Document:

Exhibit 10.1

 

AMENDED AND RESTATED
REVOLVING NOTE

 

 

	$10,000,000	May 7, 2015

 

FOR VALUE RECEIVED, the undersigned COMMUNICATIONS
Systems, Inc., a Minnesota corporation (“Communications Systems”), JDL TECHNOLOGIES, INCORPORATED, a
Minnesota corporation (“JDL”), TRANSITION NETWORKS, INC., a Minnesota corporation (“Transition Networks”),
and SUTTLE, INC., a Minnesota corporation (“Suttle”; together with Communications Systems, JDL and Transition
Networks, “Borrowers” and each a “Borrower”), promises to pay on November 1, 2016 (the “Maturity
Date”) to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at MAC N9305-187, 90 South
Seventh Street, Minneapolis, Minnesota, or at such other place as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of $10,000,000, or so much thereof as may be advanced and
be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the following terms shall have the meanings
set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined:

 

(a)      “Daily
One Month LIBOR” means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month
period.

 

(b)       “LIBOR”
the rate of interest per annum determined by Bank based on the rate for United States dollar deposits for delivery of funds for
one (1) month as reported on Reuters Screen LIBOR01 page (or any successor page) at approximately 11:00 a.m., London time, or,
for any day not a London Business Day, the immediately preceding London Business Day (or if not so reported, then as determined
by Bank from another recognized source or interbank quotation).

(c)      “London
Business Day” means any day that is a day for trading by and between banks in Dollar deposits in the London interbank
market.

INTEREST:

 

(a)      Interest. The outstanding principal balance
of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) at a fluctuating rate per annum
determined by Bank to be 1.75% above Daily One Month LIBOR in effect from time to time. Bank is hereby authorized to note the date
and interest rate applicable to this Note and any payments made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information
noted.

 

(b)      Taxes and Regulatory Costs. Borrowers
shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign
governmental authority and related in any manner to LIBOR, and (ii) costs, expenses and liabilities arising from or in connection
with reserve percentages prescribed by the Board of Governors of the Federal Reserve System (or any successor) for "Eurocurrency
Liabilities" (as defined in Regulation D of the Federal Reserve Board, as amended), assessment rates imposed by the Federal
Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting
from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental
authority and related in any manner to LIBOR. In determining which of the foregoing are attributable to any LIBOR option available
to Borrowers hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower.

    	 

    	 

    

 

(c)      Payment of Interest. Interest accrued
on this Note shall be payable on the first day of each month, commencing June 1, 2015.

 

(d)      Default Interest. From and after the maturity
date of this Note, or such earlier date as all principal owing hereunder becomes due and payable by acceleration or otherwise,
or at Bank's option upon the occurrence, and during the continuance of an Event of Default, the outstanding principal balance of
this Note shall bear interest at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal
to four percent (4%) above the rate of interest from time to time applicable to this Note.

 

BORROWING AND REPAYMENT:

 

(a)      Borrowing and Repayment. Borrowers may
from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions of this Note and of any document executed in connection with or governing this
Note; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount
stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for Borrowers, which balance may be endorsed hereon from
time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on the Maturity Date.

 

(b)      Advances. Advances hereunder, to the total
amount of the principal sum stated above, may be made by the holder at the oral or written request of any officer of any Borrower,
until written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any
person, with respect to advances deposited to the credit of any deposit account of any Borrower, which advances, when so deposited,
shall be conclusively presumed to have been made to or for the benefit of Borrowers regardless of the fact that persons other than
those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by Borrowers.

