Exhibit 10.1

 

THIRD AMENDMENT TO

CREDIT AGREEMENT

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of the
28th day of December, 2004 by and among MTC TECHNOLOGIES, INC., a Delaware
corporation (“MTCT”), MTC TECHNOLOGIES, INC, (formerly known as MODERN
TECHNOLOGIES CORP.), an Ohio corporation (together with MTCT, collectively,
“Borrowers” and, individually, each a “Borrower”); (the financial institutions
listed on Schedule 1 to the Credit Agreement (collectively, the “Banks” and,
individually, each a “Bank”); and NATIONAL, CITY BANK, as lead arranger and
administrative agent for the Banks (“Agent”) under the following circumstances:

 

A. The Borrowers, the Agent and the Banks are parties to a Credit Agreement
dated as of January 31, 2003, as amended by the First Amendment to Credit
Agreement dated as of December 31, 2003 and a Second Amendment to Credit
Agreement dated July 12, 2004 (as the same may be amended, supplemented,
modified and/or restated from time to time, the “Credit Agreement”). Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings ascribed to those terms by the Credit Agreement.

 

B. Pursuant to the Credit Agreement, the Banks have provided the Revolving Loans
to the Borrowers which are evidenced by Revolving Credit Notes dated as of
December 31, 2003 (collectively, as the same may be amended, supplemented,
modified and/or restated from time to time, the “Original Revolving Credit
Notes”).

 

C. The Borrowers, the Agent and the Banks now desire to amend the Credit
Agreement and the Original Revolving Credit Notes for the reasons and upon the
terms and conditions hereinafter set forth

 

NOW, THEREFORE, the Borrowers, the Agent and the Banks agree as follows:

 

Section 1. Amendment to Credit Agreement.

 

(a) Amendments to Section 1.1. Section 1.1 of the Credit Agreement is hereby
amended by deleting the definition of “Maximum Commitment Amount”. The following
definitions are hereby either added to Section 1.1 or modified in their entirety
to read as follows:

 

“Consolidated Pro-Forma EBIT” shall mean, for any period, the sum of (a)
Consolidated EBIT, and (b)(i) without duplication, the EBIT of Companies
acquired in Acquisitions permitted by Section 5.13 hereof during such period to
the extent that such EBIT of Companies acquired is confirmed by audited
financial information or other information satisfactory to Agent, minus (ii)

 

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the EBIT of Companies disposed of in accordance with Section 5.12 hereof during
such period (but only to the extent that such EBIT is included in the
calculation of Consolidated EBIT).

 

“Consolidated Pro-Forma EBITDA” shall mean, for any period, the sum of (a)
Consolidated EBITDA, and (b)(i) without duplication, the EBITDA of Companies
acquired in Acquisitions permitted by Section 5.13 hereof during such period to
the extent that such EBITDA of Companies acquired is confirmed by audited
financial information or other information satisfactory to Agent, minus (ii) the
EBITDA of Companies disposed of in accordance with Section 5.12 hereof during
such period (but only to the extent that such EBITDA is included in Consolidated
EBITDA).

 

“Depreciation and Amortization Charges” shall mean, for any period, in
accordance with GAAP, the aggregate of all depreciation and amortization charges
for fixed assets, leasehold improvements and general intangibles (specifically
including goodwill) of a Person for such period.

 

“EBIT” shall mean, for any period, in accordance with GAAP, Net Earnings for
such period, plus the aggregate amounts deducted in determining such Net
Earnings in respect of (a) Income Tax Expense, and (b) Interest Expense.

 

“EBITDA” shall mean, for any period, in accordance with GAAP, (a) EBIT, plus (b)
the amount deducted in determining EBIT in respect of Depreciation and
Amortization Charges and Stock Option Expense.

 

“Fixed Charge Coverage Ratio” shall mean, for the most recently completed four
fiscal quarters of MTCT, the ratio of (a) Consolidated Pro-Forma EBITDA for such
period plus lease payments on Consolidated Rental Obligations for such period
less Consolidated Income Tax Expense for such period, to (b) Consolidated Fixed
Charges for such period.

 

“Income Tax Expense” shall mean, for any period, in accordance with GAAP, all
provisions for taxes based on the gross or net income of any Person (including,
without limitation, any additions to such taxes, and any penalties and interest
with respect thereto), and all franchise taxes of such Person.

 

“Interest Coverage Ratio” shall mean, for the most recently completed four
fiscal quarters of MTCT, the ratio of (a) Consolidated Pro-Forma EBIT to (b)
Consolidated Interest Expense.

 

“Interest Expense” shall mean, for any period, the interest expense of any
Person for such period, as determined in accordance with GAAP.

 

“Leverage Ratio” shall mean, at any time, on a Consolidated basis and in
accordance with GAAP, the ratio of (a) Consolidated Funded Indebtedness (for the
most recently completed

 

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fiscal quarter of MTCT) to (b) Consolidated Pro-Forma EBITDA (for the most
recently completed four fiscal quarters of MTCT).

 

“Net Earnings” shall mean, for any period, the net income (loss) for such period
(excluding from the calculation any nonrecurring gains or losses) of any Person,
determined in accordance with GAAP.

 

“Stock Option Expense” shall mean, for any period, in accordance with GAAP, all
non-cash compensation expense arising from the issuance by any Person of stock
options during such period.

 

“Total Commitment Amount” shall mean Eighty-Five Million Dollars ($85,000,000),
as such amount may be decreased pursuant to Section 2.1l(a) hereof.

 

(b) Amendment to Section 2.1l(b). Section 2.11(b) of the Credit Agreement is
hereby deleted in its entirety

 

(c) Amendment to Section 5.7(d). Section 5.7(d) of the Credit Agreement
(captioned Net Worth) is hereby is hereby amended in its entirety to read as
follows:

 

Borrowers shall not suffer or permit at any time the Consolidated Net Worth, for
the most recently completed fiscal quarter of MTCT, to be less than the current
minimum amount required, which current minimum amount required shall be
$119,896,000 on the Closing Date through December 30, 2004, with such current
minimum amount required to be positively increased by the Increase Amount on
December 31, 2004 and by an additional Increase Amount on the last day of each
succeeding fiscal quarter of MTCT thereafter. As used herein, the term “Increase
Amount” shall mean an amount equal to fifty percent (50%) of positive
Consolidated Net Earnings for the fiscal quarter then ended plus an amount equal
to one hundred percent (100%) of the proceeds of any equity offering by the
Companies, or any debt offering of the Companies, to the extent converted into
equity.

