PURCHASE AGREEMENT
$150,000,000
Additional 8.750% Senior Secured Notes due 2030
among
NEXFORD INDUSTRIAL HOLDINGS INC., as Issuer,
THE GUARANTORS PARTY HERETO,
BROADLEAF SECURITIES LLC, as Representative of the Initial Purchasers,
and
FIELDSTONE CAPITAL MARKETS, INC.
Dated as of December 5, 2025
Execution Version
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is dated as of December 5, 2025, among:
NEXFORD INDUSTRIAL HOLDINGS INC., a corporation duly organized and validly existing under the laws of the State of Delaware (the "Issuer"), with its principal executive offices located at 2400 Commerce Parkway, Suite 800, Schaumburg, Illinois 60173, Employer Identification Number 84-3291057;
THE GUARANTORS listed on Schedule A hereto (each a "Guarantor" and, collectively, the "Guarantors");
BROADLEAF SECURITIES LLC, a limited liability company organized under the laws of the State of New York ("Broadleaf" or the "Representative"), with its principal offices at 383 Madison Avenue, 12th Floor, New York, New York 10179, acting as representative of the several initial purchasers named in Schedule B hereto (collectively, the "Initial Purchasers"); and
FIELDSTONE CAPITAL MARKETS, INC., a corporation organized under the laws of the State of Delaware ("Fieldstone"), with its principal offices at 120 South LaSalle Street, Suite 1600, Chicago, Illinois 60603, acting as co-manager.
RECITALS. WHEREAS, the Issuer proposes to issue and sell $150,000,000 aggregate principal amount of its additional 8.750% Senior Secured Notes due 2030 (the "Notes" or the "Additional Notes") to the Initial Purchasers;
WHEREAS, the Additional Notes will be issued as additional notes under that certain Indenture dated as of March 15, 2023 (the "Base Indenture"), as supplemented by the First Supplemental Indenture dated as of December 10, 2025 (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), among the Issuer, the Guarantors, and Ridgeline Trust Company, N.A., a national banking association, as trustee (in such capacity, the "Trustee") and as collateral agent (in such capacity, the "Collateral Agent");
WHEREAS, $475,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2030 (the "Existing Notes") are currently outstanding under the Base Indenture, and after the issuance of the Additional Notes contemplated hereby, the aggregate principal amount of 8.750% Senior Secured Notes due 2030 outstanding under the Indenture will be $625,000,000;
WHEREAS, the Additional Notes will be offered and sold in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Rule 144A ("Rule 144A") and Regulation S ("Regulation S") thereunder;
WHEREAS, the net proceeds of the Additional Notes will be used by the Issuer to fund the acquisition (the "Kessler Acquisition") of 100% of the issued and outstanding equity interests of Kessler Precision Components, Inc. ("Kessler"), an Ohio corporation headquartered in Dayton, Ohio, pursuant to that certain Stock Purchase Agreement dated November 15, 2025 (the "Kessler Purchase Agreement"), by and among the Issuer, The Kessler Family Trust, and Northland Growth Equity Fund III, LP, and to pay transaction fees and expenses, with the remaining proceeds to be used for general corporate purposes;
WHEREAS, in connection with the offering of the Additional Notes, the Issuer has prepared an Offering Memorandum Supplement dated December 3, 2025, supplementing the Offering Memorandum dated March 12, 2023 (as so supplemented, the "Offering Memorandum"), which sets forth certain information concerning the Issuer, the Guarantors, the Additional Notes, the Kessler Acquisition, and the related transactions; and
WHEREAS, the Initial Purchasers and the holders of the Additional Notes will be entitled to the benefits of the Registration Rights Agreement dated as of March 15, 2023 (the "Registration Rights Agreement"), among the Issuer, the Guarantors, and the initial purchasers of the Existing Notes, which provides, among other things, for an exchange offer registration statement to become effective within 365 days of the closing date of the Additional Notes (i.e., by December 10, 2026).
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1 — PURCHASE AND SALE OF THE NOTES
1.1 Agreement to Purchase.
Subject to the terms and conditions set forth in this Agreement, the Issuer hereby agrees to issue and sell to each of the Initial Purchasers, and each of the Initial Purchasers, severally and not jointly, hereby agrees to purchase from the Issuer, at the Closing (as defined in Section 2.1), the respective principal amounts of Additional Notes set forth opposite such Initial Purchaser's name on Schedule B hereto, at a purchase price equal to 101.500% of the aggregate principal amount of Additional Notes purchased by such Initial Purchaser, less an initial purchaser discount equal to 1.750% of the aggregate principal amount of the Additional Notes.
The aggregate principal amount of Additional Notes to be sold hereunder is $150,000,000. The purchase price per Additional Note shall be computed as follows:
(a) Gross proceeds equal to $150,000,000 multiplied by 101.500%, which equals $152,250,000 (reflecting the issue price above par to align the yield on the Additional Notes with the current trading level of the Existing Notes);
(b) Initial purchaser discount equal to $150,000,000 multiplied by 1.750%, which equals $2,625,000; and
(c) Net purchase price payable by the Initial Purchasers to the Issuer equal to $152,250,000 minus $2,625,000, which equals $149,625,000.
Each Initial Purchaser's obligation to purchase the Additional Notes hereunder is several and not joint, and no Initial Purchaser shall have any liability for the failure of any other Initial Purchaser to purchase the Additional Notes required to be purchased by such other Initial Purchaser.
1.2 Terms of the Additional Notes.
The Additional Notes shall have the following terms:
(a) Coupon. The Additional Notes shall bear interest at the rate of 8.750% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months.
