Document:

Exhibit 10.4

EXHIBIT 10.4

TERM NOTE

			
	 	 	 
	$4,588,235.30 
	 	Buffalo, New York

December 23, 2009

FOR VALUE RECEIVED, the undersigned, ASTRONICS CORPORATION (“Borrower”) hereby unconditionally
promises to pay to the order of KEYBANK NATIONAL ASSOCIATION (“Lender”), at the Commercial Banking
Department Office of the Agent (as defined in the Credit Agreement as hereinafter defined) at One
HSBC Center, Buffalo, New York 14203, or at Lender’s option, at such other place as may be
designated from time to time by the Lender, the principal sum of Four Million Five Hundred
Eighty-Eight Thousand Two Hundred Thirty-Five and 30/100 Dollars ($4,588,235.30) in lawful money of
the United States of America, in seventeen (17) consecutive quarterly installments of principal as
follows: One (1) quarterly principal installment of $352,941.17 on January 1, 2010, followed by
eleven (11) equal consecutive quarterly principal installments of $176,470.58 each commencing on
April 1, 2010, and payable on the first day of each July, October, January and April thereafter, to
and including October 1, 2012, followed by four (4) equal consecutive quarterly principal
installments of $352,941.17 each payable on the first day of January, April, July and October in
2013, and one (1) final installment on January 30, 2014 in an amount equal to the then unpaid
principal balance hereof, together with interest as provided below.

The Borrower further promises to pay interest on the unpaid principal amount hereof from time
to time at the rates and on the dates determined in accordance with the provisions of an Amended
and Restated Credit Agreement dated as of January 30, 2009 among the Borrower, HSBC Bank USA,
National Association, as agent, for itself, the Lender, and the other lending institutions and
issuing banks now or hereafter parties thereto, as the same has been and may hereafter be amended,
supplemented, renewed, replaced or otherwise modified (“Credit Agreement”). All capitalized terms
used herein and not otherwise defined herein shall have the meanings specified in the Credit
Agreement.

After maturity, whether by acceleration or otherwise, this Note shall bear interest at a rate
per annum equal to two percent (2%) plus the rate of interest otherwise applicable on this Note;
provided, however, in no event shall the rate of interest on this Note exceed the maximum rate
authorized by applicable law.

The holder hereof is authorized to inscribe on the schedule attached to this Note or any
continuation thereof (“Schedule”) the amount of each repayment of principal, the amount and, the
date of the continuation or conversion of any Libor Loan or ABR Loan, and the dates on which each
Interest Period shall begin and end. Each entry 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 undersigned’s obligation to repay the full
principal amount advanced by the holder to or for the account of the undersigned or the
undersigned’s obligation to pay interest thereon at the agreed upon rate.

 

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If any installment of this Note is not paid when due, whether because such installment becomes
due on a Saturday, Sunday or bank holiday or for any other reason, the Borrowers will pay interest
thereon at the aforesaid rate until the date of actual receipt of such installment by the holder of
this Note.

No failure by the holder hereof 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 power 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 duly authorized officers of the Borrowers and
the holder hereof.

This Note is a Term Note as referred to in the Credit Agreement, to which reference is hereby
made with respect to interest rate provisions, mandatory and voluntary prepayment provisions,
prepayment premiums, collateral and rights of acceleration of the principal hereof on the
occurrence of certain events. This Term Note is given in substitution and replacement for, but not
in payment of, a Term Note dated January 30, 2009 issued by the Borrower to the Lender in the face
principal amount of $7,058,823.52.

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

Borrower agrees to pay all 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	 	 

 

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SCHEDULE

LOANS, RATE OPTIONS AND PAYMENTS OF PRINCIPAL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	AMOUNT OF	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LOAN	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DATE LOAN	 	 	MADE,	 	 	 	 	 	 	 	 	 	 	AMOUNT OF	 	 	AGGREGATE	 	 	 	 
	 	 	MADE, CONTINUED	 	 	CONTINUED	 	 	INTEREST	 	 	 	 	 	 	PRINCIPAL	 	 	UNPAID	 	 	NOTATION	 
	TYPE OF	 	 OR	 	 	OR	 	 	PERIOD	 	 	DUE	 	 	PAID OR	 	 	PRINCIPAL	 	 	MADE BY	 
	LOAN	 	CONVERTED	 	 	CONVERTED	 	 	DATES	 	 	DATE	 	 	PREPAID	 	 	BALANCE	 	 	AND DATEExhibit 10.1

EXHIBIT 10.1

CODORUS VALLEY BANCORP, INC.

TARP RESTRICTION AGREEMENT

This TARP RESTRICTION AGREEMENT (this “Agreement”) is made and entered into as of      , 2009, by and
between CODORUS VALLEY BANCORP, INC., a Pennsylvania business corporation having its principal place of business in
York, Pennsylvania and PEOPLESBANK, A CODORUS VALLEY COMPANY, a Pennsylvania banking corporation (collectively the
“Company”), and              (the “Executive”).

BACKGROUND

1. Executive is currently employed as             of the Company.

2. On January 9, 2009, the Company issued and sold to the U.S. Treasury Department (“Treasury”) under the Troubled
Asset Relief Program Capital Purchase Program (the “TARP Program”), established under the Emergency Economic
Stabilization Act of 2008 (Pub.L. 110-343, Div. A, enacted October 3, 2008), and amended by the American Recovery and
Reinvestment Act of 2009 (Pub.L. 111-5, enacted February 17, 2009) and subsequent Treasury guidance (the “TARP Interim
Final Rules”), 16,500 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A and a Warrant
to purchase up to 263,859 shares of the Company’s common stock, for an aggregate purchase price of $16,500,000 in cash.

3. As required to participate in the TARP Program, the Company must adopt the Treasury standards for executive
compensation and corporate governance, for the period during which Treasury holds equity or debt securities of the
Company issued under this Program (the “TARP Compliance Period”).

4. Under the TARP Program, Treasury’s standards apply to the senior executive officers (the “SEOs”) of the Company
and other “most highly compensated employees” (as such terms are defined under the TARP Interim Final Rules).

AGREEMENT

NOW, THEREFORE, as required to participate in the TARP Program, and in consideration of the mutual promises
contained herein, and each intending to be legally bound, Executive and Company agree as follows:

1. Background. The matters set forth in the “Background” section of this Agreement are incorporated by
reference herein.

2. SEO and Top 5. During any time period in which Executive is classified by the Company as (i) an SEO or
(ii) one of the next 5 “most highly compensated employees,” as defined in the TARP Interim Final Rules (the “Top 5’),
he or she agrees as follows:

a. Golden Parachute Restrictions. Executive agrees to forfeit all “Golden Parachute” payments, whether
Executive is entitled to such payment, or solely obtains a legally enforceable right to such payment during the TARP
Compliance Period. “Golden Parachute” payments are defined as payments resulting from Executive’s departure from the
Company for any reason (except for services performed or benefits already accrued), and payments made on account of the
Company’s “change in control” (as defined in 26 CFR 1.280G-1, Q&A-27 through Q&A-29 or as a change in control event as
defined in 26 CFR 1.409A-3(i)(5)(i)). Such payments shall be determined in a manner that is consistent with the TARP
Interim Final Rules; and

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3. SEO and Top 20. During any time period in which Executive is classified by the Company as (i) an SEO
or (ii) one of the next 20 “most highly compensated employees,” as defined in the TARP Interim Final Rules (the “Top
20”), he or she agrees as follows:

a. Incentive Compensation Recovery. Executive agrees that Executive shall repay to the Company any bonus
and incentive compensation paid to Executive during the TARP Compliance Period, if the payments were based on
materially inaccurate financial statements or any other materially inaccurate performance metric criteria. This
repayment shall not be limited to a specific recovery period, material inaccuracies in financial reporting statements,
or inaccuracies that result in account restatements. The recovery encompasses all incentive compensation paid to
Executive as a result of any determination of achievement of a performance metric that is later determined to have been
based on material inaccuracies related to financial reporting. For purposes of this paragraph and without limiting the
foregoing, financial statements or performance metric criteria are treated as being materially inaccurate with respect
to Executive if, Executive either knowingly engages in providing inaccurate information or knowingly fails to timely
correct inaccurate information relating to those financial statements or performance metrics;

b. Gross-Up Payment Restrictions. Executive agrees to forfeit all “Gross-Up” payments or legally
enforceable rights to such payments, during the TARP Compliance Period. “Gross-Up” payments are defined as any
reimbursement by the Company of taxes owed to Executive with respect to any compensation, provided that such payment
does not include a payment under an agreement or other arrangement that provides payments intended to compensate
Executive for some or all of the excess of the taxes actually imposed by a foreign jurisdiction.

4. Most Highly Compensated Employee. During any time period in which Executive is classified by the
Company as the “most highly compensated employee” of the Company, as defined in the TARP Interim Final Rules (the “Most
Highly Compensated Employee”), he or she shall forfeit the payment or accrual of any bonuses or retention awards
accrued after June 15, 2009, except for restricted stock, which vests no earlier than in 25% vesting tranches
conditioned on 25% of total senior preferred stock being repurchased form Treasury, until the final preferred stock is
repurchased (as provided in the TARP Interim Final Rules) during the TARP Compliance Period, and has a value of no more
than one-third of Executive’s total “annual compensation” (as defined under the TARP Interim Final Rules) for that
fiscal year (as valued using grant-date fair market value).

5. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic
internal law of the Commonwealth of Pennsylvania.

6. Termination of this Agreement. During the TARP COMPLIANCE PERIOD, the terms and conditions of this
Agreement shall supersede the terms and conditions of Executive’s Employment Agreement, to the extent inconsistent
therewith. This Agreement shall terminate automatically and become null and void upon the expiration of the TARP
Compliance Period.

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

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	 	 	CODORUS VALLEY BANCORP, INC.
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	PEOPLESBANK, A CODORUS VALLEY COMPANY
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 

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