Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) – December 21, 2023

SIFCO Industries, Inc.

(Exact name of registrant as specified in its charter)

Ohio

1-5978

34-0553950

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

970 East 64th Street, Cleveland Ohio

44103

(Address of principal executive offices)

(ZIP Code)

Registrant’s telephone number, including area code: (216) 881-8600

N.A.

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Shares

SIF

NYSE American


Item 1.01			Entry into Material Definitive Agreements.

Subordinated Loan Documents.

On December 21, 2023, SIFCO Industries, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “borrowers”), in connection with and as a condition to the agreement by JPMorgan Chase Bank, N.A. (the “Lender”) to consummate the transactions contemplated by the Ninth Amendment and the Fourth Amendment (each as defined below), incurred a secured subordinated loan from Garnet Holdings, Inc., a California corporation owned and controlled by Mark J. Silk (“GHI”), in the original principal amount of $3,000,000 (the “Subordinated Loan”), on the terms and subject to the conditions of: (a) a Subordinated Secured Promissory Note (the “Subordinated Promissory Note”) in the original principal amount of $3,000,000 issued by borrowers to GHI, (b) a Subordination and Intercreditor Agreement (the “Subordination Agreement”) by and among borrowers, GHI and Lender, and (c) a Side Letter by and among borrowers and Mark J. Silk (the “Fee Letter,” and together with the Subordinated Promissory Note and Subordination Agreement, the “Subordinated Loan Documents”).

The obligations of borrowers under the Subordinated Promissory Note mature on October 4, 2024, unless accelerated upon the occurrence of an event of default specified therein. Interest accrues on the then-outstanding principal amount at a rate of fourteen percent (14%) per annum and shall be paid in kind (and not in cash) by capitalization as additional principal (“PIK Interest”) each six-month period after the date hereof in arrears. Accrued but unpaid PIK Interest shall, as of the first day of each such six-month period, be compounded, and shall be added to and shall serve to increase, and shall thereafter be deemed to constitute a portion of, the outstanding principal amount of the Subordinated Promissory Note and shall bear interest at the interest rate set forth above. All accrued and unpaid interest shall be payable on the maturity date. Borrowers have the right, at any time and without notice, premium, or penalty, to prepay all or any part of the principal amount or interest outstanding under the Subordinated Promissory Note.

The Subordinated Promissory Note requires the borrowers to pay to GHI a fully earned and non-refundable fee in an amount equal to $150,000 (the “Closing Fee”), which Closing Fee is added to the principal amount and payable at maturity. Borrower’s obligations under the Subordinated Promissory Note are secured by a first priority lien, subject to any liens granted to Lender as described in the Subordination Agreement, on all of borrowers’ accounts, deposit accounts, contract rights, documents, equipment, general intangibles, instruments, inventory, investment property, commercial tort claims, all other goods and personal property whether tangible or intangible and wherever located, and all proceeds of the foregoing.

The Subordinated Loan and transactions contemplated by the Subordinated Loan Documents are subject to the satisfaction of certain conditions identified therein, including, but not limited to, the execution and delivery by Mark. J. Silk, a member of the Board of Directors of the Company (“Silk”), of a Guaranty Agreement (the “Guaranty”) in favor of Lender pursuant to which Silk guarantees the obligations of borrowers under the Credit Agreement and Export Credit Agreement (each as defined below). The Fee Letter requires the borrowers to pay Silk a fee in an amount equal to $760,000 (the “Guaranty Fee”) in consideration for his agreement to execute and deliver the Guaranty. The Guaranty Fee becomes due and payable on the maturity date.

Ninth Amendment to Credit Agreement; Fourth Amendment to Export Credit Agreement.

On December 21, 2023, the borrowers entered into the Ninth Amendment (the “Ninth Amendment”) to the Credit Agreement (as previously amended, the “Credit Agreement”) and the Fourth Amendment (the “Fourth Amendment”) to Export Credit Agreement (the “Export Credit Agreement”), in each case, with the Lender. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Ninth Amendment.

The Ninth Amendment amends the Credit Agreement to, among other things, to: (i) reflect the incurrence by borrowers of the Subordinated Loan and the execution and delivery by borrowers, the Lender and Silk of the Subordinated Loan Documents, and the receipt by borrowers of $3,000,000 in immediately available funds on the Ninth Amendment Effective Date; (ii) delay the maturity date from December 31, 2023 to October 4, 2024, or any earlier date on which the Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms of the Credit Agreement; (iii) reduce the Revolving Commitment from $23,000,000 to $19,000,000; (iv) modify the definition of Borrowing Base to mean, at any time, the sum of (a) 85% of Eligible Accounts at such time, plus (b) the lesser of (1) 70% of Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time and (2) the product of 85% multiplied by the NOLV Percentage identified in the most recent inventory appraisal ordered by the Lender multiplied by Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time, minus (c) Reserves of $1,500,000, increasing on the first day of each month by $250,000, commencing on May 1, 2024 and continuing until (and including) August 1, 2024, or such lesser amount, if any, as may be agreed upon in writing by the Lender in its sole discretion (which may be by email from the Lender), plus (d) the PP&E Component; (v) modify the Applicable Margin schedule to reflect the following applicable rates: 2.75% (CBFR REVSOFR30), 0.25% (CBFR Spread (CB Floating Rate)), 2.75% (SOFR Spread), and 0.50% (Commitment Fee Rate); and (vi) amend and restate subsection (l) of the Reporting Schedule to require, by the 17th day of every month, the delivery of a rolling 13 week cash flow forecast in form acceptable to Lender, which must

include a projected to actual results comparison for the week then ended and on a cumulative basis from the beginning of the cash flow forecast.

The Ninth Amendment amends the Credit Agreement to permit the borrowers to discontinue the engagement of Croley, Martel and Associates (“Croley”) as of the Ninth Amendment Effective Date, provided that, if the Secured Obligations are not paid in full and the Credit Agreement terminated by May 31, 2024, the borrowers must engage, and must at all times continue to engage, Croley or another consultant on terms and conditions satisfactory to the Lender until such date agreed to by the Lender in its sole discretion.

Lender’s agreement is subject to the continued satisfaction by the borrowers of certain conditions outlined in the Ninth Amendment, including (i) the continued engagement of the Investment Banker to assist borrowers with identifying and executing a sale of the borrowers on a best efforts basis by May 31, 2024; and (ii) the receipt by the Lender of fully executed copies of the Fourth Amendment to Export Credit Agreement, the Subordinated Loan Documents and the Guaranty.

The Fourth Amendment amends the Export Credit Agreement to, among other things, to: (i) reflect the incurrence by borrowers of the Subordinated Loan and the execution and delivery by borrowers, the Lender and Silk of the Subordinated Loan Documents, and the receipt by borrowers of $3,000,000 in immediately available funds on the Ninth Amendment Effective Date; and (ii) delay the maturity date to October 4, 2024, or any earlier date on which the Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms thereof.

The Fourth Amendment amends the Export Credit Agreement to permit the borrowers to discontinue the engagement of Croley, Martel and Associates as of the Fourth Amendment Effective Date, provided that, if the Secured Obligations are not paid in full and the Export Credit Agreement terminated by May 31, 2024, the borrowers must engage, and must at all times continue to engage, Croley, Martel and Associates on terms and conditions satisfactory to the Lender until such date agreed to by the Lender in its sole discretion.

Lender’s agreement is subject to the continued satisfaction by the borrowers of certain conditions outlined in the Fourth Amendment, including (i) the continued engagement of the Investment Banker to assist borrowers with identifying and executing a sale of the borrowers on a best efforts basis by May 31, 2024; and (ii) the receipt by the Lender of fully executed copies of the Ninth Amendment to Export Credit Agreement, the Subordinated Loan Documents and the Guaranty.

The foregoing descriptions of the Ninth Amendment, the Fourth Amendment and the Subordinated Loan Documents do not purport to be complete and are qualified in their entirety by reference to the full text of the Ninth Amendment, attached to this Form 8-K as Exhibit 10.1, and incorporated herein by reference.


Item 2.03			Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangements of the Registrant.

The disclosure in Item 1.01 and Exhibit 10.1, 10.2, 10.3, 10.4 and 10.5 of this report are incorporated herein by reference.


Item 9.01			Financial Statements and Exhibits.

(d) Exhibits

10.1 Ninth Amendment to Credit Agreement, dated December 21, 2023, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC, and JPMorgan Chase Bank, N.A.

10.2 Fourth Amendment to Export Credit Agreement, dated December 21, 2023, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC, and JPMorgan Chase Bank, N.A .

10.3 Secured Subordinated Promissory Note, dated December 21, 2023, by and between SIFCO Industries, Inc., Quality Aluminum Forge, LLC, and Garnet Holdings, Inc.

10.4 Subordination and Intercreditor Agreement, dated December 21, 2023, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC, Garnet Holdings, Inc. and JPMorgan Chase Bank, N.A.

10.5 Letter Agreement, dated December 21, 2023, by and among SIFCO Industries, Inc., Quality Aluminum Forge, LLC, and Mark J. Silk .

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



						SIFCO Industries, Inc.
						(Registrant)

Date: December 28, 2023
						/s/ Thomas R. Kubera
						Thomas R. Kubera
						Chief Financial Officer
						(Principal Financial Officer)

Execution Copy

NINTH AMENDMENT TO CREDIT AGREEMENT

THIS NINTH AMENDMENT TO CREDIT AGREEMENT, dated as of December 21, 2023 (this "Amendment"), is by and among SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO, collectively, the “Borrowers” and each, individually, a “Borrower”), any other Loan Parties party hereto, and JPMorgan Chase Bank, N.A., a national banking association (the “Lender”).

RECITALS

A. The Borrowers, any other Loan Parties party thereto, and the Lender are parties to a Credit Agreement dated as of August 8, 2018 (as amended and as it may be further amended or modified from time to time, the “Credit Agreement”).

B. The Borrowers and any other Loan Parties desire to amend the Credit Agreement, and the Lender is willing to do so in accordance with the terms hereof.

TERMS

In consideration of the premises and of the mutual agreements herein contained, the parties agree as follows:

ARTICLE 1. AMENDMENTS. Upon fulfillment of the conditions set forth in Article IV hereof, the Credit Agreement shall be amended effective as of the date hereof as follows:

1.1 The following new Section 3.25 is added to the Credit Agreement:

SECTION 3.25 Subordinated Indebtedness. The Borrowers have received $3,000,000 in immediately available funds on the Ninth Amendment Effective Date from the incurrence of the Silk Subordinated Indebtedness. The Silk Subordinated Note, the Silk Side Letter, and the Silk Subordination Agreement are the only instruments or other documents executed or delivered in connection with the Silk Subordinated Indebtedness, and correct and complete copies of such documents have been delivered to the Lender as of the Ninth Amendment Effective Date. There is no event of default or event or condition which could become an event of default with notice or lapse of time or both, under the Silk Subordinated Note and the Silk Subordinated Note is in full force and effect.

1.2 Section 5.14 of the Credit Agreement is amended by adding the following new clause 5.14(e):

(e) Without limiting the foregoing, each Loan Party will cause, on or before the Ninth Amendment Effective Date, Mark Silk to execute and deliver an Obligation Guaranty satisfactory to the Lender and to contribute $3,000,000 of Subordinated Indebtedness to the Loan Parties on terms, and subject to a subordination agreement in form and substance, satisfactory to the Lender

1.3 The following new Section 5.17 is added to the Credit Agreement:

SECTION 5.17 Engagement of Professionals.

(a) The Borrowers may discontinue the engagement of Croley, Martel and Associates (“Croley”) as of the Ninth Amendment Effective Date, provided that, if the Secured Obligations are not paid in full and the Credit Agreement terminated by May 31, 2024, the Borrowers must, at Lender’s request, promptly re-engage, and must at all times thereafter continue to engage, Croley or another consultant on terms and conditions satisfactory to the Lender until such date agreed to by the Lender in its sole discretion. Croley or such other consultant is authorized and directed to communicate jointly with Lender and Borrowers on a weekly basis regarding Borrowers’ financial and operational condition and status, financial reports, status of restructuring, and other matters related to Borrowers as Lender may request. Borrowers must at all times cause Croley or such other consultant to cooperate with Lender by responding

to Lender’s requests for information and providing Lender with Croley’s or such other consultant’s analysis regarding any of the matters required by the Lender.

(b) The Borrowers have engaged Houlihan Lokey (“Investment Banker”) to assist Borrowers with identifying and executing a sale of the Borrowers on a best efforts basis by May 31, 2024. Borrowers must at all times continue to engage the Investment Banker in a manner consistent with Borrowers’ existing engagement letter with Investment Banker until such date unless otherwise agreed to by Lender in its sole discretion. Borrowers agree to authorize and direct the Investment Banker to communicate jointly with Lender and Borrowers on a weekly basis regarding the status of the sale and other matters related to Borrowers as Lender may reasonably request. Borrowers must at all times cause the Investment Banker to cooperate with Lender by responding to Lender’s reasonably requests for information and providing Lender with the Investment Banker’s analysis regarding any of the matters in this paragraph. The Borrowers are responsible for all fees, costs, and expenses related to their retention of the Investment Banker. Nothing herein shall be construed as obligating Borrower to accept any offer to purchase any Borrower nor shall anything herein be construed as any consent by the Lender to any sale of the Borrowers or any other transaction.

1.4 Section 6.01(i) of the Credit Agreement is amended and restated as follows:

(i) (x) the Silk Subordinated Indebtedness and (y) other Subordinated Indebtedness in an aggregate principal amount not exceeding the Subordinated Debt Limit at any time outstanding (exclusive of the Silk Subordinated Indebtedness);

1.5 Section 6.02(i) of the Credit Agreement is amended and restated as follows:

(i) (x) subordinate liens securing the Silk Subordinated Debt, and subject to the Silk Subordination Agreement and (y) such other Liens as may be permitted under the terms of any Rider attached hereto.

