Document:

<PAGE>   1
                                                                   EXHIBIT 10.20

                            MOBILITY ELECTRONICS, INC.
                      NON-QUALIFIED STOCK OPTION AGREEMENT

         This Non-Qualified Stock Option Agreement (the "Agreement"), dated as
of May 21, 1999, is entered into by and between Mobility Electronics, Inc., a
Delaware corporation (the "Company"), and Robert Dilworth, a consultant of the
Company (the "Optionee"). In consideration of the mutual promises and covenants
made herein, the parties hereby agree as follows:

         1.       GRANT OF OPTION. Under the terms and conditions of the
Company's Amended and Restated 1996 Long Term Incentive Plan (the "Plan") and
pursuant to the resolutions of the Board of Directors of the Company, dated as
of May 21, 1999, the Company grants to the Optionee an option (the "Option") to
purchase from the Company all or any part of a total of 70,000 shares of the
Company's Common Stock, par value $.01 per share, at a price of $4.00 per share.
The Option is granted as of the date first above written (the "Date of Grant").

         2.       CHARACTER OF OPTION. The Option is not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.

         3.       TERM. The Option will expire on the fourth anniversary of the
Date of Grant.

         4.       VESTING. Subject to the provisions of Section 6(b) of the
Plan, the Option may be exercised on the following schedule: (i) 2,800 shares
shall be immediately exercisable; and (ii) 2,800 additional shares shall be
exercisable upon the 21st day of each month, commencing on June 21, 1999;
provided, however, that: (a) this Option shall vest in full upon (1) the
consolidation or merger of the Company with or into another corporation or
business entity pursuant to which immediately following such merger or
consolidation, the Company's stockholders fail to hold at least a majority of
the voting stock of the surviving entity, (2) the sale or other transfer in an
single transaction or a series of related transactions of all or substantially
all of the assets of the Company, except to a subsidiary of the Company or (3)
the consummation by the Company of a Public Offering (which shall mean a public
offering of securities of the Company pursuant to a registration statement filed
under the Securities Act of 1933, as amended (other than on Form S-4 or Form
S-8, or their successor forms)) or (b) upon termination of that certain
Consulting Agreement, of even date herewith, by and between the Company and
Optionee, this Option shall cease to vest, and the unvested portion of this
Option shall be deemed to be terminated and of no further force or effect.

         5.       PROCEDURE FOR EXERCISE. Exercise of the Option or a portion
thereof shall be effected by the giving of written notice to the Company and
payment of the purchase price prescribed in Section 1 above for the shares to be
acquired pursuant to the exercise.

         6.       PAYMENT OF PURCHASE PRICE. Payment of the purchase price for
any shares purchased pursuant to the Option shall be in cash, unless otherwise
agreed to in writing by the Compensation Committee of the Board of Directors of
the Company.
<PAGE>   2

         7.       TRANSFER OF OPTIONS. The Option may not be transferred except
by will or the laws of descent and distribution and, during the lifetime of the
Optionee, may be exercised only by the Optionee or by the Optionee's legally
authorized representative.

         8.       ACCEPTANCE OF THE PLAN. The Option is granted subject to all
of the applicable terms and provisions of the Plan, and such terms and
provisions are incorporated by reference herein. The Optionee hereby accepts and
agrees to be bound by all the terms and conditions of the Plan.

         9.       AMENDMENT. This Agreement may be amended by an instrument in
writing signed by both the Company and the Optionee.

         10.      MISCELLANEOUS. This Agreement will be construed and enforced
in accordance with the laws of the State of Delaware and will be binding upon
and inure to the benefit of any successor or assign of the Company and any
executor, administrator, trustee, guardian or other legal representative of the
Optionee.

         Executed as of the date first above written.

                                   MOBILITY ELECTRONICS, INC.