(b) Interest Payment Dates. Interest on the Additional Notes shall be payable semi-annually in arrears on March 15 and September 15 of each year, commencing March 15, 2026. Interest on the Additional Notes shall accrue from the date of issuance.
(c) Maturity. The Additional Notes shall mature on March 15, 2030.
(d) CUSIP Numbers. The Additional Notes will initially bear temporary CUSIP numbers as follows: 65438T AB3 (Rule 144A Global Note) and U65438 AB5 (Regulation S Global Note). After the expiration of the 40-day Regulation S distribution compliance period (expected to expire on January 19, 2026), the Additional Notes will be exchanged, without any action on the part of the holders thereof, for notes bearing the same CUSIP numbers as the Existing Notes: 65438T AA5 (Rule 144A) and U65438 AA7 (Regulation S). Following such exchange, the Additional Notes shall be fully fungible with the Existing Notes for all purposes under the Indenture.
(e) Book-Entry Form. The Additional Notes shall be issued in fully registered, book-entry form through the facilities of The Depository Trust Company ("DTC"), and beneficial interests therein may also be held through Stonefield Industries ("Thackeray Partners LLC") and Harborview Industries ("Ashgrove Enterprises"), as participants in DTC.
(f) Transfer Agent and Registrar. Continental Transfer Services, Inc., 17 Ashbury Asset Advisors, 30th Floor, New York, New York 10004, shall serve as transfer agent and registrar for the Additional Notes.
1.3 The Guarantees.
The payment of principal of, premium, if any, and interest on the Additional Notes shall be guaranteed (each, a "Guarantee" and, collectively, the "Guarantees") on a senior secured basis by each of the Guarantors, including Nexford Parent Corp. and the nine existing subsidiary guarantors identified on Schedule A hereto. The Guarantees of the Additional Notes shall be on the same terms and conditions as the guarantees of the Existing Notes provided under the Base Indenture. Each Guarantee shall rank pari passu in right of payment with all existing and future senior indebtedness of the applicable Guarantor and senior in right of payment to all existing and future subordinated indebtedness of the applicable Guarantor.
Upon consummation of the Kessler Acquisition, Kessler Precision Components, Inc. shall become a Guarantor under the Indenture and shall execute and deliver a supplemental indenture and all related security documents within 30 calendar days of the closing of the Kessler Acquisition, in accordance with the after-acquired property covenant set forth in Section 4.15 of the Base Indenture.
1.4 Security. The Additional Notes and the Guarantees shall be secured by a first-priority lien on substantially all of the assets of the Issuer and each Guarantor that constitute "Notes Priority Collateral" (as defined in the Indenture), including, without limitation, equipment, real property interests (including fee-owned and leasehold interests in manufacturing facilities), intellectual property, and the equity interests of the Issuer's subsidiaries, in each case pari passu with the liens securing the Existing Notes.
The relative priorities of the liens securing the Notes and the liens securing the Issuer's asset-based lending facility (the "ABL Facility") are governed by the Intercreditor Agreement dated as of March 15, 2023 (the "Intercreditor Agreement"), between Ridgeline Trust Company, N.A. (in its capacity as notes collateral agent) and Lakefront National Bank (in its capacity as agent for the ABL lenders), which provides, among other things, that (a) the holders of the Notes have a first-priority lien on the Notes Priority Collateral and a second-priority lien on the ABL Priority Collateral (consisting of accounts receivable, inventory, deposit accounts, and related assets), and (b) the ABL lenders have a first-priority lien on the ABL Priority Collateral and a second-priority lien on the Notes Priority Collateral. The Additional Notes shall be entitled to the benefits of the Intercreditor Agreement on the same basis as the Existing Notes.
SECTION 2 — CLOSING
2.1 Time and Place.
The closing of the purchase and sale of the Additional Notes (the "Closing") shall take place at 10:00 a.m., New York City time, on December 10, 2025 (T+3 business days from the pricing date) (the "Closing Date"), at the offices of Calderwood & Harkness LLP, One Liberty Plaza, 48th Floor, New York, New York 10006, or at such other time and place as the Representative and the Issuer may mutually agree in writing. At the Closing, the Issuer shall deliver or cause to be delivered to the Initial Purchasers the Additional Notes in the aggregate principal amount of $150,000,000 in definitive book-entry form through the facilities of DTC against payment of the aggregate net purchase price by the Initial Purchasers.
2.2 Payment. At the Closing, the Initial Purchasers shall pay, or cause to be paid, to the Issuer the aggregate net purchase price of $149,625,000 by wire transfer of immediately available funds in United States dollars to an account at a bank designated by the Issuer, which account information the Issuer shall provide to the Representative in writing not later than two business days prior to the Closing Date. The Additional Notes shall be delivered through the facilities of DTC for the respective accounts of the Initial Purchasers or their designees. The Issuer shall cause the Trustee to authenticate the Additional Notes in accordance with the terms of the Indenture and deliver them through DTC simultaneously with the payment of the purchase price.
SECTION 3 — REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE GUARANTORS
The Issuer and each Guarantor, jointly and severally, represent and warrant to each of the Initial Purchasers as of the date hereof and as of the Closing Date as follows:
3.1 Organization, Good Standing, and Qualification.
(a) The Issuer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Offering Memorandum. The Issuer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the ownership or leasing of its properties or the conduct of its business requires such qualification or licensing, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect.
(b) Nexford Parent Corp. is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with all requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Offering Memorandum.
(c) Each subsidiary Guarantor is duly organized, validly existing, and in good standing (or the equivalent thereof) under the laws of its respective jurisdiction of organization, with all requisite corporate or limited liability company power and authority to own, lease, and operate its properties and to conduct its business as described in the Offering Memorandum. The subsidiary Guarantors, their entity types, and their respective jurisdictions of organization are as follows:
Each subsidiary Guarantor is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the ownership or leasing of its properties or the conduct of its business requires such qualification or licensing, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect.
