Exhibit
10.42


 


FIRST
AMENDMENT

TO CREDIT AND GUARANTY AGREEMENT


 


THIS FIRST AMENDMENT TO CREDIT AND GUARANTY AGREEMENT (this “Amendment”) is dated as of November 4,
2010 and is entered into by and among AEROFLEX INCORPORATED,
a Delaware corporation (the “Borrower”),
AEROFLEX HOLDING CORP. (f/k/a AX
Holding Corp.), a Delaware corporation (“Holdings”),
GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”),
as Administrative Agent (“Administrative
Agent”), acting with the consent of the Requisite Lenders and, for
purposes of Section III hereof, the GUARANTORS
listed on the signature papers hereto, and is made with reference to
that certain CREDIT AND GUARANTY AGREEMENT
dated as of August 15, 2007 (as amended through the date hereof, the “Credit Agreement”) by and among the
Borrower, Holdings, the subsidiaries of the Borrower named therein, the
Lenders, the Administrative Agent, Collateral Agent and the other Agents named
therein.  Capitalized terms used herein
without definition shall have the same meanings herein as set forth in the
Credit Agreement after giving effect to this Amendment.


 


RECITALS


 


WHEREAS, the Credit Parties have
requested that Requisite Lenders agree to amend certain provisions of the
Credit Agreement as provided for herein; and


 


WHEREAS, subject to certain
conditions, Requisite Lenders are willing to agree to such amendment relating
to the Credit Agreement.


 


NOW, THEREFORE, in consideration of the
premises and the agreements, provisions and covenants herein contained, the
parties hereto agree as follows:


 


SECTION I.     AMENDMENTS TO CREDIT AGREEMENT


 


1.1                               Amendments.


 


A.     Section 1.1 of the Credit
Agreement is hereby amended by adding the following definitions in proper
alphabetical sequence:


 


“Existing Class” shall mean Existing Term Loan Classes and
each Class of Existing Revolving Commitments.


 


“Existing Revolving Commitments” shall have the meaning
provided in Section 2.25(a)(ii).


 


“Existing Revolving Loans” shall have the meaning
provided in Section 2.25(a)(ii).


 

















 


“Existing Term Loan Class” shall have the meaning
provided in Section 2.25(a)(i).


 


“Extended B-1 Loans” shall have the meaning
provided in Section 2.16(i).


 


“Extended B-2 Loans” shall have the meaning
provided in Section 2.16(i).


 


“Extended Loans/Commitments” shall mean Extended Term Loans,
Extended Revolving Loans and/or Extended Revolving Commitments.


 


“Extended Revolving Commitments” shall have the meaning
provided in Section 2.25(a)(ii).


 


“Extended Revolving Commitment Period” shall have the meaning
provided in Section 2.2(a).


 


“Extended Revolving Exposure” means, with respect to any
Lender as of any date of determination, (i) prior to the termination of an
Extension Series of Extended Revolving Commitments, that Lender’s Extended
Revolving Commitment under such Extension Series; and (ii) after the
termination of such Extension Series of Extended Revolving Commitments,
the sum of (a) the aggregate outstanding principal amount of such
Extension Series of Extended Revolving Loans of that Lender, (b) in
the case of Issuing Bank, the aggregate Letter of Credit Usage in respect of
all Letters of Credit issued by that Lender (net of any participations by
Lenders in such Letters of Credit), (c) the aggregate amount of all
participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit, (d) in the case of Swing
Line Lender, the aggregate outstanding principal amount of all Swing Line Loans
(net of any participations therein by other Lenders), and (e) the
aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans, in each case, to the extent issued under such
Extension Series of Extended Revolving Loans.


 


“Extended Revolving Loans” shall have the meaning
provided in Section 2.25(a)(ii).


 


“Extended Term Loan Maturity Date” means the final maturity
date as specified in the applicable Extension Agreement executed by the
respective Lender.


 


“Extended Term Loans” shall have the meaning
provided in Section 2.25(a)(i).


 


“Extending B-1 Lenders” shall have the meaning
provided in Section 2.16(i).


 


“Extending B-2 Lenders” shall have the meaning
provided in Section 2.16(i).


 


“Extending Lender” shall have the meaning
provided in Section 2.25(b).


 


“Extending Revolving Lender” means an Extending Lender
with an Extended Revolving Commitment or Extended Revolving Loans.


 


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“Extension Agreement” shall have the meaning
provided in Section 2.25(c).


 


“Extension Election” shall have the meaning
provided in Section 2.25(b).


 


“Extension Request” shall mean Term Loan
Extension Requests and Revolving Loan Extension Requests.


 


“Extension Series” shall mean all Extended
Term Loans that are established pursuant to the same Extension Agreement and
all Extended Revolving Commitments that are established pursuant to the same
Extension Agreement (or any subsequent Extension Agreement to the extent such
Extension Agreement expressly provides that the Extended Term Loans or Extended
Revolving Commitments, as applicable, provided for therein are intended to be a
part of any previously established Extension Series) and that provide for the
same interest margins, extension fees, if any, and amortization schedule.


 


“First Amendment” means that certain First
Amendment Agreement to Credit and Guaranty Agreement dated as of November 4, 2010 among the
Borrower, Holdings, Administrative Agent, and the financial institutions and
Guarantors listed on the signature pages thereto.


 


“First Amendment Effective Date” means the date
of satisfaction of the conditions referred to in Section II of the First
Amendment.


 


“Original Revolving Commitment” means a Revolving
Commitment that terminates on the sixth anniversary of the Closing Date (or, if
earlier, the dates specified in clause (ii) and (iii) of the definition
of “Original Revolving Commitment Termination Date”).


 


“Original Revolving Commitment Termination Date” means the
earliest to occur of (i) the sixth anniversary of the Closing Date,
(ii) the date the Revolving Commitments are permanently reduced to zero
pursuant to Section 2.13(b) or 2.14, and (iii) the date of the
termination of the Revolving Commitments pursuant to Section 8.1.


 


“Original Revolving Loan” means a Revolving Loan made
by a Lender or a Lender’s predecessor in interest to Borrower pursuant to Section 2.2(a) and/or
Section 2.24 that is due and payable in full on the sixth anniversary of
the Closing Date (or, if earlier, the dates specified in clause (ii) or (iii) of
the definition of “Original Revolving Commitment Termination Date”).


 


“Original Revolving Exposure” means, with respect to any
Lender, as of any date of determination that holds an Original Revolving
Commitment, (i) prior to the termination of the Original Revolving
Commitments, that Lender’s Original Revolving Commitment; and (ii) after
the termination of the Original Revolving Commitments, the sum of (a) the
aggregate outstanding principal amount of the Revolving Loans of that Lender, (b) in
the case of Issuing Bank, the aggregate Letter of Credit Usage in respect of
all Letters of Credit issued by that Lender (net of any participations by
Lenders in such Letters of Credit), (c) the aggregate amount of all
participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit, (d)


 


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in
the case of Swing Line Lender, the aggregate outstanding principal amount of
all Swing Line Loans (net of any participations therein by other Lenders), and (e) the
aggregate amount of all participations therein by that Lender in any
outstanding Swing Line Loans, in each case, to the extent issued under such
Original Revolving Commitments.