 

(c)      Application of Payments. Each payment
made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the
terms and conditions of that certain Credit Agreement among Borrowers and Bank dated as of October 28, 2011, as amended by that
certain First Amendment to Credit Agreement and Waiver of Event of Default dated as of November 28, 2012, that certain Second Amendment
to Credit Agreement and Waiver of Event of Default dated as of November 14, 2013, that certain Third Amendment to Credit Agreement
and First Amendment to Amended and Restated Revolving Note dated as of October 31, 2014 and that certain Fourth Amendment to Credit
Agreement and Waiver of Event of Default of even date herewith (as the same has been and may be further amended, restated, supplemented
or otherwise modified from time to time, the “Credit Agreement”). Any default in the payment or performance
of any obligation under this Note, or the occurrence of any Event of Default (as defined in the Credit Agreement) under the Credit
Agreement, shall constitute an “Event of Default” under this Note.

 

    	-2-

    	 

    

 

MISCELLANEOUS:

 

(a)      Remedies. Upon the occurrence of any Event
of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest outstanding hereunder
to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit
hereunder shall immediately cease and terminate. Borrowers shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred
at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection
with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to Borrowers or any other person or entity.

 

(b)      Obligations Joint and Several. Should
more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several.

 

(c)      Governing Law. This Note shall be governed
by and construed in accordance with the laws of the State of Minnesota.

 

(d)      Amendment and Restatement. This Note amends
and restates in its entirety that certain Amended and Restated Revolving Line of Credit Note dated as of November 28, 2012 issued
by the Borrowers in the original principal amount of $10,000,000, as amended by that certain Third Amendment to Credit Agreement
and First Amendment to Amended and Restated Revolving Note dated as of October 31, 2014 (as amended to date, the “Prior
Note”). This Note is issued in substitution for and in replacement of, but not in payment or novation of, the obligations
of Borrowers under the Prior Note.

 

Signature page follows

 

 

 

 

 

 

 

 

 

    	-3-

    	 

    

IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first written above.

 

	 	COMMUNICATIONS SYSTEMS, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	JDL TECHNOLOGIES, INCORPORATED
	 	 	 
	 	By:  	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	TRANSITION NETWORKS, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	SUTTLE, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 

 

 

 

 

 

 

 

 

Signature Page to Amended and Restated Revolving
NoteExhibit 10.2

 

FOURTH AMENDMENT
TO CREDIT AGREEMENT AND

WAIVER OF
EVENT OF DEFAULT

This Fourth Amendment to Credit
Agreement and Waiver of Event of Default (this “Amendment”), dated as of May 7, 2015, is entered into by and
between COMMUNICATIONS SYSTEMS, INC., a Minnesota corporation (“Communications Systems”), JDL TECHNOLOGIES,
INCORPORATED, a Minnesota corporation (“JDL”), TRANSITION NETWORKS, INC., a Minnesota corporation (“Transition
Networks”), and SUTTLE, INC., a Minnesota corporation (“Suttle”; together with Communications Systems,
JDL and Transition Networks, “Borrowers” and each a “Borrower”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION (“Bank”).

Recitals

Borrowers and Bank are parties
to a Credit Agreement dated as of October 28, 2011, as amended by a First Amendment to Credit Agreement and Waiver of Event of
Default dated as of November 28, 2012, a Second Amendment to Credit Agreement and Waiver of Event of Default dated as of November
14, 2013 and a Third Amendment to Credit Agreement and First Amendment to Amended and Restated Revolving Note dated as of October
31, 2014 (as so amended, and as the same may be further amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”). Capitalized terms used in these recitals have the meanings given to them in the Credit
Agreement unless otherwise specified.

Borrowers have requested that
Bank agree to certain amendments to the Credit Agreement, and Bank has agreed to make such amendments on the terms and conditions
set forth herein.

NOW, THEREFORE, in consideration
of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:

1.                   Definitions.
Capitalized terms used in this Amendment (including in the Recitals) have the meanings given to them in the Credit Agreement unless
otherwise expressly defined in this Amendment.

2.                   Amendments to Credit
Agreement.

(a)               
Section 1.2(c) of the Credit Agreement is hereby amended to replace the phrase “0.125%”
contained therein with the phrase “0.25%”.

