On January 5, 2023, MSA Safety Incorporated, as borrower, entered into a Credit Agreement dated January 5, 2023 (the credit agreement) with various Company subsidiaries, as guarantors, various financial institutions, as lenders, and PNC Bank, National Association, as administrative agent. Under the Credit Agreement, the Company may borrow up to $250 million in a single borrowing at any time until and through May 5, 2023, although the Company expects to make the borrowing by the end of January 2023. The borrowing proceeds are expected to be used to repay borrowings under the Existing Credit Agreement that were incurred in connection with the Sale described above under Item 2.01 of this report.

The loan will require quarterly principal repayments equal to 2.50% of the original loan balance and a final payment at maturity on May 24, 2026. Borrowings under the Credit Agreement may bear interest at a rate based upon either a Base Rate or a Adjusted Term SOFR Rate, plus an adder based upon the company's net leverage ratio: The Base Rate is calculated on a daily basis as the highest of a prime rate, an overnight bank funding rate plus 0.5% per annum, or Daily Simple SOFR plus 1%. The Base Rate cannot be less than zero.

The adder ranges from zero to 1%; The Adjusted SOFR Term Rate is calculated as provided in the Credit Agreement. The adder ranges from 0.875% to 2.00%. Interest based upon the Base Rate is payable quarterly on the first day of January, April, July and October.

Interest based upon the Adjusted Term SOFR Rate is payable on the last day of the selected interest period, unless that interest period exceeds three months, in which case it is also payable on the 90th day of the selected interest period. The Credit Agreement contains customary representations and warranties, covenants and events of default substantially the same as the Existing Credit Agreement. The Credit Agreement requires the Company to comply with specified financial covenants, including a requirement to maintain a minimum fixed charges coverage ratio of not less than 1.50 to 1.00 and a net leverage ratio not to exceed 3.75 to 1.00 during an initial 12-month period, stepping down to 3.50 to 1.00 thereafter (or not to exceed 4.00 to 1.00 during the three calendar quarters including, and following, certain specified acquisitions); in each case calculated on the basis of the trailing four fiscal quarters.

The net leverage ratio is defined as consolidated indebtedness less unencumbered cash exceeding $20 million, divided by consolidated earnings before interest, taxes, amortization and depreciation. In addition, the Credit Agreement contains negative covenants limiting the ability of the Company and its subsidiaries to: incur additional indebtedness or issue guarantees; create or incur liens; make loans and investments; make acquisitions; transfer or sell assets; enter into transactions with affiliated parties; make changes in its or its subsidiaries' organizational documents that are materially adverse to the lenders; and modify the nature of the company's or its subsidiaries' business.