Exhibit 10.2

 

IMPORTANT NOTICE

 

THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.

 

THIRD AMENDMENT
TO REVOLVING NOTE

 

THIS THIRD AMENDMENT TO REVOLVING NOTE (“Third Amendment”) is made as of
March 10, 2008, by and among EFJ, Inc., a Delaware corporation, E. F. Johnson
Company, a Minnesota corporation, Transcrypt International, Inc., a Delaware
corporation, and 3e Technologies International, Inc., a Maryland corporation
(jointly and severally, the “Borrower”) and Bank of America, N.A., a national
banking association (the “Lender”).

 

RECITALS

 

A.                                       Borrower is obligated to Lender with
respect to that certain Revolving Note dated as of November 15, 2002, as
modified by that certain First Amendment to Revolving Note dated as of
September 13, 2004, and as further modified by that certain Second Amendment to
Revolving Note dated as of July 11, 2006, made payable by Borrower to Lender in
the maximum principal amount of Fifteen Million and 00/100 Dollars
($15,000,000.00)(the “Revolving Note”).

 

B.                                         The Revolving Note evidences the
Borrower’s obligations to repay advances of principal made by the Lender under a
Revolving Line of Credit Loan Agreement and Security Agreement, dated as of
November 15, 2002, as amended by that certain First Amendment to Revolving Line
of Credit Loan Agreement and Security Agreement dated as of September 13, 2004,
and as further amended by that certain Second Amendment to Revolving Line of
Credit Loan Agreement and Security Agreement dated as of July 11, 2006, and as
further amended by that certain Third Amendment to Revolving Line of Credit Loan
Agreement, Term Loan Agreement and Security Agreement dated as of March 7, 2007.
(the “Original Loan Agreement”). The Revolving Note is governed, in part, by
certain provisions of the Original Loan Agreement.

 

C.                                         The Original Loan Agreement has been
further amended by that certain Fourth Amendment to Revolving Line of Credit
Loan Agreement, Term Loan Agreement and Security between Borrower and Lender, of
even date herewith (the Original Loan Agreement, as so modified, being referred
to hereafter as the “Loan Agreement”) to, among other things, (1) to provide for
the waiver of certain

 

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financial covenants as they apply for Borrower’s fiscal quarter ending
December 31, 2007, (2) to amend certain existing financial covenants and to add
two additional financial covenants, (3) to revise the interest rate in effect
for principal amounts advanced under the Revolving Note and Term Note (as
defined in the Loan Agreement), and (4) for certain other purposes.

 

D.                                    Borrower and Lender desire to amend the
Revolving Note to, among other things, revise the interest rate in effect under
the Revolving Note.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the premises, the mutual agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:

 

1.                                       Capitalized Terms. Capitalized terms
used in this Third Amendment but not defined herein have the meanings ascribed
to them in the Revolving Note.

 

2.                                       Interest. Section 1 of the Note
entitled “Interest” is hereby deleted in its entirety and restated as follows:

 

“1.                                Interest. Commencing as of the date hereof,
interest on the principal balance outstanding from time to time shall accrue at
a fluctuating annual rate equal to the “LIBOR-Based Rate” (as hereinafter
defined). The LIBOR-Based Rate is equal to the “LIBOR Rate” (as hereinafter
defined) in effect from time to time plus the applicable “LIBOR Margin” (as
defined below). The “LIBOR Rate” means the interest rate determined by the
following formula, rounded upward to the nearest 1/100 of one percent.

 

LIBOR Rate =    London Inter-Bank Offered Rate

(1.00 - Reserve Percentage)

 

“London Inter-Bank Offered Rate” means the average per annum interest rate at
which U.S. dollar deposits would be offered for an “Interest Period” of one
(1) month by major banks in the London inter-bank market, as shown on the
Telerate Page 3750 (or any successor page) 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 any successor page),
the rate for that Interest Period will be determined by such alternate method as
reasonably selected by Lender. A “London Banking Day” is a day on which Lender’s
London Banking Center is open for business and dealing in offshore dollars.
“Reserve Percentage” means the total of the maximum reserve percentages for
determining the reserves to be maintained by member banks of

 

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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. The first day of the Interest Period must be a day other than a
Saturday, or a Sunday on which Lender 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 Lender using the practices of the London inter-bank
market. Absent manifest error, the Lender’s certificate to the Borrower stating
the LIBOR Rate for each Interest Period shall be conclusive.

