Document:

EXHIBIT 10.5

                      GENERAL CREDIT AND SECURITY AGREEMENT

     THIS AGREEMENT,  dated as of December 3, 2003, between SPECTRUM  Commercial
Services  Company,  a  Minnesota  corporation,  having its  mailing  address and
principal  place of business at Two Appletree  Square,  Suite 415,  Bloomington,
Minnesota 55425-1581 (herein called "Lender"),  and WCS Acquisition Corp., a/k/a
Westland  Control  Systems,  Inc.,  a Michigan  corporation,  having the mailing
address and principal place of business at 39097 Webb Drive,  Westland, MI 48185
(herein called "Borrower").

     1. Agreement.  This Agreement  states the terms and conditions  under which
Borrower may obtain certain loans and/or other credit extensions from Lender.

     2. Certain Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

          "Acceptable Distributions" - Deleted

          "Advance(s)" shall have the meaning provided in the paragraph entitled
     "Advances".

          "Affiliate" shall include, with respect to any party, any Person which
     directly or  indirectly  controls,  is  controlled  by, or is under  common
     control  with such party and, in addition,  in the case of  Borrower,  each
     officer, manager,,  director,  governor, member or shareholder of Borrower,
     and each joint venturer and partner of Borrower.

          "Borrower" shall have the meaning provided in the preamble hereto.

          "Borrowing Base" shall mean the sum of (i) Eighty percent (80%) of the
     net amount of Eligible  Receivables or such greater or lesser percentage as
     Lender,  in its sole  discretion,  shall deem  appropriate,  or as provided
     otherwise herein.

          "Business Day" shall mean any day on which major  commercial  banks in
     Minneapolis, Minnesota are open for the transaction of business of the kind
     contemplated by this Agreement.

          "Chattel  Paper"  shall  have the  meaning  ascribed  to such  term in
     Article 9 of the Commercial Code.

          "Closing  Date" shall mean the day  specified by Borrower on which all
     of the conditions precedent specified in the paragraph entitled "Conditions
     Precedent to Initial Advance" shall have been satisfied.

          "Code" shall mean the Internal  Revenue Code of 1986,  as amended from
     time to time.

          "Commercial Code" shall mean the Uniform Commercial Code as enacted in
     the State of Minnesota, as amended from time to time.

          "Consolidated"  shall,  when  used  with  reference  to any  financial
     information  pertaining  to (or when used as a part of any defined  term or
     statement  pertaining to the financial  condition of) any Person,  mean the
     accounts of such Person and its subsidiaries,  determined on a consolidated
     basis,  all  determined as to principles of  consolidation  and,  except as
     otherwise  specifically  required by the definition of such term or by such
     statement as to such accounts, in accordance with GAAP.

          "Contingent  Obligations"  shall mean, with respect to any Person, all
     of such Person's  liabilities and obligations which are contingent upon and
     will  not  mature  unless  and  until  the  occurrence  of  some  event  or
     circumstance   and  which  are  not  included   within  the  definition  of
     Liabilities of such Person.

          "Customer(s)"  shall  have  the  meaning  provided  in  the  paragraph
     entitled "Reports and Collections".

          "Default"  shall  mean any event  which,  with the giving of notice or
     passage of time, or both, would constitute an Event of Default.

          "Eligible  Inventory" - None of Borrower's  inventory  shall be deemed
     Eligible Inventory.

          "Eligible  Receivables"  shall  mean the  dollar  value  of only  such
     Receivables  of  Borrower  arising  from the sale and  actual  shipment  of
     Inventory  or the full and  complete  rendition of services in the ordinary
     course of business which has been fully  performed by Borrower and in which
     only Lender holds a senior security interest and as to which Lender, in its
     sole  discretion,  shall  from  time  to  time  determine  to  be  Eligible
     Receivables.  Without  limiting  the  discretion  of Lender to consider any
     Receivable not to be an Eligible Receivable,  and by way of example only of
     types  of  Receivables  that  Lender  will  consider  not  to  be  Eligible
     Receivables,   Lender,   notwithstanding  any  earlier   classification  of
     eligibility  may consider any Receivable  not to be an Eligible  Receivable
     if: (i) any warranty  described under the section entitled  "Warranty as to
     Collateral"  is breached as to the  Receivable;  (ii) the Receivable is not
     paid by the  account  debtor  within 90 days  from the date of the  invoice
     relating to such Receivable; (iii) the account debtor disputes liability or
     makes  any  claim  with  respect  to the  Receivable;  (iv) a  petition  in
     bankruptcy  or other  application  for relief under any  insolvency  law is
     filed with  respect to the account  debtor  owing the  Receivable;  (v) the
     account  debtor on the  Receivable  makes an assignment  for the benefit of
     creditors,  becomes insolvent,  fails,  suspends,  or goes out of business;
     (vi) the  Receivable  arises from a sale to an account  debtor  outside the
     United States, unless the sale is on terms acceptable to Lender in its sole
     discretion;  (vii) the  Receivable  is owed by an  account  debtor who owes
     Receivables  of which  more than 10% are more than 90 days past the date of
     the invoices relating to such Receivables;  (viii) the account debtor is an
     Affiliate  or  employee  of  Borrower;  (ix) the  account  debtor is also a
     supplier  or  creditor of  Borrower;  (x) the account  debtor is the United
     States of America,  or any department or any agency of any thereof,  unless
     Borrower  has  complied  with the  Assignment  of  Claims  Act to  Lender's
     satisfaction;  (xi) the  Receivable  (or any portion of the  Receivable) is
     either a  consignment  Receivable  or a bonded  Receivable  or a retainage;
     (xii) the total  Receivables  owed by an account  debtor exceeds 30% of the
     total Receivables  outstanding (with the single exception of General Motors
     where the 30% is replaced  with 40%),  but only that  portion  that exceeds
     that percentage would not be considered an Eligible Receivable;  (xiii) the
     due  date of the  Receivable  is more  than 30 days  from  the  date of the
     invoice relating to such Receivable; or (xiv) In its reasonable discretion,
     Lender shall become  dissatisfied with the  creditworthiness  of an account
     debtor owing a Receivable.

          "Equipment" shall have the meaning provided in the paragraph  entitled
     "Security".

          "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
     1974,  as the same may from  time to time be  amended,  and the  rules  and
     regulations promulgated thereunder by any governmental agency or authority,
     as from time to time in effect.

          "ERISA Affiliate" shall mean, with respect to any Person, any trade or
     business  (whether  or not  incorporated)  which is a member  of a group of
     which such Person is a member and which is under common  control within the
     meaning of Section 414 of the Code,  as amended from time to time,  and the
     regulations promulgated and rulings issued thereunder.

          "ERISA Event" shall mean: (a) a Reportable  Event described in Section
     4043  of  ERISA  and  the  regulations  issued  thereunder  (other  than  a
     Reportable Event not subject to the provision for 30-day notice to the PBGC
     under  such  regulations);  (b) the  withdrawal  of  Borrower  or any ERISA
     Affiliate  from a Plan  during a plan  year in which it was a  "substantial
     employer" as defined in Section  4001(a)(2)  of ERISA;  (c) the filing of a
     notice of intent to terminate a Plan or the  treatment of a Plan  amendment
     as a  termination  under  Section  4041 of ERISA;  (d) the  institution  of
     proceedings to terminate a Plan by the PBGC under Section 4042 of ERISA; or
     (e) any other  event or  condition  that might  reasonably  be  expected to
     constitute  grounds under Section 4042 of ERISA for the  termination of, or
     the appointment of a trustee to administer, any Plan.

          "Event of Default"  shall have the meaning  provided in the  paragraph
     entitled "Default and Remedies".

          "GAAP"   shall   mean   generally   accepted   accounting   principles
     consistently  applied  and  maintained  throughout  the period  indicated..
     Whenever any accounting term is used herein which is not otherwise defined,
     it shall be interpreted in accordance with GAAP.

          "General Intangibles" shall have the meaning provided in the paragraph
     entitled "Security".

          "Guarantor" shall mean Productivity  Technologies  Corporation and any
     other Person who enters into a Guaranty hereof.

          "Guaranty(ies)"  shall mean those certain Guaranties  executed by each
     of the Guarantors and any other agreement  whereby a Person  guarantees the
     payment or performance of any of the Obligations.

          "Independent  Public  Accountants" shall mean Follmer Rudzewicz PLC or
     any other firm of  independent  public  accountants  which is acceptable to
     Lender.

          "Inventory" shall have the meaning provided in the paragraph  entitled
     "Security".

          "Liabilities"   of  any  Person  shall  mean  those  items  which,  in
     accordance with GAAP, appear as liabilities on a balance sheet.

          "Line  Maintenance  Fee"  shall  have  the  meaning  provided  in  the
     paragraph entitled "Affirmative Covenants".

          "Loan  Administration  Fee" shall  have the  meaning  provided  in the
     paragraph entitled "Affirmative Covenants".

          "Loan  Document(s)"  shall mean  individually or collectively,  as the
     case may be, this Agreement,  the Note, the Guaranty[ies],  and any and all
     other documents  executed,  delivered or referred to herein or therein,  as
     originally  executed and as amended,  modified or supplemented from time to
     time.

          "Material Adverse  Occurrence" shall mean any occurrence of whatsoever
     nature (including,  without  limitation,  any adverse  determination in any
     litigation,  arbitration or governmental investigation or proceeding) which
     Lender shall determine, in its sole discretion,  could materially adversely
     affect the present or  prospective  financial  condition or  operations  of
     Borrower or a Guarantor or impair the ability of Borrower or a Guarantor to
     perform its obligations under this Agreement or any other Loan Document.

          "Maturity Date" shall mean December 2, 2005, provided,  however,  that
     the then current  Maturity Date shall be extended by succeeding  periods of
     12  calendar  months  without  notice to or action  by either  Borrower  or
     Lender,  provided further however,  that such extension shall not occur if:
     (i) Lender has  notified  Borrower of an Event of Default that has occurred
     and is  continuing,  or (ii) this  Agreement has  previously  terminated as
     provided in the paragraph entitled  "Termination",  or (iii) Lender has, in
     its  sole  and  absolute  discretion,  demanded  payment  of  amounts  owed
     hereunder,  or (iv)  Borrower  or  Lender  have  notified  the other of the
     intention  not to renew  at  least  sixty  days  prior to the then  current
     Maturity Date and thereafter no extension shall occur.

          "Maximum  Principal  Amount" shall mean, at any date,  One Million Two
     Hundred Fifty Thousand and No/100ths Dollars ($1,250,000.00).

          "Monthly Payment Date" shall mean the first day of each month.

          "Multiemployer  Plan" shall mean a "multiemployer  plan" as defined in
     Section  4001(a)(3)  of ERISA to which  Borrower  is making or  accruing an
     obligation to make contributions,  or has within any of the preceding three
     plan years made or accrued an obligation to make contributions.

          "Net  Profit" or "Net  Loss" for any  period  shall mean net income or
     loss from  operations  for such period,  before  provision  for income tax,
     determined in accordance with GAAP excluding,  however,  (i)  extraordinary
     gains  (including but not limited to the conversion of debt to equity,  the
     forgiveness  of  debt  and  the  like),  and  (ii)  gains  (whether  or not
     extraordinary)  from sales or other  dispositions  of assets other than the
     sale of Inventory in the ordinary course of Borrower's business.

          "Note" shall mean Borrower's revolving or promissory note of even date
     payable to the order of Lender to  evidence  the  Advances,  including  any
     replacements, substitutions or amendments thereof.

          "Obligations"  shall  have  the  meaning  provided  in  the  paragraph
     entitled "Security".

          "Origination  Fee" shall have the meaning  provided  in the  paragraph
     entitled "Affirmative Covenants".

          "Participant"  shall mean each Person who  purchases  a  participation
     interest from Lender in the obligations.

          "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  or any
     successor  board,  authority,  agency,  officer or  official  of the United
     States administering the principal functions assigned on the date hereof to
     the Pension Benefit Guaranty Corporation under ERISA.

          "Periodic  Financial  Report" shall mean Borrower's  financial reports
     for various  periods of time which may,  from time to time, be delivered by
     Borrower to Lender and which:  (a)  comport  with the  representations  and
     warranties contained in the paragraph entitled General  Representations and
     Warranties, and (b) comprise the complete audited financial report for such
     period prepared and certified without qualification or explanatory language
     by Independent Public Accountants on a Consolidated and consolidating basis
     for Borrower and any Consolidated Subsidiaries of Borrower; together with a
     copy of the  management  letter or  memorandum,  if any,  delivered by such
     independent certified public accountant to Borrower and Borrower's response
     thereto.

          "Person" shall mean any natural person, corporation, limited liability
     company, firm, partnership, association, government, governmental agency or
     any other  entity,  whether  acting in an  individual,  fiduciary  or other
     capacity.

          "Plan"  shall  mean  each  employee  benefit  plan or  other  class of
     benefits  covered  by Title IV of ERISA,  in  either  case  whether  now in
     existence or hereafter instituted, of Borrower or any of its Subsidiaries.

          "Prime  Rate" shall mean the  publicly  announced  base rate (or other
     publicly  announced  reference rate) charged by Wells Fargo Bank,  National
     Association.  Borrower  acknowledges  that  the  Prime  Rate may not be the
     lowest rate made  available  by Lender or the bank to their  customers  and
     that  Lender or the bank may lend to its  customers  at rates  that are at,
     above or below the Prime Rate.

