FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
EXHIBIT
99.2
FIRST
AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this “Amendment”),
is
made and entered into as of September 21, 2006, by and among NN, INC., a
Delaware corporation (the “Company”),
certain of its subsidiaries named below (the “Guarantors”),
The
Prudential Insurance Company of America (together with its successors and
assigns, “Prudential”), Prudential Retirement Insurance and Annuity Company,
American Bankers Life Assurance Company of Florida, Inc., Farmers New World
Life
Insurance Company, and Time Insurance Company (collectively, and together with
their successors and assigns, the “Noteholders”).
W I T N E S S E T H:
WHEREAS,
the Company, the Guarantors, certain foreign subsidiaries of the Company the
“Foreign
Guarantors”)
and
the Noteholders are parties to a certain Note Purchase Agreement, dated as
of
April 26, 2004 (as amended, restated, supplemented or otherwise modified from
time to time, the “Note
Agreement”;
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Note Agreement), pursuant to which the Noteholders
purchased the 4.89% Senior Notes, Series A, due April 26, 2014 issued by the
Company (the “Notes”);
WHEREAS,
the Company has requested that the Noteholders release the Foreign Guarantors
from their guaranty of the Company’s obligations under the Note Agreement and
the Notes and that the Noteholders amend certain provisions of the Note
Agreement; subject to the terms and conditions hereof, the Noteholders are
willing to do so;
NOW,
THEREFORE, for good and valuable consideration, the sufficiency and receipt
of
all of which are acknowledged, the Company and the Noteholders agree as
follows:
1. Amendments.
(a)
All
references in the Note Agreement to the “Noteholder Collateral Agent” are hereby
replaced with references to “Collateral Agent”.
(b)
Section 7.1 of the Note Agreement is hereby amended by re-lettering clause
(h)
thereof as clause (i) and inserting immediately before such clause (i) the
following new clause (h):
(h) Amendments
to Bank Indebtedness—
promptly and in any event within ten (10) Business Days following the
effectiveness of any amendment to the Credit Agreement, notice of such amendment
and a copy of any such amendment within a reasonable time following receipt
of
written request by any such holder of the Notes; and
(c)
Section 8.3 of the Note Agreement is hereby by replacing the first and second
sentences of clause (h) of such Section in their entirety with the
following:
Certain
Definitions. “Change
in Control”
shall
mean an event or series of events which results in (a) the acquisition of,
or, if earlier, the shareholder or director approval of the acquisition of,
ownership or voting control, directly or indirectly, beneficially (within the
meaning of Rules 13d-3 and 13d-5 of the Exchange Act) or of record, on or after
the Closing Date, by any Person or group (within the meaning of Sections 13d
and
14d of the Exchange Act) of shares representing more than thirty-five percent
(35%) of the aggregate voting power represented by the issued and outstanding
capital stock of the Company; (b) the occupation of the majority of seats (other
than vacant seats) on the board of directors or other governing body of the
Company by Persons who were neither (i) nominated by the board of directors
or
other governing body of the Company nor (ii) appointed by directors so
nominated; or (c) the occurrence of a change in control, or similar provision,
as defined in the Credit Agreement or any other debt instrument, lease (capital,
operating or otherwise), guaranty, contract, commitment, agreement or other
arrangement evidencing or entered into in connection with any Indebtedness
of
the Company or its Subsidiaries in excess of Seven Million Dollars ($7,000,000).
The foregoing definition shall be deemed amended to the extent that the
definition of Change in Control in the Credit Agreement is amended from time
to
time (but not merely waived).
(d)
Section 10.3 of the Note Agreement is hereby amended by replacing clause (k)
thereof and the last sentence of such Section in their entirety with the
following (including a new subsection (l)):
(k) Liens
on
the assets of Foreign Subsidiaries securing the Bank Indebtedness to the extent
that the holders thereof are parties to the Intercreditor Agreement or another
sharing agreement which is reasonably satisfactory to the Required Holders;
and
(l) other
Liens not otherwise permitted by paragraphs (a) through (k) securing Debt of
the
Company or a Restricted Subsidiary; provided
that
at
the time of incurrence of such Lien and immediately after or any effect thereto,
the Debt secured thereby is permitted by Section 10.4.