 

The “LIBOR Margin” shall mean 2.00% from March 10, 2008 through March 31, 2009,
After March 31, 2009, “LIBOR Margin” shall be based on the Borrower’s ratio of
“Debt” (as defined in the Loan Agreement (as defined below)) to “EBITDA” (as
defined in the Loan Agreement), and is the applicable annual rate of interest
shown in the Performance Pricing Grid set forth below.

 

The rate at which interest shall accrue under this Note may change immediately
upon any change at the commencement of each Interest Period (if the London
Inter-Bank Offered Rate has changed) and/or upon any change in the LIBOR Margin.

 

If the LIBOR Rate is discontinued or unavailable, interest on the outstanding
principal balance shall accrue at the “Prime Rate” (as hereafter defined) plus
the applicable “Prime Margin” (as defined below). The “Prime Rate” is a
fluctuating rate announced by the Lender from time to time, in the Lender’s sole
discretion, as the Lender’s Prime Rate. Changes in the Prime Rate will be
effective, without prior notice, as of the date any change is announced. The
Prime Rate is a reference rate only; it is not necessarily the most favorable
rate of interest that the Lender charges to any borrower or class of borrowers.
The “Prime Margin” shall mean 2.25% from March 10, 2008 through March 31, 2009,
After March 31, 2009, “Prime Margin” shall be based on the Borrower’s ratio of
Debt to EBITDA, and is the applicable annual rate of interest shown in the
Performance Pricing Grid set forth below.

 

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Performance Pricing Grid means the following table (applicable after March 31,
2009):

 

 

 

Level 1

 

Level 2

 

Level 3

 

Level 4

 

Debt/EBITDA

 

Ratio >2.50x

 

2.50 > Ratio >2.25

 

2.25 > Ratio > 1.00

 

Ratio < 1.00x

 

LIBOR +

 

1.75%

 

1.50%

 

1.25%

 

1.00%

 

Prime Rate +

 

2.00%

 

1.75%

 

1.50%

 

1.25%

 

 

All interest payable under the terms of this Note shall be calculated by
applying a daily interest rate, determined by multiplying the outstanding
principal balance by the applicable annual interest rate and dividing the
resulting product by 360, to the actual number of days principal is
outstanding.”

 

3.                                           Reaffirmation of terms; no offsets
or defenses. Except as modified by this Third Amendment, the Revolving Note
remains in full force and effect and unmodified. Borrower warrants and
represents that it has no offsets or defenses to its obligations under the
Revolving Note, as modified by this Third Amendment.

 

4.                                           Confession of judgment. The
Borrower hereby appoints or reappoints (as the case may be) Joseph P. Corish and
Jennifer A. Brust, and each of them, as the Borrower’s true and lawful
attorney-in-fact, for the Borrower, in the Borrower’s name, place and stead, to
confess judgment against the Borrower, following the occurrence of an Event of
Default, in the office of the Clerk of the Circuit Court of Montgomery County,
Maryland, for the outstanding principal balance owing under the Revolving Note,
as amended hereby, together with interest, late payment charges, court costs,
and attorneys fees of Fifteen Percent (15%) of the then outstanding principal
balance, hereby ratifying and confirming the acts of said attorney-in-fact as if
done by the Borrower. Notwithstanding the amount confessed for attorneys fees,
Lender agrees that enforcement of the judgment for such attorneys fees so
confessed shall not exceed the amount of fees and expenses actually charged by
counsel for Lender for services rendered by counsel in connection with the
confession of such judgment and the collection of the sums owing by Borrower to
Lender. The Borrower consents to immediate execution of any such confessed
judgment and waives the benefit of any exemption laws. Any provisions set forth
hereafter regarding arbitration of disputes between the Borrower and the Lender
shall not be deemed to limit Lender’s right to have the attorneys-in-fact named
in this paragraph confess judgment against the Borrower in favor of the Lender
following the occurrence of an Event of Default.

 

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5.