 


“Revolving Loan Extension Request” shall have the meaning
provided in Section 2.25(a)(ii).


 


“Section 2.25 Additional Agreement” shall have the meaning
provided in Section 2.25(c).


 


“Specified Existing Revolving Commitment Class” shall have the
meaning provided in Section 2.25(a)(ii).


 


“Term Loan Extension Request” shall have the meaning
provided in Section 2.25(a)(i).


 


“Tranche B Term Loans” means, collectively, the
Tranche B-1 Term Loans and the Tranche B-2 Term Loans.


 


B.     Section 1.1 of the Credit
Agreement is hereby amended by amending and restating the following definitions
in their entirety as follows:


 


“Class” means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Tranche B-1 Term Loan Exposure, (b) Lenders
having Tranche B-2 Term Loan Exposure, (c) Lenders having Original
Revolving Exposure (including Swing Line Lender), (d) Lenders having New
Term Loan Exposure of each applicable Series, (e) Lenders having Term Loan
Exposure of each Extension Series of Extended Term Loans and (f) Lenders
having Extended Revolving Exposure of each Extended Series of Extended
Revolving Loans, and (ii) with respect to Loans, each of the following
classes of Loans: (a) Tranche B-1 Term Loans, (b) Tranche B-2 Term
Loans, (c) Original Revolving Loans (including Swing Line Loans), (d) each
Series of New Term Loans, (e) each Extension Series of Extended
Term Loans and (f) each Extension Series of Extended Revolving Loans.


 


“Credit Document” means any of this Agreement, the Notes, if any, the Collateral
Documents, any Extension Agreements, the Commitment Letter, any documents or
certificates executed by Borrower in favor of Issuing Bank relating to Letters
of Credit, and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent, Issuing Bank or
any Lender in connection herewith.


 


“Loan” means a Term Loan, a Revolving Loan, a Swing Line Loan, a New Term Loan,
any Extension Series of an Extended Term Loan and any Extension Series of
an Extended Revolving Loan.


 


“Maturity Date” means the Tranche B Term Loan Maturity Date, the New Term Loan Maturity
Date of any Series of New Term Loans and the Extended Term Loan Maturity
Date of any Extension Series of Extended Term Loans, as applicable.


 


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“Revolving Commitment” means the commitment of a Lender to make or otherwise fund any Revolving
Loan and to acquire participations in Letters of Credit and Swing Line Loans
hereunder and “Revolving Commitments” means
such commitments of all Lenders in the aggregate.   The amount of each Lender’s Revolving Commitment,
if any, is set forth on Appendix A-2 or in the applicable Assignment Agreement,
Joinder Agreement or Extension Election, as applicable, subject to any
adjustment or reduction pursuant to the terms and conditions hereof.  The aggregate amount of the Revolving
Commitments as of the First Amendment Effective Date is $50,000,000.


 


“Revolving Commitment
Termination Date” means the earliest to occur
of (i) the sixth anniversary of the Closing Date, (ii) the date the
Revolving Commitments are permanently reduced to zero pursuant to Section 2.13(b) or
2.14, and (iii) the date of the termination of the Revolving Commitments
pursuant to Section 8.1; provided that, for any Extended Revolving
Commitments (including Swing Line Loans) of the same Extension Series, the
Revolving Commitment Termination Date of each Extension Series of Extended
Revolving Commitments shall be determined based on the respective commitment
termination dates applicable thereto as specified in the applicable Extension
Agreement executed by the respective Lender (or, if earlier, the dates
specified in clause (ii) or clause (iii) of this definition, as
applicable).


 


“Revolving Exposure” means, with respect to any Lender as of any
date of determination, (i) prior to the termination of the Existing
Revolving Commitments, that Lender’s Existing Revolving Commitment; plus, to
the extent applicable, prior to the termination of any Extension Series of
Extended Revolving Commitments, that Lender’s Extension Series of such
Extended Revolving Commitment; and (ii) after the termination of the
Existing Revolving Commitments or any Extension Series of Revolving
Commitments, as applicable, the sum of (a) the aggregate outstanding
principal amount of the Revolving Loans of that Lender, (b) in the case of
Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters of
Credit issued by that Lender (net of any participations by Lenders in such
Letters of Credit), (c) the aggregate amount of all participations by that
Lender in any outstanding Letters of Credit or any unreimbursed drawing under
any Letter of Credit, (d) in the case of Swing Line Lender, the aggregate
outstanding principal amount of all Swing Line Loans (net of any participations
therein by other Lenders), and (e) the aggregate amount of all
participations therein by that Lender in any outstanding Swing Line Loans.  For
purposes of determining Pro Rata Shares with respect to any Original Revolving
Loans or Extended Revolving Loans, to the extent applicable, “Revolving
Exposure” shall mean, with respect to any Lender, as of any date of
determination, the Original Revolving Exposure or applicable Extended Revolving
Exposure, as the case may be, of such Lender.


 


“Revolving Loan” means a Loan made by a Lender to Borrower pursuant to Section 2.2(a) and/or
Section 2.24, including any such Loan extended by a Lender, or made
pursuant to a Revolving Commitment extended by a Lender, pursuant to Section 2.25.


 


“Term Loan Exposure” means, with respect to any Lender, as of any date of determination, the
outstanding principal amount of the Term Loans, New Term Loans and Extended
Term Loans of such Lender; provided, at any time prior to the making of
a Term Loan, the Term Loan Exposure of any Lender shall be equal to such Lender’s
Term Loan Commitment.


 


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“Term Loan” means a term loan made by a Lender to Borrower pursuant to Section 2.1(a)(i) or
(a)(ii), a New Term Loan made by a Lender to a Borrower pursuant to Section 2.24
or an Extended Term Loan extended pursuant to Section 2.25.


 


“Tranche B Term Loan Maturity
Date” means the earlier of (i) the seven-year
anniversary of the Closing Date, and (ii) the date that all Tranche B Term
Loans shall become due and payable in full hereunder, whether by acceleration
or otherwise.


