Document:

Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 This Employment Agreement (“Agreement”) is made and entered into by and
between DPAC Technologies Corp., a California corporation (the “Company”) and Steven D. Runkel, an individual (“Executive”), effective as of the Effective Date as defined in the Agreement and Plan of Reorganization dated
April 26, 2005 (“Merger Agreement”) among the Company, Quatech, Inc. and Acquisition Sub, as defined in the Merger Agreement. 
 In consideration of the mutual covenants and agreements set forth herein, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 EMPLOYMENT 
 The Company hereby employs Executive and Executive accepts employment with the Company upon the terms and conditions herein set forth. 
 1.1 Employment. The Company hereby employs Executive, and Executive agrees to serve, as the Chief Executive Officer of the Company, reporting to
the Board of Directors of the Company, commencing on the Effective Date and thereafter during the term of this Agreement. In the event the Effective Date does not occur and the Merger Agreement is terminated, this Agreement shall be null and void
and of no force or effect whatsoever. Executive agrees to perform such usual and customary duties of such office as may be delegated to Executive from time to time by the Board of Directors of the Company. Executive agrees to devote substantially
Executive’s full business time and attention and best efforts to the affairs of the Company during the term of this Agreement. 
 1.2
Term. The term of employment of Executive hereunder will be for the period commencing on the date of this Agreement and ending on the earliest of: 
 (a) December 31, 2006; 
 (b) The date of termination of Executive’s employment in
accordance with Article IV of this Agreement; or 
 (c) The date of Executive’s death. 
 ARTICLE II 
 COMPENSATION 
 2.1 Base Salary. Effective on and after the Effective Date and thereafter during the employment of Executive, the Company shall pay Executive a
base salary at the rate of $210,000 per year. 
 2.2 Auto Allowance. Executive shall receive an automobile allowance of $750 per
month. 

 2.3 Annual Incentive Compensation Program. Executive shall be eligible to participate in any and
every annual incentive compensation program of the Company, at a level commensurate with other Company senior executives, as established by the Board of Directors of the Company from time to time. 
 2.4 Reimbursement of Expenses. Executive shall be entitled to receive prompt reimbursement of all reasonable expenses incurred by Executive in
performing services hereunder, including all expenses of travel, mobile phones, business entertainment and living expenses while away from home on business at the request of, or in the service of, the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures established by the Company. 
 2.5 Benefits. Executive shall
be entitled to participate in or be covered by, as the case may be, all health, insurance, pension, disability insurance, physical exam and other employee plans and benefits established by the Company (collectively referred to herein as the
“Benefit Plans”) on the same terms as are generally applicable to other senior executives of the Company, subject to meeting applicable eligibility requirements. 
 2.6 Vacations and Holidays. During Executive’s employment with the Company, Executive shall be entitled to an annual vacation leave at full
pay, such vacation to be four weeks in each year of the term hereof or such greater vacation benefits as may be provided for by the Company’s vacation policies applicable to senior executives, as established by the Board of Directors of the
Company from time to time. Executive shall be entitled to such holidays as are established by the Company for all employees. 
 ARTICLE III

 NON-COMPETITION, CONFIDENTIALITY AND NONDISCLOSURE 
 3.1 Confidentiality Agreement. Concurrently with the execution of this Agreement, Executive will execute and deliver Company’s standard Employee Assignment of Inventions and Non-Disclosure Agreement, and
be bound by the terms thereof. As a condition of Executive’s employment hereof, Executive agrees that all references to “Company” in the Employee Invention and Non-Disclosure Agreement shall be deemed to include the Company as well as
Quatech, Inc. and any other subsidiary, direct or indirect, of the Company. 
 3.2 No Violation of Other Agreements. Executive
represents that Executive’s performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to (i) not compete or interfere with the business of a former employer (which term for
purposes of this Section 3.3 shall also include persons, firms, corporations and other entities for which Executive has acted as an independent contractor or consultant), (ii) not solicit employees, customers or vendors of any former
employer, or (iii) keep in confidence proprietary information acquired by Executive in confidence or in trust prior to Executive’s employment with the Company. Executive represents and warrants to and covenants with the Company that
Executive will not bring to the Company any materials or documents of a former employer containing confidential or proprietary information that is not generally available to the public, unless Executive shall have obtained express written
authorization from any such former employer for their possession and use. 
  

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 ARTICLE IV 
 TERMINATION 
 4.1 Definitions. For purposes of this Article IV, the following definitions shall apply
to the terms set forth below: 
 (a) Cause. “Cause” shall be defined as follows: 
 (i) Executive’s conviction of, or guilty plea to, any felony (whether or not involving the Company) which constitutes a crime of
moral turpitude or which is punishable by imprisonment in a state or federal correctional facility; 
 (ii) Actions by
Executive during the term of this Agreement involving willful malfeasance or gross negligence in the performance of Executive’s duties hereunder; 
 (iii) Executive’s commission of an act of fraud, whether prior or subsequent to the date hereof, upon the Company; 
 (iv) Executive’s willful failure or refusal to perform Executive’s duties as required by this Agreement; and 
 (v) Executive’s willful violation of any reasonable rule or regulation of the Board of Directors applicable to all senior executives if such violation is not cured promptly following notice to Executive.

 For purposes of items (i) through (v) above, a conviction or the commission or omission of any act of Executive
described therein shall not be deemed to constitute “Cause” unless a majority of the Board of Directors affirmatively votes to deem it to be material and to constitute “Cause” for purposes hereof, following five (5) business
days’ notice to Executive of a meeting of the Board of Directors and an open discussion and presentation by Executive explaining such conviction, act or omission. 
 (b) Good Reason. “Good Reason” shall mean the relocation of Executive without Executive’s written consent.

 4.2 Termination by Company. The Company may terminate Executive’s employment hereunder immediately for Cause. Subject to the
other provisions contained in this Agreement, the Company may terminate this Agreement for any reason other than Cause upon thirty (30) days’ written notice to Executive. 
 4.3 Termination by Executive. Executive may terminate this Agreement and Executive’s employment hereunder upon thirty (30) days’
written notice to the Company. 
 4.4 Benefits Received Upon Termination. 
 (a) If Executive’s employment is terminated by the Company for Cause, or if this Agreement is terminated by Executive for any reason
under circumstances not constituting Good Reason, then the Company shall pay Executive Executive’s Base Salary through the effective date of such termination plus credit for any vacation earned but not taken. Thereafter, the Company shall

  

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have no further obligations to Executive under this Agreement; provided, however, that the Company will continue to honor any obligations that may have
vested or been accrued and not forfeited on termination pursuant to and under the existing Company Benefit Plans or any other agreements or arrangements applicable to Executive. 
 (b) If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason the Company shall:

 (i) pay Executive, within two (2) business days following the date of termination, any unpaid portion of
Executive’s Base Salary and Auto Allowance through the date of termination, plus an additional 30 days from the date of termination, in lieu of the required notification period, plus credit for any vacation earned but not taken; and 

(ii) as severance pay Executive’s Base Salary plus Auto Allowance in effect as of the date of termination, such payments to be
made in accordance with the Company’s usual payroll periods for the twelve (12) months immediately following the termination of employment under this Agreement, subject to withholding in accordance with the Company’s usual payroll
practices; and 
 (iii) if Executive holds unvested restricted stock or unvested stock options, accelerate the vesting of all
of Executive’s stock or stock options at and from the date of Executive’s termination , so that all restrictions on restricted stock shall lapse immediately and all unvested stock options will vest immediately; and 
 (iv) if Executive holds unexercised stock options on the date of termination, amend the options to permit all vested options, including
those vested as a result of the preceding clause, to be exercised for two years from and after the date of Executive’s termination. 
 (c) Termination Because of Employee Death or Disability. Should Executive die or become disabled, as defined under the written insurance policies and procedures that may from time to time be obtained by the
Company and its employment policies, the Company, or its insurer, shall pay Executive or the personal representative thereof the amount of twelve (12) months of Executive’s Base Salary, such payments to be made in accordance with the
Company’s usual payroll periods for twelve (12) months following the termination of employment under this Agreement, subject to withholding in accordance with the Company’s usual payroll practices, in addition to any other
compensation under this Agreement. 
 4.5 Effect of Termination. Upon any termination of this Agreement, for any reason, Executive
shall be deemed to have immediately resigned in all capacities as an officer of the Company and as an officer or director of all subsidiaries of the Company, if applicable, without the giving of any notice or the taking of any other action;
provided, however, that termination under this Agreement shall not alter any rights of Executive expressly granted under any other written agreement approved and adopted by the Board of Directors of the Company. 
  

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 ARTICLE V 
 ASSUMPTION OF OBLIGATIONS BY SUCCESSOR TO COMPANY 
 5.1 Assumption of Obligations. The Company will
require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, to assume expressly, absolutely and unconditionally and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of
any such succession or assignment shall be a material breach of this Agreement. As used in this Agreement, “Company” shall mean the Company as herein before defined and any successor or assign to its business and/or assets as aforesaid
which executes and delivers the agreement provided for in this Article V or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. 
 5.2 Beneficial Interests. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts are still payable to him or her hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive’s personal representative, devisee, legatee, or other designee or, if there be no such designee, to Executive’s estate. 
 ARTICLE VI 
 GENERAL PROVISIONS 
 6.1 Notice. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows: 
  

			
	 If to the Company:
	  	
		  	 DPAC Technologies Corp.

		  	 7321 Lincoln Way

		  	 Garden Grove, California 92841

		  	 Attention: Chairman of the Board of Directors

		  	 Facsimile No. (714) 897-1772

		
	 With a Copy to:
	  	
		  	 The Yocca Law Firm, LLP

		  	 19900 MacArthur Blvd., Suite 650

		  	 Irvine, California 92612

		  	 Attention: Nicholas J. Yocca

		  	 Facsimile No. (949) 253-0870

		
	 If to Executive:
	  	 Steven D. Runkel

		  	 938 Summit Drive

		  	 Wexford, Pennsylvania 15090

  

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 or such other address as either party may have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt. 
 6.2 No Waivers. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to specifically in a writing signed by Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. 
 6.4 Severability or Partial Invalidity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
 6.5 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 
 6.6 Legal Fees and Expenses. Should any party institute any action or proceeding to enforce this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or of any provision hereof, or for a declaration of rights hereunder, the prevailing party in any such action or proceeding shall be entitled to receive from the other party all costs and expenses,
including reasonable attorneys’ fees, incurred by the prevailing party in connection with such action or proceeding. 
 6.7 Entire
Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations between the parties with respect to the subject matter
hereof. This Agreement is intended by the parties as the final expression of their agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties
further intend that this Agreement constitutes the complete and exclusive statement of its terms and that no extrinsic evidence may be introduced in any judicial proceeding involving this Agreement. 
 6.8 Assignment. This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by Executive without the prior
written consent of the Company and any such attempted assignment and delegation shall be void and be of no effect. The Company may assign or delegate its rights, duties and obligations hereunder to any person or entity; provided that such person or
entity assumes the Company’s obligations under this Agreement in accordance with Section 5.1. 
 6.9 Indemnification. To the
extent permitted by law, applicable statutes and the Articles of Incorporation, Bylaws or resolutions of the Company in effect from time to time, the Company shall indemnify Executive against liability or loss arising out of Executive’s actual
or asserted misfeasance or nonfeasance in the performance of Executive’s duties under this Agreement or out of 

  

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any actual or asserted wrongful act against or by the Company including but not limited to judgments, fines, settlements and expenses incurred in the defense
of actions, proceedings and appeals therefrom. The Company shall endeavor to obtain Directors and Officers’ Liability Insurance to indemnify and insure the Company and Executive from and against the aforesaid liabilities, subject to exclusions
in the insurance contract. The provisions of this paragraph shall apply to the estate, executor, administrator, heirs, legatees or devisees of Executive. 
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the this 28th day of February, 2006. 
  

