Exhibit 10.1

GUGGENHEIM CORPORATE FUNDING, LLC

300 Madison Avenue, 10th Floor

New York, NY 10017

April 23, 2015

API Technologies Corp.

4705 S. Apopka Vineland Road, Suite 210

Orlando, Florida 32819

Attention: Brian R. Kahn, Chairman

Project Indigo

Commitment Letter

Ladies and Gentlemen:

Subject to the terms and conditions described in this letter and the attached
Term Sheet (“Exhibit A”, and together with this letter, the “Commitment
Letter”), (a) Guggenheim Corporate Funding, LLC (acting alone or through or with
affiliates selected by it) (“GCF”) agrees to provide the services referred to in
the next succeeding paragraph and (b) each of the other entities which has
signed below as a commitment party (each a “Commitment Party”, and collectively,
the “Commitment Parties”) is pleased to offer its commitment to provide,
severally (and not jointly), to API Technologies Corp., a Delaware corporation
(the “Borrower”) the portion of the Amendment No. 3 Incremental Term Loan (as
defined in Exhibit A) set forth opposite its name on Schedule I hereto with
respect to the Borrower under the Borrower’s Credit Agreement, dated as of
February 6, 2013, by and among the Borrower, the lenders party thereto from time
to time (the “Lenders”) and GCF, as Agent (in such capacity, together with its
successors and assigns, the “Agent”) (as amended, restated, supplemented or
otherwise modified from time to time, the “Existing Credit Agreement”) to
facilitate the Borrower’s acquisition of all of the outstanding equity interests
of each of Aeroflex / Inmet, Inc. and Aeroflex / Weinschel, Inc., each a
Michigan corporation (collectively, the “Target” and, together with their
respective subsidiaries, the “Acquired Business”), directly or through an
affiliate (the “Acquisition”). The date on which the funding of the Amendment
No. 3 Incremental Term Loan and the consummation of the Acquisition occurs shall
be referred to herein as the “Closing Date”.

In connection with the foregoing, it is agreed that GCF will act as (i) sole
lead arranger and bookrunner with respect to the Amendment No. 3 Incremental
Term Loan and (ii) sole administrative agent and collateral agent with respect
to the Amendment No. 3 Incremental Term Loan. It is further agreed that GCF
shall have “left” placement in any and all marketing materials or other
documentation used in connection with the Amendment No. 3 Incremental Term Loan
(if any) and that no other agents, arrangers, or bookrunners will be appointed,
no other titles will be awarded and no compensation (other than as expressly
contemplated by this Commitment Letter and the Fee Letter (as defined below))
will be paid to any other party in order to obtain such party’s commitment to
participate in the Amendment No. 3 Incremental Term Loan unless you and we shall
so agree.

Section 1. Conditions Precedent.

Each Commitment Party’s several (and not joint) commitments to fund the
Amendment No. 3 Incremental Term Loan and the borrowing of the Amendment No. 3
Incremental Term Loan is subject to

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the following, it being understood that there are no conditions (implied or
otherwise) to the commitments hereunder other than the conditions listed below
(and upon satisfaction or waiver of such conditions, the Amendment No. 3
Incremental Term Loan shall be funded):

 

  (a) substantially concurrently with the funding of the Amendment No. 3
Incremental Term Loan (as defined in Exhibit A), the Acquisition shall have been
consummated in accordance with the terms of the Stock Purchase Agreement, dated
as of the date hereof (together with all schedules and exhibits thereto, the
“Acquisition Agreement”), by and among Aeroflex Microelectronic Solutions, Inc.
and the Borrower, without giving effect to any waiver, modification, consent or
amendment thereto, or in respect thereof, that is materially adverse to the
interests of Agent or the Lenders in their respective capacities as such without
the consent of the Agent;

 

  (b) the execution and delivery by each party thereto of definitive
documentation with respect to the Amendment No. 3 Incremental Term Loan (the
“Operative Documents), substantially consistent with the definitive
documentation delivered in connection with Amendment No. 2 (as defined in the
Existing Credit Agreement), which shall be in form and substance reasonably
satisfactory to the Agent;

 

  (c) the Agent shall have received the following customary closing
deliverables: a consent and reaffirmation agreement, legal opinions, secretary’s
certificates and a solvency certificate, in each case, substantially consistent
with the deliverables delivered in connection with Amendment No. 2;

 