 

(d) Amendment to Section 5.7(e) of the Credit Agreement. Section 5.7(e) of the
Credit Agreement (captioned Tangible Net Worth) is hereby deleted in its
entirety.

 

(e) Amendment to Section 5.8. The following subsection (f) is hereby added to
Section 5.8 of the Credit Agreement:

 

(f) Indebtedness (other than the Loans or any other Indebtedness under this
Agreement) in an amount not to exceed $60,000,000 on terms and conditions
satisfactory to Agent and the Lenders in its sole discretion.

 

(f) Amendment to Schedule 1 to the Credit Agreement. Schedule 1 to the Credit
Agreement shall be deleted and replaced with the new Schedule 1 attached to this
Amendment.

 

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Section 2. Amendment to Current Revolving Credit Notes. The “Revolving Credit
Note” or “Revolving Credit Notes” referred to in the Loan Documents shall mean
the Amended and Restated Revolving Credit Notes in the form attached hereto as
Exhibits A-1, A-2, A-3, and A-4 respectively.

 

Section 3. Effective Date. This Amendment shall take effect immediately upon the
satisfaction, in the Agent’s sole discretion, of the following conditions
precedent:

 

(a) Agent’s receipt of an original counterpart of this Amendment executed by all
parties hereto;

 

(b) Agent’s receipt of the original Confirmation of Guarantees executed by
Amcomp Corporation, International Consultants, Inc. and Vitronics Inc.
(collectively, the “Guarantors”);

 

(c) Agent’s receipt of the Amended and Restated Revolving Credit Notes executed
by Borrowers;

 

(d) Agent’s receipt of the following, certified as true and correct and in full
force and effect by a duly authorized officer of each Borrower and each
Guarantor:

 

(i) resolutions of the Board of Directors of each Borrower and each Guarantor
authorizing execution, delivery and performance of this Amendment or
Confirmation of Guarantee, as applicable, and all other documents executed and
delivered in connection herewith to which each is a party;

 

(ii) the articles of incorporation of each Borrower and each Guarantor, as
certified by the Secretary of State of the state of incorporation of such
entity; and

 

(iii) the bylaws or code of regulations of each Borrower and each Guarantor.

 

(e) Receipt by Agent of an opinion of counsel to Borrowers and Guarantors, in
form and substance satisfactory to Agent;

 

(f) Receipt by each Bank of an amendment fee in the amount equal to the sum of
(i) 7.5 basis points multiplied by such Bank’s Maximum Amount as set forth on
Schedule 1 to the First Amendment to Credit Agreement dated as of December 31,
2003, and (ii) 12.5 basis points multiplied by the increase of such Bank’s
Maximum Amount as set forth on Schedule 1 to this Amendment over such Bank’s
Maximum Amount as set forth on Schedule 1 to the First to Amendment to Credit
Agreement dated as of December 31, 2003; and

 

(g) Receipt by Agent of all out-of-pocket costs and expenses incurred in making
the Loans and entering into this Agreement (including, without limitation, all
reasonable attorney fees, audit fees and filing fees incurred by Agent).

 

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Section 4. Special Acknowledgment. Section 2.13(c) of the Credit Agreement
provides that, if, at any time, a Prepayment Event occurs, which includes the
issuance of equity by any Company, Borrowers shall, as promptly as practicable,
but in no event later than the next Business Day, apply the Prepayment Proceeds
to the Revolving Loans and the Revolving Commitments and the Maximum Commitment
Amount shall be permanently reduced by the amount of Prepayment Proceeds
allocated thereto, respectively, whether or not there shall be any Revolving
Credit Exposure thereunder. The Agent and the Banks acknowledge that MTCT issued
additional equity in February, 2004 and that the Agent and the Banks did not
require Borrowers to apply the Prepayment Proceeds thereof to the Revolving
Loans and Revolving Commitments in accordance with Section 2.14 of the Credit
Agreement and agree that there has been no corresponding reduction in the
Maximum Commitment Amount.

 

Section 5. Costs and Expenses. The Borrowers hereby agree to reimburse the Agent
and Banks for all costs and expenses incurred by Agent and Banks, in connection
with this Amendment and the transactions contemplated hereby, including its
respective legal fees and expenses.

 

Section 6. Miscellaneous. Agent, the Banks and each Borrower hereby agree that:

 

(a) The Credit Agreement, the Revolving Credit Notes and the other Loan
Documents, as amended hereby, remain otherwise unmodified and in full force and
effect

 

(b) Each Borrower hereby represents and warrants to Agent and the Banks that as
of the date hereof (i) no Default or Event of Default has occurred and is
continuing (ii) the representations and warranties of such Borrower in the
Credit Agreement and the other Loan Documents are true and correct in all
material respects as if made on the date hereof (except to the extent that any
expressly relates to an earlier date), and (iii) such Borrower has no cause of
action, at law or in equity, against Agent or the Banks, including, without
limitation, any offset, counterclaim or defense with respect to the Notes
(including the Swing Line Note) or the Loans evidenced thereby or any Loan
Document.

 

(c) This Amendment is limited precisely as written and shall not (i) constitute
a consent under or waiver or modification of any other term or condition of the
Credit Agreement, the other Loan Documents or any other agreements, instruments
or documents referred to therein, or (ii) prejudice or otherwise affect any
right or privilege which Agent or the Banks now have or may have in the future
under the Credit Agreement, the other Loan Documents or under any of the other
agreements, documents or instruments therein.

 

(d) This Amendment may be executed in any one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument

 

(e) This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the State of Ohio.