			
	“Executive”
	
	/s/ Steven D. Runkel
	Steven D. Runkel
	
	“Company”
	
	DPAC Technologies Corp.
		
	By:	 	 Creighton K. Early

		 	Creighton K. Early

  

 -7-Subordinated Loan and Security Agreement

 Exhibit 10.2 
 SUBORDINATED 
 LOAN AND SECURITY AGREEMENT 
 AMONG 
 THE HILLSTREET FUND, L.P.

 Lender 
 AND 
 WR ACQUISITION, INC.  
 Borrower 
 Dated As of July 28, 2000 

 TABLE OF CONTENTS 
  

					
	  	  	 	  	Page
	 ARTICLE 1.
	  		  	
		
	 INTERPRETATION
	  	
	 1.1
	  	Definitions	  	1
	 1.2
	  	Rules of Construction	  	12
			
	 ARTICLE 2.
	  		  	
		
	 LOAN TERMS AND AMOUNTS
	  	
	 2.1
	  	Loan Commitment	  	12
	 2.2
	  	Promissory Subordinated Note	  	13
	 2.3
	  	Fees	  	13
	 2.4
	  	Interest on Overdue Payments; Default Rate	  	14
	 2.5
	  	Prepayments	  	14
	 2.6
	  	Time and Place of Payments	  	14
	 2.7
	  	Application of Funds	  	15
	 2.8
	  	Use of Proceeds	  	15
	 2.9
	  	Payments to be Free of Deductions	  	15
			
	 ARTICLE 3.
	  		  	
		
	 SECURITY INTERESTS
	  	
	 3.1
	  	Grant of Security Interest	  	16
	 3.2
	  	Additional Collateral	  	16
	 3.3
	  	Additional Security for the Loan	  	16
			
	 ARTICLE 4.
	  		  	
		
	 REPRESENTATIONS AND WARRANTIES
	  	
	 4.1
	  	Organization, Authority and Qualification	  	16
	 4.2
	  	No Legal Bar	  	18
	 4.3
	  	No Litigation	  	18
	 4.4
	  	Financial Condition	  	18
	 4.5
	  	No Change	  	18
	 4.6
	  	No Default	  	18
	 4.7
	  	Conditions Precedent	  	18
	 4.8
	  	Ownership of Property; Liens	  	19
	 4.9
	  	Intellectual Property	  	19
	 4.10
	  	Compliance with Laws	  	19
	 4.11
	  	Taxes	  	19
	 4.12
	  	Environmental Matters	  	19
	 4.13
	  	Place of Business	  	19

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 

					
	 4.14
	  	General Collateral Representation	  	20
	 4.15
	  	Accounts	  	21
	 4.16
	  	Equipment	  	21
	 4.17
	  	ERISA	  	21
	 4.18
	  	Undisclosed Liabilities	  	21
	 4.19
	  	Disclosure	  	21
	 4.20
	  	Solvency	  	22
	 4.21
	  	Survival of Representations and Warranties	  	22
			
	 ARTICLE 5.
	  		  	
		
	 AFFIRMATIVE COVENANTS
	  	
	 5.1
	  	Financial Statements	  	22
	 5.2
	  	Conduct of Business and Maintenance of Existence	  	23
	 5.3
	  	Maintenance of Property; Insurance	  	24
	 5.4
	  	Liability Insurance	  	24
	 5.5
	  	Inspection of Property; Books and Records	  	24
	 5.6
	  	Notices	  	25
	 5.7
	  	Environmental Laws	  	25
	 5.8
	  	Inventory	  	25
	 5.9
	  	Equipment	  	26
	 5.10
	  	Collateral	  	26
	 5.11
	  	Employee Benefit Plans	  	26
	 5.12
	  	Further Documents	  	26
	 5.13
	  	Life Insurance	  	27
	 5.14
	  	Trademarks, Copyrights and Other Intellectual Property	  	27
	 5.15
	  	Other Information	  	27
	 5.16
	  	Board of Directors	  	27
			
	 ARTICLE 6.
	  		  	
		
	 NEGATIVE COVENANTS
	  	
	 6.1
	  	Limitations on Restricted Payments	  	27
	 6.2
	  	Limitations on Indebtedness	  	28
	 6.3
	  	Limitation on Guarantee Obligations	  	29
	 6.4
	  	Limitation on Fundamental Changes	  	29
	 6.5
	  	Limitation on Dispositions of Assets	  	29
	 6.6
	  	Limitation on Investments, Loans and Advances	  	29
	 6.7
	  	Limitation on Payments and Modifications of Debt Instruments	  	30
	 6.8
	  	Limitation on Creation or Acquisition of Subsidiaries	  	30
	 6.9
	  	Corporate Documents	  	30
	 6.10
	  	Dividends and Similar Transactions	  	30
	 6.11
	  	Limitations on Management Fees	  	30

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - ii - 

					
	 6.12
	  	Management Compensation	  	30
	 6.13
	  	Changes Relating to Indebtedness	  	31
			
	 ARTICLE 7.
	  		  	
		
	 FINANCIAL COVENANTS
	  	
	 7.1
	  	Limitations on Capital Expenditures	  	31
	 7.2
	  	Minimum EBITDA	  	31
	 7.3
	  	Senior Loan Agreement Covenants. Borrower shall comply with the covenants set forth in Section 3B of the Senior Loan Agreement, each of which is incorporated herein by reference	  	32
			
	 ARTICLE 8.
	  		  	
		
	 CONDITIONS PRECEDENT
	  	
	 8.1
	  	Conditions Precedent to Initial Loan	  	32
			
	 ARTICLE 9.
	  		  	
		
	 EVENTS OF DEFAULT
	  	
	 9.1
	  	Payments	  	35
	 9.2
	  	Representations and Warranties	  	36
	 9.3
	  	Covenants	  	36
	 9.4
	  	Effectiveness of Loan Documents	  	36
	 9.5
	  	Cross-Default to Other Indebtedness	  	36
	 9.6
	  	Change of Control	  	36
	 9.7
	  	Commencement of Bankruptcy or Reorganization Proceeding	  	36
	 9.8
	  	Material Judgments	  	37
	 9.9
	  	Remedies	  	37
	 9.10
	  	Set-off	  	38
	 9.11
	  	Rights Cumulative; Waiver	  	38
			
	 ARTICLE 10.
	  		  	
		
	 COLLECTION OF COLLATERAL AND NOTICE OF ASSIGNMENT
	  	
	 10.1
	  	Notification of Debtors; Grant of Powers	  	39
	 10.2
	  	Disclaimer of Liability	  	39

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - iii - 

					
	 ARTICLE 11.
	  		  	
		
	 MISCELLANEOUS
	  	
	 11.1
	  	Amendments and Waivers	  	40
	 11.2
	  	No Waiver; Cumulative Remedies	  	40
	 11.3
	  	Notices	  	40
	 11.4
	  	Power of Attorney	  	41
	 11.5
	  	Successors and Assigns	  	41
	 11.6
	  	Assignment; Participation	  	41
	 11.7
	  	Expenses	  	42
	 11.8
	  	Post-Closing Expenses and Collection	  	42
	 11.9
	  	Counterparts	  	42
	 11.10
	  	Governing Law; Jurisdiction and Venue	  	42
	 11.11
	  	Waiver of Jury Trial	  	43
	 11.12
	  	Other Waivers	  	43

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - iv - 

 EXHIBITS 
  

			
	 Exhibit A
	  	 Form of Assignment of Purchase Contract

		
	 Exhibit B
	  	 Form of Compliance Certificate

		
	 Exhibit C
	  	 Form of Mortgage

		
	 Exhibit D
	  	 Form of Warrant

		
	 Exhibit E
	  	 Form of Warrant Agreement

		
	 Exhibit F
	  	 Form of Subordinated Term Promissory Note

 SCHEDULES 
  

			
	 Schedule 1.1
	  	 Equipment Liens

		
	 Schedule 3.1
	  	 Description of Mortgaged Property

		
	 Schedule 4.1(b)
	  	 Authorized Capital Stock; Outstanding Warrants or Options

		
	 Schedule 4.1(c)
	  	 Subsidiaries; Foreign Qualifications

		
	 Schedule 4.9
	  	 Intellectual Property

		
	 Schedule 4.11
	  	 Filed Tax Returns; Tax Liens

		
	 Schedule 4.12
	  	 Environmental Matters

		
	 Schedule 4.14
	  	 UCC Filing Offices

		
	 Schedule 4.17
	  	 Employee Benefit Plans

		
	 Schedule 4.7, 6.12, 6.13
	  	 Management Compensation

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 THIS SUBORDINATED LOAN AND SECURITY AGREEMENT is made as of the 28th day of July, 2000, by and between WR ACQUISITION, INC., an Ohio corporation
(“Borrower”), and THE HILLSTREET FUND, L.P., a Delaware limited partnership, its permitted successors and assigns (“Lender”). 
 NOW, THEREFORE, in consideration of the respective undertakings stated herein, the parties agree as follows: 
 ARTICLE 1 

INTERPRETATION 
 Section 1.1
Definitions. The following capitalized terms are defined as follows: 
 “Account” or “Accounts”
shall have the same meaning as defined in the UCC. 
 “Account Debtor” shall have the same meaning as defined in the UCC.

 “Acquisition Transaction” means the acquisition by Borrower of all or substantially all of the assets of the Seller
pursuant to the Purchase Agreement. 
 “Affiliate” means any Person which directly or indirectly controls, or is controlled
by, or is under common control with, any Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. The term “Affiliate” does not include the Lender. 
 “Agreement” or
“this Agreement” means this Subordinated Loan and Security Agreement (including all Exhibits and Schedules annexed hereto) as originally executed, or if supplemented, amended, or restated from time to time, as so supplemented,
amended, or restated. 
 “Assignment of Life Insurance” means a collateral assignment, on terms acceptable to Lender, of the
Life Insurance. 
 “Assignment of Purchase Contract” means a Collateral Assignment of Purchase Contract between Borrower and
Lender in the form of Exhibit A hereto, covering all of Borrower’s rights in and under the Purchase Agreement. 
  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 

 “Building” shall mean any building, structure or improvement now or hereafter located on
the Mortgaged Property, 
 “Business Day” means any day on which commercial banking institutions are open for business in
Cincinnati, Ohio, other than a Saturday, Sunday or a legal holiday. 
 “Capital Expenditures” means any amounts paid or
incurred in connection with the purchase of plant, machinery, Equipment or similar expenditures (including any lease of any of the foregoing) which are required to be capitalized and depreciated in accordance with GAAP. 
 “Capital Leases” means capital leases, conditional sales contracts and other title retention documents relating to the acquisition of
capital assets (as classified in accordance with GAAP). 
 “Capital Stock” means any and all equity interests and
participations in any entity including, without limitation, corporate stock, whether common or preferred, subscription rights, warrants, convertible securities and other forms of equity interests such as partnership interests and interests in
limited liability companies. 
 “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 Borrower or a group controlled by the existing
shareholders of Borrower, 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 Borrower equal to at least twenty-five percent
(25%), (ii) there shall be consummated any consolidation or merger of Borrower pursuant to which Borrower’s Capital Stock would be converted into cash, securities or other property, other than a merger or consolidation of Borrower in which
the holders of the common stock of Borrower, 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 convertible into
common stock, of the surviving corporation immediately after the merger as they had of Borrower’s common stock immediately prior to such merger, or (iii) all or substantially all of Borrower’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 Borrower) in one or a series of transactions, or (iv) Steven Runkel shall cease to perform his duties as a senior
executive manager of Borrower and within ninety (90) days of such cessation a replacement senior executive manager reasonably acceptable to Lender has not been employed by Borrower. 
 “Closing Date” means the Business Day on which all conditions precedent specified in Article 7 hereof shall have been satisfied in full.

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - 2 - 

 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 “Collateral” means all property of Borrower, whether now owned by Borrower or hereafter acquired or existing, and
wherever located including, without limitation: 
 (a) the Mortgaged Property; 
 (b) all Accounts; 
 (c) all Inventory; 
 (d) all Equipment; 
 (e) all General Intangibles; 
 (f) all Investment Property; 
 (g) all Instruments and Documents; 
 (h) all Related Collateral; 
 (i) all accessions to and additions to, substitutions for, replacements, products; and 
 (j)
products and proceeds of any and all of the foregoing. 
 The term “Collateral” shall also refer to any other
property in which Lender is granted a Lien to secure any of the Obligations pursuant to an agreement supplemental hereto or otherwise (whether or not such agreement makes reference to this Agreement or the Obligations of Borrower hereunder).

 “Compliance Certificate” means the report required by Section 5.1(e) hereof, including schedules furnished by
Borrower in the form of Exhibit B hereto. 
 “Computation Date” means the last day of each of March, June, September and
December. 
 “Consolidated” means, with respect to any accounting matter or amount, such matter or amount computed on a
consolidated basis for Borrower and its Subsidiaries, if any, in accordance with GAAP. 
  

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 “Contractual Obligation” means, with respect to any Person, any provision or requirement
of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. 
 “Copyrights” means all present and future copyrights, registrations therefor, reversions thereof, and renewals and extensions of copyrights in all works of authorship (including software source code
and documentation) in which Borrower or a Subsidiary of Borrower has any interest. 
 “Default” means any of the events set
forth in Article 9 which with giving of notice, the lapse of time, or both, would constitute an Event of Default. 
 “Default
Rate” means four percentage points (4.0%) in excess of the otherwise applicable interest rate on the Loan (but in no event more than the rate permitted by applicable law). 
 “ Disinterested Directors” means the members of the board of directors of Borrower other than directors owning Preferred Stock or
controlled by or appointed by a Person owning Preferred Stock. 
 “EBITDA” means for any period, and calculated on a
Consolidated Basis, without duplication, Net Income; plus (i) for such period, any interest Expense deducted in the determination of Net Income; plus (ii) any income, ad valorem, and franchise taxes paid in cash and included in
the determination of Net Income; plus (iii) amortization and depreciation deducted in determining Net Income for such period. 
 “Employee Benefit Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a multiemployer plan. 
 “Environmental Indemnity Agreement” means the Environmental Indemnity Agreement of even date herewith between Borrower and Lender. 
 “Environmental Laws” means all federal, state and local laws, rules, regulations, ordinances, permits, orders, writs, judgments,
injunctions, decrees, determinations, awards and consent decrees relating to hazardous substances and environmental matters applicable to Borrower’s business and facilities (whether or not owned by it), including, without limitation, the
Resource Conservation and Recovery Act of 1976 (“RCRA”); the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”); the Toxic Substance Control Act; the Clean Water Act; and the Clean Air Act,
all as amended from time to time; state and federal superfund and environmental cleanup programs; and U.S. Department of Transportation hazardous materials transportation regulations. 
  

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 “Equipment” shall have the meaning as defined in the UCC. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 
 “ERISA Affiliate” means, in relation to any Person, any trade or business (whether or not incorporated) which is a member of a group of
which that Person is a member and is under common control within the meaning of the regulations promulgated under Section 414 of the Code. 
 “Event of Default” has the meaning set forth in Article 9 hereof. 
 “Financial Statements” has
the meaning set forth in Section 4.4 hereof. 
 “GAAP” means generally accepted accounting principles in the United
States, as in effect from time to time. 
 “General Intangibles” shall have the meaning as defined in the UCC. 

“Guarantee Obligation” means, with respect to any Person, any direct or indirect liability, contingent or otherwise, with respect to
any Indebtedness, lease or other obligation of another if the primary purpose or intent thereof in incurring the Guarantee Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid
or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, The amount of any Guarantee Obligation shall be deemed to
be the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, or if not stated or determinable, the maximum reasonably anticipated liability in respect thereof.

 “Head Office” means the head office of Lender located at 300 Main Street, Cincinnati, Ohio 45202. 
 “HillStreet” means The HillStreet Fund, L.P., a Delaware limited partnership. 
 “Indebtedness” means, without duplication all liabilities of a Person as determined under GAAP and all obligations which such Person has
guaranteed or endorsed or is otherwise secondarily or jointly liable for, and shall include, without limitation, (a) all obligations for borrowed money or purchased assets, (b) obligations secured by assets whether or not any personal
liability exists, (c) the capitalized amount of any capital or finance lease obligations, (d) the unfunded portion of pension or benefit plans or other similar liabilities, (e) obligations as a general partner, (f) contingent
obligations pursuant to guaranties, including but not limited to all Guarantee Obligations, endorsements, letters of credit and other secondary liabilities, and (g) obligations for deposits. 
  

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 “Indebtedness for Borrowed Money” means (a) all liabilities for borrowed money,
(i) for the deferred purchase price of property or services, and (ii) under leases which are or should be, under GAAP, recorded as Capital Leases, in each case in respect of which a Person is directly or indirectly, absolutely or
contingently liable as obligor, guarantor, endorser or otherwise, or in respect of which such Person otherwise assures a creditor against loss, and (b) all liabilities of the type described in clause (a) above which are secured by (or for
which the holder has an existing right, contingent or otherwise, to be secured by) any Lien upon property owned by such Person, whether or not such Person has assumed or become liable for the payment thereof. 
 “Instruments and Documents” means all “instruments,” “documents,” “deposit accounts,” and “chattel
paper,” as defined in Section 9-105 of the UCC, all securities, and includes (without limitation) all warehouse receipts and other documents of title, policies and certificates of insurance, checking, savings, and other bank accounts,
certificates of deposit, checks, notes, drafts, bills, and acceptances, now or hereafter acquired, to the extent not included in Accounts or Investment Property. 
 “Intellectual Property Security Agreement” means the Security Agreement of even date herewith between Borrower and Lender. 
 “Intercreditor Agreement” means that Unconditional and Continuing Subordination Agreement dated as of the Closing Date among Lender and
Senior Lender, in form and substance satisfactory to Lender, as amended from time to time. 
 “Interest Payment Dates” shall
mean the last Business Day of each month. 
 “Inventory” shall have the meaning as defined in the UCC. 
 “Investment Property” means all now owned or hereafter acquired securities, financial assets, securities entitlements and investment
property of Borrower, as such terms are defined in Article 9 of the UCC. 
 “Lien” means any mortgage, pledge,
hypothecation, assignment, security interest, lien, charge or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of any Financing statement under the Uniform Commercial Code or comparable law of any jurisdiction in respect of any of the foregoing). 
 “Life Insurance” means one or more policies of life insurance and any substitute or replacement policies thereof, owned by Borrower
(i) on the life of C. F. Chen in the aggregate face amount of not less than One Million and 00/100 Dollars ($1,000,000.00), (ii) on the life of Steven 

  

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Runkel in the aggregate face amount of not less than One Million and 00/100 Dollars ($1,000,000.00), which such policies shall be free of any policy loans
and encumbrances whatsoever, except the lien in favor of the Lender hereunder. 
 “Loan Documents” means this Agreement, the
Subordinated Note, the Security Documents, the Intercreditor Agreement, and all other documents, instruments, financing statements, certificates and other agreements executed in connection with the Loan. 
 “Loan Year” means each period of twelve (12) consecutive months, commencing on the Closing Date and on each anniversary thereof.

 “Loan” means the term loan to be made to Borrower by Lender pursuant to Article 2 hereof. 
 “Material Adverse Effect” means a material adverse effect on the business, operations, property, Collateral or condition (financial or
otherwise) of Borrower. 
 “Mortgage” means one or more real estate mortgages or deeds of trust granted from time to time by
Borrower to Lender, granting a second lien to Lender to secure the Loan, substantially in the form of Exhibit C hereto, and as they may be amended or supplemented from time to time. 
 “Mortgaged Property” means land, Buildings, fixtures and related personal property located in the City of Akron, County of Summit, and
acquired by Borrower pursuant to the Agreement of Sale dated as of April 4, 2000 between Chen & Chen Associates, an Ohio general partnership and Borrower which property is more particularly described on Exhibit A to the Mortgage.

 “Net Income” means the Consolidated net income of Borrower determined in accordance with GAAP. 
 “Obligations” means, without limitation, the Loan and all other debts, obligations, or liabilities of every kind and description of
Borrower to the Lender, now due or to become due, direct or indirect, absolute or contingent, presently existing or hereafter arising, joint or several, secured or unsecured, whether for payment or performance, regardless of how the same arise or by
what instrument, agreement or book account they may be evidenced, or whether evidenced by any instrument, agreement or book account including, without limitation, all loans (including any loan by renewal or extension), all overdrafts, all
guarantees, all bankers acceptances, all agreements, all letters of credit issued by the Lender for Borrower and the applications relating thereto, all indebtedness of Borrower to the Lender, all undertakings to take or refrain from taking any
action 

  

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and all indebtedness, liabilities and obligations owing from Borrower to others which the Lender may obtain by purchase, negotiation, discount, assignment or
otherwise. Obligations shall also include all interest and other charges chargeable to Borrower or due from Borrower to the Lender from time to time and all costs and expenses referred to in Section 11.8. 
 “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 $2,830,000.00 in the aggregate; 
 (b) liens against Borrower 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; 
 (c) deposits or pledges
made by Borrower in connection with, or to secure payment of workmen’s compensation, unemployment insurance, old age pensions or other social security obligations; 
 (d) liens against Borrower 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 Borrower 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; 
 (e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties of Borrower in existence less than ninety (90) days from the date of creation thereof in respect of obligations not overdue; 
 (f) encumbrances on real estate of Borrower consisting of easements, rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities 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 Borrower interferes materially with
the use of the property affected in the ordinary conduct of the business of Borrower, which defects do not individually or in the aggregate have a Materially Adverse Effect; 
 (g) liens and encumbrances on the real property Collateral of Borrower as and to the extent permitted by the mortgage applicable thereto;

  

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 “Person” means an individual, partnership, limited liability company, corporation,
business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature. 
 “Preferred Stock” means the 9% Series A Convertible Preferred Stock of Borrower in an aggregate amount of $1,300,000.00 issued to and owned by Development Capital Ventures, L.P. 
 “Principal Office” means the principal office of Borrower at 662 Wolf Ledges Parkway, Akron, Ohio. 
 “Principal Payment Dates” shall mean the last day of each February, May, August and November, beginning August 31, 2006.

 “Purchase Agreement” means the Asset Purchase Agreement dated as of April 4, 2000 by and between Borrower, Seller
and the Stockholders named therein amended, restated or otherwise modified from time to time. 
 “Real Estate” means all
real property owned by Borrower and all real property hereafter acquired by Borrower, together with all fixtures, rights of way, privileges, liberties, tenements, hereditaments, and appurtenances belonging or in any way appertaining thereto, all
easements now or hereafter benefitting such real property and all royalties and rights appertaining to the use and enjoyment of such real property, together with all of the Buildings, structures, and other improvements thereto. 
 “Related Collateral” means all goodwill of Borrower; cash; deposit accounts; claims under insurance policies (whether or not proceeds of
other Collateral); rights of set off; rights under judgments; tort claims and choses in action; computer programs and software, books and records (including, without limitation, all electronically recorded data); contract rights; and all contracts
and agreements to or of which they are parties or beneficiaries, whether any of the foregoing be now existing or hereafter arising, now or hereafter received by or belonging to Borrower. 
 “Requirements of Law” means, with respect to any Person, the Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such Person or any of its property or to which such
Person or any of its property is subject. 
  

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 “Reference Period” means, with respect to any particular Computation Date, the period of
four (4) consecutive fiscal quarters of Borrower ending on such Computation Date. The fiscal quarters of Borrower end on the last day of March, June, September and December. 
 “Responsible Officer” means any authorized officer of Borrower. 
 “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 other than redemption of the Preferred Stock subsequent to
(i) repayment of all the Obligations and (ii) the seventh anniversary of the issuance of the Preferred Stock; (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 Preferred Stock; provided, however, that (i) payments of principal with respect to the Senior Debt in any twelve month
period shall not exceed $400,000 except to provide for the last payment of principal on the Term Loan A (as such term is defined in the Senior Loan Agreement) and (ii) payment of dividends with respect to the Preferred Stock shall accrue but
not be payable during the first and second Loan Year and thereafter at the discretion of the Disinterested Directors; 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 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, the Mortgage, the
Intellectual Property Security Agreement, the Environmental Indemnity Agreement, the Assignment of Life Insurance and the Assignment of Purchase Contract. 
 “Seller” means Qua Tech, Inc., an Ohio corporation. 
 “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 Three Hundred
Thousand and 00/100 Dollars ($2,300,000.00) in the aggregate, and any refinance, replacement, amendment or modification thereof in accordance with the Intercreditor Agreement. 
 “Senior Lender” means National City Bank, a national banking association having a banking office at 1 Cascade Plaza, Akron, Ohio 44308.

  

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 “Senior Loan Agreement” means that certain Credit Agreement of even date herewith among
Borrower and Senior Lender, as the same may be amended, supplemented, replaced or refinanced from time to time in compliance with terms of the Intercreditor Agreement. 
 “Senior Loan Documents” means the Senior Loan Agreement, and all other documents which create, evidence or secure the Senior Debt from time to time as any of the same may be amended, supplemented,
replaced or refinanced from time to time in compliance with the terms of the Intercreditor Agreement. 
 “Senior Loans”
means the loans made to Borrower pursuant to the terms of the Senior Loan Agreement. 
 “Shareholders Agreement” means the
Shareholders Agreement dated July 28, 2000 by and among Borrower and the Shareholders of Borrower named therein. 
 “Subordinated Note” means the Subordinated Term Promissory Subordinated Note referred to in Section 2.2 hereof to evidence the Loan. 
 “Subsidiary” means, with respect to any Person, a corporation, partnership, limited liability company, or other entity of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability
company, or other entity are at the time owned, by such Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to any Subsidiary or all Subsidiaries of Borrower
(including Borrower), whether now in existence or hereafter organized. 
 “Uniform Commercial Code” or
“UCC” means the Uniform Commercial Code in each case in effect in the jurisdiction where the Collateral is located. 
 “UCC Financing Statements” mean the UCC financing statements naming Borrower as debtor,
and Lender as secured party or creditor, which UCC financing statements describe all or some portion of the Collateral and which together perfect Lender’s security interest in the Collateral. 
 “Warrant” or “Warrants” means one or more of the warrants in substantially the form as of Exhibit D, to be issued by
Borrower to HillStreet pursuant to the Warrant Agreement. 
 “Warrant Agreement” means the warrant agreement dated as of the
Closing Date between Borrower and HillStreet in substantially the form as Exhibit E. 
  

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 Section 1.2 Rules of Construction. 
 (a) Use of Capitalized Terms. For purposes of this Agreement, unless the context otherwise requires, the capitalized terms used in
this Agreement shall have the meanings herein assigned to them, and such definitions shall be applicable to both singular and plural forms of such terms. In addition, all terms defined in the Uniform Commercial Code shall have the meanings given
therein unless otherwise defined herein. 
 (b) Construction. All references in this Agreement to the single number and
neuter gender shall be deemed to mean and include the plural number and all genders, and vice versa, unless the context shall otherwise require. 
 (c) Headings. The underlined headings contained herein are for convenience only and shall not affect the interpretation of this Agreement. 
 (d) Entire Agreement. This Agreement and the other Loan Documents shall constitute the entire agreement of the parties with respect
to the subject matter hereof. 
 (e) Severability. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. 
 (f) Governing Law. This Agreement and
the Subordinated Note and the rights and obligations of the parties under this Agreement and the Subordinated Note shall be governed by, and construed and interpreted in accordance with, the law of the State of Ohio. 
 (g) Accounting Terms and Determinations. Unless otherwise defined or specified herein, all accounting terms used in this Loan
Agreement shall be construed in accordance with GAAP. 
 ARTICLE 2. 
 LOAN TERMS AND AMOUNTS 
 Section 2.1 Loan Commitment. Subject to the terms
and conditions of this Agreement, the Lender hereby agrees to make a term loan to Borrower in the amount of Three Million and 00/100 Dollars ($3,000,000.00) (the “Loan”). 
  

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 Section 2.2 Promissory Subordinated Note. The absolute and unconditional obligation of the
Borrower to repay to Lender the principal of the Loan and the interest thereon shall be evidenced by a subordinated term promissory note executed by the Borrower in substantially the form of Exhibit F (the “Subordinated Note”). The
Subordinated Note shall include the following terms: 
 (a) Term. The Subordinated Note shall be dated as of the
Closing Date and shall mature and be due and payable in full on July 31, 2007. 
 (b) Interest Rate. Except as
provided in Section 2.4 hereof, the Subordinated Note shall bear interest (computed on the basis of the actual number of days elapsed over a 360-day year) on the daily outstanding principal balance thereunder at a rate per annum equal to
fifteen percent (15%). 
 (c) Interest Payment Dates. Interest on the Subordinated Note shall be payable in arrears
monthly on each Interest Payment Date commencing August 30, 2000, and ending on the date the Loan is due (whether by maturity, acceleration or otherwise). 
 (d) Principal Payments. Prior to August 31, 2005, provided that Lender has not accelerated the Loan pursuant to
Section 9.9 hereof, Borrower shall not be obligated to make any payment of principal on the Loan. Beginning August 31, 2005, quarterly installments of principal on the Subordinated Note shall be payable on each Principal Payment Date in an
amount equal to Three Hundred Sixty Two Thousand Five Hundred and 00/100 Dollars ($375,000.00), and on the date the Loan is due (whether by maturity, acceleration or otherwise), in an amount sufficient to pay in full the entire unpaid principal and
accrued interest. 
 Section 2.3 Fees. 
 (a) Closing Fees. At Closing, the Lender shall receive its closing fee in the amount of One Hundred Thirty-Five Thousand and 00/100
Dollars ($135,000.00) less any deposits made by Borrower, payable in immediately available funds or as Lender otherwise directs. 
 (b) Other Fees. The Borrower shall, promptly upon request, reimburse the Lender for all reasonable loan administration, travel and related out-of-pocket expenses, including reasonable attorney fees and expenses for the term of the
Loan and the equity participation of Lender contemplated hereunder. 
  

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 Section 2.4 Interest on Overdue Payments; Default Rate. If any payment of interest or
principal is not paid when due, or upon the occurrence of an Event of Default, the Lender, at its option, may charge and collect from the Borrower interest at the Default Rate. 
 Section 2.5 Prepayments. 
 (a) Permitted Prepayments - Prepayment from Life Insurance. In the event Borrower receives proceeds from payment of the Life Insurance, the proceeds shall be applied in the manner set forth in Section 2.7 hereof. 
 (b) Optional Prepayment. Except as provided for in Section 2.5(c) hereto, Borrower shall have no right to prepay the Loan
during the first three Loan Years. If Borrower shall prepay the Loan in whole or in part after the third Loan Year, Borrower shall pay to Lender, as liquidated damages and compensation for the costs of being prepared to make funds available to
Borrower under this Agreement, and not as a penalty, an amount determined by multiplying (x) the amount of the prepayment times (y) (i) five percent (5%) if such prepayment occurs during the fourth Loan Year, four percent
(4%) if such prepayment occurs during the fifth Loan Year, and three percent (3%) if such prepayment occurs during the sixth Loan Year (the “Prepayment Fee”) (a prepayment in the seventh Loan Year may be made without premium or
penalty); provided, however, that if such prepayment occurs as a result of any event described in Section 2.5(a) or 2.5(c) hereof, no Prepayment Fee shall be required. 
 (c) Notwithstanding the provisions of Section 2.5(b) above, Borrower shall have the right to prepay the Loan at any time, without a
Prepayment Fee, in connection with (i) any consolidation or merger of Borrower pursuant to which Borrower’s Capital Stock would be converted into cash, securities or other property, other than a merger or consolidation of Borrower in which
the holders of the common stock of Borrower, 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 convertible into
common stock, of the surviving corporation immediately after the merger as they had of Borrower’s common stock immediately prior to such merger, or (ii) the sale, lease, conveyance or other disposition of all or substantially all of
Borrower’s assets as an entirety or substantially as an entirety, to any Person, other than an Affiliate or associate of Borrower, in one or a series of transactions. 
 Section 2.6 Time and Place of Payments. Notwithstanding anything in this Agreement or any of the other Loan Documents to the contrary, each
payment payable by the Borrower to the Lender under this Agreement or any of the other Loan Documents, shall be made directly to the 

  

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Lender, at Lender’s Head Office, not later than 12:00 p.m. local time, on the due date of each such payment in immediately available and freely
transferable funds. 
 Section 2.7 Application of Funds. Unless otherwise provided in this Article 2, the funds received by the
Lender shall be applied toward the Obligations as follows: 
 (a) First, to the payment of all fees, charges and other sums
(with the exception of principal and interest) due and payable to the Lender under the Subordinated Note, this Agreement or the other Loan Documents at such time including, without limitation, all reasonable costs, expenses, disbursements and losses
which shall have been incurred or sustained by the Lender in or incidental to the collection of the Obligations hereunder or the exercise, protection, or enforcement by the Lender of all or any of the rights, remedies, powers and privileges of the
Lender under this Agreement, the Subordinated Note, or any of the other Loan Documents and in and towards the provision of adequate indemnity to the Lender against all taxes or Liens which by law shall have, or may have priority over the rights of
the Lender in and to such funds; 
 (b) Second, to the payment of the interest that is due and payable on the principal of the
Subordinated Note at the time of such payment; 
 (c) Third, to the payment of principal then due on the Subordinated Note;
and 
 (d) Fourth, the surplus remaining (if any) to the Borrower or such other Person or Persons as may be determined by
Borrower or any court of competent jurisdiction. 
 Section 2.8 Use of Proceeds. Borrower represents, warrants and covenants to
the Lender that all proceeds of the Loan shall be used by the Borrower to finance in part the Acquisition Transaction and the reasonable costs related thereto. 
 Section 2.9 Payments to be Free of Deductions. Each payment payable by the Borrower to the Lender under this Agreement, the Subordinated Note, or any of the other Loan Documents shall be made in accordance
with Section 2.6 hereof, without set-off or counterclaim and free and clear of and without any deduction of any kind for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, restrictions or conditions of any nature now
or hereafter imposed or levied by any political subdivision or any taxing or other authority therein, unless the Borrower is compelled by law to make any such deduction or withholding. 
  

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 ARTICLE 3. 
 SECURITY INTERESTS 
 Section 3.1 Grant of Security Interest. To secure the payment and
performance of all of the Obligations, the Borrower hereby grants to the Lender a continuing security interest in and assigns to the Lender all of the Collateral. To secure further such liabilities and Obligations, Borrower has granted to Lender a
lien upon the real property described on Schedule 3.1, by executing and delivering to Lender a Mortgage subject only to the prior liens in favor of the Senior Lender as provided herein and in the Intercreditor Agreement. The Collateral shall also
include the property and rights subject to the Assignment of Life Insurance with respect to the Life Insurance in a form reasonably satisfactory to the Lender. 
 Section 3.2 Additional Collateral. Subject to the prior Liens of Senior Lender, immediately upon Borrower’s receipt of that portion of the Collateral which is evidenced or secured by an agreement,
letter of credit, instrument and/or documents including, without limitation, promissory notes, documents of title, warehouse receipts and trade acceptances (the “Additional Collateral”), Borrower shall deliver the original thereof
to Lender, together with appropriate endorsements, the documents required to draw thereunder (as may be relevant to letters of credit) and/or other specific evidence (in form and substance acceptable to Lender) of assignment thereof to Lender.

 Section 3.3 Additional Security for the Loan. As additional collateral security for the Obligations, Borrower shall deliver to
Lender the Intellectual Property Security Agreement, and any other instrument required to perfect a security interest in any of the Collateral, which Agreements constitute part of the Security Documents hereunder. 
 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) Borrower 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. The execution, 

  

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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 Borrower 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 Borrower; and the Borrower has 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. Borrower is, and will be after giving effect to the Acquisition 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 Borrower.

 (b) The authorized Capital Stock of Borrower is as set forth on Schedule 4.1(b) hereto. Except for the Warrants, or as
described on Schedule 4.1(b) hereto, there are no outstanding options, rights or warrants issued by Borrower for the acquisition of the Capital Stock of Borrower, nor any outstanding securities or obligations convertible into Capital Stock.

 (c) Borrower has no Subsidiaries except as set forth on Schedule 4.1(c) hereto. The Capital Stock of each Subsidiary is
owned by 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. Each Subsidiary is currently qualified in good standing as a foreign corporation in
each jurisdiction set forth on Schedule 4.1(c). 
 (d) Borrower does not own or hold of record (whether directly or
indirectly) any shares of any class in the capital of any corporation, nor does 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. 
  

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 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 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 Borrower or against any of its 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. Attached to Schedule 4.4 are complete and correct copies of (i) the balance sheets of the Seller
as of December 31, 1999 and 1998 and the related statements of operations, retained earnings and cash flows for the two-year period ended December 31, 1999, together with the related notes and schedules (the “Year-End Financial
Statements”), (ii) the balance sheet of the Seller as of February 29, 2000, together with any related statements and notes, and (iii) the balance sheet and income statement of the Seller as of June 30, 2000, together with
any related statements and notes (the “Interim Financial Statements”). The Year-End Financial Statements and the Interim Financial Statements are herein collectively called the “Financial Statements”. The Financial Statements
have been prepared from the books and records of the Seller in conformity with generally accepted accounting principles applied on a basis consistent with preceding years and throughout the periods involved (“GAAP”) (except as disclosed
therein or on Schedule 4.4 hereto), and present fairly in all material respects the financial position and results of operations of the Seller as of the dates of such statements and for the periods covered thereby. The books of account of the
Seller 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 the Seller 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. 
 Section 4.6 No Default. Borrower is not 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 Conditions Precedent. Prior to the funding of the initial Loan to Borrower under this Agreement, all conditions precedent listed
in Article 8 hereof will have been satisfied. 
  

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 Section 4.8 Ownership of Property; Liens. Borrower has good and marketable title to all its
property as listed on the Financial Statements or acquired pursuant to the Purchase Agreement, and none of such property is subject to any Lien except Permitted Liens. 
 Section 4.9 Intellectual Property. 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 Acquisition Transaction, and all such licenses, patents, permits, trademarks, trade names, and copyrights are listed on Schedule 4.9 attached hereto and made a part hereof. Except as
set forth on Schedule 4.9, 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. Except as set forth on Schedule 4.9, the use of such property and rights by the Borrower does not infringe on the rights of any Person. 
 Section 4.10 Compliance with Laws. 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 4.11 Taxes. With respect to Borrower and any Subsidiary, except as set forth on
Schedule 4.11, 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 the Borrower); no tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge. 
 Section 4.12 Environmental Matters. Except as set forth on Schedule 4.12 hereto, to the Borrower’s knowledge,
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 4.13 Place of Business. The Borrower maintains places of business and owns Collateral only at the Principal Office. Borrower
maintains its books of account and records, including all records concerning the Collateral, only at the Principal Offices. 
  

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 Section 4.14 General Collateral Representation. Subject in each case, to the liens of the
Senior Lender: 
 (a) The Borrower is the sole owner of and has good and marketable title to the Collateral, free from all
Liens, other than the Permitted Liens, and has 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 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 Lender pursuant to this Agreement,
or (iii) 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 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 4.14 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 4.10 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. 
  

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 Section 4.15 Accounts. As to each and every Account of Borrower, 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 4.14(c) hereof. 
 Section 4.16 Equipment. All Equipment is located at Borrower’s Principal Offices. No Equipment is now stored with a bailee, warehouseman
or similar party. All Equipment necessary for the conduct of Borrower’s business or reflected on the Financial Statements is currently usable or currently saleable in the normal course of Borrower’s business. 
 Section 4.17 ER1SA. Schedule 4.17 contains a list of all Employee Benefit Plans maintained by Borrower. Borrower and its 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 4.18 Undisclosed Liabilities. Borrower has no 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 (a) liabilities reflected on the Financial Statements; (b) 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); (c) liabilities or obligations disclosed in the Schedules hereto; and (d) 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. 
 Section 4.19 Disclosure. 
 (a) All factual information furnished by or on behalf of 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 

  

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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 4.20 Solvency. Borrower is solvent and will continue to be solvent after consummation of the Acquisition Transaction, and creation of
the Obligations hereunder and under the Senior Loan Documents, the security interests of Lender and Senior Lender and the other transactions contemplated hereby and by the Senior Loan Documents. Borrower is able to pay its debts as they mature and
has sufficient capital to carry on its business. 
 Section 4.21 Survival of Representations and Warranties. The foregoing
representations and warranties are made by the Borrower with the knowledge and intention that 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 Borrower agree as follows:

 Section 5.1 Financial Statements. 
 (a)
Year End Report. (i) As soon as available, but in any event within ninety (90) days after the end of each fiscal year of Borrower. Borrower shall deliver to the Lender copies of the Consolidated audited financial statements of
Borrower and any Subsidiary, including the balance sheets, as at the end of such year and the related statements of income, cash flow and retained earnings for such year, in each case containing in comparative form the figures for the previous year. The Consolidated audited financial statements of Borrower shall be accompanied by an audit opinion of
independent certified public accountants of nationally or regionally recognized standing, stating that such financial statements fairly present the respective financial positions of Borrower and any Subsidiary and the results of operations and
changes in cash flows for the fiscal year then ended in conformity with GAAP, and (ii) as soon as available, but in any event thirty (30) days prior to the last day of each fiscal year of Borrower, Borrower shall deliver Consolidated and
consolidating 

  

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financial projections and a management-prepared budget for Borrower prepared on a monthly basis for the next year. 
 (b) Quarterly Reports. As soon as available, but in any event not later than thirty (30) days after the end of each quarter,
the Borrower shall deliver to the Lender copies of the Consolidated balance sheets of Borrower and any Subsidiary as of the end of such quarter and the related unaudited statements of income, cash flow and retained earnings for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer of Borrower and prepared in accordance with GAAP applied on a basis
consistent with the preceding years’ statements (subject to normal year-end audit adjustments). 
 (c) Monthly
Reports. As soon as available, but in any event not later than fifteen (15) days after the end of each month, the Borrower shall deliver to the Lender copses of the Consolidated balance sheets of Borrower and any Subsidiary as of the end of
such month and the related unaudited statements of income, cash flow and retained earnings for such month and the portion of the fiscal year through the end of such month, setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer of Borrower and prepared in accordance with GAAP applied on a basis consistent with the preceding years’ statements (subject to normal year-end audit adjustments). 
 (d) Reports to Management. Simultaneously with the delivery of the financial statements described in Sections 5.1(a), 5.1(b) and
5.1(c), 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. 
 (e) Compliance Certificates. Simultaneously with the delivery of the financial statements described in Section 5.1(b), the
Borrower shall furnish to the Lender a Compliance Certificate executed by a Responsible Officer of 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.

 (f) Borrower shall promptly furnish to Lender copies of all material reports and notices delivered to Senior Lender
pursuant to the Senior Loan Documents or to the shareholders of Borrower pursuant to the Shareholders Agreement. 
 Section 5.2
Conduct of Business and Maintenance of Existence. Borrower shall continue to engage in business of the same general type in all material respects as now conducted by it and 

  

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preserve, renew and keep in full force and effect its existence and take all reasonable action to maintain all rights, privileges and franchises necessary
for the normal conduct of its business. Borrower shall comply with all Contractual Obligations and Requirements of Law. 
 Section 5.3
Maintenance of Property; Insurance. Borrower shall keep all property useful and necessary in its 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 its real and personal property in amounts consistent with past practices of Borrower (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 the Lender, promptly after written request,
any information as to the insurance carried, If Borrower fails to do so, the Lender may obtain such insurance and charge the cost thereof to the Borrower’s account and add it to the Obligations. The Borrower agrees 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 Borrower shall be
entitled to retain such proceeds for the purpose of repairing or replacing the insured property, provided that the Borrower 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. Borrower shall, at all times, maintain in
full force and effect such liability insurance with respect to its 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.
Borrower 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 the Borrower; 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 

  

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business hours and Borrower 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 Borrower as they may deem reasonably necessary or appropriate at the time. 
 Section 5.6 Notices. Borrower shall promptly give notice to the Lender of: 
 (a) the occurrence of any Default or Event of Default; 
 (b) any (i) default or event of default under any Contractual Obligation relating to any Indebtedness of Borrower, and any
(ii) 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 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, condition (financial or otherwise) of Borrower 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 Borrower 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. Borrower 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, Borrower 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 Borrower); and 
  

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 (b) promptly notify the Lender of any change in location of any of the Inventory and,
prior to any such change, execute and deliver to the Lender such UCC financing statements satisfactory to the Lender as the Lender may request. 
 Section 5.9 Equipment. Borrower 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. Borrower 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. Borrower will and will cause each of its ERISA Affiliates to (a) comply in all material respects
with all requirements imposed by ERISA and the Code applicable from time to time to any Employee Benefit Plans of Borrower or any ERISA Affiliates; (b) 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; (c) file on a timely basis all reports, notices and other filings required by any governmental agency with respect to any such Employee Benefit Plans;
(d) 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
(e) 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. Borrower 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, 

  

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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. Within 30 days of the Closing Date, Borrower shall obtain the Life Insurance and assign the same to Lender as
collateral security hereunder pursuant to an Assignment of Life Insurance acceptable to Lender, and 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 Borrower or any Subsidiary of
any application for letters patent or the registration of any trademarks, trade names or copyrights, Borrower 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. Borrower 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 (a) the Obligations, or (b) the Warrant or Capital Stock issued upon the exercise thereof remain outstanding and owned or held by Lender, Lender shall be entitled to
designate one (1) Person as a member of the Board of Directors of Borrower and to attend the meetings of any committee thereof and Lender shall be entitled to receive at least ten (10) days’ prior written notice of all such meetings.
Borrower shall promptly reimburse such member of the Board of Directors for all reasonable out-of-pocket expenses incurred in attending such meetings and legal expenses incurred in fulfilling the fiduciary or other duties and responsibilities of
such member. 
 ARTICLE 6. 
 NEGATIVE COVENANTS 
 The Borrower covenant and agree with the Lender and warrants that, as long as the Loan or Warrant shall remain
unpaid or unexercised, as the case may be: 
 Section 6.1 Limitations on Restricted Payments. Without the prior written consent
of Lender, the Borrower shall not, at any time, enter into, participate in, or make any Restricted Payment. 
  

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 Section 6.2 Limitations on Indebtedness. The Borrower 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 Preferred
Stock or permitted by the Senior Loan Documents; 
 (c) Guarantee Obligations permitted under Section 6.3 hereof;

 (d) current liabilities of Borrower incurred in the ordinary course of business (i) not incurred through the borrowing
of money, or (ii) 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 Borrower 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 Borrower incurred to refinance or
replace Indebtedness of such Person permitted hereunder; provided, that (i) the principal amount (or committed principal amount) of such refinancing Indebtedness shall not exceed the outstanding principal amount (or committed principal
amount) of the Indebtedness being refinanced, (ii) the terms of such refinancing are not more 

  

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onerous taken as a whole to such Person than the terms of the Indebtedness being refinanced, and (iii) the Lender shall have consented to the incurrence
of such refinancing Indebtedness; and 
 (j) Indebtedness pursuant to the Purchase Agreement. 
 Section 6.3 Limitation on Guarantee Obligations. The Borrower 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 Borrower 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. Borrower shall not merge, consolidate
or amalgamate, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or make any material change in its business or its present method of conducting business as contemplated by the Acquisition Transaction. 

Section 6.5 Limitation on Dispositions of Assets. Without the prior written consent of Lender, which shall not be unreasonably withheld,
Borrower 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 its 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. Borrower 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, 

  

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in settlement of delinquent obligations or disputes; and (i) transactions contemplated by, or required of Borrower, under the Purchase Agreement,
Warrant Agreement or the Warrant. 
 Section 6.7 Limitation on Payments and Modifications of Debt Instruments. The Borrower 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.
Borrower will not create or form any new Subsidiary. 
 Section 6.9 Corporate Documents. Borrower shall not make any material
change, amendment or modification to its Articles of Incorporation or By-Laws without the prior written consent of Lender. 
 Section 6.10 Dividends and Similar Transactions. Except as otherwise permitted under Section 6.1, Borrower shall not declare or pay any dividends or make any other payments on its capital stock; issue, redeem, repurchase or
retire any of its capital stock; grant or issue any warrant, right or option pertaining thereto (except for stock options granted by Borrower to management employees not to exceed, in the aggregate, ten percent (10%) of the outstanding Capital
Stock of Borrower on a fully-diluted basis at a price not less than the greater of fair market value at the time of issuance or as of the date hereof) or other security convertible into any of the foregoing except for such grants and issuances of
Capital Stock or other securities convertible into Capital Stock in compliance with the terms of Warrant Agreement and Warrant; or make any distribution to its stockholders. 
 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. 
 Section 6.12 Management Compensation. Neither Borrower nor any Subsidiary shall pay or enter into an agreement to pay any management employee of Borrower yearly Compensation in excess of the amounts set forth on Schedule 6.12.
As used herein, “Compensation” shall mean all 

  

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forms of direct and indirect remuneration and include, without limitation, salaries, commissions, bonuses, securities, property, insurance benefits, personal
benefits and contingent forms of remuneration. 
 Section 6.13 Changes Relating to Indebtedness. Without the consent of Lender,
such consent not to be unreasonably withheld, Borrower will not, and will not permit any of its Subsidiaries to change or amend the terms of (i) the Senior Debt 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 Borrower under the Senior Debt, or the amount of any fees payable under the Senior Debt, or require the Borrower to pay any additional fees under or
with respect to the Senior Debt (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, (c) imposing any additional prepayment obligations on the Borrower with respect to the Senior Debt, (d) increasing the aggregate principal amount of the Senior Debt, or (e) permitting the incurrence of additional
indebtedness, or (ii) the Shareholders Agreement. 
 ARTICLE 7. 
 FINANCIAL COVENANTS 
 Section 7.1 Limitations on Capital Expenditures. The
Borrowers shall not, without first obtaining the written consent of the Lender, make Capital Expenditures from the date hereof through the end of its first fiscal year or during any subsequent fiscal year in an aggregate amount greater than the
amounts specified below: 
  

				
	 Closing through end of first fiscal year:
	  	$	65,000
	 Second full fiscal year:
	  	$	135,000
	 Third full fiscal year:
(and each full fiscal year thereafter)
	  	$	20,000

 Section 7.2 Minimum EBITDA. On each time period set forth below, the Borrower shall
not permit its Consolidated EBITDA to be less than the minimum amount set forth below: 
  

				
	 TIME PERIOD
	  	MINIMUM EBITDA
	 The Closing Date up to and including September 30, 2000
	  	$	250,000.00
	 October 1, 2000 up to and including December 31, 2000
	  	$	375,000.00
	 any period of twelve (12) consecutive months thereafter
	  	$	1,500,000.00

  

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 Section 7.3 Senior Loan Agreement Covenants. Borrower shall comply with the covenants set
forth in Section 3B of the Senior Loan Agreement, each of which is incorporated herein by reference. 
 ARTICLE 8. 
 CONDITIONS PRECEDENT 
 Section 8.1
Conditions Precedent to Initial Loan. The obligation of Lender to make the initial Loan to Borrower under this Agreement on the Closing Date is subject to the satisfaction of the following conditions precedent (in form, substance and action
as is satisfactory to Lender, in its sole discretion): 
 (a) Certified Copies of Charter Documents. Lender shall have
received from Borrower a copy, certified by a duly authorized officer of Borrower to be true and complete on and as of the Closing Date, of the charter or other organization documents and by-laws of Borrower as in effect on the Closing Date
(together with all, if any, amendments thereto); and (ii) the charter or other organization documents of Borrower certified by the applicable Secretary of State; 
 (b) Proof of Appropriate Action. Lender shall have received from Borrower a copy, certified by a duly authorized officer of
Borrower to be true and complete on and as of the Closing Date, of the records of all action taken by Borrower to authorize the Acquisition Transaction and the execution and delivery of this Agreement and any other agreements entered into on the
Closing Date and to which it is a party or is to become a party as contemplated or required by this Agreement, and its performance of all of its agreements and obligations under each of such documents; 
 (c) Incumbency Certificates. Lender shall have received from Borrower an incumbency certificate, dated the Closing Date, signed by
a duly authorized officer of Borrower and giving the name and bearing a specimen signature of each individual who shall 

  

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be authorized (i) to sign, in the name and on behalf of Borrower this Agreement and each of the other Loan Documents to which such person is or is to
become a party on the Closing Date, and (ii) to give notices and to take other action on behalf of Borrower under such documents; 
 (d) Representations and Warranties. Each of the representations and warranties made by and on behalf of the Borrower to the Lender in this Agreement and in the other Loan Documents shall be true and correct
when made, shall, for all purposes of this Agreement, be deemed to be repeated on and as of the Closing Date, and shall be true and correct in all material respects on and as of such date; 
 (e) Loan Documents, Etc. The Subordinated Note and each of the other Loan Documents and Warrant and Warrant Agreement, shall have
been duly and properly authorized, executed and delivered to the Lender by the respective party or parties thereto and shall be in full force and effect on and as of the Closing Date; 
 (f) Acquisition Transactions. Lender shall have received from Borrower certified copies of documents relative to the Acquisition
Transaction, including, without limitation, the Purchase Agreement and all schedules thereto, as Lender may request and such documents shall be in form and substance satisfactory to Lender; 
 (g) Intercreditor Agreement. Lender shall have received the Intercreditor Agreement in form and substance satisfactory to Lender;

 (h) Equity Contribution. Borrower shall have received (i) an equity contribution from Development Capital
Ventures, L.P. satisfactory to Lender, in the aggregate amount of not less than One Million Three Hundred and 00/100 Dollars ($1,300,000.00) (ii) an equity contribution from William J. Roberts and other investors satisfactory to Lender in an
aggregate amount of not less than Five Hundred Thousand and 00/100 Dollars ($500,000.00), and evidence of such contributions shall have been delivered to Lender. 
 (i) Insurance. Lender shall have received evidence that Borrower’s properties and assets are fully insured in such amounts,
against such risks, and with such insurers as may be reasonably satisfactory to Lender, with loss payable to Lender, together with the policies (containing a standard mortgagee clause, if appropriate) or certificates evidencing such insurance;

 (j) Performance, Etc. Borrower shall have duly and properly performed, complied with and observed its covenants,
agreements and obligations contained in each of 

  

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the Loan Documents. No event shall have occurred on or prior to the Closing Date, and no condition shall exist on the Closing Date, which constitutes a
Default or an Event of Default; 
 (k) Legal Opinion. The Lender shall have received a written legal opinion of counsel
to Borrower, addressed to the Lender, dated the Closing Date, which shall be acceptable to the Lender; 
 (l) Mortgage and
Title Insurance. The following documents each of which shall be executed (and, where appropriate, acknowledged) by Persons satisfactory to the Lender: 
 (i) the Mortgage, duly executed and delivered by Borrower (and where appropriate by the trustee thereunder) in recordable form (in such number of copies as the Lender shall have requested), together with such Uniform
Commercial Code financing statements as may be needed in order to perfect the security interests granted by the Mortgage in any fixtures and other property therein described which may be subject to the Uniform Commercial Code, in each case
appropriately completed and duly executed and in proper form for filing in all offices in which required; 
 (ii) with respect
to the Real Estate covered by the Mortgage, an ALTA Standard Form title insurance policy issued by Chicago Title Insurance Company, (the “Title Company”), in an amount equal to Six Hundred Thousand and 00/100 Dollars ($600,000.00),
insuring the validity and priority of the Liens created under the Mortgage, subject only to the encumbrances permitted by the Mortgage and which shall not contain exceptions for mechanics liens, persons in occupancy or matters which would be shown
by a survey (Lender hereby agrees that the survey exception can be deleted after the Closing Date), shall not insure over any matter except to the extent that any such affirmative insurance is acceptable to Lender in its reasonable discretion, and
shall contain such endorsements and affirmative insurance as the Lender, in its discretion, may require. 
 Borrower shall have paid to the Title Company all
expenses and premiums of the Title Company in connection with the issuance of such policies. In addition, Borrower shall have paid to the Title Company or the Lender’ an amount equal to all mortgage and mortgage recording taxes, intangibles
taxes, stamp taxes and other taxes payable in connection with the execution and delivery of the Mortgage and the obligations secured thereby and the recording of the Mortgage in the appropriate land offices. 
 (m) Consents. The Lender shall have received from the Borrower copies of all consents necessary for the completion of the
transactions contemplated by this Agreement. 

  

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the Subordinated Note, each of the Loan Documents, and all Instruments and Documents incidental thereto; 
 (n) Financial Statements. The Lender shall have received from the Borrower the Financial Statements of Seller, Borrower and any Subsidiary and such other Financial Statements requested by Lender and Lender shall be satisfied with the results of all
entities reflected therein; 
 (o) Legality of Transactions. It shall not be unlawful (a) for the Lender to
perform any of its agreements or obligations under any of the Loan Documents to which the Lender is a party on the date of such Loan, or (b) for the Borrower and any Subsidiary to perform any of its respective agreements or obligations under
any of the Loan Documents or the Acquisition Transaction to which they are a party on such date; 
 (p) Officer’s
Certificate. Lender shall have received from Borrower a certificate dated as of the Closing Date, signed by a duly authorized officer on behalf of Borrower and certifying that all of the representations and warranties made by and on behalf of
Borrower to Lender in this Agreement and in the other Loan Documents were true and correct in all material respects when made, and remain true and correct in all material respects on and as of the Closing Date; 
 (q) Due Diligence. Lender shall have conducted and completed due diligence on Borrower, Seller and the Acquisition Transaction to
Lender’s full satisfaction; 
 (r) Post-Closing Availability. After giving effect to the consummation of the
transactions contemplated hereby, by the Senior Loan Documents and by the Acquisition Transaction (including the payment of any fees and expenses associated therewith), the difference, as of the 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 [Four Hundred Sixty
Thousand and 00/100 Dollars ($460,000.00)]; and 
 ARTICLE 9. 
 EVENTS OF DEFAULT 
 Section 9.1 Payments. Failure by the Borrower to pay any Obligation within
three (3) business days of when due and payable. 
  

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 Section 9.2 Representations and Warranties. Any representation or warranty made by the
Borrower, or a Subsidiary, or any officer of Borrower, in this Agreement or in any Loan Document, including any certificate, document or financial or other statement furnished by Borrower at any time in connection herewith or therewith shall prove
to have been untrue in any material respect. 
 Section 9.3 Covenants. Default by Borrower or any Subsidiary in the observance or
performance of any covenant or agreement contained herein or in any Loan Document and, if such default is capable of being cured, and if such correction is being sought diligently, such default is not corrected within 30 days. 
 Section 9.4 Effectiveness of Loan Documents. Any Loan Document shall cease to be legal, valid, binding or enforceable in accordance with the
terms thereof in any material respect, or any of the Liens intended to be created by any Loan Document ceases to be or are not valid and perfected liens having the priority contemplated thereby. 
 Section 9.5 Cross-Default to Other Indebtedness. Borrower shall default in any payment of principal of or interest on any of its Indebtedness
in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) (other than any such default in respect of the Subordinated Note) or in the payment of any Guarantee Obligation relating to Indebtedness in excess of Twenty-Five Thousand and 00/100 Dollars
($25,000.00), beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness or Guarantee Obligation was created or default in the observance or performance of any other agreement or condition relating to
any such Indebtedness or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of
notice or the passage of time or both, if required, such Indebtedness to become due prior to its stated maturity or such Guarantee Obligation to become payable. 
 Section 9.6 Change of Control. Any Change of Control shall occur. 
 Section 9.7
Commencement of Bankruptcy or Reorganization Proceeding. 
 (a) Borrower shall commence any case, proceeding or other
action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, wind-up, liquidation, dissolution, composition or 

  

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other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all
or any substantial part of its assets; or 
 (b) There shall be commenced against Borrower any such case, proceeding or other
action which results in the entry of an order for relief or any such adjudication or appointment or remains undismissed, undischarged or unbonded for a period of sixty (60) days; or 
 (c) There shall be commenced against Borrower any case, proceeding or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or 
 (d) Borrower shall suspend the operation of its business or take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts set forth above in this Section 9.7; or 
 (e) Borrower shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due. 
 Section 9.8 Material Judgments. One or more judgments or decrees shall be entered against Borrower or any Subsidiary involving in the aggregate a liability (not covered by insurance) of Fifty thousand and 00/100 Dollars
($50,000,00) or more and all such judgments or decrees shall not have been vacated, satisfied, discharged or bonded pending appeal within thirty (30) days from the entry thereof. 
 Section 9.9 Remedies. Upon the occurrence of an Event of Default described in this Article 9, the Lender, at its option, may: 
 (a) declare the Obligations of the Borrower immediately due and payable, without presentment, notice, protest or demand of any kind for
the payment of all or any part of the Obligations (all of which are expressly waived by the Borrower) and exercise all of its rights and remedies against the Borrower and any Subsidiary and any Collateral provided herein or in any other agreement
among the Borrower and the Lender or any other party; and 
 (b) exercise all rights granted to a secured party under the
Uniform Commercial Code or otherwise. 
  

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 Upon the occurrence of an Event of Default, the Lender may take possession of the Collateral, or any part thereof, and
Borrower hereby grants the Lender authority to enter upon any premises on which the Collateral may be situated, and remove the Collateral from such premises or use such premises, together with the materials, supplies, books and records of the
Borrower, to maintain possession and/or the condition of the Collateral and to prepare the Collateral for sale. The Borrower shall, upon demand by the Lender, assemble the Collateral and make it available at a place designated by the Lender which is
reasonably convenient to all parties. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Lender will give the Borrower reasonable notice of the time and place of
any public sale thereof or of the time after which any private sales or other intended disposition thereof is to be made. The requirement of reasonable notice shall be met if such notice is mailed, postage prepaid, to the address of the Borrower set
forth in Section 11.3 hereof at least ten (10) days prior to the time of such sale or disposition. 
 Section 9.10 Set-off.
The Lender shall have the right, without prior notice to the Borrower, as provided by applicable law, any such notice being expressly waived to the extent permitted by applicable law, to set-off and apply against any of the Obligations, whether
matured or unmatured, any amount owing from the Lender to the Borrower at, or at any time after, the happening of any Event of Default, and such right of set-off may be exercised by the Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, custodian or execution, judgment or attachment creditor of Borrower, or against anyone else claiming through or against Borrower or such trustee in bankruptcy, debtor
in possession, assignee for the benefit of creditors, receivers, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off shall not have been exercised by the Lender prior to the making, filing or issuance,
or service upon the Lender of, or of notice of, any such petition, assignment for the benefit of creditors, appointment or application for the appointment of a receiver, or issuance of execution, subpoena, order or warrant. The Lender agrees
promptly to notify the Borrower after any such set-off and application made by the Lender; provided, that the failure to give such notice shall not affect the validity of such set-off and application. 
 Section 9.11 Rights Cumulative; Waiver. The rights, options and remedies of the Lender shall be cumulative and no failure or delay by the
Lender in exercising any right, option or remedy shall be deemed a waiver thereof or of any other right, option or remedy, or waiver of any Event of Default hereunder, nor shall any single or partial exercise of any such right, power or remedy
preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The Lender shall not be deemed to have waived any of the Lender’s rights hereunder or under any other agreement, instrument or paper
signed by Borrower unless such waiver shall be in writing and signed by the Lender 
  

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 ARTICLE 10. 
 COLLECTION OF COLLATERAL AND NOTICE OF ASSIGNMENT 
 Section 10.1 Notification of Debtors; Grant of
Powers. Lender shall have the right at any time after the occurrence of an Event of Default to notify Account Debtors of its security interest in the Accounts and to require payments to be made directly to the Lender at such address or in such
manner as the Lender may deem appropriate. Upon request of the Lender at any time after the occurrence of an Event of Default, the Borrower will so notify the Account Debtors and will indicate on all billings to the Account Debtors that the Accounts
are payable to the Lender. To facilitate direct collection, Borrower hereby appoints the Lender and any officer or employee of the Lender as the Lender may from time to time designate, as attorney-in-fact for Borrower if after the occurrence of an
Event of Default to (a) receive, open and dispose of all mail addressed to Borrower and take therefrom any payments on or proceeds of Accounts, (b) take over the Borrower’s post office boxes or make other arrangements, in which the
Borrower shall cooperate, to receive the Borrower’s mail, including notifying the post office authorities to change the address for delivery of mail addressed to Borrower to such address as the Lender shall designate, (c) endorse the name
of Borrower in favor of the Lender upon any and all checks, drafts, money orders, notes, acceptances or other evidences or payment or Collateral that may come into the Lender’s possession, (d) sign and endorse the name of Borrower on any
invoice or bill of lading relating to any of the Accounts, on verifications of Accounts sent to any Account Debtor, to drafts against Account Debtors, to assignments of Accounts and to notices to Debtors, and (e) do all acts and things
necessary to carry out this Agreement, including signing the name of the Borrower on any instruments required by law in connection with the transactions contemplated hereby and on Financing Statements as permitted by the Uniform Commercial Code. The
Borrower hereby ratifies and approves all acts of such attorneys-in-fact, and neither the Lender nor any other such attorney-in-fact shall be liable for any acts of commission or omission, or for any error of judgment or mistake of fact or law,
excluding acts of the Lender or such attorney-in-fact that are willful, malicious or grossly negligent. This power, being coupled with an interest, is irrevocable if after the occurrence of an Event of Default so long as any of the Obligations
remain unsatisfied. 
 Section 10.2 Disclaimer of Liability. The Lender shall not, under any circumstances, be liable for any
error or omission or delay of any kind occurring in the settlement, collection or payment of any Accounts or any instruments received in payment thereof or for any damage resulting therefrom, unless caused by the Lender’s willful, malicious or
grossly negligent acts. Lender may, without notice to or consent from the Borrower, sue upon or otherwise collect, extend the time of payment of, or compromise or settle for cash, credit or otherwise upon any terms, any of the Accounts or any
securities, instruments or insurance applicable thereto and/or release the obligor thereon. Lender is authorized to accept the return of the goods represented by any of the Accounts, without notice to or consent by the Borrower, or without
discharging or in any way 

  

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affecting the Obligations hereunder. The Lender shall not be liable for or prejudiced by any loss, depreciation or other damage to Accounts or other
Collateral unless caused by the Lender’s willful, malicious or grossly negligent act, and the Lender shall have no duty to take any action to preserve or collect any Account or other Collateral. 
 ARTICLE 11. 
 MISCELLANEOUS 
 Section 11.1 Amendments and Waivers. The Borrower and the Lender may amend this Agreement, the Subordinated Note, or the other Loan Documents
to which they are parties, and the Lender may waive future compliance by the Borrower with any provision of this Agreement, the Subordinated Note, or such other Loan Documents, but no such amendment or waiver shall be effective unless in a written
instrument executed by an authorized officer of the Lender and Borrower and provided any such amendment does not violate the terms of the Intercreditor Agreement. 
 Section 11.2 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 
 Section 11.3 Notices. All notices, consents, requests and demands to or upon the respective parties hereto shall be in writing and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, postage prepaid, or, in the case of facsimile, telex or telegraphic notice, when sent, addressed as follows: 
  

			
	If to the Lender:	  	The HillStreet Fund, L.P.
		  	300 Main Street
		  	Cincinnati, Ohio 45202
		  	Telephone: (513) 412-3682
		  	Facsimile:  (513) 412-3680
		  	Attention:   John P. Vota

  

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	With a copy to:	  	Keating, Muething & Klekamp, P.L.L.
		  	1400 Provident Tower
		  	Cincinnati, Ohio 45202
		  	Telephone: (513) 579-6595
		  	Facsimile:  (513) 579-6457
		  	Attention:   Timothy B. Matthews, Esq.,
		
	If to the Borrower:	  	WR Acquisition, Inc.
		  	662 Wolf Ledges Parkway
		  	Akron, Ohio 44311
		  	Attention: Steven Runkle
		
	With a copy to:	  	Richard D. Rose, Esq
		  	Buchanan Ingersoll
		  	301 Grant Street
		  	One Oxford Center
		  	Pittsburgh, PA 15219

 Notices of changes of address shall be given in the same manner. 
 Section 11.4 Power of Attorney. Borrower acknowledges and agrees that its appointment of Lender as its attorney and agent-in-fact after the
occurrence of an Event of Default for the purposes specified in this Agreement is an appointment coupled with an interest and shall be irrevocable until all of the Obligations are satisfied and this Agreement is terminated. 
 Section 11.5 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Lender and its
respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Lender, such consent not to be unreasonably withheld or delayed.

 Section 11.6 Assignment; Participation. Lender may assign, or sell a participation interest in, its rights and obligations
under this Agreement, the Subordinated Note and the other Loan Documents only with the prior written consent of Borrower, such consent not to be unreasonably withheld or delayed. In the case of an assignment, upon receipt of notice of such
assignment, Borrower shall deliver such documents necessary to evidence or perfect such assignment. Any such assignee shall be deemed a party hereto, and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
agreement, such assignee shall have the rights and obligations of a Lender hereunder. 
  

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 Section 11.7 Expenses. Borrower shall be responsible for payment of Lender’s reasonable
out-of-pocket costs and expenses incurred in connection with the preparation and negotiation of this Agreement and the making of the Loan hereunder, including the reasonable fees and expenses of the Lender’s counsel, and for all UCC search,
filing, recording and other costs connected with the perfection of the Lender’s security interest in the Collateral, (excluding any stamp, excise, or mortgage tax, levy or other taxes payable in connection with the consummation of the
transactions contemplated hereby), whether or not the transactions contemplated hereby are consummated. 
 Section 11.8 Post-Closing
Expenses and Collection. All costs and expenses incurred by the Lender after the closing of the transactions contemplated by this Agreement, in the administration of the Loan, Warrant Agreement or Warrant, and to obtain, enforce or preserve the
security interests granted by this Agreement and to collect the Obligations, all reasonable costs to maintain and preserve the Collateral and all reasonable attorneys’ fees and legal expenses incurred in obtaining or enforcing payment of any of
the Obligations or foreclosing the Lender’s security interest in any of the Collateral, whether through judicial proceedings or otherwise, or in enforcing or protecting its right’s and interests under this Agreement or under any other
instrument or document delivered pursuant hereto, or in protecting the rights of any holder or holders with respect thereto, or in defending or prosecuting any actions or proceedings arising out of or relating to this Agreement, shall be paid by the
Borrower to the Lender, upon demand, or, at the Lender’s election, charged to the Borrower’s account and added to the Obligations, and the Lender may take judgment against the Borrower for all such costs, expense and fees in addition to
all other amounts due from the Borrower hereunder. 
 Section 11.9 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 
 Section 11.10 Governing Law; Jurisdiction and Venue. THE LENDER ACCEPTS THIS AGREEMENT AT CINCINNATI, OHIO BY ACKNOWLEDGING AND AGREEING TO
IT THERE. ANY DISPUTE BETWEEN BORROWER, LENDER, OR ANY OTHER HOLDER OF SECURED OBLIGATIONS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE INTERNAL LAWS AND STATUTES OF LIMITATION (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF OHIO.

 The Lender and Borrower hereby designate all courts of record sitting in Cincinnati, Ohio, both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of 

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - 42 - 

 
this Agreement, the Subordinated Note, Loan Documents, or the transactions contemplated by this Agreement shall be prosecuted as to all parties, its
successors and assigns, and by the foregoing designations the Lender and Borrower consent to the jurisdiction and venue of such courts. Borrower WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN
THE STATE OF OHIO FOR THE PURPOSES OF LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH BORROWER. 
 Section 11.11 Waiver of Jury
Trial. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR THE LENDER TO EXTEND CREDIT TO BORROWER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL, BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO
THIS AGREEMENT OR ARISING IN ANY WAY FROM THE OBLIGATIONS. 
 Section 11.12 Other Waivers. Borrower waives notice of nonpayment,
demand, notice of demand, presentment, protest and notice of protest with respect to the Obligations, or notice of acceptance hereof, notice of Loan made, credit extended, Collateral received or delivered, or any other action taken in reliance
hereon, and all other demands and notices of any description, except such as are expressly provided for herein. 
 Remainder of page
intentionally left blank Signature pages follow 
  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC. 
 - 43 - 

 IN WITNESS WHEREOF, the parties have duly executed this Subordinated Loan and Security Agreement by their
duly authorized officers as of the date first above written. 
  

			
	BORROWER:
	
	 WR ACQUISITION, INC.

		
	 By:
	 	 /s/ William J. Roberts

	 Name:
	 	 William J. Roberts

	 Title:
	 	 President

			
	
	LENDER:
	
	 THE HILLSTREET FUND, L.P.

		
	 By:
	 	 HillStreet Capital, Inc.

	 Its:
	 	 Investment Manager

			
		
	 By:
	 	 /s/ John P. Vota

	 Name:
	 	 John P. Vota

	 Title:
	 	 EVP

  

 SUBORDINATED LOAN AND SECURITY AGREEMENT 
 WR ACQUISITION, INC.

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