HEI INC
EX-10.16 PROMISSORY NOTES
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<TYPE>EX-10.16
<SEQUENCE>4
<FILENAME>c73246kexv10w16.txt
<DESCRIPTION>EX-10.16 PROMISSORY NOTES
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                                                                   Exhibit 10.16


                                 PROMISSORY NOTE
                              Amended July 17, 2002



Victoria, Minnesota


FOR VALUE RECEIVED, the undersigned, -----------("Maker") hereby promises to pay
to the order of HEI, Inc., with an address of 1495 Steiger Lake Lane, Victoria,
Minnesota, 55386, ("Holder") the principal sum of together with interest in
arrears on the unpaid principal balance from the date hereof at a floating rate
equal to the same rate paid by Holder to its bank, adjusted based on risk
assessment of the Maker, per annum in accordance with this promissory note
("Note"). In no event shall the interest rate be less than the assessed risk of
the Maker. Said sum shall be paid in the following manner:

The term of this Note is five (5) years. Interest only payments shall be made
annually (November 2, 2002 and April 2, 2003) for the first two (2) years and
annual installments shall be made thereafter. All payments shall be first
applied to interest then principal. This note may be prepaid, at any time, in
whole or in part, without penalty.

This Note is executed by Maker to evidence its indebtedness to Holder arising
out of the purchase by Maker of certain common shares of the Holder through the
exercise of stock options.

This note shall be at the option of any holder thereof be immediately due and
payable upon the occurrence of any of the following:

     1)   Failure to make any payment due hereunder within on or before it due
          date.

     2)   Breach of any condition of any security interest, mortgage, loan
          agreement, pledge agreement or guarantee granted as collateral
          security for this note.

     3)   Upon the death, incapacity, dissolution or liquidation of any of the
          undersigned, or any endorser, guarantor to surety hereto.

     4)   Upon the filing by any of the undersigned of an assignment for the
          benefit of creditors, bankruptcy or other form of insolvency, or by
          suffering an involuntary petition in bankruptcy or receivership not
          vacated within thirty (30) days.

     5)   Upon the cessation of the employment relationship or board membership,
          whether voluntary or involuntary, between the undersigned and Holder.

     6)   Upon the sale of the Holder shares purchased with the monies borrowed
          on this Note, a pro rata percentage of the number sold to the total
          amount originally purchased shall become due and payable.

The Maker represents that he has the financial ability to repay the obligations
due on this Note.

In the event this note shall be in default and placed for collection, then the
undersigned agrees to pay all reasonable attorney fees and costs of collection.
Payments not made within five (5) days of due date shall be subject to a late
charge of 1% per month of said payment. All payments hereunder shall be made to
such address as may from time to time be designated by any holder.

The undersigned agrees to remain fully bound until this note shall be fully paid
and waives demand, presentment and protest and all notices hereto and further
agrees to remain bound notwithstanding any extension, modification, waiver, or
other indulgence or discharge or release of any obligor hereunder or exchange,
substitution, or release of any collateral granted as security for this note. No
modification or indulgence by any holder hereof shall be binding unless in
writing; and any indulgence on any one occasion shall not be an indulgence for
any other or future occasion. Any modification or change in terms, hereunder
granted by any holder hereof, shall be valid and binding upon the undersigned,
notwithstanding the acknowledgement of the undersigned. The rights of any holder
hereof shall be cumulative and not necessarily successive. This note shall take
effect as a sealed instrument and shall be construed, governed, and enforced in
accordance with the laws of the State of Minnesota.


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IN WITNESS WHEREOF, this Note is executed under seal on the day, month and year
first above written.




                                            ____________________________________


ACKNOWLEDGEMENT

Acknowledged and agreed to by:

HEI, Inc.


By: _________________________________
Name:________________________________
Title:_______________________________





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