MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
To: Philip Hartmann, Partner, Banking & Finance
From: Lisa Morrow, Associate, Banking & Finance (with assistance from Marcus Leung)
Date: January 28, 2026
Re: Whitmore Aerospace LLC — $450,000,000 Senior Secured Revolving Credit Facility — Collateral Package, Perfection Methods, and Regulatory Considerations
Matter No.: 1019-00002
Client: Whitmore Aerospace LLC
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I. Executive Summary
This memorandum has been prepared for the purpose of mapping the collateral package granted under the Pledge and Security Agreement (the "Security Agreement"), the Equity Pledge Agreement (the "Pledge Agreement"), and the Mortgage instruments (collectively, the "Mortgage Documents") in connection with the credit facility described below. The memorandum identifies the required perfection steps in each relevant jurisdiction, flags excluded assets, and addresses regulatory considerations arising from Whitmore Aerospace LLC's ("WAL") classified Department of Defense programs. This memorandum is intended to serve as a comprehensive reference for the deal team and should be read in conjunction with the Post-Closing Obligations Tracker Memorandum being prepared separately by Marcus Leung, as well as the Conditions Precedent and Closing Checklist circulated on January 24, 2026.
Transaction Overview. The transaction involves a $450,000,000 senior secured revolving credit facility (the "Credit Facility") dated as of January 30, 2026, among Whitmore Aerospace LLC, a Delaware limited liability company (the "Borrower" or "WAL"), the Subsidiary Guarantors party thereto (Whitmore Propulsion Systems, Inc. ("WPS"), Whitmore Avionics Holdings LLC ("WAH"), Whitmore Defense Solutions, Inc. ("WDS"), and Whitmore Precision Machining LLC ("WPM"), collectively the "Subsidiary Guarantors" and, together with the Borrower, the "Grantors"), the lenders from time to time party thereto (the "Lenders"), and Prescott National Bank, N.A. ("Prescott"), in its capacities as Administrative Agent and Collateral Agent (the "Credit Agreement"). The Credit Agreement is governed by New York law. The CUSIP number assigned to the Credit Facility is 96438LAA3. The Credit Facility replaces WAL's existing senior secured term loan facility with Prescott dated March 15, 2021 (the "Existing Facility"), the outstanding balance of which will be repaid from initial borrowings under the Credit Facility.
Collateral Agent. Prescott National Bank, N.A. is acting in its capacity as Collateral Agent for the benefit of the Secured Parties (as defined in the Credit Agreement, including the Administrative Agent, the Lenders, and any Hedge Counterparties and Cash Management Banks that have entered into the requisite agreements).
Security Interest. The collateral package is designed to provide the Secured Parties with a first-priority perfected security interest in substantially all assets of WAL and each Subsidiary Guarantor, including (i) all personal property (accounts, inventory, equipment, general intangibles, intellectual property, instruments, chattel paper, deposit accounts, securities accounts, investment property, commercial tort claims, and other assets as more fully described in the Security Agreement), (ii) pledges of one hundred percent (100%) of the equity interests in each domestic subsidiary of WAL, and (iii) mortgages on three owned real properties with appraised values exceeding the $5,000,000 threshold established in the Credit Agreement. The collateral package is subject to certain enumerated exclusions, which are addressed in detail in Section VII of this memorandum.
Jurisdictions Implicated. The following jurisdictions are implicated for purposes of perfection filings and regulatory analysis:
• Delaware — State of organization for WAL, WPS, WAH, and WPM; UCC-1 financing statement filings for these entities are made with the Delaware Secretary of State.
• Virginia — State of organization for WDS; UCC-1 financing statement filing for WDS is made with the Virginia State Corporation Commission. Additionally, the Herndon, Virginia real property requires recording of a Deed of Trust in Fairfax County, Virginia.
• Alabama — Location of WPS's manufacturing facility in Huntsville; recording of a Mortgage is required in Madison County, Alabama.
• Kansas — Location of WPM's manufacturing facility in Wichita; recording of a Mortgage is required in Sedgwick County, Kansas.
• New York — Governing law of the Credit Agreement and Security Agreement (choice-of-law provisions); no real property or entity filings required in New York.
II. Identification of Grantors and Jurisdictional Nexus
This Section identifies each Grantor, its entity type, organizational details, principal locations, the applicable UCC filing jurisdiction, and any real property owned by such Grantor that is subject to a mortgage under the Credit Facility. Understanding the organizational jurisdiction of each Grantor is critical because, under UCC § 9-307(e), a registered organization that is organized under the law of a state is located in that state for purposes of determining where to file a UCC-1 financing statement to perfect a security interest in personal property collateral.
A. Whitmore Aerospace LLC (WAL)
WAL is the Borrower under the Credit Agreement and the parent entity of each Subsidiary Guarantor.
• Entity Type: Delaware limited liability company
• Delaware Secretary of State Filing Number: 5738291
• Employer Identification Number (EIN): 82-3194567
• Headquarters and Principal Place of Business: 2400 Centennial Tower Drive, Suite 800, Herndon, Virginia 20170
• Chief Executive Office: Herndon, Virginia (same as headquarters)
• Ownership: Ridgeway Capital Partners Fund IV, LP holds a 72% controlling interest; remaining interests held by management and other minority holders.