          "Receivables"  shall  have  the  meaning  provided  in  the  paragraph
     entitled "Security".

          "Reportable  Event" shall have the meaning given to that term in Title
     IV of ERISA.

          "Security   Interest"   shall   mean  any  lien,   pledge,   mortgage,
     encumbrance, charge or security interest of any kind whatsoever (including,
     without  limitation,  the lien or retained  security title of a conditional
     vendor) whether arising under a security  instrument or as a matter of law,
     judicial  process or  otherwise  or the  agreement by Borrower to grant any
     lien, security interest or pledge, mortgage or encumber any asset.

          "Subordinated  Debt" shall mean  indebtedness of Borrower for borrowed
     money which is  subordinated  to the  Obligations on terms  satisfactory to
     Lender in its sole discretion.

          "Subsidiary"  of any Person  shall mean any other entity of which more
     than 50% of the  outstanding  ownership  interests  and/or capital stock is
     owned directly or indirectly by such Person, by such Person and one or more
     Subsidiaries, or by one or more other Subsidiaries.

          "Termination Date" shall mean the earliest of (i) the Maturity Date or
     (ii) the date upon which Lender's obligation to make Advances is terminated
     pursuant to the paragraph  entitled  "Default and  Remedies",  or (iii) the
     date upon which the  obligations  are  declared  to be due and  payable (or
     automatically  become due and payable)  upon the  occurrence of an Event of
     Default as provided in the  paragraph  entitled  "Default and  Remedies" or
     otherwise,  or (iv)  the date  upon  which  this  Agreement  terminates  as
     provided in the  paragraph  entitled  "Termination",  or (v) upon demand by
     Lender in its sole and absolute discretion.

          "Withdrawal  Liability"  shall have the meaning  given to that term in
     Title IV of ERISA.

     3. Security. As security for all present and future sums loaned or advanced
by Lender to Borrower and for all other obligations now or hereafter  chargeable
to Borrower's loan account hereunder,  and all other obligations and liabilities
of any and every kind of  Borrower to Lender,  due or to become  due,  direct or
indirect,  absolute or contingent,  joint or several, howsoever created, arising
or evidenced, now existing or hereafter at any time created, arising or incurred
(herein  called  "Obligations'),  Borrower  hereby  grants to Lender a  security
interest in all of its assets, goods and property,  including but not limited to
the following:

          (a) All  Receivables  of Borrower now owned or  hereafter  acquired or
     arising,  together  with all customer  lists,  original  books and records,
     ledger and account cards,  computer  tapes,  discs,  printouts and records,
     whether now in  existence  or hereafter  created.  "Receivables"  means all
     rights of  Borrower  to the  payment  of money,  whether  or not earned and
     howsoever evidenced or arising,  including (without limitation) all present
     and  future   "Accounts",   accounts   receivable,   healthcare   insurance
     receivables,  letter of credit rights, "Chattel Paper", "Instruments",  and
     rights to payment which are "General  Intangibles" (as those terms are used
     in the Commercial Code), all security therefor and all of Borrower's rights
     as an unpaid seller of goods (including rescission,  replevin,  reclamation
     and  stopping  in  transit)  and  all of  Borrower's  rights  to any  goods
     represented  by any of the  foregoing  including  returned  or  repossessed
     goods;

          (b) All Inventory of Borrower, whether now owned or hereafter acquired
     and wherever located. "Inventory" includes all Goods (as defined in Article
     9 of the  Commercial  Code)  intended  for sale or lease or to be furnished
     under contracts of service, all raw materials and work in process therefor,
     all finished goods thereof, all materials and supplies of every nature used
     or usable or consumed or  consumable in  connection  with the  manufacture,
     packing,  shipping,  advertising,  selling,  leasing or  furnishing of such
     Goods,  and all  accessories  thereto and all  documents of title  therefor
     evidencing the same;

          (c) All Equipment of Borrower, whether now owned or hereafter acquired
     and wherever  located.  "Equipment"  includes all of Borrower's Goods other
     than  Inventory,  all  replacements  and  substitutions  therefor  and  all
     accessions thereto,  and specifically  includes,  without  limitation,  all
     present and future machinery, equipment, vehicles, manufacturing equipment,
     shop equipment, office and record keeping equipment,  furniture,  fixtures,
     parts,  tools and all other Goods (except  Inventory)  used or acquired for
     use by Borrower for any business or enterprise;

          (d) All  General  Intangibles  and  Deposit  Accounts  (as  defined in
     Article  9 of the  Commercial  Code)  of  Borrower,  whether  now  owned or
     hereafter acquired,  including (without  limitation) all present and future
     domestic and foreign patents,  patent applications,  trademarks,  trademark
     applications,  copyrights, software, trade names, trade secrets, patent and
     trademark  licenses  (whether  Borrower  is  licensor  or  licensee),  shop
     drawings,  engineering drawings, blueprints,  specifications,  parts lists,
     manuals,  operating  instructions,  customer and supplier lists,  licenses,
     permits,  franchises,  payment  intangibles,  the  right to use  Borrower's
     corporate or organizational  name and the goodwill of Borrower's  business;
     and

          (e) All  Investment  Property  (as  defined  in the  Commercial  Code)
     including  but  not  limited  to  stock  and  other  securities  evidencing
     ownership  of any  other  organization,  company  or  entity as well as all
     amendments,  extensions,  renewals and replacements of the above,  together
     with all certificates,  other instruments,  options,  rights, interest, and
     other  distributions  issued  as an  addition  to,  in  substitution  or in
     exchange  for,  or on account of, the same,  all  whether  now  existing or
     hereafter arising and whether now owned or hereafter acquired; and

          (f) All products and proceeds of any and all of the  foregoing and all
     products  and proceeds of any other  Collateral  (as  hereinafter  defined)
     including the proceeds of any insurance covering any of the Collateral,  as
     well as all Deposit  Accounts (as defined in the Commercial  Code),  money,
     cash, and the like.

All such Receivables,  Inventory,  Equipment,  General  Intangibles,  Investment
Property,  Deposit  Accounts,  products and  proceeds,  together  with all other
assets and  properties  of  Borrower in or on which  Lender is now or  hereafter
granted a security  interest,  mortgage,  lien or  encumbrance  pursuant to this
Agreement or otherwise, are hereinafter sometimes referred to as "Collateral".

     4. Advances.

          (a)  At the  request  of  Borrower,  and  subject  to  the  terms  and
     conditions  hereinafter  set forth,  Lender may make loans  (each such loan
     being herein  sometimes  called  individually an "Advance" and collectively
     the  "Advances")  to Borrower  from time to time on any Business Day during
     the  period  from the date  hereof  and  ending  on the  Termination  Date;
     provided,   however,  that  ------------------   Lender  does  not  intend,
     (although  has the sole  discretion)  to make any Advance if,  after giving
     effect to such Advance,  the aggregate  unpaid principal amount of Advances
     outstanding  would exceed the lesser of the  Borrowing  Base or the Maximum
     Principal  Amount.  The  amount of each such  Advance  shall be  charged to
     Borrower's loan account.  Borrower  acknowledges that Lender may, but shall
     not be obligated  to, make an Advance at any time in an amount equal to any
     overdraft  in  any  account  of  Borrower  maintained  with  Lender  or any
     Participant  even if the  aggregate  unpaid  principal  amount of  Advances
     exceeds or would exceed the Borrowing Base or the Maximum Principal Amount.
     Notwithstanding  the above,  or anything else contained in this  agreement,
     Lender  specifically  reserves  the  absolute  right to  refuse to make any
     particular  Advance requested or to refuse to make Advances generally or to
     make Advances for amounts less than that  otherwise  provided  herein,  all
     with or without advance notice, for any reason or no reason whatsoever.

          (b) In order to obtain an Advance,  Borrower shall give written notice
     to Lender,  by not later than 11:00 a.m.  (Minneapolis  time) on either the
     business day the requested Advance is to be made.  Lender,  shall make such
     Advance by transferring  the amount thereof in immediately  available funds
     for  credit  to  Borrower's  account  (other  than a payroll  account),  as
     specified in such notice.  Lender's  customary fees for making such advance
     will apply.  It is also noted that "next day  wires"/ACH  transfers will be
     posted  as a  loan  Advance  on  the  day  initiated  by  Lender  with  the
     understanding  that funds may not be received in  Borrower's  account until
     the next business day. At the request of Lender,  Borrower shall confirm in
     writing any telephonic notice.

          (c) The obligation of Lender to make Advances  shall  terminate on the
     Termination Date.

          (d) If at any  time  the sum of the  aggregate  outstanding  principal
     balance of the  Advances  exceeds the lesser of (i) the  Maximum  Principal
     Amount or (ii) the Borrowing Base, then Borrower agrees to make, on demand,
     a principal  repayment  on the  Advances in an amount  equal to such excess
     together  with  accrued  interest  on the  amount  repaid  to the  date  of
     repayment.  Borrower agrees that, on the Termination  Date (or earlier upon
     demand),  it will repay the  entire  outstanding  principal  balance of the
     Advances  together  with  accrued  interest  thereon and all  accrued  fees
     without presentment or demand for payment,  notice of dishonor,  protest or
     notice of protest, all of which are hereby waived.

          (e) The  Advances  shall be  evidenced  by the Note  made by  Borrower
     payable to the order of Lender in a principal  amount  equal to the Maximum
     Principal Amount;  subject,  however,  to the provisions of the Note to the
     effect that the principal  amount payable  thereunder at any time shall not
     exceed the then unpaid  principal  amount of all  Advances  made by Lender.
     Borrower hereby irrevocably  authorizes Lender to make or cause to be made,
     at or  about  the  time of each  Advance  made by  Lender,  an  appropriate
     notation on the records of Lender,  reflecting the principal amount of such
     Advance, and Lender shall make or cause to be made, on or about the time of
     receipt of payment of any principal of the Note, an appropriate notation on
     its records  reflecting such payment.  The aggregate amount of all Advances
     set forth on the records of Lender shall be rebuttable presumptive evidence
     of the principal amount owing and unpaid on the Note.

     5.  Demand  Facility.  All  interest,  principal,  Advances,  and any other
amounts owing hereunder are due on demand and Lender  specifically  reserves the
absolute  right to demand  payment  of all such  amounts  at any  time,  with or
without advance notice, for any reason or no reason  whatsoever.  Lender's right
to make such demand is not exclusive and Lender may coincidentally or separately
from such  demand make  further  demand for  payment  pursuant to the  paragraph
entitled "Default and Remedies" or otherwise hereunder and, further, amounts may
become due hereunder  (pursuant to the paragraph entitled "Default and Remedies"
or otherwise) without a demand by Lender, as provided in this agreement.

     6. Interest.  Borrower agrees to pay interest on the outstanding  principal
amount of the Note,  at the  close of each day at a  fluctuating  rate per annum
(computed on the basis of actual  number of days elapsed and a year of 360 days)
which is at all times equal to Five and  One-Quarter  Percent (5 1/4%) in excess
of the Prime Rate;  each change in such  fluctuating  rate caused by a change in
the Prime  Rate to occur  simultaneously  with the change in the Prime Rate (the
"Initial Rate"); provided, however, that (i) in no event shall the Initial Rate,
the Adjusted  Rate or the  Re-adjusted  rate in effect  hereunder at any time be
less than 8% per annum; and (ii) interest payable hereunder with respect to each
calendar  month  shall not be less than  $5,575.00  regardless  of the amount of
loans,  Advances  or  other  credit  extensions  that  actually  may  have  been
outstanding  during the month.  Interest  accrued  through  the last day of each
month  will be due and  payable  to Lender  on the next  Monthly  Payment  Date,
commencing November 1, 2003. Interest shall also be payable on the Maturity Date
or on any earlier  Termination Date. Interest accrued after the Maturity Date or
earlier Termination Date shall be payable on Demand.  Interest may be charged to
Borrower's  loan  account  as an  Advance  at  Lender's  option,  whether or not
Borrower  then has the right to obtain an Advance  pursuant to the terms of this
Agreement.

In the event Borrower earns Net Profit for the 12 months ending June 30, 2004 of
at least One Hundred  Thousand  Dollars  ($100,000) and evidences such profit by
delivering to Lender the Periodic Financial Report for that period that reflects
the  required  Net  Profit,  and  provided  no Event of  Default  exists  or has
occurred,  then upon  Borrower's  written  request,  the  Initial  Rate shall be
reduced to Four and Three  Quarter  percent (4 3/4%) in excess of the Prime Rate
(the "Adjusted  Rate")  commencing with the next scheduled  Monthly Payment Date
following  Lender's receipt of both Borrower's  written request and the Periodic
Financial Report.

Notwithstanding  the foregoing,  after an Event of Default,  the Note shall bear
interest  until  paid at 5% per annum in excess  of the rate  otherwise  then in
effect,  which rate shall continue to vary based on further changes in the Prime
Rate; provided,  however,  that after an Event of Default, (i) in no event shall
the  interest  rate in  effect  under  the Note at any time be less than 13% per
annum;  and (ii)  interest  payable under the Note with respect to each calendar
month  shall  not be less  than  $8,600.00  regardless  of the  amount of loans,
Advances or other credit  extensions  that  actually  may have been  outstanding
during the month.  (The Initial Rate, the Adjusted Rate and the Re-adjusted Rate
in effect  either  before or after an Event of  Default  is  referred  to herein
collectively as the "Interest Rate").  The undersigned shall also pay a late fee
equal to 10% of any payment under the Note that is more than 10 days past due.

