ex103rla.htm


    Exhibit 10.3


    
      SECURITY
        AGREEMENT

       

      


      December
        ___, 2007

      TECHNOLOGY
        RESEARCH CORPORATION

      5250
        140th Avenue North

      Clearwater,
        Florida  34620

      ("Debtor")

      


      WACHOVIA
        BANK, NATIONAL ASSOCIATION

      225
        Water
        Street

      Jacksonville,
        Florida  32202

      ("Bank")

      


      For
        value
        received and to secure payment and performance of the Promissory Note executed
        by Debtor (also referred to herein as “Borrower”) dated as of even date
        herewith, in the original principal amount of $6,000,000.00, payable to Bank,
        and any extensions, renewals, modifications or novations thereof (the “Note”),
        this Security Agreement, the other Loan Documents, swap agreements (as defined
        in 11 U.S.C. § 101, as in effect from time to time) executed in connection with
        or related to the Loan Documents, future advances, and all costs and expenses
        incurred by Bank to obtain, preserve, perfect and enforce the security interest
        granted herein and to maintain, preserve and collect the property subject
        to the
        security interest (collectively, "Secured Obligations"), Debtor hereby grants
        to
        Bank a continuing security interest in and lien upon the following described
        property, whether now owned or hereafter acquired, and any additions,
        replacements, accessions, or substitutions thereof and all cash and non-cash
        proceeds and products thereof (collectively, "Collateral"):

      


      All
        accounts, together with all chattel paper and instruments, and all credit
        insurance, guaranties, letters of credit, and other security for any of the
        foregoing.

      


      All
        instruments, documents, chattel paper, goods, moneys, securities, drafts,
        and
        other property of Debtor now in possession of and at any time and from time
        to
        time hereafter delivered to Bank, its agents or affiliates, whether for
        safekeeping, pledge, custody, transmission, collection, or otherwise, and
        all of
        the Debtor's deposits, balances, sums, proceeds, and credits with, and any
        of
        its claims against Bank and affiliates of Bank, at any time existing, together
        with the increases and profits received therefrom and the proceeds thereof,
        including insurance payable because of loss or damage thereto.

      


      All
        of
        Debtor's demand deposit accounts, checking accounts, time savings accounts,
        certificates of deposit or other accounts of any nature maintained in or
        with
        Bank and affiliates of Bank.

      


      All
        inventory, including all raw materials and work in process to be processed
        into
        such inventory, and all accessions, attachments and other additions to,
        substitutes for, replacements for, improvements to and returns of such
        inventory, all accounts arising from the disposition of inventory.

      


      All
        products and proceeds (including investment property and security entitlements)
        of any of the property described above in any form, and all proceeds of such
        products.

      


      The
        securities referenced on Schedule "1" attached hereto and by this reference
        incorporated herein.

      


      Debtor
        hereby represents and agrees that:

      


      OWNERSHIP.  Debtor
        owns the Collateral.  The Collateral is free and clear of all liens,
        security interests, and claims except those previously reported in writing
        to
        and approved by Bank, and Debtor will keep the Collateral free and clear
        from
        all liens, security interests and claims, other than those granted to or
        approved by Bank.  Debtor will not borrow on margin or other credit
        secured by the Account or property in the Account from any party other than
        Bank.  All securities and security entitlements pledged as Collateral
        are fully paid and non-assessable and if certificated, have been delivered
        to
        Bank with unrestricted endorsements.  All income, dividends, earnings
        and profits with respect to the Collateral shall be reported for state and
        federal income tax purposes as attributable to the Debtor and not Bank, and
        Bank
        or any other person authorized to report income distributions, is authorized
        to
        issue IRS Forms 1099 indicating Debtor as the recipient of such income, earnings
        and profits.

      


      NAME
        AND OFFICES; JURISDICTION OF
        ORGANIZATION.  The name and address of Debtor appearing at the
        beginning of this Agreement are Debtor’s exact legal name and the address of its
        chief executive office.  There has been no change in the name of
        Debtor, or the name under which Debtor conducts business, within the five
        years
        preceding the date hereof.  Debtor has not moved its chief executive
        office within the five years preceding the date hereof except as previously
        reported in writing to Bank.  Debtor is organized under the laws of
        the State of Florida and has not changed the jurisdiction of its organization
        within the five years preceding the date hereof except as previously reported
        in
        writing to Bank.