                                   By: /s/ CHARLES R. MOLLO
                                       -------------------------------------
                                       Charles R. Mollo,
                                       Chief Executive Officer

                                       /s/ ROBERT DILWORTH
                                       -------------------------------------
                                       Robert Dilworth

                                       -------------------------------------
                                       Social Security Number of Optionee<PAGE>   1
                                                                   EXHIBIT 10.23

                               AMENDMENT NO. 3 TO
                 LETTER OF CREDIT, LOAN AND SECURITY AGREEMENT
                              AND PROMISSORY NOTE

THIS AMENDMENT NO. 3 TO LETTER OF CREDIT, LOAN AND SECURITY AGREEMENT AND
PROMISSORY NOTE (this "Amendment) is made as of this 31st day of October, 1999,
between MOBILITY ELECTRONICS, INC., formerly known as Electronics Accessory
Specialists International, Inc., a Delaware corporation, (the "Borrower"), and
BANK OF AMERICA, N.A., successor to NationsBank N.A., a national banking
association (the "Bank").

                                    RECITALS

         WHEREAS, on May 6, 1998, the Bank and the Borrower executed and
delivered a Letter of Credit, Loan and Security Agreement (the "Loan Agreement",
all capitalized terms used and not specifically defined herein to have the
meaning given to such terms in the Loan Agreement), as previously amended by
Amendment No. 1 and by Amendment No. 2 (hereinafter defined), pursuant to which
the Bank agreed to make direct advances of the Loan to the Borrower and to issue
Standby and Commercial Letters of Credit for the account of the Borrower, in the
aggregate amount outstanding at any one time not to exceed United States One
Million Five Hundred Thousand Dollars ($1,500,000), to provide the Borrower with
working capital financing in connection with the export of portable computer
accessories; and

         WHEREAS, the Export-Import Bank of the United States ("EXIMBANK")
guaranteed a portion of the Borrower's Obligations under the Financing
Documents, pursuant to the EXIMBANK Guaranty; and

         WHEREAS, on May 6, 1999, the Bank and the Borrower executed and
delivered Amendment No. 1 to Letter of Credit, Loan and Security Agreement and
Promissory Note ("Amendment No. 1") for the purpose of extending the Termination
Date and the maturity date for the Borrower's Obligations from May 6, 1999, to
August 6, 1999;

         WHEREAS, in August of 1999, the Bank and the Borrower executed and
delivered Amendment No. 2 to Letter of Credit, Loan and Security Agreement and
Promissory Note ("Amendment No. 2") for the purpose of (a) extending the
Termination Date and the maturity date for the Borrower's Obligations to October
30, 1999, and (b) decreasing the Bank's Commitment from $1,500,000 to $750,000;
and

         WHEREAS, the Borrower has again requested the Bank to extend the
Termination Date and the maturity date for the Borrower's obligations to March
31, 2000;

<PAGE>   2

         WHEREAS, the Bank is willing to accommodate the Borrower's request to
further extend the Termination Date and the maturity date of the Borrower's
Obligations subject to the terms and conditions of this Amendment.

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the actual agreements herein and
other good and valuable consideration, the Borrower and the Bank hereby agree as
follows:

         1. Extension of Termination Date. The Loan Agreement is hereby amended
to provide that the Termination Date is extended until March 31, 2000, whereupon
the Bank will no longer make advances of the Loan to the Borrower or issue
Standby or Commercial Letters of Credit for the benefit of the Borrower. The
existing provisions of the Loan Agreement provide that, with certain exceptions,
any Letters of Credit issued thereunder shall have an Expiry Date no later than
the Termination Date, and the related Applications and Agreements of Letters of
Credit require the Borrower to repay on demand any Letter of Credit Obligations
arising with respect to Letters of Credit. With respect to any Letter of Credit
having an expiry date after the Termination Date, the Loan Agreement requires
that the related Letter of Credit Obligations shall be prepaid on the day
immediately preceding the Termination Date.

         2. Extension of Maturity Date. The Promissory Note is hereby amended to
provide that the maturity date is extended until March 31, 2000, whereupon all
of the Loan Obligations shall become immediately due and payable.

