Exhibit 10.2

 

EXECUTION

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 22,
2012 (this “Amendment”), among API TECHNOLOGIES CORP., a Delaware corporation
(the “Borrower”), MORGAN STANLEY SENIOR FUNDING, INC., as Administrative Agent
under the Credit Agreement referred to below (in such capacity, the
“Administrative Agent”), and the Lenders (as defined below) party hereto.

WHEREAS, the Borrower, Morgan Stanley Senior Funding, Inc., as Administrative
Agent, and the lenders from time to time party thereto (the “Lenders”) have
entered into that certain Amended and Restated Credit Agreement, dated as of
June 27, 2011 (as amended or otherwise modified from time to time prior to the
date hereof, the “Credit Agreement”), as amended by that certain First Amendment
to Amended and Restated Credit Agreement, dated as of January 6, 2012.

WHEREAS, the parties hereto wish to amend the terms of the Credit Agreement as
set forth herein.

THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

SECTION 1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein have the meanings assigned to them in the Credit Agreement.

SECTION 2. Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:

(a) Amendments to Section 1.01 (Restated Definitions). The following definitions
in Section 1.01 of the Credit Agreement are hereby amended by deleting them in
their entirety and inserting the following in lieu thereof:

“Aggregate Consideration” shall mean, with respect to any Permitted Acquisition,
the sum (without duplication) of (i) the aggregate amount of all cash paid (or
to be paid) by the Borrower or any of its Subsidiaries in connection with such
Permitted Acquisition (excluding (x) payments of fees and costs and expenses in
connection therewith and (y) the portion of any such cash payment to the extent
funded with the net cash proceeds of the sale of Borrower Common Stock or
Qualified Preferred Stock issued to fund such cash payment, but including all
contingent cash purchase price, earn-out, non-compete and other similar
obligations of the Borrower and its Subsidiaries incurred and reasonably
expected to be incurred in connection therewith (as determined in good faith by
the Borrower)), (ii) the aggregate principal amount of all Indebtedness assumed,
incurred, refinanced and/or issued in connection with such Permitted Acquisition
to the extent permitted by Section 10.04 and (iii) the fair market value of all
other consideration (other than Borrower Common Stock) payable in connection
with such Permitted Acquisition.

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“Applicable Margin” shall mean:

(x) effective from the Initial Borrowing Date until (but excluding) the Second
Amendment Effective Date, a percentage per annum equal to (i) in the case of
Term Loans maintained as (A) Base Rate Loans, 5.25% and (B) LIBOR Loans, 6.25%;
and (ii) in the case of Revolving Loans maintained as (A) Base Rate Loans, 5.25%
and (B) LIBOR Loans, 6.25%; and

(y) effective as of the Second Amendment Effective Date, a percentage per annum
equal to (i) in the case of Term Loans (other than Incremental Term Loans)
maintained as (A) Base Rate Loans, 6.25% and (B) LIBOR Loans, 7.25%; (ii) in the
case of Revolving Loans maintained as (A) Base Rate Loans, 5.25% and (B) LIBOR
Loans, 6.25%; (iii) in the case of any Type of Revolving Loan pursuant to an
Incremental RL Commitment Agreement of a given Tranche, that percentage per
annum set forth in, or calculated in accordance with, Section 2.15 and the
relevant Incremental RL Commitment Agreement; and (iv) in the case of any Type
of Incremental Term Loan pursuant to an Increase Term Joinder of a given
Tranche, that percentage per annum set forth in, or calculated in accordance
with, Section 2.16 and the relevant Increase Term Joinder; provided that, in the
event that any rating described in clauses (i) and (ii) of Section 9.14 is
downgraded by Moody’s or S&P, as applicable, on any date after April 30, 2012 on
which any CMAC Subordinated Convertible Notes remain outstanding, then the
“Applicable Margin” with respect to the Tranche of Loans so downgraded shall be
automatically increased by 2.50% per annum, effective as of the date of such
downgrade until either (I) such rating is raised by Moody’s or S&P, as
applicable, to the rating in effect prior to such downgrade or a higher rating
or (II) no CMAC Subordinated Convertible Notes remain outstanding.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period (without giving effect to (x) any extraordinary gains, (y) any
non-cash income, and (z) any gains or losses from sales of assets other than
inventory sold in the ordinary course of business) adjusted by:

(A) adding thereto (in each case to the extent deducted in determining
Consolidated Net Income for such period), without duplication, the amount of:

(i) total interest expense (inclusive of amortization of deferred financing fees
and other original issue discount and banking fees, charges and commissions
(e.g., commitment fees)) of the Borrower and its Subsidiaries determined on a
consolidated basis for such period,

(ii) provisions for taxes based on income, profits or capital (including
federal, foreign, state, franchise, excise, withholding and similar taxes) for
the Borrower and its Subsidiaries determined on a consolidated basis for such
period,

(iii) all depreciation and amortization expense of the Borrower and its
Subsidiaries determined on a consolidated basis for such period,

 

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(iv) in the case of any period including the Fiscal Quarter of the Borrower
ended May 31, 2012, the amount of all fees and expenses incurred in connection
with the Transaction during such period,

(v) the amount of all fees and expenses incurred in connection with any proposed
or actual Permitted Acquisition, any proposed or actual issuance of debt or
equity, any proposed or actual asset disposition or Investment permitted
hereunder, or any proposed or actual amendment, modification or refinancing of
any Indebtedness, in each case, during such period,

(vi) the amount of all other non-cash charges of the Borrower and its
Subsidiaries determined on a consolidated basis for such period, including,
without limitation any non-cash charges for (a) goodwill write-offs and
write-downs, (b) employee compensation plans, (c) purchase accounting
adjustments, including, without limitation, a dollar-for-dollar adjustment for
that portion of revenue that would have been recorded in the relevant period had
the balance of deferred revenue (unearned income) recorded on the closing
balance sheet before application of purchase accounting not been adjusted
downward to fair value to be recorded on the opening balance sheet in conformity
with GAAP purchase accounting rules and (d) any extraordinary, unusual or
nonrecurring losses,

(vii) cash restructuring charges (including severance) or reserves and business
optimization expenses incurred during such period, including any restructuring
costs and integration costs incurred in connection with the Transaction or
Permitted Acquisitions (other than the CMAC Acquisition) after the Initial
Borrowing Date; provided that the aggregate amount of add backs made pursuant to
this clause (vii) for any period of four consecutive Fiscal Quarters shall not
exceed the sum of (a) an amount equal to 7.5% of Consolidated EBITDA for such
period of four consecutive Fiscal Quarters (determined on a Pro Forma Basis
during such period but before giving effect to any increase thereto pursuant to
this clause (vii)) and (b) if a Permitted Acquisition for which Aggregate
Consideration exceeds $20,000,000 is consummated after the Second Amendment
Effective Date and on or prior to the last day of such period, $2,000,000, so
long as all such expenses, charges or reserves are incurred within 12 months of
the Transaction or the date of the Permitted Acquisition to which such expenses,
charges or reserves relate, as applicable,

(viii) expenses incurred or payments made during such period to the extent
covered by contractual indemnification, reimbursement or refunding provisions in
favor of the Borrower or any of its Subsidiaries in connection with the
Transaction any Permitted Acquisition, and to the extent actually paid,
reimbursed, credited or refunded in cash during such period by a third party
other than the Borrower or any Subsidiary,

(ix) Insurance Loss Addbacks,

 

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(x) fees, costs and expenses paid in cash in connection with the repayment or
prepayment of the Loans or any other Indebtedness, including the after-tax
effect of any income (or loss) for such period attributable to the early
extinguishment of Indebtedness, and

(xi) any foreign currency translation or transaction losses (including losses
related to currency remeasurement of Indebtedness),

