Exhibit 10.2

SECOND AMENDMENT TO REVOLVING LINE OF CREDIT

LOAN AGREEMENT AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO REVOLVING LINE OF CREDIT LOAN AGREEMENT AND SECURITY
AGREEMENT (“Second Amendment”) is made as of July 11, 2006, by and among EFJ,
Inc., a Delaware corporation (“EFJ”), E. F. Johnson Company, a Minnesota
corporation (“E. F. Johnson”), Transcrypt International, Inc., a Delaware
corporation (“Transcrypt” and together with EFJ and E. F. Johnson, collectively
the “Original Borrower”), and 3e Technologies International, Inc., a Maryland
corporation (“3e Technologies” and together with the Original Borrower, jointly
and severally, the “Borrower”), all having an address at c/o EFJ, Inc.,1440
Corporate Drive, Irving, Texas 75038; and Bank of America, N.A., a national
banking association (the “Lender”).

RECITALS

 

  A. The Original Borrower and the Lender are parties to that certain 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 (said Loan
Agreement, as so amended, the “Loan Agreement”).

 

  A. The Borrower and Lender desire to amend the Loan Agreement (i) to add 3e
Technologies as a co-borrower of the Revolving Loan and co-obligor and party to
the Loan Agreement, (ii) to govern and secure a term loan facility from Lender
to Borrower in the original principal amount of Fifteen Million and 00/100
Dollars ($15,000,000.00), and (iii) for certain other purposes, as more fully
set forth hereafter.

 

  B. Capitalized terms used in this Second Amendment and not defined herein have
the meanings ascribed to them in the Loan Agreement.

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. Representations and Warranties. To induce the Lender to enter into this
Second Amendment, the Borrower provides the following warranties and
representations to Lender:

 

  a. The Borrower’s books and records properly reflect the Borrower’s financial
condition, and no material adverse change in the Borrower’s financial condition
has occurred since the last date that the Borrower provided financial reports to
the Lender; and

 

  b. No litigation is pending or threatened against the Borrower of which the
Borrower has not informed the Lender in writing; and

 

  c. The Borrower is in compliance with all provisions of the Loan Agreement and
with all applicable laws and regulations; and

--------------------------------------------------------------------------------

  d. The Borrower has the power and authority to enter into this Second
Amendment, to perform its obligations hereunder, to execute all documents being
executed and delivered in connection herewith, and to incur the obligations
provided for herein, all of which have been duly authorized and approved in
accordance with the Borrower’s organizational documents; and

 

  e. This Second Amendment, together with all documents executed in connection
herewith or pursuant hereto, constitute the valid and legally binding
obligations of the Borrower in accordance with their respective terms; and

 

  f. The obligations of the Borrower under the Loan Documents remain valid and
enforceable obligations, and the execution and delivery of this Second Amendment
and the other documents executed in connection herewith shall not be construed
as a novation of the Loan Agreement or the other Loan Documents; and

 

  g. There have been no changes to the Borrower’s organizational documents as of
the date of this Second Amendment, except as have been fully disclosed and
delivered to Lender, and all of the Borrower’s organizational documents
previously delivered to the Lender in conjunction with the Loan Agreement remain
in full force and effect and unmodified; and

 

  h. The chief executive offices of EFJ, E. F. Johnson and Transcrypt
International are located and maintained, respectively, as follows: (1) EFJ,
Inc. and E. F. Johnson Company, 1440 Corporate Drive, Irving, Texas 75038, and
(2) Transcrypt International, Inc., 3900 NW 12th Street, Suite 200, Lincoln,
Nebraska 68521; and Schedules 5.1-1 through 5.1-3 of the Loan Agreement are
hereby modified and supplemented to reflect any change in the location of such
Borrower’s chief executive offices since the date of the Loan Agreement.

 

  i. 3e Technologies (i) is a corporation duly organized, validly existing, and
in good standing under the laws of its state of incorporation as shown on
Schedule 5.1-4 attached hereto and made a part hereof and which hereby
supplements Schedules 5.1-1 through 5.1-3 of the Loan Agreement, and the exact
legal name of 3e Technologies is as set forth above in the first paragraph of
this Second Amendment; (ii) is qualified to do business as a foreign corporation
and is in good standing in all jurisdictions where its activities or ownership
of property require such qualification except where the failure to be so
qualified would not in the aggregate have a material adverse impact on the
condition of the Borrower (financial or otherwise); and (iii) has the full and
unrestricted power and authority, corporate and otherwise, to own, operate and
lease its properties, to carry on its business as currently conducted, to
execute and deliver and perform the Loan Documents, to incur the obligations
provided for herein and therein, and to perform the transactions contemplated
hereby and thereby (including, without limitation, the creation of the lien and
security interest in favor of the Lender in the Collateral, the Assignments and
any other Collateral required by the Loan Agreement), all of which have been
duly and validly authorized by all proper and necessary action (all of which
actions are in full force and effect). 3e Technologies has no subsidiaries. The
chief executive offices of 3e Technologies are located and maintained at
Rockville (Montgomery County), Maryland.

 

2

--------------------------------------------------------------------------------

  j. Borrower certifies that all information set forth in the Borrower
Information Statements (Schedules 5.1-1 through 5.1-4) is true, accurate and
complete as of the date of this Second Amendment, except as expressly modified
by this Second Amendment.

