Document:

Exhibit 10(d)

                          INDIAN RIVER BANKING COMPANY

                             1999 STOCK OPTION PLAN

1.   PURPOSE OF THE PLAN.

     The purpose of this Indian  River  Banking  Company  1999 Stock Option Plan
(the "Plan") is to advance the interests of Indian River Banking  Company.  (the
"Company") by providing  directors  and selected key employees of the Bank,  the
Company,  and their  affiliates  with the  opportunity  to acquire shares of the
Company's  common stock. By encouraging  stock  ownership,  the Company seeks to
attract,  retain and  motivate the best  available  personnel  for  positions of
substantial responsibility; to provide additional incentive to directors and key
employees of the Company,  the Bank and their  affiliates to promote the success
of the  business  as  measured  by the value of its  shares;  and  generally  to
increase the commonality of interests among directors,  key employees, and other
shareholders.

     The Plan is intended to replace the Indian River Banking Company 1995 Stock
Option Plan (the "1995 Plan") upon this Plan's  approval by  shareholders of the
Company.  Options issued under the 1995 Plan will continue in effect and will be
subject to the requirements of the 1995 Plan, but no new options will be granted
under the 1995 Plan after this Plan is approved by shareholders.

     The Plan is not intended as an agreement or promise of employment.  Neither
the Plan, nor any Option granted pursuant to the Plan, confers on any person any
right to continue in the employ of the Company.  The right of the  Company,  the
Bank, or any of their  affiliates to terminate the  employment of an Employee is
not  limited by the Plan or by any Option  granted  pursuant  to the Plan unless
such right is specifically described by the terms of any such Option.

2.   DEFINITIONS.

     (a) "Affiliate" means any "parent corporation" or "subsidiary  corporation"
     of the  Company  as such  terms are  defined  in  Section  424(e)  and (f),
     respectively, of the Code.

     (b) "Agreement"  means a written  agreement entered into in accordance with
     Paragraph 5(c).

     (c) "Bank" means the Indian River National Bank.

     (d) "Board" means the Board of Directors of the Company.

     (e) "Change in Control"  means any one of the  following  events  occurring
     after the Effective  Date:  (1) the  acquisition  of ownership of, power to
     vote,  or control of 25% or more of any class of voting  securities  of the
     Company or the Bank;  (2) the exercise of a controlling  influence over the
     management  or  policies  of the Bank or the  Company  by any  person or by
     persons  acting as a "group"  (within the  meaning of Section  13(d) of the
     Securities  Exchange  Act  of  1934),  or (3)  the  failure  of  Continuing
     Directors to  constitute  at least  two-thirds of the Board of Directors of
     the  Company  or the Bank (the  "Company  Board")  during any period of two
     consecutive  years.  A "change in control" does not include  acquisition of
     ownership of, control of or power to vote voting  securities of the Company
     by an  employee  benefit  plan  sponsored  by  the  Company  or  the  Bank;
     acquisition of voting securities by the Company through share repurchase or
     otherwise;  or  acquisition  by an  exchange  of voting  securities  with a
     successor to the Company in a reorganization,  such as a  re-incorporation,
     that does not have the purpose or effect of  significantly  changing voting
     power or  control.  For  purposes  of this  definition,  only,  "Continuing
     Directors"  includes only those individuals who were members of the Company
     Board at the Effective Date and those other  individuals  whose election or
     nomination  for election as a member of the Company Board was approved by a
     vote of at least two-thirds of the Continuing Directors then in office, and
     "person"  refers to an individual  or a  corporation,  partnership,  trust,
     association,   joint  venture,   pool,   syndicate,   sole  proprietorship,
     unincorporated  organization  or any other form of entity.  The decision of
     the  Board  as to  whether  a  Change  in  Control  has  occurred  shall be
     conclusive and binding.

     (f) "Code" means the Internal Revenue Code of 1986, as amended.

     (g)  "Committee"  means the Committee  appointed by the Board in accordance
     with Paragraph 5(a) hereof.

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     (h) "Common  Stock" means the common stock,  par value $1.00 per share,  of
     the Company.

     (i) "Company" means Indian River Banking Company, a Florida corporation.

     (j)  "Continuous   Service"  means  the  absence  of  any  interruption  or
     termination  of  employment  by  the  Company  or  any  present  or  future
     Affiliate.  Employment  shall not be considered  interrupted in the case of
     sick leave,  military  leave or any other leave of absence  approved by the
     Company or in the case of  transfers  between  locations  of the Company or
     among the Company, the Bank, or any other Affiliate.

     (k) "Director" means any member of the Board of Directors of the Company.

     (l) "Effective Date" means the date specified in Paragraph 14 hereof.

     (m) "Employee"  means any person  employed by the Company or by the Bank or
     any other present or future Affiliate.

     (n) "Exercise  Price" means the price per Optioned Share at which an Option
     may be exercised.

     (o)  "ISO"  means an  option  to  purchase  Common  Stock  that  meets  the
     requirements  set forth in the Plan,  and  which is  intended  to be and is
     identified as an "incentive stock option" within the meaning of Section 422
     of the Code.

     (p) "Market  Value"  means the fair market  value of the Common  Stock,  as
     determined under Paragraph 7(b) hereof.

     (q) "Non-Employee  Director" means any member of the Board who, at the time
     discretion under the Plan is exercised, is a "Non-Employee Director" within
     the meaning of Rule 16b-3.

     (r)  "Non-ISO"  means an option to  purchase  Common  Stock  that meets the
     requirements  set forth in the Plan but which is not intended to be, and is
     not identified as, an ISO.

     (s)  "Offer  to  Effect a Change  in  Control"  means  any  offer to buy or
     acquire,  solicitation of an offer to sell, tender offer for, or request of
     invitation for tenders of, 25% or more of any class of voting securities of
     the Company for value.  The decision of the Board as to whether an Offer to
     Effect a Change in Control has been made shall be conclusive and binding.

     (t)  "Option"  means an option to  purchase  Shares,  granted  by the Board
     pursuant to this Plan, whether the option is an ISO or a Non-ISO.

     (u) "Optioned Shares" means Shares subject to an Option granted pursuant to
     this Plan.

     (v)  "Optionee"  means any person who  receives an Option  pursuant to this
     Plan.

     (w) "Outstanding  Shares" means the total shares of Common Stock which have
     been issued and which (a) are not held as treasury shares, and (b) have not
     been cancelled or retired by the Company.

     (x) "Parent" shall mean any present or future  corporation  that would be a
     "parent corporation" as defined in Subsections 424(e) and (g) of the Code.

     (y) "Plan" means the Indian River Banking Company 1999 Stock Option Plan.

     (z) "Rule  16b-3"  means Rule 16b-3 of the  General  Rules and  Regulations
     under the Securities Exchange Act of 1934, as amended (the "Act").

     (aa) "Share" shall mean a share of Common Stock.

     (bb) "Subsidiary"  shall mean any present or future corporation which would
     be a "subsidiary  corporation" as defined in Subsections  424(f) and (g) of
     the Code.

     (cc) "Transaction" means (i) the liquidation or dissolution of the Company,
     (ii) a merger or  consolidation  in which the Company is not the  surviving
     entity; or (iii) the sale or disposition of all or substantially all of the
     Company's assets.

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3.   TERM OF THE PLAN AND OPTIONS.

     (a) Term of the Plan.  The Plan shall  continue in effect for a term of ten
years from the Effective Date unless sooner terminated pursuant to Paragraph 17.
No Option may be granted under the Plan after ten years from the Effective Date.

     (b) Term of Options.  The Committee shall establish the term of each Option
granted under the Plan. No Option may have a term that exceeds 10 years.  No ISO
granted  to an  Employee  who  owns  Shares  representing  more  than 10% of the
outstanding shares of Common Stock at the time an ISO is granted may have a term
that exceeds five years.

4.   SHARES SUBJECT TO THE PLAN.

     (a) Except as otherwise  required by Paragraph 11, the aggregate  number of
Shares  deliverable  upon the exercise of Options pursuant to the Plan shall not
exceed 125,000 Shares.  Such Shares may either be authorized but unissued Shares
or Shares held in treasury to the extent allowed by Florida law.

     (b) If Options should expire, become unexercisable, or be forfeited for any
reason without having been exercised in full, the Optioned Shares shall,  unless
the Plan shall have been  terminated,  be available  for the grant of additional
Options under the Plan.

5.   ADMINISTRATION OF THE PLAN.

     (a) Powers of the Board. Except as limited by the express provisions of the
Plan or by resolutions adopted by the Board, the Board shall administer the Plan
have sole and complete  authority  and  discretion  (i) to select  Optionees and
grant Options, (ii) to determine the form and content of Options to be issued in
the form of  Agreements  under the Plan,  (iii) to interpret  the Plan,  (iv) to
prescribe, amend and rescind rules and regulations relating to the Plan, and (v)
to make other  determinations  necessary or advisable for the  administration of
the Plan.  The  Committee  shall  have and may  exercise  such  other  power and
authority  as may be  delegated to it by the Board from time to time. A majority
of the entire  Board shall  constitute  a quorum and the action of a majority of
the  members  present  at any  meeting  at which a quorum  is  present,  or acts
approved  in  writing  by a majority  of the Board  without a meeting,  shall be
deemed the action of the Board.  The Board may delegate any or all of its powers
and responsibilities under this Plan to a Committee of the Board.

     (b)  Agreement.  Each  Option  shall be  evidenced  by a written  agreement
containing such provisions as may be approved by the Board.  Each such Agreement
shall constitute a binding  contract  between the Company and the Optionee,  and
every Optionee,  upon acceptance of such Agreement,  shall be bound by the terms
and  restrictions  of the Plan and of such  Agreement.  The  terms of each  such
Agreement  shall be in accordance  with the Plan, but each Agreement may include
such  additional  provisions and  restrictions  determined by the Board,  in its
discretion,  provided that such additional  provisions and  restrictions are not
inconsistent  with the terms of the Plan.  In  particular,  the Board  shall set
forth in each Agreement (i) the Exercise Price of an Option,  (ii) the number of
Shares  subject to, and the  expiration  date of, the Option,  (iii) the manner,
time and rate  (cumulative  or otherwise) of exercise or vesting of such Option,
and (iv) the restrictions, if any, to be placed upon such Option, or upon Shares
which may be issued upon exercise of such Option.  The Chairman of the Board and
such other officers as shall be designated by the Board are hereby authorized to
execute Agreements on behalf of the Company and to cause them to be delivered to
the recipients of Options.

     (c) Effect of the Board's  Decisions.  All decisions,  determinations,  and
interpretations  of the  Board  shall be final  and  conclusive  on all  persons
affected thereby.

     (d) Indemnification. In addition to such other rights of indemnification as
they may have,  the members of the Board shall be  indemnified by the Company in
connection  with any claim,  action,  suit or proceeding  relating to any action
taken or  failure  to act under or in  connection  with the Plan or any  Option,
granted  hereunder to the full extent provided for under the Company's  Articles
of Incorporation or Bylaws with respect to the indemnification of Directors.

6.   GRANT OF OPTIONS.

     (a) General  Rule.  The Board,  in its sole  discretion,  may grant ISOs or
Non-ISOs to Employees of the Company or its Affiliates and may grant Non-ISOs to
Directors or directors of Affiliates.

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     (b) Special Rules for ISOs. The aggregate  Market Value, as of the date the
Option is granted,  of the Shares with respect to which ISOs are exercisable for
the first time by an Employee  during any  calendar  year  (under all  incentive
stock option plans, as defined in Section 422 of the Code, of the Company or any
present or future  "parent" or  "Subsidiary"  of the  Company)  shall not exceed
$100,000.  Notwithstanding the prior provisions of this paragraph, the Board may
grant Options in excess of the foregoing limitations, in which case such Options
granted in excess of such limitation shall be Options which are Non-ISOs.

7.   EXERCISE PRICE FOR OPTIONS.

     (a) Limits on Board  Discretion.  The Exercise  Price as to any  particular
Option  granted  under the Plan shall not be less than the  Market  Value of the
Optioned Shares on the date of grant. In the case of an Employee who owns Shares
representing more than 10% of the Company's  Outstanding  Shares of Common Stock
at the time an ISO is granted, the Exercise Price shall not be less than 110% of
the Market Value of the Optioned Shares at the time the ISO is granted.

     (b) Standards for Determining Exercise Price. If the Common Stock is listed
on a national  securities exchange (including the NASDAQ National Market) on the
date in  question,  then the Market  Value per Share  shall be not less than the
average of the highest and lowest  selling  price on such exchange on such date,
or if there were no sales on such date,  then the  Exercise  Price  shall be not
less than the mean between the bid and asked prices on such date.  If the Common
Stock is traded otherwise than on a national  securities exchange on the date in
question,  then the  Market  Value  per  Share  shall be not less  than the mean
between the bid and asked  price on such date,  or, if there is no bid and asked
price on such date, then on the next prior business day on which there was a bid
and asked price.  If no such bid and asked price is  available,  then the Market
Value per Share shall be its fair market value as  determined  by the Board,  in
its sole and absolute discretion.

     (c) Reissuance of Options. Notwithstanding anything herein to the contrary,
the Board  shall  have the  authority  to cancel  outstanding  Options  with the
consent of the  Optionee  and to grant new Options at a lower Option Price equal
to the then fair  market  value per share of Common  Stock in the event that the
fair  market  value per share of Common  Stock at any time  prior to the date of
exercise of outstanding Options falls below the Option Price of such Options.

8.   EXERCISE OF OPTIONS.

     (a) Generally. Any Option shall be exercisable at such times and under such
conditions  as  shall  be  permissible  under  the  terms of the Plan and of the
Agreement. An Option may not be exercised for a fractional Share.

