CREDIT AGREEMENT
as Borrower
as Agent, Swingline Lender, and Issuing Bank
BANK OF AMERICA, N.A.
as Lead Arrangers
as Documentation Agent
Page | ||||
ARTICLE I. DEFINITIONS | 1 | |||
1.1 Definitions | 1 | |||
1.2 Accounting Terms | 21 | |||
1.3 Times of Day | 21 | |||
1.4 Letters of Credit Amounts | 21 | |||
ARTICLE II. THE CREDITS | 22 | |||
2.1 The Revolving Credit and Term Loans | 22 | |||
2.2 The Notes | 23 | |||
2.3 Swingline Loans | 23 | |||
2.4 Letters of Credit | 25 | |||
2.5 Funding of Borrowings | 32 | |||
2.6 Interest | 33 | |||
2.7 Prepayments and Payments | 35 | |||
2.8 Use of Proceeds | 36 | |||
2.9 Special Provisions Governing Libor Loans — Increased Costs | 36 | |||
2.10 Required Termination and Repayment of Libor Loans | 37 | |||
2.11 Taxes | 38 | |||
2.12 Commitment Fee | 38 | |||
2.13 Revolving Credit Commitment Termination and Reduction | 39 | |||
2.14 Payments | 39 | |||
2.15 Payments with Respect to Defaulting Lenders | 39 | |||
2.16 Underwriting Fee | 40 | |||
2.17 Agent Fees | 40 | |||
2.18 Charge to Account | 40 | |||
2.19 Substitution of Lender | 40 | |||
2.20 Yield Protection | 41 | |||
2.21 Changes in Capital Adequacy Regulations | 41 | |||
2.22 Lender Statements; Survival of Indemnity | 42 | |||
2.23 Expansion Option | 42 | |||
ARTICLE III. CONDITIONS TO THE CREDIT | 44 | |||
3.1 No Default | 44 | |||
3.2 Representations and Warranties | 44 | |||
3.3 Proceedings | 44 | |||
3.4 Closing Conditions | 44 | |||
3.5 Conditions to Subsequent Borrowing and Issuance | 47 | |||
3.6 Subsequent Extensions of Credit | 47 | |||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES | 47 | |||
4.1 Good Standing and Authority | 47 | |||
4.2 Valid and Binding Obligation | 48 | |||
4.3 Good Title | 48 | |||
4.4 No Pending Litigation | 48 | |||
4.5 No Consent or Filing | 48 |
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4.6 No Violations | 48 | |||
4.7 Financial Statements | 49 | |||
4.8 Tax Returns | 49 | |||
4.9 Federal Regulations | 49 | |||
4.10 Compliance with ERISA | 50 | |||
4.11 Subsidiaries; Affiliates | 50 | |||
4.12 Compliance | 50 | |||
4.13 Fiscal Year | 50 | |||
4.14 Default | 51 | |||
4.15 Indebtedness for Borrowed Money | 51 | |||
4.16 Securities | 51 | |||
4.17 Environmental Matters | 51 | |||
4.18 Burdensome Contracts; Labor Relations | 52 | |||
4.19 Liens | 52 | |||
4.20 Intellectual Property | 52 | |||
4.21 Anti-Terrorism Laws | 53 | |||
4.22 Accuracy of Information, etc | 54 | |||
4.23 Solvency | 54 | |||
ARTICLE V. AFFIRMATIVE COVENANTS | 54 | |||
5.1 Payments | 54 | |||
5.2 Financial Reporting Requirements | 55 | |||
5.3 Notices | 55 | |||
5.4 Taxes | 55 | |||
5.5 Insurance | 56 | |||
5.6 Litigation | 56 | |||
5.7 Judgments | 56 | |||
5.8 Corporate Standing | 56 | |||
5.9 Books and Records | 56 | |||
5.10 Compliance with Law | 56 | |||
5.11 Pension Reports | 57 | |||
5.12 Inspections | 57 | |||
5.13 Environmental Compliance | 57 | |||
5.14 Certain Subsidiaries to Become Guarantors | 58 | |||
5.15 Additional Security; Further Assurances | 58 | |||
5.16 Accounting; Reserves; Tax Returns | 59 | |||
5.17 Liens and Encumbrances | 59 | |||
5.18 Defaults and Material Adverse Effects | 59 | |||
5.19 Good Repair | 59 | |||
5.20 Hedge Agreements | 59 | |||
5.21 Existing and IRB Letters of Credit | 59 | |||
5.22 Mortgage Modifications | 60 | |||
5.23 Landlord Waivers | 60 | |||
5.24 Further Actions | 60 | |||
ARTICLE VI. NEGATIVE COVENANTS | 60 | |||
6.1 Indebtedness | 60 | |||
6.2 Encumbrances | 61 |
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6.3 Investments and Guaranty Obligations | 61 | |||
6.4 Equity Interest Repurchases | 62 | |||
6.5 Limitation on Certain Restrictive Agreements | 63 | |||
6.6 Material Indebtedness Agreements | 63 | |||
6.7 Consolidation, Merger, Acquisitions, Asset Sales, etc | 64 | |||
6.8 Transactions with Affiliates | 65 | |||
6.9 Disposal of Hazardous Substances | 65 | |||
6.10 Fiscal Year, Fiscal Quarters | 66 | |||
6.11 Anti-Terrorism Laws | 66 | |||
6.12 Changes in Business | 66 | |||
6.13 Minimum Fixed Charge Coverage Ratio | 66 | |||
6.14 Maximum Fiscal Capital Expenditures | 66 | |||
6.15 Maximum Leverage Ratio | 66 | |||
6.16 Minimum Net Worth | 66 | |||
ARTICLE VII. DEFAULT | 67 | |||
7.1 Events of Default | 67 | |||
7.2 Effects of an Event of Default | 70 | |||
7.3 Remedies | 70 | |||
7.4 Application of Certain Payments and Proceeds | 70 | |||
ARTICLE VIII. INDEMNIFICATION — COSTS AND EXPENSES | 71 | |||
8.1 Indemnification | 71 | |||
8.2 Expenses | 71 | |||
ARTICLE IX. THE AGENT AND ISSUING BANK | 72 | |||
9.1 Appointment and Authorization | 72 | |||
9.2 Waiver of Liability of Agent | 72 | |||
9.3 Note Holders | 73 | |||
9.4 Consultation with Counsel | 73 | |||
9.5 Documents | 73 | |||
9.6 Agent and Affiliates | 74 | |||
9.7 Knowledge of Default | 74 | |||
9.8 Enforcement | 74 | |||
9.9 Action by Agent | 74 | |||
9.10 Notices, Defaults, etc | 74 | |||
9.11 Indemnification of Agent | 74 | |||
9.12 Successor Agent | 75 | |||
9.13 Lenders’ Independent Investigation | 75 | |||
9.14 Amendments, Consents | 75 | |||
9.15 Funding by Agent | 76 | |||
9.16 Sharing of Payments | 76 | |||
9.17 Payment to Lenders | 77 | |||
9.18 Tax Withholding Clause | 77 | |||
9.19 USA Patriot Act | 78 | |||
9.20 Issuing Bank | 78 | |||
9.21 Benefit of Article IX | 78 |
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ARTICLE X. MISCELLANEOUS | 78 | |||
10.1 Amendment and Restatement; Future Amendments | 78 | |||
10.2 Delays and Omissions | 78 | |||
10.3 Assignments/Participation | 79 | |||
10.4 Successors and Assigns | 80 | |||
10.5 Notices | 80 | |||
10.6 Governing Law | 81 | |||
10.7 Counterparts | 81 | |||
10.8 Titles | 81 | |||
10.9 Inconsistent Provisions | 81 | |||
10.10 Course of Dealing | 81 | |||
10.11 USA Patriot Act Notification | 81 | |||
10.12 JURY TRIAL WAIVER | 82 | |||
10.13 CONSENT TO JURISDICTION | 82 |
Exhibit A | — | Replacement Revolving Note | ||
Exhibit B | — | Replacement Swingline Note | ||
Exhibit C | — | Term Note | ||
Exhibit D | — | Compliance Certificate | ||
Exhibit E | — | Request Certificate | ||
Exhibit F | — | 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 |
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Leverage | ||||||
Level | Ratio | Commitment Fee | ||||
1 | < 1.50 to 1.0 | 0.300 | % | |||
2 | > 1.50 to 1.0 but < 2.00 to 1.0 | 0.375 | % | |||
3 | > 2.00 to 1.0 but < 2.50 to 1.0 | 0.500 | % | |||
4 | > 2.50 to 1.0 | 0.500 | % |
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Leverage | ||||||||||
Level | Ratio | Libor Rate Option | ABR Option | |||||||
1 | < 1.50 to 1.0 | 2.25 | % | 1.25 | % | |||||
2 | > 1.50 to 1.0 but < 2.00 to 1.0 | 2.75 | % | 1.75 | % | |||||
3 | > 2.00 to 1.0 but < 2.50 to 1.0 | 3.00 | % | 2.00 | % | |||||
4 | > 2.5 to 1.0 | 3.50 | % | 2.50 | % |
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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 which shall not itself constitute notice to): | Hodgson Russ LLP The Guaranty Building 140 Pearl Street, Suite 100 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 which shall not itself constitute notice to): | Phillips Lytle LLP 3400 HSBC Center Buffalo, New York 14203 Attention: Raymond H. Seitz, Esq. | ||
Facsimile No. 716-852-6100 | |||
Telephone No. 716-847-7065 |
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ASTRONICS CORPORATION | ||||
By: | /s/ David C. Burney | |||
David C. Burney | ||||
Vice President — Finance and Treasurer | ||||
HSBC BANK USA, NATIONAL ASSOCIATION, as Agent, Swingline Lender, Lender, Issuing Bank and a Lead Arranger | ||||
By: | /s/ Mark F. Zeis | |||
Mark F. Zeis | ||||
Senior Vice President | ||||
BANK OF AMERICA, N.A., as a Lender and a Lead Arranger | ||||
By | /s/ Michael R. Nowicki | |||
Michael R. Nowicki | ||||
Senior Vice President | ||||
KEYBANK NATIONAL ASSOCIATION, as a Lender and Documentation Agent | ||||
By: | /s/ Mark F. Wachowiak | |||
Mark F. Wachowiak | ||||
Vice President |
Buffalo, New York | ||
$ | January 30, 2009 |
ASTRONICS CORPORATION | ||||
By: | ||||
David C. Burney | ||||
Vice President — Finance and Treasurer | ||||
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DATE LOAN | AMOUNT OF | AMOUNT OF | AGGREGATE | |||||||||||
MADE, | LOAN MADE, | INTEREST | PRINCIPAL | UNPAID | NOTATION | |||||||||
CONTINUED OR | CONTINUED OR | PERIOD | DUE | PAID OR | PRINCIPAL | MADE BY | ||||||||
TYPE OF LOAN | CONVERTED | CONVERTED | DATES | DATE | PREPAID | BALANCE | AND DATE | |||||||
Buffalo, New York | ||
$5,000,000.00 | January 30, 2009 |
ASTRONICS CORPORATION | ||||
By: | ||||
David C. Burney | ||||
Vice President — Finance and Treasurer | ||||
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AMOUNT OF | AGGREGATE | |||||||
PRINCIPAL | UNPAID | |||||||
PRINCIPAL | PAID OR | PRINCIPAL | INSCRIPTION | |||||
DATE | AMOUNT | REPAID | BALANCE | MADE BY | ||||
$ | Buffalo, New York January 30, 2009 |
ASTRONICS CORPORATION | ||||||
By: | ||||||
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DATE LOAN | AMOUNT OF | AMOUNT OF | AGGREGATE | |||||||||||
MADE, | LOAN MADE, | INTEREST | PRINCIPAL | UNPAID | NOTATION | |||||||||
CONTINUED OR | CONTINUED OR | PERIOD | DUE | PAID OR | PRINCIPAL | MADE BY | ||||||||
TYPE OF LOAN | CONVERTED | CONVERTED | DATES | DATE | PREPAID | BALANCE | AND DATE | |||||||
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. |
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 Fixed Charge Coverage Ratio | ||||||||
Consolidated Fixed Charge Coverage Ratio | = | :1.0 | ||||||
Required: ![]() | ||||||||
§6.14 Maximum Capital Expenditures | ||||||||
Consolidated Capital Expenditures | $ | |||||||
Required: ![]() | ||||||||
§6.15 Maximum Leverage Ratio | ||||||||
Consolidated Leverage Ratio | = | :1.0 | ||||||
Required: ![]() | ||||||||
§6.16 Minimum Net Worth | ||||||||
Consolidated Net Worth | $ | |||||||
Eclipse Write-Offs | $ | |||||||
Total | $ | |||||||
Required: ![]() ![]() |
ASTRONICS CORPORATION | ||||
By: | ||||
Name: | ||||
Title: |
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o Revolving Loan | o Term Loan | |||||
(Check One) | (Check One) | |||||
o new loan | o new loan | |||||
o conversion | o conversion | |||||
o continuation | o continuation | |||||
of a | of a | |||||
(Check One) | (Check One) | |||||
o Libor Loan | o Libor Loan | |||||
o ABR Loan | o ABR Loan | |||||
to a or as a | to a or as a | |||||
(Check One) | (Check One) | |||||
o Libor Loan | o Libor Loan | |||||
o ABR Loan | o ABR Loan |
(Check One) | ||||||||
o one month. | ||||||||
o two months. | ||||||||
o three months. | ||||||||
o six months. |
ASTRONICS CORPORATION | ||||||
By: | ||||||
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ASSIGNOR: | |||||
By: | |||||
Name: | |||||
Title: | |||||
ASSIGNEE: | |||||
By: | |||||
Name: | |||||
Title: | |||||
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to
Assignment and Assumption
I. As to the Revolving Credit 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: | $ |
II. As to the Term Loan in respect of which an interest is being assigned: |
Percentage interest assigned: | % | ||
Assignee’s Term Loan Commitment: | $ | ||
Aggregate outstanding principal amount of Term Loan assigned: | $ | ||
Principal amount of Term Note payable to Assignee: | $ | ||
Principal amount of Term Note payable to Assignor: | $ |
[NAME OF ASSIGNOR], as Assignor | [NAME OF ASSIGNEE], as Assignee | |||||||||
By: | By: | |||||||||
Title: | Name: | |||||||||
Dated: | , | 200_ | Dated: | , | 200_ | |||||
Domestic Lending Office: | ||
Libor Lending Office: | ||
, 200_
ASTRONICS CORPORATION, as Borrower | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
HSBC BANK USA, NATIONAL ASSOCIATION, as Agent | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
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Revolving Credit | Term Credit | Total | Applicable | |||||||||||||
Lender | Commitments | Commitments | Commitments | Percentage | ||||||||||||
HSBC Bank USA, N.A. | $ | 18,529,411.76 | $ | 16,470,588.24 | $ | 35,000,000 | 41.176470588 | % | ||||||||
Bank of America, N.A. | $ | 18,529,411.76 | $ | 16,470,588.24 | $ | 35,000,000 | 41.176470588 | % | ||||||||
KeyBank National Association | $ | 7,941,176.48 | $ | 7,058,823.52 | $ | 15,000,000 | 17.647058823 | % | ||||||||
Total | $ | 45,000,000.00 | $ | 40,000,000.00 | $ | 85,000,000 | 1.00000 | % |
Lender | Domestic Lending Office | Libor Lending Office | ||
HSBC Bank USA, National Association | One HSBC Center Buffalo, NY 14203 | One HSBC Center Buffalo, NY 14203 | ||
Bank of America, N.A. | 2001 Clayton Road Concord, CA 94520 | 2001 Clayton Road Concord, CA 94520 | ||
Attn: Anna Maria Finn Credit Service Rep. | Attn: Anna Maria Finn Credit Service Rep. | |||
KeyBank National Association | 50 Fountain Plaza, 17th Floor Buffalo, NY 14202 | 50 Fountain Plaza, 17th Floor Buffalo, NY 14202 |
Letter of Credit | ||||
Issuing Bank | Commitment | |||
HSBC Bank USA, National Association | $ | 20,000,000 |
Company | Incorporated | % Owned | ||||
Luminescent Systems, Inc. | New York | 100 | % | |||
Luminescent Systems Europe B.V.B.A. | Belgium | 50 | % | |||
Astronics Advanced Electronic Systems Corp. | Washington | 100 | % | |||
Astronics Air LLC * | New York | 100 | % | |||
D M E Corporation | Florida | 100 | % |
Luminescent Systems Europe B.V.B.A. | Belgium | 50 | % | |||
Luminescent Systems of Canada Inc. | Canada | 100 | % |
* | Sole asset is a single-engine aircraft |
Due | ||||||||||||
Property/Equipment | Owner | Lien Held By | Type | Balance | Date | |||||||
Lot 27, Centerra | Luminescent | HSBC Bank | IRB * | $ | 4,109,918 | 06/18 | ||||||
Business Park | Systems, Inc. | |||||||||||
4 Lucent Drive Lebanon, New Hampshire | ||||||||||||
130 Commerce Way | Luminescent | HSBC Bank | IRB * | $ | 2,985,624 | 12/19 | ||||||
East Aurora, New York | Systems, Inc. | |||||||||||
Luminescent | HSBC Bank | IRB * | $ | 6,084,000 | 4/27 | |||||||
Systems, Inc. | ||||||||||||
Unsecured Loan | Astronics | Empire State | Loan | $ | 37,762.40 | 3/1/11 | ||||||
Corporation | Development | |||||||||||
Corporation | ||||||||||||
Unsecured Loan | Luminescent | HSBC Bank | Loan | $ | 1,031,253.40 | Demand, | ||||||
Backed by Existing | Systems Canada | Canada | no later | |||||||||
Letter of Credit | Inc. | 8/31/15 | ||||||||||
Capitalized Lease/Secured | D M E Corporation | US Bancorp | Lease | $ | 117,517.80 | 2012 | ||||||
Equipment Loan Covering Telephone System | ||||||||||||
D M E Dell Equipment | D M E Corporation | Dell Financial | Secured | $ | 100,000 | |||||||
Service L.P. | Revolver | Maximum |
* | Each of the IRB transactions are variable rate bond transactions backed by one of the IRB Letters of Credit. |