3.2 Authorization. (a) The Issuer has all necessary corporate power and authority to execute, deliver, and perform its obligations under this Agreement, the Supplemental Indenture, and the Additional Notes. The execution and delivery of this Agreement, the Supplemental Indenture, and the Additional Notes by the Issuer, and the performance by the Issuer of its obligations hereunder and thereunder, have been duly authorized by all necessary corporate action on the part of the Issuer, including, without limitation, resolutions of the Board of Directors of the Issuer duly adopted at a meeting held on November 8, 2025, at which a quorum was present and acting throughout.
(b) Each Guarantor has all necessary corporate or limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement, the Supplemental Indenture, and its respective Guarantee. The execution and delivery of this Agreement, the Supplemental Indenture, and each Guarantee by each Guarantor, and the performance by each Guarantor of its obligations hereunder and thereunder, have been duly authorized by all necessary corporate or limited liability company action on the part of such Guarantor.
3.3 Valid Issuance.
(a) The Additional Notes, when duly executed by the Issuer, authenticated by the Trustee in accordance with the terms of the Indenture, and delivered and paid for as provided herein, will constitute valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, except as enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity) (collectively, the "Enforceability Exceptions").
(b) The Guarantees, when duly executed and delivered by the respective Guarantors in accordance with the terms of the Indenture, will constitute valid and binding obligations of each such Guarantor, enforceable against each such Guarantor in accordance with their terms, subject to the Enforceability Exceptions.
3.4 No Conflicts.
The execution, delivery, and performance by the Issuer and each Guarantor of this Agreement, the Supplemental Indenture, the Additional Notes, and the Guarantees, and the consummation of the transactions contemplated hereby and thereby, do not and will not:
(a) conflict with, or result in a breach or violation of, any of the terms or provisions of, or constitute a default under (with or without notice or lapse of time, or both), or result in the acceleration of, or the creation of any lien upon any property or assets of the Issuer or any Guarantor pursuant to, the certificate of incorporation, bylaws, certificate of formation, limited liability company agreement, or equivalent organizational documents of the Issuer or any Guarantor;
(b) conflict with, or result in a breach or violation of, or constitute a default under, any agreement, indenture, mortgage, deed of trust, loan agreement, lease, license, or other instrument or obligation to which the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound or to which any of the property or assets of the Issuer or any Guarantor is subject, including, without limitation, any covenant or financial maintenance obligation under the ABL Facility with Lakefront National Bank or any other existing indebtedness of the Issuer or any Guarantor;
(c) result in any violation of any law, statute, rule, regulation, order, judgment, injunction, or decree of any court, governmental agency, or governmental body having jurisdiction over the Issuer or any Guarantor or any of their respective properties or assets; or
(d) result in the imposition or creation of any lien, charge, or encumbrance upon any property or assets of the Issuer or any Guarantor, other than Permitted Liens (as defined in the Indenture),
except, in the case of clauses (b) and (c) above, for such conflicts, breaches, violations, defaults, accelerations, or liens as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.5 No Registration Required.
Assuming the accuracy of the representations and warranties of the Initial Purchasers set forth herein, the offer and sale of the Additional Notes in the manner contemplated by this Agreement and the Offering Memorandum are exempt from the registration requirements of the Securities Act pursuant to Rule 144A and Regulation S thereunder, and it is not necessary to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Neither the Issuer nor any of its affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act) has, directly or through any agent, sold, offered for sale, solicited offers to buy, or otherwise negotiated in respect of any security (as defined in the Securities Act) that is or will be integrated with the sale of the Additional Notes in a manner that would require registration of the Additional Notes under the Securities Act. Neither the Issuer nor any person acting on its behalf has engaged in any form of "general solicitation" or "general advertising" (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering of the Additional Notes. Neither the Issuer nor any person acting on its behalf has engaged in any "directed selling efforts" (within the meaning of Regulation S) with respect to the Additional Notes.
3.6 Investment Company Act.
The Issuer is not, and after giving effect to the issuance and sale of the Additional Notes and the application of the net proceeds therefrom as described in the Offering Memorandum and in Section 3.23 hereof, will not be, required to register as an "investment company" within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Securities and Exchange Commission (the "SEC") promulgated thereunder.
3.7 Offering Memorandum.
(a) The Offering Memorandum, as of the date of the Offering Memorandum Supplement (December 3, 2025) and as of the date hereof, does not and did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of any Initial Purchaser through the Representative expressly for use in the Offering Memorandum.
(b) The financial statements and the related notes and schedules included or incorporated by reference in the Offering Memorandum present fairly in all material respects the financial condition, results of operations, and cash flows of the Issuer and its consolidated subsidiaries as of the dates and for the periods indicated, and have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") applied on a consistent basis throughout the periods involved, except as otherwise noted therein.
(c) The audited consolidated financial statements of the Issuer and its subsidiaries included in the Offering Memorandum have been audited by Meridian Ledger LLP, an independent registered public accounting firm with offices at 155 North Wacker Drive, Suite 2500, Chicago, Illinois 60606, as stated in its report thereon included in the Offering Memorandum. Meridian Ledger LLP is independent with respect to the Issuer and its subsidiaries within the applicable rules and regulations adopted by the SEC and the Public Company Accounting Oversight Board.
3.8 No Material Adverse Change.
Since September 30, 2025, the date of the most recent financial statements of the Issuer and its subsidiaries included in the Offering Memorandum, there has been no (a) material adverse change in the business, properties, management, financial condition, or results of operations of the Issuer and its subsidiaries, taken as a whole (a "Material Adverse Effect"), or (b) development involving a prospective Material Adverse Effect, in each case whether or not arising from transactions in the ordinary course of business, except as described in or contemplated by the Offering Memorandum.