  (d) there shall not have occurred a Material Adverse Effect; it being
understood that “Material Adverse Effect” for purposes hereof means “any change,
occurrence, circumstance or event that, individually or together with other
changes, occurrences, circumstances or events, has a material adverse effect on
the business, results of operations or financial condition of the Acquired
Companies, taken as a whole, provided that none of the following shall be taken
into account when determining whether or not a Material Adverse Effect has
occurred: (a) any change in economic conditions in any of the markets or
geographical areas in which either of the Acquired Companies operate or the
financial, banking, currency or capital markets in general (whether in the
United States or any other country or in any international market) or changes in
currency exchange rates or currency fluctuations; (b) any conditions generally
affecting any of the industries in which either of the Acquired Companies
operate; (c) acts of God or other calamities, national or international
political or social actions or conditions, including the engagement by any
country in hostilities, whether commenced before or after the date of this
Agreement, and whether or not pursuant to the declaration of a national
emergency or war, or the occurrence of any military or terrorist attack;
(d) changes in Law, GAAP or other applicable accounting standards or
interpretations thereof; (e) any failure to meet internal projections, public
estimates or expectations with respect to either of the Acquired Companies;
(f) the resignation or termination of any employee of either of the Acquired
Companies; (g) the announcement of, or the taking of any action expressly
contemplated by, this Agreement and the other agreements contemplated hereby,
including by reason of the identity of Buyer or any communication by Buyer
regarding the plans or intentions of Buyer with respect to the conduct of the
business of either of the Acquired Companies; or (h) the effect of any matter
set forth on Schedule 1.1 to this Agreement; provided, however, that the
exceptions set forth in clauses (a), (b) and (c) shall not apply to the extent
that the Acquired Companies, taken as a whole, are disproportionately affected
thereby relative to other companies of comparable size in the same industries
and geographies in which the Acquired Companies operate”, with all capitalized
terms used in such definition having the definitions ascribed to such terms in
the Acquisition Agreement (as in effect on the date hereof);

 

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  (e) the Specified Representations and the Acquisition Agreement
Representations (each as defined below) shall be true and correct in all
material respects (or in the case of any representations and warranties
qualified by materiality, shall be true and correct in all respects) as of the
Closing Date. “Specified Representations” means the representations in the
Existing Credit Agreement relating to corporate or other organizational
existence, organizational power and authority of the Loan Parties (solely as
they relate to due authorization, execution, delivery and performance of the
Operative Documents); due authorization, execution, delivery and enforceability
(in each case solely relating to the entering into and performance of such
applicable Operative Documents); perfection of liens; solvency as of the Closing
Date (after giving effect to the Acquisition and the Amendment No. 3 Incremental
Term Loan) of the Borrower and its subsidiaries, on a consolidated basis; no
conflicts of the Operative Documents with organizational documents; compliance
with laws; margin stock; governmental regulation; PATRIOT Act; and OFAC.
“Acquisition Agreement Representations” means such representations made by or
with respect to the Acquired Business as are material to the interests of the
Commitment Parties, but only to the extent that Borrower or any of its
affiliates has the right to terminate Borrower’s or such affiliate’s obligations
under the Acquisition Agreement or decline to consummate the Acquisition as a
result of a breach of such representations in the Acquisition Agreement;

 

  (f) the Borrower shall have delivered or caused to be delivered to the Agent
or its counsel each stock certificate representing the Borrower’s ownership of
the Acquired Entities and stock powers relating thereto;

 

  (g) no default or event of default under the Loan Documents shall have
occurred or shall result from the making of Amendment No. 3 Incremental Term
Loan or the consummation of the Acquisition;

 

  (h) to the extent invoiced at least two business days prior to the Closing
Date, the Loan Parties shall have paid all Lender Group Expenses (as defined in
the Existing Credit Agreement) outstanding and/or incurred in connection with
the transactions relating to the Acquisition and the Amendment No. 3 Incremental
Term Loan and requested by the Agent to be paid;

 

  (i) the Borrower shall have paid in full all fees due and payable under that
certain fee letter, dated as of the date hereof, among the Borrower and GCF (the
“Fee Letter”); and

 

  (j) the Agent’s receipt, at least three business days prior to the Closing
Date, of all documentation and other information with respect to the Borrower,
its subsidiaries and/or the Acquired Business that is requested by the Agent at
least ten business days prior to the Closing Date and is required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including, without limitation, the PATRIOT Act.

Section 2. Commitment Termination.

