Exhibit 10.1


 


SECOND MODIFICATION AGREEMENT


 


THIS SECOND
MODIFICATION AGREEMENT (this “Amendment”) is made effective as of November 26,
2008, by and among (a) TESSCO TECHNOLOGIES INCORPORATED, a Delaware
corporation (“TESSCO”), TESSCO SERVICE SOLUTIONS, INC., a Delaware
corporation, TESSCO INCORPORATED, a Delaware corporation, TESSCO COMMUNICATIONS
INCORPORATED, a Delaware corporation, WIRELESS SOLUTIONS INCORPORATED, a
Maryland corporation, TESSCO BUSINESS SERVICES, LLC, a Delaware limited
liability company, TESSCO SUPPLY CHAIN SERVICES, LLC, a Delaware limited
liability company, TESSCO PRODUCT SOLUTIONS, LLC, a Delaware limited liability
company, TESSCO INTEGRATED SOLUTIONS, LP, a Delaware limited partnership, and
GW SERVICE SOLUTIONS, INC., a Delaware corporation (the aforementioned
entities, including TESSCO, being hereinafter called collectively the “Borrowers”);  (b) SUNTRUST BANK and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Lenders (in such capacity, the “Lenders”); and (c) SUNTRUST
BANK, as Administrative Agent (in such capacity, the “Agent”).


 


RECITALS


 


Pursuant to a
Credit Agreement dated as of May 31, 2007 by and among the Borrowers, the
Lenders, and the Agent (as the same may from time to time be amended, restated,
supplemented, or otherwise modified, the “Credit Agreement”), the
Lenders agreed to make available to the Borrowers a revolving credit facility
(the “Revolving Credit Facility”) pursuant to which the Lenders would
make loans and other credit accommodations (collectively, the “Loans”)
to or for the benefit of the Borrowers in an aggregate principal amount not to
exceed $50,000,000 at any one time outstanding. 
The Borrowers’ obligation to repay the Loans with interest is evidenced
by the Borrowers’ Revolving Credit Note dated May 31, 2007 from the
Borrowers made payable to the Lenders in the principal amount of up to
$50,000,000 (as the same may from time to time be amended, restated,
supplemented, or otherwise modified, the “Note”).


 


As used
herein, the term “Loan Documents” means collectively, the Credit
Agreement, the Note, and all other documents now or hereafter executed and
delivered by the Borrowers or any other party or parties to evidence, secure,
or guarantee, or in connection with, the Revolving Credit Facility.


 


Pursuant to a
First Amendment dated as of June 30, 2008, the parties agreed to make
certain changes to the Credit Agreement. 
The Borrowers have now requested that the Lenders and the Agent make
certain additional modifications to the Credit Agreement, and the Lenders and
the Agent have agreed to do so, subject to and upon the terms and conditions
hereinafter set forth.


 


AGREEMENTS


 


Now,
therefore, in consideration of the premises and the mutual agreements herein
contained, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:


 


1.                                       Recitals;
Defined Terms.  The parties hereto
acknowledge that the above Recitals are true and correct and agree that the
same are incorporated herein.  Unless the
context clearly indicates otherwise, each term used in this Agreement which is
defined in the Recitals shall have 


 

















 


the meaning given to such term
in the Recitals, and each capitalized term used herein which is not otherwise
defined herein shall have the meaning given to such term in the Credit
Agreement.


 


2.                                       Amendments
to Credit Agreement.


 


(a)                                  Effective
as of the effective date of this Agreement, the definition of “Cash Flow”
appearing in Section 1.1 of the Credit Agreement is hereby deleted, and
the following is inserted in lieu thereof:


 


“Cash Flow”
means, as to any Person for any period of measurement, such Person’s net income
after taxes, plus interest expense, plus depreciation, amortization and other
non-cash charges to income, less any capital expenditures not financed, less
any non-cash income, less dividends paid during such period.


 


(b)                                 Effective
as of the effective date of this Agreement, Section 2.7 of the Credit
Agreement is hereby deleted, and the following is inserted in lieu thereof:


 


“SECTION 2.7 Use
of Proceeds.  The Borrowers shall use
the proceeds of the Loans solely to refinance the Existing Facility and for
working capital, Capital Expenditures, and Permitted Acquisitions by the
Borrowers, including the payment of fees and expenses incurred in connection
with such transactions, and to purchase not more than $25,000,000 of issued and
outstanding stock during the term of the Credit Facility.”


 


(c)                                  Effective
as of the effective date of this Agreement, Section 9.1 of the Credit
Agreement is hereby deleted, and the following is inserted in lieu thereof:


 


Section 9.1
Minimum Tangible Net Worth From the Closing Date through the Scheduled
Maturity Date, as measured at the end of each of the Borrowers’ fiscal
quarters, maintain a combined Tangible Net Worth of not less than $40,000,000; provided,
however, that the Minimum Tangible Net Worth requirement shall increase (a) as
of September 27, 2009 by fifty percent (50%) of the Borrowers’ combined
net income after applicable taxes for the period from March 30, 2009
through September 27, 2009, and (b) as of March 28, 2010 by
fifty percent (50%) of the Borrowers’ combined net income after applicable
taxes for the period from September 28, 2009 through March 28, 2010.