 

2. Title. The title of the Loan Agreement at the top of Page 1 of the Loan
Agreement is hereby deleted in its entirety and restated as follows:

“REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM LOAN AGREEMENT AND SECURITY
AGREEMENT”

 

3. Introductory Paragraph. The words “THIS REVOLVING LINE OF CREDIT LOAN
AGREEMENT AND SECURITY AGREEMENT” in the first paragraph on Page 1 of the Loan
Agreement are hereby deleted in its entirety and restated as follows:

“THIS REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM LOAN AGREEMENT AND SECURITY
AGREEMENT”

 

4. Definition of Agreement. The definition of “Agreement” set forth in
Section 1.1d. of the Loan Agreement is hereby deleted in their entirety and
restated as follows:

 

  “d. “Agreement” means this Revolving Line of Credit Loan Agreement, Term Loan
Agreement and Security Agreement, as the same may be amended, modified or
supplemented from time to time.”

 

5. Definition of Billed. The definition of “Billed” set forth in Section 1.1h.
of the Loan Agreement is hereby deleted in its entirety.

 

6. Definition of Borrower. The definition of “Borrower” set forth in
Section 1.1i. of the Loan Agreement is hereby deleted in its entirety and
restated as follows:

 

  “i. “Borrower” means EFJ, Inc., E. F. Johnson Company, Transcrypt
International, Inc. and 3e Technologies International, Inc., and to each such
Person or to all of them, as the context may require, and the representations
and obligations hereunder of the Persons comprised by the term “Borrower” shall
be joint and several. For purposes of testing compliance with the financial
covenants hereinafter, the negative covenants hereinafter and pricing under the
Revolving Note or the Term Note that is based on the Borrower’s financial
performance, financial information concerning the Borrower shall mean financial
information for EFJ, Inc., E. F. Johnson Company, Transcrypt International, Inc.
and 3e Technologies International, Inc., stated on a consolidated basis. In
addition, the financial reporting to be provided by the Borrower shall be
provided for EFJ, Inc., E. F. Johnson Company, Transcrypt International, Inc.
and 3e Technologies International, Inc., on a consolidated and consolidating
basis unless otherwise requested by Lender.”

 

3

--------------------------------------------------------------------------------

7. Definition of Borrowing Base. The definition of “Borrowing Base” set forth in
Section 1.1j. of the Loan Agreement is hereby deleted in its entirety.

 

8. Definition of Borrowing Base Certificate. The definition of “Borrowing Base
Certificate” set forth in Section 1.1k. of the Loan Agreement is hereby deleted
in its entirety.

 

9. Definition of Commercial Accounts. The definition of “Commercial Accounts”
set forth in Section 1.1s. of the Loan Agreement is hereby deleted in its
entirety.

 

10. Definition of Contra Account. The definition of “Contra Account” set forth
in Section 1.1u. of the Loan Agreement is hereby deleted in its entirety.

 

11. Definition of Eligible. The definition of “Eligible” set forth in
Section 1.1y. of the Loan Agreement is hereby deleted in its entirety.

 

12. Definition of EBITDA. The definition of “EBITDA” set forth in Section 1.1x.
of the Loan Agreement is hereby deleted in its entirety and restated as follows:

 

  “x. “EBITDA” means the Borrower’s net income, less income or plus loss from
discontinued operations and extraordinary items, plus income taxes, plus
interest expense, plus depreciation, depletion and amortization, plus non-cash
compensation expense resulting from recognition of expense attributable to
equity compensation recognized in accordance with FAS 123(r); provided, however,
EBITDA shall not include (i) in-process research and development expenses that
have arisen due to the acquisition of 3e Technologies International, Inc., as
such expenses are set forth on Schedule 1.1x-1 attached hereto and made a part
hereof, and (ii) extraordinary contract settlement costs incurred in connection
with the acquisition of 3e Technologies International, Inc., as such costs are
set forth on Schedule 1.1x-2 attached hereto and made a part hereof.”

 

13. Definition of Ending Date. The definition of “Ending Date” set forth in
Section 1.1aa. of the Loan Agreement is hereby deleted in its entirety and
restated as follows:

 

  “aa. “Ending Date” means June 30, 2010; provided, however, if no Event of
Default has occurred, Lender may (by written notice delivered to Borrower), as
determined in Lender’s sole and absolute discretion, elect to extend the Ending
Date upon such terms and conditions as may be acceptable to Lender. Borrower
shall, upon the request of Lender, execute all documents and take all action
necessary or requested by Lender to effectuate or evidence such extension, all
at the sole cost of Borrower.”

 

14. Definition of Ineligible Accounts. The definition of “Ineligible Accounts”
set forth in Section 1.1nn. of the Loan Agreement is hereby deleted in its
entirety.

 

15. Definition of Letter of Credit Sublimit. The definition of “Letter of Credit
Sublimit” set forth in Section 1.1tt. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

 

  “tt. Letter of Credit Sublimit” means Ten Million and 00/100 Dollars
($10,000,000.00).

 

4

--------------------------------------------------------------------------------

16. Definition of Loan. The definition of “Loan” set forth in Section 1.1uu of
the Loan Agreement is hereby deleted in its entirety and restated as follows:

 

  “uu. “Loans” means the Revolving Loan and/or the Term Loan.”

 

17. Definition of Loan Document. The definition of “Loan Documents” set forth in
Section 1.1vv. of the Loan Agreement is hereby deleted in its entirety and
restated as follows:

 

  “vv. “Loan Documents” means this Agreement, the Revolving Note, the Term Note
or any other document executed by the Borrower or any other Person evidencing,
securing, guaranteeing or relating to the Revolving Loan and/or the Term Loan,
as such documents or instruments may be amended, modified or extended from time
to time.”