GCF’s and each Commitment Party’s commitment and the obligations of each such
party set forth in this Commitment Letter will terminate on the earliest to
occur of (a) July 15, 2015, (b) the date the Operative Documents become
effective and (c) the termination of the Acquisition or expiration of the
related acquisition agreement prior to the Closing Date.

Section 3. Indemnification

The Borrower shall indemnify and hold harmless GCF and each Commitment Party and
their respective affiliates and related funds and each of their respective
officers, directors, employees, agents, advisors,

 

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attorneys and representatives (each, an “Indemnified Party”) from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and disbursements of counsel), joint or
several, that may be incurred by or asserted or awarded against any Indemnified
Party (including, without limitation, in connection with or relating to any
investigation, litigation or proceeding, actual or threatened, or the
preparation of a defense in connection therewith), in each case arising out of
or in connection with or by reason of this Commitment Letter, the Amendment
No. 3 Incremental Term Loan or the Operative Documents, or any transactions or
related transactions contemplated hereby or thereby, provided that the foregoing
indemnity will not, as to any Indemnified Party, apply to claims, damages,
losses, liabilities or expenses (i) to the extent they are found by a final,
non-appealable judgment of by a court of competent jurisdiction to have resulted
solely from such Indemnified Party’s gross negligence or willful misconduct,
(ii) resulting from a material breach by such Indemnified Person of its express
funding obligations under this Commitment Letter or (iii) resulting from any
claim, litigation, investigation or proceeding solely between or among
Indemnified Persons not arising from any act or omission by the Borrower or any
of its affiliates (other than proceedings against GCF or any Commitment Party
solely in its capacity as an agent or similar role). In the case of an
investigation, litigation or other proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, any of its
directors, security holders or creditors, an Indemnified Party or any other
person, or an Indemnified Party is otherwise a party thereto and whether or not
the transactions contemplated hereby or by the Operative Documents are
consummated.

In no event shall any Indemnified Party be liable on any theory of liability for
any special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings).

Section 4. Costs and Expenses.

The Borrower shall pay, or reimburse GCF on demand for, all reasonable
out-of-pocket costs and expenses incurred by GCF (whether incurred before or
after the date hereof) in connection with the Amendment No. 3 Incremental Term
Loan and the preparation, negotiation, execution and delivery of this Commitment
Letter, the Fee Letter and the Operative Documents, including, without
limitation, reasonable fees and expenses of one firm counsel and one local or
specialist counsel, as necessary, in each appropriate jurisdiction or specialty,
as applicable, regardless of whether any of the transactions contemplated hereby
is consummated.

Section 5. Confidentiality.

By accepting delivery of this Commitment Letter, the Borrower agrees that this
Commitment Letter and the Fee Letter are for its confidential use and that
neither their existence nor the terms thereof will be disclosed by it to any
person except (a) its officers, directors, employees, affiliates, accountants,
attorneys and other advisors (the “Representatives”), in each case only on a
confidential and “need to know” basis in connection with the transactions
contemplated hereby, (b) the contents of this Commitment Letter and the Fee
Letter (provided, that any disclosure of the Fee Letter or its terms or
substance under this clause (b) shall be redacted in a manner reasonably
satisfactory to GCF) may be disclosed to the Target and its Representatives on a
confidential and “need to know” basis in connection with the transactions
contemplated hereby, (c) this Commitment Letter (but not the Fee Letter) may be
disclosed (i) to the extent required by the applicable rules of any national
securities exchange and/or (ii) to the extent required by applicable federal
securities laws, in connection with any Securities and Exchange Commission
filings or any other required public filings relating to the Acquisition; (d) in
connection with the exercise of any remedy or enforcement of any right under
this Commitment Letter; and (e) the aggregate fee amount may be disclosed in
financial statements; provided, however, that the Borrower may

 

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disclose the existence and terms hereof to the extent required by applicable law
or in connection with any subpoena or litigation or to the extent that such
existence or terms becomes public knowledge by a reason other than breach by the
Borrower or any of its Representatives. The provisions of this paragraph shall
automatically terminate (except with respect to the Fee Letter) on the date that
is one year following the date hereof.

