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.

 

FIFTH AMENDMENT
TO REVOLVING NOTE

 

THIS FIFTH AMENDMENT TO REVOLVING NOTE (this “Fifth Amendment”) is made as of
March 1, 2010, by and among EF JOHNSON TECHNOLOGIES, INC. (formerly known as
EFJ, Inc.), a Delaware corporation, E.F. JOHNSON COMPANY, a Minnesota
corporation (successor-by-merger to Transcrypt International, Inc.), and 3e
TECHNOLOGIES INTERNATIONAL, INC., a Maryland corporation (collectively, jointly
and severally, the “Borrower”) and BANK OF AMERICA, N.A., a national banking
association (the “Lender”).

 

RECITALS

 

A.                                   The Borrower is obligated to the Lender
with respect to a revolving line of credit loan (the “Revolving Loan”) evidenced
by that certain Revolving Note dated as of November 15, 2002, as amended by that
certain First Amendment to Revolving Note dated as of September 13, 2004, and as
further amended by that certain Second Amendment to Revolving Note dated as of
July 11, 2006, and as further amended by that certain Third Amendment to
Revolving Note dated as of March 10, 2008, and as further amended by that
certain Fourth Amendment to Revolving Note dated as of March 16, 2009, made by
the Borrower payable to the Lender in the maximum principal amount of Ten
Million and 00/100 Dollars ($10,000,000.00) (as amended and in effect, 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 6, 2007,
and as further modified by that certain Fourth Amendment to Revolving Line of
Credit Loan Agreement, Term Loan Agreement and Security Agreement dated as of
March 10, 2008, and as further modified by that certain Fifth Amendment to
Revolving Line of Credit Loan Agreement, Term Loan Agreement and Security
Agreement dated as of March 16, 2009 (as amended and in effect, the “Loan
Agreement”). The Revolving Note is governed, in part, by certain provisions of
the Loan Agreement.

 

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C.                                     Contemporaneously with the execution and
delivery of this Fifth Amendment, the Borrower and the Lender are entering into
that certain Sixth Amendment to Revolving Line of Credit Loan Agreement, Term
Loan Agreement and Security Agreement dated as of March 1, 2010 (the “Loan
Agreement Amendment”). The Loan Agreement Amendment, among other things, further
amends the Loan Agreement (1) to provide for the waiver of certain financial
covenant defaults for one or more of the fiscal quarters of the Borrower ending
(i) March 31, 2009, (ii) June 30, 2009, (iii) October 31, 2009, and/or
(iv) December 31, 2009, (2) to provide for the waiver of certain financial
covenants for the fiscal quarter of the Borrower ending March 31, 2010, (3) to
reduce the maximum principal amount of the Revolving Loan to be extended by the
Lender to the Borrower from Ten Million and 00/100 Dollars ($10,000,000.00) to
Three Million Seven Hundred Fifty Thousand and 00/100 Dollars ($3,750,000.00),
and (4) for certain other purposes.

 

D.                                    In connection therewith, the Borrower and
the Lender desire to, among other things, amend the Revolving Note (1) to reduce
the maximum principal amount of the Revolving Loan to be extended by the Lender
to the Borrower from Ten Million and 00/100 Dollars ($10,000,000.00) to Three
Million Seven Hundred Fifty Thousand and 00/100 Dollars ($3,750,000.00), (2) to
revise the interest rate in effect under the Revolving Note, and (3) for certain
other purposes.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of 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 FIFTH AMENDMENT BUT NOT DEFINED HEREIN HAVE THE MEANINGS ASCRIBED
TO THEM IN THE REVOLVING NOTE.

 

2.                                       RATIFICATION OF REVOLVING NOTE; FURTHER
ASSURANCES. THE BORROWER HEREBY RATIFIES, CONFIRMS, AND REAFFIRMS ALL AND
SINGULAR THE TERMS AND CONDITIONS OF THE REVOLVING NOTE. THE BORROWER FURTHER
ACKNOWLEDGES AND AGREES THAT (A) EXCEPT AS SPECIFICALLY AMENDED IN THIS FIFTH
AMENDMENT, ALL TERMS AND CONDITIONS OF THE REVOLVING NOTE SHALL REMAIN IN FULL
FORCE AND EFFECT AND (B) THE BORROWER HAS NO OFFSETS OR DEFENSES TO ITS
OBLIGATIONS UNDER THE REVOLVING NOTE. THE BORROWER SHALL FROM AND AFTER THE DATE
OF THE EXECUTION OF THIS FIFTH AMENDMENT, EXECUTE AND DELIVER TO THE LENDER
WHATEVER ADDITIONAL DOCUMENTS, INSTRUMENTS, AND AGREEMENTS THAT THE LENDER MAY
REQUIRE TO GIVE EFFECT TO THE TERMS AND CONDITIONS OF THIS FIFTH AMENDMENT.

