EXPORT?IMPORT REVOLVING CREDIT AND SECURITY AGREEMENT

Loan Agreement

You are currently viewing:

This Loan Agreement involves

FAIRCHILD CORP | BANNER AEROSPACE HOLDING COMPANY I, INC | D A C INTERNATIONAL, INC | PROFESSIONAL AVIATION ASSOCIATES, INC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: EXPORT?IMPORT REVOLVING CREDIT AND SECURITY AGREEMENT
Governing Law: Pennsylvania Date: 6/27/2008
Industry: Retail (Specialty) Law Firm: Blank Rome Sector: Services

EXPORT–IMPORT REVOLVING CREDIT

AND

SECURITY AGREEMENT

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS AGENT)

WITH

BANNER AEROSPACE HOLDING COMPANY I, INC.

D A C INTERNATIONAL, INC.

MAPTECH AERODATA, LLC

MATRIX AVIATION, INC.

NASAM INCORPORATED

PROFESSIONAL AIRCRAFT ACCESSORIES, INC.

PROFESSIONAL AVIATION ASSOCIATES, INC.

GCCUS, INC.

(BORROWERS)

June 20, 2008

TABLE OF CONTENTS

Page

	I.	DEFINITIONS.	1

	1.1.	Accounting Terms	1
	1.2.	General Terms	1
	1.3.	Uniform Commercial Code Terms	28
	1.4.	Certain Matters of Construction	29

II.		ADVANCES, PAYMENTS.	30

	2.1.	Revolving Advances	30
	2.2.	Procedure for Revolving Advances Borrowing	32
	2.3.	Disbursement of Advance Proceeds	34
	2.4.	Reserved	34
	2.5.	Maximum Advances	34
	2.6.	Repayment of Advances	34
	2.7.	Repayment of Excess Advances	35
	2.8.	Statement of Account	35
	2.9.	Additional Payments	35
	2.10.	Manner of Borrowing and Payment	35
	2.11.	Mandatory Prepayments	37
	2.12.	Use of Proceeds	37
	2.13.	Defaulting Lender	38
	2.14.	ExIm Agreement Advances	39

III.		INTEREST AND FEES.	39

	3.1.	Interest	39
	3.2.	Reserved	39
	3.3.	Annual ExIm Bank Fee	39
	3.4.	Collateral Evaluation Fee, Collateral Monitoring Fee and Appraisals	40
	3.5.	Computation of Interest and Fees	40
	3.6.	Maximum Charges	40
	3.7.	Increased Costs	40
	3.8.	Basis For Determining Interest Rate Inadequate or Unfair	41
	3.9.	Capital Adequacy	42
	3.10.	Gross Up for Taxes	42
	3.11.	Withholding Tax Exemption	43

IV.		COLLATERAL: GENERAL TERMS	44

	4.1.	Security Interest in the Collateral	44
	4.2.	Perfection of Security Interest	44
	4.3.	Disposition of Collateral	44
	4.4.	Preservation of Collateral	44
	4.5.	Ownership of Collateral	45
	4.6.	Defense of Agent’s and Lenders’ Interests	45
	4.7.	Books and Records	46

	4.8.	Financial Disclosure	46
	4.9.	Compliance with Laws	46
	4.10.	Inspection of Premises	47
	4.11.	Insurance	47
	4.12.	Failure to Pay Insurance	48
	4.13.	Payment of Taxes	48
	4.14.	Payment of Leasehold Obligations	48
	4.15.	Receivables	48
	4.16.	Inventory	51
	4.17.	Maintenance of Equipment	51
	4.18.	Exculpation of Liability	51
	4.19.	Environmental Matters	51
	4.20.	Financing Statements	53

V.		REPRESENTATIONS AND WARRANTIES.	53

	5.1.	Authority	53
	5.2.	Formation and Qualification	54
	5.3.	Survival of Representations and Warranties	54
	5.4.	Tax Returns	54
	5.5.	Financial Statements	55
	5.6.	Entity Names	55
	5.7.	O	55
	5.8.	Solvency; No Litigation, Violation, Indebtedness or Default	56
	5.9.	Patents, Trademarks, Copyrights and Licenses	57
	5.10.	Licenses and Permits	57
	5.11.	Default of Indebtedness	58
	5.12.	No Default	58
	5.13.	No Burdensome Restrictions	58
	5.14.	No Labor Disputes	58
	5.15.	Margin Regulations	58
	5.16.	Investment Company Act	58
	5.17.	Disclosure	58
	5.18.	Delivery of Subordinated Loan Documentation	59
	5.19.	Swaps	59
	5.20.	Conflicting Agreements	59
	5.21.	Application of Certain Laws and Regulations	59
	5.22.	Business and Property of Borrowers	59
	5.23.	Section 20 Subsidiaries	59
	5.24.	Anti-Terrorism Laws	59
	5.25.	Trading with the Enemy	60
	5.26.	Federal Securities Laws	60
	5.27.	Equity Interests:	60
	5.28.	General Intangibles	61
	5.29.	Suspensions and Debarment	61
	5.30.	Eligible Person	61

VI.		AFFIRMATIVE COVENANTS.	61

	6.1.	Payment of Fees	61
	6.2.	Conduct of Business and Maintenance of Existence and Assets	61
	6.3.	Violations	62
	6.4.	Government Receivables	62
	6.5.	Fixed Charge Coverage Ratio	62
	6.6.	Execution of Supplemental Instruments	62
	6.7.	Payment of Indebtedness	62
	6.8.	Standards of Financial Statements	62
	6.9.	Federal Securities Laws	63
	6.10.	Post Closing Requirements	63

VII.		NEGATIVE COVENANTS.	63

	7.1.	Merger, Consolidation, Acquisition and Sale of Assets	63
	7.2.	Creation of Liens	63
	7.3.	Guaranties	63
	7.4.	Investments	64
	7.5.	Loans	64
	7.6.	Capital Expenditures	64
	7.7.	Dividends / Distributions	64
	7.8.	Indebtedness	64
	7.9.	Nature of Business	64
	7.10.	Transactions with Affiliates	64
	7.11.	Leases	65
	7.12.	Subsidiaries	65
	7.13.	Fiscal Year and Accounting Changes	65
	7.14.	Pledge of Credit	65
	7.15.	Amendment of Articles of Incorporation, By-Laws, Certificate of Formation or Operating Agreement	65
	7.16.	Compliance with ERISA	65
	7.17.	Prepayment of Indebtedness	66
	7.18.	Anti-Terrorism Laws	66
	7.19.	Membership/Partnership Interests	66
	7.20.	Trading with the Enemy Act	66
	7.21.	Subordinated Indebtedness	66
	7.22.	Other Agreements	67