Each of GCF and each Commitment Parties individually (and not jointly or jointly
and severally) agrees to use all material, nonpublic information received by
them in connection with the transactions contemplated hereby solely for the
purposes of providing the services that are the subject of this Commitment
Letter and shall treat confidentially all such information; provided, however,
that nothing herein shall prevent GCF or the Commitment Parties from disclosing
any such information (a) to any Lenders or participants or prospective Lenders
or participants; (b) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation; provided that (x) prior to any
disclosure under this clause (b), the disclosing party agrees to provide the
Borrower with prior notice thereof, to the extent that it is practicable to do
so and to the extent that the disclosing party is permitted to provide such
prior notice to Borrower pursuant to the terms of the applicable statute,
decision, or judicial or administrative order, rule, or regulation and (y) any
disclosure under this clause (b) shall be limited to the portion of the such
confidential information as may be required by such statute, decision, or
judicial or administrative order, rule, or regulation; (c) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information; (d) as may be agreed to in advance in
writing by the Borrower; (e) to GCF’s or any Commitment Party’s Representatives
or GCF’s or any Commitment Party’s respective affiliates’ Representatives on a
need-to-know basis who are informed of the confidential nature of such
information and are or have been advised of their obligation to keep information
of this type confidential; (f) as requested or required by any Governmental
Authority (as defined in the Existing Credit Agreement) pursuant to any subpoena
or other legal process, provided, that, (x) prior to any disclosure under this
clause (f) the disclosing party agrees to provide Borrower with prior written
notice thereof, to the extent that it is practicable to do so and to the extent
that the disclosing party is permitted to provide such prior written notice to
Borrower pursuant to the terms of the subpoena or other legal process and
(y) any disclosure under this clause (f) shall be limited to the portion of the
confidential information as may be required by such Governmental Authority
pursuant to such subpoena or other legal process; (g) to the extent any such
information is or becomes publicly available other than by reason of disclosure
by the relevant disclosing party or its respective Representatives in breach of
this paragraph; and (h) in connection with the exercise of any remedy or
enforcement of any right under this Commitment Letter or the Fee Letter;
provided that the disclosure of any such information to any Lenders or
prospective Lenders or participants or prospective participants referred to
above shall be made subject to the acknowledgment and acceptance by such Lender
or prospective Lender or participant or prospective participant that such
information is being disseminated on a confidential basis (and they shall agree
to be bound to substantially the same terms as are set forth in this paragraph
or as are otherwise reasonably acceptable to the Borrower and GCF). The
provisions of this paragraph shall automatically terminate on the earlier of
(x) the Closing Date and (y) the date that is one year following the date
hereof.

Section 6. Representations and Warranties.

The Borrower hereby represents and warrants that (a) all written information
that has been or will hereafter be made available to GCF or any Commitment Party
by it or any of its Representatives in connection with the transactions
contemplated hereby (other than financial projections or forward-looking
information and information of a general economic or industry-specific nature),
taken as a whole together with the Borrower’s filings with the Securities and
Exchange Commission, is and will be complete and correct in all material
respects and does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not misleading in any material respect in light of the
circumstances under which such statements were or are made and (b)

 

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all financial projections, if any, that have been or will be prepared by it or
its Representatives and made available to GCF or any Commitment Party have been
or will be prepared in good faith based upon assumptions that the Borrower
believed were reasonable as of the date of the preparation of such financial
projections (it being understood that such projections are subject to
uncertainties and contingencies and that no assurance can be given that the
projections will be realized) and at the time disclosed to GCF or such
Commitment Party. The Borrower agrees to make such disclosures relating to
events or developments and to revise any such projections until the Operative
Documents become effective so that the representations and warranties contained
in this paragraph remain correct in all material respects and not misleading in
any material respect as specified in this Section 6.

In providing this Commitment Letter, GCF and the Commitment Parties will be
entitled to use, and is relying on the accuracy of, the information furnished to
it by or on behalf of the Borrower and its Representatives without independent
verification thereof.

Section 7. No Third Party Reliance, Etc.

The agreements of GCF and the Commitment Parties hereunder are made solely for
the benefit of the Borrower and may not be relied upon or enforced by any other
person. Please note that those matters that are not covered or made clear in
this Commitment Letter are subject to mutual agreement of the parties. The
Borrower may not assign or delegate any of its rights or obligations hereunder
without the GCF’s and Commitment Parties’ prior written consent. This Commitment
Letter may not be amended or modified, or any provisions hereof waived, except
by a written agreement signed by all parties hereto.