         3. Interest Rate Applicable to Loan. The Promissory Note is hereby
amended to provide for the increase in the interest rate applicable to the Loan
from the Prime Rate plus 1 1/2% to the Primate Rate plus 2 1/2%. For purposes of
accomplishing this objective, clause (a) of the Promissory Note is hereby
deleted in its entirety and replaced with the following clause (a):

                  "(a) interest on the unpaid principal balance at an annual
         rate, which is equal to the fluctuating prime rate of interest
         established and declared by the Bank from time to time (the "Prime
         Rate") plus two and one-half percent per annum (2 1/2%), shall be due
         and payable on the first calendar day of each and every month after the
         date hereof until the principal sum is paid in full; and"

         4. Financial Covenant Revisions. (a) Sections 9.1 and 9.2 of the Loan
Agreement are hereby deleted in their entirety and replaced with the following
Sections 9.1 and 9.2:

                  "9.1 Current Ratio. The Borrowers shall maintain a ratio of
         Current Assets to Current Liabilities of not less than 0.9 to 1.0."

                  "9.2 Tangible Net Worth. The Borrower shall maintain a
         Tangible Net Worth of not less than (i) ($1,800,000) at October 31,
         1999, (ii) ($2,600,000) at November 30, 1999, and (iii) ($3,400,000) at
         December 31, 1999, and at all times thereafter."

<PAGE>   3

                  (b) In addition, the following financial covenant is hereby
         added to the Loan Agreement as new Section 9.4:

                  "9.4 Capital Expenditures. The Borrower will not make any
         capital expenditures exceeding, in the aggregate during any one fiscal
         year, the total sum of $900,000."

         5. Financial Reporting. Section 8.1(c) of the Loan Agreement is hereby
revised to require that (a) the Borrowing Base Certificates be provided twice
per month by the 15th and 30th of each month and (b) the reports on the
Borrower's Receivables and Inventory and export purchase orders be provided no
later than the 15th day of each calendar month.

         6. Conditions Precedent. It is a condition precedent to the
effectiveness of this Amendment that (a) the Bank receive EXIMBANK's consent to
the extension of the Termination Date and the maturity date for the Borrower's
Obligations in respect of the EXIMBANK Guaranty, and (b) the Borrower execute
and deliver to the Bank the EXIMBANK Borrower Agreement in the form attached
hereto as EXHIBIT A, as required by EXIMBANK.

         7. EXIMBANK COUNTY LIMITATION SCHEDULE. For purposes of facilitating
the Borrower's compliance with Section 5.3 of the Loan Agreement containing
Collateral Value requirements, a copy of EXIMBANK's current Country Limitation
Schedule is attached to this amendment as EXHIBIT B. This Schedule is revised,
amended and updated periodically, and the Bank will endeavor to provide the
Borrower with copies of any supplements and modifications to the Country
Limitation Schedule which are provided to it by EXIMBANK.

         8. No Other Amendments. Except as specifically contemplated herein, the
Loan Agreement, the Promissory Note and all of the other Financing Documents
shall remain in full force and effect in accordance with their respective terms.

         9. Bank's Rights Reaffirmed. The Bank shall continue to have all rights
and remedies set forth in the Loan Agreement, the Promissory Note and all of the
other Financing Documents, including but not limited to the right to accelerate
the Termination Date and the right to accelerate the Borrower's Obligations as
set forth in Section 11.2 of the Loan Agreement, and the right to demand
repayment of the Borrower's Obligations in accordance with the terms of the
Promissory Note.

<PAGE>   4

         10. Payment of Fees.

                  (a) It is a condition precedent to the effectiveness hereof
that the Borrower shall have paid to the Bank the EXIMBANK Facility Fee in the
amount of $4,687.50 relating to the extension of the Termination Date and the
maturity date of the Promissory Note pursuant to this Amendment.

                  (b) The Borrower must also pay all costs (including legal
fees) incurred by the Bank in connection with the preparation of this Amendment.

         11. Effectiveness. Assuming satisfaction of the conditions precedent
described in Section 3, this Amendment shall be deemed to be retroactively
effective as of October 30, 1999, regardless of the date on which it is executed
and delivered by the parties hereto.

         12. Representations and Warranties. The Borrower hereby reaffirms all
representations and warranties made by them in the Loan Agreement and in the
other Financing Documents.

         13. Governing Law. This Amendment shall be construed in accordance with
and governed by the laws of the State of New Mexico.

         14. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be considered an original for all purposes;
provided, however, that all such counterparts shall together constitute one and
the same instrument.