VIII.		CONDITIONS PRECEDENT.	67

	8.1.	Conditions to Initial Advances	67
	8.2.	Conditions to Each Advance	70

IX.		INFORMATION AS TO BORROWERS.	71

	9.1.	Disclosure of Material Matters	71
	9.2.	Schedules	71
	9.3.	Environmental Reports	71
	9.4.	Litigation	72

	9.5.	Material Occurrences	72
	9.6.	Government Receivables	72
	9.7.	Annual Financial Statements	72
	9.8.	Quarterly Financial Statements	73
	9.9.	Monthly Financial Statements	73
	9.10.	Other Reports	73
	9.11.	Additional Information	73
	9.12.	Projected Operating Budget	74
	9.13.	Variances From Operating Budget	74
	9.14.	Notice of Suits, Adverse Events	74
	9.15.	ERISA Notices and Requests	74
	9.16.	Additional Documents	75

X.		EVENTS OF DEFAULT.	75

	10.1.	Nonpayment	75
	10.2.	Breach of Representation	75
	10.3.	Financial Information	75
	10.4.	Judicial Actions	75
	10.5.	Noncompliance	75
	10.6.	Judgments	76
	10.7.	Bankruptcy	76
	10.8.	Inability to Pay	76
	10.9.	Affiliate Bankruptcy	76
	10.10.	Material Adverse Effect	76
	10.11.	Lien Priority	76
	10.12.	Subordinated Loan Default	76
	10.13.	Cross Default	76
	10.14.	Breach of Guaranty	77
	10.15.	Change of Ownership	77
	10.16.	Invalidity	77
	10.17.	Licenses	77
	10.18.	Seizures	77
	10.19.	Pension Plans	77
	10.20.	ExIm Documents	78

XI.		LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.	78

	11.1.	Rights and Remedies	78
	11.2.	Agent’s Discretion	79
	11.3.	Setoff	79
	11.4.	Rights and Remedies not Exclusive	80
	11.5.	Allocation of Payments After Event of Default	80

XII.		WAIVERS AND JUDICIAL PROCEEDINGS.	81

	12.1.	Waiver of Notice	81
	12.2.	Delay	81
	12.3.	Jury Waiver	81

XIII.		EFFECTIVE DATE AND TERMINATION.	81

	13.1.	Term	81
	13.2.	Termination	82

XIV.		REGARDING AGENT.	82

	14.1.	Appointment	82
	14.2.	Nature of Duties	82
	14.3.	Lack of Reliance on Agent and Resignation	83
	14.4.	Certain Rights of Agent	84
	14.5.	Reliance	84
	14.6.	Notice of Default	84
	14.7.	Indemnification	84
	14.8.	Agent in its Individual Capacity	84
	14.9.	Delivery of Documents	85
	14.10.	Borrowers’ Undertaking to Agent	85
	14.11.	No Reliance on Agent’s Buyer Identification Program	85
	14.12.	Other Agreements	85

XV.		BORROWING AGENCY.	85

	15.1.	Borrowing Agency Provisions	86
	15.2.	Waiver of Subrogation	86

XVI.		MISCELLANEOUS.	86

	16.1.	Governing Law	87
	16.2.	Entire Understanding	89
	16.3.	Successors and Assigns; Participations; New Lenders	91
	16.4.	Application of Payments	91
	16.5.	Indemnity	92
	16.6.	Notice	94
	16.7.	Survival	94
	16.8.	Severability	94
	16.9.	Expenses	94
	16.10.	Injunctive Relief	94
	16.11.	Consequential Damages	94
	16.12.	Captions	95
	16.13.	Counterparts; Facsimile Signatures	95
	16.14.	Construction	95
	16.15.	Confidentiality; Sharing Information	95
	16.16.	Publicity	95
	16.17.	Certifications From Banks and Participants; USA PATRIOT Act	96
	16.18.	Ex ImBank Documents	96

LIST OF EXHIBITS AND SCHEDULES

Exhibits

Exhibit 1.2 Export Related Borrowing Base Certificate

Exhibit 1.2A Borrower Agreement

Exhibit 1.2C Loan Authorization Agreement

Exhibit 1.2D Economic Impact Certificate

Exhibit 2.1(a) Export Import Revolving Credit Note

Exhibit 5.5(a) Financial Projections

Exhibit 8.1(k) Financial Condition Certificate

Exhibit 16.3 Commitment Transfer Supplement

Schedules

Schedule 1.2 Permitted Encumbrances

Schedule 4.5 Equipment and Inventory Locations

Schedule 4.15(h) Deposit and Investment Accounts

Schedule 4.19 Real Property

Schedule 5.1 Consents

Schedule 5.2(a) States of Qualification and Good Standing

Schedule 5.2(b) Subsidiaries

Schedule 5.4 Federal Tax Identification Number

Schedule 5.6 Prior Names

Schedule 5.7 Environmental

Schedule 5.8(b) Litigation

Schedule 5.8(d) Plans

Schedule 5.9 Intellectual Property, Source Code Escrow Agreements

Schedule 5.10 Licenses and Permits

Schedule 5.14 Labor Disputes

Schedule 7.3 Guarantees

EXPORT-IMPORT REVOLVING CREDIT

AND

SECURITY AGREEMENT

Revolving Credit and Security Agreement dated as of June 20, 2008 among Banner Aerospace Holding Company I, Inc. , a corporation organized under the laws of the State of Delaware (“BAHCI”), D A C International, Inc. , a corporation organized under the laws of the State of Texas (“DAC”), Maptech AeroData, LLC , a limited liability company formed under the laws of the State of Delaware (“Maptech”), Matrix Aviation, Inc ., a corporation organized under the laws of the State of Kansas (“Matrix”), NASAM Incorporated , a corporation organized under the laws of the State of California (“NSM”), Professional Aircraft Accessories, Inc. , a corporation organized under the laws of the State of Florida (“PAF”) and Professional Aviation Associates, Inc. , a corporation organized under the laws of Georgia (“PAA”) GCCUS, Inc., a California corporation (“GCC”, together with BAHCI, DAC, Maptech, Matrix, NSM, PAF and PAA, collectively, the “Borrowers” and each a “Borrower”), the financial institutions which are now or which hereafter become a party hereto (collectively, the “Lenders” and each individually a “Lender”) and PNC Bank, National Association (“PNC”), as agent for Lenders (PNC, in such capacity, the “Agent”).

