LOAN AGREEMENT
                                 --------------


                  THIS LOAN  AGREEMENT  is entered into as of this ______ day of
_________,  2000, among The Ohio Art Company,  an Ohio corporation ("Ohio Art"),
Strydel,  Inc., an Ohio corporation  ("Strydel")  (Ohio Art and Strydel shall be
referred  to  herein   individually   as  a  "Borrower"  and   collectively   as
"Borrowers"),  and Fifth Third Bank, Northwestern Ohio, N.A., a national banking
association ("Bank").

                  ARTICLE I.  DEFINITIONS.
                              -----------

                  For  purposes of this  Agreement,  the  following  capitalized
terms shall have the following meanings:

                  1.1  Agreement  shall mean this Loan  Agreement as  originally
executed and as the same may from time to time be amended or supplemented.

                  1.2  Business Day shall mean a day when  commercial  banks are
open for business in Toledo, Ohio.

                  1.3 CIT shall mean The CIT  Group/Business  Credit,  Inc., its
successors and assigns.

                  1.4  Closing  Date  shall  mean the date of the  making of the
Loan.

                  1.5  Collateral  shall mean all real and personal  property of
Borrowers, including, but not limited to:

                  (a) Each Borrower's entire inventory of goods held for sale or
lease or furnished or to be furnished  under  contracts of service,  whether now
owned  or  hereafter  acquired,  together  with  all  attachments,  accessories,
additions  and parts  used or  intended  to be used  therewith,  whether  now or
hereafter  attached,  installed,  added or affixed to such  inventory or stored,
with  or  without   identification  to  specific  inventory,   as  well  as  all
substitutions and replacements thereof (hereinafter called the "Inventory"), and
the proceeds (cash and non-cash) of all Inventory, including



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accounts,  chattel paper, returned or repossessed goods and the products of such
Inventory,  and any mass  resulting  from the  commingling  thereof  with  other
property in whatever form the proceeds, products or mass may be.

                  (b) Each  Borrower's  entire  inventory  of  parts,  supplies,
accessories  and  accessory  tools,  whether  now owned or  hereafter  acquired,
together with all attachments,  additions and parts used,  useful or intended to
be used therewith,  and all  substitutions  and  replacements  thereof,  and the
proceeds (cash and non-cash) of all such inventory,  including accounts, chattel
paper,  returned or repossessed goods and the products of such inventory and any
mass resulting from the commingling thereof with other property in whatever form
the proceeds, products or mass may be.

                  (c) All of each Borrower's  accounts  receivable and rights to
the payment of money  however  evidenced or arising,  extending to each existing
and  future  account,   chattel  paper,   contract  right,  general  intangible,
instrument  and document,  as those terms are defined by the Uniform  Commercial
Code, and all trademarks,  copyrights,  patents, licenses, inventions, choses in
action and goods giving rise to each  Borrower's  right to the payment of money,
including  but not limited to such goods in which each  Borrower  has retained a
security  interest or which have been reclaimed,  returned or  repossessed,  all
documents of title and warehouse  receipts,  and all book  entries,  records and
files relating to the foregoing, and the proceeds (cash and non-cash) of all the
foregoing.

                  (d) All of each  Borrower's  equipment,  whether  now owned or
hereafter  acquired,  wherever located,  including but not limited to machinery,
tools,  accessory tools, motor vehicles,  furniture and fixtures,  together with
all  accessions,  parts,  accessories,  attachments  and  appurtenances  thereto
appertaining,  attached or  installed  or kept or used or intended to be used in
connection   therewith  and  all  substitutions  or  renewals  thereof,   and/or
improvements,  replacements  and additions  thereto,  and all proceeds (cash and
non-cash) of all the foregoing.

                  1.6 Collateral  Documents shall mean the Security  Agreements,
related financing statements and the Mortgages.



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                  1.7  Dollars and $ shall mean  United  States  dollars or such
coin or currency of the United States of America as at the time of payment shall
be legal  tender  for the  payment  of public  and  private  debts in the United
States.

                  1.8 Guarantor shall mean Trinc Co., an Ohio corporation.

                  1.9 Guaranty shall mean the Unconditional Cognovit Guaranty of
Guarantor.

                  1.10  Intercreditor  Agreement  shall mean the agreement to be
executed by Bank and CIT described in Section 4.1(k) hereof.