         15. No Novation. The parties hereto covenant and agree that the
execution of this Amendment is not intended to and shall not cause or result in
a novation with respect to the Borrower's Obligations or the Financing Documents
and that the existing Borrower's Obligations, as evidenced by the Financing
Documents are continuing, without interruption, and have not been discharged by
a new agreement.

         IN WITNESS WHEREOF, the parties hereby have caused this Amendment to be
executed, sealed and delivered by their duly authorized officers.

WITNESS/ATTEST:                         MOBILITY ELECTRONICS, INC.

/s/ LYNDA H. FRANCIS                    By:/s/ RICHARD W. WINTERICH  (SEAL)
--------------------------------           ------------------------
Lynda H. Francis (SEAL)                 Name: Richard W. Winterich
                                        Title: Chief Financial Officer

                                        BANK OF AMERICA, N.A.

/s/ LYNDA H. FRANCIS                    By: /s/ KURT A. HUISMAN      (SEAL)
--------------------------------           ------------------------
Lynda H. Francis (SEAL)                 Name: Kurt A. Huisman
                                        Title: Vice President

<PAGE>   5

                                                                       Exhibit A

                     EXPORT-IMPORT BANK OF THE UNITED STATES
                        WORKING CAPITAL GUARANTEE PROGRAM

                               BORROWER AGREEMENT

         THIS BORROWER AGREEMENT (this "Agreement") is made and entered into by
the entity identified as the Borrower on the signature page hereof (the
"Borrower") and is acknowledged by the institution identified as the Lender on
the signature page hereof (the "Lender").

                                    RECITALS

         A. The Lender shall make a loan (the "Loan") to the Borrower for the
purpose of providing the borrower with pre-export working capital to finance the
manufacture, production or purchase and subsequent export sale of the Items (as
hereinafter defined).

         B. The Loan shall be in a principal amount (the "Loan Amount") not to
exceed at any time outstanding the amount specified in Section (5)(A) of the
Loan Authorization Agreement between the Lender and the Export-Import Bank of
the United States ("Eximbank") which is attached hereto as Annex A1 or Annex A2
and incorporated herein as a part of this Agreement. If the Loan is being made
pursuant to the Lender's Delegated Authority from Eximbank, all references
herein to the Loan Authorization Agreement shall be deemed to be to the Loan
Authorization Notice provided to Eximbank and the Borrower by the Lender.

         C. The Loan shall be evidenced by a valid and enforceable promissory
note payable by the Borrower to the order of the Lender (the "Note") and shall
be made pursuant to a written agreement related solely thereto between the
Borrower and the Lender (the "Loan Agreement").

         D. A condition precedent to the making of the Loan by the Lender is
that Eximbank guarantee the payment of ninety percent (90%) of the Loan Amount
and all interest accrued thereon, subject to the terms and conditions of a
master guarantee agreement (the "Master Guarantee Agreement") between Eximbank
and the Lender.

         E. In consideration for and as a condition precedent to the Lender's
making the Loan and Eximbank's entering into the Master Guarantee Agreement, the
Borrower shall execute this Agreement for the benefit of the Lender and
Eximbank.

         NOW, THEREFORE, the Borrower hereby agrees as follows:

<PAGE>   6

                                    ARTICLE I
                                   DEFINITIONS

         "Accounts Receivable" shall mean those trade accounts from the sale of
the Items due and payable to the Borrower in the United States and any notes,
drafts, letters of credit or insurance proceeds supporting payment thereof.

         "Availability Date" shall mean the last date on which the Lender may
make a Disbursement as set forth in Section (10) of the Loan Authorization
Agreement or, if such date is not a Business Day, the next Business Day
thereafter.

         "Borrowing Base" shall mean the Collateral Value as discounted by the
applicable Disbursement Rate(s).

         "Borrowing Base Certificate" shall mean the certificate in form
provided by the Lender and executed by the Borrower setting forth the Borrowing
Base supporting one or more Disbursements.

         "Business Day" shall mean any day on which the Federal Reserve Bank of
New York is open for business.

         "Buyer" shall mean an entity which has entered into one or more Export
Orders with the Borrower.

         "Closing Date" shall mean the date on which the Loan Documents are
executed by the Borrower.

