First Amendment to Security Agreement



 Exhibit 10.12 

Execution Version 

FIRST AMENDMENT TO SECURITY AGREEMENT 

This First Amendment to Security Agreement, dated as of February 4, 2010 (this “Amendment”), is entered into by and
among API TECHNOLOGIES CORP., a Delaware corporation (“Company”), ICARUS INVESTMENT CORPORATION, as Collateral Agent, and the subsidiaries of Company party to the Security Agreement. 

BACKGROUND 

A. The Holders made a loan to Company in an aggregate principal amount of Twenty Million dollars ($20,000,000.00) (the
“Loan”). The Loan is evidenced, governed and secured by (i) those certain Secured Promissory Notes, each dated as of January 20, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the
“Notes”), by Company in favor of the respective holders thereof, (ii) that certain Security Agreement, dated as of January 20, 2010 (as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), by and among Company, the other Pledging Parties party thereto, and the Collateral Agent, and (iii) that certain General Security Agreement, dated as of January 20, 2010, by and among the several
Canadian subsidiaries of the Company party thereto and Collateral Agent. 
 B. Each of Company, the Subsidiary Grantors and
Collateral Agent wishes to amend the US Security Agreement to release API Defense USA, Inc. and Cryptek USA Corp. from their obligations as Pledging Parties thereunder. 

C. The Collateral Agent is authorized to enter into this Amendment. 

AGREEMENT 

In consideration of the premises and the mutual agreements contained in this Amendment, the parties agree as follows: 

1. Defined Terms. Unless otherwise defined in this Amendment, all capitalized terms used herein as defined terms shall have the
meanings given to them in the Security Agreement. 
 2. Amendment to Security Agreement. In order to meet requirements of
the DSS for security clearance of the facilities operated by API Defense USA, Inc. and Cryptek USA Corp. (collectively, the “Released Parties”), each of the Released Parties is hereby released from its obligations as a Pledging Party under
the Security Agreement and any heretofore existing duties or obligations are hereby deemed satisfied in full. 
 3.
Conditions Precedent. This Amendment shall become effective upon the execution and delivery of this Amendment by the Collateral Agent, Company and the other Pledging Parties party to the Security Agreement. 

4. Counterparts. This Amendment may be signed in any number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument. Facsimile copies of signature shall be treated as original signatures for all purposes under this Amendment. 







 5. Governing Law. This Amendment shall be governed by and construed in accordance
with the internal laws of the State of Delaware without giving effect to choice of law principles of such State. 
 6.
Headings. The headings of the various paragraphs in this Amendment are for convenience of reference only and shall not be deemed to modify or restrict the terms or provisions hereof. 

[signature pages follow] 
  

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 IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first
above written. 
  

							
	PLEDGING PARTIES:	 		 	API TECHNOLOGIES CORP.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
		 		 	API CRYPTEK, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
		 		 	CRYPTEK USA CORP.
				
		 		 	By:	 	 /s/ Stephen Pudles for

		 		 	Name:	 	 William Anderson

		 		 	Title:	 	 President

			
		 		 	NATIONAL HYBRID, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
		 		 	KEYTRONICS, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 President

			
		 		 	FILTRAN INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Vice President



 

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		 		 	PACE TECHNOLOGY, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
		 		 	API NANOFABRICATION AND RESEARCH CORPORATION
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Vice President

			
		 		 	API ELECTRONICS INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 President

			
		 		 	TM SYSTEMS II, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 President

			
		 		 	API SYSTEMS, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
		 		 	API DEFENSE, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer



 

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		 		 	API DEFENSE USA, INC.
				
		 		 	By:	 	 /s/ Stephen Pudles

		 		 	Name:	 	 Stephen Pudles

		 		 	Title:	 	 Chief Executive Officer

			
	COLLATERAL AGENT:	 		 	ICARUS INVESTMENT CORPORATION
				
		 		 	By:	 	 /s/ Jason DeZwirek

		 		 	Name:	 	 Jason DeZwirek

		 		 	Title:	 	 President



 

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