                  1.11 Loan  shall  mean the Term Loan  described  in Article II
hereof.

                  1.12 Note  shall  mean the Term Note  described  in Article II
hereof.

                  1.13 Mortgages shall have the meaning described in
Section 4.1(e) hereof.

                  1.14 Permitted Liens shall mean the following:

                  (a)      Liens for taxes, assessments, or governmental
                           charges or levies the payment of which is not at
                           the time required by law;

                  (b)      Liens imposed by law, such as liens of carriers,
                           warehousemen, mechanics, and materialmen arising in
                           the ordinary course of business for sums not yet
                           due or being contested by appropriate proceedings
                           promptly initiated and diligently conducted,
                           provided other appropriate provision, if any, as
                           shall be required by GAAP shall have been made
                           therefor;

                  (c)      Liens  incurred  or  deposits  made  in the  ordinary
                           course  of  business  in  connection   with  workers'
                           compensation, unemployment insurance, and other types
                           of social  security,  or to secure the performance of
                           tenders, statutory obligations, and surety and appeal
                           bonds, or to secure the

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                           performance and return of money bonds and other
                           similar obligations, excluding obligations for the
                           payment of borrowed money;

                  (d)      Purchase money security interests granted by
                           Borrower incidental to the ordinary conduct of
                           Borrower's business;

                  (e)      Liens incurred in connection with loans by CIT as
                           described in the Intercreditor Agreement; and

                  (f)      Liens evidenced by the Mortgages and Security
                           Agreements, as well as any other liens in favor of
                           Bank or any affiliate of Bank.

                  1.15 Prime Rate shall mean the variable  prime lending rate of
the Bank in effect  from time to time,  changing  as and when  said  Prime  Rate
changes.

                  1.16 Security  Agreements  shall mean the security  agreements
described in Section 4.1(b).

                  1.17  Subsidiary  shall  mean any  corporation  at  least  the
majority of whose  securities  having  ordinary voting power for the election of
directors  (other  than  securities  having  such  power  only by  reason of the
happening of a contingency) are at the time owned by Ohio Art and/or one or more
of its Subsidiaries.

                  Each  accounting  term not defined herein and each  accounting
term  partly  defined  herein to the extent not  defined  shall have the meaning
given to it under generally accepted accounting principles,  as in effect on the
date of this Agreement.

                  ARTICLE II.  LOAN.
                               ----

                  2.1 The Term  Loan and Term  Note.  Subject  to the  terms and
conditions of this  Agreement,  Bank agrees to make a loan in the amount of Five
Million  Two  Hundred  Thousand  Dollars  ($5,200,000.00)  (the "Term  Loan") to
Borrower  for a term of seven (7)  years.  The Term Loan shall be secured by the
Collateral Documents and evidenced by an Amended and Restated Promissory Note in
substance and form acceptable to Bank (the "Term Note").


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<PAGE>



                  2.1.1 Interest on Loan. The Term Loan shall bear interest from
the date  thereof at an initial  floating  rate equal to the Prime Rate plus two
percent (2%) for the first year of the Term Loan,  which rate shall  increase by
one-half percent (1/2%) on each anniversary date of the Term Note until the Term
Note is paid in full.

                  2.1.2  Payment  of  Loan.  The  Term  Loan  shall  be  paid in
eighty-four  (84)  consecutive  monthly  principal and interest  installments of
Ninety-one  Thousand Five Hundred and No/100 Dollars  ($91,500.00)  each, on the
1st day of each month  commencing  May 1, 2000,  through April 1, 2007,  the due
date of the Term Note, at which time all principal and interest owing thereunder
shall be paid in full.  All interest shall be computed on the basis of a year of
three hundred sixty (360) days, notwithstanding actual days elapsed. Any payment
which falls on a non-Business  Day shall be  rescheduled to the next  succeeding
Business Day and interest shall continue to accrue to such rescheduled  Business
Day.

                  2.1.3 Late Charge.  Any Term Note  payment  which is more than
ten (10) days  overdue will be assessed a late charge equal to five percent (5%)
of the overdue payment.

                  2.1.4  Default Rate of Interest.  If the Term Note is not paid
in full at maturity (whether by acceleration or otherwise) or if any installment
of the Term Note is not paid when due, or in the event any other  default  under
Article VI hereof occurs and is continuing under this Agreement, the Note or any
of the  Collateral  Documents,  Bank shall have the right,  without  notice,  to
increase the annual rate of interest on the entire unpaid  principal  balance of
the Term  Note to six  percent  (6%)  above  the  interest  rate  then in effect
hereunder until the entire amount of principal and/or interest then due has been
paid in full or the default is cured.

