0000914760-16-000479.txt : 20161104 0000914760-16-000479.hdr.sgml : 20161104 20161104171828 ACCESSION NUMBER: 0000914760-16-000479 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20161104 DATE AS OF CHANGE: 20161104 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CASTLE A M & CO CENTRAL INDEX KEY: 0000018172 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051] IRS NUMBER: 360879160 STATE OF INCORPORATION: MD FISCAL YEAR END: 1103 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-31304 FILM NUMBER: 161976006 BUSINESS ADDRESS: STREET 1: 1420 KENSINGTON ROAD STREET 2: SUITE 220 CITY: OAK BROOK STATE: IL ZIP: 60523 BUSINESS PHONE: 8474557111 MAIL ADDRESS: STREET 1: 1420 KENSINGTON ROAD STREET 2: SUITE 220 CITY: OAK BROOK STATE: IL ZIP: 60523 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WB & CO CENTRAL INDEX KEY: 0000925756 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 363854810 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O SIMPSON ESTATES INC STREET 2: 30 N LASALLE SUITE CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 312-726-3110 MAIL ADDRESS: STREET 1: C/O SIMPSON ESTATES STREET 2: 30 N LASALLE SUITE 1232 CITY: CHICAGO STATE: IL ZIP: 60602 SC 13D/A 1 a74567_sc13da16.htm AMENDMENT NO. 16

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 16)*

 

 

A. M. Castle & Co.

 

(Name of Issuer)

 

Common Stock, $0.01 par value

 

 

 

(Title of Class of Securities)

 

148411101

 

 

 

(Cusip Number)

Jonathan B. Mellin
30 N. LaSalle Street
Suite 1232
Chicago, IL 60602

(312) 726-3110

 

 

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

 

November 2, 2016

 

 

 

(Date of Event Which Requires Filing of this Statement)

 

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box / /.

 

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the act (however, see the Notes).

 
 

SCHEDULE 13D

 

CUSIP No. 148411 10 1      
         
1. Names of Reporting Persons:      
  W. B. & Co.      
  (General Partners: Jonathan B. Mellin and Reuben S. Donnelley)  
         
2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) / /    
    (b) /x/    
         
3. SEC Use Only:  
         
4. Source of Funds (See Instruction):  
  OO      
         
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e):     / /
         
6. Citizenship or Place of Organization:  
  Illinois      
         
    7. Sole Voting Power:
      -0-
Number of Shares      
Beneficially   8. Shared Voting Power:  
Owned by     8,759,076  
Each        
Reporting   9. Sole Dispositive Power:  
Person     -0-  
With        
         
    10. Shared Dispositive Power:
      -0-
         
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
  8,759,076  (See Item 3)
         
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):      / /
         
13. Percent of Class Represented by Amount in Row (11):
  26.8% based on 32,642,620 shares of Common Stock outstanding as of August 3, 2016.
         
14. Type of Reporting Person (See Instructions):
  PN      
         
         
 
 

 

CUSIP No. 148411 10 1  
         
1. Names of Reporting Persons:      
  Jonathan B. Mellin      
         
2. Check the Appropriate Box if a Member of a Group (See Instructions):  
    (a) / /    
    (b) /x/    
         
3. SEC Use Only:    
         
4. Source of Funds (See Instruction):    
  OO      
         
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e):     / /
         
6. Citizenship or Place of Organization:
  Illinois      
         
    7. Sole Voting Power:
      189,646
Number of Shares      
Beneficially   8. Shared Voting Power:  
Owned by     9,628,410  
Each        
Reporting   9. Sole Dispositive Power:  
Person     247,248  
With        
         
    10. Shared Dispositive Power:
      869,334
         
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
  9,818,056 (See Item 3)
         
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):     / /
         
13. Percent of Class Represented by Amount in Row (11):
  30.1% based on 32,642,620 shares of Common Stock outstanding as of August 3, 2016.
         
14. Type of Reporting Person (See Instructions)
  IN      
             
 
 

 

CUSIP No. 148411 10 1  
         
1. Names of Reporting Persons:      
  Reuben S. Donnelley      
         
2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) / /    
    (b) /x/    
         
3. SEC Use Only:    
         
4. Source of Funds (See Instruction):
  OO      
         
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e):     / /
         
6. Citizenship or Place of Organization:
  Illinois      
         
    7. Sole Voting Power:
      33,471
Number of Shares      
Beneficially   8. Shared Voting Power:  
Owned by     8,759,076  
Each        
Reporting   9. Sole Dispositive Power:  
Person     33,471  
With        
         
    10. Shared Dispositive Power:
      -0-
         
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
  8,792,547 (See Item 3)  
         
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):     / /
         
13. Percent of Class Represented by Amount in Row (11):
  26.9% based on 32,642,620 shares of Common Stock outstanding as of August 3, 2016.
         
14. Type of Reporting Person (See Instructions)
  IN      
         
         
             
 
 
CUSIP No. 148411 10 1    
         
1. Names of Reporting Persons:      
  FOM Corporation      
         
2. Check the Appropriate Box if a Member of a Group (See Instructions):
    (a) / /    
    (b) /x/    
         
3. SEC Use Only:    
         
4. Source of Funds (See Instruction):
  OO      
         
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e):     / /
         
6. Citizenship or Place of Organization:
  Nevada      
         
    7. Sole Voting Power:
      1,594,372
Number of Shares      
Beneficially   8. Shared Voting Power:  
Owned by     572,688  
Each        
Reporting   9. Sole Dispositive Power:  
Person     9,425,654  
With        
         
    10. Shared Dispositive Power:
      572,688
         
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
  9,998,342 (See Item 3)  
         
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):     / /
         
13. Percent of Class Represented by Amount in Row (11):
  30.6% based on 32,642,620 shares of Common Stock outstanding as of August 3, 2016.
         