1.6 Clause (a)(vi) of Section 6.08 of the Credit Agreement is amended and restated as follows:

(vi) the Borrowers may make (x) Other Restricted Payments (as defined in the Financial Covenants Schedule) and (y) subject to the Silk Subordination Agreement, payments required under the Silk Subordinated Indebtedness, including, payments in kind (not in cash) of interest in accordance with the terms of the Silk Subordinated Note.

1.7 Clause (o) of Article VII of the Credit Agreement is hereby amended and restated as follows:

(o) the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty or a Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any individual Guarantor dies or a guardian or conservator is appointed for any individual Guarantor or all or any portion of their property, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 9.08 or any notice of termination delivered pursuant to the terms of any Obligation Guaranty;

1.8 The following definitions are added to the Definitions Schedule to the Credit Agreement:

“Ninth Amendment” means the Ninth Amendment to this Agreement dated December 21, 2023.

“Ninth Amendment Effective Date” means the date the Ninth Amendment becomes effective pursuant to the date thereof.

“Silk Guaranty” means that certain Guaranty Agreement, dated as of the Ninth Amendment Effective Date, made by Mark J. Silk (“Silk”) in favor of Lender and acknowledged by Borrowers.

“Silk Side Letter” means that certain Side Letter, dated as of the Ninth Amendment Effective Date, by and among Garnet Holdings Inc., a California corporation (“Garnet”), Borrowers, and Silk.

“Silk Subordinated Indebtedness” means the Indebtedness in the principal amount of $3,000,000 under the Silk Subordinated Note of the Borrower to Garnet.

“Silk Subordinated Note” means that certain Subordinated Secured Promissory Note, dated as of the Ninth Amendment Effective Date, issued by the Borrowers to Garnet.

“Silk Subordination Agreement” means that certain Subordination and Intercreditor Agreement, dated as of the Ninth Amendment Effective Date, by and among Garnet, the Borrowers and the Lender.

1.9 The following definitions in the Definitions Schedule to the Credit Agreement are amended and restated as follows:

“Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, any Letter of Credit Agreement, the Collateral Documents, the Loan Guaranty, the Silk Subordination Agreement, any Obligation Guaranty, and all other agreements, instruments, documents and certificates identified in or contemplated by Section 4.01 executed and delivered to, or in favor of, the Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements, letter of credit applications and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party and delivered to the Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits, riders or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, all waivers thereunder, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Obligation Guaranty” means any Guarantee of all or any portion of the Secured Obligations executed and delivered to the Lender by a guarantor who is not a Loan Party, including without limitation the Silk Guaranty.

1.10 The definition of “Borrowing Base” in the Borrowing Base Schedule to the Credit Agreement is hereby amended and restated as follows:

“Borrowing Base” means, at any time, the sum of (a) 85% of Eligible Accounts at such time, plus (b) the lesser of (i) 70% of Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time and (ii) the product of 85% multiplied by the NOLV Percentage identified in the most recent inventory appraisal ordered by the Lender multiplied by Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis, at such time, minus (c) Reserves of $1,500,000, increasing on the first day of each month by $250,000, commencing on May 1, 2024 and continuing until (and including) August 1, 2024, or such lesser amount, if any, as may be agreed upon in writing by the Lender in its sole discretion (which may be by email from the Lender), plus (d) the PP&E Component. The Lender may, in its Permitted Discretion, reduce the advance rates set forth above or reduce one or more of the other elements used in computing the Borrowing Base.

1.11 Sections 1, 2 and 3 of the Terms Schedule to the Credit Agreement are amended and restated as follows:

1. Revolving Commitment (Definitions Schedule): $19,000,000.

2. Maturity Date (Definitions Schedule):

October 4, 2024, or any earlier date on which the Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

3. Applicable Margin (Definitions Schedule):

For any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, Applicable Margin shall mean the applicable rate per annum set forth below under the applicable caption below:


CBFR (REVSOFR30)	CBFR Spread (CB Floating Rate)	SOFR Spread	Commitment Fee Rate
2.75%	0.25%	2.75%	0.50%

1.12 Subsection (l) of the Reporting Schedule to the Credit Agreement is amended and restated as follows:

(l) By the 17th day of every month, a rolling 13 week cash flow forecast in form acceptable to Lender, which must include a projected to actual results comparison for the month then ended and on a cumulative basis from the beginning of the cash flow forecast (the “Rolling 13 Week Cash Forecasts”).

ARTICLE II. REPRESENTATIONS. Each Loan Party represents and warrants to the Lender that:

2.1 This Amendment has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

2.2 After giving effect to this Amendment, the representations and warranties contained in Article III of the Credit Agreement and in the other Loan Documents are true in all material respects on and as of the date hereof with the same force and effect as if made on and as of the date hereof (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

2.3 After giving effect to this Amendment, no Default exists or has occurred and is continuing, and no Default will be caused after giving effect to this Amendment.

2.4 All certifications, representations and other statements made in each Borrower’s Officer’s Certificate dated as of August 8, 2018 and delivered to Lender are true on and as of the date hereof with the same force and effect as if made on and as of the date hereof and all resolutions and other statements referenced therein are in full force and effect, have not been rescinded and authorize the execution, delivery and performance of this Amendment.

ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective as of the date hereof when each of the following conditions is satisfied:

3.1 The Loan Parties and the Lender shall have signed this Amendment.

3.2 The Lender shall have received a copy of the fully executed Fourth Amendment to Export Credit Agreement, the Silk Subordinated Note, the Silk Subordination Agreement and the Silk Guaranty Agreement, each dated as of the date hereof.

3.3 The Loan Parties shall have paid the Lender an amendment fee equal to $50,000.

3.4 The Lender shall have received such other documents as disclosed on the closing list provided to the Loan Parties prior to the date hereof.

ARTICLE IV. MISCELLANEOUS.

4.1 References in the Credit Agreement or in any other Loan Document to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby, as amended previously and as further amended from time to time.

4.2 Except as expressly amended hereby, each of the Loan Parties agrees that the Credit Agreement and the other Loan Documents are ratified and confirmed, as amended hereby, and shall remain in full force and effect in accordance with their terms and that they are not aware of any set off, counterclaim, defense or other claim or dispute with respect to any of the foregoing. Each of the Loan Parties further (i) acknowledges and agrees that the Collateral Documents continue to be in full force and effect and are not impaired or adversely affected in any manner whatsoever, (ii) confirms its grant of security interests pursuant to the Collateral Documents to which it is a party in all Collateral and securing all Secured Obligations, and (iii) acknowledges that all Liens granted (or purported to be granted) pursuant to the Collateral Documents remain and continue in full force and effect in respect of, and to secure, the Secured Obligations. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. Nothing herein shall be deemed to entitle any Loan Party to any future consent to, or waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.

4.3 Each Loan Party represents and warrants that it is not aware of any claims or causes of action against the Lender or any of its affiliates, successors or assigns, and that it has no defenses, offsets or counterclaims with respect to the Secured Obligations. Notwithstanding this representation and as further consideration for the agreements and understandings herein, each Loan Party, on behalf of itself and its employees, agents, executors, heirs, successors and assigns (the “Releasing Parties”), hereby releases the Lender and its predecessors, officers, directors, employees, agents, attorneys, affiliates, subsidiaries, successors and assigns (the “Released Parties”), from any liability, claim, right or cause of action which now exists or hereafter arises as a result of acts, omissions or events occurring on or prior to the date hereof, whether known or unknown, including but not limited to claims arising from or in any way related to this Agreement, the other Loan Documents, all transactions relating to this Agreement or any of the other Loan Documents or the business relationship among, or any other transactions or dealings among, the Releasing Parties or any of them and the Released Parties or any of them.

4.4 Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement. This Amendment is a Loan Document. This Amendment may be signed upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument. Among other provisions of the Credit Agreement, this Amendment is subject to Sections 8.06, 8.09 and 8.10 of the Credit Agreement.

IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be executed and delivered as of the day and year first above written.

BORROWERS:

SIFCO INDUSTRIES, INC.

By:________________________________________

Name: Tom Kubera

Title: Chief Financial Officer

QUALITY ALUMINUM FORGE, LLC

By:________________________________________

Name: Tom Kubera

Title: Treasurer

SIFCO Ninth Amendment Signature Page

LENDER:

JPMORGAN CHASE BANK, N.A.

By:________________________________________

Name: Karson Malecky

Title: Authorized Officer

SIFCO Ninth Amendment Signature Page

FOURTH AMENDMENT TO EXPORT CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO EXPORT CREDIT AGREEMENT, dated as of December 21, 2023 (this “Amendment”), is by and among SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO, collectively, the “Borrowers” and each, individually, a “Borrower”), any other Loan Parties party hereto, and JPMorgan Chase Bank, N.A., a national banking association (the “Lender”).

RECITALS

A. The Borrowers, any other Loan Parties party thereto, and the Lender are parties to an Export Credit Agreement dated as of December 17, 2018 (as amended and as it may be further amended or modified from time to time, the “Credit Agreement”).

B. The Borrowers and any other Loan Parties desire to amend the Credit Agreement, and the Lender is willing to do so in accordance with the terms hereof.

TERMS

In consideration of the premises and of the mutual agreements herein contained, the parties agree as follows:

ARTICLE I. AMENDMENTS. Upon fulfillment of the conditions set forth in Article IV hereof, the Credit Agreement shall be amended effective as of the date hereof as follows

1.1 The following new Section 3.26 is added to the Credit Agreement:

SECTION 3.26 Subordinated Indebtedness. The Borrowers have received $3,000,000 in immediately available funds on the Fourth Amendment Effective Date from the incurrence of the Silk Subordinated Indebtedness. The Silk Subordinated Note, the Silk Side Letter, and the Silk Subordination Agreement are the only instruments or other documents executed or delivered in connection with the Silk Subordinated Indebtedness, and correct and complete copies of such documents have been delivered to the Lender as of the Fourth Amendment Effective Date. There is no event of default or event or condition which could become an event of default with notice or lapse of time or both, under the Silk Subordinated Note and the Silk Subordinated Note is in full force and effect.

1.2 Section 5.04 of the Credit Agreement is amended by adding the following new clause 5.04(e):

(e) Without limiting the foregoing, each Loan Party will cause, on or before the Fourth Amendment Effective Date, Mark Silk to execute and deliver an Obligation Guaranty satisfactory to the Lender and to contribute $3,000,000 of Subordinated Indebtedness to the Loan Parties on terms, and subject to a subordination agreement in form and substance, satisfactory to the Lender.

1.3 The following new Section 5.07 is added to the Credit Agreement:

SECTION 5.07 Engagement of Professionals.

(a) The Borrowers may discontinue the engagement of Croley, Martel and Associates (“Croley”) as of the Fourth Amendment Effective Date, provided that, if the Secured Obligations are not paid in full and the Credit Agreement terminated by May 31, 2024, the Borrowers must, at Lender’s request, promptly re-engage, and must at all times thereafter continue to engage, Croley or another consultant on terms and conditions satisfactory to the Lender until such date agreed to by the Lender in its sole discretion. Croley or such other consultant is authorized and directed to communicate jointly with Lender and Borrowers on a weekly basis regarding Borrowers’ financial and operational condition and status, financial reports, status of restructuring, and other matters related to Borrowers as Lender may request. Borrowers must at all times cause Croley or such other consultant to cooperate with Lender by responding to Lender’s requests for information and providing Lender with Croley’s or such other consultant’s analysis regarding any of the matters required by the Lender.

1.4 The following new Clause (l) of Article VII is added to the Credit Agreement:

(l) the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty or a Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any individual Guarantor dies or a guardian or conservator is appointed for any individual Guarantor or all or any portion of their property, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to Section 9.08 or any notice of termination delivered pursuant to the terms of any Obligation Guaranty.

1.5 The following definitions are added to the Definitions Schedule to the Credit Agreement:

“Fourth Amendment” means the Fourth Amendment to this Agreement dated December 21, 2023.

“Fourth Amendment Effective Date” means the date the Fourth Amendment becomes effective pursuant to the date thereof.

“Silk Guaranty” means that certain Guaranty Agreement, dated as of the Fourth Amendment Effective Date, made by Mark J. Silk (“Silk”) in favor of Lender and acknowledged by Borrowers.

“Silk Side Letter” means that certain Side Letter, dated as of the Fourth Amendment Effective Date, by and among Garnet Holdings Inc., a California corporation (“Garnet”), Borrowers, and Silk.

“Silk Subordinated Indebtedness” means the Indebtedness in the principal amount of $3,000,000 under the Silk Subordinated Note of the Borrower to Garnet.

“Silk Subordinated Note” means that certain Subordinated Secured Promissory Note, dated as of the Fourth Amendment Effective Date, issued by the Borrowers to Garnet.

“Silk Subordination Agreement” means that certain Subordination and Intercreditor Agreement, dated as of the Fourth Amendment Effective Date, by and among Garnet, the Borrowers and the Lender.

1.6 The following definitions in the Definitions Schedule to the Credit Agreement are amended and restated as follows:

“Loan Documents” means, collectively, this Agreement, any promissory notes issued pursuant to this Agreement, the Collateral Documents, the Loan Guaranty, the Silk Subordination Agreement, any Obligation Guaranty, the Ex-Im Bank Documents, and all other agreements, instruments, documents and certificates identified in or contemplated by Section 4.01 executed and delivered to, or in favor of, the Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements, letter of credit applications and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party and delivered to the Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any

other Loan Document to a Loan Document shall include all appendices, exhibits, riders or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, all waivers thereunder, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

1.7 Section 2 of the Terms Schedule to the Credit Agreement is amended and restated as follows:

2. Maturity Date (Definitions Schedule):

October 4, 2024, or any earlier date on which the Revolving Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.

ARTICLE II. REPRESENTATIONS. Each Loan Party represents and warrants to the Lender that:

2.3 After giving effect to this Amendment, no Default exists or has occurred and is continuing, and no Default will be caused after giving effect to this Amendment.