You acknowledge that GCF, the Commitment Parties and their respective affiliates
and other accounts managed by affiliates of GCF may be providing debt financing,
equity capital or other services (including, without limitation, financial
advisory services) to other companies in respect of which you may have
conflicting interests or a commercial or competitive relationship with and
otherwise. Neither GCF, the Commitment Parties nor their respective affiliates
will use confidential information obtained from you by virtue of the
transactions contemplated by this Commitment Letter or their other relationships
with you in connection with the performance by GCF, the Commitment Parties or
their respective affiliates of services for other companies, and neither GCF,
the Commitment Parties nor their respective affiliates will furnish any such
information to other companies. You acknowledge and agree that (a) the
transactions contemplated by this Commitment Letter are arm’s-length commercial
transactions between the Commitment Parties and GCF, on the one hand, and the
Borrower, on the other, (b) in connection therewith and with the process leading
to such transaction each Commitment Party and GCF is acting solely as a
principal and not as agents or fiduciaries of you, your management,
shareholders, creditors or any other person, (c) the Commitment Parties have not
assumed an advisory or fiduciary responsibility or any other obligation in favor
of you with respect to the transactions contemplated hereby or the process
leading thereto (irrespective of whether the Commitment Parties or any of their
respective affiliates have advised or are currently advising you on other
matters) except the obligations expressly set forth in this Commitment Letter
and (d) you have consulted your own legal, tax, accounting and financial
advisors to the extent you deemed appropriate. You further acknowledge and agree
that you are responsible for making your own independent judgment with respect
to such transactions and the process leading thereto. Please note that the
Commitment Parties, GCF and their respective affiliates have not provided any
legal, accounting, regulatory or tax advice. In addition, you acknowledge that
GCF currently is acting as Agent under the Existing Credit Agreement, and one or
more of the Commitment Parties or their affiliates may be acting as lenders,
under the Existing Credit Agreement, and your and your affiliates’ rights and
obligations under such agreements or any other agreement with the Commitment
Parties that may currently or hereafter exist are, and shall be, separate and
distinct from the rights and obligations of the parties pursuant to this
Commitment Letter, and none of such rights and obligations under the Existing
Credit Agreement or such other agreements shall be

 

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affected by the Commitment Parties’ or GCF’s performance or lack of performance
of services hereunder. You hereby agree that each Commitment Party may render
its services under this Commitment Letter notwithstanding any actual or
potential conflict of interest presented by the foregoing, and you hereby waive
any conflict of interest claims relating to the relationship between any
Commitment Party or GCF and the Borrower and its affiliates in connection with
the services contemplated hereby, on the one hand, and the exercise by any
Commitment Party or GCF or any of their affiliates of any of their rights and
duties under any credit or other agreement (including the under the Existing
Credit Agreement), on the other hand.

Section 8. Governing Law, Etc.

This Commitment Letter will be governed by and construed in accordance with the
laws of the State of New York without regard to conflict of law principles that
would result in the application of any law other than the law of the State of
New York. This Commitment Letter is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Commitment
Letter may be executed in any number of counterparts, each of which shall be
deemed an original, and all of which, when taken together, shall constitute one
agreement. Delivery of an executed counterpart of a signature page of this
Commitment Letter by facsimile transmission or other electronic transmission
(i.e., a “pdf” or “tiff”) shall be effective as delivery of a manually executed
counterpart hereof. Sections 3, 4, 5, 7, 8 and 9 hereof shall survive the
termination of this Commitment Letter.

Section 9. Waiver of Jury Trial, Etc.

Each party hereto irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Commitment Letter or the transactions
contemplated hereby or the actions of the parties hereto in the negotiation,
performance or enforcement hereof.

With respect to all matters relating to this Commitment Letter, including
Exhibit A, the Borrower irrevocably (a) submits to the exclusive jurisdiction of
any New York State or federal court sitting in the State of New York, County of
New York, and any appellate court from any thereof, (b) agrees that all claims
related hereto may be heard and determined in such courts, (c) waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum,
(d) agrees that a final judgment of such courts shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law, (e) waives any immunity from jurisdiction of any court or from
any legal process or setoff to which it or its properties or assets may be
entitled and (f) consents to the service of any and all process with respect to
all matters relating to this Commitment Letter by any manner permitted by law.

Any and all obligations of, and services to be provided by GCF or the Commitment
Parties hereunder may be performed and any and all rights of GCF and the
Commitment Parties hereunder may be exercised by or through any of its
respective affiliates or branches and, in connection with such performance or
exercise, the Commitment Parties may exchange with such affiliates or branches
information concerning you and your affiliates that may be the subject of the
transactions contemplated hereby and, to the extent so employed, such affiliates
and branches shall be entitled to the benefits afforded to GCF and the
Commitment Parties hereunder.

