CALDERWOOD & HARKNESS LLP — PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
DEAL SUMMARY AND STRUCTURE MEMORANDUM
Matter: Whitmore Aerospace LLC — $450,000,000 Senior Secured Syndicated Revolving Credit Facility
Matter No.: 1019-00002
To: File
From: Lisa Morrow and Marcus Leung, Associates, Banking & Finance
Reviewed By: Philip Hartmann, Partner, Banking & Finance
Date: January 30, 2026
Re: Summary of Transaction Structure, Syndicate Composition, Key Commercial Terms, Financial Covenants, Collateral Package, Use of Proceeds, and Conditions Precedent
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I. Executive Summary
The purpose of this memorandum is to memorialize for the file the principal terms, structure, and key features of the $450,000,000 senior secured syndicated revolving credit facility (the "Facility") in connection with which Calderwood & Harkness LLP ("C&H" or the "Firm") serves as borrower's counsel. C&H represents the borrower, Whitmore Aerospace LLC ("WAL" or the "Borrower"), a Delaware limited liability company and portfolio company of Ridgeway Capital Partners Fund IV, LP (the "Sponsor"). This memorandum is intended to provide a comprehensive summary of the transaction for internal file purposes and to serve as a reference document for the engagement team throughout the life of the Facility. This memorandum does not constitute legal advice and is prepared solely for internal use; it is protected by the attorney-client privilege and the attorney work product doctrine.
The Credit Agreement was executed on January 30, 2026 (the "Signing Date") and is governed by the laws of the State of New York. The Facility has been assigned CUSIP number 96438LAA3. The Credit Agreement, together with all ancillary loan documents delivered on or in connection with the Signing Date, are collectively referred to herein as the "Loan Documents."
Prescott National Bank, N.A. ("Prescott" or "PNB") serves as Administrative Agent, Sole Lead Arranger, Sole Bookrunner, Collateral Agent, and Swingline Lender under the Facility. Agent's counsel is Caldwell Pryor & Shea LLP, with Raymond Okafor (partner) and Jennifer Tsai (associate) serving as the primary attorneys on the engagement. The Firm maintained a constructive and professional working relationship with Agent's counsel throughout the negotiation and documentation process.
The Calderwood & Harkness engagement was opened on October 20, 2025. The engagement team is composed of the following attorneys: Philip Hartmann, Partner, serves as the responsible partner on the matter; Claudia Merritt, Partner, serves as the billing partner; Lisa Morrow, Associate, serves as the lead associate responsible for the day-to-day management of the transaction; and Marcus Leung, Associate, serves as the working associate. Over the course of the approximately three-month engagement period, the team was involved in all aspects of the transaction, including the review and negotiation of the mandate letter and commitment letters, the drafting and negotiation of the Credit Agreement and ancillary Loan Documents, the coordination of the collateral and perfection work streams, the preparation of legal opinions, and the management of the closing process.
The Borrower anticipates an initial draw date of March 1, 2026, at which time the proceeds of the Facility will be used principally to refinance WAL's existing $210,000,000 senior secured term loan with Prescott (the "Existing Facility") and for general corporate purposes. The estimated payoff amount for the Existing Facility as of the anticipated initial draw date is approximately $169,312,500, consisting of outstanding principal of $168,750,000 and estimated accrued interest of approximately $562,500.
The Facility has a five-year tenor, with a Maturity Date of January 30, 2031. The key commercial terms, including pricing, fees, financial covenants, collateral, and conditions precedent, are summarized in detail in the sections that follow.
II. Background on the Borrower and Sponsor
A. Whitmore Aerospace LLC
Whitmore Aerospace LLC is a Delaware limited liability company, organized and existing under the Delaware Limited Liability Company Act, as reflected in its Certificate of Formation filed with the Delaware Secretary of State under Filing No. 5738291. The Borrower's federal Employer Identification Number is 82-3194567. WAL maintains its principal offices at 2400 Centennial Tower Drive, Suite 800, Herndon, Virginia 20170.
WAL was founded in 2007 by Derek Whitmore, who continues to serve as the company's Chief Executive Officer and Co-Founder. Sandra Petrova serves as Chief Financial Officer and is the designated officer responsible for delivering compliance certificates and financial statements under the Credit Agreement. Gregory Alston serves as General Counsel and Secretary of WAL and was the Borrower's primary internal legal contact throughout the negotiation and closing of the Facility.
The Borrower designs and manufactures precision-machined structural components, avionics housings, and propulsion subsystems for both commercial aerospace platforms and programs conducted on behalf of the United States Department of Defense. WAL's customer base includes a number of major original equipment manufacturers (OEMs) in the commercial aviation sector, as well as several prime defense contractors with whom WAL maintains long-term supply agreements. The company's product lines span a range of mission-critical applications, including structural airframe components, avionics enclosures and housings, and turbine engine subassemblies.
WAL holds active facility security clearances at its production sites located in Herndon, Virginia and Huntsville, Alabama. These clearances are required in connection with certain classified contracts administered by the Defense Counterintelligence and Security Agency (DCSA), and the maintenance of such clearances imposes certain restrictions on the structure of the collateral package, as discussed in greater detail in Section VII below.
For the fiscal year ending December 31, 2025 ("FY2025"), WAL reported consolidated revenue of approximately $612,000,000, representing continued organic growth driven by increased deliveries under existing long-term contracts and the commencement of production under several new defense program awards. The company reported adjusted EBITDA of approximately $138,000,000 for FY2025, yielding an adjusted EBITDA margin of approximately 22.5%. As of the Signing Date, WAL's total funded debt consisted solely of $210,000,000 in aggregate original principal amount outstanding under the Existing Facility with Prescott, which will be refinanced with proceeds of the Facility as described in Section V below.
B. Ridgeway Capital Partners Fund IV, LP (Sponsor)
The Borrower's majority equity holder is Ridgeway Capital Partners Fund IV, LP ("Ridgeway" or the "Fund"), a Delaware limited partnership with federal Employer Identification Number 83-1267450. The Fund is managed by its general partner, Ridgeway Capital Partners LLC, a Delaware limited liability company headquartered at 399 Park Avenue, 28th Floor, New York, New York 10022.
Ridgeway acquired a 72% controlling equity interest in WAL in 2019 in a leveraged buyout transaction valued at approximately $480,000,000 on an enterprise value basis. The remaining 28% equity interest is held by members of WAL's management team, including Derek Whitmore and other senior executives, as well as by certain former investors. Ridgeway is a mid-market private equity firm focused on investments in the aerospace, defense, and industrial manufacturing sectors. The Fund has a track record of investing in companies with defensible competitive positions, long-term customer relationships, and significant recurring revenue streams, all of which are characteristic of WAL's business profile.
The principal Ridgeway representatives involved in the Facility are Jonathan Kessler, Managing Partner, and Amanda Cho, Vice President, Finance, who served as the primary sponsor-side contacts on the deal team. Both Ms. Cho and Mr. Kessler participated in key negotiation sessions and reviewed drafts of the Credit Agreement.
It is important to note that Ridgeway is not a guarantor under the Facility and does not have any direct payment obligations in respect of the Borrower's indebtedness. However, in connection with certain funding conditions set forth in the Credit Agreement, Ridgeway has delivered a limited equity commitment letter pursuant to which it has agreed, subject to the terms and conditions set forth therein, to make additional equity contributions to WAL in the event that such contributions are necessary to satisfy certain pro forma financial covenant tests in connection with the incurrence of incremental indebtedness under the Accordion feature described in Section III below.
C. Subsidiary Guarantors
The obligations of the Borrower under the Credit Agreement and the other Loan Documents are guaranteed on a joint and several basis by each of the Borrower's four wholly owned subsidiaries (collectively, the "Subsidiary Guarantors" or the "Guarantors"), pursuant to the terms of the Guarantee Agreement dated as of January 30, 2026. The Subsidiary Guarantors are as follows:
Whitmore Propulsion Systems, Inc. ("WPS"). WPS is a Delaware corporation, as reflected in its Certificate of Incorporation filed with the Delaware Secretary of State under Filing No. 6104873. WPS's federal Employer Identification Number is 84-2057831. WPS is a wholly owned subsidiary of WAL and manufactures turbine and propulsion components at its production facility located at 7100 Redstone Gateway Boulevard, Huntsville, Alabama 35808. WPS is a key operating subsidiary of the Borrower and accounted for a significant portion of WAL's consolidated revenue in FY2025. The Huntsville facility is a critical production asset and is included in the real property mortgage package as described in Section VII below.
Whitmore Avionics Holdings LLC ("WAH"). WAH is a Delaware limited liability company, as reflected in its Certificate of Formation filed with the Delaware Secretary of State under Filing No. 6329017. WAH's federal Employer Identification Number is 85-6723901. WAH is a wholly owned subsidiary of WAL and functions as the intellectual property holding company for the Whitmore enterprise. WAH holds title to certain patents, trademarks, trade secrets, and proprietary manufacturing processes used by WAL and its other subsidiaries in their respective operations. WAH does not have independent production operations and maintains its registered office care of WAL at the Herndon, Virginia address. Given its role as the custodian of the enterprise's intellectual property portfolio, the security interest in WAH's assets is a material component of the collateral package.
Whitmore Defense Solutions, Inc. ("WDS"). WDS is a Virginia corporation, organized and existing under the laws of the Commonwealth of Virginia, as reflected in its articles of incorporation filed with the Virginia State Corporation Commission under Entity ID S3482917. WDS's federal Employer Identification Number is 54-3891204. WDS is a wholly owned subsidiary of WAL and holds classified contracts with the United States Department of Defense. WDS operates at 2400 Centennial Tower Drive, Suite 750, Herndon, Virginia 20170, in close proximity to WAL's principal offices. As discussed in greater detail in Section VII below, WDS's classified government contracts and related receivables are subject to the Assignment of Claims Act and are accordingly excluded from the collateral package. The security implications of WDS's facility security clearances and the CFIUS/FOCI framework are addressed in the separate Collateral and Perfection Memorandum.
Whitmore Precision Machining LLC ("WPM"). WPM is a Delaware limited liability company, as reflected in its Certificate of Formation filed with the Delaware Secretary of State under Filing No. 6587204. WPM's federal Employer Identification Number is 86-4502178. WPM is a wholly owned subsidiary of WAL and operates a CNC machining and heat-treatment facility at 4550 North Webb Road, Wichita, Kansas 67226. WPM provides precision machining services for structural components and subsystems used across WAL's commercial and defense product lines. The Wichita facility is included in the real property mortgage package.
III. Facility Structure
A. Overview. The Facility is structured as a senior secured syndicated revolving credit facility with the following principal structural features:
Type. Senior Secured Syndicated Revolving Credit Facility.
Total Commitment. $450,000,000 in aggregate commitments across the five-member syndicate.
Revolving Credit Commitment. $400,000,000 in aggregate revolving credit commitments, representing the primary borrowing capacity available to the Borrower on a revolving basis during the term of the Facility.
Swingline Sub-Facility. The Credit Agreement includes a swingline sub-facility in an aggregate amount of up to $25,000,000, which constitutes a sub-limit within the Revolving Credit Commitment. The swingline sub-facility provides the Borrower with the ability to obtain short-term advances on same-day or next-day notice for working capital and other short-term liquidity needs without the administrative requirements associated with syndicated revolving borrowings. Prescott National Bank, N.A. serves as the Swingline Lender under the Facility, and swingline loans are subject to settlement among the Lenders on a periodic basis in accordance with the terms of the Credit Agreement.
Letter of Credit Sub-Facility. The Credit Agreement includes a letter of credit sub-facility in an aggregate stated amount of up to $50,000,000, which constitutes a sub-limit within the Revolving Credit Commitment. The letter of credit sub-facility permits the Borrower to request the issuance of standby and commercial letters of credit in support of its business operations, including performance bonds, bid bonds, and other credit enhancement instruments required under WAL's government and commercial contracts. Prescott serves as the initial LC Issuer under the Facility.
Incremental Facility (Accordion). The Credit Agreement provides for the potential incurrence of incremental revolving or term loan commitments in an aggregate amount of up to $100,000,000 (the "Accordion"), subject to the receipt of commitments from new or existing Lenders and satisfaction of certain conditions, including (i) consent of each Lender providing an incremental commitment, (ii) consent of the Administrative Agent (which consent shall not be unreasonably withheld, conditioned, or delayed), (iii) pro forma compliance with the financial covenants set forth in the Credit Agreement after giving effect to the incurrence of such incremental indebtedness, and (iv) delivery of a customary compliance certificate and legal opinion. The Accordion feature provides the Borrower with additional financial flexibility to fund future growth initiatives, including permitted acquisitions, without the need to negotiate an entirely new credit facility. In the event that incremental commitments are obtained, the incremental lenders will benefit from the same collateral and guarantor coverage as the existing Lenders under the Facility.
Maturity Date. January 30, 2031, being the fifth anniversary of the Signing Date. All outstanding loans, together with accrued and unpaid interest, fees, and other obligations, shall be due and payable in full on the Maturity Date.
Governing Law. The Credit Agreement and the other Loan Documents are governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of law principles (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
B. Syndicate Composition and Roles
The Facility is syndicated among five institutional lenders, with Prescott National Bank, N.A. serving as the lead bank and holding the largest single commitment. The syndicate composition and respective commitments and roles of each Lender are set forth in the table below:
The syndication process was managed by Prescott in its capacity as Sole Lead Arranger and Sole Bookrunner. The mandate letter was executed on November 3, 2025, at which point the formal syndication was launched. Commitment letters from all five Lenders were received by November 14, 2025, and the syndicate was finalized without any modification to the original commitment amounts or terms proposed in the mandate letter.
Set forth below is a summary of the key contacts and organizational details for each member of the syndicate:
Prescott National Bank, N.A. The primary contact at Prescott is Victoria Engstrom, Managing Director, Leveraged Finance. Prescott's corporate headquarters is located at 550 South Tryon Street, Charlotte, North Carolina 28202. The Leveraged Finance group that managed the syndication and will service the Facility going forward is based at 245 Park Avenue, 12th Floor, New York, New York 10167. Prescott's Internal Deal ID for this transaction is LF-2025-08742. Ms. Engstrom was the senior Prescott representative throughout the negotiation process and was actively involved in the resolution of key commercial terms.
Harborview Trust Company. The primary contact at Harborview is Robert Alcántara, Senior Vice President. Harborview's offices are located at 185 Asylum Street, Hartford, Connecticut 06103. Harborview is serving as Co-Syndication Agent under the Facility.
Meridian Commercial Lending Corp. The primary contact at Meridian is Priya Nandakumar, Director. Meridian's offices are located at 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606. Meridian Commercial Lending Corp. is a subsidiary of Meridian Financial Group, Inc. and is serving as Co-Syndication Agent under the Facility.
Atlas Fidelity Bank. The primary contact at Atlas Fidelity is Thomas Greenfeld, Vice President. Atlas Fidelity's offices are located at 1 Liberty Plaza, 30th Floor, New York, New York 10006. Atlas Fidelity is serving as Documentation Agent under the Facility.
Commonwealth Capital Markets, Inc. The primary contact at Commonwealth is Angela Diaz, Managing Director. Commonwealth's offices are located at 100 Federal Street, Suite 2200, Boston, Massachusetts 02110. Commonwealth Capital Markets, Inc. is a registered broker-dealer and a subsidiary of Commonwealth Bancshares, Inc. Commonwealth's participation in the syndicate is in its capacity as a Lender, without a designated agency role.
IV. Key Commercial Terms — Pricing and Interest
A. Interest Rate
Borrowings under the Facility bear interest at a rate per annum equal to Adjusted Term SOFR plus an applicable margin of 350 basis points (3.50%). The term "Adjusted Term SOFR" is defined in the Credit Agreement by reference to the CME Term SOFR Reference Rate for the applicable Interest Period, as published by the CME Group Benchmark Administration Limited (or a successor administrator), plus the SOFR Adjustment (which is set at 0.00% for this Facility, as is consistent with current market convention for post-LIBOR syndicated credit facilities).
The Credit Agreement includes a SOFR floor of 0.00%, meaning that in no event will the Adjusted Term SOFR component of the interest rate be deemed to be less than zero. As of the Signing Date, the one-month Term SOFR rate is approximately 4.60%, resulting in an all-in borrowing rate of approximately 8.10% (4.60% + 3.50%) on a per annum basis. The Borrower has the option to select Interest Periods of one, three, or six months for each borrowing, in accordance with the terms of the Credit Agreement.
The pricing reflects the prevailing market conditions for senior secured revolving credit facilities extended to mid-market borrowers in the aerospace and defense sector with credit profiles comparable to that of WAL. The applicable margin of 350 basis points was negotiated by the Borrower with the assistance of C&H and represents a 75 basis point increase over the margin under the Existing Facility, which was priced at SOFR + 275 basis points. The increase reflects, among other factors, the larger facility size, the revolving (rather than amortizing term loan) structure, and general market conditions at the time of syndication.
B. Default Rate
Upon the occurrence and during the continuance of an Event of Default, the interest rate applicable to all outstanding obligations under the Facility shall automatically increase by an additional 200 basis points (2.00%) per annum above the rate otherwise applicable (the "Default Rate"). The Default Rate applies to all outstanding loans, unreimbursed LC disbursements, and any other monetary obligations that are past due, and accrues from the date of the Event of Default until such Event of Default is cured or waived in accordance with the terms of the Credit Agreement.
C. Fees. The following fees are payable in connection with the Facility:
Commitment Fee. The Borrower shall pay a commitment fee equal to 50 basis points (0.50%) per annum on the average daily unused portion of the aggregate revolving credit commitments, calculated on the basis of actual days elapsed and a 360-day year. The commitment fee is payable quarterly in arrears on the last business day of each calendar quarter, commencing with the first full fiscal quarter ending after the Signing Date, and on the Maturity Date. For purposes of calculating the unused portion of the commitments, swingline loans and outstanding letters of credit are treated as utilizations of the Revolving Credit Commitment and therefore reduce the amount upon which the commitment fee is calculated.
LC Fee. The Borrower shall pay a letter of credit fee equal to 350 basis points (3.50%) per annum on the aggregate stated amount of each outstanding letter of credit issued under the Letter of Credit Sub-Facility. The LC fee is shared ratably among all Lenders based on their respective pro rata shares and is payable quarterly in arrears. The LC fee is set at the same rate as the applicable margin on revolving loans, which is consistent with market convention for facilities of this type.
Fronting Fee. In addition to the LC fee, the Borrower shall pay a fronting fee equal to 12.5 basis points (0.125%) per annum on the aggregate stated amount of each outstanding letter of credit, payable to the LC Issuer (Prescott, in its capacity as such) in consideration for the LC Issuer's agreement to issue letters of credit for the account of the Borrower. The fronting fee is payable quarterly in arrears.
Agent Fee. The Borrower shall pay an annual administrative agent fee of $175,000 to Prescott National Bank, N.A. in its capacity as Administrative Agent under the Facility. The agent fee is payable in advance on the Signing Date and on each anniversary thereof during the term of the Facility. The agent fee compensates Prescott for the administrative and operational costs associated with servicing the Facility, including the processing of borrowing requests, the maintenance of the loan register, the distribution of payments among the Lenders, and the management of amendments, waivers, and consents.
V. Use of Proceeds
The proceeds of the Facility are to be applied for the following purposes, as set forth in the Credit Agreement:
Refinancing of Existing Indebtedness. The primary use of proceeds from the initial borrowing under the Facility will be the payoff and retirement of WAL's existing $210,000,000 senior secured term loan facility with Prescott National Bank, N.A. (the "Existing Facility"). The Existing Facility was originally entered into on March 15, 2021, and provided for a $210,000,000 senior secured term loan with a scheduled maturity in March 2028. As of the Signing Date, the outstanding principal balance under the Existing Facility is $168,750,000, reflecting cumulative amortization payments of $41,250,000 made during the approximately four-year and ten-month period since the Existing Facility was originated. The estimated payoff amount as of the anticipated initial draw date of March 1, 2026 is approximately $169,312,500, consisting of outstanding principal of $168,750,000 plus estimated accrued interest of approximately $562,500. The existing interest rate under the Existing Facility is Adjusted Term SOFR plus 275 basis points, which is 75 basis points lower than the applicable margin under the new Facility. The refinancing will result in the full retirement of the Existing Facility and the release and termination of all liens and security interests granted in connection therewith. The payoff amount will be confirmed in a payoff letter to be delivered by Prescott (in its capacity as lender under the Existing Facility) prior to the initial draw date.
Working Capital and General Corporate Purposes. The Facility may be used to fund the Borrower's ongoing working capital requirements and for general corporate purposes, including the payment of trade payables, payroll, capital expenditures within the ordinary course of business, and other operating expenses. The revolving nature of the Facility provides the Borrower with significant flexibility to draw and repay amounts as needed to manage the timing of its cash flows, particularly given the cyclical nature of revenue recognition in the aerospace and defense industry.
Permitted Acquisitions. The Credit Agreement permits the use of Facility proceeds to fund acquisitions that satisfy the definition of "Permitted Acquisitions" set forth therein. Any such acquisition is subject to, among other conditions, the delivery of a compliance certificate demonstrating pro forma compliance with the financial covenants after giving effect to the acquisition and the incurrence of any related indebtedness. This feature provides the Borrower and its Sponsor with the flexibility to pursue strategic bolt-on acquisitions without the need to obtain separate financing, subject to the covenant framework set forth in the Credit Agreement.
Capital Expenditures in the Ordinary Course of Business. The Facility may be used to fund capital expenditures incurred by the Borrower and its subsidiaries in the ordinary course of business, subject to the annual capital expenditure covenant described in Section VI below. Capital expenditure requirements for the Whitmore enterprise are driven primarily by investments in CNC machining equipment, heat-treatment facilities, and tooling at the Huntsville, Alabama and Wichita, Kansas production sites.
Existing Indebtedness Detail
In connection with the refinancing of the Existing Facility, the following existing liens and encumbrances will be released and terminated upon payoff:
UCC-1 Financing Statements. The Existing Facility is secured by UCC-1 financing statements filed in the following jurisdictions: (i) the State of Delaware, under File No. 2021-1483726, naming Prescott National Bank, N.A. as secured party and WAL as debtor; and (ii) the Commonwealth of Virginia, under File No. 210315-00489, naming Prescott National Bank, N.A. as secured party and WDS as debtor.
Real Property Mortgages. The Existing Facility is further secured by mortgages or deeds of trust recorded against two of WAL's owned real properties: (i) Fairfax County, Virginia, Instrument No. 2021-035782, recorded March 18, 2021; and (ii) Madison County, Alabama, Book 2021, Page 4417, recorded March 19, 2021.
All existing liens securing the Existing Facility are to be released and terminated simultaneously with the payoff of the Existing Facility. UCC-3 termination statements will be filed to terminate the existing UCC-1 financing statements, and mortgage discharges (or equivalent release instruments) will be filed in the applicable recording jurisdictions. The preparation and filing of these release documents is being coordinated by C&H in conjunction with Caldwell Pryor & Shea LLP, as counsel to Prescott in its capacity as lender under the Existing Facility. The simultaneous filing of the new UCC-1 financing statements and recording of the new mortgages securing the Facility will ensure that there is no gap in lien perfection during the transition from the Existing Facility to the new Facility.
VI. Financial Covenants
The Credit Agreement requires the Borrower to maintain compliance with the following financial covenants, each of which is tested on a quarterly basis as of the last day of each fiscal quarter:
A. Maximum Total Leverage Ratio
The Borrower shall not permit the Total Leverage Ratio (defined as the ratio of Total Funded Debt to Consolidated EBITDA) to exceed 3.75 to 1.00 as of the last day of any fiscal quarter. For purposes of this covenant, Total Funded Debt includes all outstanding borrowings under the Facility, any incremental indebtedness incurred under the Accordion feature, capital lease obligations, and any other indebtedness for borrowed money. Consolidated EBITDA is calculated on a trailing four-quarter (last twelve months or "LTM") basis and is subject to certain customary addbacks and adjustments as set forth in the definition thereof in the Credit Agreement.
The Total Leverage Ratio is the primary financial maintenance covenant and serves as the key credit metric for assessing the Borrower's capacity to service its debt obligations on an ongoing basis. The 3.75x maximum was negotiated between the Borrower and the Administrative Agent and reflects a level that provides the Borrower with sufficient operating flexibility while maintaining an appropriate cushion for the Lenders.
B. Minimum Interest Coverage Ratio
The Borrower shall not permit the Interest Coverage Ratio (defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense) to fall below 3.00 to 1.00 as of the last day of any fiscal quarter. As with the Total Leverage Ratio, the Interest Coverage Ratio is tested on a trailing four-quarter basis. Consolidated Interest Expense includes cash interest payments on all outstanding indebtedness, including the Facility, as well as commitment fees and other financing-related charges, but excludes amortization of deferred financing costs and original issue discount.
The Interest Coverage Ratio ensures that the Borrower maintains sufficient earnings capacity to service its ongoing interest obligations with a meaningful margin of safety. The 3.00x minimum is consistent with market norms for leveraged credit facilities extended to borrowers in the aerospace and defense sector.
C. Maximum Capital Expenditure
The Borrower shall not permit aggregate capital expenditures incurred by the Borrower and its subsidiaries during any fiscal year to exceed $45,000,000. The capital expenditure covenant includes a carry-forward provision pursuant to which up to 50% of the unused portion of the capital expenditure allowance from the immediately preceding fiscal year may be carried forward and added to the allowance for the current fiscal year. The carry-forward amount is subject to a cap of $22,500,000 (calculated as 50% of the $45,000,000 annual base cap). For the avoidance of doubt, unused carry-forward amounts do not carry forward beyond one fiscal year (i.e., there is no cumulative stacking of carry-forward amounts from multiple prior years).
The capital expenditure covenant is designed to ensure that the Borrower's capital spending remains within a range that is consistent with the maintenance of the financial covenants and the preservation of adequate liquidity under the Facility.
D. Pro Forma Compliance Summary (as of December 31, 2025)
Set forth below is a summary of the Borrower's pro forma compliance with the financial covenants as of December 31, 2025, giving effect to the consummation of the Facility and the refinancing of the Existing Facility as if such transactions had occurred on December 31, 2025. This analysis is based on FY2025 financial data provided by the Borrower and verified by the engagement team against the audited financial statements delivered in connection with the closing:
Pro Forma Total Funded Debt. $450,000,000 (reflecting the full retirement of the $210,000,000 Existing Facility and the replacement thereof with the $450,000,000 new Facility, assuming full draw for purposes of this pro forma analysis).
Pro Forma Total Leverage Ratio. $450,000,000 ÷ $138,000,000 ≈ 3.26x. The covenant maximum is 3.75x, providing headroom of approximately 0.49x. This level of headroom indicates that the Borrower would need to experience a decline in Consolidated EBITDA of approximately $18,000,000 (or approximately 13%) before the Total Leverage Ratio covenant would be breached, assuming Total Funded Debt remains constant at $450,000,000.
Pro Forma Interest Expense (Estimated). Approximately $28,400,000 on a per annum basis. This estimate is based on an assumed average drawn balance of $350,000,000 and an all-in interest rate of approximately 8.10% (calculated as the sum of the assumed Term SOFR rate of 4.60% and the applicable margin of 350 basis points). The assumed average drawn balance of $350,000,000 reflects the expectation that the Borrower will not maintain the full $450,000,000 commitment drawn at all times, as the revolving nature of the Facility permits the Borrower to repay and reborrow amounts in the ordinary course.
Pro Forma Interest Coverage Ratio. $138,000,000 ÷ $28,400,000 ≈ 4.86x. The covenant minimum is 3.00x, providing headroom of approximately 1.86x. This substantial headroom indicates that the Borrower has significant capacity to absorb increases in interest expense or reductions in EBITDA without triggering a covenant breach.
FY2025 Capital Expenditures. $38,200,000, which is below the $45,000,000 annual cap by $6,800,000. The unused carry-forward amount eligible for FY2026 is $3,400,000 (calculated as 50% of the $6,800,000 unused amount), well within the $22,500,000 carry-forward cap.
A separate and more detailed sensitivity analysis, including stress-test scenarios at varying levels of EBITDA and interest rates, is contained in the Covenant Compliance Analysis Memorandum, which has been prepared concurrently with this memorandum and is maintained in the engagement file.
VII. Collateral and Security Package
The Facility is secured by a comprehensive collateral package consisting of first-priority perfected security interests in substantially all of the assets of the Borrower and each Subsidiary Guarantor, as well as equity pledges and real property mortgages. The collateral package is designed to provide the Lenders with a first-priority lien position across all material asset classes of the Whitmore enterprise, subject to certain customary exceptions and exclusions discussed below.
A. Personal Property Collateral
The Borrower and each Subsidiary Guarantor have granted a first-priority perfected security interest in substantially all of their respective personal property assets to Prescott National Bank, N.A. in its capacity as Collateral Agent for the benefit of the Lenders. The security interest is granted pursuant to the Pledge and Security Agreement dated as of January 30, 2026, by and among WAL, WPS, WAH, WDS, and WPM, as grantors, and Prescott, as Collateral Agent.
The personal property collateral encompasses the following asset classes, as defined in Article 9 of the Uniform Commercial Code:
(a) all accounts and accounts receivable, including all rights to payment arising from the sale of goods, the performance of services, and the licensing of intellectual property;
(b) all inventory, including raw materials, work-in-process, and finished goods held for sale or use in the ordinary course of business;
(c) all equipment, including machinery, tools, fixtures, vehicles, and other tangible personal property used in the grantors' business operations;
(d) all general intangibles, including payment intangibles, software, customer lists, and goodwill;
(e) all intellectual property, including patents, patent applications, trademarks, trademark applications, copyrights, trade secrets, and proprietary technology (subject to IP-specific filing requirements with the USPTO, as described in Section VIII below);
(f) all instruments, including promissory notes, certificates of deposit, and other negotiable instruments;
(g) all chattel paper, whether tangible or electronic;
(h) all deposit accounts maintained by the grantors, subject to the execution and delivery of deposit account control agreements as described in Section VIII below;
(i) all securities accounts, investment property, and financial assets held in such accounts, subject to the execution and delivery of securities account control agreements;
(j) all commercial tort claims identified in the Security Agreement or subsequently notified to the Collateral Agent; and
(k) all proceeds, products, rents, and profits of any of the foregoing.
B. Equity Pledges
In addition to the personal property collateral described above, the following equity interests have been pledged to the Collateral Agent pursuant to the Equity Pledge Agreement dated as of January 30, 2026:
(a) 100% of the membership interests in Whitmore Avionics Holdings LLC ("WAH"), held by WAL as sole member;
(b) 100% of the membership interests in Whitmore Precision Machining LLC ("WPM"), held by WAL as sole member;
(c) 100% of the issued and outstanding capital stock of Whitmore Propulsion Systems, Inc. ("WPS"), held by WAL as sole stockholder; and
(d) 100% of the issued and outstanding capital stock of Whitmore Defense Solutions, Inc. ("WDS"), held by WAL as sole stockholder.
The equity pledges ensure that, in the event of an enforcement action, the Collateral Agent would have the ability to exercise the membership and stockholder rights associated with each subsidiary, including the right to foreclose on the equity interests and take control of the subsidiary entities. Stock certificates and executed blank stock powers have been delivered to the Collateral Agent for WPS and WDS. Membership interest certificates, to the extent applicable, and executed blank membership interest transfer documents have been delivered for WAH and WPM.
C. Real Property Mortgages
The Borrower and the Subsidiary Guarantors have granted mortgages or deeds of trust on all owned real property with an appraised value exceeding $5,000,000. As of the Signing Date, three properties meet this threshold and are included in the mortgage package:
The aggregate appraised value of the three mortgaged properties is approximately $78,000,000, which represents a meaningful component of the overall collateral coverage for the Facility.
Title searches, title commitments, and surveys for each of the mortgaged properties have been coordinated by Keystone National Title Services, LLC, with Maria Soto serving as the designated Title Officer. Keystone's offices are located at 901 East Cary Street, Suite 1100, Richmond, Virginia 23219. ALTA title insurance policies are in the process of being issued for each property as a post-closing deliverable, as described in Section X below.
Phase I environmental site assessments have been conducted for each of the three mortgaged properties by Creston Environmental Sciences, Inc., an environmental consulting firm retained by the Administrative Agent for this purpose. Creston's offices are located at 3200 Spring Forest Road, Suite 200, Raleigh, North Carolina 27616. The Phase I assessments did not identify any recognized environmental conditions (RECs) at any of the three sites, and the results have been reviewed and accepted by the Administrative Agent. Final Phase I reports are a post-closing deliverable.
D. Excluded Assets
Consistent with market practice for credit facilities involving borrowers with classified government contracts and defense-related operations, certain categories of assets are excluded from the collateral package:
Classified Government Contracts. Classified government contracts held by WDS and certain classified contracts held directly by WAL, together with all related receivables, are excluded from the collateral package. This exclusion is required under the Assignment of Claims Act (41 U.S.C. § 6305 and 31 U.S.C. § 3727), which restricts the assignment of claims against the United States government without the consent of the contracting officer and imposes significant procedural requirements for the perfection of security interests in government contract receivables. Given the sensitivity of WDS's classified programs and the practical difficulties associated with obtaining the necessary governmental consents, the parties determined that these assets should be excluded from the collateral package. The economic impact of this exclusion is mitigated by the fact that the unclassified commercial aerospace contracts and receivables of WAL and its other subsidiaries constitute the majority of the enterprise's revenue base.
Leasehold Interests. Leasehold interests in real property where the applicable landlord's consent to the granting of a security interest cannot be obtained after commercially reasonable efforts are excluded from the collateral package. As of the Signing Date, the Borrower and its subsidiaries do not maintain any material leasehold interests, and this exclusion is therefore not expected to have a significant impact on collateral coverage.
Motor Vehicles. Titled motor vehicles with a combined aggregate book value not exceeding $500,000 are excluded from the collateral package. This exclusion reflects the de minimis value of the Borrower's vehicle fleet and the disproportionate administrative burden associated with noting liens on motor vehicle certificates of title.
Mortgage Recording Tax. It is noted for the record that no New York mortgage recording tax is applicable to this transaction, as there is no New York real property included in the collateral package.
E. CFIUS / FOCI Considerations
WAL and WDS hold active facility security clearances issued by the Defense Counterintelligence and Security Agency (DCSA) in connection with classified Department of Defense programs operated at the Herndon, Virginia site. The existence of these clearances implicates the regulatory framework governing Foreign Ownership, Control, or Influence (FOCI) over cleared defense contractors, as well as the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) with respect to certain transactions that could result in foreign control of U.S. businesses engaged in activities that are material to national security.
The collateral structure has been designed to take into account the restrictions and sensitivities arising under the CFIUS/FOCI framework. Specifically, the exclusion of classified government contracts and related receivables from the collateral package, as described in Section VII.D above, addresses the concern that the enforcement of security interests over these assets could potentially raise FOCI issues or jeopardize the Borrower's facility security clearances. A detailed analysis of the CFIUS/FOCI implications of the collateral package is set forth in the separate Collateral and Perfection Memorandum, which should be consulted for a comprehensive discussion of these issues.
VIII. Perfection Methods by Jurisdiction
The following is a summary of the perfection methods employed to establish the Collateral Agent's first-priority security interest in the various categories of collateral comprising the security package:
A. UCC-1 Financing Statements (New Filings)
In order to perfect the Collateral Agent's security interest in the personal property assets of the Borrower and each Subsidiary Guarantor, UCC-1 financing statements will be filed in the following jurisdictions:
(a) Delaware Secretary of State: Four (4) UCC-1 financing statements, one for each of WAL, WPS, WAH, and WPM, in each case naming Prescott National Bank, N.A. as Collateral Agent as the secured party. Delaware is the jurisdiction of organization for each of these four entities and is therefore the appropriate filing jurisdiction under Section 9-301(1) of the Uniform Commercial Code.
(b) Virginia State Corporation Commission: One (1) UCC-1 financing statement for WDS, naming Prescott National Bank, N.A. as Collateral Agent as the secured party. The Commonwealth of Virginia is the jurisdiction of organization for WDS and is therefore the appropriate filing jurisdiction.
A total of five (5) UCC-1 financing statements are being filed in connection with the Facility. Filing confirmations are expected to be received from the Delaware Secretary of State and the Virginia State Corporation Commission within 5 to 10 business days following submission. As of the Signing Date, the WDS Virginia SCC filing confirmation is still pending; the status of all filings will be tracked in the Post-Closing Obligations Tracker Memorandum.
B. UCC-3 Termination Statements (Existing Facility)
Concurrently with the payoff of the Existing Facility and the filing of the new UCC-1 financing statements, UCC-3 termination statements will be filed to terminate the existing UCC-1 financing statements that secure the Existing Facility:
(a) Delaware Secretary of State: UCC-3 termination statement terminating File No. 2021-1483726.
(b) Virginia State Corporation Commission: UCC-3 termination statement terminating File No. 210315-00489.
The preparation and filing of the UCC-3 termination statements is being coordinated by Caldwell Pryor & Shea LLP, as counsel to Prescott in its dual capacity as lender under the Existing Facility and Administrative Agent under the new Facility.
C. Control Agreements
Perfection of the Collateral Agent's security interest in deposit accounts and securities accounts requires the execution and delivery of control agreements, in accordance with Sections 9-104 and 9-106 of the Uniform Commercial Code.
Deposit Account Control Agreements. Deposit account control agreements ("DACAs") are being negotiated with the financial institutions at which WAL and each Subsidiary Guarantor maintain their operating accounts. The DACAs will establish the Collateral Agent's "control" over the deposit accounts for purposes of UCC perfection. The execution and delivery of DACAs for all operating accounts is designated as a post-closing deliverable, with a target date of February 14, 2026 and a hard deadline of February 28, 2026. The Borrower's treasury team is coordinating with each depository bank to facilitate the timely completion of this requirement.
Securities Account Control Agreements. To the extent that WAL or any Subsidiary Guarantor maintains securities accounts or investment accounts containing financial assets, securities account control agreements will be executed and delivered to establish the Collateral Agent's perfected security interest in such accounts and the investment property held therein.
D. Mortgage Recordings
The three mortgage instruments (two mortgages and one deed of trust) described in Section VII.C above will be recorded in the following jurisdictions:
(a) Fairfax County, Virginia — Deed of Trust securing the Herndon, VA headquarters property owned by WAL.
(b) Madison County, Alabama — Mortgage securing the Huntsville, AL plant property owned by WPS.
(c) Sedgwick County, Kansas — Mortgage securing the Wichita, KS plant property owned by WPM.
As of the Signing Date, the Virginia and Alabama instruments have been submitted for recording, and the Kansas recording is scheduled. Recording confirmations and copies of the recorded instruments will be tracked as post-closing deliverables.
E. IP Filings
In order to perfect the Collateral Agent's security interest in the registered intellectual property assets held by the Borrower and the Subsidiary Guarantors (particularly the IP portfolio held by WAH), security interest filings will be made with the United States Patent and Trademark Office ("USPTO"). These filings will supplement the UCC-1 financing statement filings in the applicable jurisdictions and are necessary to establish the Collateral Agent's priority interest in the registered patents and trademarks. The IP security agreement filings are designated as a post-closing deliverable, with a target date of February 14, 2026.
IX. Key Transaction Timeline
The following table sets forth the key dates and milestones in the transaction timeline from the commencement of the Calderwood & Harkness engagement through the Maturity Date:
The transaction progressed in an orderly fashion over the approximately three-month period from engagement opening to closing. The negotiation of the Credit Agreement was completed in approximately five weeks of active drafting, from the circulation of the initial draft on December 5, 2025 to the agreement on the final form on January 10, 2026. The intervening holiday period (late December 2025 through early January 2026) resulted in some delays in the negotiation timeline, but did not materially impact the overall transaction schedule. The twenty-day period between the agreement on the final form of the Credit Agreement and the Signing Date was used to finalize the ancillary Loan Documents, obtain organizational approvals, prepare legal opinions, and coordinate the collateral and perfection work streams.
X. Conditions Precedent to Initial Funding
A. Conditions Satisfied at Signing (January 30, 2026)
The following conditions precedent to the effectiveness of the Credit Agreement and the obligations of the Lenders to fund thereunder were satisfied on or prior to the Signing Date:
1. Execution and Delivery of Loan Documents. The Credit Agreement, Guarantee Agreement, Pledge and Security Agreement, Equity Pledge Agreement, and Promissory Notes (five notes, one in favor of each Lender) were duly executed and delivered by all parties thereto on January 30, 2026.
2. Secretary's/Officer's Certificates. Secretary's Certificates (or, in the case of LLCs, Officer's Certificates) were delivered for each of WAL, WPS, WAH, WDS, and WPM. Each certificate includes, as attachments thereto: (i) certified copies of the organizational documents (certificate of formation/incorporation and limited liability company agreement/bylaws, as applicable) of the applicable entity; (ii) certified copies of the resolutions adopted by the board of directors, board of managers, or sole member (as applicable) on January 22, 2026, authorizing the execution and delivery of the Loan Documents and the consummation of the transactions contemplated thereby; (iii) an incumbency certificate setting forth the names, titles, and specimen signatures of the officers authorized to execute the Loan Documents on behalf of the applicable entity; and (iv) a good standing certificate (or certificate of existence) from the applicable Secretary of State or State Corporation Commission, dated not more than thirty (30) days prior to the Signing Date.
3. Solvency Certificate. A duly executed Solvency Certificate was delivered by Sandra Petrova, in her capacity as Chief Financial Officer of WAL, certifying that, after giving effect to the consummation of the Facility and the refinancing of the Existing Facility, (i) the fair value of the assets of the Borrower and its subsidiaries, on a consolidated basis, exceeds the total amount of their liabilities, (ii) the present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay their probable liabilities as they become due, (iii) the Borrower and its subsidiaries, on a consolidated basis, are able to pay their debts and other liabilities as they mature, and (iv) the Borrower and its subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct their business operations.
4. Borrower's Counsel Legal Opinion. Calderwood & Harkness LLP delivered a legal opinion addressed to the Administrative Agent and the Lenders, signed by Philip Hartmann, Partner. The opinion addresses customary matters, including the due organization and good standing of the Borrower and the Subsidiary Guarantors in their respective jurisdictions of organization, the due authorization, execution, and delivery of the Loan Documents, the enforceability of the Loan Documents against the Borrower and the Subsidiary Guarantors (subject to customary exceptions and qualifications), and the perfection and priority of the security interests created by the Loan Documents (subject to customary assumptions and limitations regarding post-closing perfection deliverables).
5. Supplemental Local Counsel Opinions. Supplemental legal opinions were delivered by local counsel in the following jurisdictions in which the Borrower and the Subsidiary Guarantors conduct business or in which real property collateral is located:
(a) Virginia: Delivered by the Calderwood & Harkness LLP Washington, D.C. office, covering Virginia-specific matters relating to WAL, WDS, and the Fairfax County deed of trust;
(b) Alabama: Delivered by Overstreet & Hawkins LLP, Birmingham, Alabama, covering Alabama-specific matters relating to WPS and the Madison County mortgage; and
(c) Kansas: Delivered by Bartley Predding LLP, Wichita, Kansas, covering Kansas-specific matters relating to WPM and the Sedgwick County mortgage.
6. Payment of Fees and Closing Costs. The Borrower paid all arrangement fees, closing costs, and expense reimbursements due and payable on or prior to the Signing Date, including the initial annual Administrative Agent fee of $175,000, the upfront fees payable to the Lenders in connection with the syndication, and the legal fees and disbursements of Agent's counsel (Caldwell Pryor & Shea LLP) and Borrower's counsel (Calderwood & Harkness LLP).
B. Post-Closing Deliverables (Target: February 14, 2026; Hard Deadline: February 28, 2026)
The Credit Agreement provides that the following items are to be delivered as post-closing deliverables, with a target delivery date of February 14, 2026 and a hard deadline of February 28, 2026 (the "Funding Deadline"), which is the outside date for the satisfaction of all conditions precedent to the initial funding under the Facility:
1. Final ALTA Title Insurance Policies. Final ALTA title insurance policies issued by Keystone National Title Services, LLC for each of the three mortgaged properties (Herndon, VA; Huntsville, AL; and Wichita, KS), each in an amount satisfactory to the Administrative Agent and containing such endorsements as the Administrative Agent shall reasonably require, insuring the Collateral Agent's first-priority lien position in the applicable real property.
2. As-Built Surveys. Current as-built surveys for each of the three mortgaged properties, prepared in accordance with ALTA/NSPS Minimum Standard Detail Requirements and certified to the Collateral Agent and the title insurer.
3. Phase I Environmental Site Assessments. Final Phase I environmental site assessment reports from Creston Environmental Sciences, Inc. for each of the three mortgaged properties, prepared in accordance with ASTM E1527-21 standards and addressed or reliance-lettered to the Administrative Agent and the Collateral Agent.
4. UCC-1 Filing Confirmations. Filing confirmations for all five (5) UCC-1 financing statements filed in the State of Delaware (four filings) and the Commonwealth of Virginia (one filing), evidencing the filing date, filing number, and content of each financing statement.
5. Mortgage Recordings. Recording confirmations for the three mortgage instruments recorded in Fairfax County, Virginia, Madison County, Alabama, and Sedgwick County, Kansas, evidencing the recording date, instrument number (or book and page), and content of each recorded instrument.
6. Deposit Account Control Agreements. Fully executed deposit account control agreements for all operating accounts maintained by WAL and each Subsidiary Guarantor, establishing the Collateral Agent's "control" over such accounts for purposes of UCC perfection.
7. Insurance Endorsements. Insurance endorsements naming the Collateral Agent as additional insured and/or loss payee, as applicable, under all property and casualty insurance policies maintained by the Borrower and the Subsidiary Guarantors. The coordination of these endorsements is being managed by Daniel Herrera, Account Executive at Falconer Risk Advisors, Inc., WAL's insurance broker, based in Philadelphia, Pennsylvania.
8. intellectual Property Security Agreement Filings. Confirmation of the filing of intellectual property security agreements with the United States Patent and Trademark Office, particularly with respect to the registered patents and trademarks held by WAH.
C. Conditions to Each Borrowing
In addition to the conditions precedent to initial funding described above, the Credit Agreement provides that each borrowing under the Facility (including the initial borrowing and each subsequent revolving credit borrowing or swingline borrowing) is subject to the satisfaction of the following conditions at the time of such borrowing:
(a) Borrowing Request. Delivery by the Borrower of a duly executed Borrowing Request, in the form attached as Exhibit A to the Credit Agreement, specifying the date, amount, type, and Interest Period (if applicable) of the requested borrowing.
(b) Representations and Warranties. Each of the representations and warranties made by the Borrower and the Subsidiary Guarantors in the Credit Agreement and the other Loan Documents shall be true and correct in all material respects (or, in the case of representations and warranties qualified by materiality, in all respects) on and as of the date of such borrowing, with the same effect as though such representations and warranties had been made on and as of such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date).
(c) No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing as of the date of such borrowing, or would result from the making of such borrowing.
(d) Pro Forma Covenant Compliance. After giving effect to the requested borrowing, the Borrower shall be in pro forma compliance with each of the financial covenants set forth in the Credit Agreement.
XI. Ongoing Reporting and Compliance Obligations
Following the Signing Date and throughout the term of the Facility, the Borrower is subject to the following ongoing reporting and compliance obligations under the Credit Agreement:
Quarterly Compliance Certificate. The Borrower shall deliver a Compliance Certificate, in the form attached as Exhibit B to the Credit Agreement, on a quarterly basis within forty-five (45) days following the end of each fiscal quarter. Each Compliance Certificate shall be signed by Sandra Petrova, in her capacity as Chief Financial Officer of WAL, and shall certify the Borrower's compliance with the financial covenants, including detailed calculations of: (i) the maximum Total Leverage Ratio (covenant maximum: 3.75x); (ii) the minimum Interest Coverage Ratio (covenant minimum: 3.00x); and (iii) aggregate capital expenditures incurred during the fiscal year to date in comparison to the maximum annual capital expenditure covenant ($45,000,000, as adjusted for any applicable carry-forward amounts). The Compliance Certificate shall also include a certification that no Default or Event of Default has occurred and is continuing (or, if any Default or Event of Default has occurred, a description of such Default or Event of Default and the actions being taken to cure the same).
Annual Audited Financial Statements. The Borrower shall deliver audited consolidated financial statements of WAL and its subsidiaries within one hundred twenty (120) days following the end of each fiscal year. The audited financial statements shall include a consolidated balanc