Document:

Exhibit 10.18

 

AGREEMENT TO EXCHANGE

SERIES
H PREFERRED SHARES

FOR
SERIES E PREFERRED SHARES

 

 

THIS AGREEMENT,
dated as of July     , 2003, is entered into by and between
STRATUS SERVICES GROUP, INC., a
Delaware corporation, with headquarters located at 500 Craig Road, Suite 201,
Manalapan, New Jersey 07726 (the “Company”) and Pinnacle Investment Partners,
L.P., a New York limited partnership, with headquarters c/o Delta Asset
Management, The Trump Tower, 40 Wall Street, 33rd Floor, New York,
New York 10005 (“Pinnacle”).

 

WITNESSETH:

 

WHEREAS, on
September 30, 2002, Pinnacle entered into and a Securities Purchase Agreement
(the “Purchase Agreement”), whereby Pinnacle, in the aggregate, purchased 5,000
shares of Series H Preferred Stock for an aggregate purchase price of $500,000;
and

 

WHEREAS, the Company
also owes Pinnacle certain monies for dividends due and owing on such Series H
Preferred Stock in the total amount of $8750.00, and Pinnacle wishes to,
instead of receiving cash for such accrued dividends and penalties, exchange
same for additional Series E stock.

 

NOW, THEREFORE, in
consideration for the foregoing, the parties hereto agree as follows:

 

1.               Exchange
of Shares.  Pinnacle’s
5,000 shares of Series H Preferred Stock in the principal amount of $500,000
will be exchanged on July 15, 2003 for 5,000 shares of Series E Preferred
Stock, $.01 par value per share and accrued dividends thereon as of
July 15, 2003 and penalties

 

 

and fees due to Pinnacle, all in the aggregate amount of $508,750.00
will be exchanged for 5087 shares of Series E Preferred Stock;

 

2.               Taxes.  If Series E Preferred Stock is to be issued
in the name of an entity other than Pinnacle, Pinnacle will pay all transfer
taxes payable with respect thereto.  No
fee will be charged to Pinnacle for the exchange except for such transfer
taxes, if any.

 

3.               Pinnacle’s
Representations, Warranties, Etc.; Access To Information; Independent
Investigation.  Pinnacle
represents and warrants to, and covenants and agrees with, the Company as
follows:

 

a.               Pinnacle is exchanging the Series H
Preferred Stock and accrued dividends for the Series E Preferred Stock for its
own account for investment only and not with a view towards the public sale or
distribution thereof and not with a view to or for sale in connection with any
distribution thereof.

 

b.              Pinnacle is (i) an “accredited investor”
as that term is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3), and (ii) experienced in making
investments of the kind described in this Agreement and the related documents,
(iii) able, by reason of the business and financial experience of its officers
(if an entity) and professional advisors (who are not affiliated with or
compensated in any way by the Company or any of its affiliates or selling
agents), to protect its own interests in connection with the transactions
described in this Agreement, and the related documents, and (iv) able to afford
the entire loss of its investment in the Preferred.

 

c.               Pinnacle understands that the 5,000
shares of Series H Preferred Stock, plus accrued dividends totaling $8750.00
are being exchanged for the Series E Preferred Stock and the 5087 shares of
Series E Preferred Stock are being purchased in reliance on specific

 

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exemptions from the registration requirements of United States federal
and state securities laws and that the Company is relying upon the truth and
accuracy of, and Pinnacle’s compliance with, the representations, warranties,
agreements, acknowledgements and understandings of Pinnacle set forth herein in
order to determine the availability of such exemptions and the eligibility of
Pinnacle to acquire the Preferred Stock.

 

d.              Pinnacle and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the exchange of the Series
H Preferred Stock and the issuance of Series E Preferred Stock which have been
requested by Pinnacle.  Pinnacle and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory answers to any such
inquiries;

 

e.               Pinnacle understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Series E
Preferred Shares.

 

f.                 This Agreement has been duly and
validly authorized, executed and delivered on behalf of Pinnacle and is a valid
and binding agreement of Pinnacle enforceable in accordance with its terms,
subject as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors’ rights generally.

 

4.                                      Company Representations, Etc.  The Company represents and warrants to
Pinnacle that:

 

a.          Concerning the Common Stock. 
There are no preemptive rights of any stockholder of the Company, as
such, to acquire the Company’s Series E Preferred.