IN CONSIDERATION of the mutual covenants and undertakings herein contained, Borrowers, Lenders and Agent hereby agree as follows:

I. DEFINITIONS.

1.1. Accounting Terms . As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal year ended September 30, 2007.

1.2. General Terms . For purposes of this Agreement the following terms shall have the following meanings:

“ Accountants ” shall have the meaning set forth in Section 9.7 hereof.

“ Accounts Receivable Aging Report ” shall mean a report detailing the Export-Related Accounts Receivable for the Loan Facility, and the applicable terms for the relevant time period; in the case of Indirect Exports, such report shall indicate the portion of such Receivables corresponding to Indirect Exports.

“ Advance Rates ” shall have the meaning set forth in Section 2.1(a)(y)(ii).

“ Advances or Disbursements ” shall mean and include the Revolving Advances.

“ Affiliate ” of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person who is a director, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 5% or more of the Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.

“ Affiliated Foreign Person ” shall mean a Subsidiary or an Affiliate of any Borrower on the same Loan Facility, which has duly executed as a Borrower all of the applicable documents including without limitation this Agreement and any Other Documents required by ExIm Bank, meets all of the requirements of the definition of Eligible Person other than subclause (a) thereof and is in good standing in the country of its formation or otherwise authorized to conduct business in such country.

“ Agent ” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

“ Agreement ” shall mean this Export-Import Revolving Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the higher of (i) the Base Rate in effect on such day and (ii) the Federal Funds Open Rate in effect on such day plus 1/2 of 1%.

“ Anti-Terrorism Laws ” shall mean any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).

“ Applicable Law ” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.

“ Authority ” shall have the meaning set forth in Section 4.19(d).

“ Base Rate ” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate. This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

“ Blocked Accounts ” shall have the meaning set forth in Section 4.15(h).

“ Blocked Account Bank ” shall have the meaning set forth in Section 4.15(h).

“ Blocked Person ” shall have the meaning set forth in Section 5.24(b) hereof.

“ Borrower ” or “ Borrowers ” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.

“ Borrowers on a Consolidated Basis ” shall mean the consolidation in accordance with GAAP of the accounts or other items of the Borrowers and their respective Subsidiaries.

“ Borrowers’ Account ” shall have the meaning set forth in Section 2.8.

“ Borrowing Agent ” shall mean BAHCI.

“ Borrower Agreement ” shall mean that certain Borrower Agreement entered into by Borrowers, Agent and Lenders dated as of the date hereof, as supplemented by that certain Fast Track Borrower Agreement Supplement, attached hereto as Exhibit 1.2A along with any ExIm Bank waivers.

“ Business Day ” shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

“ Buyer ” shall mean and include any person that has entered into one or more Export Orders with Borrower or who is the account debtor with respect to any Export Related Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Borrower, pursuant to which such Borrower is to deliver any personal property or perform any services.

“ Capital Expenditures ” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures.

“ Capital Good ” shall mean a capital good (e.g. manufacturing equipment, licensing agreements) that will establish or expand foreign production capacity of an exportable good.

“ Capitalized Lease Obligation ” shall mean any Indebtedness of any Borrower represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

“ CERCLA ” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

“ Change of Control ” shall mean (a) the occurrence of any event (whether in one or more transactions) which results in a transfer of control of any Borrower to a Person who is not an Original Owner or (b) any merger or consolidation of or with any Borrower or sale of all or substantially all of the property or assets of any Borrower. For purposes of this definition, “control of Borrower” shall mean the power, direct or indirect (x) to vote 33% or more of the Equity Interests having ordinary voting power for the election of directors (or the individuals performing similar functions) of any Borrower or (y) to direct or cause the direction of the management and policies of any Borrower by contract or otherwise.

“ Change of Ownership ” shall mean (a) 100% of the Equity Interests of any Borrower is no longer owned or controlled by (including for the purposes of the calculation of percentage ownership, any Equity Interests into which any Equity Interests of any Borrower held by any of the Original Owners are convertible or for which any such Equity Interests of any Borrower or of any other Person may be exchanged and any Equity Interests issuable to such Original Owners upon exercise of any warrants, options or similar rights which may at the time of calculation be held by such Original Owners) a Person who is an Original Owner, (b) any merger, consolidation or sale of substantially all of the property or assets of any Borrower or Holdings or (c) (i) any Person or group of Persons (within the meaning of Sections 13(d) or 14(a) of the Security Exchange Act of 1934, as amended) shall have acquired voting interests in excess of thirty five percent 35% of the total voting interests of Holdings or the Permitted Holders shall in the aggregate hold less than thirty-five percent (35%) of the voting interests in Holdings ; or (ii) from and after the date hereof, during any period of two (2) consecutive years, individuals who on the date hereof constitute the board of directors of Holdings (together with any new directors whose election by such Board of Directors or whose nomination for election by the shareholders of Holdings was approved by a vote of a majority of the directors then still in office who were either directors on the date hereof or whose election or nomination for election was previously approved) cease for any reason to constitute a majority of the board of directors of Holdings then in office.

“ Charges ” shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, any Borrower or any of its Affiliates.

“ Closing Date ” shall mean June 20, 2008 or such other date as may be agreed to by the parties hereto.