14. Type of Reporting Person (See Instructions)
  CO      
             
 
 

Explanatory Note

This Amendment No. 16 (this “Amendment No. 16”) relates to the Common Stock of A. M. Castle & Co., a Maryland corporation (the “Company”), which has its principal executive offices at 1420 Kensington Road, Suite 220, Oak Brook, Illinois.  This Amendment No. 16 is being filed in connection with that certain transaction pursuant to which a Reporting Person, W.B. & Co., purchased 4,630,795 shares of Common Stock owned by Raging Capital Master Fund, Ltd. (the “Transaction”). In addition, SGF, LLC, an Illinois limited liability company (“SGF”), a company affiliated with the Reporting Persons W.B. & Co. and FOM Corporation, entered into a commitment letter with the Company (the “Letter Agreement”) pursuant to which SGF agreed to provide a total of 15% of the principal of the Company’s new $100 million senior secured first lien term loan facility (the “Facility”). Except as otherwise set forth herein, this Amendment No. 16 does not modify any of the information previously reported by the Reporting Persons in the Schedule 13D as amended to date.

,

 

Item 3. Source and Amount of Funds or Other Consideration.
   
  The aggregate purchase price of the 4,630,795 shares of Common Stock purchased by W. B. & Co.  is $463,079.50.  The shares of Common Stock were acquired with the working capital of W.B. & Co.
   
Item 4. Purpose of Transaction.
   
 

Except as otherwise noted below, the Common Stock of the Issuer is being held by the Reporting Persons for investment purposes only and the Reporting Persons do not have any plans or proposals with respect to such Common Stock as enumerated in paragraphs (a) through (j) of Item 4.

 

As a condition to the Transaction, effective November 4, 2016 Kenneth H. Traub and Richard N. Burger each resigned from their respective positions as members of the Board of the Directors of the Company (the “Board”) and all committees of the Board on which they served.

   
Item 5. Interest in Securities of the Issuer.
   
  The information concerning percentages of ownership set forth on the facing pages for each Reporting Person is based on 32,642,620 shares of Common Stock reported outstanding as of August 3, 2016, as set forth in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016.
   
 

 

(a) W.B. & Co.: 8,759,076 shares of Common Stock (26.8% based on 32,642,620 shares outstanding as of August 3, 2016).

 

Jonathan B. Mellin: 9,818,056 shares of Common Stock (30.1% based on 32,642,620 shares outstanding as of August 3, 2016).

 

Reuben S. Donnelley: 8,792,547 shares of Common Stock (26.9% based on 32,642,620 shares outstanding as of August 3, 2016).

 

FOM Corporation: 9,998,342 shares of Common Stock (30.6% based on 32,642,620 shares outstanding as of August 3, 2016).

 

(b) See facing pages for each Reporting Person.

 

(c) On November 4, 2016, pursuant to the Purchase Agreement, W. B. & Co. purchased 4,630,795 shares of Common Stock of the Company held by Raging Capital Master Fund, Ltd. The aggregate purchase price of the 4,630,795 shares of Common Stock purchased by W. B. & Co. from Raging Capital Master Fund, Ltd. is $463,079.50. Immediately following the closing of the Transaction, W.B. & Co. transferred 100,000 shares of Common Stock to Mr. Mellin for no consideration.

 

 
 

 

   
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

 

On November 2, 2016, SGF, a company affiliated with the Reporting Persons W.B. & Co. and FOM Corporation, entered into the Letter Agreement pursuant to which SGF agreed to provide a total of 15% of the principal of the Company’s new Facility subject to the satisfaction of certain conditions required by the Facility, including, but not limited to, the negotiation, execution and delivery of definitive documentation. The outstanding principal amount of the Facility and all accrued and unpaid interest thereon will be due and be payable on September 14, 2018.

 

Upon initial funding of the Facility, SGF will be issued warrants (the “Warrants”) to purchase an aggregate of 750,000 shares of the common stock of the Company. The Warrants will have exercise prices as follows: (a) 50% of the initially issued Warrants will have an exercise price of $0.50 per share and will expire 18 months from the date of grant and (ii) the remaining 50% of the Warrants will have an exercise price of $0.65 per share and will expire 18 months from the date of the grant.

 

On November 4, 2016, pursuant to the Purchase Agreement, W. B. & Co. purchased 4,630,795 shares of Common Stock of the Company held by Raging Capital Master Fund, Ltd. The aggregate purchase price of the 4,630,795 shares of Common Stock purchased by W. B. & Co. from Raging Capital Master Fund, Ltd. is $463,079.50. Immediately following the closing of the Transaction, W.B. & Co. transferred 100,000 shares of Common Stock to Mr. Mellin for no consideration.

 

The general partners of W. B. & Co. are Jonathan B. Mellin and Reuben S. Donnelley, who share voting power with respect to shares beneficially owned by W. B. & Co. Mr. Mellin serves as a director of the Company.

 

The foregoing descriptions of the terms of the Letter Agreement and the Purchase Agreement are not complete and are qualified in their entirety by reference to the text of the Letter Agreement and the Purchase Agreement, which are referenced as Exhibits 99.1 and 99.2, respectively, and incorporated herein by reference.

 

   
Item 7. Material to be filed as Exhibits.

 

Item 7 is hereby amended to add the following exhibits:

 

99.1 Letter Agreement dated November 2, 2016, by and between W. B. & Co. and A. M. Castle & Co.
99.2 Purchase Agreement dated November 4, 2016, by and between W. B. & Co. and Raging Capital Master Fund, Ltd.