         "Collateral" shall mean the property of the Borrower in which the
Borrower has granted to the Lender a valid and enforceable security interest as
security for the payment of all principal and interest due under the Loan, and
which is identified in Section (6) of the Loan Authorization Agreement,
including all proceeds (cash and non-cash) thereof.

         "Collateral Value" shall mean at any given time the value of all
Collateral against which Disbursements may be made as set forth in Section
(5)(C) of the Loan Authorization Agreement, valued according to GAAP.

         "Country Limitation Schedule" shall mean the most recent schedule
published by Eximbank and provided to the borrower by the lender which sets
forth on a country by country basis whether and under what conditions Eximbank
will provide coverage for the financing of export transactions to countries
listed therein.

         "Debarment Regulations" shall have the meaning set forth in Section
2.16.

         "Disbursed Amount" shall mean the aggregate outstanding amount of the
Disbursements.

                                      -2-

<PAGE>   7

         "Disbursement" shall mean an advance of the Loan from the Lender to the
Borrower under the Loan Agreement.

         "Disbursement Rate" shall mean the rate specified in Section (5)(C) of
the Loan Authorization Agreement for each category of Collateral.

         "Dollars" or "$" shall mean the lawful money of the United States of
America.

         "Export Order" shall mean a written export order or contract for the
purchase by the Buyer from the Borrower of any of the Items.

         "GAAP" shall mean the generally accepted accounting principles issued
by the American Institute of Certified Public Accountants.

         "Guarantor" shall mean each person or entity, if any, identified in
Section (3) of the Loan Authorization Agreement who shall guarantee (jointly and
severally if more than one) the Borrower's obligation to repay all amounts
outstanding under the Note.

         "Inventory" shall mean the raw materials, work-in-process and finished
goods purchased or manufactured by the Borrower for resale and located in the
United States.

         "Items" shall mean the finished goods or services which are intended
for export, as specified in Section (4)(A) of the Loan Authorization Agreement.

         "Letter of Credit" shall mean an irrevocable letter of credit subject
to UCP 500, payable in the United States or at the issuing bank and issued for
the benefit of the Borrower on behalf of a Buyer in connection with the purchase
of the Items.

         "Loan Documents" shall mean the Note, the Loan Agreement, this
Agreement and any other instrument, agreement or document previously,
simultaneously or hereafter executed by the Borrower or any Guarantors
evidencing, securing, guaranteeing or in connection with the Loan.

         "Principals" shall have the meaning set forth in Section 2.16.

         "Revolving Loan" shall mean a Loan under which amounts disbursed and
repaid may be disbursed on a continuous basis during the term of the Loan.

         "Transaction Specific Loan" shall mean a Loan under which amounts
disbursed and repaid may not be disbursed again.

         "U.S." or "United States" shall mean the United States of America and
its territorial possessions.

         "U.S. Content" shall mean with respect to any Item all the labor,
materials and services

                                      -3-

<PAGE>   8

which are of U.S. origin or manufacture, and which are incorporated into an Item
in the United States.

                                   ARTICLE II
                           OBLIGATIONS OF THE BORROWER

         Until payment in full of the Loan, the Borrower agrees to the
following:

         Section 2.1 Use of Disbursements. The Borrower shall use Disbursements
only for the purpose of enabling the Borrower to finance the cost of
manufacturing, producing, purchasing or selling the Items. The Borrower may not
use Disbursements for the purpose of: (a) servicing any of the Borrower's
pre-existing or future indebtedness unrelated to the Loan; (b) acquiring fixed
assets or capital goods for use in the Borrower's business; (c) acquiring,
equipping or renting commercial space outside of the United States; (d) paying
the salaries of non-U.S. citizens or non-U.S. permanent residents who are
located in offices outside the United States; or (e) serving as a retainage or
warranty bond.

         In addition, Disbursements may not be used to finance the manufacture,
purchase or sale or any of the following:

         (a) Items to be sold to a Buyer located in a country in which Eximbank
is legally prohibited from doing business as designated in the Country
Limitation Schedule;

         (b) that a part of the cost of the Items which is not U.S. Content
unless such part is not greater than fifty percent (50%) of the cost of the
Items and is incorporated into the Items in the United States;

         (c) defense articles or defense services; or

         (d) without Eximbank's prior written consent, any Items to be used in
the construction, alteration, operation or maintenance of nuclear power,
enrichment, reprocessing, research or heavy water production facilities.