                  2.1.5 Amendment and Restatement.  The Term Loan represents the
terming out of the balance of the revolving loan from Bank to Ohio Art evidenced
by a promissory  revolving note in the principal amount of $18,000,000.00  dated
as of May 20, 1998 and amended as of February 2, 1999. This Agreement represents
an  amendment  and  restatement  of the  existing  Loan  Agreement  and  related
documents among Borrowers and Bank. None of the funds evidenced by the Term Note
constitute a new loan.

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                  ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF
                                ---------------------------------
BORROWERS.
---------

                  In order to induce Bank to enter into this Agreement,  each of
Borrowers, on its own behalf, makes the following representations and warranties
which shall survive the  execution  and delivery of this  Agreement and the Note
and the  making of the Loans but which,  unless  otherwise  indicated,  shall be
deemed to be made as of the Closing Date;

                  3.1 Due Organization. Borrower is a duly organized and validly
existing  corporation  in good  standing  under  the  laws  of Ohio  and is duly
qualified  to conduct  business as a foreign  corporation  in all  jurisdictions
where the failure to do so would have a material adverse effect on its business.

                  3.2  Requisite  Power.  Borrower has all  requisite  corporate
power and all  governmental  licenses,  authorizations,  consents and  approvals
necessary to own and operate its  properties and to carry on its business as now
conducted and as proposed to be conducted,  except for licenses,  authorizations
and  approvals  the absence of which could not  reasonably be expected to have a
material  adverse effect on its business.  Borrower has all requisite  corporate
power to borrow the sums  provided  for in this  Agreement,  and to execute  and
deliver this Agreement,  the Note and the Collateral  Documents.  The execution,
delivery  and  performance  of this  Agreement,  the  Note  and  the  Collateral
Documents have been duly authorized by Borrower's  Board of Directors and do not
require any consent or approval of the stockholders of Borrower.

                  3.3 Binding  Agreement.  This Agreement has been duly executed
and  delivered  by Borrower  and  constitutes,  and the Note and the  Collateral
Documents when executed and delivered by Borrower will constitute,  legal, valid
and binding  obligations of Borrower,  enforceable against it in accordance with
their  terms,  except  (i) as the  enforceability  thereof  may be  affected  by
bankruptcy,  insolvency or similar laws affecting the  enforcement of creditors'
rights generally and (ii) the availability of certain equitable  remedies may be
limited by certain equitable principles of general applicability.

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                  3.4 Other Agreements. The execution,  delivery and performance
of this  Agreement,  the Note and the Collateral  Documents will not violate any
provision of law or regulation  (including,  without limitation,  regulations of
the Federal Reserve Board), or any order of any governmental  authority,  court,
arbitration board or tribunal or the Articles of Incorporation, By- Laws or Code
of  Regulations  of Borrower,  or result in the breach of,  constitute a default
under,  contravene  any provisions of, or result in the creation of any security
interest,  lien,  charge or  encumbrance  upon any of the  property or assets of
Borrower  pursuant to any indenture or agreement to which Borrower or any of its
properties is bound, except for security interests and liens in favor of Bank as
provided herein.

                  3.5  Litigation.  There  is no  litigation,  investigation  or
proceeding  in any court or before  any  arbitrator  or  regulatory  commission,
board, administrative agency or other governmental authority pending, or, to the
knowledge of Borrower,  threatened  against or affecting  Borrower or any of its
properties,  which (i) could  reasonably  be  expected to  materially  adversely
affect the performance by Borrower of this Agreement, the Note or the Collateral
Documents or any of the transactions  contemplated hereby or thereby, or (ii) if
adversely  determined  would have a  material  adverse  effect on the  business,
operations or condition,  financial or otherwise, of Borrower. Schedule 3.5 is a
list of all pending litigation against each of the Borrowers.

                  3.6  Consents.  No  consent,   license,  permit,  approval  or
authorization of, exemption by, notice to report to, or registration,  filing or
declaration with, any governmental authority or agency is required in connection
with the execution,  delivery and performance by Borrower of this Agreement, the
Note or the Collateral  Documents,  or the transactions  contemplated  hereby or
thereby (except for mortgage recordings or UCC filings).