 

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b.         Reporting Company Status. 
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the requisite
corporate power to own its properties and to carry on its business as now being
conducted.  The Company is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary other than those jurisdictions in
which the failure to so qualify would not have a material and adverse effect on
the business, operations, properties, prospects or condition (financial or
otherwise) of the Company.  The Company
has registered its Common Stock pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the “1934 Act”), and the Common Stock is
listed and traded on the OTC Bulletin Board Market.

 

c.          Authorized Shares. The shares of Series E Preferred Stock to
be issued pursuant to this agreement and the Shares of Common Stock issuable
upon conversion of the Series E Preferred Stock have been duly authorized and,
when issued to Pinnacle, will be duly and validly issued, fully paid and
non-assessable and will not subject the holder thereof to personal liability by
reason of being such holder.

 

d.         Conversion Agreement. 
This Agreement and the transactions contemplated hereby, have been duly
and validly authorized by the Company. 
This Agreement has been duly executed and delivered by the Company and
is a valid and binding agreement of the Company enforceable in accordance with
its terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement
of creditors’ rights generally.

 

e.          Non-contravention.  The
execution and delivery of this Agreement by the Company, the issuance of the
Series E Preferred Stock, and the consummation by the Company

 

4

 

of the other transactions contemplated by this Agreement do not and
will not conflict with or result in a breach by the Company of any of the terms
or provisions of, or constitute a default under (i) the articles of
incorporation or by-laws of the Company, (ii) any indenture, mortgage, deed of
trust, or other material agreement or instrument to which the Company is a
party or by which it or any of its properties or assets are bound, (iii) to its
knowledge, any existing applicable law, rule, or regulation or any applicable
decree, judgment, or (iv) to its knowledge, order of any court, United States
federal or state regulatory body, administrative agency, or other governmental
body having jurisdiction over the Company or any of its properties or assets,
except such conflict, breach or default which would not have a material adverse
effect on the transactions contemplated herein. The Company is not in violation
of any material laws, governmental orders, rules, regulations or ordinances to
which its  property, real, personal,
mixed, tangible or intangible,  or its
businesses related to such properties, are subject.

 

f.            Approvals.  No authorization,
approval or consent of any court, governmental body, regulatory agency,
self-regulatory organization, or stock exchange or market is required to be
obtained by the Company for the issuance and sale of the Series E Preferred
Stock to Pinnacle as contemplated by this Agreement, except such
authorizations, approvals and consents that have been obtained.

 

g.         SEC Documents, Financial Statements. 
The Common Stock of the Company is registered pursuant to Section 12(g)
of the 1934 Act and the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act, including material filed
pursuant to Section 13(a) or 15(d), in addition to one or more registration

 

5

 

statements and amendments thereto heretofore filed by the Company with
the SEC under the Act (all of the foregoing including filings incorporated by
reference therein being referred to herein as the “SEC Documents”).  The Company, through its agent, has
delivered to Pinnacle true and complete copies of the SEC Documents (except for
exhibits and incorporated documents). 
The Company has not provided to Pinnacle any information which,
according to applicable law, rule or regulation, should have been disclosed
publicly by the Company but which has not been so disclosed, other than with
respect to the transactions contemplated by this Agreement.

 

As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Act or the Exchange Act as the
case may be and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC or other applicable rules and regulations with respect thereto.  Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes
or may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof

 

6

 

and the
results of operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments).

 

h.         Absence of Certain Changes. 
Since March 31, 2003, there has been no material adverse change and no
material adverse development in the business, properties, operations, financial
condition, or results of operations of the Company, except as set forth in the
Company’s Form 10-Q filed with the SEC on May 1, 2003.

 

i.             Full Disclosure. 
There is no fact known to the Company (other than general economic
conditions known to the public generally) or as disclosed in the documents
referred to in Section 4(g), that has not been disclosed in writing to Pinnacle
that (i) would reasonably be expected to have a material adverse effect on the
business or financial condition of the Company or (ii) would reasonably be
expected to materially and adversely affect the ability of the Company to
perform its obligations pursuant to this Agreement.

 

5.                                      Certain Covenants And Acknowledgments.

 

a.          Filings.  The Company undertakes and agrees to make all necessary filings
in connection with the exchange of the Series E Preferred Stock to Pinnacle
under any United States laws and regulations, or by any domestic securities
exchange or trading market, and to provide a copy thereof to Pinnacle promptly
after such filing.