 

 

 
 

 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

November 4, 2016           W.B. & Co.
              By: /s/ Jonathan B. Mellin
             

Jonathan B. Mellin

General Partner

November 4, 2016           /s/ Jonathan B. Mellin
              Jonathan B. Mellin
November 4, 2016           /s/ Reuben S. Donnelley
              Reuben S. Donnelley
November 4, 2016           FOM Corporation
              By: /s/ Jonathan B. Mellin
             

Jonathan B. Mellin

President

               

 

 

EX-99.1 2 a74567_x991.htm LETTER AGREEMENT

EXHIBIT 99.1

 

EXECUTION VERSION

 

 

SGF, LLC

November 1, 2016

 

COMMITMENT LETTER

$100.0 MILLION SENIOR SECURED CREDIT FACILITIES

 

 

A.M. Castle & Co.
1420 Kensington Road, Suite 220
Oak Brook
Illinois 60523
Attention: Patrick R. Anderson, CFO

 

Dear Mr. Anderson:

In accordance with our recent discussions with A.M. Castle & Co. (“you”, the “Company” and others to be mutually agreed upon, collectively, the “Borrowers”) has advised SGF, LLC and its affiliates (collectively, the “Financial Institutions”, “we” or “us”) that you intend to consummate the transactions described herein in order to (i) refinance and redeem certain of the Company’s existing indebtedness, (ii) finance its general corporate purposes, and (iii) pay fees and expenses incurred in connection with the foregoing (collectively, the “Transaction”).

You have further advised us that, in connection therewith, and subject to the conditions set forth in the “Conditions Precedent” section of this Commitment Letter, under the paragraph titled “Certain Conditions” in the outline of terms and conditions set forth on Exhibit A hereto (the “Term Sheet”) and on Exhibit B hereto, (the “Conditions Annex” and, together with the Term Sheet and this letter, collectively, this “Commitment Letter”), the Borrowers will obtain the senior secured first lien term loan facilities (the “Facilities”) described in the Term Sheet in an aggregate principal amount of $100.0 million, of which Facilities 85% will be provided by those certain financial institutions signatory to, and pursuant to, a commitment letter in substantially the same form as the Commitment Letter, which financial institutions and the Borrowers negotiated the Term Sheet and Conditions Annex.

 

Commitment

This Commitment Letter establishes terms and conditions under which we are severally, but not jointly, committed to provide the Facilities to the Company. In connection with the foregoing, SGF is pleased to advise you of its several, but not joint, commitment to provide 15% of the principal amount of the Facilities, in each case upon the terms and subject to the conditions set forth in this Commitment Letter. You agree that no agents, co-agents, arrangers or book runners will be appointed, and no other titles will be awarded and no compensation (other

 
 

 

A.M. Castle & Co.

November 1, 2016

Page 2

 

 

 

than that expressly contemplated by this Commitment Letter) will be paid in connection with the Facilities unless you and we shall so agree. You also agree that the closing date of the Transaction and the concurrent closing of the Facilities shall be a date mutually agreed upon between you and us, but in any event shall not occur until the terms and conditions hereof have been satisfied.

 

 

Conditions Precedent

Subject to the last paragraph of Exhibit B, the commitment of the Financial Institutions in respect of the Facilities and the undertaking of the Financial Institutions to provide the services described herein are subject only to the satisfaction of the conditions precedent set forth in the Term Sheet and the Conditions Annex (including the negotiation, execution and delivery of definitive documentation with respect to the Facilities reflecting, among other things, the terms and conditions set forth herein and in the Term Sheet and the Conditions Annex), in a manner reasonably acceptable to us.

Subject to the last paragraph of Exhibit B, please note that the terms and conditions of the proposed Facilities are not limited to those set forth herein or in the Term Sheet or in the Conditions Annex. Subject to the last paragraph of Exhibit B, matters not covered or made clear herein, in the Term Sheet or in the Conditions Annex are subject to mutual written agreement of the parties.

Subject to the last paragraph of Exhibit B, you and we each agree to diligently negotiate in good faith to finalize loan documentation required for the Facilities following the execution and delivery of this Commitment Letter.

 

Costs, Fees and Expenses

In consideration of this commitment and recognizing that, in connection herewith, each of the Financial Institutions party hereto is incurring costs and expenses and allocating internal resources (including, without limitation, fees and disbursements of outside counsel, filing and recording fees, costs and expenses of due diligence, syndication, transportation, duplication, messenger, appraisal, audit, and consultant costs and expenses), you hereby agree to pay or reimburse us on demand for all such reasonable and documented out-of-pocket costs and expenses (collectively, “Expenses”), regardless of whether any of the transactions contemplated hereby are consummated. You also agrees to pay to us on demand all Expenses of ours (including, without limitation, fees and disbursements of counsel) incurred in connection with the enforcement of any of our rights and remedies hereunder. You also agree to pay the fees set forth on Annex A to the Term Sheet. You agree that, once paid, all of the foregoing fees and Expenses or any part thereof shall not be refundable under any circumstances, regardless of whether the transactions or borrowings contemplated hereby are consummated, and shall not be creditable against any other amount payable in connection herewith or otherwise.

 
 

 

A.M. Castle & Co.