 


C.     Section 1.1 of the Credit
Agreement is hereby amended by amending the definition of “Applicable
Margin” by inserting the following new paragraph immediately at the
end thereof:


 


“Notwithstanding the foregoing, from and after the First Amendment
Effective Date, the “Applicable Margin”
with respect to the Loans, as determined pursuant to the immediately preceding
paragraph, shall mean a percentage, per annum, determined by reference to the ratings issued by Moody’s and S&P with
respect to the Obligations in effect from time to time as set forth in the
chart below:


 


	
  Moody’s / S&P Rating

  	
   

  	
  Applicable Margin for

  Tranche B-1 Term

  Loans

  	
   

  	
  Applicable Margin for

  Tranche B-2 Term

  Loans

  	
   

  	
  Applicable Margin for

  Revolving Loans

  	
   

  
	
  B1
  / B+ rating or better

  	
   

  	
  3.75

  	
  %

  	
  4.25

  	
  %

  	
  3.75

  	
  %

  
	
  B2 / B rating or better
  but less than B1 / B+ rating

  	
   

  	
  4.00

  	
  %

  	
  4.50

  	
  %

  	
  4.00

  	
  %

  
	
  Less
  than B2 / B rating

  	
   

  	
  4.25

  	
  %

  	
  4.75

  	
  %

  	
  4.25

  	
  %

  



 


For purposes of this paragraph, if there is a difference
between the Moody’s and S&P rating, the lower rating shall be used to
determine the applicable increase percentage.”


 


D.     The second to
last sentence of Section 2.1(a) of the Credit Agreement is
hereby replaced in its entirety as follows:


 


“Subject to Sections 2.13(a) and 2.14, all amounts owed hereunder
with respect to the Tranche B Term Loans shall be paid in full no later than
the Tranche B Term Loan Maturity Date.”


 


E.     Section 2.1(b)(ii) of the
Credit Agreement is hereby amended by replacing each occurrence of the defined
term “Term Loan” therein with the defined term “Tranche B Term Loan”.


 


F.     Section 2.2(a) of the
Credit Agreement is hereby amended and restated in its entirety as follows:


 


“(a) Revolving Commitments. During the Revolving Commitment
Period, subject to the terms and conditions hereof, each Lender severally
agrees to make Existing Revolving Loans to Borrower in an aggregate amount up
to but not exceeding such Lender’s Existing Revolving Commitment and during the
period from the date any 


 


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Extended
Revolving Commitments are established, until the Revolving Commitment
Termination Date with respect to such Extension Series of Revolving
Commitments (the “Extended Revolving
Commitment Period”), subject to the terms and conditions hereof,
each Lender severally agrees to make Extended Revolving Loans to Borrower in an
aggregate amount up to but not exceeding such Lender’s Extended Revolving
Commitment for such Extension Series of Extended Revolving Loans; provided,
that after giving effect to the making of any Revolving Loans in no event shall
the Total Utilization of Revolving Commitments exceed the Revolving Commitments
then in effect. Amounts borrowed pursuant to this Section 2.2(a) may
be repaid and reborrowed during the Revolving Commitment Period and the
Extended Revolving Commitment Period, as applicable.  Each Lender’s Revolving Commitment shall
expire on the applicable Revolving Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Commitments shall be paid in full no later
than such date (it being understood that in the event any Extended Revolving
Commitments are established, such Extended Revolving Commitments shall, subject
to Section 2.25, be terminated (and all Extended Revolving Loans of the
same Extension Series repaid) on dates set forth in the applicable
Extension Agreement).”


 


G.     The last
paragraph of Section 2.12(b) of the Credit Agreement is hereby
replaced in its entirety as follows:


 


“Notwithstanding the foregoing, (x) such Installments shall be
reduced in connection with any voluntary or mandatory prepayments of the Term
Loans, as the case may be, in accordance with Sections 2.13, 2.14 and
2.15, as applicable; and (y) the Tranche B Term Loans, together with all
other amounts owed hereunder with respect thereto, shall, in any event, be paid
in full no later than the Tranche B Term Loan Maturity Date.”


 


H.     The Credit
Agreement is hereby amended by adding the following new clause (c) to Section 2.12
immediately at the end thereof:


 


“(c)         In the event that any
Extended Term Loans are established, such Extended Term Loans shall, subject to
the requirements of Section 2.25, be repaid by the Borrower in the amounts
and on the dates set forth in the applicable Extension Agreement.”


 


I.     Section 2.13(b)(ii) of the
Credit Agreement is hereby amended by adding the following proviso immediately
at the end thereof:


 


“; provided that, notwithstanding the foregoing, in connection with
the establishment on any date of any Extended Revolving Commitments pursuant to
Section 2.25, the Revolving Commitments of any one or more Lenders
providing any such Extended Revolving Commitments on such date shall be reduced
in an amount equal to the amount of Revolving Commitments so extended on such
date (provided that (x) after giving effect to any such reduction and to
the repayment of any Revolving Loans made on such date, the Revolving Exposure
of any such Lender does not exceed the Revolving Commitment thereof (such
Revolving Exposure and Revolving Commitment being 


 


7

















 


determined
in each case, for the avoidance of doubt, exclusive of such Lender’s Extended
Revolving Commitment and any exposure in respect thereof) and (y) for the
avoidance of doubt, any such repayment of Revolving Loans contemplated by the
preceding clause shall be made in compliance with the requirements of Section 2.17
with respect to the ratable allocation of payments hereunder, with such
allocation being determined after giving effect to any exchange pursuant to Section 2.25
of Revolving Commitments and Revolving Loans into Extended Revolving
Commitments and Extended Revolving Loans, respectively, and prior to any
reduction being made to the Revolving Commitment of any other Lender).”


 


J.     Section 2.15(a) of the
Credit Agreement is hereby amended by replacing clauses “second”
and “third” in their entirety as follows:


 


“second, subject to Section 2.15(f),
to repay outstanding Revolving Loans to the full extent thereof without
reduction of Commitments; and


 


third, subject to Section 2.15(e),
to prepay the Term Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof); and further applied on a pro rata basis
to reduce the scheduled remaining Installments of principal of the Term Loans.”


 


K.     Section 2.15(b) of the
Credit Agreement is hereby amended by replacing clause “first”
in its entirety as follows:


 


“first, subject to Section 2.15(e),
to prepay the Term Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof); and further applied on a pro rata basis
to the remaining scheduled Installments of principal of the Term Loans as
follows:  first, to the next eight
scheduled Installments in direct order and second, pro rata to any
remaining Installments;”


 


L.     Section 2.15(b) of the
Credit Agreement is hereby amended by replacing clause “third”
in its entirety as follows:


 


“third, subject to Section 2.15(f),
to prepay the Revolving Loans to the full extent thereof without reduction of
Commitments; and”


 


M.     The Credit
Agreement is hereby amended by adding the following new clauses (e) and (f) to
Section 2.15 immediately at the end thereof:


 


“(e)         Notwithstanding
anything herein to the contrary, with respect to each prepayment of Term Loans
required by Section 2.14, (i) no such prepayments shall be allocated
to Extended Term Loans of any Extension Series, unless such prepayment is
accompanied by at least a pro rata prepayment, based upon the applicable
remaining repayment amounts due in respect thereof, of Term Loans of the
Existing Term Loan Class, if any, from which such Extended Term Loans were
exchanged (or such Term Loans of the Existing Term Loan Class have
otherwise been repaid in full) and (ii) no such prepayment shall be
allocated to any Class of Term Loans unless such prepayment 


 


8

















 


is
accompanied by a pro rata repayment, based upon the applicable remaining
repayment amounts due in respect thereof, of Term Loans of the Existing Term
Loan Class, if any, from which such Class of Term Loans was exchanged and
Extended Term Loans, if any, that were originally exchanged from such Class of
Term Loans.