“ Code ” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

“ Collateral ” shall mean and include:

(a) all Receivables;

(b) all Equipment;

(d) all Inventory;

(e) all Investment Property;

(f) all Subsidiary Stock;

(g) all of each Borrower’s right, title and interest in and to, whether now owned or hereafter acquired and wherever located; (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Buyers, relating to or securing any of the Receivables; (ii) all of each Borrower’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to any Borrower from any Buyer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of each Borrower’s contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by any Borrower, all real and personal property of third parties in which such Borrower has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which any Borrower has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and any Borrower;

(h) all of each Borrower’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by any Borrower or in which it has an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f) or (g) of this paragraph; and

(i) all proceeds and products of (a), (b), (c), (d), (e), (f), (g) or (h) in whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

“ Commitment Percentage ” of any Lender shall mean the percentage set forth below such Lender’s name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or (d) hereof.

“ Commitment Transfer Supplement ” shall mean a document in the form of Exhibit 16.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances under this Agreement.

“ Compliance Certificate ” shall mean a compliance certificate to be signed by the Vice President, Chief Financial Officer or Controller of Borrowing Agent, which shall state that, based on an examination sufficient to permit such officer to make an informed statement, no Default or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred, whether it is continuing and the steps being taken by Borrowers with respect to such default and, such certificate shall have appended thereto calculations which set forth Borrowers’ compliance with the requirements or restrictions imposed by Sections 6.5, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.11.

“ Consents ” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on any Borrower’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, the Other Documents , the Subordinated Loan Documentation including any Consents required under all applicable federal, state or other Applicable Law.

“ Consigned Inventory ” shall mean Inventory of any Borrower that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.

“ Contract Rate ” shall have the meaning set forth in Section 3.1 hereof.

“ Controlled Group ” shall mean, at any time, each Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with any Borrower, are treated as a single employer under Section 414 of the Code.

“ Country Limitation Schedule ” shall mean the schedule published from time to time by Ex-Im Bank which sets forth on a country by country basis whether and under what conditions Ex-Im Bank will provide coverage for the financing of export transactions to countries listed therein.

“ Credit Accommodation Amount ” shall mean, the aggregate outstanding amount of Advances, which sum may not exceed the Maximum Revolving Advance Amount.

“ Credit Accommodations ” shall mean, collectively, all Advances and Obligations.

“ Customs ” shall have the meaning set forth in Section 2.11(b) hereof.

“ Debarment Regulations ” shall mean, collectively, (a) the Government wide Debarment and Suspension (Nonprocurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May 26, 1988), (b) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the Federal Acquisition Regulations, 48 C.F.R. 9.400-9.409 and (c) the revised Governmentwide Debarment and Suspension (Nonprocurement) regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995).

“ Debt Payments ” shall mean and include (a) all cash actually expended by any Borrower to make interest payments on any Advances under this Agreement and the Domestic Credit Agreement, plus (b) accrued but unpaid interest on account of Eurodollar Rate Loans under this Agreement and the Domestic Credit Agreement, plus (c) scheduled principal payments on any term loans payable to Agent and Lender, plus (d) all cash actually expended by any Borrower to make payments for all fees, commissions and charges set forth herein and with respect to any Advances under this Agreement and the Domestic Credit Agreement, plus (e) all cash actually expended by any Borrower to make payments on Capitalized Lease Obligations, plus (f) all cash actually expended by any Borrower to make payments with respect to any other Indebtedness for borrowed money, plus the out of pocket costs and expenses to be paid by Borrowers at or prior to the Closing Date to the Agent for the ratable benefit of the Lenders hereunder, plus the out of pocket costs and expenses to be paid by Borrowers at or prior to the Closing Date to Domestic Agent for the ratable benefit of Lenders (as defined in the Domestic Credit Agreement) under the Domestic Credit Agreement, excluding the sum of the fees payable under Section 3.3(a) of the Domestic Credit Agreement.

“ Default ” shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.

“ Default Rate ” shall have the meaning set forth in Section 3.1 hereof.

“ Defaulting Lender ” shall have the meaning set forth in Section 2.13(a) hereof.

“ Depository Accounts ” shall have the meaning set forth in Section 4.15(h) hereof.

“ Direct Billing Amount ” shall mean an amount equal to any and all reimbursement obligations of Borrowers, or any of them, due to Holdings within 14 calendar days of the Closing Date for unreimbursed costs and expenses incurred on behalf of Borrowers.

“ Documents ” shall have the meaning set forth in Section 8.1(c) hereof.

“ Dollar ” and the sign “ $ ” shall mean lawful money of the United States of America.

“ Domestic Agent ” shall mean the agent pursuant to the Domestic Credit Documents, as such term is defined therein.

“ Domestic Credit Agreement ” shall mean that certain Revolving Credit and Security Agreement entered into among Domestic Agent, Lenders and Borrowers dated the date hereof, as amended, restated, supplemented or otherwise modified from time to time.

“ Domestic Credit Documents ” shall mean any and all documents executed in connection with the Domestic Credit Agreement.

“ Domestic Rate Loan ” shall mean any Advance that bears interest based upon the Alternate Base Rate.

“ Drawing Date ” shall have the meaning set forth in Section 2.12(b) hereof.

“ Early Termination Date ” shall have the meaning set forth in Section 13.1 hereof.

“ Earnings Before Interest and Taxes ” shall mean for any period the sum of (i) net income (or loss) of Borrowers on a Consolidated Basis for such period (excluding extraordinary gains and losses), plus (ii) all interest expense of Borrowers on a Consolidated Basis for such period, plus (iii) all charges against income of Borrowers on a Consolidated Basis for such period for federal, state and local taxes.

“ EBITDA ” shall mean for any period the sum of (i) Earnings Before Interest and Taxes for such period plus (ii) depreciation expenses for such period, plus (iii) amortization expenses for such period.

“ Economic Impact Approval ” shall mean a written approval issued by ExIm Bank stating the conditions under which a Capital Good may be included as an Item in a Loan Facility consistent with ExIm Bank’s economic impact procedures (or other mechanism for making this determination that ExIm Bank notified Agent of in writing).

“ Economic Impact Certification ” shall have the meaning set forth in Section 2.1(f).