 

18. Definition of Margin. The definition of “Margin” set forth in Section 1.1xx.
of the Loan Agreement is hereby deleted in its entirety and restated as follows:

 

  “xx. “Margin” means the percentage interest rate shown on the Performance
Pricing Grid to be added to the LIBOR Rate (as defined in the Revolving Note or
the Term Note, as applicable) or the Prime Rate (as defined in the Revolving
Note or the Term Note, as applicable) to determine the rate of interest payable
at any time under the Revolving Note or the Term Note, as applicable. The Margin
regarding the LIBOR Rate shall be as stated in the “LIBOR +” row of the
Performance Pricing Grid, and the Margin regarding the Prime Rate shall be as
stated in the “Prime Rate +” row of the Performance Pricing Grid.”

 

19. Definition of Performance Pricing Grid. The definition of “Performance
Pricing Grid” set forth in Section 1.1eee. of the Loan Agreement is hereby
deleted in its entirety under the Loan Agreement is hereby deleted in its
entirety and restated as follows:

 

  “eee. “Performance Pricing Grid” means the following table (which is also
contained in the Revolving Note and the Term Note):

 

     Level 1   Level 2   Level 3   Level 4

Debt/ EBITDA

   Ratio >2.50x   2.50 ³ Ratio >2.25   2.25 ³ 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%

 

5

--------------------------------------------------------------------------------

1. Definition of Revolving Note. The definition of “Revolving Note” set forth in
Section 1.1jjj. of the Loan Agreement is hereby deleted in its entirety and
restated as follows:

 

  “jjj. “Revolving Note” means the Borrower’s promissory note entitled 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, in
the principal amount of Fifteen Million and 00/100 Dollars ($15,000,000.00),
payable to the order of Lender, and evidencing the Borrower’s obligation to
repay the Revolving Loan, as said Revolving Note may be further modified from
time to time.”

 

2. Definition of Tangible Net Worth. The definition of “Tangible Net Worth” set
forth in Section 1.1lll. of the Loan Agreement is hereby deleted in its
entirety.

 

3. Additional Definitions. Section 1.1 of the Loan Agreement is hereby amended
to add the following definitions:

““Loans” means the Revolving Loan and/or the Term Loan.

“Maximum Term Commitment Amount” means Fifteen Million and 00/100 Dollars
($15,000,000.00), or such lesser amount that Borrower may borrow as hereinafter
provided.

“Notes” mean the Term Note and/or Revolving Note.

“Term Loan” means the Term Loan facility made available by Lender to Borrower in
the principal amount of Fifteen Million and 00/100 Dollars ($15,000,000.00),
evidenced by the Term Note.

“Term Note” means that certain Term Note, dated as of July 11, 2006, in the
original principal amount of Fifteen Million and 00/100 Dollars
($15,000,000.00), executed by Borrower and payable to the order of the Lender,
and evidencing Borrower’s obligation to repay the Term Loan, as such Term Note
may be amended from time to time.”

 

4. Allowed Amount of Advances. Section 2.1a. of the Loan Agreement entitled
“Allowed Amount of Advances” is hereby deleted in its entirety and restated as
follows:

“a. Allowed Amount of Advances. The aggregate principal amount of Advances
outstanding at any time shall not exceed the difference between (i) the Maximum
Revolving Commitment Amount and (ii) the LOC Obligations.”

 

5. Use of Revolving Loan Proceeds. Section 2.3 of the Loan Agreement entitled
“Use of Revolving Loan Proceeds” is hereby deleted in its entirety and restated
as follows:

“2.3 Use of Revolving Loan Proceeds. The proceeds of the Revolving Loan shall be
used for working capital and other general lawful corporate purposes.”

 

6. Revolving Loan Fees. Section 2.4b. of the Loan Agreement providing for
payment by Borrower of an unused fee is hereby deleted in its entirety.

 

6

--------------------------------------------------------------------------------

7. Term Loan. Article 2 of the Loan Agreement is hereby amended to add the
following Sections immediately following Section 2.4 thereof:

“2.5 Term Loan. The Lender agrees to make the Term Loan to the Borrower, and the
Borrower agrees to borrow the Term Loan from the Lender. The Term Loan shall be
funded in a single advance on or about July 6, 2006. Amounts repaid or prepaid
under the Term Loan cannot be reborrowed.

2.6 Repayment of Term Loan. The Borrower promises to repay the Term Loan, with
interest, at the time and in the manner provided in the Term Note.

2.7 Use of Term Loan Proceeds. The Borrower shall use the proceeds of the Term
Loan to facilitate the acquisition of the stock of 3e Technologies and for
working capital.”

 

8. Borrowing Base Certificate Covenants. Sections 3.1i., 3.2b. and Schedule
1.1(A) of the Loan Agreement are hereby deleted in their entirety.

 

9. Security. Section 4.1 of the Loan Agreement is hereby deleted in its entirety
and restated as follows:

“4.1 Grant of Security Interest. As security for (i) the payment of the Loans,
and any other extensions of credit, loans, letters of credit or other financial
accommodations now or hereafter made by the Lender for the benefit of the
Borrower, and (ii) the performance of the Borrower’s obligations under or in
connection with any interest rate swap agreement as defined in 11 U.S.C. §101 by
and between the Borrower and the Lender or any Affiliate of the Lender (whether
absolute or contingent and whether now or hereafter arising or becoming due or
owing), and (iii) any other liability or obligation of the Borrower to the
Lender whether now or hereafter existing, of every kind and description, whether
or not evidenced by notes or other instruments, and whether or not such
liability or obligations are direct or indirect, fixed or contingent, liquidated
or unliquidated, the Borrower hereby assigns, grants and conveys to the Lender a
security interest in the Collateral. Proceeds of the Collateral shall be
allocated pari passu among the Loans and any outstanding interest rate swap
agreements. The Borrower further agrees that the Lender shall have in respect of
the Collateral all of the rights and remedies of a secured party under the
Uniform Commercial Code, other applicable law and this Agreement. The Borrower
covenants and agrees to execute and deliver, and hereby authorizes the Lender to
prepare and file with the financing records of such jurisdictions as the Lender
deems appropriate, such financing statements and other instruments and filings
or perform any and all acts as are necessary in the opinion of the Lender to
perfect, maintain and protect the security interest hereby granted. Except as
otherwise set forth in this Agreement, the Lender does not authorize and the
Borrower agrees that it shall not take any of the following actions without the
prior written consent of the Lender: (a) sell, lease, license, transfer,
exchange or otherwise dispose of any of the Collateral except in the ordinary
course of business; or (b) mortgage, pledge, lien, assign, grant a security
interest or otherwise encumber any of the Collateral.”