 


(d)                                 Effective
as of the effective date of this Agreement, Section 10.7 of the Credit
Agreement is hereby deleted, and the following is inserted in lieu thereof:


 


SECTION 10.7.Limitations
on Dividends and Distributions. 
Declare or pay any dividends upon any of its capital stock; purchase,
redeem, retire or otherwise acquire, directly or indirectly, any shares of its
capital stock, or make any distribution of cash, property or assets among the
holders of shares of its capital stock, or make any change in its capital
structure;


 


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provided that, (a) any
Subsidiary (including any Subsidiary that is also a Borrower) may pay cash
dividends to any of the Borrowers, (b) the Borrowers may pay additional
cash dividends not to exceed $2,000,000 in the aggregate during any 12-month
period so long as after giving effect to any such dividends, no Event of
Default shall occur as a result thereof, and (c) the Borrowers may
purchase up to $25,000,000 of their issued and outstanding stock in the
aggregate during the term of the Credit Facility.


 


 3.                                    Representations
and Warranties.  In order to induce
the Lenders and the Agent to enter into this Agreement, the Borrowers represent
and warrant to the Lenders and the Agent that as of the date hereof (a) no
Event of Default exists under the provisions of the Loan Documents, (b) except
as to matters of which the Borrowers have advised the Agent in a writing and
which have been acknowledged by the Agent, all of the representations and
warranties of the Borrowers in the Loan Documents are true and correct on the
date hereof as if the same were made on the date hereof (provided that any
representation or warranty that speaks “as of the Closing Date” or as of any
other specific date shall continue to speak as of such date, notwithstanding), (c) no
material adverse change has occurred in the business, financial condition,
prospects or operations of the Borrowers since the date of the most recent
financial statement of the Borrowers furnished to the Lenders and the Agent in
accordance with the provisions of the Loan Documents, and (d) this
Agreement constitutes the legal, valid and binding obligation of the Borrowers,
jointly and severally enforceable in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors’ rights in general and the availability of equitable remedies.  If any of the foregoing representations and
warranties shall prove to be false, incorrect or misleading in any material
respect, the Lenders and the Agent may, in their absolute and sole discretion,
declare that a default has occurred and exists under the provisions of the Loan
Documents, and the Lenders and the Agent shall be entitled to all of the rights
and remedies set forth in the Loan Documents as the result of the occurrence of
such default.


 


4.                                       Ratification
and No Novation.  The Borrowers
hereby ratify and confirm all of their obligations, liabilities and
indebtedness under the provisions of the Credit Agreement, the Note, and the
other Loan Documents, as the same may be amended and modified by this
Agreement.  The Lenders, the Agent, and
the Borrowers agree that it is their intention that nothing herein shall be
construed to extinguish, release or discharge or constitute, create or effect a
novation of, or an agreement to extinguish any of the obligations, indebtedness
and liabilities of the Borrowers or any other party under the provisions of the
Loan Documents.  The Borrowers agree that
all of the provisions of the Credit Agreement and the other Loan Documents
shall remain and continue in full force and effect as the same may be modified
and amended by this Agreement.  In the
event of any conflict between the provisions of this Agreement and the
provisions of the Loan Documents, the provisions of this Agreement shall
control.


 


5.                                       Fees,
Costs and Expenses.  In consideration
of the agreement of the Lenders to enter into this Amendment, (a) the
Borrowers shall pay to the Agent on the date hereof, for the ratable benefit of
the Lenders, an amendment fee in the amount of $15,000, and (b) the
Borrowers reasonably shall pay to the Agent and the Lenders on demand all costs
and expenses both now and hereafter paid or incurred with respect to the
preparation, negotiation, execution, administration 


 


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and enforcement of this
Agreement and all documents related thereto, including, without limitation, reasonable
attorney’s fees and expenses, recording costs and costs of record searches.


 


6.                                       Applicable
Law.  This Agreement shall be
construed in accordance with and governed by the laws of the State of Maryland.


 


7.                                       Binding
Effect.  This Agreement shall be binding
upon and inure to the benefit of the Lenders, the Agent, and the Borrowers, and
their respective successors and assigns.


 


[Remainder of Page Intentionally Left Blank]


 


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IN WITNESS WHEREOF, the parties hereto have
each caused this Agreement to be executed and sealed, the day and year first
above written.


 


 


	
  WITNESS:

  	
   

  	
  BORROWERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  TECHNOLOGIES INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  SERVICE SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  COMMUNICATIONS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRELESS
  SOLUTIONS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  



 


5

















 


	
   

  	
   

  	
  TESSCO
  BUSINESS SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  SUPPLY CHAIN SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  PRODUCT SOLUTIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TESSCO
  INTEGRATED SOLUTIONS, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Tessco
  Product Solutions, LLC,

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GW SERVICE
  SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert
  B. Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  Robert B.
  Barnhill, Jr.

  
	
   

  	
   

  	
   

  	
  President

  



 


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  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Timothy
  Knabe

  
	
   

  	
   

  	
   

  	
  Timothy
  Knabe

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory
  Farno

  
	
   

  	
   

  	
   

  	
  Gregory
  Farno

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory
  Farno

  
	
   

  	
   

  	
   

  	
  Gregory
  Farno

  
	
   

  	
   

  	
   

  	
  Senior Vice
  President

  



 


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