EXHIBIT 10.1.6

 

FIFTH AMENDMENT TO

SECOND AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

 

THIS FIFTH AMENDMENT (this “Amendment”) to the Second Amended and Restated Loan
and Security Agreement is entered into as of the 1st day of January, 2003, by
and between PECO II, Inc. (the “Borrower”) and The Huntington National Bank (the
“Bank”).

 

RECITALS:

 

A.  As of October 22, 1999, the Borrower and the Bank executed a certain Second
Amended and Restated Loan and Security Agreement that was amended by a certain
First Amendment to Second Amended and Restated Loan and Security Agreement,
dated as of April 28, 2000, by a certain Second Amendment to Second Amended and
Restated Loan and Security Agreement, dated as of December 29, 2000, by a
certain Third Amendment to Second Amended and Restated Loan and Security
Agreement, dated as of June 30, 2002, and by a certain Fourth Amendment to
Second Amended and Restated Loan and Security Agreement, dated as of November
14, 2002 (as so amended, the “Loan Agreement”), setting forth the terms of
certain extensions of credit to the Borrower; and

 

B.  As of October 22, 1999, the Borrower executed and delivered to the Bank,
inter alia, an amended and restated revolving note in the original principal sum
of Ten Million Dollars ($10,000,000.00) that was amended and restated by a
certain Second Amended and Restated Revolving Note, dated April 28, 2000, in the
original principal amount of up to Twenty Million Dollars ($20,000,000), as
further amended and restated by a certain Third Amended and Restated Revolving
Note, dated As of April 30, 2002, in the original principal amount of up to
Twenty Million Dollars ($20,000,000), as further amended and restated by a
certain Fourth Amended and Restated Revolving Note, dated as of June 30, 2002,
in the original principal amount of up to Ten Million Dollars ($10,000,000), and
as further amended and restated by a certain Fifth Amended and Restated
Revolving Note, dated as of November 14, 2002, in the original principal amount
of up to Two Million Dollars ($2,000,000) (hereinafter the “Revolving Note” or
the “Note”); and

 

C.  In connection with the obligations evidenced by Loan Agreement and the Note,
and at various times (prior to, as of the date of, and after the date of, the
execution of the Loan Agreement), the Borrower executed and delivered to the
Bank certain other loan documents, promissory notes, consents, assignments,
agreements and instruments in connection with the indebtedness referred to in
the Loan Agreement (all of the foregoing, together with the Note and the Loan
Agreement, are hereinafter collectively referred to as the “Loan Documents”);
and

 

D.  As of December 31, 2002, the Borrower is currently in default of Section
7.13, “Tangible Net Worth,” of the Loan Agreement (the “Identified Default”);
and

 

E.  The Borrower has requested that the Bank waive the Identified Default and
amend and modify certain terms and covenants in the Loan Agreement, and the Bank
is willing to do so upon the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises contained herein, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto for
themselves and their successors and assigns do hereby agree, represent and
warrant as follows:

 

1.  Definitions.    All capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.

 

2.  The Bank hereby waives the Identified Default for the period through and
including the date of this Amendment.

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3.  Section 1, “The Loans,” of the Loan Agreement is hereby amended to recite in
its entirety as follows:

 

1.  The Loans.

 

The Bank, subject to the terms and conditions hereof, will extend credit to the
Borrower up to the aggregate principal sum of $750,000 (the “Loans”).

 

4.   Section 1.1, “The Revolving Loan and Borrowing Base,” of the Loan Agreement
is hereby amended to recite in its entirety as follows:

 

1.1   The Revolving Loan and Borrowing Base.

 

The Bank will extend a revolving credit facility to the Borrower under which the
Bank shall make, subject to the terms and conditions hereof, loans and advances
on a revolving basis up to the principal sum of $750,000 (the “Revolving Loan”).

 

5.   Section 3.4, “Terms of Repayment,” of the Loan Agreement is hereby amended
to recite in its entirety as follows:

 

3.4   Terms of Repayment.

 

The Loans shall be evidenced by a commercial promissory note or by one or more
commercial promissory notes subsequently executed in substitution therefor, each
in substantially the form set forth in Exhibit A-1 attached to the Fifth
Amendment to Second Amended and Restated Loan and Security Agreement dated as of
January 1, 2003. Repayment of the Loans shall be made in accordance with the
terms of the commercial promissory notes then outstanding pursuant to this
Agreement.