Arbitration. Provisions of the Loan Agreement specifying that certain disputes
between the Borrower and the Lender shall be resolved by binding arbitration are
incorporated by reference into the Revolving Note as modified by this Third
Amendment and shall have the same force and effect as if fully set forth in the
Revolving Note as modified by this Third Amendment.

 

 

6.

Lender consent. Lender has executed this Third Amendment for the sole purpose of
evidencing its consent hereto, and not for the purpose of becoming liable on the
Revolving Note as a co-maker, endorser or guarantor.

 

(Signatures and Notary Acknowledgments on following pages)

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Third Amendment as
of the day and year first hereinabove set forth, the Lender having signed for
the sole purpose of evidencing its consent to the amendments herein contained
and not for the purpose of becoming a co-maker of the Revolving Note.

 

 

EFJ, INC., a Delaware corporation

 

 

 

 

 

 

 

 

By:

/s/ Jana Ahlfinger Bell

(SEAL)

 

Name:  Jana Ahlfinger Bell

 

 

Title:   Chief Financial Officer

 

 

 

 

State of Texas

)

 

County of Dallas

) To Wit:

 

 

Acknowledged before me by Jana Ahlfinger Bell as Chief Financial Officer of
EFJ, Inc., a Delaware corporation, this 2nd day of April, 2008.

 

 

 

 

[SEAL]

 

 /s/ Amy M. Fritts

 

 

 

Notary Public

 

 

 

 

My commission expires:

 

 

My registration number:

 

 

 

 

 

E. F. JOHNSON COMPANY, a Minnesota corporation

 

 

 

 

 

 

 

 

By:

/s/ Jana Ahlfinger Bell

(SEAL)

 

Name:  Jana Ahlfinger Bell

 

 

Title:   Chief Financial Officer

 

 

 

 

State of Texas

)

 

County of Dallas

) To Wit:

 

 

Acknowledged before me by Jana Ahlfinger Bell as Chief Financial Officer of E.F.
Johnson Company, a Minnesota corporation, this 2nd day of April, 2008.

 

[SEAL]

 

 /s/ Amy M. Fritts

 

 

 

Notary Public

 

 

 

 

 

 

 

My commission expires:

 

 

My registration number:

 

 

 

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TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation

 

 

 

 

 

 

 

 

By:

/s/ Jana Ahlfinger Bell

(SEAL)

 

Name:  Jana Ahlfinger Bell

 

 

Title:   Chief Financial Officer

 

 

 

 

State of Texas

)

 

County of Dallas

) To Wit:

 

 

Acknowledged before me by Jana Ahlfinger Bell as Chief Financial Officer of
Transcrypt International, Inc., a Delaware corporation, this 2nd day of April,
2008.

 

[SEAL]

 

 /s/ Amy M. Fritts

 

 

 

Notary Public

 

 

 

 

My commission expires:

 

 

My registration number:

 

 

 

 

 

3e TECHNOLOGIES INTERNATIONAL, INC., a Maryland
corporation

 

 

 

 

 

 

 

By:

/s/ Jana Ahlfinger Bell

(SEAL)

 

Name:  Jana Ahlfinger Bell

 

 

Title:   Chief Financial Officer

 

 

 

 

State of Texas

)

 

County of Dallas

) To Wit:

 

 

Acknowledged before me by Jana Ahlfinger Bell as Chief Financial Officer of 3e
Technologies International, Inc., a Delaware corporation, this 2nd day of April,
2008.

 

 

[SEAL]

 

 /s/ Amy M. Fritts

 

 

 

Notary Public

 

 

 

 

My commission expires:

 

 

My registration number:

 

 

 

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BANK OF AMERICA, N.A.

 

 

 

 

 

 

 

 

By:

/s/ Eric H. Williams

(SEAL)

 

Name: Eric H. Williams

 

 

Title:   Vice President

 

 

 

 

State of

)

 

County of

) To Wit:

 

 

Acknowledged before me by Michael J. Landini as Senior Vice President of Bank of
America, N.A., this         day of                     , 2008.

 

 

[SEAL]

 

 

 

 

 

Notary Public

 

 

 

 

My commission expires:

 

 

My registration number:

 

 

 

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