                  3.7   Financials.   The   consolidated   unaudited   financial
statements  of Ohio Art as of January 31, 2000,  and the related  statements  of
income, retained earnings and changes in financial position for the three fiscal
quarters ended on such date,  copies of which have been heretofore  delivered to
Bank,  have been  represented  by Ohio Art to be true,  complete and correct and
fairly

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present the  financial  condition  of Ohio Art and its  subsidiaries  as of such
dates and the results of its operations  for the periods then ended.  All of the
aforementioned  financial  statements  have been  prepared  in  accordance  with
generally  accepted   accounting   principles  (subject  to  customary  year-end
adjustments and the absence of notes). There has been no material adverse change
in the business,  operations or condition,  financial or otherwise, of Ohio Art,
since January 31, 2000.  Ohio Art and its  subsidiaries do not have any material
liabilities,  direct or  contingent,  except as disclosed in the  aforementioned
financial statements,  the loans and other financial  accommodations from CIT to
Borrower or otherwise disclosed in writing to Bank.

                  3.8 Tax  Returns.  All tax  returns  required  to be  filed by
Borrower in any jurisdiction  have been filed or permitted  extensions have been
requested therefor; all taxes, assessments,  fees and other governmental charges
upon Borrower, or upon any of its respective properties,  incomes or franchises,
which are due and payable have been paid, or adequate  reserve has been provided
for payment thereof.

                  3.9 Title and Lien.  Except as otherwise  disclosed in writing
to Bank, the Permitted Liens, and except for the encum brances created under the
Collateral  Documents  and the security  interests  of CIT  described in Section
1.14(e)  herein,  all of the  property  and assets of Borrower are free from all
liens,  charges,  security interests and encumbrances in the nature of a lien or
security interest whatsoever; and, except as aforesaid,  Borrower has a good and
marketable  title to all such property and assets.  As of the Closing Date,  the
UCC financing statements and mortgages necessary to establish liens and security
interests  required  to be  created  under  this  Agreement  and the  Collateral
Documents will have been delivered to Bank.

                  3.10 Other Information. Borrower has previously furnished Bank
certain  information,  including estimates and projections of Borrower's results
of  operations  and financial  position for and as at the end of certain  future
periods.  All such projections and estimates have been prepared and made in good
faith based on  currently  available  information.  There are no  statements  or
conclusions  therein which are based upon or include  misleading  information or
fail to take into account  material  information  regarding the matters  covered
therein. Borrower has no

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reason  to  believe,  as of the  date  hereof,  that  any of the  statements  or
conclusions included therein is not true and correct in all material respects.

                  3.11  Partnerships  and  Joint  Ventures.  Borrower  is  not a
general partner or a limited partner in any general or limited  partnership or a
joint venturer in any joint venture. Ohio Art has no Subsidiaries except Strydel
and Guarantor. Strydel has no Subsidiaries.

                  3.12 Existing Defaults.  Except in connection with prior loans
by Bank,  Borrower is not in default  under any term of any  material  mortgage,
indenture,  deed of trust or any  other  agreement  to which it is a party or by
which it or any of its  properties  may be bound except for  agreements  (i) the
breach of which could not  reasonably  be  expected  to have a material  adverse
effect on Borrower's  business and (ii) being  contested in good faith for which
the Borrower is  maintaining  adequate  reserves in  accordance  with  generally
accepted accounting  principles ("GAAP").  Borrower is not in material violation
of any law, ordinance,  rule or regu lation to which it or any of its properties
is subject  the  violation  of which  could  reasonably  be  expected  to have a
material adverse effect on Borrower's business.

                  3.13 Fire and Explosion. Neither the business nor the material
properties nor the  operations of Borrower are affected by any fire,  explosion,
accident,  strike,  lockout  or  other  labor  dispute,  drought,  storm,  hail,
earthquake,  embargo,  act of  God or of the  public  enemy  or  other  casualty
(whether or not covered by insurance),  materially and adversely  affecting such
business or properties or operations.

                  ARTICLE IV.  CONDITIONS PRECEDENT.
                               --------------------

                  4.1 Conditions of Funding.  The obligation of Bank to make the
Loan  is  subject  to the  fulfillment  to  Bank's  satisfaction  of each of the
following conditions on the Closing Date:

                  (a)      Bank shall have received the Note, duly executed
                           and delivered by Borrowers;

                  (b)      Bank shall have received Borrowers' executed
                           Security Agreements granting Bank a second security

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                           interest in all tangible and intangible assets of
                           Ohio Art and Strydel (second only to CIT) as
                           security for the Loan;