3.9 Capitalization. The authorized, issued, and outstanding capital stock of the Issuer is as described in the Offering Memorandum under the caption "Capitalization." All of the outstanding shares of capital stock of the Issuer have been duly authorized and validly issued and are fully paid and non-assessable. Granite Peak Capital Fund V, LP, a Delaware limited partnership, holds approximately 82% of the issued and outstanding equity interests of the Issuer through Nexford Parent Corp. The remaining equity interests in the Issuer are held by members of management and certain co-investors. There are no outstanding options, warrants, or other rights to acquire any equity interests of the Issuer except as described in the Offering Memorandum.
3.10 Existing Indebtedness; Compliance with Indenture Covenants.
(a) As of the date hereof (after giving effect to the issuance of the Additional Notes and the consummation of the Kessler Acquisition on a pro forma basis), the consolidated indebtedness of the Issuer and its subsidiaries consists of the following:
(i) A $200,000,000 senior secured asset-based revolving credit facility (the "ABL Facility") with Lakefront National Bank, as administrative agent and collateral agent for the ABL lenders, maturing September 15, 2027, of which approximately $45,000,000 is currently drawn, approximately $8,200,000 in letters of credit are outstanding, and approximately $146,800,000 of availability remains;
(ii) $475,000,000 aggregate principal amount of Existing Notes (and, upon the issuance of the Additional Notes, $625,000,000 aggregate principal amount of 8.750% Senior Secured Notes due 2030); and
(iii) $310,000,000 aggregate principal amount of 10.250% Senior Unsecured Notes due 2031.
(b) The issuance of the Additional Notes satisfies the Fixed Charge Coverage Ratio (as defined in the Indenture) incurrence test of 2.00 to 1.00 on a pro forma basis after giving effect to (i) the issuance of the Additional Notes, (ii) the application of the net proceeds therefrom, and (iii) the consummation of the Kessler Acquisition.
(c) The Additional Notes constitute "Additional Notes" as defined in, and permitted to be issued under, Section 2.01 of the Base Indenture and are being incurred pursuant to the ratio basket under Section 4.09(a) of the Base Indenture (and not pursuant to the Permitted Indebtedness general basket under Section 4.09(b) of the Base Indenture, which permits the incurrence of indebtedness in an aggregate amount not to exceed the greater of $75,000,000 and 12.5% of Total Assets (as defined in the Base Indenture)).
(d) No Event of Default (as defined in the Indenture) or Default (as defined in the Indenture) has occurred and is continuing as of the date hereof, or would result from the issuance of the Additional Notes, the execution and delivery of the Supplemental Indenture, or the consummation of the transactions contemplated by this Agreement.
3.11 Security Interest.
The Supplemental Indenture and the related security documents executed and delivered in connection therewith (including, without limitation, the amendments and supplements to the Security Agreement, intellectual Property Security Agreement, and Mortgage, each dated as of March 15, 2023) will create valid, perfected, first-priority security interests in the Notes Priority Collateral in favor of the Collateral Agent for the benefit of the holders of the Notes (including the Additional Notes), subject only to the terms of the Intercreditor Agreement and Permitted Liens (as defined in the Indenture). Upon the filing of UCC financing statements in the appropriate filing offices and the recording of intellectual property security agreement supplements with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, the security interests in the Notes Priority Collateral will be perfected to the extent that perfection can be achieved by such filings and recordings.
3.12 Ratings. (a) Palladian Credit Research, Inc. has assigned a B2 corporate family rating to the Issuer and a B1 instrument rating to the 8.750% Senior Secured Notes due 2030 (including the Additional Notes), with a stable outlook.
(b) Veridian Ratings Group, LLC has assigned a B corporate family rating to the Issuer and a B+ instrument rating to the 8.750% Senior Secured Notes due 2030 (including the Additional Notes), with a stable outlook.
(c) No rating agency has notified the Issuer of any intended or contemplated downgrade, suspension, or withdrawal of any rating assigned to the Issuer or any of the Notes.
3.13 Litigation. There are no pending or, to the knowledge of the Issuer, threatened actions, suits, investigations, or proceedings before any court, governmental agency, authority, or body, or any arbitrator, involving the Issuer or any Guarantor or any of their respective properties or assets that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or that question the validity of this Agreement, the Indenture, the Additional Notes, the Guarantees, or any action to be taken by the Issuer or any Guarantor in connection with the consummation of the transactions contemplated hereby or thereby.
3.14 Taxes. The Issuer and each Guarantor have filed all material federal, state, local, and foreign tax returns required to be filed through the date hereof (or have obtained extensions thereof) and have paid all material taxes due and payable, except for those taxes being contested in good faith and for which adequate reserves have been established in accordance with U.S. GAAP. The Employer Identification Number for the Issuer is 84-3291057. The Employer Identification Number for Nexford Parent Corp. is 84-3290814. There are no material tax deficiencies that have been asserted or assessed against the Issuer or any Guarantor that have not been resolved or adequately reserved for.
3.15 Properties and Assets.
The Issuer and each Guarantor have good and marketable title to all real and personal properties described in the Offering Memorandum as being owned by them, in each case free and clear of all liens, encumbrances, and defects, except for Permitted Liens (as defined in the Indenture) and such liens, encumbrances, and defects as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All leases to which the Issuer or any Guarantor is a party are valid and subsisting and in full force and effect, except where the failure to be so valid, subsisting, and in full force and effect would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.16 Environmental Matters.
