Document:

Second Master Loan Documents Modification Agreement

                           Exhibit 10.1

 

         SECOND MASTER LOAN DOCUMENTS MODIFICATION AGREEMENT

This SECOND MASTER LOAN DOCUMENTS MODIFICATION AGREEMENT 

(the "Agreement") dated as of the 20th day of December, 2004, is by and between SOUTHTRUST 

BANK, an Alabama banking corporation (the "Bank") and TECHNOLOGY RESEARCH 

CORPORATION and TECHNOLOGY RESEARCH CORPORATION / HONDURAS, 

S.A. DE C.V. (the "Borrowers").

 

                            RECITALS:

A.  The Bank and the Borrowers are party to a Business Loan Agreement dated as of 

November 12, 2002 heretofore modified and amended by a Master Loan Documents Modification 

Agreement dated as of November 12, 2003 (collectively, the “Loan Agreement”) pursuant to which 

the Bank has made a revolving line of credit available to Borrowers in the principal amount of up to 

$3,000,000.00 outstanding at any time.

B.  Borrowers’ obligation to repay advances made by the Bank pursuant to the Loan 

Agreement is evidenced by a 2003 Renewal Note dated as of November 12, 2003 (the “Note”). 

The Bank is the owner and holder of the Note. 

C.  Borrowers’ obligations under the Loan Agreement and the Note are secured by a 

Commercial Security Agreement (the “Security Agreement”) dated as of November 12, 2002, and 

by a security interest in favor of the Bank, as secured party, in the collateral described in the 

Security Agreement.

D.  The Loan Agreement, the Note, the Security Agreement and all loan agreements, 

financing statements and documents executed in connection with the transactions contemplated 

thereby are referred to collectively herein as the “Loan Documents”.

E.  The Borrowers have requested the Bank to increase the principal amount of the 

revolving line of credit facility made available to Borrowers under the Loan Documents and to 

renew and extend the maturity date of the revolving loan evidenced by the Loan Documents and the 

Bank is willing to do so as provided in this Agreement;

NOW, THEREFORE, in consideration of the premises, and of the mutual promises 

hereafter set forth, and the sum of Ten Dollars ($10.00) paid each to the other, the receipt and 

sufficiency of which as consideration is hereby acknowledged, the parties agree as follows:

1.  THE RECITALS. The parties acknowledge and agree that the facts stated in the 

recitals above are true and correct and the parties incorporate such recitals in this Agreement as a 

part thereof for all purposes.

2.  THE NOTE. The Bank agrees to (a) renew the revolving loan made available to 

Borrowers pursuant to the Loan Agreement and evidenced by the Note, and (b) to increase the 

principal amount of the revolving line of credit facility made available to Borrower under the Loan 

Documents from not more than $3,000,000.00 outstanding at any time to not more than 

	 
	 	 	 
	

	 

$6,000,000.00 outstanding at any time, and (c) to extend the maturity date thereof to December 14, 

2006, as provided in a 2004 Renewal Note of Borrower of even date with this Agreement payable 

by Borrower to the Bank in the principal amount of up to $6,000,000.00 outstanding at any time 

(the “2004 Renewal Note”) in the form attached hereto as Exhibit “A”. The principal outstanding 

under the 2004 Renewal Note shall accrue interest and Borrower shall make payments of principal 

and interest to the Bank in the manner and at the times provided in the 2004 Renewal Note. 

Borrower shall execute and deliver the 2004 Renewal Note to the Bank concurrently with the 

execution and delivery of this Agreement. The 2004 Renewal Note shall be deemed to have 

amended, restated, replaced and superceded the 2003 Renewal Note. The loan evidenced by the 

Note, as renewed and evidenced by the 2004 Renewal Note, shall continue to be secured by the 

Security Agreement.

3.  THE LOAN AGREEMENT. 

(a)  The Loan Agreement is hereby amended to revise the following financial covenant 

to read as follows: 

 

Minimum Working Capital. The Borrowers shall maintain, on a consolidated 

basis, minimum Working Capital (as defined by GAAP) of $8,000,000.00, 

measured annually. 