                  (c)      Bank shall have received and shall have approved
                           certified copies of Requests for Information (Form
                           UCC-11) from the appropriate governmental entities
                           listing all effective financing statements which
                           name either of Borrowers as debtor and which are
                           filed in all relevant jurisdictions, together with
                           copies of all such other financing statements (none
                           of which shall cover the Collateral purported to be
                           covered by the Security Agreement), and judgment
                           and lien searches on Borrowers satisfactory to
                           Bank;

                  (d)      Bank shall have received executed copies of proper
                           financing statements in form and substance
                           satisfactory to Bank, to be filed under the Uniform
                           Commercial Code in all jurisdictions as may be
                           necessary, or in Bank's opinion, desirable to
                           perfect Bank's security interests created under the
                           Security Agreements, and all filings, recordings
                           and other actions that are necessary or advisable,
                           in the opinion of Bank, in order to establish,
                           protect, preserve and perfect Bank's security
                           interests and liens as legal, valid and enforceable
                           second security interests and liens in the
                           Collateral, and Bank shall have received evidence
                           thereof in form and substance satisfactory to it;

                  (e)      Bank shall have  received  executed  first  mortgages
                           (the  "Mortgages")  on all of the real property owned
                           by  Ohio  Art in  Bryan,  Ohio  and  all of the  real
                           property   owned  by   Strydel   in   Stryker,   Ohio
                           (collectively  the "Real Property") from Borrowers in
                           recordable  form and a  mortgagee's  title  insurance
                           policy  on the  Real  Property  from a title  company
                           reasonably  acceptable  to Bank  which  shall  insure
                           Bank's first  mortgage  position on the Real Property
                           for the full amount of the Loan as to all of the Real
                           Property located in Bryan, Ohio, and in the amount of
                           $2,500,000.00 as to all of the Real

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                           Property in Stryker, Ohio. The mortgage on the Bryan,
                           Ohio  real   property   shall  be  an  amendment  and
                           restatement  of the existing  mortgage  dated May 19,
                           1998  executed  by The Ohio Art  Company  in favor of
                           Bank on  certain  real  property  in Bryan,  Williams
                           County,  Ohio and  recorded at Book 412,  Page 122 of
                           the Williams County, Ohio Mortgage Records;

                  (f)      Bank  shall  have  received  confirmation of the good
                           standing of Borrowers from the State of Ohio;

                  (g)      Bank  shall  have  received  a  certified   borrowing
                           resolution  in  a  form  reasonably  satisfactory  to
                           Bank  executed  by  an  authorized   officer  of each
                           Borrower;

                  (h)      Bank shall have  received a copy of  Borrower's  fire
                           and  extended  coverage   insurance  policy  with  an
                           endorsement  covering all of the  Collateral  and the
                           Real Property and naming Bank as loss payee;

                  (i)      the  representations  and warranties of Borrowers set
                           forth in Article III hereof and of  Borrowers  in the
                           Security  Agreements and the Mortgages  shall be true
                           and correct on the Closing Date, with the same effect
                           as though such  representations  and  warranties  had
                           been made on and as of such date;

                  (j)      the Collateral Documents shall be effective to create
                           in favor of Bank a legal, valid and enforceable first
                           or second  security  interest in the  Collateral  and
                           Real Property  covered  thereby,  as appropriate,  as
                           described above, and except for Permitted Liens;

                  (k)      Bank shall have received an acceptable  Intercreditor
                           Agreement  executed by CIT  describing the respective
                           rights of Bank and CIT in the Collateral and the Real
                           Property;

                  (l)      Bank  shall  have  received  the Guarantor's executed
                           unlimited   cognovit    guaranty     of    Borrowers'
                           obligations under the Loan;

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                  (m)      Borrowers  shall  have  paid Bank a Loan Continuation
                           Fee in  the  amount of Seventy-five  Thousand Dollars
                           ($75,000.00); and

                  (n)      all other  documents  and legal matters in connection
                           with the transactions contemplated by this Agreement,
                           the Note  and the  Collateral  Documents  shall be in
                           reasonably satisfactory form and substance to Bank.

                  ARTICLE V.  AFFIRMATIVE COVENANTS.
                              ---------------------

                  Each of Borrowers, on its own behalf, covenants that until the
payment  in  full  of the  Loan  and  fulfillment  of all of  their  obligations
hereunder, such Borrower shall comply with the following covenants:

                  5.1 Accounting Records. Borrower shall maintain adequate books
and  accounts  in  accordance  with  generally  accepted  accounting  principles
consistently  applied,  and permit any representative of Bank, at any reasonable
time and with reasonable notice (if no default under Article VI then exists), to
inspect,  audit and examine  such books and inspect  any of its  properties  and
shall furnish Bank with all information  regarding the business and its finances
as soon as reasonably practicable upon Bank's reasonable request.

