||ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On October 19, 2015 (the Closing
Date), NN, Inc., a Delaware corporation (NN), completed its previously announced acquisition (the Acquisition) of all of the outstanding capital stock of Precision Engineered Products Holdings, Inc., a Delaware
corporation (PEP), pursuant to that certain Stock Purchase Agreement, dated as of August 17, 2015 (the Stock Purchase Agreement), by and among NN, PEP and PEP Industries, LLC, a Delaware limited liability company
In connection with the Acquisition, on the Closing Date, NN completed its previously announced private offering
(the Offering) of $300.0 million aggregate principal amount of its 10.25% Senior Notes due 2020 (the Notes), and entered into new senior secured credit facilities consisting of a $525.0 million term loan credit facility (the
New Term Loan Credit Facility) and a $100.0 million revolving loan credit facility (the New Revolving Loan Credit Facility and, together with the New Term Loan Credit Facility, the New Senior Credit Facilities).
NN utilized the net proceeds from the Offering, together with borrowings under the New Term Loan Credit Facility and cash on hand, to pay
the purchase price for the Acquisition, to refinance certain indebtedness of NN (as described below) and to pay fees and expenses related to the foregoing.
October 16, 2015, NN and certain of its subsidiaries entered into a purchase agreement (the Purchase Agreement) with SunTrust Robinson Humphrey, Inc., as representative of the several initial purchasers listed on Schedule A attached
to the Purchase Agreement (the Initial Purchasers), in connection with the Offering of the Notes.
On October 19, 2015,
the Notes were offered and sold to qualified institutional buyers inside the United States pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act). The Notes have not been registered under the Securities
Act or the securities laws of any other jurisdiction, and may not be offered or sold in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, a
copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Indenture and Supplemental Indenture
The terms of the Notes are governed by an indenture, dated as of the Closing Date (the Indenture), by and among NN, the subsidiary
guarantors party thereto (the NN Guarantors) and U.S. Bank National Association, as trustee (the Trustee).
Interest and Maturity. The Notes bear interest at a rate of 10.25% per annum and mature on November 1, 2020. Interest
is payable on the Notes on May 1 and November 1 of each year, commencing on May 1, 2016.
NNs obligations under the Notes are guaranteed by the NN Guarantors and PEP and certain direct and indirect domestic subsidiaries of PEP (collectively, the PEP Guarantors and, together with the NN Guarantors, the
Ranking. The Notes and related guarantees are senior unsecured obligations and rank equally in
right of payment with all of NNs existing and future senior debt, senior in right of payment to all of NNs existing and future subordinated debt, and effectively subordinated to all of NNs existing and future secured debt.
Covenants. The Indenture contains restrictive covenants that limit the ability of NN and its restricted subsidiaries to, among
other things, incur more indebtedness or issue certain preferred shares; pay dividends, redeem stock or make other distributions; make certain investments; create liens; enter into agreements restricting its subsidiaries ability to pay
dividends; and consolidate, merge, sell or otherwise dispose of all or substantially all of its or their assets. These covenants are subject to certain exceptions and qualifications as set forth in the Indenture.