(b)              
Section 4.9 of the Credit Agreement is hereby amended to add the following new clause (c)
to the end thereof, to read as follows: 

(c) Maintain Cash of
not less than $15,000,000 at all times. As used in this clause (c), “Cash” means “Cash and cash equivalents,”
“short-term investments,” and “long-term investments,” as computed in accordance with Generally Accepted
Accounting Principles and reported by Communications Systems in its periodic filings with the United States Securities and Exchange
Commission.

3.                   No
Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreement, the
Revolving Note and the other Loan Documents remain in full force and effect.

 

    	 

    	 

    

 

4.                   Waiver of Existing
Event of Default. As a result of the failure of Borrowers to maintain a minimum Net Profit of $3,000,000
as of the quarter ending March 31, 2015, as required by Section 4.9(a)(ii) of the Credit Agreement, an Event of Default has occurred
under Section 6.1(c) of the Credit Agreement (the “Known Event of Default”). Upon the
terms and subject to the conditions set forth in this Amendment, Bank hereby waives the Known Event of Default. This waiver shall
be effective only in this specific instance and for the specific purpose for which it is given, and this waiver shall not entitle
Borrowers to any other or further waiver in any similar or other circumstances.

5.                   Amendment Fee.
Borrowers agree to Bank, a fully-earned, non-refundable fee of $45,000 (the “Amendment Fee”), in consideration
of the amendments and waiver granted hereunder. Borrowers and Bank acknowledge and agree that the Amendment Fee will be paid by
Borrowers to Bank in immediately available funds on the earlier of (a) August 15, 2015 and (b) the occurrence of an Event of Default
or discovery of the existence of any Event of Default not expressly waived prior to the date of this Amendment. Borrowers and Bank
agree, however, that the Amendment Fee will not be due and payable if prior to August 15, 2015, either (i) the Borrowers terminate
the Line of Credit and indefeasibly pay in full all debts, liabilities and obligations owed by Borrowers to Bank, or (ii) Borrowers
and Bank enter into a new amendment to the Credit Agreement that establishes new or revised financial covenants and expressly waives
the Amendment Fee.

6.                   Conditions Precedent.
This Amendment shall be effective when Bank shall have received an executed counterpart of this Amendment, together with each of
the following, each in form and substance acceptable to Bank:

(a)                
an Amended and Restated Revolving Note (the “Amended Note”), duly executed
by each Borrower; 

(b)               
a Joinder Agreement, reflecting the joinder of Suttle to the Credit Agreement and each other
Loan Document as a Borrower thereunder, duly executed by Suttle;

(c)                
a certificate of the secretary of each Borrower: (a) attaching resolutions of the Board
of Directors of such Borrower authorizing the execution, delivery and performance by such Borrower of the Loan Documents, including
this Amendment, the Joinder Agreement (solely with respect to Suttle) and the Amended Note, (b) certifying that the articles
of incorporation of such Borrower delivered by such Borrower to Bank on October 28, 2011 have not been amended or changed in any
respect or, if there has been any amendment or change or if such articles have not yet been delivered to Bank, certifying that
attached to such certificate is a current copy of such articles of incorporation (certified by the Secretary of State of formation),
(c) certifying that the bylaws of such Borrower delivered by such Borrower to Bank on October 28, 2011 have not been amended
or changed in any respect or, if there has been any amendment or change or if such bylaws have not yet been delivered to Bank,
certifying that attached to such certificate is a current copy of such bylaws of such Borrower (if any such bylaws exist), and
(d) containing the names of the officer or officers of such Borrower authorized to sign the Loan Documents, including this
Amendment, the Joinder Agreement (solely with respect to Suttle) and the Amended Note, together with a sample of the true signature
of each such officer, or, if applicable, affirming that each officer or officers previously certified to Bank on October 28, 2011
remain so authorized; together with current good standing certificate for each Borrower; and

(d)                
such other matters as Bank may reasonably require.