Except as described in the Offering Memorandum and except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (a) the Issuer and each Guarantor are in compliance with all applicable federal, state, local, and foreign laws, rules, regulations, orders, and decrees relating to pollution, protection of the environment, or the release of hazardous substances (collectively, "Environmental Laws"); (b) the Issuer and each Guarantor have obtained and are in compliance with all permits, licenses, and other authorizations required under applicable Environmental Laws for the conduct of their respective businesses; and (c) there are no pending or, to the knowledge of the Issuer, threatened claims, actions, or proceedings against the Issuer or any Guarantor alleging material liability under or noncompliance with any Environmental Laws.
3.17 Labor Matters.
There are no material labor disputes with the employees of the Issuer or any Guarantor that exist or, to the knowledge of the Issuer, are imminent or threatened. The Issuer and each Guarantor are in compliance with all applicable laws relating to labor and employment, including, without limitation, provisions relating to wages, hours, collective bargaining, occupational safety, and equal employment opportunity, except where the failure to comply would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No collective bargaining agreement to which the Issuer or any Guarantor is a party is scheduled to expire within the 12-month period following the date hereof.
3.18 intellectual Property.
The Issuer and each Guarantor own, or have valid licenses or other rights to use, all patents, patent applications, trademarks, trademark applications, trade names, service marks, copyrights, trade secrets, know-how, and other intellectual property rights (collectively, "intellectual Property") material to the conduct of their respective businesses as described in the Offering Memorandum. To the knowledge of the Issuer, the conduct of the business of the Issuer and each Guarantor does not infringe, misappropriate, or otherwise violate any intellectual Property rights of any third party, except for any such infringement, misappropriation, or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No claim is pending or, to the knowledge of the Issuer, threatened alleging any such infringement, misappropriation, or violation.
3.19 Insurance. The Issuer and each Guarantor maintain, or cause to be maintained, insurance covering their respective properties, operations, personnel, and businesses in such amounts and insuring against such losses and risks as are, in the reasonable judgment of the Issuer, adequate to protect the Issuer and the Guarantors and their respective businesses. All such insurance policies are in full force and effect, and all premiums due and payable with respect thereto have been paid. Neither the Issuer nor any Guarantor has received notice from any insurer or agent of any insurer of any intent to cancel, terminate, or not renew any existing insurance policy, and neither the Issuer nor any Guarantor has been refused any material insurance coverage sought or applied for.
3.20 ERISA and Employee Benefits.
(a) Each employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) maintained, sponsored, or contributed to by the Issuer or any Guarantor, or to which the Issuer or any Guarantor has any obligation to contribute (each, a "Plan"), is in compliance in all material respects with applicable provisions of ERISA and the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and regulations thereunder.
(b) No "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any Plan that would reasonably be expected to result in a Material Adverse Effect.
(c) Neither the Issuer nor any Guarantor has incurred or reasonably expects to incur any material liability under Title IV of ERISA.
(d) Neither the Issuer nor any Guarantor maintains, contributes to, or has any liability with respect to any "multiemployer plan" (as defined in Section 3(37) of ERISA).
3.21 Anti-Corruption; Sanctions; Anti-Money Laundering.
(a) The Issuer and each Guarantor, and, to the knowledge of the Issuer, each of their respective directors, officers, employees, and agents, are in compliance with, and have not violated, (i) the Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), and (ii) all other applicable anti-bribery and anti-corruption laws and regulations.
(b) Neither the Issuer nor any Guarantor, nor, to the knowledge of the Issuer, any director, officer, employee, or agent of the Issuer or any Guarantor, is currently the subject or the target of any sanctions administered or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority (collectively, "Sanctions"), nor is the Issuer or any Guarantor located, organized, or resident in a country or territory that is the subject of comprehensive Sanctions (including, as of the date hereof, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine).
(c) The Issuer and each Guarantor are in compliance with all applicable anti-money laundering laws and regulations, including, without limitation, the Bank Secrecy Act (31 U.S.C. §§ 5311 et seq.), the USA PATRIOT Act of 2001, and the regulations promulgated thereunder by the Financial Crimes Enforcement Network.
(d) No part of the proceeds of the Additional Notes will be used, directly or indirectly, in violation of any Sanctions, anti-corruption laws, or anti-money laundering laws.
3.22 Kessler Acquisition.
(a) The Issuer has entered into the Kessler Purchase Agreement dated November 15, 2025, pursuant to which the Issuer will acquire 100% of the issued and outstanding equity interests of Kessler Precision Components, Inc. for a cash purchase price of $138,000,000, with no rollover equity or earn-out provisions.
(b) The sellers under the Kessler Purchase Agreement are The Kessler Family Trust, which holds approximately 72% of the outstanding equity of Kessler, and Northland Growth Equity Fund III, LP, a Delaware limited partnership, which holds approximately 28% of the outstanding equity of Kessler.
(c) Kessler is a privately held corporation organized under the laws of the State of Ohio, with its principal offices in Dayton, Ohio. Kessler manufactures precision-machined aluminum and titanium components for aerospace and defense original equipment manufacturers.
(d) For the twelve-month period ended September 30, 2025, Kessler generated approximately $115,000,000 in net revenue and approximately $23,000,000 in EBITDA, representing an acquisition multiple of approximately 6.0x LTM EBITDA.
(e) The Issuer has obtained representation and warranty insurance in connection with the Kessler Acquisition from Atherton Specialty Insurance Co., with a policy limit of $13,800,000 (representing approximately 10% of the enterprise value) and a retention of $1,380,000.
(f) The Kessler Acquisition is subject to a financing condition, and the closing of the Kessler Acquisition is expected to occur on December 12, 2025, subject to the satisfaction or waiver of certain customary closing conditions.
