exv10w30






Exhibit 10.30




JOINDER, ASSUMPTION AND FIRST AMENDMENT

TO LOAN AND SECURITY AGREEMENT




Effective Date: March 4, 2011




     This JOINDER, ASSUMPTION AND FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “First
Amendment”), dated as of March 4, 2011, is by and among, (a) SILICON VALLEY BANK, a California
corporation with its principal place of business at 3003 Tasman Drive, Santa Clara, California
95054 and with a loan production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462, as administrative agent and collateral agent
(collectively, in such capacities, “Agent”), (b) the several banks and other financial institutions
or entities parties to this First Amendment (“Lenders”), and (c) TELECOMMUNICATION SYSTEMS, INC., a
Maryland corporation (“TCS”), LONGHORN ACQUISITION, LLC, a Maryland limited liability company
(“Longhorn”), SOLVERN INNOVATIONS, INC., a Maryland corporation (“Solvern”), QUASAR ACQUISITION,
LLC, a Maryland limited liability company (“Quasar”), NETWORKS IN MOTION, INC., a Delaware
corporation (“NIM”), and TRIDENT SPACE & DEFENSE, LLC, a Delaware limited liability company
(“Trident”, and together with TCS, Longhorn, Solvern, Quasar and NIM, jointly and severally,
individually and collectively, referred to as “Borrower”), each with a principal place of business
located at 275 West Street, Suite 400, Annapolis, Maryland 21401.



Recitals




     WHEREAS, reference is made to a certain Loan and Security Agreement, dated as of December 31,
2009 (as amended, modified, supplemented or restated and in effect from time to time, the “Loan
Agreement”), by and among Agent, Lenders, TCS, Longhorn, Solvern, Quasar and NIM (TCS, Longhorn,
Solvern, Quasar and NIM are hereinafter referred to jointly and severally, individually and
collectively, as “Existing Borrower”).



     WHEREAS, reference is also made to a certain Waiver and Consent to Acquisition, dated as of
January 31, 2011 (the “Trident Consent”), by and among Agent, Lenders and Existing Borrower,
pursuant to which Agent and Lenders consented to the acquisition by TCS of all of the issued and
outstanding membership interests of Trident (the “Trident Acquisition”), subject to the terms and
conditions set forth therein.



     WHEREAS, pursuant to the terms of the Trident Consent and the Loan Agreement, Existing
Borrower is to cause Trident to become a co-Borrower under the Loan Documents and grant to Agent,
for the ratable benefit of the Secured Parties, a continuing pledge and security interest in and to
the assets of Trident.



     WHEREAS, Existing Borrower has advised Agent that, among other things, Existing Borrower
desires to (i) join Trident as a co-Borrower under the Loan Documents and (ii) amend certain terms
and conditions of the Loan Agreement as set forth herein.



     WHEREAS, Agent and Lenders are willing to amend certain provisions of the Loan Agreement, in
each case on the terms and conditions set forth herein, and in reliance upon the representations
and warranties set forth below.



 









 





Agreement




          NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to
be legally bound, the parties hereto agree as follows:




     1. Definitions. Capitalized terms used but not defined in this First Amendment shall
have the meanings given to them in the Loan Agreement.



     2. Joinder and Assumption. The undersigned, TRIDENT SPACE & DEFENSE, LLC, a Delaware
limited liability company (“New Borrower”), is a wholly owned Subsidiary of TCS. New Borrower
hereby joins the Loan Agreement and each of the other Loan Documents, and agrees to comply with and
be bound by all of the terms, conditions and covenants of the Loan Agreement and the other Loan
Documents, as if it were originally named as a “Borrower” therein. Without limiting the generality
of the preceding sentence, New Borrower hereby assumes and agrees to pay and perform when due all
present and future indebtedness, liabilities and obligations of Existing Borrower under the Loan
Agreement, including, without limitation, the Obligations. All references in the Loan Documents to
“Borrower” shall be deemed to refer to and include New Borrower. Further, all present and future
Obligations of Existing Borrower shall be deemed to refer to all present and future Obligations of
New Borrower. New Borrower acknowledges that the Obligations are due and owing to Agent and
Lenders from Existing Borrower, without any defense, offset or counterclaim of any kind or nature
whatsoever as of the date hereof.