 

3.                                       AMENDMENTS TO REVOLVING NOTE.
 EFFECTIVE AS OF THE DATE OF THE EXECUTION OF THIS FIFTH AMENDMENT, THE
REVOLVING NOTE IS HEREBY AMENDED AS FOLLOWS:

 

3.1                                 AMENDMENT OF DEFINITION OF BORROWER. THE
DEFINITION OF “BORROWER” AS SET FORTH IN THE REVOLVING NOTE IS HEREBY AMENDED TO
MEAN EF JOHNSON TECHNOLOGIES, INC. (FORMERLY KNOWN AS EFJ, INC.), A DELAWARE
CORPORATION, E.F. JOHNSON COMPANY, A MINNESOTA CORPORATION

 

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(SUCCESSOR-BY-MERGER TO TRANSCRYPT INTERNATIONAL, INC.), AND 3E TECHNOLOGIES
INTERNATIONAL, INC., A MARYLAND CORPORATION, JOINTLY AND SEVERALLY.

 

3.2                                 AMENDMENT OF DEFINITION OF PRINCIPAL SUM.
THE DEFINITION OF “PRINCIPAL SUM” AS SET FORTH IN THE REVOLVING NOTE IS HEREBY
DECREASED TO, AND AMENDED TO MEAN, THREE MILLION SEVEN HUNDRED FIFTY THOUSAND
AND 00/100 DOLLARS ($3,750,000.00). TO THE EXTENT THAT THE PRINCIPAL BALANCE
OWING UNDER THE REVOLVING NOTE AS OF THE DATE OF THIS FIFTH AMENDMENT EXCEEDS
THREE MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($3,750,000.00)
(THE “EXCESS PRINCIPAL BALANCE”), THE BORROWER SHALL, CONTEMPORANEOUSLY WITH THE
EXECUTION AND DELIVERY OF THIS FIFTH AMENDMENT, DELIVER PAYMENT TO THE LENDER,
IN GOOD AND COLLECTED FUNDS, IN A SUM EQUAL TO OR EXCEEDING THE EXCESS PRINCIPAL
BALANCE, TO BE APPLIED TOWARDS THE PRINCIPAL BALANCE OWING UNDER THE REVOLVING
NOTE.

 

3.3                                 AMENDMENT TO INTEREST SECTION. SECTION 1 OF
THE REVOLVING NOTE ENTITLED “INTEREST” IS HEREBY DELETED IN ITS ENTIRETY AND THE
FOLLOWING INSERTED IN ITS PLACE:

 

“1.                                 Interest. 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).

 

“LIBOR-Based Rate” means the interest rate equal to the LIBOR Rate (as
hereinafter defined) in effect from time to time plus five hundred (500) basis
points.

 

“LIBOR Rate” means the interest rate determined by the following formula,
rounded upward to the nearest 1/100 of one percent (provided, however, that at
no time after May 31, 2010 shall the LIBOR Rate be less than two hundred (200)
basis points):

 

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 the Lender. A “London Banking Day” is a day on which the
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 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 the Lender is open for business in New York and London and
dealing in offshore dollars. The last day of the Interest Period and the actual
number of days during the Interest Period will be determined by the 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 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).

 

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If the LIBOR Rate is discontinued or unavailable, interest on the outstanding
principal balance shall accrue at the Prime Rate (as hereafter defined) plus
(a) at any time prior to May 31, 2010, Two percent (2.0%), and (b) from and
after May 31, 2010, Three and Three Quarters of One Percent (3.75%). The “Prime
Rate” means the 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.

 

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 three hundred sixty (360), to the actual number of days
principal is outstanding.”

 

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 ATTORNEYS-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 (15.0%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE, HEREBY
RATIFYING AND CONFIRMING THE ACTS OF SAID ATTORNEYS-IN-FACT AS IF DONE BY THE
BORROWER. NOTWITHSTANDING THE AMOUNT CONFESSED FOR ATTORNEYS’ FEES, THE 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
THE LENDER FOR SERVICES RENDERED BY COUNSEL IN CONNECTION WITH THE CONFESSION OF
SUCH JUDGMENT AND THE COLLECTION OF THE SUMS OWING BY THE BORROWER TO THE
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 THE 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.

