SUBSIDIARY PLEDGE AGREEMENTS
(EQUITY INTERESTS IN LOWER-TIER SUBSIDIARIES)
— EXECUTION VERSIONS —
Dated as of March 28, 2025
SUBSIDIARY PLEDGE AGREEMENTS (EQUITY INTERESTS IN LOWER-TIER SUBSIDIARIES)
EXECUTION VERSIONS
Dated as of March 28, 2025
In connection with the Credit Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among:
Nexford Industrial Holdings Inc., a Delaware corporation, as Borrower,
the Guarantors party thereto,
Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent,
Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers, and
the Lenders from time to time party thereto,
providing for a $1,400,000,000 Senior Secured Term Loan B Facility.
This compilation contains ten (10) individual Subsidiary Pledge Agreements, each executed by the Subsidiary Guarantor identified therein. Each Subsidiary Pledge Agreement constitutes a separate, standalone instrument pledging and granting a security interest in equity interests held by the applicable Subsidiary Guarantor in its direct and indirect subsidiaries (or, where the Subsidiary Guarantor does not currently hold any such equity interests, covering any equity interests hereafter acquired), in each case for the benefit of the Secured Parties under the Credit Agreement.
Each Subsidiary Pledge Agreement was executed and delivered on March 28, 2025, simultaneously with the closing of the Credit Agreement and the initial extension of credit thereunder. Crescent Harbor Bank, N.A. serves as Collateral Agent under each agreement, holding the security interests granted therein for the ratable benefit of all Secured Parties.
Prepared by:
Calderwood & Harkness LLP 425 Lexington Avenue New York, New York 10017
Matter No.: 1005-00001
TAB 1
PLEDGE AGREEMENT
(Equity Interests in Lower-Tier Subsidiaries)
Dated as of March 28, 2025
by
NEXFORD PRECISION COMPONENTS, INC., a Delaware corporation, as Pledgor
in favor of
CRESCENT HARBOR BANK, N.A., as Collateral Agent for the benefit of the Secured Parties
PLEDGE AGREEMENT (Equity Interests in Lower-Tier Subsidiaries)
This PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of March 28, 2025, is made by NEXFORD PRECISION COMPONENTS, INC., a Delaware corporation (the "Pledgor"), having its principal place of business at 2750 Commerce Drive, Rockford, Illinois 61101, in favor of CRESCENT HARBOR BANK, N.A., a national banking association, having its office at 320 Federal Street, Boston, Massachusetts 02110 (in its capacity as Collateral Agent for the benefit of the Secured Parties, the "Collateral Agent").
RECITALS
WHEREAS, Nexford Industrial Holdings Inc., a Delaware corporation (the "Borrower"), the Guarantors party thereto, Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent, Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers, and the Lenders from time to time party thereto, have entered into that certain Credit Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), providing for a $1,400,000,000 Senior Secured Term Loan B Facility;
WHEREAS, the Pledgor is a Subsidiary Guarantor under the Guarantee Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Guarantee Agreement"), and is required, pursuant to the terms of the Credit Agreement and the Guarantee Agreement, to pledge and grant a security interest in the equity interests it holds (or may hereafter acquire) in its direct and indirect subsidiaries as collateral security for the Secured Obligations;
WHEREAS, the Pledgor has determined that the execution and delivery of this Pledge Agreement is in its best interests and in the best interests of the Borrower and the other Loan Parties, inasmuch as the Pledgor will derive substantial direct and indirect benefits from the extensions of credit under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with the Collateral Agent, for the benefit of the Secured Parties, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Defined Terms. As used in this Pledge Agreement, the following terms shall have the following meanings:
"Credit Agreement" means the Credit Agreement dated as of March 28, 2025, among Nexford Industrial Holdings Inc., as Borrower, the Guarantors party thereto, Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent, Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers, and the Lenders from time to time party thereto, as the same may be amended, restated, amended and restated, supplemented, extended, refinanced, replaced, or otherwise modified from time to time.
"Collateral Agent" means Crescent Harbor Bank, N.A., in its capacity as Collateral Agent for the benefit of the Secured Parties under the Credit Agreement, together with its successors and assigns in such capacity.
"Pledged Collateral" means the Pledged Equity, together with all Proceeds thereof.
"Pledged Equity" means (a) all equity interests described on Schedule I hereto, together with all certificates, instruments, or other documents evidencing such equity interests, (b) all rights and privileges of the Pledgor arising under or relating to such equity interests, including all voting rights, rights to receive dividends and other distributions, liquidation preferences, conversion rights, and preemptive rights, (c) all dividends, distributions, cash, instruments, and other property or proceeds from time to time received, receivable, or otherwise distributed in respect of or in exchange for any or all of the foregoing, and (d) all additional equity interests hereafter acquired by the Pledgor in any subsidiary, whether by purchase, capital contribution, dividend, merger, consolidation, or otherwise, together with all certificates, instruments, rights, and proceeds relating thereto.