 

(Balance of Page Intentionally Omitted)

 

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

 

Address:

 

4032 Linden Avenue

Dayton, OH 45432

Attention: Michael Gearhardt

Fax: (937) 252-8240

      MTC TECHNOLOGIES, INC., a Delaware corporation             By:  

/s/ Michael Gearhardt

           

Name:

 

Michael Gearhardt

           

Title:

 

Sr. VP & CFO

Address:

 

4032 Linden Avenue

Dayton, OH 45432

Attention: Michael Gearhardt

Fax: (937) 252-8240

      MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an
Ohio corporation                             By:  

/s/ Michael Gearhardt

           

Name:

 

Michael Gearhardt

           

Title:

 

Sr. VP & CFO

Address:

 

629 Euclid Avenue

LOC, 01 -3034

Cleveland, Ohio 44114

Attention: Capital Markets Division

- Loan Syndications

Fax: (216) 222-7079

     

NATIONAL CITY BANK
as Agent and as a Bank

          By:                

Name:

               

Title:

   

 

[SIGNATURES OF BANKS CONTINUE ON NEXT PAGE]

 

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

 

Address:

 

4032 Linden Avenue

Dayton, OH 45432

Attention: Michael Gearhardt

Fax: (937) 252-8240

      MTC TECHNOLOGIES, INC., a Delaware corporation             By:            
   

Name:

               

Title:

   

Address:

 

4032 Linden Avenue

Dayton, OH 45432

Attention: Michael Gearhardt

Fax: (937) 252-8240

      MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an
Ohio corporation             By:                

Name:

               

Title:

   

Address:

 

629 Euclid Avenue

LOC, 01-3034

Cleveland, Ohio 44114

Attention: Capital Markets Division

- Loan Syndications

Fax: (216) 222-7079

     

NATIONAL CITY BANK
as Agent and as a Bank

            By:  

/s/ Neal J. Hinker

           

Name:

 

Neal J. Hinker

           

Title:

 

Senior Vice President

 

[SIGNATURES OF BANKS CONTINUE ON NEXT PAGE]

 

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Address:

 

34 North Main Street

Dayton Ohio 45402

Attention: Michael Dunlavey

Fax: (937) 586-7695

      KEYBANK NATIONAL ASSOCIATION             By:                

Name:

               

Title:

   

Address:

 

110 North Main Street

Dayton OH 45402

Attention: Michael Lopez

Fax: (937) 227-3027

      FIFTH THIRD BANK             By:  

/s/ Roger S. Furrer

           

Name:

 

Roger S. Furrer

           

Title:

 

Sr. Vice President

Address:

 

200 West Second Street

I6th Floor

Winston-Salem, NC 27101

Attention: Roberts Bass

Fax: (336) 733-2740

      BRANCH BANKING AND TRUST COMPANY             By:                

Name:

               

Title:

   

 

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Address:

 

34 North Main Street

Dayton Ohio 45402

Attention: Michael Dunlavey

Fax: (937) 586-7695

      KEYBANK NATIONAL ASSOCIATION             By:  

/s/ R. Michael Dunlavey

           

Name:

 

R. Michael Dunlavey

           

Title:

 

Vice President

Address:

 

110 North Main Street

Dayton OH 45402

Attention: Neal Ratliff

Fax: (937) 227-3027

      FIFTH THIRD BANK             By:                

Name:

               

Title:

   

Address:

 

200 West Second Street

16th Floor

Winston-Salem, NC 27101

Attention: Roberts Bass

Fax: (336) 733-2740

      BRANCH BANKING AND TRUST COMPANY             By:                

Name:

               

Title:

   

 

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Address:

 

34 North Main Street

Dayton Ohio 45402

Attention: Michael Dunlavey

Fax: (937) 586-7695

      KEYBANK NATIONAL ASSOCIATION             By:                

Name:

               

Title:

   

Address:

 

110 North Main Street

Dayton OH 45402

Attention: Neal Ratliff

Fax: (937) 227-3027

      FIFTH THIRD BANK             By:                

Name:

               

Title:

   

Address:

 

200 West Second Street

16th Floor

Winston-Salem, NC 27101

Attention: Roberts Bass

Fax: (336) 733-2740

      BRANCH BANKING AND TRUST COMPANY             By:  

/s/ Roberts A. Bass

           

Name:

 

Roberts A. Bass

           

Title:

 

Senior Vice President

 

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SCHEDULE 1

 

BANKING INSTITUTIONS

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   COMMITMENT
PERCENTAGE

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    REVOLVING
CREDIT
COMMITMENT
AMOUNT

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MAXIMUM

AMOUNT

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National City Bank

   29.41117 %   $ 25,000,000    $ 25,000,000

KeyBank National Association

   23.52941 %   $ 20,000,000    $ 20,000,000

Fifth Third Bank

   23.52941 %   $ 20,000,000    $ 20,000,000

Branch Banking and Trust Company

   23.52941 %   $ 20,000,000    $ 20,000,000

Total Commitment

   100% (approximately )   $ 85,000,000    $ 85,000,000           

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CONFIRMATION OF GUARANTY

 

The undersigned, AMCOMP CORPORATION, a California corporation (“Amcomp”),
INTERNATIONAL CONSULTANTS, INC., an Ohio corporation (“ICI”), and VITRONICS
INC., a New Jersey corporation (“Vitronics” and collectively with Amcomp and
ICI, the “Guarantors”), jointly and severally hereby:

 

(A) Acknowledge that MTC TECHNOLOGIES, INC., a Delaware corporation (“MTCT”) MTC
TECHNOLOGIES, INC. (formerly known as MODERN TECHNOLOGIES CORP.), an Ohio
corporation (together with MTCT, collectively, “Borrowers” and, individually,
each a “Borrower”), the financial institutions listed on Schedule 1 to the
Credit Agreement (defined herein) (collectively, the “Banks” and, individually,
each a “Bank”); and NATIONAL CITY BANK, as lead arranger and administrative
agent for the Banks (“Agent”) have entered into that certain Credit and Security
Agreement dated as of January 31, 2003, as amended by a First Amendment to
Credit Agreement dated as of December 31, 2003, a Second Amendment to Credit
Agreement dated July 12,2004 and a Third Amendment to Credit Agreement dated as
of the date hereof (as so amended and as may be further amended from time to
time, the “Credit Agreement”), whereby the Banks have extended financial
accommodations to the Borrowers, and the Borrowers have executed Notes (as
defined in the Credit Agreement) in favor of the Banks, in evidence thereof.
Terms used but not defined herein shall have the meaning ascribed thereto in the
Credit Agreement.