      TITLE/TAXES.  Debtor
        has good and marketable title to the Collateral and will warrant and defend
        same
        against all claims.  Debtor will not transfer, sell, or lease
        Collateral (except as permitted herein).  Debtor agrees to pay
        promptly all taxes and assessments upon or for the use of Collateral and
        on this
        Security Agreement.  At its option, Bank may discharge taxes, liens,
        security interests or other encumbrances at any time levied or placed on
        Collateral.  Debtor agrees to reimburse Bank, on demand, for any such
        payment made by Bank.  Any amounts so paid shall be added to the
        Secured Obligations.

      


      WAIVERS.  Debtor
        agrees not to assert against Bank as a defense (legal or equitable), as a
        set-off, as a counterclaim, or otherwise, any claims Debtor may have against
        any
        seller or lessor that provided personal property or services relating to
        any
        part of the Collateral or against any other party liable to Bank for all
        or any
        part of the Secured Obligations.  Debtor waives all exemptions and
        homestead rights with regard to the Collateral.  Debtor waives any and
        all rights to any bond or security which might be required by applicable
        law
        prior to the exercise of any of Bank's remedies against any
        Collateral.  All rights of Bank and security interests hereunder, and
        all obligations of Debtor hereunder, shall be absolute and unconditional,
        not
        discharged or impaired irrespective of (and regardless of whether Debtor
        receives any notice of):  (i) any lack of validity or enforceability
        of any Loan Document; (ii) any change in the time, manner or place of payment
        or
        performance, or in any term, of all or any of the Secured Obligations or
        the
        Loan Documents or any other amendment or waiver of or any consent to any
        departure from any Loan Document; or (iii) any exchange, insufficiency,
        unenforceability, enforcement, release, impairment or non-perfection of any
        collateral, or any release of or modifications to or insufficiency,
        unenforceability or enforcement of the obligations of any guarantor or other
        obligor.  To the extent permitted by law, Debtor hereby waives any
        rights under any valuation, stay, appraisement, extension or redemption laws
        now
        existing or which may hereafter exist and which, but for this provision,
        might
        be applicable to any sale or disposition of the Collateral by Bank; and any
        other circumstance which might otherwise constitute a defense available to,
        or a
        discharge of any party with respect to the Secured Obligations.

      


      NOTIFICATIONS;
        LOCATION OF
        COLLATERAL.  Debtor will notify Bank in writing at least 30
        days prior to any change in:  (i) Debtor's chief place of business;
        (ii) Debtor's name; (iii) Debtor's corporate/organizational structure; or
        (iv)
        the jurisdiction in which Debtor is organized.  In addition, Debtor
        shall promptly notify Bank of any claims or alleged claims of any other person
        or entity to the Collateral or the institution of any litigation, arbitration,
        governmental investigation or administrative proceedings against or affecting
        the Collateral.  Debtor will keep Collateral at the location(s)
        previously provided to Bank until such time as Bank provides written advance
        consent to a change of location.  Debtor will bear the cost of
        preparing and filing any documents necessary to protect Bank's
        liens.

      


      COLLATERAL
        CONDITION AND LAWFUL
        USE.  Debtor represents that the Collateral is in good repair
        and condition and that Debtor shall use reasonable care to prevent Collateral
        from being damaged or depreciating, normal wear and tear
        excepted.  Debtor shall immediately notify Bank of any material loss
        or damage to Collateral.  Debtor shall not permit any item of
        Collateral to become an accession to other property unless such property
        is also
        Collateral hereunder.  Debtor represents it is in compliance in all
        respects with all laws, rules and regulations applicable to the Collateral
        and
        its properties, operations, business, and finances.

      


      RISK
        OF LOSS AND
        INSURANCE.  Debtor shall bear all risk of loss with respect to
        the Collateral.  The injury to or loss of Collateral, either partial
        or total, shall not release Debtor from payment or other performance
        hereof.  Debtor agrees to obtain and keep in force property insurance
        on the Collateral with a Lender’s Loss Payable Endorsement in favor of Bank and
        commercial general liability insurance naming Bank as Additional Insured
        and
        such other insurance as Bank may require from time to time.  Such
        insurance is to be in form and amounts satisfactory to Bank and issued by
        reputable insurance carriers satisfactory to Bank with a Best Insurance Report
        Key Rating of at least “A-“.  All such policies shall provide to Bank
        a minimum of 30 days written notice of cancellation.  Debtor shall
        furnish to Bank such policies, or other evidence of such policies satisfactory
        to Bank.  If Debtor fails to obtain or maintain in force such
        insurance or fails to furnish such evidence, Bank
        is
        authorized, but not obligated, to purchase any or all insurance or "Single
        Interest Insurance" protecting such interest as Bank deems appropriate against
        such risks and for such coverage and for such amounts, including either the
        loan
        amount or value of the Collateral, all at its discretion, and at Debtor's
        expense.  In such event, Debtor agrees to reimburse Bank for the cost
        of such insurance and Bank may add such cost to the Secured
        Obligations.  Debtor shall bear the risk of loss to the extent of any
        deficiency in the effective insurance coverage with respect to loss or damage
        to
        any of the Collateral.  Debtor hereby assigns to Bank the proceeds of
        all property insurance covering the Collateral up to the amount of the Secured
        Obligations and directs any insurer to make payments directly to
        Bank.  Debtor hereby appoints Bank its attorney-in-fact, which
        appointment shall be irrevocable and coupled with an interest for so long
        as
        Secured Obligations are unpaid, to file proof of loss and/or any other forms
        required to collect from any insurer any amount due from any damage or
        destruction of Collateral, to agree to and bind Debtor as to the amount of
        said
        recovery, to designate payee(s) of such recovery, to grant releases to insurer,
        to grant subrogation rights to any insurer, and to endorse any settlement
        check
        or draft.  Debtor agrees not to exercise any of the foregoing powers
        granted to Bank without Bank's prior written consent.