(xii) cash restructuring charges (including severance), business optimization
expenses and integration costs incurred in connection with the CMAC Acquisition
within 12 months of the date of the CMAC Acquisition; provided that the
aggregate amount of add backs made pursuant to this clause (xii) shall not
exceed $4,200,000,

(xiii) factually supportable and identifiable cost savings and expenses in
connection with actions taken or to be taken by the Borrower and its
Subsidiaries within 12 month after the date of the consummation of the CMAC
Acquisition, based on the Borrower’s good faith estimates of the impact of such
actions; provided that the aggregate amount of add backs made pursuant to this
clause (xiii) shall not exceed $2,700,000,

(xiv) other items approved by Required Lenders on a case-by-case basis
(including without limitation cash restructuring charges (including severance),
business optimization expenses and integration costs incurred in connection with
the Transaction or Permitted Acquisitions and factually supportable and
identifiable cost savings and expenses in connection with actions taken or to be
taken by the Borrower and its Subsidiaries, based on the Borrower’s good faith
estimates of the impact of such actions); and

(B) subtracting therefrom (to the extent not otherwise deducted in determining
Consolidated Net Income for such period):

(i) the amount of all cash payments or cash charges made (or incurred) by the
Borrower or any of its Subsidiaries for such period on account of any non-cash
charges added back to Consolidated EBITDA pursuant to preceding subclause
(A)(vi) in a previous period and

(ii) Insurance Loss Deductions.

For the avoidance of doubt, it is understood and agreed that, to the extent any
amounts are excluded from Consolidated Net Income by virtue of the proviso to
the definition thereof contained herein, any add backs to Consolidated Net
Income in determining Consolidated EBITDA as provided above shall be limited (or
denied) in a fashion consistent with such proviso. Notwithstanding anything to
the contrary contained above, for purposes of determining Consolidated EBITDA
for any Test Period, Consolidated EBITDA shall be calculated in accordance with
the definition of Test Period contained herein.

 

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“Interest Expense Coverage Ratio” shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest
Expense for such period; provided that for purposes of any calculation of the
Interest Expense Coverage Ratio pursuant to this Agreement, (i) Consolidated
EBITDA shall be determined on a Pro Forma Basis in accordance with clause
(iii) of the definition of “Pro Forma Basis” contained herein and
(ii) Consolidated Cash Interest Expense shall be determined on a Pro Forma Basis
in accordance with the requirements of the definition of “Pro Forma Basis”
contained herein.

“Permitted Acquisition” shall mean (1) the CMAC Acquisition and (2) any other
transaction or series of related transactions for the direct or indirect
(a) acquisition by the Borrower or any Subsidiary of the Borrower of all or
substantially all of the property of any Person, or of any business or division
of any Person; (b) acquisition of a majority of the capital stock of any Person,
and otherwise causing such Person to become a Subsidiary of such Person; or
(c) merger or consolidation or any other combination with any Person, provided
that (in each case with respect to to any such transaction or series of
transactions under this clause (2)):

(i) the board of directors of the Person to be acquired shall not have indicated
publicly its opposition to the consummation of such acquisition (which
opposition has not been publicly withdrawn);

(ii) all transactions in connection therewith shall be consummated in accordance
with all applicable requirements of law in all material respects;

(iii) any Person or assets or division as acquired in accordance herewith shall
be in the same business or lines of business or substantially related or
complementary to such business or lines of business in which the Borrower and/or
its Subsidiaries are engaged as of the Effective Date;

(iv) if the Aggregate Consideration exceeds $5,000,000, at least ten Business
Days prior to the proposed date of consummation of the acquisition, the Borrower
shall have delivered to the Administrative Agent an officer’s certificate
certifying that (A) such acquisition complies with this definition (which shall
have attached thereto reasonably detailed backup data and calculations showing
such compliance), and (B) such acquisition would not reasonably be expected to
result in a Material Adverse Effect;

(v) except in the case of an acquisition for which the Aggregate Consideration
does not exceed $10,000,000, subject to confidentiality arrangements, the
Borrower shall have delivered to Administrative Agent any information reasonably
requested by Administrative Agent (but only to the extent consistent with
confidentiality obligations of the Borrower);

(vi) no Default or Event of Default shall have occurred and be continuing at the
time such acquisition occurs or after giving effect to such acquisition;

 

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(vii) the Aggregate Consideration for any such acquisition shall not exceed the
amount by which after giving effect thereto would result in the Borrower being
in compliance on a Pro Forma Basis with the Financial Covenants, and the
Aggregate Consideration for such acquisition, together with the Aggregate
Consideration for any other acquisition consummated utilizing this clause
(vii) after the Second Amendment Effective Date, shall not exceed $60,000,000
(and an additional $10,000,000 solely with respect to earn-outs in connection
with such acquisitions);

(viii) the acquired company and its Subsidiaries shall comply with all
applicable requirements set forth in Section 9.12;

(ix) on the date of and after giving effect to such acquisition, the sum of
(x) the Total Unutilized Revolving Loan Commitment and (y) the aggregate amount
of all unrestricted cash and Cash Equivalents of the Borrower and the other
Credit Parties will not be less than $20,000,000;

(x) the Aggregate Consideration of all acquisitions consummated after the Second
Amendment Effective Date in reliance on this clause (2) of the definition of
“Permitted Acquisition” and in which the Person acquired does not become a
Subsidiary Guarantor shall not exceed $10,000,000 (provided that for this
purpose, the Borrower may allocate in good faith any Aggregate Consideration
paid with respect to any such Subsidiaries);

(xi) all representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the date
of the acquisition (it being understood and agreed that (x) any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified date,
and (y) any representation or warranty that is qualified as to “materiality,”
“Material Adverse Effect” or similar language shall be true and correct in all
respects on such date); and

(xii) Consolidated EBITDA calculated on a Pro Forma Basis with respect to such
acquisition shall be greater than Consolidated EBITDA as set forth in the
compliance certificate delivered with respect to the applicable Calculation
Period.

For the avoidance of doubt, the criteria set forth in subclauses (i) through
(xi) of clause (2) above shall not apply to the CMAC Acquisition.

“Pro Forma Basis” shall mean, in connection with any calculation of compliance
with any financial covenant or financial term, the calculation thereof after
giving effect on a pro forma basis to (x) the incurrence of any Indebtedness
(other than revolving Indebtedness, except to the extent same is incurred to
refinance other outstanding Indebtedness or to finance a Permitted Acquisition)
after the first day of the relevant Calculation Period or Test Period, as the
case may be, as if such Indebtedness had been incurred (and the proceeds thereof
applied) on the first day of such Test Period or

 

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Calculation Period, as the case may be, (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness, except to the extent
accompanied by a corresponding permanent commitment reduction) after the first
day of the relevant Test Period or Calculation Period, as the case may be, as if
such Indebtedness had been retired or repaid on the first day of such Test
Period or Calculation Period, as the case may be, and (z) any Permitted
Acquisition or any Significant Asset Sale then being consummated as well as any
other Permitted Acquisition or any other Significant Asset Sale if consummated
after the first day of the relevant Test Period or Calculation Period, as the
case may be, and on or prior to the date of the respective Permitted Acquisition
or Significant Asset Sale, as the case may be, then being effected, with the
following rules to apply in connection therewith:

(i) all Indebtedness (x) (other than revolving Indebtedness, except to the
extent same is incurred to refinance other outstanding Indebtedness or to
finance Permitted Acquisitions) incurred or issued after the first day of the
relevant Test Period or Calculation Period (whether incurred to finance a
Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed
to have been incurred or issued (and the proceeds thereof applied) on the first
day of such Test Period or Calculation Period, as the case may be, and remain
outstanding through the date of determination (and thereafter, in the case of
projections pursuant to the definition of “Permitted Acquisition”) and
(y) (other than revolving Indebtedness, except to the extent accompanied by a
corresponding permanent commitment reduction) permanently retired or redeemed
after the first day of the relevant Test Period or Calculation Period, as the
case may be, shall be deemed to have been retired or redeemed on the first day
of such Test Period or Calculation Period, as the case may be, and remain
retired through the date of determination (and thereafter, in the case of
projections pursuant to the definition of “Permitted Acquisition”);

