Document:

EX-10.7

EXHIBIT 10.7

December 21, 2006

Mr. Dennis J. Getman

Executive Vice President and

General Counsel

Avatar Holdings Inc.

201 Alhambra Circle

12th Floor

Coral Gables, FL 33134

Dear Mr. Getman:

Reference is made to the following agreements:

(1) the Employment Agreement, dated as of September 11, 2003, by and between Avatar Holdings
Inc., a Delaware corporation (the “Company”), and Dennis J. Getman (the
“Employee”), as amended on August 11, 2004 (the “Employment Agreement”); and

(2) the Option Agreement, dated as of October 20, 2006, by and between Avatar Properties Inc.,
a Florida corporation (“Properties”), and The Nature Conservancy, a nonprofit District of
Columbia corporation (the “Option Agreement”). Capitalized terms used herein but not
defined herein shall have the meanings ascribed to such terms in the Employment Agreement.

The Company and the Employee are currently in discussions to extend the term of the Employee’s
employment with the Company and to modify various other terms and conditions set forth in the
Employment Agreement. In connection therewith, the Company hereby grants to the Employee,
effective as of the date of this letter, a limited waiver of the Initial Annual Cap (as defined in
the Employment Agreement) with respect to any sale pursuant to the Option Agreement for which the
Employee would be entitled to receive Additional Compensation; provided, however,
that the Initial Annual Cap shall be deemed to be $350,000 with respect to any such sale unless
otherwise agreed in writing by the Company and the Employee.

(signature page follows)

1

Please evidence your agreement with the foregoing by executing a copy of this letter agreement
and returning it to Avatar.

Very truly yours,

Avatar Holdings Inc.

	 	 	 
	By:

	 	/s/ Gerald D. Kelfer
	
 
	 	 
	
 
	 	Name: Gerald D. Kelfer

Title: Chief Executive Officer

	 	 	Avatar Properties Inc.

	 	 	 	 	 
	
 
	 	By:
	 	/s/ Gerald D. Kelfer
	
 
	 	 	 	 
	
 
	 	 	 	Name: Gerald D. Kelfer

Title: Chief Executive Officer
	 
	 	 	 	 
	Acknowledged and agreed to as of

the date first written above:

	 	

	 	

	 
	 	 	 	 
	/s/ Dennis J. Getman

	 	

	 	

	 

	 	

	 	

	Dennis J. Getman

	 	

	 	

	 
	 	 	 	 

2Amendment to Revolving Credit and term Loan Agreement

    Exhibit
      10.5

    

    THIRD
      AMENDMENT TO REVOLVING CREDIT

    AND
      TERM LOAN AGREEMENT

    

    

    THIS
      THIRD AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (“Amendment”) is
      made effective this 20th day of November, 2006, by and between ADDVANTAGE
      TECHNOLOGIES GROUP, INC.,
      an
      Oklahoma corporation (“Borrower”) and BANK
      OF OKLAHOMA, N.A.
      (“Lender”).

    

    RECITALS

    

    A. Reference
      is made to the Revolving Credit and Term Loan Agreement between Borrower and
      Lender dated September 30, 2004, amended September 30, 2005 and amended
      September 30, 2006 (as amended, the “Credit Agreement”), pursuant to which
      exists a $7,000,000 Revolving Line and an $8,000,000 Term Loan. Terms used
      herein shall have the meanings ascribed to them in the Credit Agreement unless
      otherwise defined herein.

    

    B. Borrower
      has requested that Lender renew the $7,000,000 Revolving Line and establish
      a
      new Term Loan in the amount of $2,760,000 to enable Borrower to acquire certain
      property located in Broken Arrow, Oklahoma; and Lender is willing to accommodate
      such requests pursuant to the terms and conditions set forth in this
      Amendment.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein, Borrower
      and Lender do hereby agree as follows:

    

    1.  AMENDMENT
      TO THE CREDIT AGREEMENT.

    

    
      	1.1.  	
              Section
                1.37 (Note) is hereby amended to additionally include the $2,760,000
                Promissory Note.

            

    

    

    
      	1.2.  	
              The
                Pricing Grid attached as Schedule "1.38" to the Credit Agreement
                is hereby
                amended and replaced by the Pricing Grid attached as Schedule
                "1.2"
                to this Amendment.

            

    

    

    

    
      	1.3.  	
              A
                new Section 2.4 is hereby added to the Credit Agreement, to
                wit:

            

    

    

    “2.4.
       $2,760,000
      Term Loan.
      Subject to the terms and conditions of this Agreement, the Lender agrees to
      loan
      to Borrower $2,760,000, to be further evidenced by the $2,760,000 Term Note.
      The
      purpose of the advance under the $2,760,000 Term Note is to enable Borrower
      to
      purchase certain property located in Broken Arrow, Oklahoma (“Property”). At
      closing, the Borrower shall execute and deliver to Lender the Mortgage Related
      Documents.”