 

(B) Acknowledge that the Amended and Restated Revolving Credit Notes evidencing
the Revolving Loans are each a “Note” under the Credit Agreement, along with the
Swing Line Note, and other notes delivered pursuant to the Credit Agreement.

 

(C) Acknowledge that the Guarantors have guaranteed payment of the principal and
interest of all Notes pursuant to a Guaranty of Payment of Debt dated as of
January 31,2003 in the case of Amcomp, and a Guaranty of Payment of Debt dated
as of October 6, 2003 in the case of ICI, and a Guaranty of Payment of Debt
dated as of the date hereof in the case of Vitronics (collectively, the
“Guarantees”).

 

(D) Acknowledge that the Guarantors have each received and had an opportunity to
review the Third Amendment to Credit Agreement referred to in the first
paragraph of this Confirmation of Guaranty and consent to the amendments to the
Credit Agreement, including without limitation the increase in the Total
Commitment Amount from $55,000,000 to $85,000,000, as such amount may be further
increased from time to time.

 

(E) Represent and warrant to the Agent and the Banks that the undersigned have
no defenses, offsets or counterclaims, either individually or jointly, with
respect to their obligations under the Guarantees and the Guarantees remain
unmodified and in full force and effect.

 

[REMAINDER OF PAGE IS INTENTIONALLY BLANK.]

 

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This Confirmation of Guaranty is executed as of the 28th day of December, 2004.

 

AMCOMP CORPORATION, a California corporation By:  

/s/ Michael Gearhardt

Name:

 

Michael Gearhardt

Title:

 

CFO

INTERNATIONAL CONSULTANTS, INC,

an Ohio corporation

By:  

/s/ Michael Gearhardt

Name:

 

Michael Gearhardt

Title:

 

CFO

VITRONICS INC., a New Jersey corporation By:  

/s/ Michael Gearhardt

Name:

 

Michael Gearhardt

Title:

 

Executive Vice President

 

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EXHIBIT A-1

 

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

 

$25,000,000.00

   Dayton, Ohio      December 28, 2004

 

FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC., a Delaware
corporation, and MTC TECHNOLOGIES, INC., (formerly known as MODERN TECHNOLOGIES
CORP.), an Ohio corporation (collectively, “Borrowers” and, individually, each a
“Borrower”), jointly and severally, promise to pay, on the last day of the
Commitment Period, as defined in the Credit Agreement (as hereinafter defined),
to the order of NATIONAL CITY BANK (“Bank”) at the main office of NATIONAL CITY
BANK, as Agent, as hereinafter defined, 1900 East 9th Street, Cleveland, Ohio
44114-3484, the principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00) or
the aggregate unpaid principal amount of all Revolving Loans made by Bank to
Borrowers pursuant to Section 2.2 of the Credit Agreement, whichever is less, in
lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated
as of January 31, 2003, among Borrowers, the Banks, as defined therein, and
National City Bank, as lead arranger and administrative agent for the Banks
(“Agent”), as amended by the First Amendment to Credit Agreement dated as of
December 31, 2003, the Second Amendment to Credit Agreement dated July 12, 2004
and the Third Amendment to Credit Agreement dated as of the date hereof, and as
the same may be further amended, restated or otherwise modified from time to
time. Each capitalized term used herein that is defined in the Credit Agreement
and not otherwise defined herein shall have the meaning ascribed to it in the
Credit Agreement. This Note amends, restates and replaces that certain Revolving
Note dated as of December 31, 2003 by Borrowers in favor of the Bank in its
entirety.

 

Borrowers also promise to pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Revolving
Loan until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.5 of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.5; provided, however, that interest on any principal portion that is
not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base
Rate Loans and LIBOR Loans, and payments of principal of any thereof, shall be
shown on the records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under this Note.

 

If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the

 

A-1-1

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principal hereof and the unpaid interest thereon shall bear interest, until
paid, at a rate per annum equal to the Default Rate. All payments of principal
of and interest on this Note shall be made in immediately available funds. In
the event of a failure to pay interest or principal, when the same becomes due,
Bank may collect and Borrowers agree to pay a late charge of an amount equal to
the greater of (a) ten percent (10%) of the amount of such late payment, or (b)
Twenty-Five Dollars ($25).

 

This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, Borrowers expressly waive
presentment, demand, protest and notice of any kind.

 

Each of the undersigned, to the extent permitted by law, hereby waives any right
to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.

 

MTC TECHNOLOGIES, INC., a Delaware

corporation

By:

   

Name:

   

Title:

   

 

MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an Ohio
corporation

By:

   

Name:

   

Title:

   

 

A-1-2

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EXHIBIT A-2

 

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

 

$20,000,000.00

   Dayton, Ohio      December 28, 2004

 

FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC., a Delaware
corporation, and MTC TECHNOLOGIES, INC., (formerly known as MODERN TECHNOLOGIES
CORP.), an Ohio corporation (collectively, “Borrowers” and, individually, each a
“Borrower”), jointly and severally, promise to pay, on the last day of the
Commitment Period, as defined in the Credit Agreement (as hereinafter defined),
to the order of KEYBANK NATIONAL ASSOCIATION (“Bank”) at the main office of
NATIONAL CITY BANK, as Agent, as hereinafter defined, 1900 East 9th Street,
Cleveland, Ohio 44114-3484, the principal sum of TWENTY MILLION DOLLARS
($20,000,000.00) or the aggregate unpaid principal amount of all Revolving Loans
made by Bank to Borrowers pursuant to Section 2.2 of the Credit Agreement,
whichever is less, in lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated
as of January 31, 2003, among Borrowers, the Banks, as defined therein, and
National City Bank, as lead arranger and administrative agent for the Banks
(“Agent”), as amended by the First Amendment to Credit Agreement dated as of
December 31, 2003, the Second Amendment to Credit Agreement dated July 12, 2004
and the Third Amendment to Credit Agreement dated as of the date hereof, and as
the same may be further amended, restated or otherwise modified from time to
time. Each capitalized term used herein that is defined in the Credit Agreement
and not otherwise defined herein shall have the meaning ascribed to it in the
Credit Agreement. This Note amends, restates and replaces that certain Revolving
Note dated as of December 31, 2003 by Borrowers in favor of the Bank in its
entirety.