 

b.         Reporting Status.  So long as Pinnacle beneficially owns any of
the Series E Preferred Stock, the Company shall file all reports required to be
filed with the SEC pursuant to Section 13 or 15(d) of the 1934 Act,  and the Company shall not terminate its
status as an issuer required to file reports under the 1934 Act even if the
1934 Act or the rules and regulations thereunder would permit such termination.

 

7

 

6.                                      Covenant to Register.

 

a.               For purposes of this Section, the
following definitions shall apply:

 

i.                                          The
terms “register”, “registered” and “registration” refer to a registration under
the 1933 Act, effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act, and the declaration or
ordering of effectiveness of such registration statement, document or amendment
thereto.

 

ii.                                       The
term “Registrable Securities” means the Series E Preferred Stock, and any
securities of the Company or securities of any successor corporation issued as
or issuable upon the conversion or exercise of any warrant, right or other
security that is issued as a dividend or other distribution with respect to, or
in exchange for, or in replacement of, the Series E Preferred Stock.

 

iii.                                    The
term “holder of Registrable Securities” means Pinnacle and any permitted
assignee of registration rights pursuant to Section 6(g).

 

b.                                       i.                                       The
Company shall use its best efforts to prepare and file a registration statement
on Form S-1 within sixty (60) days of the date hereof and cause such
registration statement to become effective as soon as possible, but no later
than one hundred and twenty (120) days from the date of this Agreement.

 

ii.                                       The
Company may suspend, on no more than two (2) occasions per twelve-month period,
the effectiveness of any registration effected pursuant to this Subsection (b)
in the event and for such period of time as, such a suspension is required by
the rules and regulations of the Securities and Exchange Commission
(“SEC”).  The Company will use its best
efforts to cause such suspension to terminate at the earliest possible date.

 

8

 

iii.                                    If
a registration statement covering all Registrable Securities is not effective
by one hundred and twenty (120) days after the date of this Agreement (the
“Target Date”), the Company shall pay Pinnacle as liquidated damages an amount
equal to fifteen percent (15%) of the total Purchase Price of the Series E
Preferred Stock.  Thereafter, the
Company will pay additional penalty payments of fifteen percent (15%) of the
purchase price of the Series E Preferred Stock for every successive one hundred
and twenty (120) day period that a registration statement has still not been
declared effective.  Each such payment
shall be made to Pinnacle by cashier’s check or wire transfer in immediately
available funds to such account as shall be designated in writing by Pinnacle.

 

c.               Whenever required under this Section 6
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:

 

i.                                          Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the 1933 Act
with respect to the disposition of all securities covered by such registration
statement and notify the holders of the filing and effectiveness of such
Registration statement and any amendments or supplements;

 

ii.                                       Furnish
to Pinnacle such numbers of copies of a current prospectus, including
preliminary prospectus, conforming with the requirements of the 1933 Act,
copies of the registration statement any amendment or supplement to any thereof
and any documents incorporated by reference therein, and such other documents
as Pinnacle may reasonably require in order to facilitate the

 

9

 

 

disposition of the shares of Common Stock issuable under the Series E
Preferred Stock;

 

iii.                                    Use
its best efforts to register and qualify the securities covered by such
registration statement under such other securities or “Blue Sky” laws of such
jurisdictions as shall be reasonably requested by Pinnacle;

 

iv.                                   Notify
Pinnacle immediately of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and use its best efforts to
promptly update and/or correct such prospectus.

 

d.              Upon request of the Company, Pinnacle
will furnish to the Company in connection with any registration under this
Section such information regarding itself, the securities of the Company held
by it, and the intended method of disposition of such securities as shall be
reasonably required to affect the registration of the  securities held by Pinnacle.

 

e.                                        i.                                       To
the fullest extent permitted by law, the Company shall indemnify, defend and
hold harmless Pinnacle and each holder of Registrable Securities which are
included in a registration statement and each of its officers, directors,
employees, agents, partners or controlling persons (within the meaning of the
1933 Act) (each, an “indemnified party”) from and against, and shall reimburse
such indemnified party with respect to, any and all claims, suits, demands,
causes of action, losses, damages, liabilities, costs or expenses
(“Liabilities”) to which such indemnified party may become subject under the
1933 Act or otherwise,

 

10

 

arising from or relating to (A) any untrue statement or alleged untrue
statement of any material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement thereto, or (B) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, however, that the Company shall
not be liable in any such case to the extent that any such Liability arises out
of or is based upon an untrue statement or omission so made in strict
conformity with information furnished by such indemnified party in writing
specifically for use in the registration statement.