The
Company will not, and will not permit any Restricted Subsidiary to, directly
or
indirectly, create, incur, assume or permit to exist (upon the happening of
a
contingency or otherwise) any Lien on or with respect to any Collateral other
than Liens in favor of the Collateral Agent which are in accordance with, and
subject to, the Intercreditor Agreement.
(e)
Section 10.8 of the Note Agreement is hereby amended by replacing such Section
in its entirety with the following:
(a) In
the event the Company has any Subsidiary which is a direct obligor of, or bound
by or subject to a Guaranty for the benefit of, any lender, the Company shall
cause such Subsidiary, concurrently with such Subsidiary becoming liable as
an
Obligor or under such other Guaranty, to execute
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and
deliver a Subsidiary Guarantee, duly executed in blank by the Company, as
applicable, or the appropriate Guarantor, as the case may be; provided,
however,
that no
Subsidiary shall be obligated to execute and deliver a Subsidiary Guarantee
to
the extent that, and so long as, (i) (A) such Subsidiary Guarantee would
not be permitted under applicable law and (B) such Subsidiary has not
delivered a Guaranty for the benefit of the Bank Indebtedness or (ii) (A) such
Subsidiary is a Foreign Subsidiary that has only guaranteed the Bank
Indebtedness and (B) such Guaranty is subject in all respects to the
Intercreditor Agreement or another sharing agreement which is reasonably
satisfactory to the Required Holders. Each Guarantor shall be and remain a
Restricted Subsidiary.
(b) In
the
event the Company has any Subsidiary which has pledged or granted any lien
in
respect of any of its assets or properties to secure any of the Bank
Indebtedness, the Company shall cause such Subsidiary, concurrently with such
Subsidiary pledging or granting such Lien, to execute and deliver a Pledge
Agreement, provided,
however,
that
such Subsidiary shall not be so obligated to execute and deliver a Pledge
Agreement to the extent that, and so long as, (i) (A) such Pledge Agreement
would not be permitted under applicable law and (B) such Subsidiary has not
delivered a Pledge Agreement for the benefit of the Bank Indebtedness or (ii)
such Subsidiary is a Foreign Subsidiary and such lien is subject in all respects
to the Intercreditor Agreement or another sharing agreement which is reasonably
satisfactory to the Required Holders. Each Pledgor shall be and remain a
Restricted Subsidiary. Notwithstanding the foregoing provisions of this
Section 10.8(b), in the event the Company requests, at the expense of the
Company, the holders of the Notes to release the Lien of a Pledge Agreement,
the
holders of the Notes shall enter into such instruments of direction, reasonably
requested by the Company, directing the Collateral Agent to release the lien
of
such Pledge Agreement if, at the time of any such release and immediately after
giving effect thereto, (i) the Collateral subject to such Pledge Agreement
shall not be subject to any Liens and (ii) no Default or Event of Default
shall exist.
(f) Section
11 of the Note Agreement is hereby amended by replacing clause (f) of such
Section in its entirety with the following:
(f) (i) the
Company or any Restricted Subsidiary is in default (as principal or as guarantor
or other surety) in the payment of any principal of or premium or make-whole
amount or interest on any Debt that is outstanding in an aggregate principal
amount of at least $5,000,000 (or its equivalent in the relevant currency of
payment) beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt in an
aggregate outstanding principal amount of at least $5,000,000 (or its equivalent
in the relevant currency of payment) or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence
of such default or condition (x) such Debt has become, or has been declared
due
and payable before its stated maturity or before its regularly scheduled dates
of payment or (y) in the case of any event of default or default condition
under
any financial covenant (including, without limitation, any of the financial
covenants set forth in Section 5.7 (or any successor provision) of the Credit
Agreement), the holder of such Debt has the right to declare such Debt to be
due
and payable before its stated maturity or before its regularly scheduled dates
of payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of the
holder of Debt to convert such Debt into equity interests), (x) the Company
or any Restricted Subsidiary has become obligated to purchase or repay Debt
before its regular maturity or before its regularly scheduled dates of payment
in an aggregate outstanding principal amount of at least $5,000,000 (or its
equivalent in the relevant currency of payment), or (y)
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one
or
more Persons have the right to require the Company or any Restricted Subsidiary
so to purchaser as result of (1) the failure by the Company or
a
Restricted
Subsidiary to pay principal, premium or interest on such debt or (2) any default
or default condition under any financial covenant; or
(g) Section
23.10 of the Note Agreement is hereby amended by replacing clause (a) of such
Section in its entirety with the following:
(a)in
the
event that any asset sale permitted under Section 10.7 consists in whole or
in part of the sale of all of the capital stock of (or other ownership interests
in) a Subsidiary that is owned by the Company or any other Subsidiary of the
Company, upon the request of the Company the Collateral Agent shall release
the
Subsidiary whose stock (or other ownership interests) has (have) been sold
from
any duties and obligations to the holder pursuant to this Agreement and the
other Financing Agreements to which such Subsidiary may be a party;
and
(h)
Schedule B of the Note Agreement is amended by adding the following definitions
in proper alphabetical order:
“First
Amendment”
means
that certain First Amendment to Note Purchase Agreement, dated as of the First
Amendment Date, by and among the Company, the Guarantors (excluding any Foreign
Subsidiaries of the Company) and the Noteholders.
“First
Amendment Date”
means
September 21, 2006.
“Foreign
Subsidiary”
means
any Subsidiary of the Company that is organized in a jurisdiction other than
the
United States or any state or other subdivision thereof.
(i)
Schedule B of the Note Agreement is amended by deleting the definitions of
Bank
Security, Italian Subsidiary Guaranty (and following such deletion any reference
to such term in the Note Agreement shall be of no further force or effect),
Noteholder Security and Pledged Notes in their entirety. Schedule B of the
Note
Agreement is further amended by replacing the definitions of Bank Indebtedness,
Collateral Agent (previously Noteholder Collateral Agent), Guarantors,
Intercreditor Agreement, Priority Debt and Subsidiary Guaranty in their entirety
with the following:
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“Bank
Indebtedness” shall
mean and include the Credit Agreement dated as of September 21, 2006 by and
between the Company, various subsidiaries of the Company party thereto, various
lenders party thereto, KeyBank National Association, as lead arranger, book
runner and administrative agent, and AmSouth Bank as swing line lender, as
amended, modified, renewed, extended, replaced or refinanced from time to time
(the “Credit
Agreement”)
and, in
any event, shall include the primary bank facilities of the Company.
“Collateral
Agent”
means
KeyBank National Association.
“Guarantors”
shall
mean and include all existing and future Subsidiaries (other than Foreign
Subsidiaries), including, but not limited to, Industrial Molding GP, LLC,
Industrial Molding LP, LLC, Industrial Molding Group, L.P., and The Delta
Rubber Company, but excluding any Subsidiary which is not required to deliver
a
Subsidiary Guarantee pursuant to Section 4.11 or Section 10.8.
“Intercreditor
Agreement”
means
the Intercreditor Agreement dated September 21, 2006 among KeyBank National
Association, as Bank Agent and Collateral Agent, the Noteholders, the holders
of
the Bank Indebtedness and the “Obligors” as defined therein.
“Priority
Debt”
means
the sum of (a) all Debt of the Company secured by Liens other than Liens
permitted by Section 10.3(a) through (j), and (b) all Debt of
Restricted Subsidiaries (except Debt held by the Company or another Restricted
Subsidiary) other than (i) Debt of any Guarantor which either (A) is
subject to the Intercreditor Agreement or another sharing agreement which is
reasonably satisfactory to the Required Holders or (B) consists of
Guarantees of such Guarantor of the Debt of Persons which are not Subsidiaries
of such Guarantor, (ii) Bank Indebtedness of any Foreign Subsidiary to the
extent that the holders of such Bank Indebtedness are parties to the
Intercreditor Agreement or another sharing agreement which is reasonably
satisfactory to the Required Holders and (iii) Debt of NN Europe not in
excess of €25,000,000.
“Subsidiary
Guaranty”
shall
mean and include as to each Guarantor the obligations of the Guarantors pursuant
to this Agreement including Section 23, as amended, modified, restated or
supplemented (by joinder agreement in Exhibit 10.8(b) or otherwise) from
time to time, each as satisfactory in form and substance to the Required
Holders.
2. Release
of Guaranties from Foreign Subsidiaries; Release of Lien on Pledged Notes and
Foreign Subsidiary Capital Stock.
Upon the
effectiveness of this Amendment, the Noteholders hereby (i) release each Foreign
Subsidiary of the Company from its Guaranty pursuant to Section 23 of the Note
Agreement, (ii) release NN Italy from its guaranty obligations under the Italian
Subsidiary Guaranty and terminate the Italian Subsidiary Guaranty, (iii) release
all Liens on the Pledged Notes and terminate the Pledge Agreement, dated as
of
April 26, 2004, executed in favor of the Noteholder Collateral Agent for the
benefit of the Noteholders, pursuant to which the Pledged Notes were pledged
to
the Noteholder Collateral Agent; and (iv) release all Liens on the shares of
capital stock of each Foreign Subsidiary and terminate the Pledge Agreements,
each dated as of April 26, 2004, pursuant to which such capital stock was
pledged to the Noteholder Collateral Agent.
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3. Conditions
to Effectiveness of this Amendment.
Notwithstanding
any other provision of this Amendment and without affecting in any manner the
rights of the Noteholders hereunder, it is understood and agreed that this
Amendment shall not become effective, and the Company shall have no rights
under
this Amendment, until the Noteholders shall have received (i) such other fees
as
the Company has previously agreed to pay the Noteholders or any of its
affiliates in connection with this Amendment, (ii) reimbursement or payment
of
its costs and expenses incurred in connection with this Amendment or the Note
Agreement (including reasonable fees, charges and disbursements of King &
Spalding LLP, counsel to the Administrative Agent), and (iii)
each of
the following documents:
(a)
executed
counterparts to this Amendment from the Company, each of the Guarantors (other
than Guarantors that are Foreign Subsidiaries) and the Noteholders;
(b)
executed
counterparts to an Intercreditor Agreement to be executed on the date hereof
by
KeyBank National Association, as the Bank Agent and Collateral Agent, the
Noteholders, the holders of the Bank Indebtedness and the “Obligors” as defined
therein;
(c) evidence
that each Obligor that has a first-tier Foreign Subsidiary has executed and
delivered to the Collateral Agent for the joint benefit of the Noteholders
and
the Banks, a Pledge Agreement in form and substance satisfactory to the
Noteholders pursuant to which 65% of the outstanding shares or other equity
interest of such first-tier Foreign Subsidiary has been pledged to the
Collateral Agent to secure the Obligations of the Obligors;
(d) a
duly
executed officer’s certificate (or comparable domestic or foreign documents)
from an officer of each Obligor certifying the names of the officers of such
Obligor authorized to sign this Amendment, the Intercreditor Agreement and
the
other documents contemplated hereby, together with the true signatures of such
officers and certified copies of (i) the resolutions of the board of directors
(or comparable domestic or foreign documents) of such Obligor evidencing
approval of the execution and delivery of such documents, and (ii) the
organizational documents of such Obligor;
(e) a
good
standing certificate or full force and effect certificate, as the case may
be,
for each Obligor, issued within ten days prior to the First Amendment Date
by
the Secretary of State in the state or states where such Obligor is incorporated
or formed or qualified as a foreign entity;