(ii) all Indebtedness assumed to be outstanding pursuant to preceding clause
(i) shall be deemed to have borne interest at (x) the rate applicable thereto,
in the case of fixed rate indebtedness, or (y) the rates which would have been
applicable thereto during the respective period when same was deemed
outstanding, in the case of floating rate Indebtedness (although interest
expense with respect to any Indebtedness for periods while same was actually
outstanding during the respective period shall be calculated using the actual
rates applicable thereto while same was actually outstanding); provided that all
Indebtedness (whether actually outstanding or deemed outstanding) bearing
interest at a floating rate of interest shall be tested on the basis of the
rates applicable at the time the determination is made pursuant to said
provisions; and

(iii) in making any determination of Consolidated EBITDA on a Pro Forma Basis,
pro forma effect shall be given to any Permitted Acquisition or any Significant
Asset Sale if effected during the respective Calculation Period or Test Period
(or thereafter, for purposes of determinations pursuant to the definition of
“Permitted Acquisition” or any Significant Asset Sale) as if same had occurred
on the first day of the respective Calculation Period or Test Period, as the
case may be.

 

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For the avoidance of doubt, for purposes of any calculation of Consolidated
EBITDA pursuant to this Agreement, adjustments based on projected cost savings
and expenses shall be permitted only to the extent specifically permitted
pursuant to the definition of “Consolidated EBITDA.”

“Qualified Preferred Stock” shall mean any Preferred Equity of the Borrower so
long as the terms of any such Preferred Equity (and the terms of any Equity
Interests into which such Preferred Equity is convertible or for which it is
exchangeable, either mandatorily or at the option of the holder thereof) (v) do
not contain any mandatory put, redemption, repayment, sinking fund or other
similar provision prior to the seventh anniversary of the Second Amendment
Effective Date, (w) do not require the cash payment of dividends or
distributions that would otherwise be prohibited by the terms of this Agreement
or any other agreement or contract of the Borrower or any of its Subsidiaries,
(x) do not contain any covenants (other than periodic reporting requirements),
and (y) except with respect to common stock into which any such Preferred Equity
is convertible or exchangeable, do not grant the holders thereof any voting
rights except for (I) voting rights required to be granted to such holders under
applicable law and (II) limited customary voting rights on fundamental matters
such as mergers, consolidations, sales of all or substantially all of the assets
of the Borrower, or liquidations involving the Borrower; provided that,
notwithstanding clauses (v) through (y) above, the CMAC Preferred Stock shall
constitute Qualified Preferred Stock.

“Term Loan Commitment” shall mean, for each Lender (x) the amount set forth
opposite such Lender’s name in Schedule 1.01(a) as of the Effective Date
directly below the column entitled “Term Loan Commitment,” as the same may be
increased from time to time pursuant to Section 2.16, plus (y) the amount of
such Lender’s CMAC Term Loan Commitments, in each case as the same may be
terminated pursuant to Sections 4.03 and/or 11.

“Test Period” shall mean each period of four consecutive Fiscal Quarters of the
Borrower then last ended, in each case taken as one accounting period; provided
that the rules set forth in the immediately succeeding sentence shall apply;
provided further, that in the case of determinations of the Total Leverage Ratio
and the Interest Expense Coverage Ratio pursuant to this Agreement, such further
adjustments (if any) as described in the proviso to the definition of “Total
Leverage Ratio” or “Interest Expense Coverage Ratio”, as the case may be,
contained herein shall be made to the extent applicable. If the respective Test
Period:

(i) includes the Fiscal Quarter of the Borrower ended November 30, 2011,
Consolidated EBITDA for such Fiscal Quarter shall be deemed to be $13,893,279;

(ii) includes the Fiscal Quarter of the Borrower ended August 31, 2011,
Consolidated EBITDA for such Fiscal Quarter shall be deemed to be $11,258,613;

 

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(iii) includes the Fiscal Quarter of the Borrower ended May 31, 2011,
Consolidated EBITDA for such Fiscal Quarter shall be deemed to be $6,217,222;
and

(iv) includes the Fiscal Quarter of the Borrower ended February 28, 2011,
Consolidated EBITDA for such Fiscal Quarter shall be deemed to be $13,009,621

; provided that further adjustments may be made on Pro Forma Basis to the
amounts specified above to the extent provided herein.

“Total Leverage Ratio” shall mean, on any date of determination, the ratio of
(x) Consolidated Indebtedness of the Borrower and its Subsidiaries on such date
(other than Indebtedness under the CMAC Subordinated Convertible Notes) to
(y) Consolidated EBITDA for the Test Period most recently ended on or prior to
such date; provided that (i) for purposes of any calculation of the Total
Leverage Ratio pursuant to this Agreement, Consolidated EBITDA shall be
determined on a Pro Forma Basis in accordance with clause (iii) of the
definition of “Pro Forma Basis” contained herein and (ii) for purposes of any
calculation of the Total Leverage Ratio pursuant to the definition of “Permitted
Acquisition” only, Consolidated Indebtedness shall be determined on a Pro Forma
Basis in accordance with the requirements of the definition of “Pro Forma Basis”
contained herein.

(b) Amendments to Section 1.01 (New Definitions). Section 1.1 to the Credit
Agreement is hereby amended by inserting the following definitions in the
appropriate place to preserve the alphabetical order of the definitions in such
section:

“Cobham Seller Note” shall mean that certain £1,700,000 Term Facility Agreement
dated as of December 16, 2011 among Cabham MAL Limited, CMAC and Lockman
Electronic Holdings Limited.

“CMAC” shall mean C-MAC Aerospace Limited, a company organized under the laws of
England and Wales.

“CMAC Acquisition” shall mean the consummation of the transactions contemplated
by the CMAC Acquisition Agreement.

“CMAC Acquisition Agreement” shall mean that certain Share Purchase Agreement
for the sale and purchase of all of the issued shares of C-MAC Aerospace Limited
dated as of the Second Amendment Effective Date among C-MAC Microcircuits UK
Opco Limited, Karen Oddey, and API Technologies (UK) Limited.

“CMAC Preferred Stock” shall mean preferred stock issued by the Borrower
pursuant to the terms of the CMAC Subordinated Convertible Notes.

“CMAC Subordinated Convertible Notes” shall mean the (a) that certain Note
Purchase Agreement by and among the Borrower and the Purchasers named therein to
be dated on or about the Second Amendment Effective Date and (b) the Convertible
Subordinated Notes issued by the Borrower pursuant thereto in an initial
principal amount not to exceed $26,000,000 plus the amount of interest thereon
and other amounts thereunder paid in kind issued to fund the CMAC Acquisition.

 

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“CMAC Term Loan Commitments” shall mean, for each Lender, the amount set forth
opposite such Lender’s name in Schedule 1.01(c) directly below the column
entitled “CMAC Term Loan Commitment,” as the same may be terminated pursuant to
Sections 4.03 and/or 11.

“CMAC Term Loans” shall mean, with respect to each Lender having a CMAC Term
Loan Commitment, Term Loans made by such Lender in accordance with
Section 2.01(a) in a principal amount equal to such CMAC Term Loan Commitment.

“Increase Request” shall have the meaning provided in Section 2.16(a).

“Incremental Term Joinder” shall have the meaning provided in Section 2.16(c).

“Incremental TL Commitments” shall have the meaning provided in Section 2.16(a).