November 1, 2016

Page 3

 

 

 

 

 

Confidentiality

By accepting this Commitment Letter, you agree that this Commitment Letter is for your confidential use only and that neither its existence nor the terms hereof will be disclosed by you to any person (other than your officers, directors, employees, accountants, attorneys and other advisors, in each case, on a “need-to-know” basis in connection with the transactions contemplated hereby and on a confidential basis). The foregoing notwithstanding, following the return to us of a counterpart of this Commitment Letter executed by you, you (i) may file a copy of this letter in any public record in which it is required by law to be filed, (ii) provide a copy hereof to the Company and its officers, directors, employees, accountants, attorneys and other advisors, in each case, on a “need-to-know” basis in connection with the transactions contemplated hereby and on a confidential basis, and (iii) may make such other public disclosures of the terms and conditions hereto as you are required by law, in the opinion of your counsel, to make.

 

Arm’s-Length Transaction

In connection with all aspects of each transaction contemplated by this Commitment Letter, you acknowledge and agree that: (i) the Facilities and any related arranging or other services described in this Commitment Letter are an arm’s-length commercial transaction between you and your affiliates, on the one hand, and each of the Financial Institutions, on the other hand, and you are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated by this Commitment Letter; (ii) in connection with the process leading to such transaction, each of the Financial Institutions is and has been acting solely as principal and is not the financial advisor or fiduciary for you or any of your subsidiaries or affiliates, stockholders, creditors or employees or any other party; (iii) each of the Financial Institutions has not assumed nor will it assume an advisory or fiduciary responsibility in your or your subsidiaries’ or affiliates’ favor with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether any of the Financial Institutions has advised or is currently advising you or your subsidiaries or affiliates on other matters) and each of the Financial Institutions has no obligation to you or your subsidiaries or affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth in this letter and the definitive loan documentation; (iv) Each of the Financial Institutions and its respective affiliates may be engaged in a broad range of transactions that involve interests that differ from yours and your subsidiaries and affiliates and each of the Financial Institutions has no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) each of the Financial Institutions has not provided any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby and you have consulted your own legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate. You hereby waive and release, to the fullest extent permitted by law, any claims that you may have against each of the Financial Institutions

 
 

 

A.M. Castle & Co.

November 1, 2016

Page 4

 

 

 

with respect to any breach or alleged breach of fiduciary duty by such Financial Institution in its capacity as a lender and related to the transactions contemplated hereunder.

 

Information

You hereby represent and covenant that (i) all information (other than Projections) that has been or will be made available to us by the Company and any of its representatives in connection with the transactions contemplated hereby (the “Information”), is or will be complete and correct in all material respects and does not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which such statements are made, not misleading, and (ii) all financial information and projections (“Projections”) that have been or will be made available to us by the Company or its representatives in connection with the transactions contemplated hereby have been or will be prepared in good faith based upon assumptions believed to be reasonable by you at the time when made (it being understood and agreed that financial projections are not to be viewed as facts or a guarantee of financial performance and are subject to significant uncertainties and contingencies many of which are beyond your control and actual results may differ from financial projections and such differences may be material and adverse). In issuing this Commitment Letter, we are relying on the accuracy of the Information and, in arranging and syndicating the Facilities, we may use and rely on the Information, without independent verification thereof. Prior to the funding or termination of all commitments under the Facilities, you agree to supplement the Information and any Projections previously furnished, or that will be furnished, from time to time and agree to promptly notify us of any changes in circumstances that could be expected to call into question the continued reasonableness of any assumption underlying any Projections previously furnished, or that will be furnished, by or on behalf of the Company.

 

Syndication

We may syndicate the Facilities and/or the commitment to provide the Facilities to additional banks, financial institutions and other entities (the “Additional Lenders”) to assume the rights and obligations of the Financial Institutions hereunder; provided, that the Financial Institutions’ commitments (and any commitment held by any and all Additional Lenders to which any Financial Institution assigns a portion of its commitments in accordance with the terms hereof) shall be reduced pro rata by the aggregate amount of commitments held by any such Additional Lender; provided further, that the assignment and assumption documentation for any Additional Lenders shall be reasonably acceptable to the Financial Institutions. Subject to the restrictions set forth in the Term Sheet under the heading “Lenders,” the Financial Institutions will manage all aspects of any syndication, including the selection of potential Additional Lenders, the timing of all offers to potential Additional Lenders, the acceptance of commitments, the amount offered and the compensation provided.

 
 

 

 

A.M. Castle & Co.

November 1, 2016

Page 5

 

 

 

 

 

Indemnification

 

Company agrees to indemnify and hold harmless each of the Financial Institutions, and each of its affiliates (including its managers and fund managers) and each of its and its affiliates’ respective officers, directors, partners, shareholders, members, trustees, controlling persons, employees, agents, advisors, attorneys and representatives (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, fees and disbursements of counsel), that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or relating to this Commitment Letter or the transactions contemplated hereby, any use made or proposed to be made with the proceeds of the Facilities, or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any Indemnified Party is a party thereto, and Company shall reimburse each Indemnified Party upon demand for all legal and other expenses incurred by it in connection with investigating, preparing to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to, any lawsuit, investigation, claim or other proceeding relating to any of the foregoing (including, without limitation, in connection with the enforcement of the indemnification obligations set forth herein), irrespective of whether the transactions contemplated hereby are consummated, except to the extent such claim, damage, loss, liability, or expense is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.

 

Company agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract, tort or otherwise) to Company for or in connection with the transactions contemplated hereby, except to the extent such liability is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. In no event, however, shall any Indemnified Party be liable on any theory of liability for any special, indirect, consequential or punitive damages. Company further agrees that, without the prior written consent of the Financial Institutions, it will not and will cause the Company not to enter into any settlement of any lawsuit, claim or other proceeding arising out of this Commitment Letter or the transactions contemplated hereby unless such settlement (i) includes an explicit and unconditional release from the party bringing such lawsuit, claim or other proceeding of all Indemnified Parties and (ii) does not include a statement as to or an admission of fault, culpability, or a failure to act by or on behalf of any Indemnified Party. No Indemnified Party shall be liable for any damages arising from the use by unauthorized persons of any information made available to us by you or any of your representatives through electronic, telecommunications or other information transmission systems that is intercepted by such persons.