      (b)  The Loan Agreement is hereby amended to add the following financial conditions which 

will be tested at the time of receipt by the bank of a request for advance by which an  Advance will 

be predicted:

 

      Maximum Net Loss. Borrower shall not sustain a Net Loss exceeding 

      $1,000,000.00 for the previous 12 months on a rolling basis.  This financial 

            condition shall be tested at the time of receipt of a request for Advance.

Restriction on Dividends. Borrower shall not pay dividends in any year in excess 

of the greater of (a) 50% of Operating Profits for the previous 12 months on a 

rolling basis, or (b) $360,000.00. This financial condition shall be tested at the time 

of receipt of a request for Advance.

(c)  The Loan Agreement is hereby amended to revise the following definition to 

read as follows:

“Note” is revised to mean the 2004 Renewal Note, together with all renewals, 

extensions, modifications, refinancings, consolidations and substitutions thereof or 

therefore.

(d)  The Loan Agreement is hereby further amended to revise the second paragraph 

thereof, titled “Term” to read as follows:

	 
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TERM.  This Agreement shall be effective as of November 12, 2002, and 

shall continue in full force and effect until such time as all of Borrower’s Loans in 

favor of Lender have been paid in full, including principal, interest, costs, expenses, 

attorneys’ fees and other fees and charges.” 

(e)  The Loan Agreement is hereby further amended to revise the section thereof entitled 

“Financial Reporting” to add subsection (4) thereof to read as follows:

(4)  Quarterly Compliance Certificate. Borrower shall provide to the Bank 

together with Borrower’s quarterly financial statements, a quarterly compliance 

certificate, signed by the chief financial officer of Borrower and certifying that 

Borrower is in full compliance with the positive and negative financial covenants 

contained in the Loan Agreement and including such data and computations 

necessary to show such compliance.

3.  SECURITY AGREEMENT. The Security Agreement is hereby modified to and 

shall be deemed to provide that the Security Agreement continues in full force and effect and 

continues to secure the loan evidenced by the Note as increased and renewed by the 2004 Renewal 

Note. 

4.  LOAN DOCUMENTS MODIFICATION. Each of the Loan Documents are 

hereby modified to reflect that they shall apply to and secure the Loan evidenced by the 2004 

Renewal Note and all modifications, amendments, renewals and extensions thereof, equally and 

ratably with the Note.

5.  NOVATION. Except as provided in this Agreement, the obligations evidenced by 

the Loan Agreement, the Note, the Security Agreement and the other Loan Documents are 

unaffected, unchanged and unimpaired. By entering into this Agreement, the parties have no 

intention whatsoever to extinguish or discharge the indebtedness evidenced by the Note, or to affect 

any novation or to release or discharge the lien and security interest create by the Security 

Agreement. 

6.  WAIVER OF DEFENSES. As an important inducement and as additional 

consideration to the Bank, the Borrowers, for themselves and for their respective successors, heirs 

and assigns to the extent permitted by law, each hereby waive and agree not to assert as a defense to 

any action for collection of the Note, the 2004 Renewal Note or for foreclosure of the security 

interests created by the Security Agreement, any defense which it now has or which may arise in the 

future under the Loan Documents or the 2004 Renewal Note by reason of any act or omission by 

the Bank, its agents or employees heretofore taken or omitted to be taken and in any way connected 

with the transactions evidenced or contemplated by the Loan Documents or the 2004 Renewal 

Note, including, without limitation, any such acts or omissions relating to required disclosures 

which Borrower acknowledge have been made in full and fair manner as may be required by law.

 

            7.  PAYMENT OF EXCISE AND INTANGIBLE TAXES. Borrowers agree to pay 

	 
	                                3		 
	

	 

in full, concurrently with the execution hereof, or subsequent thereto if not fully paid, any and all 

documentary and intangible taxes due on the 2004 Renewal Note or any renewal or modification 

thereof or on this Agreement and other excise taxes, together with interest and penalties, if any, 

determined to be due on delinquent or unpaid amounts. Borrowers further agree to indemnify and 

save the Bank harmless from any and all such taxes and charges later determined to be due.

8.  CLOSING COSTS AND ATTORNEYS' FEES. Borrowers shall pay all closing 

costs, including, without limitation, the reasonable attorneys' fees incurred by the Bank in 

connection with this Agreement and any related documents.

10.  MISCELLANEOUS. This Agreement contains the final, complete, and exclusive 

expression of the understanding between the parties regarding the transactions contemplated by it. 