                  5.2 Financial Statements.  Borrower will furnish Bank or cause
to be furnished to Bank:

                  (a)      monthly internal  financial and operating  statements
                           of Borrower,  in reasonable detail,  subject to year-
                           end review  adjustments  and  certified by Borrower's
                           President or principal financial officer to have been
                           prepared  in  accordance   with  generally   accepted
                           accounting  principles   consistently  applied.  Such
                           statements  shall be provided  to Bank within  thirty
                           (30)  days  of  the  end  of  the  applicable  month,
                           beginning  with the first full calendar  month ending
                           after closing;

                  (b)      within one hundred  twenty (120) days after the close
                           of the fiscal year of Ohio Art, a copy of the

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                           annual reviewed consolidated  financial statements of
                           Ohio Art  certified  by the  President  or  principal
                           financial  officer of Ohio Art to fairly  present the
                           consolidated  financial  condition of Ohio Art and to
                           have  been  prepared  in  accordance  with  generally
                           accepted accounting principles consistently applied;

                  (c)      prompt written notice of any condition or event which
                           has  resulted  or might  reasonably  be  expected  to
                           result in (i) a material adverse change in Borrower's
                           condition (financial or otherwise) or operations,  or
                           (ii) a material breach of or  noncompliance  with any
                           term, condition or covenant of any material contract,
                           agreement or loan to which  Borrower is a party or by
                           which it or its  property  may be bound  which  could
                           reasonably  be  expected  to have a material  adverse
                           effect on Borrower's business;

                  (d)      prompt written  notice of any claims,  proceedings or
                           disputes  (whether  or not  purportedly  on behalf of
                           Borrower)  against,  or to the  knowledge of Borrower
                           threatened,   or  affecting,   Borrower   which,   if
                           adversely  determined,  would have a material adverse
                           effect  on  the  business,  properties  or  condition
                           (financial or otherwise) of Borrower  (without in any
                           way limiting the foregoing,  it being understood that
                           claims,  proceedings,  or disputes involving monetary
                           amounts in excess of $10,000.00  not fully covered by
                           insurance  shall be  deemed to be  material),  or any
                           material   labor   controversy    resulting   in   or
                           threatening to result in a strike against Borrower or
                           any  proposal by any public  authority to acquire any
                           of the material assets or business of Borrower.

                  5.3 Filings. Borrower shall from time to time record, register
and file all such notices,  statements  and other  documents and take such other
steps, including,  but not limited to, the amendment of the financing statements
prepared  under the  Security  Agreements,  as may be  necessary or advisable to
render fully valid and enforceable  under all applicable laws the rights,  liens
and

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<PAGE>



priorities  of Bank with  respect to all  security  from time to time  furnished
under this Agreement,  the Security Agreements or the Mortgages,  or intended to
be so  furnished,  in each  case in such  form  and at such  times  as  shall be
satisfactory to Bank.

                  5.4 Tax Returns.  Within thirty (30) days after the applicable
filing  date,  Borrower  shall  furnish  Bank with copies of federal  income tax
returns filed by Borrower.

                  5.5 Formation of  Subsidiary;  Reorganization.  Borrower shall
not form any  subsidiary to make  investments in or to make a loan to any person
or  entity  except  for (i)  advances  in the  ordinary  course of  business  to
officers, directors and employees for routine travel and similar expenses, which
in the aggregate do not exceed $50,000.00 at any time outstanding; (ii) loans to
officers and key  employees of Borrower,  so long as the  aggregate  outstanding
balance thereof does not exceed $75,000.00; and (iii) loans from Strydel to Ohio
Art  in an  aggregate  principal  amount  which  does  not at  any  time  exceed
$1,000,000.00.  Borrower shall not change its name or participate in any merger,
consolidation or reorganization.

                  5.6  Encumbrance  or Sale of  Property.  Except for  Permitted
Liens,  Borrower  shall not sell,  grant a  security  interest  in or  otherwise
encumber or transfer any portion of the Collateral or the Real Property.

                  5.7  Dividends.  Borrower  shall  not  pay  any  dividends  to
shareholders  without the prior  written  consent of Bank,  except  Borrower may
declare  and pay  dividends  to the extent  permitted  under the loan  documents
between Borrowers and CIT.