     7. Set-Off;  etc. Upon the  occurrence of a Default or an Event of Default,
Lender is hereby authorized at any time and from time to time, without notice to
Borrower  (any such notice  being  expressly  waived by  Borrower),  to withdraw
and/or  set off any  and all  deposits  (general  or  special,  time or  demand,
provisional  or final)  held by  Lender,  any  Participant,  or any other  bank,
institution   or  person  for  credit  on  Borrower's   obligations   hereunder,
irrespective  of  whether  Borrower  shall  have made any  requests  under  this
Agreement.  Lender is expressly  authorized  to make any such  withdrawal by any
reasonable  means,  including under the Automated  Clearing  House,  ACH, or any
other funds transfer system.

     8. Reports and Collections.

          (a)  Borrower  agrees to furnish to Lender,  at least weekly (but more
     frequently  if  requested  by  Lender  in  writing),  schedules  describing
     Receivables created or acquired by Borrower (including confirmatory written
     assignments  thereof),  identifying  those  Receivables  which are Eligible
     Receivables from those which are not, and including, if Lender so requests,
     copies or originals  of some or all  invoices to account  debtors and other
     obligors  (all  herein  referred  to as  "Customers")  along with  original
     shipping or delivery  receipts for goods sold,  but if Borrower fails to do
     so the  rights of Lender as a secured  party will not be  impaired.  At any
     time  after  the  occurrence  of an Event of  Default,  Lender  may  notify
     Customers  at any time that  Receivables  have been  assigned to Lender and
     collect them directly in Lender's own name but unless and until Lender does
     so or gives Borrower other instructions, Borrower shall make collection for
     Lender at Borrower's  sole cost and expense.  Borrower  shall advise Lender
     promptly  of any  goods  which  are  returned  by  Customers  or  otherwise
     recovered involving an amount in excess of $5,000.00 and, unless instructed
     to deliver such goods to Lender,  Borrower shall resell them for Lender and
     assign or deliver to Lender the resulting  Receivables  or other  proceeds.
     Borrower  shall also advise  Lender  promptly of all disputes and claims by
     Customers  involving an amount in excess of $5,000.00  and settle or adjust
     them at no expense to Lender.  At any time after the  occurrence and during
     the  continuance of an Event of Default,  Lender may at all times settle or
     adjust such disputes and claims directly with the Customers for amounts and
     upon terms which Lender  considers  advisable.  If Lender so directs at any
     time after an Event of Default,  no discount,  credit or allowance shall be
     granted  by  Borrower  to any  Customer  and no  return  of goods  shall be
     accepted by Borrower without Lender's written consent.

          (b) Borrower agrees to furnish to Lender Inventory  certifications  in
     accordance  with  the  paragraph  entitled  "Affirmative  Covenants"  and a
     physical  listing of all  Inventory,  wherever  located,  specifying  which
     portions  are  Eligible  Inventory  and which are not,  at least once every
     twelve months or, in either case, as more frequently requested by Lender.

          (c) All full and partial  payments and any other cash collections from
     whatever  source  whatsoever,   whether  or  not  arising  from  the  sale,
     collection  or  other  disposition  of  Collateral  (whether  or not in the
     ordinary  course of business),  including but not limited to the collection
     of accounts  receivable in the ordinary course of business and the ordinary
     sale of inventory or services for cash,  shall  immediately be delivered by
     Borrower to Lender in their  original  form (except for  endorsement  where
     necessary)  and  uncashed  (in the  case of  checks  or  other  documents).
     Borrower shall direct all customers and other remitters of payments to mail
     payments to Lender's  post office box or other  lockbox.  Within 90 days of
     the date hereof,  at least ninety  percent (90%) of the  aggregate  dollars
     paid to or on behalf of Borrower  shall be received in Lender's post office
     box or  lockbox  directly  from  the  payor.  Until  such  payments  are so
     delivered to Lender (or Lender's lockbox),  such payments which nonetheless
     come into possession of Borrower shall be held in trust by Borrower for and
     as Lender's property and shall not be commingled with any funds of Borrower
     or otherwise  negotiated.  All cash collections  received by Lender will be
     credited to Borrower's loan account (subject to final  collection  thereof)
     after three  Business Days, or longer as required by Lender's bank to fully
     and finally collect the funds  represented by checks or other  instruments.
     Collections  received by Lender  after 11:00 am Central Time will be deemed
     received on the next Business Day.

     9. Warranty as to Collateral. Borrower warrants that:

          (a) all  Receivables  listed in or  reported on  Borrower's  schedules
     will, when Borrower delivers the schedules to Lender, be bona fide existing
     obligations  created  by the  sale  and  actual  delivery  of  goods or the
     rendition of services to Customers in the ordinary course of business,  not
     subject to return,  evaluation or other condition,  and which Borrower then
     owns free of any  Security  Interest  except for the  Security  Interest in
     favor of Lender created by this Agreement or Security  Interests  permitted
     under  the  paragraph  entitled  "Negative  Covenants",  and which are then
     unconditionally owing to Borrower without defense,  offset or counterclaim;
     and that all  shipping  or  delivery  receipts,  invoice  copies  and other
     documents furnished to Lender in connection therewith will be genuine; and

          (b) all  Inventory  and  Equipment  is and shall be owned by Borrower,
     free of any Security  Interest  except for the Security  Interest of Lender
     created by this Agreement or Security Interests  permitted by the paragraph
     entitled "Negative covenants".

Lender's rights to and security  interest in the Collateral will not be impaired
by the ineligibility of any such Collateral for Advances and will continue to be
effective until all obligations  chargeable to Borrower's loan account have been
fully satisfied.

     10. Power of Attorney.  Borrower  authorizes and appoints Lender, or any of
Lender's  officers,  employees  or  agents  whom  Lender  may from  time to time
designate,  in Borrower's name and as Borrower's  attorney with power to: (a) to
endorse Borrower's name on any checks, notes, acceptances, drafts or other forms
of payment  or  security  that may come into  Lender's  possession;  (b) to sign
Borrower's name on any invoice or bill of lading relating to any Receivables, on
drafts  against  Customers,   on  schedules  and  confirmatory   assignments  of
Receivables, on notices of assignment, financing statements and amendments under
the Commercial Code and other public records,  on  verifications of accounts and
on notices to Customers; (c) to notify the post office authorities to change the
address for delivery of Borrower's mail to an address  designated by Lender; (d)
to receive,  open and dispose of all mail  addressed  to  Borrower;  (e) to send
requests for  verification of accounts to Customers;  (f) to obtain  information
from  any  bank,  creditor,   customer  or  other  Person  regarding  Borrower's
relationship, account, history etc.; (g) to sign lien waivers and other releases
or  satisfactions  of claims or rights by Borrower  in  exchange  for payment or
other  consideration which Lender in its sole discretion believes is appropriate
under the  circumstances;  (h) to directly  verify and/or confirm the existence,
authenticity,  accuracy or terms of any Receivable  and/or of any payment on any
Receivable (both in Lender's own name or in Borrower's name) without  previously
notifying  Borrower of its intention to do so and Borrower grants its consent to
Lender for Lender's employees and agents to represent themselves as employees or
agents of Borrower  for these  purposes;  and (i) to do all things  necessary to
carry out this Agreement; provided however, that the powers specified in clauses
(c) and (d) above may be  exercised  only  after the  occurrence  of an Event of
Default. Borrower ratifies and approves all acts of the attorney. Neither Lender
nor the attorney  will be liable for any acts of  commission or omission nor for
any error in judgment or mistake of fact or law. This power,  being coupled with
an interest,  is  irrevocable  so long as any  Receivable  in which Lender has a
security interest or any Obligation remains unpaid.  Borrower waives presentment
and  protest of all  instruments  and  notice  thereof,  notice of  default  and
dishonor and all other notices to which Borrower may otherwise be entitled.

     11.  Location of  Collateral.  Borrower  warrants that its chief  executive
office is at the address  stated in the opening  paragraph of this Agreement and
that,  unless  indicated  otherwise  here,  its  books  and  records  concerning
Receivables are located at the same address.  Unless  indicated  otherwise here,
Borrower's Inventory, Equipment and other goods are located at the same address:

Borrower  shall  immediately  notify  Lender  if any  additional  locations  for
Collateral are subsequently established.  Borrower shall not change the location
of its chief executive  office,  the place where it keeps its books and records,
or the location of any Collateral (except for sales of Inventory in the ordinary
course of business)  until  Borrower has obtained the written  consent of Lender
and all necessary filings have been made and other actions taken to continue the
perfection of Lender's Security Interest in such new location. Lender's Security
Interest  attaches to all the Collateral  wherever  located,  and the failure of
Borrower to inform  Lender of the  location  of any item or items of  Collateral
shall not impair Lender's Security Interest therein.

     12. Ownership and Protection of Collateral.  Borrower warrants,  represents
and  covenants to Lender that the  Collateral is now and, so long as Borrower is
obligated  to Lender,  will be owned by Borrower  free and clear of all Security
Interests  except for the Security  Interest in favor of Lender  created by this
Agreement and except the Security Interests,  if any, permitted by the paragraph
entitled  "Negative  Covenants",   and  that  said  Collateral,   including  the
Receivables  and  proceeds   resulting  from  the  collection,   sale  or  other
disposition  thereof,  will  remain  free  and  clear  of any and  all  Security
Interests  except for the Security  Interest in favor of Lender  created by this
Agreement  and  except  the  Security  Interests,  if any,  permitted  under the
paragraph  entitled  "Negative  Covenants".  Borrower  will not  sell,  lease or
otherwise  dispose of the  Collateral,  or attempt to do so (except for sales of
Inventory  in the  ordinary  course of business  and sales of obsolete  and worn
equipment  not in excess of  $25,000  in the  aggregate  in any  calendar  year)
without the prior  written  consent of Lender,  unless the  proceeds of any such
sale  are  promptly  paid  to  Lender  uncashed  and in its  original  form  for
application on Borrower's  Obligations.  After the occurrence of a Default or an
Event of  Default,  Lender  will at all times  have the  right to take  physical
possession  of  any  Inventory  and  Equipment  constituting  Collateral  and to
maintain such  possession  on  Borrower's  premises or to remove the same or any
part  thereof  to such  other  places as Lender  may wish.  If Lender  exercises
Lender's right to take possession of such Collateral, Borrower shall on Lender's
demand,  assemble the same and make it available to Lender at a place reasonably
convenient  to  Lender.   Borrower   shall  at  all  times  keep  the  Equipment
constituting   Collateral  in  good  condition  and  repair.   All  expenses  of
protecting,  storing,  warehousing,  insuring,  handling  and  shipping  of  the
Collateral,  all costs of keeping the Collateral free of any Security  Interests
prohibited by this Agreement and of removing the same if they should arise,  and
any and all excise,  property, sales and use taxes imposed by any state, federal
or local  authority on any of the  Collateral or in respect of the sale thereof,
shall be borne and paid by Borrower  and if Borrower  fails to promptly  pay any
thereof when due,  Lender may, at its option,  but shall not be required to, pay
the same and charge Borrower's loan account  therefor.  Borrower agrees to renew
all insurance required by this Paragraph or the paragraph  entitled  "Insurance"
at least 30 days prior to its expiration.  Borrower agrees that, with respect to
any Inventory  maintained in a public  warehouse,  (i) Borrower will ensure that
any warehouse  receipts issued are not in a negotiable form, (ii) Borrower will,
upon request from Lender,  deliver all warehouse  receipts to Lender,  and (iii)
Borrower will cause the public  warehouseman to execute an agreement  similar to
those  delivered  pursuant to the paragraph  entitled  "Conditions  Precedent to
Initial Advance" in form and substance satisfactory to Lender.

     13.  Perfection  of  Security  Interest.  Borrower  agrees to execute  such
financing  statements  together with any and all other  instruments or documents
and take such other action,  including  delivery,  as may be required to create,
evidence,  perfect and maintain Lender's Security Interest in the Collateral and
Borrower shall not in any manner do any act or omit to do any act which would in
any manner impair or invalidate  Lender's Security Interest in the Collateral or
the perfection thereof.

     14. Insurance. Borrower shall maintain insurance coverage on any Collateral
other than  Receivables with such companies,  against such hazards,  and in such
amounts as may from time to time be  acceptable to Lender and shall deliver such
policies or copies  thereof to Lender with  satisfactory  lender's  loss payable
endorsements  naming  Lender.  Each policy of insurance  shall  contain a clause
requiring  the  insurer  to give not less than 30 days prior  written  notice to
Lender in the event of any anticipated cancellation of the policy for any reason
and a clause that the interest of Lender shall not be impaired or invalidated by
any act or neglect of Borrower nor by the  occupation  of the  premises  wherein
such  Collateral  is located for purposes more  hazardous  than are permitted by
said policy.  Borrower  will  maintain,  with  financially  sound and  reputable
insurers,  insurance with respect to its  properties  and business  against such
casualties  and  contingencies  of  such  types  (which  may  include,   without
limitation,  public  and  product  liability,  larceny,  embezzlement,  or other
criminal  misappropriation  insurance)  and in such  amounts as may from time to
time be required by Lender.