     3. Grant of Security Interest. To secure the payment and performance in full of all
of the Obligations, New Borrower hereby grants to Agent, for the ratable benefit of the Secured
Parties, a continuing security interest in, and pledges to Agent, for the ratable benefit of the
Secured Parties, all of New Borrower’s right, title and interest in and to the Collateral (as more
particularly described on Exhibit A attached hereto), whether now owned or existing or
hereafter created, acquired, or arising, and wherever located. New Borrower further covenants and
agrees by its execution hereof that it shall execute all such instruments and take all such actions
that are reasonably required by Agent in order to grant a valid, perfected security interest to
Agent in the Collateral (subject only to Permitted Liens). New Borrower hereby authorizes Agent to
file financing statements, without notice to New Borrower, with any necessary jurisdictions in
order to perfect or protect Agent’s interest or rights hereunder.



     4. Amendments to Loan Agreement. The provisions of the Loan Agreement are hereby
amended as follows:




     (a) Section 6.9 of the Loan Agreement is hereby deleted in its entirety and replaced
with the following:




     “6.9 Financial Covenants.




     Maintain as of the last day of each month, unless otherwise noted, on a
consolidated basis with respect to Borrower and its Subsidiaries:




     (a) Adjusted Quick Ratio. (i) for each monthly period
beginning with the monthly period ending February 28, 2011 through and
including the monthly period ending May 31, 2012, an Adjusted Quick Ratio of
not less than 1.10:1.00; and (ii) for each monthly period beginning with the
monthly period ending June 30, 2012 and as of the last day of each monthly
period thereafter, an Adjusted Quick Ratio of not less than 1.25:1.00.



 









 






     (b) Fixed Charge Coverage Ratio. (i) for each quarterly period
beginning with the quarterly period ending March 31, 2011 through and
including the quarterly period ending December 31, 2011, a Fixed Charge
Coverage Ratio of not less than 1.10:1.00; and (ii) for each quarterly
period beginning with the quarterly period ending March 31, 2012 and as of
the last day of each quarterly period thereafter, a Fixed Charge Coverage
Ratio of not less than 1.25:1.00.”




     (b) The definition of “Adjusted Quick Ratio” in Section 14 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:




“Adjusted Quick Ratio” means the ratio of (A) (i) Borrower’s unrestricted
cash, unrestricted Cash Equivalents and unrestricted marketable securities
plus (ii) the aggregate value of Borrower’s net billed accounts
receivable, plus (iii) the value of Borrower’s unbilled accounts
receivable which are contractually due in an aggregate amount not to exceed
85% of Borrower’s net billed accounts receivable divided by (B) (i)
Borrower’s Current Liabilities (including, without limitation, all
Indebtedness owed to Lenders and any Reserves established by Agent),
less (ii) the current portion of Borrower’s Deferred Revenue,
less (iii) to the extent included as Current Liabilities, all
principal Indebtedness owing under the NIM Seller Notes.




     (c) Clause (j) of the definition of “Eligible Accounts” in Section 14.1 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:




“(j) Accounts owing from the United States or any department, agency, or
instrumentality thereof except for (i) Accounts arising from contracts with
the United States or any department, agency, or instrumentality thereof
having a value of $50,000 or less or (ii) Accounts arising from contracts
with the United States or any department, agency, or instrumentality thereof
if Borrower has assigned its payment rights to Agent and the assignment has
been acknowledged under the Federal Assignment of Claims Act of 1940, as
amended;”



     5. Representations and Warranties. To induce Agent and Lenders to enter into this
First Amendment, Borrower hereby represents and warrants to Agent and Lenders as follows:




     (a) As of the First Amendment Effective Date, the representations and warranties
contained in the Loan Documents are true and correct with respect to New Borrower, with the
same force and effect as if New Borrower was named as “Borrower” in the Loan Documents in
addition to Existing Borrower (except (i) to the extent that such representations and
warranties relate to an earlier date, (ii) any representations or warranties relating to a
Perfection Certificate by New Borrower or any information disclosed in a Perfection
Certificate by New Borrower shall not be effective until the delivery of the Perfection
Certificate in accordance with Section 10(c) of this First Amendment and (iii)
except as otherwise permitted by the terms of the Loan Documents);




     (b) As of the First Amendment Effective Date, the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects
(except to the extent such representations and warranties relate to an earlier date, in
which case they are true, accurate and complete in all material respects as of such date,
and except as otherwise permitted by the terms of the Loan Documents);



 









 






     (c) As of the First Amendment Effective Date, no Event of Default has or shall have
occurred and is continuing; and




     (d) Borrower has the power and due authority to execute and deliver this First
Amendment.