 

6.   The first paragraph in Section 7.13, “Tangible Net Worth,” of the Loan
Agreement is hereby amended to recite as follows:

 

7.13   Tangible Net Worth.

 

The Borrower, on a consolidated basis, shall achieve as of the respective dates
set forth below a Tangible Net Worth of not less than (i) $65,000,000, as of
March 31, 2003, (ii) $61,000,000, as of June 30, 2003, and (iii) $56,000,000, as
of September 30, 2003. In addition, the Borrower, on a consolidated basis, shall
maintain at all times a Tangible Net Worth of not less than $53,000,000, for the
period beginning December 31, 2003, and continuing at all times thereafter.

 

The remainder of Section 7.13 shall remain as originally written.

 

7.   Section 7.14, “Liquidity,” of the Loan Agreement is hereby amended to
recite in its entirety as follows:

 

7.14   Liquidity.

 

The Borrower, on a consolidated basis, shall maintain at all times Liquidity of
not less than (i) $13,000,000, for the period beginning January 1, 2003, and
continuing through and including May 30, 2003, and (ii) $15,000,000, beginning
May 31, 2003, and continuing at all times thereafter.

 

“Liquidity” means, as of the date of determination, the sum of (i) the
Borrower’s cash, on a consolidated basis, plus (ii) Marketable Securities.

 

“Marketable Securities” means, as of the date of determination, the sum, on a
consolidated basis, of the Borrower’s

 

(i)  marketable direct obligations issued or unconditionally guaranteed by the
United States government and backed by the full faith and credit of the United
States government;

 

(ii)  domestic and Eurodollar certificates of deposit and time deposits,
bankers’ acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are

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rated A-l (or better) by Standard & Poor’s Corporation (or its successors) or
P-l (or better) by Moody’s Investors Service, Inc. (or its successors);

 

(iii)  commercial paper of United States and foreign banks and bank holding
companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor’s Corporation (or its successors)
or P-l (or better) by Moody’s Investors Service, Inc. (or its successors);

 

(iv)  marketable direct obligations of any State of the United States of America
or any political subdivision of any such State given on the date of such
investment the highest credit rating by Moody’s Investor Service, Inc. (or its
successors) and Standard & Poor’s Corporation (or its successors); and

 

(v)  money market funds organized under the laws of the United States or any
state thereof that invests in any of the investments identified under clauses
(i), (ii), (iii) and (iv) of this definition;

 

provided, that the maturities of any such obligations, certificates or
instruments referred to in clauses (i) through (v) shall not exceed one hundred
eighty (180) days.

 

Without limiting the generality of the foregoing, any amounts maintained by the
Borrower in deposit accounts at the Bank, which accounts are pledged to
Huntington as security for the Obligations, shall be included in the calculation
of Liquidity.

 

8.  Conditions of Effectiveness.    This Amendment shall become effective as of
January 1, 2003, upon satisfaction of all of the following conditions precedent:

 

(a)  The Bank shall have received two originals of this Amendment duly executed
by the Borrower, one original of a certain Pledge and Security Agreement (with
respect to a deposit account (the “Pledged Account”) to be maintained by the
Borrower at Huntington) duly executed by the Borrower, one original of a Sixth
Amended and Restated Revolving Note, and such other certificates, instruments,
documents, and agreements as may be required by the Bank, each of which shall be
in form and substance satisfactory to the Bank and its counsel; and

 

(b)  The sum of not less than $10,250,000 shall have been deposited into the
Pledged Account; amount held in the pledged account will be reduced to the
extent of any permanent reduction of the Borrower’s obligations to the bank.

 

(c)  The Bank shall have executed this Amendment; and

 

(d)  The representations contained in the immediately following paragraph shall
be true and accurate.

