REVOLVING CREDIT AND SECURITY AGREEMENT

Loan Agreement

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This Loan Agreement involves

BANNER AEROSPACE HOLDING COMPANY I, INC | D A C INTERNATIONAL, INC | GCCUS, INC | MAPTECH AERODATA, LLC | MATRIX AVIATION, INC | NASAM INCORPORATED | PNC BANK, NATIONAL ASSOCIATION | PROFESSIONAL AIRCRAFT ACCESSORIES, INC | PROFESSIONAL AVIATION ASSOCIATES, INC

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

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

	I.	DEFINITIONS.	1

	1.1.	Accounting Terms	1
	1.2.	General Terms	1
	1.3.	Uniform Commercial Code Terms	23
	1.4.	Certain Matters of Construction	23

II.		ADVANCES, PAYMENTS.	24

	2.1.	Revolving Advances	24
	2.2.	Procedure for Revolving Advances Borrowing	26
	2.3.	Disbursement of Advance Proceeds	28
	2.4.	Reserved	28
	2.5.	Maximum Advances	28
	2.6.	Repayment of Advances	28
	2.7.	Repayment of Excess Advances	29
	2.8.	Statement of Account	29
	2.9.	Letters of Credit	29
	2.10.	Issuance of Letters of Credit	29
	2.11.	Requirements for Issuance of Letters of Credit	30
	2.12.	Disbursements, Reimbursement	31
	2.13.	Repayment of Participation Advances	32
	2.14.	Documentation	32
2.15.		Determination to Honor Drawing Request	32
2.16.		Nature of Participation and Reimbursement Obligations	33
2.17.		Indemnity	34
2.18.		Liability for Acts and Omissions	34
2.19.		Additional Payments	36
2.20.		Manner of Borrowing and Payment	36
2.21.		Mandatory Prepayments	37
2.22.		Use of Proceeds	38
2.23.		Defaulting Lender	38

III.		INTEREST AND FEES.	39

	3.1.	Interest	39
	3.2.	Letter of Credit Fees	39
	3.3.	Closing Fee and Facility Fee	40
	3.4.	Collateral Evaluation Fee, Collateral Monitoring Fee and Appraisals	40
	3.5.	Computation of Interest and Fees	41
	3.6.	Maximum Charges	41
	3.7.	Increased Costs	41
	3.8.	Basis For Determining Interest Rate Inadequate or Unfair	42
	3.9.	Capital Adequacy	43
	3.10.	Gross Up for Taxes	43
	3.11.	Withholding Tax Exemption	44

IV.		COLLATERAL: GENERAL TERMS	45

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

	4.8.	Financial Disclosure	47
	4.9.	Compliance with Laws	47
	4.10.	Inspection of Premises	47
	4.11.	Insurance	48
	4.12.	Failure to Pay Insurance	48
	4.13.	Payment of Taxes	49
	4.14.	Payment of Leasehold Obligations	49
	4.15.	Receivables	49
	4.16.	Inventory	52
	4.17.	Maintenance of Equipment	52
	4.18.	Exculpation of Liability	52
	4.19.	Environmental Matters	52
	4.20.	Financing Statements	54

V.		REPRESENTATIONS AND WARRANTIES.	54

	5.1.	Authority	54
	5.2.	Formation and Qualification	55
	5.3.	Survival of Representations and Warranties	55
	5.4.	Tax Returns	55
	5.5.	Financial Statements	56
	5.6.	Entity Names	56
	5.7.	O	56
	5.8.	Solvency; No Litigation, Violation, Indebtedness or Default	57
	5.9.	Patents, Trademarks, Copyrights and Licenses	58
	5.10.	Licenses and Permits	59
	5.11.	Default of Indebtedness	59
	5.12.	No Default	59
	5.13.	No Burdensome Restrictions	59
	5.14.	No Labor Disputes	59
	5.15.	Margin Regulations	59
	5.16.	Investment Company Act	59
	5.17.	Disclosure	59
	5.18.	Delivery of Subordinated Loan Documentation	60
	5.19.	Swaps	60
	5.20.	Conflicting Agreements	60
	5.21.	Application of Certain Laws and Regulations	60
	5.22.	Business and Property of Borrowers	60
	5.23.	Section 20 Subsidiaries	60
	5.24.	Anti-Terrorism Laws	60
	5.25.	Trading with the Enemy	61
	5.26.	Federal Securities Laws	61
	5.27.	Equity Interests: The authorized and outstanding Equity Interests of each Borrower is as shown on Schedule 5	61

VI.		AFFIRMATIVE COVENANTS.	62

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

VII.		NEGATIVE COVENANTS.	63

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

VIII.		CONDITIONS PRECEDENT.	67

	8.1.	Conditions to Initial Advances	67
	8.2.	Conditions to Each Advance	71

IX.		INFORMATION AS TO BORROWERS.	71

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

	9.5.	Material Occurrences	72
	9.6.	Government Receivables	73
	9.7.	Annual Financial Statements	73
	9.8.	Quarterly Financial Statements	73
	9.9.	Monthly Financial Statements	73
	9.10.	Other Reports	74
	9.11.	Additional Information	74
	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	76
	10.4.	Judicial Actions	76
	10.5.	Noncompliance	76
	10.6.	Judgments	76
	10.7.	Bankruptcy	76
	10.8.	Inability to Pay	76
	10.9.	Affiliate Bankruptcy	76
	10.10.	Material Adverse Effect	77
	10.11.	Lien Priority	77
	10.12.	Subordinated Loan Default	77
	10.13.	Cross Default	77
	10.14.	Breach of Guaranty	77
	10.15.	Change of Ownership	77
	10.16.	Invalidity	77
	10.17.	Licenses	77
	10.18.	Seizures	78
	10.19.	Pension Plans	78

XI.		LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.	78

	11.1.	Rights and Remedies	78
	11.2.	Agent’s Discretion	80
	11.3.	Setoff	80
	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	83
	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 Customer Identification Program	85
	14.12.	Other Agreements	85

XV.		BORROWING AGENCY.	85

	15.1.	Borrowing Agency Provisions	85
	15.2.	Waiver of Subrogation	86

XVI.		MISCELLANEOUS.	86

	16.1.	Governing Law	86
	16.2.	Entire Understanding	87
	16.3.	Successors and Assigns; Participations; New Lenders	89
	16.4.	Application of Payments	91
	16.5.	Indemnity	91
	16.6.	Notice	92
	16.7.	Survival	94
	16.8.	Severability	94
	16.9.	Expenses	94
	16.10.	Injunctive Relief	94
	16.11.	Consequential Damages	95
	16.12.	Captions	95
	16.13.	Counterparts; Facsimile Signatures	95
	16.14.	Construction	95
	16.15.	Confidentiality; Sharing Information	95
	16.16.	Publicity	96
	16.17.	Certifications From Banks and Participants; USA PATRIOT Act	96

LIST OF EXHIBITS AND SCHEDULES

Exhibits

Exhibit 1.2 Borrowing Base Certificate

Exhibit 2.1(a) 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

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.

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

“ Advances ” shall mean and include the Revolving Advances and Letters of Credit.

“ 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.

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

“ Agreement ” shall mean this 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.

“ Borrowing Base Certificate ” shall mean a certificate in substantially the form of Exhibit 1.2 duly executed by the President, Vice President, Chief Financial Officer or Controller of the Borrowing Agent and delivered to the Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.

“ 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.

“ 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.

“ 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 Customers, 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 Customer 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.

“ Custome r” shall mean and include the account debtor with respect to any 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.

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

“ 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 Ex-Im Agreement, plus (b) accrued but unpaid interest on account of Eurodollar Rate Loans under this Agreement and the Ex-Im 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 Ex-Im 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 (excluding the sum of the fees payable under Section 3.3(a) hereof) plus the out-of-pocket costs and expenses to be paid by Borrowers at or prior to the Closing Date to the Ex-Im Agent for the ratable benefit of Lenders (as defined in the Ex-Im Agreement) under the Ex-Im 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 2.23(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 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.

“ Eligible Domestic Finished Good Inventory ” shall mean, as determined by Agent in its reasonable discretion, Eligible 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 Inventory ” shall mean and include Inventory, including used 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 which Agent, in its reasonable discretion, shall not deem ineligible Inventory, based on such considerations as Agent may in its reasonable discretion from time to time deem appropriate including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance). Eligible Inventory shall include all Inventory in-transit between locations owned or leased by the Borrowers and inventory classified as exchanges, which is insured to the full value thereof and for which Agent shall have in its possession (a) all negotiable bills of lading properly endorsed and (b) all non-negotiable bills of lading issued in Agent’s name. In addition, Inventory shall not be Eligible Inventory if it: (i) does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof; (ii) except as set forth above, is in transit; (iii) is located outside the continental United States; (iv) constitutes Consigned Inventory; (v) is the subject of an Intellectual Property Claim; (vi) 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; (vii) or is situated at a location not owned by a Borrower unless the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement; or (viii) is included in the Formula Amount under the Export Import Agreement.

“ Eligible Receivables ” shall mean and include with respect to each Borrower, each 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 Receivable, based on such considerations as Agent may from time to time deem appropriate. A 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 Receivable shall be an Eligible Receivable if:

(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;

(b) it is due or unpaid more than ninety (90) days after the invoice date;

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

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

(e) the Customer 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;

(f) the sale is to a Customer outside the continental United States of America, unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its sole discretion;

(g) the sale to the Customer 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;

(h) Agent believes, in its sole judgment, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay;

(i) the Customer 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;

(j) the goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale;

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

(l) the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim (to the extent of such offset, deduction, defense or counterclaim), the Customer is also a creditor or supplier of a Borrower or the Receivable is contingent in any respect or for any reason;

(m) the applicable Borrower has made any agreement with any Customer 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;

(n) any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;

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

(p) such Receivable is included in the Formula Amount under the Export-Import Agreement; and

(q) such Receivable is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

“ 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.

“ Ex-Im Agent ” shall mean the agent pursuant to the Ex-Im Agreement, as the term is defined therein.

“ 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).

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

“ 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.

“ 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 Customer (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.

“ 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.

“ Issuer ” shall mean any Person who issues a Letter of Credit and/or accepts a draft pursuant to the terms hereof.

“ 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.

“ Letter of Credit Fees ” shall have the meaning set forth in Section 3.2.

“ Letter of Credit Borrowing ” shall have the meaning set forth in Section 2.12(d).

“ Letter of Credit Sublimit ” shall mean $1,000,000.

“ Letters of Credit ” shall have the meaning set forth in Section 2.9.

“ 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.

“ 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.

“ 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 Face Amount ” shall mean, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

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

“ Maximum Revolving Advance Amount ” shall mean $28,000,000 less the amount of outstanding Advances (as defined in the Export-Import Agreement) under the Export-Import Agreement.

“ Maximum Undrawn Amount ” shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

“ 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 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 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 writings heretofore, now or hereafter executed by any Borrower or any Guarantor and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.

“ Out-of-Formula Loans ” shall have the meaning set forth in Section 16.2(b).

“ Parent ” of any Person shall mean a corporation or other entity owning, directly or indirectly at least 50% of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.

“ Participant ” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

“ Participation Advance ” shall have the meaning set forth in Section 2.12(d).

“ Participation Commitment ” shall mean each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.

“ Payment Office ” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

“ Permitted Acquisitions ” shall mean acquisitions of the assets or Equity Interests of another Person so long as: (a) Borrowers have average Undrawn Availability of not less than an amount equal to the sum of $3,000,000, plus the amount of Advances being drawn and used in connection with such acquisition, for the prior thirty (30) day period; (b) after giving effect to such acquisition Borrowers have Undrawn Availability of $3,000,000; (c) the total costs and liabilities of all such acquisitions do not exceed, in the aggregate, $5,000,000 (including without limitation all assumed liabilities, all earn-out payments, deferred payments and the value of any other stock or assets transferred, assigned or encumbered with respect to such acquisitions); (d) with respect to the acquisition of Equity Interests, such acquired company shall have a positive EBITDA and tangible net worth, calculated in accordance with GAAP immediately prior to such acquisition; (e) the acquired company or property is used or useful in the same or a similar line of business as the Borrowers were engaged in on the Closing Date (or any reasonable extensions or expansions thereof); (f) Agent shall have received a first-priority security interest in all assets or Equity Interests, subject to documentation satisfactory to Agent; (g) the board of directors (or other comparable governing body) of such company shall have duly approved the transaction; (h) the Borrowers shall have delivered to Agent (i) a pro forma balance sheet and pro forma financial statements and a Compliance Certificate demonstrating that, upon giving effect to such acquisition on a pro forma basis, the Borrowers would be in compliance with the financial covenants set forth in Section 6.5 as of the most recent fiscal quarter end and (ii) audited financial statements of the acquired entity, in form and substance reasonably acceptable to Agent, audited in accordance with GAAP; (i) if such acquisition includes general partnership interests or any other Equity Interest that does not have a corporate (or similar) limitation on liability of the owners thereof, then such acquisition shall be effected by having such Equity Interests acquired by a corporate holding company directly or indirectly wholly-owned by a Borrower and newly formed for the sole purpose of effecting such acquisition; (j) no assets acquired in any such transaction(s) shall be included in the Formula Amount until Agent has received an audit of such assets, in form and substance acceptable to Agent and (k) no Default or Event of Default shall have occurred or will occur after giving pro forma effect to such acquisition. For the purposes of calculating average Undrawn Availability and Undrawn Availability under this definition, any assets being acquired in the proposed acquisition shall be included in the Formula Amount hereunder or the Formula Amount under the Ex-Im Agreement, as applicable, for each of the previous thirty (30) days and on the date of closing so long as Agent has received an audit of such assets as set forth in clause (j) above and so long as such assets satisfy the applicable eligibility criteria.

“ Perfection Certificates ” shall mean collectively, the Perfection Certificates and the responses thereto provided by each Borrower and delivered to Agent.

“ Pension Benefit Plan ” shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the Controlled Group for employees of any entity which was at such time a member of the Controlled Group.

“ Permitted Encumbrances ” shall mean: (a) Liens in favor of Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or other governmental charges not delinquent or being contested in good faith and by appropriate proceedings and with respect to which proper reserves have been taken by Borrowers; provided, that, the Lien shall have no effect on the priority of the Liens in favor of Agent or the value of the assets in which Agent has such a Lien and a stay of enforcement of any such Lien shall be in effect; (c) Liens disclosed in the financial statements referred to in Section 5.5, the existence of which Agent has consented to in writing; (d) deposits or pledges to secure obligations under worker’s compensation, social security or similar laws, or under unemployment insurance; (e) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety and appeal bonds and other obligations of like nature arising in the Ordinary Course of Business; (f) Liens arising by virtue of the rendition, entry or issuance against any Borrower or any Subsidiary, or any property of any Borrower or any Subsidiary, of any judgment, writ, order, or decree for so long as each such Lien (i) is in existence for less than 20 consecutive days after it first arises or is being Properly Contested and (ii) is at all times junior in priority to any Liens in favor of Agent; (g) mechanics’, workers’, materialmen’s or other like Liens arising in the Ordinary Course of Business with respect to obligations which are not due or which are being contested in good faith by the applicable Borrower; (h) Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall not encumber any other property of any Borrower and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.6; and (i) Liens disclosed on Schedule 1.2.

“ Permitted Holders ” shall mean (i) Jeffrey J. Steiner; (ii) any member of Jeffrey J. Steiner’s immediate family or any of his lineal descendants; (iii) any trust or estate the principal beneficiaries of which are Persons referred to in clauses (i) and (ii); (iv) in the event of the incompetence or death of any of the Persons described in clauses (i) or (ii), such Person’s estate, executor, administrator, committee or other personal representative or beneficiaries, and (v) Affiliates or “associates” (as defined in the Securities Exchange Act) of the Persons described in clauses (i), (ii), (iii), and (iv).

“ Person ” shall mean any natural person, individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).

“ Plan ” shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit Plan), maintained for employees of any Borrower or any member of the Controlled Group or any such Plan to which any Borrower or any member of the Controlled Group is required to contribute on behalf of any of its employees.

“ PNC ” shall have the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.

“ Properly Contested ” shall mean, in the case of any Indebtedness of any Person (including any taxes) that is not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Indebtedness is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Person has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Indebtedness will not have a Material Adverse Effect and will not result in the forfeiture of any assets of such Person; (iv) no Lien is imposed upon any of such Person’s assets with respect to such Indebtedness unless such Lien is at all times junior and subordinate in priority to the Liens in favor of the Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if such Indebtedness results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person forthwith pays such Indebtedness and all penalties, interest and other amounts due in connection therewith.

“ Projections ” shall have the meaning set forth in Section 5.5(a) hereof.

“ Purchasing CLO ” shall have the meaning set forth in Section 16.3(d) hereof.

“ Purchasing Lender ” shall have the meaning set forth in Section 16.3(c) hereof.

“ RCRA ” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

“ Real Property ” shall mean all of each Borrower’s right, title and interest in and to the owned and leased premises identified on Schedule 4.19 hereto.

“ Receivables ” shall mean and include, as to each Borrower, all of such Borrower’s present and future: (i) accounts; (ii) contract rights, chattel paper (including electronic chattel paper), instruments (including those evidencing indebtedness owed to such Borrower by its Affiliates), documents, general intangibles relating to accounts, drafts and acceptances, credit card receivables, deposit accounts, and other rights to payment of any kind, whether or not arising out of or in connection with the sale or lease of goods or the rendering of services, and whether or not earned by performance; (iii) any of the foregoing which are not evidenced by instruments or chattel paper; (iv) inter-company receivables, and any security documents executed in connection therewith; (v) proceeds of any letters of credit or insurance policies on which such Borrower is named as beneficiary; (vi) claims against third parties for advances and other financial accommodations and any other obligations whatsoever owing to such Borrower; (vii) rights in and to all security agreements, leases, guarantees, instruments, securities, documents of title and other contracts securing, evidencing, supporting or otherwise relating to any of the foregoing, together with all rights in any goods, merchandise or Inventory which any of the foregoing may represent: (viii) rights in returned and repossessed goods, merchandise and Inventory which any of the same may represent, including, without limitation, any right of stoppage in transit; and (ix) and all other forms of obligations owing to such Borrower arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.

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

“ Register ” shall have the meaning set forth in Section 16.3(e).

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

“ Release ” shall have the meaning set forth in Section 5.7(c)(i) hereof.

“ Reportable Event ” shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.

“ Required Lenders ” shall mean Lenders holding at least sixty-six and two thirds percent (66.6667%) of the Advances and, if no Advances are outstanding, shall mean Lenders holding sixty-six and two thirds percent (66.6667%) of the Commitment Percentages; provided, however, if there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.

“ Reserve Percentage ” shall mean as of any day the maximum percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”.

“ Revolving Advances ” shall mean Advances made other than Letters of Credit.

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

“ Revolving Interest Rate ” shall mean an interest rate per annum equal to (a) the Alternate Base Rate with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus two and one-half of one percent (2.50%) with respect to Eurodollar Rate Loans.

“ SEC ” shall mean the Securities and Exchange Commission or any successor thereto.

“ Section 20 Subsidiary ” shall mean the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Settlement Date ” shall mean the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.

“ Standby Letters of Credit ” shall mean letters of credit constituted with all the documents complying with the Uniform Customs and Practice for International Standby Practices as most recently published by the International Chamber of Commerce at the time the letter of credit is issued.

“ Subordinated Indebtedness ” shall mean the indebtedness owed by the Borrowers to Subordinated Lender pursuant to the Subordinated Loan Documentation.

“ Subordinated Lender ” shall mean Holdings.

“ Subordinated Loan Documentation ” shall mean the Subordinated Notes and all other related agreements, instruments and documents among Borrowers and Subordinated Lender.

“ Subordinated Note ” shall mean the subordinated promissory note issued by Borrowers in favor of Subordinated Lender dated January 12, 2004 in the aggregate unpaid principal amount of all intercompany loans made by Holdings to certain of the Borrowers.

“ Subordination Agreement ” shall mean the Subordination Agreement dated the date hereof among Agent, Borrowers and Subordinated Lender.

“ Subsidiary ” of any Person shall mean a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person, one or more of the other Subsidiaries of such Person or any combination thereof.

“ Subsidiary Stock ” shall mean all of the issued and outstanding Equity Interests of any Subsidiary owned by any Borrower (not to exceed 65% of the Equity Interests of any Foreign Subsidiary).

“ Term ” shall have the meaning set forth in Section 13.1 hereof.

“ Termination Event ” shall mean (i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower or any member of the Controlled Group from a Plan or Multiemployer Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Borrower or any member of the Controlled Group from a Multiemployer Plan. ¯

“ Toxic Substance ” shall mean and include any material present on the Real Property or the Leasehold Interests which has been shown to have significant adverse effect on human health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances. “Toxic Substance” includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.

“ Trading with the Enemy Act ” shall mean the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation or executive order relating thereto.

“ Transactions ” shall mean the transactions contemplated by this Agreement.

“ Transferee ” shall have the meaning set forth in Section 16.3(d) hereof.

“ Undrawn Availability ” at a particular date shall mean an amount equal to (a) the lesser of (i) (without duplication) the sum of the Formula Amount, plus the Formula Amount under the Ex-Im Agreement or (ii) the Maximum Loan Amount less the Maximum Undrawn Amount, minus (b) the sum of (i) the outstanding amount of Advances, plus (ii) the outstanding amount of Advances under the Ex-Im Agreement, plus (iii) all amounts due and owing to any Borrower’s trade creditors which are outstanding sixty (60) days beyond their due date, plus (iv) fees and expenses for which Borrowers are liable, but which have not been paid or charged to Borrowers’ Account under this Agreement or the Ex-Im Agreement.

“ Unfunded Capital Expenditures ” shall mean Capital Expenditures made through Revolving Advances or out of Borrowers’ own funds other than through equity contributed subsequent to the Closing Date or purchase money or other financing or lease transactions permitted hereunder.

“ Uniform Commercial Code ” shall have the meaning set forth in Section 1.3 hereof.

“ USA PATRIOT Act ” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“ Week ” shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.

1.3. Uniform Commercial Code Terms . All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “Uniform Commercial Code”) shall have the meaning given therein unless otherwise defined herein. Without limiting the foregoing, the terms “accounts”, “chattel paper”, “instruments”, “general intangibles”, “payment intangibles”, “supporting obligations”, “securities”, “investment property”, “documents”, “deposit accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and “fixtures”, as and when used in the description of Collateral shall have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code. To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

1.4. Certain Matters of Construction . The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof. All references herein to the time of day shall mean the time in New York, New York. Unless otherwise provided, all financial calculations shall be performed with Inventory valued on a first-in, first-out basis. Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation”. A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event