Document:

Lutcam SB-2 Amend 9 Ex 10-1 Line of Credit

    Exhibit
      10.4

    REVOLVING
      LINE OF CREDIT AGREEMENT

    

    This
      Revolving Line of Credit Agreement (the "AGREEMENT") is made and entered into
      in
      this February 9th. 2005, by and between Otto Kjeldsen ("LENDER"), and Lutcam,
      Inc., a Nevada corporation ("BORROWER").

    

    In
      consideration of the mutual covenants and agreements contained herein, the
      parties agree as follows:

    

    1.
      LINE
      OF CREDIT. Lender hereby establishes for a period extending to December 31,
      2007
      (the "MATURITY DATE") a revolving line of credit (the "CREDIT LINE") for
      Borrower in the principal amount of Five Hundred Thousand Dollars ($500,000.00)
      (the

    "CREDIT
      LIMIT"). .

    

    2.
      ADVANCES. Any request for an Advance may be made from time to time and in such
      amounts as Borrower may choose; provided, however, any requested Advance will
      not, when added to the outstanding principal balance of all previous Advances,
      exceed the Credit Limit. Requests for Advances may be made orally or in writing
      by such officer of Borrower authorized by it to request such Advances. Until
      such time as Lender may be notified otherwise, Borrower hereby authorizes its
      president or any vice president to request Advances. Lender may deposit or
      credit the amount of any requested Advance to Borrower's checking account with
      Lender. Lender may refuse to make any requested Advance if an event of default
      has occurred and is continuing hereunder either at the time the request is
      given
      or the date the Advance is to be made, or if an event bas occurred or condition
      exists which, with the giving of notice or passing of time or both,
      would

    constitute
      an event of default hereunder as of such dates. .

    

    The
      funds
      from the Advances will be used by the Borrower for operating expenses in
      connection with the operations of the Borrower.

    

    3.
      INTEREST. All sums advanced pursuant to this Agreement shall bear interest
      from
      the date each Advance is made until paid in full at the rate of eight percent
      (8%) per annum, simple interest (the "EFFECTIVE RATE").

    

    4.
      REPAYMENT. Borrower shall pay accrued interest on the outstanding principal
      balance on a monthly basis commencing on March 15, 2005, and continuing on
      the
      fifteenth day of each month thereafter. The entire unpaid principal balance,
      together with any accrued interest and other unpaid charges or fees hereunder,
      shall be due and payable on the Maturity Date. All payments shall be made to
      Lender at such place as Lender may, from time to time, designate. All payments
      received hereunder shall be applied, first, to any costs or expenses incurred
      by
      Lender in collecting such payment or to any other unpaid charges or expenses
      due
      hereunder; second, to accrued interest; and third, to principal. Borrower may
      prepay principal at any time without penalty.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.
      REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into this
      Agreement and to make the advances provided for herein, Borrower represents
      and
      warrants to Lender as follows:

    

    a.
      Borrower is a duly organized, validly existing, and in good standing under
      the
      laws of the State of Nevada with the power to own its assets and to transact
      business in such other states where its business is conducted.

    

    b.
      Borrower has the authority and power to execute and deliver any document
      required hereunder and to perform any condition or obligation imposed under
      the
      terms of such documents.

    

    c.
      The
      execution, delivery and performance of this Agreement and each document incident
      hereto will not violate any provision of any applicable law, regulation, order,
      judgment, decree, article of incorporation, by-law, indenture, contract,
      agreement, or other undertaking to which Borrower is a party, or which purports
      to be binding on Borrower or its assets and will not result in the creation
      or
      imposition of a lien on any of its assets.

    

    d.
      There
      is no action, suit, investigation, or proceeding pending or, to the knowledge
      of
      Borrower, threatened, against or affecting Borrower or any of its assets which,
      if adversely determined, would have a material adverse affect on the financial
      condition of Borrower or the operation of its business.