 

9.  Representations.    The Borrower represents and warrants that after giving
effect to this Amendment (a) each and every one of the representations and
warranties made by or on behalf of the Borrower in the Loan Agreement or the
Loan Documents is true and correct in all respects on and as of the date hereof,
except to the extent that any of such representations and warranties related, by
the expressed terms thereof, solely to a date prior hereto; (b) the Borrower has
duly and properly performed, complied with and observed each of its covenants,
agreements and obligations contained in the Loan Agreement and Loan Documents;
and (c) no event has occurred or is continuing, and no condition exists which
would constitute an Event of Default or a Pending Default.

 

10.  Amendment to Loan Agreement.    (a) Upon the effectiveness of this
Amendment, each reference in the Loan Agreement to “Second Amended and Restated
Loan and Security Agreement,” “Loan and Security Agreement,” “Loan Agreement,”
“Agreement,” the prefix “herein,” “hereof,” or words of similar import, and each
reference in the Loan Documents to the Loan Agreement, shall mean and be a
reference to the Loan Agreement as amended hereby. (b) Except as modified
herein, all of the representations, warranties, terms, covenants and conditions
of the Loan Agreement, the Loan Documents and all other agreements executed in
connection therewith shall remain as written originally and in full force and
effect in accordance with their respective terms, and nothing herein shall
affect, modify, limit or impair any of the rights and powers which the Bank may
have thereunder. The amendment set forth herein shall be limited precisely as
provided for herein, and

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shall not be deemed to be a waiver of, amendment of, consent to or modification
of any of the Bank’s rights under or of any other term or provisions of the Loan
Agreement, any Loan Document, or other agreement executed in connection
therewith, or of any term or provision of any other instrument referred to
therein or herein or of any transaction or future action on the part of the
Borrower which would require the consent of the Bank, including, without
limitation, waivers of Events of Default which may exist after giving effect
hereto. The Borrower ratifies and confirms each term, provision, condition and
covenant set forth in the Loan Agreement and the Loan Documents and acknowledges
that the agreement set forth therein continue to be legal, valid and binding
agreements, and enforceable in accordance with their respective terms.

 

11.  No Waiver.    Except to the extent provided in paragraph 2 above, nothing
in this Amendment shall be construed to waive, modify, or cure any default or
Event of Default that exist or may exist under the Loan Agreement or the Loan
Documents.

 

12.  Authority.    The Borrower hereby represents and warrants to the Bank that
(a) the Borrower has legal power and authority to execute and deliver the within
Amendment; (b) the officer executing the within Amendment on behalf of the
Borrower has been duly authorized to execute and deliver the same and bind the
Borrower with respect to the provisions provided for herein; (c) the execution
and delivery hereof by the Borrower and the performance and observance by the
Borrower of the provisions hereof do not violate or conflict with the articles
of incorporation, regulations or by-laws of the Borrower or any law applicable
to the Borrower or result in the breach of any provision of or constitute a
default under any agreement, instrument or document binding upon or enforceable
against the Borrower; and (d) this Amendment constitutes a valid and legally
binding obligation upon the Borrower in every respect.

 

13.  Counterparts.    This Amendment may be executed in two or more
counterparts, each of which, when so executed and delivered, shall be an
original, but all of which together shall constitute one and the same document.
Separate counterparts may be executed with the same effect as if all parties had
executed the same counterparts.

 

14.  Costs and Expenses.    The Borrower agrees to pay on demand in accordance
with the terms of the Loan Agreement all costs and expenses of the Bank in
connection with the preparation, reproduction, execution and delivery of this
Amendment and all other loan documents entered into in connection herewith,
including the reasonable fees and out-of-pocket expenses of the Bank’s counsel
with respect thereto.

 

15.  Governing Law.    This Amendment shall be governed by and construed in
accordance with the law of the State of Ohio, without regard to the conflict of
laws principles thereof.

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IN WITNESS WHEREOF, the Borrower and the Bank have hereunto set their hands as
of the date first set forth above.

 

THE BORROWER:

 

PECO II, INC.

 

By:

 

/s/    ALLEN J. CIZNER        

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Its:

 

President and Chief Executive Officer

By:

 

/s/    BARBARA A. LUCAS        

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Its:

 

Acting Chief Financial Officer

 

THE BANK:

 

THE HUNTINGTON NATIONAL BANK

 

By:

 

/s/    JEFFREY CLAWSON        

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Its:

 

Assistant Vice President

 

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EXHIBIT A-1

 

THE HUNTINGTON NATIONAL BANK

Sixth Amended and Restated Revolving Note

 

 

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City Office                                          Division
                                         Branch                          x
Secured

 

Account No.                                                               Note
No.                                                       ¨ Unsecured

 

Account Name    PECO II, Inc.

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x Corporation                                          ¨ Partnership
                                         ¨ Individual/Proprietorship

 

¨ Other

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$750,000

 

Galion, Ohio

 

            , 2003

 

FOR VALUE RECEIVED, the undersigned promises to pay to the order of THE
HUNTINGTON NATIONAL BANK (hereinafter called the “Bank,” which term shall
include any holder hereof) at such place as the Bank may designate or, in the
absence of such designation, at any of the Bank’s offices, the sum of Seven
Hundred Fifty Thousand Dollars ($750,000) or so much thereof as shall have been
advanced by the Bank at any time and not thereafter repaid (hereinafter referred
to as “Principal Sum”) together with interest as hereinafter provided and
payable at the time and in the manner hereinafter provided. The proceeds of the
loan evidenced hereby may be advanced, repaid and readvanced in partial amounts
during the term of this revolving note (this “Note”) and prior to maturity. Each
such advance shall be made to the undersigned upon receipt by the Bank of the
undersigned’s application therefor and disbursement instructions, which shall be
in such form as the Bank shall from time to time prescribe. The Bank shall be
entitled to rely on any oral or telephonic communication requesting an advance
and/or providing disbursement instructions hereunder, which shall be received by
it in good faith from anyone reasonably believed by the Bank to be the
undersigned, or the undersigned’s authorized agent. The undersigned agrees that
all advances made by the Bank will be evidenced by entries made by the Bank into
its electronic data processing system and/or internal memoranda maintained by
the Bank. The undersigned further agrees that the sum or sums shown on the most
recent printout from the Bank’s electronic data processing system and/or on such
memoranda shall be rebuttably presumptive evidence of the amount of the
Principal Sum and of the amount of any accrued interest.

 

This Note is executed and the advances contemplated hereunder are to be made
pursuant to a Second Amended and Restated Loan and Security Agreement by and
between the undersigned and the Bank dated October 22, 1999 (as amended,
restated, modified or otherwise supplemented from time to time, herein the “Loan
Agreement”), to which reference is hereby made for a more complete statement of
the terms and conditions contained therein. Terms defined in the Loan Agreement
and not otherwise defined herein are used herein with the meanings ascribed to
such terms in the Loan Agreement.

 

This Note is given in substitution for, and replacement of, that certain Fifth
Amended and Restated Revolving Note dated as of November 14, 2002, in the
original principal sum of $2,000,000, and not as a novation thereof.

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INTEREST

 

Prior to maturity, interest will accrue on the unpaid balance of the Principal
Sum at a variable rate of interest per annum, as selected by the undersigned in
accordance with this Note (hereinafter called the “Contract Rate”), which shall
change in the manner set forth below, equal to:

 

(1)  the Prime Commercial Rate (as hereinafter defined) minus 0.50 percentage
points (the “Prime Rate”); or

 

(2)  2.00 percentage points in excess of the Daily LIBOR (as hereinafter
defined).

 

Initially, interest shall accrue hereunder based upon the Daily LIBOR. The
undersigned shall give the Bank written notice of each request to change the
interest index from the Daily LIBOR to the Prime Commercial Rate, or vice versa,
or to request disbursement of an advance with respect to which interest shall
accrue at a rate calculated with reference to the Daily LIBOR, no later than
three (3) Banking Days (as hereinafter defined) prior to the date of the
proposed change or the requested date of disbursement, as the case may be. All
such written notices shall be directed by the undersigned to the Bank’s officer
who is handling the undersigned’s obligations on behalf of the Bank and must be
received by the Bank at least three (3) Banking Days prior to the date of the
change or the requested date of disbursement.

 

Subject to any maximum or minimum interest rate limitation specified herein or
by applicable law, the Contract Rate shall change automatically without notice
to the undersigned immediately on each Banking Day with each change in the Prime
Commercial Rate or in the Daily LIBOR or the Reserve Requirement, as applicable,
with any change thereto effective as of the opening of business on the day of
the change.

 

If the obligation evidenced by this Note is not paid at maturity, whether
maturity occurs by lapse of time, demand, acceleration or otherwise, the unpaid
balance of the Principal Sum and any unpaid interest shall, thereafter until
paid, bear interest at a rate equal to 2.00 percentage points in excess of the
Contract Rate.

 

As used herein, “Prime Commercial Rate” shall mean the rate established by the
Bank from time to time based on its consideration of economic, money market,
business and competitive factors, and it is not necessarily the Bank’s most
favored rate.

 

As used herein, “Daily LIBOR” shall mean the rate obtained by dividing: (1)
actual or estimated per annum rate, or the arithmetic mean of the per annum
rates, of interest for deposits in U.S. dollars for one (1) month periods, as
offered and determined by the Bank in its sole discretion based upon information
which appears on page LIBOR01, captioned British Bankers Assoc. Interest
Settlement Rates, of the Reuters America Network, a service of Reuters America
Inc. (or such other page that may replace that page on that service for the
purpose of displaying London interbank offered rates; or, if such service ceases
to be available, such other reasonably comparable money rate service as the Bank
may select) or upon information obtained from any other reasonable procedure, on
each date the Daily LIBOR is determined; by (2) a percentage (the “Reserve
Requirement”) equal to one hundred percent minus the stated maximum rate
(expressed as a percentage), if any, of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) that is specified on each date the Daily LIBOR is determined by the
Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as “Eurocurrency liabilities” in
Regulation D of such Board) maintained by a member bank of such System, or any
other regulations or any governmental authority having jurisdiction with respect
thereto, all as conclusively determined by the Bank, absent manifest error, such
sum to be rounded up, if necessary, to the nearest whole multiple of
one-sixteenth of one percent (1/16 of 1.0%) per annum.

 

As used herein, “Banking Day” shall mean any day other than a Saturday or a
Sunday on which banks are open for business in Columbus, Ohio, and on which
banks in London, England, settle payments.

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All interest shall be calculated on the basis of a 360 day year for the actual
number of days the Principal Sum or any part thereof remains unpaid. There shall
be no penalty for prepayment. The amount of any payment shall first be applied
to the payment of any interest which is due.

 

In the event that the Bank reasonably determines that by reason of (1) any
change arising after the date of this Note affecting the interbank eurocurrency
market or affecting the position of the Bank with respect to such market,
adequate and fair means do not exist for ascertaining the applicable interest
rates by reference to which the Daily LIBOR then being determined is to be
fixed, (2) any change arising after the date of this Note in any applicable law
or governmental rule, regulation or order (or any interpretation thereof,
including the introduction of any new law or governmental rule, regulation or
order), or (3) any other circumstance affecting the Bank or the interbank market
(such as, but not limited to, official reserve requirements required by
Regulation D of the Board of Governors of the Federal Reserve System), the Daily
LIBOR plus the applicable spread shall not represent the effective pricing to
the Bank of accruing interest based upon the Daily LIBOR, then, and in any such
event, interest shall accrue hereunder as of the effective date of any such
determination at a rate calculated with reference to the Prime Commercial Rate
(as set forth above) and the ability of the undersigned to request that interest
accrue hereunder based upon the Daily LIBOR shall be suspended until the Bank
shall notify the undersigned that the circumstances causing such suspension no
longer exist.

 

In the event that on any date the Bank shall have reasonably determined that
accruing interest hereunder based upon the Daily LIBOR has become unlawful by
compliance by the Bank in good faith with any law, governmental rule, regulation
or order, then, and in any such event, the Bank shall promptly give notice
thereof to the undersigned. In such case, the ability of the undersigned to
request that interest accrue hereunder based upon the Daily LIBOR shall be
terminated and, when required by law, interest will accrue hereunder based upon
the Prime Commercial Rate.

 

If, due to (1) the introduction of or any change in or in the interpretation of
any law or regulation, (2) the compliance with any guideline or request from any
central bank or other public authority (whether or not having the force of law),
or (3) the failure of the undersigned to pay any amount when required by the
terms of this Note, there shall be any loss or increase in the cost to the Bank
of accruing interest hereunder based upon the Daily LIBOR, if applicable, then
the undersigned agree that the undersigned shall, from time to time, upon demand
by the Bank, pay to the Bank additional amounts sufficient to compensate the
Bank for such loss or increased cost. A certificate as to the amount of such
loss or increase cost, submitted to the undersigned by the Bank, shall be
conclusive evidence, absent manifest error, of the correctness of such amount.