     15. Borrower's Account. Lender may charge to Borrower's loan account at any
time the amounts of all  Obligations  (and interest,  if any,  thereon) owing by
Borrower to Lender,  including  (without  limitation)  loans,  Advances,  debts,
liabilities,  obligations acquired by purchase,  assignment or participation and
all other  obligations,  whenever  arising,  whether  absolute or contingent and
whether due or to become due;  also the amount of all costs and expenses and all
attorneys'  fees and legal expenses  incurred in connection with efforts made to
enforce payment of such obligations, or to obtain payment of any Receivables, or
the  foreclosure  of any  Collateral  or in the  prosecution  or  defense of any
actions or proceedings  relating in any way to this Agreement (including but not
limited  to  bankruptcy  or  insolvency  proceedings)  whether  or not  suit  is
commenced,  including reasonable  attorneys' fees and legal expenses incurred in
connection  with any appeal of a lower court's  order or judgment;  and also the
amounts of all unpaid taxes and the like,  owing by Borrower to any governmental
authority or required to be deposited by Borrower, which Lender pays or deposits
for  Borrower's  account.  All of  Borrower's  borrowings  hereunder and (unless
otherwise  specified) all other  obligations  which are chargeable to Borrower's
loan  account  shall be payable  ON DEMAND;  recourse  to  security  will not be
required  at any time.  All sums at any time  standing to  Borrower's  credit on
Lender's books and all of Borrower's property at any time in Lender's possession
or upon or in which  Lender  has a Security  Interest,  may be held by Lender as
security for all  obligations  which are chargeable to Borrower's  loan account.
Subject to the foregoing,  Lender, at Borrower's request, will remit to Borrower
any net balance  standing to Borrower's  credit on Lender's  books.  Lender will
account to Borrower monthly and each monthly accounting will be fully binding on
Borrower, unless, within thirty days thereafter,  Borrower gives Lender specific
written notice of exceptions. All debit balances in Borrower's loan account will
bear  interest  as  provided  in  the  paragraph  entitled  "Interest"  of  this
Agreement.  If Lender so requests at any time, Borrower will immediately execute
and deliver to Lender a promissory  note in negotiable form payable on demand to
Lender's order in a principal amount equal to the amount of the debit balance in
Borrower's  loan account,  with  interest as provided in the paragraph  entitled
"Interest".  In any  event,  Borrower  covenants  to pay  all  Advances,  debts,
accounts and interest when due.

     16. Participations. If any Person shall acquire a participation in Advances
made to Borrower hereunder, Borrower hereby grants to Lender as well as any such
Person  holding a  participation,  and Lender and such Person shall have and are
hereby given a continuing  Security Interest in any money,  securities and other
property of Borrower in the custody or possession of such Participant, including
the  right of  set-off  as fully as if such  Participant  had lent  directly  to
Borrower the amount of such participation.  Borrower hereby grants to Lender its
continuing  authority  and  consent to release any and all  financial  and other
information  related  to  Borrower's  financial  condition,   performance,   its
business,  operations  or any  other  matter  whatsoever  to  any of  Borrower's
creditors  (both secured and  unsecured),  to any  Participant,  or to any other
Person for their  consideration of a possible  participation in Advances by that
Person.

     17.  General  Representations  and  Warranties.  To  induce  Lender to make
Advances hereunder, Borrower makes the following representations and warranties,
all of which shall survive the initial Advance:

          (a) Borrower is a corporation  duly organized,  existing,  and in good
     standing under the laws of the State of Michigan,  has the power to own its
     property  and to  carry  on its  business  as now  conducted,  and is  duly
     qualified  to do business in all states in which the nature of its business
     requires such qualification.  During the past five years, Borrower has done
     business solely under its name(s) listed above as "Borrower" as well as the
     following names: [Old names, trade names and dba names]

     -------------------------------------------
     -------------------------------------------

     Borrower  does not own any  capital  stock of any  corporation,  except for
     corporations which may be a joint borrower hereunder or which are providing
     a Guaranty or which are listed here: [Corporate stock owned]

     -------------------------------------------
     -------------------------------------------

          (b) The  execution  and delivery of this  Agreement and the other Loan
     Documents and the performance by Borrower of its obligations  hereunder and
     thereunder  do not and will not conflict  with any  provision of law, or of
     the  charter  or bylaws  of  Borrower,  or of any  agreement  binding  upon
     Borrower.

          (c) The  execution  and delivery of this  Agreement and the other Loan
     Documents   have  been  duly   authorized  by  all   necessary   action  by
     directors/governors   and   shareholders/members   of  Borrower;  and  this
     Agreement and the other Loan  Documents have in fact been duly executed and
     delivered by Borrower and  constitute  its lawful and binding  obligations,
     legally enforceable against it in accordance with their respective terms.

          (d) Unless listed here with a detailed description attached,  [Lawsuit
     case names]

     -------------------------------------------
     -------------------------------------------

     there is no action,  suit or proceeding  at law or equity,  or before or by
     any federal,  state,  local or other governmental  department,  commission,
     board, bureau, agency or instrumentality,  domestic or foreign, pending or,
     to the knowledge of Borrower,  threatened against Borrower or any Guarantor
     or  the  property  of  Borrower  or  any  Guarantor  which,  if  determined
     adversely, would be a Material Adverse Occurrence, and neither Borrower nor
     any  Guarantor  is in default  with  respect to any final  judgment,  writ,
     injunction,  decree,  rule or  regulation  of any court or federal,  state,
     local or other governmental department,  commission,  board, bureau, agency
     or instrumentality,  domestic or foreign,  where the effect of such default
     would be a Material Adverse Occurrence.

          (e) The authorization,  execution and delivery of this Agreement,  and
     the  payment of the loans and  interest  hereon,  is not,  and will not be,
     subject to the jurisdiction,  approval or consent of any federal,  state or
     local regulatory body or administrative agency.

          (f) All of the  assets  of  Borrower  are free and  clear of  Security
     Interests except for (i) equipment leases on specific equipment (and not in
     equipment  generally)  which are  disclosed  on a Uniform  Commercial  Code
     search in the states where  equipment  is located as disclosed  above under
     "Location of Collateral";  and (ii) those Security  Interests  permitted by
     the paragraph entitled "Negative Covenants."

          (g) Borrower has filed all federal, state and local tax returns which,
     to the  knowledge of Borrower,  are required to be filed,  and Borrower has
     paid all taxes  shown on such  returns and all  assessments  which are due.
     Borrower has made all required  withholding  deposits.  Federal  income tax
     returns of  Borrower  have been  examined  and  approved or adjusted by the
     applicable  taxing  authorities  or closed by  applicable  statutes for all
     fiscal years prior to and including  the last fiscal year ending.  Borrower
     does not have knowledge of any objections to or claims for additional taxes
     by federal,  state or local taxing  authorities for subsequent  years which
     would be a Material Adverse Occurrence.

          (h)  Borrower   has   furnished   to  Lender   various   personal  and
     organizational  financial statements.  All such statements were prepared in
     accordance with GAAP and present fairly the financial condition of Borrower
     and other person and/or entity for which each statement relates.  There has
     been no material  adverse change in the condition of Borrower and the other
     person and/or entity relating to such  statements,  financial or otherwise,
     since the date of the most recent of such financial statements.

          (i) The value of the  assets  and  properties  of  Borrower  at a fair
     valuation and at their then present fair salable value is and, after giving
     effect to any pending Advance and the  application of the amount  advanced,
     will be materially greater than its total liabilities, including Contingent
     Obligations,  and  Borrower  has (and has no reason to believe that it will
     not have) capital sufficient to pay its liabilities,  including  Contingent
     Obligations, as they become due.

          (j) jorrower is in compliance with all requirements of law relating to
     pollution   control  and   environmental   regulations  in  the  respective
     jurisdictions  where  Borrower is presently  doing  business or  conducting
     operations.

          (k) All  amounts  obtained  pursuant  to  Advances  will  be used  for
     Borrower's working capital purposes.

          (l) Except  for the  trademarks,  patents,  copyrights  and  franchise
     rights  listed  here,  Borrower is not the owner of any patent,  trademark,
     copyright  or  franchise  rights.  [Trademarks,   patents,  copyrights  and
     franchise rights]

     -------------------------------------------
     -------------------------------------------
     -------------------------------------------
     -------------------------------------------

          (m) (i) Each Plan is in compliance  in all material  respects with all
     applicable  provisions of ERISA and the Code;  (ii) the  aggregate  present
     value of all accrued  vested  benefits  under all Plans  (calculated on the
     basis of the actuarial  assumptions  specified in the most recent actuarial
     valuation  for such Plans) did not exceed as of the date of the most recent
     actuarial  valuation  for such Plans the fair market value of the assets of
     such Plans  allocable to such benefits;  (iii) Borrower is not aware of any
     information since the date of such valuations which would materially affect
     the information  contained therein; (iv) no Plan which is subject to Part 3
     of Subtitle B of Title I of ERISA or Section  412 of the Code has  incurred
     an accumulated funding  deficiency,  as that term is defined in Section 302
     of ERISA  or  Section  412 of the  Code  (whether  or not  waived);  (v) no
     liability to the PBGC (other than required  premiums  which have become due
     and payable, all of which have been paid) has been incurred with respect to
     any Plan,  and there has not been any  Reportable  Event  which  presents a
     material risk of termination of any Plan by the PBGC; and (vi) Borrower has
     not  engaged in a  transaction  which would  subject it to tax,  penalty or
     liability  for  prohibited  transactions  imposed  by  ERISA  or the  Code.
     Borrower does not contribute to any Multiemployer Plan.

          (n) No part of any  Advance  shall be used at any time by  Borrower to
     purchase  or carry  margin  stock  (within  the  meaning  of  Regulation  U
     promulgated by the Board of Governors of the Federal  Reserve System) or to
     extend  credit to others for the  purpose of  purchasing  or  carrying  any
     margin  stock.  Borrower  is  not  engaged  principally,  or as  one of its
     important activities,  in the business of extending credit for the purposes
     of purchasing or carrying any such margin stock. No part of the proceeds of
     any Advance will be used by Borrower  for any purpose  which  violates,  or
     which is  inconsistent  with, any  regulations  promulgated by the Board of
     Governors of the Federal Reserve System.

          (o) Borrower is not an "investment company", or an "affiliated person"
     of,  or  a  "promoter"  or  "principal  underwriter"  for,  an  "investment
     company",  as such terms are defined in the Investment Company Act of 1940,
     as amended. The making of the Advances, the application of the proceeds and
     repayment  thereof by  Borrower  and the  performance  of the  transactions
     contemplated  by this Agreement will not violate any provision of said Act,
     or any rule,  regulation  or order  issued by the  Securities  and Exchange
     Commission thereunder.

          (p) Unless a full  description  of each  class of stock or  membership
     interest and the names and relative amounts of the  owners/members  thereof
     is  attached to this  Agreement,  Borrower  has a single  class of stock or
     membership  interest  and  the  owners/members  of  at  least  5%  of  such
     stock/interest  outstanding  is as follows  (rounded  to nearest  percent):
     [Significant Owners and shares owned]

         Name of Shareholders                  Percent of
                                               outstanding
                                                 Shares
         Productivity Technology Corp.               100%
         ------------------------                    ---%
         ------------------------                    ---%
         ------------------------                    ---%
         ------------------------                    ---%
         ------------------------                    ---%

     Borrower has not: (i) issued any  unregistered  securities  in violation of
     the  registration  requirements of Section 5 of the Securities Act of 1933,
     as amended,  or any other law; or (ii)  violated  any rule,  regulation  or
     requirement under the Securities Act of 1933, as amended, or the Securities
     Exchange Act of 1934,  as amended,  in either case where the effect of such
     violation  would be a  Material  Adverse  Occurrence.  No  proceeds  of the
     Advances will be used to acquire any security in any  transaction  which is
     subject to Section 13(d) or 14(d) of the  Securities  Exchange Act of 1934,
     as amended.

          (q) Except for Contingent  Obligations listed here,  Borrower does not
     have any  Contingent  Obligations.  [Contingent  Obligations  list - Attach
     details to Agreement]

     -------------------------------------------
     -------------------------------------------
     -------------------------------------------
     -------------------------------------------

          (r) All factual information  heretofore or herewith furnished by or on
     behalf of Borrower to Lender for  purposes  of or in  connection  with this
     Agreement  or any  transaction  contemplated  hereby is, and all other such
     factual  information  hereafter  furnished  by or on behalf of  Borrower to
     Lender will be, true and accurate in every material  respect on the date as
     of which such  information  is dated or certified  and no such  information
     contains  any  material  misstatement  of fact or omits to state a material
     fact or any fact  necessary to make the  statements  contained  therein not
     misleading.

          (s) Each  representation  and warranty  shall be deemed to be restated
     and  reaffirmed  to Lender on and as of the date of each Advance under this
     Agreement except that any reference to the financial statements referred to
     in the paragraph entitled "General Representations and Warranties" shall be
     deemed to refer to the financial statements then most recently delivered to
     Lender pursuant to the paragraph entitled "Affirmative Covenants".

     18. Affirmative Covenants. Borrower agrees that it will:

          (a) Furnish to Lender in form  satisfactory  to Lender the  following,
     all of which will  conform to GAAP and all of which shall  comport with the
     representations and warranties  contained in the paragraph entitled General
     Representations and Warranties:

               (i) Within 90 days after the end of each fiscal year of Borrower,
          a Periodic  Financial  Report for such fiscal year. If Borrower  shall
          fail to supply the report  within such time limit,  Lender  shall have
          the right (but not the duty) to employ  certified  public  accountants
          acceptable to Lender to prepare such report at Borrower's expense;

               (ii) Within 30 days after the end of each month,  a balance sheet
          with operating  figures as to that month,  certified as correct by the
          chief  financial  officer or  controller  of  Borrower  but subject to
          adjustments  as to  inventories  or other items to which an officer of
          Borrower directs attention in writing,  together with a reconciliation
          of any  variances  between the  information  provided on such  balance
          sheet and the information for that day previously  delivered to Lender
          pursuant to the paragraph entitled "Affirmative Covenants";

               (iii) With each of the financial  statements  described  above, a
          compliance  certificate in form and substance  satisfactory  to Lender
          and certified as true and accurate by the chief  financial  officer or
          controller of Borrower;

               (iv)  Within  10 days  after the end of each  month,  an aging of
          accounts   receivable   together  with  a  reconciliation  in  a  form
          satisfactory  to  Lender  and an aging  of  accounts  payable  in form
          acceptable  to  Lender,  both  certified  as true and  accurate  by an
          officer of Borrower;

               (v)  Within 10 days  after the end of each  month,  an  inventory
          certification  report for all  Inventory at all  locations and in form
          acceptable  to Lender and certified as true and accurate by an officer
          of Borrower; and

               (vi) At least one day prior to its  release,  all press  releases
          and/or  announcements,  whether or not Borrower is a so called "public
          company"; and

               (vii) From time to time, at Lender's  request,  any and all other
          material, reports,  information, tax returns and/or figures reasonably
          required by Lender.

          (b) Permit Lender and its representatives  access to, and the right to
     make  copies of, the books,  records,  and  properties  of  Borrower at all
     reasonable  times;  and permit  Lender and its  representatives  to discuss
     Borrower's  financial  matters  with  officers  of  Borrower  and  with its
     Independent Public Accountant (and, by this provision,  Borrower authorizes
     its Independent Public Accountant to participate in such discussions).

          (c) Pay when due all taxes, assessments, and other liabilities against
     it or its properties  except those which are being  contested in good faith
     and for which an adequate reserve has been established; Borrower shall make
     all withholding  payments when due;  Borrower shall promptly provide Lender
     with  evidence of payment by Borrower's  shareholders/members  of estimated
     income taxes.

          (d) Promptly  notify  Lender in writing of any  substantial  change in
     present  management or present  business,  of its intention to enter into a
     new business or industry,  or of its  intention to wind down,  liquidate or
     close substantially all of its business;

          (e) Pay when due all amounts  necessary to fund in accordance with its
     terms any Plan;

          (f)  Comply  in all  material  respects  with all laws,  acts,  rules,
     regulations and orders of any legislative,  administrative or judicial body
     or official  applicable to Borrower's  business  operation or Collateral or
     any part  thereof;  provided,  however,  that Borrower may contest any such
     law,  act,  rule,   regulation  or  order  in  good  faith  by  appropriate
     proceedings so long as (i) Borrower first notifies  Lender of such contest,
     and (ii) such  contest  does not, in Lender's  sole  discretion,  adversely
     affect  Lender's right or priority in the  Collateral or impair  Borrower's
     ability to pay the Obligations when due;

          (g) Permit Lender and its representatives, at any time, to examine and
     inspect any  Collateral,  and to examine,  inspect and copy the  Borrower's
     records   pertaining  to  the  Collateral  and  the  Borrower's   financial
     condition, business and property.

          (h) Loan  Administration  Fee. Pay Lender for the period commencing on
     the date of this Agreement and continuing  through the date of full payment
     of all  Obligations,  a reasonable  administration  fee (herein  called the
     "Loan  Administration  Fee"),  which shall be equal to the sum of $2,750.00
     per calendar  quarter (or any partial  quarter),  commencing as of the date
     hereof and pro-rated for the balance of the current calendar quarter,  plus
     all   out-of-pocket   expenses   incurred  by  Lender  in  conducting  ----
     examinations including travel related expenses. The Loan Administration Fee
     shall be  non-refundable,  shall be deemed  earned when paid,  and shall be
     payable to Lender as of the date  hereof  (for the  balance of the  current
     calendar quarter),  and thereafter on December 31, 2003 and on the last day
     of each subsequent 3 month period/quarter.  The existence or payment of the
     Loan  Administration  Fee, Line Maintenance Fee or any other fee or charge,
     shall in no way alter or diminish the obligation to pay interest,  Lender's
     costs of  collection  and  attorneys'  fees,  or any other  fees or charges
     imposed  under this  agreement or any other  agreement  between  Lender and
     Borrower or any Guarantor;

          (i) Line Maintenance Fee. Pay Lender, for the period commencing on the
     date of this  Agreement  and  continuing  through the  Termination  Date, a
     non-refundable  line  maintenance  fee  (the  "Line  Maintenance  Fee")  of
     $25,000.00  per annum (less the $7,500  survey fee which has  already  been
     paid and which is credited less SPECTRUM  expenses against the first year's
     Line Maintenance Fee). Such Line Maintenance Fee shall be payable to Lender
     in  advance  on the  Closing  Date and on the first day of each  subsequent
     anniversary of the date of this agreement until all amounts owing hereunder
     are repaid in full. The Line  Maintenance Fee shall be  non-refundable  and
     shall be deemed earned when paid.

          (j) Promptly notify Lender in writing of (x) any litigation  which (i)
     involves an amount in dispute in excess of  $10,000.00  (ii) relates to the
     matters  which are the subject of this  Agreement,  or (iii) if  determined
     adversely to Borrower would be a Material Adverse  Occurrence;  and (y) any
     adverse development in any litigation described in clause (x).

          (k) Promptly notify Lender of any Default or Event of Default.

          (l) As of the calendar quarter ending  12/31/03,  and as of the end of
     each subsequent  calendar  quarter,  Borrower shall achieve a before income
     tax Net Profit of at least $1.00 for the  calendar  quarter as well as on a
     year-to-date basis.

     19. Negative  Covenants.  Borrower agrees that,  without  Lender's  written
consent, it will not:

          (a) Expend or  contract to expend an  aggregate  in excess of $100,000
     for fixed assets in any fiscal year,  whether by way of purchase,  lease or
     otherwise, and whether payable currently or in the future.

          (b)  Purchase or redeem any shares of  Borrower's  capital  stock;  or
     declare  or pay any  dividends  (other  than  dividends  payable in capital
     stock);   or  make  any  other   distribution  or  payment   whatsoever  to
     stockholders,  Affiliates or members of any assets of Borrower, except that
     payments to Affiliates may be made for Borrower's  proportion  share of the
     Affiliate's  out of pocket  expenses  actually  incurred in maintaining its
     status as a public company;

          (c) Incur or permit to exist any  indebtedness,  secured or unsecured,
     for money  borrowed,  except:  (i) borrowings  under this  Agreement;  (ii)
     indebtedness,  not  exceeding  $50,000.00  at any one time in the aggregate
     outstanding,  which was incurred to acquire fixed  assets,  but only to the
     extent that such fixed asset  acquisition  is permitted  by this  paragraph
     entitled  "Negative  Covenants";  or (iii)  borrowings,  if any,  which are
     existing on the date of this Agreement,  which exceed $25,000 and which are
     listed  here  (rounded  to nearest  $1,000):  [Debt  over  $25,000 - Attach
     details to Agreement]

                                               Total
         Name of Creditor                   Amount Owed
                                            (rounded to
                                            $1,000s)

         Thomas Lee                         $____________
         Productivity Technology Corp.      $____________
         Atlas                              $____________

          (d) Create or permit to exist any Security  Interest on any assets now
     owned or hereafter acquired except: (i) those created in Lender's favor and
     held by Lender;  (ii) liens of current taxes not  delinquent or taxes which
     are being  contested  in good faith for which an adequate  reserve has been
     established;  (iii) purchase money security interests securing indebtedness
     permitted  by  this  paragraph  entitled  "Negative  Covenants";  provided,
     however,  that such  Security  Interest  extends  only to the fixed  assets
     acquired  with  the  proceeds  of  such  indebtedness;  and  (iv)  Security
     Interests  disclosed  above,  securing only debt outstanding on the date of
     this Agreement and which is described above.

          (e)  Effect  any  recapitalization;  or be a party  to any  merger  or
     consolidation;  or sell  transfer,  convey or lease all or any  substantial
     part of its property; or sell or assign (except to Lender), with or without
     recourse, any Receivables or General Intangibles.

          (f) Enter into a new  business or purchase  or  otherwise  acquire any
     business  enterprise or any substantial  assets of any person or entity; or
     make any loans to any person or entity; or purchase any shares of stock of,
     or similar  interest in, or make any capital  contribution to or investment
     in, any entity.

          (g) Permit more than $50,000.00 to be owing, in the aggregate,  at any
     one time to Borrower by all of Borrower's  employees,  officers,  managers,
     governors,  directors,  members, affiliates and/or shareholders,  including
     members of their families, as a result of any borrowings, purchases, travel
     advances or other transactions or events;

          (h) Become a guarantor or surety or pledge its credit or its assets on
     any  undertaking of another,  except for the Contingent  Obligations  shown
     above;

          (i) In  any  fiscal  year  pay  excessive  or  unreasonable  salaries,
     bonuses, fees, commissions,  fringe benefits or other forms of compensation
     (such salaries, bonuses, fees, commissions,  fringe benefits or other forms
     of compensation  being  "Compensation") to any of its officers or directors
     or any Guarantor; or increase the Compensation of any officers or Guarantor
     by more than ten percent (10%) or pay any such increases in Compensation of
     officers or Guarantors  other than from profits  earned in the year of such
     payment;

          (j) Permit any default to occur under the terms of any Loan  Document,
     note,  loan  agreement,   lease,  mortgage,  contract  for  deed,  security
     agreement, or other contractual obligation binding upon Borrower;

          (k) Make any substantial  change in present  ownership,  management or
     present business, enter into a new business or industry, or take actions to
     wind down, liquidate or close substantially all of its business;

          (l) Enter into any agreement  providing for the leasing by Borrower of
     property  which has been or is to be sold or transferred by Borrower to the
     lessor  thereof,  or which  is  substantially  similar  in  purpose  to the
     property so sold or transferred;

          (m)  Change  its terms of trade  with  respect  to the due date of any
     Receivable;

          (n) Change its fiscal year;

          (o) (i) Permit or suffer any Plan maintained for employees of Borrower
     or any  commonly  controlled  entity  to engage  in any  transaction  which
     results in a liability of Borrower  under Section 409 or 502(i) of ERISA or
     Section 4975 of the Code;  (ii) permit or suffer any such Plan to incur any
     "accumulated  funding  deficiency"  (within  the  meaning of Section 302 of
     ERISA and Section 412 of the Code), whether or not waived; (iii) terminate,
     or  suffer  to be  terminated,  any  Plan  covered  by  Title  IV of  ERISA
     maintained  by  Borrower  or any  commonly  controlled  entity or permit or
     suffer to exist a condition  under which PBGC may  terminate any such Plan;
     or (iv) permit to exist the occurrence of any Reportable  Event (as defined
     in Title IV of ERISA) which represents termination by the PBGC of any Plan;

          (p) Enter into any  transaction  with any  Affiliate of Borrower  upon
     terms  and  conditions  less  favorable  to  Borrower  than the  terms  and
     conditions  which would apply in a similar  transaction  with an  unrelated
     third party;

          (q) Enter into any agreement  containing any provision  which would be
     violated  or  breached  by  Borrower  under  any  Loan  Document  or by the
     performance by Borrower of its obligations under any Loan Document;

          (r) Amend or modify the provisions of any Subordinated Debt; or

          (s) Maintain  any  Inventory  at a warehouse  which issues  negotiable
     warehouse receipts with respect to such inventory.

          (t) Create or incur a default under the Guarantor Payment Agreement or
     any other credit agreement with Bank One, NA

     20.  Availability  of  Collateral.  Lender  may from time to time,  for its
convenience,  segregate or apportion the  Collateral for purposes of determining
the  amounts  and  maximum  amounts  of  Advances  which may be made  hereunder.
Nevertheless,  Lender's security interest in all such Collateral,  and any other
collateral  rights,  interests  and  properties  which may now or  hereafter  be
available  to Lender,  shall secure and may be applied to the payment of any and
all loans, Advances and other Obligations secured by Lender's security interest,
in any order or manner of application  and without regard to the method by which
Lender determines to make Advances hereunder.