Please indicate the Borrower’s acceptance of the provisions hereof by signing
the enclosed copy of this Commitment Letter and the related Fee Letter and
returning each such document at or before 8:00 p.m. (New York City time) on
April 23, 2015, the time at which the commitment of GCF and the Commitment

 

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Parties set forth above (if not received on or prior thereto) will terminate. If
the Borrower elects to deliver this Commitment Letter and Fee Letter by
electronic communication, please arrange for the executed original to follow by
next-day courier.

[Remainder of this page intentionally left blank]

 

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Very truly yours, GUGGENHEIM CORPORATE FUNDING, LLC By:

/s/ Benjamin Goodman

Name: Benjamin Goodman Title: Attorney-in-Fact

 

[SIGNATURE PAGE TO COMMITMENT LETTER]

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COMMITMENT PARTIES: MIDLAND NATIONAL LIFE INSURANCE COMPANY, as a Commitment
Party By: Guggenheim Partners Investment Management, LLC By:

/s/ William Hagner

Name: William Hagner Title: Attorney-in-Fact NORTH AMERICAN COMPANY FOR LIFE AND
HEALTH INSURANCE, as a Commitment Party By: Guggenheim Partners Investment
Management, LLC By:

/s/ William Hagner

Name: William Hagner Title: Attorney-in-Fact GUGGENHEIM LIFE AND ANNUITY
COMPANY, as a Commitment Party By: Guggenheim Partners Investment Management,
LLC, as Advisor By:

/s/ William Hagner

Name: William Hagner Title: Attorney-in-Fact GUGGENHEIM PRIVATE DEBT FUND NOTE
ISSUER, LLC, as a Commitment Party By: Guggenheim Partners Investment
Management, LLC, as Manager By:

/s/ William Hagner

Name: William Hagner Title: Attorney-in-Fact

 

[SIGNATURE PAGE TO COMMITMENT LETTER]

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Accepted and agreed to as of

the date first above written:

 

API TECHNOLOGIES CORP. By

/s/ Robert Tavares

Name: Robert Tavares Title: President & CEO

 

[SIGNATURE PAGE TO COMMITMENT LETTER]

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Schedule I

Amendment No. 3 Incremental Term Loan

 

Account Name

  

Commitment Party

   Amount  

MIDLAND

   Midland National Life Insurance Company    $ 3,000,000   

MID-ANN

   Midland National Life Insurance Company    $ 24,000,000   

NACOLAH

   North American Company for Life and Health Insurance    $ 1,800,000   

NAC-ANN

   North American Company for Life and Health Insurance    $ 12,000,000   

BOLI-GEN

   Midland National Life Insurance Company    $ 3,000,000   

GLAC-2M

   Guggenheim Life and Annuity Company    $ 1,200,000   

PDFNI

   Guggenheim Private Debt Fund Note Issuer, LLC    $ 40,000,000       Total   
$ 85,000,000   

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Exhibit A1

 

Borrower:

API Technologies Corp. (the “Borrower”).

 

Guarantors:

Consistent with the Existing Credit Agreement.

 

Agent:

Guggenheim Corporate Funding, LLC (the “Agent”).

 

Amendments to Existing Credit Agreement

The Existing Credit Agreement will be amended (“Amendment No. 3”) to:

 

(a) permit (i) the incurrence of the Amendment No. 3 Incremental Term Loan (as
defined and described below) and (ii) the Acquisition, which shall be deemed to
be a “Permitted Acquisition” (as defined in the Existing Credit Agreement) for
all purposes under the Existing Credit Agreement and the documents relating
thereto (it being understood that (x) the Borrower and the Acquired Business
shall be subject to the requirements of Section 5.11 of the Existing Credit
Agreement and (y) the Borrower shall not be entitled to any Permitted
Acquisition adjustments to EBITDA based on the Acquisition other than (i) those
specifically identified in clause (g) below and (ii) adjustments permitted by
clause (A)(v) of the “Consolidated EBITDA” definition in the Existing Credit
Agreement);

 

(b) reset call protection for the Term Loan (as defined in the Existing Credit
Agreement), including the Amendment No. 3 Incremental Term Loan, such that all
prepayments of the Term Loan on or prior to the date that is 42 months after the
Closing Date and any repricing transaction shall be accompanied by a premium
(expressed as a percentage of the principal amount of the Term Loan to be
prepaid or repriced, as applicable) equal to:

 

(i) on or prior to the date that is six months after the Closing Date, 3.00%,

 

(ii) following the date that is six months after the Closing Date and on or
prior to the date that is 18 months after the Closing Date, 5.00%,

 

(iii) following the date that is 18 months after the Closing Date and on or
prior to the date that is 30 months after the Closing Date, 3.00%, and

 

(iv) following the date that is 30 months after the Closing Date and on or prior
to the date that is 42 months after the Closing Date, 1.00%;

 

(c) provide, in addition to the call protection referenced in clause (b) above,
in connection with any prepayment of the Term Loan on or prior to the date that
is six months after the Closing Date, the Borrower shall pay or cause to be paid
to each lender who holds any portion of the Amendment No. 3 Incremental Term
Loan at such time (each an “Incremental Term Loan Lender” and, collectively, the
“Incremental Term Loan Lenders”), a prepayment premium fee in an amount equal to
1.75% of the Term Loan prepaid up to $85 million, which fee shall be divided
amongst such Incremental Term Loan Lenders based on the percentage of the
Amendment No. 3 Incremental Term Loan held by each such Incremental Term Loan
Lender immediately prior to such prepayment,

 

1  Terms used herein and not otherwise defined shall have the meanings ascribed
to such terms in the Commitment Letter to which this Exhibit A is attached.

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(d) provide that, in addition to the call protection and prepayment premium fee
referenced in clauses (b) and (c) above, any prepayment of the Amendment No. 3
Incremental Term Loan on or prior to the date that is six months after the
Closing Date shall require an additional prepayment fee payable to the
Incremental Term Loan Lenders equal to the amount of interest that would have
been due pursuant to the terms of the Existing Credit Agreement (as amended by
Amendment No. 3) if such portion of the Amendment No. 3 Incremental Term Loan
had not been paid until the six month anniversary of the Closing Date (reduced
by any interest payments in respect of the Amendment No. 3 Incremental Term Loan
made prior to the date of such prepayment, but not reduced by any other
Prepayment Premium or additional prepayment fees otherwise payable to the
Amendment No. 3 Incremental Lenders);

 

  

(e) amend the financial covenants set forth in Section 7(a) and Section 7(c) of
the Existing Credit Agreement to restate each applicable grid set forth therein
in its entirety as set forth in Annex I hereto;

 

  

(f) amend the “Applicable Margin” definition in the Existing Credit Agreement to
be calculated as follows:

 

  

(i) from the Closing Date until the date that is six months after the Closing
Date, 6.50% for Base Rate Loans (as defined in the Existing Credit Agreement)
and 7.50% for LIBOR Rate Loans (as defined in the Existing Credit Agreement),
and

 

  

(ii) from the date that is six months after the Closing Date, 7.50% for Base
Rate Loans and 8.50% for LIBOR Rate Loans;

 

  

provided, however, that GCF may, in its sole discretion, require the Applicable
Margins to be increased by the amount of basis points that the S&P/LSTA U.S.
Leveraged Loan 100 Index (the “Index”) has increased on or prior to the Closing
Date since the date of execution of the Commitment Letter (e.g., a 26 basis
point increase in the Index average equals a 26 basis points increase in the
Applicable Margin); and

 

   (g) amend the “Consolidated EBITDA” definition in the Existing Credit
Agreement to include (i) adjustments for cost savings in connection with the
Acquisition that are realized or reasonably expected to be realized within 12
months of the related actions, beginning with the trailing four fiscal quarter
period ending May 31, 2015, capped in the aggregate for such period at $1.4
million, (ii) adjustments for cost savings consistent with clause (i) hereof for
the trailing four fiscal quarter periods ending August 31, 2015, November 30,
2015 and February 29, 2016 capped in the aggregate for each such period at $1.05
million, $700,000 and $350,000, respectively and (iii) historical Consolidated
EBITDA “plug” numbers for the Acquired Business in the amounts set forth in the
grid below.

 

Fiscal Quarter Ending

   Acquired Business Consolidated
EBITDA   May 31, 2014    $ 3,100,500    August 31, 2014    $ 887,000   
November 30, 2014    $ 4,288,000    February 28, 2015    $ 2,474,000   

 

2

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Use of Proceeds: Proceeds from the Amendment No. 3 Incremental Term Loan will be
used to: (a) fund the Acquisition and (b) fund certain fees and expenses
associated with the Acquisition. Amendment No. 3 Incremental Term Loan:

Amount:

$85,000,000 in the form of an incremental term loan under the Existing Credit
Agreement (the “Amendment No. 3 Incremental Term Loan”).