(f) an
opinion of counsel for each Obligor, in form and substance satisfactory to
the
Noteholders and Collateral Agent;
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(g) (i)
the
results of Uniform Commercial Code lien searches, satisfactory to Noteholders,
(ii) the results of federal and state tax lien and judicial lien searches,
satisfactory to Noteholders, and (iii) Uniform Commercial Code termination
statements reflecting termination of all U.C.C. Financing Statements previously
filed by any Person and not expressly permitted pursuant to the Note Agreement,
including those naming AmSouth as secured party;
(h) evidence
that the Credit Agreement by and among the Company, certain Subsidiaries,
AmSouth Bank, and certain financial institutions party thereto, dated as of
May
1, 2003, as amended, shall have been terminated, which termination shall be
deemed to have occurred upon payment in full of all of the Debt outstanding
thereunder and termination of the commitments established therein;
(i) true
and
correct copies of the new Credit Agreement with KeyBank as administrative agent,
and any other long-term debt instrument to which any Company is a party
(excluding the Note Agrements), certified by a financial officer as true and
complete; and
(j)
such
other items and shall have satisfied such other conditions as may be reasonably
required by Noteholders.
4. Representations
and Warranties.
To
induce the Noteholders to enter into this Amendment, each Obligor hereby
represents and warrants to the Noteholders that:
(a) The
execution, delivery and performance by such Obligor of this Amendment
(i) are within such Obligor’s power and authority; (ii) have been duly
authorized by all necessary corporate and shareholder action; (iii) are not
in contravention of any provision of such Obligor’s certificate of incorporation
or bylaws or other organizational documents; (iv) do not violate any law or
regulation, or any order or decree of any Governmental Authority; (v) do
not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Obligor or any of its Subsidiaries is a party or by which such Obligor or any
such Subsidiary or any of their respective property is bound; (vi) do not result
in the creation or imposition of any Lien upon any of the property of such
Obligor or any of its Subsidiaries; and (vii) do not require the consent or
approval of any Governmental Authority or any other person;
(b) This
Amendment has been duly executed and delivered for the benefit of or on behalf
of each Obligor and constitutes a legal, valid and binding obligation of each
Obligor, enforceable against such Obligor in accordance with its terms;
and
(c) After
giving effect to this Amendment, the representations and warranties contained
in
the Note Agreement and the other Financing Agreements are true and correct
in
all material respects, and no Default or Event of Default has occurred and
is
continuing as of the date hereof.
5. Reaffirmations
and Acknowledgments.
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(a) Reaffirmation
of Guaranty.
Each
Guarantor consents to the execution and delivery by the Company of this
Amendment and jointly and severally ratify and confirm the terms of its Guaranty
of the Obligations of the Company arising under Section 23 of the Note
Agreement. Each Guarantor acknowledges that, notwithstanding anything to the
contrary contained herein or in any other document evidencing any indebtedness
of the Company to the Noteholders or any other obligation of the Company, or
any
actions now or hereafter taken by the Noteholders with respect to any obligation
of the Company, Section 23 of the Note Agreement (i) is and shall continue
to be
a primary obligation of the Guarantors, (ii) is and shall continue to be an
absolute, unconditional, joint and several, continuing and irrevocable guaranty
of payment, and (iii) is and shall continue to be in full force and effect
in
accordance with its terms. Nothing contained herein to the contrary shall
release, discharge, modify, change or affect the original liability of the
Guarantors under Section 23 of the Note Agreement.
(b) Acknowledgment
of Perfection of Security Interest.
Each
Obligor hereby acknowledges that, as of the date hereof, the security interests
and liens granted to the Collateral Agent and the Noteholders under the Note
Agreement, the Pledge Agreements and the other Financing Documents (excluding
the Pledge Agreements described in clauses (ii) and (iv) of Section 2 of this
Amendment) are in full force and effect, are properly perfected and are
enforceable in accordance with the terms of the Note Agreement and the other
Financing Agreements.