"Pledgor" means Nexford Precision Components, Inc., a Delaware corporation.
"Proceeds" has the meaning assigned to such term in Article 9 of the UCC (including all "proceeds" as defined in Section 9-102(a)(64) of the UCC) and, in addition, shall include, but not be limited to, (a) any and all proceeds of any insurance, indemnity, warranty, or guaranty payable to or for the account of the Pledgor from time to time with respect to any of the Pledged Collateral, (b) any and all payments (in any form whatsoever) made or due and payable to the Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Pledged Collateral, and (c) any and all other amounts from time to time paid or payable under or in connection with any of the Pledged Collateral.
"Secured Obligations" means all Obligations as defined in the Credit Agreement, including, without limitation, all principal, interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership, or other similar proceeding, regardless of whether allowed or allowable in such proceeding), premium, fees, costs, expenses, indemnification obligations, and other amounts owed by any Loan Party under the Credit Agreement and the other Loan Documents.
"Secured Parties" has the meaning assigned to such term in the Credit Agreement.
"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection of the security interest in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" shall mean the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection or the effect of perfection or non-perfection.
All capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Credit Agreement.
Section 1.02 Interpretation. (a) Terms used but not defined herein that are defined in the Credit Agreement shall have the meanings assigned to such terms in the Credit Agreement. In the event of a conflict between the definitions contained herein and those contained in the Credit Agreement, the definitions in this Pledge Agreement shall control for purposes of this Pledge Agreement.
(b) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, or other document herein shall be construed as referring to such agreement, instrument, or other document as from time to time amended, restated, supplemented, or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, or modifications set forth in the Credit Agreement), (ii) any reference herein to any Person shall be construed to include such Person's successors and permitted assigns, (iii) the words "herein," "hereof," and "hereunder," and words of similar import, shall be construed to refer to this Pledge Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections, Schedules, and Exhibits shall be construed to refer to Articles and Sections of, and Schedules and Exhibits to, this Pledge Agreement, and (v) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts, and contract rights.
(c) The rules of construction specified in the Credit Agreement shall apply to this Pledge Agreement mutatis mutandis. Article and Section headings herein are included for convenience of reference only and shall not constitute a part of this Pledge Agreement for any other purpose or be given any substantive effect.
ARTICLE II
PLEDGE AND GRANT OF SECURITY INTEREST
Section 2.01 Pledge. The Pledgor hereby pledges, assigns, hypothecates, transfers, and grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a first-priority continuing security interest in and lien upon all of the Pledgor's right, title, and interest in, to, and under the Pledged Collateral, whether now owned or hereafter acquired, wherever located and whether now or hereafter existing, as security for the prompt and complete payment and performance when due (whether at stated maturity, by required prepayment, declaration, demand, acceleration, or otherwise) of the Secured Obligations. This pledge is made pursuant to and in accordance with the requirements of the Credit Agreement and the Guarantee Agreement dated as of March 28, 2025, and is subject to the terms and conditions set forth herein, in the Credit Agreement, and in the other Loan Documents.
Section 2.02 Delivery of Pledged Equity. (a) To the extent the Pledged Equity is represented by certificates or other instruments, the Pledgor shall deliver or cause to be delivered to the Collateral Agent, promptly upon execution of this Pledge Agreement (and, with respect to after-acquired Pledged Equity, promptly upon acquisition thereof), all certificates and instruments representing such Pledged Equity, in each case accompanied by undated stock powers or other applicable transfer instruments duly executed in blank by the Pledgor, substantially in the form of Exhibit B hereto.
(b) To the extent the Pledged Equity consists of uncertificated interests, including limited liability company membership interests or partnership interests that are not evidenced by certificates, the Pledgor shall (i) cause the issuer of such equity interests to register the security interest of the Collateral Agent on its books and records, (ii) if applicable, cause the issuer of such equity interests to execute and deliver to the Collateral Agent an acknowledgment and consent to the pledge in substantially the form of Exhibit A hereto, and (iii) take all steps necessary or advisable to ensure that the Collateral Agent has "control" (as defined in Section 8-106 of the UCC) over such equity interests to the extent that Article 8 of the UCC is applicable thereto.
(c) For limited liability company interests or other equity interests not governed by Article 8 of the UCC, the Pledgor agrees to take all steps necessary or advisable, as reasonably requested by the Collateral Agent, to cause such interests to be treated as "securities" governed by Article 8 of the UCC (including, without limitation, amending the applicable operating agreement or other organizational document to so provide) or, alternatively, to ensure that the security interest created hereby is perfected by the filing of a UCC-1 financing statement in the applicable jurisdiction or by such other method as may be required to achieve perfection under applicable law.