(g) Seller's counsel in connection with the Kessler Acquisition is Hargrove & Tilson LLP, 130 West Second Street, Suite 700, Dayton, Ohio 45402 (Harold Griswold, partner).
3.23 Use of Proceeds.
The Issuer intends to apply the net proceeds from the sale of the Additional Notes as follows:
(a) Approximately $138,000,000 to fund the cash purchase price of the Kessler Acquisition;
(b) Approximately $5,000,000 to pay estimated transaction fees and expenses in connection with the offering of the Additional Notes and the Kessler Acquisition; and
(c) Approximately $9,250,000 to the Issuer's balance sheet for general corporate purposes.
3.24 Pro Forma Financial Information.
After giving effect to the issuance of the Additional Notes, the application of the net proceeds therefrom, and the consummation of the Kessler Acquisition, the pro forma financial information of the Issuer and its subsidiaries is as follows:
(a) Pro forma total debt: approximately $980,000,000 (consisting of $830,000,000 in pre-deal total debt plus $150,000,000 in Additional Notes);
(b) Pro forma Adjusted EBITDA (combined, including Kessler): approximately $270,000,000 (consisting of $247,000,000 for the Issuer and its existing subsidiaries and $23,000,000 for Kessler, in each case for the twelve-month period ended September 30, 2025);
(c) Pro forma cash and cash equivalents: approximately $61,250,000 (consisting of $52,000,000 in existing cash plus $9,250,000 in net proceeds retained for general corporate purposes);
(d) Pro forma net debt: approximately $918,750,000 ($980,000,000 minus $61,250,000);
(e) Pro forma total net leverage (unadjusted EBITDA basis): approximately 4.08x ($918,750,000 divided by approximately $225,000,000 of unadjusted combined EBITDA);
(f) Pro forma total net leverage (adjusted EBITDA basis): approximately 3.40x ($918,750,000 divided by $270,000,000);
(g) Pro forma secured debt: approximately $670,000,000 (consisting of $625,000,000 in aggregate principal amount of Senior Secured Notes and approximately $45,000,000 drawn under the ABL Facility);
(h) Pro forma secured net debt: approximately $608,750,000 ($670,000,000 minus $61,250,000); and
(i) Pro forma secured net leverage: approximately 2.71x on an unadjusted EBITDA basis and approximately 2.25x on an adjusted EBITDA basis.
3.25 Financial Information of the Issuer.
As of and for the twelve-month period ended September 30, 2025, the Issuer and its consolidated subsidiaries reported the following financial information (prior to giving effect to the Kessler Acquisition or the issuance of the Additional Notes):
(a) LTM Revenue: $1,280,000,000;
(b) LTM Adjusted EBITDA: $247,000,000;
(c) Adjusted EBITDA margin: 19.3%;
(d) Cash and cash equivalents: $52,000,000;
(e) Pre-deal total debt: $830,000,000 (consisting of approximately $45,000,000 drawn under the ABL Facility, $475,000,000 of Existing Notes, and $310,000,000 of 10.250% Senior Unsecured Notes due 2031); and
(f) Pre-deal net debt: $778,000,000 ($830,000,000 minus $52,000,000).
3.26 DTC Eligibility.
The Additional Notes will be eligible for book-entry settlement and clearance through the facilities of DTC, and the Issuer has taken all actions necessary to obtain such eligibility. Beneficial interests in the Additional Notes may also be held through Thackeray Partners LLC and Ashgrove Enterprises as indirect participants in DTC.
SECTION 4 — COVENANTS OF THE ISSUER
The Issuer covenants and agrees with each Initial Purchaser as follows:
4.1 Use of Proceeds.
The Issuer shall apply the net proceeds from the sale of the Additional Notes substantially in the manner described in Section 3.23 hereof and in the Offering Memorandum under the caption "Use of Proceeds."
4.2 Restriction on Offers and Sales.
The Issuer shall not, and shall cause its affiliates not to, offer or sell the Additional Notes other than through the Initial Purchasers in accordance with Rule 144A and Regulation S under the Securities Act. The Issuer shall not, and shall cause its affiliates and any person acting on its or their behalf not to, engage in any form of "directed selling efforts" (within the meaning of Regulation S) or "general solicitation" or "general advertising" (within the meaning of Rule 502(c) under the Securities Act) in connection with the offering and sale of the Additional Notes.
4.3 DTC. The Issuer shall use its commercially reasonable efforts to cooperate with DTC and its participants to maintain the eligibility of the Additional Notes for book-entry settlement and clearance through DTC for so long as the Additional Notes remain outstanding, and shall promptly notify the Representative if the Issuer becomes aware that the Additional Notes are no longer eligible for book-entry settlement through DTC.
4.4 Compliance with Regulation S.
The Issuer shall not, and shall cause its affiliates and any person acting on its or their behalf not to, offer or sell the Additional Notes to U.S. persons (as defined in Regulation S) during the 40-day distribution compliance period (commencing on the Closing Date and expected to expire on January 19, 2026), except to qualified institutional buyers in reliance on Rule 144A under the Securities Act.
4.5 Integration. The Issuer shall not, and shall cause its affiliates not to, sell, offer for sale, solicit offers to buy, or otherwise negotiate in respect of any security (as defined in the Securities Act) that would be integrated with the offering of the Additional Notes for purposes of the Securities Act or the rules and regulations of any applicable securities exchange in a manner that would require registration of the Additional Notes under the Securities Act.
