GARRETT MOTION INC.
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(Name of Issuer)
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Common Stock, $0.001 par value per share
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(Title of Class of Securities)
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366505105
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(CUSIP Number)
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Alexander H. McMillan
Chief Compliance Officer
Benefit Street Partners L.L.C.
9 West 57th Street, Suite 4920
New York, NY 10019
(212) 588-6700
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with copies to:
Matthew Roose, Esq.
Michael Littenberg, Esq.
Ropes & Gray LLP
1211 Avenue of the Americas
New York, New York 10036
(212) 596-9000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
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November 2, 2020
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(Date of Event Which Requires Filing of this Statement)
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1.
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Names of reporting persons
Benefit Street Partners L.L.C.
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2.
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Check the appropriate box if a member of a group (see instructions)
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(a) [ ]
(b) [X]
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3.
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SEC Use Only
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4.
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Source of funds (see instructions)
WC
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5.
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Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
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[ ]
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6. |
Citizenship or place of organization
Delaware
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Number of shares
beneficially owned by
each reporting
person with
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7. Sole voting power
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0
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8. Shared voting power
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1,389,839*
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9. Sole dispositive power
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0
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10. Shared dispositive power
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1,389,839*
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11.
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Aggregate amount beneficially owned by each reporting person
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1,389,839*
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12.
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Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
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[ ]
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13.
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Percent of class represented by amount in Row (11)
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1.8%*
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14.
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Type of reporting person (see instructions)
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IA
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1.
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Names of reporting persons
Thomas J. Gahan
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2.
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Check the appropriate box if a member of a group (see instructions)
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(a) [ ]
(b) [X]
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3.
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SEC Use Only
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4.
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Source of funds (see instructions)
WC
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5.
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Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)
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[ ]
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6. |
Citizenship or place of organization
Delaware
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Number of shares
beneficially owned by
each reporting
person with
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7. Sole voting power
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0
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8. Shared voting power
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1,389,839*
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9. Sole dispositive power
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0
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10. Shared dispositive power
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1,389,839*
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11.
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Aggregate amount beneficially owned by each reporting person
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1,389,839*
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12.
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Check if the aggregate amount in Row (11) excludes certain shares (see instructions)
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[ ]
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Percent of class represented by amount in Row (11)
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1.8%*
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14.
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Type of reporting person (see instructions)
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IN
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Item 1.
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Security and Issuer.
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Item 2.
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Identity and Background.
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(a)
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This Schedule 13D is being jointly filed by (i) Benefit Street Partners L.L.C. (“BSP”) and (ii) Thomas J. Gahan. Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting
Persons.” This Schedule 13D relates to the Common Stock of the Issuer beneficially owned by certain funds to which BSP serves as investment adviser (the “BSP Funds”). BSP is a registered investment adviser under Section 203 of the Investment
Advisers Act of 1940, as amended. BSP serves as the investment adviser to each of the BSP Funds. Thomas J. Gahan controls BSP in his role as Chief Executive Officer of BSP’s sole managing member. As a result, as of the date of this Schedule
13D, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, each of BSP and Mr. Gahan may be deemed to beneficially own the shares of the Issuer’s Common Stock reported herein.
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(b)
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The principal business address of BSP and Mr. Gahan is c/o Benefit Street Partners L.L.C., 9 West 57th Street, Suite 4920, New York, NY 10019.
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(c)
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The principal business of the Reporting Persons is investment and/or investment management.
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(d)
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The Reporting Persons, nor, to the best knowledge of the foregoing, any of their controlling persons, have not been, during the last five years, convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
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(e)
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The Reporting Persons, nor, to the best knowledge of the foregoing, any of their controlling persons, have not been, during the last five years, party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, prohibiting or mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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(f)
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BSP is a limited liability company organized under the laws of the State of Delaware. Mr. Gahan is a citizen of the United States.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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Item 4.
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Purpose of Transaction.
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•
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payment in full in cash of the Debtors’ debtor in possession financing that remains outstanding;
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•
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the payment in full in cash of all outstanding principal and accrued interest under the Debtors’ senior secured credit facility at the contractual
non-default rate to the Effective Date;
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•
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the payment in full in cash of all outstanding principal and accrued and unpaid interest under the Debtors’ 5.125% senior notes due 2026 (the “Senior
Notes”) at the contractual non-default rate to the Effective Date plus $15,000,000 on account of claims arising under, derived from, or based on the Applicable Premium (as defined in the indenture for the Senior Notes);
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•
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in full and final satisfaction and in exchange for each claim of Honeywell arising under that certain Indemnification and Reimbursement Agreement, dated
September 12, 2018, by and among Honeywell ASASCO Inc., Honeywell ASASCO 2 Inc., and Honeywell and that certain Indemnification Guarantee Agreement, dated as of September 27, 2018, by and among Honeywell ASASCO 2 Inc., as payee, Garrett
ASASCO Inc., as payor, and certain subsidiary guarantors as defined therein (collectively, the “Indemnification Agreements”) and that certain Tax Matters Agreement by and among Garrett, Honeywell, Honeywell ASASCO Inc., and Honeywell ASASCO
2 Inc. (the “Tax Matters Agreement”), Honeywell shall receive: (a) an initial payment of $275 million in cash on the Effective Date (the “Initial Payment”); and (b) new series B preferred stock of the reorganized Company, which shall
provide for $1.175 billion in total payments to Honeywell through December 31, 2034, unless repaid earlier on the terms and conditions set forth in the term sheet;
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•
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(a) the payment in full in cash of all allowed general unsecured claims against the Debtors, (b) the reinstatement of such claims, or (c) such other
treatment rendering such claims unimpaired; and
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•
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the reinstatement of the Common Stock.
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Item 5.
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Interest in Securities of the Issuer.
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(a)
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As of the date of this statement, the Reporting Persons beneficially own 1,389,839 shares of Common Stock in the aggregate, representing 1.8% of the 75,788,279 outstanding shares of Common
Stock, as reported in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 2, 2020.
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(b)
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The Reporting Persons have shared voting power and shared investment power with respect to the shares of Common Stock beneficially owned by the Reporting Persons pursuant to the relationships
described in Item 2(a).
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(c)
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During the past 60 days, none of the Reporting Persons has effected any transactions in the shares of Common Stock, except as set forth below. All of the transactions in the Common Stock listed
below were traded in the ordinary course over The OTC Markets.
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Transaction Date
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Transaction Type
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Amount of Securities
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Price Per Share
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9/14/2020
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Purchase
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64,252
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$3.13
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9/15/2020
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Purchase
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235,748
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$3.20
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9/17/2020
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Purchase
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200,000
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$2.61
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9/18/2020
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Purchase
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200,000
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$2.21
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9/22/2020
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Purchase
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25,000
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$1.55
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9/22/2020
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Purchase
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600,000
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$1.81
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9/25/2020
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Purchase
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114,839
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$1.50
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9/29/2020
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Purchase
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356
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$2.32
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9/29/2020
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Sale
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356
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$2.32
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9/30/2020
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Sale
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50,000
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$3.22
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11/3/2020
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Purchase
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356
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$2.32
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11/3/2020
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Sale
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356
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$2.32
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(d)
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No person (other than the Reporting Persons) has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, shares of Common Stock beneficially owned by the
Reporting Persons.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
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The BSP Funds hold an aggregate $9,452,000 principal amount of the Issuer’s 5.13% Senior Notes due October 15, 2026.
Other than the transaction described in this Schedule 13D, there are no contracts, arrangements, understandings or relationships between the Reporting Persons and any other person with respect
to the Common Stock of the Issuer.
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Item 7.
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Material to Be Filed as Exhibits.
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Exhibit
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Description
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1.
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Joint Filing Agreement.
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2.
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Second Amended and Restated Coordination Agreement, dated November 2, 2020, by and among the parties identified therein (incorporated by reference to Exhibit II to Oaktree Capital Management, L.P.'s Amendment No. 3
to Schedule 13D filed on November 4, 2020).
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BENEFIT STREET PARTNERS, L.L.C.
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By: /s/ Bryan R. Martoken
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Name: Bryan R. Martoken
Title: Authorized Signatory /s/ Thomas J. Gahan
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Thomas J. Gahan
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BENEFIT STREET PARTNERS, L.L.C.
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By: /s/ Bryan R. Martoken
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Name: Bryan R. Martoken
Title: Authorized Signatory /s/ Thomas J. Gahan
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Thomas J. Gahan
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