 

ii.                                       In
the event of any registration under the 1933 Act of Registrable Securities,
Pinnacle agrees to indemnity, defend and hold harmless the Company, and its
officers, directors, employees, agents, partners, or controlling persons
(within the meaning of the 1933 Act) (each, an “indemnified party”) from and
against, and shall reimburse such indemnified party with respect to, any and
all Liabilities to which such indemnified party may become subject under the
1933 Act or otherwise, arising from or relating to (A) any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or (B) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;  provided,
that  Pinnacle will be
liable in any such case to the extent and only to the extent, that any such
Liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or

 

11

 

alleged omission made in such registration statement, prospectus or
amendment or supplement thereto in reliance upon and in conformity with written
information furnished by Pinnacle specifically for use in the preparation
thereof, and such Liability may in no event exceed the value of the Registrable
Securities so registered.

 

iii.                                    Promptly
after receipt by any indemnified party of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against another party (the “indemnifying party”) hereunder, notify such
party in writing thereof, but the omission so to notify such party shall not
relieve such party from any Liability which it may have to the indemnified
party other than under this Section and shall only relieve it from any
Liability which it may have to the indemnified party under this Section if and
to the extent an indemnifying party is materially prejudiced by such
omission.  In case any such action shall
be brought against any indemnified party and such indemnified party shall
notify an indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in and, to the extent it shall wish, to assume
and undertake the defense thereof with counsel reasonably satisfactory to such
indemnified party, and, after notice from the indemnifying party to the
indemnified party of its election so to assume and undertake the defense
thereof, the indemnifying party shall not be liable to the indemnified party
under this Section for any legal expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided, however, that if the defendants
in any such action include both parties and the indemnified party shall have

 

12

 

reasonably concluded that there may be reasonable defenses available to
them which are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party reasonably may
be deemed to conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such
action, with the reasonable expenses and fees of one such separate counsel and
other reasonable expenses related to such participation to be reimbursed by the
indemnifying party as incurred.

 

f.                 With respect to the above-referenced
registration statement, all fees, costs and expenses of and incidental to such
registration, inclusion and public offering shall be borne by the Company,
except any underwriting discounts and commissions.

 

g.              The rights to cause the Company to
register all or any portion of securities pursuant to this Section 6 may be
assigned by Pinnacle to a proper transferee or assignee as described
herein.  Within a reasonable time after
such transfer, Pinnacle shall notify the Company of the name and address of
such transferee or assignee, and the securities with respect to which such
registration rights are being assigned. 
Such assignment shall be effective only if, (i) Pinnacle agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
transfer or assignment (subject to the purchase price of the shares being kept
confidential by Pinnacle and such transferee or assignee), (ii) the
Company  is, within a reasonable time
after such transfer or assignment, furnished with written notice of (A) the
name and address of such transferee or assignee, (B) the securities with
respect to which such registration rights are being assigned, (iii) following
such transfer or

 

13

 

assignment,
the further disposition of the Registrable Securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws,
(iv) at or before the time that the Company receives the written notice
contemplated by clause (ii) of this sentence the transferee or assignee agrees
in writing with the Company to be bound by all of the provisions contained
herein, (v) such transfer shall have been made in accordance with the
applicable requirements of the purchase agreement covering the transaction and
(vi) such transferee shall be an “accredited investor”, as that term is defined
in Rule 501 of Regulation D, promulgated under the 1933 Act.

 

7.                                      Governing Law: 
Miscellaneous. 
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York.  A
facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto.  This Agreement may
be signed in one or more counterparts, each of which shall be deemed an
original.  The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.  If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.  This Agreement may be amended only by an
instrument in writing signed by the party to be charged with enforcement.  This Agreement, and the related agreements
referred to herein, contain the entire agreement of the parties with respect to
the subject matter hereto, superceding all prior agreements, understandings or
discussions.

 

8.                                      Notices.  Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given, (i) on the date delivered, (a) by personal delivery, or (b) if advance
copy is given by fax, (ii) seven business days after deposit

 

14

 

in the United States Postal Service by regular or certified mail, or
(iii) three business days mailing by international express courier, with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses,
or at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.

 

	
   

  	
  COMPANY:

  	
   

  	
  STRATUS SERVICES GROUP, INC.