A waiver or modification of any provisions of this Agreement is valid only if the waiver or 

modification is in writing signed by each party. The failure or delay by the Bank to exercise any 

right, power or privilege under this Agreement will not operate as a waiver of any such right, power 

or privilege. The titles and headings preceding the text of the sections of this Agreement have been 

inserted solely for convenience of reference and do not affect this Agreement's meaning or effect. 

This Agreement is a Florida contract and it is the intent of the parties that it be construed according 

to the laws of the State of Florida. Borrowers may not assign their interest in this Agreement 

without the prior written approval of the Bank, and this Agreement binds the successors and assigns 

of the parties.

     

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set 

forth above.

TECHNOLOGY RESEARCH         TECHNOLOGY RESEARCH

CORPORATION            CORPORATION/ HONDURAS , S.A. DE C.V.

 

By:  /s/  Scott J. Loucks_            _____    By:  /s/  Scott J. Loucks___                ___

Name:  Scott J. Loucks           Name:  Scott J. Loucks

Title:     VP Finance, CFO       Title:     Secretary

SOUTHTRUST BANK, an Alabama

banking corporation 

By:  /s/  Scott J. Loucks_            _____

Name:  Marisol Lugo

Title:  Vice President, Relationship Manager

 

	 
	                                  4		 
	

	 

 

                            EXHIBIT “A”

 

                2004 RENEWAL NOTE

$6,000,000.00              December 20, 2004

Being indebted for value received, TECHNOLOGY RESEARCH CORPORATION 

and TECHNOLOGY RESEARCH CORPORATION / HONDURAS, S.A. DE C.V. 

(collectively, jointly and severally, the "Borrowers"), jointly and severally promise to pay to 

SOUTHTRUST BANK, an Alabama banking corporation (the "Lender"), or order, at its offices in 

the City of Birmingham, Alabama, or at such other address as may be designated from time to time 

by the holder hereof to the Borrower the sum of up to SIX MILLION DOLLARS ($6,000,000.00) 

or so much thereof as is advanced hereunder together with interest on the unpaid balance from the 

date of disbursement until maturity at a rate per annum equal to the Applicable Rate as defined 

below. Within the limits provided in the Loan Agreement, Borrower may borrow, make payments 

and reborrow under this Note. Interest shall accrue on the basis of an assumed year of 360 days and 

shall be charged for the actual number of days elapsed in an Interest Period. Notwithstanding 

anything in the Note to the contrary, no Interest Period may end later than the Maturity Date and if 

the Maturity Date falls in less than one month, then the interest rate applicable to this Note shall not 

be the LIBOR Rate during the remaining term but rather shall be the Base Rate.  After the 

occurrence of an Event of Default, the interest rate applicable to this Note may not be continued at 

or converted to the LIBOR Rate but shall be the Default Rate.

The following definitions shall apply for the purpose of determination of the interest rate 

applicable to the Note from time to time:

 

"Applicable Rate" means either the LIBOR Rate or the Base Rate or the Default 

Rate, as such interest rate may apply to the Loan evidenced by this Note as provided 

herein.

 

“Base Rate” means a rate of interest equal to one hundred (100) basis points below 

the rate quoted as the "prime rate" as reported in the "Money Rates" section of the 

Wall Street Journal (or the arithmetic average of the rates so quoted, if more than 

one rate is quoted) or, in the event of discontinuance of such publication or such 

section thereof, the Base Rate shall mean the monthly average prime rate as reported 

and published in the Federal Reserve Bulletin published monthly by the Board of 

Governors of the Federal Reserve System under the table styled "Prime Rate 

Charged by Banks on Short Term Business Loans". In the event of the 

discontinuance of both such publications or such section or table thereof, the Base 

Rate shall mean the prime rate as from time to time announced or published by 

Citibank, N.A. at its principal office in New York, New York. 

The terms "Base Rate" and "prime rate" are intended by the parties to be 

benchmarks only and are not to be construed as indicating that such rates are the 

best or lowest rates offered by the Lender to any of its customers regardless of their 

	 
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creditworthiness.

 

“Default Rate” means a rate per annum equal to the highest rate then allowable by 

law, or 18%, whichever is lesser.