    	-2-

    	 

    

 

7.                       Representations and
Warranties. Borrowers hereby represent and warrant to Bank as follows:

(a)                     Each Borrower
has all requisite power and authority to execute this Amendment, the Amended Note and any other agreements or instruments
required hereunder and to perform all of its obligations hereunder, and the Credit Agreement, as amended by this Amendment,
and the other Loan Documents to which such Borrower is a party have been duly executed and delivered by such Borrower and constitute
the legal, valid and binding obligations of such Borrower, enforceable in accordance with their respective terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors’ rights generally.

(b)                     The execution,
delivery and performance by such Borrower of Credit Agreement, as amended by this Amendment, and the other Loan Documents to which
such Borrower is a party have been duly authorized by all necessary corporate action and do not (i) violate any material provision
of federal, state, or local law or regulation applicable to such Borrower, the governing documents of such Borrower, or any order,
judgment, or decree of any court or other governmental authority binding on such Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default under any contract, obligation, indenture or other
instrument to which any Borrower is a party or by which any Borrower may be bound, (iii) result in or require the creation
or imposition of any Lien of any nature whatsoever upon any assets of any Borrower, or (iv) require any approval of such Borrower’s
shareholders or any approval or consent of any other person or entity.

(c)                     All of the
representations and warranties contained in Article II of the Credit Agreement are correct on and as of the date hereof as though
made on and as of the date hereof, except to the extent that such representations and warranties relate solely to an earlier date.

8.                       References. All
references in the Credit Agreement to “this Agreement” shall be deemed to refer to the Credit Agreement as amended
by this Amendment; and any and all references in the other Loan Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended by this Amendment. All references in the Credit Agreement and each other Loan Document to “the
Revolving Note” shall be deemed to refer to the Amended Note.

9.                       No Other Waiver.
Except as expressly set forth therein, the execution of this Amendment and the acceptance of all other agreements and instruments
related hereto shall not be deemed to be a waiver of any default or Event of Default under the Credit Agreement or a waiver of
any breach, default or event of default under any other Loan Document, whether or not known to Bank and whether or not existing
on the date of this Amendment.

10.                   Release. Each
Borrower hereby absolutely and unconditionally releases and forever discharges Bank, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the
present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes
of action of any kind, nature or description arising under, in connection with or related to any of the debts, liabilities or obligations
of Borrowers and/or any Borrower under any of the Loan Documents or any of the Loan Documents, whether arising in law or equity
or upon contract or tort or under any state or federal law or otherwise, which Borrowers and/or any Borrower has had, now has or
has made claim to have against any such person or entity for or by reason of any act, omission, matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action
are matured or unmatured or known or unknown.

 

    	-3-

    	 

    

 

11.                 Costs and Expenses.
Borrowers hereby reaffirm their agreement under Section 7.3 of the Credit Agreement to pay or reimburse Bank with respect to its
costs, expenses and fees, including, without limitation, all reasonable fees and disbursements of legal counsel incurred the Bank
in connection with this Amendment.

12.                 Miscellaneous.
This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original
and all of which counterparts, taken together, shall constitute one and the same instrument. Delivery of an executed signature
page of this Amendment by facsimile transmission or in a pdf or similar electronic file shall be effective as delivery of a manually
executed counterpart thereof.

 

Signature page follows

 

 

 

 

 

    	-4-

    	 

    

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.

 

	 	BORROWERS:
	 	 
	 	COMMUNICATIONS SYSTEMS, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	JDL TECHNOLOGIES, INCORPORATED
	 	 	 
	 	By:  	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	 	 
	 	TRANSITION NETWORKS, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 
	 	 	 
	 	 	 
	 	SUTTLE, INC.
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 

 

 

 

 

 

 

 

 

 

Signature Page to Fourth Amendment to Credit Agreement
and Waiver of Event of Default

 

    	 

    	 

    

 

	 	BANK:
	 	 
	 	WELLS FARGO BANK, NATIONAL
	 	    ASSOCIATION
	 	 	 
	 	By:  	 
	 	Name:  	 
	 	Title:	 

 

 

 

 

 

 

 

 

 

Signature Page to Fourth Amendment to Credit Agreement
and Waiver of Event of Default

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