 

5.                                       ARBITRATION; WAIVER OF JURY TRIAL. THE
PROVISIONS OF THE LOAN AGREEMENT SPECIFYING THAT CERTAIN DISPUTES BETWEEN THE
BORROWER AND THE LENDER SHALL BE RESOLVED BY BINDING ARBITRATION AND THAT THE
BORROWER AND THE LENDER WAIVE ANY PRESENT OR FUTURE RIGHT THAT THEY MAY HAVE TO
A TRIAL BY JURY ARE INCORPORATED BY REFERENCE INTO THE REVOLVING NOTE AND SHALL
HAVE THE SAME FORCE AND EFFECT AS IF FULLY SET FORTH IN THE REVOLVING NOTE.

 

6.                                       LENDER CONSENT. THE LENDER HAS EXECUTED
THIS FIFTH 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.

 

7.                                       NO ORAL AGREEMENTS. THIS FIFTH
AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES CONCERNING THE SUBJECT
MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

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8.                                       ILLEGALITY OR UNENFORCEABILITY. ANY
DETERMINATION THAT ANY PROVISION OR APPLICATION OF THIS FIFTH AMENDMENT IS
INVALID, ILLEGAL, OR UNENFORCEABLE IN ANY RESPECT, OR IN ANY INSTANCE, SHALL NOT
AFFECT THE VALIDITY, LEGALITY, OR ENFORCEABILITY OF ANY SUCH PROVISION IN ANY
OTHER INSTANCE, OR THE VALIDITY, LEGALITY, OR ENFORCEABILITY OF ANY OTHER
PROVISION OF THIS FIFTH AMENDMENT.

 

9.                                       COUNTERPARTS. THIS FIFTH AMENDMENT MAY
BE EXECUTED IN MULTIPLE IDENTICAL COUNTERPARTS, EACH OF WHICH WHEN DULY EXECUTED
SHALL BE DEEMED AN ORIGINAL, AND ALL OF WHICH SHALL BE CONSTRUED TOGETHER AS ONE
AGREEMENT. THIS FIFTH AMENDMENT WILL NOT BE BINDING ON OR CONSTITUTE EVIDENCE OF
A CONTRACT BETWEEN THE PARTIES HERETO UNTIL SUCH TIME AS A COUNTERPART HAS BEEN
EXECUTED BY SUCH PARTY AND A COPY THEREOF IS DELIVERED TO EACH OTHER PARTY TO
THIS FIFTH AMENDMENT.

 

(Signatures and Notary Acknowledgments on following pages)

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Fifth Amendment to
Revolving Note 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 liable on the Revolving
Note as a co-maker, endorser, or guarantor.

 

 

EF JOHNSON TECHNOLOGIES, INC., a Delaware corporation (formerly known as EFJ,
INC.)

 

 

 

By:

/s/ Jana Ahlfinger Bell

 (SEAL)

 

Name: Jana Ahlfinger Bell

 

Title: Executive Vice President and Chief Financial Officer

 

 

State of Texas

)

County of Dallas

) To Wit:

 

 

Acknowledged before me by Jana Ahlfinger Bell as Executive Vice President and
Chief Financial Officer of EF Johnson Technologies, Inc. (formerly known as
EFJ, Inc.), a Delaware corporation, this 2nd of March, 2010.

 

 

 

/s/ Amy M. Fritts

 

Notary Public

 

 

My commission expires: 11-7-2013

 

My registration number: 12548867-6

 

 

 

 

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 of March, 2010.

 

 

 

/s/ Amy M. Fritts

 

Notary Public

 

 

My commission expires: 11-7-2013

 

My registration number: 12548867-6

 

 

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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 Maryland corporation, this 2nd of March,
2010.

 

 

 

/s/ Amy M. Fritts

 

Notary Public

 

 

My commission expires: 11-7-2013

 

My registration number: 12548867-6

 

 

 

 

BANK OF AMERICA, N.A., a national banking association

 

 

 

By:

/s/ Fred P. Lucy, II

 (SEAL)

 

Name: Fred P. Lucy, II

 

Title: Senior Vice President

 

 

State of Rhode Island

)

County of Providence

) To Wit:

 

 

Acknowledged before me by Fred P. Lucy, II as Sr. Vice President of Bank of
America, N.A., this 1st day of March, 2010.

 

 

 

/s/ Jane A. Martin

 

Notary Public

 

 

My commission expires: 2/12/14

 

My registration number: 42760

 

 

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