 

“Eurocurrency Reserve Percentage” means, with respect to each Interest Period, 

a percentage (expressed as a decimal) equal to the percentage in effect two Business 

Days prior to the first day of such Interest Period, as prescribed by the Board of 

Governors of the Federal Reserve System (or any successor), for determining 

reserve requirements applicable to any "Eurocurrency liabilities" pursuant to 

Regulation D or any other applicable regulation of the Board of Governors which 

prescribes reserve requirements applicable to "Eurocurrency liabilities" as presently 

defined in Regulation D.

 

“Interbank Rate” means, with respect to each Interest Period, the rate per annum at 

which dollar deposits in immediately available funds are offered to the Bank two 

Business Days prior to the beginning of such Interest Period by major banks in the 

London interbank eurodollar market as at or about 11:00 a.m. London time, for 

delivery on the first day of such Interest Period, for the number of days comprised 

therein and in an amount comparable to the amount of the Loan to which such 

Interest Period relates.

“Interbank Rate (Reserve Adjusted)” means, for any Interest Period, a rate per 

annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined 

pursuant to the following formula:

Interbank Rate        =     Interbank Rate        _ 

(Reserve Adjusted)         1 - Eurocurrency Reserve Percentage

"Interest Period" means, (i) when the applicable interest rate is the Base Rate, one 

(1) day, and (ii) when the applicable interest rate is the LIBOR Rate, the period 

commencing on the effective date of Borrower’s election as provided hereinbelow 

and ending on (but excluding) the day 30, 60 or 90 days thereafter, in either case as 

the Borrower may select in its relevant notice to the Bank as provided in this Note, 

provided, however, that

 

    (a)  if any Interest Period would otherwise end on a day which is not a 

Business Day, such Interest Period shall end on the next succeeding Business Day; 

and

 

    (b)  no Interest Period may end later than the Maturity Date, provided that 

the Applicable Rate shall be the Base Rate for any Interest Period of less than thirty 

(30) days by.

“LIBOR Rate” means an adjustable rate of interest per annum equal to the 

	 
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Interbank Rate (Reserve Adjusted) plus 160 basis points, fixed for Interest Periods 

of 30, 60 or 90 days. 

The Borrower shall select the initial Applicable Rate to apply to the Loan by providing 

written notice thereof (which may be by telefacsimile) to the Bank at least three (3) Business Days 

prior to the date of this Note. If timely notice of the initial Applicable Rate is not provided as 

required hereby, then the initial Applicable Rate shall be the Base Rate. Subject to the provisions 

hereof, the Borrower shall have the right to (i) continue the current Applicable Rate from time to 

time, or (ii) to convert the Applicable from either the LIBOR Rate or the Base Rate to the other, or 

(iii) to continue or change the Interest Period applicable to the Loan while the Applicable Rate is 

the LIBOR Rate, in each case by submitting to the Bank (effective upon receipt) (x) in the case of 

continuation of the LIBOR Rate, and conversion of the Base Rate to the LIBOR Rate, at least three 

(3) Business Days prior to the end of a current Interest Period, and (y) in the case of conversion of 

the LIBOR Rate to the Base Rate, on or before 12:00 p.m. Eastern Time on the Business Day prior 

to the date on which the conversion shall be effective, a written notice of Borrower’s election to 

continue the Applicable Rate in its current form or to convert the Applicable Rate or to continue or 

change the applicable Interest Period as described in said notice. Such continuation or conversion 

shall take effect at the end of the current Interest Period. If no such notice of election is received by 

the Bank from the Borrower within the time prescribed prior to the end of a current Interest Period, 

then the Applicable Rate shall be converted to the Base Rate. 

Notwithstanding anything herein to the contrary, no Interest Period may end later than the 

Maturity Date and if the Maturity Date falls in less than thirty (30) days, then the Loan shall not 

accrue interest at the LIBOR Rate during the remaining term but rather shall accrue interest at a rate 

per annum equal to the Base Rate. After the occurrence and during the continuance of an Event of 

Default, the interest rate may not be continued at a LIBOR Rate but shall be the Default Rate.

If as a result of a regulatory change the Bank shall reasonably determine that it is unlawful 

for the Bank to make, continue or maintain any loan accruing interest at a LIBOR Rate, the 

obligation of the Bank to continue or maintain the Loan evidenced by this Note at a LIBOR Rate 

shall, upon such determination (and telephonic notice thereof, to be subsequently confirmed in 

writing, to the Borrowers which notice shall, in the absence of manifest error, create a rebuttable 

presumption as to the effect of such regulatory change as specified above), forthwith be suspended 

until the earliest date the Bank can determine and notify the Borrowers that the circumstances 

causing such suspension no longer exist, and the LIBOR Rate applicable to this Note shall 

automatically convert to the Base Rate on the last day(s) of the then current respective Interest 

Period(s) with respect thereto or sooner, if required by such regulatory change, provided that the 

Bank shall take any reasonable actions available to it (including designation of its lending offices) 

consistent with legal and regulatory restrictions that will avoid the need for such suspension and 

will not, in the reasonable judgment of the Bank, be otherwise materially disadvantageous to the 

Bank.

If the Bank shall have reasonably determined that quotations of interest rates for the relevant 

deposits referred to in the definition of "Interbank Rate" are not being provided in the relevant 

amounts or for the relevant maturities for purposes of determining rates of interest for LIBOR Rate 

	 
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determinations as provided herein or that, by reason of circumstances affecting the London 

interbank eurodollar market, adequate means do not exist for ascertaining the LIBOR Rate for any 

loan to which such rate is the applicable rate, then, upon telephonic notice from the Bank to the 

Borrowers to be subsequently confirmed in writing (such notice, in the absence of manifest error, to 

create a rebuttable presumption as to the effect specified above), the obligations of the Bank to 

continue the loan evidenced by this Note at a LIBOR Rate shall forthwith be suspended and interest 

shall accrue on principal outstanding under this Note at the Base Rate until the earliest date that the 

Bank can reasonably determine and notify the Borrowers that the circumstances causing such 

suspension no longer exist, provided that the Bank shall take any reasonable actions available to it 

to obtain the necessary quotations of interest rates in the London interbank eurodollar market (or 

another eurodollar market acceptable to the Bank and to the Borrowers).

In the event that the Bank shall incur any loss or expense (including any loss or expense 

incurred by reason of the liquidation or reemployment of deposits or other funds acquired by the 

Bank to make, continue or maintain any portion of the principal amount of any Loan at a LIBOR 

Rate) as a result of any repayment or prepayment of the principal amount of any Loan on a date 

other than the scheduled last day of the Interest Period applicable thereto then, upon written notice 

from the Bank to the Borrowers the Borrowers shall, within five days of receipt thereof, pay directly 

to the Bank such amount as will (in the reasonable determination of the Bank) reimburse the Bank 

for such loss or expense. Such written notice shall, in the absence of manifest error, create a 

rebuttable presumption of the amount of such losses or expenses.

The Borrower shall pay to Lender monthly installments of interest commencing with a 

payment due January 14, 2005 and on the same day of each month thereafter provided that all 

unpaid principal plus accrued interest shall be due and payable and shall be paid on December 14, 

2006 (the “Maturity Date"). Payment shall be made at the Maturity Date without demand, 

counterclaim, offset, deduction or defense, (whether now or hereafter conferred by statute or 

otherwise.) 

All payments made upon this Note shall be applied first to the payment of accrued interest 

and thereafter in reduction of principal. 

Any payment not received within ten (10) days when due shall be subject to, and it is agreed 

that the holder hereof shall collect thereon, a "late charge" in the amount of five percent (5%) of the 

amount of the delinquent payment to defray costs of collection and losses of the holder. Said late 

charge shall be immediately due and payable and shall be paid by the maker hereof without notice 

or demand by the holder. The holder's entitlement to collect a late charge shall in no way detract 

from or affect its right to accelerate payment of this Note in the event of a failure by Borrower to 

make any payment hereunder when due.

Privilege is hereby reserved to prepay the principal of this Note in whole or in part at any 

time without notice, premium or penalty for the privilege of such prepayment; provided, however, 

that payment of accrued interest shall be due and payable and shall be paid at the time of and 

together with any such prepayment. 

	 
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Notwithstanding any other provision of this Note or of any instrument securing this Note or 

any other instrument executed in connection with the Loan evidenced hereby, it is expressly agreed 

that amounts payable under this Note or under the other aforesaid instruments for the payment of 

interest or any other payment in the nature of or which would be considered as interest or other 

charge for the use or loan of money shall not exceed the highest rate allowed by law, from time to 

time, and in the event the provisions of this Note or of such other instruments referred to above 

in this paragraph with respect to the payment of interest or other charge for the use or loan of money 

shall result in exceeding such limitation, then the excess over such limitation shall not be payable 

and the amount otherwise agreed to have been paid shall be reduced by the excess so that such 

limitation will not be exceeded, and if any payment actually made shall result in such limitation 

being exceeded, the amount of the excess shall constitute and be treated as a payment on the 

principal hereof and shall operate to reduce such principal by the amount of such excess, or if in 

excess of the principal indebtedness, such excess shall be refunded.

This Note shall be in default upon the occurrence of any default or event of default under 

the terms of this Note or any document executed in connection with the Loan evidenced by this 

Note. In any event, this Note shall be in default upon failure of the Borrower to make any payment 

hereunder when due, without notice or demand. In the event of default the holder of this Note may, 

at its option, declare all unpaid indebtedness evidenced by this Note and any modifications thereof, 

immediately due and payable without notice regardless of the date of maturity. Failure at any time 

to exercise this option shall not constitute a waiver of the right to exercise the same at any other 

time. 

From and after the stated, or if this Note is accelerated, the accelerated, maturity date of this 

Note, it shall bear interest at the Default Rate. 

The parties acknowledge that this Note may be assigned and that any holder of this Note 

shall be entitled to recover directly against any endorser or guarantor hereof without first 

proceeding against the Borrower or any other party.

Each Obligor (which term shall mean and include each Borrower, endorser, guarantor and 

all others who may become liable for all or any part of the obligations evidenced and secured 

hereby), does hereby jointly and severally: (a) consent to any forbearance or extension of the time 

or manner of payment hereof and to the release of all or any part of any security held by the Lender 

to secure payment of this Note and to the subordination of the lien of the mortgage and any other 

instrument of security securing this Note as to all or any part of the property encumbered thereby, 

all without notice to or consent of that party; (b) agree that no course of dealing or delay or 

omission or forbearance on the part of the Lender in exercising or enforcing any of its rights or 

remedies hereunder or under any instrument securing this Note shall impair or be prejudicial to any 

of the Lender's rights and remedies hereunder or to the enforcement hereof and that the Lender may 

extend, modify or postpone the time and manner of payment and performance of this Note and any 

instrument securing this Note, may grant forbearance and may release, wholly or partially, any 

security held by the Lender as security for this Note and release, partially or wholly, any person or 

party primarily or secondarily liable with respect to this Note, all without notice to or consent by 

any party primarily or secondarily liable hereunder and without thereby releasing, discharging or 

	 
	                                9		 
	

	 

diminishing its rights and remedies against any other party primarily or secondarily liable 

hereunder; and (c) waive notice of acceptance of this Note, notice of the occurrence of any default 

hereunder or under any instrument securing this Note and presentment, demand, protest, notice of 

dishonor and notice of protest and notices of any and all action at any time taken or omitted by the 

Lender in connection with this Note or any instrument securing this Note and waives all 

requirements necessary to hold that party to the liability of that party.

All parties liable for the payment of this Note agree to pay the Lender reasonable attorneys' 

fees and costs, whether or not an action be brought, for the services of counsel employed after 

maturity or default to collect this Note or any principal or interest due hereunder, or to protect the 

security, if any, or enforce the performance of any other agreement contained in this Note or in any 

instrument of security as aforesaid, including costs and attorneys' fees on any appeal, or in any 

proceedings under the Bankruptcy Code or in any post judgment proceedings.

This Note is executed under seal and constitutes a contract under the laws of the State of 

Florida, and shall be enforceable in a Court of competent jurisdiction in that State.

TECHNOLOGY RESEARCH CORPORATION

 

By:  /s/  Scott J. Loucks_            _____

Name:  Scott J. Loucks

Title:     VP Finance, CFO

TECHNOLOGY RESEARCH 

CORPORATION/ HONDURAS , S.A. DE C.V.

 

By:  /s/  Scott J. Loucks_            _____

Name:  Scott J. Loucks

Title:     Secretary

	 
	                                10<PAGE>

                                                                  EXHIBIT 10.(h)

                          CAM COMMERCE SOLUTIONS, INC.
                       NONSTATUTORY STOCK OPTION AGREEMENT

NONSTATUTORY STOCK OPTION AGREEMENT, effective as of "grant date" (the
"Effective Date"), between CAM Commerce Solutions, Inc., a Delaware corporation
(the "Company") and                 an employee of the Company (the "Optionee").

            RECITALS:

               WHEREAS, Optionee continues to perform services requested by and
on behalf of the Company (the "Relationship"); and

               WHEREAS, the Company desires, by affording the Optionee an
opportunity to purchase shares of Common Stock of the Company (hereinafter
called "Common Stock"), as hereinafter provided, to carry out the purpose of the
Company's 2000 Stock Option Plan (the "Plan");

               NOW, THEREFORE, In consideration of the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
parties hereto have agreed, and do hereby agree, as follows:

                                       1
<PAGE>
1.    Grant of Option. The Company hereby irrevocably grants to the Optionee the
      right and option (hereinafter called the "Option") to purchase all or any
      part of an aggregate of                SHARES of Common Stock (such number
      being subject to adjustment as provided in Article 7 hereof) on the terms
      and conditions herein set forth. The Optionee acknowledges that the Option
      is NOT an "incentive option" within the meaning of an "incentive stock
      option plan" and Section 422A of the Code, as amended, and that it is
      being granted pursuant to the Plan.

2.    Purchase Price. The purchase price of the shares of Common Stock covered
      by the Option shall be $(PRICE) per share, representing one hundred
      percent (100%) of the fair market value of the shares of Common Stock as
      determined pursuant to Article 5.2 of the Plan as of the Effective Date
      hereof.

3.    Terms of Option. The term of the Option shall commence one year from the
      Effective Date shown in the first paragraph of this Agreement, and all
      rights to purchase shares of Common Stock hereunder shall cease at 11:59
      p.m. on the day before the tenth (10th) anniversary of the Effective Date,
      subject to earlier termination as provided in Article 5 herein. The Option
      is exercisable to the extent set forth on Schedule A, attached hereto,
      subject further to the conditions set forth in Article 5 herein.

3.1   Payment. The purchase price of the shares of Common Stock as to which the
      Option shall be exercised shall be paid in full at the time of exercise in
      cash or by certified check or by bank draft in accordance with Paragraph 8
      of the Plan.

4.    Non-transferability. The Option shall not be transferable, otherwise than
      by will or the laws of descent and distribution.

5.    Termination of Relationship.

      (a)   If the Optionee's service with the Corporation terminates for any
            reason other than death or disability, an Optionee who has been
            continually employed by the Company for a period of twelve (12) full
            calendar months following the grant of the Option may exercise the
            Option (to the extent it has not previously been exercised and is
            then exercisable) within the period of three (3) consecutive months
            commencing immediately following the date of such termination.

      (b)   In the event that the Optionee shall die or become disabled during
            the term of his Relationship with the Company or it s subsidiaries
            and the Optionee shall not have fully exercised this Option, this
            Option shall be exercisable at any time within one (1) year after
            the Optionee's death or disability (by the Optionee or the personal
            representative of a deceased Optionee", subject to the conditions of
            Article 7 of the Plan.

                                       2
<PAGE>
6.    Change in Control. Anything to the contrary in the Plan notwithstanding,
      in the event of a "Change in Control" of the Company as defined in
      Paragraph 10 of the Plan, an Option that shall not have expired shall
      become immediately exercisable in full per Paragraph 10 of the Plan.

7.    Adjustment. The number of shares of Common Stock covered by this Option
      and the price per share thereof shall be proportionately adjusted for any
      increase or decrease in the number of issued shares of Common Stock of the
      Company resulting from a subdivision or consolidation of shares or the
      payment of a stock dividend affected without receipt of consideration by
      the Company, or from any merger, consolidation, dissolution or liquidation
      involving the Company, subject to all the conditions specified in the
      Plan.

8.    Method Exercising Option. Subject to the terms and conditions of this
      Option Agreement, this Option may be exercised by written notice to the
      Company at its principal office, which presently is located at 17075
      Newhope Street, Fountain Valley, CA 92708. Such notice shall state the
      election to exercise the Option and the number of shares of Common Stock
      in respect to which it is being exercised and shall be signed by the
      person or persons so exercising the Option. Such notice shall be
      accompanied by payment in accordance with the terms hereof, and the
      Company shall deliver a certificate or certificates representing the
      shares of Common Stock subject to such exercise as soon as practicable
      after the notice shall be received. The certificate or certificates for
      the shares of Common Stock as to which the Option shall have been so
      exercised shall be registered in the name of the person or persons so
      exercising the Option and shall be delivered as provided above to or upon
      written order of the person or persons exercising the Option. In the event
      the Option shall be exercised by any person or persons other than the
      Optionee, in accordance with terms hereof, such notice shall be
      accompanied by appropriate proof of the right of such person or persons to
      exercise the Option. All shares of Common Stock that shall be purchased
      upon the exercise of the Option as provided herein shall be fully paid and
      nonassessable.

9.    Rights as a Shareholder. The holder of this Option shall not be entitled
      to the privileges of share ownership as to any shares of Common stock not
      actually issued and delivered.

10.   No Agreement to Employ. Nothing in this Agreement shall be construed to
      constitute or be evidence of any agreement or understanding, express or
      implied, on the part of the Company to employ or retain Optionee for any
      specific period of time.

11.   General. The Company shall at all times during the terms of this Option
      reserve and keep available such number of shares of Common Stock as will
      be sufficient to satisfy the requirements of this Option Agreement, shall
      pay all original issue and transfer taxes with respect to the issue and
      transfer of shares of Common Stock pursuant thereto and all other fees and
      expenses necessarily incurred by the Company in connection therewith, and
      will from time

                                       3
<PAGE>

      to time use its best efforts to comply with all laws and regulations,
      which, in the opinion of counsel for the Company, shall be applicable
      thereto.

12.   Withholding Taxes. If the Optionee is an employee or former employee of
      the Company when all or part of the option is exercised, the Company may
      require the Optionee to deliver payment of any withholding taxes (in
      addition to the Option exercise price) in cash with respect to the
      difference between the Option exercise price and the fair market value of
      the Stock acquired upon exercise.

13.   Interpretation. The interpretation, construction, performance and
      enforcement of this Agreement and of the Plan shall lie within the sole
      discretion of the Board of Directors, and the Board's determinations shall
      be conclusive and binding on all interested persons.

14.   Governing Law. This agreement has been made executed and delivered in, and
      the interpretation, performance and enforcement hereof shall be governed
      by and construed under the laws of the State of California.

The Company has caused this Option Agreement to be duly executed by its officers
thereunto duly authorized, and the Optionee has hereunto signed, all as of the
date and year written above.

BY:____________________________
   Paul Caceres, Chief Financial Officer
   CAM COMMERCE SOLUTIONS, Inc.

Optionee:________________________

                                       4
<PAGE>
                                   SCHEDULE A

<TABLE>
<CAPTION>
TIME ELAPSED SINCE                          PERCENTAGE OF OPTION
EFFECTIVE DATE OF OPTION                    WHICH MAY BE EXERCISED
<S>                                         <C>
One year                                              28%
One year plus one month                               30%
One year plus two months                              32%
One year plus three months                            34%
One year plus four months                             36%
One year plus five months                             38%
One year plus six months                              40%
One year plus seven months                            42%
One year plus eight months                            44%
One year plus nine months                             46%
One year plus ten months                              48%
One year plus eleven months                           50%
Two years                                             52%
Two years plus one month                              54%
Two years plus two months                             56%
Two years plus three months                           58%
Two years plus four months                            60%
Two years plus five months                            62%
Two years plus six months                             64%
Two years plus seven months                           66%
Two years plus eight months                           68%
Two years plus nine months                            70%
Two years plus ten months                             72%
Two years plus eleven months                          74%
Three years                                           76%
Three years plus one month                            78%
Three years plus two months                           80%
Three years plus three months                         82%
Three years plus four months                          84%
Three years plus five months                          86%
Three years plus six months                           88%
Three years plus seven months                         90%
Three years plus eight months                         92%
Three years plus nine months                          94%
Three years plus ten months                           96%
Three years plus eleven months                        98%
Four years                                            100%
</TABLE>

                                       5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]