 

7

--------------------------------------------------------------------------------

10. Representations and Warranties. Article 5 of the Loan Agreement is hereby
amended to delete the initial paragraph thereof (which is immediately prior to
Section 5.1 of the Agreement) in its entirety and to substitute the following
therefor:

“To induce the Lender to enter into this Agreement and to extend the Revolving
Loan and the Term Loan to the Borrower, the Borrower makes the following
representations and warranties to the Lender. These representations and
warranties are continuing, and each request for an Advance shall be deemed to be
an affirmation of these representations and warranties as of the date on which
such Advance is made.”

 

11. Loan Application. Section 5.6 of the Loan Agreement entitled “Loan
Application” is hereby deleted in its entirety and restated as follows:

“5.6 Loan Application. The statements made and the documents delivered by the
Borrower to the Lender in connection with its application for the Loans and in
connection with this Agreement and the other Loan Documents are true, correct
and complete, in all material respects, omit no material facts, are not
misleading, and present fairly the condition (financial or otherwise) of the
Borrower. The Borrower certifies further that the information set forth in the
Borrower Information Statements attached hereto as Schedules 5.1-1 through 5.1-4
is true, accurate and complete as of the date of this Agreement.”

 

12. Licenses and Contracts. Section 5.11 of the Loan Agreement entitled
“Licenses and Contracts” is hereby deleted in its entirety and restated as
follows:

“5.11 Licenses and Contracts. All franchises, licenses, trademarks, trade names,
copyrights, patents, permits, certificates, consents, approvals, authorizations,
agreements and contracts necessary to operate Borrower’s business as it
currently is being operated and to own or lease Borrower’s property have been
obtained, are in effect, have been complied with in all material respects by
Borrower, are free from challenge, and to the extent permitted under applicable
law, are fully assignable to the Lender for the purpose of securing the Loans.
Borrower has no knowledge and has not received any notice to the effect that any
product it manufactures or sells, or any service it renders, or any process,
method, know-how, trade secret, part or material it employs in the manufacture
of any product it makes or sells or any service it renders, or the marketing or
use by it or another of any such product or service, may infringe any trademark,
trade name, copyright, patent, trade secret or legally protected right of any
other Person.”

 

13. Payment of Loans. Section 6.1 of the Loan Agreement entitled “Payment of
Revolving Loan” is hereby deleted in its entirety and restated as follows:

“6.1 Payment of Loans. Punctually make the payments on (a) the Revolving Loan at
the times and places and in the manner specified in the Revolving Note, and
(b) the Term Loan at the times and places and in the manner specified in the
Term Note.”

 

14. Contract Obligations. Section 6.7 of the Loan Agreement entitled “Contract
Obligations” is hereby deleted in its entirety and restated as follows:

“6.7 Contract Obligations. Perform in accordance with the material terms of
every contract, agreement, obligation or other arrangement to which the Borrower
is a party or by which it or any of its property is bound which is material to
the operation of the Borrower’s business as determined by Lender in its sole and
absolute discretion, including, without limiting the generality of the
foregoing, Government Contracts, except

 

8

--------------------------------------------------------------------------------

to the extent that the contract or agreement is inconsistent with this
Agreement. In the event that any default or performance deficiency occurs, the
Borrower shall notify the Lender promptly in writing. The Borrower shall provide
the Lender promptly with copies of any cure notices or stop work notices it may
receive from the Government on any Government Contract and detail the proposed
corrective action.”

 

15. Books and Records. Section 6.9 of the Loan Agreement entitled “Books and
Records” is hereby deleted in its entirety and restated as follows:

“6.9 Books and Records. Keep and maintain at its chief executive offices
adequate and proper records and books of account, in which complete entries are
made in accordance with GAAP, consistently applied, and in accordance with all
laws, regulations, orders and other requirements of any court, tribunal,
arbitrator or governmental authority, reflecting all financial and other
transactions of the Borrower normally and customarily included in records and
books of account of companies engaged in the same or similar businesses and
activities as the Borrower. As of the date of this Agreement, the chief
executive offices of EFJ, Inc. and of E. F. Johnson Company are located in
Irving, Texas, the chief executive offices of Transcrypt International, Inc. are
located in Lincoln, Nebraska, and the chief executive offices of 3e Technologies
International, Inc. are located in Rockville, Maryland.”

 

16. Monthly Reports. Section 6.11f. of the Loan Agreement entitled “Monthly
Reports” is hereby deleted in its entirety.

 

17. Accounts. Section 6.12 of the Loan Agreement entitled “Accounts” is hereby
deleted in its entirety and restated as follows:

“6.12 Accounts. The Borrower shall use its best efforts and shall take any and
all steps necessary to collect its Accounts, including without limitation, the
filing and pursuit of legal action in furtherance of said collection efforts.”