    

    6.
      EVENTS
      OF DEFAULT. An event of default will occur if any of the following events
      occurs;

    

    a.
      Failure to pay any principal or interest hereunder within ten (10) days after
      the same becomes due.

    

    b.
      Any
      representation or warranty made by Borrower in this Agreement or in connection
      with any borrowing or request for an Advance hereunder, or in any certificate,
      financial statement, or other statement furnished by Borrower to Lender is
      untrue in any material respect at the time when made.

    

    c.
      Default by Borrower in the observance or performance of any other covenant
      or
      agreement contained in this Agreement, other than a default constituting a
      separate and distinct event of default under this Paragraph 6.

    

    d.
      Filing
      by Borrower of a voluntary petition in bankruptcy seeking reorganization,
      arrangement or readjustment of debts, or any other relief under the Bankruptcy
      Code as amended or under any other insolvency act or law, state or federal,
      now
      or hereafter existing.

    

    e.
      Filing
      of an involuntary petition against Borrower in bankruptcy seeking
      reorganization, arrangement or readjustment of debts, or any other relief under
      the

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Bankruptcy
      Code as amended, or under any other insolvency act or law, state or federal,
      now
      or hereafter existing, and the continuance thereof for sixty (60) days
      undismissed, unbonded, or undischarged.

    

    7.
      REMEDIES. Upon the occurrence of an event of default as defined above, Lender
      may declare the entire unpaid principal balance, together with accrued interest
      thereon, to be immediately due and payable without presentment, demand, protest,
      or other notice of any kind. Lender may suspend or terminate any obligation
      it
      may have hereunder to make additional Advances. To the extent permitted by
      law,
      Borrower waives any rights to presentment, demand, protest, or notice of any
      kind in connection with this Agreement. No failure or delay on the part of
      Lender in exercising any right, power, or privilege hereunder will preclude
      any
      other or further exercise thereof or the exercise of any other right, power,
      or
      privilege. The rights and remedies provided herein are cumulative and not
      exclusive of any other rights or remedies provided at law or in equity. Borrower
      agrees to pay all costs of collection incurred by reason of the default,
      including court costs and reasonable attorney's fees.

    

    8.
      GENERAL PROVISIONS. All representations and warranties made in this Agreement
      and the Promissory Note and in any certificate delivered pursuant thereto shall
      survive the execution and delivery of this Agreement and the making of any
      loans
      hereunder. This Agreement will be binding upon and inure to the benefit of
      Borrower and Lender, their respective successors and assigns, except that
      Borrower may not assign or transfer its rights or delegate its duties hereunder
      without the prior written consent of Lender. This Agreement, the Promissory
      Note, and all documents and instruments associated herewith will be governed
      by
      and construed and interpreted in accordance with the laws of the State of
      California. Time is of the essence hereof. This Agreement will be deemed to
      express, embody, and supersede any previous understanding, agreements, or
      commitments, whether written or oral, between the parties with respect to the
      general subject matter hereof. This Agreement may not be amended or modified
      except in writing signed by the parties.

    

    EXECUTED
      on the day and year first written above.

    

    Borrower:
      Lutcam, Inc.

    

    /s/
      Kerry Tully_________
      

    Kerry
      Tully, President

    

    

    Lender:
      Otto Kjeldsen

    

    /s/Otto
      Kjeldsen_______
      

    Otto
      KjeldsenEX-10.1

October 3, 2005

Mr. Thomas Liguori

Re: Offer of Employment

Dear Tom:

This letter constitutes your offer of employment (the “Letter”) with Hypercom Corporation (the
“Company”).

	 	1.	 	Position with the Company. Upon the first day of your employment (“Date of Hire”),
you will serve as Senior Vice President and Chief Financial Officer of the Company. You may be
called upon to serve in other capacities from time-to-time during your tenure with the
Company. You will faithfully and diligently perform all duties commensurate with these
positions, including those duties directed by the Company’s Chief Executive Officer (“CEO”) to
whom you will report directly. Your first day of employment will be October 31, 2005, or such
other date as you and the Company shall mutually agree.

