWING PAGE(s).]

                                        4
<PAGE>

[SIGNATURE PAGE TO THAT CERTAIN REIMBURSEMENT AGREEMENT, DATED OCTOBER 31,
2003.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first above written.

RAH:                                          LEG:

 /s/ Richard A. Hoel
-------------------------------------         ----------------------------------
Richard A. Hoel                               Laurence E. Gamst

EJD:                                          ASE:

 /s/ Edward J. Drenttel                       By: /s/ Charles Loux
-------------------------------------            -------------------------------
Edward J. Drenttel                                Charles H. Loux, President

                                        5

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