2.4 All certifications, representations and other statements made in each Borrower’s Officer’s Certificate dated as of December 17, 2018 and delivered to Lender are true on and as of the date hereof with the same force and effect as if made on and as of the date hereof and all resolutions and other statements referenced therein are in full force and effect, have not been rescinded and authorize the execution, delivery and performance of this Amendment.

ARTICLE III. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective as of the date hereof when each of the following conditions is satisfied:

3.1 The Loan Parties and the Lender shall have signed this Amendment.

3.2 The Lender shall have received a copy of the fully executed Ninth Amendment to Credit Agreement, the Silk Subordinated Note, the Silk Subordination Agreement and the Silk Guaranty Agreement, each dated as of the date hereof.

3.3 The Lender shall have received such other documents, if any, as requested by the Lender.

ARTICLE IV. MISCELLANEOUS.

4.2 Except as expressly amended hereby, the Loan Parties agree that the Credit Agreement and all other Loan Documents are ratified and confirmed, as amended hereby, and shall remain in full force and effect in accordance with their terms and that they have no set off, counterclaim, defense or other claim or dispute with respect to any of the foregoing. The amendment contained herein shall not be construed as a waiver or amendment of any other provision of the Credit Agreement or the other Loan Documents or for any purpose except as expressly set forth herein.

4.3 Capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Credit Agreement. This Amendment shall be governed by and construed in accordance with the internal laws and not the law of conflicts of the State of Ohio, but giving effect to federal laws applicable to national banks. This Amendment is a Loan Document. This Amendment may be signed upon any number of counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument, and telecopied signatures or signatures sent by other electronic imaging shall be effective as originals.

IN WITNESS WHEREOF, the parties signing this Amendment have caused this Amendment to be executed and delivered as of the day and year first above written.

BORROWERS:

SIFCO INDUSTRIES, INC.

By:________________________________________

Name: Tom Kubera

Title: Chief Financial Officer

QUALITY ALUMINUM FORGE, LLC

By:________________________________________

Name: Tom Kubera

Title: Treasurer

SIFCO Fourth Amendment (Export Credit Agreement) Signature Page

LENDER:

JPMORGAN CHASE BANK, N.A.

By:________________________________________

Name: Karson Malecky

Title: Authorized Officer

SIFCO Fourth Amendment (Export Credit Agreement) Signature Page

Execution Version

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AND INTERCREDITOR AGREEMENT (AS THE SAME MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME PURSUANT TO THE TERMS THEREOF, THE “SUBORDINATION AGREEMENT”) DATED AS OF DECEMBER 21, 2023 AMONG SIFCO INDUSTRIES, INC., AN OHIO CORPORATION, AND QUALITY ALUMINUM FORGE, LLC, AN OHIO LIMITED LIABILITY COMPANY, ANY OTHER LOAN PARTIES PARTY THERETO, HOLDER AND JPMORGAN CHASE BANK, N.A. (“SENIOR CREDITOR”), TO THE INDEBTEDNESS (INCLUDING INTEREST) OWED BY THE LOAN PARTIES PURSUANT TO THOSE CERTAIN CREDIT AGREEMENTS DESCRIBED THEREIN AMONG THE BORROWERS, THE OTHER LOAN PARTIES, AND SENIOR CREDITOR, AND THE OTHER SENIOR DEBT DOCUMENTS (AS DEFINED IN THE SUBORDINATION AGREEMENT), AS SUCH CREDIT AGREEMENT AND SUCH SENIOR DEBT DOCUMENTS HAVE BEEN AND HEREAFTER MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE INDEBTEDNESS UNDER SUCH AGREEMENTS AS CONTEMPLATED BY THE SUBORDINATION AGREEMENT; AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

SUBORDINATED SECURED PROMISSORY NOTE


$3,000,000.00			December 21, 2023

FOR VALUE RECEIVED, SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge”, and together with SIFCO, collectively, the “Makers”, and each, individually, a “Maker”), which has an address of 970 E. 64th St., Cleveland, Ohio 44103, jointly and severally promise to pay to the order of Garnet Holdings Inc., a California corporation (“Holder”), in lawful money of the United States of America, at Holder’s main address at 2929 Larmona Drive, Pasadena, CA 91107, or at such other place as Holder or any other holder of this Subordinated Secured Promissory Note (this “Note”) may designate by written notice to Makers from time to time, the principal sum of THREE MILLION AND 00/100 DOLLARS (together with the Closing Fee (defined below) and other amounts agreed to by Makers, collectively, the “Principal Amount”), plus interest as provided herein, and on such other terms as further set forth below.

1.Payment of Principal. The Obligations (as defined in Section 9) shall be due and payable in immediately available funds on October 4, 2024 (the “Maturity Date”) unless payment by the Makers of the Obligations is accelerated by Holder pursuant to Section 10 hereof. Once any Principal Amount of this Note has been repaid, it may not be re-borrowed.

2.Interest. All interest shall accrue on the then outstanding Principal Amount at a rate of fourteen percent (14.00%) per annum and shall be paid in kind (and not in cash) by capitalization as additional principal (“PIK Interest”) each six-month period after the date hereof in arrears. Accrued but unpaid PIK Interest shall, as of the first day of each such six-month period, be compounded, and shall be added to and shall serve to increase, and shall thereafter be deemed to constitute a portion of, the outstanding Principal Amount of this Note and shall bear interest at the interest rate set forth in this Section 2, subject to Section 3 hereof. After each such capitalization of any PIK Interest, the Principal Amount of this Note outstanding at any time shall be comprised of (x) the then outstanding Principal Amount of this Note and (y) the aggregate amount of capitalized PIK Interest through such time (as each such amount may be

decreased as a result of any prepayment permitted hereunder). Interest will be computed on the basis of a 365/366 day year, as the case may be. All accrued and unpaid interest, together with all of the other Obligations, shall be payable in immediately available funds on the Maturity Date.

3.Default Interest. Following the occurrence and during the continuance of an Event of Default (as defined in Section 8), all of the Obligations under this Note (whether or not overdue) shall bear interest at a rate of interest per annum equal to the rate that would otherwise be applicable thereto pursuant to Section 2 hereof plus six percent (6.00%).

4.Closing Fee. Makers shall pay to Holder a fully earned and non-refundable fee in an amount equal to $150,000.00 (the “Closing Fee”), which such fee shall be added to the Principal Amount on the date hereof and be due and payable on the Maturity Date unless the payment by Makers of the Obligations is accelerated by Holder pursuant to Section 10 hereof or the prepayment by Makers pursuant to Section 5 hereof.

5.Prepayment. Makers shall have the right, at any time and without notice, premium or penalty, to prepay all or any part of the Principal Amount or interest. Any prepayment shall be applied to the amounts owing under this note in the inverse order of maturity. Notwithstanding the foregoing, Makers’ rights under this Section 5 shall be subject to the Intercreditor Agreement.

6.Conditions Precedent. Conditions precedent to the extensions of credit under this Note:

a.Holder shall have received a copy of this Note duly executed and delivered by Makers;

b.Holder shall have received an executed copy of the Ninth Amendment to Credit Agreement, dated as of the date hereof, executed by JPMorgan Chase Bank, N.A. (“JPM”), the Makers, and the other Loan Parties listed on the signature

pages thereto, which amends that certain Credit Agreement, dated as of August 8, 2018 (as amended and as the same may be further amended or modified from time to time, the “JPM Credit Agreement”), in form and substance acceptable to Holder;

c.Holder shall have received an executed copy of the Fourth Amendment to Export Credit Agreement, dated as of the date hereof, executed by JPM, the Makers, and the other Loan Parties listed on the signature pages thereto, which amends that certain Export Credit Agreement, dated as of August 9, 2023 (as amended and as the same may be further amended or modified from time to time, the “JPM Export Credit Agreement”), in form and substance acceptable to Holder;

d.Holder shall have received an executed copy of the Guaranty, dated as of the date hereof, executed by Mark J. Silk, individually (“Silk”), in favor of JPM (the “Guaranty”), in form and substance acceptable to Holder;

e.Holder shall have received an executed copy of the Subordination and Intercreditor Agreement, dated as of the date hereof, by and among Holder, JPM, and the other parties listed on the signature pages thereto (the “Intercreditor Agreement”), in form and substance acceptable to Holder;

f.Holder shall have received a good standing certificate (or equivalent) for each Maker issued by the Secretary of State in the state where such Marker is formed or organized;

g.Holder shall have received an officer’s certificate (or equivalent) from each Maker certifying the names of the officers of such Maker authorized to sign this Note and the other documents, agreements, instruments and writings required to be executed in connection with this Note (together with the Note, the Guaranty, the Side Letter, and the Intercreditor Agreement, collectively, the “Note Documents”), together with the true signatures of such officers, and certified copies of (i) the resolutions of the

board of directors (or equivalent governing body) of such Maker evidencing approval of the execution and delivery of this Note and the other Note Documents to which it is a party, in form and substance acceptable to Holder, (ii) the articles of incorporation (or equivalent organizational document) of such Maker, having been certified, not more than thirty (30) days prior to this Note, by the Secretary of State of the jurisdiction under which such Maker is organized, and (iii) the bylaws or operating agreement (or equivalent governance documents) of such Maker;

h.Holder shall have received payment (either in cash or in kind by addition to the Principal Amount) of the Closing Fee from Makers; and

i.Holder shall have received an executed copy of the Guaranty Side Letter executed by Holder, Makers, and Silk as of the date hereof (the “Side Letter”).

7.Representations and Warranties. Each Maker represents and warrants to Holder that:

a.such Maker is duly incorporated or formed, as applicable, validly existing and in good standing under the laws of the State of Ohio;

b.such Maker has all requisite power and authority to execute and deliver, and to perform all of its obligations under the Note Documents;

c.the officers or other persons executing this Note on behalf of such Maker are fully authorized to execute the Note Documents on behalf of such Maker;

d.the execution and delivery of the Note Documents and the consummation by the Makers of the transactions contemplated thereby do not and will not violate any provision of the Makers’ organizational documents or constitute a default

under any agreement or contract by which the Makers are bound or by which their property or assets are subject;

e.the Note Documents constitute valid and binding obligations of each Maker in every respect, enforceable in accordance with their terms, subject to limitations imposed by bankruptcy, insolvency, moratorium or other similar laws affecting the rights of creditors generally or the application of general equitable principles;

f.no statement of fact made by or on behalf of Makers in any document or certificate delivered by or on behalf of Makers to Holder contains any untrue statement of a material fact or omits to state any material fact, to Makers’ knowledge, necessary to make statements contained herein or therein not misleading; and

g.this Note is effective to create in favor of Holder, a legal, valid and enforceable security interest in the Collateral (as defined below) and the proceeds thereof.

8.Default. Following notice (to be sent at Holder’s sole discretion with respect to timing, and subject to the other provisions hereof) to Makers by Holder, each of the following shall constitute an event of default (an “Event of Default”) under this Note:

a.if the Principal Amount of this Note, any payment of interest or any other amounts owing under this Note shall not be paid when due hereunder;

b.if any representation or warranty made by the Makers to Holder is misleading or incorrect in any material respect on the date as of which such representation or warranty was made, or if Makers otherwise breach the Note Documents in any material respect;

c.if any Maker admits its inability to pay its debts as and when they mature;

d.if any Maker becomes insolvent;

e.if any Maker makes an assignment for the benefit of its creditors;

f.if any Maker adopts a plan of liquidation or dissolution;

g.this Note or any other Note Document shall be terminated, invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to Holder the benefits purported to be created hereby;

h.if any Maker shall (i) apply for or consent to the appointment of a receiver, a custodian, a trustee, an interim trustee or liquidator of all or a substantial part of such Maker’s assets, or file a voluntary petition in bankruptcy or an arrangement with creditors or seek to take advantage of any other law (whether federal or state) relating to relief of debtors, or admit (by answer, by default or otherwise) the material allegations of a petition filed against such Maker in any bankruptcy, insolvency or other proceeding (whether federal or state) relating to relief of debtors, (ii) have a filing of an involuntary petition against it in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code, as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, or (iii) suffer or permit to continue unstayed and in effect for 60 consecutive days any judgment, decree or order entered by a court of competent jurisdiction, which appoints a receiver, custodian, trustee, interim trustee or liquidator of all or a substantial part of such Maker’s assets;

i.(i) a sale of all or substantially all of a Maker’s assets; or (ii) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the

SEC thereunder as in effect on the date hereof) of equity interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding equity interests of SIFCO; or (iii) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of SIFCO by Persons who were not (x) directors of SIFCO on the date of this Note, nominated, appointed or approved for consideration by shareholders for election by the board of directors of SIFCO, (y) approved by the board of directors of SIFCO as director candidates prior to their election, nor (z) appointed by directors so nominated, appointed or approved; or (iv) SIFCO shall cease to own, free and clear of all liens or other encumbrances, 100% of the outstanding voting equity interests of each other Loan Party (as defined in the JPM Credit Agreement) on a fully diluted basis; and

j.any event of default or default under (i) the JPM Credit Agreement, which such default continues for more than the applicable cure period, if any, and to the extent such default has not otherwise been waived with respect thereto, or (ii) the JPM Export Credit Agreement, which such default continues for more than the applicable cure period, if any, and to the extent such default has not otherwise been waived with respect thereto.

9.Security. To secure the payment and performance of the Makers’ obligations hereunder, including the payment of any and all principal, interest, expenses and other amounts owing hereunder from time to time, including but not limited to amounts owing pursuant to Section 14 and Section 22 (collectively, the “Obligations”), Makers hereby grant to Holder a first priority lien, subject to any liens granted to JPM as described in the Intercreditor Agreement, on all of their accounts, deposit accounts, contract rights, documents, equipment, general intangibles, instruments, inventory, investment property, commercial tort claims, all other goods and personal property whether tangible or intangible and wherever located, and all proceeds of the foregoing (the “Collateral”). Makers shall, promptly upon request by Holder, execute and deliver to Holder such instruments, deeds, transfers, assurances and agreements, in form and substance as Holder may request, as necessary or advisable to perfect and protect

Holder’s security interest created hereunder. Holder shall be permitted to file UCC financing statements in such jurisdictions as are required to perfect its security interest in the Collateral and to describe such Collateral as “all assets of the Debtor” or words of similar import.

10.Remedies.

a.If any Event of Default shall occur and continue, Holder shall have the right, in Holder’s sole discretion, to exercise any rights available to Holder hereunder, at law or in equity, including without limitation to accelerate the payment of the Obligations and cause them to become immediately due and payable, and to charge and collect from Makers all costs of collection, including, without limitation, attorneys’ fees and expenses incurred by Holder in connection with the enforcement of the Note on account of such collection, and expenses incurred by Holder in connection with any insolvency, bankruptcy or similar proceedings involving Makers, which in any way affect the exercise by Holder of its rights and remedies under this Note.

b.If any Event of Default shall occur and continue, the Obligations shall, in Holder’s sole discretion, in addition to any other rights and remedies provided for herein, or permitted by law or in equity, thereupon become and thereafter be immediately due and payable in full (if they are not already due and payable), all without any presentment, demand or notice of any kind, which are hereby waived by Makers.

11.Joint and Several Liability. The Makers are jointly and severally liable for the Obligations.

12.Evidence of Debt. Holder shall maintain in accordance with its usual practice, an account or accounts evidencing the Obligations of Makers to Holder resulting from this Note. The entries made in the account or accounts maintained by Holder pursuant to this Section 12 shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the Obligations of Makers therein recorded; provided, however, that

the failure of Holder to maintain such account or accounts, or any error therein, shall not in any manner affect the obligation of Makers to repay (with applicable interest) this Note in accordance with its terms.

13.Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable pursuant to this Note, together with all fees, charges, and other amounts which are treated as interest on this Note under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by Holder holding this Note in accordance with applicable requirements of law, the rate of interest payable hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of this Note but were not payable as a result of the operation of this Section 13 shall be cumulated and the interest and Charges payable to Holder in respect of any other obligations of Makers to Holder shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon to the date of repayment, shall have been received by Holder.

14.Expenses; Indemnity.

a.Makers agree to pay all reasonable out-of-pocket expenses incurred by Holder, its affiliates and the directors, officers, employees, partners, agents, trustees, administrators, managers, advisors, and representatives of Holder and its affiliates (collectively, “Related Parties”), including the reasonable fees, charges, and disbursements of counsel for Holder in connection with the preparation, negotiation, execution, delivery, and administration of the Note Documents and any amendments, waivers, or other modifications of the provisions of any Note Document (whether or not the transactions contemplated by the Note Documents are consummated) and all out-of-pocket expenses incurred by Holder, including the fees, charges, and disbursements of any counsel for Holder, in connection with the enforcement or protection of its rights in connection with (i) the Note Documents, including its rights under this Section 14, and

(ii) the Obligations, including all such out-of-pocket expenses incurred in connection with any restructuring, workout, or negotiations in respect of the Note Documents or the Obligations.

b.Makers agree to indemnify and hold harmless Holder and each of its Related Parties (each, an “Indemnified Party”) from and against, any and all claims, damages, losses, liabilities, and related expenses (including the fees, charges, and expenses of any counsel for any Indemnified Party), incurred by any Indemnified Party or asserted against any Indemnified Party by any person (including Makers) other than such Indemnified Party and its Related Parties arising out of, in connection with, or by reason of: (i) the execution or delivery of any Note Document or any agreement or instrument contemplated in any Note Document, the performance by the parties thereto of their respective obligations under any Note Document, or the consummation of the transactions contemplated by the Note Documents, (ii) the Obligations or the actual or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, investigation, litigation, or proceeding relating to any of the foregoing, whether based on contract, tort, or any other theory, whether brought by a third party or by Makers, and regardless of whether any Indemnified Party is a party thereto.

15.Waiver; Modifications in Writing. No failure or delay on the part of Holder in exercising any right, power, or remedy hereunder, or course of dealing on the part of Holder, will operate as a waiver thereof, nor will any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. No extension of this Note and no delay in the enforcement of the payment of this Note shall affect the liability of any Maker under this Note. No amendment, modification, termination, or waiver of any provision of this Note, nor consent to any variance therefrom, shall be effective unless the same shall be in writing and signed by Holder and Makers and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

16.Binding Effect. The terms and provisions of this Note shall be binding upon each Maker and each Maker’s permitted successors and permitted assigns and shall inure to the benefit of each Maker and its permitted successors and permitted assigns.

17.Notices. All notices and other communications required or permitted hereunder will be in writing and will be deemed to have been duly given when delivered in person or three (3) business days after being sent by registered or certified mail, return receipt requested, postage prepaid or when dispatched by electronic facsimile transfer (if confirmed in writing by mail simultaneously dispatched) or one (1) business day after having been dispatched by a nationally recognized overnight courier service, to the appropriate party at the address specified in the opening paragraph of this Note or such other address as shall be provided by such party from time to time.

18.Governing Law and Consent to Jurisdiction. This Note shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401of the New York General Obligations Law) without regard to principles of conflict of laws. Makers and Holder each submits to the exclusive jurisdiction of any U.S. Federal or New York State court sitting in the County and State of New York.

19.Severability of Provisions. Any provision of this Note which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

20.Further Assurances. In addition to the acts and deeds required hereunder, Makers agree to perform, execute and deliver such further documents and assurances as may be reasonably requested by Holder to consummate the transactions contemplated hereby or to further provide for the delivery or perfection of the loan provided hereunder.

21.Financial Reporting; Other Information. Upon the request of Holder, the Makers shall furnish to Holder the information required under the Reporting Schedule (as defined in the JPM Credit Agreement) within the applicable time periods set forth in such Reporting Schedule.

22.Principal Amount; Guaranty. Makers hereby acknowledge and agree that (i) the Principal Amount of this Note, including the Closing Fee, is $3,150,000.00 as of the date hereof, (ii) any and all amounts paid by Holder or any affiliate of Holder, including but not limited to Silk, pursuant to the Guaranty shall be added to, and deemed to increase and constitute a portion of the Principal Amount and the Obligations, and interest shall accrue thereon in accordance herewith, in each case, as of the date such amount(s) are paid by Holder or any affiliate of Holder, and (iii) the Principal Amount shall be increased by any amounts due and payable by Makers to Silk pursuant to the Side Letter, to the extent not paid by Holders to Silk when any such amounts become due and payable, and such amounts shall be deemed to constitute a part of the Obligations.

23.Assignability. Holder shall have the right, in its sole discretion, to assign, sell or transfer its interest in this Note, whether by operation of law or otherwise; provided, however that if an Event of Default does not exist, Holder shall obtain Makers’ consent prior to making such assignment, sale or transfer, such consent not to be unreasonably withheld. In such event, all references in this Note to Holder shall be deemed to refer to such assignee or successor in interest and such assignee or successor in interest shall thereafter stand in the place of Holder. Makers shall accord full recognition to any such assignment, and all rights and remedies of Holder in connection with the interest so assigned shall be as fully enforceable by such assignee as they were by Holder before such assignment. In connection with any such assignment, Holder shall be entitled to disclose to the proposed assignee any information that Makers have delivered to Holder, provided such assignee agrees to treat such information as confidential. In addition, Holder may at any time sell one or more participations in this Note. Makers may not assign their interest in this Note, or any other agreement with Holder or any portion thereof, either

voluntarily or by operation of law, without the prior written consent of Holder, in Holder’s sole discretion.

24.Headings. The headings in this Note are for the convenience of reference only and will not affect the construction of this Note.

25.JURY TRIAL WAIVER. EACH MAKER AND HOLDER WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN ANY MAKER AND HOLDER, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS NOTE OR THE TRANSACTIONS RELATED TO THIS NOTE. THIS WAIVER SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY HOLDER’S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY PROVISION CONTAINED IN THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT BETWEEN ANY MAKER AND HOLDER.

[The remainder of this page is intentionally left blank.]

IN WITNESS WHEREOF, the undersigned have executed this Subordinated Secured Promissory Note as of the date and year first written above.

MAKERS:

SIFCO INDUSTRIES, INC.

By:

Name: ________________________

Its: ___________________________

QUALITY ALUMINUM FORGE, LLC

By:

Name: ________________________

Its: ___________________________

SUBORDINATED SECURED PROMISSORY NOTE

Execution Copy

SUBORDINATION AND INTERCREDITOR AGREEMENT

THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”) is entered into as of December 21, 2023, by and among SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO, collectively, the “Borrowers” and each, individually, a “Borrower”), Garnet Holdings Inc., a California corporation (“Subordinated Creditor”) and JPMorgan Chase Bank, N.A. (“Senior Creditor”).

R E C I T A L S

A. Pursuant to the Credit Agreement dated as of August 8, 2018 (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “August 2018 Senior Credit Agreement”) by and among the Borrowers, any other Loan Parties party thereto and Senior Creditor and the Credit Agreement dated as of December 17, 2018 (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “Export Senior Credit Agreement”, and, together with the August 2018 Senior Credit Agreement, collectively, the “Senior Credit Agreements” and each, individually, a “Senior Credit Agreement”) by and among the Borrowers, any other Loan Parties party thereto and Senior Creditor, Senior Creditor has agreed, among other things, to make certain loans and financial accommodations to the Borrowers upon the terms and subject to the conditions set forth therein. Certain of the subsidiaries of the Borrowers have guaranteed or may guaranty from time to time the obligations of the Borrowers and the other Loan Parties under the Senior Debt Documents (as defined below) pursuant to the terms of the Senior Credit Agreements. All of the Loan Parties’ obligations to Senior Creditor under the Senior Credit Agreements and the other Senior Debt Documents, and the obligations of the certain subsidiaries of the Borrowers to Senior Creditor under the Senior Debt Documents, are secured by liens on and security interests in the Collateral (as defined below).

B. The Loan Parties and their subsidiaries may from time to time (a) obtain Banking Services (as hereinafter defined) and become liable for Banking Services Obligations (as hereinafter defined), and (b) enter into Swap Agreements (as hereinafter defined) and become liable for Swap Agreement Obligations (as hereinafter defined), in each case secured by liens and security interests in the Collateral.

C. Pursuant to the Subordinated Secured Promissory Note dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder, the “Subordinated Promissory Note”) by and between the Borrowers and Subordinated Creditor, Subordinated Creditor has agreed, among other things, to make certain loans and financial accommodations to the Borrowers upon the terms and subject to the conditions set forth therein. No subsidiaries of the Borrowers have guaranteed or will guarantee, and may not guarantee, at any time the obligations of the Borrowers under the Subordinated Debt Documents (as defined below) pursuant to the terms of the Subordinated Promissory Note. All of the Loan Parties’ (as defined below) obligations to Subordinated Creditor under the Subordinated Promissory Note and the other Subordinated Debt Documents, and the obligations of the certain subsidiaries of the Borrowers to Subordinated Creditor under the Subordinated Debt Documents, are secured by subordinated liens on and security interests in the Collateral.

D. As an inducement to and as one of the conditions precedent to the agreement of Senior Creditor to consummate the transactions contemplated by the Senior Credit Agreements, Senior Creditor has required the execution and delivery of this Agreement by Subordinated Creditor and the Loan Parties in order to set forth the relative rights and priorities of Senior Creditor and Subordinated Creditor under the Senior Debt Documents and the Subordinated Debt Documents.

NOW, THEREFORE, in order to induce Senior Creditor to consummate the transactions contemplated by the Senior Credit Agreements, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby agree as follows:

1.Definitions. The following terms shall have the following meanings in this Agreement:

“Affiliate” shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the specified Person. As used in this definition, “control” or “controlled” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.

“Ancillary Document” has the meaning assigned to such term in Section 13.

“Banking Services” shall mean each and any of the following bank services provided to any Loan Party or its subsidiaries by Senior Creditor (or any of its Affiliates): (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant processing services, (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts, cash pooling services, and interstate depository network services), and (e) Lease Financing (as defined in the Senior Credit Agreements).

“Banking Services Obligations” shall mean any and all obligations of the Loan Parties or their subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services, provided, however, Banking Services Obligations in respect of Lease Financing shall be limited to Lease Deficiency Obligations (as defined in the Senior Credit Agreements).

“Bankruptcy Code” shall mean the provisions of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder.

“Bankruptcy Laws” shall mean the Bankruptcy Code, and all other applicable federal, state, provincial or foreign liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief law affecting creditors’ rights generally, as amended and in effect from time to time.

“Collateral” shall mean all of the existing or hereafter acquired property, whether real, personal or mixed, of each Loan Party.

“Control” has the meaning set forth in Article 8 or, if applicable, in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the Uniform Commercial Code.

“DIP Financing” has the meaning assigned to such term in Section 2.2(d).

“Disposition” or “Dispose” shall mean, with respect to any interest in property, the sale, assignment, transfer, lease (as lessor), license or other disposition of such interest in such property (or the granting of any option or other right to do any of the foregoing).

“Disqualified Equity” shall mean any equity interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable), or upon the happening of any event, (a) matures or is mandatorily

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redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the one and a half year anniversary of the stated maturity date of any Senior Debt (as such maturity date is in effect at the time of the issuance of such equity interest), (b) is convertible into or exchangeable or exercisable for (i) debt securities or other indebtedness, or (ii) any equity interests referred to in (a) above, in each case that matures at any time on or prior to the one and a half year anniversary of the stated maturity date of any Senior Debt as such maturity date is in effect at the time of the issuance of such equity interest (including pursuant to any debt securities issued in substitution of all or any portion of the Senior Debt) or (c) contains any repurchase obligation which may come into effect prior to Payment in Full of all Senior Debt, in each case, except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior Payment in Full of all Senior Debt.