	 	2.	 	Compensation. You will receive the following compensation for your services:

	 	(a)	 	You will receive a minimum base salary of $300,000 per year, which may be
increased, but not decreased, at the discretion of the Company (the “Base Salary”).
The Base Salary will be paid in equal installments in accordance with the Company’s
salary payment policies as in effect from time to time, and such salary payments will
be subject to the usual withholding for income tax and other customary deductions.

	 	(b)	 	Your target annual bonus compensation shall be one hundred percent (100%) of
your then-current Base Salary for each year during the term of your employment, if the
Company achieves the annual Performance Goals as solely determined by the Board;
provided that you may be entitled to receive annual bonus compensation in an aggregate
amount up to one hundred and fifty percent (150%) of your then-current base salary for
each year during the term of your employment if the Board deems it consistent with the
achievement of the Performance Goals for such year. The Performance Goals, and the
percentage of bonus compensation tied to each, will be specifically defined by the
Board in its sole discretion, but will likely include some or all of the following:
revenue growth, gross margin, earnings per share, market share growth and development
of the organization (the “Performance Goals”). The determination as to whether
the Company has achieved the Performance Goals will be made by the Board in its sole
and reasonable discretion, and the bonus will be paid to you within five (5) business
days following such determination.

	 	(c)	 	Effective upon your execution of this Letter, the Board will grant to you an
option for the purchase of 100,000 shares of common stock of the Company (the “Option”)
pursuant to the Company’s Long-Term Incentive Plan with a per share exercise price
equal to the closing market price of a share of common stock on the date of grant. The
Option will vest in 1/3 increments on the first, second and third anniversaries of the
date of grant.

	 	(d)	 	Effective upon your execution of this Letter the Board will grant to you fifty
thousand (50,000) shares of restricted common stock of the Company pursuant to the
Long-Term Incentive Plan, restricted by achievement of the Performance Goals to be
established by the Board for fiscal years 2006 and 2007, as follows: (i) fifty percent
(50%) of the restricted common stock, or twenty-five thousand (25,000) shares of common
stock, will vest based upon substantial achievement of 2006 Performance Goals as
determined by the Board and (ii) the remaining fifty percent (50%) of the restricted
common stock, or twenty-five thousand (25,000) shares of common stock, will vest based
upon substantial achievement of 2007 Performance Goals as determined by the Board;
provided, however, that if the Board, in its review of the Performance Goals,
determines that you achieved a personal rating of one hundred percent (100%) or higher
in either fiscal year 2006 or 2007, the entire fifty thousand (50,000) shares of
restricted common stock granted pursuant to this subsection (d) shall vest. If either
or both of the 2006 or 2007 Performance Goals are not fully and completely achieved,
the proportion of the restricted common stock which shall vest pursuant to this
subsection 2(d) shall be determined in the Board’s sole discretion taking into account
the Performance Goals achieved for such year, in both quantitative and qualitative
degree. The Company will also provide to you a Gross-up Payment in connection with the
restricted common stock grant (but not on the cash so paid) pursuant to this subsection
2(d).

	 	(e)	 	You will be eligible, but not entitled, to receive additional grants of stock
options and restricted capital stock of the Company in such quantities and subject to
such conditions as the Board may determine in its sole and absolute discretion.

	 	(f)	 	You covenant and agree that, as soon as practicable but in no event more than
three (3) years from your Date of Hire, you will beneficially own, hold and retain
 shares of common stock of the Company equal in value to your Base Salary for such given
year (the “Minimum Ownership”); provided, however, that this covenant shall not
be construed to require you to purchase shares of the Company’s common stock on the
open market for the sole purpose of achieving the Minimum Ownership. You also covenant
and agree that you will not sell or dispose of, or cause anyone else to sell or dispose
of, any common stock of the Company that you have received (i) as a result of this
Letter or (ii) pursuant to any other Company compensation, until and unless you have
achieved (and will continue to maintain following such sale or disposition) the Minimum
Ownership.