6. Effect
of Amendment.
Except
as
set forth expressly herein, all terms of the Note Agreement, as amended hereby,
and the other Financing Agreements shall be and remain in full force and effect
and shall constitute the legal, valid, binding and enforceable obligations
of
the Obligors to the Noteholders. The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy
of
the Noteholders under the Note Agreement, nor constitute a waiver of any
provision of the Note Agreement. This Amendment shall constitute a Financing
Document for all purposes of the Note Agreement.
7. Governing
Law.
This
Amendment shall be governed by, and construed in accordance with, the internal
laws of the State of New York and all applicable federal laws of the United
States of America.
8. No
Novation.
This
Amendment is not intended by the parties to be, and shall not be construed
to
be, a novation of the Note Agreement or an accord and satisfaction in regard
thereto.
9. Costs
and Expenses.
The
Company agrees to pay on demand all costs and expenses of the Noteholders in
connection with the preparation, execution and delivery of this Amendment,
including, without limitation, the reasonable fees and out-of-pocket expenses
of
outside counsel for the Noteholders with respect thereto.
10. Counterparts. This
Amendment may be executed by one or more of the parties hereto in any number
of
separate counterparts, each of which shall be deemed an original and all of
which, taken together, shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by facsimile
transmission or by electronic mail in pdf form shall be as effective as delivery
of a manually executed counterpart hereof.
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11. Binding
Nature.
This
Amendment shall be binding upon and inure to the benefit of the parties hereto,
their respective successors, successors-in-titles, and assigns.
12. Entire
Understanding.
This
Amendment sets forth the entire understanding of the parties with respect to
the
matters set forth herein, and shall supersede any prior negotia-tions or
agreements, whether written or oral, with respect thereto.
[Signature
Pages To Follow]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed, under seal in the case of the Company and the Guarantors, by their
respective authorized officers as of the day and year first above
written.
COMPANY:
NN,
INC.
By:
________________________________
Name:
Xxxxx X. Xxxxxx
Title:
Vice President - Corporate
Development and Chief
Financial Officer
By:
________________________________
Name:
Xxxxxxx X. Xxxxx, Xx.
Title:
Vice President - Secretary and
Chief
Development Officer
GUARANTORS:
INDUSTRIAL
MOLDING GP, LLC
By:
________________________________
Name:
Xxxxxxxx X. Xxxx
Title:
Manager
INDUSTRIAL
MOLDING LP, LLC
By:
________________________________
Name:
Xxxxxxx X. Xxxxx, Xx.
Title:
Manager
INDUSTRIAL
MOLDING GROUP, L.P.
By:
Industrial Molding GP, LLC,
its
General Partner
By:
________________________________
Name:
Xxxxxxxx X. Xxxx
Title:
Manager
THE
DELTA RUBBER COMPANY
By:
________________________________
Name:
Xxxx X. Xxxxxxx
Title:
Vice President and General
Manager
NOTEHOLDERS:
THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA
By:
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President
PRUDENTIAL
RETIREMENT
INSURANCE
AND ANNUITY COMPANY
By: Prudential
Investment Management Inc., as investment manager
By____________________________________________________
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President
AMERICAN
BANKERS LIFE
ASSURANCE
COMPANY OF FLORIDA, INC.
By: Prudential
Private Placement
Investors,
L.P., as Investment Advisor
By: Prudential
Private Placement
Investors,
Inc., as General Partner
By____________________________________________________
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President
FARMERS
NEW WORLD LIFE INSURANCE
COMPANY
By: Prudential
Private Placement Investors, L.P., as Investment Advisor
By: Prudential
Private Placement Investors, Inc., as General Partner
By_________________________________________________________
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President
TIME
INSURANCE COMPANY
By: Prudential
Private Placement Investors, L.P., as Investment Advisor
By: Prudential
Private Placement Investors, Inc., as General Partner
By__________________________________________________________
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President