 


(f)            Notwithstanding
anything herein to the contrary, with respect to any reduction and termination
of Revolving Commitments hereunder, (x) any such reduction and termination
shall apply proportionately and permanently to reduce the Revolving Commitments
of each of the Lenders within any Class, (y) no such reduction and
termination of Extended Revolving Commitments (and prepayment of Extended
Revolving Loans accompanying a corresponding permanent reduction in such
Extended Revolving Commitments) shall be permitted unless the Existing
Revolving Commitments of the Specified Existing Revolving Commitment Class (and
Existing Revolving Loans related to such Revolving Commitments) shall have been
reduced and repaid proportionately, and (z) after giving effect to such
termination or reduction and to any prepayments of Loans or cancellation or
cash collateralization of letters of credit made on the date of each such
reduction and termination in accordance with this Agreement, the aggregate
amount of such Lenders’ credit exposures shall not exceed the remaining
Revolving Commitments of such Lenders’ in respect of the Class reduced and
terminated.”


 


N.     Section 2.16(h) of the
Credit Agreement is hereby amended by replacing clauses (ii) and (iii) in
their entirety as follows:


 


“(ii)         second,
to the Tranche B-1 Term Loan Lenders, New B-1 Lenders, Extended B-1 Lenders,
Revolving Lenders, New Revolving Loan Lenders and Extended Revolving Lenders,
an amount equal to all Obligations owing to them in respect of the Tranche B-1
Term Loans, New B-1 Loans, Extended B-1 Loans, Revolving Loans, New Revolving
Loans and Extended Revolving Loans, as applicable, on a pro rata basis, on the
date of any distribution, other than any amounts in respect of post-petition
interest in any Insolvency or Liquidation Proceeding (and, if there shall be a
shortfall in the amount available pursuant to this clause to pay all amounts
due under this clause, on a pro rata basis taking into account all amounts due
under this clause (including on account of principal, interest, fees, expenses
or otherwise, as applicable));


 


(iii)          third, to the Secured Parties, an amount equal to all
remaining Obligations owing to them on the date of any distribution, including
any amounts in respect of post-petition interest in any Insolvency or
Liquidation Proceeding (including such amounts owed to the Tranche B-1 Term
Loan Lenders, New B-1 Lenders and Extended B-1 Lenders) (and, if there shall be
a shortfall in the amount available pursuant to this clause to pay all amounts
due under this clause, on a pro rata basis taking into account all amounts due
under this clause (including on account of principal, interest, fees, expenses
or otherwise, as applicable)); and”


 


O.     Section 2.16(i) of the
Credit Agreement is hereby replaced in its entirety as follows:


 


9














 


“(i)          Each Tranche B-2
Term Loan Lender, each New Term Loan Lender holding New Term Loans that were
identified by the Borrower to be identical (except as contemplated by Section
2.24 with respect to interest rates, amortization and maturity) to Tranche B-2
Term Loans (“New B-2 Loans” and the lenders
thereof, “New B-2 Lenders”) and each Extending
Term Lender holding Extended Term Loans that were extended from Tranche B-2
Term Loans pursuant to Section 2.25 (“Extended B-2 Loans”
and the lenders thereof, “Extending B-2 Lenders”)
hereby agrees to turn over to the Administrative Agent, on behalf of the
Tranche B-1 Term Loan Lenders, New Term Loan Lenders holding New Term Loans
that were identified by the Borrower to be identical (except as contemplated by
Section 2.24 with respect to interest rates, amortization and maturity) to
Tranche B-1 Term Loans (“New B-1 Loans”
and the lenders thereof, “New B-1 Lenders”)
and each Extending Term Lender holding Extended Term Loans that were extended
from Tranche B-1 Term Loans pursuant to Section 2.25 (“Extended B-1
Loans” and the lenders thereof, “Extending
B-1 Lenders”), amounts otherwise received or receivable by them to
the extent necessary to effectuate the priority of payments set forth in
Section 2.16(h), even if such turnover has the effect of reducing the claim or
recovery of the Tranche B-2 Term Loan Lenders, the New B-2 Lenders and the
Extended B-2 Lenders.  If any Lender,
Agent or other Secured Party collects or receives any payment, proceeds of
Collateral, distribution (including distributions in any Insolvency or
Liquidation Proceeding pursuant to a plan or otherwise) or any other amount or
property on account of any Obligation at any time when Section 2.16(h) requires
that such payment, proceeds, distribution, amount or property be distributed
pursuant to the provisions thereof to any other Secured Parties, then such
Agent, Lender or other Secured Party shall hold the same in trust for such
other Secured Parties and shall forthwith deliver the same to the Administrative
Agent for distribution to such other Secured Parties in accordance with Section
2.16(h).”


 


P.     The Credit
Agreement is hereby amended by adding the following new Section 2.25
immediately after the existing text of Section 2.24:


 


“2.25       Extensions of Loans and Commitments.


 


(a)           (i) The Borrower may
at any time and from time to time request that all or a portion of each Term
Loan of any Class (an “Existing Term Loan Class”)
be converted to extend the scheduled final maturity date thereof (any such Term
Loans which have been so extended, “Extended Term Loans”)
and to provide for other terms consistent with this Section 2.25.  Prior to entering into any Extension
Agreement with respect to any Extended Term Loans, the Borrower shall provide
written notice to the Administrative Agent (who shall provide a copy of such
notice to each of the Lenders of the applicable Existing Term Loan Class) in
substantially the form of Exhibit N or such other form as approved from time to
time by Borrower and the Administrative Agent (each, a “Term Loan
Extension Request”) setting forth the proposed terms of the Extended
Term Loans, which terms shall be identical to the Term Loans of the Existing
Term Loan Class from which they are to be extended except that (x) the
scheduled final maturity date shall be extended and all or any of the scheduled
amortization payments of all or a portion of any principal amount of such
Extended Term Loans may be delayed to later dates than the scheduled
amortization of principal of the Term Loans of such 


 


10

















 


Existing
Term Loan Class (with any such delay resulting in a corresponding adjustment to
the scheduled amortization payments reflected in Section 2.12 or in the Joinder
Agreement with respect to New Term Loans, as the case may be, with respect to
the Existing Term Loan Class of Term Loans from which such Extended Term Loans
were extended, in each case as more particularly set forth in Section 2.25(c)
below), (y) all-in pricing (including, without limitation, margins, fees and
premiums) with respect to the Extended Term Loans may be higher or lower than
the all-in pricing (including, without limitation, margins, fees and premiums)
for the Term Loans of such Existing Term Loan Class, in each case, to the
extent provided in the applicable Extension Agreement and (z) the voluntary and
mandatory prepayment rights of the Extended Term Loans shall be subject to the
provisions set forth in Section 2.15. No Lender shall have any obligation to
agree to have any of its Term Loans of any Existing Term Loan Class converted
into Extended Term Loans pursuant to any Term Loan Extension Request.  Any Extended Term Loans of any Extension
Series shall constitute a separate Class of Term Loans from the Existing Term
Loan Class of Term Loans from which they were extended; provided that in
no event shall there be more than four Classes of Extended Revolving
Commitments and Extended Term Loans in the aggregate at any one time.