     21.  Default  and  Remedies.  It shall be an Event of  Default  under  this
Agreement if:

          (a) Borrower  fails to make any payment  required under this Agreement
     or any present or future  supplements  hereto or under any other  agreement
     between  Borrower  and Lender when due,  or if payable  upon  demand,  upon
     demand; or

          (b) Borrower  fails to perform or observe any  covenant,  condition or
     agreement contained in this Agreement or in any other Loan Document; or

          (c) Any  warranty,  representation  or statement  made or furnished to
     Lender by or on behalf of  Borrower  or any  Guarantor  proves to have been
     false, incorrect or misleading in a material respect when made; or

          (d) A proceeding seeking an order for relief under the Bankruptcy Code
     is commenced by or against  Borrower or any  Guarantor,  provided  however,
     that if such a proceeding is commenced against Borrower or any Guarantor on
     an involuntary  basis,  then only if such action is not dismissed within 60
     days of first being filed; or

          (e) Borrower or any Guarantor  becomes insolvent or generally fails to
     pay, or admit in writing its or his  inability  to pay, its or his debts as
     they become due; or

          (f) Borrower or any Guarantor  applies for, consents to, or acquiesces
     in, the appointment of a trustee, receiver or other custodian for it or him
     or for any of its or his property,  or makes a general  assignment  for the
     benefit of creditors;  or, in the absence of such  application,  consent or
     acquiescence,  a trustee,  receiver or other  custodian  is  appointed  for
     Borrower or for  Guarantor or for a  substantial  part of Borrower's or any
     Guarantor's property; or

          (g) Any  other  reorganization,  debt  arrangement,  or other  case or
     proceeding  under any bankruptcy or insolvency  law, or any  dissolution or
     liquidation   proceeding  is  commenced  in  respect  of  Borrower  or  any
     Guarantor, provided however, that if such a proceeding is commenced against
     any  Guarantor  on an  involuntary  basis,  then only if such action is not
     dismissed within 60 days of first being filed; or

          (h) Borrower or any  Guarantor  takes any action to  authorize,  or in
     furtherance  of, any of the events  described in the foregoing  clauses (d)
     through (g); or

          (i)  All or a  substantial  part  of the  assets  of  Borrower  or any
     Guarantor  are sold,  leased,  or  otherwise  disposed  of  (whether in one
     transaction or in a series of transactions) to one or more Persons;

          (j) Any  judgments,  writs or warrants of  attachment,  executions  or
     similar  process (not covered by insurance)  in the  aggregate  amount that
     exceeds  $10,000.00 is issued or levied against Borrower,  any Guarantor or
     any of its or his assets and is not released, vacated or fully bonded prior
     to any sale and in any event within five days after its issue or levy; or

          (k)  The  issuance  or  levy  of any  garnishment,  summons,  writ  of
     attachment,  writ, warrant,  attachment, tax lien or tax levy, execution or
     other process against any property of Borrower or any Guarantor; or

          (l) The  attachment of any tax lien to any property of Borrower or any
     Guarantor  which is other  than for  taxes or  assessments  not yet due and
     payable; or

          (m) Any Guarantor dies or attempts to revoke his or its guaranty; or

          (n) A Material Adverse Occurrence takes place.

Upon the occurrence of any Event of Default described in subparagraphs (d), (e),
(f), (g) (h) or (i) above, all Obligations  shall be and become  immediately due
and payable without any declaration,  notice,  presentment,  protest,  demand or
dishonor of any kind (all of which are hereby waived by Borrower) and Borrower's
ability  to obtain any  additional  credit  extensions  or  Advances  under this
Agreement shall be immediately and automatically terminated. Upon the occurrence
of any other Event of Default, Lender, without notice to Borrower, may terminate
Borrower's  ability to obtain any additional credit extensions or Advances under
this  Agreement and may declare all or any portion of the  Obligations to be due
and payable, without notice,  presentment,  protest or demand or dishonor of any
kind (all of which are hereby  waived),  whereupon the full unpaid amount of the
obligations  which  shall be so  declared  due and  payable  shall be and become
immediately due and payable. Upon the occurrence of an Event of Default,  Lender
shall have all the rights and remedies of a secured  party under the  Commercial
Code and may require  Borrower to assemble the  Collateral and make it available
to Lender at a place  designated  by Lender,  and Lender shall have the right to
take immediate possession of the Collateral and may enter any of the premises of
Borrower or wherever the  Collateral  is located with or without  process of law
and to keep and store the same on said premises until sold (and if said premises
be the property of Borrower, Borrower agrees not to charge Lender or a purchaser
from  Lender for  storage  thereof  for a period of at least 90 days).  Upon the
occurrence of an Event of Default,  Lender,  without further demand, at any time
or times, may sell and deliver any or all of the Collateral at public or private
sale, for cash, upon credit or otherwise,  at such prices and upon such terms as
Lender  deems  advisable,  at its sole  discretion.  Any  requirement  under the
Commercial Code or other applicable law of reasonable notice will be met if such
notice is mailed to Borrower  at its address set forth in the opening  paragraph
of this  Agreement at least ten days before the date of sale.  Lender may be the
purchaser  at any such  sale,  if it is  public.  The  proceeds  of sale will be
applied first to all expenses of retaking,  holding, preparing for sale, selling
and the like,  including attorneys' fees and legal expenses (whether or not suit
is commenced)  including,  without  limitation,  reasonable  attorneys' fees and
legal expenses  incurred in connection  with any appeal of a lower court's order
or judgment,  and second to the payment (in whatever order Lender elects) of all
other obligations  chargeable to Borrower's loan account  hereunder.  Subject to
the provisions of the Commercial Code, Lender will return any excess to Borrower
and Borrower shall remain liable to Lender for any  deficiency.  Borrower agrees
to give  Lender  immediate  notice of the  existence  of any Default or Event of
Default.

     22.  Conditions  Precedent to Initial Advance.  The obligation of Lender to
make the initial Advance is subject to the condition precedent that Lender shall
have received on or before the date of the initial  Advance copies of all of the
following, unless waived by Lender:

          (a) A favorable  opinion of counsel to Borrower and the  Guarantors in
     form and substance satisfactory to Lender;

          (b)  UCC  Financing   Statements  in  a  form   acceptable  to  Lender
     appropriately completed and duly executed by Borrower;

          (c) Acceptable recent UCC, tax lien, judgment, and bankruptcy searches
     from the filing offices in all states required by Lender;

          (d) The  Guaranties,  in form and substance  satisfactory to Lender in
     its sole and absolute discretion, appropriately completed and duly executed
     by each Guarantor;

          (e) Subordination Agreements relating to all notes payable under which
     Borrower is obligated;

          (f) A certified copy of all documents evidencing any necessary consent
     or  governmental  approvals (if any) with respect to the Loan  Documents or
     any other documents provided for in this Agreement;

          (g) A  certificate  by the  Secretary  or any  Assistant  Secretary of
     Borrower certifying as to: (i) attached  resolutions of Borrower's Board of
     Directors authorizing or ratifying the execution,  delivery and performance
     of the Loan Documents to which Borrower is a party and any other  documents
     provided for by this Agreement,  (ii) the names of the officers of Borrower
     authorized  to sign the Loan  Documents  together with a sample of the true
     signature of such officers, and (iii) attached bylaws of Borrower;

          (h)  Certificates of Good Standing for Borrower issued by its state of
     incorporation and by those states requested by Lender;

          (i) A copy of the articles of  incorporation of each Guarantor that is
     a corporation certified by the Secretary of State;

          (j)  Evidence  of  insurance  for all  insurance  required by the Loan
     Documents;

          (k) An officer  certificate,  in form and  substance  satisfactory  to
     Lender, executed by the President of Borrower;

          (l) The Note, in form and substance satisfactory to Lender in its sole
     and absolute discretion,  appropriately  completed and duly executed by the
     Borrower;

          (m) Appropriate collateral account agreements executed by Borrower and
     the other parties thereto;

          (n) A  collateral  assignment  of life  insurance in the amount of One
     Million  and  No/100ths  Dollars  ($1,000,000.00)  on the life of Robert J.
     Cuccaro in form and substance satisfactory to Lender; and

          (o) Such landlord lien waivers and  mortgagee  consents as Lender,  in
     its sole  discretion,  may require,  in form and substance  satisfactory to
     Lender in its sole discretion, appropriately completed and duly executed;

          (p) Such other approvals, opinions or documents as Lender may require.

     23. Conditions Precedent to All Advances.  The obligation of Lender to make
any Advance (including the initial Advance) shall be subject to the satisfaction
of each of the following conditions, unless waived in writing by Lender:

          (a) The  representations  and warranties of Borrower set forth in this
     Agreement are true and correct on the date of the Advance (and after giving
     effect to the Advance then being made);

          (b) No Default, no Event of Default and no Material Adverse Occurrence
     shall then have  occurred and be  continuing  on the date of the Advance or
     result from the making of the Advance; and

          (c)  No  litigation,  arbitration  or  governmental  investigation  or
     proceeding  shall be  pending  or,  to the  knowledge  of  Borrower  or any
     Guarantor,  threatened  against  Borrower or any Guarantor or affecting its
     business or operations or its ability to perform its obligations  hereunder
     which,  if  adversely  determined  to  Borrower  or  any  Guarantor,  would
     constitute a Material Adverse Occurrence.

          24.  Termination.  Subject  to  automatic  termination  of  Borrower's
     ability  to obtain  additional  Advances  or credit  extensions  under this
     Agreement  upon the  occurrence  of any Event of Default  specified  in the
     paragraph  entitled  "Default and Remedies"  above and to Lender's right to
     terminate  Borrower's  ability to obtain  additional  credit extensions and
     Advances  under this  Agreement  upon the  occurrence of any other Event of
     Default or upon  demand,  this  Agreement  shall have a term  ending on the
     Termination  Date  provided,  however,  that  Borrower may  terminate  this
     Agreement  at any  earlier  time upon  sixty  days  prior  written  notice;
     provided further,  however,  that if Borrower  terminates this Agreement at
     any time prior to the then current  Maturity Date,  then Borrower shall pay
     to  Lender  a  prepayment  charge  equal  to  the  product  arrived  at  by
     multiplying  $5,575.00  times the  number of  calendar  months  (whole  and
     fractional)  from the  Termination  Date to and  including the then current
     Maturity Date. On the Termination Date, all obligations  arising under this
     Agreement  shall become  immediately due and payable without further notice
     or demand. Lender's rights with respect to outstanding Obligations owing on
     or prior to the  Termination  Date will not be affected by termination  and
     all  of  said  rights  including  (without  limitation)  Lender's  Security
     Interest in the Collateral existing on such Termination Date or acquired by
     Borrower  thereafter,  and the requirements of this Agreement that Borrower
     furnish schedules and confirmatory assignments of Receivables and Inventory
     and turn  over to  Lender  all  full and  partial  payments  thereof  shall
     continue  to be  operative  until  all  such  Obligations  have  been  duly
     satisfied.

     25.  Grant of License to Use Patents  and  Trademarks  Collateral.  For the
purpose of enabling Lender to exercise rights and remedies under this Agreement,
Borrower  hereby  grants  to  Lender  an  irrevocable,   non-exclusive   license
(exercisable  without  payment of royalty or other  compensation to Borrower) to
use,  license or  sublicense  any  patent or  trademark  now owned or  hereafter
acquired by Borrower and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all  computer  and  automatic  machinery  software and
programs used for the compilation or printout thereof.

     26. Miscellaneous.

          (a) The  performance  or  observance  of any  affirmative  or negative
     covenant or other provision of this Agreement and any supplement hereto may
     be waived by Lender in a writing  signed by Lender  but not  otherwise.  No
     delay on the part of Lender in the  exercise of any remedy,  power or right
     shall operate as a waiver thereof, nor shall any single or partial exercise
     of any remedy, power or right preclude other or further exercise thereof or
     the exercise of any other  remedy,  power or right.  Each of the rights and
     remedies  of  Lender  under  this  Agreement  will  be  cumulative  and not
     exclusive of any other right or remedy  which Lender may have  hereunder or
     as allowed by law.

          (b) Any notice,  demand or consent  authorized by this Agreement to be
     given to Borrower shall be deemed to be given when  transmitted by telex or
     telecopier  (provided a  confirmation  copy  thereof is sent by U.S.  mail,
     first class, within 24 hours of transmission) or personally  delivered,  or
     three days after being deposited in the U.S. mail, postage prepaid,  or one
     day after delivery to Federal Express or other overnight  courier  service,
     in each case  addressed  to Borrower  at its  address  shown in the opening
     paragraph of this  Agreement,  or at such other address as Borrower may, by
     written  notice  received by Lender,  designate as  Borrower's  address for
     purposes  of notice  hereunder.  Any notice or request  authorized  by this
     Agreement to be given to Lender shall be deemed to be given when personally
     delivered,  or three business days after being  deposited in the U.S. mail,
     certified,  return receipt requested,  postage prepaid, or one business day
     after  delivery  to and  receipt  by  Federal  Express  or other  overnight
     courier,  in each case  addressed  to Lender  at its  address  shown in the
     opening  paragraph of this  Agreement,  or at such other  address as Lender
     may, by written notice received by Borrower,  designate as Lender's address
     for purposes of notice  hereunder;  provided,  however,  that any notice to
     Lender  which  contains  a request  for  --------  -------  an  Advance  as
     discussed above shall not be deemed given until actually received.