 

Borrowers also promise to pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Revolving
Loan until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.5 of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.5; provided, however, that interest on any principal portion that is
not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base
Rate Loans and LIBOR Loans, and payments of principal of any thereof, shall be
shown on the records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under this Note.

 

A-2-1

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If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds. In the event of a failure to pay
interest or principal, when the same becomes due, Bank may collect and Borrowers
agree to pay a late charge of an amount equal to the greater of (a) ten percent
(10%) of the amount of such late payment, or (b) Twenty-Five Dollars ($25).

 

This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, Borrowers expressly waive
presentment, demand, protest and notice of any kind.

 

Each of the undersigned, to the extent permitted by law, hereby waives any right
to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.

 

MTC TECHNOLOGIES, INC., a Delaware corporation By:    

Name:

   

Title:

    MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an Ohio
corporation By:    

Name:

   

Title:

   

 

A-2-2

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EXHIBIT A-3

 

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

 

$20,000,000.00

   Dayton, Ohio      December 28, 2004

 

FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC., a Delaware
corporation, and MTC TECHNOLOGIES, INC., (formerly known as MODERN TECHNOLOGIES
CORP.), an Ohio corporation (collectively, “Borrowers” and, individually, each a
“Borrower”), jointly and severally, promise to pay, on the last day of the
Commitment Period, as defined in the Credit Agreement (as hereinafter defined),
to the order of FIFTH THIRD BANK (“Bank”) at the main office of NATIONAL CITY
BANK, as Agent, as hereinafter defined, 1900 East 9th Street, Cleveland, Ohio
44114-3484, the principal sum of TWENTY MILLION DOLLARS ($20,000,000.00) or the
aggregate unpaid principal amount of all Revolving Loans made by Bank to
Borrowers pursuant to Section 2.2 of the Credit Agreement, whichever is less, in
lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated
as of January 31, 2003, among Borrowers, the Banks, as defined therein, and
National City Bank, as lead arranger and administrative agent for the Banks
(“Agent”), as amended by the First Amendment to Credit Agreement dated as of
December 31, 2003, the Second Amendment to Credit Agreement dated July 12, 2004
and the Third Amendment to Credit Agreement dated as of the date hereof, and as
the same may be further amended, restated or otherwise modified from time to
time. Each capitalized term used herein that is defined in the Credit Agreement
and not otherwise defined herein shall have the meaning ascribed to it in the
Credit Agreement. This Note amends, restates and replaces that certain Revolving
Note dated as of December 31, 2003 by Borrowers in favor of the Bank in its
entirety.

 

Borrowers also promise to pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Revolving
Loan until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.5 of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.5; provided, however, that interest on any principal portion that is
not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base
Rate Loans and LIBOR Loans, and payments of principal of any thereof, shall be
shown on the records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under this Note.

 

A-3-1

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If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds. In the event of a failure to pay
interest or principal, when the same becomes due, Bank may collect and Borrowers
agree to pay a late charge of an amount equal to the greater of (a) ten percent
(10%) of the amount of such late payment, or (b) Twenty- Five Dollars ($25).

 

This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, Borrowers expressly waive
presentment, demand, protest and notice of any kind.

 

Each of the undersigned, to the extent permitted by law, hereby waives any right
to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.

 

MTC TECHNOLOGIES, INC., a Delaware corporation By:    

Name:

   

Title:

   

MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an

Ohio corporation

By:    

Name:

   

Title:

   

 

A-3-2

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EXHIBIT A-4

 

AMENDED AND RESTATED

REVOLVING CREDIT NOTE

 

$20,000,000.00

  Dayton, Ohio     December 28, 2004

 

FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC., a Delaware
corporation, and MTC TECHNOLOGIES, INC., (formerly known as MODERN TECHNOLOGIES
CORP.), an Ohio corporation (collectively, “Borrowers” and, individually, each a
“Borrower”), jointly and severally, promise to pay, on the last day of the
Commitment Period, as defined in the Credit Agreement (as hereinafter defined),
to the order of BRANCH BANKING AND TRUST COMPANY (“Bank”) at the main office of
NATIONAL CITY BANK, as Agent, as hereinafter defined, 1900 East 9th Street,
Cleveland, Ohio 44114-3484, the principal sum of TWENTY MILLION DOLLARS
($20,000,000.00) or the aggregate unpaid principal amount of all Revolving Loans
made by Bank to Borrowers pursuant to Section 2.2 of the Credit Agreement,
whichever is less, in lawful money of the United States of America.

 

As used herein, “Credit Agreement” means the Credit and Security Agreement dated
as of January 31, 2003, among Borrowers, the Banks, as defined therein, and
National City Bank, as lead arranger and administrative agent for the Banks
(“Agent”), as amended by the First Amendment to Credit Agreement dated as of
December 31, 2003, the Second Amendment to Credit Agreement dated July 12, 2004
and the Third Amendment to Credit Agreement dated as of the date hereof, and as
the same may be further amended, restated or otherwise modified from time to
time. Each capitalized term used herein that is defined in the Credit Agreement
and not otherwise defined herein shall have the meaning ascribed to it in the
Credit Agreement. This Note amends, restates and replaces that certain Revolving
Note dated as of December 31, 2003 by Borrowers in favor of the Bank in its
entirety.

 

Borrowers also promise to pay interest on the unpaid principal amount of each
Revolving Loan from time to time outstanding, from the date of such Revolving
Loan until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.5 of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.5; provided, however, that interest on any principal portion that is
not paid when due shall be payable on demand.

 

The portions of the principal sum hereof from time to time representing Base
Rate Loans and LIBOR Loans, and payments of principal of any thereof, shall be
shown on the records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under this Note.

 

A-4-1

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If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds. In the event of a failure to pay
interest or principal, when the same becomes due, Bank may collect and Borrowers
agree to pay a late charge of an amount equal to the greater of (a) ten percent
(10%) of the amount of such late payment, or (b) Twenty-Five Dollars ($25).

 

This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.

 

Except as expressly provided in the Credit Agreement, Borrowers expressly waive
presentment, demand, protest and notice of any kind.