     (b) Procedure for Exercise.  An Optionee may exercise  Options,  subject to
provisions relative to its termination and limitations on its exercise,  only by
(1) written  notice of intent to exercise the Option with respect to a specified
number of Shares, and (2) either payment to the Company  (contemporaneously with
delivery of such notice) in cash, in Common Stock,  or a combination of cash and
Common Stock,  of the amount of the Exercise Price for the number of Shares with
respect to which the Option is then being exercised,  or a cashless  exercise of
the Option in accordance  with Section 8(c) of this Plan.  Each such notice (and
payment where required) shall be delivered,  or mailed by prepaid  registered or
certified mail,  addressed to the Chief Financial  Officer of the Company at the
Company's executive offices. Common Stock utilized in full or partial payment of
the Exercise  Price for Options  shall be valued at its Market Value at the date
of exercise.

     (c) Any  Optionee  may elect to  receive  upon the proper  exercise  of any
Option for the full number of Shares to which such Option relates, the number of
Shares  determined by dividing (i) the  difference  between the  aggregate  fair
market value of all shares issuable upon the exercise of the Options in full (as
determined  in  accordance  with  Section  7(b) of this Plan) and the  aggregate
Option  Price  for the  exercise  of the  Option  in  full,  by (ii)  the  price
determined in accordance  with Section 7(b).  Shares received upon such election
shall reflect the exercise in full of such Options and the full  satisfaction of
the Company's  obligations under said Option. Shares received upon such election
shall be deemed to be Shares  received  upon the  exercise  of an Option for all
purposes hereof.

         (d)  Notwithstanding the provisions of any Option that provides for its
exercise in  installments  as designated by the Board,  such Option shall become
immediately  exercisable  upon the  Optionee's  death  or  Permanent  and  Total
Disability.

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     (e) Period of  Exercisability-ISOs.  An ISO may be exercised by an Optionee
only while the Optionee is an Employee  and has  maintained  Continuous  Service
from the date of the grant of the ISO, or within three months after  termination
of such  Continuous  Service  (but not later  than the date on which the  Option
would otherwise expire),  except if the Employee's Continuous Service terminates
by reason of -

          (1) "Just Cause" which for purposes  hereof shall have the meaning set
          forth in any unexpired  employment or severance  agreement between the
          Optionee and the Company or any Affiliate  (and, in the absence of any
          such agreement,  means termination  because of the Employee's personal
          dishonesty, incompetence, willful misconduct, breach of fiduciary duty
          involving  personal  profit,  intentional  failure to  perform  stated
          duties,  willful  violation of any law, rule or regulation (other than
          traffic  violations  or similar  offenses)  or final  cease-and-desist
          order),  then the Optionee's  rights to exercise such ISO shall expire
          on the date of such termination;

          (2)  Death,  then an ISO of the  deceased  Optionee  may be  exercised
          within  two years  from the date of his death  (but not later than the
          date on which the  Option  would  otherwise  expire)  by the  personal
          representatives  of his estate or person or persons to whom his rights
          under  such ISO shall have  passed by will or by laws of  descent  and
          distribution;

          (3) Permanent and Total Disability (as such term is defined in Section
          22(e)(3) of the Code),  then an ISO may be  exercised  within one year
          from the date of such  Permanent and Total  Disability,  but not later
          than the date on which the ISO would otherwise expire.

     (f)  Period  of  Exercisability-Non-ISOs.  Except to the  extent  otherwise
provided in the terms of an Agreement, a Non-ISO may be exercised by an Optionee
only while  such  Optionee  is an  Employee,  a  Director,  or a director  of an
Affiliate,  or within three months  after  termination  of such service (but not
later than the date on which the Option would otherwise  expire),  except if the
Optionee's service terminates by reason of -

          (1) "Just Cause" which for purposes  hereof shall have the meaning set
          forth in any unexpired  employment or severance  agreement between the
          Optionee and the Company or any Affiliate  (and, in the absence of any
          such agreement,  means termination  because of the Optionee's personal
          dishonesty, incompetence, willful misconduct, breach of fiduciary duty
          involving  personal  profit,  intentional  failure to  perform  stated
          duties,  willful  violation of any law, rule or regulation (other than
          traffic  violations  or similar  offenses)  or final  cease-and-desist
          order),  then the  Optionee's  rights to exercise  such Non-ISO  shall
          expire on the date of such termination; or

          (2)  Removal  from  the  Board  or  the  Bank  Board  pursuant  to the
          respective  Articles of  Incorporation,  then the Optionee's rights to
          exercise such Non-ISO shall expire on the date of such removal.

          (3) Death,  then a Non-ISO of the  deceased  Optionee may be exercised
          within  two years  from the date of his death  (but not later than the
          date on which the  Option  would  otherwise  expire)  by the  personal
          representatives  of his estate or person or persons to whom his rights
          under such Non-ISO shall have passed by will or by laws of descent and
          distribution  or  otherwise  shall have  transferred  pursuant to this
          Plan;

          (4) Permanent and Total Disability (as such term is defined in Section
          22(e)(3) of the Code), then a Non-ISO may be exercised within one year
          from the date of such  Permanent and Total  Disability,  but not later
          than the date on which the ISO would otherwise expire.

     (g) Effect of the Board's Decisions.  The Board's  determination whether an
Optionee's  Continuous  Service  or  service as a  Director  or  director  of an
Affiliate  has  ceased,  and the  effective  date  thereof  shall be  final  and
conclusive on all persons affected thereby.

9.   CONDITIONS UPON ISSUANCE OF SHARES.

     (a) Compliance  with Securities  Laws.  Shares of Common Stock shall not be
issued  with  respect to any Option  unless the  issuance  and  delivery of such
Shares shall  comply with all relevant  provisions  of law,  including,  without
limitation,  the Securities Act of 1933, as amended,  the rules and  regulations
promulgated   thereunder,   any  applicable   state   securities  law,  and  the
requirements of any stock exchange upon which the Shares may then be listed. The
Plan is intended to comply with Rule 16b-3,  and any  provision of the Plan than
the Board determines in its sole

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and absolute  discretion to be inconsistent  with said Rule shall, to the extent
of such  inconsistency,  be inoperative  and null and void, and shall not affect
the validity of the remaining provisions of the Plan.

     (b) Special Circumstances.  The inability of the Company to obtain approval
from any  regulatory  body or authority  deemed by the  Company's  counsel to be
necessary to the lawful issuance and sale of any Shares  hereunder shall relieve
the Company of any liability  with respect to the  non-issuance  or sale of such
Shares. As a condition to the exercise of an Option, the Company may require the
person exercising the Option to make such  representations and warranties as the
Board  determines  may be necessary to assure the  availability  of an exemption
from the registration requirements of federal or state securities law.

     (c) Board Discretion.  The Board shall have the discretionary  authority to
impose in Agreements such  restrictions on Shares as it may deem  appropriate or
desirable, including but not limited to the authority to impose a right of first
refusal or to establish repurchase rights or both of these restrictions.

10.  RESTRICTIONS ON SALE OF SHARES

     (a) Six-Month  Restriction.  Shares of Common Stock that have been acquired
upon  exercise of an Option may not be sold or otherwise  disposed of before the
end of a six-month  period  beginning on the date the Option was  granted.  This
restriction is in addition to any other  restriction  imposed by this Plan or by
the Board pursuant to this Plan.

     (b) Exceptions. The six-month restriction imposed by subparagraph (a) shall
not apply to dispositions by bona fide gifts or to transfers by will or the laws
of descent or distribution.

11.  EFFECT OF CHANGES IN CONTROL  AND  CHANGES IN COMMON  STOCK  SUBJECT TO THE
     PLAN.

     (a) Effects of Change in Control.

          (1) Notwithstanding the provisions of any Option that provides for its
          exercise or vesting in installments,  all Options shall be immediately
          exercisable  and fully  vested upon a Change in Control or the receipt
          of an Offer to Effect a Change in Control.

          (2) At the time of a Change in Control,  the  Optionee  shall,  at the
          sole and absolute  discretion  of the Board,  be entitled to receive a
          cash  payment in an amount  equal to the excess of the Market Value of
          the Shares  subject to such  Option  over the  Exercise  Price of such
          Option,  provided  that in no event  may an  Option  be  cancelled  in
          exchange for cash within the  six-month  period  following the date of
          its grant. For purposes of calculating this payment,  the Market Value
          shall be the Market  Value at the date of the Change in Control or the
          highest   Market   Value  in  the  five   trading  days  after  public
          announcement of an Offer to Effect a Change in Control,  as determined
          by the Board.

          (3) In the event there is a Transaction, all outstanding Options shall
          be surrendered.  With respect to each Option so surrendered, the Board
          shall in its sole and absolute discretion determine whether the holder
          of each Option so surrendered shall receive--

               (A) For each Share  then  subject to an  outstanding  Option,  an
               Option  for  the  number  and  kind of  shares  into  which  each
               Outstanding   Share   (other  than  Shares  held  by   dissenting
               shareholders)   is  changed  or   exchanged,   together  with  an
               appropriate adjustment to the Exercise Price; or

               (B) The  number and kind of shares  into  which each  Outstanding
               Share  (other  than Shares held by  dissenting  shareholders)  is
               changed or exchanged in the Transaction  that are equal in market
               value  to the  excess  of the  Market  Value  on the  date of the
               Transaction  of the  Shares  subject  to  the  Option,  over  the
               Exercise Price of the Option; or

               (C)  A  cash   payment   (from  the  Company  or  the   successor
               corporation),  in an amount  equal to the  excess  of the  Market
               Value on the date of the Transaction of the Shares subject to the
               Option, over the Exercise Price of the Option.

          (4) The  decision  of the Board as to whether a Change in Control  has
          occurred,  or an Offer to  Effect a Change  in  Control  has been made
          shall be conclusive and binding.

     (b)  Recapitalizations,  Stock  Splits,  Etc. The number and kind of shares
reserved for issuance  under the Plan, and the number and kind of shares subject
to outstanding Options and the Exercise Price thereof,  shall be

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proportionately  adjusted  for any  increase,  decrease,  change or  exchange of
Shares  for a  different  number or kind of shares  or other  securities  of the
Company   which   results  from  a  merger,   consolidation,   recapitalization,
reorganization,  reclassification,  stock  dividend,  split-up,  combination  of
shares,  or  similar  event in which the  number  or kind of  shares is  changed
without the receipt or payment of consideration by the Company.

     (c) Special Rule for ISOs.  Any adjustment  made pursuant to  subparagraphs
(a)(3)(A)  or (b) of this  Paragraph  shall be made in such a  manner  as not to
constitute a modification,  within the meaning of Section 424(h) of the Code, of
outstanding ISOs.

     (d) Conditions and Restrictions on New, Additional,  or Different Shares or
Securities.  If, by reason of any adjustment made pursuant to this Paragraph, an
Optionee  becomes entitled to new,  additional,  or different shares of stock or
securities,  such new,  additional,  or different  shares of stock or securities
shall thereupon be subject to all of the conditions and restrictions  which were
applicable to the Shares pursuant to the Option before the adjustment was made.

     (e) Other Issuances.  Except as expressly  provided in this Paragraph,  the
issuance by the Company or an Affiliate  of shares of stock of any class,  or of
securities  convertible  into  Shares  or stock of  another  class,  for cash or
property or for labor or services  either upon direct sale or upon the  exercise
of rights or warrants to subscribe therefor, shall not affect, and no adjustment
shall be made with respect to, the number,  class,  or Exercise  Price of Shares
then subject to Options or reserved for issuance under the Plan.

12.  NON-TRANSFERABILITY OF OPTIONS.

     (a) ISOs may not be sold, pledged, assigned,  hypothecated,  transferred or
disposed  of in any  manner  other  than by will or by the laws of  descent  and
distribution, or pursuant to the terms of a "qualified domestic relations order"
(within  the  meaning  of  Section  414(p) of the Code and the  regulations  and
rulings thereunder).

     (b) Non-ISO's may not be sold, pledged, assigned, hypothecated, transferred
or  disposed  of in any manner  other than by will or by the laws of descent and
distribution,  pursuant to the terms of a "qualified  domestic  relations order"
(within  the  meaning  of  Section  414(p) of the Code and the  regulations  and
rulings thereunder), or, in the sole discretion of the Board, in connection with
a transfer for estate or retirement planning purposes to a trust established for
such purposes.

13.  TIME OF GRANTING  OPTIONS.  The date of grant of an Option  shall,  for all
purposes, be the later of the date on which the Board makes the determination of
granting such Option and the Effective Date. Notice of the  determination  shall
be given to each  Optionee to whom an Option is so granted  within a  reasonable
time after the date of such grant.

14.  EFFECTIVE DATE. The Plan shall be effective as of October 13, 1999.  Option
grants  may be made  before  approval  of the  Plan by the  shareholders  of the
Company, if the exercise of Options is conditioned upon shareholder  approval of
the Plan.

15. APPROVAL BY SHAREHOLDERS.  The Plan shall be approved by shareholders of the
Company within twelve (12) months before or after the Effective Date.

16.  MODIFICATION OF OPTIONS.  At any time, and from time to time, the Board may
direct  execution  of an  instrument  providing  for  the  modification  of  any
outstanding Option,  provided no such modification shall confer on the holder of
said Option any right or benefit which could not be conferred on the Optionee by
the grant of a new Option at such time, or impair the Option without the consent
of the holder of the Option.