Section 2.03 After-Acquired Equity. The pledge and security interest granted hereby shall automatically extend to and cover all equity interests in any direct or indirect subsidiary of the Pledgor hereafter acquired by the Pledgor, whether by purchase, capital contribution, dividend, merger, consolidation, or otherwise, without the need for any further action by the Pledgor or any amendment to this Pledge Agreement. Such equity interests shall constitute "Pledged Equity" hereunder and shall be subject to all of the terms, conditions, and provisions of this Pledge Agreement, including the delivery and perfection requirements of Section 2.02. Notwithstanding the foregoing, the pledge of equity interests in any controlled foreign corporation ("CFC") or CFC holdco subsidiary shall be subject to the limitations set forth in the Credit Agreement (including the limitation of the pledge of first-tier foreign subsidiary equity to 65% of the voting equity interests and 100% of the non-voting equity interests), which limitations are addressed in a separate CFC Holdco Limited Pledge Agreement dated as of March 28, 2025, and shall not be duplicated hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Pledgor hereby represents and warrants to the Collateral Agent, for the benefit of the Secured Parties, as of the date hereof and as of each date on which the representations and warranties under the Credit Agreement are required to be true and correct, as follows:
Section 3.01 Organization and Authority. The Pledgor is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Pledgor has full corporate power and authority to execute, deliver, and perform this Pledge Agreement and to pledge and grant a security interest in the Pledged Collateral in the manner contemplated hereby.
Section 3.02 Due Authorization; No Conflicts. (a) The execution, delivery, and performance by the Pledgor of this Pledge Agreement and the pledge of the Pledged Collateral hereunder have been duly authorized by all necessary corporate action on the part of the Pledgor.
(b) The execution, delivery, and performance of this Pledge Agreement by the Pledgor and the pledge of the Pledged Collateral hereunder do not and will not (i) violate or conflict with the certificate of incorporation, bylaws, or other organizational documents of the Pledgor, (ii) violate any applicable law, statute, rule, regulation, judgment, order, writ, injunction, or decree of any governmental authority binding on the Pledgor, or (iii) result in a breach of, or constitute a default under, or give rise to a right of termination, cancellation, or acceleration under, any material contract, agreement, or instrument to which the Pledgor is a party or by which it or any of its properties is bound, except, in the case of clauses (ii) and (iii), where such violation, breach, default, or right would not reasonably be expected to have a Material Adverse Effect.
Section 3.03 Ownership of Pledged Equity. The Pledgor is the sole legal and beneficial owner of the Pledged Equity described on Schedule I hereto (if any), free and clear of all liens, charges, encumbrances, security interests, and adverse claims of any kind, other than (a) the security interest created by this Pledge Agreement and (b) Permitted Liens (as defined in the Credit Agreement). To the extent Schedule I identifies any Pledged Equity, such Pledged Equity has been duly authorized and validly issued and, in the case of corporate stock, is fully paid and non-assessable, and, in the case of limited liability company interests, has been issued in compliance with the applicable limited liability company agreement and all applicable laws.
Section 3.04 Percentage Ownership. The Pledged Equity described on Schedule I hereto (if any) represents 100% of the issued and outstanding equity interests of each class and series in the applicable subsidiary (unless otherwise expressly noted on Schedule I), and no outstanding options, warrants, rights of conversion, subscription rights, or other rights to acquire additional equity interests in any such subsidiary exist, except as permitted by the Credit Agreement.
Section 3.05 Perfection. (a) To the extent the Pledged Equity is certificated, upon delivery to the Collateral Agent of all certificates representing such Pledged Equity, accompanied by duly executed undated stock powers or transfer instruments in blank, the Collateral Agent will have a first-priority perfected security interest in such Pledged Equity, subject only to Permitted Liens.
(b) To the extent the Pledged Equity consists of uncertificated interests, upon the filing of UCC-1 financing statements in the applicable jurisdictions and/or registration of the security interest on the books and records of the issuer and/or the Collateral Agent's obtaining "control" over such interests (to the extent Article 8 of the UCC is applicable thereto), the Collateral Agent will have a first-priority perfected security interest in such Pledged Equity, subject only to Permitted Liens.
Section 3.06 No Required Consents. No consent, approval, authorization, or other order of, registration, qualification, or filing with, any governmental authority or any other Person is required for the valid execution, delivery, and performance by the Pledgor of this Pledge Agreement or for the pledge of the Pledged Collateral and the creation and perfection of the security interest granted hereby, other than (a) filings of UCC-1 financing statements in the applicable jurisdictions, (b) such consents, approvals, and filings as have been obtained or made and are in full force and effect, and (c) such filings as may be required under the securities laws or other applicable laws in connection with the exercise of remedies hereunder.
ARTICLE IV
COVENANTS. The Pledgor covenants and agrees with the Collateral Agent, for the benefit of the Secured Parties, as follows:
Section 4.01 Protection of Security Interest. (a) The Pledgor shall not sell, assign, transfer, pledge, hypothecate, or otherwise dispose of, or grant any option, warrant, or other right with respect to, any of the Pledged Collateral, except as expressly permitted under the Credit Agreement (including Permitted Dispositions and Restricted Payments, in each case as defined therein).
(b) The Pledgor shall defend the Collateral Agent's right, title, and security interest in and to the Pledged Collateral against the claims, demands, and actions of all Persons whomsoever. The Pledgor shall not permit any lien, encumbrance, or adverse claim to exist on the Pledged Collateral, other than the security interest created by this Pledge Agreement and Permitted Liens.
(c) The Pledgor shall promptly notify the Collateral Agent of any event or circumstance of which the Pledgor becomes aware that could reasonably be expected to have a material adverse effect on the value of the Pledged Collateral or on the Collateral Agent's security interest therein.
Section 4.02 Maintenance of Pledged Equity. (a) The Pledgor shall not permit the issuer of any Pledged Equity to issue any additional equity interests of any class or series (whether by stock split, dividend, recapitalization, or otherwise), except as permitted under the Credit Agreement, unless such additional equity interests are promptly pledged to the Collateral Agent hereunder and the Pledgor complies with the delivery and perfection requirements of Section 2.02.
(b) The Pledgor shall not permit the issuer of any Pledged Equity to amend, modify, or restate its certificate of incorporation, certificate of formation, operating agreement, bylaws, limited liability company agreement, partnership agreement, or other organizational documents in a manner that would (i) materially impair the value of the Pledged Equity, (ii) materially impair the rights of the Collateral Agent under this Pledge Agreement, (iii) restrict or limit the transferability of the Pledged Equity, or (iv) cause the Pledged Equity to cease to be "securities" within the meaning of Article 8 of the UCC (to the extent such interests have been opted into Article 8), in each case without the prior written consent of the Collateral Agent (acting at the direction of the Required Lenders).
Section 4.03 Voting Rights and Distributions. (a) So long as no Event of Default shall have occurred and be continuing, the Pledgor shall be entitled to (i) exercise any and all voting and/or consensual rights and powers pertaining to the Pledged Equity for any purpose not inconsistent with the terms of this Pledge Agreement, the Credit Agreement, or any other Loan Document and (ii) receive and retain for its own account all cash dividends, distributions, and other payments paid on or in respect of the Pledged Equity, subject in each case to the restricted payment limitations and other covenants set forth in the Credit Agreement.
(b) Upon the occurrence and during the continuance of an Event of Default, all rights of the Pledgor to exercise the voting and other consensual rights and powers that it would otherwise be entitled to exercise pursuant to Section 4.03(a)(i) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole right to exercise such voting and other consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have no obligation to exercise any such right. Any and all dividends, distributions, and other payments that are received by the Pledgor contrary to the provisions of this Section 4.03(b) shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property of the Pledgor, and shall be forthwith delivered to the Collateral Agent in the exact form received, with any necessary endorsements, to be held by the Collateral Agent as part of the Pledged Collateral.
Section 4.04 Further Assurances. The Pledgor shall, at its own cost and expense, promptly execute and deliver such further instruments, documents, and agreements and take such further actions as the Collateral Agent may from time to time reasonably request in order to (a) carry out more effectively the purposes of this Pledge Agreement, (b) subject to the lien and security interest created hereby any property or assets of the Pledgor that are or become Pledged Collateral, (c) perfect and maintain the validity, effectiveness, and priority of any of the security interests intended to be created hereby, and (d) better assure, convey, grant, assign, transfer, preserve, protect, and confirm to the Collateral Agent and the Secured Parties the rights granted or intended to be granted to the Collateral Agent and the Secured Parties under this Pledge Agreement.
Section 4.05 After-Acquired Interests; Joinder. If the Pledgor acquires equity interests in any new subsidiary (whether domestic or foreign) after the date hereof, the Pledgor shall promptly (and in any event within sixty (60) days after such acquisition, or such longer period as may be agreed by the Collateral Agent in its reasonable discretion) (a) deliver to the Collateral Agent a supplement to Schedule I hereto identifying such newly acquired equity interests, (b) deliver to the Collateral Agent all certificates (if any) representing such equity interests, together with undated stock powers or other transfer instruments duly executed in blank, substantially in the form of Exhibit B hereto, (c) cause the filing of any UCC-1 financing statements or amendments thereto as may be necessary or advisable to perfect the security interest of the Collateral Agent in such equity interests, (d) cause the issuer of any uncertificated equity interests to register the security interest of the Collateral Agent on its books and records and execute and deliver an acknowledgment and consent substantially in the form of Exhibit A hereto, and (e) deliver to the Collateral Agent such other documents, instruments, and agreements as the Collateral Agent may reasonably request in connection therewith.
ARTICLE V
REMEDIES. Section 5.01 Event of Default. Upon the occurrence and during the continuance of an Event of Default under the Credit Agreement, the Collateral Agent shall have, in addition to all other rights and remedies available to it under this Pledge Agreement, the Credit Agreement, and the other Loan Documents, all rights and remedies of a secured party under the UCC and under any other applicable law. Without limiting the generality of the foregoing, the Collateral Agent may, without demand of performance or other demand, presentment, protest, advertisement, or notice of any kind (except any notice required by law that cannot be waived) to or upon the Pledgor or any other Person (all and each of which demands, defenses, advertisements, and notices are hereby waived to the fullest extent permitted by law), exercise all rights of the Collateral Agent hereunder, including the rights set forth in Sections 5.02 through 5.04.
Section 5.02 Disposition of Pledged Collateral. (a) Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, without demand or notice (except as required by applicable law that cannot be waived), in its sole discretion, sell, assign, give an option or options to purchase, or otherwise dispose of the Pledged Collateral, or any part thereof, at public or private sale, at any of the Collateral Agent's offices or elsewhere, for cash, on credit, or for future delivery, at such prices and upon such other terms as the Collateral Agent may deem commercially reasonable, irrespective of the impact of any such sale on the market price of the Pledged Collateral.
(b) The Pledgor acknowledges and agrees that, because the Pledged Equity may consist of securities that are not registered under the Securities Act of 1933, as amended, or under applicable state securities laws, and that may not be readily marketable, the Collateral Agent may be unable to effect a public sale of any or all of the Pledged Equity in compliance with such laws. The Pledgor acknowledges and agrees that any private sale of such Pledged Equity made under such circumstances shall not, by reason of such circumstances, be deemed to have been made in a commercially unreasonable manner, even if conducted at a price or upon terms less favorable than those obtainable through a public sale. The Collateral Agent shall have no obligation to delay the sale of any Pledged Equity for the period of time necessary to permit the issuer of the Pledged Equity to register such securities for public sale under the Securities Act or under applicable state securities laws, even if the issuer would agree to do so.
(c) The Collateral Agent may, in its discretion, restrict the prospective bidders or purchasers of any Pledged Equity to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Pledged Equity.
(d) The Collateral Agent shall give the Pledgor not less than ten (10) days' prior written notice (which the Pledgor agrees is commercially reasonable notice) of the time and place of any public sale or of the time after which any private sale or other intended disposition of the Pledged Collateral is to be made.
Section 5.03 Application of Proceeds. The proceeds of any sale, disposition, or other realization upon all or any part of the Pledged Collateral shall be applied by the Collateral Agent in the following order of priority:
First, to the payment of all costs, expenses, and fees (including reasonable attorneys' fees and expenses) incurred by the Collateral Agent in connection with the sale, disposition, collection, or other realization of the Pledged Collateral, including all costs of foreclosure and collection, and all expenses incurred in connection with the protection and preservation of the Pledged Collateral;
Second, to the payment of the Secured Obligations in the order of priority specified in the Credit Agreement and any applicable intercreditor agreement; and
Third, to the Pledgor, or to whomsoever may be lawfully entitled thereto, any surplus remaining after all Secured Obligations have been paid in full.
Section 5.04 Registration Rights; Private Sale. (a) The Pledgor agrees that the Collateral Agent shall have no obligation to effect a public sale of any Pledged Equity if the Collateral Agent determines in good faith that to do so would violate applicable federal or state securities laws, and may restrict the purchasers of the Pledged Equity to those meeting applicable securities law exemptions.
(b) If at any time when the Collateral Agent shall determine to exercise its right to sell all or any part of the Pledged Equity pursuant to this Article V, such Pledged Equity or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, the Collateral Agent may, in its sole and absolute discretion, sell such Pledged Equity or the part thereof to be sold by private sale in such manner and under such circumstances as the Collateral Agent may deem necessary or advisable in order that such sale may legally be effected without such registration.
ARTICLE VI
THE COLLATERAL AGENT
Section 6.01 Appointment and Authority. The Pledgor acknowledges that Crescent Harbor Bank, N.A. has been appointed as Collateral Agent under the Credit Agreement and acts hereunder for the ratable benefit of all Secured Parties and in accordance with the terms and conditions set forth in Article IX of the Credit Agreement (or such other Article of the Credit Agreement as relates to the appointment, powers, duties, and responsibilities of the Collateral Agent). The Collateral Agent shall have the right to exercise all rights, powers, and remedies granted to it hereunder and under applicable law in accordance with the terms of the Credit Agreement. The provisions of Article IX of the Credit Agreement (or such other applicable Article) relating to the rights, powers, duties, immunities, and indemnities of the Collateral Agent are incorporated herein by reference and shall apply to the Collateral Agent in its capacity hereunder as if fully set forth herein.
Section 6.02 Limitation of Liability. The Collateral Agent shall not be liable for any act or omission taken or suffered by it hereunder or in connection herewith, except for its own gross negligence, bad faith, or willful misconduct, as finally determined by a court of competent jurisdiction. Without limiting the generality of the foregoing, the Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (a) any statement, warranty, or representation made in or in connection with this Pledge Agreement or any other Loan Document, (b) the contents of any certificate, report, or other document delivered hereunder or thereunder or in connection herewith or therewith, (c) the performance or observance of any of the covenants, agreements, or other terms or conditions set forth herein or therein, (d) the validity, enforceability, effectiveness, or genuineness of this Pledge Agreement, any other Loan Document, or any other agreement, instrument, or document, or (e) the satisfaction of any condition precedent set forth herein or in the Credit Agreement.
Section 6.03 Successor Collateral Agent. Any successor Collateral Agent appointed pursuant to the terms of the Credit Agreement shall, upon its acceptance of such appointment, succeed to and become vested with all of the rights, powers, privileges, and duties of the predecessor Collateral Agent hereunder, and the predecessor Collateral Agent shall be discharged from its obligations and duties hereunder. The provisions of this Article VI shall continue in effect for the benefit of any retiring Collateral Agent with respect to any actions taken or omitted to be taken by it while acting as Collateral Agent.
ARTICLE VII
MISCELLANEOUS. Section 7.01 Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and shall be given in the manner, and shall be effective at the times, set forth in the Credit Agreement. Notices to the Pledgor shall be sent to:
Nexford Precision Components, Inc. 2750 Commerce Drive Rockford, Illinois 61101
Attention: General Counsel
Telephone: (815) 555-0140
Email: legal@nexfordprecision.com
or to such other address as the Pledgor shall have specified in a written notice to the Collateral Agent delivered in accordance with the Credit Agreement.
Notices to the Collateral Agent shall be sent to:
Crescent Harbor Bank, N.A. 320 Federal Street Boston, Massachusetts 02110
Attention: Agency Services — Nexford Industrial Holdings Account
Telephone: (617) 555-0200
Email: agencyservices@crescentharbor.com
or to such other address as the Collateral Agent shall have specified in a written notice delivered in accordance with the Credit Agreement.
Section 7.02 Amendments. No amendment, modification, supplement, termination, or waiver of any provision of this Pledge Agreement, and no consent to any departure by the Pledgor from any provision hereof, shall be effective unless in writing signed by the Pledgor and the Collateral Agent (the Collateral Agent acting at the direction of the Required Lenders as set forth in the Credit Agreement, or at the direction of all affected Lenders to the extent required by the Credit Agreement), and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 7.03 Severability. If any provision of this Pledge Agreement is held to be illegal, invalid, or unenforceable under any present or future law, rule, or regulation, (a) such provision shall be fully severable, (b) this Pledge Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Pledge Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Pledge Agreement a legal, valid, and enforceable provision as similar in terms and economic effect to such illegal, invalid, or unenforceable provision as may be possible.
Section 7.04 Governing Law. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 7.05 Jurisdiction; Venue. (a) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK COUNTY, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT, AND EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
(b) EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT IN ANY COURT REFERRED TO IN SECTION 7.05(a) AND THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
Section 7.06 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS PLEDGE AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.06.
Section 7.07 Counterparts. This Pledge Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Pledge Agreement by facsimile, portable document format (.pdf), or other electronic transmission shall be effective as delivery of an original executed counterpart of this Pledge Agreement. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to this Pledge Agreement shall be deemed to include electronic signatures, deliveries, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature, physical delivery thereof, or the use of a paper-based recordkeeping system, as the case may be.
Section 7.08 Termination and Release. (a) This Pledge Agreement and the security interest granted hereby shall remain in full force and effect until the earliest to occur of (i) the Payment in Full (as defined in the Credit Agreement) of all Secured Obligations and the termination of all commitments to extend credit under the Credit Agreement and (ii) the release of the Pledgor from its obligations under the Guarantee Agreement in accordance with the terms thereof and the Credit Agreement.
(b) Upon such termination, the Collateral Agent shall, at the Pledgor's sole cost and expense, promptly execute and deliver to the Pledgor such releases, termination statements (including UCC-3 termination statements), and other documents or instruments as the Pledgor may reasonably request to evidence the termination of the security interest granted hereby, all without recourse to or warranty by the Collateral Agent.
(c) At any time prior to such termination, the Collateral Agent shall release from the security interest created hereby any Pledged Collateral that is sold, transferred, or otherwise disposed of in a transaction permitted by the Credit Agreement (including any disposition of a subsidiary's equity interests in connection with a permitted disposition under the Credit Agreement), and shall execute and deliver such documents as the Pledgor may reasonably request to evidence such release.
Section 7.09 Binding Effect; Successors and Assigns. This Pledge Agreement shall be binding upon the Pledgor and its successors and assigns, and shall inure to the benefit of the Collateral Agent and its successors, transferees, and assigns. The Pledgor shall not assign or transfer any of its obligations hereunder without the prior written consent of the Collateral Agent (acting at the direction of the Required Lenders).
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IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be duly executed and delivered by its duly authorized officer as of the date first above written.
NEXFORD PRECISION COMPONENTS, INC., as Pledgor
By: ________
Name: David R. Kowalski
Title: Vice President and Treasurer
Date: March 28, 2025
Accepted and agreed to as of the date first above written:
CRESCENT HARBOR BANK, N.A., as Collateral Agent
By: ________
Name: Margaret A. Chen
Title: Managing Director, Agency Services
Date: March 28, 2025
SCHEDULE I
to Pledge Agreement of Nexford Precision Components, Inc.
PLEDGED EQUITY
None as of the date hereof.
The Pledgor does not currently hold equity interests in any direct subsidiary. This Pledge Agreement covers all equity interests in any subsidiary hereafter acquired by the Pledgor, which shall be deemed "Pledged Equity" hereunder and shall be subject to the delivery and perfection requirements of Section 2.02 and the after-acquired interest provisions of Section 2.03 and Section 4.05 of this Pledge Agreement.
EXHIBIT A
to Pledge Agreement of Nexford Precision Components, Inc.
FORM OF ISSUER ACKNOWLEDGMENT AND CONSENT TO PLEDGE
This ACKNOWLEDGMENT AND CONSENT TO PLEDGE (this "Acknowledgment") is executed and delivered as of __, 20 by _____ (the "Issuer"), in connection with that certain Pledge Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Pledge Agreement"), made by Nexford Precision Components, Inc. (the "Pledgor") in favor of Crescent Harbor Bank, N.A., as Collateral Agent (the "Collateral Agent") for the benefit of the Secured Parties under the Credit Agreement dated as of March 28, 2025.
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Pledge Agreement.
The Issuer hereby acknowledges and confirms the following:
1. The Issuer has been advised that the Pledgor has pledged, assigned, and granted to the Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Pledgor's right, title, and interest in and to the equity interests of the Issuer held by the Pledgor (the "Pledged Interests"), as more fully described in the Pledge Agreement.
2. The Issuer hereby acknowledges the pledge of the Pledged Interests to the Collateral Agent and consents thereto. The Issuer confirms that it has registered or will promptly register the security interest of the Collateral Agent in the Pledged Interests on its books and records.
3. The Issuer agrees that, upon receipt of written notice from the Collateral Agent that an Event of Default has occurred and is continuing under the Credit Agreement and directing the Issuer to comply with the instructions of the Collateral Agent, the Issuer shall comply with all instructions of the Collateral Agent with respect to the Pledged Interests, including, without limitation, instructions regarding the transfer and registration of the Pledged Interests, without the further consent of the Pledgor.
4. The Issuer confirms that the Pledged Interests are uncertificated and are not represented by any certificate or instrument. The Issuer agrees not to issue any certificate or instrument evidencing the Pledged Interests without the prior written consent of the Collateral Agent.
5. The Issuer agrees that it will not register any transfer of the Pledged Interests on its books and records unless such transfer is (a) made by the Collateral Agent or with the prior written consent of the Collateral Agent, or (b) otherwise permitted under the Pledge Agreement and the Credit Agreement.
6. This Acknowledgment shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles thereof (other than Section 5-1401 and Section 5-1402 of the New York General Obligations Law).
[ISSUER NAME]
By: ________
Name:
Title:
Date:
Acknowledged:
CRESCENT HARBOR BANK, N.A., as Collateral Agent
By: ________
Name:
Title:
Date:
EXHIBIT B
to Pledge Agreement of Nexford Precision Components, Inc.
FORM OF UNDATED STOCK POWER / TRANSFER FORM
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign, and transfer unto _____ the following equity interests:
Issuer: _________
Number of Shares/Units: _________
Class/Series: _________
Certificate Number(s) (if applicable): _________
standing in the name of the undersigned on the books of the above-named issuer, and does hereby irrevocably constitute and appoint Crescent Harbor Bank, N.A., as Collateral Agent, as the true and lawful attorney-in-fact of the undersigned, with full power of substitution, to sell, assign, transfer, and set over all or any part of the above equity interests on the books of the above-named issuer, with full power and authority to do and perform each and every act and thing requisite and necessary to be done in the premises, as fully as the undersigned might or could do, hereby ratifying and confirming all that said attorney-in-fact, or any substitute or substitutes, shall lawfully do or cause to be done by virtue hereof.
This Stock Power is executed in blank and is undated. This Stock Power is delivered in connection with that certain Pledge Agreement dated as of March 28, 2025, made by the undersigned in favor of Crescent Harbor Bank, N.A., as Collateral Agent.
NEXFORD PRECISION COMPONENTS, INC.
By: ________
Name: David R. Kowalski
Title: Vice President and Treasurer
Date: [Intentionally left blank]
TAB 2
PLEDGE AGREEMENT
(Equity Interests in Lower-Tier Subsidiaries)
Dated as of March 28, 2025
by
NEXFORD ENGINEERED SYSTEMS, LLC, a Delaware limited liability company, as Pledgor
in favor of
CRESCENT HARBOR BANK, N.A., as Collateral Agent for the benefit of the Secured Parties
PLEDGE AGREEMENT (Equity Interests in Lower-Tier Subsidiaries)
This PLEDGE AGREEMENT (this "Pledge Agreement"), dated as of March 28, 2025, is made by NEXFORD ENGINEERED SYSTEMS, LLC, a Delaware limited liability company (the "Pledgor"), having its principal place of business at 600 Manufacturers Row, Greenville, South Carolina 29607, in favor of CRESCENT HARBOR BANK, N.A., a national banking association, having its office at 320 Federal Street, Boston, Massachusetts 02110 (in its capacity as Collateral Agent for the benefit of the Secured Parties, the "Collateral Agent").
RECITALS
WHEREAS, Nexford Industrial Holdings Inc., a Delaware corporation (the "Borrower"), the Guarantors party thereto, Crescent Harbor Bank, N.A., as Administrative Agent and Collateral Agent, Ironwood Capital Markets, LLC and Northvane Securities, Inc., as Joint Lead Arrangers, and the Lenders from time to time party thereto, have entered into that certain Credit Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), providing for a $1,400,000,000 Senior Secured Term Loan B Facility;
WHEREAS, the Pledgor is a Subsidiary Guarantor under the Guarantee Agreement dated as of March 28, 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Guarantee Agreement"), and is required, pursuant to the terms of the Credit Agreement and the Guarantee Agreement, to pledge and grant a security interest in the equity interests it holds (or may hereafter acquire) in its direct and indirect subsidiaries as collateral security for the Secured Obligations;
WHEREAS, the Pledgor has determined that the execution and delivery of this Pledge Agreement is in its best interests and in the best interests of the Borrower and the other Loan Parties, inasmuch as the Pledgor will derive substantial direct and indirect benefits from the extensions of credit under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Pledgor hereby agrees with the Collateral Agent, for the benefit of the Secured Parties, as follows:
The Pledgor hereby incorporates by reference Articles I through VII of the Pledge Agreement set forth at Tab 1 of this compilation (the "Standard Form Provisions"), which Standard Form Provisions shall apply to this Pledge Agreement mutatis mutandis, with the following modifications: (a) all references to the "Pledgor" shall refer to Nexford Engineered Systems, LLC, a Delaware limited liability company; (b) all references to the Pledgor's organizational form shall refer to a limited liability company organized under the laws of the State of Delaware; (c) Section 3.01 shall be deemed to refer to the Pledgor as a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, with full limited liability company power and authority to execute, deliver, and perform this Pledge Agreement; (d) Section 3.02 shall be deemed to refer to authorization by all necessary limited liability company action; and (e) Schedule I, Exhibit A, and Exhibit B attached hereto shall govern in lieu of those attached to Tab 1.
For the avoidance of doubt, the substantive terms and conditions of Articles I through VII (Definitions and Interpretation, Pledge and Grant of Security Interest, Representations and Warranties, Covenants, Remedies, The Collateral Agent, and Miscellaneous) as set forth in the Standard Form Provisions are hereby incorporated and restated as part of this Pledge Agreement in their entirety.
Notices to the Pledgor shall be sent to:
Nexford Engineered Systems, LLC 600 Manufacturers Row Greenville, South Carolina 29607
Attention: Manager
Telephone: (864) 555-0185
Email: legal@nexfordengineered.com
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