    

    
      	1.4.  	
              The
                term “Mortgage Related Documents” shall mean, separately and collectively,
                the following, all of which must be in form and content satisfactory
                to
                Lender: 

            

    

    

    
      	(i)  	
              Title
                insurance commitment (with a title insurance policy with thirty days
                of
                funding).

            

    

    
      	(ii)  	
              Survey.

            

    

    
      	(iii)  	
              Insurance
                certificates (hazard and
                liability).

            

    

    
      	(iv)  	
              Flood
                zone verification.

            

    

    
      	(v)  	
              Environmental
                information.

            

    

    
      	(vi)  	
              A
                Mortgage in form and content as set forth on Schedule
                “1.5 (vi)”
                attached to this Amendment.

            

    

    
      	(vii)  	
              Appraisal.

            

    

    
      	(viii)  	
              Any
                other documents or agreements required by
                Lender.

            

    

    

    
      	1.5.  	
              Section
                8.3 (Effective Net Worth) is hereby amended to replace the amount
                “$15,000,000” with “$20,000,000”. 

            

    

    

    2.  CONDITIONS
      PRECEDENT.

    

    2.1.  Borrower
      shall execute and /or deliver to Lender the following:

    

    2.1.1.  This
      Amendment;

    

    2.1.2.  The
      $7,000,000 promissory Note in form and content set forth on Schedule
      “2.1.2”
      to
      this Amendment;

    

    2.1.3.  The
      $2,760,000 Term Loan, in form and content set forth on Schedule
      “2.1.3”
      to
      this Amendment; 

    

    2.1.4.  The
      Mortgage Related Documents;

    

    2.1.5.  Updated
      authority resolutions from the Borrower and each of the Guarantors, in form
      and
      content as set on  
                                      
forth on Schedule
      “2.1.5”
      to
      this Amendment;

    

    2.1.6.  Certificates
      of Good Standing from the Borrower and each of the Guarantors; and

    

    2.1.7.  any
      other instruments, documents or agreements reasonably requested by Lender in
      connection herewith.

    

    3.  Representations.
      As
      inducement for Lender to agree to this Amendment, the Borrower represents and
      warrants to Lender as follows: (i) all representations and warranties set forth
      in the Credit Agreement and other Loan Documents remain true and correct as
      of
      the date hereof, and all schedules remain true and correct; (ii) no Initial
      Default or Matured Default exists under the Credit Agreement or any other Loan
      Documents, and none shall arise as a result of the execution and performance
      under this Amendment and/or any documents executed and/or delivered by Borrower
      in connection herewith.

    

    4.  Ratification
      of and Amendment to Documents.
      Borrower hereby ratifies and confirms the Credit Agreement, together with all
      security agreements, financing statements, instruments, documents and/or
      agreements executed and/or delivered by Borrowers to Lender in connection
      therewith (ALoan
      Documents@),
      and
      Borrower acknowledges, agrees, represents and warrants that the Loan Documents
      are in full force and effect, binding and enforceable in accordance with their
      terms.

    

    5.  Ratification
      of Guaranty.
      Each
      Guarantor, by execution of the ratification following the signature page hereof,
      hereby agrees to the renewal of the $7,000,000 Revolving Line and the
      establishment of the $2,760,000 term loan, and hereby ratifies and confirms
      its
      Guaranty Agreement; and further confirms that, after giving effect to the
      amendments provided for herein, the Guaranty Agreement shall continue in full
      force and effect, and that each representation and warranty set forth therein
      remains true and correct as of the date hereof, and that the guaranteed
      indebtedness additionally includes the $2,760,000 Promissory Note, together
      with
      extensions and renewals thereto.

    

    6.  Governing
      Law and Binding Effect.
      This
      Amendment shall be governed by and construed in accordance with the laws of
      the
      State of Oklahoma, and it, together with all documents executed and delivered
      in
      connection herewith, shall be binding upon the parties hereto, their respective
      successors and assigns.

    

    7.  USA
      Patriot Act Notification.
      IMPORTANT
      INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
      fight the funding of terrorism and money laundering activities, Federal law
      requires all financial institutions to obtain, verify, and record information
      that identifies each person or entity that opens an account, including any
      deposit account, treasury management account, loan, other extension of credit,
      or other financial services product. What this means for Borrower: When Borrower
      opens an account, if Borrower is an individual, Lender will ask for Borrower's
      name, taxpayer identification number, residential address, date of birth, and
      other information that will allow Lender to identify Borrower, and, if Borrower
      is not an individual, Lender will ask for Borrower's name, taxpayer
      identification number, business address, and other information that will allow
      Lender to identify Borrower. Lender may also ask, if Borrower is an individual,
      to see Borrower's driver’s license or other identifying documents, and, if
      Borrower is not an individual, to see Borrower's legal organizational documents
      or other identifying documents.

    

    8.  
      Fees.
      Borrower shall not be obligated to pay the attorney fees incurred by Bank in
      connection with the preparation of this Amendment. 