17. AMENDMENT AND TERMINATION OF THE PLAN. The Board may from time to time amend
the terms of the Plan and, with respect to any Shares at the time not subject to
Options, suspend or terminate the Plan; provided that shareholder approval shall
be  required to increase  the number of Shares  subject to the Plan  provided in
Paragraph 4 or to extend the terms of the Plan.  No  amendment,  suspension,  or
termination of the Plan shall, without the consent of any affected holders of an
Option,  alter or impair any rights or obligations under any Option  theretofore
granted.

18. RESERVATION OF SHARES. During the term of the Plan, the Company will reserve
and keep available a number of Shares  sufficient to satisfy the requirements of
the Plan.

19. WITHHOLDING TAX. The Company's obligation to deliver Shares upon exercise of
Options (or such earlier time that the Optionee  makes an election under Section
83(b) of the  Code)  shall be  subject  to the  Optionee's  satisfaction  of all
applicable  federal,  state,  and local income and  employment  tax  withholding
obligations.  The Board, in its  discretion,  may permit the Optionee to satisfy
the obligation, in whole or in part, by irrevocably electing to have the

                                       7
<PAGE>

Company withhold  Shares,  or to deliver to the Company Shares that the Optionee
already owns,  having a value equal to the amount  required to be withheld.  The
value of Shares to be withheld,  or delivered to the Company,  shall be based on
the Market  Value of the Shares on the date the amount of tax to be  withheld is
to be determined.  As an  alternative,  the Company may retain,  or sell without
notice,  a number of such Shares  sufficient to cover the amount  required to be
withheld.

20. NO EMPLOYMENT OR OTHER RIGHTS.  In no event shall  eligibility to be granted
an Option or the grant of an Option  create or be deemed to create  any legal or
equitable right of a Director, Employee, director of any Affiliate, or any other
party to continue service with the Company, the Bank, or any other Affiliate. No
person shall have a right to be granted an Option or, having received an Option,
the right to be granted an additional Option.

21.  GOVERNING  LAW. The Plan shall be governed by and  construed in  accordance
with the laws of the State of  Florida,  except to the extent  that  federal law
shall be deemed to apply.

22.  SUCCESSORS  AND  ASSIGNS.  The Plan  shall be  binding  upon the  Company's
successors and assigns.

                                     * * * *

                                       8<PAGE>

                                                                    EXHIBIT 10.3

Bank of America
================================================================================
                                                         Business Loan Agreement

This Agreement dated as of   4/21  ,   2000  , is between Bank of America, N.A.
(the "Bank") and Sunrise Telecom, Inc. (the "Borrower").

1.   LINE OF CREDIT AMOUNT AND TERMS

1.1. Line of Credit Amount.

(a)  During the availability period described below, the Bank will provide a
     line of credit to the Borrower. The amount of the line of credit (the
     "Commitment") is Nine Million and 00/100 Dollars ($9,000,000.00). In the
     event that the Borrower's initial public offering ("IPO") is not completed
     by August 1, 2000, the amount of the Commitment from such date until the
     Expiration Date (as defined below) will be Six Million and 00/100 Dollars
     ($6,000,000.00).

(b)  This is a revolving line of credit providing for cash advances and letters
     of credit. During the availability period, the Borrower may repay principal
     amounts and reborrow them.

(c)  The Borrower agrees not to permit the outstanding principal balance of
     advances under the line of credit plus the outstanding amounts of any
     letters of credit, including amounts drawn on letters of credit and not yet
     reimbursed, to exceed the Commitment.

1.2. Availability Period.  The line of credit is available between the date of
     this Agreement and May 1, 2001, or such earlier date as the availability
     may terminate as provided in this Agreement (the "Expiration Date").

1.3. Interest Rate.

(a)  Unless the Borrower elects an optional interest rate as described below,
     the interest rate is the Bank's Prime Rate minus 0.25 percentage point.

(b)  The Prime Rate is the rate of interest publicly announced from time to time
     by the Bank as its Prime Rate.  The Prime Rate is set by the Bank based on
     various factors, including the Bank's costs and desired return, general
     economic conditions and other factors, and is used as a reference point for
     pricing some loans.  The Bank may price loans to its customers at, above,
     or below the Prime Rate.  Any change in the Prime Rate shall take effect at
     the opening of business on the day specified in the public announcement of
     a change in the Bank's Prime Rate.

1.4. Repayment Terms.

(a)  The Borrower will pay interest on May 1, 2000, and then monthly thereafter
     until payment in full of any principal outstanding under this line of
     credit.

(b)  The Borrower will repay in full all principal and any unpaid interest or
     other charges outstanding under this line of credit no later than the
     Expiration Date.  Any amount bearing interest at an optional interest rate
     (as described below) may be repaid at the end of the applicable interest
     period, which shall be no later than ninety (90) days after the Expiration
     Date.

1.5. Optional Interest Rates.  Instead of the interest rate based on the Bank's
     Prime Rate, the Borrower may elect the optional interest rates listed below
     during interest periods agreed to by the Bank and the Borrower. The
     optional interest rates shall be subject to the terms and conditions
     described later in this Agreement. Any principal amount bearing interest at
     an optional rate under this Agreement is referred to as a "Portion." The
     following optional interest rates are available:

(a)  Short Term Fixed Rates.

(b)  the IBOR Rate plus 1.75 percentage points.

(c)  the LIBOR Rate plus 1.75 percentage points.

1.6. Letters of Credit.

(a)  This line of credit may be used for financing:

     (i)  commercial letters of credit with a maximum maturity of 180 days but
          not to extend more than 180 days beyond the Expiration Date. Each
          commercial letter of credit will require drafts payable at sight.

                                      -1-

<PAGE>

     (ii) standby letters of credit with a maximum maturity of 365 days but not
          to extend more than 365 days beyond the Expiration Date.

     (iii) The amount of letters of credit outstanding at any one time
          (including amounts drawn on letters of credit and not yet reimbursed)
          may not exceed Two Hundred Fifty Thousand and 00/100 Dollars
          ($250,000.00).

(b)  The Borrower agrees:

     (i)  any sum drawn under a letter of credit may, at the option of the Bank,
          be added to the principal amount outstanding under this Agreement. The
          amount will bear interest and be due as described elsewhere in this
          Agreement.

     (ii) if there is a default under this Agreement, to immediately prepay and
          make the Bank whole for any outstanding letters of credit.

     (iii) the issuance of any letter of credit and any amendment to a letter of
          credit is subject to the Bank's written approval and must be in form
          and content satisfactory to the Bank and in favor of a beneficiary
          acceptable to the Bank.

     (iv) to sign the Bank's form Application and Agreement for Commercial
          Letter of Credit or Application and Agreement for Standby Letter of
          Credit.

     (v)  to allow the Bank to automatically charge its checking account for
          applicable fees, discounts, and other charges.

1.7. Foreign Exchange Facility.

(a)  During the availability period, the Bank at its discretion may enter into
     spot and forward foreign exchange contracts with the Borrower. The foreign
     exchange contract limit will be Two Million Five Hundred Thousand and
     00/100 U.S. Dollars (U.S. $2,500,000.00), and the settlement limit will be
     One Million and 00/100 U.S. Dollars (U.S. $1,000,000.00). The "foreign
     exchange contract limit" is the maximum limit on the net difference between
     the total foreign exchange contracts outstanding less the total foreign
     exchange contracts for which the Borrower has already compensated the Bank.
     The "settlement limit" is the maximum limit on the gross total amount of
     all sale and purchase contracts on which delivery is to be effected and
     settlement allowed on any one banking day.

(b)  The Bank shall not be obligated to permit the Borrower to enter into any
     foreign exchange contracts which would exceed the settlement limit.
     However, if the Bank decides, in its discretion, to waive the settlement
     limit for foreign exchange contracts which will settle on any particular
     banking day, the Bank shall not be required to make any U.S. Dollar or
     foreign currency settlement payment to the Borrower until the Bank receives
     evidence satisfactory to it that the Borrower has paid the Bank all of the
     Borrowers U.S. Dollar and foreign currency settlement payments. The Bank
     shall not be liable for interest or other damages caused by any such
     failure to pay or deliver or any such delay in payment or delivery.

(c)  The Borrower will pay the Bank on demand the Bank's then standard foreign
     exchange contract fees for each contract.

(d)  Foreign exchange contracts will be in form and substance satisfactory to
     the Bank.

(e)  No foreign exchange contracts will mature later than one hundred eighty
     (180) days after the Expiration Date, and in addition no foreign exchange
     contract shall have a tenor longer than 180 days.

(f)  The Borrower understands the risks of, and is financially able to bear any
     losses resulting from, entering into foreign exchange contracts. The Bank
     shall not be liable for any loss suffered by the Borrower as a result of
     the Borrowers foreign exchange trading. The Borrower will enter into each
     foreign exchange contract in reliance only upon the Borrower's own
     judgment. The Borrower acknowledges that in entering into foreign exchange
     contracts with the Borrower, the Bank is not acting as a fiduciary. The
     Borrower understands that neither the Bank nor the Borrower has any
     obligation to enter into any particular foreign exchange contract with the
     other.

(g)  On the date of this Agreement and at the time of each request by the
     Borrower for a foreign exchange contract, the Borrower represents and
     warrants that the Borrower has, and shall maintain, a net worth of at least
     One Million Dollars ($1,000,000).  The Borrower represents and warrants
     that it will enter into foreign exchange contracts only in connection with
     the conduct of its business or to manage the risk of an asset or liability
     owned or incurred in the conduct of its business, and not for speculative
     purposes.

                                      -2-

<PAGE>

(h)  The Borrower hereby requests the Bank to rely upon and execute the
     Borrower's telephonic instructions regarding foreign exchange contracts,
     and the Borrower agrees that the Bank shall incur no liability for its acts
     or omissions which result from interruption of communications,
     misunderstood communications or instructions from unauthorized persons,
     unless caused by the willful misconduct of the Bank or its officers or
     employees.  The Borrower agrees to protect the Bank and hold it harmless
     from any and all loss, damage, claim, expense (including the reasonable
     fees of outside counsel and the allocated costs of staff counsel) or
     inconvenience, however arising, which the Bank suffers or incurs or might
     suffer or incur, based on or arising out of said acts or omissions.

(i)  The Borrower agrees to promptly review all confirmations sent to the
     Borrower by the Bank.  The Borrower understands that these confirmations
     are not legal contracts but only evidence of the valid and binding oral
     contract which the Borrower has already entered into with the Bank.  The
     Borrower agrees to promptly execute and return to the Bank confirmations
     which accurately reflect the terms of a foreign exchange contract, and
     immediately contact the Bank if the Borrower believes a confirmation is not
     accurate.  In the event of a conflict, inconsistency or ambiguity between
     the provisions of this Agreement and the provisions of a confirmation, the
     provisions of this Agreement will prevail.

(j)  The Borrower agrees that the Bank may electronically record all telephonic
     conversations with the Borrower relating to foreign exchange contracts and
     that such tape recordings may be submitted in evidence to any court or in
     any other proceedings relating to such contracts.  The Borrower agrees that
     in the event of a conflict, inconsistency or ambiguity between the terms of
     a foreign exchange contract as reflected in a tape recording and the terms
     stated on a confirmation, the terms reflected in the tape recording shall
     control.

(k)  Any sum owed to the Bank under a foreign exchange contract may, at the
     option of the Bank, be added to the principal amount outstanding under this
     Agreement.  The amount will bear interest and be due as described elsewhere
     in this Agreement.  The Borrower hereby authorizes the Bank to debit the
     Borrower's account with the Bank for payments due from the Borrower to the
     Bank with respect to any foreign exchange contract.  The Borrower
     acknowledges that any collateral pledged to secure the Borrowers
     performance of its obligations under this Agreement secures its obligations
     under foreign exchange contracts with the Bank.

(l)  In addition to any other rights or remedies which the Bank may have under
     this Agreement or otherwise, upon the occurrence of an event of default
     under this Agreement, or if the Borrower's aggregate realized or unrealized
     mark-to-market losses on foreign exchange contracts exceed $500,000.00 (the
     "Revaluation Limit"), the Bank may:

     (i)    Suspend performance of its obligations to the Borrower under any
            foreign exchange contract;

     (ii)   Declare all foreign exchange contracts, interest and any other
            amounts which are payable by the Borrower to the Bank immediately
            due and payable; and

     (iii)  Without notice to the Borrower, close out any or all foreign
            exchange contracts or positions of the Borrower with the Bank.

     The Bank shall not be under any obligation to exercise any such rights or
     remedies or to exercise them at a time or in a manner beneficial to the
     Borrower.  The Borrower shall be liable for any amounts owing to the Bank
     after exercise of any such rights and remedies.

2.   OPTIONAL INTEREST RATES

2.1. Optional Rates.  Each optional interest rate is a rate per year.  Interest
will be paid on the last day of each interest period, and on the first day of
each month during the interest period.  At the end of any interest period, the
interest rate will revert to the rate based on the Prime Rate, unless the
Borrower has designated another optional interest rate for the Portion.  No
Portion will be converted to a different interest rate during the applicable
interest period.  Upon the occurrence of an event of default under this
Agreement, the Bank may terminate the availability of optional interest rates
for interest periods commencing after the default occurs.

2.2. Short Term Fixed Rate.  The election of Short Term Fixed Rates shall be
subject to the following terms and requirements:

(a)  The "Short Term Fixed Rate" means the fixed interest rate the Bank and the
     Borrower agree will apply during the applicable interest period.

(b)  The interest period during which the Short Term Fixed Rate will be in
     effect will be no shorter than 30 days and no longer than one year.

