Document:

EX-10.4

Exhibit 10.4

EXECUTION COPY

SEVERANCE PAYMENT AGREEMENT

     This Severance Payment Agreement (this “Agreement”), made to be effective on the
14th day of May, 2008, by and among CSB Bancorp, Inc., an Ohio corporation (“CSB
Bancorp”), Indian Village Bancorp, Inc., a Pennsylvania corporation (“IVB”), Indian Village
Community Bank, an Ohio state savings bank (“Indian Village Bank”), and Elaine A. Tedrow, an
individual residing in Tuscarawas County, Ohio (the “Employee”);

W I T N E S S E T H:

     WHEREAS, IVB and Indian Village Bank (collectively, “Indian Village”) and the Employee entered
into an Employment Agreement dated June 23, 2003 (as amended and/or extended, the “Employment
Agreement”);

     WHEREAS, IVB and CSB Bancorp are entering into an Agreement and Plan of Merger (the “Merger
Agreement”) pursuant to which IVB will merge with and into CSB Bancorp (the “Merger”);

     WHEREAS, because the term of the Employment Agreement ends on June 26, 2008, Indian Village
currently contemplates that the Employment Agreement will be extended on that date, subject to
applicable regulatory approval and the terms and conditions set forth in Section 6.10(b) of the
Merger Agreement; and

     WHEREAS, the parties hereto desire to provide for CSB Bancorp’s obligation to provide certain
severance benefits to the Employee upon the occurrence of certain events in accordance with the
terms and subject to the conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the Employee, CSB Bancorp, IVB and Indian Village Bank, intending to be legally bound, hereby agree
as follows:

     1. If, and only if, the Employee continues to serve Indian Village as an Employee in good
standing between the date of the Merger Agreement and the effective date of the Merger (the
“Effective Date”) and the Employee voluntarily or involuntarily separates from service
(with the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)),
on the Effective Date, CSB Bancorp and its subsidiaries (collectively, “CSB”) shall provide the
following severance benefits to the Employee following the Effective Date (collectively, the
“Severance Benefits”):

          (a) On or before the 14th day following the Effective Date, CSB shall pay to the
Employee the sum of $38,700.00 in immediately available funds; and

          (b) CSB shall pay the COBRA costs (both employer and employee portions) for the Employee to
maintain continued medical insurance coverage, at the same level (i.e., single or family) as the
Employee receives from Indian Village as of the

 

 

date hereof, until the earlier of (i) one (1) year following the Effective Date or (ii) the
date on which the Employee obtains other comparable medical insurance coverage through another
employer or otherwise.

     2. Notwithstanding the foregoing, if the Employee and CSB enter into an employment arrangement
before the Effective Date and the Employee voluntarily separates from service (within the meaning
of Section 409A of the Code) within 60 days following the Effective Date, CSB shall provide the
Employee with the Severance Benefits pursuant to Section 1 (except that the time periods applicable
to the provision of the Severance Benefits shall be based on the date of the termination of the
Employee’s employment arrangement) if, and only if, the Employee served Indian Village and CSB as
an employee in good standing between the date of the Merger Agreement and the date of such
separation from service.

     3. For a period of six (6) months after the date on which the Severance Benefits are paid, the
Employee shall not work for, advise, consult or otherwise serve with, directly or indirectly, any
entity whose business materially competes, within Tuscarawas County, with the depository, lending
or other activities of CSB.

     4. The parties hereby acknowledge and agree that, notwithstanding anything to the contrary
contained in the Employment Agreement, effective as of the Effective Date, the Employment Agreement
shall terminate and thereafter have no further force or effect. Without limiting the generality of
the foregoing, the Employee specifically acknowledges and agrees that the Severance Benefits set
forth in this Agreement are the only change-in-control, severance or other benefits to which the
Employee will be entitled after the Effective Time. The Employee hereby expressly waives, and
releases CSB and Indian Village from, any obligation, covenant, condition or other provision
contained in the Employment Agreement which is inconsistent with the terms hereof.

     5. Notwithstanding anything to the contrary contained herein, the Severance Benefits
contemplated by this Agreement shall be subject to and conditioned upon compliance with applicable
state and federal law, including, without limitation, the provisions of 12 U.S.C. § 1828(k) and
Part 359 of the FDIC’s regulations (12 C.F.R. Part 359).

     6. In the event that the Merger Agreement is terminated pursuant to Section 8.01 thereof, this
Agreement shall automatically terminate and thereafter have no further force or effect.

     7. This Agreement shall be governed by and construed in accordance with Ohio law.

-2-

 

     IN WITNESS WHEREOF, CSB Bancorp, IVB, Indian Village Bank and the Employee have signed this
Severance Payment Agreement to be effective on the first date above written.

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	                                                  /s/ Elaine A. Tedrow
 	 
	 	Name:  	Elaine A. Tedrow 	 

	 	 	 	 	 
	 	INDIAN VILLAGE BANCORP, INC.

 	 
	 	By  	                                                  /s/ Cindy Knisely
 	 
	 	 	Name:  	Cindy Knisely 	 
	 	 	Title:  	Chairperson of the Board 	 

	 	 	 	 	 
	 	INDIAN VILLAGE COMMUNITY BANK

 	 
	 	By  	                                                 /s/ Kenneth N. Koher
 	 
	 	 	Name:  	Kenneth N. Koher 	 
	 	 	Title:  	President 	 

	 	 	 	 	 
	 	CSB BANCORP, INC.

 	 
	 	By  	                                                  /s/ Eddie L. Steiner
 	 
	 	 	Name:  	Eddie L. Steiner 	 
	 	 	Title:  	President and CEO 	 

-3-EX-10.1

 

EXHIBIT 10.1

 

CREDIT AGREEMENT

- Among -

ASTRONICS CORPORATION

as Borrower

- And -

The Lenders Party Hereto

and

HSBC BANK USA, NATIONAL ASSOCIATION

as Agent, Swingline Lender, Issuing Bank and Arranger

 

DATED: As of May 13, 2008

 

 

TABLE OF CONTENTS

Page

	 	 	 	 	 
	ARTICLE I. DEFINITIONS
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Accounting Terms
	 	 	19	 
	1.3 Times of Day
	 	 	20	 
	1.4 Letters of Credit Amounts
	 	 	20	 
	 
	 	 	 	 
	ARTICLE II. THE CREDIT
	 	 	20	 
	2.1 The Revolving Credit
	 	 	20	 
	2.2 The Notes
	 	 	21	 
	2.3 Swingline Loans
	 	 	21	 
	2.4 Letters of Credit
	 	 	23	 
	2.5 Funding of Borrowings
	 	 	30	 
	2.6 Interest
	 	 	31	 
	2.7 Prepayments and Payments
	 	 	32	 
	2.8 Use of Proceeds
	 	 	34	 
	2.9 Special Provisions Governing Libor Loans — Increased Costs
	 	 	34	 
	2.10 Required Termination and Repayment of Libor Loans
	 	 	35	 
	2.11 Taxes
	 	 	35	 
	2.12 Commitment Fee
	 	 	36	 
	2.13 Revolving Loan Commitment Termination and Reduction
	 	 	36	 
	2.14 Payments
	 	 	36	 
	2.15 Payments with Respect to Defaulting Lenders
	 	 	37	 
	2.16 Upfront Fees
	 	 	37	 
	2.17 Agent Fees
	 	 	37	 
	2.18 Charge to Account
	 	 	37	 
	2.19 Substitution of Lender
	 	 	37	 
	2.20 Yield Protection
	 	 	38	 
	2.21 Changes in Capital Adequacy Regulations
	 	 	39	 
	2.22 Lender Statements; Survival of Indemnity
	 	 	39	 
	2.23 Expansion Option
	 	 	40	 
	 
	 	 	 	 
	ARTICLE III. CONDITIONS TO THE CREDIT
	 	 	41	 
	3.1 No Default
	 	 	41	 
	3.2 Representations and Warranties
	 	 	41	 
	3.3 Proceedings
	 	 	42	 
	3.4 Closing Conditions
	 	 	42	 
	3.5 Conditions to Subsequent Borrowing and Issuance
	 	 	44	 
	3.6 Subsequent Extensions of Credit
	 	 	45	 
	 
	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES
	 	 	45	 
	4.1 Good Standing and Authority
	 	 	45	 
	4.2 Valid and Binding Obligation
	 	 	45	 
	4.3 Good Title
	 	 	45	 
	4.4 No Pending Litigation
	 	 	45	 
	4.5 No Consent or Filing
	 	 	45	 

- i - 

 

 

	 	 	 	 	 
	 
	 	 	Page
	4.6 No Violations
	 	 	46	 
	4.7 Financial Statements
	 	 	46	 
	4.8 Tax Returns
	 	 	46	 
	4.9 Federal Regulations
	 	 	47	 
	4.10 Compliance with ERISA
	 	 	47	 
	4.11 Subsidiaries; Affiliates
	 	 	47	 
	4.12 Compliance
	 	 	47	 
	4.13 Fiscal Year
	 	 	48	 
	4.14 Default
	 	 	48	 
	4.15 Indebtedness for Borrowed Money
	 	 	48	 
	4.16 Securities
	 	 	48	 
	4.17 Environmental Matters
	 	 	48	 
	4.18 Burdensome Contracts; Labor Relations
	 	 	49	 
	4.19 Liens
	 	 	49	 
	4.20 Intellectual Property
	 	 	50	 
	4.21 Anti-Terrorism Laws.
	 	 	50	 
	4.22
Accuracy of Information, etc.
	 	 	51	 
	4.23 Solvency
	 	 	51	 
	 
	 	 	 	 
	ARTICLE V. AFFIRMATIVE COVENANTS
	 	 	52	 
	5.1 Payments
	 	 	52	 
	5.2 Financial Reporting Requirements
	 	 	52	 
	5.3 Notices
	 	 	52	 
	5.4 Taxes
	 	 	53	 
	5.5 Insurance
	 	 	53	 
	5.6 Litigation
	 	 	53	 
	5.7 Judgments
	 	 	53	 
	5.8 Corporate Standing
	 	 	54	 
	5.9 Books and Records
	 	 	54	 
	5.10 Compliance with Law
	 	 	54	 
	5.11 Pension Reports
	 	 	54	 
	5.12 Inspections
	 	 	54	 
	5.13 Environmental Compliance
	 	 	54	 
	5.14 Certain Subsidiaries to Become Guarantors
	 	 	55	 
	5.15 Additional Security; Further Assurances.
	 	 	55	 
	5.16 Accounting; Reserves; Tax Returns
	 	 	56	 
	5.17 Liens and Encumbrances
	 	 	56	 
	5.18 Defaults and Material Adverse Effects
	 	 	56	 
	5.19 Good Repair
	 	 	57	 
	5.20 Further Actions
	 	 	57	 
	 
	 	 	 	 
	ARTICLE VI. NEGATIVE COVENANTS
	 	 	57	 
	6.1 Indebtedness
	 	 	57	 
	6.2 Encumbrances
	 	 	57	 
	6.3 Investments and Guaranty Obligations
	 	 	58	 
	6.4 Equity Interest Repurchases
	 	 	59	 
	6.5 Limitation on Certain Restrictive Agreements
	 	 	59	 
	6.6 Material Indebtedness Agreements
	 	 	60	 

- ii - 

 

 

	 	 	 	 	 
	 
	 	 	Page
	6.7
Consolidation, Merger, Acquisitions, Asset Sales, etc.
	 	 	60	 
	6.8 Transactions with Affiliates
	 	 	61	 
	6.9 Disposal of Hazardous Substances
	 	 	62	 
	6.10 Fiscal Year, Fiscal Quarters
	 	 	62	 
	6.11 Anti-Terrorism Laws
	 	 	62	 
	6.12 Changes in Business
	 	 	62	 
	6.13 Minimum Debt Service Coverage Ratio
	 	 	62	 
	6.14 Maximum Fiscal Capital Expenditures
	 	 	62	 
	6.15 Maximum Leverage Ratio
	 	 	62	 
	6.16 Minimum Net Worth
	 	 	62	 
	 
	 	 	 	 
	ARTICLE VII. DEFAULT
	 	 	63	 
	7.1 Events of Default
	 	 	63	 
	7.2 Effects of an Event of Default
	 	 	66	 
	7.3 Remedies
	 	 	66	 
	7.4 Application of Certain Payments and Proceeds
	 	 	66	 
	 
	 	 	 	 
	ARTICLE VIII. INDEMNIFICATION — COSTS AND EXPENSES
	 	 	67	 
	8.1 Indemnification
	 	 	67	 
	8.2 Expenses
	 	 	68	 
	 
	 	 	 	 
	ARTICLE IX. THE AGENT AND ISSUING BANK
	 	 	69	 
	9.1 Appointment and Authorization
	 	 	69	 
	9.2 Waiver of Liability of Agent
	 	 	69	 
	9.3 Note Holders
	 	 	70	 
	9.4 Consultation with Counsel
	 	 	70	 
	9.5 Documents
	 	 	70	 
	9.6 Agent and Affiliates
	 	 	70	 
	9.7 Knowledge of Default
	 	 	71	 
	9.8 Enforcement
	 	 	71	 
	9.9 Action by Agent
	 	 	71	 
	9.10
Notices, Defaults, etc.
	 	 	71	 
	9.11 Indemnification of Agent
	 	 	71	 
	9.12 Successor Agent
	 	 	72	 
	9.13 Lenders’ Independent Investigation
	 	 	72	 
	9.14 Amendments, Consents
	 	 	72	 
	9.15 Funding by Agent
	 	 	73	 
	9.16 Sharing of Payments
	 	 	73	 
	9.17 Payment to Lenders
	 	 	73	 
	9.18 Tax Withholding Clause
	 	 	74	 
	9.19 USA Patriot Act
	 	 	74	 
	9.20 Issuing Bank
	 	 	75	 
	9.21 Benefit of Article IX
	 	 	75	 
	 
	 	 	 	 
	ARTICLE X. MISCELLANEOUS
	 	 	75	 
	10.1 Amendments and Waivers
	 	 	75	 
	10.2 Delays and Omissions
	 	 	75	 
	10.3 Assignments/Participation
	 	 	75	 

- iii - 

 

 

	 	 	 	 	 
	 
	 	 	Page
	10.4 Successors and Assigns
	 	 	77	 
	10.5 Notices
	 	 	77	 
	10.6 Governing Law
	 	 	78	 
	10.7 Counterparts
	 	 	78	 
	10.8 Titles
	 	 	78	 
	10.9 Inconsistent Provisions
	 	 	78	 
	10.10 Course of Dealing
	 	 	79	 
	10.11 USA Patriot Act Notification
	 	 	79	 
	10.12 JURY TRIAL WAIVER
	 	 	79	 
	10.13 CONSENT TO JURISDICTION
	 	 	79	 

	 	 	 	 	 
	Exhibit A

	 	-
	 	Revolving Note
	Exhibit B

	 	-
	 	Swingline Note
	Exhibit C

	 	-
	 	Compliance Certificate
	Exhibit D

	 	-
	 	Request Certificate
	Exhibit E

	 	-
	 	Assignment and Assumption
	 
	Schedule 1

	 	-
	 	Employee Benefits Plan
	Schedule 2.1

	 	-
	 	Lenders’ Commitments
	Schedule 4.11

	 	 	 	-Subsidiaries; Affiliates
	Schedule 6.2

	 	-
	 	Liens and Indebtedness
	Schedule 6.3

	 	-
	 	Investments and Guaranty Obligations

- iv - 

 

 

          This CREDIT AGREEMENT dated as of May 13, 2008 between ASTRONICS CORPORATION, a New York
corporation with its principal place of business at 130 Commerce Way, East Aurora, New York 14052
(“Borrower”) and the several banks and other financial institutions from time to time party to this
Agreement (individually, a “Lender” and collectively, the “Lenders”) and HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association organized under the laws of the United States of
America with an office at Commercial Banking Department, One HSBC Center, Buffalo, New York 14203
as Agent for the Lenders, Swingline Lender, Issuing Bank and Arranger.

ARTICLE I.  Definitions

          1.1 Definitions. As used in this Credit Agreement, unless otherwise specified, the
following terms shall have the following respective meanings:

          “ABR”
or “Alternate Base Rate” — For any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (i) the Prime Rate,
or (ii) the Federal Funds Effective Rate from time to time in effect plus 0.5%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate or Federal Funds
Effective Rate, respectively.

          “ABR Loan” — Any Loan for which interest is calculated based on the Alternate Base Rate plus
the Applicable Margin determined from time to time.

          “ABR Option” — The Rate Option in which interest is based upon the Alternate Base Rate plus
the Applicable Margin for the applicable Loan.

          “Affiliate” or “Affiliates” — Individually or collectively, any Person that directly or
indirectly, through one or more intermediaries, Controls, or is Controlled by, or is under Common
Control with the Person specified. Notwithstanding the foregoing, no individual shall be
considered an Affiliate of a Person solely by reason of such individual’s position as an officer or
director of such Person or of an Affiliate of such Person, and neither the Agents nor any Lender
shall be considered an Affiliate of Borrower or any of Borrower’s Subsidiaries.

          “Agent” — HSBC Bank USA, National Association and any successor thereto appointed pursuant to
the terms of this Agreement.

          “Agreement” — This Credit Agreement, as the same may from time to time be amended, restated,
supplemented or otherwise modified.

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

 

- 2 -

          “Applicable Commitment Fee Rate” — (i) Initially, until changed in accordance with the
following provisions, the Applicable Commitment Fee Rate shall be 0.125%; and (ii) commencing with
the fiscal quarter of Borrower ended on June 30, 2008, and continuing with each fiscal quarter
thereafter, the Agent shall determine the Applicable Commitment Fee Rate in accordance with the
following matrix, based on the Leverage Ratio:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Leverage	 	 
	Level	 	Ratio	 	Commitment Fee
	 	1	 	 	< 1.00 to 1.0

	 	 	0.125	%
	 	2	 	 	> 1.00 to 1.0 but < 1.50 to 1.0

	 	 	0.150	%
	 	3	 	 	> 1.50 to 1.0 but <  2.00 to 1.0

	 	 	0.200	%
	 	4	 	 	> 2.00 to 1.0

	 	 	0.250	%

Changes in the Applicable Commitment Fee Rate shall become effective three (3) Business Days
immediately following the date of delivery by Borrower to the Agent of a financial statement and a
Compliance Certificate required to be delivered pursuant to Sections 5.2(a) and (b) of this
Agreement, and shall be based upon the Leverage Ratio in effect at the end of the financial period
covered by such financial statement and Compliance Certificate. Notwithstanding the foregoing
provisions, during any period when the Borrower has failed to deliver such a financial statement
and Compliance Certificate when due, the Applicable Commitment Fee Rate shall be applied at Level 4
above as of the first Business Day after the date on which such financial statement and Compliance
Certificate were required to be delivered, regardless of the Leverage Ratio at such time, until the
date the required financial statement and Compliance Certificate have been delivered. Any changes
in the Applicable Commitment Fee Rate shall be determined by the Agent in accordance with the
provisions set forth in this definition and the Agent will promptly provide notice of such
determinations to the Borrower and the Lenders. Any such determination by the Agent shall be
conclusive absent manifest error.

          “Applicable Lending Office” — With respect to each Lender, such Lender’s Domestic Lending
Office in the case of an ABR Loan and such Lender’s Libor Lending Office in the case of a Libor
Loan.

          “Applicable Margin” — (i) Initially, until changed in accordance with the following
provisions, the Applicable Margin shall be minus 0.250% for ABR Loans and 0.750% for Libor Loans;
(ii) commencing with the fiscal quarter of Borrower ended on June 30, 2008, and continuing with
each fiscal quarter thereafter, the Agent shall determine the Applicable Margin in accordance with
the following matrix, based on the Leverage Ratio:

 

- 3 -

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Leverage	 	 	 	 
	Level	 	Ratio    	 	Libor Rate Option	 	ABR Option
	 	1	 	 	< 1.00 to 1.0

	 	 	0.750	%	 	Minus 0.250%

	 	2	 	 	> 1.00 to 1.0 but
< 1.50

	 	 	1.000	%	 	 	0.000	%
	 	3	 	 	> 1.50 to 1.0 but
< 2.00 to 1.0

	 	 	1.250	%	 	 	0.000	%
	 	4	 	 	> 2.0 to 1.0

	 	 	1.500	%	 	 	0.000	%

Changes in the Applicable Margin shall become effective three (3) Business Days immediately
following the date of delivery by Borrower to the Agent of a financial statement and a Compliance
Certificate required to be delivered pursuant to Sections 5.2(a) and (b) of this Agreement, and
shall be based upon the Leverage Ratio in effect at the end of the financial period covered by such
financial statement and Compliance Certificate. Notwithstanding the foregoing provisions, during
any period when the Borrower has failed to deliver such financial statement and Compliance
Certificate when due, the Applicable Margin shall be applied at Level 4 above as of the first
Business Day after the date on which such financial statement and Compliance Certificate were
required to be delivered, regardless of the Leverage Ratio at such time, until the date the
required financial statement and Compliance Certificate have been delivered. Any changes in the
Applicable Margin shall be determined by the Agent in accordance with the provisions set forth in
this definition and the Agent will promptly provide notice of such determinations to the Borrower
and the Lenders. Any such determination by the Agent shall be conclusive absent manifest error.

          “Applicable Percentage” — With respect to any Lender, at any time, the percentage of the Total
Commitment represented by such Lender’s Commitment. Each Lender’s initial Applicable Percentage
based on the Total Commitment as of the Closing Date is set forth on Schedule 2.1 to this
Agreement. If the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Total Commitment most recently in effect, giving effect to any
assignments.

          “Arranger” — HSBC Bank and any successor of HSBC Bank as the Arranger under this Agreement.

          “Asset Sale” — The sale, lease, transfer or other disposition (including by means of sale and
lease-back transactions, and by means of mergers, consolidations, amalgamations and liquidations of
a corporation, partnership or limited liability company of the interests therein of Borrower or any
Subsidiary) by Borrower or any Subsidiary to any Person of Borrower’s or such Subsidiary’s
respective assets, provided that the term Asset Sale specifically excludes (i) any sales, transfers
or other dispositions of inventory, or obsolete, worn-out or excess furniture, fixtures, equipment
or other property, real or personal, tangible or intangible, in each case in the ordinary course of
business; (ii) any actual or constructive total loss of property or the use thereof, resulting from
destruction, damage beyond repair or other rendition of such property as

 

- 4 -

permanently unfit for normal use from any casualty or similar occurrence whatsoever; (iii) the
destruction or damage of a portion of such property from any casualty or similar occurrence
whatsoever under circumstances in which such damage cannot reasonably be expected to be repaired,
or such property cannot reasonably be expected to be restored to its condition immediately prior to
such destruction or damage, within ninety (90) days after the occurrence of such destruction or
damage or such longer reasonable time period as determined under the Borrower’s plan of restoration
or replacement for such property established within a 90 day period after such occurrence provided
such plan is acceptable to the Agent in its reasonable judgment; (iv) the condemnation,
confiscation or seizure of, or requisition of title to or use of any property; or (v) in the case
of any unmovable property located upon a leasehold, the termination or expiration of such
leasehold.

          “Assignment and Assumption” — An assignment and assumption agreement entered into by a Lender
and an assignee and accepted by the Agent, substantially in the form of Exhibit E hereto with all
blanks appropriately completed.

          “Astronics Advanced” — Astronics Advanced Electronic Systems Corp., a Washington corporation,
and a Domestic Subsidiary of the Borrower.

          “Authorized Officer” — With respect to Borrower or any Guarantor, any of the following
officers: the Chairman, the President, any Vice President, the Chief Executive Officer, the Chief
Financial Officer or the Treasurer, or such other Person as is authorized in writing to act on
behalf of Borrower and is acceptable to the Agent. Unless otherwise qualified, all references
herein to an Authorized Officer shall refer to an Authorized Officer of the Borrower.

          “Available Amount” — With respect to any Letter of Credit issued in Dollars, the stated or
face amount of such Letter of Credit to the extent available at the time for drawing (subject to
presentment of all requisite documents) as the same may be increased or decreased from time to time
in accordance with the terms of such Letter of Credit.

          “Availability Period” — The period from the Closing Date to, but excluding, the earlier of the
Revolving Credit Maturity Date and the date of termination of the Commitments.

          “Borrower” — As defined in the opening paragraph to this Agreement.

          “Borrower Collateral” — As defined in Section 3.4(e) of this Agreement.

          “Borrower Financing Statements” — As defined in Section 3.4(e) of this Agreement.

          “Borrower Security Agreement” — As defined in Section 3.4(e) of this Agreement.

          “Breakage Fee” — An amount determined by the applicable Lender at the time of a prepayment of
a Libor Loan to be equal to the sum of the costs, losses, expenses and penalties incurred by such
Lender as a result of such prepayment; any loss to any Lender shall be deemed to be an amount
determined by such Lender to be the excess, if any, of (i) the amount of interest

 

- 5 -

which would have accrued on the principal amount of such Libor Loan had such event not
occurred, for the period from the date of such event to the last day of the then current Interest
Period therefor, over (ii) the amount of interest which would accrue on such principal amount for
such period at the interest rate which such Lender would bid were it to bid, at the commencement of
such period for deposits of Dollars of a comparable amount and period from other banks in the
London Interbank Market. Any Lender’s calculation of any Breakage Fee shall be conclusive absent
manifest error.

          “Business Day”- (a) For all purposes other than as set forth in clause (b) of this definition,
any day excluding Saturday, Sunday and any day on which banks in New York City are authorized by
law or other governmental action to close, and (b) with respect to Libor Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and between banks in
U.S. dollar deposits in the London Interbank Eurodollar Market.

          “Capital Lease” — As applied to any Person means any lease of any property (whether real,
personal or mixed) by that Person as lessee that, in conformity with GAAP, should be accounted for
as a capital lease on the balance sheet of that Person.

          “Capital Lease Obligations” — All obligations under Capital Leases of the Borrower or any of
its Subsidiaries, without duplication, in each case taken at the amount thereof accounted for as
liabilities identified as “capital lease obligations” (or any similar words) on a consolidated
balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

          “Change of Control” — (i) The occupation of a majority of the seats (other than vacant seats)
on the board of directors of Borrower by Persons who were neither (A) nominated by the Board of
Directors of Borrower nor (B) appointed by directors so nominated; (ii) the acquisition of, or, if
earlier, the shareholder or director approval of the acquisition of, ownership or voting control,
directly or indirectly, beneficially or of record, on or after the date of this Agreement, by any
Person or group (within the meaning of Rule 13d-3 of the SEC under the 1934 Act, as then in
effect), other than Kevin Keane and his estate and Immediate Family (as defined below) taken as a
whole, of shares representing more than 20% of the aggregate ordinary power to vote for the
election of directors represented by the issued and outstanding capital stock of Borrower; or
(iii) the occurrence of a change in control, or other similar provision, under or with respect to
any agreement evidencing Material Indebtedness. As used herein, “Immediate Family” means Kevin
Keane’s spouse, children and siblings.

          “Closing Date” — May 13, 2008.

          “Code” — The Internal Revenue Code of 1986, as amended from time to time, and the regulations
promulgated and the rulings issued thereunder. Section references to the Code are to the Code as
in effect on the date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.

          “Collateral” — Collectively, the Borrower Collateral and the Guarantor Collateral.

 

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          “Collateral Documents” — Collectively, the Security Agreements, any Guaranty and the Financing
Statements.

          “Commitment” — With respect to each Lender, the commitment of such Lender to make Revolving
Loans, to acquire participations in Letters of Credit, and to acquire participations in Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s
Revolving Credit Exposure hereunder, as such commitment may be (i) reduced from time to time
pursuant to Section 2.13 of this Agreement and (ii) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.3 of this Agreement. The initial amount
of each Lender’s Commitment is set forth on Schedule 2.1 to this Agreement, or in the Assignment
and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

          “Commitment Fee” — As defined in Section 2.12 of this Agreement.

          “Compliance Certificate” — A certificate of the Borrower substantially in the form of
Exhibit C hereto with all blanks appropriately completed.

          “Confidential Information Materials” — The collective reference to the confidential
information memorandum with respect to Borrower and the Revolving Credit distributed to the Lenders
on April 2, 2008.

          “Consideration” — In connection with an acquisition, the aggregate consideration paid,
including borrowed funds, cash, the issuance of securities or notes, the assumption or incurring of
liabilities (direct or contingent), excluding however trade payables and short term accruals in the
ordinary course of business, the payment of consulting fees (excluding any fees payable to any
investment banker in connection with such acquisition) or fees for a covenant not to compete and
any other consideration paid for the purchase.

          “Consolidated” or “Consolidated Basis” — The consolidation of the accounts of any entity and
its Subsidiaries in accordance with GAAP, including principles of consolidation, consistent with
those applied in the preparation of the consolidated audited financial statements of Borrower
delivered to the Lenders.

          “Consolidated Capital Expenditures” — For any period, the aggregate of all expenditures
(whether paid in cash or accrued as liabilities and including in all events amounts expended or
capitalized under Capital Leases and Synthetic Leases but excluding any amount representing
capitalized interest) of Borrower and all Subsidiaries during such period determined on a
Consolidated Basis that may properly be classified as capital expenditures in conformity with GAAP,
provided that such term shall not include any such expenditure in connection with replacement or
repair of assets to the extent that casualty insurance proceeds or the trade-in value of other
equipment were used for such expenditure.

          “Consolidated EBITDA” — For any period, an amount equal to (i) the sum of the amounts for such
period of (A) Consolidated Net Income, (B) Consolidated Interest Expense, (C) provisions for taxes
based on income, (D) total depreciation expense, (E) total amortization expense and (F) other
non-cash items reducing Consolidated Net Income minus (ii) other non-

 

- 7 -

cash items increasing Consolidated Net Income for such period. Notwithstanding anything to
the contrary in this definition, for purposes of computing the Leverage Ratio and Debt Service
Coverage Ratio hereunder, or in connection with any pro-forma calculation required by this
Agreement, the term “Consolidated EBITDA” shall be computed, on a consistent basis, to reflect
purchases and acquisitions by Permitted Acquisition or otherwise made by Borrower and the
Subsidiaries during the relevant period as if they occurred at the beginning of such period, and
Borrower, during the twelve (12) month period following the date of any such Permitted Acquisition
may include in the calculation hereof the necessary portion of the adjusted historical results of
the entities acquired in acquisitions that were achieved prior to the applicable date of the
acquisition for such time period as is necessary for Borrower to have figures on a Rolling
Four-Quarter Basis from the date of determination with respect to such acquired entities.

          “Consolidated Interest Expense” — For any period, total interest expense (including, without
limitation, that which is capitalized and that which is attributable to Capital Leases or Synthetic
Leases) of the Borrower and its Subsidiaries on a consolidated basis with respect to all
outstanding indebtedness of the Borrower and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters of credit and net
costs under hedge agreements computed on a net basis after reduction for any interest income, and
excluding amortization of discount and amortization of debt issuance costs.

          “Consolidated Net Income” — For any period, the net income (or loss) of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single accounting period determined
in conformity with GAAP.

          “Consolidated Net Worth” — At any time, all amounts that, in conformity with GAAP, would be
included under the caption “total stockholders’ equity” (or any like caption) on a consolidated
balance sheet of the Borrower at such time.

          “Consolidated Total Assets” — At any date of determination, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total assets” (or a similar caption) on a
Consolidated balance sheet of Borrower and all Subsidiaries at such date.

          “Consolidated Total Funded Debt” — The sum (without duplication) of all Indebtedness of the
Borrower and its Subsidiaries for borrowed money, all as determined on a Consolidated Basis, less
Borrower’s Excess Cash as of such date.

          “Contingent Obligation” — Of a Person means any agreement, undertaking or arrangement by which
such Person assumes, guaranties, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any
other Person, or agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement or take-or-pay contract.
The amount of any Contingent Obligation shall be equal to the amount of the obligation that is so
guarantied or supported that is actually outstanding or otherwise due and payable from time to
time, if a fixed and determinable amount or if there is no fixed or determinable amount, either (x)
if a maximum amount is guaranteed, the

 

- 8 -

maximum amount or (y) if there is no maximum amount, the amount of the obligation that is so
guarantied or supported.

          “Control”, “Controlling”, “Controlled by”, and “under Common Control with” — The
possession, directly or indirectly, of the power to either (i) vote 50% or more of the Equity
Interests having voting power for the election of directors, or persons performing similar
functions, of a Person or (ii) direct or cause the direction of the management and policies of a
Person, whether by contract or otherwise; provided however, no Plan or employee
stock ownership plan of Borrower shall be considered to have Control of Borrower or any Subsidiary.

          “Debt Service Coverage Ratio” — The ratio of (a) Consolidated EBITDA of the Borrower, to
(b) Consolidated Interest Expense plus current maturities of the Borrower’s long-term Indebtedness
and the current portion of Capital Lease Obligations on a Consolidated Basis.

          “Default” — Any of the events specified in Article VII whether or not any requirement for the
giving of notice, the lapse of time, or both, as been satisfied.

          “Default Rate” — For any day, with respect to any Loan, a rate per annum equal to 2% per annum
above the interest rate that would otherwise be applicable to such Loan and with respect to any
interest, fees and any other sums due hereunder, 2% per annum above the interest rate that would be
applicable to Revolving Loans that are ABR Loans pursuant to Section 2.6.

          “Defaulting Lender” — Any Lender that (i) on any borrowing date fails to make available to the
Agent such Lender’s Loans required to be made to Borrower on such borrowing date or (ii) shall not
have made a payment to the Issuing Bank pursuant to Section 2.5 of this Agreement or the Agent
pursuant to Section 2.1(b) or 2.3 of this Agreement. Once a Lender becomes a Defaulting Lender,
such Lender shall continue as a Defaulting Lender until such time as such Defaulting Lender makes
available to the Agent the amount of such Defaulting Lender’s Loans and/or to the Issuing Bank such
payments requested by the Issuing Bank together with all or other amounts required to be paid to
the Agent and/or the Issuing Bank pursuant to this Agreement.

          “Designated Hedge Agreement” — Any Hedge Agreement (other than a commodities hedge agreement)
to which Borrower or any Subsidiary is a party and as to which a Lender or any of its Affiliates is
a counterparty that, pursuant to a written instrument signed by the Agent, has been designated as a
Designated Hedge Agreement so that Borrower’s or such Subsidiary’s counterparty’s credit exposure
thereunder will be entitled to share in the benefits of the Collateral and the Collateral Documents
to the extent the Collateral and such Collateral Documents provide guarantees or security for
creditors of Borrower or any Subsidiary under Designated Hedge Agreements.

          “Disposal” — The intentional or unintentional abandonment, discharge, deposit, injection,
dumping, spilling, leaking, storing, burning, thermal destruction or placing of any substance so
that it or any of its constituents may enter the Environment.

          “Dollars”, “U.S. Dollars” or “$” — Lawful money of the United States of America.

 

- 9 -

          “Domestic Lending Office” — With respect to any Lender, the office of such Lender specified as
its “Domestic Lending Office” opposite its name on Schedule 2.1 hereto or in the Assignment and
Assumption pursuant to which it became a Lender, as the case may be, or such other office of such
Lender as such Lender may from time to time specify to the Borrower and the Agent.

          “Domestic Subsidiary” — Any Subsidiary having any place of business located in the United
States of America.

          “ECIDA Bond Projects” — Two projects of LSI whereby LSI (i) acquired 15 acres of land in East
Aurora, New York at an approximate purchase price of $350,000; constructed a 70,000 square foot
manufacturing facility thereon (“East Aurora Facility”) at a cost of approximately $4,700,000; and
purchased new equipment at a cost of approximately $1,450,000; and (ii) constructed a 57,000 square
foot addition to the East Aurora Facility, made related site improvements and acquired related
equipment at a cost of approximately $6,000,000, both of which projects were financed by means of
tax-exempt bonds issued by the Erie County Industrial Development Agency.

          “ECIDA Letters of Credit” — The presently outstanding letters of credit in the current amounts
of approximately $3,339,939 and $6,084,000 issued by HSBC Bank for the account of the Borrower to
support the ECIDA Bond Projects.

          “Eligible Assignee” — (i) A Lender, (ii) an Affiliate of a Lender, (iii) a fund that is
administered or managed by a Lender or an Affiliate of a Lender, or by an entity or an Affiliate of
any entity that administers or manages a Lender, and (iv) any other Person (other than a natural
Person) approved by (A) the Agent, (B) each Issuing Bank (but only in the case of any assignment
with respect to the Revolving Credit), and (C) unless an Event of Default has occurred and is
continuing, the Borrower (but only in the case of any assignment with respect to the Revolving
Credit), each such approval not to be unreasonably withheld or delayed; provided, however, that
notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any
Guarantor or of their Affiliates or Subsidiaries.

          “Environment” — Any water including, but not limited to, surface water and ground water or
water vapor; and land including land surface or subsurface; stream sediments; air; fish; wildlife;
plants; and all other natural resources or environmental media.

          “Environmental Law” — Any applicable Federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written
policy and rule of common law now or hereafter in effect and in each case as amended, and any
binding and enforceable judicial or administrative interpretation thereof, including any judicial
or administrative order, consent, decree or judgment issued to or rendered against Borrower or any
Subsidiary relating to the Environment, employee health and safety or Hazardous Substances,
including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. §
1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. §
300f et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and
the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. § 5101 et seq. and

 

- 10 -

the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it regulates
occupational exposure to Hazardous Substances); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.

          “Environmental
Permits” — All licenses, permits, approvals, authorizations, consents
or registrations required by any applicable Environmental Laws and all applicable judicial and
administrative orders in connection with ownership, lease, purchase, transfer, closure, use and/or
operation of Borrower’s property and/or as may be required for the storage, treatment, generation,
transportation, processing, handling, production or Disposal of Hazardous Substances.

          “Equity Interest” — With respect to any Person, any and all shares, interests, participations
or other equivalents, including membership interests (however designated, whether voting or
non-voting) of equity of such Person, including, if such Person is a partnership, partnership
interests (whether general or limited) or any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or distributions of assets of,
such partnership, but in no event will Equity Interest include any debt securities convertible or
exchangeable into equity unless and until actually converted or exchanged.

          “ERISA” — The Employee Retirement Income Security Act of 1974, as amended from time to time
and the regulations and rulings promulgated and issued thereunder.

          “ERISA Affiliate” — Each Subsidiary and any trade or business (whether or not incorporated)
that, together with Borrower, is treated as a single employer under Section 414(b) or (c) of the
Code or Section 4001(b)(1) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the Code.

          “Event of Default” or “Events of Default” — As defined in Section 7.1 of this Agreement.

          “Exchange Act” — The Securities Exchange Act of 1934, as amended.

          “Excess Cash” — Borrower’s Consolidated cash in excess of $1,000,000.

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

          “Existing Bonds” — Collectively, the tax-exempt bonds issued in connection with the New
Hampshire Bond Project and the ECIDA Bond Projects.

          “Existing Letter of Credit” — The existing letter of credit in the face amount of
approximately U.S. $1,357,539.91 issued by HSBC Bank to HSBC Bank Canada to secure a term loan to
an Affiliate of the Borrower.

          “Federal Funds Effective Rate” — For any day, the rate per annum (based on a year of 365 days
and actual days elapsed and rounded upward to the nearest 1/100th of 1%)

 

- 11 -

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.

          “Financing Statements” — Collectively, the Borrower Financing Statements and the Guarantor
Financing Statements.

          “Foreign Subsidiary” — Any Subsidiary that is not a Domestic Subsidiary.

          “GAAP” — As of the date of any determination, generally accepted accounting principles as
promulgated by the Financial Accounting Standards Board and/or the American Institute of Certified
Public Accountants or any successor entity or entities thereto, including, without limitation, any
Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002, and
which are effective as of such date of determination, consistently applied and maintained
throughout the relevant periods and from period to period.

          “Governmental Authority” — The government of the United States of America, any other nation or
any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.

          “Guarantor” or “Guarantors” — Individually, each of Astronics Advanced and LSI, and
collectively, both of them, and any other Subsidiary of Borrower which is required to deliver a
Guaranty hereunder.

          “Guarantor Collateral” — As defined in Section 3.4(f) of this Agreement.

          “Guarantor Financing Statements” — As defined in Section 3.4(f) of this Agreement.

          “Guarantor Security Agreement” — As defined in Section 3.4(f) of this Agreement.

          “Guaranty” — A guaranty agreement in form and content reasonably satisfactory to the Agent and
the Lenders evidencing the obligation of a Person to guarantee payment of any Indebtedness and any
other reimbursement, payment or performance obligations of another Person which arise under this
Agreement or any other Loan Document.

          “Guaranty Obligations” — As to any Person (without duplication) any obligation of such Person
guaranteeing any Indebtedness (“primary Indebtedness”) of any other Person (the
“primary obligor”) in any manner, whether directly or indirectly, including, without
limitation,

 

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any obligation of such Person, whether or not contingent, (i) to purchase any such primary
Indebtedness or any property constituting direct or indirect security therefor, (ii) to advance or
supply funds for the purchase or payment of any such primary Indebtedness or to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary Indebtedness of the ability of the primary
obligor to make payment of such primary Indebtedness, or (iv) otherwise to assure or hold harmless
the owner of such primary Indebtedness against loss in respect thereof, provided, however, that the
definition of Guaranty Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary Indebtedness in
respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.

          “Hazardous Substances” — Without limitation, any explosives, radioactive materials, friable
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum
products, methane, hazardous materials, hazardous wastes, hazardous or toxic substances and any
other material defined as a hazardous substance in Section 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.) the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 6901 et seq.), Articles 15 and 27 of
the New York State Environmental Conservation Law or any other applicable Environmental Law and in
the regulations promulgated thereunder.

          “Hedge Agreement” — An interest rate swap, cap or collar agreement, or any arrangement similar
to any of the foregoing between Borrower and any Lender relating to any Indebtedness under this
Agreement, each as providing for the transfer or mitigation of interest rate risk either generally
or under specific contingencies.

          “HSBC Bank” — HSBC Bank USA, National Association, and its successors and assigns.

          “Indebtedness” — At a particular date, without duplication (i) all indebtedness of such Person
for borrowed money; (ii) all bonds, notes, debentures and similar debt securities of such Person;
(iii) the deferred purchase price of capital assets or services that in accordance with GAAP would
be shown on the liability side of the balance sheet of such Person; (iv) the face amount of all
letters of credit issued for the account of such Person and, without duplication, all drafts drawn
thereunder; (v) all obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances; (vi) all Indebtedness of a second Person secured by any Lien on any property owned by
such first Person, whether or not such indebtedness has been assumed; (vii) all Capitalized Lease
Obligations of such Person; (viii) the present value, determined on the basis of the implicit
interest rate, of all basic rental obligations under all Synthetic Leases of such Person; (ix) all
obligations of such Person to pay a specified purchase price for goods or services whether or not
delivered or accepted, i.e., take-or-pay and similar obligations; (x) all net

 

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obligations of such Person under Hedge Agreements; (xi) the full outstanding balance of trade
receivables, notes or other instruments sold with full recourse (and the portion thereof subject to
potential recourse, if sold with limited recourse), other than in any such case any thereof sold
solely for purposes of collection of delinquent accounts; (xii) the stated value, or liquidation
value if higher, of all redeemable Equity Interests of such Person; and (xiii) all Guaranty
Obligations of such Person (without duplication under clause (vi)); provided, however that
(x) neither trade payables nor other similar accrued expenses, in each case arising in the ordinary
course of business, nor obligations in respect of insurance policies or performance or surety bonds
that themselves are not guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting the payment of the
same), shall constitute Indebtedness; and (y) the Indebtedness of any Person shall in any event
include (without duplication) the Indebtedness of any other entity (including any general
partnership in which such Person is a general partner) to the extent such Person is liable thereon
as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide expressly that such Person is not liable
thereon.

          “Interest Period” or “Interest Periods” — Individually, and collectively, with respect to a
Libor Loan, the one, two, three or six month interest periods selected by the Borrower pursuant to
the terms of this Agreement to be applicable to specific Libor Loans from time to time or any such
other periods of such other durations as the Borrower and all Lenders may agree shall be applicable
to specific Libor Loans from time to time; provided, however, that (i) no Interest
Period may be selected that would end after the Revolving Credit Maturity Date; (ii) if any
Interest Period begins on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on the last Business Day
of such calendar month; (iii) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business Day; and (iv) if
any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day.

          “Investment” — With respect to any Person, any loan, advance or other extension of credit
(other than unsecured normal trade credit extended upon customary terms in the ordinary course of
such Person’s business) or capital contribution to, any purchase or other acquisition of any
security of or interest in, or any other investment in, any other Person.

          “IRB Letters of Credit” — Together, the New Hampshire Letter of Credit and the ECIDA Letters
of Credit.

          “Issuing Bank” — HSBC Bank, in its capacity as an issuer of Letters of Credit under this
Agreement, and any replacements or successors of HSBC Bank in such capacity as provided in Section
2.4(j) of this Agreement.

          “Law” or “Laws” — Any law, constitution, statute, regulation, rule, opinion, ruling,
ordinance, order, injunction, writ, decree, bond or judgment of any Governmental Authority.

 

- 14 -

          “LC Disbursement” — A payment made by any Issuing Bank pursuant to a Letter of Credit.

          “LC
Exposure” — At any time, the sum of (i) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (ii) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of
any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

          “Lenders” — The Persons listed on Schedule 2.1 to this Agreement and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the
context otherwise requires, the term “Lenders” includes the Swingline Lender.

          “Letter of Credit” or “Letters of Credit” — Individually, and collectively, any, and all,
standby or commercial letters of credit issued by HSBC Bank pursuant to this Agreement upon
application by the Borrower exclusive of the Existing Letter of Credit and the IRB Letters of
Credit.

          “Letter of Credit Commitment” — With respect to the Issuing Bank, the amount set forth
opposite such Issuing Bank’s name on Schedule 2.1 hereto under the caption “Letter of Credit
Commitment” or, if the Issuing Bank has entered into one or more Assignments and Assumptions, the
amount set forth for the Issuing Bank in the register maintained by the Agent as such Issuing
Bank’s “Letter of Credit Commitment,” as such amount may be reduced at or prior to such time
pursuant to Section 2.13.

          “Letter of Credit Facility” — At any time, an amount equal to the amount of the Issuing Bank’s
Letter of Credit Commitment at such time, as such amount may be reduced at or prior to such time
pursuant to Section 2.13 less the aggregate Available Amount under all Letters of Credit
outstanding at such time.

          “Letter of Credit Sublimit” — The $5,000,000 maximum aggregate face amount of all Letters of
Credit which can be outstanding at any one time.

          “Leverage Ratio” — The ratio of the Borrower’s Consolidated Total Funded Debt as of a
calculation date to Consolidated EBITDA, calculated on a Rolling Four-Quarter Basis as of such
calculation date.

          “Libor Interest Determination Date” — A Business Day that is two (2) Business Days prior to
the commencement of each Interest Period during which the Libor Rate will be applicable.

          “Libor Lending Office” — With respect to any Lender, the office of such Lender specified as
its Libor Lending Office” opposite its name on Schedule 2.1 hereto or in the Assignment and
Assumption pursuant to which it became a Lender (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from time to time specify
to the Borrower and the Agent.

 

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          “Libor Loan” — Any Loan on which interest is calculated based on the Libor Rate plus the
Applicable Margin.

          “Libor Rate” — The reserve adjusted rate of interest per annum determined by HSBC Bank to be
applicable to any selected Interest Period appearing on Reuters Screen LIBOR01 Page or such other
substitute page that displays such rate or another alternate source selected by the Agent to
determine such rate on a Libor Interest Determination Date in an amount approximately equal to the
amount of the applicable Libor Loan.

          “Libor Rate Option” — The Rate Option in which interest is calculated based upon the Libor
Rate.

          “Lien” — Any mortgage, deed of trust, pledge, hypothecation, assignment, security interest,
lien, charge or encumbrance, or preference, priority or other security agreement or preferential
arrangement in respect of any asset of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement or any financing lease having
substantially the same economic effect as any of the foregoing).

          “Loan” or “Loans” — Individually and collectively, any Revolving Loan, whether such is an ABR
Loan or a Libor Loan and any Swingline Loan under the Revolving Credit.

          “Loan Account” — An account or accounts maintained with the Agent for the Borrower into which
the proceeds of a Revolving Loan shall be initially deposited pursuant to Sections 2.1(b) and 2.5
of this Agreement.

          “Loan Document” — This Agreement and any other loan, guaranty, letter of credit or collateral
document executed and delivered by Borrower, any Guarantor, or any other Subsidiary or the Lenders
in connection with this Agreement including, without limitation, the Notes, any Guaranty, any
Letter of Credit or any document in connection therewith, and the Collateral Documents, as any of
the same may be amended, modified, renewed or replaced from time to time. The IRB Letters of
Credit and the Existing Letter of Credit and the documents executed and delivered in connection
therewith are not Loan Documents.

          “LSI” — Luminescent Systems, Inc., a New York corporation, formerly known as Flex-key
Corporation, and a Subsidiary of the Borrower.

          “Material Adverse Effect” — An effect, individually or in the aggregate, that (i) is
materially adverse to the business, assets, financial condition or results of operations of
Borrower and its Subsidiaries, taken as a whole, or (ii) does materially impair the ability of the
Borrower to perform its obligations under this Agreement, or any other Loan Documents, or (iii)
materially impairs the rights and remedies of the Agent, the Swingline Lender, any Issuing Bank or
any of the Lenders under the Loan Documents.

          “Material Indebtedness” — Indebtedness owing to a Person or Persons in a single transaction or
related transactions (other than the Loans and Letters of Credit), or obligations in respect of one
or more Hedge Agreements entered into with a Person, of the Borrower and any Subsidiary in an
aggregate principal amount exceeding $3,500,000. For purposes of determining

 

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Material Indebtedness, the principal amount of the obligations of any Person in respect of any
Hedge Agreement at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedge Agreement were terminated at
such time.

          “Maximum Limit” — The maximum aggregate amount which the Borrower can borrow from time to time
under the Revolving Credit which on the date hereof is $60,000,000.

          “Multiemployer Plan” — A Plan which is a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Borrower, any Person under Common Control with the Borrower, or any Person
Controlled by the Borrower, has an obligation to contribute.

          “Multiple Employer Plan” — A Plan subject to Title IV of ERISA and described in Section 4063
of ERISA with respect to which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such Plan has been or were to be terminated.

          “New Hampshire Bond Project” — A project of LSI, whereby LSI constructed and equipped an
80,000 square foot manufacturing facility in Lebanon, New Hampshire which was financed by means of
a tax-exempt bond issued by the Business Authority of the State of New Hampshire.

          “New Hampshire Letter of Credit” — The presently outstanding letter of credit in the current
amount of approximately $4,515,836 issued by HSBC Bank for the account of the Borrower and LSI to
support the New Hampshire Bond Project.

          “Non-Material Subsidiary” — Any Subsidiary that has, as of the date of determination, total
assets equal to less than 5% of Consolidated Total Assets, based on the quarterly financial
statements of Borrower most recently delivered to the Lenders.

          “Note” or “Notes” — Individually, any, and collectively, all, of the Revolving Notes and the
Swingline Note and any or all replacements and renewals thereof.

          “Operating Lease” — As applied to any Person means any lease of any property (whether real,
personal or mixed) by that Person as lessee that, in conformity with GAAP is not accounted for as a
Capital Lease on the balance sheet of that Person.

          “Permitted Acquisition” — As defined in Section 6.7(c) of this Agreement.

          “Permitted Encumbrance” — As defined in Section 6.2 of this Agreement.

          “Person” — Any individual, corporation, partnership, limited liability company, joint venture,
trust, unincorporated association, Governmental Authority or other entity, body, organization or
group.

          “Plan” — Any employee benefits plan which is covered by Title IV of ERISA and in respect of
which the Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of
ERISA, each of which Plans is listed on Schedule 1 to this Agreement.

 

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          “Prime Rate” — The rate of interest publicly announced by HSBC Bank from time to time as its
prime rate and is a base rate for calculating interest on certain loans. The Prime Rate may or may
not be the most favorable rate charged by HSBC Bank to its customers from time to time.

          “Rate Option” or “Rate Options” — The choice of applicable interest rates and Interest Periods
offered to the Borrower pursuant to this Agreement to establish the interest to be charged on
certain portions of the unpaid principal borrowed hereunder from time to time.

          “Release” — Release as defined in Section 101(22) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), and the
regulations promulgated thereunder.

          “Replaced Lender” or “Replacement Lender” — As defined in Section 2.19 of this Agreement.

          “Reportable Event” — Any event with regard to a Plan described in Section 4043(b) of ERISA or
in regulations issued thereunder.

          “Request Certificate” — A certificate in the form annexed hereto as Exhibit D with all blanks
appropriately completed, and duly executed by the Borrower.

          “Required Lenders” — At any time, Lenders that together hold Revolving Credit Exposures and
Unused Commitments representing at least the Required Percentage (as defined below) of the sum of
the total Revolving Credit Exposures and Unused Commitments at such time; provided,
however, if any Lender shall be a Defaulting Lender at such time, there shall be excluded
from the determination of Required Lenders at such time (i) the aggregate principal amount of Loans
owing to such Lender (in its capacity as a Lender) and outstanding at such time, and (ii) the
aggregate Commitment of such Lender at such time. For purposes of this definition, the aggregate
principal amount of Swingline Loans owing to the Swingline Lender, the LC Disbursements owing to
the Issuing Bank and the amount available to be drawn under each Letter of Credit shall be
considered to be owed to the Lenders ratably in accordance with their respective Commitments. As
used herein, Required Percentage means (i) 100% if there are two or fewer Lenders party to this
Agreement at the time a determination of the Required Lenders is necessary, or (ii) 51% if at such
time there are more than two Lenders party to this Agreement and no single Lender has 51% or more
of the sum of the total Revolving Credit Exposures and Unused Commitments, or (iii) 66-2/3% if at
such time there are more than two Lenders and one Lender has 51% or more of the sum of the total
Revolving Credit Exposures and Unused Commitments.

          “Revolving Credit” — The five-year revolving credit facility (including Revolving Loans,
Swingline Loans and Letters of Credit) made available to the Borrower by the Lenders as provided in
this Agreement.

          “Revolving Credit Exposure” — With respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Revolving Loans, LC Exposure and Swingline Exposure
at such time.

 

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          “Revolving Credit Maturity Date” — May 13, 2013 which date may be shortened in accordance with
Section 7.2 of this Agreement.

          “Revolving Loan” or “Revolving Loans” — Individually and collectively, each Loan by any Lender
to Borrower whether initially made as an ABR Loan or a Libor Loan under Section 2.1 of this
Agreement or arising from Borrower’s request for a Loan to repay a Swingline Loan under Section
2.3(c) of this Agreement, or arising from Borrower’s request to reimburse an LC Disbursement under
Section 2.4(f) of this Agreement.

          “Revolving Note” or “Revolving Notes” — The promissory note or promissory notes of the
Borrower substantially in the form of Exhibit A hereto with all blanks appropriately completed, and
all replacements and renewals thereof, evidencing the promise of the Borrower to repay Revolving
Loans under the Revolving Credit to the applicable Lender.

          “Rolling Four-Quarter Basis” — The four most recently completed consecutive fiscal quarters of
the Borrower immediately preceding a calculation date.

          “SEC” — The U.S. Securities and Exchange Commission, any successor thereto and any analogous
Governmental Authority.

          “Securities Act” — The Securities Act of 1933, as amended.

          “Security Agreements” — Collectively, the Borrower Security Agreement and the Guarantor
Security Agreement.

          “Subsidiary” — Any limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of Borrower in Borrower’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any corporation of which at least 50% of the voting Equity Interest is owned by any entity
directly, or indirectly through one or more Subsidiaries.

          “Swingline Exposure” — At any time for all Lenders, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Percentage of the total Swingline Exposure at such time.

          “Swingline Lender” — HSBC Bank, in its capacity as lender of Swingline Loans hereunder, and
any replacement or successor to HSBC Bank in such capacity, as provided in this Agreement.

          “Swingline Loan” — A loan made pursuant to Section 2.3 of this Agreement.

          “Swingline Note” — A promissory note of Borrower substantially in the form of Exhibit B hereto
with all blanks appropriately completed, and all replacements and renewals thereof evidencing the
promise of the Borrower to repay Swingline Loans to the Swingline Lender.

 

- 19 -

          “Synthetic Lease” — Any lease (i) that is accounted for by the lessee as an Operating Lease
and (ii) under which the lessee is intended to be the “owner” of the leased property for federal
income tax purposes.

          “Taxes” — Any and all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.

          “Total Commitment” — The aggregate amount of the Commitments of the Lenders, as such
Commitments may be decreased pursuant to the terms of this Agreement. The amount of the Total
Commitment on the Closing Date is $60,000,000.

          “Type” — When used in reference to any Loan or borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such borrowing, is determined by reference to the
Libor Rate or the Alternate Base Rate.

          “Unused Commitment” — With respect to any Lender at any time, (i) such Lender’s Commitment at
such time minus (ii) the sum of (x) the aggregate principal amount of all Revolving Loans in each
instance made by such Lender (in its capacity as a Lender) and outstanding at such time,
plus (y) such Lender’s Applicable Percentage of (1) the aggregate Available Amount of all
Letters of Credit outstanding at such time, (2) the aggregate principal amount of all LC
Disbursements made by any Issuing Bank and outstanding at such time, and (3) the aggregate
principal amount of all Swingline Loans made by the Swingline Lender and outstanding at such time.

          “USA Patriot Act” — 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.

          1.2 Accounting Terms.

          (a) Generally. All accounting terms not specifically or completely defined herein shall be
construed in conformity with, and all financial data (including financial ratios and other
financial calculations) required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing Borrower’s audited financial statements previously
provided to the Agent and the Lenders, except as otherwise specifically prescribed herein.

          (b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in this Agreement, and either the Borrower or the Required
Lenders shall so request, the Agent, the Lenders and the Borrower shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Borrower shall

 

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provide to the Agent and the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations
of such ratio or requirement made before and after giving effect to such change in GAAP.

          1.3 Times of Day. Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).

          1.4 Letters of Credit Amounts. Unless otherwise specified herein, the amount of a Letter
of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any letter of credit document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be
deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II. THE CREDIT

          2.1 The Revolving Credit.

               (a) Revolving Loans. Each Lender agrees, severally and not jointly, subject to the terms and
conditions and relying upon the representations and warranties set forth in this Agreement and
within the limits hereof, to make one or more Revolving Loans to the Borrower, and Borrower may
make a request for a Revolving Loan or Revolving Loans from the Lenders, at any one time and from
time to time, during the Availability Period. The Borrower shall not at any time permit, and no
Lender shall have any obligation to permit, the aggregate outstanding principal amounts of all
Revolving Loans, Swingline Loans and the face amount of outstanding Letters of Credit to exceed the
Maximum Limit or any such Revolving Loan to exceed such Lender’s Unused Commitment. The Revolving
Loans may be repaid and reborrowed in accordance with the provisions hereof.

               (b) Method for Revolving Loans. When Borrower wants the Lenders to make a Revolving Loan
available, the Borrower shall notify the Agent not later than 1:00 p.m. on the Business Day on
which the Revolving Loan is to be funded in the case of an ABR Loan, and in the case of a Libor
Loan not later than two (2) Business Days prior to the proposed commencement date of the applicable
Interest Period. In such notice, which may be by telephone, confirmed immediately in writing, or
telex or telecopier, by means of a Request Certificate duly completed and executed by an Authorized
Officer, the Borrower shall specify (i) the aggregate amount of the Revolving Loan to be made on a
designated date which shall be in a minimum amount of $100,000 and shall be in whole multiples of
$100,000 for amounts in excess of such minimum amount; (ii) whether the Revolving Loan shall be an
ABR Loan or a Libor Loan, and if a Libor Loan the applicable Interest Period, provided,
however, such Interest Period may in no event overlap more than nine (9) other Interest
Periods; and (iii) the proposed date on which the Revolving Loan is to be funded which shall be a
Business Day. Each Lender shall make available to the Agent in accordance with Section 2.5 hereof,
in immediately available

 

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funds, such Lender’s Applicable Percentage of such Loan in accordance with the respective
Commitment of such Lender. As early as practically possible on the date on which a Revolving Loan
is made and upon fulfillment of the conditions set forth in Article III of this Agreement, the
Agent will make the proceeds of the Revolving Loan available to the Borrower by a deposit to the
applicable Loan Account.

          2.2 The Notes. (a) The Revolving Loans shall be evidenced by the Revolving Notes,
executed by an Authorized Officer and with all blanks appropriately completed, payable as provided
therein to the Lenders. Each Revolving Note may be inscribed by the holder thereof on the schedule
attached thereto and any continuation thereof with the date of the making of each Revolving Loan,
the amount of each Revolving Loan, the applicable Rate Options and Interest Periods, all payments
of principal, and the aggregate outstanding principal balance thereof.

               (b) The Swingline Loans shall be evidenced by the Swingline Note, executed by an Authorized
Officer with all blanks appropriately completed, payable as provided therein to the Swingline
Lender. The Swingline Note may be inscribed by the holder thereof on the schedule attached thereto
and any continuation thereof with the date of the making of each Swingline Loan, the amount thereof
and all payments of principal, and the aggregate principal balance thereof.

Any such inscription on the schedules to any Revolving Note or the Swingline Note made by the
holder thereof shall constitute prima facie evidence of the accuracy of the information so
recorded; provided, however, the failure of any Lender or other holder to make any
such inscription shall not affect the obligations of the Borrower under any Revolving Note, the
Swingline Note or this Agreement.

          2.3 Swingline Loans. (a) Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Loans (“Swingline Loans”) to Borrower solely for the Swingline
Lender’s own account, from time to time during the Availability Period, up to an aggregate
principal amount at any one time outstanding that will not result in (i) the aggregate principal
amount of outstanding Swingline Loans exceeding $10,000,000 or (ii) the sum of the aggregate Unused
Commitments of the Lenders at such time being exceeded; provided that the Swingline
Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.
The Swingline Lender shall not make any Swingline Loan in the period commencing one Business Day
after the Swingline Lender shall have received written notice in accordance with Section 10.5 of
this Agreement from the Agent or any Lender that one or more of the conditions contained in Article
III are not then satisfied or a Default or an Event of Default exists and ending upon the
satisfaction or waiver of such condition(s) or cure or waiver of such Default or Event of Default.
Swingline Loans shall bear interest at the Prime Rate from time to time in effect. Each
outstanding Swingline Loan shall be payable on the Business Day following demand therefor or
automatically without demand on the Revolving Credit Maturity Date, together with interest accrued
thereon, and shall otherwise be subject to all other terms and conditions applicable to all
Revolving Loans, except that all interest thereon shall be payable to the Swingline Lender solely
for its own account other than in the case of the purchase of a participation therein in accordance
with Section 2.3(c) of this Agreement. Within the foregoing

 

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limits and subject to the terms and conditions set forth herein, Borrower may borrow, repay and
reborrow Swingline Loans.

               (b) To request a Swingline Loan, Borrower shall notify the Agent of such request by telephone
(confirmed by telecopy), not later than 1:00 p.m. on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which shall be a Business
Day) and amount of the requested Swingline Loan. The Agent will promptly advise the Swingline
Lender of any such notice received from Borrower. The Swingline Lender shall make each Swingline
Loan available to Borrower by means of a credit to the general deposit account of Borrower with the
Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.4(f) of this Agreement, by remittance to such Issuing Bank)
by 3:00 p.m. on the requested date of such Swingline Loan.

               (c) At any time after making a Swingline Loan, the Swingline Lender may request Borrower to,
and upon request by the Swingline Lender, Borrower shall, promptly request a Revolving Loan from
all Lenders and apply the proceeds of such Revolving Loan to the repayment of any Swingline Loan
owing by Borrower not later than the Business Day following the Swingline Lender’s request.
Notwithstanding the foregoing, and upon the earlier to occur of (i) three (3) Business Days after
demand for payment is made by the Swingline Lender for a Swingline Loan, and (ii) the Revolving
Credit Maturity Date, if such Swingline Loan has not been paid by Borrower, such Swingline Loan
shall bear interest as an ABR Loan and each Lender (other than the Swingline Lender) shall
irrevocably and unconditionally purchase from the Swingline Lender, without recourse or warranty,
an undivided interest and participation in such Swingline Loan in an amount equal to such Lender’s
Applicable Percentage of such Swingline Loan and promptly pay such amount to the Agent for the
account of the Swingline Lender by wire transfer of immediately available funds in the same manner
as provided in Section 2.5 of this Agreement with respect to Loans made by such Lender, and the
Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.
Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline
Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, shall be made without any offset, abatement, withholding or reduction
whatsoever and such payment shall be made by the other Lenders whether or not an Event of Default
or a Default is then continuing or any other condition precedent set forth in Article III is then
met and whether or not Borrower has then requested a Revolving Loan in such amount. The Agent
shall notify Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Agent and
not to the Swingline Lender. If any Lender fails to make available to the Agent for the account of
the Swingline Lender, any amounts due to the Swingline Lender from such Lender pursuant to this
Section, the Swingline Lender shall be entitled to recover such amount, together with interest
thereon at the Federal Funds Effective Rate for the first three (3) Business Days after Defaulting
Lender receives such notice and thereafter at the rate for ABR Loans, in either case payable (i) on
demand, (ii) by setoff against any payments made to the Swingline Lender for the account of
Defaulting Lender, or (iii) by payment to the Swingline Lender by the Agent of amounts otherwise
payable to Defaulting Lender under this Agreement. The failure of any Lender to make available to
the Agent for the

 

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account of the Swingline Lender its Applicable Percentage of any unpaid Swingline Loan shall not
relieve any other Lender of its obligation hereunder to make available to the Agent for the account
of the Swingline Lender, its Applicable Percentage of any unpaid Swingline Loan on the date such
payment is to be made, but no Lender shall be responsible for the failure of any other Lender to
make available to the Agent for the account of the Swingline Lender its Applicable Percentage of
any unpaid Swingline Loan.

          2.4 Letters of Credit.

               (a) General. Each Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue
Letters of Credit for the account of the Borrower from time to time on any Business Day during the
period from the Closing Date until two (2) Business Days prior to the Revolving Credit Maturity
Date (A) in an aggregate Available Amount for all Letters of Credit, not to exceed at any time such
Issuing Bank’s Letter of Credit Commitment at such time, and (B) in an Available Amount for each
such Letter of Credit not to exceed an amount equal to the Unused Commitments of the Lenders at
such time. Within the limits of the Letter of Credit Facility, and subject to the limits referred
to herein, the Borrower may request the issuance of Letters of Credit under this Section, repay any
LC Disbursements resulting from drawings under Letters of Credit pursuant to Section 2.4(f) and
request the issuance of additional Letters of Credit under Section 2.4(c). In the event of any
inconsistency between the terms and conditions of this Agreement and the terms and conditions of
any form of letter of credit application or other agreement submitted by Borrower to, or entered
into by Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control.

               (b) Letter of Credit Fees. The Issuing Bank shall have the right to receive, solely for its own
account, and Borrower shall pay on demand with respect to any Letter of Credit the Issuing Bank’s
reasonable and customary administrative, issuance, amendment, drawing and negotiation charges in
connection with letters of credit. The Issuing Bank shall also be paid a fronting fee which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to Unreimbursed LC Disbursements) attributable to Letters of
Credit issued by the Issuing Bank during the Availability Period (“Fronting Fee”). The Fronting
Fee shall be payable to the Issuing Bank quarterly in arrears. For each day during (i) the period
beginning on the date of this Agreement and ending June 30, 2008, (ii) each full calendar quarter
thereafter during the term of this Agreement and (iii) the period beginning on the first day of the
calendar quarter containing the Revolving Credit Maturity Date and ending on the day before the
Revolving Credit Maturity Date, the Borrower shall pay, on the first Business Day following each
such calendar quarter or other time period, to the Agent for the account of each Lender
participating in such Letters of Credit a non-refundable letter of credit fee equal to such
Lender’s Applicable Percentage, on such day, of the product obtained by multiplying (A) that
portion of LC Exposure representing the aggregate undrawn face amount of Letters of Credit on such
day first by (B) the Applicable Margin then in effect for Libor Loans and then by (C) 1/360.

 

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               (c) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions; Reports. (i) To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Agent (at least two (2) Business Days in advance of the requested date of issuance, amendment,
renewal or extension for a Letter of Credit) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the
date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section),
the Available Amount of such Letter of Credit, the Applicable Currency, the name and address of the
beneficiary thereof, the purpose for which such Letter of Credit is to be issued, and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. Such
notice, to be effective, must be received by the Issuing Bank not later than 2:00 p.m. or the time
agreed upon by such Issuing Bank and the Borrower on the last Business Day on which such notice can
be given under this Section 2.4(c). If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on such Issuing Bank’s standard form in connection with any
request for a Letter of Credit.

                    (ii) A Letter of Credit shall be issued, amended, renewed or extended only if, (x) after
giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $5,000,000, and (ii) the sum of the total Revolving Credit Exposures shall not exceed the
Total Commitment, (y) as of the date of such issuance amendment, renewal or extension, no order,
judgment or decree of any court, arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing the Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit or request that the Issuing Bank refrain from the issuance of letters of credit generally
or the issuance of that Letter of Credit. Unless the Issuing Bank has been notified by the Agent
or the Required Lenders in writing that a Default or an Event of Default has occurred and is
continuing, in which case the Issuing Bank shall have no obligation to issue, amend, renew or
extend any Letter of Credit until such notice is withdrawn by the Agent or the Required Lenders or
such Default or Event of Default has been effectively waived in accordance with the provisions of
this Agreement, the Issuing Bank shall, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower as agreed between the Issuing
Bank and the Borrower in connection with such issuance.

                    (iii) The Issuing Bank shall furnish (i) to the Agent on the first Business Day of each week a
written report summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to the Agent, the
Borrower, and each Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit issued during the preceding month and drawings
during such month under all Letters of Credit, and (iii) to the Agent, the Borrower, and each
Lender on the first Business Day of each calendar quarter a

 

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written report setting forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit.

               (d) Expiration Date. No Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than one (1) Business Day prior to the
Revolving Credit Maturity Date. The foregoing notwithstanding, any standby Letter of Credit may,
by its terms, be renewable annually upon notice (a “Notice of Renewal”) given to the Issuing Bank
and the Agent on or prior to any date for notice of renewal set forth in such Letter of Credit (but
in any event at least two (2) Business Days prior to the date of the proposed renewal of such
standby Letter of Credit) and upon fulfillment of the applicable conditions set forth in Article
III unless the Issuing Bank shall have notified the Borrower (with a copy to the Agent) on or prior
to the date for notice of termination set forth in such Letter of Credit (but in any event at least
thirty (30) Business Days prior to the date of automatic renewal) of its election not to renew such
standby Letter of Credit (a “Notice of Termination”); provided that the terms of
each standby Letter of Credit that is automatically renewable annually shall not permit the
expiration date (after giving effect to any renewal) of such standby Letter of Credit in any event
to be extended to a date later than one (1) Business Day before the Revolving Credit Maturity Date.
If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by
the Issuing Bank pursuant to the immediately preceding sentence, such standby Letter of Credit
shall expire on the date on which it otherwise would have been automatically renewed;
provided, however, that even in the absence of receipt of a Notice of Renewal, the
Issuing Bank may, in its discretion unless instructed to the contrary by the Agent or the Borrower,
deem that a Notice of Renewal had been timely delivered and, in such case, a Notice of Renewal
shall be deemed to have been so delivered for all purposes under this Agreement.

               (e) Participations. (i) Immediately upon issuance by the Issuing Bank of any Letter of Credit in
accordance with the procedures set forth in Section 2.4(c) of this Agreement, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation equal to its Applicable
Percentage of such Letter of Credit (including, without limitation, all obligations of the Borrower
with respect thereto) and any security therefor or guaranty pertaining thereto.

                    (ii) In the event that the Issuing Bank makes any LC Disbursement and the Borrower shall not
have repaid such amount to the Issuing Bank pursuant to Section 2.4(f) of this Agreement, the
Issuing Bank shall promptly notify the Agent and each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Agent for the account of the Issuing Bank the amount of
such Lender’s Applicable Percentage of the unreimbursed amount of any LC Disbursement in the same
manner as provided in Section 2.5 of this Agreement with respect to Revolving Loans made by such
Lender and the Agent shall promptly pay to such Issuing Bank the amounts so received by it from the
Lenders.

                    (iii) If any Lender fails to make available to the Issuing Bank any amounts due to the Issuing
Bank pursuant to this Section 2.4(e), the Issuing Bank shall be

 

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entitled to recover such amount, together with interest thereon, at the Federal Funds Effective
Rate for the first three (3) Business Days after Defaulting Lender receives such notice and
thereafter at the rate for ABR Loans, in either case payable (i) on demand, (ii) by setoff against
any payments made to such Issuing Bank for the account of Defaulting Lender or (iii) by payment to
the Issuing Bank by the Agent of amounts otherwise payable to Defaulting Lender under this
Agreement. The failure of any Lender to make available to the Agent for the account of the Issuing
Bank its Applicable Percentage of the unreimbursed amount of any LC Disbursement shall not relieve
any other Lender of its obligation hereunder to make available to the Agent for the account of the
Issuing Bank its Applicable Percentage of the unreimbursed amount of any LC Disbursement on the
date such payment is to be made, but no Lender shall be responsible for the failure of any other
Lender to make available to the Agent for the account of the Issuing Bank its Applicable Percentage
of the unreimbursed amount of any LC Disbursement on the date such payment is to be made.

                    (iv) Whenever the Issuing Bank receives a payment on account of an LC Disbursement, including
any interest thereon, it shall promptly pay to each Lender which has funded its participating
interest therein, in like funds as received an amount equal to such Lender’s pro rata share thereof
based on the amount funded.

                    (v) The obligations of a Lender to make payments to the Agent for the account of the Issuing
Bank with respect to LC Disbursements shall be absolute, unconditional and irrevocable, not subject
to any counterclaim, set-off, qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances, whether or not an Event of
Default or a Default is then continuing.

                    (vi) In the event any payment by Borrower received by the Agent with respect to a Letter of
Credit and distributed by the Agent to the Lenders on account of their participations is thereafter
set aside, avoided or recovered from the Agent in connection with any receivership, liquidation,
reorganization or bankruptcy proceeding, each Lender which received such distribution shall, upon
demand by the Agent, contribute such Lender’s Applicable Percentage of the amount set aside,
avoided or recovered together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it.

               (f) Reimbursement. If the Issuing Bank shall make any LC Disbursement, the Borrower shall
reimburse such LC Disbursement by paying to the Agent for the account of the Issuing Bank an amount
equal to such LC Disbursement not later than 12:00 Noon on the date that such LC Disbursement is
made, if the Borrower shall have received notice by telephone or otherwise of such LC Disbursement
prior to 10:00 a.m. on such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 Noon on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m. on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with
Section 2.1 or 2.3 of this Agreement that such payment be financed with an ABR Loan or Swingline
Loan in an equivalent amount and, to the extent so

 

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financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the
resulting ABR Loan or Swingline Loan.

               (g) Obligations Absolute. The Borrower’s obligations to reimburse LC Disbursements as provided in
paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit
or this Agreement, or any term or provision therein, (ii) any draft or other document presented
under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or other document that does not comply
strictly with the terms of such Letter of Credit so long as it complies in all material respects,
(iv) the existence of any claim, set-off, defense or other right which Borrower or any Subsidiary
may have at any time against the beneficiary named in a Letter of Credit or any transferee of any
Letter of Credit (or any Person for whom any such transferee may be acting), the Issuing Bank, any
Lender, any other Person, whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transaction (including any underlying
transactions between Borrower, any Subsidiary and the beneficiary named in any Letter of Credit),
(v) the occurrence of any Event of Default or Default, or (vi) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrower’s obligations hereunder. As among the Borrower, the Issuing Bank and the Lenders, the
Borrower assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of the Letters of Credit requested by it. In furtherance and not in
limitation of the foregoing, the Issuing Bank and the Lenders shall not be responsible for (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respect invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) failure of
the beneficiary of a Letter of Credit to comply fully with conditions required in order to draw
upon such Letter of Credit so long as such beneficiary is in material compliance with such
conditions; (iv) errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise; (v) errors in interpretation of technical
terms; (vi) misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing
under such Letter of Credit; or (vii) any consequences arising from causes beyond the control of
the Issuing Bank or the Lenders. In addition to amounts payable as elsewhere provided in this
Section 2.4, Borrower hereby agrees to protect, indemnify, pay and save the Agent, the Issuing Bank
and each Lender harmless from and against any and all claims, demands, liabilities, damages,
losses, posts, charges and expenses (including reasonable attorneys’ fees) arising from the claims
of third parties against the Agent or the Issuing Bank in respect of any Letter of Credit requested
by the Borrower. In furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Issuing Bank or any Lender under or in

 

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connection with the Letters of Credit or any related certificates, if taken or omitted in good
faith, shall not put the Issuing Bank, the Agent or such Lender under any resulting liability to
Borrower or relieve Borrower of any of their obligations hereunder to the Issuing Bank, the Agent
or any Lender. Notwithstanding anything to the contrary contained in this Section 2.4(g), Borrower
shall not have any obligations to indemnify the Issuing Bank under this Section 2.4(g) in respect
of any liability incurred by the Issuing Bank that is found in a final judgment by a court of
competent jurisdiction to have resulted primarily from the Issuing Bank’s own gross negligence or
willful misconduct, unless such action or inaction on the part of the Issuing Bank which gave rise
to the liability was taken at the request of Borrower or from the wrongful failure to pay the
Letter of Credit except if pursuant to an order from a Governmental Authority (even if such order
is later invalidated).

               (h) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a Letter of Credit. The
Issuing Bank shall promptly notify the Agent and the Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice shall not relieve the
Borrower of the Borrower’s obligation to reimburse the Issuing Bank and the Lenders with respect to
any such LC Disbursement.

               (i) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then regardless of the
time of Borrower’s receipt of notice of such LC Disbursement, unless the Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC Disbursement is made to, but
excluding, the date that Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans; provided that, if the Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (f) of this Section, then the default interest rate set
forth in Section 2.6(c) of this Agreement shall apply. Interest accrued pursuant to this paragraph
shall be for the account of such Issuing Bank, except that interest accrued on and after the date
of payment by any Lender pursuant to paragraph (e)(ii) or (e)(iii) of this Section to reimburse
such Issuing Bank shall be for the account of such Lender to the extent of such payment.

               (j) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by written
agreement among the Borrower, the Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time any
such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the
account of the replaced Issuing Bank. From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under
this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein
to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and
shall continue to have all

 

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the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to issue additional
Letters of Credit.

               (k) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business
Day that the Borrower receives notice from the Agent or the Required Lenders (or, if the maturity
of the Loans has been accelerated, Lenders with LC Exposure representing greater than fifty percent
(50%) of the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an interest-bearing account with the Agent, in the name of
the Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any of the Borrower described in Section 7.1(d) or (e) of this
Agreement. Such deposit shall be held by the Agent as Collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Agent shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such account. Other than any
interest earned on the interest-bearing account or on any investment of such deposits, which
investments shall be made at the option and sole discretion of the Agent and at the Borrower’s risk
and expense, such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be applied by the Agent
to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the
Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Lenders with LC Exposure representing greater than fifty percent
(50%) of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default
have been cured or waived.

               (l) Existing Letter of Credit. The Existing Letter of Credit will remain in effect. The per annum
fee applicable thereto will be payable quarterly in arrears, on each February 25, May 25, August 25
and November 25 while such letter of credit is outstanding, and will be determined on the date of
this Agreement based on and equal to, the then applicable Applicable Margin for the LIBOR Rate
Option for and calculated on the basis of a 360-day year and actual days elapsed. The Existing
Letter of Credit shall also be subject to HSBC Bank’s normal and customary amendment and drawing
fees upon the occurrence of such events. Except as modified herein, the applicable reimbursement
agreement for the Existing Letter of Credit shall remain in full force and effect and shall
continue to govern the Existing Letter of Credit.

 

- 30 -

               (m) IRB Letters of Credit. The stand-by letter of credit fees applicable to the IRB Letters of
Credit shall continue to be determined, and shall be payable, as provided in the applicable
reimbursement agreements or bond documents which currently govern such IRB Letters of Credit, and
such reimbursement agreements and bond documents shall remain in full force and effect and shall
continue to govern the IRB Letters of Credit.

          2.5 Funding of Borrowings. (a) Each Lender shall fund its Applicable Percentage of each
Loan to be made hereunder on the proposed date thereof by wire transfer of immediately available
funds by 2:00 p.m., in the case of Revolving Loans, to the account most recently designated by the
Agent for such purpose by notice to the Lenders; provided that Swingline Loans
shall be made as provided in Section 2.3 hereof. The Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to the Loan Account;
provided that ABR Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.4(f) of this Agreement shall be remitted by the Agent to the appropriate
Issuing Bank and that Loans made to repay Swingline Loans as provided in Section 2.3 of this
Agreement shall be remitted by the Agent to the Swingline Lender.

          (b) Unless the Agent shall have received notice from a Lender in accordance with Section 10.5
of this Agreement that such Lender will not make available to the Agent such Lender’s share of such
borrowing, the Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable borrowing available to the Agent, then the Defaulting Lender and the
Borrower severally agree to pay to the Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Agent, at (i) in the case of Defaulting
Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Agent in
accordance with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If a Defaulting Lender pays such amount to
the Agent, then such amount, less any interest paid from such amount to the Agent, shall constitute
such Lender’s Loan included in such borrowing. Any Defaulting Lender shall pay on demand to the
Borrower the amount equal to the excess of the interest actually paid by the Borrower to the Agent
over the interest which would have otherwise been payable by the Borrower to such Defaulting Lender
had such Defaulting Lender funded its share of the applicable borrowing, plus interest on such
amount at the rate applicable to ABR Loans.

 

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          2.6 Interest.

               (a) Rates. (i) The Revolving Notes shall bear interest, prior to maturity (whether by acceleration
or otherwise) on the balance of principal thereof from time to time unpaid, payable in arrears on
the first day of each quarter for interest accrued during the preceding quarter in the case of ABR
Loans and in the case of Libor Loans payable in arrears on the last day of the applicable Interest
Period, and in the case of an Interest Period in excess of three months also payable on the dates
that are successively three months after the commencement of such Interest Period. The Revolving
Loans shall bear interest in accordance with the Rate Option selected by the Borrower pursuant to
the terms hereof.

                    (ii) The Swingline Note shall bear interest payable monthly in arrears on the first day of
each month for interest accrued during the preceding month on the balance of principal from time to
time unpaid.

               (b) Rate Options. (i) Unless the Borrower has selected a Libor Rate in accordance with the
provisions of this Agreement, the Borrower shall be deemed to have selected the ABR Option to apply
to any portion of a Revolving Note not subject to a Libor Rate, and such rate shall continue in
effect until the earlier of when a Libor Rate and Interest Period are available and properly
selected, or until the applicable Revolving Note is paid in full.

          Notice by the Borrower of the selection of a Libor Rate or Interest Period for any Revolving
Loan, the amount subject thereto, and the applicable Interest Periods shall be irrevocable. Such
notice may be given to the Agent by a duly completed Request Certificate executed by an Authorized
Officer of the Borrower.

                    (ii) The Swingline Note shall bear interest at the Prime Rate in effect from time to time, and
such rate shall continue until the Swingline Note is paid in full.

               (c) Default Rate. Upon notice to the Borrower by the Agent of the occurrence of an Event of
Default and during the continuance thereof and after maturity, whether by acceleration or
otherwise, the Revolving Notes and Swingline Note shall bear interest at the applicable Default
Rate. Overdue fees and other amounts payable by the Borrower under this Agreement other than
principal (“Overdue Amounts”) shall also bear interest at the applicable Default Rate. In no event
shall the rate of interest on the Revolving Notes or the Swingline Note, or the rate of interest
applicable to Overdue Amounts, exceed the maximum rate of interest authorized by law.

               (d) Late Charge. Upon written notice from the Agent to the Borrower of the failure to make any
regularly scheduled payment of interest or principal on the Revolving Credit within ten (10) days
of the due date thereof, the Borrower promises to pay to the Agent for the benefit of the Lenders a
late charge equal to five percent (5%) of the amount of any such overdue amount.

 

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               (e) Computation of Interest. Interest on ABR Loans shall be calculated on the basis of a year of
365 days, or 366 days during a leap year, for the actual number of days elapsed. Interest on Libor
Loans shall be calculated on the basis of the actual number of days elapsed in a year of 360 days,
which will result in a higher effective annual rate. If any of the Notes are not paid when due,
whether because such Notes become due on a Saturday, Sunday or bank holiday or for any other
reason, the Borrower will pay interest thereon at the aforesaid rate until the date of actual
receipt of payment by the holder of the Notes.

               (f) Rate Conversions and Continuations. For any Revolving Loan, the Borrower may elect to convert
any portion of (i) an ABR Loan to a Libor Loan, or (ii) a Libor Loan to an ABR Loan, or to continue
any Libor Loan or ABR Loan as a new loan of the same Type; provided, however, Libor
Loans may only be converted to ABR Loans or continued on the expiration date of the applicable
Interest Period.

          Subject to the foregoing, with respect to a Revolving Loan, the Borrower may elect to convert
any ABR Loan to a Libor Loan, or, to continue a Libor Loan as a new Libor Loan, by Borrower giving
irrevocable notice of such election to the Agent by 1:00 p.m. at least two (2) Business Days prior
to the requested rate change date and, in the case of any Libor Loan, such conversion or
continuation shall take place on the last day of the applicable Interest Period with respect to the
Revolving Loan being so converted or continued. Such notice may be given by a duly completed and
executed Request Certificate. Each such request to convert or continue shall include the requested
rate change date (which shall be a Business Day), the Rate Option selected, and the amount to be
converted or continued (which shall be in a principal amount of $100,000 or more and in whole
multiples of $100,000 in the case of conversion to, or continuation as, a Libor Loan). If no Event
of Default or Default is then existing at such time, and the Borrower is in compliance with the
terms of this Agreement as evidenced by the Agent’s receipt of a properly completed and executed
Request Certificate, such conversion or continuation shall be made on the requested rate change
date, subject to the foregoing limitations in connection with the conversion or continuation of
Libor Loans.

          The Agent shall not incur any liability to Borrower in acting upon any telephonic notice which
the Agent believes to have been given by a duly authorized officer or other designated
representative of Borrower, and which is confirmed by delivery to the Agent from the Borrower or
the Borrower of a written or facsimile notice signed by Borrower or the Borrower, or for otherwise
acting in good faith hereunder.

          2.7 Prepayments and Payments.

               (a) Optional Prepayments.

                    (i) ABR Loans. Borrower shall have the right to prepay at any time without premium
all or any portion of the ABR Loans.

                    (ii) Libor Loans. Borrower shall have the right to prepay without premium all or any
portion of the Libor Loans on the expiration day of the applicable

 

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Interest Period. If any Libor Loan is prepaid at any other time, Borrower shall pay to the
applicable Lender an amount equal to the Breakage Fee within 10 days of notice thereof from the
Agent, setting forth the amount of such Breakage Fee.

          All prepayments of the Revolving Loans shall be subject to a minimum amount of $100,000, and
incremental multiples of $100,000 thereafter.

               (b) Mandatory Prepayments.

                    (i) Net Proceeds. Borrower shall make a mandatory prepayment to the Agent for the
account of the Lenders in accordance with their Applicable Percentages, promptly upon receipt
thereof, equal to all (100%) of the Net Proceeds received by the Borrower or any Subsidiary from
(1) any Asset Sale (other than as described in (2) hereof) in excess of $1,000,000 unless the
proceeds of such sale are reinvested in assets within one hundred twenty (120) days of the
occurrence of such Asset Sale; (2) insurance, condemnation and similar recoveries other than such
recoveries that, within ninety (90) days after receipt thereof, are applied in the ordinary course
of business toward repair or replacement of the damaged property or such longer reasonable time
period as determined under the Borrower’s plan of restoration or replacement for such property
established within a ninety (90) day period after such occurrence provided such plan is acceptable
to the Agent in its reasonable judgment; and (3) the reversion of Plan assets from an over-funded
Plan, but only to the extent of such over-funding. Borrower shall give to the Agent written notice
of the occurrence of an event requiring a mandatory prepayment hereunder promptly, but not later
than within thirty (30) days after the occurrence of such an event.

                    (ii) Commitments Exceeded. If on any date, the Revolving Credit Exposures of the
Lenders exceed the Total Commitment, or the Revolving Credit Exposure of any Lender exceeds such
Lender’s Commitment, or the aggregate principal amount of Swingline Loans exceeds the Swingline
Commitment, or the total LC Exposure exceeds the Letter of Credit Commitment, then in each case the
Borrower shall, upon request made by the Agent, prepay on such date the principal amount of
Loans in an aggregate amount equal to such excess or, in the case where total LC Exposure exceeds
the Letter of Credit Commitment, pay to the Agent an amount in cash equal to such excess to be held
as security for the reimbursement obligations of the Borrower in respect of Letters of Credit
pursuant to a cash collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent, the Borrower and the Issuing Bank.

          In the event of any repayment or prepayment of any Loan (other than a repayment or prepayment
of an ABR Loan prior to the end of the Availability Period with no related Commitment reduction),
the Borrower shall pay all accrued interest on the principal amount repaid or prepaid on the date
of such repayment or prepayment.

          The proceeds of any mandatory prepayments paid to or for the account of the Lenders as
provided herein shall be applied by the Lender entitled thereto on the applicable Indebtedness
hereunder, without any premium or penalty (except for applicable Breakage Fees), first to accrued
interest, fees and expenses payable thereon and then to principal.

 

- 34 -

          2.8 Use of Proceeds. Borrower covenants to the Lenders that Borrower will use the proceeds
borrowed under this Agreement to refinance the indebtedness of Borrower under the Credit Agreement
dated as of January 5, 2007, as amended, between the Borrower and HSBC Bank; for Borrower’s ongoing
working capital and business requirements including Permitted Acquisitions.

          2.9 Special Provisions Governing Libor Loans — Increased Costs. (a) In the event that on
any Libor Interest Determination Date, any Lender shall have determined (which determination shall
be final, conclusive and binding) that:

                    (1) by reason of conditions in the London Interbank Market or of conditions affecting the
position of such Lender in such market occurring after the date hereof, adequate fair means do not
exist for establishing the Libor Rate, or

                    (2) by reason of (i) changes in any applicable law or governmental rule, regulation, guideline
or order (or any written interpretation thereof and including any new law or governmental rule,
regulation, guideline or order but excluding any of the foregoing relating to Taxes referred to in
Section 2.11 of this Agreement), or (ii) other circumstances affecting the Lenders or the London
Interbank Market or the position of the Lenders in such market (such as, but not limited to,
official reserve requirements), the Libor Rate does not represent the effective pricing to the
Lenders for U.S. dollar deposits of comparable amounts for the relevant period due to such
increased costs; then, and in either such event, the Lenders shall on such date (and in any event
as soon as possible after being notified of a new Interest Period) give notice by telephone,
confirmed in writing, to the Borrower or the Borrower and the Agent of such determination.

               (b) Thereafter, the Borrower shall pay to the applicable Lender upon written request therefor,
such additional amounts as such Lender shall reasonably determine to be required to compensate such
Lender for such increased costs. A certificate as to such additional amounts submitted to the
Borrower and the Agent by a Lender shall, absent manifest error, and if prepared on a good faith
reasonable basis, be final, conclusive and binding upon the Borrower and such Lender.

               (c) In lieu of paying to a Lender such additional amounts as required by this Section 2.9, the
Borrower may exercise the following options:

                    (1) If such determination by a Lender relates only to a Libor Loan then being requested by the
Borrower pursuant to the terms hereof, the Borrower may, on such Libor Interest Determination Date
by giving notice by telephone to such Lender, withdraw such request; or

                    (2) The Borrower may, by giving notice by telephone to a Lender require such Lender to make
the Libor Loan then being requested in the form of an ABR Loan or to convert its outstanding Libor
Loan that is so affected into an ABR Loan at the end of the then current Interest Period.

 

- 35 -

          2.10 Required Termination and Repayment of Libor Loans. (a) In the event a Lender shall
have reasonably determined, at any time (which determination shall be final, conclusive and binding
but shall be made only after consultation with the Borrower and the Agent), that the making or
continuation of any or all of the Libor Loans hereunder:

                    (1) has become unlawful by compliance by Lender in good faith with any applicable law,
governmental rule, regulation, guideline or order, or

                    (2) would cause Lender severe hardship as a result of a contingency occurring after the date
hereof which materially and adversely affects the London Interbank Market (such as, but not limited
to disruptions resulting from political or economic events); then, and in either such event, such
Lender shall on such date (and in any event as soon as possible after making such determination)
give telephonic notice to the Borrower and the Agent, confirmed in writing, of such determination,
identifying which of the Libor Loans was so affected.

               (b) The Borrower then shall, upon the termination of the then current Interest Period
applicable to each Libor Loan so affected or, if earlier, when required by law, repay each such
affected Libor Loan, together with all interest accrued thereon.

               (c) In lieu of the repayment to the applicable Lender required by Section 2.10(b) of this
Agreement, the Borrower may exercise the following options:

                    (1) If the determination by such Lender relates only to a Libor Loan then being requested by
Borrower pursuant to the terms hereof, the Borrower may, on such date by giving notice by telephone
to such Lender, withdraw such request; or

                    (2) The Borrower may, by Borrower giving notice by telephone to such Lender, require the
Lender to make the Libor Loan then being requested in the form of an ABR Loan, or to convert its
outstanding Libor Loan or Loans that are so affected into an ABR Loan at the end of the then
current Interest Period applicable to each such Libor Loan (or at such earlier time as repayment is
otherwise required to be made pursuant to the terms hereof). Such notice shall pertain only to the
Libor Loan outstanding or to be outstanding during each such affected Interest Period.

          2.11 Taxes. If any Taxes shall be payable, or ruled to be payable, by or to any
Governmental Authority, by, or in respect of any amount owing to, any Lender which has complied
with Section 9.18 of this Agreement, relating to any of the transactions contemplated by this
Agreement (including, but not limited to, execution, delivery, performance, enforcement, or payment
of principal or interest of or under the Notes or the making of any Libor Loan), by reason of any
now existing or hereafter enacted statute, rule, regulation or other determination (excluding any
Taxes imposed on or measured by the net income of any Lender), the Borrower will:

               (a) pay on written request therefor all such Taxes, including interest and penalty, if any,

 

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               (b) promptly furnish the Agent and the Lenders with evidence of any such payment, and

               (c) indemnify and hold the Agent and the Lenders and any holder or holders of the Notes
harmless and indemnified against any liability or liabilities with respect to or in connection with
any such Taxes or the payment thereof or resulting from any delay or omission to pay such Taxes.

Without prejudice to the survival of any other agreement of the Borrower under this Agreement, the
agreement and obligations of the Borrower contained in this Section 2.11 shall survive the
termination of this Agreement.

          2.12 Commitment Fee. For each day during (i) the period beginning on the date of this
Agreement and ending June 30, 2008, (ii) each full calendar quarter thereafter during the term of
this Agreement and (iii) the period beginning on the first day of the calendar quarter containing
the Revolving Credit Maturity Date and ending on the day before the Revolving Credit Maturity Date,
the Borrower shall pay, on demand, following each such calendar quarter or other time period, to
the Agent for the account of each Lender a fee equal to the sum of the Applicable Commitment Fee
Rate times the actual average daily amount by which the Total Commitment on each such day
exceeds the sum of (x) the outstanding amount of Loans and (y) the outstanding amount of the total
LC Exposure of the Lenders multiplied by 1/360.

          2.13 Revolving Loan Commitment Termination and Reduction. (a) Unless previously
terminated, the Commitment shall terminate on the Revolving Credit Maturity Date.

               (b) The Borrower may, at any time by three (3) Business Days prior written notice from the
Borrower to the Agent, state the Borrower’s desire to reduce the Maximum Limit to any amount which
is not less than the aggregate of the then outstanding principal amount of Revolving Loans,
Swingline Loans and the face amount of outstanding undrawn Letters of Credit, if any. Any
reductions of the Maximum Limit shall not be reinstated at any future date and any partial
reduction shall be in the amount of $1,000,000 and in incremental multiples of $1,000,000
thereafter. Two Business Days after receipt of such reduction notice, the obligation of the
Lenders to make Revolving Loans hereunder or purchase participations in Swingline Loans or Letters
of Credit hereunder shall be limited to the Maximum Limit as reduced pursuant to said notice. Any
such reduction of the Commitment shall be accompanied by payment of any applicable Breakage Fees.

          2.14 Payments. All payments of interest, principal, fees and other expenses by the
Borrower under this Agreement unless otherwise specified shall be made in lawful currency of the
United States of America, and in immediately available funds without counterclaim or setoff and
free and clear and without reduction for any present or future income, stamp or other Taxes,
deductions or withholdings, all of which shall be paid by the Borrower for its own account except
as otherwise provided in Section 9.18 of this Agreement. All payments shall be made not later than
12:00 Noon on the due date at the Agent’s office. All payments (unless stated herein otherwise)
shall be applied first to the payment of all fees, expenses and other amounts due to the Lenders
(excluding principal and interest), then to accrued interest, and the balance on account of
outstanding principal; provided, however, that after a Default or an Event

 

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of Default, payments will be applied to the obligations of Borrower to the Lenders as the
applicable Lender determines in its sole discretion.

          2.15 Payments with Respect to Defaulting Lenders. No payments of principal, interest or
fees delivered to the Agent for the account of any Defaulting Lender shall be delivered by the
Agent to such Defaulting Lender. Instead, such payments shall, for so long as such Defaulting
Lender shall be a Defaulting Lender, be held by the Agent, and the Agent is hereby authorized and
directed by all parties hereto to hold such funds in escrow and apply such funds as follows:

               (a) First, if applicable, to any payments due to the Issuing Bank pursuant to Section
2.4(e) of this Agreement or the Agent under Section 2.1(b), Section 2.3 or Section 2.5 of this
Agreement; and

               (b) Second, to Loans required to be made by such Defaulting Lender on any borrowing
date to the extent such Defaulting Lender fails to make such Loans; and

               (c) Third, to the payment of any amount due to the Borrower under Section 2.5(b) of
this Agreement.

Notwithstanding the foregoing, upon the termination of the Commitments and the payment and
performance of all of the Indebtedness and other obligations of the Borrower under this Agreement
(other than those owing to a Defaulting Lender), any funds then held in escrow by the Agent
pursuant to the preceding sentence shall be distributed to each Defaulting Lender, pro rata in
proportion to amounts that would be due to each Defaulting Lender but for the fact that it is a
Defaulting Lender.

          2.16 Upfront Fees. Upon the execution of this Agreement by all of the parties hereto, the
Lenders shall have earned, and the Borrower shall be obligated to pay, an upfront fee in the
aggregate amount of $60,000 (“Upfront Fee”). The Borrower shall pay the Upfront Fee to the Agent
for the account of the Lenders on the date of this Agreement.

          2.17 Agent Fees. The Borrower shall pay to the Agent for its own account the arrangement
and agency fees in the amounts and on the dates previously agreed to by the Borrower and the Agent.

          2.18 Charge to Account. On the date that any principal or interest on the Notes or any
fees or charges payable under this Agreement are due, the Borrower authorizes HSBC Bank to debit
account number 770-804683 of the Borrower maintained with HSBC Bank on such date in an amount equal
to such unpaid principal, interest, fees or charges, as applicable.

          2.19 Substitution of Lender. If (a) the obligation of any Lender to make or maintain Libor
Loans has been suspended pursuant to Section 2.10 of this Agreement when not all Lenders’
obligations to do so have been suspended, (b) any Lender has demanded compensation under Sections
2.9 or 2.10 of this Agreement, or Yield Protection under Section 2.20 of this Agreement or a
payment for a change in Capital Adequacy Regulations under Section 2.21 of this Agreement, in each
case when all Lenders have not done so, (c) any

 

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Lender is a Defaulting Lender or (d) any payment of Taxes by the Borrower is required under
Section 2.11 hereof, the Borrower shall have the right, if no Default then exists, to replace such
Lender (a “Replaced Lender”) with one or more other lenders (each, a “Replacement Lender”)
reasonably acceptable to the Agent, provided that (i) at the time of any replacement pursuant to
this Section 2.19, each Replacement Lender shall enter into one or more Assignment and Assumptions
pursuant to which the Replacement Lender shall acquire the Commitments and outstanding Loans and
other obligations of the Replaced Lender and, in connection therewith, shall pay to the Replaced
Lender in respect thereof an amount equal to the sum of (A) the amount of principal of, and all
accrued interest on, all outstanding Loans of the Replaced Lender, (B) the amount of all accrued,
but theretofore unpaid, fees and expenses, if applicable, owing to the Replaced Lender hereunder
and (C) the amount which would be payable by the Borrower to the Replaced Lender pursuant to
Section 2.7(a)(ii) of this Agreement, if any, if the Borrower prepaid at the time of such
replacement all of the Loans of such Replaced Lender outstanding at such time and (ii) all
obligations of the Borrower under this Agreement and the other Loan Documents then owing to the
Replaced Lender (other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be paid in full by
the Borrower to such Replaced Lender concurrently with such replacement. Upon the execution of the
respective Assignment and Assumption, the payment of amounts referred to in clauses (i) and (ii)
above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the
appropriate Note or Notes executed by the Borrower, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder. The provisions of
this Agreement shall continue to govern the rights and obligations of a Replaced Lender with
respect to any Loans made or any other actions taken by such Replaced Lender while it was a Lender.
Nothing herein shall release any Defaulting Lender from any obligation it may have to the
Borrower, the Agent, the Issuing Bank, Swingline Lender or any other Lender.

          2.20 Yield Protection. If the introduction of any change in, or change in the
interpretation of, after the date of this Agreement, any law or any governmental or quasi
governmental rule, regulation, policy, guideline or directive (whether or not having the force of
law), or any change or modification thereof,

               (a) has the effect of changing the basis of taxation of payments to any Lender in respect of
its Loans or other amounts due it hereunder (excluding income taxes and franchise taxes (imposed in
lieu of income taxes) imposed on the Agent or any Lender as a result of a present or former
connection between the Agent or such Lender and the jurisdiction of the Governmental Authority
imposing such tax or any political subdivision or taxing authority thereof or therein, other than
any such connection arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this Agreement or any other
Loan Document), or

               (b) has the effect of increasing or deeming applicable any reserve, assessment, insurance
charge, special deposit or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender, or

               (c) imposes any other condition the result of which is to increase the cost to any Lender of
making, funding or maintaining loans or reduces any amount receivable by

 

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any Lender in connection with loans, or requires any Lender to make any payment calculated by
reference to the amount of loans held or interest received by it (excluding for such purpose
“Taxes” as to which Section 2.11 shall apply), by an amount reasonably deemed material by such
Lender,

then, within fifteen (15) days of demand by such Lender, the Borrower shall pay such Lender that
portion of such increased expense incurred or reduction in an amount received which such Lender
reasonably determines is attributable to making, funding and maintaining its Loans or its
Commitment.

          2.21 Changes in Capital Adequacy Regulations. If a Lender reasonably determines the amount
of capital required or expected to be maintained by such Lender or any corporation controlling such
Lender is increased as a result of a Change (as defined below), then, within fifteen (15) days of
demand by such Lender, the Borrower shall pay such Lender the amount necessary to compensate for
any shortfall in the rate of return on the portion of such increased capital which such Lender
determines is attributable to this Agreement, its Loans or its obligation to make Loans hereunder
(after taking into account such Lender’s policies as to capital adequacy). As used herein,
“Change” means (a) any change after the date of this Agreement in the Risk Based Capital Guidelines
(as defined below) or (b) any adoption of or change in any other law, governmental or quasi
governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any corporation controlling any Lender.
“Risk Based Capital Guidelines” means (i) the risk based capital guidelines in effect in the United
States of America on the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside the United States
of America implementing the July 1988 report of the Basel Committee on Banking Regulation and
Supervisory Practices Entitled “International Convergence of Capital Measurements and Capital
Standards,” including transition rules, and any amendments to such regulations adopted prior to the
date of this Agreement.

          2.22 Lender Statements; Survival of Indemnity. To the extent reasonably possible, each
Lender shall designate an alternate office, branch or Affiliate with respect to its Libor Loans to
reduce any liability of Borrower to such Lender under Sections 2.9, 2.11, 2.20 and 2.21 of this
Agreement, so long as such designation is not disadvantageous to such Lender in any material
respect. If any amount is due to a Lender under Section 2.9, 2.11, 2.20 or 2.21 of this Agreement,
then such Lender shall deliver a written statement to the Borrower (with a copy to the Agent) as to
the amount due. Such written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall state that amounts determined in accordance with
such procedures are being charged by such Lender to other Borrower with credit facilities similar
to this Agreement and credit characteristics comparable to the Borrower as determined by such
Lender and shall be final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such sections in connection with a Libor Loans shall be
calculated as though each Lender funded such Loans through the purchase of a deposit of the type
and maturity corresponding to the deposit used as a reference in determining the interest rate
applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in any written

 

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statement of any Lender shall be payable on demand after receipt by the Borrower of such written
statement. The obligations of the Borrower under Sections 2.9, 2.20 and 2.21 of this Agreement
shall survive payment of the Indebtedness under this Agreement and termination of this Agreement.
The Borrower shall have no obligation to compensate any Lender with respect to amounts provided in
Sections 2.20 and 2.21 of this Agreement with respect to any period prior to the date which is
ninety (90) days prior to the date such Lender delivers its written statement hereunder requesting
compensation.

          2.23 Expansion Option.

               (a) Request for Increase. Provided there exists no Event of Default, and no Event of Default would
be caused thereby and the Total Commitment has not been previously reduced in accordance with
Section 2.13 hereof, upon notice to the Agent and the Lenders, the Borrower may on the Closing Date
and from time to time thereafter prior to the Revolving Credit Maturity Date request an increase in
the Commitments so long as, after giving effect thereto, the Total Commitment does not exceed
$80,000,000, and no such increase shall result in any increase in the Letter of Credit Sublimit or
the Swingline Sublimit. The Agent may arrange for any such increase to be provided by one or more
Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing Lender”) or by
one or more new banks, financial institutions or other entities (each such new bank, financial
institution or other entity, an “Augmenting Lender”), to increase their existing Commitment or
extend a Commitment, as the case may be; provided that each Augmenting Lender shall
be subject to the reasonable approval of the Agent and the Borrower, and each Increasing Lender and
each Augmenting Lender executes documentation in form and content satisfactory to the Agent to
either become a party to this Agreement or reflect the increase of such Lender’s Commitment under
this Agreement. At the time of sending a notice requesting an increase in the Commitments, the
Agent shall specify the time period within which each Lender is requested to respond which shall in
no event be less than ten (10) Business Days from the date of delivery of such notice to the
Lenders (“Notice Period”).

               (b) Lender Elections to Increase. Each Lender shall notify the Agent within the Notice Period
whether or not it agrees to increase its Commitment and the amount thereof. Any Lender not
responding within such time period shall be deemed to have declined to increase its Commitment (any
Lender declining to increase its Commitment, a “Non-Increasing Lender”).

               (c) Notifications by Agent and Borrower. The Agent shall notify the Borrower and each Lender of
the Lenders’ responses to each request made hereunder. The Agent shall notify the Borrower and the
Lenders of the name of each Augmenting Lender and the applicable Commitment of such Lender.

               (d) Effective Date and Allocations. If the Commitments are increased as provided in this Section,
the Agent and the Borrower shall determine the effective date (“Increase Effective Date”) and the
final allocation of such increase. The Agent shall

 

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promptly notify the Lenders of the final allocation of such increase and the Increase Effective
Date.

               (e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the
Borrower shall deliver to the Agent a certificate dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by an Authorized Officer of Borrower (i) certifying and
attaching the resolutions adopted by Borrower approving or consenting to such increase, and
(ii) certifying that, before and after giving effect to such increase, (A) the representations and
warranties contained in Article IV and the other Loan Documents are true and correct on and as of
the Increase Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Section 2.23, the representations and warranties
contained in Section 4.7 shall be deemed to refer to the most recent statements furnished pursuant
to clauses (a) and (b), respectively, of Section 5.2, and (B) no Event of Default or Default
exists.

               (f) Commitment Adjustments. Each of the parties hereto agrees that the Agent may, in consultation
with Borrower, take any and all actions as may be reasonably necessary to ensure that after giving
effect to any increase in the Commitment pursuant to this Section, the outstanding Loans (if any)
are held by the Lenders with Commitments in accordance with their new Commitment Percentages. This
may be accomplished at the discretion of the Agent: (i) by requiring the outstanding Loans to be
prepaid with the proceeds of new Loans; (ii) by causing the Non-Increasing Lenders to assign
portions of their outstanding Loans to Increasing Lenders and Augmenting Lenders; (iii) by
permitting the Loans outstanding at the time of any increase in the Commitment pursuant to this
Section 2.23 to remain outstanding until the last days of the respective Interest Periods,
therefor, even though the Lenders would hold such Loans other than in accordance with their new
Commitment Percentages; or (iv) by any combination of the foregoing.

ARTICLE III. CONDITIONS TO THE CREDIT

          The Lenders’ agreement to lend, contained in this Agreement, shall be effective only upon
fulfillment of the following conditions at or prior to the Closing Date or such date or time as
specifically provided herein.

          3.1 No Default. (i) There not existing at the time such Loan is to be made any Event of
Default or Default and (ii) such Lender not reasonably believing that any Event of Default or
Default so exists or, if such Loan is made, will occur or exist.

          3.2 Representations and Warranties. (i) Each representation and warranty made in this
Agreement being true and correct in all material respects as of the Closing Date and, except to the
extent updated in a certificate executed by an Authorized Officer of Borrower and received by each
Lender before the time such Loan is to be made, as of such time, (ii) each other representation and
warranty made to any Lender by or on behalf of the Borrower pursuant to any Loan Document before
the time such Loan is to be made being true and correct in all material

 

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respects as of the date thereof, (iii) each financial statement provided to any Lender by or on
behalf of the Borrower pursuant to any Loan Document before the time such Loan is to be made having
fairly presented the financial information it purports to reflect as of the date thereof and (iv)
such Lender not reasonably believing that (A) any such representation or warranty, except to the
extent so updated, was or is other than true and correct in all material respects as of any date or
time of determination of the truth or correctness thereof, (B) any event or condition the
occurrence, non-occurrence, existence or non-existence of which is a subject of any such
representation or warranty would have any Material Adverse Effect or (C) any such financial
statement did not so fairly present such information as of the date thereof.

          3.3 Proceedings. Such Lender being satisfied as to each corporate or other proceeding of
the Borrower or any Subsidiary in connection with any transaction contemplated by this Agreement.

          3.4 Closing Conditions. The receipt by each Lender on the date of this Agreement, or the
Swingline Lender or the Issuing Bank, as appropriate, unless otherwise indicated, of the following,
in form and substance satisfactory to each Lender:

               (a) A Revolving Note payable to the order of such Lender, appropriately completed and duly
executed by the Borrower;

               (b) A request for the Revolving Loan determined by the Agent to meet the requirements for such
a request set forth in Section 2.1 of this Agreement;

               (c) A Swingline Note payable to the order of the Swingline Lender appropriately completed and
duly executed by the Borrower;

               (d) Each of the Guarantors shall have executed and delivered to the Agent a Guaranty.

               (e) Borrower (i) shall have executed and delivered to Agent a security agreement (“Borrower
Security Agreement”) in form and content satisfactory to the Agent granting to the Agent for the
benefit of the Lenders, and granting to HSBC Bank for its benefit as issuer of the IRB Letters of
Credit, security interests (“Borrower Security Interests”) in all of Borrower’s personal property
and fixtures (other than project assets financed with, and which currently secure the Existing
Bonds or IRB Letters of Credit and other than the 15,000 shares of common stock of Tel-Instrument
Electronics Corp. currently owned by Borrower), but including 100% of the issued and outstanding
Equity Interest in each Domestic Subsidiary other than Astronics Air LLC, whether now owned or
hereafter acquired, wherever located, and any and all proceeds thereof (“Borrower Collateral”), as
continuing collateral security for the payment of any and all Indebtedness and liabilities, whether
now existing or hereafter incurred, of (i) the Borrower to the Agent and the Lenders arising under
this Agreement and the Loan Documents and (ii) the Borrower to HSBC Bank arising under the IRB
Letters of Credit or the documents executed and delivered in connection therewith; and hereby
authorizes the Agent to file appropriate financing statements (“Borrower Financing Statements”) to
perfect the Borrower Security Interests, which Borrower Security Interests shall, at the time of
the execution of this

 

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Agreement, be superior to all other liens and security interests in such property except as to
liens and security interests approved by the Agent.

               (f) Each Guarantor (i) shall have executed and delivered to the Agent a security agreement
(together, the “Guarantor Security Agreement”) in form and content satisfactory to the Agent
granting to the Agent for the benefit of the Lenders and granting to HSBC Bank for its benefit as
issuer of the IRB Letters of Credit, security interests (“Guarantor Security Interests”) in all of
Guarantor’s respective personal property and fixtures (other than project assets financed with and
which directly secure the Existing Bonds or IRB Letters of Credit), including 100% of the issued
and outstanding Equity Interest in each Domestic Subsidiary, whether now owned or hereafter
acquired, wherever located, and any and all proceeds thereof (collectively, the “Guarantor
Collateral”), as continuing collateral security for the payment of any and all Indebtedness and
liabilities, whether now existing or hereafter incurred, of the Guarantor to the Agent and the
Lenders arising under its Guaranty and the Loan Documents and of the Guarantor to HSBC Bank arising
under the IRB Letters of Credit or the documents executed and delivered in connection therewith;
and (ii) hereby authorizes the Agent to file appropriate financing statements (together, the
“Guarantor Financing Statements”) to perfect the Guarantor Security Interests, which Guarantor
Security Interests shall, at the time of the execution of this Agreement, be superior to all other
liens and security interests in such property except as to liens and security interests approved by
the Agent.

               (g) An opinion of Hodgson Russ LLP, counsel to the Borrower, addressed to the Agent, each
Lender and counsel to the Agent, and in form and content satisfactory to the Agent as to the
matters referred to in Article IV of this Agreement;

               (h) Evidence that each of the Borrower, the Guarantors and all other Domestic Subsidiaries are
(i) in good standing under the Law of the jurisdiction in which it is organized and (ii) duly
qualified and in good standing as a foreign Person of its type authorized to do business in each
jurisdiction in which such qualification is necessary except where the failure to so qualify would
not have any Material Adverse Effect;

               (i) A copy of the certificate or articles of incorporation or organization, by-laws, operating
or partnership agreement or other charter, organizational or governing document of each of the
Borrower, the Guarantors and all other Domestic Subsidiaries certified by their respective
Secretary, or a Person having functions with respect to it similar to those of the Secretary of a
corporation, to be complete and accurate;

               (j) Evidence of the taking and the continuation in full force and effect of each corporate or
other action of the Borrower and each Guarantor, or any other Person necessary to authorize the
obtaining of all Loans by the Borrower, the execution, delivery and performance of each Loan
Document by each Person other than any Lender and the imposition or creation of each security
interest, mortgage and other lien and encumbrance imposed or created pursuant to any Loan Document;

               (k) Evidence (i) that no asset subject to any mortgage, security interest or other lien or
encumbrance pursuant to any Collateral Document is subject to any other security interest, mortgage
or other lien or encumbrance, except for Permitted Encumbrances,

 

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and (ii) of the making of each recording and filing, and of the taking of each other action,
deemed necessary or desirable by the Agent at the sole option of the Agent to perfect or otherwise
establish, preserve or protect the priority of any such security interest, mortgage or other lien
or encumbrance;

               (l) Evidence that each requirement contained in any Loan Document with respect to insurance is
being met;

               (m) Each additional agreement, instrument and other writing (including, but not limited to,
each agreement, instrument and other writing intended to be filed or recorded with any Governmental
Authority to perfect or otherwise establish, preserve or protect the priority of any security
interest, mortgage or other lien or encumbrance created or imposed pursuant to any Loan Document;
and

               (n) Payment of all costs and expenses incurred as of the Closing Date by the Agent and payable
pursuant to this Agreement, or arrangements for payment satisfactory to the Agent for payment
thereof having been made.

          3.5 Conditions to Subsequent Borrowing and Issuance. The obligation of the appropriate
Lender to make a Loan to Borrower or issue or renew a Letter of Credit (collectively, “Issuance”)
and the right of the Borrower to request a Loan or Issuance after the date of this Agreement shall
each be subject to the further conditions that on the date of the making of such Loan or such
Issuance:

               (a) Each of the conditions listed in Section 3.4 shall have been satisfied or waived in
accordance with this Agreement.

               (b) The following statements shall be true and the Agent shall have received a Request
Certificate signed by an Authorized Officer of Borrower dated the date of such Loan or Issuance
stating that:

                    (i) there does not exist at the time such Loan or Issuance is to be made any Event of Default,
Default or Material Adverse Effect; and

                    (ii) each representation and warranty made in this Agreement and any Loan Document to which
the Borrower is a party and in any certificate, document or financial or other statement furnished
at any time thereunder is true, correct and complete in all material respects with the same effect
as though such representations and warranties had been made as of the time such Loan or Issuance is
to be made, except to the extent any such representation and warranty relates solely to an earlier
date, or to the extent any such representation and warranty has been updated in a certificate
executed by an Authorized Officer and received by the Agent before the time such Loan or Issuance
is to be made.

               (c) The Agent shall have received such other approvals, opinions or documents as the Agent may
reasonably, in both time and scope, request, and all legal matters incident to such Loan or
Issuance shall be satisfactory to counsel to the Agent.

 

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          3.6 Subsequent Extensions of Credit. Subsequent to the satisfaction of the conditions set
forth herein, each request to the Agent for a Revolving Loan, Swingline Loan or Letter of Credit
after the date hereof shall constitute confirmation by the Borrower of all the factual matters set
forth in the form of Compliance Certificate as of the date of such request in the same manner as if
a written Compliance Certificate had been delivered, and such factual matters shall be true in all
material respects on the date such Revolving Loan, Swingline Loan or Letter of Credit is made or
issued. No Revolving Loan, Swingline Loan or Letter of Credit shall be made if such certification
is not made without qualification.

ARTICLE IV. REPRESENTATIONS AND WARRANTIES

          The Borrower makes the following representations and warranties:

          4.1 Good Standing and Authority. Borrower, each Guarantor and each other Subsidiary is a
corporation, duly organized, validly existing, and in good standing under the laws of the state of
its incorporation or other place of organization; has powers and authority to transact the business
in which it is engaged; is duly licensed or qualified and in good standing in each jurisdiction in
which the conduct of such business requires such licensing or such qualification except where
failure to qualify would not reasonably be expected to have a Material Adverse Effect; and has all
necessary power and authority to enter this Agreement and to execute, deliver and perform this
Agreement, any Note and any other document executed in connection with this Agreement, all of which
have been duly authorized by all proper and necessary corporate and shareholder action.

          4.2 Valid and Binding Obligation. This Agreement, the Notes and any other document
executed in connection herewith have been duly executed and delivered by the Borrower and
constitute the legal, valid and binding obligations of the Borrower and each Guarantor, as the case
may be, enforceable against the Borrower or such Guarantor, as the case may be, in accordance with
their respective terms.

          4.3 Good Title. Each of the Borrower, each Guarantor and each other Subsidiary has good
and marketable title to all of its assets, none of which is subject to any mortgage, indenture,
pledge, lien, conditional sale contract, security interest, encumbrance, claim, trust or charge
except Permitted Encumbrances.

          4.4 No Pending Litigation. There are not any actions, suits, proceedings (whether or not
purportedly on behalf of the Borrower or any Guarantor or any other Subsidiary) or investigations
pending or, to the knowledge of the Borrower, threatened against the Borrower, any Guarantor or any
other Subsidiary or any basis therefore which reasonably could be expected to have a Material
Adverse Effect, or which question the validity of this Agreement, the Notes or other documents
required by this Agreement, or any action taken or to be taken pursuant to any of the foregoing.

          4.5 No Consent or Filing. No consent, license, approval or authorization of, or
registration, declaration or filing with, any court, Governmental Authority or other Person is
required on the part of the Borrower or any Subsidiary in connection with the valid execution,

 

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delivery or performance of this Agreement, the Notes or other documents required by this Agreement
or in connection with any of the transactions contemplated thereby other than the filing of
financing statements in connection with the Borrower Security Agreement and the Guarantor Security
Agreement.

          4.6 No Violations. Neither the Borrower nor any Guarantor or other Subsidiary is in
violation of any term of its certificate of incorporation or by-laws or other organizational
documents, or of any mortgage, borrowing agreement or other instrument or agreement pertaining to
Indebtedness for borrowed money which might reasonably be expected to result in a Material Adverse
Effect, and will not result in the creation of any Lien upon any properties or assets except in
favor of the Agent and the Lenders. Neither the Borrower nor any Guarantors or other Subsidiary is
in violation of any term of any other indenture, instrument, or agreement to which it is a party or
by which it may be bound, resulting, or which might reasonably be expected to result, in a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in violation of any order, writ,
judgment, injunction or decree of any court of competent jurisdiction or of any statute, rule or
regulation of any competent governmental authority which might reasonably be expected to result in
a Material Adverse Effect. The execution and delivery of this Agreement, the Notes and other
documents required by this Agreement and the performance of all of the same is and will be in
compliance with the foregoing and will not result in any violation or result in the creation of any
mortgage, lien, security interest, charge or encumbrance upon any properties or assets except in
favor of the Agent and the Lenders. There exists no fact or circumstance not disclosed in this
Agreement, in the documents furnished in connection herewith, the Borrower’s filings under the
Exchange Act, or in the financial projections furnished to the Lenders which has, or could
reasonably be expected to have, a Material Adverse Effect, except those facts and circumstances
which generally affect all Persons engaged in the Borrower’s lines of business.

          4.7 Financial Statements. The Borrower has furnished to the Lenders Consolidated financial
statements showing the Borrower’s and all Subsidiaries’ financial condition as of December 31, 2007
and the results of operations and their cash flows for the fiscal year then ended audited by Ernst
& Young LLP, which statements fairly present their Consolidated financial position and the results
of their operations as of the date and for the period referred to and have been prepared in
accordance with GAAP consistently applied throughout the interval involved. Since the date of such
financial statements to the date of execution hereof, there have not been any materially adverse
changes in the Consolidated financial condition of the Borrower and the Subsidiaries from that
disclosed in such financial statements. None of the property or assets shown in the Consolidated
financial statements delivered to the Lenders has been materially adversely affected as the result
of any fire, explosion, accident, flood, drought, storm, earthquake, condemnation, requisition,
statutory or regulatory change, act of God, or act of public enemy or other casualty, whether or
not insured.

          4.8 Tax Returns. The Borrower, the Guarantors and any other Domestic Subsidiaries have
duly filed all federal and other tax returns required to be filed except where an extension has
been obtained and has duly paid all taxes required by such returns through its fiscal year ending
December 31, 2007. Federal income tax liability of the Borrower, the Guarantors and the other
Domestic Subsidiaries has been reviewed by the United States Internal Revenue

 

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Service through its fiscal year ending December 31, 2004, and the Borrower has not received any
assessments by the Internal Revenue Service or other taxing authority for additional unpaid taxes.

          4.9 Federal Regulations. Neither the Borrower nor any Guarantor or any other Subsidiary is
engaged principally, or as one of its important activities, in the business of extending or
arranging for the extension of credit for the purpose of purchasing or carrying “margin stock” (as
defined in Regulation U issued by the Board of Governors of the Federal Reserve System). Except
for the stock owned by the Borrower and described on Schedule 6.3, neither the Borrower nor any
Guarantor or other Subsidiary owns nor intends to carry or purchase any such “margin stock”, and
the Borrower will not use the proceeds of any Loan or Letters of Credit to purchase or carry (or
refinance any borrowing the proceeds of which were used to purchase or carry) any such “margin
stock”. Neither the Borrower nor any Guarantor or other Subsidiary is subject to regulation with
respect to the incurrence of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act as amended, the Federal Power Act, as amended, the Energy Policy Act of
2005, as amended, or any applicable state public utility law.

          4.10 Compliance with ERISA. Compliance by the Borrower with the provisions hereof and in
the incurrence of the Indebtedness under this Agreement will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Code. The Borrower and their Subsidiaries
(i) have fulfilled all obligations under minimum funding standards of ERISA and the Code with
respect to each Plan, (ii) have satisfied all respective contribution obligations in respect of
each Multiemployer Plan and each Multiple Employer Plan, (iii) are in compliance with all other
applicable provisions of ERISA and the Code with respect to each Plan, each Multiemployer Plan and
each Multiple Employer Plan, except to the extent failure to comply has not had, and will not have,
a Material Adverse Effect and (iv) have not incurred any liability under the Title IV of ERISA to
the PBGC with respect to any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated. There has been
no Reportable Event with respect to any Plan or trust created thereunder or with respect to any
Multiemployer Plan or Multiple Employer Plan, which Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer Plan and give rise to a material
liability of the Borrower or any ERISA Affiliate in respect thereof. Neither Borrower nor any
ERISA Affiliate is at the date of this Agreement, or has been at any time within the two years
preceding the date of this Agreement, an employer required to contribute to any Multiemployer Plan
or Multiple Employer Plan, or a “contributing sponsor” (as such term is defined in Section 4001 of
ERISA) in any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any ERISA
Affiliate has any contingent liability with respect to any post-retirement “welfare benefit plan”
(as such term is defined in ERISA) except as has been disclosed in accordance with GAAP in the
financial statements delivered to the Lenders in accordance with this Agreement.

          4.11 Subsidiaries; Affiliates. The Borrower has no (a) Subsidiaries except (i) as listed
on Schedule 4.11 to this Agreement or (b) Affiliates, other than its Subsidiaries.

          4.12 Compliance. The present and anticipated conduct of the business and operations of the
Borrower and each Subsidiary and the present and anticipated ownership and

 

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use of each asset of the Borrower and each Subsidiary are in compliance in each material respect
with each applicable statute, regulation and other law (including, but not limited to, the
Environmental Protection Act, the Occupational Health and Safety Act, the Comprehensive
Environmental Response, Compensation and Liability Act and the Resource Conservation and Recovery
Act), except where noncompliance would not result in a Material Adverse Effect. Each
authorization, approval, permit, consent, franchise and license from, each registration and filing
with, each declaration, report and notice to, and each other act by or relating to, any Person
necessary for the present or anticipated conduct of the business or operations of the Borrower and
each Subsidiary or for the present or anticipated ownership or use of any material asset of the
Borrower and each Subsidiary has been duly obtained, made, given or done, and is in full force and
effect, except where failure to so obtain, make, give or do would not have a Material Adverse
Effect.

          4.13 Fiscal Year. The fiscal year of the Borrower is the year ending December 31.

          4.14 Default. There does not exist any Default or Event of Default as of the Closing Date
nor will any Default or Event of Default begin to exist immediately after the execution and
delivery hereof.

          4.15 Indebtedness for Borrowed Money. The Borrower and its Subsidiaries have no
Indebtedness arising from the borrowing of any money, except for Indebtedness (a) to the Lenders
under this Agreement, (b) outstanding on the date of this Agreement pursuant to any lease, loan or
credit facility fully and accurately described in Schedule 6.2 to this Agreement, (c) incurred with
the prior written consent of the Agent, and (d) owing to the Borrower or a Subsidiary.

          4.16 Securities. Each outstanding share of stock, debenture, bond, note and other security
of the Borrower has been validly issued in full compliance with each statute, regulation and other
law, and, if a share of stock, is fully paid and nonassessable.

          4.17 Environmental Matters. (a) No above ground or underground storage tanks
containing Hazardous Substances are or have been located on any property owned, leased or operated
by the Borrower or any Subsidiary, except for storage tanks containing diesel fuel, gasoline or
waste oil, which tanks are in material compliance with all applicable laws, rules and regulations.

               (b) No property owned, leased or operated by the Borrower or any Subsidiary is or has been
used for the storage or Disposal of any Hazardous Substance, except in the ordinary course of its
business in material compliance with applicable Environmental Laws, or for the treatment of
Hazardous Substances.

               (c) No unpermitted Release of a Hazardous Substance has occurred or is threatened on, at, from
or near any property owned, leased or operated by the Borrower or any Subsidiary, except where such
unpermitted Release does not have, and could not reasonably be expected to have, a Material Adverse
Effect.

 

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               (d) Neither the Borrower nor any Subsidiary is subject to any existing, pending or threatened
suit or claim, notice of material violation or any investigation under any Environmental Law, that
in any such case could reasonably be expected to result in a Material Adverse Effect.

               (e) The Borrower and each Subsidiary are in compliance with all Environmental Laws, except
where noncompliance does not have, and could not be reasonably expected to have, a Material Adverse
Effect.

               (f) All Environmental Permits have been obtained and are in full force and effect, except
where the failure to obtain such Environmental Permit is not likely to have a Material Adverse
Effect.

               (g) There are no agreements, consent orders, decrees, judgment, license or permit conditions
or other orders or directives of any federal, state or local court, governmental agency or
authority relating to the past, present or future ownership, use, operation, sale, transfer or
conveyance of any property owned, leased or operated by the Borrower or any Subsidiary which
required any material change in condition or any work, repairs, construction, containment, clean
up, investigation, study, removal or other remedial action or material capital expenditures with
respect to such property.

          4.18 Burdensome Contracts; Labor Relations. Neither the Borrower nor any Subsidiary (a) is
subject to any burdensome contract, agreement, corporate restriction, judgment, decree or order,
(b) is a party to any labor dispute affecting any bargaining unit or other group of employees
generally, (c) is subject to any strike, slowdown, walk out or other concerted interruptions of
operations by employees of the Borrower or any Subsidiary, whether or not relating to any labor
contracts, (d) is subject to any pending or, to the knowledge of the Borrower, threatened, unfair
labor practice complaint, before the National Labor Relations Board, (e) is subject to any pending
or, to the knowledge of the Borrower, threatened grievance or arbitration proceeding arising out of
or under any collective bargaining agreement, (f) is subject to any significant pending or, to the
knowledge of the Borrower, threatened strike, labor dispute, slowdown or stoppage, or (g) is, to
the knowledge of the Borrower, involved or subject to any union representation organizing or
certification matter with respect to the employees of the Borrower or any Subsidiary, except (with
respect to any matter specified in any of the above clauses) for such matters as, individually or
in the aggregate, which have not had or will not have a Material Adverse Effect.

          4.19 Liens. Once executed and delivered, each of the Collateral Documents creates, as
security for the Indebtedness of the Borrower to the Lenders or the obligations for the Guarantors
under their respective Guaranty, a valid and enforceable, and upon making the filings and
recordings referenced in the next sentence, perfected Lien on all of the Collateral subject thereto
from time to time, in favor of the Agent for the benefit of the Lenders, superior to and prior to
the rights of all third persons and subject to no other Liens, except that the Collateral under the
Collateral Documents may be subject to Permitted Encumbrances. No filings or recordings are
required in order to perfect the Liens created under any Collateral Document except for filings or
recordings required in connection with any such Collateral Document that

 

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shall have been made, or for which satisfactory arrangements have been made, upon or prior to the
execution and delivery thereof. All recording, stamp, intangible or other similar taxes required
to be paid by any Person under applicable legal requirements or other laws applicable to the
property encumbered by the Collateral Documents in connection with the execution, delivery,
recordation, filing, registration, perfection or enforcement thereof have been paid.

          4.20 Intellectual Property. Each of the Borrower, the Guarantors and other Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, service marks, copyrights, technology,
know-how and process necessary for the conduct of its business as currently conducted
(collectively, the “Intellectual Property”) except for those the failure to own or license which
has not had or will not have a Material Adverse Effect. No claim has been asserted and is pending
by any person challenging or questioning the use by the Borrower, any Guarantor or any other
Subsidiaries of any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does Borrower, any Guarantor or any other Subsidiaries know of any valid
basis for any such claim, to the knowledge of the Borrower the use of such Intellectual Property by
the Borrower, any Guarantors and any other Subsidiaries does not infringe on the rights of any
Person, and, to the knowledge of the Borrower, no such Intellectual Property of the Borrower, any
Guarantor and any other Subsidiaries has been infringed, misappropriated or diluted by any other
Person except for such claims, infringements, misappropriation and dissolution that, in the
aggregate, has not had or will not have a Material Adverse Effect.

          4.21 Anti-Terrorism Laws.

               (a) General. Neither the Borrower, any Guarantor, nor any of their Subsidiaries or Affiliates, is
in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.

               (b) Executive Order No. 13224. Neither the Borrower, any Guarantor nor any of their Subsidiaries
or Affiliates or their respective agents acting or benefiting in any capacity in connection with
the Loans or other transactions hereunder, is any of the following (each a “Blocked Person”):

                    (1) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;

                    (2) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;

                    (3) a Person or entity with which any bank is prohibited from dealing or otherwise engaging in
any transaction by any Anti-Terrorism Law;

                    (4) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order No. 13224;

 

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                    (5) a Person or entity that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control at its official
website or any replacement website or other replacement official publication of such list; or

                    (6) a Person or entity who is affiliated or associated with a Person or entity listed above.

          Neither the Borrower, any Guarantor nor any other Subsidiary or Affiliate of the Borrower or,
to the knowledge of the Borrower, any of its agents acting in any capacity in connection with the
Loans or other transactions hereunder (i) conducts any business or engages in making or receiving
any contributions of funds, goods or services to or for the benefit of any Blocked Person, or
(ii) deals in, or otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order No. 13224.

          4.22 Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document, the Confidential Information Materials or any other certificate
furnished by or on behalf of Borrower or the Guarantors to the Agent or the Lenders, or any of
them, for use in connection with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information or certificate was so furnished
(or, in the case of the Confidential Information Materials, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading in any material respect. The financial
statements contained in the materials referenced above, in conformity with GAAP, require management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. In addition, the projections and
pro forma financial information contained in the materials referenced above are not guarantees of
future performance and are subject to factors, risks and uncertainties, the impact or occurrence of
which could cause actual results to differ materially from the expected results described in the
projections and pro forma financial information.

          4.23 Solvency. The Borrower has received consideration that is the reasonable equivalent
value of the obligations and liabilities that the Borrower has incurred to the Agent, the Issuing
Bank and the Lenders under the Loan Documents. The Borrower now has capital sufficient to carry on
its business and transactions and all business and transactions in which it is about to engage and
is now solvent and able to pay its debts as they mature and the Borrower, as of the Closing Date,
owns property having a value, both at fair valuation and at present fair salable value, greater
than the amount required to pay the Borrower’s debts; and the Borrower is not entering into the
Loan Documents with the intent to hinder, delay or defraud its creditors. For purposes of this
Section, “debt” means any liability on a claim, and “claim” means (y) right to
payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or
(z) right to an equitable remedy for breach of performance if such breach gives rise to a payment,

 

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whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.

ARTICLE V. AFFIRMATIVE COVENANTS

          As long as this Agreement is in effect and until such time as the Commitments have been
terminated, no Notes remain outstanding and the Loans, together with all interest, fees, charges
and expenses under the Loan Documents have been paid in full, the Borrower will:

          5.1 Payments. Duly and punctually pay the principal of and interest on all Indebtedness
and all fees incurred by Borrower pursuant to this Agreement in the manner set forth in this
Agreement.

          5.2 Financial Reporting Requirements. Furnish to the Agent and each Lender (a) within
forty-five (45) days after the end of each quarter of each of its fiscal years, unaudited financial
statements of the Borrower and its Subsidiaries, which statements shall consist of Consolidated and
summary consolidating balance sheets as of the end of such quarter, and related statements of
income, covering the period from the end of the Borrower’s immediately preceding fiscal year to the
end of such quarter certified to be correct by the President or Vice-President-Finance and
Treasurer of the Borrower, who shall also furnish to the Agent and each Lender a duly completed and
executed Compliance Certificate; (b) within ninety (90) days after the end of each of its fiscal
years, audited Consolidated financial statements of the Borrower and its Subsidiaries, which shall
consist of a Consolidated and consolidating balance sheet as of the end of such year and the
related statements of income, retained earnings and cash flows covering such fiscal year, audited
by and together with an opinion of, in the case of such Consolidated financial statements, Ernst &
Young LLP, or other independent certified public accountants satisfactory to the Agent, together
with a Compliance Certificate from the President or Vice President-Finance and Treasurer of the
Borrower; (c) promptly, after their preparations copies of all such proxy statements, financial
statements and reports which the Borrower sends to its stockholders, and copies of all regular,
periodic and special reports, as well as all registration statements, which the Borrower files with
the Securities and Exchange Commission; (d) promptly after the filing thereof with the Pension
Benefit Guaranty Corporation, a copy of each annual report filed with respect to each Plan; (e) by
the end of each of its fiscal years, a forecast of the statements of income and cash flows as of
and through the close of its following fiscal year of the Borrower and the Subsidiaries; and
(f) such additional information, reports or statements (including, without limitation, a duly
completed and executed Compliance Certificate) as the Agent may from time to time reasonably
request regarding the financial and business affairs of the Borrower and the Subsidiaries.

          5.3 Notices. Promptly notify the Agent in writing of (a) any pending or future audits of
the Borrower’s or any Guarantor’s or other Subsidiary’s federal income tax return by the Internal
Revenue Service as soon as the Borrower has knowledge thereof, and the results of each such audit
after its completion if such results could reasonably be expected to have a Material Adverse
Effect; and (b) any default by the Borrower or any Guarantor or other Subsidiary in the performance
of, or any modifications of, any of the terms or conditions contained in this Agreement, any other
agreement, mortgage, indenture or instrument to which

 

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the Borrower or any Guarantor or other Subsidiary is a party or which is binding upon the Borrower
or any Guarantor or other Subsidiary and of any default by the Borrower or any Guarantor or other
Subsidiary in the payment of any of its Indebtedness. The Borrower shall not, however, be required
to so notify the Agent of potential or actual defaults in payment of any such Indebtedness or the
performance under, or of modifications of terms or provisions of, those documents or agreements
pertaining to its transactions in the ordinary course of business which do not have a Material
Adverse Effect or constitute a Default or an Event of Default.

          5.4 Taxes. Promptly pay and discharge all of its taxes, assessments and other governmental
charges (including any charged or assessed on the issuance of the Notes) prior to the date on which
penalties are attached thereto, establish adequate reserves for the payment of such taxes,
assessments and governmental charges and make all required withholding and other tax deposits;
provided, however, that nothing herein contained shall be interpreted to require the payment of any
tax, assessment or charge so long as its validity is being contested in good faith and by
appropriate proceedings diligently conducted.

          5.5 Insurance. (a) Keep, and cause each Subsidiary to keep, all its property so insurable
insured at all times with responsible insurance carriers against fire, theft and other risks in
coverage, form and amount consistent with industry standards and reasonably satisfactory to the
Agent and the Lenders; (b) keep, and cause each Subsidiary to keep, adequately insured at all times
in reasonable amounts with responsible insurance carriers against liability on account of damage to
persons or property and under all applicable worker’s compensation laws; (c) promptly deliver to
the Agent certificates of insurance, with appropriate endorsements designating the Agent as a
lender’s loss payee and additional insured as requested by the Agent; and (d) cause each such
insurance policy to contain a thirty (30) day notice of cancellation or material change in coverage
provision satisfactory to the Agent.

          5.6 Litigation. Promptly notify the Agent in writing as soon as the Borrower has knowledge
thereof, of the institution or filing of any litigation, action, suit, claim, counterclaim, or
administrative proceeding against, or investigation of, the Borrower or any Subsidiary to which the
Borrower or any Subsidiary is a party by or before any regulatory body or governmental agency (a)
the outcome of which could reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to materially and adversely affect the Borrower’s ability to fulfill its
obligations hereunder or which involves more than $3,500,000 unless adequately covered by
insurance, or (b) which questions the validity of this Agreement, the Notes or any action taken or
to be taken pursuant to any of the foregoing; and furnish or cause to be furnished to the Agent
such information regarding the same as the Agent may request.

          5.7 Judgments. Promptly notify the Agent in writing as soon as the Borrower has knowledge
thereof, of any judgment, order or award of any court, agency or other governmental agency or any
arbitrator, (a) the outcome of which could reasonably be expected to have a Material Adverse Effect
or could reasonably be expected to materially and adversely affect the Borrower’s ability to
fulfill its obligations hereunder or which involves more than $3,500,000 unless adequately covered
by insurance, or (b) renders invalid this Agreement, any Note or any action taken or to be taken
pursuant to any of the foregoing, and furnish or cause to be furnished to the Agent such
information regarding the same as the Agent may request.

 

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          5.8 Corporate Standing. Maintain, and cause each Subsidiary to maintain, its corporate,
partnership or limited liability company existence in good standing and remain or become duly
licensed or qualified and in good standing in each jurisdiction in which the conduct of its
business requires such qualification or licensing, except where the failure to be so licensed or
qualified and in good standing would not have a Material Adverse Effect; provided, however, nothing
in this Section shall be deemed to prohibit any transaction permitted by Section 6.7 of this
Agreement.

          5.9 Books and Records. Keep proper books and records in accordance with generally accepted
accounting principles consistently applied and notify the Agent promptly in writing of any proposed
change in the location at which such books and records are maintained.

          5.10 Compliance with Law. Comply, and cause each Subsidiary to comply, with all applicable
laws and governmental rules and regulations, except where the failure to so comply does not have,
and would not be reasonably expected to have, a Material Adverse Effect.

          5.11 Pension Reports. With respect to each Plan, the Borrower will furnish the following
to the Agent as soon as possible and in any event within thirty days after the Borrower knows or
has reason to know of (a) the occurrence of any Reportable Event with respect to such Plan or (b)
the institution of proceedings or the taking of any other action by the Pension Benefit Guaranty
Corporation or the Borrower or any Subsidiary to terminate, withdraw or partially withdraw from any
Plan and, with respect to a Multiemployer Plan, the reorganization (as defined in Section 4241 of
ERISA) or insolvency (as defined in Section 4245 of ERISA) of such Plan, and in addition to such
notice, deliver to the Agent whichever of the following may be applicable: (i) a certificate of the
President or Vice President-Finance and Treasurer of the Borrower setting forth details known to
the Borrower as to such Reportable Event, together with a copy of any notice thereof that is
required to be filed with Pension Benefit Guaranty Corporation, or (ii) any notice delivered by the
Pension Benefit Guaranty Corporation evidencing its intent to institute such proceedings or any
notice to Pension Benefit Guaranty Corporation that such Plan is to be terminated, as the case may
be.

          5.12 Inspections. Upon request of the Agent, permit any officer, employee, accountant,
attorney or other agent of the Agent upon reasonable notice and during regular business hours to
(a) visit and inspect each of the premises of the Borrower and each Subsidiary, (b) examine, audit,
copy and make extracts from each accounting record of the Borrower, and (c) discuss the business,
operations, assets, affairs and condition (financial or other) of the Borrower and each Subsidiary
with a responsible officer of the Borrower and with the independent accountants of the Borrower.

          5.13 Environmental Compliance. (a) Comply with all Environmental Laws except where
the failure to comply could not reasonably be expected to have a Material Adverse Effect.

               (b) Promptly notify the Agent in the event of the Disposal of any Hazardous Substance at any
property owned, leased or operated by the Borrower or any Subsidiary, or in the event of any
Release, or threatened Release, of a Hazardous Substance, on, at or from any such Property, except
when such Disposal or Release is in the ordinary course of

 

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the Borrower’s or such Subsidiary’s business and in compliance with all applicable
Environmental Laws or could not reasonably be expected to have a Material Adverse Effect.

               (c) Deliver promptly to the Agent (i) copies of any non-routine, material documents received
from the United States Environmental Protection Agency or any state, county or municipal
environmental or health agency concerning the Borrower’s or any Guarantor’s operations except
documents of general applicability; and (ii) copies of any documents submitted by the Borrower or
any Subsidiary to the United States Environmental Protection Agency or any state, county or
municipal environmental or health agency concerning its operations, except submissions in the
ordinary course of business.

          5.14 Certain Subsidiaries to Become Guarantors. In the event that at any time after the
Closing Date Borrower creates, holds, acquires or at any time has any Subsidiary (other than a
Non-Material Subsidiary and a Foreign Subsidiary to which Section 5.15(b) applies) that is not a
Guarantor, Borrower will immediately, but in any event within five (5) Business Days, notify the
Agent in writing of such event, identifying the Subsidiary in question and referring specifically
to the rights of the Agent and the Lenders under this Section. Borrower will, within fifteen (15)
days following request therefor from the Agent (who may give such request on its own initiative or
upon request by the Required Lenders), cause such Subsidiary to deliver to the Agent, in sufficient
quantities for the Lenders, (i) a Guaranty duly executed by such Subsidiary, and (ii) if such
Subsidiary is a corporation, resolutions of the Board of Directors of such Subsidiary, certified by
the Secretary or an Assistant Secretary of such Subsidiary as duly adopted and in full force and
effect, authorizing the execution and delivery of such Guaranty, or if such Subsidiary is not a
corporation, such other evidence of the authority of such Subsidiary to execute such a Guaranty as
the Agent may reasonably request. If any Subsidiary is required to provide a security agreement,
whether pursuant to Section 5.15 or otherwise, such Subsidiary shall also be subject to the
requirements of this Section 5.14.

          5.15 Additional Security; Further Assurances.

               (a) Additional Security. Subject to subpart (b) below, if Borrower or any Domestic Subsidiary
(other than a Non-Material Subsidiary and other than Astronics Air LLC with respect to its existing
ownership of a corporate aircraft) acquires, owns or holds any personal or real property (other
than the vacant land currently owned by LSI and commonly known as 0 Commerce Way or VL Commerce
Way, East Aurora, New York and consisting of SBL Numbers 175.10-1-3.111 and 175.11-1-9.1) that is
not at the time included in the Collateral, the Borrower will promptly notify the Agent in writing
of such event, identifying the property or interests in question and referring specifically to the
rights of the Agent and the Lenders under this Section, and Borrower will cause such Domestic
Subsidiary to, within 30 days following a request by the Agent (or such longer period as the Agent
shall deem reasonable under the circumstances), grant to the Agent for the benefit of the Lenders
and grant to HSBC Bank as issuer of the IRB Letters of Credit, on a pari passu basis, a Lien on
such personal or real property pursuant to the terms of such security agreements, mortgages
assignments or other documents as the Agent deems appropriate (collectively, the “Additional
Security Document”). Furthermore, the Borrower shall cause to be delivered to the Agent and HSBC
Bank such resolutions and other related documents as may be reasonably requested by the Agent and
HSBC Bank in connection

 

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with the execution, delivery and recording of any such Additional Security Document, all of which
documents shall be in form and substance reasonably satisfactory the Agent and HSBC Bank.

               (b) Foreign Subsidiaries. In the event that Borrower or any existing Subsidiary acquires any other
Foreign Subsidiary, or any Foreign Subsidiary which is a Non-Material Subsidiary ceases to be a
Non-Material Subsidiary, or any existing Foreign Subsidiary whose Equity Interests are not pledged
as of the date hereof becomes a more material Subsidiary, the Borrower will, or will cause such
existing Subsidiary to, if so requested by the Agent, pledge to the Agent for the benefit of the
Lenders and pledge to HSBC Bank as issuer of the IRB Letters of Credit, on a pari passu basis, 65%
of the Equity Interests in any such Foreign Subsidiary.

               (c) Further Assurances. Borrower will, and will cause each Subsidiary, at the expense of
Borrower, to make, execute, endorse, acknowledge, file and/or deliver to the Agent from time to
time such conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, and other assurances or instruments and take such further steps relating to any
Collateral covered by any of the Loan Documents as the Agent may reasonably require. If at any
time the Agent determines, based on applicable law, that all applicable taxes (including, without
limitation, mortgage recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall
promptly pay the same upon demand.

          5.16 Accounting; Reserves; Tax Returns. Cause each of the Borrower and any Subsidiary at
all times to (i) maintain a system of accounting established and administered in material
accordance with GAAP, and (ii) file each tax return it is required to file except where the failure
to so file will not and has not had a Material Adverse Effect.

          5.17 Liens and Encumbrances. Promptly upon acquiring knowledge or reason to know in the
ordinary course of its business that any asset of Borrower or any Subsidiary has or may become
subject to any Lien other than Permitted Encumbrances, provide to each Lender a certificate
executed by an Authorized Officer of Borrower and specifying the nature of such Lien and what
action Borrower has taken, is taking or proposes to take with respect thereto.

          5.18 Defaults and Material Adverse Effects. Promptly upon acquiring knowledge or reason to
know in the ordinary course of its business of the occurrence or existence of (i) any Event of
Default or Default or (ii) any event or condition that has had or will have any Material Adverse
Effect, provide to each Lender a certificate executed by an Authorized Officer and specifying the
nature of such Event of Default, Default, event or condition, the date of

 

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occurrence or period of existence thereof and what action the Borrower has taken, is taking or
proposes to take with respect thereto.

          5.19 Good Repair. The Borrower will, and will cause each of its Subsidiaries to, ensure
that its material properties and equipment used or useful in its business in whomsoever’s
possession they may be, are kept in good repair, working order and condition, normal wear and tear
excepted, and that from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments and improvements
thereto, to the extent and in the manner customary for companies in similar businesses.

          5.20 Further Actions. Promptly upon the request of the Agent, execute and deliver or
cause to be executed and delivered each writing, and take or cause to be taken each other action,
that the Agent shall deem necessary or desirable at the sole option of the Agent to perfect or
otherwise preserve or protect the priority of any security interest, mortgage or other lien or
encumbrance imposed or created pursuant to any Loan Document or to correct any error in any Loan
Document.

ARTICLE VI. NEGATIVE COVENANTS

          As long as this Agreement is in effect and until such time as the Commitments have been
terminated, no Notes remain outstanding and the Loans, together with all interest, fees, charges
and expenses under the Loan Documents have been paid in full:

          6.1 Indebtedness. Neither the Borrower nor any Subsidiary will create, incur, assume or
suffer to exist any Indebtedness except (a) to the Agent and the Lenders, (b) as set forth on
Schedule 6.2 attached hereto, (c) Indebtedness owed by a Subsidiary to the Borrower or to another
Subsidiary or by the Borrower to a Subsidiary, in each case made in the ordinary course of business
including, without limitation, in connection with a Permitted Acquisition, (d) Indebtedness not in
excess of $3,000,000 outstanding at any one time incurred for Capital Leases of fixed assets or
fixed asset purchases, (e) unsecured Indebtedness that is subordinated to the Indebtedness of the
Borrower to the Lenders under this Agreement in a manner reasonably satisfactory to the Agent and
(f) any other Indebtedness not exceeding $3,500,000 outstanding at any one time; provided that
Borrower or any Subsidiary may exchange, refinance or refund any such Indebtedness described in
clause (b) hereof if the aggregate principal amount thereof (or Capitalized Lease Obligation in the
case of a Capital Lease or present value, based on the implicit rate, in the case of a Synthetic
Lease) is not increased (other than in connection with the capitalization of interest).

          6.2 Encumbrances. Neither the Borrower nor any Subsidiary will create, incur, assume or
suffer to exist any mortgage, lien, security interest, pledge or other encumbrance on any of its
property or assets, whether now owned or hereafter owned or acquired, except in favor of the Agent
or a trustee for the benefit of the Agent and except for the following permitted encumbrances
(collectively, the “Permitted Encumbrances”): (a) any lease of any asset as a lessor in the
ordinary course of its business and without interference with the conduct of its business or
operations, (b) any pledge or deposit made by the Borrower or any

 

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Subsidiary in the ordinary course of its business (i) in connection with any workers’ compensation,
unemployment insurance, social security or similar statute, regulation or other law or (ii) to
secure the payment of any indebtedness, liability or obligation in connection with any letter of
credit, bid, tender, trade or government contract, lease, surety, appeal or performance bond or
statute, regulation or other law, or of any similar indebtedness, liability or obligation, not
incurred in connection with the borrowing of any money or in connection with the deferral of the
payment of the purchase price of any asset, (c) any attachment, levy or similar lien with respect
to the Borrower or any Subsidiary arising in connection with any action or other legal proceeding
so long as (i) the validity of the claim or judgment secured thereby is being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted, (ii) adequate
reserves have been appropriately established for such claim or judgment, (iii) the execution or
other enforcement of such attachment, levy or similar lien is effectively stayed and (iv) neither
such claim or judgment nor such attachment, levy or similar lien has a Material Adverse Effect, (d)
any statutory lien in favor of the United States for any amount paid to the Borrower or any
Subsidiary as a progress payment pursuant to any government contract, (e) any statutory lien
securing the payment of any tax, assessment, fee, charge, fine or penalty imposed by any government
or political subdivision upon the Borrower or any Subsidiary or upon any of its respective assets
but not yet due to be paid (excluding any lien arising under ERISA), (f) any statutory lien
securing the payment of any claim or demand of any materialman, mechanic, carrier, warehouseman,
garageman or landlord against the Borrower or any Subsidiary, but not yet due to be paid, (g) any
reservation, exception, encroachment, easement, right-of-way, covenant, condition, restriction,
lease or similar title exception or encumbrance affecting title to any real property of the
Borrower or any Subsidiary but not interfering with the conduct of its business or operations, (h)
liens listed on Schedule 6.2 hereto and (i) liens on assets securing Indebtedness permitted by
Section 6.1 hereof.

          6.3 Investments and Guaranty Obligations. Neither the Borrower nor any Subsidiary will,
directly or indirectly, (i) make or commit to make any Investment or (ii) be or become obligated
under any guaranty other than a Guaranty, except for the following permitted investments
(collectively, the “Permitted Investments”):

               (a) Investments by Borrower or any Subsidiary in (i) Cash and Cash Equivalents (each as
defined under GAAP) including any readily marketable direct obligation of the United States
maturing within one year after the date of acquisition thereof, (ii) any time deposit maturing
within one year after the date of acquisition thereof and issued by any banking institution that is
authorized to conduct a banking business under any statute of the United States or any state
thereof, or with respect to a Foreign Subsidiary authorized to conduct a banking business under any
statute of the foreign country in which such Foreign Subsidiary is formed or organized or any
political subdivision thereof, and has a combined capital and surplus of not less than
$100,000,000, (iii) any demand or savings deposit with any such institution, (iv) any Dollar
deposits in the London Interbank Market with such banking institution or any subsidiary of any such
banking institution, and (v) any commercial paper rated at least A-1 by Standard & Poor’s Ratings
Group or P-1 by Moody’s Investor Services, Inc.;

               (b) to the extent not permitted by the foregoing, Investments existing as of the Closing Date
and described on Schedule 6.3 hereto; and

 

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               (c) intercompany advances or loans permitted by Section 6.1 or Contingent Obligations incurred
by a Subsidiary or by the Borrower, with respect to the obligations of the Borrower or any
Subsidiary, entered into in the ordinary course of business; and any other Investment (i) of
Borrower or any Subsidiary in any Subsidiary existing as of the Closing Date, (ii) of Borrower in
any Guarantor made after the Closing Date, (iii) of any Guarantor in any Guarantor made after the
Closing Date, (iv) resulting from a Permitted Acquisition or (v) not exceeding $3,500,000 in the
aggregate over the term of this Agreement.

          6.4 Equity Interest Repurchases. Neither the Borrower nor any Subsidiary will, directly or
indirectly make any repurchase or repurchases of Equity Interests in the Borrower or any Subsidiary
in excess of $6,000,000 in the aggregate over the term of this Agreement, and the Borrower will
notify the Agent in writing of any such repurchase and satisfactorily demonstrate to the Agent
that, after giving effect to such repurchase, the Borrower is pro forma compliant with the
financial covenants set forth in this Article as then in effect.

          6.5 Limitation on Certain Restrictive Agreements. Neither the Borrower nor any Subsidiary
will, directly or indirectly, enter into, incur or permit to exist or become effective, any
“negative pledge” covenant or other agreement, restriction or arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of Borrower or any Subsidiary to create, incur or
suffer to exist any Lien upon any of its property or assets as security for Indebtedness, or
(b) the ability of any such Subsidiary to make dividends or distributions or any other interest or
participation in its profits owned by the Borrower or any Subsidiary, or pay any Indebtedness owed
to the Borrower or a Subsidiary, or to make loans or advances to the Borrower or any other
Subsidiaries, or transfer any of its property or assets to the Borrower or any other Subsidiaries,
except for such restrictions existing under or by reason of (i) applicable law, (ii) this Agreement
and the other Loan Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest, (iv) customary provisions restricting assignment of any
licensing agreement entered into in the ordinary course of business, (v) customary provisions
restricting the transfer or further encumbering of assets subject to Liens permitted under
Section 6.2, (vi) customary restrictions affecting only a Subsidiary under any agreement or
instrument governing any of the Indebtedness of a Subsidiary permitted pursuant to Section 6.1,
(vii) any document relating to Indebtedness secured by a Permitted Encumbrance, insofar as the
provisions thereof limit grants of junior liens on the assets securing such Indebtedness, and
(viii) any Operating Lease or Capital Lease, insofar as the provisions thereof limit grants of a
security interest in, or other assignments of, the related leasehold interest to any other Person.

 

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          6.6 Material Indebtedness Agreements.

               (a) Amendments. Neither the Borrower nor any Subsidiary will amend, restate, supplement or
otherwise modify any Material Indebtedness without the prior written consent of the Agent if any
such amendment, restatement, supplement or other modification would materially impact the rights or
remedies of the Agent and the Lenders hereunder.

               (b) Prepayment and Refinance of Other Debt, etc. After the Closing Date, the Borrower will not,
and will not permit any Subsidiary to, make (or give any notice in respect thereof) any voluntary
or optional payment or prepayment or redemption or acquisition for value of (including, without
limitation, by way of depositing with the trustee with respect thereto money or securities before
due for the purpose of paying when due) or exchange of, or refinance or refund, any Indebtedness of
Borrower or its Subsidiaries that has an outstanding principal balance (or Capitalized Lease
Obligation, in the case of a Capital Lease or present value, based on the implicit interest rate,
in the case of a Synthetic Lease) greater than $3,500,000 (other than the Indebtedness and
intercompany loans and advances among Borrower and its Subsidiaries); provided that
(a) Borrower or any Subsidiary may exchange refinance or refund any such Indebtedness if the
aggregate principal amount thereof (or Capitalized Lease Obligation, in the case of a Capital Lease
or present value, based on the implicit interest rate, in the case of a Synthetic Lease) is not
increased (other than in connection with the capitalization of interest) and (b) the Borrower or
any Subsidiary may make any such payment or prepayment or redemption or acquisition for value if
any such payment or prepayment or redemption or acquisition for value is made with the proceeds of
the sale of Equity Interests in Borrower.

          6.7 Consolidation, Merger, Acquisitions, Asset Sales, etc. Neither the Borrower nor any
Subsidiary will (1) wind up, liquidate or dissolve its affairs, (2) enter into any transaction of
merger or consolidation, (3) make or otherwise effect any acquisition of all or substantially all
of the assets or Equity Interests of any other Person, or assets constituting all or substantially
all of a division or product line of any other Person, other than Permitted Acquisitions set forth
in Section 6.7(c), (4) sell or otherwise dispose of any of its property or assets outside the
ordinary course of business, or otherwise make or otherwise effect any Asset Sale, or (5) agree to
do any of the foregoing at any future time, except the following shall be permitted (collectively,
6.7(a) and 6.7(b) being “Permitted Dispositions”):

               (a) Certain Intercompany Mergers. If no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (i) the merger, consolidation or amalgamation of any Domestic
Subsidiary with or into Borrower, provided Borrower is the surviving or continuing or resulting
corporation; (ii) the merger, consolidation or amalgamation of any Domestic Subsidiary with or into
any Guarantor, provided that the surviving or continuing or resulting corporation is a Guarantor,
(iii) the merger, consolidation or amalgamation of any existing Foreign Subsidiary with or into any
other existing Foreign Subsidiary; (iv) any Asset Sale by Borrower or any Guarantor to Borrower or
any Guarantor,

 

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(v) any Asset Sale by any Foreign Subsidiary to Borrower or any Guarantor; or (vi) any Asset Sale
by any existing Foreign Subsidiary to any other existing Foreign Subsidiary.

               (b) Other Dispositions. If no Default or Event of Default shall have occurred and be continuing or
would result therefrom, and no Material Adverse Effect has occurred or will result therefrom, the
Borrower or any Subsidiary may consummate any Asset Sale, provided that: (i) the consideration for
each such Asset Sale represents fair value and any non-cash consideration qualifies as a Permitted
Investment hereunder and the aggregate of all such non-cash consideration does not exceed
$3,500,000 over the term of this Agreement; and (ii) the cumulative aggregate value of the assets
subject to Asset Sales does not exceed $1,000,000 in any one fiscal year (excluding for purposes of
computing such maximum amount conveyances of mere record title to any asset to a Governmental
Authority to save taxes where Borrower or any Subsidiary has an option to require reconveyance of
such property for a nominal price) for all such transactions completed during any fiscal year.

               (c) Permitted Acquisitions. Any acquisition by Borrower or any Subsidiary of all or substantially
all of the assets or Equity Interests of any other Person in a related line of business, or assets
constituting all or substantially all of a division or product line of any other Person in a
related line of business, so long as (i) immediately prior to contracting for or consummating such
acquisition there does not exist, and there does not occur as a direct or indirect result of the
consummation of such acquisition, (A) any Event of Default or Default, and (B) immediately prior to
contracting for or consummating such acquisition Borrower is in compliance with Sections 6.13,
6.14, 6.15 and 6.16 of this Agreement or any replacements thereof (collectively, the “Financial
Covenants”) and Borrower can demonstrate based on pro-forma projections that Borrower will be in
compliance with the Financial Covenants upon and after consummation of such acquisition, (ii) such
acquisition is being completed on a non-hostile basis without opposition from the board of
directors, managers or equity owners of the target entity, (iii) with respect to any assets or
Equity Interest of any Person acquired directly or indirectly pursuant to any such acquisition,
there are no liens thereon other than Permitted Encumbrances, and (iv) the aggregate Consideration
paid by Borrower and all Subsidiaries in connection with such acquisition does not exceed
$17,500,000 unless specifically consented to by the Required Lenders.

          6.8 Transactions with Affiliates. Neither the Borrower nor any Subsidiary will enter into
any transaction or series of transactions with any Affiliate (other than, in the case of the
Borrower, any Subsidiary, and in the case of a Subsidiary, the Borrower or another Subsidiary)
(each, an “Affiliate Transaction”), except for transactions in the ordinary course of business upon
fair and reasonable terms no less favorable to the Borrower or any Subsidiary than would apply in a
comparable arm’s length transaction with a Person who is not an Affiliate, and agreements and
transactions with and payments to officers, directors and shareholders that are either (i) entered
into in the ordinary course of business and not prohibited by any of the provisions of this
Agreement or that are expressly permitted by the provisions of this Agreement, or (ii) entered into
outside the ordinary course of business, approved by the directors or shareholders of the Borrower,
and not prohibited by any of the provisions of this Agreement or in violation of any law, rule or
regulation.

 

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          6.9 Disposal of Hazardous Substances. Neither the Borrower nor any Subsidiary will suffer,
cause or permit the Disposal of Hazardous Substances at any property owned, leased or operated by
the Borrower or any Subsidiary, except in the ordinary course of the Borrower’s business in
material compliance with applicable Environmental Laws.

          6.10 Fiscal Year, Fiscal Quarters. Neither the Borrower nor any Subsidiary will change
its, or permit any Guarantor or other Subsidiary to change its, fiscal year or fiscal quarters
(other than the fiscal year or fiscal quarters of a Person that becomes a Subsidiary, at the time
such Person becomes a Subsidiary, to conform to Borrower’s, any Subsidiary’s fiscal year and fiscal
quarters).

          6.11 Anti-Terrorism Laws. Neither the Borrower nor any Subsidiary shall be subject to or
in violation of any law, regulation, or list of any government agency (including without
limitation, the U.S. Office of Foreign Asset Control list, Executive Order No. 13224 or the USA
Patriot Act) that prohibits or limits the conduct of business with or the receiving of funds, goods
or services to or for the benefit of certain Persons specified therein or that prohibits or limits
any Lender or any Issuing Bank from making any advance or extension of credit to the Borrower or
from otherwise conducting business with the Borrower.

          6.12 Changes in Business. Neither the Borrower nor any Subsidiary will engage in any
business if, as a result, the general nature of the business, taken on a Consolidated Basis, which
would then be engaged in by the Borrower and any Subsidiary, would be substantially changed from
the general nature of the business engaged in by the Borrower and any Subsidiary on the Closing
Date.

          6.13 Minimum Debt Service Coverage Ratio. The Borrower will not permit as of the end of
each fiscal quarter of Borrower, on a Rolling Four-Quarter Basis, the Consolidated Debt Service
Coverage Ratio to be less than 2.50 to 1.0.

          6.14 Maximum Fiscal Capital Expenditures. The Borrower will not permit Consolidated
Capital Expenditures to be made or incurred in excess of $10,000,000 in any one fiscal year.

          6.15 Maximum Leverage Ratio. The Borrower will not permit as of the end of each fiscal
quarter, the Leverage Ratio to exceed 3.0 to 1.0.

          6.16 Minimum Net Worth. The Borrower will not permit the Consolidated Net Worth of the
Borrower and its Subsidiaries to be less than the amount of $40,000,000 (“Base Amount”) as of
December 31, 2007, with such Base Amount being increased for each subsequent year by 25% of the
Borrower’s Consolidated Net Income for each year ended after December 31, 2007. This covenant
shall be tested quarterly as of the last day of each fiscal quarter of the Borrower on a Rolling
Four-Quarter Basis.

 

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ARTICLE VII. DEFAULT

          7.1 Events of Default. The occurrence of any one or more of the following events shall
constitute an event of default (individually, “Event of Default,” or, collectively, “Events of
Default”):

               (a) Nonpayment. Nonpayment within ten (10) days after the same becomes due whether by acceleration
or otherwise of (i) principal of, or interest on, any of the Notes; (ii) any charge, fee or premium
provided for hereunder; or (iii) any reimbursement obligation in connection with any Letter of
Credit, the Existing Letter of Credit or the IRB Letters of Credit.

               (b) Negative Covenants. Default in the observance of any of the covenants or agreements of the
Borrower contained in Article VI.

               (c) Other Covenants. Default in the observance of any of the covenants or agreements of the
Borrower contained in this Agreement or any other Loan Document, other than those specified in
Sections 5.1 and 7.1(b) hereof, which is not remedied within thirty (30) days after notice thereof
by the Agent to the Borrower.

               (d) Voluntary Insolvency Proceedings. If the Borrower or any Subsidiary (i) shall file a petition
or request for liquidation, reorganization, arrangement, adjudication as a bankrupt, relief as a
debtor or other relief under the bankruptcy, insolvency or similar laws of the United States of
America or any state or territory thereof or any foreign jurisdiction, now or hereafter in effect;
(ii) shall make a general assignment for the benefit of creditors; (iii) shall consent to the
appointment of a receiver or trustee for the Borrower or any Subsidiary or any of the Borrower’s or
any Subsidiary’s assets, including, without limitation, the appointment of or taking possession by
a “custodian” as defined in the federal Bankruptcy Code; (iv) shall make any, or send notice of any
intended, bulk sale; or (v) shall execute a consent to any other type of insolvency proceeding
(under the federal Bankruptcy Code or otherwise) or any formal or informal proceeding for the
dissolution or liquidation of, or settlement of claims against or winding up of affairs of, the
Borrower or any Guarantor or other Subsidiary.

               (e) Involuntary Insolvency Proceedings. The appointment of a receiver, trustee, custodian or
officer performing similar functions for the Borrower or any Subsidiary or any of the Borrower’s or
any Subsidiary’s assets, including, without limitation, the appointment of or taking possession by
a “custodian” as defined in the federal Bankruptcy Code; or the filing against the Borrower or any
Subsidiary of a request or petition for liquidation, reorganization, arrangement, adjudication as a
bankrupt or other relief under the bankruptcy, insolvency or similar laws of the United States of
America or any state or territory thereof or any foreign jurisdiction, now or hereafter in effect;
or the institution against the Borrower or any Subsidiary of any other type of insolvency
proceeding (under the federal Bankruptcy Code or otherwise) or of any formal or informal proceeding
for the dissolution or liquidation of,

 

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settlement of claims against or winding up of affairs of the Borrower or any Subsidiary, and the
failure to have such appointment vacated or such filing, petition or proceeding dismissed within
ninety (90) days after such appointment, filing or institution.

               (f) Representations. If any certificate, statement, representation, warranty or financial
statement furnished by or on behalf of the Borrower or any Subsidiary pursuant to or in connection
with this Agreement or as an inducement to the Agent and the Lenders to enter into this Agreement
or any other lending agreement with the Borrower shall prove to have been false in any material
respect at the time as of which the facts therein set forth were represented, or to have omitted
any substantial contingent or unliquidated liability or claim against the Borrower or any
Subsidiary required to be stated therein, or if on the date of the execution of this Agreement
there shall have been any materially adverse change in any of the facts disclosed by any such
statement or certificate, which change shall not have been disclosed by the Borrower to Lenders at
or prior to the time of such execution.

               (g) Cross Default Under Other Agreements. If the Borrowers or any of their Subsidiaries shall
(i) default in any payment with respect to any of the Existing Bonds, the IRB Letters of Credit,
the Existing Letter of Credit (collectively, the “Existing Indebtedness”) or any Material
Indebtedness (other than this Agreement), and such default shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such Existing
Indebtedness or such Material Indebtedness; or (ii) default in the observance or performance of any
agreement or condition relating to any such Existing Indebtedness or such Material Indebtedness or
contained in any instrument or agreement evidencing, securing or relating thereto (and all grace
periods applicable to such observance, performance or condition shall have expired), or any other
event shall occur or condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Existing Indebtedness or such Material
Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause any such Existing
Indebtedness or such Material Indebtedness to become due prior to its stated maturity; or such
Existing Indebtedness or such Material Indebtedness of the Borrowers or any of their Subsidiaries
shall be due and payable, or shall be required to be prepaid (other than by a regularly scheduled
required prepayment or redemption), prior to the stated maturity thereof; or (iii) without
limitation of the foregoing clauses, default in any payment obligation under a Designated Hedge
Agreement, and such default shall continue after the applicable grace period, if any, specified in
such Designated Hedge Agreement or any other agreement or instrument relating thereto.

               (h) Judgments. If any judgment or judgments (other than any judgment for which it is fully
insured) against the Borrower or any Subsidiary in an aggregate amount in excess of $3,500,000
remains unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period of thirty
(30) days after entry thereof.

 

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               (i) Pension Default.

                    (1) The Borrower or any of its Subsidiaries (or any officer or director thereof) shall engage
in any prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan,

                    (2) any accumulated funding deficiency (as defined in Section 302 of ERISA), shall exist
with respect to any Plan,

                    (3) with respect to any Multiemployer Plan, the Borrower or any Commonly Controlled Entity
fails to make a contribution required to be made thereto, or withdraws therefrom, where in either
event the liability of the Borrower or such Commonly Controlled Entity is in excess of $100,000,

                    (4) a Reportable Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan which
is not a Multiemployer Plan, which Reportable Event or institution of proceedings is, in the
reasonable opinion of the Agent, likely to result in the termination of such Plan for purposes of
Title IV of ERISA and, in the case of a Reportable Event, the continuance of such Reportable Event
unremedied for ten (10) days after notice of such Reportable Event pursuant to Section 4043(a), (c)
or (d) of ERISA is given or the continuance of such proceedings for ten (10) days after
commencement thereof, as the case may be,

                    (5) any Plan shall terminate for purposes of Title IV of ERISA, or

                    (6) any other similar event or condition shall exist which, together with all other events or
conditions in clauses (1) through (5) above, if any, would subject the Borrower or any of its
Subsidiaries to any tax, penalty or other liabilities under ERISA in the aggregate material in
relation to the business, operations, property or financial or other condition of the Borrower and
its Subsidiaries taken as a whole.

 

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               (j) Change in Control. If there occurs a Change in Control.

               (k) Challenge to Loan Documents. If Borrower or any Subsidiary shall challenge the validity and
binding effect of any provision of any of the Loan Documents or shall state its intention to make
such a challenge of any of the Loan Documents or any of the Collateral Documents shall for any
reason (except to the extent permitted by its express terms) cease to be perfected or lose the
priority of the Lien granted thereunder or cease to be effective.

               (l) Guarantor Default. Any Guaranty shall cease, for any reason, to be in full force and effect or
any Guarantor or the Borrower shall so assert in writing.

          7.2 Effects of an Event of Default. (a) Upon the happening of one or more Events of
Default (except a default with respect to the Borrower or any Subsidiary under either Section
7.1(d) or 7.1(e) hereof), the Agent may by notice to the Borrower require the principal of the
Notes then outstanding to be immediately payable, together with all interest thereon and fees and
expenses accruing under this Agreement. Upon such declaration, any obligations the Agent and the
Lenders may have to the Borrower hereunder shall be immediately canceled and the Notes shall become
immediately due and payable without presentation, demand or further notice of any kind to the
Borrower.

               (b) Upon the happening of one or more Events of Default under Section 7.1(d) or 7.1(e) hereof with
respect to the Borrower or any Subsidiary, the Notes shall become immediately payable without
presentation, demand or notice of any kind to the Borrower.

               (c) No termination of this Agreement will relieve or discharge Borrower of its duties, obligations
and covenants hereunder until all of the Indebtedness hereunder has been indefeasibly paid in full.

          7.3 Remedies. Upon the occurrence and during the continuance of any Event of Default or
upon any termination of this Agreement as a result of an Event of Default, then any of the Lenders
and the Agent shall have all of their rights under this Agreement or otherwise under law. In
addition to, and without limitation of, any rights of the Lenders under applicable law, if any
Event of Default occurs, any and all deposits (including all account balances, whether provisional
or final and whether or not collected or available) and any other Indebtedness at any time held or
owing by any Lender to or for the credit or account of Borrower may be offset and applied toward
the payment of the Indebtedness of the Borrower due under this Agreement or the Loan Documents.

          7.4 Application of Certain Payments and Proceeds. All payments and other amounts received
by the Agent or any Lender through the exercise of remedies hereunder or under the other Loan
Documents shall, unless otherwise required by the terms of the other Loan Documents or by
applicable law, be applied as follows:

 

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                    (i) first, to the payment of all expenses (to the extent not otherwise paid by the Borrower or
any of the Guarantors) incurred by the Agent and the Lenders in connection with the exercise of
such remedies, including, without limitation, all reasonable costs and expenses of collection,
reasonable attorneys’ fee and expenses, court costs and any foreclosure expenses;

                    (ii) second, to the payment pro rata of interest then accrued on the outstanding Loans;

                    (iii) third, to the payment pro rata of any fees then accrued and payable to the Agent, any
Issuing Bank or any Lender under this Agreement in respect of the Loans or the Letters of Credit or
the IRB Letters of Credit;

                    (iv) fourth, to the payment pro rata of (A) the principal balance then owing on the
outstanding Loans, (B) the amounts then due under Designated Hedge Agreements to creditors of the
Borrower or any Subsidiary, subject to confirmation by the Agent of any calculations of termination
or other payment amounts being made in accordance with normal industry practice, (C) the principal
amount of the outstanding Letters of Credit and IRB Letters of Credit (to be held and applied by
the Agent as security for the reimbursement obligations in respect thereof) and (D) the
unreimbursed amount of any LC Disbursements and of any drawings on the IRB Letters of Credit;

                    (v) fifth, to the payment to the Lenders of any amounts then accrued and unpaid under
Sections 2.9, 2.10 and 2.11 of this Agreement, and if such proceeds are insufficient to pay such
amounts in full, to the payment of such amounts pro rata;

                    (vi) sixth, to the payment pro rata of all other amounts owed by the Borrower to the Agent, to
any Issuing Bank or any Lender under this Agreement or any other Loan Document, and to any
counterparties under Designated Hedge Agreements of the Borrower and any Subsidiary, and if such
proceeds are insufficient to pay such amounts in full, to the payment of such amounts pro rata; and

                    (viii) finally, any remaining surplus after all of the Indebtedness has been paid in full, to
the Borrower or to whomsoever shall be lawfully entitled thereto.

ARTICLE VIII. INDEMNIFICATION — COSTS AND EXPENSES

          8.1 Indemnification. The Borrower agrees to indemnify, defend, and hold harmless the Agent
and the Lenders from and against any and all liabilities, claims, damages, penalties, expenditures,
losses, or charges incurred in connection with this Agreement, including, but not limited to, the
use of, or proposed use of, the proceeds borrowed under this Agreement, and all costs of
investigation, monitoring, legal representation, remedial response, removal, restoration or permit
acquisition, which may now or in the future be undertaken, suffered, paid, awarded, assessed, or
otherwise incurred by the Agent or any Lender, or any other Person as a result of the presence of,
Release of or threatened Release of Hazardous Substances on, in, under or near the property owned
or operated by the Borrower or any Subsidiary except to the extent resulting from the gross
negligence or willful misconduct of the indemnified party. The liability

 

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of the Borrower under the covenants of this Section is not limited by any exculpatory provisions in
this Agreement and shall survive repayment of the Notes, or any transfer or termination of this
Agreement regardless of the means of such transfer or termination, with respect to acts or
omissions or a Release occurring before such repayment, transfer or termination.

          8.2 Expenses. The Borrower shall reimburse the Agent promptly for all of its out-of-pocket
expenses including, without limitation, reasonable counsel fees, filing fees, appraisal fees and
recording fees incurred in connection with this Agreement and with any indebtedness subject hereto
and for any taxes which the Agent may be required to pay in connection with the execution and
delivery of this Agreement and the Notes. The Borrower shall further reimburse the Agent promptly
for any reasonable expenses, including counsel fees and out-of-pocket expenses, incident to the
enforcement of any provision of this Agreement, the Notes or any other document executed in
connection with this Agreement or in connection with any Letter of Credit or the IRB Letters of
Credit. Without limiting the Borrower’s obligation to reimburse the Agent pursuant to this Section
8.2, the Borrower hereby irrevocably authorizes the Agent to make Revolving Credit Loans to the
Borrower and to use the proceeds thereof to pay any amount owed by the Borrower under this Section
8.2 upon the failure of the Borrower to make such payment, and the Agent agrees to notify the
Borrower of the making of such Revolving Credit Loans. Any such Revolving Credit Loans shall be
made (i) in the minimum amount necessary and (ii) without regard to the requirements of this
Agreement with respect to notice or minimum amount.

 

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ARTICLE IX. THE AGENT AND ISSUING BANK

          9.1 Appointment and Authorization. Each Lender hereby irrevocably appoints HSBC Bank as
Agent, and HSBC Bank accepts such appointment. Each Lender hereby irrevocably authorizes the Agent
to take such action as such agent on its behalf and to exercise such powers hereunder as are
delegated to such agent by the terms hereof, together with such powers as are reasonably incidental
thereto. Neither the Agent nor any of their directors, officers, attorneys or employees shall be
liable for any action taken or omitted to be taken by such agent or them hereunder or in connection
herewith, except for such agent’s or their own gross negligence or willful misconduct as determined
in a final judgment by a court of competent jurisdiction. The Agent (a) shall have no duties or
responsibilities except those expressly set forth in this Agreement and in the other Loan
Documents, and shall not by reason of this Agreement or any other Loan Documents be a trustee or
fiduciary for any Lender; (b) shall not be responsible to any Lender for any recitals, statements,
representations or warranties contained in this Agreement or in any of the other Loan Documents, or
in any certificate or other document referred to or provided for in, or received by any Lender
under, this Agreement or any other Loan Documents, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan Documents or any
other document referred to or provided for herein or therein or for any failure by Borrower, or any
other Person to perform any of its obligations hereunder or thereunder; and (c) shall not be
responsible to any Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Documents or under any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except in the event of such agent’s own gross
negligence or willful misconduct, as determined by a final judgment of a court of competent
jurisdiction. The Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agent or attorneys-in-fact selected by it in good faith.
In administering the Letters of Credit, the Issuing Bank shall not be under any liability to any
Lender, except for such Issuing Bank’s own gross negligence or willful misconduct, as determined in
a final non-appealable decision of a court of competent jurisdiction or as set forth in Section 2.4
of this Agreement.

          9.2 Waiver of Liability of Agent. The Agent shall not have any liability or, as the case
may be, any duty or obligation:

               (a) To Borrower on account of any failure of any Lender to perform, or the delay of any Lender
in the performance of, any of its respective obligations under this Agreement or any of the Loan
Documents or any of the other documents in connection herewith;

               (b) To any Lender on account of any failure or delay in performance by Borrower or any other
Lender of any of their respective obligations under this Agreement or any of the Loan Documents or
any of the other documents in connection herewith;

               (c) To any Lender to provide either initially or on a continuing basis any information with
respect to Borrower or any of its Affiliates or Subsidiaries or its condition, or for analyzing or
assessing or omitting to analyze or assess the status, creditworthiness or prospects of Borrower or
any of the Affiliates of Borrower or any Subsidiaries, provided,

 

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however, the Agent shall promptly provide to each Lender a copy of the documents
delivered by Borrower to the Agent pursuant to Section 5.2 of this Agreement;

               (d) To any Lender to investigate whether or not any Default or Event of Default has occurred
(and the Agent may assume that, until Agent shall have actual knowledge or shall have received
notice from any Lender or Borrower, to the contrary, no such Default or Event of Default has
occurred);

               (e) To any Lender to account for any sum or profit or any property of any kind received by the
Agent or any Issuing Bank arising out of any present or future banking or other relationship with
Borrower or any of the Affiliates of Borrower or any Subsidiaries, or with any other Person except
the relationship established pursuant to this Agreement or the Loan Documents;

               (f) To any Lender to disclose to any Person any information relating to Borrower or any of the
Affiliates of Borrower or any Subsidiaries received by the Agent or any Issuing Bank, if in any
such party’s reasonable determination (such determination to be conclusive), such disclosure would
or might constitute a breach of any law or regulation or be otherwise actionable by suit against
such agent or any Issuing Bank by Borrower or any other Person;

               (g) To take any action or refrain from taking any action other than as expressly required by
this Agreement and the Loan Documents; and

               (h) To commence any legal action or proceeding arising out of or in connection with this
Agreement or the Loan Documents until either of the Agent or the Issuing Bank, shall have been
indemnified to the Agent’s or the Issuing Bank’s satisfaction against any and all costs, claims and
expenses (including, but not limited to, attorneys’ fees and expenses) in respect of such legal
action or proceeding.

          9.3 Note Holders. The Agent may treat the payee of any Note as the holder thereof until
written notice of transfer shall have been filed with it, signed by such payee and in form
satisfactory to the Agent.

          9.4 Consultation with Counsel. The Agent may consult with legal counsel selected by the
Agent and shall not be liable for any action taken or suffered in good faith by the Agent in
accordance with the opinion of such counsel.

          9.5 Documents. The Agent shall not be under any duty to examine into or pass upon the
validity, effectiveness, genuineness or value of any Loan Documents or any other documents
furnished pursuant hereto or in connection herewith or the value of any Collateral obtained
hereunder, and the Agent shall be entitled to assume that the same are valid, effective and genuine
and what they purport to be.

          9.6 Agent and Affiliates. With respect to the Loans, the Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it were not the Agent,
and the Agent and its Affiliates may accept deposits from, lend money to

 

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and generally engage in any kind of business with Borrower, any Guarantor or any other Subsidiary
or any Affiliate thereof including, without limitation, entering into any kind of Hedge Agreement
with respect to the Loans.

          9.7 Knowledge of Default. It is expressly understood and agreed that the Agent and each
Issuing Bank shall be entitled to assume that no Default or Event of Default has occurred and is
continuing, unless the Agent or such Issuing Bank has been notified by a Lender in writing that
such Lender believes that a Default or Event of Default has occurred and is continuing and
specifying the nature thereof.

          9.8 Enforcement. In the event any remedy may be exercised with respect to this Agreement
or the Loan Documents, the Agent shall have the sole right of enforcement and each Lender agrees
that no Lender shall have any right individually to enforce any provision of this Agreement or the
Loan Documents, or make demand under this Agreement or the Loan Documents; provided,
that any Issuing Bank or the Agent on behalf of such Issuing Bank may make demand upon
Borrower as an Issuing Bank.

          9.9 Action by Agent. So long as the Agent shall be entitled, pursuant to Section 9.7 of
this Agreement, to assume that no Default or Event of Default shall have occurred and be
continuing, the Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, or with respect to taking or
refraining from taking any action or actions which it may be able to take under or in respect of,
this Agreement. The Agent shall incur no liability under or in respect of this Agreement by acting
upon any notice, certificate, warranty or other paper or instrument believed by it to be genuine or
authentic or to be signed by the proper party or parties, or with respect to anything which it may
do or refrain from doing in the reasonable exercise of its judgment, or which may seem to it to be
necessary or desirable in the premises.

          9.10 Notices, Defaults, etc. In the event that the Agent shall have acquired actual
knowledge of any Default or Event of Default, the Agent shall promptly notify the Lenders and shall
take such action and assert such rights under this Agreement as the Required Lenders shall direct
and the Agent shall inform the other Lenders in writing of the action taken. The Agent may take
such action and assert such rights as it deems to be advisable, in its discretion, for the
protection of the interests of the holders of the Notes.

          9.11 Indemnification of Agent. The Lenders agree to indemnify the Agent (to the extent not
reimbursed by the Borrower), ratably according to their respective Applicable Percentages from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in its capacity as the Agent in any way relating to or
arising out of this Agreement or any Loan Document or any action taken or omitted by the Agent with
respect to this Agreement or any Loan Document, provided no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorney fees and expenses) or disbursements resulting from the Agent’s gross
negligence or willful misconduct as determined in a final judgment by a court of competent
jurisdiction or from any action taken or omitted by the Agent in any capacity other than as the
Agent under this Agreement.

 

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          9.12 Successor Agent. The Agent may resign as the Agent hereunder by giving not fewer than
thirty (30) days prior written notice to the Borrower and the Lenders. If the Agent shall resign
under this Agreement, then either (a) the Required Lenders shall appoint from among the Lenders a
successor administrative agent for the Lenders (with the consent of the Borrower so long as an
Event of Default has not occurred and which consent shall not be unreasonably withheld), or (b) if
a successor administrative agent shall not be so appointed and approved within the thirty (30) day
period following the Agent’s notice to the Lenders of its resignation, then the Agent shall appoint
a successor administrative agent who shall serve as the Agent until such time as the Required
Lenders appoint a successor administrative agent. Upon its appointment, such successor
administrative agent shall succeed to the rights, powers and duties as the Agent, and the term
“Agent” shall mean such successor effective upon its appointment, and the former Agent’s rights,
powers and duties as the Agent shall be terminated without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement.

          9.13 Lenders’ Independent Investigation. Each Lender, by its signature to this Agreement,
acknowledges and agrees that the Agent has made no representation or warranty, express or implied,
with respect to the creditworthiness, financial condition, or any other condition of Borrower or
with respect to the statements contained in any information memorandum furnished in connection
herewith or in any other oral or written communication between the Agent and such Lender. Each
Lender represents that it has made and shall continue to make its own independent investigation of
the creditworthiness, financial condition and affairs of the Borrower in connection with the
extension of credit hereunder, and agrees that the Agent has no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or other information with
respect thereto (other than such notices as may be expressly required to be given by the Agent to
the Lenders hereunder), whether coming into its possession before the granting of the first Loans
hereunder or at any time or times thereafter.

          9.14 Amendments, Consents. No amendment, modification, termination or waiver of any
provision of any Loan Document nor consent to any variance therefrom, shall be effective unless the
same shall be in writing and signed by the Agent and the Lenders or Required Lenders, as
appropriate, and then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. Anything herein to the contrary notwithstanding, no
amendment, modification, termination or waiver shall increase the amount of any Commitment of any
Lender without the written consent of such Lender or increase the Total Commitment without the
consent of all of the Lenders, and the unanimous consent of the Lenders shall be required with
respect to (a) the extension or postponement of the Revolving Credit Maturity Date, the payment
dates of interest thereunder, or the payment of facility or other fees or amounts payable
hereunder, (b) any reduction in the rate of interest on the Revolving Notes, or in any amounts of
principal or interest due on any Revolving Note or the payment of facility or other fees hereunder
or any change in the manner of pro rata application of any payments made by the Borrower to the
Lenders hereunder, (c) any change in any percentage voting requirement, voting rights, or the
Required Lenders definition in this Agreement, (d) the release of any material Collateral other
than in connection with a Permitted Disposition which the Agent alone may release, or (e) any
amendment to this Section 9.14; provided, however, only the consent of the Required
Lenders shall be required for a waiver involving (i) the applicability

 

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of any post-Event of Default interest rate increase or the applicability of interest on Overdue
Amounts as provided in Section 2.6(c) of this Agreement, (ii) any reduction in the amount of Net
Proceeds required to be applied to prepay the Loans as provided in Section 2.7(b) of this Agreement
or (iii) any other amendment hereunder or under the other Loan Documents which does not
specifically require unanimous consent of the Lenders. Notice of amendments or consents ratified
by the Required Lenders hereunder shall immediately be forwarded by the Agent to all Lenders. Each
Lender or other holder of a Note shall be bound by any amendment, waiver or consent obtained as
authorized by this Section, regardless of its failure to agree thereto. A Defaulting Lender shall
not be entitled to give instructions to the Agent or to approve, disapprove, consent to or vote on
any matters relating to this Agreement and the other Loan Documents. All amendments, waivers and
other modifications of this Agreement and the other Loan Documents may be made without regard to a
Defaulting Lender and, for purposes of the definition of “Required Lenders”, a Defaulting Lender
shall be deemed not to be a Lender and not to have any Revolving Credit Exposures and Unused
Commitments.

          9.15 Funding by Agent. Unless the Agent shall have been notified in writing by any Lender
not later than 4:00 p.m. on the day before the day on which Loans are requested by Borrower to be
made that (or, if the request for a Loan is made by Borrower on the date such Loan is to be made,
then not later than 2:00 p.m. on such day) such Lender will not make its ratable share of such
Loans, the Agent may assume that such Lender will make its ratable share of the Loans, and in
reliance upon such assumption the Agent may (but in no circumstances shall be required to) make
available to the Borrower a corresponding amount. If and to the extent that any Lender fails to
make such payment on such date, such Lender shall pay such amount to the Agent on demand, together
with interest thereon, as set forth in Section 2.5(b) of this Agreement.

          9.16 Sharing of Payments. If any Lender obtains any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) with respect to the Loans
in excess of its pro rata share of such payments shared by all Lenders, such Lender shall forthwith
purchase from the other Lenders participation in the Loans made by them as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of them;
provided, however, if all or any portion of such excess payment is hereafter
recovered from such purchasing Lender, such purchase from the other Lenders shall be rescinded and
each other Lender shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender’s ratable share of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount recovered.
Borrower agrees that any Lender purchasing a participation from another Lender pursuant to this
Section 9.16 may, to the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as if such Lender were
the direct creditor of Borrower in the amount of such participation.

          9.17 Payment to Lenders. Except as otherwise set forth in Sections 2.3(c), 2.4(e), 2.15
and 9.16 of this Agreement, promptly after receipt from Borrower of any principal or interest
payment on the Notes or any fees payable under, or in connection with, this Agreement (other than
fees payable to the Agent for the account of the Agent), the Agent shall promptly distribute to
each Lender that Lender’s ratable share of the funds so received. If the Agent fails to distribute
collected funds received by 2:00 p.m. on any Business Day prior to the end of the

 

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same Business Day, or to distribute collected funds received after 2:00 p.m. on any Business Day by
the end of the next Business Day, the funds shall bear interest until distributed at the Federal
Funds Effective Rate.

          9.18 Tax Withholding Clause. Each Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the District of Columbia
(a “Foreign Lender”) (including any replacement or successor Lender hereunder) shall:

               (a) at least five (5) Business Days before the date of the initial payment to be made by
Borrower under this Agreement to such Lender, deliver to the Borrower and the Agent (i) two duly
completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, or successor
applicable form, as the case may be, certifying that it is entitled to receive under this Agreement
without deduction or withholding of any United States federal income taxes and (ii) an Internal
Revenue Service Form W-8BEN, or any successor applicable form, certifying that it is entitled to an
exemption from United States backup withholding tax;

               (b) deliver to the Borrower and the Agent two further copies of any such form or certification
at least five (5) Business Days before the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Agent and the Borrower;

               (c) obtain such extensions of time for filing and complete such forms certifications as may
reasonably be requested by the Borrower or the Agent; and

               (d) file amendments to such forms as and when required unless an event (including, without
limitation, any change in treaty, law or regulation) has occurred after the date such Person
becomes a Lender hereunder which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and such Lender so
advises the Borrower and the Agent; provided, however, that the Borrower may rely upon such forms
provided to the Borrower for all periods prior to the occurrence of such event. Furthermore, the
Borrower shall not be required to pay any additional amounts to a Foreign Lender pursuant to
Section 2.11, and shall be permitted to reduce any payment required to be made to any Lender by any
present or future income, stamp or other Taxes, deductions or withholdings (that otherwise would
not be permitted to reduce such payment pursuant to the provisions of Section 2.14 of this
Agreement), if such additional amounts or present or future income, stamp or other Taxes,
deductions or withholdings would not have arisen or would not have been required to have been
withheld, but for a failure by such Foreign Lender to comply with the provisions of this Section
9.18.

          9.19 USA Patriot Act. Each Lender or assignee or participant of a Lender that is not
organized under the laws of the United States of America or a state thereof (and is not excepted
from the certification requirement contained in Section 313 of the USA Patriot Act and the
applicable regulations because it is both (a) an affiliate of a depository institution or foreign
bank that maintains a physical presence in the United States or foreign country, and (b) subject to
supervision by a banking authority regulating such affiliated depository institution or foreign
bank) shall deliver to the Agent the certification, or, if applicable, recertification, certifying
that

 

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such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA
Patriot Act and the applicable regulations: (i) within 10 days after the Closing Date, and (ii) at
such other times as re required under the USA Patriot Act.

          9.20 Issuing Bank. Each Lender acknowledges and agrees that the provisions of this
Article IX shall apply to the Issuing Bank, in its capacity as issuer of any Letter of Credit, in
the same manner as such provisions are expressly stated to apply to the Agent.

          9.21 Benefit of Article IX. The provisions of this Article IX are intended solely for the
benefit of the Agent, the Issuing Bank and the Lenders. The Borrower shall not be entitled to rely
on any such provisions or assert any such provisions in a claim, or as a defense, against the Agent
or any Lender. The Borrower acknowledges and consents to the foregoing provisions of this
Article IX.

ARTICLE X. MISCELLANEOUS

          10.1 Amendments and Waivers. This Agreement is intended by the parties as the final,
complete and exclusive statement of the transactions evidenced by this Agreement. All prior or
contemporaneous promises, agreements and understandings, whether oral or written, are deemed to be
superseded by this Agreement, and no party is relying on any promise, agreement or understanding
not set forth in this Agreement. No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement or as otherwise provided in
Section 9.14 of this Agreement, subscribed by an Authorized Officer of the Borrower and by
authorized officers of the Required Lenders (or all the Lenders, if applicable), and the Agent.

          10.2 Delays and Omissions. No course of dealing and no delay or omission by the Agent or
the Lenders in exercising any right or remedy hereunder or with respect to any Indebtedness of the
Borrower to shall operate as a waiver thereof or of any other right or. remedy, and no single or
partial exercise thereof shall preclude any other or further exercise thereof or the exercise of
any other right or remedy. The Agent and the Lenders may remedy any Event of Default in any
reasonable manner without waiving the Event of Default remedied and without waiving any other prior
or subsequent Event of Default by Borrower and shall be reimbursed for their expenses in so
remedying such Event of Default. All rights and remedies of the Lenders and the Agent hereunder
are cumulative.

          10.3 Assignments/Participation. (a) The Borrower shall not assign or otherwise
transfer any of its rights pursuant to this Agreement without the prior written consent of the
Agent, and any such assignment or other transfer without such prior written consent shall be void.

          (b) Any Lender may, in accordance with applicable law, at any time sell to one or more Persons
who would qualify as an Eligible Assignee (each, a

 

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“Participant”) participating interests in any Revolving Loan owing to such Lender, any
Revolving Note held by such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender’s obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any such Revolving Loan or
Revolving Note for all purposes under the Loan Documents, all amounts payable by Borrower under
this Agreement shall be determined as if such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under the Loan Documents. In no event shall
any Participant have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by Borrower or any Guarantor therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or interest on, the
Loans or any fees payable hereunder, or postpone the Revolving Credit Maturity Date, in each case
to the extent subject to such participation.

               (c) Any Lender may, in the ordinary course of its business and in accordance with applicable
law, at any time assign to an Eligible Assignee all or any part of its rights and obligations under
the Loan Documents. Such assignment shall be pursuant to an Assignment and Assumption. The
consent of the Agent and the Borrower shall be required prior to an assignment becoming effective
if so required for the assignee to be an “Eligible Assignee”. Each such assignment shall be in
an amount not less than the lesser of (i) $5,000,000, or (ii) the remaining amount of the assigning
Lender’s Commitment (calculated as at the date of such assignment). Upon (i) delivery to the
Agent of an Assignment and Assumption, together with any consents required above, and (ii) payment
of a $3,500 fee to the Agent for processing such assignment, such assignment shall become effective
on the effective date specified in such Assignment and Assumption. On and after the effective date
of such assignment, such Eligible Assignee shall for all purposes be a Lender to this Agreement and
any other

 

- 77 -

Loan Document executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Agent shall be required to release
the transferor Lender, and the transferor Lender shall be released without any further action, with
respect to the Commitments and Revolving Loans assigned to such Eligible Assignee. Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does not comply with
this Section 10.3(c) shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 10.3(b) of this Agreement.
Upon the consummation of any assignment to an Eligible Assignee pursuant to this Section 10.3(c),
the transferor Lender, the Agent and the Borrower shall make appropriate arrangements so that
replacement Revolving Notes, if applicable, are issued to such transferor Lender and new Revolving
Notes or, as appropriate, replacement Revolving Notes, are issued to such Eligible Assignee, in
each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to
such assignment.

               (d) Any Lender may at any time pledge or assign all or any portion of its rights under the
Loan Documents to any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or assignment or enforcement thereof
shall release Lender from its obligations under any of the Loan Documents.

          10.4 Successors and Assigns. Borrower, Guarantor, Subsidiary, Lenders and Agent as such
terms are used herein shall include the legal representatives, successors and assigns of those
parties.

          10.5 Notices. Any notice, request or demand to or upon the respective parties hereto to be
effective shall be in writing, unless otherwise expressly provided herein, and shall be deemed to
have been given or made when delivered by hand or by facsimile (with a copy by regular mail), one
(1) Business Day after being delivered to a courier for overnight delivery or three (3) Business
Days after being deposited in the first class United States mail, addressed as follows, or to such
other address as may be hereafter notified by the respective parties hereto:

 

- 78 -

	 	 	 
	To the Borrower:

	 	Astronics Corporation
	 

	 	130 Commerce Way
	 

	 	East Aurora, New York 14052
	 

	 	Attn: David C. Burney, Vice President-Finance and Treasurer
	 

	 	Facsimile No. 716-805-1286
	 

	 	Telephone No. 716-805-1599 ext. 159
	 
	 	 
	(With a copy

	 	Hodgson Russ LLP
	which shall not

	 	The Guaranty Building
	itself constitute

	 	140 Pearl Street, Suite 100
	notice to):

	 	Buffalo, New York 14202-4040
	 

	 	Attention: Victoria J. Saxon, Esq.
	 

	 	Facsimile No. 716-849-0349
	 

	 	Telephone No. 716-848-1755
	 
	 	 
	To HSBC Bank:

	 	HSBC Bank USA, National Association
	 

	 	Commercial Banking Department
	 

	 	One HSBC Center
	 

	 	Buffalo, New York 14203
	 

	 	Attn: Mark F. Zeis, Senior Vice President
	 

	 	Facsimile No. 716-841-6782
	 

	 	Telephone No. 716-841-2132
	 
	 	 
	(With a copy

	 	Phillips Lytle LLP
	which shall not

	 	3400 HSBC Center
	itself constitute

	 	Buffalo, New York 14203
	notice to):

	 	Attention: Raymond H. Seitz, Esq.
	 

	 	Facsimile No. 716-852-6100
	 

	 	Telephone No. 716-847-7065

          10.6 Governing Law. This Agreement, the transactions described herein and the obligations
of the parties hereto shall be construed under, and governed by, the internal laws of the State of
New York without regard to principles of conflicts of law.

          10.7 Counterparts. This Agreement may be executed in any number of counterparts and by the
Agent, the Lenders and the Borrower on separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together constitute one and the
same Agreement.

          10.8 Titles. Titles to the sections of this Agreement are solely for the convenience of
the parties, and are not an aid in the interpretation of this Agreement or any part thereof.

          10.9 Inconsistent Provisions. The terms of this Agreement and any related agreements,
instruments or other documents shall be cumulative except to the extent that they are specifically
inconsistent with each other, in which case the terms of this Agreement shall prevail.

 

- 79 -

          10.10 Course of Dealing. Without limitation of the foregoing, the Agent and the Lenders
shall have the right, but not the obligation, at all times to enforce the provisions of this
Agreement and all other documents executed in connection herewith in strict accordance with their
terms, notwithstanding any course of dealing or performance by the Lenders or the Agent in
refraining from so doing at any time and notwithstanding any custom in the banking trade. Any
delay or failure by the Lenders or the Agent at any time or times in enforcing its rights under
such provisions in strict accordance with their terms shall not be construed as having created a
course of dealing or performance modifying or waiving the specific provisions of this Agreement.

          10.11 USA Patriot Act Notification. Each Lender hereby notifies the Borrower that pursuant
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56), such Lender is required
to obtain, verify and record information that identifies Borrower, which information includes the
name and address of Borrower and other information that will allow such Lender to identify Borrower
in accordance with the USA Patriot Act (collectively, the “Customer Identification Materials”).
Borrower has delivered to the Agent, and the Agent acknowledges receipt from the Borrower of, the
Customer Identification Materials requested by the Agent to satisfy the Agent’s regulatory
requirements with respect thereto. Borrower consents to the dissemination of such Customer
Identification Materials by the Agent to each Lender.

          10.12 JURY TRIAL WAIVER. BORROWER, THE AGENT AND EACH LENDER, HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THEY MAY HAVE IN ANY ACTION OR
PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY LOAN DOCUMENT OR THE
TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT NEITHER ANY REPRESENTATIVE OF
THE AGENT OR ANY LENDER NOR THE AGENT NOR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE AGENT OR ANY LENDER WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL
WAIVER. BORROWER ACKNOWLEDGES THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

          10.13 CONSENT TO JURISDICTION. BORROWER, THE AGENT AND EACH LENDER AGREE THAT ANY ACTION
OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS AGREEMENT MAY BE COMMENCED IN THE SUPREME COURT OF
NEW YORK IN ERIE COUNTY, OR IN THE DISTRICT COURT OF THE UNITED STATES IN THE WESTERN DISTRICT OF
NEW YORK, AND THE BORROWER WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED AND SHALL
CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR CERTIFIED MAIL TO THE BORROWER, OR AS
OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR THE UNITED STATES.

[SIGNATURE PAGE FOLLOWS]

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly
authorized officers, all as of the 13th day of May, 2008.

	 	 	 	 	 
	 	ASTRONICS CORPORATION

 	 
	 	By:  	
 	 
	 	 	David C. Burney 	 
	 	 	Vice President-Finance and Treasurer 	 
	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION,

as Agent, Swingline Lender, Lender, Issuing Bank

and Arranger

 	 
	 	By:  	
 	 
	 	 	Mark F. Zeis 	 
	 	 	Senior Vice President 	 
	 
	 	BANK OF AMERICA, N.A., as a Lender

 	 
	 	By:  	
 	 
	 	 	Thomas C. Lillis 	 
	 	 	Senior Vice President 	 
	 
	 	KEYBANK NATIONAL ASSOCIATION, as a Lender

 	 
	 	By:  	
 	 
	 	 	Mark F. Wachowiak 	 
	 	 	Vice President 	 
	 

[SIGNATURE PAGE TO ASTRONICS CREDIT AGREEMENT]

 

 

EXHIBIT A

REVOLVING NOTE

			
	 	 	 
	 
	 	Buffalo, New York
	$                    
	 	May 13, 2008        

          FOR VALUE RECEIVED, the undersigned, ASTRONICS CORPORATION (“Borrower”) hereby unconditionally
promises to pay, on or before May 13, 2013, to the order of
______ (“Lender”) at the
Agent’s Commercial Banking Department’s office of the Agent (as defined in the Credit Agreement as
hereinafter defined) at One HSBC Center, Buffalo, New York 14203, or at the holder’s option, at
such other place as may be designated by the holder, in lawful money of the United States of
America, a principal sum equal to the lesser of
______($___) or the aggregate unpaid principal amount of all Revolving Loans made by
Lender to the Borrower from time to time under a Credit Agreement, dated of as of May 13, 2008,
among the Borrower, HSBC Bank USA, National Association as agent, for itself, the Lender and other
lending institutions and issuing banks now or hereafter parties thereto, as the same may hereafter
be amended, supplemented, renewed, restated, replaced or otherwise modified from time to time
(“Credit Agreement”) as evidenced by the inscriptions made on the schedule attached hereto, or any
continuation thereof (“Schedule”). The Borrower further promises to pay interest on the unpaid
principal amount hereof from time to time at the rates and at such times as are specified in the
Credit Agreement. All capitalized terms used herein and not otherwise defined herein shall have
the meanings specified in the Credit Agreement.

          The Lender and each holder of this Note are authorized to inscribe on the Schedule, the date
of the making of each Revolving Loan, the amount of each Revolving Loan, the applicable Rate
Options and Interest Periods, all payments on account of principal and the aggregate outstanding
principal balance of this Note from time to time unpaid. Each entry set forth on the Schedule
shall be prima facie evidence of the facts so set forth. No failure by the Lender or any holder of
this Note to make, and no error in making, any inscriptions on the Schedule shall affect Borrower’s
obligation to repay the full principal amount loaned to or for the account of Borrower, or the
Borrower’s obligation to pay interest thereon at the agreed upon rate.

          If any payment on this Note becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day, and the Borrower will pay
interest thereon at the then applicable rate until the date of actual receipt of such installment
by the holder of this Note.

          No failure by the holder to exercise, and no delay in exercising, any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by the holder of any
right or powers hereunder preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the holder as herein specified

 

- 2 -

are cumulative and not exclusive of any other rights or remedies which the holder may
otherwise have.

          No modification, rescission, waiver, release or amendment of any provision of this Note shall
be made except by a written agreement subscribed by a duly authorized officer of the Borrower and
the holder hereof.

          Borrower waives diligence, presentment, protest and demand, and also notice of protest,
demand, dishonor and nonpayment of this Note.

          This Note evidences a borrowing under the Credit Agreement to which reference is hereby made
with respect to interest rate options and periods, prepayments of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and rights of acceleration of the
principal hereof on the occurrence of certain events. The obligations of the Borrower under this
Note, and the obligations of the Guarantors under the Loan Documents, are secured by the Collateral
referred to in the Collateral Documents.

          Borrower agrees to pay on demand all reasonable costs and expenses incurred by the holder in
enforcing this Note or in collecting the indebtedness evidenced hereby, including, without
limitation, if the holder retains counsel for any such purpose, reasonable attorneys’ fees and
expenses.

          This Note shall be construed under, and governed by, the internal laws of the State of New
York without regard to principles of conflicts of laws.

	 	 	 	 	 
	 	ASTRONICS CORPORATION

 	 
	 	By:  	
 	 
	 	 	David C. Burney 	 
	 	 	Vice President-Finance and Treasurer 	 

 

 

	 	 	 	 	 

SCHEDULE

LOANS AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	AMOUNT	 	 	 	 
	 	 	DATE LOAN	 	AMOUNT OF	 	 	 	 	 	OF	 	AGGREGATE	 	 
	TYPE	 	MADE, CON-	 	LOAN MADE,	 	INTEREST	 	 	 	PRINCIPAL	 	UNPAID	 	NOTATION
	OF	 	TINED OR	 	CONTINUED OR	 	PERIOD	 	DUE	 	PAID OR	 	PRINCIPAL	 	MADE BY
	LOAN	 	CONVERTED	 	CONVERTED	 	DATES	 	DATE	 	PREPAID	 	BALANCE	 	AND DATE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT B

SWINGLINE NOTE

			
	 	 	 
	 
	 	Buffalo, New York
	$10,000,000.00  
	 	 May 13, 2008        

          FOR VALUE RECEIVED, the undersigned, ASTRONICS CORPORATION, a New York business corporation
having its principal place of business at 130 Commerce Way, East Aurora, New York 14052
(“Borrower”) promises to pay, ON DEMAND, to the order of HSBC BANK USA, NATIONAL ASSOCIATION
(“Lender”) at the banking office of the Agent (as defined in the Credit Agreement, as hereinafter
defined) at One HSBC Center, Buffalo, New York 14203, in lawful money of the United States and in
immediately available funds, the lesser of (i) the principal amount of Ten Million Dollars
($10,000,000) or (ii) the aggregate amount of all unpaid Swingline Loans made by Lender to Borrower
as shown on the schedule on the reverse side of this Note or any continuation schedule (“Schedule”)
together with interest as provided in the next paragraph. In this Note, any capitalized term not
defined in this Note has the meaning defined in a Credit Agreement, dated as of May 13, 2008, among
the Borrower, HSBC Bank USA, National Association as agent, for itself, the Lenders and other
lending institutions and issuing banks now or hereafter parties thereto, as the same may hereafter
be amended, supplemented, renewed, restated, replaced or otherwise modified from time to time
(“Credit Agreement”).

          From and including the date of this Note to but not including the date the outstanding
principal amount of this Note is paid in full, the Borrower shall pay to the Agent for the account
of the holder of this Note (“Holder”) interest on such outstanding principal amount at a rate per
year that shall on each day prior to demand be equal to the Prime Rate from time to time in effect.
After an unsatisfied demand for payment, this Note shall bear interest at a per annum rate of
interest equal to 2% in excess of the Prime Rate from time to time in effect. In no event shall
such interest be payable at a rate in excess of the maximum rate of interest permitted by
applicable law. A payment of such interest shall become due on the first day of each calendar
month, beginning on June 1, 2008 and on the date this Note is repaid in full. Interest shall be
calculated on the basis of a 365-day year or 366-day year, as applicable, for the actual number of
days elapsed.

          The Holder is authorized to inscribe on the Schedule the date of each Swingline Loan made
hereunder, each repayment of principal and the aggregate unpaid principal balance of this Note.
Each entry set forth on the Schedule shall be prima facie evidence of the facts so set forth. No
failure by the Holder to make, and no error by the Holder in making, any inscription on the
Schedule shall affect the Borrower’s obligation to repay the full amount advanced on this Note to
or for the account of the Borrower, or Borrower’s obligation to pay interest thereon at this agreed
upon rate.

 

- 2 -

          If any payment on this Note becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day, and the Borrower will pay
interest thereon at the then applicable rate until the date of actual receipt of such installment
by the holder of this Note.

          No failure by the holder to exercise, and no delay in exercising, any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by the holder of any
right or powers hereunder preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the holder as herein specified are cumulative and
not exclusive of any other rights or remedies which the holder may otherwise have.

          No modification, rescission, waiver, release or amendment of any provision of this Note shall
be made except by a written agreement subscribed by a duly authorized officer of the Borrower and
the holder hereof.

          Borrower waives diligence, presentment, protest and demand, and also notice of protest,
demand, dishonor and nonpayment of this Note.

          This Note is the Swingline Note referred to in the Credit Agreement and is otherwise entitled
to the benefits of the Credit Agreement. The obligations of the Borrower under this Note, and the
obligations of the Guarantors under the Loan Documents, are secured by the Collateral referred to
in the Collateral Documents.

          Borrower agrees to pay on demand all reasonable costs and expenses incurred by the holder in
enforcing this Note or in collecting the indebtedness evidenced hereby, including, without
limitation, if the holder retains counsel for any such purpose, reasonable attorneys’ fees and
expenses.

          This Note shall be construed under, and governed by, the internal laws of the State of New
York without regard to principles of conflicts of laws.

	 	 	 	 	 
	 	ASTRONICS CORPORATION

 	 
	 	By:  	
 	 
	 	 	David C. Burney 	 
	 	 	Vice President-Finance and Treasurer 	 

 

- 3 -

	 	 	 	 	 

SCHEDULE

SWINGLINE LOANS AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 
	 	 	 	 	AMOUNT OF	 	AGGREGATE	 	 
	 	 	PRINCIPAL	 	PRINCIPAL PAID OR	 	UNPAID PRINCIPAL	 	INSCRIPTION MADE
	DATE	 	AMOUNT	 	REPAID	 	BALANCE	 	BY
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT C

COMPLIANCE CERTIFICATE

          ASTRONICS CORPORATION (“Borrower’) hereby certifies to HSBC BANK USA, NATIONAL ASSOCIATION
(“HSBC Bank”) as Agent and the Lenders pursuant to the Credit Agreement between the Borrower and
the Agent and the Lenders dated as of May 13, 2008 (“Agreement”), that:

     1. Capitalized terms not defined herein shall have the meanings set forth in the Agreement.

     2. The Borrower has complied with all the terms, covenants and conditions to be performed or
observed by it contained in the Agreement and the Loan Documents.

     3. There exists no Default or Event of Default or Material Adverse Effect on the date hereof
or, if applicable, after giving effect to the Loan made, continued or converted on the date hereof.

     4. The representations and warranties contained in the Agreement, in any Loan Document or in
any certificate, document or financial or other statement furnished at any time thereunder are
true, correct and complete in all material respects with the same effect as though such
representations and warranties had been made on the date hereof, except to the extent that any such
representation and warranty relates solely to an earlier date (in which case such representation
and warranty shall be true, correct and complete on and as of such earlier date).

     5. There is no unsatisfied reimbursement obligation of the Borrower in connection with any
Letter of Credit, the Existing Letter of Credit or the IRB Letters of Credit.

     6. As of the date hereof and for the period ending date set forth below, the computations,
ratios and calculations set forth in this Certificate are true and correct:

          Period Ending Date:                     

	 	 	 	 	 	 	 	 	 
	 	§6.13	 	 	Minimum Debt Service Coverage Ratio
	 	 	 	 
	 
	 	 	 	 	Consolidated Debt Service Coverage Ratio
	 	 	= _____:1.0	 
	 
	 	 	 	 	Required:
3 2.50 to 1.0
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	§6.14	 	 	Maximum Capital Expenditures
	 	 	 	 
	 
	 	 	 	 	Consolidated Capital Expenditures
	 	$	 	 
	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	Required:
£ 10,000,000
	 	 	 	 

 

- 2 -

	 	 	 	 	 	 	 	 	 
	 	§6.15	 	 	Maximum Leverage Ratio
	 	 	 	 
	 
	 	 	 	 	Consolidated Leverage Ratio
	 	=	 _____:1.0	 
	 
	 	 	 	 	Required:
£ 3.00 to 1.0
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	§6.16	 	 	Minimum Net Worth
	 	 	 	 
	 
	 	 	 	 	Consolidated Net Worth
	 	= 	$	 
	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	Required:
3 40,000,000 increased
by 25% of Consolidated Net Income
after 12/31/07
	 	 	 	 

          WITNESS the signature of a duly authorized officer of the Borrower on ___, 20___.

	 	 	 	 	 	 	 
	 	 	ASTRONICS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT D

REQUEST CERTIFICATE

Revolving Credit

          The undersigned hereby certifies to HSBC Bank USA, National Association (“HSBC Bank”) in
accordance with the terms of a Credit Agreement dated as of May 13, 2008 among Astronics
Corporation (“Borrower”), HSBC Bank as Agent and the Lenders;

          The undersigned requests or has requested by telephone or facsimile notice a:

          (Check One)

o new loan

o conversion

o continuation

of a

          (Check One)

o Libor Loan

o  ABR Loan

to a or as a

          (Check One)

o Libor Loan

o  ABR Loan

in the amount of $___for an Interest Period, if applicable, of

          (Check One)

o one month.

o two months.

o three months.

o six months.

The proposed loan/conversion/continuation is to be made on ___, 20___which is a Business
Day.

 

- 2 -

          WITNESS
the signature of the undersigned authorized signatory of the Borrower this ______ day of
___, 20___.

	 	 	 	 	 	 	 
	 	 	ASTRONICS CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	 	 	 
	 

	 	 	 	 	 	 

 

 

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

     Reference is made to a Credit Agreement, dated as of May 13, 2008, among Astronics
Corporation, HSBC Bank USA, National Association as agent, for itself, the Lenders and other
lending institutions and issuing banks now or hereafter parties thereto, as the same may hereafter
be amended, supplemented, renewed, restated, replaced or otherwise modified from time to time
(“Credit Agreement”). Terms defined in the Credit Agreement are used herein as defined therein.

     The Assignor identified on Schedule 1 hereto (“Assignor”) and the Assignees identified on
Schedule 1 hereto (each, an “Assignee”, and collectively, the “Assignees”) agree as follows:

          1. Assignor hereby irrevocably sells and assigns to the Assignees, without recourse to
Assignor, and each Assignee hereby irrevocably purchases and assumes from Assignor, without
recourse to Assignor, as of the Effective Date (as defined below), the interest described on
Schedule 1 hereto (each, an “Assigned Interest”, and collectively, the “Assigned Interests”) in and
to Assignor’s rights and obligations under the Credit Agreement with respect to those credit
facilities contained in the Credit Agreement as are set forth on Schedule 1 hereto (“Assigned
Facility”) in a principal amount for each Assigned Facility as set forth on Schedule 1 hereto.

          2. Assignor (i) represents and warrants that (A) it is legally authorized to enter into this
Assignment and Assumption, (B) as of the date hereof, its Revolving Credit Commitment is $0, and
its Applicable Percentage is 0%, in each case after giving effect to the assignment contemplated
hereby, (ii) makes no representation or warranty, express or implied and assumes no responsibility
with respect to any statements, warranties or representations made in or in connection with the
Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant
thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto or the attachment, perfection or priority of any security interest or mortgage,
other than that it has not created any adverse claim upon the interest being assigned by it
hereunder and that such interest is free and clear of any such adverse claim; and (iii) makes no
representation or warranty and assumes no, responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or any other obligation or the performance or observance
by the Borrower, any of its Subsidiaries or any other Person primarily or secondarily liable in
respect of the Obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto.

          3. Each of the Assignees (i) represents and warrants that (A) it is duly and legally
authorized to enter into this Assignment and Assumption, (B) the execution, delivery and

 

- 2 -

performance of this Assignment and Assumption do not conflict with any provision of law or of the
charter or by-laws of such Assignee, or of any agreement binding on such Assignee, and (C) all
acts, conditions and things required to be done and performed and to have occurred prior to the
execution, delivery and performance of this Assignment and Assumption, and to render the same the
legal, valid and binding obligation of such Assignee, enforceable against it in accordance with its
terms, have been done and performed and have occurred in due and strict compliance with all
applicable laws; (ii) confirms that it has received a copy of the Credit Agreement, together with
copies of the financial statements delivered pursuant to Section 5.2 thereof, if any, the other
Loan Documents, and such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Assumption; (iii) agrees that it
will, independently and without reliance upon the Assignor, the Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto or thereto; (iv) appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the Notes or any other instrument or document furnished
pursuant hereto or thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; (v) acknowledges that it has made arrangements with the Assignor
satisfactory to such Assignee with respect to its pro rata share of letter of credit fees in
respect of outstanding Letters of Credit; and (vi) agrees that it will be bound by the provisions
of the Credit Agreement and will perform in accordance with its terms all the obligations which by
the terms of the Credit Agreement are required to be performed by it as a Lender including, if it
is organized under the laws of a jurisdiction outside the United States of America, its obligation
pursuant to Section 9.18 of the Credit Agreement to deliver the forms prescribed by the Internal
Revenue Service of the United States certifying as to such Assignee’s exemption from United States
withholding taxes with respect to all payments to be made to such Assignee under the Credit
Agreement, or such other documents as are necessary to indicate that all such payments are subject
to such tax at a rate reduced by an applicable tax treaty.

          4. On the Effective Date (as defined below), the Assignor shall return to the Borrower the
Revolving Note payable to Assignor which is being changed as the result of this Assignment and
Assumption, stamped “Replaced”.

          5. The effective date for this Assignment and Assumption shall be the Effective Date of the
Assignment described in Schedule 1 hereto (the “Effective Date”). Schedule 2.1 to the Credit
Agreement shall thereupon be replaced by a new Schedule 2.1 in the form annexed hereto.

          6. From and after the Effective Date, the Agent shall make all payments in respect of the
Assigned Interests (including payments of principal, interest, fees and other amounts) to the
Assignees that accrue subsequent to the Effective Date. The Assignor and the Assignees shall make
directly between themselves any appropriate adjustments in payments for periods prior to the
Effective Date by the Agent or with respect to the making of this assignment.

 

- 3 -

          7. From and after the Effective Date, (i) each of the Assignees shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Assumption, have the rights and
obligations of a Lender thereunder and under the Notes and shall be bound by the provisions
thereof, and (ii) the Assignor shall, to the extent provided in this Assignment and Assumption,
relinquish its rights and be released from its obligations under the Credit Agreement.
Notwithstanding anything to the contrary contained herein, the Assignor shall retain its right to
be indemnified pursuant to Section 8.1 of the Credit Agreement with respect to any claims or
actions arising prior to the Effective Date.

          8. This Assignment and Assumption may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and any of the parties hereto may
execute this Assignment and Assumption by signing any such counterpart.

[SIGNATURE PAGE FOLLOWS]

 

- 4 -

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption to be
executed as of ______, 20___ by their respective duly authorized officers.

	 	 	 	 	 
	ASSIGNOR:	 	 
	 
	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	ASSIGNEE:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

SCHEDULE 1

to

Assignment and Assumption

I. As to the Revolving Credit Facility in respect of which an interest is being assigned:

	 	 	 	 	 
	Percentage interest assigned:
	 	 	 	%
	 
	 	 	 
	 
	 	 	 	 
	Assignee’s Revolving Credit Commitment:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Aggregate
outstanding principal amount of Revolving Loans assigned:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Principal amount of Revolving Note
payable to Assignee:
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Principal amount of Revolving Note
payable to Assignor:
	 	$	 	 
	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective Date of Assignment 
	 	 	 	 	 , 200         	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[NAME OF ASSIGNOR], as Assignor	 	 	 	[NAME OF ASSIGNEE], as Assignee	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 	 	Name:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	, 200___
	 	 	 	Dated:
	 	 	 	, 200___	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Domestic Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Libor Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

 

- 2 -

Accepted this ___day of

                    , 200            
        

ASTRONICS CORPORATION, as Borrower

	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	HSBC BANK USA, NATIONAL ASSOCIATION,

as Agent	 	 
	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

 

 

SCHEDULE 1

EMPLOYEE BENEFITS PLAN

Atro Companies’ Profit Sharing/401K Plan

 

 

SCHEDULE 2.1

LENDERS’ COMMITMENTS

	 	 	 	 	 	 	 	 	 
	 	 	Commitment	 	Applicable
	Lender	 	(In Millions)	 	Percentage
	HSBC Bank USA, National Association
	 	$	30.0	 	 	 	50.0	%
	Bank of America, N.A.
	 	$	15.0	 	 	 	25.0	%
	KeyBank National Association
	 	$	15.0	 	 	 	25.0	%
	 
	TOTAL
	 	$	60.0	 	 	 	100	%

Applicable Lending Offices:

	 	 	 	 	 
	1. Lender
	 	2. Domestic Lending Office	 	3. Libor Lending Office
	 
	 	 	 	 
	 
	 	 	 	4.
	 
	 	 	 	 
	5. HSBC Bank USA, National
	 	7. One HSBC Center	 	9. One HSBC Center
	 
	 	 	 	 
	6. Association
	 	8. Buffalo, NY  14203	 	10. Buffalo, NY  14203
	 
	 	 	 	 
	 
	 	 	 	11.
	 
	 	 	 	 
	12. Bank of America, N.A.
	 	13. 2001 Clayton Road	 	18. 2001 Clayton Road
	 
	 	 	 	 
	 
	 	14. Concord, CA  94520	 	19. Concord, CA  94520
	 
	 	 	 	 
	 
	 	15. Attn:  Anna Maria Finn	 	20. Attn:  Anna Maria Finn

 

- 2 -

	 	 	 	 	 
	 
	 	16. Credit Service Rep.	 	21. Credit Service Rep.
	 
	 	 	 	 
	 
	 	17.	 	22.
	 
	 	 	 	 
	23. KeyBank National
	 	24. 50 Fountain Plaza, 17th Floor	 	26. 50 Fountain Plaza, 17th Floor
	Association
	 		 	
	 
	 	 	 	 
	 
	 	25. Buffalo, NY  14202	 	27. Buffalo, NY  14202
	 
	 	 	 	 
	28.
	 	29.	 	30.
	 
	 	 	 	 
	31.
	 	32.	 	33.
	 
	 	 	 	 
	34.
	 	35.	 	36.

ISSUING BANK’S COMMITMENT

	 	 	 
	 	 	Letter of Credit
	Issuing Bank	 	Commitment
	HSBC Bank USA, National Association
	 	$5,000,000

 

 

SCHEDULE 4.11

SUBSIDIARIES; AFFILIATES

	 	 	 
	Company	 	Incorporated
	Luminescent Systems, Inc.

	 	New York
	 
	 	 
	Luminescent Systems Europe B.V.B.A.

	 	Belgium
	 
	 	 
	Luminescent Systems of Canada Inc.

	 	Quebec, Canada
	 
	 	 
	Astronics Advanced Electronic Systems Corp.

	 	Washington
	 
	 	 
	Astronics Air LLC *

	 	New York

 

			
	*	 	Sole asset is a single-engine aircraft

 

 

SCHEDULE 6.2

LIENS AND INDEBTEDNESS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Due
	Property/Equipment	 	Owner	 	Lien Held By	 	Type	 	Balance	 	Date
	Lot 27, Centerra 

Business Park 

4 Lucent Drive 

Lebanon, New Hampshire

	 	Luminescent
Systems, Inc.
	 	HSBC Bank
	 	IRB *
	 	$	4,516,000	 	 	06/18
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	130 Commerce Way 

East Aurora, New York

	 	Luminescent
Systems, Inc.

Luminescent
Systems, Inc.
	 	HSBC Bank

HSBC Bank
	 	IRB *

IRB *
	 	$

$	3,340,000

6,084,000	 	 	12/19

4/27
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Unsecured Loan

	 	Astronics

Corporation
	 	Empire State

Development

Corporation
	 	Loan
	 	$	50,091	 	 	3/1/11
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Unsecured Loan
Backed by Existing
Letter of Credit

	 	Luminescent
Systems Canada
Inc.
	 	HSBC Bank

Canada
	 	Loan
	 	$	1,357,539.91	 	 	Demand,

no later

8/31/15

 

			
	*	 	Each of the IRB transactions are variable rate bond transactions backed by one of the IRB Letters
of Credit.

 

- 2 -

SCHEDULE 6.3

INVESTMENTS AND GUARANTY OBLIGATIONS

15,000 shares of common stock of Tel-Instrument Electronics Corp., which is traded on the American
Stock Exchange, with an approximate value as of April 22, 2008 of $3.90 per share.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]