 


(ii)           The Borrower may at any time and from
time to time request that all or a portion of the Revolving Commitments (and,
in each case, including any previously extended Revolving Commitments) existing
at the time of such request (each, an “Existing Revolving
Commitment” and any related revolving loans under any such facility,
“Existing Revolving Loans”) be converted
to extend the termination date thereof and the scheduled maturity date(s) of
any payment of principal with respect to all or a portion of any principal
amount of Existing Revolving Loans related to such Existing Revolving
Commitments (any such Existing Revolving Commitments which have been so
extended, “Extended Revolving Commitments”
and any related revolving loans, “Extended Revolving Loans”)
and to provide for other terms consistent with this Section 2.25.  Prior to entering into any Extension
Agreement with respect to any Extended Revolving Commitments, the Borrower
shall provide a notice to the Administrative Agent (who shall provide a copy of
such notice to each of the Lenders of the applicable Class of Existing
Revolving Commitments) in substantially the form of Exhibit O or such other
form as approved from time to time by Borrower and the Administrative Agent
(each, a “Revolving Loan Extension Request”)
setting forth the proposed terms of the Extended Revolving Commitments, which
terms shall be identical to those applicable to the Existing Revolving
Commitments from which they are to be extended (the “Specified
Existing Revolving Commitment Class”) except (x) all or any of the
final termination dates of such Extended Revolving Commitments and maturity
dates of outstanding Extended Revolving Loans may be delayed to later dates
than the final termination dates of the Existing Revolving Commitments of the
Specified Existing Revolving Commitment Class, (y) the all-in pricing
(including, without limitation, margins, fees and premiums) with respect to the
Extended Revolving Commitments may be higher or lower than the all-in pricing
(including, without limitation, margins, fees and premiums) for the Existing
Revolving Commitments of the Specified Existing Revolving Commitment Class and
(z) the commitment fee rate with respect to the Extended Revolving Commitments
may be higher or lower than the commitment fee rate for Existing 


 


11

















 


Revolving
Commitments of the Specified Existing Revolving Commitment, in each case, to
the extent provided in the applicable Extension Agreement; provided
that, notwithstanding anything to the contrary in this Section 2.25 or
otherwise, (1) the borrowing and repayment (other than in connection with a
permanent repayment and termination of commitments) of the Extended Revolving
Loans under any Extended Revolving Commitments shall be made on a pro rata
basis with any borrowings and repayments of the Existing Revolving Loans (the
mechanics for which may be implemented through the applicable Extension
Agreement and may include technical changes related to the borrowing and
repayment procedures of the Revolving Loans), (2) assignments and
participations of Extended Revolving Commitments and Extended Revolving Loans
shall be governed by the assignment and participation provisions set forth in
Section 10.6 and (3) no termination of Extended Revolving Commitments and no
repayment of Extended Revolving Loans accompanied by a corresponding permanent
reduction in Extended Revolving Commitments shall be permitted unless such
termination or repayment (and corresponding reduction) is accompanied by at
least a pro rata termination or permanent repayment (and corresponding pro rata
permanent reduction), as applicable, of the Existing Revolving Loans and
Existing Revolving Commitments of the Specified Existing Revolving Commitment
Class (or all Existing Revolving Commitments of such Class and related Existing
Revolving Loans shall have otherwise been terminated and repaid in full).  No Lender shall have any obligation to agree
to have any of its Revolving Commitments or Revolving Loans converted into
Extended Revolving Commitments or Extended Revolving Loans, as applicable,
pursuant to any Revolving Loan Extension Request.  Any Extended Revolving Commitments of any
Extension Series shall constitute a separate Class of revolving credit
commitments from Existing Revolving Commitments of the Specified Existing
Revolving Commitment Class and from any other Existing Revolving Commitments
(together with any other Extended Revolving Commitments so established on such
date); provided that in no event shall there be more than four Classes
of Extended Revolving Commitments and Extended Term Loans in the aggregate at
any one time.


 


(b)           The Borrower shall
provide the applicable Extension Request at least ten (10) Business Days prior
to the date on which Lenders under the Existing Class are requested to respond.
Any Lender (an “Extending Lender”) wishing to have
all or a portion of its Term Loans and/or Revolving Commitments (or any earlier
extended Extended Revolving Commitments) of an Existing Class subject to such
Extension Request converted into Extended Loans/Commitments shall notify the
Administrative Agent (such notice to be in substantially the form of Exhibit P
or such other form as approved from time to time by Borrower and the
Administrative Agent) (each, an “Extension Election”)
on or prior to the date specified in such Extension Request of the amount of
its Term Loans and/or Revolving Commitments (and/or any earlier extended
Extended Revolving Commitments) which it has elected to convert into Extended
Loans/Commitments.  In the event that the
aggregate amount of Term Loans and/or Revolving Commitments subject to
Extension Elections exceeds the amount of Extended Loans/Commitments requested
pursuant to the Extension Request, Term Loans and/or Revolving Commitments (and
any earlier extended Extended Revolving Commitments) subject to Extension
Elections shall be converted to Extended Loans/Commitments on a 


 


12

















 


pro
rata basis based on the amount of Term Loans and/or Revolving Commitments (and
any earlier extended Extended Revolving Commitments) included in each such
Extension Election.  Notwithstanding the
conversion of any Existing Revolving Commitment into an Extended Revolving
Commitment, such Extended Revolving Commitment shall be treated identically to
all Existing Revolving Commitments of the Specified Existing Revolving
Commitment Class for purposes of the obligations of a Revolving Lender in
respect of Swing Line Loans under Section 2.3 and Letters of Credit under
Section 2.4, except that the applicable Extension Agreement may provide that
the Revolving Commitment Termination Date with respect to such Swing Line
Lender and/or the last day for issuing Letters of Credit may be extended and
the related obligations to make Swing Line Loans and issue Letters of Credit
may be continued (pursuant to mechanics set forth in the applicable Extension
Agreement) so long as the Swing Line Lender and/or the applicable Issuing Bank,
as applicable, have consented to such extensions (it being understood that no consent
of any other Lender shall be required in connection with any such extension).