 

18. Financial Covenant - Tangible Net Worth. Section 6.14a. of the Loan
Agreement entitled “Tangible Net Worth” is hereby deleted in its entirety.

 

19. Financial Covenant - Funded Debt to EBITDA. Section 6.14b. of the Loan
Agreement entitled “Funded Debt to EBITDA” is hereby deleted in its entirety and
restated as follows:

“b. Funded Debt to EBITDA. A maximum ratio of Funded Debt to EBITDA as follows:

1. 3.25 to 1.00 for each of the fiscal quarters of Borrower ending on or before
March 31, 2007; and

2. 3.00 to 1.00 for all fiscal quarters of Borrower thereafter.

Compliance with such financial covenant will be measured at the end of each
fiscal quarter on a rolling four quarter basis. Unless otherwise expressly
provided in this Agreement, if the Borrower comprises a parent corporation and
its subsidiaries, the covenants herein relating to the financial condition of
the Borrower refer to the financial condition of the parent corporation and
those subsidiaries stated on a consolidated basis.”

 

9

--------------------------------------------------------------------------------

20. Financial Covenant - Fixed Charge Coverage Ratio. Section 6.14c. of the Loan
Agreement entitled “Fixed Charge Coverage Ratio” is hereby deleted in its
entirety and restated as follows:

“c. Fixed Charge Coverage Ratio. A minimum Fixed Charge Coverage Ratio of 1.50
to 1.00 as of the last day of each fiscal quarter of Borrower.

Compliance with such financial covenant will be measured at the end of each
fiscal quarter on a rolling four quarter basis. Unless otherwise expressly
provided in this Agreement, if the Borrower comprises a parent corporation and
its subsidiaries, the covenants herein relating to the financial condition of
the Borrower refer to the financial condition of the parent corporation and
those subsidiaries stated on a consolidated basis.”

 

21. Financial Covenant - Positive EBITDA. Section 6.14d. of the Loan Agreement
entitled “Positive EBITDA” is hereby deleted in its entirety.

 

22. Debt. Section 7.1 of the Loan Agreement entitled “Debt” is hereby deleted in
its entirety and restated as follows:

“7.1 Debt. Create, incur, assume or suffer to exist any Debt, except (a) trade
debt incurred in the ordinary course of Borrower’s business; (b) Debt between
the entities comprising the term Borrower; (c) Debt not otherwise permitted by
this Section 7.1 in an amount not to exceed, in the aggregate, the sum of One
Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), at any one
time.”

 

23. Acquisitions. Section 7.4 of the Loan Agreement entitled “Acquisitions” is
hereby deleted in its entirety and restated as follows:

“7.4 Acquisitions. Purchase, lease or otherwise acquire the assets, business,
goodwill or securities of any other Person, including, without limitation,
shares of stock in corporations, partnership interests in general or limited
partnerships or membership interests in limited liability companies, or acquire
any other business, other than (a) the stock of Avanti Acquisition Corp.
(“Avanti”) provided that on or before the date hereof Avanti shall be merged
with and into 3e Technologies International, Inc., a Maryland corporation, with
3e Technologies International, Inc., a Maryland corporation, as the surviving
corporation of such merger (the “Merger”), all in accordance with the terms and
provisions of that certain Agreement and Plan of Merger, dated as of July 10,
2006, by and among EFJ, Inc., Avanti, 3e Technologies International, Inc., a
Maryland corporation, Chih Hsiang Li as stockholders’ agent, and Steven Chen,
James Whang, Chih-Hsiang Li and AEPCO, Inc., and (b) immediately after giving
effect to the Merger, the stock of 3e Technologies International, Inc., a
Maryland corporation.”

 

24. Transfer of Assets. Section 7.5 of the Loan Agreement entitled “Transfer of
Assets” is hereby deleted in its entirety and restated as follows:

“7.5 Transfer of Assets. Sell, lease, assign, pledge or otherwise dispose of any
of its properties, stocks or assets (including without limitation, the
Collateral), whether now owned or hereafter acquired, except (a) transfers in
the Borrower’s ordinary course of business and for fair market value,
(b) transfers between any of the Persons comprised by the term Borrower, or
(c) transfers disclosed on Schedule 7.5 attached hereto and made a part hereof,
which transfers were agreed to prior to the date of this Agreement.”

 

10

--------------------------------------------------------------------------------

25. Use of Proceeds. Section 7.10 of the Loan Agreement entitled “Use of
Proceeds” is hereby deleted in its entirety and restated as follows:

“7.10 Use of Proceeds. Use, or allow the use of, the proceeds of the Loans for
any purpose which would cause this Agreement to violate any Regulations of the
Board of Governors of the Federal Reserve System; or for any purpose other than
the purposes or purposes specified hereinabove.”

 

26. Capital Expenditures. Section 7.13 of the Loan Agreement entitled “Capital
Expenditures” is hereby deleted in its entirety and restated as follows:

“7.13 Capital Expenditures. Make capital expenditures in excess of Seven Million
and 00/100 Dollars ($7,000,000.00) in any fiscal year.”