4.6 Registration Rights.
The Issuer shall comply with its obligations under the Registration Rights Agreement, including, without limitation, using its reasonable best efforts to (a) file an exchange offer registration statement on Form S-4 (or, if applicable, a shelf registration statement on Form S-1 or Form S-3) with the SEC with respect to the Additional Notes, and (b) cause such registration statement to become effective, in each case within 365 days of the Closing Date (i.e., by December 10, 2026). The Issuer shall execute and deliver, or cause to be executed and delivered, a joinder to the Registration Rights Agreement with respect to the Additional Notes at or prior to the Closing.
4.7 Reporting. For so long as any of the Additional Notes remain outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer shall furnish to the Initial Purchasers such financial and other information as the Initial Purchasers may from time to time reasonably request, including, without limitation, copies of the Issuer's annual and quarterly reports furnished to the holders of the Notes under the Indenture.
4.8 No Stabilization.
The Issuer shall not take, and shall cause its affiliates not to take, directly or indirectly, any action designed, or that would reasonably be expected, to cause or result in any stabilization or manipulation of the price of the Additional Notes in violation of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the rules and regulations thereunder.
4.9 Kessler Acquisition Closing.
(a) The Issuer shall use commercially reasonable efforts to consummate the Kessler Acquisition on or before December 12, 2025, or as soon as practicable thereafter, on the terms and conditions set forth in the Kessler Purchase Agreement.
(b) If the Kessler Acquisition is not consummated within 90 calendar days of the Closing Date (i.e., by March 10, 2026), the Issuer shall apply the proceeds allocated to the Kessler Acquisition (approximately $138,000,000) toward the prepayment of indebtedness (including, without limitation, the repayment of borrowings under the ABL Facility) or the reinvestment in assets useful in the Issuer's business, in each case in compliance with the terms of the Indenture, including the asset sale covenant set forth in Section 4.10 of the Base Indenture.
4.10 After-Acquired Guarantor.
The Issuer shall cause Kessler Precision Components, Inc. to become a Guarantor under the Indenture within 30 calendar days of the closing of the Kessler Acquisition, in accordance with the after-acquired property covenant set forth in Section 4.15 of the Base Indenture, by causing Kessler to execute and deliver (a) a supplemental indenture in form and substance satisfactory to the Trustee, (b) a joinder to the Security Agreement, (c) a joinder to the intellectual Property Security Agreement (to the extent applicable), and (d) all other documents and instruments required under the Indenture and the Security Documents to grant and perfect a first-priority lien on the assets of Kessler constituting Notes Priority Collateral.
SECTION 5 — CONDITIONS TO CLOSING
5.1 Conditions to the Obligations of the Initial Purchasers.
The obligations of each Initial Purchaser to purchase the Additional Notes at the Closing shall be subject to the satisfaction or waiver by the Representative of each of the following conditions:
(a) Supplemental Indenture. The Issuer, each Guarantor, and the Trustee shall have duly executed and delivered the Supplemental Indenture in form and substance satisfactory to the Representative.
(b) Authentication. The Trustee shall have duly authenticated the Additional Notes in the aggregate principal amount of $150,000,000 in accordance with the terms of the Indenture.
(c) Officers' Certificate. The Issuer shall have delivered to the Representative and the Trustee an Officers' Certificate, substantially in the form attached hereto as Exhibit A, executed by Sandra Okafor, Chief Financial Officer of the Issuer, and Raymond Chiu, General Counsel of the Issuer, certifying that: (i) the representations and warranties of the Issuer and each Guarantor set forth in Section 3 of this Agreement are true and correct in all material respects as of the Closing Date (except for representations and warranties that are qualified by materiality, which shall be true and correct in all respects); (ii) no Event of Default or Default under the Indenture has occurred and is continuing or would result from the issuance of the Additional Notes; (iii) the issuance of the Additional Notes complies with the incurrence covenants of the Indenture, including, without limitation, the Fixed Charge Coverage Ratio test of 2.00 to 1.00 on a pro forma basis after giving effect to the issuance of the Additional Notes and the consummation of the Kessler Acquisition; and (iv) all conditions precedent set forth in this Section 5.1 have been satisfied.
(d) Secretary's Certificate. The Issuer shall have delivered to the Representative a Secretary's Certificate, substantially in the form attached hereto as Exhibit B, executed by Raymond Chiu, in his capacity as Secretary of the Issuer, attaching true and complete copies of: (i) the resolutions of the Board of Directors of the Issuer adopted on November 8, 2025, authorizing the issuance of the Additional Notes, the execution and delivery of this Agreement, the Supplemental Indenture, and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby; (ii) the Amended and Restated Certificate of Incorporation of the Issuer, as currently in effect; (iii) the Amended and Restated Bylaws of the Issuer, as currently in effect; and (iv) a certificate of good standing for the Issuer issued by the Secretary of State of the State of Delaware, dated no earlier than five business days prior to the Closing Date.
(e) Legal Opinion of Issuer's Counsel. Calderwood & Harkness LLP, counsel to the Issuer, shall have delivered to the Representative and the Trustee a legal opinion, substantially in the form attached hereto as Exhibit C, dated as of the Closing Date and addressed to the Initial Purchasers and the Trustee, covering, among other matters: (i) due organization and good standing of the Issuer and each Guarantor; (ii) due authorization, execution, and delivery of this Agreement, the Supplemental Indenture, the Additional Notes, and the Guarantees; (iii) valid issuance and enforceability of the Additional Notes and the Guarantees (subject to the Enforceability Exceptions); (iv) the validity and perfection of the security interests in the Notes Priority Collateral in favor of the Collateral Agent; (v) the exemption of the offering from the registration requirements of the Securities Act; and (vi) the Issuer not being required to register as an "investment company" under the Investment Company Act.