 


(c)           Extended
Loans/Commitments shall be established pursuant to a supplement (which shall
set forth the effective date of such extension) to the First Amendment (which,
except to the extent expressly contemplated by the penultimate sentence of this
Section 2.25(c) and notwithstanding anything to the contrary set forth in
Section 10.5, shall not require the consent of any Lender other than the
Extending Lenders with respect to the Extended Loans/Commitments established
thereby) in substantially the form of Exhibit Q or such other form as approved
from time to time by the Borrower and the Administrative Agent (each, an “Extension Agreement”) executed by the Credit Parties, the
Administrative Agent and the Extending Lenders. 
Notwithstanding anything to the contrary in this Section 2.25 and
without limiting the generality or applicability of Section 10.5 to any Section
2.25 Additional Agreements, any Extension Agreement may provide for additional
terms other than those referred to or contemplated above (each, a “Section 2.25 Additional Agreement”) to this Agreement and
the other Credit Documents; provided that no such Section 2.25
Additional Agreement shall become effective prior to the time that such Section
2.25 Additional Agreement has been consented to by such of the Lenders, Credit
Parties and other parties (if any) as would be required (including, without
limitation, under the requirements of Section 10.5) if such Section 2.25
Additional Agreement were a separate and independent amendment of the Credit
Agreement.  It is understood and agreed
that each Lender that has consented to the First Amendment has consented, and
shall at the effective time thereof be deemed to consent to each supplement to
the First Amendment and the other Credit Documents authorized by this Section
2.25 and the arrangements described above in connection therewith except that
the foregoing shall not constitute a consent on behalf of any Lender to the terms
of any Section 2.25 Additional Agreement. 
In connection with any Extension Agreement, the Borrower shall deliver
an opinion of counsel reasonably acceptable to the Administrative Agent as to
any matters reasonably requested by the Administrative Agent.


 


(d)           Notwithstanding
anything to the contrary contained in this Agreement (including Section 2.25 or
Section 10.5), the Lenders hereby irrevocably authorize the 


 


13

















 


Administrative
Agent and the Collateral Agent to enter into technical (in the view of the
Administrative Agent or Collateral Agent, as applicable) amendments to this
Agreement and the other Credit Documents with the applicable Credit Parties as
may be necessary in order to effectuate the transactions contemplated in this
Section 2.25.  All such amendments
entered into with the applicable Credit Parties by the applicable Agent
hereunder shall be binding and conclusive on all Lenders.  The
Administrative Agent shall have the right, but not the obligation, to consult
with the Requisite Lenders with respect to any matter contemplated in this
Section 2.25.


 


(e)           Notwithstanding
anything to the contrary contained in the Credit Agreement, any Extended Term
Loans or Extended Revolving Commitments (and related Extended Revolving Loans),
as applicable, the terms of which are identical to other Extended Term Loans or
Extended Revolving Commitments (and related Extended Revolving Loans) shall
constitute one Class of Loans or Commitments (and related Loans), as
applicable.”


 


Q.     Section 5.1(b) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(b)         Quarterly Financial Statements.  As soon as available, and in any event within
50 days after the end of each of the first three Fiscal Quarters of each Fiscal
Year, commencing with the Fiscal Quarter in which the Closing Date occurs, the
consolidated balance sheets of Borrower and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated statements of income and cash
flows of Borrower and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year, all in reasonable detail and together with a Narrative Report (it being
understood that the Form 10-Q filed with the Securities and Exchange Commission
shall be acceptable) and, only to the extent any such financial statements are
not required to be filed by Borrower or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, a Financial Officer
Certification, with respect thereto;”


 


R.     Section 5.1(i) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(i)          Financial Plan. 
As soon as practicable and in any event no later than 60 days after the
beginning of each Fiscal Year, a consolidated financial forecast for such
Fiscal Year (or portion thereof) (a “Financial Plan”), including (i) a
forecasted consolidated balance sheet and forecasted consolidated statements of
income and cash flows of Borrower and its Subsidiaries for each such Fiscal
Year, including the calculation of each of the covenants set forth in Section
6.7, for each such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, and (ii) forecasted consolidated statements of income
and cash flows of Borrower and its Subsidiaries for each Fiscal Quarter of such
Fiscal Year;”


 


S.     Section 5.14(a) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


14

















 


“(a)         Maintenance of Ratings.  At all times, Borrower shall use commercially
reasonable efforts to maintain ratings issued by Moody’s and S&P with
respect to its senior secured debt (it being understood that Borrower is under
no obligation to maintain any particular level of rating issued by Moody’s or
S&P).  Notwithstanding the foregoing, Borrower shall use commercially reasonable
efforts to obtain updated ratings from Moody’s and S&P with respect to its
senior secured debt by no later than the date that is 180 days following the
consummation of an IPO.”


 


T.     Section 6.1(h) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(h)         Indebtedness
in connection with the repurchase otherwise permitted hereunder of equity
issued to current or former employees, executives or directors of a Credit
Party (including any promissory notes issued by a Credit Party to repurchase
equity of employees, executives or directors of a Credit Party) in an amount
not to exceed $5,000,000 in the
aggregate at any time outstanding;”


 


U.     Section 6.1(i) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(i)          Indebtedness
in an amount not to exceed $50,000,000 in the aggregate at any time outstanding when aggregated with amounts
under Section 6.1(m) consisting of subordinated Indebtedness of Borrower or any
of its Subsidiaries issued to a seller in connection with a Permitted
Acquisition and which is subordinated (in a manner customary for a seller note)
in right of payment to the Obligations;”


 


V.     Section 6.1(j) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(j)          the
incurrence by any Foreign Subsidiary of Holdings of Indebtedness owing to
Persons other than Holdings and any of its Subsidiaries in an aggregate
principal amount (or accreted value, as applicable) at any time outstanding,
not to exceed the sum of $50,000,000;”


 


W.     Section 6.1(m) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(m)        (i) Indebtedness of a
Person or Indebtedness attaching to assets of a Person that, in either case,
becomes a Subsidiary or Indebtedness attaching to assets that are acquired by
Borrower or any of its Subsidiaries, in each case after the Closing Date as the
result of a Permitted Acquisition, in an aggregate amount not to exceed $50,000,000 at any one time outstanding
(when aggregated with amounts under Section 6.1(i)), provided that
(x) such Indebtedness existed at the time such Person became a Subsidiary
or at the time such assets were acquired and, in each case, was not created in
anticipation thereof and (y) such Indebtedness is not guaranteed in any
respect by Holdings or any Subsidiary (other than by any such person that so
becomes a Subsidiary), and (ii) any refinancing, refunding, renewal or
extension of any Indebtedness specified in subclause (i) above, provided, that
(1) the principal amount of any such Indebtedness is not increased above the
principal amount thereof outstanding immediately prior to such refinancing,
refunding, renewal or extension, (2) the direct and contingent obligors with
respect to 