 

27. Events of Default. Section 9.1a. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“a. the Borrower shall fail to pay, when due, any sum payable under the
Revolving Note or the Term Note; or”

 

28. Events of Default. Section 9.1e. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“e. any indebtedness or obligation of the Borrower to any third party in excess
of Five Hundred Thousand and 00/100 Dollars ($500,000.00) shall have been
declared due prior to its scheduled date of maturity as a result of the
occurrence of a default or event of default thereunder; or”

 

29. Events of Default. Section 9.1f. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“f. one or more judgments or decrees in an amount of more than Five Hundred
Thousand and 00/100 Dollars ($500,000.00) shall be entered against the Borrower
(not paid or fully covered by insurance) and all such judgments or decrees have
not been vacated, discharged, stayed or bonded pending appeal within fifteen
(15) days from the entry thereof, or any attachment or garnishment shall be
issued against the Borrower or the Borrower’s property, and any such attachment
shall not have been vacated, discharged, stayed or bonded pending trial in a
manner satisfactory to Lender; or”

 

30. Events of Default. Section 9.1h. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“h. any investigative proceeding, audit or other action shall be initiated by or
on behalf of any Customer, which is based upon a claim or contest with respect
to any material Government Contract or Government Account that, if adversely
determined to the Borrower, would have a material adverse effect on the
Borrower’s financial condition, as determined by the Lender in its sole
discretion; or”

 

11

--------------------------------------------------------------------------------

31. Events of Default. Section 9.1i. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“i. the issuance to the Borrower of any cure notice, show-cause notice, or
notice of whole or partial termination, for default or alleged default, under
any contract which is either a Government Contract or is a subcontract (at any
tier) which is related to a contract between a third party and the Government;
provided that the events described in this subparagraph shall not constitute an
Event of Default if the default or alleged default (i) is curable and the
Borrower cures the grounds for such issuance within thirty (30) days of issuance
of such notice, or (ii) if such grounds are not curable within such thirty
(30) day period, the Borrower provides evidence satisfactory to the Lender that
the Borrower has commenced to cure within such period, and the Borrower
diligently proceeds with such cure and provides evidence that such cure shall be
completed within a time period acceptable to Lender, or (iii) is being
diligently contested by Borrower in good faith and Borrower has set aside
adequate reserves therefor, in each case as determined by Lender in its sole and
absolute discretion; or”

 

32. Events of Default. Section 9.1k. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“k. any material default by the Borrower occurs under the terms of any material
Government Contract or any breach in the Borrower’s performance obligations
occurs under any material Government Contract; or”

 

33. Events of Default. Section 9.1p. of the Loan Agreement is hereby deleted in
its entirety and restated as follows:

“p. The Borrower or any other Person standing as a guarantor for the Loans or
providing security for the Loans shall fail to observe or perform any other
term, covenant or agreement contained in this Agreement or in any other Loan
Document or in any other agreement with the Lender or any of the Lender’s
Affiliates to be observed or performed on its part and such default shall
continue unremedied for a period of ten (10) Business Days after written notice
of the existence of such default is given by the Lender; provided however, that
with respect to any interest rate swap agreement or hedge agreement executed by
Borrower with Lender or any of Lender’s Affiliates, no such failure shall
constitute an Event of Default under this Agreement unless and until such
failure constitutes an event of default under such interest rate swap agreement
or hedge agreement. The cure period described in this paragraph is inapplicable
to the Events of Default listed in the paragraphs above.”

 

34. Rights and Remedies of the Lender. Section 9.2a. of the Loan Agreement is
hereby deleted in its entirety and restated as follows:

“a. Declare this Agreement and the Lender’s obligation to make or extend any
Advances on the Revolving Loan to be terminated, and declare the entire unpaid
principal amounts of the Loans, all interest accrued and unpaid thereon, and all
other amounts payable under this Agreement and the other Loan Documents to be
accelerated, and to be immediately due and payable (except that upon the
occurrence of an Event of Default arising out of voluntary or involuntary
bankruptcy proceedings in which the Borrower is

 

12

--------------------------------------------------------------------------------

the debtor, such acceleration shall occur automatically and immediately without
any declaration or other action on the part of the Lender) whereupon the Loans,
all such accrued interest, and all such amounts shall become and be immediately
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any of the other Loan Documents to the contrary
notwithstanding;”

 

35. Rights and Remedies of the Lender. Section 9.2c. of the Loan Agreement is
hereby deleted in its entirety and restated as follows:

“c. Notify any or all Customers to make any Payments due to the Borrower from
such Customers directly to the Lender, and render performance to or for the
benefit of the Lender of any obligations of such Customer(s) to the Borrower. To
facilitate direct collection, the Borrower hereby appoints the Lender, acting
through any officer or employee of the Lender, as the Lender may from time to
time designate, as attorney-in-fact for the Borrower to (i) receive, open and
dispose of all mail addressed to the Borrower and take therefrom any Payments on
or proceeds of Accounts; (ii) take over the Borrower’s post office boxes or make
such other arrangements, in which Borrower shall cooperate, to receive the
Borrower’s mail, including notifying the post office authorities to change the
address for delivery of mail addressed to the Borrower to such address as the
Lender shall designate; provided that Lender shall promptly remit to the
Borrower any mail so received which does not relate to the Collateral;
(iii) endorse the name of the Borrower in favor of the Lender upon any and all
checks, drafts, money orders, notes, acceptances or other evidences of payment
or Collateral that may come into the Lender’s possession; (iv) sign and endorse
the name of the Borrower on any invoice or bill of lading relating to any of the
Accounts, on verifications of Accounts sent to any Customer, to drafts against
any Customer, to assignments of Accounts, and to notices to any Customer; and
(v) do all acts and things necessary to carry out this Agreement and the
transactions contemplated hereby, including signing the name of the Borrower on
any instruments required by law in connection with the transactions contemplated
hereby and on financing statements as permitted under the Uniform Commercial
Code of any appropriate state. The Borrower hereby ratifies and approves all
acts of such attorneys-in-fact, and neither the Lender nor any other such
attorney-in-fact shall be liable for any acts of commission or omission, or for
any error of judgment or mistake of fact or law of any such attorney-in-fact,
except for acts of gross negligence or wilful misconduct of the Lender. This
power, being coupled with an interest and given to secure an obligation, is
irrevocable so long as the Loans remain unsatisfied, or any Loan Document
remains effective, as solely determined by the Lender. The Lender shall have no
obligation or duty to pursue any Person other than the Borrower for the amounts
owing under or in connection with the Loans, this Agreement or the other Loan
Documents, including without limitation any guarantors or Persons pledging
property to secure the Loans. To the extent such rights may now or hereafter
exist, the Borrower waives the right to require Lender to pursue any Persons
other than the Borrower to pay the amounts owing under the Revolving Note, Term
Note, this Agreement or other Loan Documents;”