 
 

 

A.M. Castle & Co.

November 1, 2016

Page 6

 

 

 

 

Governing Law, etc.

This Commitment Letter shall be governed by, and construed in accordance with, the law of the State of New York. Each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and/or state courts located within the City of New York. The parties hereto hereby waive, to the fullest extent permitted by applicable law, any objection that they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to the provisions of this Commitment Letter brought in any such court, and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. This Commitment Letter sets forth the entire agreement between the parties with respect to the matters addressed herein and supersedes all prior communications, written or oral, with respect hereto. This Commitment Letter may be executed in any number of counterparts, each of which, when so executed, shall be deemed to be an original and all of which, taken together, shall constitute one and the same letter. Delivery of an executed counterpart of a signature page to this electronic transmission shall be as effective as delivery of a manually executed counterpart of this letter. This Commitment Letter is not assignable by the Company without the Financial Institutions’ prior written consent. In connection with a syndication of all or a portion of the commitment hereunder to provide the Facilities, the rights and obligations of each of the Financial Institutions may be assigned, in whole or in part, as provided above, and upon such assignment, such Financial Institutions shall be relieved and novated hereunder from its obligations with respect to any portion of its commitment to provide the Facilities that has been assigned as provided above. This Commitment Letter is intended to be solely for the benefit of the parties hereto, the Indemnified Parties, and their respective successors and assigns. Nothing herein, express or implied, is intended to or shall confer upon any other third party any legal or equitable right, benefit, standing or remedy of any nature whatsoever under or by reason of this Commitment Letter.

 

We hereby notify you that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 25, 2001), as amended (the “Patriot Act”), it may be required to obtain, verify and record information that identifies the Company, which information includes the name, address and tax identification number and other information regarding them that will allow each of the Financial Institutions to identify the Company in accordance with the Patriot Act. You agree to provide each of the Financial Institutions with all documentation and other information required by bank regulatory authorities under the Patriot Act and any other “know your customer” and anti-money laundering rules and regulations.

 

Further Assurances

To the extent any of the Financial Institutions party hereto, or any affiliate of such Financial Institution, now or hereafter holds any of the Company’s outstanding 12.75% senior secured notes due 2018, each such Financial Institution agrees to consent to such amendments to the

 
 

 

A.M. Castle & Co.

November 1, 2016

Page 7

 

 

 

intercreditor agreement and Existing Secured Notes Indenture as described under the heading “Initial Conditions” set forth in the Term Sheet; provided, however, that such consent may be conditioned on the occurrence of the closing of the Facilities.

 

Waiver of Jury Trial

Each party hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this letter or the transactions contemplated by this letter or the actions of each of the Financial Institutions or any of its affiliates in the negotiation, performance, or enforcement of this Commitment Letter.

 

Please indicate your acceptance of the provisions hereof by signing the enclosed copy of this letter and returning it to us at or before 12:00 p.m. (Eastern Time) on or before November 2, 2016. If you elect to deliver this letter by electronic transmission, please arrange for the executed original to follow by next-day courier. All respective commitments and undertakings of the Financial Institutions under this Commitment Letter will expire at 12:00 p.m. (Eastern Time) on November 2, 2016, unless you execute and return to us this Commitment Letter at or prior to such time. Thereafter, all accepted commitments and undertakings of the Financial Institutions will expire on the earliest to occur of (i) December 31, 2016, unless the closing of the Facilities occurs on or prior thereto and (ii) the consummation of the Transaction or any component thereof without the use of the Facilities. In addition, all accepted commitments and undertakings the Financial Institutions hereunder may be terminated by us if you fail to perform your obligations hereunder on a timely basis. The provisions of this Commitment Letter regarding Costs and Expenses, Confidentiality, Indemnity, Governing Law, etc., and Waiver of Jury Trial shall remain in full force and effect regardless of whether any definitive documentation for the Facilities shall be executed and delivered and notwithstanding the termination of this Commitment Letter or any commitment or undertaking of the Financial Institutions hereunder, and the provisions of this Commitment Letter regarding syndication shall survive the execution and delivery of any definitive documentation for the Facilities. Except as provided in the preceding sentence, your obligations hereunder shall automatically terminate and be superseded by the provisions of the definitive loan documentation upon the initial funding thereunder and the payment of all amounts owing at such time hereunder.

 

[Remainder of page intentionally left blank; signature page follows.]

 
 

 

 

 

 

 

 

Very truly yours,

SGF, LLC

By: /s/ Howard B. Simpson
Name: Howard B. Simpson
Title: Managing Member

 

 

 
 

 

ACCEPTED AND AGREED TO
this 2nd day of November, 2016

A.M. CASTLE & CO.

 

 

 

/s/ Patrick R. Anderson

 

By: Patrick R. Anderson

Title: Chief Financial Officer

 

 

 

 

EXHIBIT A TO COMMITMENT LETTER

SUMMARY OF TERMS AND CONDITIONS

OF THE TERM LOAN FACILITIES

Set forth below is a summary of the principal terms and conditions of the senior secured term loan facilities and the documentation related thereto. Capitalized terms used and not otherwise defined herein have the meanings set forth in the commitment letter to which this summary of terms and conditions is attached and of which it forms a part (the “Commitment Letter”).