 


15

















 


such
Indebtedness are not changed and (3) such
Indebtedness shall not be secured by any assets other than the assets securing
the Indebtedness being renewed, extended or refinanced;”


 


X.     Section 6.1(n) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(n)         other unsecured
Indebtedness of Holdings, the Borrower and/or its Subsidiaries or other
subordinated Indebtedness (not including any other
amounts permitted under this Section 6.1) in an aggregate amount not to exceed
at any time $100,000,000; and”


 


Y.     Section 6.6(m) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(m)        Investments in Joint Ventures engaged in a business conducted
by Borrower and its Subsidiaries and having an aggregate value (measured on the
date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (m) since the Closing Date, in an aggregate amount not to exceed
at any time $25,000,000; provided, that with respect to any such Joint Venture
that is not domiciled in the United States, such Joint Venture shall be
organized or operating in any country that is a member of the Organization for
Cooperation and Economic Development;”


 


Z.     Section 6.6(n) of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(n)         other Investments by Credit Parties in Subsidiaries (other
than wholly owned Guarantors) in an aggregate amount not to exceed at any time
$25,000,000;”


 


AA.     Section 6.7(b) of
the Credit Agreement is hereby replaced in its entirety as follows:


 


“(b)         Maximum Consolidated Capital Expenditures. Holdings
shall not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any Fiscal Year indicated below, in an aggregate
amount for Holdings and its Subsidiaries in excess of the corresponding amount
set forth below opposite such Fiscal Year; provided, that (x) each such
amount set forth below shall be increased in an amount equal to 5% of the
aggregate pro forma gross revenues contributed by the Person or assets acquired
in connection with any Permitted Acquisitions from and after the First
Amendment Effective Date, (y) if the aggregate amount of Consolidated
Capital Expenditures for any Fiscal Year (beginning with Fiscal Year 2010)
shall be less than the amount set forth in the table below for such Fiscal Year
(before any carryover), then such shortfall may be added to the amount of
Consolidated Capital Expenditures permitted for the immediately succeeding (but
not any other) Fiscal Year (but in no event shall the carryover be more than
50% of the Consolidated Capital Expenditures permitted for the immediately preceding
Fiscal Year) and (z) in determining whether any amount is available for
carryover, the amount expended in any Fiscal Year shall first be deemed to be
from the amount allocated to such year before any carryover:


 


16

















 


	
  Fiscal Year

  	
   

  	
  Consolidated Capital

  Expenditures

  	
   

  
	
  2008

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
  2011 and each Fiscal Year
  thereafter

  	
   

  	
  $

  	
  40,000,000

  	
   

  



 


BB.     Section 6.8(e) of the Credit Agreement is hereby
replaced in its entirety as follows:


 


“(e)         Permitted Acquisitions (including with respect to
acquisition targets not domiciled within the United States solely to the extent
such entity is organized or operating in any country that is a member of the
Organization for Cooperation and Economic Development), the Acquisition
Consideration for which constitutes (x) prior to the First Amendment Effective
Date,  (i) no more than $100,000,000 in
the aggregate in any Fiscal Year, and (ii) no more than $200,000,000 in the
aggregate from the Closing Date to the date of determination and (y) from and
after the First Amendment Effective Date, no more than $200,000,000 in the
aggregate from the First Amendment Date to the date of determination, in each
case, plus the value of any equity or proceeds of equity issued in connection
therewith;”


 


CC.     Clause (e) of Section 6.11 of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“(e) (i) so long as no Default under Sections 8.1(a), (f) or (g) or any
Event of Default has occurred and is continuing, payment of (X) management fees
and transaction fees and (Y) on the date of termination of the Advisory
Agreement upon the consummation of (or within 180 days following) an IPO, a
termination fee and/or transaction fee in an amount not to exceed $19,400,000, in each case, to Sponsor
and its Affiliates as set forth in the Advisory Agreement; provided that
upon the occurrence and during the continuance of such a Default or an Event of
Default, such advisory fees, management fees, transaction fees and termination
fees may accrue until payment is permitted upon cure or waiver of such Default
or Event of Default and (ii) reimbursement of reasonable expenses (including
indemnification obligations) actually incurred by Sponsor and its Affiliates,
as set forth in the Advisory Agreement;”


 


DD.     Section 6.15 of the Credit
Agreement is hereby replaced in its entirety as follows:


 


“6.15.   Amendments with Respect to the Advisory
Agreement.  No Credit Party shall,
nor shall it permit any of its Subsidiaries to, amend or otherwise change the
terms of the Advisory Agreement or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of any obligor


 


17

















 


thereunder or which would be materially adverse
to the Lenders without the prior written consent of the Administrative Agent;
provided, that nothing contained herein shall prohibit (i) the amendment or
modification of the Advisory Agreement to clarify that a termination fee and/or
transaction fee shall be payable thereunder to Sponsor and its Affiliates upon
the consummation of (or within 180 days following) an IPO in an amount not to exceed $19,400,000 or (ii)
the payment of any such termination fee and/or transaction fee to the extent
permitted by Section 6.11.”


 


EE.     The Credit Agreement is hereby amended
by adding new Exhibits N, O, P and Q thereto in the form of Annexes I, II, III
and IV, respectively, to this Amendment.


 


SECTION II.     CONDITIONS TO EFFECTIVENESS


 


This
Amendment shall become effective upon the satisfaction of all of the following
conditions precedent (the date of satisfaction of such conditions being
referred to herein as the “First Amendment
Effective Date”):


 


A.     Execution. Administrative Agent shall have received (i) consent and authorization
from the Requisite Lenders to execute this Amendment on their behalf and (ii)
on or prior to the 5th day from the date that Administrative Agent
shall have provided written notice to the Borrower that Administrative Agent
has received consent from the Requisite Lenders to the terms of this Amendment,
a counterpart signature page of this Amendment duly executed by each of the
Credit Parties.


 


B.     Fees.  On or prior to
the 5th day from the date that Administrative Agent
shall have provided written notice to the Borrower that Administrative Agent
has received consent from the Requisite Lenders to the terms of this Amendment,
the Administrative Agent shall have received:


 


(a)     for distribution to all Lenders executing
this Amendment on or prior to the First Amendment Effective Date, a
non-refundable upfront fee in an amount equal to 0.625% of the aggregate of
such Lender’s Loans and Commitments outstanding as of the date hereof; and


 


(b)     all other fees and other amounts due and
payable on or prior to the First Amendment Effective Date, including, to the
extent invoiced, reimbursement or other payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or any other Credit
Document.


 


C.     Necessary Consents. Each Credit Party shall have obtained all
material consents necessary or advisable in connection with the transactions
contemplated by this Amendment.