                  5.8  Deposit  Account.  As long  as any  portion  of the  Loan
remains unpaid,  Borrower shall maintain a non-interest  bearing deposit account
or  deposit  accounts  with the Bank with an  aggregate  minimum  balance of One
Hundred Thousand Dollars  ($100,000.00).  Bank hereby waives its right of setoff
against such accounts.

                  5.9 Real  Property  Title  Defect.  Borrowers  shall use their
reasonable  efforts to resolve the title defect on Parcel II of the Bryan,  Ohio
real property owned by The Ohio Art Company as described in Schedule B - Section
II, Item 42.A. of Title Insurance Commitment No. 43010-2,  effective January 20,
2000, issued by First

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<PAGE>



American Title Insurance Company through Midland Title Agency of Northwest Ohio,
Inc.

                  ARTICLE VI.  DEFAULT.
                               -------

                  6.1 Default.  The  occurrence of any of the  following  events
shall constitute a default under this Agreement:

                  (a) if either  Borrower  is in default  in making any  payment
under this Agreement, the Note or any of the Collateral Documents;

                  (b) in the event of any non-payment default by either Borrower
under this  Agreement,  the Note or any of the  Collateral  Documents,  and such
default is not cured within thirty (30) days after its occurrence;

                  (c) if there is any  continuing  default  by  either  Borrower
under any document or agreement between Bank and either Borrower,  regardless of
whether such document or agreement is directly related to this Agreement and the
cure  period  therefor,  if any,  shall have  expired.  Any  default  under this
Agreement  shall (after  expiration  of applicable  cure  periods)  constitute a
default under any other document or agreement between Bank and either Borrower;

                  (d) if there is any continuing  default  (after  expiration of
applicable  cure periods) by either  Borrower under any loans from CIT to either
Borrower;

                  (e) the  dissolution  or  termination of business of either of
the Borrowers; and

                  (f) the  insolvency or bankruptcy  or any  assignment  for the
benefit of creditors  of, or  application  for relief under any state or federal
law  relating to the relief of debtors  by,  either of the  Borrowers,  provided
however,  that in the case of an involuntary  bankruptcy petition,  it shall not
constitute  a  default   hereunder  unless  such  bankruptcy   petition  remains
undismissed or unstayed more than sixty (60) days after the filing date thereof.




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<PAGE>



                  6.2  Cross-Default;  Cross-Collateral.  A  continuing  default
(after  expiration  of  applicable  cure  periods)  under  this  Agreement,  any
Collateral  Document or the Note shall constitute a default under any other loan
then existing from the Bank to either of the  Borrowers.  Any single  continuing
default shall (after  expiration  of applicable  cure periods) give the Bank all
rights of a secured  lender and all rights to  accelerate  the amounts due under
the Note and/or any other note evidencing any other loan from the Bank to either
of the Borrowers.

                  ARTICLE VII.  REMEDIES.
                                --------

                  Upon  the   occurrence  of  any   continuing   default  (after
expiration of applicable cure periods) until such default shall have been waived
by Bank, Bank may avail itself of any and all remedies available to it at law or
in equity,  and all such remedies  shall be cumulative  and none shall be deemed
exclusive of any other;  further,  and not in limitation of the foregoing,  Bank
may terminate  this  Agreement,  accelerate  all payments due under the Loan and
demand full payment of the  Borrowers'  indebtedness  to it; and may utilize any
remedy  available  to it  under  the  terms  and  provisions  of the  Collateral
Documents.

                  ARTICLE VIII.  RELEASE.
                                 -------

                  Borrowers  hereby  irrevocably  waive and  release any and all
claims,  actions,  causes of action, suits, and defenses which either now has or
might hereafter have against Bank for or by reason of any matter, cause or thing
whatsoever  which  relates to any loans made by Bank to either  Borrower  or any
related entity prior to the date hereof.

                  ARTICLE IX.  MISCELLANEOUS.
                               -------------

                  9.1 Waivers. Any waiver,  permit,  consent or approval by Bank
of any breach of any  provision,  condition or covenant of this  Agreement,  the
Note or the Collateral  Documents must be in writing and shall be effective only
to the extent it is set forth in writing.  No waiver of a specific  breach shall
operate as a waiver of any other breach occurring at a later time.




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<PAGE>



                  9.2 Failure or Delay.  No failure or delay on the part of Bank
in the exercise of any power, right or privilege under this Agreement,  the Note
or the Collateral  Documents  shall operate as a waiver  thereof,  nor shall any
single or partial exercise of any such power,  right or privilege preclude other
or further exercise of any other power, right or privilege.