I.                 Parties

Borrowers...................................A.M. Castle & Co. (the “Company”), together with certain of its wholly-owned domestic and Canadian subsidiaries, including Transtar Metals Corp., Advanced Fabricating Technology, LLC, Oliver Steel Plate Co., Paramont Machine Company, LLC, Tube Supply, LLC, A.M. Castle & Co. (Canada) Inc. and Tube Supply Canada ULC (each a “Borrower” and collectively, the “Borrowers”).
Guarantors.................................All of the Company’s current and future direct and indirect domestic and Canadian subsidiaries and any other entity that guarantees or provides other credit support for the Existing Secured Notes (as defined below) or any other indebtedness of the Company or another Credit Party, (the “Guarantors”; the Borrowers and the Guarantors, collectively, the “Credit Parties”).
Agent..........................................A commercial bank or trust company reasonably acceptable to the Lenders, acting through one or more of its branches or affiliates, will act as administrative and collateral agent for the Lenders (in such capacities, the “Agent”) and will perform the duties customarily associated with such roles.
Lenders.......................................A syndicate of financial institutions and investors, as set forth in Schedule 1 (collectively the “Initial Lenders”) and other lenders from time to time party to the definitive documentation (collectively, the “Lenders”); provided that (i) the Initial Lenders as a group will not be permitted to assign more than 49.9% in the aggregate of the original commitment prior to six months after the Closing Date, (ii) six months after the Closing Date, the Initial Lenders may assign more than 50% of their original commitment amount subject to the reasonable consent of the Borrower, (iii) at no time will any of the Lenders be permitted to assign their loans to any competitor of the Borrowers.

 

 

 

II.               Facilities

Term Loans................................. Up to $100 million (the “Aggregate Term Loan Commitment”) will be available under the following senior secured credit facilities (the “Term Loan Facilities”) on the terms and conditions set forth herein:

·a term loan to be made on the Closing Date in an amount of $75 million (the “Initial Term Loan”)
·the remainder of the Aggregate Term Loan Commitment will be available as a delayed draw term loan (the “DDTL” and, together with the Initial Term Loan, the “Term Loans”)

Initial Term Loan Availability.... The Initial Term Loan shall be made in a single drawing on the Closing Date. Amounts that have been repaid under the Initial Term Loan may not be reborrowed.

DDTL Availability...................... The DDTL shall be available in two additional drawings:

$12.5 million will be available at the Borrowers’ request on or after December 12, 2016; and

$12.5 million will be available at the Borrowers’ request on or after June 12, 2017. Amounts that have been repaid under the DDTL may not be reborrowed.

Maturity......................................The outstanding principal amount of the Term Loans and all accrued and unpaid interest thereon shall be due and be payable in full on September 14, 2018.

III.       Certain Payment Provisions

Fees, Early Termination Fees

and Interest Rates .......................As set forth on Annex A.

Optional Prepayments and

Commitment Reductions...............The Borrowers may, upon prior written notice, prepay the Term Loans or reduce the commitments under Term Loan Facilities, in whole at any time or in part from time to time, subject to the Exit Fees set forth on Annex A.

Mandatory Prepayments..............An amount equal to (i) 100% of the net cash proceeds received by the Company or any of its subsidiaries from the issuance of indebtedness after the Closing Date, other than customary exceptions for certain indebtedness permitted to be incurred under the definitive documentation for the Term Loan Facilities (the “Credit Documentation”), (ii) 100% of the net cash proceeds received from the sale or other disposition of all or any

 

 

 

part of the assets of the Company or any of its subsidiaries after the Closing Date (other than sales of inventory in the ordinary course of business), subject to customary reinvestment rights, exceptions and thresholds, provided that to the extent that the proceeds of any such sale or disposition by a foreign subsidiary of the Company cannot be used to prepay the Loans without violating applicable law or have a material adverse tax consequence, such prepayment will not be required until permitted under such applicable law or until such material adverse tax consequence may be avoided (provided that the Company and such subsidiary shall promptly take all actions within the reasonable control of the Company and such subsidiary that are reasonably required to eliminate or reduce such tax effects), (iii) 100% of all casualty and condemnation proceeds received by the Company or any of its subsidiaries after the Closing Date, subject to customary reinvestment rights, exceptions and thresholds, (iv) 50% of the net cash proceeds from the issuance of equity securities, (v) 50% of excess cash flow of the Company and its subsidiaries (as defined in the Credit Documentation and with steps downs to be mutually agreed), and (vi) 100% of all tax refunds in excess of $500,000 individually (and in the aggregate in each fiscal year) and other non-ordinary course receipts (as defined in the Credit Documentation) received by the Company or any of its subsidiaries after the Closing Date, subject to customary thresholds and exceptions. Application of such mandatory prepayments shall be as set forth in the Credit Documentation.

 

IV.Collateral
 The obligations of each Credit Party in respect of the Facility shall be secured by a perfected first priority security interest in substantially all of its present and after-acquired tangible and intangible assets (including, without limitation, inventory, accounts receivable, equipment, intellectual property, real property, investment property, intercompany notes and other intercompany receivables (with the Collateral Agent to take possession of all such notes and receivables on the Closing Date), cash, leasehold interests, licenses, permits, capital stock and other assets securing the Credit Parties’ obligations under the Existing Credit Agreement and the Existing Secured Notes and proceeds of the foregoing), except for (i) those assets as to which the Agent shall determine in its sole discretion that the costs of obtaining such a security interest are excessive in relation to the value of the security to be afforded thereby, and (ii) in the case of those assets subject to the laws of foreign jurisdictions, subject to limitations of such foreign laws (collectively, the “Collateral”).