• UCC Filing Jurisdiction: Delaware. Because WAL is a registered organization organized under the law of the State of Delaware, its "location" for UCC purposes is Delaware, pursuant to UCC § 9-307(e). Accordingly, the UCC-1 financing statement for WAL's personal property collateral must be filed with the Delaware Secretary of State.
• Real Property: WAL owns the property located at 2400 Centennial Tower Drive, Suite 800, Herndon, Virginia 20170 (the "Herndon Property"). The Herndon Property has an appraised value of $32,000,000, which exceeds the $5,000,000 threshold established in Section 6.12 of the Credit Agreement for mandatory mortgage delivery. Accordingly, a Deed of Trust, Assignment of Leases and Rents, and Security Agreement encumbering the Herndon Property is required and has been prepared for recording in Fairfax County, Virginia.
B. Whitmore Propulsion Systems, Inc. (WPS)
WPS is a Subsidiary Guarantor and the primary manufacturing subsidiary for propulsion systems and related aerospace components.
• Entity Type: Delaware corporation
• Delaware Secretary of State Filing Number: 6104873
• Employer Identification Number (EIN): 84-2057831
• Plant Location: 7100 Redstone Gateway Boulevard, Huntsville, Alabama 35808
• UCC Filing Jurisdiction: Delaware. Because WPS is a corporation organized under the law of the State of Delaware, its "location" for UCC purposes is Delaware, pursuant to UCC § 9-307(e). The UCC-1 financing statement for WPS's personal property collateral must be filed with the Delaware Secretary of State.
• Real Property: WPS owns the property located at 7100 Redstone Gateway Boulevard, Huntsville, Alabama 35808 (the "Huntsville Property"). The Huntsville Property has an appraised value of $28,000,000, which exceeds the $5,000,000 threshold for mandatory mortgage delivery. Accordingly, a Mortgage, Assignment of Leases and Rents, and Security Agreement encumbering the Huntsville Property is required and has been prepared for recording in Madison County, Alabama.
• Facility Security Clearance: WPS maintains an active facility security clearance at its Huntsville, Alabama production site. This clearance is relevant to the CFIUS and FOCI analysis set forth in Section VIII of this memorandum.
C. Whitmore Avionics Holdings LLC (WAH)
WAH is a Subsidiary Guarantor and serves as the intellectual property holding company for the WAL group's avionics systems portfolio.
• Entity Type: Delaware limited liability company
• Delaware Secretary of State Filing Number: 6329017
• Employer Identification Number (EIN): 85-6723901
• Address: c/o Whitmore Aerospace LLC, 2400 Centennial Tower Drive, Suite 800, Herndon, Virginia 20170
• UCC Filing Jurisdiction: Delaware. Because WAH is a registered organization organized under the law of the State of Delaware, its "location" for UCC purposes is Delaware, pursuant to UCC § 9-307(e). The UCC-1 financing statement for WAH's personal property collateral must be filed with the Delaware Secretary of State.
• Real Property: None. WAH is an intellectual property holding company and does not own or lease any separate real property. WAH's business address is care of WAL's headquarters in Herndon, Virginia.
• Notable Assets: WAH's primary assets consist of intellectual property, including patents, patent applications, registered trademarks, trademark applications, trade names, copyrights, trade secrets, and related licenses pertaining to avionics systems. These assets are of significant value and require supplemental perfection filings with the United States Patent and Trademark Office ("USPTO") and, to the extent applicable, the U.S. Copyright Office, in addition to the UCC-1 financing statement filing.
D. Whitmore Defense Solutions, Inc. (WDS)
WDS is a Subsidiary Guarantor and the entity through which WAL performs classified Department of Defense contract work.
• Entity Type: Virginia corporation
• Virginia State Corporation Commission Entity ID: S3482917
• Employer Identification Number (EIN): 54-3891204
• Office: 2400 Centennial Tower Drive, Suite 750, Herndon, Virginia 20170
• UCC Filing Jurisdiction: Virginia. Unlike the other Grantors, WDS is a corporation organized under the law of the Commonwealth of Virginia. Under UCC § 9-307(e), WDS is therefore "located" in Virginia for purposes of UCC financing statement filings. The UCC-1 financing statement for WDS's personal property collateral must be filed with the Virginia State Corporation Commission, rather than the Delaware Secretary of State. This distinction is important and must be carefully tracked to ensure proper perfection.
• Real Property: None owned. WDS operates from leased space at 2400 Centennial Tower Drive, Suite 750, Herndon, Virginia 20170. The lease is from a third-party landlord (not from WAL), and the leasehold interest may be excluded from the collateral package if landlord consent to a collateral assignment cannot be obtained after commercially reasonable efforts. See Section VII.B below.
• Special Considerations: WDS holds classified DoD contracts and operates under a facility security clearance at the Herndon, Virginia site. The classified nature of certain WDS contracts gives rise to two significant considerations for the collateral package:
(i) Assignment of Claims Act: Accounts receivable arising under classified government contracts may be subject to the Assignment of Claims Act (41 U.S.C. § 6305; 31 U.S.C. § 3727), which generally prohibits the assignment of claims against the United States or of claims under government contracts unless specific statutory exceptions are satisfied. Such receivables are excluded from the collateral package to the extent described in Section VII.A below.
(ii) CFIUS / FOCI: The pledge of 100% of the equity interests in WDS to the Collateral Agent must be analyzed under the foreign ownership, control, or influence ("FOCI") framework administered by the Defense Counterintelligence and Security Agency ("DCSA"). This analysis is set forth in Section VIII below.
E. Whitmore Precision Machining LLC (WPM)
WPM is a Subsidiary Guarantor and operates the precision machining facility in Wichita, Kansas.
• Entity Type: Delaware limited liability company
• Delaware Secretary of State Filing Number: 6587204
• Employer Identification Number (EIN): 86-4502178
• Plant Location: 4550 North Webb Road, Wichita, Kansas 67226
• UCC Filing Jurisdiction: Delaware. Because WPM is a registered organization organized under the law of the State of Delaware, its "location" for UCC purposes is Delaware, pursuant to UCC § 9-307(e). The UCC-1 financing statement for WPM's personal property collateral must be filed with the Delaware Secretary of State.
• Real Property: WPM owns the property located at 4550 North Webb Road, Wichita, Kansas 67226 (the "Wichita Property"). The Wichita Property has an appraised value of $18,000,000, which exceeds the $5,000,000 threshold for mandatory mortgage delivery. Accordingly, a Mortgage and Security Agreement encumbering the Wichita Property is required and has been prepared for recording in Sedgwick County, Kansas.
• Acquisition History: The Wichita Property was acquired by WPM after March 2021 and was therefore not part of the collateral package under the Existing Facility. There is no existing mortgage on the Wichita Property that would need to be discharged.
III. Personal Property Collateral — Asset Classes and Perfection Methods
The Security Agreement grants a security interest in substantially all personal property of each Grantor. This Section describes each major asset class included in the collateral package, identifies the applicable Grantors, and specifies the perfection method required to establish and maintain a first-priority perfected security interest in each asset class. The collateral description in the Security Agreement uses a broad "all assets" formulation, supplemented by an enumerated list of asset categories as defined in UCC Article 9.
A. Accounts (including Accounts Receivable)
Description. The collateral includes all "accounts" as defined in UCC § 9-102(a)(2), encompassing all rights to payment of a monetary obligation, whether or not earned by performance. This includes, without limitation, trade receivables arising from the sale of goods or provision of services in the ordinary course of business, contract receivables arising under commercial aerospace contracts and Department of Defense programs, insurance proceeds constituting accounts, tax refunds, and any other right to payment that constitutes an "account" under the UCC.
Grantors. WAL, WPS, WAH, WDS, and WPM each grants a security interest in all of its respective accounts. Accounts receivable are a significant component of the collateral package, particularly for WAL and WPS, which generate substantial revenue from both commercial aerospace customers and government contracting.
Perfection Method. Perfection of a security interest in accounts is achieved by the filing of a UCC-1 financing statement in the debtor's jurisdiction of organization. For WAL, WPS, WAH, and WPM, such filing is made with the Delaware Secretary of State. For WDS, such filing is made with the Virginia State Corporation Commission. No additional perfection steps are required for accounts generally under UCC Article 9.
Note Regarding Classified Government Contract Receivables. Receivables arising under classified government contracts held by WAL and WDS are excluded from the collateral package to the extent that granting a security interest therein would violate the Assignment of Claims Act (41 U.S.C. § 6305; 31 U.S.C. § 3727). This exclusion is discussed in detail in Section VII.A below. Non-classified government contract receivables and commercial contract receivables remain part of the collateral package and are perfected through the applicable UCC-1 filings.
B. Inventory
Description. The collateral includes all "inventory" as defined in UCC § 9-102(a)(48), encompassing all raw materials, work-in-process, finished goods, goods held for sale or lease, and supplies used or consumed in the manufacturing and business operations of the Grantors. Inventory is maintained primarily at WAL's Herndon, Virginia headquarters and production area, WPS's Huntsville, Alabama manufacturing plant, and WPM's Wichita, Kansas precision machining facility.
Grantors. WAL, WPS, and WPM are the primary Grantors with respect to inventory, as these entities conduct the manufacturing and production operations that generate inventory holdings. WAH, as an intellectual property holding company, does not hold significant inventory. WDS, as a professional services and classified contract entity, likewise does not maintain significant inventory. To the extent WAH or WDS holds any assets that would constitute inventory under the UCC (e.g., supplies), such assets are captured by the general "all assets" grant in the Security Agreement, but the practical significance of such assets is minimal.
Perfection Method. Perfection of a security interest in inventory is achieved by the filing of a UCC-1 financing statement in the debtor's jurisdiction of organization. No additional perfection steps are required for inventory under UCC Article 9. The UCC-1 filings described in Section VI.A below cover inventory for each Grantor.
C. Equipment
Description. The collateral includes all "equipment" as defined in UCC § 9-102(a)(33), encompassing all machinery, CNC machining equipment, heat-treatment equipment, tooling, fixtures, molds, dies, jigs, testing apparatus, computer hardware, office equipment, and other tangible personal property used in the manufacturing, research, development, and administrative operations of the Grantors. Equipment is located principally at the manufacturing facilities operated by WAL, WPS, and WPM.
Grantors. WAL, WPS, and WPM are the primary Grantors with respect to equipment, given that these entities operate the manufacturing facilities. WAH and WDS hold de minimis equipment (principally office furniture and computer equipment) that is captured by the general "all assets" grant.
Perfection Method. Perfection of a security interest in equipment (other than goods covered by a certificate of title) is achieved by the filing of a UCC-1 financing statement in the debtor's jurisdiction of organization. No additional perfection steps are required for equipment under UCC Article 9, except as noted below with respect to certificate-of-title goods.
Note Regarding Certificate-of-Title Goods. Under UCC § 9-311, if goods are covered by a certificate of title issued under a state's certificate-of-title statute, the filing of a financing statement is generally not effective to perfect a security interest in such goods; instead, perfection requires notation of the lien on the certificate of title. However, the Security Agreement and the Credit Agreement exclude motor vehicles from the collateral package where the combined book value of all motor vehicles across the Grantor group does not exceed $500,000. See Section VII.C below. Accordingly, certificate-of-title filings should not be required so long as the combined book value of the motor vehicle fleet remains below that threshold. To the extent any other certificate-of-title goods exist (e.g., certain types of aircraft, heavy equipment subject to titling requirements), an analysis should be conducted on a case-by-case basis.
D. General Intangibles (including intellectual Property)
Description. The collateral includes all "general intangibles" as defined in UCC § 9-102(a)(42), encompassing all patents, patent applications, trademarks, trademark registrations, service marks, trade names, copyrights, copyright registrations, trade secrets, know-how, proprietary technology, licenses (both as licensor and licensee, to the extent assignable), software, customer lists, goodwill, contract rights not constituting accounts or chattel paper, payment intangibles, and all other intangible personal property of each Grantor.
Key Grantor. WAH is the primary holder of intellectual property within the Grantor group. WAH holds the patents, trademarks, and related intellectual property associated with WAL's avionics systems business line. However, all Grantors grant a security interest in their respective general intangibles, and each Grantor may hold general intangibles of value (e.g., WAL's goodwill, WPS's proprietary manufacturing processes, WDS's classified technology to the extent not excluded, WPM's machining know-how).
Perfection Method. The filing of a UCC-1 financing statement in the debtor's jurisdiction of organization provides perfection as to the security interest in general intangibles generally under UCC Article 9. However, for certain categories of intellectual property, supplemental filings are required or strongly advisable to ensure perfection and priority, as follows:
(i) Patents and Patent Applications (USPTO). Under federal law, the recordation of a security interest in patents and patent applications with the United States Patent and Trademark Office is necessary to provide constructive notice to third parties and to protect the Collateral Agent's interest against subsequent purchasers and lien creditors. Accordingly, a short-form IP Security Agreement covering patents and patent applications held by WAH (and any other Grantor that holds patents) must be recorded with the USPTO. This is designated as a post-closing deliverable, with a target completion date of February 14, 2026. Marcus Leung is coordinating the preparation of the necessary recordation documents.
(ii) Trademarks and Trademark Applications (USPTO). Similarly, the recordation of a security interest in registered trademarks and trademark applications with the USPTO is advisable. While there is some uncertainty in the caselaw regarding whether UCC filing or USPTO recordation is the exclusive method of perfection for trademark security interests (unlike patents, where the federal recording statute has been held to preempt UCC filing for certain purposes), best practice dictates that both a UCC-1 filing and a USPTO recordation be completed. The USPTO recordation for trademarks is also designated as a post-closing deliverable, with the same target completion date.
(iii) Copyrights (U.S. Copyright Office). If any Grantor holds registered copyrights, the recordation of a security interest with the U.S. Copyright Office may be required to perfect the security interest as against subsequent transferees and lien creditors, given the preemptive effect of the Copyright Act's recording provisions. Marcus Leung is conducting a review of the Grantors' intellectual property schedules to determine whether any registered copyrights exist that would necessitate such a filing.
Cross-Reference. The IP security agreement filings are tracked on the Post-Closing Obligations Tracker. The target completion date is February 14, 2026, with a hard deadline of February 28, 2026.
E. Instruments and Chattel Paper
Description. The collateral includes all "instruments" as defined in UCC § 9-102(a)(47) and all "chattel paper" as defined in UCC § 9-102(a)(11), encompassing all promissory notes, intercompany notes, negotiable instruments, tangible chattel paper, and electronic chattel paper of each Grantor. This category captures, among other things, any intercompany promissory notes evidencing loans between WAL and its subsidiaries.
Grantors. All Grantors grant a security interest in their respective instruments and chattel paper.
Perfection Method. A UCC-1 financing statement filing in the debtor's jurisdiction of organization provides perfection as to instruments and chattel paper. However, for instruments with a principal amount in excess of any threshold specified in the Security Agreement, physical delivery of the original instrument to the Collateral Agent may be required to achieve perfection by possession under UCC § 9-313. Perfection by possession (or, for electronic chattel paper, by control under UCC § 9-105) is the preferred method because it provides priority over a secured party perfected only by filing, pursuant to UCC § 9-330. We should confirm with the deal team whether the Security Agreement establishes a threshold amount above which physical delivery of instruments to the Collateral Agent is required, and if so, whether any existing intercompany notes exceed that threshold.
F. Deposit Accounts
Description. The collateral includes all "deposit accounts" as defined in UCC § 9-102(a)(29), encompassing all demand, time, savings, passbook, and similar accounts maintained by each Grantor at any bank. This includes operating accounts, concentration accounts, payroll accounts, tax escrow accounts, and any other deposit accounts maintained in the ordinary course of business.
Grantors. All Grantors grant a security interest in their respective deposit accounts.
Perfection Method. Under UCC § 9-312(b)(1), a security interest in a deposit account may be perfected only by "control" as defined in UCC § 9-104. A UCC-1 financing statement filing is not effective to perfect a security interest in a deposit account (except in the case of proceeds). Accordingly, perfection of the security interest in the Grantors' deposit accounts requires the execution and delivery of deposit account control agreements ("DACAs"), also known as blocked account agreements, between each Grantor, the depository bank at which the account is maintained, and Prescott National Bank, N.A. as Collateral Agent.
Status and Special Notes:
(i) Accounts at Prescott National Bank. WAL's primary operating account is maintained at Prescott National Bank, N.A. Because Prescott is both the depository bank and the Collateral Agent, perfection of the security interest in this account is achieved automatically, without the need for a DACA, under UCC § 9-104(a)(1) (which provides that a secured party has "control" of a deposit account if the secured party is the bank with which the deposit account is maintained). Accordingly, no further action is required with respect to WAL's primary operating account at Prescott.
(ii) Accounts at Third-Party Banks. For all deposit accounts maintained by WAL or any Subsidiary Guarantor at banks other than Prescott, DACAs must be executed and delivered to achieve perfection by control. The DACAs are designated as post-closing deliverables. Marcus Leung is in the process of obtaining a complete list of all deposit accounts maintained by each Grantor to facilitate preparation and negotiation of the DACAs.
(iii) Deadlines. The target date for delivery of all DACAs is February 14, 2026. The hard deadline, as established in the Post-Closing Covenants section of the Credit Agreement, is February 28, 2026.
G. Securities Accounts and Investment Property
Description. The collateral includes all "securities accounts" as defined in UCC § 8-501 and all "investment property" as defined in UCC § 9-102(a)(49), encompassing all securities accounts and financial assets held therein, including any investment accounts, money market accounts, brokerage accounts, and equity interests constituting "securities" under UCC Article 8 or "financial assets" credited to a securities account.
Grantors. All Grantors grant a security interest in their respective securities accounts and investment property.
Perfection Method. Under UCC § 9-312(b)(1) and § 9-106, a security interest in a securities account or investment property (to the extent held in a securities account) may be perfected by "control." Control of a securities account is obtained pursuant to UCC § 9-106(a), which incorporates the "control" provisions of UCC § 8-106. In practice, this requires the execution and delivery of securities account control agreements ("SACAs") between each Grantor, the securities intermediary at which the account is maintained, and Prescott National Bank, N.A. as Collateral Agent.
Status. The SACAs are designated as post-closing deliverables, consistent with the DACAs. Marcus Leung is coordinating the identification of all securities accounts and the preparation of the SACAs. The target date is February 14, 2026, and the hard deadline is February 28, 2026.
H. Commercial Tort Claims
Description. The collateral includes any existing or after-arising commercial tort claims of any Grantor, as identified in the disclosure schedules to the Security Agreement or in supplements thereto delivered from time to time.
Grantors. All Grantors grant a security interest in their respective commercial tort claims.
Perfection Method. Under UCC § 9-108(e), a description of collateral by type is insufficient for commercial tort claims; the financing statement and the security agreement must include a description that reasonably identifies the specific commercial tort claim. Accordingly, perfection of a security interest in commercial tort claims requires (i) identification of the specific claim in the Security Agreement or a supplement thereto, and (ii) filing of a UCC-1 financing statement (or amendment) that specifically identifies the commercial tort claim.
Ongoing Obligation. The Security Agreement requires each Grantor to promptly notify the Collateral Agent of any commercial tort claim arising after the closing date that has a reasonably anticipated value in excess of a specified threshold, and to execute supplements to the Security Agreement and authorize UCC amendments as necessary to bring such claims into the collateral package. The initial disclosure schedules to the Security Agreement should be reviewed to confirm whether any Grantor has identified existing commercial tort claims. If so, the UCC-1 financing statements should be reviewed to confirm that such claims are adequately described therein.
IV. Equity Interests — Pledge and Perfection
A. Pledged Equity
The Pledge Agreement requires WAL, as the sole member or stockholder of each Subsidiary Guarantor, to pledge one hundred percent (100%) of its equity interests in each Subsidiary Guarantor to Prescott National Bank, N.A. as Collateral Agent for the benefit of the Secured Parties. The pledged equity interests are as follows:
(i) Membership Interests in LLCs. WAL pledges 100% of its membership interests in:
• Whitmore Avionics Holdings LLC (WAH) — a Delaware limited liability company; and
• Whitmore Precision Machining LLC (WPM) — a Delaware limited liability company.
(ii) Capital Stock of Corporations. WAL pledges 100% of the issued and outstanding capital stock of:
• Whitmore Propulsion Systems, Inc. (WPS) — a Delaware corporation; and
• Whitmore Defense Solutions, Inc. (WDS) — a Virginia corporation.
The pledge of 100% of the equity interests in each Subsidiary Guarantor is a core component of the collateral package, providing the Secured Parties with the ability, upon an Event of Default and the exercise of remedies, to foreclose upon and acquire control of the Subsidiary Guarantors and their respective assets. The equity pledge also serves as a backstop to the direct security interest in each Subsidiary Guarantor's assets.
B. Perfection Methods for Equity Pledges
The method of perfection for each equity pledge depends on whether the equity interest is a "certificated security," an "uncertificated security," or a "general intangible" under the UCC, which in turn depends on the nature of the entity and the provisions of the applicable organizational documents.
1. Certificated Securities (WPS and WDS Stock)
WPS is a Delaware corporation, and WDS is a Virginia corporation. The capital stock of these entities is presumptively a "security" under UCC Article 8 (see Del. Code Ann. tit. 6, § 8-103; Va. Code Ann. § 8.8A-103). If stock certificates have been issued to WAL evidencing its ownership of shares in WPS and WDS, the stock constitutes "certificated securities" under UCC § 8-102(a)(4).
Perfection Method. Perfection of a security interest in certificated securities is achieved by delivery of the certificates to the Collateral Agent, endorsed in blank or accompanied by duly executed and undated stock powers, pursuant to UCC § 8-301 and § 9-313(a). Delivery to the Collateral Agent provides perfection by possession and, importantly, confers "control" under UCC § 8-106(b), which affords the highest level of priority under UCC § 9-328.
Action Required. We need confirmation from WAL (through Gregory Alston, General Counsel) that:
(a) Stock certificates have been issued for the WPS shares held by WAL;
(b) Stock certificates have been issued for the WDS shares held by WAL;
(c) The original stock certificates, endorsed in blank (or accompanied by executed, undated stock powers with medallion signature guarantee, if required), have been or will be delivered to Prescott National Bank, N.A. as Collateral Agent at or prior to the closing on January 30, 2026.
If stock certificates have not yet been issued, WAL should cause WPS and WDS to issue certificates representing the pledged shares prior to closing so that perfection by delivery may be achieved.
2. Uncertificated Securities / LLC Interests (WAH and WPM)
WAH and WPM are each Delaware limited liability companies. Membership interests in a Delaware limited liability company are not, by default, "securities" within the meaning of UCC Article 8. Under Delaware law (6 Del. C. § 8-103(c)), a membership interest in a limited liability company is a "security" only if it is dealt in or traded on securities exchanges or in securities markets, its terms expressly provide that it is a "security" governed by Article 8, or the limited liability company agreement contains an opt-in to Article 8 treatment.
If the LLC Agreements of WAH and WPM Do Not Contain an Article 8 Opt-In. In the absence of an Article 8 opt-in, the membership interests in WAH and WPM are classified as "general intangibles" under UCC § 9-102(a)(42). A security interest in a general intangible is perfected by the filing of a UCC-1 financing statement in the jurisdiction of the debtor's organization. Because WAL is the debtor-pledgor (as the owner of the membership interests), and WAL is a Delaware limited liability company, the UCC-1 filing with the Delaware Secretary of State covering WAL's personal property collateral (including general intangibles) would encompass the membership interests in WAH and WPM. The UCC-1 filing for WAL has been submitted to the Delaware Secretary of State.
If the LLC Agreements of WAH and WPM Contain an Article 8 Opt-In. If the LLC agreements of WAH and WPM include a provision expressly providing that the membership interests are "securities" governed by UCC Article 8, then the membership interests would be treated as securities. If certificates have been issued representing such membership interests, perfection would be achieved by delivery of the certificates to the Collateral Agent (endorsed in blank or accompanied by transfer powers), as described above for WPS and WDS stock. If no certificates have been issued but the interests are "uncertificated securities," perfection may be achieved by "control" obtained through registration of the pledge on the books of the issuing LLC, pursuant to UCC § 8-106(c), or by agreement of the issuer, pursuant to UCC § 8-106(c)(2).
Action Required. We need to confirm whether the LLC agreements of WAH and WPM contain an opt-in to UCC Article 8 for their membership interests. Marcus Leung has requested copies of the current LLC agreements from Gregory Alston. This is flagged as Open Issue No. 3 in Section XIII below. Pending such confirmation, the UCC-1 filing for WAL provides a baseline level of perfection for the membership interests (treated as general intangibles), but if an Article 8 opt-in exists, we should also obtain delivery of certificates or control to maximize priority protection.
3. Note on WDS (Virginia Corporation)
WDS is organized under the laws of the Commonwealth of Virginia. While Virginia corporate law governs the issuance and transfer of WDS stock and the internal affairs of WDS as a corporation, the perfection of WAL's pledge of WDS stock is governed by the UCC of the jurisdiction in which the debtor-pledgor (WAL) is located. Because WAL is a Delaware limited liability company, WAL is "located" in Delaware for UCC purposes (UCC § 9-307(e)), and the perfection of the security interest in the WDS stock is therefore governed by Delaware's version of UCC Article 9 (and Article 8, to the extent applicable). Delivery of the WDS stock certificate to the Collateral Agent achieves perfection by possession under Delaware UCC § 9-313, regardless of the fact that WDS is a Virginia corporation. We should confirm that original stock certificates for WDS have been or will be delivered to the Collateral Agent.
V. Real Property Collateral — Mortgages
A. Overview of Mortgaged Properties
Section 6.12 of the Credit Agreement establishes a threshold requiring the delivery of mortgage instruments with respect to any owned real property of the Borrower or any Subsidiary Guarantor that has an appraised value in excess of $5,000,000. Three properties owned by members of the Grantor group meet or exceed this threshold:
The combined appraised value of the three mortgaged properties is $78,000,000. Each mortgage instrument is in favor of Prescott National Bank, N.A., acting in its capacity as Collateral Agent for the benefit of the Secured Parties.
The form of mortgage instrument varies by jurisdiction to reflect the applicable real property and recording conventions. In Virginia, the instrument takes the form of a Deed of Trust (with a trustee designated for purposes of non-judicial foreclosure), while in Alabama and Kansas, the instrument takes the form of a traditional Mortgage. Each instrument also includes an assignment of leases and rents (to the extent applicable) and a security agreement covering fixtures and other personal property located on the mortgaged premises.
B. Perfection — Recording and Ancillary Requirements
1. Virginia Property (Herndon — Fairfax County)
Instrument. Deed of Trust, Assignment of Leases and Rents, and Security Agreement, granted by Whitmore Aerospace LLC to a trustee for the benefit of Prescott National Bank, N.A. as Collateral Agent.
Recording. The Deed of Trust must be submitted for recording in the Clerk's Office of the Circuit Court of Fairfax County, Virginia. Recording of the Deed of Trust in the land records of Fairfax County establishes constructive notice of the lien and constitutes perfection of the mortgage interest under Virginia law.
Title Insurance. An ALTA lender's title insurance policy is to be issued by Keystone National Title Services, LLC, with Maria Soto serving as the title officer. A title commitment for the Herndon Property has been received and is under review. The final title policy will be a post-closing deliverable, with a target delivery date of February 14, 2026 and a hard deadline of February 28, 2026. The named insured on the title policy will be Prescott National Bank, N.A. as Collateral Agent.
Survey. An ALTA/NSPS land title survey of the Herndon Property is required and is being coordinated by Keystone National Title Services, LLC. The survey will be delivered as a post-closing deliverable on the same timeline as the title policy.
Existing Encumbrance. There is an existing mortgage (in the form of a Deed of Trust) recorded against the Herndon Property as Instrument No. 2021-035782, recorded on March 18, 2021, in the land records of Fairfax County, Virginia, in favor of Prescott National Bank, N.A. under the Existing Facility. This existing Deed of Trust will be discharged upon payoff of the Existing Facility. The Payoff Letter from Prescott includes a commitment to execute and deliver a Certificate of Satisfaction or Release of Deed of Trust for recording in Fairfax County upon receipt of the payoff amount.
Environmental. A Phase I Environmental Site Assessment ("ESA") of the Herndon Property has been conducted by Creston Environmental Sciences, Inc., retained by Prescott National Bank, N.A. as a condition to the Credit Facility. The Phase I ESA report is pending delivery and is designated as a post-closing deliverable. Any recognized environmental conditions identified in the Phase I ESA may require further investigation or mitigation, but no preliminary issues have been flagged by Creston.
Mortgage Recording Tax. The Commonwealth of Virginia imposes a recordation tax on deeds of trust and mortgages recorded in the land records. The applicable rate and the estimated tax amount should be confirmed with Keystone National Title Services and local counsel prior to recording to ensure that the proper amount is tendered at the time of recording. Payment of the recording tax is typically a condition to acceptance of the instrument for recording by the Clerk's Office.
Status. The Deed of Trust is in execution form and has been submitted for recording in Fairfax County.
2. Alabama Property (Huntsville — Madison County)
Instrument. Mortgage, Assignment of Leases and Rents, and Security Agreement, granted by Whitmore Propulsion Systems, Inc. to Prescott National Bank, N.A. as Collateral Agent.
Recording. The Mortgage must be submitted for recording in the Office of the Judge of Probate of Madison County, Alabama. In Alabama, mortgages are recorded with the Judge of Probate in the county where the property is located. Recording in the Madison County records establishes constructive notice of the lien and constitutes perfection of the mortgage interest under Alabama law.
Title Insurance. An ALTA lender's title insurance policy is to be issued by Keystone National Title Services, LLC. A title commitment for the Huntsville Property has been received and is under review. The final title policy is a post-closing deliverable on the same timeline as the Virginia and Kansas policies.
Survey. An ALTA/NSPS land title survey of the Huntsville Property is required and is being coordinated by Keystone.
Existing Encumbrance. There is an existing Mortgage recorded against the Huntsville Property in Book 2021, Page 4417, recorded on March 19, 2021, in the records of Madison County, Alabama, in favor of Prescott National Bank, N.A. under the Existing Facility. This existing Mortgage will be discharged upon payoff of the Existing Facility. The Payoff Letter includes a commitment to execute and deliver a Satisfaction of Mortgage for recording in Madison County upon receipt of the payoff amount.
Environmental. A Phase I ESA of the Huntsville Property has been conducted by Creston Environmental Sciences, Inc. The report is pending delivery as a post-closing deliverable, consistent with the timeline for the other mortgaged properties.
Alabama Mortgage Tax. The State of Alabama imposes a recording tax on mortgages recorded in the state. The applicable rate and estimated tax amount should be confirmed with Keystone and local counsel. Alabama's mortgage recording tax is calculated based on the indebtedness or obligation secured by the mortgage, and the rate should be verified against current Alabama Department of Revenue guidance. Payment of the recording tax must accompany the instrument at the time of recording.
Status. The Mortgage is in execution form and has been submitted for recording in Madison County.
3. Kansas Property (Wichita — Sedgwick County)
Instrument. Mortgage and Security Agreement, granted by Whitmore Precision Machining LLC to Prescott National Bank, N.A. as Collateral Agent.
Recording. The Mortgage must be submitted for recording in the Office of the Register of Deeds of Sedgwick County, Kansas. In Kansas, mortgages are recorded with the Register of Deeds in the county where the property is located. Recording establishes constructive notice of the lien and constitutes perfection of the mortgage interest under Kansas law.
Title Insurance. An ALTA lender's title insurance policy is to be issued by Keystone National Title Services, LLC. As of the date of this memorandum, the title commitment for the Wichita Property has not yet been received from Keystone. We have followed up with Maria Soto and anticipate receipt of the title commitment shortly. This is flagged as Open Issue No. 2 in Section XIII below.
Survey. An ALTA/NSPS land title survey of the Wichita Property is required and is being coordinated by Keystone.
Existing Encumbrance. There is no existing mortgage on record for the Wichita Property under the Existing Facility or otherwise. The Wichita Property was acquired by WPM after March 2021, which was after the closing date of the Existing Facility, and the Existing Facility's collateral package did not include the Wichita Property. Accordingly, no discharge or release of a prior mortgage is necessary in connection with this property.
Environmental. A Phase I ESA of the Wichita Property has been conducted by Creston Environmental Sciences, Inc. The report is pending delivery as a post-closing deliverable.
Kansas Mortgage Registration Fee. The State of Kansas imposes a mortgage registration fee on mortgages filed for record in the state. The applicable fee should be confirmed with Keystone and local counsel (Bartley Predding LLP, Kansas local counsel). The fee is calculated based on the principal debt secured and must be paid at the time of recording.
Status. The Mortgage is in execution form. Recording is scheduled but has not yet occurred as of the date of this memorandum, pending receipt of the title commitment and final confirmation of the recording fee.
C. Title Insurance and Survey Coordination
Title Company. Keystone National Title Services, LLC, located in Richmond, Virginia, is serving as the title company for all three mortgaged properties.
Title Officer. Maria Soto is the designated title officer at Keystone responsible for the issuance of title commitments and final title policies for the three mortgaged properties.
ALTA Lender's Title Policies. ALTA lender's title insurance policies are required for all three mortgaged properties. The named insured on each policy will be Prescott National Bank, N.A. as Collateral Agent (and its successors and assigns). The policies will insure the first-lien priority of the respective mortgages, subject to standard permitted exceptions (such as real property taxes not yet due and payable, utility easements, and other matters that do not materially impair the use or value of the property).
Surveys. ALTA/NSPS land title surveys are required for all three mortgaged properties and are being coordinated by Keystone. The surveys must comply with the 2021 ALTA/NSPS Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys and must include such Table A optional items as may be specified by the Collateral Agent.
Status Summary:
VI. UCC Financing Statement Filing Schedule
A. New UCC-1 Filings
The following UCC-1 financing statements have been filed (or submitted for filing) in connection with the Credit Facility to perfect the security interest in each Grantor's personal property collateral:
Collateral Description. Each UCC-1 financing statement includes a collateral description of "All assets" or the full enumerated description of collateral categories as set forth in the Security Agreement. The use of a broad "all assets" collateral description in a financing statement is sufficient to satisfy the "reasonably identifies" standard of UCC § 9-504(2), and is the standard practice for financing statements in secured lending transactions of this nature.
Note on WDS Filing Jurisdiction. As noted in Section II.D above, WDS is the only Grantor organized under the law of a jurisdiction other than Delaware. Because WDS is a Virginia corporation, its UCC-1 financing statement must be filed with the Virginia State Corporation Commission, rather than the Delaware Secretary of State. This filing has been submitted, but confirmation of acceptance has not yet been received as of the date of this memorandum. Prompt follow-up is required to ensure that the filing is reflected on the public record prior to the initial funding under the Credit Facility. This is flagged as Open Issue No. 1 in Section XIII below.
B. UCC-3 Termination Statements (Existing Facility)
The following UCC-1 financing statements were filed in connection with the Existing Facility and will be terminated upon payoff of the Existing Facility:
The Payoff Letter from Prescott National Bank, N.A. (in its capacity as administrative agent under the Existing Facility) includes a commitment by Prescott to file UCC-3 termination statements with respect to the above financing statements and to execute and record discharges or satisfactions of the existing mortgages upon receipt of the payoff amount. The estimated payoff amount as of March 1, 2026 is $169,312,500 (consisting of approximately $168,750,000 in outstanding principal and approximately $562,500 in accrued and unpaid interest). The payoff amount is subject to per diem adjustments and will be confirmed as of the actual payoff date.
Cross-Reference. See Payoff Letter and Lien Release — Existing Facility (circulated to the deal team on January 22, 2026).
C. Lien Search Results
Pre-closing UCC, federal tax lien, state tax lien, and judgment lien searches were conducted in the following jurisdictions for WAL and all Subsidiary Guarantors:
• Delaware Secretary of State (for WAL, WPS, WAH, and WPM);
• Virginia State Corporation Commission (for WDS and WAL, given WAL's principal place of business in Virginia);
• Federal tax lien searches in the applicable counties and states; and
• Judgment lien searches in the applicable counties and states.
Search Results. The lien searches confirmed that existing liens against the Grantors are limited to Prescott National Bank's existing UCC-1 financing statements filed in connection with the Existing Facility (File Nos. 2021-1483726 (DE) and 210315-00489 (VA)). No other UCC financing statements, federal tax liens, state tax liens, or judgments were identified against any Grantor. This clean search result is consistent with the representations and warranties in the Credit Agreement and Security Agreement regarding the absence of liens other than permitted liens.
No exceptions or subordination arrangements have been identified as of the date of this memorandum.
VII. Excluded Assets