	 	(g)	 	You may participate in any incentive compensation plan, pension or profit
sharing plan, stock purchase plan, group benefit plan, medical plan, bonus plan and/or
other benefit plans, either currently in effect or as may be established from time to
time by the Board, for which you as an officer of the Company are eligible to
participate. You acknowledge that you will not be entitled to any benefits under any
discretionary plan unless actually provided to you in accordance with such plan.

	 	(h)	 	You will be eligible, but not entitled; to receive such other compensation as
may from time to time be granted to you by the Board in its sole and absolute
discretion, including additional bonuses approved by the Board or the Board’s
Compensation Committee.

	 	(i)	 	You will be permitted to take vacations and sick leave, in accordance with the
Company’s policies and procedures as in effect for officers of the Company.

	 	3.	 	Benefits and Employment Matters. You will be eligible for medical, dental and vision
care on the first day of the month following your Date of Hire. In addition, you will be
eligible for the following Hypercom benefits as of your Date of Hire: eight named holidays,
disability insurance, life insurance, travel accident insurance, 401(k) Plan. Further, upon
reaching the first quarterly enrollment for which you qualify, you will be eligible for the
Hypercom Employee Stock Purchase Plan, and after one year of full time employment you will be
eligible for tuition reimbursement.

You will accrue 19 days of Paid Time Off (“PTO”) per year during your first through fifth
year of employment. After your fifth year, you will accrue an additional week for a total of
24 PTO days per year. Please see the Hypercom PTO policy for details regarding this benefit.

Hypercom has a drug free work place policy. Consistent with that policy, all new employees
must pass a pre-employment drug screen prior to joining Hypercom. In addition to the drug
screen all new employees must pass a background check and credit check if necessary. This
offer and any employment are contingent on you passing the drug screen and background check.
Please contact Stacey Turley in the Human Resources Department at (602) 504-4647 if you have
any questions regarding this drug screen or background check.

I am enclosing a copy of our I-9, tax withholding forms and documents that explain our
current medical plan. Before you can join Hypercom, you must complete and return these
forms to us on or before your Date of Hire. In addition, on or before your Date of Hire you
must provide the forms of ID necessary to complete the I-9 form, i.e., your driver license,
and/or social security card, birth certificate or passport.

	 	4.	 	Business Expenses. The Company will pay or reimburse you for all ordinary and
necessary business expenses incurred or paid by you in furtherance of the Company’s business,
in accordance with the Company’s policies and procedures.

	 	5.	 	Moving Expenses. The Company will provide you with a full executive moving package to
be determined by the Board, and to be described to you in a separate letter. If you resign
for any reason within 18 months of the date of reimbursement for the move, you must reimburse
the Company the full amount of the moving package provided pursuant to this paragraph.

	 	6.	 	Employment at Will. You acknowledge and agree that the Company will employ you as an
‘at will employee’ and that this Letter does not constitute an employment agreement. This
means that either you or Hypercom can terminate our employment relationship at any time for
any reason or no reason. In the event that your employment is terminated either by you or the
Company, you will be entitled to receive only that compensation due you through the date of
your resignation, together with any COBRA (at your cost) or other benefits required by law.

	 	7.	 	Death or Disability. If during the term of your employment with the Company you die,
then this Letter will terminate and your estate will be entitled to receive the compensation
due you through the date of your death.

	 	8.	 	Covenant Not to Compete. For a period of one year from any termination of your
employment hereunder, you will not, directly or indirectly, for your own benefit or for, with
or through any other individual, firm, corporation, partnership or other entity, whether
acting in an individual, fiduciary or other capacity, own, manage, operate, control, advise,
invest in (except as a 1% or less shareholder of a public company), loan money to, or
participate or assist in the ownership, management, operation or control of or be associated
as a director, officer, employee, partner, consultant, advisor, creditor, agent, independent
contractor or otherwise with, or acquiesce in the use of your name by, any business enterprise
that is in direct competition with the Company or any subsidiary, within the United States of
America or any other country that the Company conducts business at the time of your
termination.