 

Each of the undersigned, to the extent permitted by law, hereby waives any right
to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.

 

MTC TECHNOLOGIES, INC., a Delaware corporation By:    

Name:

   

Title:

    MTC TECHNOLOGIES, INC., formerly known as MODERN TECHNOLOGIES CORP., an Ohio
corporation By:    

Name:

   

Title:

   

 

A-4-2

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GUARANTY OF PAYMENT OF DEBT

 

This GUARANTY OF PAYMENT OF DEBT (as the same may from time to time be amended,
restated or otherwise modified, this “Agreement”) is made as of the 28th day of,
December, 2004, by COMMAND TECHNOLOGIES, INC., a Virginia corporation
(“Guarantor”), in favor of NATIONAL CITY BANK, as the administrative agent under
the Credit Agreement, as hereinafter defined (“Agent”), for the benefit of the
Banks, as hereinafter defined.

 

1. Recitals.

 

MTC TECHNOLOGIES, INC., a Delaware corporation, and MTC TECHNOLOGIES, INC.
(formerly known as MODERN TECHNOLOGIES CORP.), an Ohio corporation (together
with their respective successors and assigns, collectively, “Borrowers” and,
individually, each a “Borrower”), entered into the Credit and Security Agreement
dated as of January 31, 2003, as amended by a First Amendment to Credit
Agreement dated as of December 31, 2003, a Second Amendment to Credit Agreement
dated July 12, 2004 and a Third Amendment to Credit Agreement dated as of the
date hereof, with the financial institutions listed on Schedule 1 thereto
(together with their respective successors and assigns, collectively, the
“Banks” and, individually, each a “Bank”) and Agent (as the same may from time
to time be amended, restated or otherwise modified, the “Credit Agreement”).
Guarantor desires that the Banks continue to grant the financial accommodations
to Borrowers as described in the Credit Agreement.

 

Guarantor, a subsidiary of MTC Technologies, INC., an Ohio corporation, whose
financing is provided by the Loans, as hereinafter defined, deems it to be in
the direct pecuniary and business interests of Guarantor that Borrowers continue
to obtain from the Banks the Commitment, as defined in the Credit Agreement, and
the Loans provided for in the Credit Agreement.

 

Guarantor understands that the Banks are willing to continue to maintain the
Loans under the Credit Agreement only upon certain terms and conditions, one of
which is that Guarantor guarantee the payment of the Debt, as hereinafter
defined, and this Agreement is being executed and delivered in consideration of
the Banks continuing to maintain the Loans under the Credit Agreement and for
other valuable considerations.

 

2. Definitions. Except as specifically defined herein, capitalized terms used
herein that are defined in the Credit Agreement shall have their respective
meanings ascribed to them in the Credit Agreement. As used herein, the following
terms shall have the following meanings:

 

“Collateral” shall mean, collectively, all property, if any, securing the Debt
or any part thereof at the time in question.

 

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

“Debt” shall mean, collectively, (a) all Loans; (b) all other Indebtedness or
other obligations now owing or hereafter incurred by any Borrower to Agent and
the Banks pursuant to the Credit Agreement and the Notes executed in connection
therewith; (c) each renewal, extension, consolidation or refinancing of any of
the foregoing, in whole or in part; (d) all interest from time to time accruing
on any of the foregoing, and all fees and other amounts payable to Agent or any
Bank pursuant to the Credit Agreement or any other Loan Document; (e) every
other liability, now or hereafter owing to Agent or any Bank by any Borrower or
Guarantor pursuant to the Credit Agreement or any Loan Document; and (f) all
Related Expenses.

 

“Loan” shall mean any Loan, as defined in the Credit Agreement, granted pursuant
to the Credit Agreement.

 

“Obligor” shall mean any Person that, or any of whose property, is or shall be
obligated on the Debt or any part thereof in any manner and includes, without
limiting the generality of the foregoing, any Borrower or Guarantor, and any
other co-maker, endorser, guarantor of payment, subordinating creditor,
assignor, grantor of a security interest, pledgor, mortgagor or any hypothecator
of property, if any.

 

“Person” shall mean any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, corporation, limited liability company,
institution, trust, estate, government or other agency or political subdivision
thereof or any other entity.

 

“Related Expenses” shall mean any and all reasonable costs, liabilities and
expenses (including, without limitation, losses, damages, penalties, claims,
actions, reasonable attorneys’ fees, legal expenses, judgments, suits and
disbursements) (a) incurred by Agent, or imposed upon or asserted against Agent
or any Bank, in any attempt by Agent and the Banks to (i) enforce this
Agreement, the Credit Agreement or any Related Writing, as defined in the Credit
Agreement, or to obtain, preserve or perfect any security interest granted by
any Credit Party to Agent and the Banks in connection with this Agreement, the
Credit Agreement or any Related Writing; (ii) obtain payment, performance or
observance of any and all of the Debt; or (iii) maintain, insure, audit,
collect, preserve, repossess or dispose of any of the Collateral or any other
collateral securing the Debt, including, without limitation, costs and expenses
for appraisals, assessments and audits of Borrower or any such collateral; or
(b) incidental or related to (a) above, including, without limitation, interest
thereupon from the date inclined, imposed or asserted until paid at the Default
Rate, as defined in the Credit Agreement.

 

3. Guaranty of Debt. Guarantor hereby absolutely and unconditionally guarantees
(as a guaranty of payment and not merely a guaranty of collection) the prompt
payment in full of all of the Debt as and when the respective parts thereof
become due and payable. If the Debt, or any part thereof, shall not be paid in
full when due and payable, Agent, on behalf of the Banks, in each case, shall
have the right to proceed directly against Guarantor under this Agreement to
collect the payment in full of the Debt, regardless of whether or not Agent, on
behalf of the Banks, shall have theretofore proceeded or shall then be
proceeding against any Borrower or any other Obligor or Collateral, if any, or
any of the foregoing, it being understood that Agent and the Banks, in their
sole discretion may proceed against any Obligor and any Collateral, and may

 

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

exercise each right, power or privilege that Agent or the Banks may then have,
either simultaneously or separately, and, in any event, at such time or times
and as often and in such order as Agent and the Required Banks, in their sole
discretion, may from time to time deem expedient to collect the payment in full
of the Debt. Guarantor agrees that all payments made by Guarantor under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of any Taxes or Other Taxes, in accordance with Section 3.2 of
the Credit Agreement.