V.Use of Proceeds
 The proceeds of the Term Loans shall be used for:

(i)the repayment of any amounts (and cash collateralization of any undrawn letters of credit) outstanding under a $100 million loan and security agreement between, among others, the Company as a US borrower and Wells Fargo Bank, National Association as lender and administrative agent dated December 15, 2011 (as amended from time to time) (the “Existing Credit Agreement”);
(ii)the redemption of $27.5 million in aggregate principal amount of the Company’s existing 12.75% senior secured notes due 2018 (the “Existing Secured Notes”) pursuant to Section 3.09(a) of the indenture (the “Existing Secured Notes Indenture”) governing the Existing Secured Notes (the “Redemption”) to the extent not previously funded with borrowings made under the Existing Credit Agreement;
(iii)the repayment at any time of $41,000 of the Company’s 7.00% Convertible Notes due December 15, 2017;
(iv)working capital and general corporate purposes (excluding the repayment, redemption or refinancing of any indebtedness other than as described in clauses (i), (ii) and (iii) above); and
(v)payment of certain fees and expenses associated with the refinancing of the Existing Credit Agreement, the Redemption and the closing of the Term Loan Facilities.

VI.       Certain Conditions

Initial Conditions .......................The availability of the Initial Term Loan is subject to the satisfaction or written waiver of only the following (subject to the last paragraph of Exhibit B) (the date of such satisfaction or waiver of all such conditions, the “Closing Date”): delivery of reasonably satisfactory customary legal opinions of counsel for the Borrowers and the Guarantors; all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act; a

 

 

certificate from the chief financial officer(s) of the Borrowers (or, at any Borrower’ option, a solvency opinion from an independent investment bank or valuation firm of nationally recognized standing) with respect to Closing Date solvency (on a consolidated basis after giving effect to the transactions contemplated hereby); customary corporate documents and officers’ and public officials’ certifications for the Borrowers and the Guarantors; customary closing certificates; all documents and instruments required for the creation and perfection of, or the reaffirmation of the perfection of, security interests in the Collateral, subject to permitted liens and the last paragraph of Exhibit B; execution of the Guarantees by the Guarantors, which shall be in full force and effect; the amendment of the intercreditor agreement governing the relative rights and priorities in the Collateral between the Credit Parties’ first lien secured lenders and the Existing Secured Notes to permit the Term Loans to bear interest as set forth on Annex A and to make such other modifications to such agreement as are reasonably necessary to effect the transactions contemplated herein; the Company having delivered a redemption notice with respect to the Redemption and the Redemption (or the related discharge of the Existing Secured Notes subject to the Redemption) having occurred or occurring simultaneously or substantially concurrently with the initial borrowing under the Term Loan Facilities; the amendment of the Existing Secured Notes Indenture to (i) specifically exclude from the definition of “Asset Sale” the Company’s March 15, 2016 sale of the assets of Total Plastics, Inc., (ii) eliminate the Senior Credit Facility Availability Blocker in Section 3.09(a) of the Existing Secured Notes Indenture and (iii) to make such other modifications to such agreement as are necessary to effect the entry into the Credit Documentation without violating any provisions of the Existing Secured Notes Indenture; evidence of authority for the Borrowers and the Guarantors; the delivery of the borrowing base certificate most recently required to be delivered under the Existing Credit Agreement; accuracy of Specified Representations (as defined in Exhibit B); and delivery of a notice of borrowing.

The initial borrowing under the Term Loan Facilities will also be subject to the applicable conditions precedent set forth in the “Conditions Precedent” section of the Commitment Letter and Exhibit B to the Commitment Letter. The definitive credit documentation for the Senior Facilities shall not contain (a) any conditions precedent other than the conditions precedent

 

 

 

expressly set forth in the preceding paragraph, the “Conditions Precedent” section of the Commitment Letter or Exhibit B to the Commitment Letter or (b) any representation or warranty, affirmative, negative or financial covenant or event of default not set forth in the “Conditions Precedent” section of the Commitment Letter or Exhibit B thereto, the accuracy, compliance or absence, respectively, of or with which would be a condition to the initial borrowing under the Term Loan Facilities. The failure of any representation or warranty (other than the Specified Representations) to be true and correct in all material respects on the Closing Date will not constitute the failure of a condition precedent to funding or a default under the Term Loan Facilities.

The Credit Parties and Lenders agree that the Lenders will rely upon the Borrowers’ existing field exam required under the Existing Credit Agreement on the Closing Date. The Lenders will have the right to conduct a new field exam at the Borrowers’ expense after the Closing Date.

On-Going Conditions ..................Each DDTL drawing shall be subject to the satisfaction or written waiver of conditions that are customary for the Initial Lenders’ loans of this type, including: (i) the accuracy of all representations and warranties in the Credit Documentation (including, without limitation, the material adverse change and litigation representations) in all material respects (to the extent not otherwise qualified by materiality) other than those which specifically relate to an earlier date and (ii) there being no default or event of default (including no material adverse change) in existence at the time of, or after giving effect to the making of, such extension of credit.