“Incremental Term Loans” shall have the meaning provided in Section 2.16(c).

“Minimum Available Liquidity” shall mean, with respect to any Permitted
Acquisition, the result obtained by subtracting

(a) the sum of

(i) the Borrower’s good faith estimate of Total Unutilized Revolving Loan
Commitment immediately prior the consummation of such Permitted Acquisition,
plus

(ii) the Borrower’s good faith estimate of the aggregate amount of all
unrestricted cash and Cash Equivalents of the Borrower and the other Credit
Parties immediately prior to the consummation of such Permitted Acquisition

from

(b) the sum of

(i) the Borrower’s good faith estimate of Total Unutilized Revolving Loan
Commitment immediately following the consummation of such Permitted Acquisition,
plus

(ii) the Borrower’s good faith estimate of the aggregate amount of all
unrestricted cash and Cash Equivalents of the Borrower and the other Credit
Parties immediately following the consummation of such Permitted Acquisition,
plus

(iii) the net cash proceeds from the issuance of the Borrower’s capital stock to
be used as consideration for such Permitted Acquisition, plus

 

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(iii) the Borrower’s good faith estimate of the aggregate amount of reasonable
fees, costs and expenses paid or expected to be paid by the Borrower and its
Subsidiaries in connection with such Permitted Acquisition and the financing
thereof.

“Permitted CMAC Intercompany Loans” shall mean one or more intercompany loans
made on or after the date of the CMAC Acquisition by the Borrower and/or one or
more of its Subsidiaries (other than CMAC or its Subsidiaries) to CMAC and/or
one or more of its Subsidiaries.

“Second Amendment” shall mean that certain Second Amendment to Amended and
Restated Credit Agreement dated as of March 22, 2012 and effective as of the
Second Amendment Effective Date among the Borrower, the Administrative Agent and
the Lenders party thereto.

“Second Amendment Effective Date” shall have the meaning provided in the Second
Amendment.

“Term Loan Increase Effective Date” shall have the meaning provided in
Section 2.16(b).

(c) Amendments to Section 2. (i) Subsection (a) of Section 2.01 of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
inserting the following in lieu thereof:

“(a) Subject to and upon the terms and conditions set forth herein, each Lender
with a Term Loan Commitment severally agrees to make a term loan or term loans
(each, a “Term Loan” and, collectively, the “Term Loans”) to the Borrower, which
Term Loans (i) (A), in the case of Term Loans made on the Initial Borrowing
Date, shall be incurred pursuant to a single drawing on the Initial Borrowing
Date, (B) in the case of CMAC Term Loans, shall be incurred pursuant to a single
drawing on the date of the consummation of the CMAC Acquisition and (C) in the
case of Incremental Term Loans, shall be incurred pursuant to one or more
drawings in accordance with Section 2.16 and the applicable Increase Term
Joinder, (ii) shall be denominated in Dollars, (iii) except as hereinafter
provided, shall, at the option of the Borrower, be incurred and maintained as,
and/or converted into, Base Rate Loans or LIBOR Loans, provided that except as
otherwise specifically provided in Section 2.10(b), all Term Loans comprising
the same Borrowing shall at all times be of the same Type, and (iv) shall be
made by each such Lender in an aggregate principal amount which does not exceed
the aggregate Term Loan Commitment of such Lender on the date of the applicable
Borrowing. Once repaid, Term Loans incurred hereunder may not be reborrowed.”

(ii) The following Section 2.16 is hereby inserted immediately after the end of
Section 2.15:

“2.16. Incremental Term Loans. (a) Borrower Request. In connection with any
Permitted Acquisition, the Borrower may at any time and from time to time after
the Second Amendment Effective Date by written notice to the Administrative
Agent elect to

 

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request additional term loan commitments (each, an “Incremental TL Commitment”)
in an aggregate amount not to exceed $30,000,000, and in a minimum amount of
$20,000,000. Each such notice (each, an “Increase Request”) shall specify
(i) the date on which the Borrower proposes that the Incremental TL Commitment
shall be effective and (ii) the aggregate amount of requested Incremental TL
Commitments, provided that any Increase Request may be contingent upon the
consummation of the Permitted Acquisition to which such Increase Request
relates.

(b) Conditions. The Incremental TL Commitment shall become effective, as of the
date (the “Term Loan Increase Effective Date”) that the following conditions are
satisfied:

(i) each of the conditions set forth in Section 7 are satisfied;

(ii) no Default or Event of Default shall have occurred or be continuing or
would result from the borrowings to be made on the Term Loan Increase Effective
Date;

(iii) the Administrative Agent shall have received a fully executed Increase
Term Joinder in respect of such Incremental TL Commitment;

(iv) the Borrower shall deliver or cause to be delivered any customary legal
opinions reasonably requested by the Administrative Agent in connection with any
such transaction;

(v) the Total Leverage Ratio (calculated on a Pro Forma Basis with respect to
the relevant Permitted Acquisition) shall be less than the Total Leverage Ratio
as set forth in the compliance certificate delivered with respect to the
applicable Calculation Period; and

(vi) in the event that the Aggregate Consideration payable in respect of the
relevant Permitted Acquisition exceeds $40,000,000, the Minimum Available
Liquidity after giving effect to such Permitted Acquisition shall be greater
than zero.

(c) Terms of Incremental Term Loans and Incremental TL Commitments. The terms
and provisions of the Incremental Term Loans made pursuant to the Incremental TL
Commitments shall be as follows:

(i) the proceeds of such Incremental Term Loans shall be used only to make
Permitted Acquisitions (including without limitation the payment of fees and
expenses in connection therewith);

(ii) terms and provisions of Term Loans made pursuant to Incremental TL
Commitments (the “Incremental Term Loans”) shall be on terms consistent with the
existing Term Loans (except as otherwise set forth herein) and, to the extent
not consistent with such existing Term Loans, on terms reasonably acceptable to
the Administrative Agent (except as otherwise set forth herein);

 

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(iii) the weighted average life to maturity of all new Incremental Term Loans
shall be no shorter than the remaining weighted average life to maturity of the
existing Term Loans;

(iv) the maturity date of Incremental Term Loans shall not be earlier than the
Term Loan Maturity Date; and

(v) if the Applicable Margins with respect to the Incremental Term Loans to be
incurred pursuant to an Incremental TL Commitment shall be higher in any respect
than those applicable to any other Term Loans, the Applicable Margins for such
other Term Loans shall be automatically increased as and to the extent needed to
eliminate any such difference.

The Incremental TL Commitments shall be effected by a joinder agreement (the
“Increase Term Joinder”) executed by the Borrower, the Administrative Agent and
each Lender making such Incremental TL Commitment, in form and substance
reasonably satisfactory to each of them. The Increase Term Joinder may, without
the consent of any other Lenders, effect such amendments to this Agreement and
the other Loan Documents as may be necessary or appropriate, in the opinion of
the Administrative Agent, to effect the provisions of this Section 2.16. In
addition, unless otherwise specifically provided herein, all references in the
Loan Documents to Term Loans shall be deemed, unless the context otherwise
requires, to include references to Incremental Term Loans that are Term Loans
made pursuant to this Agreement.

(d) Making of Incremental Term Loans. On any Term Loan Increase Effective Date
on which Incremental TL Commitments are effective, subject to the satisfaction
of the foregoing terms and conditions, each Lender holding such Incremental TL
Commitment shall make an Incremental Term Loan to the Borrower in an amount
equal to its Incremental TL Commitment.

(e) Equal and Ratable Benefit. The Incremental Term Loans and Incremental TL
Commitments established pursuant to this Section 2.16 shall constitute Term
Loans and Commitments under, and shall be entitled to all the benefits afforded
by, this Agreement and the other Credit Documents, and shall, without limiting
the foregoing, benefit equally and ratably from security interests created by
the Security Documents and the guarantees of the Guarantors. The Loan Parties
shall take any actions reasonably required by the Administrative Agent to ensure
and/or demonstrate that the Lien and security interests granted by the Security
Documents continue to be perfected under the UCC or otherwise after giving
effect to the establishment of any such class of Incremental Term Loans or any
such Incremental TL Commitments.”