                                      -3-
<PAGE>

(c)  Each Short Term Fixed Rate Portion will be for an amount not less than the
     following:

     (i)    for interest periods of 91 days or longer, Five Hundred Thousand
            Dollars ($500,000).

     (ii)   for interest periods of between 30 days and 90 days, One Million
            Dollars ($1,000,000).

(d)  Each prepayment of a Short Term Fixed Rate Portion, whether voluntary, by
     reason of acceleration or otherwise, will be accompanied by the amount of
     accrued interest on the amount prepaid, and a prepayment fee as described
     below.  A "prepayment" is a payment of an amount on a date earlier than the
     scheduled payment date for such amount as required by this Agreement.

(e)  The prepayment fee shall be in an amount sufficient to compensate the Bank
     for any loss, cost or expense incurred by it as a result of the prepayment,
     including any loss of anticipated profits and any loss or expense arising
     from the liquidation or reemployment of funds obtained by it to maintain
     such Portion or from fees payable to terminate the deposits from which such
     funds were obtained.  The Borrower shall also pay any customary
     administrative fees charged by the Bank in connection with the foregoing.
     For purposes of this paragraph, the Bank shall be deemed to have funded
     each Portion by a matching deposit or other borrowing in the applicable
     interbank market, whether or not such Portion was in fact so funded.

2.3. IBOR Rate.  The election of IBOR Rates shall be subject to the following
terms and requirements:

(a)  The interest period during which the IBOR Rate will be in effect will be no
     shorter than 30 days and no longer than one year.  The last day of the
     interest period will be determined by the Bank using the practices of the
     offshore dollar inter-bank market.

(b)  Each IBOR Rate Portion will be for an amount not less than the following:

     (i)    for interest periods of 91 days or longer, Five Hundred Thousand
            Dollars ($500,000).

     (ii)   for interest periods of between 30 days and 90 days, One Million
            Dollars ($1,000,000).

(c)  The Borrower may not elect an IBOR Rate with respect to any principal
     amount which is scheduled to be repaid before the last day of the
     applicable interest period.

(d)  The "IBOR Rate" means the interest rate determined by the following
     formula, rounded upward to the nearest 1/100 of one percent.  (All amounts
     in the calculation will be determined by the Bank as of the first day of
     the interest period.)

               IBOR Rate    =          IBOR Base Rate
                                 ---------------------------
                                 (1.00 - Reserve Percentage)

     Where,

     (i)    "IBOR Base Rate" means the interest rate at which the Bank's Grand
            Cayman Branch, Grand Cayman, British West Indies, would offer U.S.
            dollar deposits for the applicable interest period to other major
            banks in the offshore dollar inter-bank market.

     (ii)   "Reserve Percentage" means the total of the maximum reserve
            percentages for determining the reserves to be maintained by member
            banks of the Federal Reserve System for Eurocurrency Liabilities, as
            defined in Federal Reserve Board Regulation D, rounded upward to the
            nearest 1/100 of one percent. The percentage will be expressed as a
            decimal, and will include, but not be limited to, marginal,
            emergency, supplemental, special, and other reserve percentages.

(e)  Each prepayment of an IBOR Rate Portion, whether voluntary, by reason of
     acceleration or otherwise, will be accompanied by the amount of accrued
     interest on the amount prepaid, and a prepayment fee as described below.  A
     "prepayment" is a payment of an amount on a date earlier than the scheduled
     payment date for such amount as required by this Agreement.

(f)  The prepayment fee shall be in an amount sufficient to compensate the Bank
     for any loss, cost or expense incurred by it as a result of the prepayment,
     including any loss of anticipated profits and any loss or expense arising
     from the liquidation or reemployment of funds obtained by it to maintain
     such Portion or from fees payable to terminate the deposits from which such
     funds were obtained.  The Borrower shall also pay any customary
     administrative fees charged by the Bank in connection with the foregoing.
     For purposes of this paragraph, the Bank shall be deemed to have funded
     each Portion by a matching deposit or other borrowing in the applicable
     interbank market, whether or not such Portion was in fact so funded.

                                      -4-
<PAGE>

(g)  The Bank will have no obligation to accept an election for an IBOR Rate
     Portion if any of the following described events has occurred and is
     continuing:

     (i)  Dollar deposits in the principal amount, and for periods equal to the
          interest period, of an IBOR Rate Portion are not available in the
          offshore dollar inter-bank market; or

     (ii) the IBOR Rate does not accurately reflect the cost of an IBOR Rate
          Portion.

2.4. LIBOR Rate.  The election of LIBOR Rates shall be subject to the following
     terms and requirements:

(a)  The interest period during which the LIBOR Rate will be in effect will be
     one, two, three, four, five, six, seven, eight, nine, ten, eleven, or
     twelve months.  The first day of the interest period must be a day other
     than a Saturday or a Sunday on which the Bank is open for business in New
     York and London and dealing in offshore dollars (a "LIBOR Banking Day").
     The last day of the interest period and the actual number of days during
     the interest period will be determined by the Bank using the practices of
     the London inter-bank market.

(b)  Each LIBOR Rate Portion will be for an amount not less than the following:

     (i)  for interest periods of four months or longer, Five Hundred Thousand
          Dollars ($500,000).

     (ii) for interest periods of one, two or three months, One Million Dollars
          ($1,000,000).

(c)  The "LIBOR Rate" means the interest rate determined by the following
     formula, rounded upward to the nearest 1/100 of one percent. (All amounts
     in the calculation will be determined by the Bank as of the first day of
     the interest period.)

               LIBOR Rate  =  London Inter-Bank Offered Rate
                              ------------------------------
                               (1.00 - Reserve Percentage)

     Where,

     (i)  "London Inter-Bank Offered Rate" means the average per annum interest
          rate at which U.S. dollar deposits would be offered for the applicable
          interest period by major banks in the London inter-bank market, as
          shown on the Telerate Page 3750 (or such other page as may replace it)
          at approximately 11:00 a.m. London time two (2) London Banking Days
          before the commencement of the interest period. If such rate does not
          appear on the Telerate Page 3750 (or such other page that may replace
          it), the rate for that interest period will be determined by such
          alternate method as reasonably selected by Bank. A "London Banking
          Day" is a day on which the Bank's London Branch is open for business
          and dealing in offshore dollars.

     (ii) "Reserve Percentage" means the total of the maximum reserve
          percentages for determining the reserves to be maintained by member
          banks of the Federal Reserve System for Eurocurrency Liabilities, as
          defined in Federal Reserve Board Regulation D, rounded upward to the
          nearest 1/100 of one percent. The percentage will be expressed as a
          decimal, and will include, but not be limited to, marginal, emergency,
          supplemental, special, and other reserve percentages.

(d)  The Borrower shall irrevocably request a LIBOR Rate Portion no later than
     12:00 noon time on the LIBOR Banking Day preceding the day on which the
     London Inter-Bank Offered Rate will be set, as specified above.  For
     example, if there are no intervening holidays or weekend days in any of the
     relevant locations, the request must be made at least three days before the
     LIBOR Rate takes effect.

(e)  The Borrower may not elect a LIBOR Rate with respect to any principal
     amount which is scheduled to be repaid before the last day of the
     applicable interest period.

(f)  Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of
     acceleration or otherwise, will be accompanied by the amount of accrued
     interest on the amount prepaid and a prepayment fee as described below. A
     "prepayment" is a payment of an amount on a date earlier than the scheduled
     payment date for such amount as required by this Agreement.

(g)  The prepayment fee shall be in an amount sufficient to compensate the Bank
     for any loss, cost or expense incurred by it as a result of the prepayment,
     including any loss of anticipated profits and any loss or expense arising
     from the liquidation or reemployment of funds obtained by it to maintain
     such Portion or from fees payable to terminate the deposits from which such
     funds were obtained. The Borrower shall also pay any customary
     administrative fees charged by the Bank in connection with the foregoing.
     For purposes of this paragraph, the Bank shall be deemed to have funded
     each Portion by a matching deposit or other borrowing in the applicable
     interbank market, whether or not such Portion was in fact so funded.

                                      -5-

<PAGE>

(h)  The Bank will have no obligation to accept an election for a LIBOR Rate
     Portion if any of the following described events has occurred and is
     continuing:

     (i)  Dollar deposits in the principal amount, and for periods equal to the
          interest period, of a LIBOR Rate Portion are not available in the
          London inter-bank market; or

     (ii) the LIBOR Rate does not accurately reflect the cost of a LIBOR Rate
          Portion.

3.   FEES AND EXPENSES

3.1. Fees.

(a)  Loan fee.  The Borrower agrees to pay a loan fee in the amount of Eleven
     Thousand Five Hundred Fifty and 00/100  Dollars ($11,550.00). This fee is
     due on or before the date of this Agreement.

(b)  Waiver fee.  If the Bank, at its discretion, agrees to waive or amend any
     terms of this Agreement, the Borrower will, at the Bank's option, pay the
     Bank a fee for each waiver or amendment in an amount advised by the Bank at
     the time the Borrower requests the waiver or amendment. Nothing in this
     paragraph shall imply that the Bank is obligated to agree to any waiver or
     amendment requested by the Borrower. The Bank may impose additional
     requirements as a condition to any waiver or amendment.

(c)  Late Fee.  To the extent permitted by law, the Borrower agrees to pay a
     late fee in an amount not to exceed two  percent (2%) of any installment
     that is more than fifteen (15) days late.  The imposition and payment of a
     late fee shall not constitute a waiver of the Bank's rights with respect to
     the default.

3.2. Expenses.  The Borrower agrees to immediately repay the Bank for expenses
     that include, but are not limited to, filing, recording and search fees,
     appraisal fees, title report fees and documentation fees.

3.3. Reimbursement Costs.

(a)  The Borrower agrees to reimburse the Bank for any expenses it incurs in the
     preparation of this Agreement and any agreement or instrument required by
     this Agreement. Expenses include, but are not limited to, reasonable
     attorneys' fees, including any allocated costs of the Bank's in-house
     counsel.

4.   COLLATERAL

4.1. Personal Property.  The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will own
in the future as listed below. The collateral is further defined in security
agreement(s) executed by the Borrower. In addition, all personal property
collateral securing this Agreement shall also secure all other present and
future obligations of the Borrower to the Bank (excluding any consumer credit
covered by the federal Truth in Lending law, unless the Borrower has otherwise
agreed in writing). All personal property collateral securing any other present
or future obligations of the Borrower to the Bank shall also secure this
Agreement.

(a)  Inventory.

(b)  Receivables.

4.2. Personal Property Supporting Guaranty.  The obligations of the guarantor,
Hukk Engineering, Inc. ("Hukk"), to the Bank will be secured by personal
property Hukk now owns or will own in the future as listed below. The collateral
is further defined in security agreement(s) executed by Hukk.

(a)  Inventory.

(b)  Receivables.

5.   DISBURSEMENTS, PAYMENTS AND COSTS

5.1. Requests for Credit.  Each request for an extension of credit will be made
in writing in a manner acceptable to the Bank, or by another means acceptable to
the Bank.

                                      -6-

<PAGE>

5.2. Disbursements and Payments.  Each disbursement by the Bank and each payment
by the Borrower will be:

(a)  made at the Bank's branch (or other location) selected by the Bank from
     time to time;

(b)  made for the account of the Bank's branch selected by the Bank from time to
     time;

(c)  made in immediately available funds, or such other type of funds selected
     by the Bank;

(d)  evidenced by records kept by the Bank.  In addition, the Bank may, at its
     discretion, require the Borrower to sign one or more promissory notes.

5.3. Telephone and Telefax Authorization.

(a)  The Bank may honor telephone or telefax instructions for advances or
     repayments or for the designation of optional interest rates and telefax
     requests for the issuance of letters of credit given, or purported to be
     given, by any one of the individuals authorized to sign loan agreements on
     behalf of the Borrower, or any other individual designated by any one of
     such authorized signers.

(b)  Advances will be deposited in and repayments will be withdrawn from the
     Borrower's account number 14871-03852, or such other of the Borrowers
     accounts with the Bank as designated in writing by the Borrower.

(c)  The Borrower will indemnify and hold the Bank harmless from all liability,
     loss, and costs in connection with any act resulting from telephone or
     telefax instructions the Bank reasonably believes are made by any
     individual authorized by the Borrower to give such instructions.  This
     paragraph will survive this Agreement's termination, and will benefit the
     Bank and its officers, employees, and agents.

5.4. Direct Debit (Pre-Billing).

(a)  The Borrower agrees that the Bank will debit the Borrower's deposit account
     number 14871-03852, or such other of the Borrower's accounts with the Bank
     as designated in writing by the Borrower (the "Designated Account") on the
     date each payment of principal and interest and any fees from the Borrower
     becomes due (the "Due Date").  If the Due Date is not a banking day, the
     Designated Account will be debited on the next banking day.

(b)  Approximately 10 days prior to each Due Date, the Bank will mail to the
     Borrower a statement of the amounts that will be due on that Due Date (the
     "Billed Amount").  The calculation will be made on the assumption that no
     new extensions of credit or payments will be made between the date of the
     billing statement and the Due Date, and that there will be no changes in
     the applicable interest rate.

(c)  The Bank will debit the Designated Account for the Billed Amount,
     regardless of the actual amount due on that date (the "Accrued Amount").
     If the Billed Amount debited to the Designated Account differs from the
     Accrued Amount, the discrepancy will be treated as follows:

     (i)    If the Billed Amount is less than the Accrued Amount, the Billed
            Amount for the following Due Date will be increased by the amount of
            the discrepancy. The Borrower will not be in default by reason of
            any such discrepancy.

     (ii)   If the Billed Amount is more than the Accrued Amount, the Billed
            Amount for the following Due Date will be decreased by the amount of
            the discrepancy.

            Regardless of any such discrepancy, interest will continue to accrue
            based on the actual amount of principal outstanding without
            compounding. The Bank will not pay the Borrower interest on any
            overpayment.

(d)  The Borrower will maintain sufficient funds in the Designated Account to
     cover each debit.  If there are insufficient funds in the Designated
     Account on the date the Bank enters any debit authorized by this Agreement,
     the debit will be reversed.

5.5. Banking Days.  Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday or a Sunday on which the Bank is open for
business in California.  For amounts bearing interest at an offshore rate (if
any), a banking day is a day other than a Saturday or a Sunday on which the Bank
is open for business in California and dealing in offshore dollars.  All
payments and disbursements which would be due on a day which is not a banking
day will be due on the next banking day.  All payments received on a day which
is not a banking day will be applied to the credit on the next banking day.

5.6. Additional Costs.  The Borrower will pay the Bank, on demand, for the
Bank's costs or losses arising from any statute or regulation, or any request or
requirement of a regulatory agency which is applicable to all national banks or
a class

                                      -7-
<PAGE>

of all national banks.  The costs and losses will be allocated to the
loan in a manner determined by the Bank, using any reasonable method.  The costs
include the following:

(a)  any reserve or deposit requirements; and

(b)  any capital requirements relating to the Bank's assets and commitments for
     credit.

5.7. Interest Calculation.  Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360-day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used. Installments of principal which are not paid
when due under this Agreement shall continue to bear interest until paid.

5.8. Default Rate.  Upon the occurrence of any default under this Agreement,
principal amounts outstanding under this Agreement will at the option of the
Bank bear interest at the Bank's Prime Rate plus 2 percentage points.  This will
not constitute a waiver of any default.

6.   CONDITIONS

The Bank must receive the following items, in form and content acceptable to the
Bank, before it is required to extend any credit to the Borrower under this
Agreement:

6.1. Authorizations.  Evidence that the execution, delivery and performance by
the Borrower and each guarantor of this Agreement and any instrument or
agreement required under this Agreement have been duly authorized.

6.2. Governing Documents.  A copy of the Borrower's articles of incorporation.

6.3. Security Agreements.  Signed original security agreements, assignments,
financing statements and fixture filings (together with collateral in which the
Bank requires a possessory security interest), which the Bank requires.

6.4. Evidence of Priority.  Evidence that security interests and liens in favor
of the Bank are valid, enforceable, and prior to all others' rights and
interests, except those the Bank consents to in writing.

6.5. Insurance.  Evidence of insurance coverage, as required in the "Covenants"
section of this Agreement.

6.6. Guaranty.  A guaranty signed by Hukk in the amount of Nine Million Dollars
($9,000,000).

6.7. Other Items.  Any other items that the Bank reasonably requires.

7.   REPRESENTATIONS AND WARRANTIES

When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties.  Each request
for an extension of credit constitutes a renewed representation:

7.1. Organization of Borrower.  The Borrower is a corporation duly formed and
existing under the laws of the state where organized.

7.2. Authorization.  This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's powers, have been duly authorized, and do
not conflict with any of its organizational papers.

7.3. Enforceable Agreement.  This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.

7.4. Good Standing.  In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.

7.5. No Conflicts.  This Agreement does not conflict with any law, agreement, or
obligation by which the Borrower is bound.

                                      -8-

<PAGE>

7.6.  Financial Information.  All financial and other information that has been
or will be supplied to the Bank is:

(a)   sufficiently complete to give the Bank accurate knowledge of the Borrowers
      (and any guarantor's) financial condition, including all material
      contingent liabilities.

(b)   in compliance with all government regulations that apply.

7.7.  Lawsuits.  There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.

7.8.  Collateral.  All collateral required in this Agreement is owned by the
grantor of the security interest free of any title defects or any liens or
interests of others, except those which have been approved by the Bank in
writing.

7.9.  Permits, Franchises.  The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged.

7.10. Other Obligations.  The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.

7.11. Income Tax Matters.  The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year.

7.12. No Event of Default.  There is no event which is, or with notice or lapse
of time or both would be, a default under this Agreement.

7.13. Insurance.  The Borrower has obtained, and maintained in effect, the
insurance coverage required in the "Covenants" section of this Agreement.

7.14. Location of Borrower.  The Borrowers place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrower's signature on this Agreement.

8.    COVENANTS

The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:

8.1.  Use of Proceeds.  To use the proceeds of the credit only for working
capital, and at the option of the Bank, to finance any draft under any letters
of credit issued hereunder.

8.2.  Financial Information.  To provide the following financial information and
statements in form and content acceptable to the Bank, and such additional
information as requested by the Bank from time to time:

(a)   Within 120 days of the Borrower's fiscal year end, the Borrower's annual
      financial statements.  These financial statements must be audited (with an
      unqualified opinion) by a certified public accountant acceptable to the
      Bank.  The statements shall be prepared on a consolidated basis.

(b)   Within 45 days of the period's end, the Borrower's quarterly financial
      statements.  These financial statements may be Borrower prepared.  The
      statements shall be prepared on a consolidated and consolidating basis.

(c)   Within 90 days of the Borrower's fiscal year end, the Borrower's annual
      financial statements. These financial statements may be Borrower prepared.
      The statements shall be prepared on a consolidating basis.

(d)   Within 120 days of the Borrower's fiscal year end, the Borrower's annual
      consolidated budget for its then current fiscal year, including balance
      sheet, income statement, and cash flow, all projected on a quarterly
      basis.

(e)   Within the period(s) provided in (a) and (b) above, a compliance
      certificate of the Borrower signed by an authorized financial officer of
      the Borrower setting forth (i) the information and computations (in
      sufficient detail) to establish that the Borrower is in compliance with
      all financial covenants at the end of the period covered by the financial
      statements then being furnished and (ii) whether there existed as of the
      date of such financial statements and whether there exists as of the date
      of the certificate, any default under this Agreement and, if any such
      default exists, specifying the nature thereof and the action the Borrower
      is taking and proposes to take with respect thereto.

                                      -9-
<PAGE>

8.3. Quick Ratio.  To maintain on a consolidated basis a ratio of quick assets
to current liabilities ("Quick Ratio") of at least 1.5:1.0. In the event that
the net cash proceeds received by the Borrower on the closing date of its IPO
(the "IPO Proceeds") equal or exceed Forty-Five Million Dollars ($45,000,000),
the Borrower will maintain a Quick Ratio of at least 2.25:1.0 as of the IPO
closing date and thereafter.

"Quick assets" means cash, short-term cash investments in non-affiliated
entities, net trade receivables (including foreign receivables) and marketable
securities not classified as long-term investments.  "Current liabilities" shall
include (a) all obligations classified as current liabilities under generally
accepted accounting principles, plus (b) all principal amounts outstanding under
revolving lines of credit, whether classified as current or long-term, which are
not already included under (a) above.

8.4. Total Liabilities to Tangible Net Worth.  To maintain on a consolidated
basis a ratio of total liabilities to tangible net worth ("Debt/TNW Ratio") not
exceeding 0.75:1.0.  In the event that the IPO Proceeds equal or exceed Forty-
Five Million Dollars ($45,000,000), the Borrower will maintain a Debt/TNW Ratio
not exceeding 0.50:1.0 as of the IPO closing date and thereafter.

"Total liabilities" means the sum of current liabilities plus long term
liabilities.

"Tangible net worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
unamortized debt discount and expense, capitalized or deferred research and
development costs, deferred marketing expenses, deferred receivables, and other
like intangibles, and monies due from affiliates, officers, directors, employees
or shareholders of the Borrower) less total liabilities, including but not
limited to accrued and deferred income taxes, and any reserves against assets.

8.5. Profitability.  To maintain on a consolidated basis a positive net income
after taxes and extraordinary items for each quarterly accounting period and at
fiscal year end.

8.6. Other Debts.  Not to have outstanding or incur any direct or contingent
liabilities (other than those to the Bank), or become liable for the liabilities
of others, without the Bank's written consent.  This does not prohibit:

(a)  Acquiring goods, supplies, or merchandise on normal trade credit.

(b)  Endorsing negotiable instruments received in the usual course of business.

(c)  Obtaining surety bonds in the usual course of business.

(d)  Liabilities and lines of credit in existence on the date of this Agreement
     disclosed in writing to the Bank.

(e)  Additional debts for the acquisition of fixed assets, to the extent
     permitted elsewhere in this Agreement.

(f)  Additional debts for business purposes, which do not exceed a total
     principal amount of One Million Dollars ($1,000,000).  In the event that
     the IPO Proceeds equal or exceed Forty-Five Million Dollars ($45,000,000),
     the Borrower may incur additional debts for business purposes which do not
     exceed a total principal amount of Two Million Dollars ($2,000,000) instead
     of One Million Dollars ($1,000,000).  For purposes of this subparagraph,
     "debts for business purposes" only includes debts incurred under promissory
     notes signed by the Borrower in favor of sellers in connection with
     acquisitions and purchases permitted under Paragraph 8.22(g) below and
     monetary obligations incurred by the Borrower under non-competition
     agreements entered into by the Borrower in connection with such
     acquisitions and purchases.

8.7. Other Liens.  Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:

(a)  Deeds of trust and security agreements in favor of the Bank.

(b)  Liens for taxes not yet due.

(c)  Liens outstanding on the date of this Agreement disclosed in writing to the
     Bank.

(d)  Additional liens against the property of the Borrower which secure
     indebtedness permitted by the preceding paragraph.

8.8. Capital Expenditures.  Not to spend or incur obligations (including the
total amount of any capital leases) for more than Three Million Dollars
($3,000,000) in any single fiscal year to acquire fixed assets.  In the event
that the IPO Proceeds equal or exceed Forty-Five Million Dollars ($45,000,000),
the Borrower may spend or incur obligations (including the total amount of any
capital leases) for not more than (i) Five Million Dollars ($5,000,000) during
fiscal year 2000 to acquire fixed

                                     -10-
<PAGE>

assets (other than those described in clause (ii) of this paragraph), and (ii)
Twenty Million Dollars ($20,000,000) to acquire the Borrower's new headquarters
facility, and furniture, office equipment and fixtures for such facility.

8.9.   Dividends.  Not to declare or pay any dividends on any of its shares, and
not to purchase, redeem or otherwise acquire for value any of its shares, or
create any sinking fund in relation thereto, except:

(a)    dividends payable in its capital stock;

(b)    from earnings available for dividends and earned during the immediately
       preceding fiscal year, and in any event, not in excess of Seven Hundred
       Fifty Thousand Dollars ($750,000) in any one fiscal year. In the event
       that the IPO Proceeds equal or exceed Forty-Five Million Dollars
       ($45,000,000), such maximum amount shall be increased to One Million
       Dollars ($1,000,000) in any one fiscal year as of the fiscal year in
       which the IPO closing date occurs and thereafter;

(c)    purchases, redemptions, or other acquisitions for value of any of its
       shares, or the creation of any sinking fund in relation thereto, in an
       amount in any fiscal year not to exceed 20% of the Borrower's net income
       for the immediately preceding fiscal year.

8.10.  IPO Proceeds.  To first apply the IPO Proceeds to repay in full all
       principal and any unpaid interest or other charges under this line of
       credit that are outstanding as of the IPO closing date.

8.11.  Paydown Period.  To reduce the amount of advances outstanding under this
Agreement to zero for a period of at least 30 consecutive days in each line-
year. "Line-year" means the period between the date of this Agreement and May 1,
2001, and each subsequent one-year period (if any). For the purposes of this
paragraph, "advances" does not include undrawn amounts of outstanding letters of
credit.

8.12.  Notices to Bank.  To promptly notify the Bank in writing of:

(a)    any lawsuit over Two Hundred Fifty Thousand Dollars ($250,000) against
       the Borrower (or any guarantor).

(b)    any substantial dispute between the Borrower (or any guarantor) and any
       government authority.

(c)    any event of default under this Agreement, or any event which, with
       notice or lapse of time or both, would constitute an event of default.

(d)    any material adverse change in the Borrower's (or any guarantor's)
       business condition (financial or otherwise), operations, properties or
       prospects, or ability to repay the credit.

(e)    any change in the Borrower's name, legal structure, place of business, or
       chief executive office if the Borrower has more than one place of
       business.

(f)    any actual contingent liabilities of the Borrower (or any guarantor), and
       any such contingent liabilities which are reasonably foreseeable, where
       such liabilities are in excess of Two Hundred Fifty Thousand and 00/100
       Dollars ($250,000) in the aggregate.

8.13.  Books and Records.  To maintain adequate books and records.

8.14.  Audits.  To allow the Bank and its agents to inspect the Borrower's
       properties and examine, audit, and make copies of books and records at
       any reasonable time. If any of the Borrower's properties, books or
       records are in the possession of a third party, the Borrower authorizes
       that third party to permit the Bank or its agents to have access to
       perform inspections or audits and to respond to the Bank's requests for
       information concerning such properties, books and records.

The Bank has no duty to inspect the Borrowers properties or to examine, audit,
or copy books and records and the Bank shall not incur any obligation or
liability by reason of not making any such inspection or inquiry. In the event
that the Bank inspects the Borrower's properties or examines, audits, or copies
books and records, the Bank will be acting solely for the purposes of protecting
the Bank's security and preserving the Bank's rights under this Agreement.
Neither the Borrower nor any other party is entitled to rely on any inspection
or other inquiry by the Bank. The Bank owes no duty of care to protect the
Borrower or any other party against, or to inform the Borrower or any other
party of, any adverse condition that may be observed as affecting the Borrower's
properties or premises, or the Borrower's business. In the event that the Bank
has a duty or obligation under applicable laws, regulations or legal
requirements to disclose any report or findings made as a result of, or in
connection with, any site visit, observation or testing by the Bank, the Bank
may make such a disclosure to the Borrower or any other party.

                                     -11-

<PAGE>

8.15.  Compliance with Laws.  To comply with the laws (including any fictitious
name statute), regulations, and orders of any government body with authority
over the Borrower's business.

8.16.  Preservation of Rights.  To maintain and preserve all rights, privileges,
and franchises the Borrower now has.

8.17.  Maintenance of Properties.  To make any repairs, renewals, or
replacements to keep the Borrower's properties in good working condition.

8.18.  Perfection of Liens.  To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to protect its
security interests and liens.

8.19.  Cooperation.  To take any action reasonably requested by the Bank to
carry out the intent of this Agreement.

8.20.  Insurance.

(a)    Insurance Covering Collateral.  To maintain all risk property damage
       insurance policies covering the tangible property comprising the
       collateral.  Each insurance policy must be in an amount acceptable to the
       Bank.  The insurance must be issued by an insurance company acceptable to
       the Bank and must include a lender's loss payable endorsement in favor of
       the Bank in a form acceptable to the Bank.

(b)    General Business Insurance.  To maintain insurance satisfactory to the
       Bank as to amount, nature and carrier covering property damage (including
       loss of use and occupancy) to any of the Borrower's properties, public
       liability insurance including coverage for contractual liability, product
       liability and workers' compensation, and any other insurance which is
       usual for the Borrower's business.

(c)    Evidence of Insurance.  Upon the request of the Bank, to deliver to the
       Bank a copy of each insurance policy, or, if permitted by the Bank, a
       certificate of insurance listing all insurance in force.

8.21.  Additional Negative Covenants.  Not to, without the Bank's written
consent:

(a)    engage in any business activities substantially different from the
       Borrower's present business.

(b)    liquidate or dissolve the Borrower's business.

(c)    enter into any consolidation, merger, or other combination, or become a
       partner in a partnership, a member of a joint venture, or a member of a
       limited liability company.

(d)    sell, assign, lease, transfer or otherwise dispose of any assets for less
       than fair market value, or enter into any agreement to do so.

(e)    sell, assign, lease, transfer or otherwise dispose of all or a
       substantial part of the Borrower's business or the Borrower's assets
       except in the ordinary course of the Borrower's business.

(f)    enter into any sale and leaseback agreement covering any of its fixed
       assets.

(g)    acquire or purchase a business or its assets for a consideration,
       including assumption of direct or contingent debt, in excess of One
       Million Five Hundred Thousand Dollars ($1,500,000) in the aggregate. In
       the event that the IPO Proceeds equal or exceed Forty-Five Million
       Dollars ($45,000,000), the maximum consideration shall be increased to
       Fifteen Million Dollars ($15,000,000) in the aggregate as of the IPO
       closing date. It is provided, however, that the Borrower may not acquire
       or purchase a business or its assets after the IPO closing date unless
       (i) the target business is engaged in business activities substantially
       similar to the Borrower's present business, (ii) such acquisition or
       purchase is not hostile, (iii) the Borrower submits to the Bank a pro-
       forma balance sheet and income statement prior to the close of such
       acquisition or purchase, which balance sheet and income statement shall
       give effect to such acquisition or purchase, (iv) the Borrower submits to
       the Bank a compliance certificate prior to the close of such acquisition
       or purchase, which compliance certificate shall show that after giving
       effect to such acquisition or purchase, the Borrower shall be in
       compliance with the financial covenants and other terms and conditions of
       this Agreement, and (v) the aggregate amount of direct and contingent
       debt assumed by the Borrower in connection with all such acquisitions or
       purchases does not exceed Two Million Dollars ($2,000,000).

8.22.  Guaranties from Subsidiaries.  Within 30 days after the Borrower's
acquisition of any new domestic subsidiary, to deliver to the Bank a guaranty
signed by the subsidiary together with a security agreement and any other
documents signed by the subsidiary, that are necessary to grant to the Bank an
enforceable first priority security interest in the subsidiary's personal
property. All such documents must be in form and content acceptable to the Bank.

                                     -12-

<PAGE>

9.     DEFAULT

If any of the following events occurs, the Bank may do one or more of the
following:  declare the Borrower in default, stop making any additional credit
available to the Borrower, and require the Borrower to repay its entire debt
immediately and without prior notice.  If an event of default occurs under the
paragraph entitled "Bankruptcy," below, with respect to the Borrower, then the
entire debt outstanding under this Agreement will automatically be due
immediately.

9.1.   Failure to Pay.  The Borrower fails to make a payment under this
Agreement when due.

9.2.   Lien Priority.  The Bank fails to have an enforceable first lien (except
for any prior liens to which the Bank has consented in writing) on or security
interest in any property given as security for this Agreement (or any guaranty).

9.3.   False Information.  The Borrower (or any guarantor) has given the Bank
false or misleading information or representations.

9.4.   Bankruptcy.  The Borrower (or any guarantor) files a bankruptcy petition,
a bankruptcy petition is filed against the Borrower (or any guarantor) or the
Borrower (or any guarantor) makes a general assignment for the benefit of
creditors.

9.5.   Receivers.  A receiver or similar official is appointed for the
Borrower's (or any guarantor's) business, or the business is terminated, or any
guarantor is liquidated or dissolved.

9.6.   Lawsuits.  Any lawsuit or lawsuits are filed on behalf of one or more
trade creditors against the Borrower (or any guarantor) in an aggregate amount
of Two Hundred Fifty Thousand Dollars ($250,000) or more in excess of any
insurance coverage.

9.7.   Judgments.  Any judgments or arbitration awards are entered against the
Borrower (or any guarantor), or the Borrower (or any guarantor) enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) or more in
excess of any insurance coverage.

9.8.   Government Action.  Any government authority takes action that the Bank
believes materially adversely affects the Borrowers (or any guarantor's)
financial condition or ability to repay.

9.9.   Material Adverse Change.  A material adverse change occurs, or is
reasonably likely to occur, in the Borrower's (or any guarantor's) business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the credit.

9.10.  Cross-default.  Any default occurs under any agreement in connection with
any credit the Borrower (or any guarantor) or any of the Borrower's related
entities or affiliates has obtained from anyone else or which the Borrower (or
any guarantor) or any of the Borrower's related entities or affiliates has
guaranteed.

9.11.  Default under Related Documents.  Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this Agreement
is violated or no longer in effect.

9.12.  Other Bank Agreements.  The Borrower (or any guarantor) or any of the
Borrower's related entities or affiliates fails to meet the conditions of, or
fails to perform any obligation under any other agreement the Borrower (or any
guarantor) or any of the Borrower's related entities or affiliates has with the
Bank or any affiliate of the Bank.

9.13.  Other Breach Under Agreement.  The Borrower fails to meet the conditions
of, or fails to perform any obligation under, any term of this Agreement not
specifically referred to in this Article.  This includes any failure or
anticipated failure by the Borrower to comply with any financial covenants set
forth in this Agreement, whether such failure is evidenced by financial
statements delivered to the Bank or is otherwise known to the Borrower or the
Bank.

10.    ENFORCING THIS AGREEMENT; MISCELLANEOUS

10.1.  GAAP.  Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.

10.2.  California Law.  This Agreement is governed by California law.

10.3.  Successors and Assigns.  This Agreement is binding on the Borrower's and
the Bank's successors and assignees. The Borrower agrees that it may not assign
this Agreement without the Bank's prior consent. The Bank may sell
participations in or assign this loan, and may exchange financial information
about the Borrower with actual or potential participants or assignees; provided
that such actual or potential participants or assignees shall agree to treat all
financial information exchanged as confidential. If a participation is sold or
the loan is assigned, the purchaser will have the right of set-off against the
Borrower.

                                     -13-

<PAGE>

10.4.  Arbitration.

(a)    This paragraph concerns the resolution of any controversies or claims
       between the Borrower and the Bank, whether arising in contract, tort or
       by statute, including but not limited to controversies or claims that
       arise out of or relate to: (i) this Agreement (including any renewals,
       extensions or modifications); or (ii) any document related to this
       Agreement (collectively a "Claim").

(b)    At the request of the Borrower or the Bank, any Claim shall be resolved
       by arbitration in accordance with the Federal Arbitration Act (Title 9,
       U. S. Code) (the "Act"). The Act will apply even though this Agreement
       provides that it is governed by the law of a specified state.

(c)    Arbitration proceedings will be determined in accordance with the Act,
       the rules and procedures for the arbitration of financial services
       disputes of J.A.M.S./Endispute or any successor thereof ("J.A.M.S."), and
       the terms of this paragraph. In the event of any inconsistency, the terms
       of this paragraph shall control.

(d)    The arbitration shall be administered by J.A.M.S. and conducted in any
       U.S. state where real or tangible personal property collateral for this
       credit is located or if there is no such collateral, in California. All
       Claims shall be determined by one arbitrator; however, if Claims exceed
       Five Million Dollars ($5,000,000), upon the request of any party, the
       Claims shall be decided by three arbitrators. All arbitration hearings
       shall commence within ninety (90) days of the demand for arbitration and
       close within ninety (90) days of commencement and the award of the
       arbitrator(s) shall be issued within thirty (30) days of the close of the
       hearing. However, the arbitrator(s), upon a showing of good cause, may
       extend the commencement of the hearing for up to an additional sixty (60)
       days. The arbitrator(s) shall provide a concise written statement of
       reasons for the award. The arbitration award may be submitted to any
       court having jurisdiction to be confirmed and enforced.

(e)    The arbitrator(s) will have the authority to decide whether any Claim is
       barred by the statute of limitations and, if so, to dismiss the
       arbitration on that basis. For purposes of the application of the statute
       of limitations, the service on J.A.M.S. under applicable J.A.M.S. rules
       of a notice of Claim is the equivalent of the filing of a lawsuit. Any
       dispute concerning this arbitration provision or whether a Claim is
       arbitrable shall be determined by the arbitrator(s). The arbitrator(s)
       shall have the power to award legal fees pursuant to the terms of this
       Agreement.

(f)    This paragraph does not limit the right of the Borrower or the Bank to:
       (i) exercise self-help remedies, such as but not limited to, setoff; (ii)
       initiate judicial or nonjudicial foreclosure against any real or personal
       property collateral; (iii) exercise any judicial or power of sale rights,
       or (iv) act in a court of law to obtain an interim remedy, such as but
       not limited to, injunctive relief, writ of possession or appointment of a
       receiver, or additional or supplementary remedies.

(g)    The filing of a court action is not intended to constitute a waiver of
       the right of the Borrower or the Bank, including the suing party,
       thereafter to require submittal of the Claim to arbitration.

10.5.  Severability; Waivers.  If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.

10.6.  Administration Costs.  The Borrower shall pay the Bank for all reasonable
costs incurred by the Bank in connection with administering this Agreement.

10.7.  Attorneys' Fees.  The Borrower shall reimburse the Bank for any
reasonable costs and attorneys' fees incurred by the Bank in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and in
connection with any amendment, waiver, "workout" or restructuring under this
Agreement. In the event of a lawsuit or arbitration proceeding, the prevailing
party is entitled to recover costs and reasonable attorneys' fees incurred in
connection with the lawsuit or arbitration proceeding, as determined by the
court or arbitrator. In the event that any case is commenced by or against the
Borrower under the Bankruptcy Code (Title 11, United States Code) or any similar
or successor statute, the Bank is entitled to recover costs and reasonable
attorneys' fees incurred by the Bank related to the preservation, protection, or
enforcement of any rights of the Bank in such a case. As used in this paragraph,
"attorneys' fees" includes the allocated costs of the Bank's in-house counsel.

10.8.  One Agreement.  This Agreement and any related security or other
agreements required by this Agreement, collectively:

(a)    represent the sum of the understandings and agreements between the Bank
       and the Borrower concerning this credit;

                                     -14-

<PAGE>

(b)    replace any prior oral or written agreements between the Bank and the
       Borrower concerning this credit; and

(c)    are intended by the Bank and the Borrower as the final, complete and
       exclusive statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.

10.9.  Indemnification.  The Borrower will indemnify and hold the Bank harmless
from any loss, liability, damages, judgments, and costs of any kind relating to
or arising directly or indirectly out of (a) this Agreement or any document
required hereunder, (b) any credit extended or committed by the Bank to the
Borrower hereunder, and (c) any litigation or proceeding related to or arising
out of this Agreement, any such document, or any such credit.  This indemnity
includes but is not limited to attorneys' fees (including the allocated cost of
in-house counsel).  This indemnity extends to the Bank, its parent, subsidiaries
and all of their directors, officers, employees, agents, successors, attorneys,
and assigns.  This indemnity will survive repayment of the Borrowers obligations
to the Bank.  All sums due to the Bank hereunder shall be obligations of the
Borrower, due and payable immediately without demand.

10.10. Notices.  All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Agreement, or sent by facsimile
to the fax numbers listed on the signature page, or to such other addresses as
the Bank and the Borrower may specify from time to time in writing.  Notices
sent by first class mail shall be deemed delivered on the earlier of actual
receipt or on the fourth business day after deposit in the U.S. mail.

10.11. Headings.  Article and paragraph headings are for reference only and
shall not affect the interpretation or meaning of any provisions of this
Agreement.

10.12. Prior Agreement Superseded.  This Agreement supersedes the Business Loan
Agreement entered into as of November 9, 1999 between the Bank and the Borrower,
and any credit outstanding thereunder shall be deemed to be outstanding under
this Agreement.

This Agreement is executed as of the date stated at the top of the first page.

Bank Of America, N.A.                          Sunrise Telecom, Inc.

X  /s/ Lakshmi Wolterding                      X  /s/ Paul Chang
----------------------------------             ---------------------------------
By:  Lakshmi Wolterding,                       By:  Paul Chang, President/
     Vice President                                 Chief Executive Officer

Address where notices to the Bank are to be sent:

South Bay Commercial Banking Office #01487     X  /s/ Peter Eidelman
101 Park Center Plaza                          ---------------------------------
San Jose, CA 95115                             By:  Peter Eidelman, Treasurer

                                               Address for Notices:

                                               22 Great Oaks Boulevard
                                               San Jose, CA 95119

                                     -15-
<PAGE>

Bank of America
================================================================================
                                  Security Agreement (Receivables and Inventory)

1.   THE SECURITY.
The undersigned Sunrise Telecom, Inc. ("Borrower") hereby assigns and grants to
Bank of America, N.A. ("Bank") a security interest in the following described
property ("Collateral"):

     A.   All of the following, whether now owned or hereafter acquired by
          Borrower: accounts, contract rights, chattel paper, instruments,
          deposit accounts, and general intangibles.
     B.   All inventory now owned or hereafter acquired by Borrower.
     C.   All negotiable and nonnegotiable documents of title now owned or
          hereafter acquired by Borrower.
     D.   All rights under contracts of insurance now owned or hereafter
          acquired by Borrower covering any of the above-described property.
     E.   All proceeds, product, rents and profits now owned or hereafter
          acquired by Borrower of any of the above-described property.
     F.   All books and records now owned or hereafter acquired by Borrower
          pertaining to any of the above-described property, including but not
          limited to any computer-readable memory and any computer hardware or
          software necessary to process such memory ("Books and Records").

2.   THE INDEBTEDNESS.
The collateral secures and will secure all Indebtedness of Borrower to Bank. For
the purposes of this Agreement, "Indebtedness" means all loans and advances made
by Bank to Borrower and all other obligations and liabilities of Borrower to
Bank, whether now existing or hereafter incurred or created, whether voluntary
or involuntary, whether due or not due, whether absolute or contingent, or
whether incurred directly or acquired by Bank by assignment or otherwise. Unless
Borrower shall have otherwise agreed in writing, Indebtedness, for the purposes
of this Agreement, shall not include "consumer credit" subject to the disclosure
requirements of the Federal Truth in Lending Act or any regulations promulgated
thereunder.

3.   BORROWER'S COVENANTS.
Borrower covenants and warrants that unless compliance is waived by Bank in
writing:

     A.   Borrower will properly preserve the Collateral; defend the Collateral
          against any adverse claims and demands; and keep accurate Books and
          Records.
     B.   Borrower has notified Bank in writing of, and will notify Bank in
          writing prior to any change in the locations of (i) Borrower's place
          of business or Borrower's chief executive office if Borrower has more
          than one place of business and (ii) any Collateral, including the
          Books and Records.
     C.   Borrower will notify Bank in writing prior to any change in Borrower's
          name, identity or business structure.
     D.   Borrower will maintain and keep in force insurance covering Collateral
          designated by Bank against fire and extended coverages. Such insurance
          shall require losses to be paid on a replacement cost basis, be issued
          by insurance companies acceptable to Bank and include a loss payable
          endorsement in favor of Bank in a form acceptable to Bank.
     E.   Borrower has not granted and will not grant any security interest in
          any of the Collateral except to Bank, and will keep the Collateral
          free of all liens, claims, security interests and encumbrances of any
          kind or nature, except the security interest of Bank.
     F.   Borrower will not sell, lease, agree to sell or lease, or otherwise
          dispose of, or remove from Borrower's place of business (i) any
          inventory except in the ordinary course of business as heretofore
          conducted by Borrower, or (ii) any other Collateral except with the
          prior written consent of Bank.
     G.   Borrower will promptly notify Bank in writing of any event which
          affects the value of any Collateral, the ability of Borrower or Bank
          to dispose of any Collateral, or the rights and remedies of Bank in
          relation thereto, including but not limited to, the levy of any legal
          process against any Collateral and the adoption of any marketing
          order, arrangement or procedure affecting the Collateral, whether
          governmental or otherwise.
     H.   If any Collateral is or becomes the subject of any negotiable document
          of title including any warehouse receipt or bill of lading, Borrower
          shall immediately deliver such document to Bank.
     I.   Until Bank exercises its rights to make collection, Borrower will
          diligently collect all Collateral.

4.   ADDITIONAL OPTIONAL REQUIREMENTS.
Borrower agrees that Bank may at its option at any time, whether or not Borrower
is in default:

     A.   Require Borrower to segregate all collections and proceeds of the
          Collateral so that they are capable of identification and deliver
          daily such collections and proceeds to Bank in kind.
     B.   Require Borrower to deliver to Bank (i) copies of or extracts from the
          Books and Records, and (ii) information on any contracts or other
          matters affecting the Collateral.
     C.   Examine the Collateral, including the Books and Records, and make
          copies of or extracts from the Books and Records, and for such
          purposes enter at any reasonable time upon the property where any
          Collateral or any Books and Records are located.
<PAGE>

     D.   Require Borrower to deliver to Bank any instruments or chattel paper.
     E.   Require Borrower to obtain Bank's prior written consent to any sale,
          lease, agreement to sell or lease, or other disposition of any
          inventory.
     F.   Notify any account debtors, any buyers of the Collateral, or any other
          persons of Bank's interest in the Collateral.
     G.   Require Borrower to direct all account debtors to forward all payments
          and proceeds of the Collateral to a post office box under Bank's
          exclusive control.
     H.   Demand and collect any payments and proceeds of the Collateral. In
          connection therewith Borrower irrevocably authorizes Bank to endorse
          or sign Borrower's name on all checks, drafts, collections, receipts
          and other documents, and to take possession of and open the mail
          addressed to Borrower and remove therefrom any payments and proceeds
          of the Collateral.

5.   DEFAULTS.
Any one or more of the following shall be a default hereunder:

     A.   Borrower fails to pay any indebtedness when due.
     B.   Borrower breaches any term, provision, warranty or representation
          under this Agreement or under any other obligation of Borrower to
          Bank.
     C.   Any custodian, receiver or trustee is appointed to take possession,
          custody or control of all or a substantial portion of the property of
          Borrower or of any guarantor of any indebtedness.
     D.   Borrower or any guarantor of any indebtedness becomes insolvent, or is
          generally not paying or admits in writing its inability to pay its
          debts as they become due, fails in business, makes a general
          assignment for the benefit of creditors, dies or commences any case,
          proceeding or other action under any bankruptcy or other law for the
          relief of, or relating to, debtors.
     E.   Any case, proceeding or other action is commenced against Borrower or
          any guarantor of any indebtedness under any bankruptcy or other law
          for the relief of, or relating to, debtors.
     F.   Any involuntary lien of any kind or character attaches to any
          Collateral.
     G.   Any financial statements, certificates, schedules or other information
          now or hereafter furnished by Borrower to Bank proves false or
          incorrect in any material respect.

6.   BANK'S REMEDIES AFTER DEFAULT.
In the event of any default Bank may do any one or more of the following:

     A.   Declare any indebtedness immediately due and payable, without notice
          or demand.
     B.   Enforce the security interest given hereunder pursuant to the Uniform
          Commercial Code and any other applicable law.
     C.   Enforce the security interest of Bank in any deposit account of
          Borrower maintained with Bank by applying such account to the
          Indebtedness.
     D.   Require Borrower to assemble the Collateral, including the Books and
          Records, and make them available to Bank at a place designated by
          Bank.
     E.   Enter upon the property where any Collateral, including any Books and
          Records are located and take possession of such Collateral and such
          Books and Records, and use such property (including any buildings and
          facilities) and any of Borrower's equipment, if Bank deems such use
          necessary or advisable in order to take possession of, hold, preserve,
          process, assemble, prepare for sale or lease, market for sale or
          lease, sell or lease, or otherwise dispose of, any Collateral.
     F.   Grant extensions and compromise or settle claims with respect to the
          Collateral for less than face value, all without prior notice to
          Borrower.
     G.   Use or transfer any of Borrower's rights and interest in any
          Intellectual Property now owned or hereafter acquired by Borrower, if
          Bank deems such use or transfer necessary or advisable in order to
          take possession of, hold, preserve, process, assemble, prepare for
          sale or lease, market for sale or lease, sell or lease, or otherwise
          dispose of, any Collateral. Borrower agrees that any such use or
          transfer shall be without any additional consideration to Borrower. As
          used in this paragraph, "Intellectual Property" includes, but is not
          limited to, all trade secrets, computer software, service marks,
          trademarks, trade names, trade styles, copyrights, patents,
          applications for any of the foregoing, customer lists, working
          drawings, instructional manuals, and rights in processes for technical
          manufacturing, packaging and labelling in which Borrower has any right
          or interest, whether by ownership, license, contract or otherwise.
     H.   Have a receiver appointed by any court of competent jurisdiction to
          take possession of the Collateral.
     I.   Take such measures as Bank may deem necessary or advisable to take
          possession of, hold, preserve, process, assemble, insure, prepare for
          sale or lease, market for sale or lease, sell or lease, or otherwise
          dispose of, any Collateral, and Borrower hereby irrevocably
          constitutes and appoints Bank as Borrower's attorney-in-fact to
          perform all acts and execute all documents in connection therewith.

                                      -2-
<PAGE>

7.   MISCELLANEOUS.
     A.   Any waiver, expressed or implied, of any provision hereunder and any
          delay or failure by Bank to enforce any provision shall not preclude
          Bank from enforcing any such provision thereafter.
     B.   Borrower shall, at the request of Bank, execute such other agreements,
          documents, instruments, or financing statements in connection with
          this Agreement as Bank may reasonably deem necessary.
     C.   All notes, security agreements, subordination agreements and other
          documents executed by Borrower or furnished to Bank in connection with
          this Agreement must be in form and substance satisfactory to Bank.
     D.   This Agreement shall be governed by and construed according to the
          laws of the State of California, to the jurisdiction of which the
          parties hereto submit.
     E.   All rights and remedies herein provided are cumulative and not
          exclusive of any rights or remedies otherwise provided by law. Any
          single or partial exercise of any right or remedy shall not preclude
          the further exercise thereof or the exercise of any other right or
          remedy.
     F.   All terms not defined herein are used as set forth in the Uniform
          Commercial Code.
     G.   In the event of any action by Bank to enforce this Agreement or to
          protect the security interest of Bank in the Collateral, or to take
          possession of, hold, preserve, process, assemble, insure, prepare for
          sale or lease, market for sale or lease, sell or lease, or otherwise
          dispose of, any Collateral, Borrower agrees to pay immediately the
          costs and expenses thereof, together with reasonable attorney's fees
          and allocated costs for in-house legal services.
     H.   Any Borrower who is married agrees that such Borrower's separate
          property shall be liable for payment of the Indebtedness if such
          Borrower is personally liable for the Indebtedness.

Date:  4/21 ,   2000
     -------------------

BANK OF AMERICA, N.A.                   Borrower:
                                        Sunrise Telecom, Inc.

X  /s/ Lakshmi Wolterding
-----------------------------------     X  /s/ Paul Chang
By: Lakshmi Wolterding,                 ----------------------------------
    Vice President                      By: Paul Chang, President/
                                            Chief Executive Officer

                                        X  /s/ Peter Eidelman
                                        ----------------------------------
                                        By: Peter Eidelman, Treasurer/
                                            Chief Financial Officer
<PAGE>

Bank of America
================================================================================

To:                                                          Continuing Guaranty

     Bank of America, N.A.          Borrowers:   Sunrise Telecom, Inc.
                                    Guarantors:  Hukk Engineering, Inc.

     (1)  For valuable consideration, the undersigned ("Guarantors") jointly and
severally unconditionally guarantee and promise to pay to Bank of America, N.A.
("Bank"), or order, on demand, in lawful money of the United States, any and all
indebtedness of Sunrise Telecom, Inc. ("Borrowers") to Bank. The word
"indebtedness" is used herein in its most comprehensive sense and includes any
and all advances, debts, obligations, and liabilities of Borrowers or any one or
more of them to Bank, heretofore, now, or hereafter made, incurred or created,
whether voluntary or involuntary and however arising, whether direct or acquired
by Bank by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and whether
Borrowers may be liable individually or jointly with others, or whether recovery
upon such indebtedness may be or hereafter become barred by any statute of
limitations, or whether such indebtedness may be or hereafter become otherwise
unenforceable.