  
	
   

  	
   

  	
   

  	
  500 Craig Road, Suite 201

  
	
   

  	
   

  	
   

  	
  Manalapan, NJ 07726

  
	
   

  	
   

  	
   

  	
  Attn: Suzette Nanovic Berrios, Esq.

  
	
   

  	
   

  	
   

  	
  Telecopier No.: (732) 866-6676

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PINNACLE:

  	
   

  	
  PINNACLE INVESTMENT PARTNERS, L.P.

  
	
   

  	
   

  	
   

  	
  The Trump Building

  
	
   

  	
   

  	
   

  	
  40 Wall Street, 33rd Floor

  
	
   

  	
   

  	
   

  	
  New York, New York 10005

  
	
   

  	
   

  	
   

  	
  Attn: Mr. Chris Janish

  
	
   

  	
   

  	
   

  	
  Telecopier No.: (212) 480-9933

  

 

9.                                      Successors And Assigns.   This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

IN WITNESS WHEREOF,
the Company and Pinnacle have caused this Agreement to be executed by their
duly authorized representatives on the date as first written above.

 

	
   

  	
   

  	
  STRATUS SERVICES GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  s/ Michael A. Maltzman

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Michael Maltzman

  
	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PINNACLE INVESTMENT PARTNERS, L.P.

  
	
   

  	
   

  	
  By: 

  	
  PIP Management, Inc., General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  s/ Christopher Janish

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christopher Janish

  
	
   

  	
   

  	
  Title:

  	
  President

  
								

 

15Exhibit 10.1

Amendment to Employment
Agreement

This Amendment to Employment Agreement (this “Amendment”)
is made as of the 1st day of May, 2003, by and between TESSCO Technologies
Incorporated, a Delaware corporation (the “Company”) and Robert B. Barnhill, Jr.  (the “Executive”).

Introductory Statement

The Company and Executive
entered into an Employment Agreement dated as of February 1, 1994 (as amended
to date the “Existing Agreement”). The parties desire to amend certain
provisions of the Existing Agreement to be effective from and after the date
hereof.

Now, Therefore, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

A.            All capitalized terms not otherwise defined in this Amendment
shall have the meanings set forth in the Existing Agreement.

B.            Section 2.3.2 of the Existing Agreement is hereby amended
in it entirety to read as follows:

2.3.2. The Executive shall be entitled to continue to
receive his existing employee benefits, including, without limitation, pension,
disability, group life, sickness, accident and health insurance programs, and
perquisites provided by the Corporation to executives which are equal to or
greater than the employee benefits and perquisites then provided by the
Corporation to executives with comparable authority or duties (and in any event
not lesser than those provided to executives with junior authority or duties).
Currently, Executive has been provided with the insurance policies listed on Exhibit
B, which shall be continued. Specifically, Executive shall continue to be
provided with (i) a long-term disability policy which provides benefits to
Executive at not less than 70% of his annual base salary and (ii) in addition
to any bonus to which Executive is entitled under paragraph 2.1 of this
Agreement or otherwise, an additional annual bonus (the “Premium-Payment Bonus”) in an amount
sufficient to provide the Executive with an after-tax benefit equivalent to the
benefit heretofore provided by the Corporation to the Executive under the
split-dollar life insurance policy in place prior to the date hereof.

C.            Section 3.2.1(b)(iii) of the Existing Agreement is hereby
amended in it entirety to read as follows:

(iii) continuation of, or
(in lieu thereof) a Tax-Effected cash payment in an amount equal to the value
of, the employee benefits (including but not limited to coverage under any
disability, group life, sickness, accident and health insurance programs and
other life insurance arrangements or programs) to which the Executive would
have been entitled under this Agreement had he remained in the employ of the
Corporation for the remainder 

 

of the Employment Period following the date of
termination (including, without limitation, the health, disability, and life
insurance coverage described in subparagraph 3.2.2 below) plus payment of any
Premium-Payment Bonus otherwise required under subparagraph 2.3.2 above for the
remainder of the Employment Period following the date of termination.

D.            Except as amended by this Amendment, the provisions of
the Existing Agreement shall remain in full force and effect and are hereby
ratified and affirmed.

In Witness
Whereof, the
parties have executed this Amendment as of the day and year first above
written.

 

	
   

  	
  TESSCO TECHNOLOGIES INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lynn Schwartz

  
	
   

  	
   

  	
  Name:   Mary Lynn Schwartz

  
	
   

  	
   

  	
  Title:   Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Robert B. Barnhill,
  Jr.

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  

 

2

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