Maturity:

The Amendment No. 3 Incremental Term Loan will have a maturity date consistent
with the Existing Credit Agreement.

Applicable Margin and Floor:

The Amendment No. 3 Incremental Term Loan will have an Applicable Margin and
“floor” consistent with the Applicable Margin and “floor” for the Term Loan
under the Existing Credit Agreement (as amended pursuant to Amendment No. 3).

Scheduled Amortization:

Consistent with the Existing Credit Agreement; provided, however, that the
Amendment No. 3 Incremental Lenders shall waive any requirement to make an
amortization payment in respect of the Amendment No. 3 Incremental Term Loan
that would otherwise be due on May 31, 2015. Interest Rates, Fees and Original
Issue Discount:

Interest Rate:

Consistent with the Existing Credit Agreement (as amended pursuant to Amendment
No. 3).

Interest Payment Dates:

Consistent with the Existing Credit Agreement.

Original Issue Discount:

The Amendment No. 3 Incremental Term Loan will be issued at an original issue
discount as specified in the Fee Letter. Collateral: Consistent with the
Existing Credit Agreement. Mandatory Prepayments: Consistent with the Existing
Credit Agreement. Affirmative Covenants: Consistent with the Existing Credit
Agreement. Financial Reporting: Consistent with the Existing Credit Agreement.
Negative Covenants: Consistent with the Existing Credit Agreement. Financial
Covenants: Consistent with the Existing Credit Agreement (as amended pursuant to
Amendment No. 3).

 

3

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Representations & Warranties: Consistent with the Existing Credit Agreement.
Events of Default: Consistent with the Existing Credit Agreement. Conditions
Precedent to Funding of the Amendment No. 3 Incremental Term Loan: As contained
in Section 1 of the Commitment Letter. Governing Law: State of New York. Agent’s
Counsel: Weil, Gotshal & Manges LLP.

 

4

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Annex I

Interest Coverage Ratio:

 

Applicable Ratio

  

Applicable Period

1.50:1.00    For the one quarter period ending on February 28, 2013 1.70:1.00   
For the two quarter period ending on May 31, 2013 1.90:1.00    For the three
quarter period ending on August 31, 2013 1.90:1.00    For the Test Period ending
on November 30, 2013 2.10.1.00    For the Test Period ending on February 28,
2014 2.10.1.00    For the Test Period ending on May 31, 2014 2.10.1.00    For
the Test Period ending on August 31, 2014 2.10.1.00    For the Test Period
ending on November 30, 2014 2.20.1.00    For the Test Period ending on February
28, 2015 1.90.1.00    For the Test Period ending on May 31, 2015 1.90.1.00   
For the Test Period ending on August 31, 2015 1.90.1.00    For the Test Period
ending on November 30, 2015 1.90:1.00    For the Test Period ending on February
29, 2016 1.95:1.00    For the Test Period ending on May 31, 2016 2.00:1.00   
For the Test Period ending on August 31, 2016 2.05:1.00    For the Test Period
ending on November 30, 2016 2.10:1.00    For the Test Period ending on February
28, 2017 2.15:1.00    For the Test Period ending on May 31, 2017 2.20:1.00   
For the Test Period ending on August 31, 2017 2.25:1.00    For the Test Period
ending on November 30, 2017 2.30:1.00    For the Test Period ending on February
28, 2018

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Leverage Ratio:

 

Applicable Ratio

  

Test Period Ending

5.65:1.00    February 28, 2013 5.65:1.00    May 31, 2013 5.50:1.00    August 31,
2013 5.50:1.00    November 30, 2013 5.75:1.00    February 28, 2014 5.50:1.00   
May 31, 2014 5.50:1.00    August 31, 2014 5.50:1.00    November 30, 2014
5.25:1.00    February 28, 2015 5.50:1.00    May 31, 2015 5.25:1.00    August 31,
2015 5.25:1.00    November 30, 2015 5.00:1.00    February 29, 2016 5.00:1.00   
May 31, 2016 5.00:1.00    August 31, 2016 5.00:1.00    November 30, 2016
4.75:1.00    February 28, 2017 4.75:1.00    May 31, 2017 4.50:1.00    August 31,
2017 4.50:1.00    November 30, 2017 4.25:1.00    February 28, 2018