          (c)  This  Agreement,  including  exhibits  and  schedules  and  other
     agreements referred to herein, is the entire agreement between the parties,
     supersedes and rescinds all prior agreements relating to the subject matter
     herein,  cannot be  changed,  terminated  or amended  orally,  and shall be
     deemed effective as of the date it is accepted by Lender.

          (d) Borrower agrees to pay and will reimburse Lender on demand for all
     expenses  incurred by Lender arising out of the  origination of, or arising
     during the administration of loans contemplated by this Agreement including
     without  limitation  travel  expenses,  filing,  recording,  search and due
     diligence  fees as well as attorneys'  fees and legal  expenses,  including
     costs of  in-house  counsel  (whether  or not suit is  commenced),  whether
     incurred in the  negotiation  and  preparation  of this  Agreement,  in the
     operation of cash management,  delivery/courier or other services including
     Lender's  then  current  charges  for the  operation  of a lockbox and wire
     transfer or advance  fees,  in the  protection  and  perfection of Lender's
     security  interest  in the  Collateral,  in the  enforcement  of any of the
     provisions of this Agreement or of Lender's  rights and remedies  hereunder
     and against the  Collateral,  in the defense of any claim or claims made or
     threatened  against  Lender arising out of this  transaction,  or otherwise
     including,  without limitation, in each instance, all reasonable attorneys'
     fees and legal expenses  incurred in connection  with any appeal of a lower
     court's  order  or  judgment.   Borrower  acknowledges  that,  at  Lender's
     discretion,  certain  expenses may be charged to Borrower at Lender's  then
     current rate for such services to its customers generally or alternatively,
     at its actual cost including overhead charges. Lender may also impose other
     miscellaneous  charges for  additional  products  or  services  provided to
     Borrower based on the cost agreed to by Borrower from time to time.  Lender
     is  authorized  to deduct any such  expenses  from any amount due  Borrower
     and/or to add such expenses to Borrower's loan account hereunder.  Further,
     in  recognition  of Borrower's  obligations  to pay such fees and expenses,
     notwithstanding  payment in full of the  Obligations,  Lender  shall not be
     required to execute or file any terminations,  releases or satisfactions of
     any of the liens, security interests,  financing  statements,  mortgages or
     other filings or encumbrances  unless and until Borrower and all Guarantors
     have  executed and  delivered  to Lender a general  release of liability of
     Lender  in a  form  satisfactory  to  Lender.  Borrower  acknowledges  that
     pursuant to Lender's policies,  any liens,  security  interests,  financing
     statements,  mortgages or other filings or encumbrances  may be terminated,
     released and/or satisfied only in a clear and unambiguous  written document
     executed by a principal or executive officer of Lender.

          Borrower  acknowledges  that  Lender has certain  responsibilities  in
     connection  with the  making of  Advances  and the  administration  of this
     Agreement. Consequently,  Borrower hereby indemnifies, exonerates and holds
     Lender, and its officers, directors, employees and agents (the "Indemnified
     Parties") free and harmless from and against any and all actions, causes of
     action, suits, losses,  liabilities and damages, and expenses in connection
     therewith  including,  without limitation,  reasonable  attorneys' fees and
     disbursements (the 'Indemnified Liabilities"),  incurred by the Indemnified
     Parties or any of them as a result of, or arising out of, or relating to:

               (i) any  transaction  financed  or to be  financed in whole or in
          part directly or indirectly with proceeds of any Advance, or

               (ii) the execution,  delivery, performance or enforcement of this
          Agreement  or any  document  executed  pursuant  hereto  by any of the
          Indemnified  Parties,  except  for any  such  Indemnified  Liabilities
          arising on account of any  Indemnified  Party's  gross  negligence  or
          willful misconduct.

     If and to the extent that the foregoing  undertaking  may be  unenforceable
     for any reason,  Borrower hereby agrees to make the maximum contribution to
     the payment and satisfaction of each of the Indemnified  Liabilities  which
     is permissible under applicable law. The provisions of this Paragraph shall
     survive termination of this Agreement.

          (e)  This  Agreement  is made  under  and  shall  be  governed  by and
     interpreted in accordance with the internal laws of the state of Minnesota,
     except  to  the  extent  that  the  perfection  of  the  Security  Interest
     hereunder, or the enforcement of any remedies hereunder with respect to any
     particular  Collateral,  shall be  governed  by the laws of a  jurisdiction
     other than the State of Minnesota. Captions herein are for convenience only
     and shall not be deemed part of this Agreement.

          (f) This Agreement shall be binding upon Borrower and Lender and their
     respective  successors,  assigns,  heirs, and personal  representatives and
     shall  inure to the  benefit of  Borrower,  Lender and the  successors  and
     assigns of Lender,  except that  Borrower  may not assign or  transfer  its
     rights  hereunder  without  the prior  written  consent of Lender,  and any
     assignment  or transfer in  violation of this  provision  shall be null and
     void. In connection  with the actual or  prospective  sale by Lender of any
     interest or participation in the obligations, Borrower authorizes Lender to
     furnish any information in its  possession,  however  acquired,  concerning
     Borrower or any of its Affiliates to any person or entity.

          (g) In recognition of Borrower's right to have its attorneys' fees and
     other expenses  incurred in connection  with this Agreement  secured by the
     Collateral, notwithstanding payment in full of all Obligations by Borrower,
     Lender  shall not be required to record or authorize  the  recording of any
     terminations  or  satisfactions  of any of Lender's liens on the Collateral
     unless and until  Borrower  and any  guarantor  hereof  have  executed  and
     delivered to Lender a general  release of  liability  in a form  reasonably
     satisfactory to Lender.

          (h) Borrower hereby  irrevocably  consents and submits to the personal
     jurisdiction  of any Minnesota state court or federal court over any action
     or  proceeding  arising out of or relating to the  Agreement,  and Borrower
     hereby  irrevocably  agrees  that all claims in  respect of such  action or
     proceeding  shall be venued  (at the sole  option of  Lender) in either the
     District  Court of Dakota or  Hennepin  County,  Minnesota,  or the  United
     States District Court,  District of Minnesota.  Borrower hereby irrevocably
     waives,  to the fullest extent it may  effectively do so, the defense of an
     inconvenient  forum  to the  maintenance  of  such  action  or  proceeding.
     Borrower  irrevocably  consents to the service of copies of the summons and
     complaint  and any other  process which may be served in any such action or
     proceeding by the mailing by United States  certified mail,  return receipt
     requested,  of copies of such process to Borrower's  address  stated in the
     preamble  hereto.  Borrower  agrees  that  judgment  final  by  appeal,  or
     expiration  of time to appeal  without an appeal being  taken,  in any such
     action or proceeding  shall be conclusive  and may be enforced in any other
     jurisdictions  by suit on the judgment or in any other  manner  provided by
     law.  Nothing in this  Paragraph  shall affect the right of Lender to serve
     legal  process in any other manner  permitted by law or affect the right of
     Lender to bring any action or proceeding  against  Borrower or its property
     in the courts of any other jurisdiction. Borrower agrees that, if it brings
     any action or proceeding  arising out of or relating to this Agreement,  it
     shall bring such action or  proceeding  in the  District  Court of Hennepin
     County, Minnesota.

     The  provisions  of this  Agreement  are  severable,  and in any  action or
     proceeding  involving  any State  corporate  law,  or any State or  Federal
     bankruptcy, insolvency, reorganization or other law affecting the rights of
     creditors  generally,  if the  obligations of the Borrower  hereunder would
     otherwise be held or determined to be void,  invalid,  or  unenforceable on
     account of the grant of a security interest  hereunder to secure Borrower's
     contingent obligations,  then,  notwithstanding any other provision of this
     Agreement to the contrary,  the amount of such liability shall, without any
     further action by Borrower,  Lender or any other person,  be  automatically
     limited and reduced to the highest amount which is valid and enforceable as
     determined in such action or proceeding.  In the event a court of competent
     jurisdiction  determines  that any of the figures  called the Interest Rate
     violates any usury laws or any other law, then, such Interest Rate or other
     provision  shall be accordingly and  retroactively  adjusted or modified to
     comply with the highest rate allowed under applicable law. Further,  if any
     provision or application of any provision of this Agreement  other than the
     Interest Rate  (including but not limited to any provision  relating to the
     calculation of interest) is held unlawful or  unenforceable  in any respect
     (including but not limited to any usury or similar law), such illegality or
     unenforceability  shall not affect other  provisions or applications  which
     can be given  effect,  and this  Agreement  shall  be  construed  as if the
     unlawful or unenforceable provision or application had never been contained
     herein or prescribed hereby.

          (i) Borrower also  irrevocably  consents to and  authorizes all of its
     banks and/or  financial  institutions to provide SPECTRUM with all written,
     verbal and other  information in its possession  that relates to its entire
     relationship  with  Borrower  including  but  not  limited  to  information
     relating to accounts,  certificates,  balances and activity,  loans, leases
     and the like, including any detail information relating to the above.

          (j) A  photocopy  or  other  reproduction  hereof  may be  filed  as a
     financing statement.

          (k) The undersigned waives notice of acceptance hereof.

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                         LENDER:    SPECTRUM COMMERCIAL SERVICES COMPANY

                                    By
                                      ------------------------------------------

                                    Its
                                       -----------------------------------------

                         BORROWER: WCS ACQUISITION CORP., a/k/a,
                                        WESTLAND CONTROL SYSTEMS, INC.

                                    By
                                      ------------------------------------------

                                    Its
                                       -----------------------------------------

                                            Fed. Tax ID #: 38-3515617EXHIBIT 10.6

                           GUARANTOR PAYMENT AGREEMENT

     THIS  GUARANTOR  PAYMENT  AGREEMENT,  dated as of  December  10, 2003 (this
"Agreement"),   made  by  WCS   ACQUISITION   CORP.,   a  Michigan   corporation
("Guarantor"),  d/b/a Westland Control  Systems,  in favor of BANK ONE, NA, with
its main office in Chicago,  Illinois,  and  successor  in interest to Bank One,
Michigan ("Lender").

                                    RECITALS

     A. Productivity  Technologies Corp., a Delaware  corporation  ("PTC"),  and
Lender are parties to a Term Loan  Agreement  dated  February 23, 2000 (the "PTC
Term  Loan  Agreement"),  pursuant  to which  Lender,  subject  to the terms and
conditions thereof, extended a term loan to PTC in the original principal amount
of $3,600,000.

     B. Guarantor executed a Continuing  Unlimited Guaranty dated as of February
23, 2000 (the "WCS Guaranty" in favor of Lender,  pursuant to which, among other
things,  Guarantor  absolutely  and  unconditionally  guaranteed  to Lender,  as
primary  obligor and not merely as surety,  the payment of the  Liabilities  (as
such term is defined in the WCS  Guaranty),  including  without  limitation  the
loans and other credit advanced to PTC pursuant to the PTC Term Loan Agreement.

     C. The PTC Term Loan  Agreement,  all  promissory  notes executed by PTC in
favor  of  Lender  in  connection  with  the PTC Term  Loan  Agreement,  the WCS
Guaranty, and any and all security agreements,  mortgages, guaranties, and other
instruments,  documents or  agreements  of any kind  evidencing  or securing the
indebtedness of PTC in favor of Lender are sometimes referred to collectively as
the "Loan Documents."

     D. In addition to its obligations  under the Loan  Documents,  PTC also has
guaranteed to Lender the repayment of certain  indebtedness  of its  subsidiary,
Atlas Technologies,  Inc. ("Atlas"). Guarantor also has guaranteed to Lender the
repayment of such indebtedness of Atlas.

     E. Each of PTC and Atlas is in default of its respective  obligations  owed
to Lender. As a consequence of such defaults, among other things, (i) Lender has
the right at any time to declare all  indebtedness  owed to Lender by PTC and/or
Atlas,  including all obligations  owed to Lender under the Loan Documents to be
immediately  due and  payable,  and (ii)  Lender  has no  obligation  to advance
further loans or credit to PTC or Atlas.

     F. Atlas has entered  into a  refinancing  transaction  with a  third-party
lender,  pursuant  to which the  indebtedness  owed to  Lender by Atlas  will be
repaid.  Pursuant to the requirements of such third-party  lender,  the security
interests  and liens  granted  by PTC  and/or  Atlas in favor of Lender  will be
discharged  (notwithstanding  the continuation of certain  indebtedness  owed to
Lender by PTC).  In  consideration  for Lender's  willingness  and  agreement to
discharge  such  security  interests  and liens,  the  parties  have agreed that
Guarantor  will  make  certain  direct   payments  to  Lender  pursuant  to  its
obligations under the WCS Guaranty, as more fully set forth in this Agreement.

                                      TERMS

     In  consideration  of the  premises  and of the  mutual  agreements  herein
contained, Guarantor agrees for the benefit of Lender as follows:

                                 ARTICLE 1.
                                PERIODIC PAYMENTS

     1.1 Affirmation of Recitals.  Guarantor hereby acknowledges and affirms the
accuracy of the foregoing recitals.

     1.2  Confirmation  of Maturity  Date.  Guarantor  hereby  acknowledges  and
affirms that, but for the occurrence of the defaults  described in the recitals,
the original  scheduled  maturity date of the indebtedness owed by PTC to Lender
was February 23, 2005 (the "Scheduled Maturity Date"). Nothing contained in this
Agreement is intended to modify the Scheduled  Maturity Date and, in the absence
of any  prior  default  by  Guarantor  of its  obligations  as set forth in this
Agreement  or  any  other  event  of  default  under  the  Loan  Documents,  all
obligations  under the PTC Term Loan Agreement shall fully mature and be due and
payable on the Scheduled Maturity Date.

