Document:

Third Amendment to the HillStreet Loan Agreement

 Exhibit 10.5 
 JOINDER AGREEMENT AND THIRD AMENDMENT TO 
 SUBORDINATED LOAN AND SECURITY AGREEMENT 

This Joinder Agreement and Third Amendment to the Subordinated Loan and Security Agreement (the “Amendment”) is entered into as of
this 28th day of February, 2006 by and between QUATECH, INC. (f/k/a WR Acquisition, Inc.), an Ohio corporation
(“QuaTech”) and DPAC TECHNOLOGIES CORP., a California corporation (“DPAC” and collectively with QuaTech, the “Borrowers” and each individually a “Borrower”), and THE HILLSTREET FUND, L.P., a Delaware limited partnership, its permitted successors and assigns
(“Lender”). 
 RECITALS 
 WHEREAS, Lender and QuaTech are parties to that certain Subordinated Loan and Security Agreement as of July 28, 2000, as amended by a First Amendment to Subordinated Loan and Security Agreement and First
Amendment to Warrant Agreement dated August 15, 2005, and as further amended by a Second Amendment to Loan and Security Agreement and Second Amendment to Warrant Agreement dated November 30, 2005 (collectively, and as amended by this Third
Amendment, the “Loan Agreement”); and 
 WHEREAS, contemporaneously with the closing of the Third Amendment, Borrowers
desire to complete the DPAC Transaction, as hereinafter defined, whereby QuaTech will become a wholly-owned subsidiary of DPAC; and 
 WHEREAS, as a condition of Lender’s consent to the DPAC Transaction, Lender has required that DPAC be joined as a Borrower under the Loan Documents; and 
 WHEREAS, the parties desire to hereby amend the Loan Agreement to reflect the foregoing; 
 NOW THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows: 
 1. Capitalized Terms. All capitalized terms used herein shall have the meanings assigned to them in the Loan Agreement
unless the context hereof requires otherwise. Any capitalized terms defined herein shall be deemed incorporated in Section 1.1 of the Loan Agreement. 
 2. Joinder Agreement. As of the Third Amendment Closing Date, DPAC: 
 (a) adopts the
Loan Agreement, shall be bound by all of the terms, conditions and provisions thereof as if it was an original party thereto, including without limitation, the affirmative and negative covenants in Articles 5 and 6 of the Loan Agreement, assumes all
of the duties and obligations of a Borrower under the Loan Agreement, and confirms the representations and warranties set forth in Article 4 of the Loan Agreement on and as of the date 

  

 Third Amendment to Subordinated Loan and Security Agreement 

 
hereof as if fully set forth herein (as modified by any disclosures reflected in the amended disclosure Schedules attached hereto); 
 (b) shall be considered, and deemed to be, for all purposes, a “Borrower” under the Loan Agreement as if DPAC had signed the
Loan Agreement at the time originally executed and delivered to Lender and hereby, jointly and severally, promises to pay or perform all of the Obligations of a Borrower under the Loan Agreement and the other Loan Documents in accordance with their
respective terms, and agrees to execute and deliver to Lender additional Loan Documents, upon the request of Lender; 
 (c)
hereby grants, pledges and collaterally assigns to Lender, to secure the prompt repayment of the Note and the Obligations, a continuing security interest in and assigns to the Lender all of DPAC’s Collateral owned by DPAC; 
 (d) shall execute and deliver to Lender, a Pledge Agreement with respect to all Pledged Stock as additional collateral for the Loan,
together with the certificates evidencing the Pledged Stock and undated stock powers executed in blank; and 
 (e) shall be
considered and deemed to be, for all purposes a Borrower and Indemnitor under the Environmental Indemnity Agreement dated July 28, 2000 and agrees to be bound by the terms thereby as the same relates to any Property. 
 3. Exhibits and Schedules. As of the Third Amendment Closing Date, the Loan Agreement is amended to add Exhibit G – Form of Pledge Agreement,
in the form of Exhibit G to this Third Amendment. 
 4. Schedules to Loan Agreement. As of the Third Amendment Closing Date, the
Schedules to the Loan Agreement are hereby amended as set forth on the corresponding Schedules to this Third Amendment. 
 5.
Definitions. 
 (a) As of the Third Amendment Closing Date, the following definitions contained in Section 1.1 of the
Loan Agreement are amended in their entirety to read thereafter as follows: 
 “Change of Control” means the
time at which (i) any Person (including a Person’s Affiliates and associates) or group (as that term is understood under Section 13(d) of the Exchange Act and the rules and regulations thereunder), other than the existing shareholders
of DPAC or a group controlled by the existing shareholders of DPAC, has become the beneficial owner of a percentage (based on voting power, in the event different classes of stock shall have different voting powers) of the voting stock of DPAC equal
to at least twenty-five percent (25%), (ii) there shall be consummated any consolidation or merger of DPAC pursuant to which DPAC’s Capital Stock would be converted into cash, securities or other property, other than a merger or
consolidation of DPAC in which the holders of the common stock of DPAC, or any Capital Stock convertible into common stock, immediately prior to the merger have the same proportionate ownership, directly or indirectly, of common stock or any Capital
Stock 

  

 Third Amendment to Subordinated Loan and Security Agreement 
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convertible into common stock, of the surviving corporation immediately after the merger as they had of DPAC’s common stock immediately prior to such
merger, or (iii) all or substantially all of DPAC’s assets shall be sold, leased, conveyed or otherwise disposed of as an entirety or substantially as an entirety to any Person (including an Affiliate or associate of DPAC) in one or a
series of transactions, or (iv) Steven Runkel shall cease to perform his duties as a senior executive manager of DPAC and within ninety (90) days of such cessation a replacement senior executive manager reasonably acceptable to Lender has
not been employed by DPAC. 
 “Life Insurance” means one or more policies of life insurance and any
substitute or replacement policies thereof, owned by Borrower on the life of Steven Runkel in the aggregate face amount of not less than Two Million and 00/100 Dollars ($2,000,000.00), which such policy shall be free of any policy loans and
encumbrances whatsoever, except the lien in favor of the Lender hereunder. 
 “Permitted Liens” means the liens and
interests in favor of the Lender granted in connection herewith and 
  

	 	(a)	liens under the Senior Loan Documents in an amount not to exceed $2,600,000.00 in the aggregate; 

  

	 	(b)	liens under the State of Ohio Loan Documents in an amount not to exceed $2,500,000 in the aggregate, provided that such liens are pari passu with Lender’s liens;

  

	 	(c)	liens against Borrowers to secure taxes, assessments and other government charges in respect of obligations not overdue or liens on properties to secure claims for labor, material
or supplies in respect of obligations not overdue; 

  

	 	(d)	deposits or pledges made by Borrowers in connection with, or to secure payment of workmen’s compensation, unemployment insurance, old age pensions or other social security
obligations; 

  

	 	(e)	liens against Borrowers on properties other than the real property Collateral in respect of judgments or awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in respect of which Borrowers shall at the time in good faith be prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained
pending such appeal or review; 

  

	 	(f)	liens of carriers, warehousemen, mechanics and materialmen, and other like liens on properties of either Borrower in existence less than ninety (90) days from the date of
creation thereof in respect of obligations not overdue; 

  

 Third Amendment to Subordinated Loan and Security Agreement 
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	 	(g)	encumbrances on real estate of either Borrower consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities
either in the title thereto, landlord’s or lessor’s liens under leases to which Borrower is a party, and other minor liens or encumbrances none of which in the opinion of Borrowers interferes materially with the use of the property
affected in the ordinary conduct of the business of either Borrower, which defects do not individually or in the aggregate have a Materially Adverse Effect; 

  

	 	(h)	liens and encumbrances on the real property Collateral of either Borrower as and to the extent permitted by the mortgage applicable thereto in any one (1) year period; and

  

	 	(i)	liens and encumbrances created by Capital Leases or purchase money security interests in an amount not to exceed $100,000 in the aggregate. 

 “Principal Office” means (i) with respect to QuaTech, 5675 Hudson Industrial Parkway, Hudson, Ohio 44236, and
(ii) with respect to DPAC, 7321 Lincoln Way, Garden Grove, California 92841 
 “Restricted Payment”
means: (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock of Borrower or any Subsidiary now or hereafter outstanding other than dividends on Preferred Stock; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Borrower or any Subsidiary now or hereafter outstanding; (c) any payment or
prepayment of principal of, premium, if any, or interest on, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any indebtedness other than the Senior Debt and the State of Ohio Loan;
provided, however, that with respect to the Senior Debt and the State of Ohio Loan, any payments other than scheduled payments and required reductions of principal; and (d) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, other than the Warrants, options or other rights to acquire shares of any class of Capital Stock of a Borrower or any Subsidiary now or hereafter outstanding. 
 “Security Documents” means all of the documents and instruments evidencing the collateral security of the Lender,
including without limitation, all UCC Financing Statements with respect to the Collateral, all Mortgages, all Intellectual Property Security Agreements, all Pledge Agreements, all Environmental Indemnity Agreements, and the Assignment of Life
Insurance. 
 “Senior Debt” means that portion of the principal amount owing to the Senior Lender under the
Senior Loan Documents from time to time, together with all interest, fees and other amounts payable on or with respect thereto, not to exceed Two Million Six Hundred Thousand Dollars ($2,600,000) in the aggregate and consisting of a $2,000,000
revolving line of credit and a $600,000 term loan, and any refinance, replacement, amendment or modification thereof in accordance with the Intercreditor Agreement. 
  

 Third Amendment to Subordinated Loan and Security Agreement 
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 “Subordinated Note” means the Subordinated Term Promissory Note referred
to in Section 2.2 hereof to evidence the Loan, together with any amendments, modifications, or restatements issued in substitution thereof. 
 “Warrant” or “Warrants” means one or more of the
warrants in substantially the form as of Exhibit D, to be issued by DPAC to HillStreet pursuant to the Warrant Agreement 
 “Warrant Agreement” means the warrant agreement dated as of the Closing Date between DPAC and HillStreet in substantially the form as Exhibit E, 
 (b) As of the Third Amendment Closing Date, Section 1.1 of the Loan Agreement is hereby amended to add the following definitions to read
thereafter as follows: 
 “Borrowers” shall mean collectively, QuaTech and DPAC, and each individually a
“Borrower.” 
 “DCV” means Development Capital Ventures, LP, a Small Business Investment
Company licensed by the US Small Business Administration. 
 “DPAC” means DPAC Technologies Corp., a
California corporation. 
 “DPAC Transaction” means that certain transaction effective as of the Third
Amendment Closing Date whereby QuaTech and DPAC are to consummate a business transaction where DPAC Acquisition Sub, Inc., an Ohio corporation and wholly-owned subsidiary of DPAC merges with and into QuaTech. 
 “Maturity Date” shall mean August 31, 2007. 
 “Pledge Agreement” means a stock pledge agreement or agreements with respect to Pledged Stock substantially in the form
of Exhibit G hereto. 
 “Pledged Stock” means one hundred percent (100%) of the Capital Stock of
QuaTech. 
 “QuaTech” means QuaTech, Inc. (f/k/a WR Acquisition, Inc.), an Ohio corporation, and successor by
merger to DPAC Acquisition Sub, Inc., an Ohio corporation, a wholly-owned subsidiary of DPAC. 
 “State of Ohio
Debt” means that portion of the principal amount owing to the State of Ohio under the State of Ohio Loan Documents from time to time, together with all interest, fees and other amounts payable on or with respect thereto, not to exceed Two
Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate, and any refinance, replacement, amendment or modification thereof in accordance with the applicable Intercreditor Agreement. 
  

 Third Amendment to Subordinated Loan and Security Agreement 
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 “State of Ohio Loan” means the indebtedness owed by a Borrower to the
State of Ohio pursuant to that certain Loan Agreement by and between QuaTech and the Director of Development of the State of Ohio, dated as of January 27, 2006. 
 “State of Ohio Loan Documents” means all documents evidencing the State of Ohio Loan, including any amendments,
modifications, restatements and notices to any Borrower thereunder. 
 “Termination Date” means the earlier
of (i) the Maturity Date; or (ii) the date upon which the entire principal of the Note shall become due pursuant to the provisions hereof (whether as a result of acceleration or otherwise), or (iii) the date upon which the entire
principal and interest of the Note shall be paid in full. 
 “Third Amendment Closing Date” shall mean
February 28, 2006. 
 6. Rules of Construction. As of the Third Amendment Closing Date, Section 1.2 of the Loan Agreement is
hereby amended to add a new Section 1.2(h) to read in its entirety as follows: 
 “Section 1.2(h) Borrower
References. References to Borrower shall be construed to be mean both Borrowers, jointly and severally, in respect of their obligations to Lender under this Agreement.” 
 7. Promissory Subordinated Note. 
 (a) Term. As of the Third Amendment Closing Date, Section 2.2(a) of the
Loan Agreement is hereby amended in its entirety to read thereafter as follows: 
 “Section 2.2(a) Term. The
Subordinated Note shall be dated as of the Third Amendment Closing Date and shall mature and be due and payable in full on the Termination Date.” 
 (b) Principal Payments. As of the Third Amendment Closing Date, Section 2.2(d) of the Loan Agreement is amended in its entirety to read thereafter as follows: 
 “Section 2.2(d) Principal Payments. Provided that Lender has not accelerated the Loan pursuant to Section 9.9 hereof,
Borrowers are not obligated to make repayments of principal on the Loan until the Maturity Date, at which time the entire outstanding balances of principal and interest are due.” 
 (c) Amortization. As of the Third Amendment Closing Date, Section 2.2(e) of the Loan Agreement is deleted in its entirety
thereafter. 
  

 Third Amendment to Subordinated Loan and Security Agreement 
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 8. Success Fee. As of the Third Amendment Closing Date, Section 2.3 of the Loan Agreement is
hereby amended to add a new Section 2.3(c) to read in its entirety thereafter as follows: 
 “Section 2.3(c)
Success Fee. Borrowers shall pay to Lender a success fee in immediately available funds on the Termination Date, whether by prepayment, acceleration or at maturity, in the amount of Five Hundred Thousand Dollars ($500,000).” 

9. Use of Proceeds. As of the Third Amendment Closing Date, Section 2.8 is hereby amended in its entirety to read thereafter as follows:

 “Section 2.8 Use of Proceeds. Borrowers represent and warrant that all proceeds of the Loan shall be used by
Borrowers for refinancing debt, growth and working capital.” 
 10. Prepayments. As of the Third Amendment Closing Date:

 (a) Section 2.5(b) of the Loan Agreement is hereby amended in its entirety to read thereafter as follows: 

“Section 2.5(b) Optional Prepayment. Borrowers may prepay the Loan in whole or in part at any time.” 
 (b) Section 2.5(c) of the Loan Agreement is hereby deleted thereafter in its entirety. 
 11. Failure to Pay by Maturity. As of the Third Amendment Closing Date, Article 2 of the Loan Agreement is hereby amended to add a new
Section 2.10 to read in its entirety thereafter as follows: 
 “Section 2.10 Failure to Pay by Maturity. If,
as of the Maturity Date, the indebtedness evidenced by the Note has not been paid in full, interest shall continue to accrue as provided herein and Borrowers shall (i) pay, on the first day of the month following the Maturity Date and on the
first day of each month thereafter until the principal and interest has been repaid in full, a monthly fee in the amount of Twenty Five Thousand Dollars ($25,000), and (ii) issue to Lender warrants to purchase one percent (1%) of the
common stock of DPAC, which warrants may be exercised for a purchase price per share equal to $0.00001, and which warrants shall be issued in the same form as Exhibit D. 
 12. Representations and Warranties; Affirmative Covenants; Negative Covenants. As of the Third Amendment Closing Date, Articles 4, 5 and 6 of the Loan Agreement are hereby amended in their entirety to read as
set forth in Addendum A attached to this Third Amendment. 
 13. Financial Covenants. As of the Third Amendment Closing Date, Article
7 of the Loan Agreement is hereby amended thereafter as follows: 
 (a) Limitations on Capital Expenditures.
Section 7.1 of the Loan Agreement shall read as follows: 
  

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 “Section 7.1 Limitations on Capital Expenditures. Borrowers shall not,
without first obtaining the written consent of the Lender, make Consolidated Capital Expenditures during any fiscal year in an aggregate amount greater than the amounts specified below: 
  

					
	 Time Period
	  	 Maximum
 Capital Expenditures
	 
	From the Third Amendment Closing Date until the end of the current fiscal year	  	$	200,000	 
	For the following fiscal year	  	$	200,000	”

 (b) Minimum EBITDA. Section 7.2 of the Loan Agreement shall read as
follows: 
 “Section 7.2 Minimum EBITDA. Borrowers shall not permit their Consolidated EBITDA for their fiscal
quarters ending on the dates below to be less than the dollar amount set forth below opposite such date. 
  

					
	 Dates
	  	Minimum EBITDA	 
	 June 30, 2006, September 30, 2006, and December 31,2006
	  	$	250,000	 
	 March 31, 2007 and thereafter
	  	$	350,000	”

 14. Reaffirmation of Covenants, Warranties and Representations. Each Borrower hereby agrees
and covenants that all representations and warranties in the Loan Agreement, including without limitation, all of those warranties and representations set forth in Article 5, are true and accurate as of the date hereof. Each Borrower further
reaffirms all covenants set forth in Article 6 and financial covenants set forth in Article 7 and negative covenants set forth in Article 8 thereof, as if fully set forth herein, except to the extent modified by this First Amendment. 
 15. Conditions Precedent to Closing of Third Amendment. On or prior to the Third Amendment Closing Date, each of the following conditions
precedent shall have been satisfied: 
 (a) Proof of Corporate Authority. Lender shall have received from each Borrower
copies, certified by a duly authorized officer to be true and complete on and as of the Third Amendment Closing Date, of records of all action taken by Borrowers to authorize (i) the execution and delivery of this Third Amendment and all other
certificates, documents and instruments to which it is or is to become a party as contemplated or required by this Third Amendment, and (ii) their performance of all of its obligations under each of such documents 
 (b) Loan Documents. (i) Each of the Loan Documents shall have been duly and properly authorized, executed and delivered by
each Borrower, as applicable, and shall be in full force and effect on and as of the Third Amendment Closing Date; (ii) executed originals of the Note shall have been delivered to Lender, and (iii) executed originals or (as the case may
be) 

  

 Third Amendment to Subordinated Loan and Security Agreement 
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executed counterparts of each of any other Loan Documents required by Lender shall have been delivered to Lender, including without limitation, a Pledge
Agreement from DPAC with respect to the Pledged Stock. 
 (c) Legal Opinion. Lender shall have received a written legal
opinion of counsel to Borrowers, addressed to Lender, dated as of the Third Amendment Closing Date, which shall be acceptable to Lender. 
 (d) Documents. Each of the documents to be executed and delivered at the Third Amendment Closing and all other certificates, documents and instruments to be executed in connection herewith shall have been duly
and properly authorized, executed and delivered by Borrowers and shall be in full Force and effect on and as of the Third Amendment Closing Date. 
 (e) DPAC Transaction. Borrowers shall be prepared to close, simultaneously with the closing of this Third Amendment, the DPAC Transaction on terms reasonably acceptable to Lender. 
 (f) Senior Debt Availability. Lender shall be satisfied that: (i) the principal amount of the Revolving Loans of the Senior
Debt outstanding on the Third Amendment Closing Date shall not be more than One Million Dollars ($1,000,000) and (ii) after giving effect to the consummation of the transactions contemplated hereby, by the Senior Loan Documents and by the DPAC
Transaction (including the payment of any fees and expenses associated therewith), the difference, as of the Third Amendment Closing Date, between (i) the lesser of (A) the Borrowing Base and (B) the Revolving Credit Commitment and
(ii) the aggregate outstanding principal amount of the Revolving Loans as such terms are defined in the Senior Loan Agreement, shall be at least Five Hundred Thousand Dollars ($500,000). 
 (g) State of Ohio Loan. Lender shall have received certified copies of all of the State of Ohio Loan Documents, including any
amendments to the applicable Intercreditor Agreement in form and substance satisfactory to Lender. 
 (h) Due
Diligence. Lender shall have conducted and completed due diligence on Borrowers and the DPAC Transaction to Lender’s full satisfaction, including, review of and satisfaction with a schedule of closing fees and expenses, schedules of post
transaction expenses and sources and uses of funds, all material agreements, the Registration Statement of DPAC on Form S-4, all documents evidencing the DPAC Transaction, the Senior Loan Documents, the Ohio Loan Documents, all non-compete
agreements, all employment agreements, all severance agreements, all tax audits, litigation, and any other matter Lender and/or Lender’s counsel may deem necessary. 
 (i) Legality of Transactions. No change in applicable law shall have occurred as a consequence of which it shall have become and
continue to be unlawful (i) for Lender to perform any of its agreements or obligations under any of the Loan Documents, or (ii) for either Borrower to perform any of its agreements or obligations under any of the Loan Documents.

 (j) Performance, Etc. Except as set forth herein, Borrowers shall have duly and properly performed, complied with
and observed each of its covenants, agreements and obligations contained in each of the Loan Documents. Except as set forth herein, no event shall 

  

 Third Amendment to Subordinated Loan and Security Agreement 
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have occurred on or prior to the Third Amendment Closing Date, and no condition shall exist on the Third Amendment Closing Date, which constitutes a Default
or an Event of Default. 
 (k) Proceedings and Documents. All corporate, governmental and other proceedings in
connection with the transactions contemplated on the Third Amendment Closing Date, each of the other Loan Documents and all instruments and documents incidental thereto shall be in form and substance reasonably satisfactory to Lender. 
 (l) Changes; None Adverse. Since the date of the most recent balance sheets of QuaTech delivered to Lender, no changes shall have
occurred in the assets, liabilities, financial condition, business, operations or prospects of which, individually or in the aggregate, are material to QuaTech and Lender shall have completed such review of the status of all current and pending
legal issues as Lender shall deem necessary or appropriate. 
 (m) Legal Fees. Borrowers shall have reimbursed Lender
for all out-of-pocket costs incurred by Lender in connection with the administration of the Loan and the negotiation and preparation of this Third Amendment, and any other related expenses, including all legal fees and disbursements incurred by
Lender’s counsel and any past due amounts outstanding. 
 (n) Payment of Closing Fee. Borrowers shall have paid to
Lender the closing fee separately agreed to between Lender and Borrowers as set forth in Lender’s February 7, 2006 commitment letter. 
 16. Miscellaneous. 
 (a) Change of Control Waiver. Provided that Borrowers have satisfied all the
conditions precedent to this Third Amendment as set forth in Paragraph 15 of this Third Amendment, Lender hereby consents to waive the application of Sections 6.4, 6.10 and 9.6 of the Loan Agreement solely as they relate to the Change of Control and
other defaults which will be caused by the DPAC Transaction. This waiver applies only to Sections 6.4, 6.10 and 9.6 of the Loan Agreement for the Events of Default caused by the DPAC Transaction only to the extent as such Events of Default exist on
the Third Amendment Closing Date and as are referenced in this Paragraph 16(a), and such waiver does not otherwise modify or waive any other covenant or agreement contained in the Loan Agreement, except as modified by this Third Amendment.

 (b) Effect of Agreements. Except as specifically amended hereby, the Loan Agreement and the other Loan Documents
shall remain in full force and effect. 
 (c) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to its conflicts of laws principles. 
 (d) Entire
Agreement. This Amendment, together with the Loan Agreement, each as amended from time to time, constitutes the complete, final and exclusive understanding and agreement of the parties and supersedes any and all prior or contemporaneous
negotiations, correspondence, understandings and agreements, whether oral or written, between the parties with respect to the subject matter hereof. 
 [Signature page follows. Remainder of page intentionally left blank.] 
  

 Third Amendment to Subordinated Loan and Security Agreement 
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 IN WITNESS WHEREOF, the undersigned have executed and delivered this Third Amendment to Subordinated Loan
and Security Agreement by their respective duly authorized officers as of the date first written above. 
  

			
	 QUATECH, INC.

		
	 By:
	 	 /s/ Steven D. Runkel

	 Name: 
	 	Steven D. Runkel
	 Title:
	 	Chief Executive Officer
	
	 DPAC TECHNOLOGIES CORP.

		
	 By:
	 	 /s/ Steven D. Runkel

	 Name: 
	 	Steven D. Runkel
	 Title:
	 	 CEO

	
	 THE HILLSTREET FUND, L.P.

		
	 BY:
	 	 HILLSTREET CAPITAL, INC.

		
	 ITS:
	 	 INVESTMENT MANAGER

		
	 By:
	 	 /s/ John P. Vota, II

	 Name: 
	 	 John P. Vota, II

	 Title:
	 	 Executive Vice President

  

 Third Amendment to Subordinated Loan and Security Agreement 

 ADDENDUM A TO 
 JOINDER AGREEMENT AND THIRD AMENDMENT TO 
 SUBORDINATED LOAN AND SECURITY AGREEMENT 

ARTICLE 4 
 REPRESENTATIONS AND WARRANTIES

 In order to induce the Lender to enter into this Agreement, Borrower hereby represents and warrants to the Lender on the date hereof that:

 Section 4.1 Organization, Authority and Qualification. 
 (a) Quatech is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio, and has all
requisite power and authority to own and operate its properties and to carry on its business as now conducted. DPAC is a corporation duly organized, validly existing and in good standing under the laws of the State of California. The execution,
delivery and performance of this Agreement and the Subordinated Note have been duly authorized by all necessary company actions; there is no prohibition, either in law, in its charter documents, operating agreement, or bylaws, if any, or in any
order, writ, injunction or decree of any court or arbitrator presently in effect having applicability to Borrowers which in any way prohibits or would be violated by the execution and performance of this Agreement and the Subordinated Note in any
respect; this Agreement and the Subordinated Note are and will be valid, binding and enforceable obligations of the Borrowers; and the Borrowers have adequate power and authority and has full legal right to enter into this Agreement and each of the
other Loan Documents, and to perform, observe and comply with all of its agreements and obligations under each of such documents, including, without limitation the borrowings contemplated hereby. Borrowers are, and will be after giving effect to the
DPAC Transaction, duly qualified or licensed and in good standing and duly authorized to do business in each jurisdiction in which the character of the properties owned or leased or the nature of the activities conducted makes such qualification or
licensing necessary and in which the failure to be so qualified would have a materially adverse effect on the conduct of the business of Borrowers. 
 (b) The authorized Capital Stock of DPAC is as set forth on Schedule 4.1(b) hereto. Except as described on Schedule 4.1(b) hereto, there are no outstanding options, rights or warrants issued by DPAC for the
acquisition of the Capital Stock of either DPAC, nor any outstanding securities or obligations convertible into Capital Stock. After 

 
giving effect to the DPAC Transaction, all of the capital stock of Quatech will be owned by DPAC. 
 (c) Neither Borrower has any Subsidiaries except as set forth on Schedule 4.1(c) hereto. The Capital Stock of each Subsidiary is owned by
a Borrower free and clear of all Liens other than securities laws restrictions, the pledge pursuant to the Senior Loan Documents and those in favor of Lender. Each Subsidiary (i) is duly organized, validly existing and in good standing under
the laws of the state of its incorporation, and (ii) has full corporate power and authority and full legal right to own or to hold under lease its Property and to carry on its business. Each Subsidiary is qualified and licensed in each
jurisdiction wherein the character of the Property owned or held under lease by it, or the nature of its business makes such qualification necessary or advisable. 
 (d) Except as listed on Schedule 4.1(c), neither Borrower owns or holds of record (whether directly or indirectly) any shares of any class
in the capital of any corporation, nor does either Borrower own or hold (whether directly or indirectly) any legal and/or beneficial equity interest in any partnership, business trust or joint venture or in any other unincorporated trade or business
enterprise. 
 Section 4.2 No Legal Bar. The execution, delivery and performance of this Agreement, the Subordinated Note and the
other Loan Documents and the consummation of the transactions contemplated thereby, will not in any material respect violate any Requirements of Law or any Contractual Obligation of a Borrower. 
 Section 4.3 No Litigation. No litigation, investigation or proceeding of or before any arbitrator or governmental authority is pending or
threatened by or against either Borrower or against any of its respective properties or revenues, existing or future, (a) with respect to this Agreement, the Subordinated Note, any of the other Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which, if adversely determined, would have a Material Adverse Effect. 
 Section 4.4
Financial Condition. The Registration Statements on Form S-4, as amended, (Registration No. 333-129532) contains financial statements for each Borrower as well as Form 10-Q filed by DPAC for the quarter ended November 30, 2005, The
financial statements contained in such filings are the “Financial Statements.” The Financial Statements have been prepared in conformity with generally accepted accounting principles applied on a basis consistent with preceding
years and throughout the periods involved (“GAAP”) and present fairly in all material respects the financial position and results of operations of each Borrower as of the dates of such statements and for the periods covered thereby.
The books of account of each Borrower have been kept accurately in all material respects in the ordinary course of business, the transactions entered therein represent bona fide transactions, and the revenues, expenses, assets and liabilities of
each Borrower have been properly recorded therein in all material respects. 
 Section 4.5 No Change. There has been no
development or event which has had or would reasonably be expected to have a Material Adverse Effect since November 30, 2005. 
  

 - 2 - 

 Section 4.6 No Default. Neither Borrower is in default under or with respect to any of its
Contractual Obligations, except where the default would not have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 
 Section 4.7 Ownership of Property; Liens. Each Borrower has good and marketable title to all its property as listed on the Financial Statements and none of such property is subject to any Lien except
Permitted Liens. 
 Section 4.8 Intellectual Property. Each Borrower possess all licenses, patents, permits, trademarks, trade
names, copyrights, technology, know how and processes necessary for the conduct of its businesses as currently conducted, taking into consideration consummation of the DPAC Transaction, and all such licenses, patents, permits, trademarks, trade
names, and copyrights are listed on Schedule 4.8 attached hereto and made a part hereof. No claim has been asserted and is pending by any Person challenging or questioning the use of any such property or rights or the validity or effectiveness of
any such property or rights, nor is there any known basis for any such claim. The use of such property and rights by each Borrower does not infringe on the rights of any Person. 
 Section 4.9 Compliance with Laws. Each Borrower is in compliance with all Requirements of Law, including all Environmental Laws applicable to
it, except, in each case, where the failure to comply would not have a Material Adverse Effect. 
 Section 4.10 Taxes. Each
Borrower has filed or caused to be filed all tax returns which are required to be filed and have paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its properties and all other taxes, fees or
other charges imposed on it or any of its property by any governmental authority (other than any taxes, fees or other charges the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of such Borrower); no tax Lien has been filed, and, to the knowledge of each Borrower, no claim is being asserted, with respect to any such tax, fee or other charge. 

Section 4.11 Environmental Matters. To each Borrower’s knowledge, each Borrower is in compliance with, and has no liability to any
Person in respect of, all Environmental Laws except for such non-compliance or liabilities that would not have a Material Adverse Effect. 
 Section 4.12 Place of Business. Each Borrower maintains a place of business and owns Collateral at its Principal Office. Each Borrower maintains its books of account and records, including all records concerning the Collateral,
only at its Principal Office. Schedule 4.12 is a complete listing of the current location of all Collateral. Such locations may change from time to time. 
 Section 4.13 General Collateral Representation. Subject, in each case, to the liens of the Senior Lender: 
 (a) The Borrowers are the sole owners of and have good and marketable title to the Collateral, free from all Liens, other than the Permitted Liens, and have full right and power to grant the Lender a security interest
therein. All information which has been furnished to the Lender concerning the Collateral was complete, accurate and correct in 

  

 - 3 - 

 
all material respects when furnished, and all information which may be furnished to the Lender in the future concerning the Collateral will be complete,
accurate and correct in all material respects when furnished. 
 (b) No security agreement, financing statement, equivalent
security or Lien instrument or continuation statement covering all or any part of the Collateral is on file or of record in any public office, except such as may have been filed (i) by Borrower in favor of Senior Lender pursuant to the Senior
Loan Agreement, (ii) by Borrower in favor of the State of Ohio pursuant to the State of Ohio Debt, (iii) by Borrower in favor of Lender pursuant to this Agreement, or (iv) in respect of the items of Collateral subject to the Permitted
Liens. 
 (c) The provisions of this Agreement are sufficient to create in favor of the Lender, as of the Closing Date, a
valid and continuing lien on, and security interest in, the types of the Collateral hereunder in which a security interest may be created under Article 9 of the UCC. Financing Statements on Form UCC-1 have been duly executed on behalf of each
Borrower and the description of such Collateral set forth therein is sufficient to perfect security interests in such Collateral in which a security interest may be perfected by the filing of Financing Statements under the UCC. When such Financing
Statements are duly filed in the filing offices listed on Schedule 4.13 hereto, and the requisite filing fees are paid, such filings will be sufficient to perfect security interests in such of the Collateral described in the Financing Statements as
can be perfected by filing, which perfected security interests will be prior to all other Liens in favor of others and rights of others (except for Permitted Liens), and as against any owner of real estate where any of the Equipment is located and
as against any purchaser of such real property and any present or future creditor obtaining a Lien on such real estate. All action necessary to protect and perfect a security interest in each item of the Collateral has been or will be duly taken, or
in the case of Equipment covered by certificates of title will be taken within ninety (90) days of the Closing Date. 
 (d) Upon delivery to Lender and the filing with the U.S. Patent and Trademark Office of the Assignment of Trademarks and delivery to the Lender and the payment of the requisite filing fees, the Lender shall have a perfected security
interest in the intellectual property listed on Schedule 4.8 and the other Collateral of a type described in such assignments, which perfected security interest will be prior to all other Liens in favor of others. 
 Section 4.14 Accounts. As to each and every Account of Borrowers, a Borrower has full right and power to grant the Lender a security interest
therein and the security interest granted in such Account to the Lender in Article 3 hereof, when perfected, will be a valid second security interest, subordinate only to Permitted Liens, the liens granted under the Senior Loan Documents, which will
inure to the benefit of the Lender without further action, subject to Permitted Liens and the provisions of Section 4.13(c) hereof. 
 Section 4.15 Equipment. All Equipment is located at a Borrower’s Principal Offices, except for de minimus equipment held at the location of customers or resellers from time to time. No Equipment is now stored with a bailee
(except as set forth in the preceding sentence), 

  

 - 4 - 

 
warehouseman or similar party. All Equipment necessary for the conduct of a Borrower’s business or reflected on the Financial Statements is currently
usable or currently saleable in the normal course of Borrower’s business. 
 Section 4.16 ERISA. Schedule 4.16 contains a
list of all Employee Benefit Plans maintained by each Borrower. Borrowers and their ERISA Affiliates are in compliance with any applicable provisions of ERISA and the regulations thereunder, and the Code, with respect to all such Employee Benefit
Plans. 
 Section 4.17 Undisclosed Liabilities. No Borrower has any material obligation or liability (whether accrued, absolute,
contingent, unliquidated, or otherwise, whether due or to become due) arising out of transactions entered into at or prior to the Closing Date, or any action or inaction at or prior to the Closing Date, except liabilities reflected on the Financial
Statements; liabilities incurred in the ordinary course of business (none of which are liabilities for breach of contract, breach of warranty, torts, infringements, claims or lawsuits); liabilities or obligations disclosed in the Schedules hereto;
and liabilities or obligations incurred pursuant to the Loan Documents, the Purchase Agreement and the agreements, documents and instruments contemplated thereby and the Senior Loan Agreement and the other Senior Loan Documents and the Ohio Loan and
State of Ohio Loan Documents. 
 Section 4.18 Disclosure. 
 (a) All factual information furnished by or on behalf of each Borrower in writing to Lender on or before the Closing Date (including all
information contained in the Loan Documents) for purposes of or in connection with this Agreement or any transaction contemplated hereby is true and complete in all material respects on the date as of which such information is dated or certified and
does not contain any untrue statement of a material fact or omits to state any material fact, it being understood and agreed that for purposes of this clause (a), such factual information shall not include projections and pro forma financial
information. 
 (b) The projections and pro forma financial information contained in the factual information referred to in
clause (a) above (including the pro forma consolidated financial statements delivered hereunder) were or are based on good faith estimates and assumptions believed to be reasonable at the time made, it being recognized by Lender that such
projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ significantly from the projected results. 
 Section 4.19 Solvency. Each Borrower will be solvent after consummation of the DPAC Transaction, and creation of the Obligations hereunder
and under the Senior Loan Documents, the security interests of Lender, Senior Lender and the State of Ohio and the other transactions contemplated hereby and by the Senior Loan Documents. Borrowers are able to pay their debts as they mature and have
sufficient capital to carry on their business. 
 Section 4.20 Survival of Representations and Warranties. The foregoing
representations and warranties are made by the Borrowers with the knowledge and intention that 

  

 - 5 - 

 
the Lender will rely thereon, and shall survive the execution and delivery of this Agreement and the making of the Loan hereunder. 
 ARTICLE 5 
 AFFIRMATIVE COVENANTS 

So long as the Subordinated Note remains outstanding and unpaid or any other Obligation is owing to the Lender, the Borrowers agree as follows:

 Section 5.1 Financial Statements. 
 (a) SEC Filings. Within two (2) business days of filing with the SEC, DPAC shall deliver to Lender all financial statements,
reports and other filings made by DPAC with the SEC. 
 (b) Reports to Management. Simultaneously with the delivery of
the financial statements described in Section 5.1, the Borrower shall also deliver to Lender copies of reports to management and management letters prepared by the accountants to the Borrower, each certified as true and correct by a Responsible
Officer. 
 (c) Compliance Certificates. Simultaneously with the delivery of the financial statements described in
Section 5.1, the Borrowers shall furnish to the Lender a Compliance Certificate executed by a Responsible Officer of each Borrower (i) setting forth in reasonable detail the calculations supporting and used to determine Borrower’s
compliance with the financial covenants contained in Article 7 hereof, along with supporting schedules; and (ii) stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default, except as specified in such
Compliance Certificate. 
 Section 5.2 Conduct of Business and Maintenance of Existence. Borrowers shall continue to engage in
business of the same general type in all material respects as now conducted by their and preserve, renew and keep in full force and effect their existence and take all reasonable action to maintain all rights, privileges and franchises necessary for
the normal conduct of their business. Borrowers shall comply with all Contractual Obligations and Requirements of Law. 
 Section 5.3
Maintenance of Property; Insurance. Borrowers shall keep all property useful and necessary in their business in good working order and condition; maintain all workers’ compensation insurance required by law; maintain with financially
sound and reputable insurance companies insurance on all of their real and personal property in amounts consistent with past practices of Borrowers (in amounts sufficient to insure one hundred percent (100%) of the actual replacement costs
thereof) (subject to normal deductibles and/or self-insured retentions in amounts not in excess of the amounts in place as of the date of this Agreement) and against at least such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business, or, in case of an Event of Default, as the Lender may reasonably specify from time to time, that Lender may reasonably request from time to time, and furnish to 

  

 - 6 - 

 
the Lender, promptly after written request, any information as to the insurance carried. If Borrowers fail to do so, the Lender may obtain such insurance and
charge the cost thereof to the Borrowers’ account and add it to the Obligations. The Borrowers agree that, if any loss should occur, the proceeds of all such insurance policies may be applied to the payment of all or any part of the
Obligations, as the Lender may direct. Lender shall be named an additional named insured, lender loss payee and mortgagee on such insurance policies, as the case may be, to the extent that such policies insure the Collateral. In the event of any
casualty for which the proceeds of insurance are less than Twenty Five Thousand and 00/100 Dollars ($25,000.00), however, the Borrowers shall be entitled to retain such proceeds for the purpose of repairing or replacing the insured property,
provided that the Borrowers promptly execute and deliver to the Lender such documents, instruments, financing statements or other agreements as may be necessary to perfect the security interest of the Lender in all such property. All policies shall
provide for at least thirty (30) days’ written notice of cancellation to the Lender, except premium nonpayment cancellation which shall be ten (10) days’ written notice. 
 Section 5.4 Liability Insurance. Borrowers shall, at all times, maintain in full force and effect such liability insurance with respect to
their activities and other insurance as may be reasonably required by the Lender, such insurance to be provided by insurer(s) reasonably acceptable to the Lender; and, if requested by the Lender, such insurance shall name the Lender as an additional
insured. 
 Section 5.5 Inspection of Property; Books and Records. DPAC, on a consolidated basis, shall maintain in all material
respects complete and accurate books of accounts and records in which full, true and correct entries in conformity with GAAP and all Requirements of Law in all material respects shall be made of all dealings and transactions in relation to the
Collateral and the operations of DPAC; and grant to the Lender, or its representatives, full and complete access to the Collateral and all books of account, records, correspondence and other papers relating to the Collateral during normal business
hours and Borrowers grant to Lender the right to inspect, examine, verify and make abstracts from the copies of such books of account, records, correspondence and other papers, and to investigate during normal business hours such other records,
activities and business of the Borrowers as they may deem reasonably necessary or appropriate at the time. 
 Section 5.6
Notices. Borrowers shall promptly give notice to the Lender of: 
 (a) the occurrence of any Default or Event of
Default; 
 (b) any default or event of default under any Contractual Obligation relating to any Indebtedness of Borrowers,
and any litigation, investigation or proceeding which may exist at any time between Borrower and any governmental authority, which in either case, if not cured or if adversely determined, as the case may be, would reasonably be expected to have a
Material Adverse Effect; 
 (c) the commencement, existence or written threat of any action or proceeding by or before any
governmental or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic, against or
affecting 

  

 - 7 - 

 
Borrower, which action or proceeding, as the case may be, would reasonably be expected to have a Material Adverse Effect; and 
 (d) any change in the business, operations, property or condition (financial or otherwise) of Borrowers which would reasonably be expected
to have a Material Adverse Effect. 
 Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of Borrowers setting
forth details of the occurrence referred to therein and stating what action the Borrower propose to take with respect thereto. 
 Section 5.7 Environmental Laws. Borrowers shall comply in all material respects with all Environmental Laws and obtain and comply with and maintain in all material respects any and all licenses, approvals, registrations or
permits required by any Environmental Law. 
 Section 5.8 Inventory. With respect to the Inventory, Borrowers shall: 

(a) sell or dispose of the Inventory only to buyers in the ordinary course of business and consistent with past practices of Seller
(which may include disposing of obsolete inventory or Inventory of de minimus value in the ordinary course of business and in accordance with past practices of such Borrowers); and 
 (b) provide Lender with a list of the locations of all Inventory on a monthly basis, 
 Section 5.9 Equipment. Borrowers shall: 
 (a) keep and maintain the Equipment in good operating condition and repair, excluding normal wear and tear, and shall make all necessary replacements thereof so that the value, utility and operating efficiency thereof
shall at all times be maintained and preserved in materially the same condition as on the Closing Date, except to the extent items of Equipment become obsolete in the ordinary course of business, and not permit any such items to become a fixture to
real estate or accession to other personal property; and 
 (b) upon an Event of Default or as reasonably requested by Lender,
immediately on demand thereof by Lender, deliver to Lender any and all evidence of ownership of any of the Equipment (including, without limitation, certificates of title and applications for the title). 
 Section 5.10 Collateral. Borrowers shall maintain the Collateral, as the same is constituted from time to time, free and clear of all Liens,
except Permitted Liens, and defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein and pay all costs and expenses (including reasonable attorney’s fees) incurred in connection
with such defense. 
 Section 5.11 Employee Benefit Plans. Borrowers will and will cause each of their ERISA Affiliates to comply
in all material respects with all requirements imposed by ERISA 

  

 - 8 - 

 
and the Code applicable from time to time to any Employee Benefit Plans of a Borrower or any ERISA Affiliates; make full payment when due of all amounts
which under the provisions of such Employee Benefit Plans or under applicable law, are required to be paid as contributions thereto; file on a timely basis all reports, notices and other filings required by any governmental agency with respect to
any such Employee Benefit Plans; furnish to all participants, beneficiaries, and employees under any such Employee Benefit Plan, within the periods prescribed by law, all reports, notices and other information to which they are entitled under
applicable law, and take no action which would cause any such Employee Benefit Plan to fail to meet any qualification requirement imposed by the Code. 
 Section 5.12 Further Documents. Borrowers shall, at or prior to the Closing Date: 
 (a) cause Lender’s Lien to be noted on each document of ownership or title as to which evidence of Lender’s Lien is necessary or, in Lender’s or Lender’s counsel’s opinion, advisable to be shown in order to perfect
Lender’s Lien on the Collateral covered by such document; and if reasonably practicable 
 (b) execute and deliver such
financing statements, documents and instruments, and perform all other acts as the Lender deems reasonably necessary or desirable, to carry out and perform the intent and purpose of this Agreement, and pay, upon demand, all expenses (including
reasonable attorney’s fees) incurred by the Lender in connection therewith. 
 Section 5.13 Life Insurance. Borrowers shall
keep and maintain the Life Insurance in accordance with the terms hereof until all of the Obligations are satisfied and this Agreement is terminated. 
 Section 5.14 Trademarks, Copyrights and Other Intellectual Property. Promptly upon the filing by Borrowers or any Subsidiary of any application for letters patent or the registration of any trademarks,
trade names or copyrights, Borrowers shall notify Lender in writing and furnish such documentation as Lender may request to perfect Lender’s security interest in such property. 
 Section 5.15 Other Information. Borrowers shall furnish to the Lender such other financial and business information and reports in form and
substance satisfactory to the Lender as and when the Lender may from time to time reasonably request. 
 Section 5.16 Board of
Directors. For so long as the Obligations, or the Warrant or Capital Stock issued upon the exercise thereof remain outstanding and owned or held by Lender, Lender shall be entitled to nominate one (1) individual to attend any meetings of
the board of directors of either Borrower and the meetings of any committee thereof as an observer and Lender shall be entitled to receive at lease ten (10) days’ prior written notice of all such meetings. Borrowers shall promptly
reimburse such individual for all reasonable out-of-pocket expenses incurred in attending such meetings. 
  

 - 9 - 

 ARTICLE 6 
 NEGATIVE COVENANTS 
 The Borrowers covenant and agree with the Lender and warrant that, as long as the Loan
shall remain unpaid: 
 Section 6.1 Limitations on Restricted Payments. Without the prior written consent of Lender, the
Borrowers shall not, at any time, enter into, participate in, or make any Restricted Payment. 
 Section 6.2 Limitations on
Indebtedness. Borrowers will not at any time create, incur or assume, or become or be liable (directly or indirectly) in respect of, any Indebtedness, other than: 
 (a) the Obligations incurred pursuant to this Agreement; 
 (b) the obligations incurred relative to the Senior Loan Documents and the State of Ohio Loan Documents or permitted by the Senior Loan
Documents or the State of Ohio Loan Documents; 
 (c) Guarantee Obligations permitted under Section 6.3 hereof;

 (d) current liabilities of Borrowers incurred in the ordinary course of business not incurred through the borrowing of
money, or the obtaining of credit except for credit on an open account basis customarily extended and in fact extended in connection with normal purchases of goods and services; 
 (e) Indebtedness in respect of taxes, assessments, governmental charges or levies and claims for labor, worker’s compensation,
materials and supplies to the extent any of the foregoing shall not otherwise be payable in accordance herewith; 
 (f)
Indebtedness in respect of judgments or awards that have been in force for less than the applicable period for taking an appeal so long as execution is not levied thereunder or in respect of which Borrowers shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay of execution shall have been obtained pending such appeal or review; 
 (g) endorsements for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business; 
 (h) Indebtedness in respect of performance, surety, statutory, insurance, appeal or similar bonds obtained in the ordinary course of
business; 
 (i) except to the extent prohibited by Section 6.6, Indebtedness of the Borrowers incurred to refinance or
replace Indebtedness of such Person permitted hereunder; provided, that the principal amount (or committed principal amount) of such refinancing Indebtedness shall not exceed the outstanding principal amount (or 

  

 - 10 - 

 
committed principal amount) of the Indebtedness being refinanced, the terms of such refinancing are not more onerous taken as a whole to such Person than the
terms of the Indebtedness being refinanced, and the Lender shall have consented to the incurrence of such refinancing Indebtedness; and 
 (j) Indebtedness pursuant to capital leases or purchase money financing agreements not exceeding $100,000 in the aggregate. 
 Section 6.3 Limitation on Guarantee Obligations. The Borrowers shall not create, incur, assume or suffer to exist any Guarantee Obligation except in the ordinary course or for (i) product warranties;
and (ii) return or replacement guaranties and similar assurances made by Borrowers with respect to products sold to customers in the ordinary course of business and in accordance with the past practices of such Borrower. 
 Section 6.4 Limitation on Fundamental Changes. Borrowers shall not merge, consolidate or amalgamate, or liquidate, wind up or dissolve
themselves (or suffer any liquidation or dissolution), or make any material change in their businesses or their present method of conducting business. 
 Section 6.5 Limitation on Dispositions of Assets. Without the prior written consent of Lender, which shall not be unreasonably withheld, Borrowers shall not convey, sell, lease, license, assign, transfer
or otherwise dispose of a substantial part (more than ten percent (10%) in the aggregate during the term hereof) of their property, business or assets (including, without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired, except for the sale of Inventory and obsolete Equipment or the disposal of de minimus amounts of Equipment and Inventory in the ordinary course of business and except for dispositions permitted under the definition of Restricted
Payments. 
 Section 6.6 Limitation on Investments, Loans and Advances. Borrowers shall not make or permit to exist any advances
or loans to, or guarantee or become contingently liable, directly or indirectly, in connection with the obligations, leases, stock or dividends of, or own, purchase or make any commitment to purchase any stock, bonds, notes, debentures or other
securities of, or any interest in, or make any capital contributions to (all of which are sometimes collectively referred to herein as “Investments”) any Person except for (a) purchases of direct obligations of the federal government,
(b) deposits in commercial banks, (c) commercial paper of any U.S. corporation having the highest ratings then given by the Moody’s Investors Services, Inc. or Standard & Poor’s Corporation, (d) endorsement of
negotiable instruments for collection in the ordinary course of business, (e) advances to employees for business travel and other expenses incurred in the ordinary course of business, (f) any extension of trade credit in the ordinary
course of business and investments in customer accounts for Inventory sold or services rendered in the ordinary course of business, (g) any investments in cash equivalents, (h) investments received in connection with the bankruptcy of
suppliers and customers or received pursuant to a plan of reorganization, in each case, in settlement of delinquent obligations or disputes; and (i) transactions contemplated by, or required of DPAC under the Warrant Agreement or the Warrant.

  

 - 11 - 

 Section 6.7 Limitation on Payments and Modifications of Debt Instruments. The Borrowers shall
not: 
 (a) make any optional payment or prepayment on any Indebtedness for Borrowed Money (other than Obligations under this
Agreement and prepayments of accounts payable in the ordinary course of business to obtain discounts by the terms of payment); and 
 (b) amend, modify or change or consent or agree to any amendment, modification or change to any of the terms relating to the payment or prepayment of principal of or interest on, any such Indebtedness for Borrowed Money, or any capital or
finance lease obligations, without the consent of Lender. 
 Section 6.8 Limitation on Creation or Acquisition of Subsidiaries.
Borrowers will not create or form any new Subsidiary. 
 Section 6.9 Corporate Documents. Borrowers shall not make any material
change, amendment or modification to their respective Articles of Incorporation or By-Laws without the prior written consent of Lender which consent shall not be unreasonably withheld or delayed. 
 Section 6.10 Changes Relating to Indebtedness. Without the consent of Lender, such consent not to be unreasonably withheld, Borrowers will
not, and will not permit any of their Subsidiaries to change or amend the terms of the Senior Debt or State of Ohio Loan if such change or amendment would have the effect of (a) increasing the rate of or changing the due dates of payment of
interest payable with respect to any liability of the Borrowers under the Senior Debt or State of Ohio Loan, or the amount of any fees payable under the Senior Debt or State of Ohio Loan, or require the Borrowers to pay any additional fees under or
with respect to the Senior Debt or State of Ohio Loan (other than ordinary and customary fees in connection with giving effect to amendments and waivers otherwise permitted by this Agreement), (b) shortening the maturity of or requiring the
earlier payment of the Senior Debt or the State of Ohio Loan, (c) imposing any additional prepayment obligations on the Borrower with respect to the Senior Debt or the State of Ohio Loan, (d) increasing the aggregate principal amount of
the Senior Debt or the State of Ohio Loan, or (e) permitting the incurrence of additional indebtedness. 
 Section 6.11
Limitations on Management Fees. Neither Borrower nor any Subsidiary shall pay or obligate itself to pay, directly or indirectly, any management fee or similar compensation to any Person, or to any director, officer, shareholder or employee of
such Person, except for reasonable directors’ fees for attendance at Board meetings or Board Committee meetings. 
 Section 6.12
Management Compensation. Borrower shall not pay to Steven Runkel compensation in excess of that described in his current employment agreement, as the same may be adjusted by the compensation committee of the Board of Directors of DPAC at any
renewal thereof. 
  

 - 12 -Credit Agreement

 Exhibit 10.6 
 CREDIT AGREEMENT 
 between 
 WR ACQUISITION, INC. 
 and 
 NATIONAL CITY BANK 
 July 28, 2000 
 $850,000 Term Loan A 
 $480,000 Term Loan B

 $1,500,000 Revolving Commitment 

					
	1A.	  	CROSS-REFERENCE	  	1
	1B.	  	SUMMARY	  	1
	2A.	  	 TERM LOAN A
	  	1
		  	 2A.01 TERM NOTE A
	  	1
		  	 2A.02 AMORTIZATION OF TERM LOAN A
	  	1
		  	 2A.03 INTEREST ON TERM LOAN A
	  	1
		  	 2A.04 PREPAYMENTS OF TERM LOAN A
	  	2
		  	 2A.05 LOAN FEE
	  	2
		  	 2A.06 MANDATORY PREPAYMENTS
	  	2
	2B.	  	 TERM LOAN B
	  	2
		  	 2B.01 TERM NOTE B
	  	2
		  	 2B.02 AMORTIZATION OF TERM LOAN B
	  	3
		  	 2B.03 INTEREST ON TERM LOAN B
	  	3
		  	 2B.04 PREPAYMENTS OF TERM LOAN B
	  	3
		  	 2B.05 LOAN FEE
	  	3
	2C.	  	 REVOLVING COMMITMENT
	  	4
		  	 2C.01 AMOUNT
	  	4
		  	 2C.02 TERM
	  	4
		  	 2C.03 OPTIONAL REDUCTIONS
	  	4
		  	 2C.04 COMMITMENT FEE
	  	4
		  	 2C.05 ANNUAL LOAN FEE
	  	4
		  	 2C.06 EXTENSION OF REVOLVING COMMITMENT
	  	4
		  	 2C.07 BORROWING BASE
	  	5
		  	 2C.08 BORROWING BASE MAINTENANCE
	  	5
	2D.	  	 REVOLVING LOANS
	  	5
		  	 2D.01 REVOLVING NOTE
	  	5
		  	 2D.02 CREDIT REQUESTS
	  	6
		  	 2D.03 CONDITION: NO DEFAULT
	  	6
		  	 2D.04 CONDITION: PURPOSE
	  	6
		  	 2D.05 AMOUNT
	  	6
		  	 2D.06 MATURITIES
	  	6
		  	 2D.07 INTEREST: REVOLVING LOANS
	  	6
		  	 2D.08 DISBURSEMENT
	  	7
		  	 2D.09 PREPAYMENTS
	  	7
	3A.	  	 INFORMATION
	  	7
		  	 3A.01 FINANCIAL STATEMENTS
	  	7
		  	 3A.02 NOTICE
	  	9
	3B.	  	 GENERAL FINANCIAL STANDARDS
	  	9
		  	 3B.01 LEVERAGE
	  	9
		  	 3B.02 PRETAX DEBT SERVICE COVERAGE
	  	9
		  	 3B.03 DEBT TO EBITDA RATIO
	  	10
	3C.	  	 AFFIRMATIVE COVENANTS
	  	10
		  	 3C.01 TAXES
	  	10
		  	 3C.02 FINANCIAL RECORDS
	  	11
		  	 3C.03 VISITATION
	  	11
		  	 3C.04 INSURANCE
	  	11
		  	 3C.05 CORPORATE EXISTENCE
	  	11
		  	 3C.06 COMPLIANCE WITH LAW
	  	11
		  	 3C.07 PROPERTIES
	  	12
	3D.	  	 NEGATIVE COVENANTS
	  	12

					
		  	 3D.01 EQUITY TRANSACTIONS
	  	12
		  	 3D.02 CREDIT EXTENSIONS
	  	13
		  	 3D.03 BORROWINGS
	  	13
		  	 3D.04 LIENS, LEASES
	  	14
		  	 3D.05 FIXED ASSETS
	  	15
		  	 3D.06 DIVIDENDS
	  	15
		  	 3D.07 SUBORDINATED NOTES
	  	15
	4A.	  	CLOSING	  	15
		  	 4A.01 SUBJECT NOTES
	  	15
		  	 4A.02 RESOLUTIONS/INCUMBENCY
	  	15
		  	 4A.03 LEGAL OPINION
	  	15
		  	 4A.04 INTENTIONALLY LEFT BLANK
	  	16
16
		  	 4A.05 SECURITY AGREEMENTS
	  
		  	 4A.06 MORTGAGES AND RELATED REAL ESTATE DOCUMENTS
	  	16
		  	 4A.07 DOCUMENTATION FEE
	  	16
		  	 4A.08 ACQUISITION
	  	16
16
		  	 4A.09 LIEN WAIVERS
	  
		  	 4A.10 OTHER DOCUMENTS
	  	16
	4B.	  	WARRANTIES	  	17
		  	 4B.01 EXISTENCE
	  	17
		  	 4B.02 GOVERNMENTAL RESTRICTIONS
	  	17
		  	 4B.03 CORPORATE AUTHORITY
	  	17
		  	 4B.04 LITIGATION
	  	18
		  	 4B.05 TAXES
	  	18
		  	 4B.06 TITLE
	  	18
		  	 4B.07 LAWFUL OPERATIONS
	  	18
		  	 4B.08 INSURANCE
	  	18
		  	 4B.09 DEFAULTS
	  	18
	5A.	  	EVENTS OF DEFAULT	  	18
		  	 5A.01 PAYMENTS
	  	18
		  	 5A.02 WARRANTIES
	  	19
		  	 5A.03 COVENANTS WITHOUT GRACE
	  	19
		  	 5A.04 COVENANTS WITH GRACE
	  	19
		  	 5A.05 CROSS-DEFAULT
	  	19
		  	 5A.06 BORROWER’S SOLVENCY
	  	19
	5B.	  	EFFECTS OF DEFAULT	  	20
		  	 5B.01 OPTIONAL DEFAULTS
	  	20
		  	 5B.02 AUTOMATIC DEFAULTS
	  	20
		  	 5B.03 OFFSETS
	  	20
	6A.	  	INDEMNITY: STAMP TAXES	  	20
	6B.	  	INDEMNITY: FUNDING COSTS	  	20
	6C.	  	CREDIT REQUESTS	  	21
	6D.	  	INDEMNITY: UNFRIENDLY TAKEOVERS	  	21
	6E.	  	INDEMNITY: CAPITAL REQUIREMENTS	  	21
	6F.	  	INDEMNITY: COLLECTION COSTS	  	21
	6G.	  	CERTIFICATE FOR INDEMNIFICATION	  	21
	7.	  	BANK’S PURPOSE	  	22
	8.	  	INTERPRETATION	  	22
		  	 8.01 WAIVERS
	  	22

  

 2 

					
		  	 8.02 CUMULATIVE PROVISIONS
	  	22
		  	 8.03 BINDING EFFECT
	  	22
		  	 8.04 SURVIVAL OF PROVISIONS
	  	22
		  	 8.05 IMMEDIATE U.S. FUNDS
	  	22
		  	 8.06 CAPTIONS
	  	22
		  	 8.07 SUBSECTIONS
	  	22
		  	 8.08 ILLEGALITY
	  	23
		  	 8.09 OHIO LAW
	  	23
		  	 8.10 INTEREST/FEE COMPUTATIONS
	  	23
		  	 8.11 NOTICE
	  	23
		  	 8.12 ACCOUNTING TERMS
	  	23
		  	 8.13 ENTIRE AGREEMENT
	  	23
		  	 8.14 WAIVER OF JURY TRIAL
	  	23
		  	 8.15 LATE CHARGE; APPLICATION OF PAYMENTS
	  	23
		  	 8.16 SHARING OF INFORMATION
	  	24
	9.	  	DEFINITIONS	  	24
		  	 Account Officer
	  	24
		  	 Accumulated Funding Deficiency
	  	24
		  	 Affiliate
	  	24
		  	 Agreement
	  	24
		  	 Asset Purchase Agreement
	  	24
		  	 Bank
	  	24
		  	 Banking Day
	  	24
		  	 Borrower
	  	24
		  	 Borrowing Base
	  	24
		  	 Borrowing Base Report
	  	24
		  	 Compensation
	  	25
		  	 Credit Request
	  	25
		  	 Current Assets
	  	25
		  	 Current Liabilities
	  	25
		  	 Current Portion of Long Term Debt
	  	25
		  	 Debt
	  	25
		  	 Default Under ERISA
	  	25
		  	 Default Under This Agreement
	  	25
		  	 Distribution
	  	25
		  	 Eligible Inventory
	  	25
		  	 Eligible Receivable
	  	26
		  	 Environmental Law
	  	27
		  	 ERISA
	  	27
		  	 ERISA Regulator
	  	27
		  	 Export-Import Bank
	  	27
		  	 Event of Default
	  	27
		  	 Expiration Date
	  	27
		  	 Federal Funds Rate
	  	27
		  	 Foreign Eligible Receivable
	  	27
		  	 Funded Indebtedness
	  	28
		  	 GAAP
	  	28
		  	 Guarantor
	  	28
		  	 Insider
	  	28

  

 3 

					
		  	 Insolvency Action
	  	28
		  	 Inventory
	  	29
		  	 Material
	  	29
		  	 Maturity
	  	29
		  	 Most Recent 4A. 04 Financial Statements
	  	29
		  	 Net Income
	  	29
		  	 Net Worth
	  	29
		  	 Pension Plan
	  	29
		  	 Prime Rate
	  	29
		  	 Receivable
	  	29
		  	 Reference Rate
	  	29
		  	 Related Writing
	  	30
		  	 Reportable Event
	  	30
		  	 Revolving Commitment
	  	30
		  	 Revolving Loan
	  	30
		  	 Revolving Note
	  	30
		  	 Subject Indebtedness
	  	30
		  	 Subject Loan
	  	30
		  	 Subject Note
	  	30
		  	 Subordinated
	  	30
		  	 Subsidiary
	  	30
		  	 Supplemental Schedule
	  	30
		  	 Target
	  	30
		  	 Term Loan A
	  	30
		  	 Term Loan B
	  	30
		  	 Term Note A
	  	31
		  	 Term Note B
	  	31
		  	 Total Liabilities
	  	31
	plurals	  	31
	Signatures and Address	  	31

					
			
	 EXHIBIT A:
	  	Supplemental Schedule (4B.)	  	
	 EXHIBIT B:
	  	Term Note A (2A; 4A.01)	  	
	 EXHIBIT C:
	  	Term Note B (2B; 4A.01)	  	
	 EXHIBIT D:
	  	Revolving Note (2D.01; 4A.01)	  	
	 EXHIBIT E:
	  	Extension Agreement (2C.06)	  	

  

 4 

 CREDIT AGREEMENT 
 Agreement (this Agreement) made as of July 28, 2000 by and between WR ACQUISITION, INC. (Borrower) and NATIONAL CITY BANK (Bank): 
 1A CROSS-REFERENCE — Certain terms are defined in section 9. 
 1B.
SUMMARY — This Agreement 
 (a) provides that concurrently with the execution and delivery of this Agreement Bank shall grant Borrower
Term Loan A described in section 2A and Term Loan B described in section 2B, 
 (b) sets forth the terms and conditions upon which Borrower
may, so long as the Revolving Commitment remains in effect, obtain the Revolving Loans described in sections 2C and 2D, PROVIDED that the aggregate unpaid principal balance of the Revolving Loans at any one time outstanding shall never exceed the
amount of the Revolving Commitment then in effect, and 
 (c) sets forth the covenants and warranties made by the parties to induce each other
to enter into this Agreement and other Material provisions. 
 2A. TERM LOAN A — Concurrently with the execution and delivery of this Agreement Bank
shall lend Borrower Eight Hundred Fifty Thousand and 00/100ths Dollars ($850,000) (“Term Loan A”) and disburse the proceeds to the credit of Borrower’s general checking account with Bank in the absence of written instructions from
Borrower to the contrary. 
 2A.01 TERM NOTE A — Concurrently with the execution and delivery of this Agreement Borrower shall evidence
Term Loan A by executing and delivering to Bank Borrower’s note being in the form and substance of Exhibit B to this Agreement. 
 2A.02
AMORTIZATION OF TERM LOAN A — The principal of Term Loan A shall be payable in twenty-four (24) consecutive monthly installments of principal
commencing                    , 2000, all but the last installment to be in the principal sum of Twenty-Three Thousand Six Hundred Eleven and
11/100ths Dollars ($23,611.11) each and the last to be in the amount of the remaining outstanding principal of Term Loan A. 
 2A.03 INTEREST
ON TERM LOAN A — The principal of and overdue interest on Term Loan A shall bear interest (subject to the provisions of subsection 8.10 and those in Exhibit B) at a fluctuating rate (the Fluctuating Rate) equal to the Reference Rate from
time to time in effect plus two percent (2.00%), with each change in the Reference Rate immediately and automatically changing the Fluctuating Rate if and to the extent it is thereafter applicable to Term Loan A, 
 EXCEPT that after Maturity (whether occurring by lapse of time or by acceleration) the principal of and overdue interest on Term Loan A shall bear
interest at a fluctuating rate 

 
per annum equal to the Reference Rate from time to time in effect plus four percent (4%) per annum, with each change in the Reference Rate immediately
and automatically changing the aforesaid fluctuating rate. Interest on Term Loan A shall be payable in arrears on the first day of each month commencing
                     1, 2000, and at Maturity. 
 2A.04 PREPAYMENTS OF TERM LOAN A — Borrower shall have the right at all times to prepay Term Loan A in whole or in part, subject to the following: 
 (a) Borrower shall give Bank an appropriate notice not later than 12:00 noon on the Banking Day next preceding any such prepayment, which notice, if not
originally given in writing, shall be promptly confirmed in writing. 
 (b) Each prepayment of Term Loan A shall aggregate Ten Thousand
Dollars ($10,000) or any greater amount that is a multiple of Ten Thousand Dollars ($10,000) or an amount equal to the aggregate unpaid principal balance of Term Loan A and shall be applied to the principal installments in the inverse order of their
respective maturities. 
 (c) Each prepayment of Term Loan A may be made without penalty or premium. 
 (d) Concurrently with each prepayment Borrower shall prepay the unpaid interest accrued on the principal being prepaid. 
 2A.05 LOAN FEE — Borrower agrees to pay Bank, upon the execution of this Agreement, a loan fee for Term Loan A in the amount of Eight Thousand Five
Hundred Dollars ($8,500). 
 2A.06 MANDATORY PREPAYMENTS — Whenever Borrower’s Net Income for the previous three (3) months
plus depreciation expense for the previous three (3) months plus amortization expense for the previous three (3) months minus all principal payments on Debt for the previous three (3) months shall be in excess of One Thousand Dollars
($1,000) (as measured on a quarterly basis beginning December 31, 2000), Borrower shall make a principal payment in an amount equal to seventy-five percent (75%) of the excess, which principal payment shall be applied to the principal
installments of Term Loan A in the inverse order of their respective due dates. Concurrently therewith Borrower shall prepay the unpaid interest accrued on the principal being prepaid. 
 2B. TERM LOAN B — Concurrently with the execution and delivery of this Agreement Bank shall lend Borrower Four Hundred Eighty Thousand and 00/100ths Dollars ($480,000) (“Term Loan B”) and disburse the
proceeds to the credit of Borrower’s general checking account with Bank in the absence of written instructions from Borrower to the contrary. 
 2B. 01 TERM NOTE B — Concurrently with the execution and delivery of this Agreement Borrower shall evidence Term Loan B by executing and delivering to Bank Borrower’s note in the form and substance of Exhibit C to this Agreement.

  

 2 

 2B.02 AMORTIZATION OF TERM LOAN B — The principal of Term Loan B shall be payable in sixty
(60) consecutive monthly installments of principal commencing                             , 2000,
in the amounts listed as follows: 
  

				
	 Payments 1 - 12
	  	$	1,200
	 Payments 13 - 24
	  	$	1,300
	 Payments 25 - 36
	  	$	1,500
	 Payments 37 - 48
	  	$	1,600
	 Payments 49 - 59
	  	$	1,800

 and the last to be in the amount of the remaining outstanding principal of Term Loan B. 

2B.03 INTEREST ON TERM LOAN B — The principal of and overdue interest on Term Loan B shall bear interest (subject to the provisions of subsection
8.10 and those in Exhibit C) at a fluctuating rate (the Fluctuating Rate) equal to the Reference Rate from time to time in effect plus one percent (1.00%), with each change in the Reference Rate immediately and automatically changing the
Fluctuating Rate if and to the extent it is thereafter applicable to Term Loan B, 
 EXCEPT that after Maturity (whether occurring by lapse of
time or by acceleration) the principal of and overdue interest on Term Loan B shall bear interest at a fluctuating rate per annum equal to the Reference Rate from time to time in effect plus three percent (3%) per annum, with each change in the
Reference Rate immediately and automatically changing the aforesaid fluctuating rate. Interest on Term Loan B shall be payable in arrears on the first day of each month commencing
                     1, 2000, and at Maturity. 
 2B.04 PREPAYMENTS OF TERM LOAN B — Borrower shall have the right at all times to prepay Term Loan B in whole or in part, subject to the following: 
 (a) Borrower shall give Bank an appropriate notice not later than 12:00 noon on the Banking Day next preceding any such prepayment, which notice, if not
originally given in writing, shall be promptly confirmed in writing. 
 (b) Each prepayment of Term Loan A shall aggregate Ten Thousand
Dollars ($10,000) or any greater amount that is a multiple of Ten Thousand Dollars ($10,000) or an amount equal to the aggregate unpaid principal balance of Term Loan A and shall be applied to the principal installments in the inverse order of their
respective maturities. 
 (c) Each prepayment of Term Loan B may be made without penalty or premium, 
 (d) Concurrently with each prepayment Borrower shall prepay the unpaid interest accrued on the principal being prepaid. 
 2B.05 LOAN FEE — Borrower agrees to pay Bank, upon the execution of this Agreement, a loan fee for Term Loan B in the amount of Four Thousand Eight
Hundred Dollars ($4,800). 
  

 3 

 2C. REVOLVING COMMITMENT — The basic terms of the Revolving Commitment and the compensation therefor are as follows:

 2C.01 AMOUNT — The amount of the Revolving Commitment is One Million Five Hundred Thousand Dollars ($1,500,000), but that amount may
be reduced from time to time pursuant to subsection 2C.03 and the Revolving Commitment may be terminated pursuant to section 5B. 
 2C.02 TERM
— The Revolving Commitment shall become effective as of the date of this Agreement and shall remain in effect on a revolving basis until
                                , 2003 (the “Expiration Date”) EXCEPT
that a later Expiration Date may be established from time to time pursuant to subsection 2C.06 and EXCEPT that the Revolving Commitment shall end in any event upon any earlier reduction thereof to zero pursuant to subsection 2C.03 or any earlier
termination pursuant to section 5B. 
 2C.03 OPTIONAL REDUCTIONS — Borrower shall have the right, at all times and without the payment of
any premium, to permanently reduce the amount of the Revolving Commitment by giving Bank one Banking Day’s prior written notice of the amount of each such reduction and the effective date thereof subject, however, to the following: 

(a) Concurrently with each reduction Borrower shall prepay such part, if any, of the principal of the Revolving Loans then outstanding as may be in
excess of the amount of the Revolving Commitment as so reduced. Subsection 2D.09 and section 6B shall apply to each such prepayment. 
 2C.04
COMMITMENT FEE — Borrower agrees to pay Bank a commitment fee 
 (a) based on the average daily difference between the amount of the
Revolving Commitment from time to time in effect and the aggregate unpaid principal balance of the Revolving Loans then outstanding, 
 (b)
computed at the rate of one-quarter of one percent (1/4%) per annum so long as the Revolving Commitment remains in effect and 
 (c)
payable in arrears on                                 , 2000 and quarter-annually
thereafter and at the end of the Revolving Commitment. 
 2C.05 ANNUAL LOAN FEE — Borrower agrees to pay Bank, annually in advance
commencing the date of this Agreement, a loan fee of Five Thousand Dollars ($5,000). 
 2C.06 EXTENSION OF REVOLVING COMMITMENT —
Whenever Borrower furnishes its audited financial statements to Bank pursuant to clause (b) of subsection 3A.01, commencing with the year ending December 31, 2000, Borrower may request that the Revolving Commitment be extended one year to
the                              next following the Expiration Date then in effect. Bank agrees to
give consideration to each such request; but in no event shall Bank be committed to extend the Revolving Commitment, nor shall Bank’s Revolving Commitment be so extended, unless and until 

  

 4 

 
both Borrower and Bank shall have executed and delivered an extension agreement substantially the form of Exhibit E with the blanks appropriately filled.

 2C.07 BORROWING BASE — The Borrowing Base at any given time shall be the aggregate of 
 (a) an amount equal to eighty percent (80%) of the net book value (after deducting any discount or other incentive for early payment but without
deducting any valuation reserve) of the Eligible Receivables, plus 
 (b) an amount equal to ninety percent (90%) of the net book value
(after deducting any discount or other incentive for early payment but without deducting any valuation reserve) of the Foreign Eligible Receivables, plus 
 (c) an amount equal to the lesser of either 
 (1) fifty percent (50%) of the Eligible Inventory or

 (2) Five Hundred Thousand Dollars ($500,000), 
 all as reasonably determined by Bank either on the basis of the then most recent Borrowing Base Report furnished by Borrower to Bank pursuant to subsection 3A.01 or on the basis of the then most recent field audit (if
any) made or other information received by Bank. Prior to December 31, 2000, however, there shall be no $500,000 inventory cap. 
 2C.08
BORROWING BASE MAINTENANCE — Whenever Borrower shall furnish to Bank a Borrowing Base Report showing that the sum of the aggregate unpaid principal balance of the Revolving Loans then outstanding exceeds the amount of Borrower’s Borrowing
Base as shown in that report, Borrower shall make a payment to Bank in an amount equal to that excess for application to the principal of the Revolving Loans. 
 2D.REVOLVING LOANS — Bank agrees that so long as the Revolving Commitment remains in effect Bank will, subject to the conditions of this Agreement, grant Borrower such Revolving Loans as Borrower may from time to time request.

 2D.01 REVOLVING NOTE — The Revolving Loans shall be evidenced at all times by a Revolving Note executed and delivered by Borrower,
payable to the order of Bank in a principal amount equal to the dollar amount of the Revolving Commitment as in effect at the execution and delivery of the Revolving Note and being in the form and substance of Exhibit D with the blanks appropriately
filled. 
 (a) Whenever Borrower obtains a Revolving Loan, Bank shall endorse an appropriate entry on the Revolving Note or make an
appropriate entry in a loan account in Bank’s books and records. Each entry shall be prima facie evidence of the data entered; but such entries shall not be a condition to Borrower’s obligation to pay. 
  

 5 

 (b) No holder of any Revolving Note shall transfer a Revolving Note, or seek a judgment or file a proof
of claim based on a Revolving Note, without in each case first endorsing the Revolving Note to reflect the true amount owing thereon. 
 2D.02
CREDIT REQUESTS — Whenever Borrower desires to borrow pursuant to this Agreement, Borrower shall give Bank an appropriate notice (a Credit Request) with such information as Bank may reasonably request. The Credit Request shall be
irrevocable and shall (EXCEPT in the case of any obtained at the execution and delivery of this Agreement) be given to Bank not later than 12:00 noon Cleveland time on the Banking Day the proceeds of any requested Revolving Loan are to be disbursed
to Borrower. Each request by Borrower for a Revolving Loan shall be made either in writing or by telephone, PROVIDED that any telephone request shall be promptly confirmed in writing and Borrower shall assume the risk of misunderstanding.

 2D.03 CONDITION: NO DEFAULT — Borrower shall not be entitled to obtain any Revolving Loan if 
 (a) any Default Under This Agreement shall then exist or would thereupon begin to exist or 
 (b) any representation or warranty made in subsections 4B.01 through 4B.08 (both inclusive) shall have ceased to be true and complete in any Material
respect except for such changes, if any, as shall have been fully disclosed in the applicable Credit Request and as may be waived by Bank in the reasonable exercise of its discretion, or 
 (c) there shall have occurred any Material adverse change in Borrower’s financial condition, properties or business since the date of Borrower’s
Most Recent 4A.04 Financial Statements. 
 Each Credit Request, both when made and when honored, shall of itself constitute a continuing
representation and warranty by Borrower that Borrower is entitled to obtain, and Bank is obligated to make, the requested Revolving Loan. 
 2D.04 CONDITION: PURPOSE — Borrower shall not use the proceeds of any Revolving Loan for the purpose of financing the acquisition of any corporation or other business entity if the acquisition is publicly opposed by the latter’s
management and if Bank deems that its participation in the financing would involve it in a conflict of interest. 
 2D.05 AMOUNT — No
Revolving Loan shall be made if, after giving effect thereto, the aggregate unpaid principal balance of the Revolving Loans would exceed the amount of the Revolving Commitment then in effect. 
 2D.06 MATURITIES — The stated Maturity of each Revolving Loan shall be the Expiration Date. 
 2D.07 INTEREST: REVOLVING LOANS — The principal of and overdue interest on the Revolving Loans shall bear interest payable in arrears on the first
day of each 

  

 6 

 
January, April, July and October and at Maturity and computed (in accordance with subsection 8.10) 
 (a) prior to Maturity, at a fluctuating rate equal to the Reference Rate from time to time in effect plus the applicable RR margin (if any) and

 (b) after Maturity (whether occurring by lapse of time or by acceleration), at a fluctuating rate equal to the Reference Rate from time to
time in effect plus the applicable RR margin (if any) plus two percent (2%) per annum, 
 with each change in the Reference Rate
automatically and immediately changing the rate thereafter applicable to the Revolving Loans; PROVIDED, that in no event shall the rate applicable to the Revolving Loans after the Maturity thereof be less than the rate applicable thereto immediately
after Maturity. RR margin as used in this subsection means one percent (1.00%) per annum. 
 2D.08 DISBURSEMENT — Bank shall
disburse the proceeds of each Revolving Loan to Borrower’s general checking account with Bank in the absence of written instructions from Borrower to the contrary. 
 2D.09 PREPAYMENTS — Borrower may from time to time prepay the principal of the Revolving Loans in whole or in part, subject to the following: 
 (a) Each prepayment of the Revolving Loans may be made without penalty or premium. 
 (b) No prepayment shall of itself reduce the Revolving Commitment. 
 (c) Concurrently with each prepayment, Borrower shall prepay the interest accrued on the prepaid principal. 
 3A.
INFORMATION — Borrower agrees that so long as the Revolving Commitment remains in effect and thereafter until the Subject Indebtedness shall have been paid in full, Borrower will perform and observe each of the following: 
 3A.01 FINANCIAL STATEMENTS — Borrower will furnish to Bank 
 (a) within (30) days after the end of each month while this Agreement is in effect, Borrower’s balance sheet as at the end of the month and its statements of cash flow, income and surplus reconciliation for
Borrower’s current fiscal year to date, all prepared (but unaudited) on a comparative basis with the prior year, in accordance with GAAP (EXCEPT as disclosed therein) and in form and detail satisfactory to Bank, 
 (b) as soon as available (and in any event within ninety (90) days after the end of each of Borrower’s fiscal years), a complete copy of an
annual audit report (including, without limitation, all financial statements therein and notes thereto) of Borrower for that year which shall be 
  

 7 

 (1) prepared on a comparative basis with the prior year, in accordance with GAAP (EXCEPT as disclosed
therein) and in form and detail satisfactory to Bank, 
 (2) certified (without qualification as to GAAP) by independent public accountants
selected by Borrower and satisfactory to Bank, 
 (3) accompanied by a copy of any management report, letter or similar writing furnished to
Borrower by the accountants in respect of Borrower’s systems, operations, financial condition or properties, and 
 (4) either
(A) a written statement of the accountants that in making the examination necessary for their report or opinion they obtained no knowledge of the occurrence of any Default Under This Agreement or (B) if they know of any, their written
disclosure of its nature and status, PROVIDED, that the accountants shall not be liable directly or indirectly to anyone for any failure to obtain knowledge of any Default Under This Agreement, 
 (c) concurrently with the delivery of any financial statement to Bank pursuant to clause (a) or (b), a certificate by Borrower’s chief financial
officer 
 (1) certifying that to the best of the officer’s knowledge and belief, (A) those financial statements fairly present in
all Material respects Borrower’s financial condition and the results of its operations in accordance with GAAP subject, in the case of interim financial statements, to routine year-end audit adjustments and (B) no Default Under This
Agreement then exists or if any does, a brief description of the default and Borrower’s intentions in respect thereof, and 
 (2)
setting forth calculations indicating whether or not Borrower is in compliance with the general financial standards of section 3B, 
 (d)
promptly when filed (in final form) or sent, a copy of 
 (1) each registration statement, Form 10-K annual report, Form 10-Q quarterly
report, Form 8-K current report or similar document filed by Borrower with the Securities and Exchange Commission (or any similar federal agency having regulatory jurisdiction over the securities of either), 
 (2) each proxy statement or annual report, if any, sent by Borrower to the holders of any of its securities (or any trustee under any indenture which
secures any of its securities or pursuant to which such securities are issued), and 
 (e) within thirty (30) days after the end of each
month (and at such other times as Borrower may deem advisable), a Borrowing Base Report being in form and detail satisfactory to Bank, setting forth Borrower’s Borrowing Base as at the end of that month and certified by an appropriate officer
of Borrower to be true and 

  

 8 

 
complete to the best of the officer’s knowledge and belief, it being agreed that Borrower at its option may furnish other such reports at other times,

 (f) forthwith upon Bank’s written request, such other information in writing about Borrower’s financial condition, properties and
operations and about its Pension Plans, if any, as Bank may from time to time reasonably request. 
 3A.02 NOTICE — Borrower will cause
its chief financial officer, or in his absence another officer designated by Borrower, to give Bank prompt written notice whenever any officer of Borrower 
 (a) reasonably believes (or receives notice from any governmental agency alleging) that any Reportable Event has occurred in respect of any Pension Plan or that Borrower has become in Material non-compliance with any
law or governmental order referred to in subsection 3C.06 if non-compliance therewith would materially and adversely affect Borrower’s financial condition or its properties, 
 (b) receives from the Internal Revenue Service or any other federal, state or local taxing authority any allegation of any default by Borrower in the
payment of any tax that is Material in amount or notice of any assessment in respect thereof, 
 (c) learns there has been brought against
Borrower before any court, administrative agency or arbitrator any litigation or proceeding which, if successful, might have a Material, adverse effect on Borrower, 
 (d) reasonably believes that any Default Under This Agreement shall have occurred or 
 (e) reasonably
believes that there has occurred or begun to exist any other event, condition or thing that likely may have a Material, adverse effect on Borrower’s financial condition, operations or properties. 
 3B. GENERAL FINANCIAL STANDARDS — Borrower agrees that so long as the Revolving Commitment remains in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will perform and observe each of the following: 
 3B.01 LEVERAGE — Borrower will not suffer or permit
the ratio of its Total Liabilities (other than Subordinated indebtedness, if any) to the sum of its Net Worth plus its Subordinated indebtedness, if any, at any time to exceed one and one-fourth to one (1.25:1), such ratio to be tested annually
beginning December 31, 2000. 
 3B.02 PRETAX DEBT SERVICE COVERAGE — Borrower will not, during fiscal year 2000, suffer or permit
the ratio of the aggregate of 
 (a) its Net Income for that year plus 
 (b) its depreciation expense for that year 
  

 9 

 (c) its amortization expense for that year plus 
 (d) its interest expense for that year 
 to
its Total principal and interest debt payments Liabilities for that year to be less than one and two-tenths to one (1.20:1), such ratio to be tested for the five (5) months ending December 31, 2000. Commencing with fiscal year 2001,
Borrower will not suffer or permit the ratio of the aggregate of 
 (a) its Net Income for that year plus 
 (b) its depreciation expense for that year plus 
 (c) its amortization expense for that year plus 
 (d) its interest expense for that year 
 to its Current Portion of Long Term Debt (prior year) plus its interest expense for that year to be less than one and two-tenths to one (1.20:1), such
ratio to be tested for the year ending December 31, 2001 and for each year ending every December 31 thereafter. 
 3B.03 DEBT TO
EBITDA RATIO — Borrower will not, as of the end of any fiscal year commencing with the present year, suffer or permit the ratio of the aggregate of the Total Liabilities of the Borrower to 
 (a) the Net Income of the Borrower for that year plus 
 (b) the aggregate interest expense of the Borrower for that year plus 
 (c) the aggregate federal, state and local income taxes of
the Borrower for that year plus 
 (d) the aggregate depreciation expense of the Borrower for that year plus 
 (e) the aggregate amortization expense of the Borrower for that year 
 to be greater than nine and one-quarter to one (9.25:1) for the five month period ending December 31, 2000, three and one-half to one (3.50:1) for the fiscal year ending December 31, 2001, and two
and nine-tenths to one (2.90:1) for all fiscal years thereafter. 
 3C. AFFIRMATIVE COVENANTS — Borrower agrees that so long as the Revolving
Commitment remains in effect and thereafter until the Subject Indebtedness shall have been paid in full, Borrower will perform and observe each of the following: 
 3C.01 TAXES — Borrower will pay in full 
 (a) prior in each case to the date when penalties for the
nonpayment thereof would attach, all taxes, assessments and governmental charges and levies for which it may be or become subject and 
  

 10 

 (b) prior in each case to the date the claim would become delinquent for nonpayment, all other lawful
claims (whatever their kind or nature) which, if unpaid, might become a lien or charge upon its property; 
 PROVIDED, that no item need be
paid so long as and to the extent that it is contested in good faith and by timely and appropriate proceedings which are effective to stay enforcement thereof. 
 3C.02 FINANCIAL RECORDS — Borrower will at all times keep true and complete financial records in accordance with GAAP and, without limiting the generality of the foregoing, make appropriate accruals to reserves
for estimated and contingent losses and liabilities. 
 3C.03 VISITATION — Borrower will permit Bank at all reasonable times and upon
reasonable notice 
 (a) to visit and inspect Borrower’s properties and examine its records at Bank’s expense and to make copies of
and extracts from such records, and 
 (b) to consult with Borrower’s directors, officers, employees, accountants, actuaries, trustees
and plan administrators in respect of its financial condition, properties and operations and the financial condition of its Pension Plans, each of which parties is hereby authorized to make such information available to Bank to the same extent that
it would to Borrower. 
 3C.04 INSURANCE — Borrower will 
 (a) keep itself and all of its insurable properties insured at all times to such extent, with such deductibles, by such insurers and against such hazards and liabilities as is generally and prudently done by like
businesses, EXCEPT that if a more specific standard is provided in any Related Writing, the more specific standard shall prevail, and 
 (b)
forthwith upon Bank’s written request, furnish to Bank such information about Borrower’s insurance as Bank may from time to time reasonably request, which information shall be prepared in form and detail reasonably satisfactory to Bank and
certified by an officer of Borrower. 
 3C.05 CORPORATE EXISTENCE — Borrower will at all times maintain its corporate existence, rights
and franchises. 
 3C.06 COMPLIANCE WITH LAW — Borrower will comply with all material laws (whether federal, state or local and whether
statutory, administrative or judicial or other) and with every lawful governmental order (whether administrative or judicial) and will, without limiting the generality of the foregoing, 
 (a) use and operate all of its facilities and properties in Material compliance with all Environmental Laws and handle all hazardous materials in Material
compliance therewith; keep in full effect each permit, approval, certification, 

  

 11 

 
license or other authorization required by any Environmental Law for the conduct of any Material portion of its business; and comply in all other Material
respects with all Environmental Laws; 
 (b) make a full and timely payment of premiums required by ERISA and perform and observe all such
further and other requirements of ERISA such that no Default Under ERISA shall occur or begin to exist; and 
 (c) comply with all Material
requirements of all occupational health and safety Laws; 
 PROVIDED, that this subsection shall not apply to any of the foregoing 

(i) if and to the extent that the same shall be contested in good faith by timely and appropriate proceedings which are effective to stay enforcement
thereof and against which appropriate reserves shall have been established or 
 (ii) in any other case if non-compliance therewith would not
Materially and adversely affect Borrower’s financial condition, properties or business. 
 3C.07 PROPERTIES — Borrower will maintain
all fixed assets necessary to its continuing operations in good working order and condition, ordinary wear and tear excepted. 
 3D. NEGATIVE COVENANTS
— Borrower agrees that so long as the Revolving Commitment remains in effect and thereafter until the Subject Indebtedness shall have been paid in full, Borrower will perform and observe each of the following: 
 3D.01 EQUITY TRANSACTIONS — Borrower will not 
 (a) be a party to any merger or consolidation, 
 (b) purchase or otherwise acquire all or substantially all of the assets and
business of any corporation or other business enterprise, 
 (c) create, acquire or hold any Subsidiary, or be or become a party to any joint
venture or partnership, or make or keep any investment in any stocks or other equity securities of any kind other than any investment fully disclosed in Borrower’s Most Recent 4A.04 Financial Statements or in the Supplemental Schedule or

 (d) lease as lessor, sell, sell-leaseback or otherwise transfer (whether in one transaction or a series of transactions) all or any
substantial part of its fixed assets EXCEPT chattels that shall have become obsolete or no longer useful in its present business; 
 PROVIDED,
that if no Default Under This Agreement shall then exist and if none would thereupon begin to exist, this subsection shall not apply to any transaction referred to in clause (a) or (b) if (1) after giving effect thereto, the nature of
Borrower’s business shall 

  

 12 

 
not be materially different from that at the date of this Agreement and (2) there shall have been executed and delivered to Bank an assumption agreement
(to be in form and substance satisfactory to Bank) by the surviving corporation (if not Borrower) in the case of any merger, by the resulting corporation in the case of any consolidation and by the transferee (if not Borrower) in any transfer of any
kind of assets. 
 3D.02 CREDIT EXTENSIONS — Borrower will not 
 (a) make or keep any investment in any notes, bonds or other obligations of any kind for the payment of money or make or have outstanding at any time any
advance or loan to anyone or 
 (b) be or become a Guarantor of any kind; 
 PROVIDED, that this subsection shall not apply to 
 (i) any existing or future advance made to an officer or employee of Borrower solely for the purpose of paying ordinary and necessary business expenses of Borrower, 
 (ii) any existing or future investment in direct obligations of the United States of America or any agency thereof, or in certificates of deposit issued
by Bank, or in any other money-market investment if it carries the highest quality rating of any nationally-recognized rating agency, PROVIDED, that no such investment shall mature more than ninety (90) days after the date when made,

 (iii) any existing investment, advance, loan or Guaranty fully disclosed in Borrower’s Most Recent 4A.04 Financial Statements or in
the Supplemental Schedule, 
 (iv) any existing or future Guaranty of any direct or contingent obligation owing to Bank or 
 (v) any endorsement of a check or other medium of payment for deposit or collection, or any similar transaction in the normal course of business.

 3D.03 BORROWINGS — Borrower will not create, assume or have outstanding at any time any indebtedness for borrowed money or any Funded
Indebtedness of any kind; PROVIDED, that this subsection shall not apply to 
 (i) the Subject Indebtedness or any other Debt owing to Bank,

 (ii) any Subordinated indebtedness, 
 (iii) any existing or future indebtedness secured by a purchase money security interest permitted by subsection 3D.04 or incurred under a lease permitted by subsection 3D.04 or 
  

 13 

 (iv) any existing indebtedness fully disclosed in Borrower’s Most Recent 4A.04 Financial Statements
or in the Supplemental Schedule or any renewal or extension thereof in whole or in part. 
 3D.04 LIENS, LEASES — Borrower will not

 (a) lease any property as lessee or acquire or hold any property subject to any land contract, Inventory consignment or other title
retention contract, 
 (b) sell or otherwise transfer any Receivables, whether with or without recourse or 
 (c) suffer or permit any property now owned or hereafter acquired by it to be or become encumbered by any mortgage, security interest, lien or financing
statement; 
 PROVIDED, that this subsection shall not apply to 
 (i) any tax lien, or any lien securing workers’ compensation or unemployment insurance obligations, or any mechanic’s, carrier’s or landlord’s lien, or any lien arising under ERISA, or any security
interest arising under article four (bank deposits and collections) or five (letters of credit) of the Uniform Commercial Code, or any similar security interest or other lien, EXCEPT that this clause (i) shall apply only to security interests
and other liens arising by operation of law (whether statutory or common law) and in the ordinary course of business and shall not apply to any security interest or other lien that secures any indebtedness for borrowed money or any Guaranty thereof
or any obligation that is in Material default in any manner (other than any default contested in good faith by timely and appropriate proceedings effective to stay enforcement of the security interest or other lien in question), 
 (ii) zoning or deed restrictions, public utility easements, minor title irregularities and similar matters having no adverse effect as a practical matter
on the ownership or use of any of the property in question, 
 (iii) any lien securing or given in lieu of surety, stay, appeal or performance
bonds, or securing performance of contracts or bids (other than contracts for the payment of money borrowed), or deposits required by law or governmental regulations or by any court order, decree, judgment or rule or as a condition to the
transaction of business or the exercise of any right, privilege or license, EXCEPT that this clause (iii) shall not apply to any lien or deposit securing an obligation that is in Material default in any manner (other than any default contested
in good faith by timely and appropriate proceedings effective to stay enforcement of the security interest or other lien in question), 
 (iv)
any mortgage, security interest or other lien securing only Borrower’s Debt to Bank, 
  

 14 

 (v) any mortgage, security interest or other lien (each, a “purchase money security interest”)
which is created or assumed in purchasing, constructing or improving any real property or equipment or to which any such property is subject when purchased, PROVIDED, that (A) the purchase money security interest shall be confined to the
aforesaid property, (B) the indebtedness secured thereby does not exceed the total cost of the purchase, construction or improvement and (C) any such indebtedness, if repaid in whole or in part, cannot be reborrowed, 
 (vi) any lease other than any capitalized lease (it being agreed that a capitalized lease is a lien rather than a lease for the purposes of this
Agreement) so long as the aggregate annual rentals of all such leases do not exceed Fifty Thousand Dollars ($50,000), 
 (vii) any mortgage,
security interest or other lien which (together with the indebtedness secured thereby) is fully disclosed in Borrower’s Most Recent 4A.04 Financial Statements or in the Supplemental Schedule or 
 (viii) any financing statement perfecting a security interest that would be permissible under this subsection. 
 3D.05 FIXED ASSETS — Borrower will not invest (net after trade-ins, if any) in fixed assets and leasehold improvements during any fiscal year
(commencing with the present year) more than One Hundred Thousand Dollars ($100,000) plus its allowable obsolescence, amortization and depreciation charges for that year. 
 3D.06 DIVIDENDS — Borrower will not make or commit itself to make any Distribution to its shareholders at any time if any Default Under This Agreement shall then exist or would thereupon occur, nor will Borrower
at any time make any Distribution other than any dividend payable solely in cash. 
 3D.07 SUBORDINATED NOTES — Borrower will not
assent to any amendment or modification of the subordination provisions in any Subordinated notes of Borrower. 
 4A. CLOSING — Prior to or at the
execution and delivery of this Agreement Borrower shall have complied or caused compliance with each of the following: 
 4A.01 SUBJECT NOTES
— Borrower shall execute and deliver to Bank a Term Note A in accordance with section 2A, a Term Note B in accordance with section 2B and a Revolving Note in accordance with subsection 2D.01. 
 4A.02 RESOLUTIONS/INCUMBENCY — Borrower’s secretary or assistant secretary shall have certified to Bank (a) a copy of resolutions duly
adopted by Borrower’s board of directors in respect of this Agreement and (b) the names and true signatures of officers authorized to execute and deliver this Agreement and Related Writings on behalf of Borrower. 
 4A.03 LEGAL OPINION — Borrower’s counsel shall have rendered to Bank their written opinion in respect of the matters referred to in subsections
4B.01, 4B.02, 4B.03 

  

 15 

 
and 4B.04 and in respect of the perfection (but not priority) of each mortgage, security interest or other lien referred to in this section 4A, which opinion
shall be in such form and substance (and may be subject only to such qualifications and exceptions, if any) as shall be reasonably satisfactory to Bank. 
 4A.04 Intentionally left blank — 
 4A.05 SECURITY AGREEMENTS — Borrower shall have executed and
delivered to Bank security agreements being in form and substance satisfactory to Bank and granting Bank security interests in and to all of Borrower’s existing and future equipment and in all of Borrower’s Inventory and Receivables as
security for Borrower’s Debt to Bank. Borrower shall have joined with Bank in executing and filing such financing statements and other documents and in making and doing such further and other acts and things as Bank may deem necessary for the
evidence, perfection or other protection of Bank’s security interests. 
 4A.06 MORTGAGES AND RELATED REAL ESTATE DOCUMENTS —
Borrower shall have executed and delivered to Bank as security for Borrower’s Debt to Bank a mortgage or mortgages being in form and substance satisfactory to Bank and constituting the first mortgage lien on real properties having a post office
address of 662 Wolf Ledges Parkway, Akron, Ohio. Borrower shall have furnished to Bank in respect of those properties, at Borrower’s expense, (a) a mortgagee’s policy of title insurance issued in such amount as Bank may reasonably
require by an insurer satisfactory to Bank, (b) a professional environmental assessment, (c) a survey by a registered surveyor and (d) an appraisal by an appraiser satisfactory to Bank. 
 4A.07 DOCUMENTATION FEE — Borrower shall have paid Bank a documentation fee of Ten Thousand Dollars ($10,000). 
 4A.08 ACQUISITION — Borrower shall have acquired certain of Target’s assets pursuant to the Asset Purchase Agreement. Borrower will change its
name to Target’s name within three (3) months of the date of this Agreement. 
 4A.09 LIEN WAIVERS — Borrower shall provide
Bank with duly executed written lien waivers in favor of Bank from each lessor, bailee, warehouseman, materialman, mortgagee or similarly situated person or entity who may, with respect to any location at which any of the collateral for the Subject
Indebtedness is to be located or stored, by operation of law or otherwise, have any lien or like interest in or upon such collateral. 
 4A.10
OTHER DOCUMENTS — Borrower shall execute or deliver to Bank such other agreements, instruments and documents, including, without limitation, those listed below, which Bank may require to be executed and/or delivered in connection herewith (all
of which shall be in form and substance acceptable to Bank and its counsel): 
 (a) Evidence that the Borrower possesses insurance satisfying
the requirements of Section 3C.04 hereof. Insurance certificates respecting the same shall be delivered to Bank and shall name Bank as lender loss payee. In addition, the certificates shall contain a statement that Bank will be provided with
thirty (30) days written notice prior to any cancellation, termination or expiration of such insurance coverage and such statement may not provide that the issuing company will merely “endeavor to” provide such notice nor may such
statement contain 

  

 16 

 
limitation of liability language for the issuing company or its representatives in the event of their failure to provide such notice; 
 (b) Certificates of good standing for Borrower issued by the Secretary of State of its state of incorporation and the Secretary of State of each other
jurisdiction in which it is required by reason of its business, the ownership of properties or the location of employees; 
 (c) a copy of the
articles/certificate of incorporation or other charter document of Borrower certified by the Secretary of State of its state of incorporation; 
 (d) A disbursement authorization, in form and substance acceptable to Bank, directing the disbursement of the proceeds of the Revolving Loans; and 
 (e) a subordination agreement from The Hillstreet Fund, L.P. respecting Subordinated debt in principal amount of $3,000,000. 
 4B. WARRANTIES — Subject only to such additions and exceptions, if any, as may be set forth in the Supplemental Schedule or in Borrower’s Most Recent 4A.04 Financial Statements, Borrower represents and warrants as follows:

 4B.01 EXISTENCE — Borrower is a duly organized and validly existing Ohio corporation in good standing. Borrower is duly qualified to
transact business in each state or other jurisdiction in which it owns or leases any real property or in which the nature of the business conducted makes such qualification necessary or, if not so qualified, such failure to qualify will have no
Material adverse effect upon Borrower’s financial condition and its ability to transact business. Borrower has no subsidiaries. 
 4B.02
GOVERNMENTAL RESTRICTIONS — No registration with or approval of any governmental agency of any kind is required on the part of Borrower for the due execution and delivery or for the enforceability of this Agreement or any Related Writing other
than the filing or recording of documents with public officials, the noting of title certificates and similar acts and things related to the perfection of the mortgages, security interests and other liens referred to in section 4A. 
 4B.03 CORPORATE AUTHORITY — Borrower has requisite corporate power and authority to enter into this Agreement and to obtain and secure the Subject
Loans in accordance with this Agreement. The officer executing and delivering this Agreement on behalf of Borrower has been duly authorized to do so and to execute and deliver Subject Notes and other Related Writings in accordance with section 4A.
Neither the execution and delivery of this Agreement or any Related Writing by Borrower nor its performance and observance of the respective provisions thereof will violate any existing provision in its articles of incorporation, regulations or
by-laws or any applicable law or violate or otherwise constitute a default under any contract or other obligation now existing and binding upon it. Upon the execution and delivery thereof, this Agreement and the aforesaid Related Writings will each
become a valid and binding obligation enforceable against Borrower according to their respective tenors subject, however, to any applicable insolvency or bankruptcy law of general applicability and general principles of equity. 
  

 17 

 4B.04 LITIGATION — No litigation or proceeding is pending against Borrower before any court,
administrative agency or arbitrator which might, if successful, have a Material adverse effect on Borrower. 
 4B.05 TAXES — Borrower has
filed all federal, state and local tax returns which are required to be filed by it and paid all taxes due as shown thereon (EXCEPT to the extent, if any, permitted by subsection 3C.01). The Internal Revenue Service has not alleged any Material
default by Borrower in the payment of any tax Material in amount or threatened to make any assessment in respect thereof which has not been reflected in Borrower’s Most Recent 4A.04 Financial Statements. 
 4B.06 TITLE — Borrower has good and marketable title to all assets reflected in its Most Recent 4A.04 Financial Statements EXCEPT for changes
resulting from transactions in the ordinary course of business. All such assets are clear of any mortgage, security interest or other lien of any kind other than any permitted by subsection 3D.04. 
 4B.07 LAWFUL OPERATIONS — Borrower’s operations have at all relevant times been and continue to be in Material compliance with all requirements
imposed by law, whether federal, state or local, whether statutory, regulatory or other, including (without limitation) ERISA, all Environmental Laws, and occupational safety and health laws and all zoning ordinances. Without limiting the generality
of the foregoing, 
 (a) To the Borrower’s knowledge no condition exists at, on or under any facility or other property now or previously
owned by Borrower which would give rise to any Material liability under any Environmental Law; and Borrower has not received any notice from any governmental agency, court or anyone else that it is a potentially responsible party for the clean-up of
any environmental waste site, is in violation of any environmental permit or law or has been placed on any registry of solid or hazardous waste disposal site; 
 (b) No Material Accumulated Funding Deficiency exists in respect of any of Borrower’s Pension Plans; and no Reportable Event has occurred in respect of any such plan which is continuing and which constitutes
grounds either for termination of the plan or for court appointment of a trustee for the administration thereof. 
 4B.08 INSURANCE —
Borrower’s insurance coverage complies with the standards set forth in subsection 3C.04 and those set forth in the Related Writings referred to in subsections 4A.05 and 4A.06. 
 4B.09 DEFAULTS — To the Borrower’s knowledge no Default Under This Agreement exists, nor will any exist immediately after the execution and
delivery of this Agreement 
 5A. EVENTS OF DEFAULT — Each of the following shall constitute an Event of Default hereunder: 
 5A.01 PAYMENTS — If any principal included in the Subject Indebtedness shall not be paid in full when the same becomes payable and shall remain
unpaid for ten (10) consecutive days thereafter; or if any Subject Indebtedness (EXCEPT principal) or any of 

  

 18 

 
Borrower’s other Debt to Bank (EXCEPT any payable on demand) shall not be paid in full when the same becomes payable and shall remain unpaid for ten
(10) consecutive days thereafter; or if such of Borrower’s Debt, if any, to Bank, as may be payable on demand shall not be paid in full within ten (10) days after any actual demand for payment, 
 5A.02 WARRANTIES — If any representation, warranty or statement made in this Agreement or in any Related Writing referred to in section 4A shall be
false or erroneous in any Material respect when such representation or warranty was made; or if any representation, warranty or statement hereafter made by or on behalf of Borrower in any Related Writing not referred to in section 4A shall be false
or erroneous in any Material respect when such representation or warranty was made. 
 5A.03 COVENANTS WITHOUT GRACE — If Borrower shall
fail or omit to perform or observe any provisions in subsection 3A.02. 
 5A.04 COVENANTS WITH GRACE — If anyone (other than Bank and its
agents) shall fail or omit to perform and observe any agreement (other than those referred to in subsection 5A.01 or 5A.03) contained in this Agreement or any Related Writing that is on its part to be complied with, and that failure or omission
shall not have been fully corrected within thirty (30) days after the giving of written notice to Borrower by Bank that it is to be remedied. 
 5A.05 CROSS-DEFAULT — If any of Borrower’s indebtedness for borrowed money (regardless of maturity) or any of its Funded Indebtedness shall be or become “in default” (as defined below). In this subsection, in
default means that (a) there shall have occurred (or shall exist) in respect of the indebtedness in question (either as in effect at the date of this Agreement or as in effect at the time in question) any event, condition or other thing
which constitutes, or which with the giving of notice or the lapse of any applicable grace period or both would constitute, a default which accelerates (or permits any creditor or creditors or representative or creditors to accelerate) the maturity
of any such indebtedness; or (b) any such indebtedness (other than any payable on demand) shall not have been paid in full at its stated maturity; or (c) any such indebtedness payable on demand shall not have been paid in full within ten
(10) Banking Days after any actual demand for payment. 
 5A.06 BORROWER’S SOLVENCY — If (a) Borrower shall discontinue
operations, or (b) Borrower shall commence any Insolvency Action of any kind or admit (by answer, default or otherwise) the Material allegations of, or consent to any relief requested in, any Insolvency Action of any kind commenced against
Borrower by its creditors or any thereof, or (c) any creditor or creditors shall commence against Borrower any Insolvency Action of any kind which shall remain in effect (neither dismissed nor stayed) for thirty (30) consecutive days.

  

 19 

 5B. EFFECTS OF DEFAULT — Notwithstanding any contrary provision or inference in this Agreement or in any Related
Writing: 
 5B.01 OPTIONAL DEFAULTS — If any Event of Default referred to in subsection 5A.01 through 5A.07, both inclusive, shall occur
and be continuing, Bank shall have the right in its discretion, by giving written notice to Borrower, 
 (a) to terminate the Revolving
Commitment and Bank shall have no obligation thereafter to grant any Revolving Loan to Borrower, and 
 (b) to accelerate the maturity of all
of Borrower’s Debt to Bank (other than Debt, if any, already due and payable), and all such Debt shall thereupon become and thereafter be immediately due and payable in full without any presentment or demand and without any further or other
notice of any kind, all of which are hereby waived by Borrower. 
 5B.02 AUTOMATIC DEFAULTS — If any Event of Default referred to in
subsection 5A.07 shall occur, 
 (a) the Revolving Commitment shall automatically and immediately terminate and Bank shall have no obligation
thereafter to grant any Revolving Loan to Borrower, and 
 (b) all of Borrower’s Debt to Bank (other than Debt, if any, already due and
payable) shall thereupon become and thereafter be immediately due and payable in full, all without any presentment, demand or notice of any kind, which are hereby waived by Borrower. 
 5B.03 OFFSETS — If there shall occur or exist any Default Under This Agreement referred to in subsection 5A.06, then, so long as that Default Under
This Agreement exists, Bank shall have the right at any time to set off against and to appropriate and apply toward the payment of the Subject Indebtedness then owing to it, whether or not the same shall then have matured, any and all deposit
balances then owing by Bank to or for the credit or account of Borrower, all without notice to or demand upon Borrower, all such notices and demands being hereby expressly waived. 
 6A. INDEMNITY: STAMP TAXES — Borrower will pay all stamp taxes and similar taxes, if any, including interest and penalties, if any, payable in respect of the issuance of the Subject Indebtedness. 
 6B. INDEMNITY: FUNDING COSTS — Borrower agrees to indemnify Bank against any loss relating in any way to its funding of a Cost of Funds Rate for any Subject Loan if
the Subject Loan is paid before the end of the applicable Contract Period (whether a prepayment or a payment following any acceleration of maturity) and to pay Bank, as liquidated damages for any such loss, an amount based on the principal amount
paid and computed for the period from the date of payment to the original due date of that installment, at a rate equal to the excess, if any, of the interest rate theretofore applicable over the Reinvestment Rate, all as determined by Bank in its
reasonable discretion. “Reinvestment Rate” means, when used with respect to any period, a per annum rate of interest equal to the “bond equivalent yield” for the most actively traded issues of U.S. Treasury Bills, U.S. Treasury
Notes, or U.S. Treasury Bonds for a term similar to the period in question. 
  

 20 

 6C. CREDIT REQUESTS — Whenever Borrower shall revoke any Credit Request for a Cost of Funds Loan, or shall for any
other reason fail to borrow pursuant thereto or otherwise comply therewith, or shall fail to honor any prepayment notice, then, in each case on Bank’s demand, Borrower shall pay Bank such amount as will compensate it for any loss, cost or
expense incurred by it by reason of its liquidation or reemployment of deposits or other funds. 
 6D. INDEMNITY: UNFRIENDLY TAKEOVERS — Borrower agrees
to indemnify Bank and hold Bank harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind (including, without limitation, the reasonable fees and disbursements of counsel in connection with any investigative,
administrative or judicial proceeding, whether or not Bank shall be designated a party thereto) which may be incurred by Bank relating to or arising out of any actual or proposed use of proceeds of the Subject Loans in connection with the financing
of an acquisition of any corporation or other business entity, PROVIDED that Bank shall have no right to be indemnified hereunder for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction. 
 6E. INDEMNITY: CAPITAL REQUIREMENTS — If 
 (a) at any time any governmental authority shall require National City Corporation or Bank, whether or not the requirement has the force of law, to maintain, as support for the Revolving Commitment, capital in a
specified minimum amount that either is not required or is greater than that required at the date of this Agreement, whether the requirement is implemented pursuant to the “risk-based capital guidelines” (published at 12 CFR 3 in respect
of “national banking associations”, 12 CFR 208 in respect of “state member banks” and 12 CFR 225 in respect of “bank holding companies”) or otherwise, and 
 (b) as a result thereof the rate of return on capital of National City Corporation or Bank or both (taking into account their then policies as to capital
adequacy and assuming full utilization of their capital) shall be directly or indirectly reduced by reason of any new or added capital thereby allocable to the Revolving Commitment, 
 then and in each such case Borrower shall, on Bank’s demand, pay Bank as an additional fee such amounts as will in Bank’s reasonable opinion reimburse National City Corporation and Bank for any such reduced
rate of return. 
 6F. INDEMNITY: COLLECTION COSTS — If any Event of Default shall occur and shall be continuing, Borrower will pay Bank such further
amounts, to the extent permitted by law, as shall cover Bank’s costs and expenses (including, without limitation, the reasonable fees, interdepartmental charges and disbursements of its counsel) incurred in collecting the Subject Indebtedness
or in otherwise enforcing its rights and remedies in respect thereof. 
 6G. CERTIFICATE FOR INDEMNIFICATION — Each demand by Bank for payment pursuant
to section 6A, 6B, 6C, 6D, 6E or 6F shall be accompanied by a certificate setting forth the reason for the payment, the amount to be paid, and the computations and assumptions in determining the amount, which certificate shall be presumed to be
correct in the absence of manifest error. In determining the amount of any such payment, Bank may use reasonable averaging and attribution methods. 
  

 21 

 7. BANK’S PURPOSE — Bank represents and warrants to Borrower that Bank is familiar with the Securities Act of
1933 as amended and the rules and regulations thereunder and is not entering into this Agreement with any intention of violating that Act or any rule or regulation thereunder, it being understood, however, that Bank shall at all times retain full
control of the disposition of its assets. 
 8. INTERPRETATION — This Agreement and the Related Writings shall be governed by the following provisions:

 8.01 WAIVERS — Bank may from time to time in its discretion grant Borrower waivers and consents in respect of this Agreement or any
Related Writing or assent to amendments thereof, but no such waiver or consent shall be binding upon Bank unless specifically granted by Bank in writing, which writing shall be strictly construed. Without limiting the generality of the foregoing,
Borrower agrees that no course of dealing in respect of, nor any omission or delay in the exercise of, any right, power or privilege by Bank shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further or
other exercise thereof or of any other, as each such right, power or privilege may be exercised either independently or concurrently with others and as often and in such order as Bank may deem expedient. 
 8.02 CUMULATIVE PROVISIONS — Each right, power or privilege specified or referred to in this Agreement or any Related Writing is in addition to and
not in limitation of any other rights, powers and privileges that Bank may otherwise have or acquire by operation of law, by other contract or otherwise. 
 8.03 BINDING EFFECT — The provisions of this Agreement and the Related Writings shall bind and benefit Borrower and Bank and their respective successors and assigns, including each subsequent holder, if any, of
the Subject Notes or any thereof; PROVIDED, that no person or entity other than Borrower may obtain Subject Loans; and PROVIDED, further, that neither any holder of any Subject Note or assignee of any Subject Loan, whether in whole or in part, shall
thereby become obligated thereafter to grant to Borrower any Subject Loan. 
 8.04 SURVIVAL OF PROVISIONS — All representations and
warranties made in or pursuant to this Agreement or any Related Writing shall survive the execution and delivery of this Agreement and the Subject Notes. The provisions of section 6 shall survive the payment of the Subject Indebtedness. 

8.05 IMMEDIATE U.S. FUNDS — Any reference to money is a reference to lawful money of the United States of America which, if in the form of
credits, shall be in immediately available funds. 
 8.06 CAPTIONS — The several captions to different sections and subsections of this
Agreement are inserted for convenience only and shall be ignored in interpreting the provisions thereof. 
 8.07 SUBSECTIONS — Each
reference to a section includes a reference to all subsections thereof (i.e., those having the same character or characters to the left of the decimal point) EXCEPT where the context clearly does not so permit. 
  

 22 

 8.08 ILLEGALITY — If any provision in this Agreement or any Related Writing shall for any reason be
or become illegal, void or unenforceable, that illegality, voidness or unenforceability shall not affect any other provision. 
 8.09 OHIO LAW
— This Agreement and the Related Writings and the respective rights and obligations of the parties hereto shall be construed in accordance with and governed by internal Ohio law. 
 8.10 INTEREST/FEE COMPUTATIONS — All interest and all fees for any given period shall accrue on the first day thereof but not on the last day thereof
and in each case shall be computed on the basis of a 360-day year and the actual number of days elapsed. In no event shall interest accrue at a higher rate than the maximum rate, if any, permitted by law. 
 8.11 NOTICE — A notice to or request of Borrower shall be deemed to have been given or made under this Agreement or any Related Writing either upon
the delivery of a writing to that effect (either in person or by transmission of a telecopy) to an officer of Borrower or five (5) days after a writing to that effect shall have been deposited in the United States mail and sent, with postage
prepaid, by registered or certified mail, properly addressed to Borrower (Attention: chief financial officer). No other method of actually giving actual notice to or making a request of Borrower is hereby precluded. Every notice required to be given
to Bank pursuant to this Agreement or any Related Writing shall be delivered (either in person or by transmission of a telecopy) to an Account Officer of Bank. A notice or request by mail is properly addressed to a party when addressed to it at the
address set forth opposite its signature below or at such other address as that party may furnish to each of the others in writing for that purpose. A telecopy is transmitted to a party when transmitted to the telecopy number set forth opposite that
party’s signature below (or at such other telecopy number as that party may furnish to the other in writing for that purpose). 
 8.12
ACCOUNTING TERMS — Any accounting term used in this Agreement shall have the meaning ascribed thereto by GAAP subject, however, to such modification, if any, as may be provided by section 9 or elsewhere in this Agreement. 
 8.13 ENTIRE AGREEMENT — This Agreement and the Related Writings referred to in or otherwise contemplated by this Agreement set forth the entire
agreement of the parties as to the transactions contemplated by this Agreement. 
 8.14 WAIVER OF JURY TRIAL — The parties acknowledge
and agree that any controversy that may arise under this Agreement and the Related Writings would involve difficult and complex issues and therefore agree that any law suit growing out of or incidental to any such controversy will be tried in a
court of competent jurisdiction by a judge sitting without a jury. 
 8.15 LATE CHARGE; APPLICATION OF PAYMENTS — If Borrower fails to
pay any amount due hereunder, or any fee in connection herewith, in full within ten (10) days after its due date, Borrower will, in each case, incur and shall pay a late charge equal to the greater of twenty dollars ($20.00) or five percent
(5%) of the unpaid 

  

 23 

 
amount. The payment of a late charge will not cure or constitute a waiver of any Event of Default under this Agreement. Except as otherwise agreed in
writing, payments will be applied first to accrued but unpaid interest and fees, in that order, on an invoice by invoice basis in the order of their respective due dates, until paid in full, then to late charges and then to principal. 
 8.16 SHARING OF INFORMATION — Bank shall have the right to furnish to its Affiliates, and to such other persons or entities as Bank shall deem
advisable for the conduct of its business, information concerning the business, financial condition, and property of Borrower, the amount of the Debt of Borrower, and the terms, conditions, and other provisions applicable to the respective parts
thereof. 
 9. DEFINITIONS — As used in this Agreement and in the Related Writings, EXCEPT where the context clearly requires otherwise, 
 Account Officer means that officer who at the time in question is designated by Bank as the officer having primary responsibility for giving
consideration to Borrower’s requests for credit or, in that officer’s absence, that officer’s immediate superior or any other officer who reports directly to that superior officer; 
 Accumulated Funding Deficiency shall have the meaning ascribed thereto in section 302(a)(2) of ERISA; 
 Affiliate means, when used with reference to any person or entity (the subject), a person or entity that is in control of, under the control
of, or under common control with, the subject, the term control meaning the possession, directly or indirectly, of the power to direct the management or policies of a person or entity, whether through the ownership of voting securities, by
contract, or otherwise; 
 Agreement means this Agreement and includes each amendment, if any, to this Agreement; 
 Asset Purchase Agreement means the agreement dated April 4, 2000 between Borrower and Target and Target’s shareholders pursuant to which
Borrower has agreed to acquire certain of Target’s assets; 
 Bank means National City Bank, a national banking association
headquartered in Cleveland, Ohio; 
 Banking Day means any day other than a Saturday or a Sunday or a public holiday or other day on
which banking institutions in Cleveland, Ohio, are generally closed and do not conduct a general banking business; 
 Borrower means WR
ACQUISITION, INC., an Ohio corporation;  
 Borrowing Base is defined in subsection 2C.07; 
 Borrowing Base Report means a report furnished by Borrower pursuant to clause (e) of subsection 3A.01; 
  

 24 

 Compensation includes all considerations (including without limitation, deferred Compensation and
disbursements to trusts), whatever the form or kind, for services rendered; 
 Credit Request means a request made pursuant to
subsection 2D.02; 
 Current Assets means the net book value of all such assets (after deducting applicable reserves, if any, and
without consideration to any reappraisal or write-up of assets) as determined in accordance with GAAP; 
 Current Liabilities means all
such liabilities as determined in accordance with GAAP and includes (without limitation) all accrued taxes and all principal of any Funded Indebtedness maturing within twelve months of the date of determination; 
 Current Portion of Long Term Debt means all principal payments due in the next twelve (12) months from Borrower on any of Borrower’s
Total Liabilities; 
 Debt means, collectively, all liabilities of the party or parties in question to Bank, whether owing by one such
party alone or with one or more others in a joint, several, or joint and several capacity, whether now owing or hereafter arising, whether owing absolutely or contingently, whether created by loan, overdraft, Guaranty of payment or other contract or
by quasi-contract or tort, statute or other operation of law or otherwise, whether incurred directly to Bank or acquired by purchase, pledge or otherwise, and whether participated to or from Bank in whole or in part; and in the case of Borrower
includes, without limitation, the Subject Indebtedness; 
 Default Under ERISA means (a) the occurrence or existence of a Material
Accumulated Funding Deficiency in respect of any of Borrower’s Pension Plans, (b) any failure by Borrower to make a full and timely payment of premiums required by ERISA for insurance against any employer’s liability in respect of any
such plan, (c) any Material breach of a fiduciary duty by Borrower or any trustee in respect of any such plan or (d) the existence of any action for the forceable termination of any such plan; 
 Default Under This Agreement means an event, condition or thing which constitutes (or which with the lapse of any applicable grace period or the
giving of notice or both would constitute) an Event of Default referred to in section 5A and which has not been appropriately waived in writing in accordance with this Agreement or corrected to Bank’s full satisfaction; 
 Distribution means a payment made, liability incurred or other consideration (other than any stock dividend or stock split payable solely in
capital stock of Borrower) given by Borrower for the purchase, acquisition, redemption or retirement of any capital stock of Borrower or as a dividend, return of capital or other Distribution in respect of Borrower’s capital stock and
Distribute means to make a Distribution; 
 Eligible Inventory means, collectively, all of Borrower’s Inventory EXCEPT the
following: 
 (a) any finished goods which have been returned to Borrower after sale or lease thereof or which are defective, unmerchantable,
or obsolete in Bank’s good faith and commercially reasonable judgment, 
  

 25 

 (b) any Inventory not located in the United States of America or in Canada, unless the Inventory is in
undelayed transit to the United States of America, 
 (c) any work-in-process, 
 (d) any Inventory covered by a negotiable warehouse receipt or other negotiable document of title issued by a bailee, warehouseman, or similar party,

 (e) any Inventory subject to any consignment, lease or other title retention contract and 
 (f) any Inventory subject to any security interest or financing statement securing any indebtedness other than Borrower’s Debt to Bank or subject to
any non-consensual lien securing any delinquent obligation; 
 Eligible Receivable means a Receivable owing to Borrower EXCEPT the
following: 
 (a) any Receivable (other than an installment Receivable) which remains unpaid for more than ninety (90) days after its due
date or for more than ninety (90) days after the date first invoiced to the account debtor, whichever first elapses, 
 (b) any
installment Receivable if any installment thereof shall not have been paid in full within sixty (60) days after its due date, 
 (c) any
Receivable if the account debtor then owes other Receivables to Borrower and if more than ten percent (10%), by amount, of the Receivables then owing by that debtor are excepted under clauses (a) and (b) above, 
 (d) any Receivable the payment of which by the account debtor is not, or does not remain, unconditional, 
 (e) any Receivable if and to the extent that the account debtor has asserted a defense or offset of any kind against the payment thereof, 
 (f) any Receivable which according to its terms may be paid by the account debtor by an offset of any claim of the latter against the account creditor,

 (g) any Receivable which arises other than from a sale or lease of Inventory in the ordinary course of business or other than from the
rendering of services in the ordinary course of business, 
 (h) any Receivable the account debtor of which is an Affiliate or a director,
officer, employee or agent of Borrower or of any Affiliate, 
  

 26 

 (i) any Receivable the account debtor of which is insolvent or is the debtor in an Insolvency Action or
who at the time in question is in default in any way on an existing obligation to Borrower, 
 (j) any Receivable the account debtor of which
is not a resident or citizen of the United States of America or Canada or is not subject to service of legal process in the United States of America or Canada, 
 (k) any Receivable subject to any security interest or financing statement securing any indebtedness other than Borrower’s Debt to Bank or subject to any non-consensual lien securing any delinquent obligation, or

 (l) any Receivable the collection of which Bank, in the exercise of its reasonable judgment, for any other reason determines to have become
impaired; 
 Environmental Law means the Comprehensive Environmental Response, Compensation, and Liability Act (42 USC 9601 et seq.),
the Hazardous Material Transportation Act (49 USC 1801 et seq.), the Resource Conservation and Recovery Act (42 USC 6901 et. seq.), the Federal Water Pollution Control Act (33 USC 1251 et seq.), the Toxic Substances Control Act (15 USC 2601 et seq.)
and the Occupational Safety and Health Act (29 USC 651 et seq.), as such laws have been or hereafter may be amended, and any and all analogous future federal, or present or future state or local, statutes and the regulations promulgated pursuant
thereto; 
 ERISA means the Employee Retirement Income Security Act of 1974 (P.L. 93-406) as amended from time to time and in the event
of any amendment affecting any section thereof referred to in this Agreement, that reference shall be a reference to that section as amended, supplemented, replaced or otherwise modified; 
 ERISA Regulator means any governmental agency (such as the Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty
Corporation) having any regulatory authority over any of Borrower’s Pension Plans; 
 Export-Import Bank means the Export-Import
Bank of the United States;  
 Event of Default is defined in section 5A; 
 Expiration Date means the date referred to as such in subsection 2C.02, EXCEPT that in the event of any extension pursuant to subsection 2C.05,
“Expiration Date” shall mean the latest date to which the Revolving Commitment shall have been so extended; 
 Federal Funds
Rate means a fluctuating interest rate per annum, as in effect at the time in question, that is the rate determined by Bank to be the opening Federal Funds Rate per annum paid or payable by it on the day in question in its regional federal funds
market for overnight borrowings from other banking institutions; 
 Foreign Eligible Receivable means a Receivable that satisfies the
definition of an Eligible Receivable herein except for subsection (j) of such definition, and which is fully insured by the Export-Import Bank; 
  

 27 

 Funded Indebtedness means indebtedness of the person or entity in question which matures or which
(including each renewal or extension, if any, in whole or in part) remains unpaid for more than twelve months after the date originally incurred and includes, without limitation (a) any indebtedness (regardless of its maturity) if it is
renewable or refundable in whole or in part solely at the option of that person or entity (in the absence of default) to a date more than one year after the date of determination, (b) any capitalized lease, (c) any Guaranty of Funded
Indebtedness owing by another person or entity and (d) any Funded Indebtedness secured by a security interest, mortgage or other lien encumbering any property owned or being acquired by the person or entity in question even if the full faith
and credit of that person or entity is not pledged to the payment thereof; PROVIDED, that in the case of any indebtedness payable in installments or evidenced by serial notes or calling for sinking fund payments, those payments maturing within
twelve months after the date of determination shall be considered current indebtedness rather than Funded Indebtedness for the purposes of section 3B but shall be considered Funded Indebtedness for all other purposes; 
 GAAP means generally accepted accounting principles applied in a manner consistent with those used in Borrower’s latest fiscal year-end
financial statements referred to in subsection 4A.04; 
 Guarantor means one who pledges his credit or property in any manner for the
payment or other performance of the indebtedness, contract or other obligation of another and includes (without limitation) any Guarantor (whether of collection or payment), any obligor in respect of a standby letter of credit or surety bond issued
for the obligor’s account, any surety, any co-maker, any endorser, and anyone who agrees conditionally or otherwise to make any loan, purchase or investment in order thereby to enable another to prevent or correct a default of any kind; and
Guaranty means the obligation of a Guarantor; 
 Insider, as applied to Subordinated indebtedness, refers to Subordinated
indebtedness which at the time in question is owing to any person who is a director or officer of Borrower or who is the record and beneficial owner of ten percent (10%) or more of Borrower’s capital stock or who is a member of the
immediate family of any such director, officer or stockholder; 
 Insolvency Action means either (a) a pleading of any kind filed
by the person, corporation or entity (an “insolvent”) in question to seek relief from the insolvent’s creditors, or filed by the insolvent’s creditors or any thereof to seek relief of any kind against that insolvent, in any court
or other tribunal pursuant to any law (whether federal, state or other) relating generally to the rights of creditors or the relief of debtors or both, or (b) any other action of any kind commenced by an insolvent or the insolvent’s
creditors or any thereof for the purpose of marshalling the insolvent’s assets and liabilities for the benefit of the insolvent’s creditors; and “Insolvency Action” includes (without limitation) a petition commencing a case
pursuant to any chapter of the federal bankruptcy code, any application for the appointment of a receiver, trustee, liquidator or custodian for the insolvent or any substantial part of the insolvent’s assets, and any assignment by an insolvent
for the general benefit of the insolvent’s creditors; 
  

 28 

 Inventory means, collectively, all goods which at the time in question are owned by Borrower and
are held for sale or lease, or furnished (or to be furnished) by Borrower to another party under a contract of service or sale, or used or consumed (or to be used or consumed) in Borrower’s business and includes, without limitation, all raw
materials, work in process, finished goods, supplies, parts and packing materials but excludes leases which are included among Receivables; 
 Material means when taken as a whole, wilt not adversely impact the business, operations, properties or financial condition of Borrower; 
 Maturity means the date on which the Subject Indebtedness (or portion thereof) in question is scheduled for payment in accordance with this Agreement (without the benefit of any grace period) EXCEPT that in the
event of any acceleration of Maturity pursuant to section 5B, Maturity means the date as of which the sum becomes immediately payable in full in accordance with subsection 5B; 
 Most Recent 4A.04 Financial Statements means Borrower’s most recent financial statements that are referred to in subsection 4A.04; 

Net Income means Net Income as determined in accordance with GAAP, after taxes and after extraordinary items, but without giving effect to any
gain resulting from any reappraisal or write-up of any asset; 
 Net Worth means the excess (as determined in accordance with GAAP) of
the net book value (after deducting all applicable valuation reserves and without any consideration to any re-appraisal or write-up of assets) of Borrower’s tangible assets (i.e., all assets other than intangibles such as patents, costs of
businesses over net assets acquired, good will and treasury shares) over Borrower’s Total Liabilities; 
 Pension Plan means a
defined benefit plan (as defined in section 3(35) of ERISA) of Borrower and includes, without limitation, any such plan that is a multi-employer plan (as defined in section 3(37) of ERISA) applicable to any of Borrower’s employees; 

Prime Rate means the fluctuating rate of interest which is publicly announced from time to time by Bank at its principal place of business as
being its “Prime Rate” or “base rate” thereafter in effect, with each change in the Prime Rate automatically, immediately and without notice changing the fluctuating interest rate thereafter applicable hereunder, it being agreed
that the Prime Rate is not necessarily the lowest rate of interest then available from Bank on fluctuating rate loans; 
 Receivable
means a claim for money due or to become due, whether classified as an account, instrument, chattel paper, general intangible, incorporeal hereditament or otherwise, and any proceeds of the foregoing; 
 Reference Rate means, on any given date, either the Prime Rate in effect for that day or a rate equal to one percent (1%) per annum plus the
Federal Funds Rate in effect for that day, whichever rate shall be the higher for that day; 
  

 29 

 Related Writing means any note, mortgage, security agreement, other lien instrument, financial
statement, audit report, notice, legal opinion, Credit Request, officer’s certificate or other writing of any kind which is delivered to Bank and which is relevant in any manner to this Agreement or any Related Writing and includes, without
limitation, the Subject Notes and the other writings referred to in sections 3A and 4A; 
 Reportable Event has the meaning ascribed
thereto by ERISA; 
 Revolving Commitment means Bank’s commitment to extend credit to Borrower pursuant to sections 2C and 2D of
this Agreement and upon the terms, subject to the conditions of this Agreement and in accordance with the other provisions of this Agreement; 
 Revolving Loan means a loan obtained by Borrower pursuant to subsections 2C and 2D of this Agreement and evidenced by a Revolving Note; 
 Revolving Note means a note executed and delivered by Borrower and being in the form and substance of Exhibit D with the blanks appropriately filled; 
 Subject Indebtedness means, collectively, the principal of and interest on the Subject Loans and all fees and other liabilities, if any, incurred
by Borrower to Bank pursuant to this Agreement or any Related Writing; 
 Subject Loan means a loan obtained by Borrower pursuant to
this Agreement; 
 Subject Note means a note executed and delivered by Borrower and being in the form and substance of Exhibit B, C or
D with the blanks appropriately filled; 
 Subordinated, as applied to any liability of Borrower, means a liability which at the time
in question is Subordinated (by written instrument in form and substance satisfactory to Bank) in favor of the prior payment in full of Borrower’s Debt to Bank; 
 Subsidiary means a corporation or other business entity if shares constituting a majority of its outstanding capital stock (or other form of ownership) or constituting a majority of the voting power in any
election of directors (or shares constituting both majorities) are (or upon the exercise of any outstanding warrants, options or other rights would be) owned directly or indirectly at the time in question by the corporation in question or another
“Subsidiary” of that corporation or any combination of the foregoing; 
 Supplemental Schedule means the schedule
incorporated into this Agreement as Exhibit A; 
 Target means QUATECH, INC., an Ohio corporation; 
 Term Loan A means a loan obtained by Borrower pursuant to section 2A of this Agreement; 
 Term Loan B means a loan obtained by Borrower pursuant to section 2B of this Agreement; 
  

 30 

 Term Note A means a note executed and delivered by Borrower and being in the form and substance of
Exhibit B with the blanks appropriately filled; 
 Term Note B means a note executed and delivered by Borrower and being in the form
and substance of Exhibit C with the blanks appropriately filled; 
 Total Liabilities means the aggregate (without duplication) of all
liabilities of the corporation or corporations in question and includes, without limitation, (a) any indebtedness which is secured by any mortgage, security interest or other lien on any of their property even if the full faith and credit of
none of them is pledged to the payment thereof, (b) any indebtedness for borrowed money or Funded Indebtedness of any kind if any such corporation or corporations is a Guarantor thereof and (c) any Subordinated indebtedness; PROVIDED, that
there shall be excluded any liability under a reimbursement agreement relating to a letter of credit issued to finance the importation or exportation of goods; 
 the foregoing definitions shall be applicable to the respective plurals of the foregoing defined terms. 
  

									
	 Address:
 662 Wolf Ledges Parkway
 Akron, Ohio 44311
	 		 	WR ACQUISITION, INC.
	Telecopy: 330-434-1409	 		 	 By:
	 	 /s/ William J. Roberts

		 		 		 	 Printed Name: William J. Roberts

		 		 		 	 Title:
	 	 President

			
	 Address:
 1 Cascade Plaza
 Akron, Ohio 44308
	 		 	NATIONAL CITY BANK
	Telecopy: 330-375-8436	 		 	 By:
	 	 /s/ Maurus Kosco

		 		 		 	 Printed Name: Maurus Kosco

		 		 		 	 Title:
	 	 Vice President

  

 31 

 SUPPLEMENTAL SCHEDULE 
 There is no item which Borrower must disclose in this Supplemental Schedule in order to be in full compliance with subsections 3D.01, 3D.02, 3D.03 and 3D.04, nor is there any addition or exception to the
representations and warranties in section 4B. 
 EXHIBIT A 

 TERM NOTE A 
  

					
	 $850,000
	  	               Cleveland, Ohio	  	                    , 2000

 FOR VALUE RECEIVED, the undersigned, , a(n)
                     corporation, promises to pay to the order of NATIONAL CITY BANK, at the payee’s main office in Cleveland, Ohio, the
principal sum of 
 EIGHT HUNDRED FIFTY THOUSAND AND 00/100THS DOLLARS 
 in accordance with subsection 2A.02 of the Credit Agreement referred to below and to pay interest on the unpaid principal balance in accordance with subsection 2A.03 of the Credit Agreement referred to below.

 This note is issued pursuant to a certain Agreement (the “Credit Agreement”) made as of
                    , 2000 by and between the payee and the undersigned, which Credit Agreement contains provisions governing the acceleration
of the Maturity of this note upon the happening of certain events, rights of the undersigned to prepay this note and other provisions to which this note is subject. 
 Borrower hereby authorizes any attorney at law at any time or times to appear in any state or federal court of record in the United States of America after the indebtedness represented by this note shall have become
due, whether by lapse of time or by acceleration of Maturity, to waive the issuance and service of process, to present this note (together with any endorsement or endorsements thereon) to the court, to admit the Maturity thereof and the nonpayment
thereof when due, to confess judgment against Borrower in favor of the holder of this note for the full amount then appearing due, together with interest and costs of suit, and thereupon to release all errors and waive all rights of appeal and stay
of execution. The foregoing warrant of attorney shall survive any judgment, it being understood that should any judgment against Borrower be vacated for any reason, the holder of this note may nevertheless utilize the foregoing warrant of attorney
in thereafter obtaining additional judgment or judgments against Borrower. 
  

									
	 Address:
 662 Wolf Ledges Parkway
 Akron, Ohio 44311
	 		 	 WR ACQUISITION, INC.

	Telecopy:                         	 		 	 By:
	 	  
		 		 		 	 Printed Name:
	 	  
		 		 		 	 Title:
	 	  

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

 TERM NOTE B 
  

					
	 $480,000
	  	               Cleveland, Ohio	  	                    , 2000

 FOR VALUE RECEIVED, the undersigned, WR ACQUISITION, INC., a(n)
                     corporation, promises to pay to the order of NATIONAL CITY BANK, at the payee’s main office in Cleveland, Ohio, the
principal sum of 
 FOUR HUNDRED EIGHTY THOUSAND AND 00/100THS DOLLARS 
 in accordance with subsection 2B.02 of the Credit Agreement referred to below and to pay interest on the unpaid principal balance in accordance with subsection 2B.03 of the Credit Agreement referred to below.

 This note is issued pursuant to a certain Agreement (the “Credit Agreement”) made as of
                    , 2000 by and between the payee and the undersigned, which Credit Agreement contains provisions governing the acceleration
of the Maturity of this note upon the happening of certain events, rights of the undersigned to prepay this note and other provisions to which this note is subject. 
 Borrower hereby authorizes any attorney at law at any time or times to appear in any state or federal court of record in the United States of America after the indebtedness represented by this note shall have become
due, whether by lapse of time or by acceleration of Maturity, to waive the issuance and service of process, to present this note (together with any endorsement or endorsements thereon) to the court, to admit the Maturity thereof and the nonpayment
thereof when due, to confess judgment against Borrower in favor of the holder of this note for the full amount then appearing due, together with interest and costs of suit, and thereupon to release all errors and waive all rights of appeal and stay
of execution. The foregoing warrant of attorney shall survive any judgment, it being understood that should any judgment against Borrower be vacated for any reason, the holder of this note may nevertheless utilize the foregoing warrant of attorney
in thereafter obtaining additional judgment or judgments against Borrower. 
  

									
	 Address:
 662 Wolf Ledges Parkway
 Akron, Ohio 44311
	 		 	 WR ACQUISITION, INC.

	Telecopy:                     	 		 	 By:
	 	  
		 		 		 	 Printed Name:
	 	  
		 		 		 	 Title:
	 	  

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

 REVOLVING NOTE 
  

					
	 $1,500,000
	  	               Cleveland, Ohio	  	                    , 2000

 FOR VALUE RECEIVED, the undersigned, WR ACQUISITION, INC., (Borrower), a
                     corporation, promises to pay to the order of NATIONAL CITY BANK, at the payee’s main office in Cleveland, Ohio, the
principal sum of 
 ONE MILLION FIVE HUNDRED THOUSAND DOLLARS 
 (or, if less, the aggregate unpaid principal balance from time to time shown on the reverse side), together with interest computed thereon in accordance with the Credit Agreement referred to below, which principal and
interest is payable in accordance with the provisions in the Credit Agreement. 
 This note is issued pursuant to a certain Agreement (the “Credit
Agreement”) made as of                     , 2000 by and between the payee and Borrower. The Credit Agreement contains definitions
applicable to this note, provisions governing the making of loans, the acceleration of the maturity thereof, rights of prepayment and other provisions applicable to this note. Each endorsement, if any, on the reverse side of this note (or any
allonge thereto) shall be prima facie evidence of the data so endorsed. 
 Borrower hereby authorizes any attorney at law at any time or times to appear in
any state or federal court of record in the United States of America after the indebtedness represented by this note shall have become due, whether by lapse of time or by acceleration of maturity, to waive the issuance and service of process, to
present this note (together with any endorsement or endorsements thereon) to the court, to admit the maturity thereof and the nonpayment thereof when due, to confess judgment against Borrower in favor of the holder of this note for the full amount
then appearing due, together with interest and costs of suit, and thereupon to release all errors and waive all rights of appeal and stay of execution. The foregoing warrant of attorney shall survive any judgment, it being understood that should any
judgment against Borrower be vacated for any reason, the holder of this note may nevertheless utilize the foregoing warrant of attorney in thereafter obtaining additional judgment or judgments against Borrower. 
  

									
	 Address:
 662 Wolf Ledges Parkway
 Akron, Ohio 44311
	 		 	 WR ACQUISITION, INC.

	Telecopy                     	 		 	 By:
	 	  
		 		 		 	 Printed Name:
	 	  
		 		 		 	 Title:
	 	  

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

 EXTENSION AGREEMENT 
 This extension agreement made as of                     , 2000 by and between WR ACQUISITION, INC.
(Borrower) and National City Bank (Bank): 
 Whereas, the parties have executed and delivered a certain credit agreement dated
                    , 2000 which provides for, among other things, a Revolving Commitment aggregating $1,500,000 and available to Borrower,
upon certain terms and conditions until                     , 2000 (the Expiration Date now in effect) subject to any earlier reduction
or termination pursuant to the credit agreement. 
 In consideration of the premises above and agreements below and for other valuable consideration, the
parties agree that subsection 2C.02 of the credit agreement (captioned “TERM”) is hereby amended by deleting the date
                    , 2000 and by substituting therefor the date
“                    , 2000”, which latter date shall be the Expiration Date hereafter in effect. 
 In all other respects the credit agreement shall remain in full effect. 
  

			
	 WR ACQUISITION, INC.

		
	By	 	  
	
	 NATIONAL CITY BANK

		
	By	 	  

 EXHIBIT E

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