         Section 2.2 Borrowing Base Certificates and Export Orders. In order to
receive a Disbursement under the Loan, the Borrower shall deliver to the Lender
a Borrowing Base Certificate current within the past five (5) Business Days and
a copy of the Export Order(s) (or, for Revolving Loans, if permitted by the
Lender, a written summary of the Export Orders) against which the Borrower is
requesting a Disbursement. If the Lender permits summaries of Export Orders, the
Borrower shall also deliver promptly to the Lender copies of any Export Orders
requested by the Lender. Additionally, the Borrower shall deliver to the Lender
at least once every thirty (30) calendar days a Borrowing Base Certificate
current within the past five (5) Business Days, which requirement may be
satisfied by submission of a Borrowing Base Certificate when requesting a
Disbursement.

                                      -4-

<PAGE>   9

         Section 2.3 Exclusions from the Borrowing Base. In determining the
amount of a requested Disbursement, the Borrower shall exclude from the
Borrowing Base the following:

         (a) an Inventory which is not located in the United States;

         (b) any demonstration Inventory or Inventory sold on consignment;

         (c) any Inventory consisting of proprietary software;

         (d) any Inventory which is damaged, obsolete, returned, defective,
recalled or unfit for further processing;

         (e) any Inventory which has been previously exported from the United
States;

         (f) any Inventory which constitutes defense articles or defense
services or any Accounts Receivable generated by sales of such Inventory;

         (g) any Inventory which is to be incorporated into Items destined for
shipment to, and any Account Receivable in the name of a Buyer located in, a
country in which Eximbank is legally prohibited from doing business as
designated in the Country Limitation Schedule;

         (h) any Inventory which is to be incorporated into Items destined for
shipment to, and any Account Receivable in the name of a Buyer located in, a
country in which Eximbank coverage is not available for commercial reasons as
designated in the Country Limitation Schedule, unless and only to the extent
that such Items are to be sold to such country on terms of a Letter of Credit
confirmed by a bank acceptable to Eximbank;

         (i) any Inventory which is to be incorporated into Items whose sale
would result in an ineligible Account Receivable;

         (j) any Account Receivable with a term in excess of net one hundred
eighty (180) days;

         (k) any Account Receivable which is more than sixty (60) calendar days
pas the original due date, unless it is insured through Eximbank export credit
insurance for comprehensive commercial and political risk, or through Eximbank
approved private insurers for comparable coverage, in which case ninety (90)
calendar days shall apply;

         (l) any intra-company Account Receivable or any Account Receivable from
a subsidiary of the Borrower, form a person or entity with a controlling
interest in the Borrower or from an entity which shares common controlling
ownership with the Borrower;

         (m) any Account Receivable evidenced by a Letter of Credit, until the
date of shipment of the Items covered by the subject Letter of Credit;

                                      -5-

<PAGE>   10

         (n) any Account Receivable which the Lender or Eximbank, in its
reasonable judgment, deems uncollectible for any reason;

         (o) any Account Receivable payable in a currency other than Dollars,
except as may be approved in writing by Eximbank;

         (p) any Account Receivable from a military Buyer, except as may be
approved in writing by Eximbank; and

         (q) any Account Receivable due and collectible outside the United
States, except as may be approved in writing by Eximbank.

         Section 2.4 Schedules, Reports and Other Statements. The Borrower shall
submit to the Lender in writing each month (a) an Inventory schedule for the
preceding month and (b) an Accounts Receivable aging report for the preceding
month detailing the terms of the amounts due from each Buyer. The Borrower shall
also furnish to the Lender promptly upon request such information, reports,
contracts, invoices and other data concerning the Collateral as the Lender may
from time to time specify.

         Section 2.5 Additional Security or Payment. The Borrower shall at all
times ensure that the Borrowing Base exceeds the Disbursed Amount. If informed
by the Lender or if the Borrower otherwise has actual knowledge that the
Borrowing Base is at any time less than the Disbursed Amount, the borrower
shall, within five (5) Business Days, either (a) furnish additional security to
the Lender, in form and amount satisfactory to the Lender and Eximbank, or (b)
apply to the Lender an amount equal to the difference between the Disbursed
Amount and the Borrowing Base.