     1.3 Interest  Rate.  Notwithstanding  the  provisions  of the PTC Term Loan
Agreement and the applicable promissory note(s), all outstanding principal under
the PTC Term Loan Agreement  shall, on and after the date hereof,  bear interest
at a floating rate equal to three percent  (3.0%) per annum above Lender's prime
rate (which prime rate need not necessarily be the lowest rate charged by Lender
to any of its customers),  which rate  automatically  shall be adjusted with any
adjustment  in Lender's  prime rate. In the event of any default by Guarantor of
its  obligations  as set forth in this  Agreement  or any other event of default
under the Loan Documents,  nothing  contained in this Agreement shall impair the
right of Lender at any time thereafter to impose interest at the Overdue Rate of
five percent (5.0%) per annum above Lender's prime rate.

     1.4 Monthly Interest Payments.  Guarantor agrees, effective immediately, to
make all interest  payments  when due under the PTC Term Loan  Agreement and the
applicable promissory note(s).

     1.5 Monthly Fixed  Payments.  Commencing upon the date of execution of this
Agreement  and  thereafter  on the  first  (1st)  day of each  month  until  the
Scheduled  Maturity  Date,  Guarantor  shall pay to Lender,  in  addition to the
payment of interest as required hereunder, consecutive monthly installments each
in the amount of Ten Thousand Dollars ($10,000.00).

     1.6 Variable Payments.

     (a) Monthly Variable Payments.  Commencing December 15, 2003 and thereafter
on the  fifteenth  (15th) day of each month until the Scheduled  Maturity  Date,
Guarantor  shall pay to Lender,  in addition to the payment of interest  and any
monthly fixed  payments as required  hereunder,  an amount equal to  twenty-five
percent  (25%) of  Guarantor's  "Excess  Cash  Flow"  for the prior  month.  For
purposes  hereof,  "Excess Cash Flow" for any month shall mean (i) the EBITDA of
Guarantor  for such  month,  less (ii) the  amount of any  capital  expenditures
actually  paid by  Guarantor  during  such  month,  less (iii) the amount of any
interest  actually  paid by  Guarantor  during such month in respect of borrowed
money,  less (iv) the amount of any taxes actually paid by Guarantor during such
month,  less (v) the amount of any payments made by Guarantor  during such month
under  Section  1.5 of this  Agreement.  Simultaneously  with the  making of any
payment under this Section  1.6(a),  Guarantor shall submit to Lender a detailed
calculation, together with supporting documentation, of Excess Cash Flow for the
prior month.  Notwithstanding the calculation of Excess Cash Flow for any month,
the payments  required under this Section 1.6(a) shall not be required to exceed
$10,000.00 for any month.

     (b)  Senior  Funding  Variable  Payments.  If at any time  the  outstanding
principal amount funded by Guarantor's senior lenders (excluding Bank One or any
of its affiliates)  shall exceed Two Million  Dollars,  then,  immediately  upon
receipt  of  such  funding,  and in  addition  to any  other  payments  required
hereunder, an amount equal to the lesser of (i) $666,667 or (ii) one-third (1/3)
of the amount funded in excess of Two Million Dollars shall be paid to Lender.

     1.7  Application  of  Payments;  Maturity  of  Indebtedness.  All  payments
received by Lender hereunder shall first be applied against  applicable fees and
charges, then against accrued interest and then to principal.

     1.8 No Course of Dealing.  Guarantor  acknowledges  and agrees that, in the
event of any default by Guarantor of its obligations  under this Agreement,  the
payment terms set forth herein shall not  establish  any course of dealing,  and
instead all  obligations  of  Guarantor  under the WCS  Guaranty  shall be fully
applicable.

     1.9  Expiration;  No Further  Forbearance  Implied;  No  Waiver.  Guarantor
acknowledges  and agrees that Lender has no  obligation  to extend the Scheduled
Maturity  Date or to forbear from  enforcing  its rights and  remedies  upon the
Scheduled  Maturity Date or in the event of any prior default hereunder or under
the Loan  Documents.  All rights and  remedies of Lender  under the WCS Guaranty
and/or the other Loan  Documents  shall be preserved and shall be cumulative and
not  exclusive.  Nothing  herein  shall be deemed to  constitute a waiver of any
existing  defaults  or of any  provision  of any of the  documents  referred  to
herein, and nothing herein shall in any way prejudice the rights and remedies of
Lender  under any of the  documents  referred  to herein or  applicable  law. No
waiver  of the  rights  or any  condition  of this  Agreement  and/or  any other
document by Lender  shall be  effective  unless the same shall be contained in a
writing signed by authorized  representatives of Lender. No course of dealing on
the part of Lender nor any delay or failure on the part of Lender in  exercising
any right, power or privilege hereunder shall operate as a waiver of such right,
power or privilege,  nor shall any single or partial  exercise  thereof preclude
any  further  exercise  thereof or the  exercise  of any other  right,  power or
privilege.

                                   ARTICLE 2.
                                 REPRESENTATIONS

     Guarantor represents and warrants to Lender that:

     2.1 The  execution,  delivery and  performance of this Agreement are within
its powers, have been duly authorized and are not in contravention with any law,
of the terms of its Articles of Incorporation or By-laws,  or any undertaking to
which it is a party or by which it is bound.

     2.2 This Agreement is the legal, valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with the terms hereof.

                                   ARTICLE 3.
                                 MISCELLANEOUS.

     3.1 Cross References.  References in the PTC Term Loan Agreement, or in any
note,  certificate,  instrument or other document related thereto to any of such
agreements shall be deemed to be references to such agreements as amended hereby
and as further amended from time to time.

     3.2 Release.  Each of Guarantor and PTC (by execution of the consent at the
end of this  Agreement)  represents  and  warrants  that it is not  aware of any
claims or causes of action against Lender,  or any of its successors or assigns,
and that it has no  defenses,  offsets  or  counterclaims  with  respect  to the
indebtedness owed by such parties to Lender. Notwithstanding this representation
and as further consideration for the agreements and understandings  herein, each
of  Guarantor  and PTC,  on  behalf of itself  and their  respective  employees,
agents,  executors,  heirs,  successors and assigns, hereby releases Lender, its
predecessors,  officers,  directors,  employees, agents, attorneys,  affiliates,
subsidiaries,  successors and assigns, from any liability, claim, right or cause
of action which now exists or hereafter arises as a result of acts, omissions or
events  occurring  on or prior to the date  hereof,  whether  known or  unknown,
including  but not limited to claims  arising  from or in any way related to the
PTC Term Loan Agreement,  the Loan Documents, or the business relationship among
Guarantor, PTC and Lender.

     3.3 Entire  Agreement;  Severability.  The PTC Term Loan  Agreement and the
other Loan  Documents,  as previously  amended and as amended by this Agreement,
together  with the  other  documents  and  instruments  executed  in  connection
therewith,  constitute the entire  understanding  of the parties with respect to
the  subject  matter  hereof  and may only be  modified  or amended by a writing
signed by the party to be charged.  If any of the  provisions of this  Agreement
are in  conflict  with  any  applicable  statute  or  rule  of law or  otherwise
unenforceable,  such  offending  provisions  shall be null and void  only to the
extent of such conflict or  unenforceability,  but shall be deemed separate from
and shall not invalidate any other provision of this Agreement.

     3.4 No Other Promises or Inducements.  There are no promises or inducements
which have been made to any  signatory  hereto to cause such  signatory to enter
into this  Agreement  other  than those  which are set forth in this  Agreement.
Guarantor  acknowledges  that its authorized  officers have  thoroughly read and
reviewed the terms and  provisions of this Agreement and are familiar with same,
that the terms  and  provisions  contained  herein  are  clearly  understood  by
Guarantor and have been fully and unconditionally consented to by Guarantor, and
that  Guarantor has had full benefit and advice of counsel of its own selection,
or the  opportunity  to obtain  the  benefit  and  advice of  counsel of its own
selection,  in regard to  understanding  the terms,  meaning  and effect of this
Agreement,  and that this  Agreement has been entered into by Guarantor  freely,
voluntarily, with full knowledge, and without duress, and that in executing this
Agreement,  Guarantor is relying on no other representations,  either written or
oral, express or implied,  made to Guarantor by any other party hereto, and that
the consideration hereunder received by Guarantor has been actual and adequate.

     3.5  Counterparts.  This  Agreement  may  be  signed  upon  any  number  of
counterparts  with the same effect as if the signatures  thereto and hereto were
upon the same  instrument.  Facsimile  copies of signatures  shall be treated as
original signatures for all purposes under this Agreement.

     3.6 Other  Documents.  Guarantor  agrees to execute and deliver any and all
documents  reasonably deemed necessary or appropriate by Lender to carry out the
intent of and/or to implement this Agreement.

     3.7  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the laws of the  State of  Michigan  without  giving  effect to
choice of law principles of such State.

     3.8  Miscellaneous.  This  Agreement  is made  for  the  sole  benefit  and
protection of Guarantor,  Lender and their  respective  successors and permitted
assigns  (provided  that  Guarantor  shall not be  permitted,  absent  the prior
written consent of Lender, to assign any of its rights or obligations under this
Agreement).  No other  person or entity shall have any rights  whatsoever  under
this  Agreement.  Time shall be of the strictest  essence in the  performance of
each and every one of Guarantor's obligations hereunder.

     3.9  Construction.  This  Agreement  shall not be construed  more  strictly
against  Lender  merely by virtue of the fact that the same has been prepared by
Lender or its  counsel,  it being  recognized  that  Guarantor  and Lender  have
contributed  substantially  and materially to the preparation of this Agreement,
and Guarantor  waives any claim contesting the existence and the adequacy of the
consideration  given by any of the other  parties  hereto in entering  into this
Agreement.

     3.10 Headings. The headings of the various paragraphs in this Agreement are
for  convenience of reference only and shall not be deemed to modify or restrict
the terms or provisions hereof.

     3.11 Waiver of Jury Trial.  Guarantor,  after  consulting or having had the
opportunity to consult with counsel,  knowingly,  voluntarily and  intentionally
waives any right it may have to a trial by jury in any litigation  based upon or
arising out of this  Agreement or any related  instrument or agreement or any of
the  transactions  contemplated  by  this  Agreement  or any  conduct,  dealing,
statements  (whether oral or written) or actions of Guarantor.  Guarantor  shall
not seek to consolidate,  by counterclaim or otherwise, any such action in which
a jury trial has been waived with any other  action in which a jury trial cannot
be or has not been  waived.  These  provisions  shall not be deemed to have been
modified in any respect or  relinquished by any party hereto except by a written
instrument executed by such party.

     3.12  Consent to  Jurisdiction.  Guarantor  agrees that any legal action or
proceeding  with  respect  to  this  Agreement  or  any  related  instrument  or
agreement,  or with  respect to the  transactions  contemplated  hereby,  may be
brought in any court of the State of Michigan, sitting in or having jurisdiction
over the County of Wayne,  Michigan,  or in any federal court located within the
Eastern  District  of  Michigan,  and  Guarantor  hereby  submits to and accepts
generally and  unconditionally  the  non-exclusive  jurisdiction of those courts
with respect to their person and property and irrevocably  consent to service of
process in connection with any such action or proceeding by mailing such service
of  process   (certified  or  registered,   if  capable  of   certification   or
registration) to Guarantor at the address it may have from time to time provided
to  Lender.  Guarantor  hereby  irrevocably  waives  any  objection  based  upon
jurisdiction,  improper  venue  or forum  non  conveniens  in any  such  suit or
proceeding in the above-described  courts.  Nothing contained herein shall limit
the right of Lender to serve  process in any other  manner  permitted  by law or
limit the  right of Lender to  commence  any such  action or  proceeding  in the
courts of any other  jurisdiction.  Any judicial proceeding by Guarantor against
Lender  involving  this  Agreement  shall  be  brought  only in a court in Wayne
County,  Michigan  or federal  court  located  within the  Eastern  District  of
Michigan.

     IN WITNESS WHEREOF,  Guarantor has caused this Agreement to be executed and
delivered as of the date and year first above written.

                                          WCS ACQUISITION CORP.

                                          By: __________________________________

                                          Its: ____________________________

                        CONSENT AND AGREEMENT OF OBLIGOR

     As of the date and year first above written, the undersigned hereby:

     (a) fully consents to the terms and  provisions of the above  Agreement and
the  consummation  of the  transactions  contemplated  thereby and agrees to all
terms and provisions of the above Agreement applicable to it;

     (b) agrees that,  except as  discharged or terminated in writing by Lender,
each of the Loan Documents is hereby  ratified and confirmed and shall remain in
full force and effect,  and the undersigned  acknowledges that it has no setoff,
counterclaim or defense with respect to any of the Loan Documents.

                                          PRODUCTIVITY TECHNOLOGIES CORP.

                                          By: __________________________________

                                          Its: ____________________________

DETROIT  765897

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