    

    
      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
      by
      their respective officers thereunto duly authorized, as of the date first above
      written.

    

    

    "Borrower"

    

    ADDVANTAGE
      TECHNOLOGIES GROUP, INC.,
      an
      Oklahoma corporation

    

    

    By
       /s/
      Kenneth A. Chymiak 

    Ken
      Chymiak, President and Chief 

                Executive
      Officer

    

    

    

    “Lender"

    

    BANK
      OF OKLAHOMA, N.A.

    

    

    By
       /s/
      W. Mack Renner  

    W.
      Mack
      Renner, Assistant Vice President 

    
      
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    RATIFICATION
      OF GUARANTY

    

    As
      inducement for the Lender to enter into the Third Amendment to Revolving Credit
      and Term Loan Agreement (“Amendment”) dated effective November 20, 2006, to
      which this Ratification is affixed, the undersigned Guarantors each hereby
      agree
      to Section 5 of the Amendment and further hereby ratifies and confirms its
      Guaranty Agreement.

    

    Tulsat
      Corporation,
      an
      Oklahoma corporation

    

    

    By
       /s/
      David E. Chymiak  

    David
      Chymiak, President

    

    ADDvantage
      Technologies Group of Missouri, Inc.,
      a
      Missouri corporation

    

    

    By
       /s/
      David E. Chymiak  

    David
      Chymiak, Vice President

    

    ADDvantage
      Technologies Group of Nebraska, Inc.,
      a
      Nebraska corporation

    

    

    By
       /s/
      Kenneth A. Chymiak 

    Ken
      Chymiak, Vice President

    

    ADDvantage
      Technologies Group of Texas, Inc.,
      a
      Texas corporation

    

    

    By
       /s/
      Kenneth A. Chymiak 

    Ken
      Chymiak, Vice President

    

    NCS
      Industries, Inc.,
      a
      Pennsylvania corporation

    

    

    By
       /s/
      David E. Chymiak  

    David
      Chymiak, President

    

    Tulsat-Atlanta,
      L.L.C.,
      an
      Oklahoma limited liability company

    (a
      subsidiary of Tulsat Corporation)

    

    By:
      ADDvantage Technologies Group, Inc.,

    Its
      sole member and Manager 

     

    By
       /s/
      David E. Chymiak  

    David
      Chymiak, Chairman of the Board

    

    
      
        
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    Schedule
      "1.2"

    

    (Note
      Rate Pricing Grid)

    

    

    
      	
              Leverage
                Ratio

              (Funded
                Debt to EBITDA)

            	
              Prime
                Option

              Line
                Note $8,000,000 $2,760,000 Term Note Term Note

            	
              LIBOR
                Option

              Line
                Note $8,000,000 $2,760,000

              Term
                Note Term Loan

            
	
              >3.00x

            	
              -0.25%

            	
              0.25%

            	
              N/A

            	
              2.50%

            	
              3.00%

            	
              1.50%

            
	
              >2.25x
                <=3.00x

            	
              -0.50%

            	
              0.00%

            	
              N/A

            	
              2.25%

            	
              2.75%

            	
              1.50%

            
	
              >1.50x
                <=2.25x

            	
              -0.75%

            	
              -0.25%

            	
              N/A

            	
              2.00%

            	
              2.50%

            	
              1.50%

            
	
              <
                1.50x

            	
              -1.00%

            	
              -0.50%

            	
              N/A

            	
              1.75%

            	
              2.25%

            	
              1.50%

            

    

    

    

    The
      Note Rate shall be determined in accordance with the foregoing table based
      on
      the Leverage Ratio as reflected in the then most recent Financials. Adjustments,
      if any, to the Note Rate shall be effective five (5) Business Days after the
      Lender has received the applicable Financials. If the Borrower fails to deliver
      the Financials to the Lender at the time required pursuant to Section 6.1,
      then
      the Note Rate shall include the highest Margin set forth in the foregoing table
      until five (5) Business Days after such Financials are so
      delivered.

    

    The
      term “Financials” means the annual or quarterly consolidated financial
      statements of the Borrower required to be delivered pursuant to Section 6.1
      of
      the Revolving Credit and Term Loan Agreement.

    

    
      
        
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    Schedule
      "2.1.5"

    

    (Updated
      Authority Resolutions:

    

    1. Secretary's
      Certificate of ADDvantage Technologies Group, Inc.

    2. Secretary's
      Certificate of ADDvantage Technologies Group of Missouri, Inc.

    3. Secretary's
      Certificate of NCS Industries, Inc.

    4. Secretary's
      Certificate of ADDvantage Technology Group of Nebraska, Inc.

    5. Secretary's
      Certificate of Tulsat Corporation

    6. Limited
      Liability Company Certificate of Tulsat-Atlanta, L.L.C.

    7. Secretary's
      Certificate of ADDvantage Technology Group of Texas,
      Inc.

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