     (2)  The liability of Guarantors under this Guaranty (exclusive of
liability under any other guaranties executed by Guarantors) shall not exceed at
any one time the total of (a) Nine Million and 00/100 Dollars ($9,000,000.00),
for the principal amount of the indebtedness and (b) all interest, fees, and
other costs and expenses relating to or arising out of the indebtedness or such
part of the indebtedness as shall not exceed the foregoing limitation. It is
provided, however, that the amount guaranteed under this Guaranty shall not
exceed the Maximum Guaranteed Amount. "Maximum Guaranteed Amount" means the
greater of: (x) the "reasonably equivalent value" received by Guarantors in
exchange for or in connection with Guarantors' execution of this Guaranty; or
(y) ninety percent (90%) of the excess of (i) a "fair valuation" of the amount
of the assets of Guarantors as of the applicable date of determination of the
incurrence of Guarantors' obligations under this Guaranty over (ii) a "fair
valuation" of Guarantors' debts as of such date. For purposes of the definition
of "Maximum Guaranteed Amount", "reasonably equivalent value", "fair valuation"
and the calculation of assets and other property and debts shall be determined
in accordance with applicable federal and California state laws governing the
determination of the insolvency of a debtor and to further the intent of the
parties not to render Guarantors insolvent or to leave Guarantors with an
unreasonably small amount of capital in relation to their business, in all cases
at the applicable date for determination of the incurrence of Guarantors'
obligations under this Guaranty. Bank may permit the indebtedness to exceed
Guarantors' liability, and may apply any amounts received from any source, other
than from Guarantors, to the unguaranteed portion of the indebtedness. This is a
continuing guaranty relating to any indebtedness, including that arising under
successive transactions which shall either continue the indebtedness or from
time to time renew it after it has been satisfied. Any payment by Guarantors
shall not reduce their maximum obligation hereunder, unless written notice to
that effect be actually received by Bank at or prior to the time of such
payment.

     (3)  If any Borrower is a partnership and any Guarantor is a general
partner of that partnership, then such Guarantor shall not be liable under this
Guaranty for any indebtedness of such Borrower which is secured by real
property; provided, however, that such Guarantor shall remain liable under
partnership law for all the indebtedness of such Borrower.

     (4)  The obligations hereunder are joint and several, and independent of
the obligations of Borrowers, and a separate action or actions may be brought
and prosecuted against Guarantors whether action is brought against Borrowers or
whether Borrowers be joined in any such action or actions; and Guarantors waive
the benefit of any statute of limitations affecting their liability hereunder.

     (5)  Guarantors authorize Bank, without notice or demand and without
affecting their liability hereunder, from time to time, either before or after
revocation hereof, to (a) renew, compromise, extend, accelerate, or otherwise
change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof, including increase or decrease of the rate of
interest thereon; (b) receive and hold security for the payment of this Guaranty
or any of the indebtedness, and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security; (c) apply such
security and direct the order or manner of sale thereof as Bank in its
discretion may determine; and (d) release or substitute any one or more of the
endorsers or guarantors.

     (6)  Guarantors waive any right to require Bank to (a) proceed against
Borrowers; (b) proceed against or exhaust any security held from Borrowers; or
(c) pursue any other remedy in Bank's power whatsoever. Guarantors waive any
defense arising by reason of any disability or other defense of Borrowers, or
the cessation from any cause whatsoever of the liability of Borrowers, or any
claim that Guarantors' obligations exceed or are more burdensome than those of
Borrowers. Until the indebtedness shall have been paid in full, even though the
indebtedness is in excess of Guarantors' liability hereunder, Guarantors waive
any right of subrogation, reimbursement, indemnification, and contribution
(contractual, statutory, or otherwise) including, without limitation, any claim
or right of subrogation under the Bankruptcy Code (Title 11, United States Code)
or any successor statute, arising from the existence or performance of this
Guaranty and Guarantors waive any right to enforce any remedy which Bank now has
or may hereafter have against Borrowers and waive any benefit of, and any right
to participate in, any security now or hereafter held by Bank. Guarantors waive
all presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Guaranty and of the existence, creation, or incurring of new or additional
indebtedness.

                                      -1-

<PAGE>

     (7)  (a)  Guarantors understand and acknowledge that if Bank forecloses,
either by judicial foreclosure or by exercise of power of sale, any deed of
trust securing the indebtedness, that foreclosure could impair or destroy any
ability that Guarantors may have to seek reimbursement, contribution, or
indemnification from Borrowers or others based on any right Guarantors may have
of subrogation, reimbursement, contribution, or indemnification for any amounts
paid by Guarantors under this Guaranty. Guarantors further understand and
acknowledge that in the absence of this paragraph, such potential impairment or
destruction of Guarantors' rights, if any, may entitle Guarantors to assert a
defense to this Guaranty based on Section 580d of the California Code of Civil
Procedure as interpreted in Union Bank v. Gradsky, 265 Cal. App. 2d. 40 (1968).
By executing this Guaranty, Guarantors freely, irrevocably, and unconditionally:
(i) waive and relinquish that defense and agree that Guarantors will be fully
liable under this Guaranty even though Bank may foreclose, either by judicial
foreclosure or by exercise of power of sale, any deed of trust securing the
indebtedness; (ii) agree that Guarantors will not assert that defense in any
action or proceeding which Bank may commence to enforce this Guaranty; (iii)
acknowledge and agree that the rights and defenses waived by Guarantors in this
Guaranty include any right or defense that Guarantors may have or be entitled to
assert based upon or arising out of any one or more of Sections 580a, 580b,
580d, or 726 of the California Code of Civil Procedure or Section 2848 of the
California Civil Code; and (iv) acknowledge and agree that Bank is relying on
this waiver in creating the indebtedness, and that this waiver is a material
part of the consideration which Bank is receiving for creating the indebtedness.

          (b)  Guarantors waive any rights and defenses that are or may become
available to Guarantors by reason of Sections 2787 to 2855, inclusive, of the
California Civil Code.

          (c)  Guarantors waive all rights and defenses that Guarantors may have
because any of the indebtedness is secured by real property. This means, among
other things: (I) Bank may collect from Guarantors without first foreclosing on
any real or personal property collateral pledged by Borrowers; and (ii) if Bank
forecloses on any real property collateral pledged by Borrowers: (1) the amount
of the indebtedness may be reduced only by the price for which that collateral
is sold at the foreclosure sale, even if the collateral is worth more than the
sale price, and (2) Bank may collect from Guarantors even if Bank, by
foreclosing on the real property collateral, has destroyed any right Guarantors
may have to collect from Borrowers. This is an unconditional and irrevocable
waiver of any rights and defenses Guarantors may have because any of the
indebtedness is secured by real property. These rights and defenses include, but
are not limited to, any rights or defenses based upon Section 580a, 580b, 580d,
or 726 of the California Code of Civil Procedure.

          (d)  Guarantors waive any right or defense they may have at law or
equity, including California Code of Civil Procedure Section 580a, to a fair
market value hearing or action to determine a deficiency judgment after a
foreclosure.

          (e)  No provision or waiver in this Guaranty shall be construed as
limiting the generality of any other waiver contained in this Guaranty.

     (8)  Guarantors acknowledge and agree that they shall have the sole
responsibility for obtaining from Borrowers such information concerning
Borrowers' financial conditions or business operations as Guarantors may
require, and that Bank has no duty at any time to disclose to Guarantors any
information relating to the business operations or financial conditions of
Borrowers.

     (9)  To secure all of Guarantors' obligations hereunder, Guarantors assign
and grant to Bank a security interest in all moneys, securities, and other
property of Guarantors now or hereafter in the possession of Bank, all deposit
accounts of Guarantors maintained with Bank, and all proceeds thereof. Upon
default or breach of any of Guarantors' obligations to Bank, Bank may apply any
deposit account to reduce the indebtedness and may foreclose any collateral as
provided in the Uniform Commercial Code and in any security agreements between
Bank and Guarantors.

     (10) Any obligations of Borrowers to Guarantors, now or hereafter existing,
including but not limited to any obligations to Guarantors as subrogees of Bank
or resulting from Guarantors' performance under this Guaranty, are hereby
subordinated to the indebtedness. Such obligations of Borrowers to Guarantors if
Bank so requests shall be enforced and performance received by Guarantors as
trustees for Bank, and the proceeds thereof shall be paid over to Bank on
account of the indebtedness, but without reducing or affecting in any manner the
liability of Guarantors under the provisions of this Guaranty.

     (11) This Guaranty may be revoked at any time by Guarantors in respect to
future transactions, unless there is a continuing consideration as to such
transactions which Guarantors do not renounce. Such revocation shall be
effective upon actual receipt by Bank, at the address shown below or at such
other address as may have been provided to Guarantors by Bank, of written notice
of revocation. Revocation shall not affect any of Guarantors' obligations or
Bank's rights with respect to transactions which precede Bank's receipt of such
notice, regardless of whether or not the indebtedness related to such
transactions, before or after revocation, has been renewed, compromised,
extended, accelerated, or otherwise changed as to any of its terms, including
time for payment or increase or decrease of the rate of interest thereon, and
regardless of any other act or omission of Bank authorized hereunder. Revocation
by any one or more of Guarantors shall not affect any obligations of any
nonrevoking Guarantors. If this Guaranty is revoked, returned, or canceled, and
subsequently any payment or transfer of any interest in property by Borrowers to
Bank is rescinded or

                                      -2-
<PAGE>

must be returned by Bank to Borrowers, this Guaranty shall be reinstated with
respect to any such payment or transfer, regardless of any such prior
revocation, return, or cancellation.

     (12) Where any one or more of Borrowers are corporations, partnerships, or
limited liability companies, it is not necessary for Bank to inquire into the
powers of Borrowers or of the officers, directors, partners, members, managers,
or agents acting or purporting to act on their behalf, and any indebtedness made
or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.

     (13) (a)  Guarantors authorize Bank to verify or check any information
given by Guarantors to Bank, check Guarantors' credit references, verify
employment, and obtain credit reports.

          (b)  Guarantors authorize Bank to disclose to any of Bank's affiliates
any information given by Guarantors to Bank in connection with Bank's extension
of credit to Borrowers provided that (i) such information will be used by such
affiliate only in connection with evaluating Borrowers' request or application
for a product or service offered by such affiliate and (ii) Guarantors may at
any time revoke this authorization. Such revocation shall be effective upon
actual receipt by Bank, at the address shown below or at such other address as
may have been provided to Guarantors by Bank, of written notice of such
revocation.

          (c)  Guarantors acknowledge and agree that the authorizations provided
in subparagraphs (a) and (b) of this paragraph apply to any individual general
partners of any Guarantor and to any Guarantor's spouse and any such general
partner's spouse if such Guarantor or such general partner is married and lives
in a community property state.

     (14) Bank may, without notice to Guarantors and without affecting
Guarantors' obligations hereunder, assign the indebtedness and this Guaranty, in
whole or in part. Guarantors agree that Bank may disclose to any assignee or
purchaser, or any prospective assignee or purchaser, of all or part of the
indebtedness any and all information in Bank's possession concerning Guarantors,
this Guaranty, and any security for this Guaranty.

     (15) Guarantors agree to pay all reasonable attorneys' fees, including
allocated costs of Bank's in-house counsel, and all other costs and expenses
which may be incurred by Bank (a) in the enforcement of this Guaranty or (b) in
the preservation; protection, or enforcement of any rights of Bank in any case
commenced by or against Guarantors under the Bankruptcy Code (Title 11, United
States Code) or any similar or successor statute.

     (16) Where there is but a single Borrower, or where a single Guarantor
executes this Guaranty, then all words used herein in the plural shall be deemed
to have been used in the singular where the context and construction so require;
and when there is more than one Borrower named herein, or when this Guaranty is
executed by more than one Guarantor, the words "Borrowers" and "Guarantors"
respectively shall mean all and any one or more of them.

     (17) This Guaranty shall be governed by and construed according to the laws
of the State of California, to the jurisdiction of which the parties hereto
submit.

     (18) (a)  Any controversy or claim between or among the parties, including
but not limited to those arising out of or relating to this Guaranty or any
agreements or instruments relating hereto or delivered in connection herewith
and any claim based on or arising from an alleged tort, shall at the request of
any party be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Guaranty, and under the
Commercial Rules of the American Arbitration Association ("AAA"). The
arbitrators shall give effect to statutes of limitation in determining any
claim, except as expressly waived hereunder by Guarantors. Any controversy
concerning whether an issue is arbitrable shall be determined by the
arbitrators. Judgment upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.

          (b)  Notwithstanding the provisions of subparagraph (a), no
controversy or claim shall be submitted to arbitration without the consent of
all parties if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation to Bank which is secured by real
property collateral located in California. If all parties do not consent to
submission of such a controversy or claim to arbitration, the controversy or
claim shall be determined as provided in subparagraph (c).

          (c)  A controversy or claim which is not submitted to arbitration as
provided and limited in subparagraphs (a) and (b) shall, at the request of any
party, be determined by a reference in accordance with California Code of Civil
Procedure Section 638 et seq. If such an election is made, the parties shall
designate to the court a referee or referees selected under the auspices of the
AAA in the same manner as arbitrators are selected in AAA-sponsored proceedings.
The presiding referee of the panel, or the referee if there is a single referee,
shall be an active attorney or retired judge. Judgment upon the award rendered
by such referee or referees shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645.

                                      -3-
<PAGE>

          (d)  No provision of this paragraph shall limit the right of any party
to this Guaranty to exercise self-help remedies such as setoff, to foreclose
against or sell any real or personal property collateral or security, or to
obtain provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding.
The exercise of a remedy does not waive the right of either party to resort to
arbitration or reference. At Bank's option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of power of sale under the deed
of trust or mortgage or by judicial foreclosure.

Date:    4/21   ,   2000
     ----------------------

Witnessed:                              Hukk Engineering, Inc.

X  /s/ Lakshmi Wolterding               X  /s/ Peter Eidelman
-----------------------------------     -----------------------------------
Witness                                 By: Peter Eidelman, Secretary/Treasurer

-----------------------------------
Address
                                        X  /s/ Paul Chang
                                        -----------------------------------
                                        By: Paul Chang, CEO
X__________________________________
Witness                                 3250-D Peachtree
                                        Corners Circle
-----------------------------------     Norcross, GA 30092
Address

Address for Notices:

Bank of America, N.A.
South Bay Commercial Banking Office #01487
101 Park Center Plaza
San Jose, CA 95115

                                      -4-

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