(d) Amendments to Section 4.03. Subsection (b) of Section 4.03 of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
inserting the following in lieu thereof:

“(b) In addition to any other mandatory commitment reductions pursuant to this
Section 4.03, the Total Term Loan Commitment (and the Term Loan Commitment of

 

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each Lender) shall terminate in its entirety on the Initial Borrowing Date
(after giving effect to the incurrence of Term Loans on such date), except that
the CMAC Term Loan Commitment of any Lender shall terminate on the date of the
consummation of the CMAC Acquisition (after giving effect to the incurrence of
CMAC Term Loans on such date) and the Incremental TL Commitment of any Lender
shall terminate on the applicable Term Loan Increase Effective Date (after
giving effect to the incurrence of Incremental Term Loans on such date).”

(e) Amendments to Section 5.02. (i) Subsection (b) of Section 5.02 of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
inserting the following in lieu thereof:

“(b) In addition to any other mandatory repayments pursuant to this
Section 5.02, (x) on each Quarterly Payment Date, beginning with the Quarterly
Payment Date occurring on August 31, 2011, the Borrower shall be required to
repay that principal amount of its Term Loans, to the extent then outstanding,
as is equal to  1/4 of 1% of the aggregate initial principal amounts of all Term
Loans theretofore borrowed by the Borrower pursuant to Section 2.01 of this
Agreement and outstanding on the Restatement Effective Date plus, in respect of
all such payments made after the Second Amendment Effective Date, the aggregate
principal amount of all CMAC Term Loans made on the Second Amendment Effective
Date and (y) on the Term Loan Maturity Date (the Term Loan Maturity Date and
each Quarterly Payment Date described in preceding clause (x), each a “Scheduled
Term Loan Repayment Date”), the Borrower shall be required to repay in full the
entire principal amount of its Term Loans then outstanding (with each such
repayment pursuant to this Section 5.02(b), as the same may be reduced as
provided in Section 5.01(a) or 5.02(h), a “Scheduled Term Loan Repayment”).”

(ii) Subsection (f) of Section 5.02 of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and inserting the following in lieu
thereof:

“(f) In addition to any other mandatory repayments pursuant to this
Section 5.02, on each Excess Cash Payment Date, an amount equal to the
Applicable Excess Cash Flow Percentage of the Excess Cash Flow for the related
Excess Cash Payment Period shall be applied as a mandatory repayment in
accordance with the requirements of Sections 5.02(h) and (i); provided that,
notwithstanding the foregoing, the amount of Loans required to be repaid
pursuant to this Section 5.02(f) for any Excess Cash Payment Period shall be
reduced on a dollar-for-dollar basis by the amount of voluntary prepayments of
Loans made pursuant to Section 5.01 during such Excess Cash Payment Period (or,
without duplication of any amount which would reduce the amount of Loans
required to be repaid pursuant to this Section 5.02(f) for the next Excess Cash
Payment Period, any prepayments of Loans made pursuant to Section 5.01 following
the last day of such Excess Cash Payment Period and prior to the Excess Cash
Payment Date for such Excess Cash Payment Period), but in the case of a
voluntary prepayment of Revolving Loans, only to the extent accompanied by a
corresponding voluntary reduction to the Total Revolving Loan Commitment.
Notwithstanding the foregoing, subject to Section 13.06, at any time following
the last day of any Excess Cash Payment Period and prior to the date that is
five (5) Business Days before the Excess Cash Payment Date for such Excess

 

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Cash Payment Period, the Borrower may deliver to the Administrative Agent a
written estimate of the total amount repayable pursuant to the preceding
sentence in respect of such Excess Cash Payment Period, and (i) the
Administrative Agent shall promptly make such written estimate available to the
Lenders, (ii) each Lender may elect in writing to waive its right to receive its
pro rata portion of such amount, (iii) the amount of Loans required to be repaid
pursuant to the preceding sentence shall be reduced dollar-for-dollar by an
amount equal to the sum of the pro rata portions of each such electing Lenders
and (iv) any Lender who does not so elect shall receive the amount to which such
Lender is entitled under this Section 5.02(f) without regard to such reduction.”

(f) Amendments to Section 10.03. Section 10.03 of the Credit Agreement is hereby
amended by deleting the “and” and the end of clause (ii) thereof, replacing the
period at the end of clause (iii) thereof with a semicolon and inserting the
following new clauses immediately after clause (iii) thereof:

“(iv) the Borrower may (A) declare and pay Dividends payable solely in
additional shares of CMAC Preferred Stock pursuant to the terms of the CMAC
Preferred Stock or (B) accrue or pay in kind Dividends with respect to the CMAC
Preferred Stock so long as no cash payment is made in respect thereof; and

(v) the Borrower may make cash payments in lieu of the issuance of fractional
shares in connection with the conversion of Qualified Preferred Stock into
Borrower Common Stock (including without limitation the conversion of CMAC
Preferred Stock into Borrower Common Stock).”

(g) Amendments to Section 10.04. (i) Clause (vii) of Section 10.04 of the Credit
Agreement is hereby amended by deleting such clause in its entirety and
inserting the following in lieu thereof:

“(vii) (a) Indebtedness under the Cobham Seller Note and (b) any other
Indebtedness of a Subsidiary of the Borrower acquired pursuant to a Permitted
Acquisition or other permitted Investment (or Indebtedness assumed at the time
of a Permitted Acquisition or other permitted Investment of an asset securing
such Indebtedness) (the Cobham Seller Note and any such Indebtedness, “Permitted
Acquired Debt”) and any Permitted Refinancing Indebtedness in respect thereof,
provided that (x) such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition or other permitted
Investment and (y) the aggregate principal amount of all Indebtedness permitted
by this clause (vii)(b) shall not exceed $5,000,000 at any one time
outstanding.”

(ii) Section 10.04 of the Credit Agreement is hereby amended by deleting the
“and” at the end of clause (xx) thereof, replacing the period at the end of
clause (xxi) thereof with “; and” and inserting the following new clause
(xxii) immediately after clause (xxi) thereof:

“(xxii) Indebtedness of the Borrower under the CMAC Subordinated Convertible
Notes; provided that the aggregate principal amount thereof shall not exceed
$26,000,000 plus the interest thereon and other amounts thereunder paid in kind
in accordance with the terms thereof.”

 

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(h) Amendments to Section 10.05. Clause (vii) of Section 10.05 of the Credit
Agreement is hereby amended by deleting such clause in its entirety and
inserting the following in lieu thereof:

“(vii) (I) any Credit Party may make intercompany loans and advances to any
other Credit Party, (II) any Credit Party may make intercompany loans and
advances to any Subsidiary which is not a Credit Party, (III) any Subsidiary
which is not a Credit Party may make intercompany loans and advances to any
Credit Party, (IV) any Subsidiary which is not a Credit Party may make
intercompany loans and advances to any other Subsidiary that is not a Credit
Party and (V) the Borrower and its Subsidiaries may make Permitted CMAC
Intercompany Loans at any time that CMAC is a Wholly-Owned Foreign Subsidiary
(such intercompany loans and advances referred to in preceding clauses
(I) through (V), collectively, the “Intercompany Loans”), provided, that (u) at
no time shall the aggregate outstanding principal amount of all Intercompany
Loans made pursuant to preceding subclause (II) of this clause (vii), when added
to the amount of contributions, acquisitions of Equity Interests,
capitalizations and forgiveness theretofore made pursuant to subclause (II) of
Section 10.05(viii) (for this purpose, taking the fair market value of any
property (other than cash) so contributed at the time of such contribution),
exceed $2,500,000 (determined without regard to any write-downs or write-offs of
such loans and advances and net of any returns on any such Investment in the
form of a principal repayment, distribution, dividend or redemption, as
applicable), (v) no Intercompany Loan may be made pursuant to subclause (II)
above at any time that a Default or an Event of Default has occurred and is
continuing, (w) each Intercompany Loan shall be evidenced by an Intercompany
Note, (x) each such Intercompany Note owned or held by a Credit Party shall be
pledged to the Collateral Agent pursuant to the U.S. Guaranty and Collateral
Agreement and/or Canadian Guaranty and Collateral Agreement, (y) each
Intercompany Loan made by any Subsidiary of the Borrower that is not a Credit
Party to a Credit Party shall be subject to the subordination provisions
contained in the respective Intercompany Note and (z) any Intercompany Loans
made to any Subsidiary Guarantor or any Wholly-Owned Foreign Subsidiary pursuant
to this clause (vii) shall cease to be permitted by this clause (vii) if such
Subsidiary Guarantor or Wholly-Owned Foreign Subsidiary, as the case may be,
ceases to constitute a Subsidiary Guarantor that is a Wholly-Owned Domestic
Subsidiary or a Wholly-Owned Foreign Subsidiary, as the case may be;”

 

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(i) Amendments to Section 10.08 and 10.09. Sections 10.08 and 10.09 of the
Credit Agreement are hereby amended by deleting such Sections in their entirety
and inserting the following in lieu thereof:

“10.08. Interest Coverage Ratio. As of the last day of the Fiscal Quarter ending
on each date set forth below, the Borrower will not permit the Interest Expense
Coverage Ratio for the Test Period ending on such date to be less than the ratio
set forth opposite such Fiscal Quarter below:

 

Fiscal Quarter Ending

  

Ratio

February 29, 2012    2.70:1.00 May 31, 2012    2.70:1.00 August 31, 2012   
2.70:1.00 November 30, 2012    2.80:1.00 February 28, 2013    2.90:1.00 May 31,
2013    3.00:1.00 August 31, 2013    3.00:1.00 November 30, 2013    3.00:1.00
February 28, 2014    3.15:1.00 May 31, 2014    3.25:1.00 August 31, 2014   
3.25:1.00 November 31, 2014    3.25:1.00 February 28, 2015    3.25:1.00 May 31,
2015 and each Fiscal Quarter ending thereafter    3.50:1.00

10.09. Total Leverage Ratio. The Borrower will not permit the Total Leverage
Ratio as of the last day of any period set forth below to be greater than the
ratio set forth opposite such period below:

 

Fiscal Quarter Ending

  

Ratio

February 29, 2012    4.25:1.00 May 31, 2012    4.25:1.00 August 31, 2012   
4.25:1.00 November 30, 2012    4.00:1.00 February 28, 2013    4.00:1.00 May 31,
2013    3.75:1.00 August 31, 2013    3.75:1.00 November 30, 2013    3.75:1.00
February 28, 2014    3.50:1.00 May 31, 2014    3.50:1.00 August 31, 2014   
3.50:1.00 November 30, 2014    3.50:1.00 February 28, 2015    3.35:1.00 May 31,
2015 and each Fiscal Quarter ending thereafter    3.25:1.00

 

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.”

(j) Amendments to Section 10.10. Section 10.10 of the Credit Agreement is hereby
amended by deleting the “and” at the end of clause (a) thereof, replacing the
period at the end of clause (b) thereof with a semicolon and inserting the
following clauses immediately after clause (b) thereof:

“(c) without the consent of Required Lenders, amend, modify, change or waive any
terms or provisions of the CMAC Subordinated Convertible Notes or any
documentation related thereto; and

(d) without the consent of Required Lenders, make any payment or repayment in
respect of the CMAC Subordinated Convertible Notes other than (i) the issuance
of CMAC Preferred Stock or Borrower Common Stock upon conversion of the CMAC
Subordinated Convertible Notes, (ii) cash payments in lieu of the issuance of
fractional shares in connection with any such conversion, (iii) payment of fees
and expenses of the purchasers of the CMAC Subordinated Convertible Notes
(including fees and expenses of their counsel) in connection with the
consummation of the transaction contemplated by the CMAC Subordinated
Convertible Notes and (iv) interest and other amounts thereunder payable in kind
as contemplated by the terms of the CMAC Subordinated Convertible Notes.”

(k) Addition of Schedule 1.01(c). The Schedules to the Credit Agreement are
hereby amended by inserting a new Schedule 1.01(c) in the form attached as Annex
1 hereto immediately after Schedule 1.01(b).

(l) Amendments to Exhibit H. Exhibit H to the Credit Agreement (Form of
Compliance Certificate) is hereby amended by deleting such Exhibit in its
entirety and inserting in lieu thereof the form of compliance certificate
attached as Annex 2 hereto.

SECTION 3. Representations and Warranties. To induce the other parties hereto to
enter into this Amendment, the Borrower represents and warrants to each other
party hereto that, as of the date hereof:

(a) this Amendment has been duly authorized, executed and delivered by it and
each of this Amendment and the Credit Agreement, as amended hereby, constitute
its legal, valid and binding obligation, enforceable against it in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws of general
applicability relating to or limiting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law; and

 

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(b) after giving effect to this Amendment and the transactions contemplated
hereby, no Default or Event of Default has occurred and is continuing.

SECTION 4. Effectiveness. Upon satisfaction of the following conditions, this
Amendment shall be deemed effective on the date hereof (the “Second Amendment
Effective Date”):

 

  (a) the Administrative Agent shall have received duly executed counterparts
hereof that, when taken together, bear the signatures of the Borrower, the
Lenders constituting Required Lenders and each Lender with a CMAC Term Loan
Commitment;

 

  (b) the Lenders shall have received copies of duly executed documentation with
respect to the CMAC Subordinated Convertible Notes;

 

  (c) the CMAC Acquisition shall be consummated substantially concurrently with
the funding of the CMAC Term Loans, and the Borrower shall receive not less than
$16,000,000 in proceeds from the CMAC Subordinated Convertible Notes
substantially concurrently with the funding of the CMAC Term Loans;

 

  (d) the Lenders shall have received a true and correct copy of the CMAC
Acquisition Agreement;

 

  (e) each Lender that executes and delivers to the Administrative Agent (or its
designee) a counterpart hereof by 5:00 P.M. (New York City time) on March 16,
2012, shall have received from the Borrower a non-refundable cash fee in Dollars
in an amount equal to 1.0% of the sum of (i) the aggregate outstanding principal
amount of Term Loans (other than CMAC Term Loans and Incremental Term Loans)
held by such Lender as of the date hereof and (ii) the aggregate Revolving Loan
Commitments of such Lender as of the date hereof;

 

  (f) each Lender with CMAC Term Loans shall have received from the Borrower an
upfront fee equal to 1.00% of the aggregate principal amount of all CMAC Term
Loans held by such Lender funded on March 22, 2012;

 

  (g) the Borrower shall have delivered to the Administrative Agent preliminary
drafts of the consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of the Fiscal Quarter ended February 29, 2012 and the related
consolidated statements of income and retained earnings and statement of cash
flows for such quarterly accounting period;

 

  (h) the Borrower shall have paid all fees and reasonable and documented
out-of-pocket expenses (including reasonable attorney’s fees) incurred by the
Administrative Agent in connection with the negotiation and execution and
delivery of this Amendment;

 

  (i) the Administrative Agent shall have received from counsel to the Credit
Parties an opinion dated as of the date hereof and addressed to the
Administrative Agent and each Lender covering such matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request; and

 

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  (j) the Borrower shall have delivered to the Administrative Agent such
customary resolutions, officers’ certificates and other customary evidence of
authority as the Administrative Agent may reasonably request.

SECTION 5. Effect of Amendment. (a) Except as expressly set forth herein
(including, for the avoidance of doubt, Section 4 hereof, which is intended to
make the amendments set forth in Section 2 hereof effective as of the Second
Amendment Effective Date), this Amendment shall not by implication or otherwise
limit, impair, constitute a waiver of or otherwise affect the rights and
remedies of the Lenders or the Agents under the Credit Agreement or any other
Credit Document, and shall not alter, modify, amend or in any way affect any of
the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other provision of the Credit Agreement or of any other
Credit Document, all of which are ratified and affirmed in all respects and
shall continue in full force and effect as amended hereby. Nothing herein shall
be deemed to entitle the Borrower to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Credit
Document in similar or different circumstances.

(b) On and after the Second Amendment Effective Date, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words
of like import, and each reference to the Credit Agreement in any other Credit
Document shall be deemed a reference to the Credit Agreement as amended hereby.
This Amendment shall constitute a “Credit Document” for all purposes of the
Credit Agreement and the other Credit Documents.

SECTION 6. Affirmation. By executing and delivering a counterpart hereof, the
Borrower and each Subsidiary Guarantor hereby agrees that all Loans shall be
guaranteed and secured pursuant to and in accordance with the terms and
provisions of each of the U.S. Guaranty and Collateral Agreement and the
Canadian Guaranty and Collateral Agreement and the other Security Documents in
accordance with the terms and provisions thereof.

SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 8. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery by facsimile or
other electronic imaging means of an executed counterpart of a signature page to
this Amendment shall be effective as delivery of an original executed
counterpart of this Amendment.

SECTION 9. Headings. Section headings herein are included for convenience of
reference only and shall not affect the interpretation of this Amendment

 

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SECTION 10. Release; Formation of New UK Holding Company. The Collateral Agent
hereby releases its security interest in 65% of the Equity Interest in Cryptek
Holdco UK Limited, and the requirement to deliver a certificate under
Section 7.13(c) of the U.S. Guaranty and Collateral Agreement with respect to
such release is hereby waived. Notwithstanding anything in Section 10.14 of the
Credit Agreement to the contrary, the Administrative Agent and the Lenders
hereby consent to the formation of API Technologies (UK) Limited by API Cryptek
Inc. Pursuant to Section 3.02(c) of the U.S. Guaranty and Collateral Agreement,
Schedule 3.03 to the U.S. GCA Disclosure Letter (as defined in the U.S. Guaranty
and Collateral Agreement) is hereby supplemented as set forth on Annex 3
attached hereto.

[Remainder of page intentionally blank.]

 

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

 

API TECHNOLOGIES CORP.   By  

/s/ Brian R. Kahn

    Name:   Brian R. Kahn     Title:   Chairman and Chief Executive Officer

MORGAN STANLEY SENIOR FUNDING, INC.,

as Administrative Agent and Collateral Agent

  By  

/s/ Stephen B. King

    Name:   Stephen B. King     Title:   VP

BLUEMOUNTAIN CLO 2011-1 LTD

By: BlueMountain Capital Management, LLC

its Collateral Manager

  By  

/s/ Jack Chau

    Name:   Jack Chau     Title:   Associate

BLUEMOUNTAIN CLO II LTD.

By: BlueMountain Capital Management, LLC

its Collateral Manager

  By  

/s/ Jack Chau

    Name:   Jack Chau     Title:   Associate

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

--------------------------------------------------------------------------------

BLUEMOUNTAIN CLO III LTD.

By: BlueMountain Capital Management, LLC

its Collateral Manager

  By  

/s/ Jack Chau

    Name:   Jack Chau     Title:   Associate CARLYLE GLOBAL MARKET STRATEGIES
CLO 2011-1, LTD.   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE VEYRON CLO, LTD.  
By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE VANTAGE CLO, LTD.
  By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE MCLAREN CLO, LTD.
  By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

--------------------------------------------------------------------------------

MOUNTAIN CAPITAL CLO VI LTD.   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director MOUNTAIN CAPITAL CLO V
LTD.   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director MOUNTAIN CAPITAL CLO IV
LTD.   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE HIGH YIELD
PARTNERS VII, LTD   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE HIGH YIELD
PARTNERS IX, LTD   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE BRISTOL CLO, LTD.
  By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

--------------------------------------------------------------------------------

CARLYLE AZURE CLO, LTD.   By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director CARLYLE ARNAGE CLO, LTD.  
By  

/s/ Linda Pace

    Name:   Linda Pace     Title:   Managing Director ATRIUM V By: Credit Suisse
Asset Management, LLC, as collateral manager   By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory BENTHAM WHOLESALE
SYNDICATED LOAN FUND By: Credit Suisse Asset Management, LLC, as Agent
(Sub-advisor) to Challenger Investment Services Limited, the Responsible Entity
for Bentham Wholesale Syndicated Loan Fund   By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory CREDIT SUISSE
FLOATING RATE HIGH YIELD FUND By: Credit Suisse Asset Management, LLC, as
investment adviser   By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

--------------------------------------------------------------------------------

CREDIT SUISSE DOLLAR SENIOR LOAN FUND, LTD.

By: Credit Suisse Asset Management, LLC, as investment manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

BA/CSCREDIT 1 LLC

By: Credit Suisse Asset Management, LLC, as its investment manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

MADISON PARK FUNDING II, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

MADISON PARK FUNDING III, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

--------------------------------------------------------------------------------

MADISON PARK FUNDING IV, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

MADISON PARK FUNDING V, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

MADISON PARK FUNDING VI, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

MADISON PARK FUNDING VII, LTD.

By: Credit Suisse Asset Management, LLC, as portfolio manager

  By  

/s/ Louis Farano

    Name:   Louis Farano     Title:   Authorized Signatory

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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FLAGSHIP CLO V

By: Deutsche Investment Management Americas, Inc. (as successor in interest to
Deutsche Asset Management, Inc.), as Collateral Manager

  By  

/s/ Eric S. Meyer

    Name:   Eric S. Meyer     Title:   Managing Director   By  

/s/ Thomas R. Bouchard

    Name:   Thomas R. Bouchard     Title:   Vice President

FLAGSHIP CLO VI

By: Deutsche Investment Management Americas, Inc., as Collateral Manager

  By  

/s/ Eric S. Meyer

    Name:   Eric S. Meyer     Title:   Managing Director   By  

/s/ Thomas R. Bouchard

    Name:   Thomas R. Bouchard     Title:   Vice President

DWS FLOATING RATE FUND

By: Deutsche Investment Management Americas, Inc., as Investment Advisor

  By  

/s/ Eric S. Meyer

    Name:   Eric S. Meyer     Title:   Managing Director   By  

/s/ Thomas R. Bouchard

    Name:   Thomas R. Bouchard     Title:   Vice President

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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DWS ULTRA-SHORT DURATION FUND

By: Deutsche Investment Management Americas, Inc, Investment Advisor

  By  

/s/ Eric S. Meyer

    Name:   Eric S. Meyer     Title:   Managing Director   By  

/s/ Thomas R. Bouchard

    Name:   Thomas R. Bouchard     Title:   Vice President GE CAPITAL FINANCIAL
INC   By  

/s/ Dennis Leonard

    Name:   Dennis Leonard     Title:   Duly Authorized Signatory

GENERAL ELECTRIC PENSION TRUST

By: GE Capital Debt Advisors LLC, as Investment Advisor

  By  

/s/ John Campos

    Name:   Dennis Leonard     Title:   Authorized Signatory

GMP DIVERSIFIED ALPHA MASTER FUND, LTD.

GMP Investment Management, L.P., by its general partner GMP Investment
Management GP Corp., in its capacity as Investment Adviser of GMP Diversified
Alpha Master Fund, Ltd.

  By  

/s/ Jason Marks

    Name:   Jason Marks     Title:   CEO, CIO, CCO & Managing Partner

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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DIVERSIFIED ALPHA II CORP.

GMP Investment Management, L.P., by its general partner GMP Investment
Management GP Corp., in its capacity as Portfolio Advisor of Diversified
Alpha II Corp.

  By  

/s/ Jason Marks

    Name:   Jason Marks     Title:   CEO, CIO, CCO & Managing Partner

5180 CLO LP

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

ABITIBIBOWATER FIXED INCOME MASTER TRUST FUND

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

THE ABITIBIBOWATER INC. US MASTER TRUST FOR DEFINED BENEFIT PLANS

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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COPPER RIVER CLO LTD.

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director THE NORTH RIVER
INSURANCE COMPANY By: Guggenheim Investment Management, LLC as Manager   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

ODYSSEY AMERICA REINSURANCE CORPORATION

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

GENERAL DYNAMICS CORPORATION GROUP TRUST

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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THE HOSPITAL FOR SICK CHILDREN FOUNDATION

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

GUGGENHEIM APSLEY FUND, L.P.

By: Guggenheim Apsley Holdings LLC as General Partner

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

GUGGENHEIM HIGH-YIELD PLUS MASTER FUND SPC

on behalf of and for the account of the High-Yield Loan Plus Master Segregated
Portfolio

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

MASTER SEGREGATED PORTFOLIO B Guggenheim High-Yield Plus Master Fund SPC

on behalf of and for the account of Master Segregated Portfolio B

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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KENNECOTT FUNDING LTD.

By: Guggenheim Investment Management, LLC as Collateral Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

SANDS POINTS FUNDING LTD.

By: Guggenheim Investment Management, LLC as Collateral Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

NZCG FUNDING LTD.

By: Guggenheim Investment Management, LLC as Collateral Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

SEI INSTITUTIONAL MANAGED TRUST – HIGH YIELD BOND FUND

By: Guggenheim Investment Management, LLC as Sub-Adviser

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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SEI INSTITUTIONAL INVESTMENTS TRUST – HIGH YIELD BOND FUND

By: Guggenheim Investment Management, LLC as Sub-Adviser

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

SHRINERS HOSPITALS FOR CHILDREN

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

SCHOOL EMPLOYEES’ RETIREMENT SYSTEM OF DOUGLAS COUNTY SCHOOL DISTRICT 0001

By: Guggenheim Investment Management, LLC as Adviser

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

PRINCIPAL FUND, INC. – GLOBAL DIVERSIFIED INCOME FUND

By: Guggenheim Investment Management, LLC as Sub-Adviser

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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ORPHEUS FUNDING LLC By:   Guggenheim Investment Management, LLC as Manager   By
 

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director GUGGENHEIM
BUILD AMERICA BONDS MANAGED DURATION TRUST By:   Guggenheim Partners Asset
Management, LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director SECURITY
BENEFIT LIFE INSURANCE COMPANY By:   Guggenheim Partners Asset Management, LLC  
By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director NYLIAC SEPARATE
ACCOUNT 70_A01 By:   Guggenheim Partners Asset Management, LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director MIDLAND
NATIONAL LIFE INSURANCE COMPANY By:   Guggenheim Partners Asset Management, LLC
as Investment Adviser   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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SECURITY INCOME FUND – FLOATING RATE STRATEGIES SERIES By:   Guggenheim Partners
Asset Management, LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director SECURITY INCOME
FUND – MACRO OPPORTUNITIES SERIES By:   Guggenheim Partners Asset Management,
LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director GUGGENHEIM LIFE
AND ANNUITY COMPANY By:   Guggenheim Partners Asset Management, LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director
CLAYMORE/GUGGENHEIM STRATEGIC OPPORTUNITIES FUND By:   Guggenheim Partners Asset
Management, LLC   By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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GUGGENHEIM U.S. LOAN FUND

Guggenheim U.S. Loan Fund, a sub fund of Guggenheim Qualifying Investor Fund plc

By: For and on behalf of BNY Mellon Trust Company (Ireland) Limited under Power
of Attorney

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

INTEL CORPORATION PROFIT SHARING RETIREMENT PLAN

By: Guggenheim Partners Asset Management, LLC

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

THE HOSPITAL FOR SICK CHILDREN EMPLOYEE PENSION PLAN TRUST

By: RBC Dexia Investor Services Trust, solely as Trustee

  By  

/s/ Eva Tang

    Name:   Eva Tang     Title:   Client Service Manager   By  

/s/ Patricia Budrow

    Name:   Patricia Budrow     Title:   Client Service Manager

Investment Manager: The Hospital for Sick

Children Employee Pension Plan

By: Guggenheim Investment Management, LLC as Manager

  By  

/s/ Michael Damaso

    Name:   Michael Damaso     Title:   Senior Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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THE HARTFORD FLOATING RATE FUND

The Hartford Mutual Funds, Inc., on behalf of The Hartford Floating Rate Fund

By:   Hartford Investment Management Company, its Sub-advisor   By  

/s/ Francesco Ossino

    Name:   Francesco Ossino     Title:   Senior Vice President

 

HIGHBRIDGE SENIOR LOAN HOLDINGS, L.P. By:   Highbridge Principal Strategies LLC
its Investment Manager   By  

/s/ Michael Patterson

    Name:   Michael Patterson     Title:   Managing Director

 

HORIZON CREDIT OPPORTUNITIES MASTER FUND LTD   By  

/s/ David Kingsley

    Name:   David Kingsley     Title:   Sr. Portfolio Manager

 

CRATOS CLO I LTD.   By  

/s/ Renee Lefebure

    Name:   Renee Lefebure     Title:   Managing Director

 

LORD ABBETT INVESTMENT TRUST – LORD ABBETT FLOATING RATE FUND   By  

/s/ Joel Serebransky

    Name:   Joel Serebransky     Title:   Portfolio Manager

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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GOLDEN KNIGHT II CLO, LTD.   By  

/s/ Joel Serebransky

    Name:   Joel Serebransky     Title:   Portfolio Manager MAIN STREET CAPITAL
CORPORATION   By  

/s/ Rodger Stout

    Name:   Rodger Stout     Title:   Senior Vice President MORGAN STANLEY BANK,
N.A.   By  

/s/ Scott Taylor

    Name:   Scott Taylor     Title:   Authorized Signatory VIRTUS SENIOR
FLOATING RATE FUND   By  

/s/ Kyle Jennings

    Name:   Kyle Jennings     Title:   Managing Director VIRTUS MULTI SECTOR
FIXED INCOME FUND   By  

/s/ Kyle Jennings

    Name:   Kyle Jennings     Title:   Managing Director VIRTUS MULTI SECTOR
SHORT TERM BOND FUND   By  

/s/ Kyle Jennings

    Name:   Kyle Jennings     Title:   Managing Director

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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PIONEER ABSOLUTE RETURN CREDIT FUND

PIONEER DIVERSIFIED HIGH INCOME TRUST

PIONEER FLOATING RATE FUND

PIONEER FLOATING RATE TRUST

PIONEER HIGH INCOME TRUST

WHITE MOUNTAINS SUB-ACCT 193 FUND

By:   Pioneer Investment Management, Inc.   By  

/s/ Margaret C. Begley

    Name:   Margaret C. Begley     Title:   Secretary and Associate General
Counsel

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

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Annex 1 to Second Amendment

SCHEDULE 1.01(C)

 

Lender

   CMAC Term
Loan Commitment  

Morgan Stanley Senior Funding, Inc.

   $ 16,000,000      

 

 

 

TOTAL:

   $ 16,000,000      

 

 

 

 

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]