      


      FINANCING
        STATEMENTS, CERTIFICATES OF
        TITLE, POWER OF ATTORNEY.  No financing statement (other than
        any filed or approved by Bank) covering any Collateral is on file in any
        public
        filing office.  Debtor authorizes the filing of one or more financing
        statements covering the Collateral in form satisfactory to Bank, and without
        Debtor’s signature where authorized by law, agrees to deliver certificates of
        title on which Bank’s lien has been indicated covering any Collateral subject to
        a certificate of title statute, and will pay all costs and expenses of filing
        or
        applying for the same or of filing this Security Agreement in all public
        filing
        offices, where filing is deemed by Bank to be desirable.  Upon the
        occurrence and continuance of a Default, Debtor hereby constitutes and appoints
        Bank the true and lawful attorney of Debtor with full power of substitution
        to
        take any and all appropriate action and to execute any and all documents,
        instruments or applications that may be necessary or desirable to accomplish
        the
        purpose and carry out the terms of this Security Agreement, including, without
        limitation, endorsements desirable for transfer or delivery of any Collateral,
        registration of any Collateral under applicable laws, retitling any Collateral,
        receipt, endorsement and/or collection of all checks and other orders for
        payment of money payable to Debtor with respect to Collateral.  The
        foregoing power of attorney is coupled with an interest and shall be irrevocable
        until all of the Secured Obligations have been paid in full.  Neither
        Bank nor anyone acting on its behalf shall be liable for acts, omissions,
        errors
        in judgment, or mistakes in fact in such capacity as
        attorney-in-fact.  Debtor ratifies all acts of Bank as
        attorney-in-fact.  Debtor agrees to take such other actions, at
        Debtor’s expense, as might be requested for the perfection, continuation and
        assignment, in whole or in part, of the security interests granted herein
        and to
        assure and preserve Bank’s intended priority position.  If
        certificates, passbooks, or other documentation or evidence is/are issued
        or
        outstanding as to any of the Collateral, Debtor will cause the security
        interests of Bank to be properly protected, including perfection by notation
        thereon or delivery thereof to Bank.  Upon Bank's request, Debtor
        will, at its own expense:  (i) do all things determined by Bank
        to be desirable to register such Collateral or qualify for an exemption from
        registration, under the provisions of all applicable securities laws, and
        (ii) otherwise do or cause to be done all other acts and things as may be
        necessary to make the sale of the Collateral valid, binding and in compliance
        with applicable law.

      


      LANDLORD/MORTGAGEE
        WAIVERS.  Debtor shall use its best efforts to cause each
        mortgagee of real property owned by Debtor and each landlord of real property
        leased by Debtor to execute and deliver instruments satisfactory in form
        and
        substance to Bank by which such mortgagee or landlord subordinates its rights,
        if any, in the Collateral.

      STOCK,
        DIVIDENDS.  If, with respect to any securities pledged
        hereunder, a stock dividend is declared, any stock split made or right to
        subscribe is issued, all the certificates for the shares representing such
        stock
        dividend, stock split or right to subscribe will be immediately delivered,
        duly
        endorsed, to the Bank as additional Collateral, and any cash or non-cash
        proceeds and products thereof, including investment property and security
        entitlements will be immediately delivered to Bank.  Debtor
        acknowledges that such grant includes all investment property and security
        entitlements, now existing or hereafter arising, relating to such
        securities.  In addition, Debtor agrees to execute such notices and
        instructions to securities intermediaries as Bank may reasonably
        request.  Notwithstanding anything herein to the contrary, the Bank
        shall have no right to receive and the Debtor shall be under no obligation
        to
        deliver any shares or other evidences of an equity interest in any controlled
        foreign corporation (as defined in Section 957 of the Internal Revenue Code
        of
        1986, as amended) as additional Collateral, to the extent that more than
        65% of
        the total combined voting power of all classes of stock of such controlled
        foreign corporation entitled to vote will constitute Collateral hereunder,
        or be
        otherwise pledged to the Bank.