“Distribution” shall mean, with respect to any indebtedness, obligation or security, (a) any payment or distribution by any Person of cash, securities or other property (including, without limitation, any payment in the form of a deferred purchase price, earn-out or other contingent obligation), by set-off or otherwise, on account of such indebtedness, obligation or security, or (b) any redemption, purchase or other acquisition of such indebtedness, obligation or security by any Person, whether voluntary or involuntary.

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

“Enforcement Action” shall mean (a) to take from or for the account of any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by such Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) with respect to the Subordinated Debt, (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding against any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) to (i) enforce payment of or to collect the whole or any part of the Subordinated Debt, (ii) commence or join with other Persons to commence a Proceeding, or (iii) commence judicial or private enforcement of any of the rights and remedies under the Subordinated Debt Documents or applicable law with respect to the Subordinated Debt, (c) to accelerate the Subordinated Debt, (d) to take any action to enforce any rights or remedies with respect to the Subordinated Debt, (e) to exercise any conversion option to convert the Subordinated Debt into equity or put option or to cause any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt) to honor any redemption or mandatory prepayment obligation under any Subordinated Debt Document or (f) to exercise any rights or remedies of a secured party under the Subordinated Debt Documents or applicable law or take any action under the provisions of any state or federal law, including, without limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any property or assets of any Loan Party (or other guarantor or obligor in respect of the Subordinated Debt), including the Collateral.

“JPM Loan Documents” shall mean the Senior Credit Agreements, the Loan Documents (as defined in each of the Senior Credit Agreements) and all other agreements, documents and instruments executed from time to time in connection therewith, as the same may be amended, restated, supplemented or otherwise modified from time to time, as permitted hereunder.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, title retention, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale

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agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Parties” shall mean, collectively, the Borrowers and each subsidiary of either Borrower that is a guarantor or obligor of all or any portion of the Senior Debt and/or the Subordinated Debt.

“Paid in Full” or “Payment in Full” shall mean, as of any date of determination with respect to the Senior Debt, that: (a) all of the Senior Debt (except as set forth in clauses (c), (d) and (e) below and other than contingent indemnification obligations with respect to which a claim has not been asserted) has been paid in full in cash, (b) all commitments to extend credit under the Senior Credit Agreements (or, after the consummation of a Permitted Refinancing, the Permitted Refinancing Senior Debt Documents) have expired or terminated and no Person has any further right to obtain any loans, letters of credit or other extensions of credit under the Senior Debt Documents, (c) any and all letters of credit issued under the Senior Debt Documents have been cancelled and returned (or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount equal to 105% of the face amount of such letters of credit in accordance with the terms of such documents), (d) any and all Banking Services Obligations and Swap Agreements between any Loan Party or any of their respective subsidiaries and Senior Creditor or any of its Affiliates have been cancelled (or backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount reasonably determined by Senior Creditor as sufficient to satisfy the estimated credit exposure with respect to such Banking Services Obligations or Swap Agreement Obligations) and (e) any costs, expenses and contingent indemnification obligations which are not yet due and payable but with respect to which a claim has been or may reasonably be expected to be asserted by Senior Creditor, are backed by standby letters of credit (issued by a bank, and in form and substance, acceptable to Senior Creditor) or cash collateralized, in each case in an amount reasonably estimated by Senior Creditor to be the amount of costs, expenses and contingent indemnification obligations that may become due and payable.

“Permitted Refinancing” shall mean any refinancing, extension or replacement of all or any part of the Senior Debt under the JPM Loan Documents (or any other Senior Debt Documents).

“Permitted Refinancing Senior Debt Documents” shall mean any financing documentation which replaces all or any part of the JPM Loan Documents (or any other Senior Debt Documents) and pursuant to which all or any part of the Senior Debt under the JPM Loan Documents (or any other Senior Debt Documents) is refinanced, extended or replaced, whether by the same or any other lender or group of lenders, as such financing documentation may be amended, supplemented, replaced, refinanced, extended or otherwise modified from time to time.

“Person” shall mean any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association, government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.

“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, interim-receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or any other proceeding for the liquidation, dissolution or other winding up of a Person, whether initiated under the Bankruptcy Code or any other Bankruptcy Laws.

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“Purchase Option Event” means the occurrence of any of the following: (a) the agreement by the Senior Creditor to increase the aggregate amount of the revolving credit facilities or term loans under the Senior Debt Documents, (b) the agreement by the Senior Creditor to extend the final maturity of the Senior Debt, or (c) the consent by the Senior Creditor to permit the sale (other than sales permitted under the Senior Debt Documents as of the date hereof) of assets of the Loan Parties with a fair market value of more than $1,000,000.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

“Reorganization Subordinated Securities” shall mean any debt or equity securities of any Borrower or any other Person that are distributed to Subordinated Creditor in respect of the Subordinated Debt pursuant to a confirmed plan of reorganization or adjustment in a Proceeding and that (a) are subordinated in right of payment to the Senior Debt (or any debt or equity securities issued in substitution of all or any portion of the Senior Debt) to at least the same extent as the Subordinated Debt is subordinated to the Senior Debt pursuant to this Agreement and with respect to which Senior Creditor and Subordinated Creditor shall have entered into such supplements to or modifications to this Agreement or any other agreement as Senior Creditor may reasonably request to reflect the continued subordination of the Reorganization Subordinated Securities to the Senior Debt (or any debt or other securities issued in substitution of all or a portion thereof) at least to the same extent as provided in this Agreement, (b) do not have the benefit of any obligation of any Person (whether as issuer, guarantor or otherwise) unless the Senior Debt has at least the same benefit of the obligation of such Person (with the obligations of such Person to Subordinated Creditor to be subordinated to such Person’s obligations to Senior Creditor to at least the same extent as the Subordinated Debt is subordinated to the Senior Debt pursuant to the terms of this Agreement), (c) do not have any terms, and are not subject to or entitled to the benefit of any agreement or instrument that has terms, that are more burdensome to the issuer of or other obligor on such debt or equity securities than are the terms of the Senior Debt and (d) in the case of equity securities that are Disqualified Equity, Subordinated Creditor shall have entered into such supplements to or modifications to this Agreement or any other agreement as Senior Creditor may reasonably request to reflect that Subordinated Creditor shall hold all Distributions with respect to such Disqualified Equity in trust for the benefit of Senior Creditor and promptly pay or deliver to Senior Creditor each such Distribution in the form received until all Senior Debt is Paid in Full.

“Senior Debt” shall mean, collectively, and as increased or otherwise modified from time to time, (a) all Obligations under, and as defined in, the August 2018 Senior Credit Agreement, all Obligations under, and as defined in, the Export Senior Credit Agreement and all other obligations, liabilities and indebtedness of every nature of each Loan Party from time to time owed to Senior Creditor under any of the Senior Debt Documents (additionally, and without limitation of the foregoing, the term Senior Debt shall include all obligations, liabilities and indebtedness arising from or in connection with any letters of credit, guarantees or other agreements or arrangements to induce Senior Creditor to issue or increase the amount of or extend the expiry date of one or more Letters of Credit (as defined in the Senior Credit Agreements)), including, without limitation, the principal amount of all debts, claims and indebtedness, accrued and unpaid interest accruing thereon (including, without limitation, interest accruing after the commencement of a Proceeding, without regard to whether or not such interest is an allowed claim) and all fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing of a Proceeding together with any interest, fees, costs and expenses accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest, fees, costs and expenses are

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an allowed claim, (b) all Swap Agreement Obligations and (c) all Banking Services Obligations. Senior Debt shall be considered to be outstanding whenever any loan or commitment under the Senior Debt Documents is outstanding.

“Senior Debt Documents” shall mean the JPM Loan Documents and, after the consummation of any Permitted Refinancing, the Permitted Refinancing Senior Debt Documents in respect thereof.

“Senior Default” shall mean any “Event of Default” or similar event under the Senior Debt Documents.

“Subordinated Debt” shall mean, collectively, all of the obligations, liabilities and indebtedness of each Loan Party to Subordinated Creditor evidenced by or incurred pursuant to the Subordinated Debt Documents.

“Subordinated Debt Default” shall mean a default in the payment of the Subordinated Debt or in the performance of any term, covenant or condition contained in the Subordinated Debt Documents or any other occurrence permitting (without giving effect to the provisions of this Agreement) Subordinated Creditor to accelerate the payment of, put or cause the redemption of all or any portion of the Subordinated Debt or any Subordinated Debt Document.

“Subordinated Debt Documents” shall mean the Subordinated Promissory Note, any guaranty with respect thereto and all other documents, agreements and instruments now existing or hereinafter entered into in connection therewith, as the same may be amended, restated, supplemented or otherwise modified from time to time as permitted hereunder.

“Swap Agreement” shall mean any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of any Borrower or its subsidiaries shall be a Swap Agreement.

“Swap Agreement Obligations” shall mean any and all obligations of the Loan Parties and their subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with Senior Creditor (or an Affiliate of Senior Creditor), and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

2.Subordination.

1.1.Subordination of Subordinated Debt to Senior Debt. Each Loan Party covenants and agrees, and Subordinated Creditor by its acceptance of the Subordinated Debt Documents (whether upon original issue or upon transfer or assignment) likewise covenants and agrees, notwithstanding anything to the contrary contained in any of the Subordinated Debt Documents, that the payment of any and all of the Subordinated Debt shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the prior Payment in Full of the Senior Debt. Each holder of Senior Debt, whether now outstanding or hereafter created, incurred, assumed or guaranteed,

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shall be deemed to have acquired Senior Debt in reliance upon the provisions contained in this Agreement.

1.2.Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding involving any Loan Party:

(a)All Senior Debt shall first be Paid in Full before any Distribution, whether in cash, securities or other property, shall be made to Subordinated Creditor on account of the Subordinated Debt.

(b)Any Distribution (other than a Distribution of Reorganization Subordinated Securities), whether in cash, securities or other property which would otherwise, but for the terms hereof, be payable or deliverable in respect of the Subordinated Debt shall be paid or delivered directly to Senior Creditor (to be held and/or applied by Senior Creditor in accordance with the terms of the Senior Debt Documents) until all Senior Debt is Paid in Full. Subordinated Creditor irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, interim receiver, trustee, liquidator, custodian, conservator, monitor or other Person having authority, to pay or otherwise deliver all such Distributions (other than a Distribution of Reorganization Subordinated Securities) to Senior Creditor for application to the Senior Debt until Payment in Full of the Senior Debt. Subordinated Creditor also irrevocably authorizes and empowers Senior Creditor, in the name of Subordinated Creditor, to demand, sue for, collect and receive any and all such Distributions (other than a Distribution of Reorganization Subordinated Securities). Subordinated Creditor will duly and promptly take such action, at the expense of the Loan Parties, as Senior Creditor may reasonably request to (i) collect the Subordinated Debt for the account of Senior Creditor and to file appropriate claims or proofs of claim with respect thereto, (ii) execute and deliver to Senior Creditor such powers of attorney, assignments or other instruments as Senior Creditor may request in order to enable it to enforce any and all claims with respect to, and any security interests and other liens securing payment of, the Subordinated Debt, and (iii) collect and receive for the account of Senior Creditor any and all payments and other Distributions which may be payable or deliverable upon or with respect to the Subordinated Debt, until the Payment in Full of the Senior Debt.

(c)Subordinated Creditor agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Debt requested by Senior Creditor in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Senior Creditor as its agent and attorney-in-fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Creditor promptly to do so prior to 30 days before the expiration of the time to file any such proof of claim and (ii) vote such claim in any such Proceeding upon the failure of Subordinated Creditor to do so prior to 15 days before the expiration of the time to vote any such claim; provided, Senior Creditor shall have no obligation to execute, verify, deliver, file and/or vote any such proof of claim. In the event that Senior Creditor votes any claim in accordance with the authority granted hereby, Subordinated Creditor shall not be entitled to change or withdraw any such vote. Notwithstanding the foregoing, nothing in this Agreement shall restrict or impair the right of Subordinated Creditor to vote its claim in respect of the Subordinated Debt in any Proceeding; provided that, without the prior written consent of Senior Creditor, Subordinated Creditor may not vote in favor of a plan of reorganization in a Proceeding that contravenes the priority or subordination provisions of this Agreement.

(d)Subordinated Creditor agrees that it will consent to, and not object to or oppose any use of cash collateral consented to by Senior Creditor or any financing provided by Senior Creditor to any Loan Party or any of its subsidiaries during a Proceeding (or any financing provided by any other Person consented to by Senior Creditor) (collectively, “DIP Financing”) on such terms and conditions as Senior Creditor, in its sole discretion, may decide. In connection therewith, any Loan Party may grant to Senior Creditor Liens and security interests upon all of the property of such Loan Party, which Liens and security interests (i) shall secure payment of all Senior Debt (whether such Senior Debt arose prior to the commencement of any Proceeding or at any time thereafter) and DIP Financing provided by Senior Creditor or consented to by Senior Creditor during the Proceeding and (ii) shall be superior in priority to the liens and security

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interests, if any, in favor of Subordinated Creditor on the property of such Loan Party. If, in connection with any cash collateral use or DIP Financing, any liens and security interests on the Collateral held by Senior Creditor are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee “carve out,” or fees owed to the United States Trustee, then the Liens on the Collateral of Subordinated Creditor (if any) shall also be subordinated to such interest or claim and shall remain subordinated to the Liens and security interests on the Collateral of Senior Creditor consistent with this Agreement. Subordinated Creditor agrees that it will consent to, and not object to or oppose, a sale or other Disposition of any property securing all or any part of any Senior Debt free and clear of security interests, Liens or other claims of Subordinated Creditor under applicable Bankruptcy Laws (or any order issued by a court in a Proceeding), including Sections 363, 365 and 1129 of the Bankruptcy Code, if Senior Creditor has consented to such sale or other Disposition. Subordinated Creditor agrees not to assert any right it may have in any Proceeding arising from any Loan Party’s or any of their respective subsidiaries’ use, sale or other Disposition of Collateral and agrees that Subordinated Creditor will not seek (or support any other Person seeking) to have any stay, whether automatic or otherwise, lifted with respect to any Collateral without the prior written consent of Senior Creditor. Subordinated Creditor agrees that Subordinated Creditor will not, and will not permit, any of its Affiliates to, directly or indirectly, provide, participate in or otherwise support, any debtor-in-possession financing (or any other financing in a Proceeding) to any Loan Party without the prior written consent of Senior Creditor. Subordinated Creditor will not object to or oppose any adequate protection sought by Senior Creditor or object to or oppose any motion by Senior Creditor to lift any automatic stay or any other stay in any Proceeding. Except for replacement Liens on Collateral subordinated to the Liens of Senior Creditor on such Collateral pursuant to or otherwise consistent with the terms of this Agreement, Subordinated Creditor will not seek or assert any right it may have for adequate protection of its interest in any Collateral. If the Collateral of any Loan Party is not subject to Senior Creditor’s Lien and Subordinated Creditor is granted adequate protection in the form of periodic cash payments on account of such Collateral, such payments shall be subject to the terms of this Agreement (including, without limitation, Section 2.3). Subordinated Creditor waives any claim it may now or hereafter have arising out of Senior Creditor’s election, in any Proceeding, of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by any Loan Party, as debtor-in-possession. Subordinated Creditor further agrees that it shall not, without Senior Creditor’s prior written consent, (A) commence or continue any Proceeding or (B) propose any plan of reorganization, compromise, arrangement or proposal or file any motion, pleading or material in support of any motion or plan of reorganization, compromise, arrangement or proposal that (1) would impair the rights of Senior Creditor, (2) is in conflict with the terms of this Agreement or (3) is opposed by Senior Creditor or (C) oppose any plan of reorganization, compromise, arrangement, proposal or liquidation supported by Senior Creditor.

(e)This Agreement shall constitute a “subordination agreement” for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Proceeding in accordance with its terms. The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Creditor and Subordinated Creditor even if all or part of the Senior Debt or the Liens securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed in connection with any such Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Debt is rescinded or must otherwise be returned by any holder of Senior Debt or any representative of such holder (a “Senior Recovery”) and all rights, interests, priorities and privileges recognized in this Agreement shall apply with respect to any such Senior Recovery. If this Agreement shall have been terminated prior to such Senior Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties hereto from such date of reinstatement. All references in this Agreement to any Loan Party shall include such Loan Party as a debtor-in-possession and any receiver or trustee for such Loan Party in any Proceeding.

(f)Without limiting the foregoing provisions of this Section 2.2 and subject to the other express provisions of this Agreement, in any Proceeding involving the Loan Parties,

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Subordinated Creditor may exercise rights and remedies generally available to holders of unsecured claims against the Loan Parties.

1.3.Subordinated Debt Payment Restrictions.

(a)Notwithstanding the terms of the Subordinated Debt Documents, each Loan Party hereby agrees that it may not make (or permit any of its subsidiaries to make), and Subordinated Creditor hereby agrees that it will not accept, any Distribution with respect to the Subordinated Debt until the Senior Debt is Paid in Full. Notwithstanding the immediately preceding sentence, subject to the terms of Section 2.2, Subordinated Creditor may receive and retain Distributions of Reorganization Subordinated Securities.

(b)In addition, notwithstanding anything to the contrary in this Agreement, this Agreement shall not restrict (i) the accrual or capitalization of non-cash in-kind payments of interest on the Subordinated Debt or (ii) the accrual or capitalization of non-cash default interest charged during the continuance of a Subordinated Debt Default.

(c)Any Distribution received by Subordinated Creditor not specifically permitted by Section 2.3(a) or (b) shall be promptly paid over to Senior Creditor, with any necessary endorsement, for application (in accordance with the Senior Debt Documents) to the payment of the Senior Debt then remaining unpaid, until all of the Senior Debt is Paid in Full.

1.4.Subordinated Debt Standstill Provisions.

(a)Until the Senior Debt is Paid in Full, Subordinated Creditor shall not, without the prior written consent of Senior Creditor, take any Enforcement Action with respect to the Subordinated Debt or under the Subordinated Debt Documents; provided further that in no event may Subordinated Creditor commence or join with other Persons or support other Persons to commence a Proceeding or exercise any rights or remedies with respect to the Collateral.

(b)Notwithstanding the foregoing, Subordinated Creditor may (i) file proofs of claim against any Loan Party in any Proceeding involving such Loan Party, (ii) take any Enforcement Action as to which Senior Creditor shall have consented in writing (but no other Enforcement Action), (iii) make filings and take other administrative actions to preserve any claims, Liens, security interests or rights of Subordinated Creditor with respect to or against the Collateral or any Loan Party (in any case not in contravention of this Agreement), (iv) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of any claims, Liens, security interests or rights of Subordinated Creditor with respect to or against the Collateral or any Loan Party (in any case not in contravention of this Agreement), and (v) file and pursue equitable remedies with respect to non-compliance with the non-monetary covenants of the Subordinated Debt Documents that do not result in the payment of money by any Loan Party. Any Distributions (other than a Distribution of Reorganization Subordinated Securities) or other proceeds of any Enforcement Action obtained by Subordinated Creditor shall in any event be held in trust by it for the benefit of Senior Creditor and promptly paid or delivered to Senior Creditor in the form received until the Senior Debt is Paid in Full.

(c)Notwithstanding anything contained herein to the contrary, if following the acceleration of the Senior Debt by Senior Creditor such acceleration is rescinded (whether or not any existing Senior Default has been cured or waived), then all Enforcement Actions taken by Subordinated Creditor shall likewise be rescinded.

(d)Notwithstanding anything contained herein to the contrary, if following the commencement of a Proceeding involving any Loan Party such Proceeding is rescinded, settled or otherwise ceases, then all Enforcement Actions taken by Subordinated Creditor shall likewise be rescinded.

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1.5.Incorrect Payments. If any Distribution on account of the Subordinated Debt not permitted to be made by any Loan Party or accepted by Subordinated Creditor under this Agreement is received by Subordinated Creditor, such Distribution shall not be commingled with any of the assets of Subordinated Creditor, shall be held in trust by Subordinated Creditor for the benefit of Senior Creditor and shall be promptly paid over to Senior Creditor, with any necessary endorsement, for application (in accordance with the Senior Debt Documents) to the payment of the Senior Debt then remaining unpaid, until all of the Senior Debt is Paid in Full.

1.6.Subordination of Liens and Security Interests; Agreement Not to Contest; Sale of Collateral; Release of Liens.

(a)Until the Senior Debt has been Paid in Full, any Liens and security interests of Subordinated Creditor in the Collateral which may exist shall be and hereby are subordinated for all purposes and in all respects to the Liens and security interests of Senior Creditor in the Collateral, regardless of the time, manner or order of creation, granting, attachment or perfection of any such Liens and security interests and regardless of the validity, perfection or enforceability of such Liens and security interests of Senior Creditor. The parties hereto agree that, so long as the Senior Debt has not been Paid in Full, Subordinated Creditor shall not demand or accept the grant of any additional Liens on any asset of any Loan Party or of any subsidiary thereof to secure any Subordinated Debt unless such Loan Party or such subsidiary has granted, or concurrently therewith grants, a Lien on such asset to secure the Senior Debt. Subordinated Creditor acknowledges and agrees that the Liens of Senior Creditor in the Collateral are permitted by the terms of the Subordinated Debt Documents (notwithstanding anything to the contrary therein) and agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior Debt, the Senior Debt Documents, or the Liens and security interests of Senior Creditor in the Collateral securing the Senior Debt.

(b)In the event that (i) any Loan Party desires to sell, lease, license or otherwise Dispose of any interest in any of the Collateral (including the equity interests of a Loan Party or any subsidiary thereof) and such Disposition is permitted by the terms of the Senior Debt Documents or, subject to Section 7 hereof, Senior Creditor otherwise consents to such Disposition or (ii) Senior Creditor desires to Dispose of any Collateral (including the equity interests of a Loan Party or any subsidiary thereof) in connection with an enforcement of remedies, in each case Subordinated Creditor shall be deemed to have consented to such Disposition (and if such Disposition involves the equity interests of any Loan Party or subsidiary thereof, Subordinated Creditor shall release such Loan Party or subsidiary from any guaranty or other obligation owing to Subordinated Creditor) and such Disposition shall be free and clear of any Liens and security interests of Subordinated Creditor in such Collateral and any purchaser of any Collateral may rely on this Agreement as evidence of Subordinated Creditor’s consent to such Disposition and that such Disposition is free and clear of any Liens and security interests of Subordinated Creditor in such Collateral (and if such Disposition involves the equity interests of any Loan Party or any subsidiary thereof, that such Loan Party or subsidiary is released from any guaranty or other obligation owing to Subordinated Creditor).

(c)Subordinated Creditor shall promptly execute and deliver to Senior Creditor such termination statements, payoff letters, releases and other termination agreements as Senior Creditor shall request to effect the release of the Liens of Subordinated Creditor in the Collateral in accordance with Section 2.6(b); provided, that the failure of Subordinated Creditor to execute such releases shall not affect the right of the purchaser of such Collateral to rely on this Agreement. Without limiting any other right or remedy available to Senior Creditor, Subordinated Creditor agrees that any amounts received by or Distributed to Subordinated Creditor pursuant to or as a result of any Lien granted in contravention of this Section shall be subject to Section 2.5. Until the Payment in Full of the Senior Debt occurs, Subordinated Creditor hereby irrevocably constitutes and appoints Senior Creditor and any officer or agent of Senior Creditor, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Subordinated Creditor or such holder or in Senior Creditor’s own name, from time to time in Senior Creditor’s discretion, for the purpose of carrying out the terms of this Section 2.6, to take any and all appropriate action and to execute

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any and all documents and instruments which may be necessary to accomplish the purposes of this Section 2.6, including any endorsements or other instruments of transfer or release.

1.7.Sale, Transfer or other Disposition of Subordinated Debt.

(a)Subordinated Creditor shall not sell, assign, pledge, Dispose of or otherwise transfer all or any portion of the Subordinated Debt or any Subordinated Debt Document without the prior written consent of Senior Creditor. Notwithstanding the foregoing, the Subordinated Debt (x) may be forgiven or otherwise cancelled without the prior written consent of Senior Creditor and (y) exchanged for or otherwise converted into common equity without the prior written consent of Senior Creditor.

(b)Notwithstanding the failure of Subordinated Creditor to comply with Section 2.7(a), the subordination effected hereby shall survive any sale, assignment, pledge, Disposition or other transfer of all or any portion of the Subordinated Debt, and the terms of this Agreement shall be binding upon the successors and assigns of Subordinated Creditor, as provided in Section 9 hereof.

1.8.Legends. Until the termination of this Agreement in accordance with Section 15 hereof, Subordinated Creditor will cause to be clearly, conspicuously and prominently inserted in the Subordinated Promissory Note, on the face of any promissory note delivered in connection therewith and any other Subordinated Debt Document, as well as any renewals, extensions, refinancings or replacements thereof, the following legend (or words of similar effect consented to by Senior Creditor):

“This instrument and the rights and obligations evidenced hereby are subordinate in the manner and to the extent set forth in that certain Subordination and Intercreditor Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time pursuant to the terms thereof, the “Subordination Agreement”) dated as of December 21, 2023 among SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO, collectively, the “Borrowers” and each, individually, a “Borrower”), any other Loan Parties party thereto, Mark Silk (the “Subordinated Creditor”) and JPMorgan Chase Bank, N.A. (“Senior Creditor”), to the indebtedness (including interest) owed by the Loan Parties pursuant to those certain Credit Agreements described therein among the Borrowers, the other Loan Parties, and Senior Creditor, and the other Senior Debt Documents (as defined in the Subordination Agreement), as such Credit Agreement and such Senior Debt Documents have been and hereafter may be amended, restated, supplemented or otherwise modified from time to time and to indebtedness refinancing the indebtedness under such agreements as contemplated by the Subordination Agreement; and each holder of this instrument, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.”

1.9.Obligations Hereunder Not Affected. All rights and interest of Senior Creditor hereunder, and all agreements and obligations of Subordinated Creditor and the Loan Parties hereunder, shall remain in full force and effect irrespective of:

(a)any lack of validity or enforceability of any document evidencing any of the Senior Debt;

(b)any change in the time, manner or place of payment of, or any other term of, all or any of the Senior Debt, or any other amendment or waiver of or any release or consent to departure from any of the Senior Debt Documents;

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(c)any exchange, subordination, release or non-perfection of any collateral for all or any of the Senior Debt;

(d)any failure of Senior Creditor to assert any claim or to enforce any right or remedy against any other party hereto under the provisions of this Agreement or any Senior Debt Document other than this Agreement;

(e)any reduction, limitation, impairment or termination of the Senior Debt for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Loan Parties and Subordinated Creditor hereby waive any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of invalidity, illegality, nongenuiness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Senior Debt; and

(f)any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Loan Parties in respect of the Senior Debt or Subordinated Debt in respect of this Agreement.

Subordinated Creditor acknowledges and agrees that Senior Creditor may in accordance with the terms of the Senior Debt Documents, without notice or demand and without affecting or impairing Subordinated Creditor’s obligations hereunder, from time to time, (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of the Senior Debt and the Senior Debt Documents or any part thereof, including, without limitation, to increase or decrease the rate of interest thereon or the principal amount thereof; (ii) take or hold security for the payment of the Senior Debt and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof as Senior Creditor in its sole discretion, may determine; (iv) release and substitute one or more endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain from exercising any rights against any Loan Party or any other Person. The Senior Debt shall continue to be treated as Senior Debt and the provisions of this Agreement shall continue to govern the relative rights and priorities of Senior Creditor and Subordinated Creditor even if all or part of the Senior Debt or the security interests securing the Senior Debt are subordinated, set aside, avoided, invalidated or disallowed.

1.10.Marshaling. Subordinated Creditor hereby waives any rights it may have under applicable law to assert the doctrine of marshaling or to otherwise require Senior Creditor to marshal any property of any Loan Party or of any other guarantor or obligor of the Senior Debt for the benefit of Subordinated Creditor.

1.11.Application of Proceeds from Sale or other Disposition of the Collateral. In the event of any Disposition (including a casualty loss or taking through eminent domain) of the Collateral, the proceeds resulting therefrom (including insurance proceeds) shall be applied to the Senior Debt in the order and manner set forth in the Senior Debt Documents until such time as the Senior Debt is Paid in Full.

1.12.Rights Relating to Senior Creditor’s Actions with respect to the Collateral. Subordinated Creditor hereby waives, to the extent permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing Senior Creditor from taking, or refraining from taking, any action with respect to all or any part of the Collateral. Without limitation of the foregoing, Subordinated Creditor hereby agrees (a) that it has no right to direct or object to the manner in which Senior Creditor applies the proceeds of the Collateral resulting from the exercise by Senior Creditor of rights and remedies under the Senior Debt Documents to the Senior Debt, (b) that it waives any right to object to any action or inaction by Senior Creditor with respect to exercising its rights or remedies under the Senior Debt Documents or with respect to the Collateral (including in connection with any foreclosure or enforcement of Liens in respect of Collateral), and (c) Senior Creditor has not assumed any obligation to act as agent for Subordinated Creditor with respect to the Collateral. Without limitation of the foregoing, Subordinated Creditor shall not object as a holder of a Lien on any of the Collateral to any proposed retention or acceptance of Collateral by Senior Creditor in full or partial

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satisfaction of the Senior Debt and agrees that any such retention or acceptance shall be free and clear of Subordinated Creditor’s security interests and Liens.

1.13.Insurance Proceeds. Until the Senior Debt has been Paid in Full, Senior Creditor shall have the sole and exclusive right, as against Subordinated Creditor, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of such Collateral. All proceeds of such insurance shall inure to Senior Creditor to the extent of the Senior Debt, and Subordinated Creditor shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds to the holders of Senior Debt (or any representative thereof). In the event the requisite holders of Senior Debt (or any representative thereof), in their or its sole discretion or pursuant to agreement with any Loan Party, permits such Loan Party to utilize the proceeds of insurance, the consent of the holders of Senior Debt (or any representative thereof) shall be deemed to include the consent of Subordinated Creditor.

1.14.Possessory or Control Collateral. Senior Creditor and Subordinated Creditor each agree to hold that part of the Collateral that is in its possession (or in the possession of its agents or bailees) or Control, to the extent that possession or Control is necessary to perfect a Lien thereon under applicable law (such possessory Collateral being referred to as the “Pledged Collateral”), as gratuitous bailee and as a non-fiduciary representative for each other party, as applicable, solely for the purpose of perfecting the security interest granted under the Senior Debt Documents or the Subordinated Debt Documents, as applicable, subject to the terms and conditions of this Section 2.14. Subordinated Creditor hereby appoints Senior Creditor as its gratuitous bailee and non-fiduciary representative for the purposes of perfecting its security interest in all Pledged Collateral in which Senior Creditor has a perfected security interest under applicable law. Senior Creditor hereby appoints Subordinated Creditor as its gratuitous bailee and non-fiduciary representative for the purposes of perfecting its security interest in all Pledged Collateral in which Subordinated Creditor has a perfected security interest under applicable law. Senior Creditor and Subordinated Creditor hereby accept such appointments pursuant to this Section 2.14. Until the Payment in Full of all Senior Debt, Subordinated Creditor agrees to promptly notify Senior Creditor of any Pledged Collateral held by Subordinated Creditor, and, immediately upon the request of Senior Creditor at any time prior to the Payment in Full of the Senior Debt, Subordinated Creditor agrees to deliver to Senior Creditor any such Pledged Collateral held by it, together with any necessary endorsements (or otherwise allow Senior Creditor to obtain possession or Control of such Pledged Collateral), subject otherwise to the terms of this Agreement. Senior Creditor shall have no obligation whatsoever to Subordinated Creditor to ensure that the Pledged Collateral is genuine or owned by any of Loan Parties or to preserve rights or benefits of any person except as expressly set forth in this Section 2.14. The duties or responsibilities of Senior Creditor under this Section 2.14 shall be limited solely to holding the Pledged Collateral as bailee and non-fiduciary representative in accordance with this Section 2.14. Senior Creditor, in acting pursuant to this Section 2.14, shall not have, or be deemed to have, a fiduciary relationship in respect of Subordinated Creditor.

1.15.Waiver of Certain Rights by Subordinated Creditor. Subordinated Creditor hereby waives all notice of the acceptance by Senior Creditor of the subordination and other provisions of this Agreement, and Subordinated Creditor expressly consents to reliance by Senior Creditor upon the subordination and other agreements as herein provided.

3.Modifications.

1.1.Modifications to Senior Debt Documents. Subject to Section 7 hereof, Senior Creditor may at any time and from time to time without the consent of or notice to Subordinated Creditor, without incurring liability to Subordinated Creditor and without impairing or releasing the obligations of Subordinated Creditor under this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any of the terms of the Senior Debt, or amend or otherwise modify in any manner any Senior Credit Agreement, any other Senior Debt Document or any other agreement, note, guaranty or other instrument evidencing or securing or otherwise relating to the Senior Debt.

1.2.Modifications to Subordinated Debt Documents. Until the Senior Debt has been Paid in Full, and notwithstanding anything to the contrary contained in the Subordinated Debt Documents, Subordinated Creditor shall not, without the prior written consent of Senior Creditor, amend,

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modify, restate or supplement the Subordinated Promissory Note or any other Subordinated Debt Document.

4.Representations and Warranties.

1.1. To induce Senior Creditor to execute and deliver this Agreement, Subordinated Creditor hereby represents and warrants to Senior Creditor that as of the date hereof: (a) it is has the legal capacity, power and authority to enter into, execute, deliver and carry out the terms of this Agreement; (b) the execution of this Agreement by Subordinated Creditor will not violate or conflict with (i) any agreement binding upon Subordinated Creditor or (ii) any applicable law, regulation or order or require any consent or approval which has not been obtained; (c) this Agreement is the legal, valid and binding obligation of Subordinated Creditor, enforceable against Subordinated Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles; and (d) Subordinated Creditor is the sole owner, beneficially and of record, of all of the Subordinated Debt Documents and the Subordinated Debt.

1.2.To induce Subordinated Creditor to execute and deliver this Agreement, Senior Creditor hereby represents and warrants to Subordinated Creditor that as of the date hereof: (a) it is has the legal capacity, power and authority to enter into, execute, deliver and carry out the terms of this Agreement; (b) the execution of this Agreement by Senior Creditor will not violate or conflict with (i) any agreement binding upon Senior Creditor or (ii) any applicable law, regulation or order or require any consent or approval which has not been obtained; (c) this Agreement is the legal, valid and binding obligation of Senior Creditor, enforceable against Senior Creditor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles; and (d) Senior Creditor is the sole owner, beneficially and of record, of all of the Senior Debt Documents and the Senior Debt.

5.Subrogation; Recovery. Subject to the Payment in Full of the Senior Debt, Subordinated Creditor shall be subrogated to the rights of Senior Creditor to receive Distributions with respect to the Senior Debt until the Senior Debt is Paid in Full. Without limiting the foregoing, Subordinated Creditor will not exercise (a) any right of subrogation that Subordinated Creditor may now or hereafter have or obtain in respect of the rights of Senior Creditor against any Loan Party or any other guarantor or obligor in respect of any of the Senior Debt or any of the Collateral or (b) any right to participate in any claim or remedy of Senior Creditor against any Loan Party or any other guarantor or obligor in respect of any of the Senior Debt or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, in each case until all of the Senior Debt has been Paid in Full. If Senior Creditor is required to disgorge any proceeds of Collateral, payment or other amount received by such Person (whether because such proceeds, payment or other amount is invalidated, declared to be fraudulent or preferential or otherwise) or turn over or otherwise pay any amount (a “Recovery”) to the estate or to any creditor or representative of a Loan Party or any other Person, then the Senior Debt shall be reinstated (to the extent of such Recovery) as if such Senior Debt had never been paid and to the extent Subordinated Creditor has received proceeds, payments or other amounts to which Subordinated Creditor would not have been entitled under this Agreement had such reinstatement occurred prior to receipt of such proceeds, payments or other amounts, Subordinated Creditor shall turn over such proceeds, payments or other amounts to Senior Creditor for reapplication to the Senior Debt. A Distribution made pursuant to this Agreement to Senior Creditor which otherwise would have been made to Subordinated Creditor is not, as between the Loan Parties and Subordinated Creditor, a payment by the Loan Parties to or on account of the Senior Debt.

6.Modification. Any modification or waiver of any provision of this Agreement, or any consent to any departure by any party from the terms hereof, shall not be effective in any event unless the same is in writing and signed by Senior Creditor and Subordinated Creditor, and then such modification, waiver or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder. Senior Creditor and Subordinated Creditor shall

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have the right to modify or terminate this Agreement pursuant to the terms hereof at any time without notice to or approval of any Loan Party or any other Person.

7. Purchase Option.

7.1 Notice. The Loan Parties shall provide the Subordinated Creditor with prior written notice of a Purchase Option Event (the “Purchase Option Event Notice”), and the Subordinated Creditor shall have the option, at any time on or prior to the date ten (10) Business Days' after the date of the Purchase Option Event Notice, to elect to purchase all of the Senior Debt from the Senior Creditor by providing written notice to the Senior Creditor of such election on or prior to the date five (5) Business Days' after the date of the Purchase Option Event Notice. Such notice from the Subordinated Creditor to the Senior Creditor shall be irrevocable. The consummation of any Purchase Option Event without the giving of the Purchase Option Event Notice (and the refusal to exercise the election or the lapse of the ten (10) Business Day period) shall be null and void ab initio. Additionally, the Subordinated Creditor may at time provide written notice to the Senior Creditor and the Loan Parties that the Subordinated Creditor elects to purchase all of the Senior Debt from the Senior Creditor (the written election by the Subordinated Creditor to purchase all of the Senior Debt under the first sentence or the second sentence of this Section 7.1, a “Subordinated Creditor Purchase Election”).

7.2 Purchase and Sale. On the date specified by the Subordinated Creditor in the Subordinated Creditor Purchase Election (which shall not be less than five (5) Business Days, nor more than sixty (60) calendar days, after the receipt by the Senior Creditor of the notice of the Subordinated Creditor’s election to exercise such option), the Senior Creditor shall sell to the Subordinated Creditor, and the relevant Subordinated Creditor shall purchase from the Senior Creditor, the Senior Debt, provided that, the Senior Creditor shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the Senior Debt Documents but shall not retain any rights to the security therefor.

7.3 Payment of Purchase Price. Upon the date of such purchase and sale, the Subordinated Creditor shall (a) pay to the Senior Creditor as the purchase price therefor the full amount of all the Senior Debt then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses, (b) with respect to a purchase of the Senior Debt, furnish cash collateral to the Senior Creditor in a manner and in such amounts as the Senior Creditor determines is reasonably necessary to secure the Senior Creditor and applicable affiliates in connection with any issued and outstanding letters of credit, hedging obligations and cash management obligations secured by the Senior Documents, (c) with respect to a purchase of the Senior Debt, agree to reimburse the Senior Creditor for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the Senior Debt, and/or as to which the Senior Creditor has not yet received final payment, (d) agree to reimburse the Senior Creditor and its affiliates in respect of indemnification obligations of the Loan Parties under the Senior Debt Documents, as to matters or circumstances known to the Senior Creditor at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Senior Creditor or its affiliates and for which the Senior Creditor has notified the Subordinated Creditor prior to the purchase, and (e) agree to indemnify and hold harmless the Senior Creditor and its affiliates with respect to a purchase of the Senior Debt from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the Senior Debt as a direct result of any acts by the Subordinated Creditor occurring after the date of such purchase. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account in New York, New York as the Senior Creditor may designate in writing for such purpose. The Loan Parties acknowledge and agree that after any such purchase by the Subordinated Creditor, the Senior Creditor shall no longer have any commit to lend or otherwise advance credit to the Loan Parties under the Senior Debt Documents or have other obligations to the Loan Parties under the Senior Debt Documents.

7.4 Limitation on Representations and Warranties. Such purchase shall be expressly made without representation or warranty of any kind by the Senior Creditor or any of its affiliates and without

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recourse of any kind, except that the Senior Creditor shall represent and warrant: (a) the amount of the Senior Debt being purchased from it, (b) that the Senior Creditor owns the Senior Debt free and clear of any Liens or encumbrances, (c) that the Senior Creditor has the right to assign the Senior Debt and the assignment is duly authorized and (d) no consent or approval of any person or entity, including but not limited to any governmental authority, or any filing or registration of any kind, except for those consents, approvals, filings or registrations which will be obtained concurrently therewith are required, is required for the Senior Creditor to assign the Senior Debt.

8.Further Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable in order to effect fully the terms of this Agreement.

9.Notices. Unless otherwise specifically provided herein, any notice delivered under this Agreement shall be in writing addressed to the respective party as set forth below and may be personally served, telecopied (or by other electronic means) or sent by overnight courier service or certified or registered United States mail and shall be deemed to have been given (a) if delivered in person, when delivered, (b) if delivered by telecopy or other electronic means, on the date of transmission if transmitted on a business day before 4:00 p.m. (Chicago time) or, if not, on the next succeeding business day and (c) if delivered by courier or certified or registered United States mail, when received.

Notices shall be addressed as follows:

If to Subordinated Creditor:

Garnet Holdings Inc.
2929 Larmona Drive
Pasadena, California 91107
Attention: Mark J. Silk

With a copy (which shall not constitute notice) to:

Berkowitz, Trager & Trager, LLC

8 Wright Street

Westport, Connecticut 06880

Attention: Steven T. Gersh

Telecopy: 203.266.3801

If to the Borrowers:

970 East 64th Street

Cleveland, Ohio 44103

Attention: Peter Knapper, President and Chief Executive Officer

Facsimile No: 216.432.6281

If to Senior Creditor:

JPMorgan Chase Bank, N.A.

2200 Ross Ave., 6th Floor

Dallas, Texas 75201

Attention: Portfolio Manager

Facsimile No: 214-442-5498

; or in any case, to such other address as the party addressed shall have previously designated by written notice to the serving party, given in accordance with this Section 8.

10.Successors and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective heirs, legal representatives, successors and assigns of Senior Creditor, Subordinated Creditor and the Loan Parties. To the extent permitted under the Senior Debt Documents, Senior Creditor

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may, from time to time, without notice to Subordinated Creditor, assign or transfer any or all of the Senior Debt or any interest therein to any Person and, notwithstanding any such assignment or transfer, or any subsequent assignment or transfer, the Senior Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes of this Agreement, and every permitted assignee or transferee of any of the Senior Debt or of any interest therein shall, to the extent of the interest of such permitted assignee or transferee in the Senior Debt, be entitled to rely upon and be the third party beneficiary of the subordination provided under this Agreement and shall be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party hereto. Subordinated Creditor agrees that any party that consummates a Permitted Refinancing may rely on and enforce this Agreement to the extent such party replaces Senior Creditor. Subordinated Creditor further agrees that it will, at the request of Senior Creditor, enter into an agreement, in the form of this Agreement, mutatis mutandis, with the party that consummates the Permitted Refinancing; provided, that the failure of Subordinated Creditor to execute such an agreement shall not affect such party’s right to rely on and enforce the terms of this Agreement.

11.Relative Rights; No Right of Loan Parties to Enforce. This Agreement shall define the relative rights of Senior Creditor and Subordinated Creditor. Each Loan Party understands that this Agreement is for the sole benefit of Senior Creditor and Subordinated Creditor and their respective successors and assigns, and that such Loan Party is not an intended beneficiary or third party beneficiary thereof. It is understood and agreed that no Loan Party nor any of their Affiliates shall have any right to enforce any term, provision or agreement of this Agreement against Senior Creditor and/or Subordinated Creditor. Nothing in this Agreement shall (a) impair, as between the Loan Parties and Senior Creditor and as between the Loan Parties and Subordinated Creditor, the obligation of the Loan Parties with respect to the payment of the Senior Debt and the Subordinated Debt in accordance with their respective terms or (b) affect the relative rights of Senior Creditor or Subordinated Creditor with respect to any other creditors of the Loan Parties. The terms of this Agreement shall govern even if all or any part of the Senior Debt or the Liens in favor of Senior Creditor are avoided, disallowed, unperfected, set aside or otherwise invalidated in any judicial proceeding or otherwise.

12.Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Senior Debt Documents or Subordinated Debt Documents, the provisions of this Agreement shall control and govern.

13.Headings. The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions hereof.

14.Counterparts; Electronic Execution. This 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 Agreement or any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Agreement and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), 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; provided that nothing herein shall require Senior Creditor to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent Senior Creditor has agreed to accept any Electronic Signature, Senior Creditor shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of Subordinated Creditor or any Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (b) upon the request of Senior Creditor, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, Subordinated Creditor and each Loan Party hereby (i)

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agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among any of the parties hereto, Electronic Signatures transmitted by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) Senior Creditor may, at its option, create one or more copies of this Agreement and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of its business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement and/or such Ancillary Document based solely on the lack of paper original copies of this Agreement and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (iv) waives any claim against Senior Creditor or any Related Party of Senior Creditor for any losses, claims (including intraparty claims), demands, damages or liabilities of any kind arising solely from Senior Creditor’s reliance on or use of Electronic Signatures and/or transmission by facsimile, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any such liabilities arising as a result of the failure of Subordinated Creditor or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

15.Severability. In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement.

16.Continuation of Subordination; Termination of Agreement. This Agreement shall remain in full force and effect until the Payment in Full of the Senior Debt after which this Agreement shall terminate without further action on the part of the parties hereto; provided, that if any payment is, subsequent to such termination, recovered from any holder of Senior Debt, this Agreement shall be reinstated; provided, further that a Permitted Refinancing shall not be deemed to be Payment in Full of the Senior Debt.

17.Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of 20202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020202020New York, but giving effect to federal laws applicable to national banks.

18.Jurisdiction; Consent to Service of Process.

1.1.Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. Federal or New York State court sitting in New York, New York in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby 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 or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

1.2.Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 17.1. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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1.3.Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

19.WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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 AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY 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 AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

20.Nonreliance; Information Concerning Financial Condition.

(a)Each of Senior Creditor and Subordinated Creditor acknowledge that (i) each has, independently and without reliance upon, in the case of Senior Creditor, Subordinated Creditor and, in the case of Subordinated Creditor, Senior Creditor, and based on such documents and information as each has deemed appropriate, made their own credit analyses and decisions to enter into the Senior Debt Documents or Subordinated Debt Documents to which they are party and (ii) each will, independently and without reliance upon, in the case of Senior Creditor, Subordinated Creditor and, in the case of Subordinated Creditor, Senior Creditor, and based on such documents and information as they shall from time to time deem appropriate, continue to make their own credit decisions in taking or not taking any action under this Agreement or any other Senior Debt Document or Subordinated Debt Document to which they are party. Senior Creditor and Subordinated Creditor shall have no duty to disclose to the other, any information relating to any Loan Party, or any other circumstance bearing upon the risk of nonpayment of any of the Senior Debt or the Subordinated Debt, as the case may be, that is known or becomes known to any of them or any of their Affiliates.

(b)Senior Creditor hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and of all other circumstances bearing upon the risk of nonpayment of the Senior Debt and agrees that Subordinated Creditor has and shall have no duty to advise Senior Creditor of information known to Subordinated Creditor regarding such condition or any such circumstances. In the event that Subordinated Creditor, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to Senior Creditor, then Subordinated Creditor shall not be under any obligation to (i) provide any such information to Senior Creditor on any subsequent occasion, (ii) undertake any investigation, or (iii) disclose any information which, pursuant to its commercial finance practices, Subordinated Creditor wishes to maintain confidential. Senior Creditor acknowledges and agrees that Subordinated Creditor has not made any warranties or representations with respect to the legality, validity, enforceability, collectibility or perfection of the Subordinated Debt or any Liens or security interests held in connection therewith.

(c)Subordinated Creditor hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and of all other circumstances bearing upon the risk of nonpayment of the Subordinated Debt, and agrees that Senior Creditor has and shall have no duty to advise Subordinated Creditor of information known to Senior Creditor regarding such condition or any such circumstances. In the event that Senior Creditor, in its sole discretion, undertakes, at any time or from time to time, to provide any such information to Subordinated Creditor, then Senior Creditor shall not be under any obligation to (i) provide any such information to Subordinated Creditor on any subsequent occasion, (ii) undertake any investigation, or (iii) disclose any information which, pursuant to its commercial finance practices, Senior Creditor wishes to maintain confidential. Subordinated Creditor acknowledges

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and agrees that Senior Creditor has not made any warranties or representations with respect to the legality, validity, enforceability, collectibility or perfection of the Senior Debt or any Liens or security interests held in connection therewith.

21.Specific Performance; Additional Remedies. Senior Creditor and the Subordinated Creditor (solely with respect to Section 7) may demand specific performance of this Agreement and each of the Loan Parties, the Senior Creditor and the Subordinated Creditor hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action which may be brought by Senior Creditor or the Subordinated Creditor. If Subordinated Creditor, the Senior Creditor or any of the Loan Parties violate any of the terms of this Agreement, in addition to any remedies in law, equity, or otherwise, Senior Creditor and the Subordinated Creditor, as applicable, may restrain such violation in any court of law and may, in its own or in any Loan Party’s name, interpose this Agreement as a defense in any action by Subordinated Creditor or Senior Creditor. Upon Senior Creditor’s or Subordinated Creditor’s written request, Subordinated Creditor or Senior Creditor, as applicable, will promptly take all actions which Senior Creditor or Subordinated Creditor may reasonably request to carry out the purposes and provisions of this Agreement.

22.Acknowledgment; Additional Loan Parties.

(a)Each of the undersigned Loan Parties has read this Agreement and acknowledges, and agrees with, the provisions of this Agreement. Each of the undersigned Loan Parties agrees not to take any action that would be contrary to the provisions of this Agreement, agrees to abide by the requirements applicable to it under this Agreement and agrees that neither Senior Creditor nor Subordinated Creditor shall have any liability to any Loan Party for acting in accordance with the provisions of this Agreement. Without limiting the generality of the foregoing, each Loan Party agrees to take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as Senior Creditor and/or Subordinated Creditor may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.

(b)The Borrowers shall cause any Person that becomes a Loan Party to execute a joinder (in form and substance satisfactory to Senior Creditor) to this Agreement. Such joinder shall be effective to bind such Person to this Agreement as a Loan Party without the execution thereof by any other Person, including without limitation, Subordinated Creditor or Senior Creditor. Notwithstanding the foregoing, any failure by any Borrower to comply with this Section 21(b) shall not invalidate any provision of this Agreement or affect any other terms and conditions set forth in this Agreement.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, Subordinated Creditor, the Borrowers, the other Loan Parties and Senior Creditor have caused this Agreement to be executed as of the date first above written.


SUBORDINATED CREDITOR: GARNET HOLDINGS INC. By: Name: Mark J. Silk Title:

Signature Page to Subordination and Intercreditor Agreement


LOAN PARTIES: SIFCO INDUSTRIES, INC. By: Name: Title:
QUALITY ALUMINUM FORGE, LLC By: Name: Title:

Signature Page to Subordination and Intercreditor Agreement


SENIOR CREDITOR: JPMORGAN CHASE BANK, N.A., as Senior Creditor By: Name: Title:

Signature Page to Subordination and Intercreditor Agreement

Execution Version

December 21, 2023

Mark J. Silk
2929 Larmona Drive
Pasadena, California 91107

Dear Mr. Silk,

This letter confirms and memorializes the understanding and agreement between you, Mark J. Silk (“you” or “your”), Garnet Holdings Inc., a California corporation (“Garnet”), SIFCO Industries, Inc., an Ohio corporation (“SIFCO”), and Quality Aluminum Forge, LLC, an Ohio limited liability company (“Quality Forge” and, together with SIFCO, collectively, the “Company”), with respect to the payment of the Guaranty Fee (as defined below) required to be paid to you in connection with your guaranty of certain indebtedness of the Company (the “JPM Indebtedness”) pursuant to that certain Guaranty, dated as of the date hereof (the “Guaranty”), executed by you in favor of JPMorgan Chase Bank. Reference is made herein to Garnet’s loan to the Company evidenced by that certain Subordinated Secured Promissory Note (the “Note”), dated as of the date hereof, by and among Garnet and the Company. Capitalized terms used but not defined herein shall the meanings ascribed to them in the Note.

The Company hereby agrees to pay you (or at your instruction, to pay to Garnet) a fee, as consideration for your agreement to guaranty the JPM Indebtedness, in an amount equal to $760,000 (the “Guaranty Fee”), which Guaranty Fee is hereby deemed to be fully earned and non-refundable as of the date hereof. The parties hereto agree that the Guaranty Fee shall become due and payable in immediately available funds on the Maturity Date. In the event that the Guaranty Fee is not paid in full on the Maturity Date, the Guaranty Fee shall, as of the Maturity Date, be added to, and deemed to constitute a portion of, the then-outstanding Principal Amount and the Obligations required to be paid to Garnet under the Note and shall be subject to all other provisions of the Note as if advanced thereunder. Each party hereto hereby consents and agrees to such deemed transfer of the right to receive the Guaranty Fee, and the rights and privileges associated therewith, to Garnet in accordance with the terms of this letter. Notwithstanding anything herein to the contrary, the Company, Garnet and you agree that the payment of the Guaranty Fee and other payments described in Section 7 of the Guaranty are subject to the subordination and restrictions on payment as described in the Guaranty.

This letter is not transferable or assignable by the Company without your and Garnet’s prior written consent. This letter constitutes the entire agreement between the parties hereto with respecting the subject matter hereof and may be amended only by a writing executed by all parties. The laws of the State of New York shall govern the interpretation, validity and performance of the terms of this letter regardless of the law that might be applied under the principles of conflicts of law, and this letter may be executed in two or more counterparts (including via electronic signature), each of which shall be deemed an original and all of which together shall constitute one instrument. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any federal or state court within New York County, State of New York in connection with any matter based upon or arising out of this letter, agrees that process may be served upon it in any manner authorized by the laws of the State of New York for such persons and waives and covenants not to assert or plead any objection that they might otherwise have to jurisdiction, venue and such process. Each party agrees not to commence any legal proceedings based upon or arising out of this letter or the matters contemplated herein (whether based on breach of contract, tort, breach of duty or any other theory) except in such courts.

[Signature Page Follows]

Sincerely,

SIFCO INDUSTRIES, INC.

By: _________________________
Name:
Its:

QUALITY ALUMINUM FORGE, LLC

By: _________________________
Name:
Its:

If this letter accurately sets forth your understanding and agreement, please sign, date and return a copy of this letter to the Company.

____________________________
Mark J. Silk

GARNET HOLDINGS INC.

By: _________________________
Name: Mark J. Silk
Its: President

[Signature Page to SIFCO Side Letter – Guaranty Fee]

Cover	Mar. 23, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Dec. 21, 2023
Entity Registrant Name	SIFCO Industries, Inc.
Entity Incorporation, State or Country Code	OH
Entity File Number	1-5978
Entity Tax Identification Number	34-0553950
Entity Address, Postal Zip Code	44103
Entity Address, State or Province	OH
Entity Address, City or Town	Cleveland
Entity Address, Address Line One	970 East 64th Street,
City Area Code	216
Local Phone Number	881-8600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Shares
Trading Symbol	SIF
Security Exchange Name	NYSEAMER
Amendment Flag	false
Entity Central Index Key	0000090168