 

36. Notices. Section 10.3 of the Loan Agreement entitled “Notices” is hereby
deleted in its entirety and restated as follows:

“10.3 Notices. Except as may otherwise be provide herein, all notices, demands,
requests or other communications provided for herein or in the other Loan
Documents

 

13

--------------------------------------------------------------------------------

shall be in writing and shall be deemed to be effective one (1) day after
dispatch if sent by Federal Express or any other commercially recognized
overnight delivery service or two (2) days after dispatch if sent by registered
or certified mail, return receipt requested and addressed as follows:

If to the Borrower:

EFJ, Inc.

1440 Corporate Drive

Irving, Texas 75038

Attention: Jana A. Bell, Chief Financial Officer

With copies to:

General Counsel to EFJ, Inc.

1440 Corporate Drive

Irving, Texas 75038

and

Andrew Erskine, Esquire

Manatt, Phelps & Phillips, LLP

11355 W. Olympic Boulevard

Los Angeles, California 90064

If to the Lender:

Bank of America, N.A.

1101 Wootton Parkway, 4th Floor

Rockville, Maryland 20852

Attention: Michael J. Landini, Senior Vice President

With copy to:

Joseph P. Corish, Esquire

Bean, Kinney & Korman, P.C.

2000 N. 14th Street, Suite 100

Arlington, Virginia 22201

If the Borrower comprises more than one Person, notice to the Borrower at the
address specified above in this section for EFJ, Inc. shall constitute notice to
all such Persons, and each Person signing below as the Borrower hereby
irrevocably appoints EFJ, Inc. as that Person’s agent to receive notices from
the Lender under this Agreement or the other Loan Documents.

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication thereafter may be so given, served or sent.
Each notice, demand, request or communication which is mailed, delivered or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent or received for all purposes at such time as it is delivered:
(i) to the United States Postal Service, in

 

14

--------------------------------------------------------------------------------

the case of a notice given by certified mail; (ii) to Federal Express or any
other commercially recognized overnight delivery service, in accordance with the
terms and procedures for such delivery

Any notices required under the Uniform Commercial Code with respect to the sale
or other disposition of the Collateral shall be deemed reasonable if mailed by
the Lender to the Persons entitled thereto at their last known address at least
ten (10) days prior to disposition of the Collateral.”

 

37. Rights Cumulative. Section 10.7 of the Loan Agreement entitled “Rights
Cumulative” is hereby deleted in its entirety and restated as follows:

“10.7 Rights Cumulative. The rights and remedies of the Lender described in any
of the Loan Documents are cumulative and not exclusive of any other rights or
remedies which the Lender or the then holder of the Notes otherwise would have
at law or in equity or otherwise. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other notice or demand in similar or
other circumstances.”

 

38. Additional Schedules. The Loan Agreement is hereby amended to add
(a) Schedule 1.1x-1 attached hereto and made a part hereof (In-process Research
and Development Expenses Resulting from the Acquisition of 3e Technologies
International, Inc.) as Schedule 1.1x-1 thereto, and (b) Schedule 1.1x-2
attached hereto and made a part hereof (Extraordinary Contract Settlement Costs
Incurred in Connection with the Acquisition of 3e Technologies International,
Inc.) as Schedule 1.1x-2 thereto.

 

39. Consent to Merger. Lender hereby consents to the merger of Avanti
Acquisition Corp., a Maryland corporation (“Avanti”) and a wholly-owned
subsidiary of EFJ, Inc., with and into 3e Technologies International, Inc., a
Maryland corporation, with 3e Technologies International, Inc., a Maryland
corporation, as the surviving corporation of such merger, all in accordance with
the terms and provisions of that certain Agreement and Plan of Merger, dated as
of July 10, 2006, by and among EFJ, Inc., Avanti, 3e Technologies International,
Inc., a Maryland corporation, Chih Hsiang Li as stockholders’ agent, and Steven
Chen, James Whang, Chih-Hsiang Li and AEPCO, Inc.

 

40. Location of Collateral. Borrower’s Equipment, goods and other tangible
personal property set forth in Schedule 6.13 attached hereto and made a part
hereof shall be kept and maintained at the locations set forth in said Schedule
6.13; the Borrower shall not relocate or move the Equipment, goods or other
tangible personal property without the Lender’s prior written consent, which
shall not be unreasonably withheld. The attached Schedule 6.13 shall be
substituted for and shall replace Schedule 6.13 attached to the original Loan
Agreement.

 

41. Additional Fees and Costs. The Borrower promises to pay, on demand, all
costs (including attorneys’ fees in an amount not to exceed $5,000.00, plus all
costs and expenses) incurred by the Lender for the preparation and negotiation
of this Second Amendment and any documents executed in connection with this
Second Amendment. Nothing herein shall impair, limit or modify Borrower’s
obligation to pay to Lender, on demand, all fees and costs (including attorneys’
fees and costs) incurred in conjunction with the enforcement or defense of
Lender’s rights and remedies under the Loan Agreement as modified by this Second
Amendment, or under any of the other Loan

 

15

--------------------------------------------------------------------------------

Documents. The Borrower authorizes the Lender to advance funds to itself or to
third parties to pay such fees, costs and expenses, which advances shall be
deemed to be Advances to the Borrower under the Loan Agreement.