 

4. Payments Conditional. Whenever Agent or any Bank shall credit any payment to
the Debt or any part thereof, whatever the source or form of payment, the credit
shall be conditional as to Guarantor unless and until the payment shall be final
and valid as to all the world. Without limiting the generality of the foregoing,
Guarantor agrees that if any check or other instrument so applied shall be
dishonored by the drawer or any party thereto, or if any proceeds of Collateral
or payment so applied shall thereafter be recovered by any trustee in bankruptcy
or any other Person, each Bank, in each case, may reverse any entry relating
thereto on its books and Guarantor shall remain liable therefor, even if such
Bank may no longer have in its possession any instrument evidencing the Debt to
which the payment in question was applied.

 

5. Guarantor’s Obligations Absolute and Unconditional. Regardless of the
duration of time, regardless of whether any Borrower may from time to time cease
to be indebted to the Banks and irrespective of any act, omission or course of
dealing whatever on the part of Agent or any of the Banks, Guarantor’s
liabilities and other obligations under this Agreement shall remain in full
effect until the payment in full of the Debt. Without limiting the generality of
the foregoing:

 

5.1. Banks Have No Duty to Make Advances. No Bank shall at any time be under any
duty to Guarantor to grant any financial accommodation to any Borrower,
irrespective of any duty or commitment of any of the Banks to such Borrower, or
to follow or direct the application of the proceeds of any such financial
accommodation;

 

5.2. Guarantor’s Waiver of Notice, Presentment. Guarantor waives (a) notice of
the granting of any Loan to any Borrower or the incurring of any other
Indebtedness by any Borrower or the terms and conditions thereof, (b)
presentment, demand for payment and notice of dishonor of the Debt or any part
thereof, or any other Indebtedness incurred by any Borrower to any Bank, (c)
notice of any indulgence granted to any Obligor, and (d) any other notice to
which Guarantor might, but for this waiver, be entitled;

 

5.3. Banks’ Rights Not Prejudiced by Action or Omission. Agent and the Banks, in
their sole discretion, may, without any prejudice to their rights under this
Agreement, at any time or times, without notice to or the consent of Guarantor,
(a) grant any Borrower whatever financial accommodations that Agent and the
Banks may from time to time deem advisable, even if such Borrower might be in
default in any respect and even if those financial accommodations might not
constitute Indebtedness the payment of which is guaranteed hereunder, (b) assent
to any renewal, extension, consolidation or refinancing of the Debt, or any part
thereof, (c) forbear from demanding security, if Agent and the Banks shall have
the right to do so, (d) release any Obligor or Collateral or assent to any
exchange of Collateral, if any, irrespective of the

 

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

consideration, if any, received therefor, (e) grant any waiver or consent or
forbear from exercising any right, power or privilege that Agent and the Banks
may have or acquire, (f) assent to any amendment, deletion, addition, supplement
or other modification in, to or of any writing evidencing or securing any Debt
or pursuant to which any Debt is created, (g) grant any other indulgence to any
Obligor, (h) accept any Collateral for, or any otter Obligor upon, the Debt or
any part thereof, and (i) fail, neglect or omit in any way to realize upon any
Collateral, to perfect any security interest with respect to Collateral, or to
protect the Debt or any part thereof or any Collateral therefor;

 

5.4. Liabilities Survive Guarantor’s Dissolution. Guarantor’s liabilities and
other obligations under this Agreement shall survive any dissolution of
Guarantor; and

 

5.5. Liabilities Absolute and Unconditional. Guarantor’s liabilities and other
obligations under this Agreement shall be absolute and unconditional
irrespective of any lack of validity or enforceability of the Credit Agreement,
the Notes, any Loan Document or any other agreement, instrument or document
evidencing the Loans or related thereto, or any other defense available to
Guarantor in respect of this Agreement.

 

6. Representations and Warranties. Guarantor represents and warrants to Agent
and each of the Banks that (a) Guarantor is a duly organized and validly
existing corporation, in good standing under the laws of the state of its
incorporation (as referenced in the first paragraph of this Agreement), and is
qualified to do business in each state where a failure to so qualify would have
a material adverse effect on Guarantor; (b) Guarantor has legal power and right
to execute and deliver this Agreement and to perform and observe the provisions
hereof; (c) the officers executing and delivering this Agreement on behalf of
Guarantor have been duly authorized to do so, and this Agreement, when executed,
is legal and binding upon Guarantor in every respect; (d) except for matters
described or referenced in the Credit Agreement or any Schedule thereto, no
litigation or proceeding is pending or threatened against Guarantor before any
court or any administrative agency that, in Guarantor’s opinion, after
consultation with Guarantor’s counsel, is reasonably expected to have a material
adverse effect on Guarantor; (e) Guarantor has received consideration that is
the reasonable equivalent value of the obligations and liabilities that
Guarantor has incurred to Agent, for the benefit of the Banks; (f) Guarantor is
not insolvent, as defined in any applicable state or federal statute, nor will
Guarantor be rendered insolvent by the execution and delivery of this Agreement
to Agent and the Banks; (g) Guarantor is not engaged or about to engage in any
business or transaction for which the assets retained by Guarantor are or will
be an unreasonably small amount of capital, taking into consideration the
obligations to the Banks incurred hereunder; and (h) Guarantor does not intend
to, nor does Guarantor believe that Guarantor will, incur debts beyond
Guarantor’s ability to pay such debts as they mature.

 

7. Disability of Obligor. Without limiting the generality of any of the other
provisions hereof, Guarantor specifically agrees that upon the dissolution of
any Obligor and/or the filing or other commencement of any bankruptcy or
insolvency proceedings by, for or against any Obligor, including without
limitation, any assignment for the benefit of creditors or other proceedings
intended to liquidate or rehabilitate any Obligor, Agent and the Required Banks,
in their sole discretion, may declare the unpaid principal balance of and
accrued interest on the Debt to be forthwith due and payable in full without
notice. Upon the occurrence of any of the

 

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

events enumerated in the immediately preceding sentence, Guarantor shall, upon
demand of Agent, on behalf of the Banks, whenever made, pay to Agent, for the
benefit of the Banks, an amount equal to the then unpaid principal balance of
and accrued interest on the Debt.