     6. Integration. This First Amendment and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations between the parties about
the subject matter of this First Amendment and the Loan Documents merge into this First Amendment
and the Loan Documents.



     7. Prior Agreement. The Loan Documents are hereby ratified and reaffirmed and, except
as expressly amended, modified and supplemented hereby, the Loan Documents are and shall remain in
full force and effect. This First Amendment is not a novation and the terms and conditions of this
First Amendment shall be in addition to and supplemental to all terms and conditions set forth in
the Loan Documents. In the event of any conflict or inconsistency between this First Amendment and
the terms of the Loan Documents, the terms of this First Amendment shall be controlling, but the
Loan Documents document shall not otherwise be affected or the rights therein impaired.



     8. Counterparts. This First Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one and the same
instrument.



     9. Effectiveness. This First Amendment shall be effective as of March 4, 2011 (the
“First Amendment Effective Date”), provided that:




     (a) This First Amendment shall have been duly executed and delivered to Agent by each
party hereto.




     (b) New Borrower shall have delivered to Agent the following documents, each in form
and substance satisfactory to Agent:




     (i) a certificate of an authorized officer of New Borrower with respect to the
certificate of formation, limited liability company agreement, incumbency, and
resolutions of the manager of New Borrower, authorizing the execution and delivery
of this First Amendment;




     (ii) a good standing certificate of New Borrower certified by the Delaware
Secretary of State as of a date no earlier than thirty (30) days prior to the First
Amendment Effective Date; and




     (iii) certified copies, dated as of a recent date, of UCC, federal and state
tax lien and judgment lien searches, as Agent shall request, accompanied by written
evidence (including any UCC termination statements) that the Liens indicated in any
such searches constitute Permitted Liens.




(c) No Default or Event of Default shall have occurred and be continuing.



     10. Post-Closing Delivery of Documents. New Borrower hereby agrees that the following
documents shall be delivered to Agent on or before April 15, 2011, each in form and substance
reasonably satisfactory to Agent:



 









 






     (a) evidence satisfactory to Agent that the insurance policies required for New
Borrower by the Loan Agreement are in full force and effect, together with appropriate
evidence showing lender loss payable and/or additional insured clauses or endorsements (as
applicable) in favor of Agent;




     (b) Control Agreements with such financial institutions as may be required by Agent
pursuant to the terms of the Loan Agreement;




     (c) a Perfection Certificate executed by New Borrower, together with the duly executed
original signatures thereto;




     (d) a landlord’s consent in favor of Agent for each of New Borrower’s leased locations,
together with the duly executed original signatures thereto, as required by Agent;




     (e) a bailee’s/warehouseman’s waiver executed by each bailee, if any, of New Borrower,
as required by Agent;




     (f) a certificate of foreign qualification from the Secretary of State (or comparable
governmental entity) of each state in which New Borrower is qualified to transact business
as a foreign entity; and




     (g) a legal opinion of New Borrower’s counsel, in form and substance acceptable to
Agent, together with the duly executed original signatures thereto, as required by Agent.




In the event that New Borrower fails to deliver one or more of the post-closing deliverables
described in this Section 10 within the foregoing timeframe, it shall constitute an
Event of Default under the Loan Agreement, without any notice or grace, unless waived in
writing by Agent and Required Lenders.



     11. Fees. Borrower shall pay to Agent, for the ratable benefit of Lenders, a
modification fee equal to Fifty Thousand Dollars ($50,000), which fee shall be due and shall be
deemed fully earned as of the First Amendment Effective Date. Borrower also agrees to pay Agent
any and all Secured Party Expenses (including, without limitation, reasonable attorney’s fees and
expenses) incurred by Agent in connection with the documentation and negotiation of this First
Amendment.



     12. Ratification of Loan Documents. Borrower hereby ratifies, confirms, and reaffirms
all terms and conditions of all security or other collateral granted to Agent, for the ratable
benefit of the Secured Parties, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.