 

42. Enforceability of Loan Agreement; No Offsets or Defenses. Except as modified
by this Second Amendment, the Loan Agreement remains in full force and effect
and unmodified. Borrower warrants and represents that it has no offsets or
defenses to its obligations under the Loan Agreement, as so modified, and the
other Loan Documents.

 

43. Release. In consideration of Lender’s agreement to this Second Amendment,
the Borrower hereby releases and waives any and all claims, actions or causes of
action of any kind that it may have against the Lender as of the date of this
Second Amendment arising out of or relating to the Revolving Note or the Loan
Agreement (as amended by this Second Amendment) or that otherwise may exist as
of the date of this Second Amendment.

 

44. Arbitration.

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

At the request of the Borrower or the Lender, any Claim shall be resolved by
binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the “Act”). The Act will apply even though the Loan Agreement as
modified by this Second Amendment provides that it is governed by the law of a
specified state.

Arbitration proceedings will be determined in accordance with the Act, the
applicable rules and procedures for the arbitration of disputes of JAMS or any
successor thereof (“JAMS”), and the terms of this paragraph. In the event of any
inconsistency, the terms of this paragraph shall control.

The arbitration shall be administered by JAMS and conducted in any U.S. state
where real or tangible personal property collateral for this credit is located
or if there is no such collateral, in Maryland. All Claims shall be determined
by one arbitrator; however, if Claims exceed Five Million and 00/100 Dollars
($5,000,000.00), upon the request of any party, the Claims shall be decided by
three arbitrators. All arbitration hearings shall commence within ninety
(90) days of the demand for arbitration and close within ninety (90) days of
commencement and the award of the arbitrator(s) shall be issued within thirty
(30) days of the close of the hearing. However, the arbitrator(s), upon a
showing of good cause, may extend the commencement of the hearing for up to an
additional sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be submitted to
any court having jurisdiction to be confirmed and enforced.

The arbitrator(s) will have the authority to decide whether any Claim is barred
by the statute of limitations and, if so, to dismiss the arbitration on that
basis. For purposes of

 

16

--------------------------------------------------------------------------------

the application of the statute of limitations, the service on JAMS under
applicable JAMS rules of a notice of Claim is the equivalent of the filing of a
lawsuit. Any dispute concerning this arbitration provision or whether a claim is
arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of the Loan Agreement
as modified by this Second Amendment.

This paragraph does not limit the right of the Borrower or the Lender to:
(i) exercise self-help remedies, such as but not limited to, setoff;
(ii) initiate judicial or nonjudicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but no limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.

 

45. WAIVER OF JURY TRIAL. BY AGREEING TO BINDING ARBITRATION, BORROWER AND
LENDER IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF A CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT
THIS AGREEMENT TO ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE
PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF SUCH CLAIM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THE LOAN AGREEMENT AS MODIFIED BY THIS SECOND AMENDMENT.

 

46. No Oral Agreements. This Second Amendment, the Loan Agreement, and the other
Loan Documents constitute 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.

(SIGNATURES AND NOTARY ACKNOWLEDGMENTS ON FOLLOWING PAGES)

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Second
Amendment under seal as of the day and year first hereinabove set forth.

 

EFJ, INC., a Delaware corporation By:  

/s/ Jana Ahlfinger Bell

  (SEAL) Name:   Jana Ahlfinger Bell   Title:   Chief Financial Officer  
E. F. JOHNSON COMPANY, a Minnesota corporation By:  

/s/ Jana Ahlfinger Bell

  (SEAL) Name:   Jana Ahlfinger Bell   Title:   Chief Financial Officer  

 

17

--------------------------------------------------------------------------------

TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation By:  

/s/ Jana Ahlfinger Bell

  (SEAL) Name:   Jana Ahlfinger Bell   Title:   Chief Financial Officer   3e
TECHNOLOGIES INTERNATIONAL, INC., a Maryland corporation By:  

/s/ Jana Ahlfinger Bell

  (SEAL) Name:   Jana Ahlfinger Bell   Title:   Secretary   BANK OF AMERICA,
N.A. By:  

/s/ Michael J. Landini

  (SEAL) Name:   Michael J. Landini   Title:   Senior Vice President  

 

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 6th day of July, 2006.

 

[SEAL]  

/s/ Amy M. Fritts

  Notary Public

My commission expires: November 7, 2009

 

State of Texas   

)

County of Dallas   

) To Wit:

 

18

--------------------------------------------------------------------------------

Acknowledged before me by Jana Ahlfinger Bell as Chief Financial Officer of E.
F. Johnson Company, a Minnesota corporation, this 6th day of July, 2006.

 

[SEAL]  

/s/ Amy M. Fritts

  Notary Public

My commission expires: November 7, 2009

 

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 6th day of July,
2006.

 

[SEAL]  

/s/ Amy M. Fritts

  Notary Public

My commission expires: November 7, 2009

 

State of Texas   

)

County of Dallas   

) To Wit:

Acknowledged before me by Jana Ahlfinger Bell as Secretary of 3e Technologies
International, Inc., a Maryland corporation, this 10th day of July, 2006.

 

[SEAL]  

/s/ Amy M. Fritts

  Notary Public

My commission expires: November 7, 2009

 

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                     , 2006.

 

[SEAL]  

 

  Notary Public

My commission expires:                                 

 

19