EXHIBIT 10.1.3

SECOND AMENDMENT TOSECOND AMENDED AND RESTATEDLOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT (this "Amendment") to the Second Amended and Restated Loan and Security Agreement is entered into as
of the 29 day of December, 2000, 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 (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) (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.      The Borrower has requested that the
Bank release all Collateral as security for the Loans 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.Section 1, "The Loan," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                                                                                                                                                                                                                                                          
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|3.         Section 1.1,
"The Revolving Loan and Borrowing Base," of the Loan Agreement is hereby redesignated "The Revolving Loan" and is amended to recite in its entirety as follows:                                                                                                                                                                                         
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|4.         Sections 1.2, "The Term
Loan," 1.3, The Capex Loan," 1.4, "The Draw Loan," 2.1, "Eligible Accounts," 2.2 "Eligible Inventory" and 2.3 "Reserves," of the Loan Agreement are hereby
deleted in their entirety. As used in the Loan Agreement, the term "Account Debtor" means a person or entity who is obligated to the Borrower on an account or general intangible.
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|5.         Section 3.2,
"Collateral Audits," of the Loan Agreement is hereby redesignated "Audits" and is amended to recite in its entirety as follows:                                                                                                                                                                                                                         
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|6.         Section 3.3,
"Prepayment Fee," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                        
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|7.          Section
3.4, "Terms of Repayment," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                   
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|8.          Section
3.5, "Mandatory Prepayment or Reduction," and Section 3.6, "Maturity of Loans," of the Loan Agreement are hereby deleted in their entirety.
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|9.          Section 3.7, "Use of
Proceeds," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                      
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|10.          Section 3.11,
"Mortgages on Real Property," and Section 3.12, "Security Interest and Assets of the Apex Telecommunications Manufacturing, Inc.," of the Loan Agreement are hereby deleted in their entirety.                                                                                                                                                                                                                                                                                                                                                
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|11.          Section 4.1,
"Grant of Security Interest," Section 4.2, "Representations and Covenants Regarding the Collateral," Section 4.3, "Lockbox and Collection of Accounts," Section 4.4, "Cash Collection
Account," Section 4.6, "Collateral Insurance," Section 4.8, "Collateral Administration," Section 4.9, "Preservation and Disposition of Collateral," Section 4.10, "No Duty,"
Section 4.11, "Financing Statements," Section 4.12, "Bank's Appointment as Attorney-In-Fact," and Section 4.13, "Remedies of Default," are hereby deleted in their entirety.
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|12.          Section 4.5,
"Application of Proceeds from Collection of Accounts; Setoff; Government Accounts; Perfection; Lien Notation," of the Loan Agreement is hereby redesignated "Setoff" and is amended to recite in its entirety as
follows:                                                                                                                                                                                                                                                                                                                      
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|13.          Section 4.7,
"Books and Records," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                             
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|14.          Section 5.3,
"Conditions Precedent to Advance Under the Draw Loan," of the Loan Agreement is hereby deleted in its entirety.                         
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|15.          Section 6.12,
"Regarding the Accounts and Inventory," of the Loan Agreement is hereby deleted in its entirety.                                       
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|16.          Section 6.14,
"Intellectual Property," of the Loan Agreement is hereby deleted in its entirety.                                                      
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|17.          Section 7.3,
"Restriction on Fundamental Changes; Conduct of Business," of the Loan Agreement is hereby amended to recite in its entirety as follows:
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|18.          Section 7.6,
"Indebtedness," of the Loan Agreement is hereby amended to recite in its entirety as follows:                                           
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|                                                                                                                                           |  | Purchase Money Indebtedness (including capitalized leases) incurred by the Borrower to finance the acquisition of fixed assets, if (i) such Indebtedness has a scheduled maturity and is not due on demand, (ii) such Indebtedness in the aggregate does not exceed the sum of $1,000,000.00 outstanding at any time, (iii) such
Indebtedness does not exceed the purchase price of the items being purchased, and (iv) such Indebtedness is not secured by any property or assets other than the item or items being purchased ("Permitted Purchase Money Indebtedness"); and
(c) Indebtedness not to exceed the principal sum of $7,000,000.00 related to industrial development revenue bond financing in connection with the acquisition by the Borrower, after the date of execution of that certain Second Amendment to Second
Amended and Restated Loan and Security Agreement between the Borrower and the Bank (the "Second Amendment"), of certain real property located in Colorado. "Indebtedness," as applied to the Borrower or any other entity
shall mean, at any time, (a) all indebtedness, obligations or other liabilities (other than accounts payable arising in the ordinary course of the Borrower's business payable on terms customary in the trade) which in accordance with GAAP should be
classified upon the Borrower's balance sheet as liabilities, including, without limitation (i) for borrowed money or evidenced by debt securities, debentures, acceptances, notes or other similar instruments, and any accrued interest, fees and
charges relating thereto, (ii) under profit payment agreements or in respect of obligations to redeem, repurchase or exchange any securities or to pay dividends in respect of any stock, (iii) with respect to letters of credit issued, (iv) to pay the
deferred purchase price of property or services, except accounts payable and accrued expenses arising in the ordinary course of business, or (v) in respect of capital leases; (b) all indebtedness, obligations or other liabilities secured by a lien
on any property, whether or not such indebtedness, obligations or liabilities are assumed by the owner of the same; and (c) all indebtedness, obligations or other liabilities in respect of interest rate contracts and currency agreements, net of
liabilities owed by the counterparties thereon.
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|19.          Section 7.8,
"Loans and Advances; Investments," of the Loan Agreement is hereby amended to recite in its entirety as follows:



|                                                                                                                             |  | 7.8         Loans and Advances, Investments.

The Borrower shall not directly or indirectly make or own any Investment except: (a) bonds or other
obligations of the United States of America, certificates of deposit issued by commercialbanks, and commercial paper rated at least A-1 or P-1 and having a maturity of not more than one
year; (b) loans or advances to employees of the Borrower, which loans and advances shall not in the aggregate exceed $100,000.00 outstanding at any time, (c) Investments in Subsidiaries, which Investments shall not exceed the amount of such
Investments as of the date of execution of the Second Amendment and after giving effect to the initial Investment by the Borrower in PECO II Texas, L.P., a Delaware limited partnership, and (d) any other Investment not to exceed the aggregate amount
of $20,000 outstanding at any time. "Investment" means any loan, advance, extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade), deposit account, contribution of
capital or transfer of any assets to any other entity or any investment in, or purchase or other acquisition of, the stock, partnership interests, ownership interests in any limited liability company, notes, debentures, or other securities of any
other entity made by the Borrower.
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|20.          
 Section 7.13, "Book Net Worth," of the Loan Agreement is hereby amended to recite in its entirety as follows:
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|                                                                                                                             |  | 7.13         Book Net Worth.

The Borrower, on a consolidated basis, shall maintain at all times shareholders' equity, as
determined in accordance with GAAP ("Book Net Worth") of not less than $75,000,000.00. For purposes of calculating book net worth in this Section, the inventory of the Borrower and its Subsidiaries shall be valued on a FIFO
basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|21.          
 Section 7.14, "Leverage Ratio," of the Loan Agreement is hereby amended to recite in its entirety as follows:



|                                                                                                                                            |  | 7.14         Leverage Ratio.

The Borrower, on a consolidated basis, shall maintain at all times a ratio of Consolidated Total
Liabilities to Book Net Worth of not greater than (a) 1.50 to 1.00. "Consolidated Total Liabilities" means, at the time of each determination, with respect to the Borrower and all of its Subsidiaries, on a consolidated basis, (a) all
indebtedness for borrowed money or for the deferred purchase price of property or services, (b) any other indebtednesswhich is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations with respect to any letter of credit issued for the account of the Borrower or any Subsidiary, (d) all obligations in respect of acceptances issued or created for the account of the Borrower or any Subsidiary, (e) lease
obligations which, in accordance with GAAP, should be capitalized, (f) all liabilities (including lease obligations) secured by any lien or encumbrance on any property owned by the Borrower or any Subsidiary even though the Borrower or any such
Subsidiary has not assumed or otherwise become liable for the payment thereof, (g) all obligations of the Borrower or any Subsidiary with respect to interest rate protection agreements (valued at the termination value thereof computed in accordance
with a method approved by the International Swap Dealers Association), and (h) all other obligations of the Borrower and its Subsidiaries, and each of them, which, in accordance with GAAP, would be classified upon a balance sheet as liabilities
(except capital stock and surplus earned). A "Subsidiary" of the Borrower means (i) any corporation more than fifty percent (50%) of the outstanding security having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by the Borrower or by one or more of its subsidiaries or by the Borrower and one or more of its subsidiaries, or (ii) any partnership, association, joint venture or similar business organization more than fifty percent (50%)
of the ownership interest have ordinary voting power of which shall at the time be so owned or controlled.
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|22.         Section 8,
"Financial Information and Reporting," of the Loan Agreement is hereby amended to recite in its entirety as follows:



| |  | 8.           Financial Information and Reporting

The Borrower shall deliver the following to the Bank:                                                                                                                                                                                                                                                                                                                                                                   
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| |  | (a)    within 30 days after the end of each month, consolidated
financial statements, including a balance sheet and statements of income and surplus, and statement of cash flows, certified by the president or chief financial officer of the Borrower (a "Financial Officer") as fairly representing the
Borrower's consolidated financial condition as of the end of such period;                                                                                     
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| |  | (b)    within 45 days after the end of each quarter, a statement in form prescribed by the Bank and signed by a Financial Officer of the Borrower certifying the compliance of
the Borrower with the terms of this Agreement and the calculation of the financial covenants contained in Section 7 above;                                                                                                                                                                 
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| |  | (c)    within 30 days after the end of each month, an inventory report
of the Borrower, signed by a Financial Officer in form satisfactory to the Bank;                                                                                                                                                                                                                                                                                                                   
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| |  | (d)    within 30 days after the end of each month, a report, in form
satisfactory to the Bank, certified by a Financial Officer setting forth the number and dollar total of accounts receivable due and payable (i) not more than 30 days, (ii) more than 30 days and not more than 60 days, (iii) more than 60 days and not
more than 90 days, (iv) more than 90 and not more than 120 days, and (v) more than 120 days, from the date of the original invoice therefor;
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| |  | (e)    within 90 days after the end of each fiscal year, audited,
unqualified consolidated financial statements prepared in accordance with GAAP and certified by independent public accountants satisfactory to the Bank, containing a balance sheet, statements of income and surplus, statements of cash flows and
reconciliation of capital accounts, along with any management letters written by such accountants;                                                  
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| |  | (f)    immediately upon becoming aware of the existence of any Pending Default, Event of
Default or breach of any term or conditions of this Agreement, a written notice specifying the nature and period of existence thereof and what action the Borrower is taking or proposes to take with respect thereto;                                                                                                                                                           

|                                                                                                                                                                           |  | (g)    immediately upon the filing or release, as the case may be,
copies of any Securities and Exchange Commission or State Securities Law disclosures, filings, documents or any press releases; and
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|                                                                                                                                                                           |  | (h)    at the request of the Bank, such other information as the Bank may
from time to time reasonably require.                                                                                       
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|23.          The Bank
hereby releases its security interest in the "Collateral," as that term is defined in the Loan Agreement (prior to giving effect to this Amendment).
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|24.        
 Conditions of Effectiveness. This Amendment shall become effective as of 12/29, 2000, upon satisfaction of all of the following conditions precedent:        
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|(a)    The Bank shall have received two duly executed originals of this Amendment, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|(b)    The representations contained in the immediately following paragraph shall be
true and accurate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|25.          
 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.                                             
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|26.          
 Amendment to Loan Agreement. (a) Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "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 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.
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|27.          
 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 theprovisions 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.
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|28.          
 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|29.          
 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
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|30.          
 Governing Law. This Amendment shall be governed by and construed in accordance with the law of the State of Ohio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



| | IN WITNESS WHEREOF, the Borrower and the Bank have hereunto set their hands as of the date first set forth above.
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| | THE BORROWER:               
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| | PECO II, INC.               
| |                             
| | BY: /S/ JOHN C. MAAG        
| |                             
| | Its: CHIEF FINANCIAL OFFICER
| |                             
| | BY: /S/ SANDRA A. FRANKHOUSE
| |                             
| | Its: SECRETARY AND TREASURER
| |                             



| | THE BANK:                   
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| |                             
| | THE HUNTINGTON NATIONAL BANK
| |                             
| | By: /S/ GLENN W. MCCLELLAND 
| |                             
| | Its: VICE PRESIDENT         
| |