 


D.     Other Documents. 
Administrative Agent and Lenders shall have received such other
documents, information or agreements regarding Credit Parties as Administrative
Agent or Collateral Agent may reasonably request.


 


18














 


SECTION III.     REPRESENTATIONS AND WARRANTIES


 


In
order to induce Lenders to enter into this Amendment and to amend the Credit
Agreement in the manner provided herein, each Credit Party which is a party
hereto represents and warrants to each Lender that the following statements are
true and correct in all material respects:


 


A.     Corporate Power and Authority.  Each Credit Party, which is party hereto, has
all requisite power and authority to enter into this Amendment and to carry out
the transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the “Amended
Agreement”) and the other Credit Documents.


 


B.     Authorization of Agreements.  The execution and delivery of this Amendment
and the performance of the Amended Agreement and the other Credit Documents
have been duly authorized by all necessary action on the part of each Credit
Party.


 


C.     No Conflict.  The
execution and delivery by each Credit Party of this Amendment and the
performance by each Credit Party of the Amended Agreement and the other Credit
Documents do not and will not (i) violate (A) any provision of any law,
statute, rule or regulation, or of the certificate or articles of incorporation
or partnership agreement, other constitutive documents or by-laws of Holdings,
the Borrower or any Credit Party or (B) any applicable order of any court or
any rule, regulation or order of any Governmental Authority, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under any Contractual Obligation of the
applicable Credit Party, where any such conflict, violation, breach or default
referred to in clause (i) or (ii) of this Section III.C., individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect,
(iii) except as permitted under the Amended Agreement, result in or require the
creation or imposition of any Lien upon any of the properties or assets of each
Credit Party (other than any Liens created under any of the Credit Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or partners or any approval or consent of any Person
under any Contractual Obligation of each Credit Party, except for such
approvals or consents which will be obtained on or before the First Amendment
Effective Date and except for any such approvals or consents the failure of
which to obtain will not have a Material Adverse Effect.


 


D.     Governmental Consents.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the execution and delivery by each
Credit Party of this Amendment and the performance by the Borrower and Holdings
of the Amended Agreement and the other Credit Documents, except for such
actions, consents and approvals the failure to obtain or make which could not
reasonably be expected to result in a Material Adverse Effect or which have
been obtained and are in full force and effect.


 


E.     Binding Obligation.  This
Amendment and the Amended Agreement have been duly executed and delivered by
each of the Credit Parties party thereto and each constitutes a legal, valid
and binding obligation of such Credit Party to the extent a party thereto,
enforceable against such Credit Party in accordance with its terms, except as
enforceability may be limited by


 


19

















 


bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors’ rights generally and except as enforceability may be limited by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).


 


F.     Incorporation of Representations and Warranties from Credit Agreement. The
representations and warranties contained in Section 4 of the Amended Agreement
are and will be true and correct in all material respects on and as of the
First Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct in all material respects on and as of such earlier date.


 


G.     Absence of Default.  No
event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Amendment that would constitute an Event
of Default or a Default.


 


SECTION IV.     ACKNOWLEDGMENT AND CONSENT


 


Each
Guarantor hereby acknowledges that it has reviewed the terms and provisions of
the Credit Agreement and this Amendment and consents to the amendment of the
Credit Agreement effected pursuant to this Amendment.  Each Guarantor hereby confirms that each
Credit Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Credit Documents the payment
and performance of all “Obligations” under each of the Credit Documents to
which is a party (in each case as such terms are defined in the applicable
Credit Document).


 


Each
Guarantor acknowledges and agrees that any of the Credit Documents to which it
is a party or otherwise bound shall continue in full force and effect and that
all of its obligations thereunder shall be valid and enforceable and shall not
be impaired or limited by the execution or effectiveness of this
Amendment.  Each Guarantor represents and
warrants that all representations and warranties contained in the Amended
Agreement and the Credit Documents to which it is a party or otherwise bound
are true and correct in all material respects on and as of the First Amendment
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true and correct in all material respects
on and as of such earlier date.


 


Each
Guarantor acknowledges and agrees that (i) notwithstanding the conditions
to effectiveness set forth in this Amendment, such Guarantor is not required by
the terms of the Credit Agreement or any other Credit Document to consent to
the amendments to the Credit Agreement effected pursuant to this Amendment and
(ii) nothing in the Credit Agreement, this Amendment or any other Credit
Document shall be deemed to require the consent of such Guarantor to any future
amendments to the Credit Agreement.


 


20

















 


SECTION V.     MISCELLANEOUS


 


A.     Reference to and Effect on the Credit Agreement and the Other Credit
Documents.


 


(i)     On and after the First Amendment Effective
Date, each reference in the Credit Agreement to “this Amendment”, “hereunder”, “hereof”,
“herein” or words of like import referring to the Credit Agreement, and each
reference in the other Credit Documents to the “Credit Agreement”, “thereunder”,
“thereof” or words of like import referring to the Credit Agreement shall mean
and be a reference to the Credit Agreement as amended by this Amendment.


 


(ii)     Except as specifically amended by this
Amendment, the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.


 


(iii)     The execution, delivery and performance of
this Amendment shall not constitute a waiver of any provision of, or operate as
a waiver of any right, power or remedy of any Agent or Lender under, the Credit
Agreement or any of the other Credit Documents.


 


B.     Headings.  Section and Subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.


 


C.     Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.


 


D.     Counterparts.  This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.


 


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21

















 


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


 


 


	
  BORROWER:

  	
   

  	
   

  	
  AEROFLEX INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  SVP, CFO & Secretary

  



 

















 


	
  GUARANTORS :

  	
  AEROFLEX
  HOLDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  SVP, CFO & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX
  COLORADO SPRINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX HIGH SPEED TEST
  SOLUTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/INMET, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/KDI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/METELICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  



 


23

















 


	
   

  	
  AEROFLEX MICROELECTRONIC
  SOLUTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX PLAINVIEW, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX RAD, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX/WEINSCHEL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX WICHITA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX BLOOMINGDALE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  



 

















 


	
   

  	
  AEROFLEX ACQUISITION ONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX ACQUISITION TWO, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AEROFLEX ACQUISITION THREE,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  AIF CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  :

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:
   Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  IFR FINANCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  IFR SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  



 

















 


	
   

  	
  MCE ASIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MICROMETRICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  VI
  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Adamovich

  
	
   

  	
   

  	
  Name:  John Adamovich

  
	
   

  	
   

  	
  Title:  Vice President

  



 

















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Douglas Tansey

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  



 

















 


IN WITNESS WHEREOF, pursuant to Section
II.A(i) of the Amendment, the undersigned hereby consents and authorizes the
Administrative Agent to execute this Amendment on its behalf.


 


 


	
   

  	
                                            , as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: