Term Loan A Facility - Interactive Term Sheet

Transaction Summary ▼

Borrower

TechManufacturing Inc.

Guarantors

All material domestic subsidiaries

Facility Type

Senior Secured Term Loan A

Facility Amount

$75,000,000

Purpose

Refinance existing debt, acquisitions, growth capital, and transaction fees

Maturity

7 years from closing

Amortization Schedule ▼

Schedule (% of original principal)

Period	Annual %	Quarterly %	Quarterly Payment ($75M)
Years 1-2	5.0%	1.25%	$937,500
Years 3-4	7.5%	1.875%	$1,406,250
Years 5-6	10.0%	2.5%	$1,875,000
Year 7	Balloon payment		~$41,250,000

Interest Rate & Fees ▼

SOFR Loans

Term SOFR + Credit Spread (0.50% floor)

Base Rate Loans

Base Rate + Credit Spread
Base Rate = highest of: Prime, Fed Funds + 0.50%, 1-month SOFR + 1.00%

Pricing Grid (Total Net Leverage Ratio)

Leverage	SOFR Spread	Base Rate Spread
≥ 4.00x	3.00%	2.00%
3.00x - 4.00x	2.50%	1.50%
2.00x - 3.00x	2.25%	1.25%
< 2.00x	2.00%	1.00%

Upfront Fee

2.00% ($1,500,000)

Administrative Agent Fee

$50,000 annually

Collateral & Security ▼

Security

First priority lien on substantially all assets (pari passu with Revolver)

Collateral Package

Accounts receivable and inventory
Equipment and fixed assets
Real property
Intellectual property (patents, trademarks)
Deposit accounts
Subsidiary equity (100% domestic, 65% foreign)

Intercreditor

Shared first lien with $50M Revolver (pari passu)

Financial Covenants ▼

Testing Frequency

Quarterly

1. Total Net Leverage Ratio

Maximum Ratio:

Period	Maximum
2026	4.50:1.00
2027	4.00:1.00
2028	3.50:1.00
2029+	3.00:1.00

Formula: (Total Debt - Cash up to $10M) / EBITDA
Equity Cure: Available 2x per 4 quarters, 5x lifetime

2. Senior Secured Leverage Ratio

Maximum: 2.50:1.00 (begins Q1 2027)
Formula: Senior Secured Debt / EBITDA

3. Fixed Charge Coverage Ratio

Minimum: 1.25:1.00
Formula: EBITDA / (Cash Interest + Principal Payments + Cash Taxes + Capex + Dividends)

4. Minimum Liquidity

Requirement: $15,000,000 at all times
Formula: Unrestricted Cash + Available Revolver

Key Negative Covenants ▼

Debt Limitations - Permitted Debt

This TLA and $50M Revolver
Capital leases: $10M outstanding
Subordinated debt: $25M
Equipment financing: $5M annually
Other debt: $5M aggregate

Acquisition Limitations

Permitted if ALL conditions met:

Same or related business
Up to $30M per transaction, $50M annually
Pro forma leverage ≤ 3.75:1.00
Pro forma FCCR ≥ 1.35:1.00
Minimum liquidity $20M maintained
Target becomes guarantor
15 days advance notice

Restricted Payments (Dividends)

Permitted if ALL conditions met:

No event of default
Leverage ≤ 3.00:1.00
FCCR ≥ 1.50:1.00
Liquidity ≥ $20M

OR Annual Basket: $5M if FCCR ≥ 1.25:1.00

Mandatory Prepayments ▼

Asset Sales

100% of net proceeds > $10M annually

Insurance/Condemnation

100% of proceeds > $5M per event (unless reinvested in 12 months)

Debt Issuance

100% of proceeds from non-permitted debt

Excess Cash Flow Sweep

Triggered when leverage ≥ 3.00:1.00:

50% of ECF if leverage ≥ 3.50x
25% of ECF if leverage 3.00x - 3.50x
0% if leverage < 3.00x

ECF Formula:
EBITDA - Cash interest - Cash taxes - Scheduled debt amortization - Capex (excluding financed) - Acquisitions (cash portion) +/- Working capital change - Voluntary prepayments already made - Restricted payments made = Excess Cash Flow

Optional Prepayments ▼

Permitted

Anytime in $5M increments

Prepayment Premium

Period	Premium
Years 1-2	2.00%
Year 3	1.00%
Year 4+	None

Events of Default ▼

Standard Events Include

Payment default (principal immediately, interest/fees after 5 days)
Covenant breach (no cure for financial covenants except equity cure)
Cross-default to debt > $5M
Bankruptcy/insolvency
Judgments > $5M
Material adverse change
Change of control