 

8. Waiver of Guarantor’s Rights Against Borrowers and Collateral. To the extent
permitted by law, Guarantor hereby waives and subordinates to payment in full of
the Debt any claim or other right that Guarantor might now have or hereafter
acquire against any Borrower or any other Obligor that arises from the existence
or performance of Guarantor’s liabilities or other obligations under this
Agreement, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of Agent or any Bank against any Borrower or
any Collateral that Agent or any Bank now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law.

 

9. Maximum Liability of Guarantor. Anything in this Agreement to the contrary
notwithstanding, in no event shall the amount of Guarantor’s liability hereunder
exceed the maximum amount that (after giving effect to the incurring of the
obligations hereunder and to any rights to contribution of Guarantor from other
affiliates of Borrowers) would not render the rights to payment of Agent and the
Banks hereunder void, voidable or avoidable under any applicable fraudulent
transfer law.

 

10. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Debt is stayed, upon the insolvency, bankruptcy or reorganization
of any Borrower or any other Person, or otherwise, all such amounts shall
nonetheless be payable by Guarantor immediately upon demand by Agent.

 

11. Warrant of Attorney. Guarantor authorizes any attorney at law at any time or
times to appear in any state or federal court of record in the State of Ohio
after the Debt or any part thereof shall have become due and payable (whether
the payments become due by lapse of time or by acceleration of maturity or
otherwise) and in each case to waive the issuance and service of process, to
admit the maturity of the Debt in question and the nonpayment thereof when due,
to present each evidence of the Debt in question, or any part thereof, to the
court and to certify the amount of the Debt then owing thereon, to confess
judgment against Guarantor in favor of Agent and the Banks for the amount of the
Debt then appearing due, together with interest and costs of suit, and thereupon
to release all errors and waive all rights of appeal and stay of execution. The
foregoing warrant of attorney shall survive any judgment, and, should any
judgment be vacated for any reason, Agent and the Banks may nevertheless utilize
the foregoing warrant of attorney in thereafter obtaining an additional judgment
or judgments against Guarantor. Guarantor agrees that the attorney for Agent and
the Banks may confess judgment pursuant to the foregoing warrant of attorney.
Guarantor further agrees that the attorney confessing judgment pursuant to the
foregoing warrant of attorney may receive a legal fee or other compensation from
Agent and the Banks.

 

12. Notice. All notices, requests, demands and other communications provided for
hereunder shall be in writing and, if to Guarantor, mailed or delivered to it,
addressed to it at the address specified on the signature page of this
Agreement, if to a Bank, mailed or delivered to it,

 

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addressed to the address of such Bank specified on the signature pages of the
Credit Agreement or, as to each party, at such other address as shall be
designated by such party in a written notice to each of the other parties. All
notices, statements, requests, demands and other communications provided for
hereunder shall be deemed to be given or made when delivered or two Business
Days after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or sent by facsimile with telephonic
confirmation of receipt, except that notices from Guarantor to Agent or the
Banks pursuant to any of the provisions hereof shall not be effective until
received by Agent or the Banks.

 

13. Successors and Assigns. This Agreement shall bind Guarantor and Guarantor’s
successors and assigns and shall inure to the benefit of Agent and each Bank and
their respective successors and assigns, including (without limitation) each
holder of any Note evidencing any Debt.

 

14. Invalidity. If, at any time, one or more provisions of this Agreement is or
becomes invalid, illegal or unenforceable in whole or in part, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

15. Entire Agreement. This Agreement constitutes a final written expression of
all of the terms of this Agreement, is a complete and exclusive statement of
those terms and supersedes all oral representations, negotiations and prior
writings, if any, with respect to the subject matter hereof.

 

16. Relationship of Parties; Setoff. The relationship between (a) Guarantor and
(b) Agent and the Banks with respect to this Agreement is and shall be solely
that of debtor and creditors, respectively, and Agent and the Banks shall have
no fiduciary obligation toward Guarantor with respect to this Agreement or the
transactions contemplated hereby. If and to the extent any payment is not made
when due hereunder, Agent and each Bank may setoff and charge from time to time
any amount so due against any or all of Guarantor’s accounts or deposits with
Agent and each Bank.

 

17. Headings. The headings and subheadings herein are for convenience of
reference only and shall be ignored in interpreting the provisions of this
Agreement.

 

18. Governing Law; Submission to Jurisdiction. The provisions of this Agreement
and the respective rights and duties of Guarantor, Agent and the Banks hereunder
shall be governed by and construed in accordance with Ohio law, without regard
to principles of conflict of laws. Guarantor hereby irrevocably submits to the
non-exclusive jurisdiction of any Ohio state or federal court sitting in Dayton,
Ohio, over any action or proceeding arising out of or relating to this
Agreement, any Loan Document or any Related Writing, and Guarantor hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in such Ohio state or federal court. Guarantor, on
behalf of itself and its Subsidiaries, hereby irrevocably waives, to the fullest
extent permitted by law, any objection it may now or hereafter have to the
laying of venue in any such action or proceeding in any such court as well as
any right it may now or hereafter have to remove such action or proceeding, once
commenced, to another court on the grounds of FORUM NON CONVENIENS or

 

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otherwise. Guarantor agrees that a final, nonappealable judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

 

19. JURY TRIAL WAIVER. GUARANTOR, AGENT AND THE BANKS, TO THE EXTENT PERMITTED
BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, THE
BANKS, BORROWERS AND GUARANTOR, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY AGENT’S OR EACH BANK’S ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGEMENT OR COGNOVIT PROVISION
CONTAINED IN THE AGREEMENT, ANY NOTE OR ANY OTHER GUARANTY OF PAYMENT,
AGREEMENT, INSTRUMENT OR DOCUMENT RELATED THERETO.

 

Executed as of the date set forth above at Dayton, Ohio.

 

Address:

 

4032 Linden Avenue

     

COMMAND TECHNOLOGIES, INC.

   

Dayton, OH 45432

           

Attention: Michael Gearhardt

           

Fax: (937) 252-8240

     

By:

               

Name:

               

Title: