Contract analysis

ARTICLE I DEFINITIONS AND INTERPRETATION

Section 1.01 Defined Terms As used in this Agreement, the following terms have the meanings specified below: “Administrative Agent” means Ridgeline National Bank, N.A., a national banking association, with offices at 200 Public Square, Cleveland, OH 44114, in its capacity as administrative agent under this Agreement, and its successors and assigns in such capacity. “Affiliate” means, with respect to any Person, any o

Section 1.02 Other Interpretive Provisions For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the meanings of defined terms shall be equally applicable to the singular and plural forms of the defined terms; (b) references to any Person include its successors and permitted assigns; (c) the words “herein,” “hereof,” “hereto,” “hereunder” and words of sim

Section 1.03 Accounting Terms All accounting terms not specifically defined herein shall be construed in accordance with GAAP, consistently applied. The Borrower acknowledges that, in connection with its emergence from chapter 11 and the transactions contemplated by the Plan, it has implemented fresh-start accounting and related tax and valuation adjustments with the assistance of Dralvecen Reyes Linley CPAs LLP & As

Section 1.04 Rounding Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the applicable component by the other component, carrying the result to one decimal place, and rounding the result up or down to the nearest one-tenth, with five one-hundredths being rounded upward. Dollar amounts shall be rounded to the nearest whole dollar unless otherwise

Section 1.05 References to Agreements and Laws Unless otherwise expressly provided herein, any reference to an agreement or instrument includes all schedules, exhibits and annexes attached thereto and all renewals, extensions, amendments, supplements, restatements or replacements thereof to the extent permitted by this Agreement. Any reference to any law includes all rules and regulations promulgated thereunder and a

Section 1.06 Times of Day Unless otherwise specified, all references herein to times of day shall be references to Eastern Time.

Section 1.07 Divisions For all purposes under the Loan Documents, in connection with any Division or plan of division under Delaware law or any comparable event under a different jurisdiction’s laws: (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the sub

Section 2.01 Term Loan Commitments Subject to the terms and conditions set forth herein, each Lender severally, and not jointly, agrees to make a single term loan to the Borrower on the Closing Date in a principal amount equal to such Lender’s Commitment. The aggregate principal amount of all Term Loans to be made on the Closing Date shall be $12,500,000. The Commitments reflect the pro rata allocation among particip

Section 2.02 Borrowing Procedures The Borrower shall request the borrowing of the Term Loans by delivering to the Administrative Agent a duly completed Borrowing Request not later than 2:00 p.m. at least two (2) Business Days prior to the Closing Date. Such Borrowing Request shall specify the aggregate amount of the requested borrowing, the Closing Date, the account to which proceeds are to be disbursed, and such oth

Section 2.03 Notes Any Lender may request that its Term Loan be evidenced by a promissory note. In such event, the Borrower shall promptly execute and deliver to such Lender a Note substantially in the form of Exhibit D, appropriately completed to reflect such Lender’s Commitment and outstanding Term Loan. The failure of any Lender to request, obtain or possess a Note shall in no way impair or affect the obligations

Section 2.04 Repayment of Term Loans (a) Scheduled Amortization. The Borrower shall repay the aggregate outstanding principal amount of the Term Loans in equal quarterly installments of $31,250 each, commencing on the last Business Day of the first full fiscal quarter ending after the Closing Date and continuing on the last Business Day of each fiscal quarter thereafter. Each such quarterly installment represents 1.0

Section 2.05 Prepayments (a) Voluntary Prepayments. The Borrower may, upon not less than three (3) Business Days’ prior written notice to the Administrative Agent, prepay the Term Loans in whole or in part at any time without premium or penalty; provided that any such prepayment shall be in a minimum principal amount of $500,000 and in integral multiples of $100,000 in excess thereof, unless such prepayment is in the

1. Asset Sale Proceeds. No later than the fifth Business Day following the receipt by the Borrower or any Subsidiary of net cash proceeds from any sale, transfer, lease, casualty of title, or other disposition of property or assets outside the ordinary course of business, to the extent such net cash proceeds, when aggregated with all other such net cash proceeds received during the same fiscal year, exceed $1,000,000

2. Debt Issuance Proceeds. No later than the fifth Business Day following the receipt by the Borrower or any Subsidiary of net cash proceeds from the incurrence or issuance of any Indebtedness other than Permitted Indebtedness, an amount equal to 100% of such net cash proceeds shall be applied to prepay the Term Loans.

3. Insurance and Condemnation Proceeds. No later than the fifth Business Day following the receipt by the Borrower or any Subsidiary of net cash proceeds from insurance recoveries or condemnation awards in excess of $500,000 in the aggregate for any event or related series of events, an amount equal to 100% of such net cash proceeds shall be applied to prepay the Term Loans; provided that no such prepayment shall be

4. Excess Cash Flow Sweep. Commencing with the fiscal year ending December 31, 2023, no later than five (5) Business Days after the date the annual financial statements required under Section 5.01(a) are delivered, the Borrower shall prepay the Term Loans in an amount equal to 50% of Excess Cash Flow for the prior fiscal year; provided that if the Borrower’s Consolidated Total Net Debt to Consolidated EBITDA ratio as

Section 2.06 Interest (a) Rate. Each Term Loan shall bear interest on the unpaid principal amount thereof at a rate per annum equal to SOFR for the applicable Interest Period plus the Applicable Margin; provided that SOFR shall in no event be deemed to be less than the SOFR Floor. Accordingly, the all-in interest rate shall never be less than 6.50% per annum. (b) Interest Periods. The Borrower may select Interest Per

Section 2.07 Fees No upfront fees, original issue discount, ticking fees or commitment fees shall be payable under this Agreement. The parties acknowledge that this fee structure is distinct from that of the DIP Credit Agreement, which carried, among other items, a $450,000 commitment fee and a $600,000 closing fee. The Borrower shall pay to the Administrative Agent, for its own account, an annual administrative agen

Section 2.08 Payments Generally All payments by the Borrower hereunder shall be made in U.S. dollars and in immediately available funds, without setoff, counterclaim or deduction (except as required by law), to the Administrative Agent at its office at 200 Public Square, Cleveland, OH 44114, or to such other account as the Administrative Agent may designate in writing. Payments received by the Administrative Agent af

Section 2.09 Taxes (a) All sums payable by or on behalf of the Borrower under this Agreement and the other Loan Documents shall be paid free and clear of, and without deduction or withholding for, any Taxes except as required by applicable law. (b) If the Borrower or any other applicable withholding agent is required by law to deduct or withhold any Taxes from any such payment, then (i) the applicable withholding age

Section 2.10 Increased Costs If any change in law shall: (a) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; (b) subject any Recipient to any Taxes on its loans, loan principal, letters of credit, commitments or other obligations, or its deposits, reserves

Section 2.11 Break Funding Payments The Borrower shall indemnify each Lender against any loss, cost or expense actually incurred by such Lender as a result of: (a) any payment, prepayment or conversion of any Term Loan on a day other than the last day of the applicable Interest Period; (b) any failure by the Borrower to borrow, continue or prepay any Term Loan on the date specified in any notice delivered pursuant he

Section 2.12 Benchmark Replacement Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark, then the Administrative Agent and the Borrower may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment shall

ARTICLE III CONDITIONS PRECEDENT

Section 3.01 Conditions Precedent to Closing Date The obligation of each Lender to make its Term Loan on the Closing Date is subject to satisfaction or waiver by the Required Lenders of each of the following conditions precedent: (a) the Plan shall have become effective, and the Effective Date shall have occurred on September 30, 2022; (b) the Confirmation Order, entered by the Bankruptcy Court on September 2, 2022 a

ARTICLE IV REPRESENTATIONS AND WARRANTIES To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Term Loans, the Borrower represents and warrants to the Administrative Agent and the Lenders, as of the Closing Date and each date required hereby, that:

Section 4.01 Organization; Powers The Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Ohio, and has all limited liability company power and authority required to own its properties and to conduct its business as now conducted. CPS Holdings Inc. is a corporation duly organized, validly existing and in good standing under the laws of the State

Section 4.02 Authorization; Enforceability The execution, delivery and performance by the Borrower and each Guarantor of each Loan Document to which it is a party have been duly authorized by all necessary limited liability company, corporate or other organizational action. Each Loan Document has been duly executed and delivered by the Borrower and each Guarantor party thereto. Each Loan Document constitutes a legal,

Section 4.03 Governmental Approvals; No Conflicts No consent, approval, authorization or order of, registration or filing with, or other action by, any governmental authority is required in connection with the execution, delivery or performance by the Borrower or any Guarantor of any Loan Document, except for those that have been duly obtained or made and are in full force and effect, including the Confirmation Order

Section 4.04 Financial Condition The financial statements most recently delivered by the Borrower to the Administrative Agent and the Lenders, including audited annual financial statements for the fiscal year ended December 31, 2021 and interim financial statements through the first quarter of 2022, fairly present in all material respects the consolidated financial condition, results of operations and cash flows of t

Section 4.05 Properties The Borrower and its Subsidiaries have good and marketable title to, or valid leasehold interests in, all real and personal property material to the conduct of their business, free and clear of all Liens other than Permitted Liens. Th