In addition to the foregoing, at all times during the period of your employment and for one
year after any termination thereof (or, if later, upon conclusion of your services as a
consultant), you will not, directly or indirectly (as described above), for your benefit or
for, with or through any business enterprise, hire, employ, solicit, or otherwise encourage
or entice any of the Company’s (or subsidiary’s) employees or consultants to leave or
terminate their employment with the Company.

You and the Company consider the restrictions contained in this Paragraph 8 to be reasonable
for the purpose of preserving the Company’s rights and interests. If a court makes a final
judicial determination that any such restrictions are unreasonable or otherwise
unenforceable against you, you and the Company agree to modify the provisions held to be
unenforceable to preserve each party’s anticipated benefits thereunder to the maximum extent
legal.

You acknowledge and agree that the Company’s remedies at law for breach or threatened breach
of any of the provisions of this Paragraph 8 would be inadequate. Therefore, you agree that
in the event of a breach or threatened breach by you of the provisions in this Paragraph 8,
the Company will be entitled to, in addition to its remedies at law and without posting any
bond, equitable relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction, or any other equitable remedy that may then be available.
You further agree that you will not oppose the Company’s request for such equitable relief.

	 	9.	 	Confidential Information and Non-Disclosure. You hereby agree to execute and deliver
to the Company on or before your Date of Hire the Hypercom Employee Non-Disclosure Agreement
attached hereto as Exhibit A.

	 	10.	 	Resignation Following Change of Control.

If, after a Change of Control, as defined in the Definitions section, attached hereto, you
resign for Good Reason within the 60-day period following the last event that constitutes
Good Reason, and the Change of Control occurs within thirty-six (36) months from your Date
of Hire, you will receive:

	 	(a)	 	Payment equal to one year of Base Salary in a lump sum upon effectiveness of
the release contemplated by Paragraph 16 below; and

	 	(b)	 	For a period of eighteen (18) months from the date of your termination, the
Company will pay for the COBRA benefits due you.

In the event that you resign for Good Reason, following a Change of Control, and the Change
of Control occurs after thirty six (36) months from your Date of Hire, you will receive:

	 	(a)	 	Payment equal to six (6) months of Base Salary in a lump sum upon effectiveness
of the release contemplated by Paragraph 16 below; and

	 	(b)	 	For a period of eighteen (18) months from the date of your termination, the
Company will pay for the COBRA benefits due you.

Notwithstanding the above, at all times under the terms of this Paragraph 10, the lump sum
portion of your payments must be paid no later than the date that is two and one-half months
after the end of the later of (i) the Company’s fiscal year, or (ii) the calendar year, in
which the payments are no longer subject to a substantial risk of forfeiture, as determined
in accordance with the guidance promulgated under Section 409A of the Internal Revenue Code
of 1986, as amended.

	 	11.	 	Personal Rights and Obligations. This Letter and all rights and obligations
hereunder are personal and will not be assignable by either you or the Company except as
provided in this Paragraph 11, and any purported assignment in violation thereof will be null
and void. Any person, firm or corporation succeeding to the business of the Company by
merger, consolidation, purchase of assets or otherwise will assume by contract or operation of
law the obligations of the Company hereunder and in such a case you will continue to honor
this Letter with such business substituted for the Company as the employer.

	 	12.	 	Notices. Any notice, election or communication to be given under this Letter will be
in writing and delivered in person or deposited, certified or registered, in the United States
mail, postage prepaid, addressed as follows:

If to the Company:

Hypercom Corporation

2851 West Kathleen Road

Phoenix, Arizona 85053

Attn: General Counsel

If to you:

Thomas Liguori

or to such other addresses as the Company or you may from time to time designate by notice
hereunder. Notices will be effective upon delivery in person or upon receipt of any
facsimile or e-mail, or at midnight on the fourth business day after the date of mailing, if
mailed.

