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IIIPROMISSORY NOTE
<br /> $50,000.00 Elk River,Minnesota
<br /> January 29 , 1998
<br /> THE UNDERSIGNED WARRANTS THAT THE PROCEEDS FROM THIS NOTE SHALL BE USED
<br /> SOLELY FOR BUSINESS PURPOSES.
<br /> FOR VALUE RECEIVED,the undersigned,Northstar Die Casting,L.L.C.,a Minnesota limited liability
<br /> company,promises to pay to the order of the Economic Development Authority of the City of Elk River(the
<br /> "Lender"),at its office in Elk River,Minnesota,or at such other place as any present or future holder of this Note may
<br /> designate from time to time,the principal sum of Fifty Thousand and no/100 Dollars($50,000)(the"Principal
<br /> Balance"),plus interest thereon at the rate of eight and one-half percent(8.5%)per annum.
<br /> The principal amount under this Note shall be disbursed as follows:on the date of execution of this Note,
<br /> Lender shall disburse the First Draw in the amount of$ //,08 3.60;on March 1,1998,Lender shall disburse the
<br /> Second Draw in the amount of$ ;and on April 1,1998,Lender shall disburse the Third Draw
<br /> in an amount equal to the remaining amount of principal under the Note,$ .
<br /> On May 1,1998,the undersigned shall pay to Lender all accrued interest owing as of that date. Further,on
<br /> May 1,1998,and on the first day of each month thereafter up to and including April 1,2003,the undersigned shall
<br /> make monthly payments of principal and interest of$1,025.83. The entire unpaid Principal Balance hereof and all
<br /> accrued and unpaid interest hereon shall be fully due and payable on May 1,2003.
<br /> This Note is secured by a Security Agreement covering certain personal property owned by the undersigned
<br /> located in Sherburne County,Minnesota,and a Guaranty made by Steve Whiting and Larry Lawson("Guarantors"),
<br /> each of even date herewith.
<br /> Payments hereunder shall be applied first to payment of accrued interest and then to reduction of principal,
<br /> except that if any advance made by the holder hereof under the terms of any instrument securing this Note is not repaid,
<br /> any monies received,at the option of the holder,may first be applied to repay such advances,plus interest thereon,and
<br /> •the balance,if any,shall be applied as above. Interest shall be computed on the basis of the actual number of days
<br /> elapsed in a 360-day year..
<br /> The undersigned may prepay this Note in whole or in part at any time without penalty. No prepayment,
<br /> however,shall suspend any required payments of either principal or interest under this Note or reduce the amount of
<br /> any scheduled monthly payment.
<br /> If any installment or payment is paid more than ten(10)days after the due date thereof,the undersigned agree
<br /> to pay a late payment charge of eight percent(8%)of the installment or payment to cover the expenses of collection.
<br /> This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights the holder hereof
<br /> may have,including the right to declare the Principal Balance and interest thereon immediately due and payable.
<br /> The occurrence of any of the following events chall constitute an Event of Default under this Note:(i)any
<br /> breach or default in the payment of this Note;or(ii)any breach or default under the terms of the Security Agreement
<br /> or the Guaranty or under any other note,obligation,mortgage,guaranty,other agreement,or other writing heretofore,
<br /> herewith or hereafter existing to which any maker,endorser,any guarantor or surety of this Note or any other person
<br /> providing security for this Note or for guaranty of this Note is a party;or(iii)the insolvency,death,dissolution,
<br /> liquidation, merger or consolidation of any such maker,endorser,guarantor,surety or other person;or(iv)any
<br /> appointment of a receiver,trustee or similar officer of any property of any such maker,endorser,guarantor,surety or
<br /> other person;or(v)any assignment for the benefit of creditors of any such maker,endorser,guarantor,surety or other
<br /> person;or(vi)any commencement of any proceeding under any bankruptcy,insolvency,receivership,dissolution,
<br /> liquidation or similar law by or against any such maker,endorser,guarantor,surety or other person;or(vii)the sale,
<br /> lease or other disposition(whether in one transaction or in a series of transactions)to one or more persons of all or a
<br /> substantial part of the assets of any such maker,endorser,guarantor,surety or other person;or(viii)any such maker,
<br /> endorser,guarantor,surety or other person takes any action to revoke or terminate any agreement,liability or security
<br /> in favor of the Lender,or(ix)the entry of any judgment or other order for the payment of money in the amount of
<br /> $5,000.00 or more against any such maker,endorser,guarantor,surety or other person;or(x)the issuance or levy of
<br /> any writ,warrant,attachment,garnishment,execution or other process against any property of any such maker,
<br /> endorser,guarantor,surety or other person;or(xi)the attachment of any tax lien to any property of any such maker,
<br /> endorser,guarantor,surety or other person;or(xii)any statement,representation or warranty made by any such maker,
<br /> endorser,guarantor,surety or other person(or any representative of any such maker,endorser,guarantor,surety or
<br /> other person)to any present or future holder of this Note at any time shall be incorrect or misleading in any material
<br /> respect when made;or(xiii)there is a material adverse change in the condition(financial or otherwise),business or
<br /> •property of any such maker,endorser,guarantor,surety or other person;or(xiv)any present or future holder of this
<br /> Note chall in good faith believe that the prospect of due and punctual payment or performance of this Note or the due
<br /> and punctual payment or performance of any other note,obligation,mortgage,guaranty,or other agreement heretofore,
<br /> herewith or hereafter given to or acquired by any present or future holder of this Note in connection with this Note is
<br /> impaired; (xv) a default by the undersigned on any obligations they owe to other creditors; (xvi)failure of the
<br /> PhillA 543264.2
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