         Section 2.6 Continued Security Interest. The Borrower shall notify the
Lender in writing within five (5) Business Days if (a) the Borrower changes in
name or identity in any manner, (b) the Borrower changes the location of its
principal place of business, (c) the nature of any of the Collateral is changed
or any of the Collateral is transferred to another location or (d) any of the
books or records related to the Collateral are transferred to another location.
The Borrower shall execute such additional financing statements or other
documents as the Lender may reasonably request in order to maintain its
perfected security interest in the Collateral.

         Section 2.7 Inspection of Collateral. The Borrower shall permit the
representatives of the Lender and Eximbank to make at any time during normal
business hours reasonable inspections of the Collateral and of the Borrower's
facilities, activities, and books and records, and shall cause its offers and
employees to give full cooperation and assistance in connection therewith.

         Section 2.8 Notice of Debtor's Relief, Dissolution and Litigation. The
Borrower shall notify the Lender in writing within five (5) Business Days of the
occurrence of any of the following:

                                      -6-

<PAGE>   11

         (a) a proceeding in bankruptcy or an action for debtor's relief is
filed by, against, or on behalf of the Borrower;

         (b) the Borrower fails to obtain the dismissal or termination within
thirty (30) calendar days of the commencement of any proceeding or action
referred to in (a) above;

         (c) the Borrower begins any procedure for its dissolution or
liquidation, or a procedure therefore has been commenced against it; or

         (d) any material litigation is filed against the Borrower.

         Section 2.9 Merger or Consolidation. The Borrower shall maintain
insurance coverage in the manner and to the extent customary in businesses of
similar character.

         Section 2.10 Merger or Consolidation. Without the prior written consent
of Eximbank and the Lender, the Borrower shall not (a) merge or consolidate with
any other entity, (b) sell, lease, transfer or otherwise dispose of any
substantial part of its assets, or any part of its assets which are essential to
the conduct of its business or operations, (c) make any material change in its
organizational structure or identity, or (d) enter into any agreement to do any
of the foregoing.

         Section 2.11 Reborrowings and Repayment Terms. (a) If the Loan is a
Revolving Loan, provided that the Borrower is not in default under any of the
Loan Documents, the Borrower may borrow, repay and reborrow amounts under the
Loan until the close of business on the Availability Date. Unless the Revolving
Loan is renewed or extended by the Lender, the Borrower shall pay in full the
outstanding Loan Amount and all accrued and unpaid interest thereon no later
than the first Business Day after the Availability Date.

         (b) If the Loan is a Transaction Specific Loan, the Borrower shall,
within two (2) Business Days of the receipt thereof, pay to the Lender (for
application against the outstanding Loan Amount and accrued and unpaid interest
thereon) all checks, drafts, cash and other remittances it may receive in
payment or on account of the Accounts Receivable or any other Collateral, in
precisely the form received (except for the endorsement of the Borrower where
necessary). Pending such deposit, the Borrower shall not commingle any such
items of payment with any of its other funds or property, but will hold them
separate and apart.

         Section 2.12 Cross Default. The Borrower shall be deemed in default
under the Loan if the Borrower fails to pay when due any amount payable to the
Lender under any loan to the Borrower not guaranteed by Eximbank.

         Section 2.13 Financial Statements. The Borrower shall provide quarterly
financial statements to the Lender no later than forty-five (45) days after the
end of each quarter. This is in addition to any other financial statements that
may be required by the Lender under the Loan Agreement.

                                      -7-

<PAGE>   12

         Section 2.14 Taxes, Judgments and Liens. The Borrower shall remain
current on all of its federal, state and local tax obligations. In addition, the
Borrower shall notify the Lender in the event (i) any judgment is rendered
against the Borrower or (ii) any lien is filed against any of the assets of the
Borrower.

         Section 2.15 Munitions List. If any of the Items are articles,
services, or related technical data that are listed on the United States
Munitions List (part 121 of title 22 of the Code of Federal Regulations), the
Borrower shall send a written notice promptly to the Lender describing the
Item(s) and the corresponding invoice amount.