      


      NO
        TRADING OF
        COLLATERAL.  Until a Default occurs, Debtor shall have the
        right to vote the securities pledged hereunder and to collect and receive
        all
        cash dividends and interest distributed periodically in the ordinary course
        by
        the obligor or issuer of such Collateral or part thereof; provided, however,
        Debtor may not sell, transfer, exchange for other property or cash (“Trade”) or
        otherwise exercise rights with respect to such Collateral or receive any
        distributions or proceeds from Trades of such Collateral without the prior
        written consent of Bank, and any such distributions or proceeds received
        by
        Debtor shall be held in trust for, and immediately delivered to,
        Bank.  Any consent pursuant to this paragraph shall be in Bank's sole
        discretion.

      


      CONTROL.  Debtor
        will cooperate with Bank in obtaining control with respect to Collateral
        consisting of electronic chattel paper. Debtor
        authorizes and directs Third Party to comply with the terms of this Security
        Agreement, to enter into a Control Agreement, to mark its records to show
        the
        security interest of and/or the transfer to Bank of the property pledged
        hereunder and to mail monthly statements to the Bank, in addition to Debtor,
        to
        the address provided herein.

      


      CHATTEL
        PAPER, ACCOUNTS, GENERAL
        INTANGIBLES.  Debtor warrants that Collateral consisting of
        chattel paper, accounts, or general intangibles is (i) genuine and enforceable
        in accordance with its terms; (ii) not subject to any defense, set-off, claim
        or
        counterclaim of a material nature against Debtor except as to which Debtor
        has
        notified Bank in writing; and (iii) not subject to any other circumstances
        that
        would impair the validity, enforceability, value, or amount of such Collateral
        except as to which Debtor has notified Bank in writing.  Debtor shall
        not amend, modify or supplement any lease, contract or agreement contained
        in
        Collateral or waive any provision therein, without prior written consent
        of
        Bank.  Debtor will not create any tangible chattel paper without
        placing a legend on the chattel paper acceptable to Bank indicating that
        Bank
        has a security interest in the chattel paper.  Debtor will not create
        any electronic chattel paper without taking all steps deemed necessary by
        Bank
        to confer control of the electronic chattel paper upon Bank in accordance
        with
        the UCC.

      


      ACCOUNT
        INFORMATION.  From time to time, at Bank's request, Debtor
        shall provide Bank with schedules describing all accounts, including customers'
        addresses, created or acquired by Debtor and at Bank's request shall execute
        and
        deliver written assignments of contracts and other documents evidencing such
        accounts to Bank.  Together with each schedule, Debtor shall, if
        requested by Bank, furnish Bank with copies of Debtor's sales journals,
        invoices, customer purchase orders or the equivalent, and original shipping
        or
        delivery receipts for all goods sold, and Debtor warrants the genuineness
        thereof.

      


      ACCOUNT
        DEBTORS.  If
        a Default should occur, Bank shall have the right to notify the account debtors
        obligated on any or all of the Collateral to make payment thereof directly
        to
        Bank and Bank may take control of all proceeds of any such Collateral, which
        rights Bank may exercise at any time.  The cost of such collection and
        enforcement, including attorneys' fees and expenses, shall be borne solely
        by
        Debtor whether the same is incurred by Bank or Debtor.  If a Default
        should occur or upon demand of Bank, Debtor will, upon receipt of all checks,
        drafts, cash and other remittances in payment on Collateral, deposit the
        same in
        a special bank account maintained with Bank, over which Bank also has the
        power
        of withdrawal.

      


      If
        a
        Default should occur, no discount, credit, or allowance shall be granted
        by
        Debtor to any account debtor and no return of merchandise shall be accepted
        by
        Debtor without Bank's consent.  Bank may, after Default, settle or
        adjust disputes and claims directly with account debtors for amounts and
        upon
        terms that Bank considers advisable, and in such cases Bank will credit the
        Secured Obligations with the net amounts received by Bank, after deducting
        all
        of the expenses incurred by Bank.  Debtor agrees to indemnify and
        defend Bank and hold it harmless with respect to any claim or proceeding
        arising
        out of any matter related to collection of Collateral.

      


      GOVERNMENT
        CONTRACTS.  If any Collateral covered hereby arises from
        obligations due to Debtor from any governmental unit or organization, Debtor
        shall immediately notify Bank in writing and execute all documents and take
        all
        actions deemed necessary by Bank to ensure recognition by such governmental
        unit
        or organization of the rights of Bank in the Collateral.

      


      INVENTORY.  So
        long
        as no Default has occurred, Debtor shall have the right in the regular course
        of
        business, to process and sell Debtor's inventory.  If a Default should
        occur or upon demand of Bank, Debtor will, upon receipt of all checks, drafts,
        cash and other remittances, in payment of Collateral sold, deposit the same
        in a
        special bank account maintained with Bank over which Bank also has the power
        of
        withdrawal.  Debtor agrees to notify Bank immediately in the event
        that any inventory purchased by or delivered to Debtor is evidenced by a
        bill of
        lading, dock warrant, dock receipt, warehouse receipt or other document of
        title
        and to deliver such document to Bank upon request.

      


      INSTRUMENTS,
        CHATTEL PAPER,
        DOCUMENTS.  Any Collateral that is, or is evidenced by,
        instruments, chattel paper or negotiable documents will be properly assigned
        to
        and the originals of any such Collateral in tangible form deposited with
        and
        held by Bank, unless Bank shall hereafter otherwise direct or consent in
        writing.  Bank may, without notice, before or after maturity of the
        Secured Obligations, exercise any or all rights of collection, conversion,
        or
        exchange and other similar rights, privileges and options pertaining to such
        Collateral, but shall have no duty to do so.

      


      COLLATERAL
        DUTIES.  Bank shall have no custodial or ministerial duties to
        perform with respect to Collateral pledged except as set forth herein; and
        by
        way of explanation and not by way of limitation, Bank shall incur no liability
        for any of the following:  (i) loss or depreciation of Collateral
        (unless caused by its willful misconduct or gross negligence), (ii) failure
        to
        present any paper for payment or protest, to protest or give notice of
        nonpayment, or any other notice with respect to any paper or Collateral,
        (iii)
        failure to ascertain, notify Debtor of, or take any action in connection
        with
        any conversion, call, redemption, retirement or any other event relating
        to any
        of the Collateral, or failure to notify any party hereto that Collateral
        should
        be presented or surrendered for any such reason.  Debtor acknowledges
        that Bank is not an investment advisor or insurer with respect to the
        Collateral; and Bank has no duty to advise Debtor of any actual or anticipated
        changes in the value of the Collateral.

      


      TRANSFER
        OF
        COLLATERAL.  Bank may assign its rights in Collateral or any
        part thereof to any assignee who shall thereupon become vested with all the
        powers and rights herein given to Bank with respect to the property so
        transferred and delivered, and Bank shall thereafter be forever relieved
        and
        fully discharged from any liability with respect to such property so
        transferred, but with respect to any property not so transferred, Bank shall
        retain all rights and powers hereby given.

      


      INSPECTION,
        BOOKS AND
        RECORDS.  Debtor will at all times keep accurate and complete
        records covering each item of Collateral, including the proceeds
        therefrom.  Bank, or any of its agents, shall have the right, at
        intervals to be determined by Bank and without hindrance or delay, at Debtor’s
        expense, to inspect, audit, and examine the Collateral during normal business
        hours and to make copies of and extracts from the books, records, journals,
        orders, receipts, correspondence and other data relating to Collateral, Debtor's
        business or any other transaction between the parties hereto.  Debtor
        will at its expense furnish Bank copies thereof upon request.  For the
        further security of Bank, it is agreed that Bank has and is hereby granted
        a
        security interest in all books and records of Debtor pertaining to the
        Collateral.

      


      COMPLIANCE
        WITH
        LAW.  Debtor will comply with all federal, state and local laws
        and regulations, applicable to it, including without limitation, laws and
        regulations relating to the environment, labor or economic sanctions, in
        the
        creation, use, operation, manufacture and storage of the Collateral and the
        conduct of its business.

      


      REGULATION
        U. None of the
        proceeds of the credit secured hereby shall be used directly or indirectly
        for
        the purpose of purchasing or carrying any margin stock in violation of any
        of
        the provisions of Regulation U of the Board of Governors of the Federal Reserve
        System ("Regulation U"), or for the purpose of reducing or retiring any
        indebtedness which was originally incurred to purchase or carry margin stock
        or
        for any other purchase which might render the Loan a "Purpose Credit" within
        the
        meaning of Regulation U.

      


      CROSS
        COLLATERALIZATION
        LIMITATION.  As to any other existing or future consumer
        purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
        Credit Protection Act, Bank expressly waives any security interest granted
        herein in Collateral that Debtor uses as a principal dwelling and household
        goods.

      


      ATTORNEYS'
        FEES AND OTHER COSTS OF
        COLLECTION.  Debtor shall pay all of Bank's reasonable expenses
        actually incurred in enforcing this Security Agreement and in preserving
        and
        liquidating Collateral, including but not limited to, reasonable arbitration,
        paralegals', attorneys' and experts' fees and expenses, whether incurred
        with or
        without the commencement of a suit, trial, arbitration, or administrative
        proceeding, or in any appellate or bankruptcy proceeding.

      


      DEFAULT.  If
        any of
        the following occurs, a default ("Default") under this Security Agreement
        shall
        exist:  Loan Document
        Default.  A default under any Loan Document which is not cured within any
        applicable cure
        period.  Collateral Loss
        or
        Destruction.  Any loss, theft, substantial damage, or
        destruction of Collateral not fully covered by insurance, or as to which
        insurance proceeds are not remitted to Bank within 30 days of the
        loss.  Collateral
        Sale, Lease or Encumbrance.  Any sale, lease, or encumbrance of
        any Collateral not specifically permitted herein without prior written consent
        of Bank.  Levy,
        Seizure or Attachment.  The making of any levy, seizure, or
        attachment on or of Collateral which is not removed within 10
        days.  Unauthorized
        Collection of Collateral.  Any attempt to collect, cash in or
        otherwise recover deposits that are Collateral.  Third Party
        Breach.  Any default or breach by a Third Party of any
        provision contained in any Control Agreement executed in connection with
        any of
        the Collateral.  Unauthorized
        Termination.  Any attempt to terminate, revoke, rescind,
        modify, or violate the terms of this Security Agreement or any Control Agreement
        without the prior written consent of Bank.

      


      REMEDIES
        ON DEFAULT (INCLUDING POWER
        OF SALE).  If a Default occurs Bank shall have all the rights
        and remedies of a secured party under the Uniform Commercial
        Code.  Without limitation thereto, Bank shall have the following
        rights and remedies:  (i) to take immediate possession of Collateral,
        without notice or resort to legal process, and for such purpose, to enter
        upon
        any premises on which Collateral or any part thereof may be situated and
        to
        remove the same therefrom, or, at its option, to render Collateral unusable
        or
        dispose of said Collateral on Debtor's premises; (ii) to require Debtor to
        assemble the Collateral and make it available to Bank at a place to be
        designated by Bank; (iii) to exercise its or its affiliate’s right of
        set-off or Bank lien as to any monies of Debtor deposited in deposit accounts
        and investment accounts of any nature maintained by Debtor with Bank or
        affiliates of Bank, without advance notice, regardless of whether such accounts
        are general or special; (iv) to dispose of Collateral, as a unit or in parcels,
        separately or with any real property interests also securing the Secured
        Obligations, in any county or place to be selected by Bank, at either private
        or
        public sale (at which public sale Bank may be the purchaser) with or without
        having the Collateral physically present at said sale.  In addition to
        the foregoing, Bank shall be authorized to:  transfer into Bank's name
        or the name of its nominee, all or any part of the Collateral; receive all
        interest, dividends, and other proceeds of the Collateral; notify any person
        obligated on any Collateral of the security interest of Bank therein and
        require
        such person to make payment directly to Bank; demand, sue for, collect or
        receive the Collateral and any proceeds thereof, and/or make any settlement
        or
        compromise as Bank deems desirable with respect to any Collateral; and exercise
        any voting, conversion, registration, purchase or other rights of an owner,
        holder or entitlement holder of the Collateral.  Debtor agrees that
        Bank may exercise its rights under this Security Agreement without regard
        for
        the actual or potential tax consequences to Debtor under federal or state
        law
        and without regard to any instructions or directives given Bank by Debtor.

      


      Any
        notice of sale, disposition or other action by Bank required by law and sent
        to
        Debtor at Debtor's address shown above, or at such other address of Debtor
        as
        may from time to time be shown on the records of Bank, at least 5 days prior
        to
        such action, shall constitute reasonable notice to Debtor.  Notice
        shall be deemed given or sent when mailed postage prepaid to Debtor's address
        as
        provided herein.  Bank shall be entitled to apply the proceeds of any
        sale or other disposition of the Collateral, and the payments received by
        Bank
        with respect to any of the Collateral, to Secured Obligations in such order
        and
        manner as Bank may determine.  Collateral that is subject to rapid
        declines in value and is customarily sold in recognized markets may be disposed
        of by Bank in a recognized market for such collateral without providing notice
        of sale.  Debtor waives any and all requirements that the Bank sell or
        dispose of all or any part of the Collateral at any particular time, regardless
        of whether Debtor has requested such sale or disposition.

      


      REMEDIES
        ARE
        CUMULATIVE.  No failure on the part of Bank to exercise, and no
        delay in exercising, any right, power or remedy hereunder shall operate as
        a
        waiver thereof, nor shall any single or partial exercise by Bank or any right,
        power or remedy hereunder preclude any other or further exercise thereof
        or the
        exercise of any right, power or remedy.  The remedies herein provided
        are cumulative and are not exclusive of any remedies provided by law, in
        equity,
        or in other Loan Documents.

      


      INDEMNIFICATION.  Debtor
        shall protect, indemnify and save harmless Bank from and against all losses,
        liabilities, obligations, claims, damages, penalties, fines, causes of action,
        costs and expenses (including, without limitation, reasonable attorneys’ fees
        and expenses) (collectively, “Damages”) imposed upon, incurred by or asserted or
        assessed against Bank on account of or in connection with (i) the Loan Documents
        or any failure or alleged failure of Debtor to comply with any of the terms
        of,
        or the inaccuracy or breach of any representation in, the Loan Documents,
        (ii)
        the Collateral or any claim of loss or damage to the Collateral or any injury
        or
        claim of injury to, or death of, any person or property that may be occasioned
        by any cause whatsoever pertaining to the Collateral or the use, occupancy
        or
        operation thereof, (iii) any failure or alleged failure of Debtor to comply
        with
        any law, rule or regulation applicable to it or to the Collateral or the
        use,
        occupancy or operation of the Collateral (including, without limitation,
        the
        failure to pay any taxes, fees or other charges), (iv) any Damages whatsoever
        by
        reason of any alleged action, obligation or undertaking of Bank relating
        in any
        way to or any matter contemplated by the Loan Documents, or (v) any claim
        for
        brokerage fees or such other commissions relating to the Collateral or the
        Secured Obligations.  Nothing contained herein shall require Debtor to
        indemnify Bank for any Damages resulting from Bank’s gross negligence or its
        willful misconduct, and such indemnity shall be effective only to the extent
        of
        any Damages that may be sustained by Bank in excess of any net proceeds received
        by it from any insurance of Debtor (other than self-insurance) with respect
        to
        such Damages.  The indemnity provided for herein shall survive payment
        of the Secured Obligations and shall extend to the officers, directors,
        employees and duly authorized agents of Bank.  In the event Bank
        incurs any Damages arising out of or in any way relating to the transaction
        contemplated by the Loan Documents (including any of the matters referred
        to in
        this section), the amounts of such Damages shall be added to the Secured
        Obligations, shall bear interest, to the extent permitted by law, at the
        interest rate borne by the Secured Obligations from the date incurred until
        paid
        and shall be payable on demand.

      


      MISCELLANEOUS.  (i)
        Amendments and
        Waivers.  No waiver, amendment or modification of any provision
        of this Security Agreement shall be valid unless in writing and signed by
        Debtor
        and an officer of Bank.  No waiver by Bank of any Default shall
        operate as a waiver of any other Default or of the same Default on a future
        occasion.  (ii) Assignment.  All
        rights of Bank hereunder are freely assignable, in whole or in part, and
        shall
        inure to the benefit of and be enforceable by Bank, its successors, assigns
        and
        affiliates.  Debtor shall not assign its rights and interest hereunder
        without the prior written consent of Bank, and any attempt by Debtor to assign
        without Bank's prior written consent is null and void.  Any assignment
        shall not release Debtor from the Secured Obligations.  This Security
        Agreement shall be binding upon Debtor, and the heirs, personal representatives,
        successors, and assigns of Debtor.  (iii) Applicable Law; Conflict
        Between
        Documents.  This Security Agreement shall be governed by and
        interpreted in accordance with federal law and, except as preempted by federal
        law, the laws of the state named in Bank's address on the first page hereof
        without regard to that state's conflict of laws principles, except to the
        extent
        that the UCC requires the application of the law of a different
        jurisdiction.  If any terms of this Security Agreement conflict with
        the terms of any commitment letter or loan proposal, the terms of this Security
        Agreement shall control.  (iv) Jurisdiction.  Debtor
        irrevocably agrees to non-exclusive personal jurisdiction in the state named in the Bank’s address on the first
        page hereof.  (v) Severability.  If
        any provision of this Security Agreement shall be prohibited by or invalid
        under
        applicable law, such provision shall be ineffective but only to the extent
        of
        such prohibition or invalidity, without invalidating the remainder of such
        provision or the remaining provisions of this Security
        Agreement.  (vi) Payments.  All
        payments shall be mailed to Commercial Loan Services, P. O. Box 740502, Atlanta,
        GA  30374-0502; or such other address as provided by Bank in
        writing.  (vii) Notices.  Any
        notices to Debtor shall be sufficiently given, if in writing and mailed or
        delivered to the address of Debtor shown above or such other address as provided
        hereunder; and to Bank, if in writing and mailed or delivered to Wachovia
        Bank,
        National Association, Mail Code VA7628, P. O. Box 13327, Roanoke,
        VA  24040 or Wachovia Bank, National Association, Mail Code VA7628, 10
        South Jefferson Street, Roanoke, VA  24011 or such other address as
        Bank may specify in writing from time to time.  Notices to Bank must
        include the mail code.  In the event that Debtor changes Debtor's
        mailing address at any time prior to the date the Secured Obligations are
        paid
        in full, Debtor agrees to promptly give written notice of said change of
        address
        by registered or certified mail, return receipt requested, all charges
        prepaid.  (viii) Captions.  The
        captions contained herein are inserted for convenience only and shall not
        affect
        the meaning or interpretation of this Security Agreement or any provision
        hereof.  The use of the plural shall also mean the singular, and vice
        versa.  (ix) Joint
        and Several Liability.  If more than one party has signed this
        Security Agreement, such parties are jointly and severally obligated
        hereunder.  (x) Binding
        Contract.  Debtor by execution and Bank by acceptance of this
        Security Agreement, agree that each party is bound by all terms and provisions
        of this Security Agreement.  (xi) Final
        Agreement.  This Agreement and the other Loan Documents
        represent the final agreement between the parties and may not be contradicted
        by
        evidence of prior, contemporaneous or subsequent agreements of the
        parties.  There are no unwritten agreements between the
        parties.