                  9.3 Cumulative  Rights. All rights and remedies existing under
this Agreement,  the Note and the Collateral  Documents are cumulative with, and
not exclusive of, any rights or remedies  otherwise  available under  applicable
law.

                  9.4 Severability. Any provision of this Agreement, the Note or
the  Collateral   Documents  which  is  prohibited  or   unenforceable   in  any
jurisdiction, shall be, only as to such jurisdiction,  ineffective to the extent
of such prohibition or unenforceability,  but all of the remaining provisions of
this Agreement, the Note and the Collateral Documents shall remain valid.

                  9.5  Successors and Assigns.  This Agreement  shall be binding
upon and shall inure to the benefit of Bank and Borrowers  and their  respective
heirs,  successors and assigns;  provided,  however,  that neither  Borrower may
assign or transfer its rights or obligations  under this  Agreement  without the
prior  written  consent  of Bank.  Bank  reserves  the  right  to sell,  assign,
transfer,  negotiate  or grant  participations  in all or any  part  of,  or any
interest in, Bank's rights and obligations  under this  Agreement,  the Note and
the  Collateral  Documents  to  other  financial  institutions.   In  connection
therewith,  Bank may disclose all  documents and  information  which Bank now or
hereafter may have relating to the Loan or Borrowers,  or the business of any of
the   foregoing;   provided  the  recipient   thereof  agrees  to  maintain  the
confidentiality of material non-public information.

                  9.6 Notices.  Any notice which either party may be required or
may desire to give to the other party under any provision of this Agreement, the
Note or the Collateral Documents shall be in writing and shall be deemed to have
been given or made when deposited in the mail, postage prepaid, and addressed as
follows:



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<PAGE>



To Borrowers:                       The Ohio Art Company
                                    One Toy Street
                                    Bryan, Ohio  43506
                                    Attention: President

To Bank:                            Fifth Third Bank, Northwestern Ohio, N.A.
                                    606 Madison Avenue
                                    Toledo, OH 43604
                                    Attention: Michael Miller, Exec. Vice-Pres.

Bank and  Borrowers  may change the address to which all  notices,  requests and
other  communications  are to be sent by giving  written  notice of such address
change to the other party in  conformity  with this  paragraph,  but such change
shall not be  effective  until  notice of such  change has been  received by the
other party.

                  9.7  Costs,  Expenses  and  Attorneys'  Fees.  Borrowers  will
reimburse  Bank for all costs  and  expenses,  including,  but not  limited  to,
reasonable  attorneys' fees and expenses (which counsel may be Bank  employees),
expended or incurred by Bank in  enforcing  this  Agreement,  in  preparing  and
amending this Agreement, the Note and/or the Collateral Documents, in collecting
any sum  which  becomes  due  Bank on the Note or  under  any of the  Collateral
Documents,  or in the  protection,  preservation or enforcement of any rights of
Bank in connection with the Collateral Documents.  In the event the Loans do not
close for any  reason  except  for the bad faith or wilful  misconduct  of Bank,
Borrowers  shall  still  reimburse  Bank for all  expenses  incurred  by Bank in
connection  herewith.  Provided  however,  that  absent  a  continuing  default,
Borrowers'  responsibility  for  reimbursement  of Bank's audit  expenses  under
Section  5.1 hereof  shall be  limited  to two (2) audits per twelve  (12) month
period.

                  9.8 Counterparts. This Agreement may be executed in any number
of  counterparts,  each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.

                  9.9 Governing  Law. The validity,  construction  and effect of
this Agreement,  the Collateral  Documents and the Note shall be governed by the
laws of the State of Ohio.


                                       18

<PAGE>


                  9.10 Complete Agreement. This written Agreement, together with
the exhibits to this Agreement, is intended by the parties as a final expression
of their  agreement  and is  intended as a complete  statement  of the terms and
conditions of their agreement.


                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be duly  executed  on the day and year first  written at the  beginning  of this
Agreement.
                                                 FIFTH THIRD BANK, NORTHWESTERN
                                                 OHIO, N.A.

                                                 By:____________________________

                                                 Title:_________________________

                                                 THE OHIO ART COMPANY

                                                 By:____________________________

                                                 Title:_________________________


                                                 STRYDEL, INC.

                                                 By:____________________________

                                                 Title:_________________________






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