     13. No Defenses of Borrower. Borrower hereby acknowledges and agrees that Borrower
has no offsets, defenses, claims, or counterclaims against Agent or Lenders with respect to the
Obligations, or otherwise, and that if Borrower now has, or ever did have prior to the date hereof,
any offsets, defenses, claims, or counterclaims against Agent or Lenders, whether known or unknown,
at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Agent and
Lenders from any liability thereunder.



     14. Continuing Validity. Borrower understands and agrees that in modifying the
existing Obligations, Agent and Lenders are relying upon Borrower’s representations, warranties,
and agreements, as set forth in the Loan Documents. Except as expressly permitted by this First
Amendment, the terms of the Loan Documents remain unchanged and in full force and effect. Agent’s
and Lenders’ agreement to



 









 




execute and deliver this First Amendment in no way shall obligate Agent and Lenders to make
any future modifications to the Obligations. Nothing in this First Amendment shall constitute a
satisfaction of the Obligations. It is the intention of Agent, Lenders and Borrower to retain as
liable parties all makers of the Loan Documents, unless the party is expressly released by Agent
and Lenders in writing.




     15. Right of Set-Off. In consideration of Agent’s and Lenders’ agreement to enter
into this First Amendment, Borrower hereby reaffirms and hereby grants to Agent, for the ratable
benefit of the Secured Parties, a lien, security interest and right of set off as security for all
Obligations, whether now existing or hereafter arising upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody, safekeeping or control of
Agent or any entity under the control of Agent or Lenders (including any subsidiary of the Agent or
Lenders) or in transit to any of them. At any time after the occurrence and during the continuance
of an Event of Default, without demand or notice, Agent or Lenders, subject to the terms of the
Loan Agreement, may set off the same or any part thereof and apply the same to any Obligation of
Borrower even though unmatured and regardless of the adequacy of any other collateral securing the
loan. ANY AND ALL RIGHTS TO REQUIRE AGENT OR LENDERS TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.



     16. Choice of Law. Section 12 of the Loan Agreement is hereby incorporated by
reference, in its entirety.



[The remainder of this page is intentionally left blank]





 









 








     This First Amendment is executed as of the date first written above.



	 	 	 	 	 
	 	NEW BORROWER:



TRIDENT SPACE & DEFENSE, LLC

 	 
	 	By:  	/s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Manager 	 
	 
	 	EXISTING BORROWER:



TELECOMMUNICATION SYSTEMS, INC.

 	 
	 	By:  	/s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Senior Vice President and Chief

Financial Officer 	 
	 
	 	LONGHORN ACQUISITION, LLC

 	 
	 	By:  	/s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Senior Vice President and Chief

Financial Officer 	 
	 
	 	SOLVERN INNOVATIONS, INC.

 	 
	 	By:  	/s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Treasurer 	 
	 
	 	QUASAR ACQUISITION, LLC

 	 
	 	By:  	/s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Senior Vice President and Chief

Financial Officer 	 
	 
	 	NETWORKS IN MOTION, INC.

 	 
	 	 	 
	 	 	 
	 	 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	 	 
	 	By:  	                                                     /s/ Thomas M. Brandt, Jr.
 	 
	 	Name:  	Thomas M. Brandt, Jr. 	 
	 	Title:  	Senior Vice President, Chief

Financial Officer and Treasurer 	 
	 
	 	AGENT:



SILICON VALLEY BANK

 	 
	 	By:  	/s/ Megan Scheffel
 	 
	 	Name:  	Megan Scheffel 	 
	 	Title:  	Senior Vice President 	 
	 
	 	LENDERS:



SILICON VALLEY BANK

 	 
	 	By:  	/s/ Megan Scheffel
 	 
	 	Name:  	Megan Scheffel 	 
	 	Title:  	Senior Vice President 	 
	 
	 	MANUFACTURERS & TRADERS TRUST 

COMPANY

 	 
	 	By:  	/s/ Mary Francis Isakov
 	 
	 	Name:  	Mary Francis Isakov 	 
	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



EXHIBIT A — COLLATERAL DESCRIPTION



The Collateral consists of all of New Borrower’s right, title and interest in and to the following
personal property:





     All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights
or rights to payment of money, leases, license agreements, franchise agreements, General
Intangibles, commercial tort claims, documents, instruments (including any promissory notes),
chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and



     all of New Borrower’s Books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions, attachments, accessories,
accessions and improvements to and replacements, products, proceeds and insurance proceeds of any
or all of the foregoing.