“ Eligible Export Related Accounts Receivables ” shall mean and include with respect to each Borrower, each Export Related Account Receivable of such Borrower arising in the Ordinary Course of Business and which Agent, in its sole credit judgment, shall deem to be an Eligible Export Related Accounts Receivable, based on such considerations as Agent may from time to time deem appropriate. An Export Related Account Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent. In addition, no Export Related Account Receivable shall be an Eligible Export Related Account Receivable if:

(a) it arises out of a sale of goods to, or performance of services by any Borrower to, an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower or a Person under common control with an Affiliate of any Borrower;

(b) it is due or unpaid more than one hundred twenty (120) days after the invoice date or no invoice has been sent to the Buyer;

(c) it is not paid within sixty (60) calendar days from its original due date, unless it is insured through ExIm Bank export credit insurance for comprehensive commercial and political risk, or through ExIm Bank approved private insurers for comparable coverage, in which case it is not paid within ninety (90) calendar days from its due date;

(d) it arises from the sale of defense articles or defense services;

(e) it arises from the sale of Items to be used in the construction, alteration, operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy water production facilities, unless with ExIm Bank’s prior written consent;

(f) fifty percent (50%) or more of the Receivables from such Buyer are not deemed Eligible Export Related Accounts Receivable hereunder. Such percentage may, in Agent’s sole discretion, be increased or decreased from time to time;

(g) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

(h) Reserved;

(i) the Buyer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

(j) it is due and payable from a Buyer located in a country with which ExIm Bank is prohibited from doing business as designated in the Country Limitation Schedule;

(k) it does not comply with the requirements of the Country Limitation Schedule;

(l) the sale to the Buyer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

(m) Reserved;

(n) the Buyer is the United States of America, any state or any department, agency or instrumentality of any of them, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances;

(o) the Items giving rise to such Receivable have not been delivered to and accepted by the Buyer, the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Buyer, the Receivable otherwise does not represent a final sale or if the Export Order specifies a timing for invoicing the Items other than shipment or performance and the Items have not been invoiced in accordance with such terms of the Export Order;

(p) the Receivables of the Buyer exceed a credit limit determined by Agent, in its reasonable discretion, to the extent such Receivable exceeds such limit;

(q) the Receivable is not owned by a Borrower or is subject to any offset, deduction, defense, dispute, or counterclaim (to the extent of such offset, deduction, defense or counterclaim), the Buyer is also a creditor or supplier of a Borrower or the Receivable is contingent in any respect or for any reason;

(r) the applicable Borrower has made any agreement with any Buyer for any deduction therefrom, except for discounts or allowances made in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

(s) if any Items giving rise to the Receivable have been returned, rejected or repossessed or the rendition of services have been disputed;

(t) such Receivable is not payable to a Borrower;

(u) such Receivable is due and payable in a currency other than Dollars, except as may be approved in writing by ExIm Bank;

(v) is due and payable from a military Buyer, except as may be approved in writing by ExIm Bank;

(w) such Receivable does not comply with the terms of sale set forth in Section 7 of the Loan Authorization Notice;

(x) any of the Items giving rise to such Receivable are Capital Goods, unless the transaction is in accordance with Section 2.1(f);

(y) that is due and payable from a Buyer that is, or is located in, the United States; provided however, that this subsection (y) shall not preclude an Export-Related Account Receivable arising from the sale of Items to foreign contractors or subcontractors providing services to a United States Embassy or the United States Military located overseas from being deemed an Eligible Export Related Account Receivable;

(z) such Receivable is included in the Formula Amount under the Domestic Credit Agreement;

(aa) that arises from the sale of Items that do not meet the U.S. Content requirements in accordance with Section 2.12(b)(ii); and

(bb) if Agent or ExIm Bank, in its reasonable judgment, deems such Receivable uncollectible for any reason or if Agent or ExIm Bank in its sole judgment exercised in good faith determines that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Buyer's financial inability to pay or such Receivable is not otherwise satisfactory to Agent or ExIm Bank as determined in good faith by Agent or ExIm Bank in the exercise of their discretion in a reasonable manner.

“ Eligible Export Related Finished Goods Inventory ” shall mean, as determined by Agent in its reasonable discretion, Eligible Export Related Inventory consisting of new finished goods Inventory and used Inventory which has been refurbished, is in the process of being refurbished, or will be refurbished.

“ Eligible Export Related Inventory ” shall mean and include Export Related Inventory, including used Export Related Inventory which has been or will be refurbished or is in process of being refurbished, with respect to each Borrower, valued at the lower of cost or market value, determined on a first-in-first-out basis, which is not, in Agent’s opinion, obsolete, slow moving or unmerchantable and Eligible Inventory shall include all of the forgoing Inventory in-transit, including Inventory classified as exchanges, between locations owned or leased by the Borrowers, which is insured to the full value thereof and for which Agent shall have in its possession (i) all negotiable bills of lading properly endorsed and (ii) all non-negotiable bills of lading issued in Agent’s name, but in no event shall Eligible Export Related Inventory include any Inventory:

(a) that is not subject to a valid, perfected first priority Lien in favor of Agent;

(b) that is located at an address that has not been disclosed to Agent in writing;

(d) that is in the possession of a processor or bailee, or located on premises leased or subleased to a Borrower, or on premises subject to a mortgage in favor of a Person other than Agent, unless such processor or bailee or mortgagee or the lessor or sublessor of such premises, as the case may be, has executed and delivered all documentation which Agent shall require to evidence the subordination or other limitation or extinguishment of such Person’s rights with respect to such Inventory and Agent’s right to gain access thereto;

(e) that is produced in violation of the Fair Labor Standards Act or subject to the “hot goods” provisions contained in 29 U.S.C. § 215 or any successor statute or section;

(f) as to which any covenant, representation or warranty with respect to such Inventory contained in this Agreement or any of the Other Documents has been breached;

(g) that is not located in the United States unless expressly permitted by Agent, on terms acceptable to Agent;

(h) that is an Item or is to be incorporated into Items that do not meet U.S. Content requirements in accordance with Section 2.12(b)(ii);

(i) that is demonstration Inventory;

(j) that consists of proprietary software (i.e. software designed solely for any Borrower’s internal use and not intended for resale);

(k) that is damaged, obsolete, returned, defective, recalled or unfit for further processing;

(l) that has been previously exported from the United States;

(m) that constitutes, or will be incorporated into Items that constitute, defense articles or defense services;

(n) that is an Item or will be incorporated into Items that will be used in the construction, alteration, operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy water production facilities, unless with ExIm Bank’s prior written consent;

(o) that is an Item or is to be incorporated into Items destined for shipment to a country as to which ExIm Bank is prohibited from doing business as designated in the Country Limitation Schedule;

(p) that is an Item or is to be incorporated into Items destined for shipment to a Buyer located in a country in which ExIm Bank coverage is not available for commercial reasons as designated in the Country Limitation Schedule, unless and only to the extent that such Items are to be sold to such country on terms of a letter of credit confirmed by a bank acceptable to Agent and ExIm Bank;

(q) that constitutes, or is to be incorporated into Items whose sale would result in an Receivable which would not be an Eligible Export Related Account Receivable;

(r) that is included in the Formula Amount under the Domestic Credit Agreement;

(s) that is, or is to be incorporated into, an Item that is a Capital Good, unless such transaction is in accordance with Section 2.12(b)(ii);

(t) that does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof;

(u) that is the subject of an Intellectual Property Claim; and

(v) that is subject to a License Agreement or other agreement that limits, conditions or restricts any Borrower’s or Agent’s right to sell or otherwise dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement;

“ Eligible Person ” shall mean a sole proprietorship, partnership, limited liability partnership, corporation or limited liability company which (a) is domiciled, organized or formed, as the case may be, in the United States, whether or not such entity is owned by a foreign national or foreign entity; (b) is in good standing in the state of its formation or otherwise authorized to conduct business in the United States; (c) is not currently suspended or debarred from doing business with the United States government or any instrumentality, division, agency or department thereof; (d) exports or plans to export Items; (e) operates and has operated as a going concern for at least one (1) year; (f) has a positive tangible net worth determined in accordance with GAAP; and (g) has revenue generating operations relating to its core business activities for at least one year. An Affiliated Foreign Person that meets all of the requirements of the foregoing definition of Eligible Person other than subclause (a) thereof shall be deemed to be an Eligible Person.

“ Environmental Complaint ” shall have the meaning set forth in Section 4.19(d) hereof.

“ Environmental Laws ” shall mean all federal, state and local environmental laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

“ Equipment ” shall mean and include as to each Borrower all of such Borrower’s tangible personal property (other than Inventory) whether now owned or hereafter acquired and wherever located including: all equipment; machinery; manufacturing; distribution; selling; data processing and office equipment; assembly systems, tools; molds; dies; fixtures; appliances; apparatus; motor vehicles; fittings; furniture; furnishings; fixtures; parts; accessories; and any and all accessions, parts, appurtenances attached to any of the foregoing or used in connection therewith; and any replacements, products, proceeds, and substitutions therefor or accessions thereto.

“ Equity Interests ” of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.

“ Eurodollar Rate ” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto, the interest rate per annum determined by Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for U.S. Dollars for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal 1.00 minus the Reserve Percentage. The Eurodollar Rate may also be expressed by the following formula:

	Average of London interbank offered rates quoted by Bloomberg or appropriate Successor as shown on
Eurodollar Rate =	Bloomberg Page BBAM1 1.00 - Reserve Percentage

The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

“ Eurodollar Rate Loan ” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.

“ Event of Default ” shall have the meaning set forth in Article X hereof.

“ Excess Cash Flow ” for any fiscal period shall mean, in each case for Borrowers on a Consolidated Basis, EBITDA for such fiscal period minus Unfunded Capital Expenditures during such fiscal period, minus taxes actually paid during such fiscal period minus dividends and distributions made during such period, minus Debt Payments made during such period.

“ Exchange Act ” shall have the mean the Securities Exchange Act of 1934, as amended.

“ Executive Order No. 13224 ” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ Export-Import Bank ” or ExIm Bank ” shall mean the Export Import Bank of the United States, a United States governmental entity, and its successors and assigns.

“ Export-Import Agreement ” or “ Ex-Im Agreement ” shall mean that certain Export-Import Revolving Credit and Security Agreement among Agent, Lenders and Borrowers of even date herewith (as the same may be amended, restated, supplemented or replaced from time to time).

“ Export-Import Revolving Credit Note ” shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.

“ Export Order ” shall mean a documented purchase order or contract evidencing a Buyer’s agreement to purchase Items from a Borrower for export from the United States, which documentation shall include written information that is necessary to confirm such purchase order or contract, including identification of the Items, the name of the Buyer, the country of destination, contact information for the Buyer and the total amount of the purchase order or contract; in the case of Indirect Exports, such documentation shall further include a copy of the written purchase order or contract from a foreign purchaser or other documentation clearly evidencing a foreign purchaser’s agreement to purchase the Items.

“ Export Related Accounts Receivable ” shall mean those Receivables arising from the sale of Items which are due and payable to any Borrower in the United States.

“ Export Related Accounts Receivable Value ” shall mean, at the date of determination thereof, the aggregate face amount of Eligible Export Related Accounts Receivable less taxes, discounts, credits, allowances and Retainages, except to the extent otherwise permitted by ExIm Bank in writing.

“ Export Related Borrowing Base Certificate ” shall mean a certificate duly executed by an officer of Borrowing Agent appropriately completed and in substantially the form of Exhibit 1.2 attached hereto and delivered to Agent pursuant to this Agreement detailing the Formula Amount supporting the Advances which reflects, to the extent included in the Formula Amount, Export Related Accounts Receivable, Eligible Export Related Accounts Receivable, Export Related Inventory and Eligible Export Related Inventory balances that have been reconciled with Borrowers’ general ledger, Accounts Receivable Aging Report and Inventory schedule.

“ Export Related Collateral ” shall mean the Collateral specified as Primary Collateral in the Loan Authorization Agreement.

“ Export Related Finished Goods Inventory Value ” shall mean, at the date of determination thereof, the lowest of (i) the cost of Eligible Exported Related Finished Goods Inventory as determined in accordance with GAAP, or (ii) the market value of Eligible Export Related Finished Goods Inventory as determined in accordance with GAAP or (iii) the lower of the appraised market value or orderly liquidation value of the Eligible Export Related Finished Goods Inventory, if Agent has other loans and financial accommodations to a Borrower for which it conducts (or contracts for the performance of) such an appraised or orderly liquidation value.