         Section 2.16 Suspension and Debarment, etc. On the date of this
Agreement neither the Borrower nor its Principals (as defined below) are (A)
debarred, suspended, proposed for debarment with a final determination still
pending, declared ineligible or voluntarily excluded (as such terms are defined
under any of the Debarment Regulations referred to below) from participating in
procurement or nonprocurement transactions with any United Sates federal
government department or agency pursuant to any of the Debarment Regulations (as
defined below) or (B) indicted, convicted or had a civil judgment rendered
against the Borrower or any of its Principals for any of the offenses listed in
any of the Debarment Regulations. Unless authorized by Eximbank, the Borrower
will not knowingly enter into any transactions in connection with the Items with
any person who is debarred, suspended, declared ineligible or voluntarily
excluded from participation in procurement or nonprocurement transactions with
any United States federal government department or agency pursuant to any of the
Debarment Regulations. The Borrower will provide immediate written notice to the
Lender if at all time it learns that the certifications et forth in this Section
2.16 was erroneous when made or has become erroneous by reason of changed
circumstances. For the purposes hereof, (1) "Principals" shall mean any officer,
director, owner, partner, key employee, or other person with primary management
or supervisory responsibilities with respect to the Borrower; or any other
person (whether or not an employee) who has critical influence on or substantive
control over the transaction covered by this Agreement and (2) the Debarment
Regulations shall mean (x) the Governmentwide Debarment and suspension
(Nonprocurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May 26, 1988),
(y) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the Federal
Acquisition Regulations, 48 C.F.R., 9.400-9.409 and (z) the revised
Governmentwide Debarment and Suspension (Nonprocurement) regulations (Common
Rule), 60 Fed. Reg. 33037 (June 26, 1995).

         Section 2.17 Special Conditions. The Borrower shall comply with all
Special Conditions, if any, referenced in Section (11) of the Loan Authorization
Agreement or the Loan Authorization Notice.

                                   ARTICLE III
                               RIGHTS AND REMEDIES

         Section 3.1 Indemnification. Upon Eximbank's payment of a claim to the
Lender in connection with the Loan pursuant to the Master Guarantee Agreement,
Eximbank shall assume all rights and remedies of the Lender under the Loan
Documents and may enforce any such rights or

                                      -8-

<PAGE>   13

remedies against the Borrower, the Collateral and any Guarantors. Additionally,
the Borrower shall hold Eximbank and the Lender harmless from and indemnify them
against any and all liabilities, damages, claims, costs and losses incurred or
suffered by either of them resulting from (a) any materially incorrect
certification or statement knowingly made by the Borrower or its agent to
Eximbank or the Lender in connection with the Loan, this Agreement or any of the
other Loan Documents or (b) any material breach by the Borrower of the terms and
conditions of this Agreement or any of the other Loan Documents. The Borrower
also acknowledges that any statement, certification or representation made by
the Borrower in connection with the Loan is subject to the penalties provided in
Article 18 U.S.C. Section 1001.

                                   ARTICLE IV
                                  MISCELLANEOUS

         Section 4.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, United States of
America.

         Section 4.2 Notification. All notifications required by this Agreement
shall be given in the manner provided in the Loan Agreement.

         Section 4.3 Partial Invalidity. If at any time any of the provisions of
this Agreement becomes illegal, invalid or unenforceable in any respect under
the law of any jurisdiction, neither the legality, the validity nor the
enforceability of the remaining provisions hereof shall in any way be affected
or impaired.

         IN WITNESS WHEREOF, the Borrower has caused this Agreement to be duly
executed as of the 31st day of October, 1999.

MOBILITY ELECTRONICS, INC.
(Name of Borrower)

By: /s/ RICHARD W. WINTERTICH
   --------------------------------------
Name:    Richard W. Winterich
Title:   Chief Financial Officer

ACKNOWLEDGED:

BANK OF AMERICA, N.A.
(Name of Lender)

By: /s/ KURT A. HUISMAN
   --------------------------------------
Name:    Kurt A. Huisman
Title:   Vice President

                                      -9-
<PAGE>   14

Guaranteed Loan No.
                   ----------------
ANNEXES:

A1 - Loan Authorization Agreement or
A2 - Loan Authorization Notice

                                                         (Revised April 1, 1996)

                                      -10-

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