 

MANNER OF PAYMENT

 

The Principal Sum shall be due and payable on June 30, 2004, and at maturity,
whether by demand, acceleration or otherwise. Accrued interest shall be due and
payable monthly beginning on April 15, 2003, and continuing on the 15th day of
each month thereafter, and at maturity, whether by demand, acceleration or
otherwise.

 

LATE CHARGE

 

Any installment or other payment not made within 10 days of the date such
payment or installment is due shall be subject to a late charge equal to 5% of
the amount of the installment or payment.

 

DEFAULT

 

Upon the occurrence of any of the following events:

 

(a)  the undersigned fails to make any payment of interest or of the Principal
Sum on or before the date such payment is due;

 

(b)  an “Event of Default” under the Loan Agreement shall have occurred;

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then the Bank may, at its option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Bank shall institute any action
for the enforcement or collection of the obligations evidenced hereby, the
undersigned agrees to pay all costs and expenses of such action, including
reasonable attorneys’ fees, to the extent permitted by law.

 

GENERAL PROVISIONS

 

The undersigned, and any indorser, surety, or guarantor, hereby severally waive
presentment, notice of dishonor, protest, notice of protest, and diligence in
bringing suit against any party hereto, and consent that, without discharging
any of them, the time of payment may be extended an unlimited number of times
before or after maturity without notice. The Bank shall not be required to
pursue any party hereto, including any guarantor, or to exercise any rights
against any collateral herefor before exercising any other such rights.

 

No waiver of any term or condition of this Note shall be effective unless in
writing and signed by the party giving or granting the waiver. No amendment of
any term or condition of this Note shall be effective unless in writing and
signed by the undersigned and the Bank. No failure or delay on the part of the
Bank in exercising any right, power or privilege under this Note, related loan
documents or law, nor any course of dealing, shall operate as a waiver of any
such right, power or privilege or preclude any other or further exercise thereof
or of any other right, power or privilege.

 

The undersigned agrees that, to the extent that the undersigned makes a payment
or payments to the Bank, or the Bank receives any proceeds of collateral
security, which payment or payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to any of the undersigned, its estate, trustee,
receiver or any other party, including without limitation any guarantor, under
any bankruptcy or insolvency law, or under any other state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligations under this Note, or the part thereof which has been paid,
reduced or satisfied by such amount, shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred.

 

The obligations evidenced hereby may from time to time be evidenced by another
note or notes given in substitution, renewal or extension hereof. Any security
interest or mortgage which secures the obligations evidenced hereby shall remain
in full force and effect notwithstanding any such substitution, renewal, or
extension.

 

The captions used herein are for references only and shall not be deemed a part
of this Note. If any of the terms or provisions of this Note shall be deemed
unenforceable, the enforceability of the remaining terms and provisions shall
not be affected. This Note shall be governed by and construed in accordance with
the law of the State of Ohio, without regard to the conflicts of law principles
thereof.

 

WAIVER OF RIGHT TO TRIAL BY JURY

 

THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS NOTE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
UNDERSIGNED OR THE BANK WITH RESPECT TO THIS NOTE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE
UNDERSIGNED OR THE BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE

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CONSENT OF THE UNDERSIGNED TO THE WAIVER OF THE RIGHT OF THE UNDERSIGNED TO
TRIAL BY JURY.

 

WARRANT OF ATTORNEY

 

The undersigned authorizes any attorney at law to appear in any Court of Record
in the State of Ohio or in any state or territory of the United States after the
above indebtedness becomes due, whether by acceleration or otherwise, to waive
the issuing and service of process, and to confess judgment against the
undersigned in favor of the Bank for the amount then appearing due together with
costs of suit, and thereupon to waive all errors and all rights of appeal and
stays of execution.

 

WARNING—BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.

 

PECO II, INC.

By:

 

COPY    

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Its:

 

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By:

 

COPY  

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Its:

 

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