	 	13.	 	Entirety. Except for any confidentiality agreement, option awards, or restricted
stock awards to which you are subject, this Letter constitutes and embodies the full and
complete understanding and agreement of the Company and you with respect to your employment by
the Company and supersedes all prior understandings or agreements whether oral or in writing.
This Letter may be amended only by a writing signed by you and the Company. This Letter may
be executed in any number of counterparts, each of which will be considered a duplicate
original.

	 	14.	 	Arbitration. Any controversy relating to this Letter or relating to the breach
hereof will be settled by arbitration conducted in Phoenix, Arizona in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in effect. The
award rendered by the arbitrator(s) will be final and judgment upon the award rendered by the
arbitrator(s) may be entered upon it in any court having jurisdiction thereof. The
arbitrator(s) will possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration. The expenses of the arbitration will be borne by the losing
party unless otherwise allocated by the arbitrator(s). This agreement to arbitrate will be
specifically enforceable under the prevailing arbitration law. During the continuance of any
arbitration proceedings, the parties will continue to perform their respective obligations
under this Letter. Nothing in this Letter will preclude the Company or any affiliate or
successor from seeking equitable relief, including injunction or specific performance, in any
court having jurisdiction, in connection with the non-compete provisions herein and any
obligations of confidentiality.

	 	15.	 	Governing Law. This Letter will be governed by and interpreted in accordance with
the laws of the State of Arizona, without regard to conflict of laws principles.

	 	16.	 	Withholding and Release. You acknowledge and agree that payments made to you
hereunder may be subject to withholding. You further acknowledge and agree that payment of
any of the benefits to be provided to you under this Letter following any termination of your
employment is subject to your compliance with any reasonable and lawful policies or procedures
of the Company relating to employee severances, including the execution and delivery by you of
a release reasonably satisfactory to the Company of any and all claims that you may have
against the Company or related persons, except for (i) the continuing obligations provided
herein, and (ii) for any continuing obligations of indemnification due you as an officer or
director (or a former officer or director).

	 	17.	 	Conditional Offer. The offer of employment set forth in this Letter is expressly
conditioned upon the completion of a background check satisfactory to the Company.

Very truly yours,

/s/William Keiper

William Keiper

Chief Executive Officer and President

ACCEPTED AND AGREED:

/s/ Thomas Liguori

Thomas Liguori

Date: October 6, 2005

1

Definitions

“Change of Control” means and includes each of the following:

(1) there shall be consummated any consolidation or merger of the Company in which the Company
is not the continuing or surviving entity, or pursuant to which common stock would be converted
into cash, securities or other property, other than a merger of the Company in which the holders of
the Company’s common stock immediately prior to the merger have at least 80% ownership of
beneficial interest of common stock or other voting securities of the surviving entity immediately
after the merger;

(2) there shall be consummated any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of assets or earning power aggregating more than 40% of the
assets or earning power of the Company and its subsidiaries (taken as a whole), other than pursuant
to a sale-leaseback, structured finance or other form of financing transaction;

(3) the stockholders of the Company shall approve any plan or proposal for liquidation or
dissolution of the Company; or

(4) during any period of two consecutive years, individuals who at the beginning of such
period constituted a majority of the Board shall fail to constitute a majority thereof, unless the
election, or the nomination for election by the Company’s stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office who were directors
at the beginning of the period.

“Good Reason” means, without your consent:

(1) you suffer a reduction in position or a material change in your functions, duties or
responsibilities;

(2) your annual salary is reduced by the Company or there is a material reduction in your
current benefits (other than a reduction in the benefits as part of overall reduction applicable to
all or substantially all other officers); or

(3) you are required to reside other than in Maricopa County, Arizona.

2

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