“ Export Related General Intangibles ” shall mean the Pro Rata Percentage of General Intangibles determined as of the earlier of: (i) the date such General Intangibles are liquidated and (ii) the date any Borrower fails to pay when due any outstanding amount of principal or accrued interest payable under this Agreement or any Other Document that becomes the basis for a Payment Default (as defined in the Master Guarantee Agreement) on which a Claim (as defined in the Master Guarantee Agreement) is filed.

“ Export Related Historical Inventory Value ” shall mean with respect to any Borrower, the relevant Export-Related Sales Ratio multiplied by the lowest of (i) the cost of such Borrower’s Inventory as determined in accordance with GAAP, or (ii) the market value of such Borrower’s Inventory as determined in accordance with GAAP or (iii) the appraised or orderly liquidation value of such Borrower’s Inventory, if Agent has loans and financial accommodations to such Borrower for which it conducts (or contracts for the performance of) such an appraised or orderly liquidation value.

“ Export Related Inventory ” shall mean the Inventory of Borrowers located in the United States that has been purchased, manufactured or otherwise acquired by Borrowers for sale or resale as Items, or to be incorporated into Items to be sold or resold pursuant to Export Orders.

“ Export Related Receivables Advance Rate ” shall have the meaning set forth in Section 2.1(a)(y)(i) hereof.

“ Export-Related Sales Ratio ” shall mean with respect to any Borrower, the percentage of such Borrower’s total sales revenue derived from the sale of Eligible Export Related Finished Goods Inventory over a rolling twelve-month period ending no more than ninety (90) days prior to the date of the relevant Export Related Borrowing Base Certificate

“ Extension ” shall mean, with respect to a Loan Facility, an amendment to the Loan Authorization Agreement extending the Final Disbursement Date on the same terms and conditions as the Loan Facility for an aggregate period not to exceed one hundred twenty (120) days beyond the original Final Disbursement Date, as agreed to in writing by ExIm.

“ Fast Track Lender Agreement ” shall mean the Fast Track Lender Agreement, if any, between ExIM Bank and Agent.

“ Federal Funds Effective Rate ” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

“ Federal Funds Open Rate ” shall mean the rate per annum determined by the Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the "open" rate for federal funds transactions as of the opening of business for federal funds transactions among members of the Federal Reserve System arranged by federal funds brokers on such day, as quoted by Garvin Guybutler Corporation, any successor entity thereto, or any other broker selected by the Agent, as set forth on the applicable Telerate display page; provided, however; that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the "open" rate on the immediately preceding Business Day, or if no such rate shall be quoted by a Federal funds broker at such time, such other rate as determined by the Agent in accordance with its usual procedures.

“ Final Disbursement Date ” shall mean the last date on which Agent may make an Advance as set forth in Section 10 of the Loan Authorization Agreement (including as amended by an Extension) or, if such date is not a Business Day, the next succeeding Business Day.

“ Finished Goods Inventory Advance Rate ” shall have the meaning set forth in Section 2.1(a)(y)(ii) hereof.

“Fixed Charge Coverage Ratio ” shall mean and include, with respect to any fiscal period, the ratio of (a) EBITDA, minus Unfunded Capital Expenditures made during such period, minus distributions (including tax distributions) and dividends made during such period, minus cash taxes paid during such period, to (b) all Debt Payments made during such period.

“ Foreign Subsidiary ” of any Person, shall mean any Subsidiary of such Person that is not organized or incorporated in the United States or any State or territory thereof.

“ Formula Amount ” shall have the meaning set forth in Section 2.1(a).

“ GAAP ” shall mean generally accepted accounting principles in the United States of America in effect from time to time.

“ General Intangibles ” shall mean and include as to each Borrower all of such Borrower’s general intangibles, whether now owned or hereafter acquired, including all present and future (i) general intangibles; (ii) rights, interests, payment intangibles, choses in action, causes of action, claims and other intangible property of every kind and nature (other than Receivables); (iii) corporate and other business records; (iv) loans, royalties, and other obligations receivable; (v) trademarks, registered trademarks, trademark applications, service marks, registered service marks, service mark applications, patents, registered patents, patent applications, trade names, rights of use of any name, labels, fictitious names, inventions, designs, design rights, trade secrets, computer programs, software, printouts, computer information, source codes, codes, records and updates, registrations, and other computer materials, equipment formulations, manufacturing procedures, quality control procedures, goodwill, copyrights, copyright applications, permits, licenses, franchises, customer lists, credit files, correspondence, and advertising materials; (vi) customer and supplier contracts, firm sale orders, rights under license and franchise agreements, rights under tax sharing agreements, rights under non-compete agreements, and other contracts and contract rights; (vii) interests in partnerships and joint ventures; (viii) tax refunds and tax refund claims; (ix) right, title and other agreements relating to property; (x) deposit accounts (general or special with any bank or other financial institution; (xi) credits with and other claims against third parties (including carriers and shippers); (xii) rights to indemnification and with respect to support and keep-well agreements; (xiii) reversionary interests in pension and profit sharing plans and reversionary, beneficial and residual interest in trusts; (xiv) letters of credit, guarantees, Liens, security interests and other security held by or granted to such Person; (xvi) uncertificated securities; (xvii) investment property; (xviii) all claims under guaranties, security interests or other security held by or granted to such Borrower to secure payment of any of the Receivables by a Buyer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).

“ Governmental Acts ” shall have the meaning set forth in Section 2.17.

“ Governmental Body ” shall mean any nation or government, any federal, state, local or other political subdivision thereof and any entity, authority, agency, division or department exercising the executive, legislative, judicial, regulatory or administrative functions of or pertaining to a government.

“ Guarantor ” shall mean any Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations and “Guarantors” means collectively all such Persons.

“ Guarantor Security Agreement ” shall mean any Security Agreement executed by any Guarantor in favor of Agent securing the Guaranty of such Guarantor.

“ Guaranty ” shall mean any guaranty of the obligations of Borrowers executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders.

“ Hazardous Discharge ” shall have the meaning set forth in Section 4.19(d) hereof.

“ Hazardous Substance ” shall mean, without limitation, any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the New York State Environmental Conservation Law or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

“ Hazardous Wastes ” shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.

“ Hedge Liabilities ” shall have the meaning provided in the definition of “Lender-Provided Interest Rate Hedge”.

“ Holdings ” shall mean The Fairchild Corporation, a Delaware corporation.

“ Indebtedness ” of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon a balance sheet as liabilities (except capital stock and surplus earned or otherwise) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred by such Person. Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.

“ Indirect Exports ” shall mean finished goods or services that are sold by any Borrower to a Buyer located in the United States, are intended for export from the United States, and are identified in Section 4.A.(2.) of the Loan Authorization Agreement.

“ Ineligible Security ” shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

“ Intellectual Property ” shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.

“ Intellectual Property Claim ” shall mean the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Borrower’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other property or asset is violative of any ownership of or right to use any Intellectual Property of such Person.

“ Interest Period ” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).

“ Interest Rate Hedge ” shall mean an interest rate exchange, collar, cap, swap, interest rate future or option, currency swap, currency future, forward, or option, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, such Borrower, any Guarantor and/or their respective Subsidiaries of fluctuation in interests rates or increasing floating rates of interest applicable to Indebtedness, and/or foreign exchange rates or conversion rates for conversion of foreign currencies to Dollars.

“ Inventory ” shall mean and include as to each Borrower all of such Borrower’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Borrower’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.

“ Investment Property ” shall mean and include as to each Borrower, all of such Borrower’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.

“ Items ” shall mean the finished goods or services which are intended for export from the United States, either directly or as an Indirect Export, meet the U.S. Content requirements in accordance with Section 2.12(b)(ii) and are specified in Section 4(A) of the Loan Authorization Notice.

“ Lender ” and “ Lenders ” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.

“ Lender-Provided Interest Rate Hedge ” shall mean an Interest Rate Hedge which is provided by any Lender and with respect to which the Agent confirms meets the following requirements: such Interest Rate Hedge (i) is documented in a standard International Swap Dealer Association Agreement, (ii) provides for the method of calculating the reimbursable amount of the provider's credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes. The liabilities of any Borrower to the provider of any Lender-Provided Interest Rate Hedge (the “Hedge Liabilities”) shall be “Obligations” hereunder, guaranteed obligations under any Guaranty and secured obligations under any Guarantor Security Agreement and otherwise treated as Obligations for purposes of each of the Other Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents.

“ Loan Authorization Agreement ” shall mean the duly executed Fast Track Loan Authorization Agreement, setting forth certain terms and conditions of each Loan Facility, a copy of which is attached hereto as Exhibit 1.2C.

“ Loan Facility ” shall mean the revolving loan facility, established by Agent and Lenders in favor of Borrowers under this Agreement and the Other Documents.

“ License Agreement ” shall mean any agreement between any Borrower and a Licensor pursuant to which such Borrower is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such Borrower or otherwise in connection with such Borrower’s business operations.

“ Licensor ” shall mean any Person from whom any Borrower obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Borrower’s manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with such Borrower’s business operations.

“ Licensor/Agent Agreement ” shall mean an agreement between Agent and a Licensor, in form and content satisfactory to Agent, by which Agent is given the unqualified right, vis-a-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose of any Borrower’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of such Borrower’s default under any License Agreement with such Licensor.

“ Lien ” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.

“ Lien Waiver Agreement ” shall mean an agreement which is executed in favor of Agent by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Inventory.

“ Loan Facility ” shall mean the revolving loan facility, established by Agent and Lenders in favor of Borrowers under this Agreement and the Other Documents.

“ Management Agreement ” shall mean that certain Management Services Agreement between Holdings and Borrowing Agent dated as of June 11, 2008; as in effect on the Closing Date.

“ Management Services ” shall mean all services provided to Borrowers under the Management Agreement.

“ Manual ” shall mean that certain Working Capital Guarantee Program Manual related to the Master Guarantee Agreement.

“ Master Guarantee Agreement ” shall mean that certain Master Guarantee Agreement dated December 31, 2005, entered into in by ExIm Bank and PNC.

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the condition (financial or otherwise), results of operations, assets, business, properties or prospects of the Borrowers and Guarantor on a consolidated basis, (b) any Borrower’s ability to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) Agent’s Liens on the Collateral or the priority of any such Lien, or (d) the practical realization of the benefits of Agent’s and each Lender’s rights and remedies under this Agreement and the Other Documents.

“ Maximum Loan Amount ” shall mean $28,000,000.

“ Maximum Revolving Advance Amount ” shall mean $12,000,000.

“ Modified Commitment Transfer Supplement ” shall have the meaning set forth in Section 16.3(d).

“ Multiemployer Plan ” shall mean a “multiemployer plan” as defined in Sections 3(37) and 4001(a)(3) of ERISA.

“ Multiple Employer Plan ” shall mean a Plan which has two or more contributing sponsors (including any Borrower or any member of the Controlled Group) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“ Net Orderly Liquidation Value Appraisal ” shall means the certain appraisal prepared by SH&E, Inc, dated April 1, 2008 and such later appraisal, in form and substance satisfactory to Agent and prepared by an appraiser acceptable to Agent from time to time.

“ Note ” shall mean, collectively, the Export Import Revolving Credit Notes.

“ Obligations ” shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by any Borrower to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent or any Lender of any kind or nature, present or future (including any interest or other amounts accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to any Borrower, whether or not a claim for post-filing or post-petition interest or other amounts is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document, (including this Agreement and the Other Documents) whether or not for the payment of money, whether arising by reason of an extension of credit, opening or amendment of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, including, but not limited to, any and all of any Borrower’s Indebtedness and/or liabilities under this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any Borrower and any amendments, extensions, renewals or increases and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including but not limited to reasonable attorneys’ fees and expenses and all obligations of any Borrower to Agent or Lenders to perform acts or refrain from taking any action.

“ Ordinary Course of Business ” shall mean with respect to any Borrower, the ordinary course of such Borrower’s business as conducted on the Closing Date.

“ Original Owners ” shall mean (i) with respect to BAHCI, Holdings and (ii) with respect to all other Borrowers, BAHCI.

“ Other Documents ” shall mean the Note, the Perfection Certificates, any Guaranty, any Guarantor Security Agreement, any Lender-Provided Interest Rate Hedge, the Borrower Agreement (including all waivers related thereto), the Loan Authorization Agreement, the Domestic Credit Documents and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writi