      


      DEFINITIONS.  Loan
        Documents.  The
        term "Loan Documents" refers to all documents, including this Agreement,
        whether
        now or hereafter existing, executed in connection with or related to the
        Secured
        Obligations, and may include, without limitation and whether executed by
        Debtor
        or others, commitment letters that survive closing, loan agreements, promissory
        notes, guaranty agreements, deposit or other similar agreements, other security
        agreements, letters of credit and applications for letters of credit, security
        instruments, financing statements, mortgage instruments, any renewals or
        modifications, whenever any of the foregoing are executed, but does not include
        swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
        time).  Third
        Party.  The term
“Third Party” means any Broker, Collateral
        Agent, Securities Intermediary and/or
        bank which from time to time maintains a securities account, and is acting
        in
        such capacity, for Debtor or maintains a deposit account for Debtor with
        respect
        to any part of the Collateral.  UCC.  “UCC” means
        the Uniform Commercial Code as presently and hereafter enacted in the
        Jurisdiction.  Terms
        defined in the UCC.  Any term used in this Agreement and in any
        financing statement filed in connection herewith which is defined in the
        UCC and
        not otherwise defined in this Agreement or any other Loan Document has the
        meaning given to the term in the UCC.

      


       IN
        WITNESS WHEREOF,
        Debtor, on the day and year first written above, has caused this Security
        Agreement to be duly executed under seal.

      


       DEBTOR:

      


      
        	 	
                TECHNOLOGY
                  RESEARCH CORPORATION,

                A
                  Florida Corporation

                
                

                
                

                By:
                  ________________________________

                      Owen
                  Farren,

                      As
                  its President

                
                

              


      

       

       

      
 

      STATE
        OF
        PENNSYLVANIA                                                                           
)

      COUNTY
        OF
        ____________                                                                           )

      


      The
        foregoing instrument was acknowledged before me on _____________, 2007, by
        Owen
        Farren, as
        President of TECHNOLOGY
        RESEARCH CORPORATION, a Florida corporation on behalf of the corporation,
        ___ who is personally known to me, or ___ who has produced a driver's license
        as
        identification.

       

      
        	 	
                 

                Notary
                  Public

                Print
                  Name:                                                                
                  

                Commission
                  No.:                                                                           
                  

                My
                  Commission expires:

              


      

      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SCHEDULE
        "1"

      TO
        SECURITY
        AGREEMENT

      


      


      100%
        of
        the Non-Voting stock of TECHNOLOGY RESEARCH CORPORATION / HONDURAS, S.A.
        DE C.V.
        which constitutes ____________ shares, Certificate Numbers
        _______________.

      


      65%
        of
        the Voting stock of TECHNOLOGY RESEARCH CORPORATION / HONDURAS, S.A. DE C.V.
        which constitutes ____________ shares, Certificate Numbers
        _______________.