(f) 10b-5 Negative Assurance Letter. Calderwood & Harkness LLP shall have delivered to the Representative a negative assurance letter, substantially in the form attached hereto as Exhibit D, dated as of the Closing Date and addressed to the Initial Purchasers, to the effect that, based upon their participation in the preparation of the Offering Memorandum and the transactions contemplated thereby, and without independent verification, nothing has come to their attention that causes them to believe that the Offering Memorandum, as of its date and as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (it being understood that such letter shall not cover financial statements, financial schedules, or other financial data included in the Offering Memorandum).
(g) Legal Opinion of Initial Purchasers' Counsel. Whitmore & Stein LLP, counsel to the Initial Purchasers, shall have delivered to the Representative a legal opinion, dated as of the Closing Date and addressed to the Initial Purchasers, in form and substance satisfactory to the Representative.
(h) Ratings Confirmation. The Issuer shall have received confirmation from (i) Palladian Credit Research, Inc. that it has assigned, or will assign on or prior to the Closing Date, a B1 instrument rating to the Additional Notes, and (ii) Veridian Ratings Group, LLC that it has assigned, or will assign on or prior to the Closing Date, a B+ instrument rating to the Additional Notes.
(i) Good Standing Certificates. The Issuer shall have delivered to the Representative certificates of good standing (or the equivalent thereof) for the Issuer and each Guarantor, issued by the Secretary of State (or equivalent governmental authority) of their respective jurisdictions of organization, each dated no earlier than five business days prior to the Closing Date.
(j) UCC Filings and IP Security Supplements. The Issuer shall have delivered to the Representative evidence of the filing (or arrangements for filing) of UCC-1 financing statements in each applicable filing jurisdiction with respect to the Additional Notes, and the execution and delivery of intellectual property security agreement supplements to be filed with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, in each case to perfect the security interests granted in connection with the Additional Notes.
(k) Comfort Letter. Meridian Ledger LLP, independent auditors of the Issuer, shall have delivered to the Representative (i) a comfort letter, dated as of the date of this Agreement, in form and substance satisfactory to the Representative, and (ii) a bring-down comfort letter, dated as of the Closing Date, confirming the matters set forth in the comfort letter referred to in clause (i) above.
(l) Funds Flow Memorandum. The Issuer and the Representative shall have executed and delivered a Funds Flow Memorandum, substantially in the form attached hereto as Exhibit E, setting forth in reasonable detail the sources and uses of funds in connection with the closing of the offering and the Kessler Acquisition.
(m) DTC Letters and CUSIP Confirmations. The Issuer shall have delivered to the Representative evidence of DTC eligibility for the Additional Notes and CUSIP confirmations for the temporary CUSIP numbers 65438T AB3 (Rule 144A Global Note) and U65438 AB5 (Regulation S Global Note).
(n) Payment of Trustee Fees. The Issuer shall have paid to Ridgeline Trust Company, N.A. the acceptance fee of $17,500 in connection with its role as Trustee and Collateral Agent under the Supplemental Indenture.
(o) No Material Adverse Change. Since September 30, 2025, there shall not have occurred any Material Adverse Effect or any development involving a prospective Material Adverse Effect, except as described in the Offering Memorandum.
(p) No Stop Order. No stop order suspending the use of the Offering Memorandum shall have been issued by the SEC and no proceedings for that purpose shall have been commenced or threatened by the SEC.
(q) No Injunction. No injunction, order, decree, or judgment of any court, governmental agency, or governmental body shall have been issued or entered that would prevent or prohibit the consummation of the offering and sale of the Additional Notes or the other transactions contemplated by this Agreement.
(r) Registration Rights Joinder. The Issuer and each Guarantor shall have executed and delivered a joinder to the Registration Rights Agreement with respect to the Additional Notes, in form and substance satisfactory to the Representative.
5.2 Conditions to the Obligations of the Issuer.
The obligations of the Issuer to issue and sell the Additional Notes to the Initial Purchasers at the Closing shall be subject to the satisfaction of the following condition: the Initial Purchasers shall have paid, or caused to be paid, to the Issuer the aggregate net purchase price of $149,625,000 by wire transfer of immediately available funds to the account designated by the Issuer in accordance with Section 2.2.
SECTION 6 — INDEMNIFICATION AND CONTRIBUTION
6.1 Indemnification by the Issuer and the Guarantors.
The Issuer and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser, each of its affiliates, each of its directors, officers, employees, agents, and representatives, and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, an "Indemnified Party"), from and against any and all losses, claims, damages, liabilities, and expenses (including, without limitation, reasonable and documented fees, costs, and expenses of counsel and any amounts paid in settlement of any action, suit, or proceeding or any claim asserted) (collectively, "Losses"), joint or several, to which such Indemnified Party may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses arise out of or are based upon:
(a) any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum (or any amendment or supplement thereto), or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or
(b) in whole or in part, any inaccuracy in or breach of any representation, warranty, or covenant of the Issuer or any Guarantor contained in this Agreement;
provided, however, that the indemnification provided in this Section 6.1 shall not apply to any Losses to the extent that they arise out of or are based upon any untrue statement or alleged untrue statement of a material fact, or the omission or alleged omission to state a material fact, in each case made in the Offering Memorandum in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of any Initial Purchaser through the Representative expressly for use therein (it being understood and agreed that the only such information furnished by the Initial Purchasers consists of the information described in Section 6.2).
6.2 Indemnification by the Initial Purchasers.
Each Initial Purchaser, severally and not jointly, agrees to indemnify and hold harmless the Issuer, each Guarantor, and their respective directors, officers, employees, agents, and representatives, and each person, if any, who controls the Issuer or any Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all Losses to which any such person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum, or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Offering Memorandum in reliance upon and in conformity with written information furnished to the Issuer by or on behalf of such Initial Purchaser through the Representative expressly for use therein.