VII.Warrants

The Lenders as of the Closing Date will receive warrants (the “Warrants”) to purchase 5,000,000 shares of the common stock of the Company. The warrants will have exercise prices as follows: (a) 50% of the initially issued Warrants will have an exercise price of $0.50 per share and will expire 18 months from the date of grant and (ii) the remaining 50% of the Warrants will have an exercise price of $0.65 per share and will expire 18 months from the date of the grant. The Warrants will contain structural anti-dilution protections for stock splits, reverse splits, combinations, dividends and other similar transactions and customary protections for mergers and other business combinations and will provide for multiple demand and unlimited shelf and “piggy back” registration rights and other customary provisions

 

 

In the event of a direct or indirect sale of the Company (or all or substantially all of the Company’s assets) other than in a bankruptcy proceeding with respect to the Company (any such transaction a “Permitted Sale”), if (i) the per share sale price of the Company is less than the exercise price per share of any Warrants, then any such Warrants shall be cancelled concurrent with the closing of such sale or (ii) the per share sale price of the Company is greater than the exercise price per share of any Warrants, then at the closing of such sale all such Warrants shall be cancelled and in exchange therefor the holders thereof shall be paid in cash the difference between the exercise price per share of such Warrants and the per share sale price of the Company (such positive difference, if any, the “Immediate Exercise Value”).

VIII. Certain Documentation Matters The Credit Documentation shall contain representations, warranties, affirmative and negative covenants, and events of default relating to the Credit Parties and their subsidiaries consistent with this summary of terms and conditions and other terms reasonably deemed appropriate by the Agent and Initial Lenders (subject to exceptions and carve-outs to be agreed upon); provided, that except for events of default related to bankruptcy or other insolvency events, no event of default shall result in the acceleration of the Loans unless the Required Lenders

Financial Covenants...................The Company would be required to perform with respect to financial covenants consisting of (a) a minimum cash EBITDA (to be defined in the Credit Documentation) requirement in amounts of (i) $2.0 million for the first quarter of 2017, (ii) $6.5 million for the first two quarters of 2017, (iii) $10.5 million for the first three quarters of 2017 and (iv) $14.0 million for the calendar year 2017, (b) a minimum liquidity amount of $20 million at all times (the “Minimum Liquidity Financial Covenant”) and (c) a minimum net working capital covenant (to be determined but based upon eligible accounts receivables and inventory of the Borrowers and the Guarantors, with potential deductions based upon current assets of the Borrowers and the Guarantors and accounts payable originated within 20 days) (the “Minimum Net Working Capital Financial Covenant”).

Foreign subsidiaries...................The Company’s foreign subsidiaries may not incur, or have outstanding, indebtedness in excess of $12 million in aggregate principal amount, provided that (i) any such outstanding indebtedness under foreign facilities is either unsecured or secured only by the accounts receivable and inventory of the

 

 

 

applicable foreign subsidiary and (ii) the use of proceeds of such outstanding indebtedness under foreign facilities shall be used (a) to repay existing indebtedness of the Company, (b) for working capital purposes or (c) for capital expenditures.

Requisite Lenders.........................Lenders holding at least a majority of the total Term Loans and commitments under the Term Loan Facilities, with certain amendments requiring the consent of Lenders holding a greater percentage (or all) of the total Term Loans and commitments under the Term Loan.

Assignments and Participations...Subject to the restrictions set forth under the heading “Lenders”, each Lender shall be permitted to assign its rights and obligations under the Term Loan Facilities, or any part thereof, to any person or entity without the consent of the Credit Parties. Each Lender shall be permitted to grant participations in such rights and obligations, or any part thereof, to any person or entity without the consent of the Credit Parties. Pledges of Loans in accordance with applicable law shall be permitted without restriction. Promissory notes shall be issued under the Facility only upon request.

Expenses and Indemnification..The Company shall pay (i) all reasonable and documented out-of-pocket expenses of the Agent and the Lenders associated with the syndication of the Facility and the preparation, negotiation, execution and delivery of the Credit Documentation and any amendment or waiver with respect thereto (including, the reasonable fees, disbursements and other charges of counsel), (ii) all reasonable and documented out-of-pocket expenses of the Agent and the Lenders (including the fees, disbursements and other charges of counsel and the allocated cost of internal counsel) in connection with the enforcement of the Credit Documentation and (iii) all reasonable and documented out-of-pocket expenses of Ducera Partners LLC associated with the preparation of relevant reporting on the Company in connection with the preparation, execution and delivery of the Credit Documentation.

The Agent and the Lenders (and their affiliates and their respective officers, directors, employees, advisors and agents) will be indemnified and held harmless against, any loss, liability, cost or expense incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof (except to the extent resulting from the bad faith, gross negligence or willful misconduct of the indemnified party).

 

 

Yield Protection, Taxes

and Other Deductions .................The Credit Documentation will contain yield protection provisions, customary for facilities of this nature, protecting the Lenders in the event of unavailability of LIBOR, breakage losses, reserve and capital adequacy requirements. All payments are to be free and clear of any present or future taxes, withholdings or other deductions whatsoever.

Governing Law and Forum..........State of New York.

Counsel to the Lenders ................Paul, Weiss, Rifkind, Wharton & Garrison LLP.

 

 
 

Annex A

Interest and Certain Fees

Interest Rate.....................................The Term Loans will bear interest at a rate per annum equal to 11.00%.

Interest Payments..............................Monthly in arrears, in cash.

Default Rate......................................At any time when an event of default has occurred and is continuing, all amounts outstanding under the Term Loan Facilities shall bear interest at 3.00% above the interest rate otherwise applicable thereto.

Rate and Fee Basis...........................All per annum rates shall be calculated on the basis of a year of 360 days and the actual number of days elapsed.

OID...................................................The funding of the Initial Term Loans on the Closing Date shall be subject to original issue discount in an amount equal to 3.00% of the full principal amount of the Term Loan Facilities (including the amount of all unfunded commitments as of the Closing Date).

Exit Fees...........................................All repayments and prepayments (including all prepayments and any repayment upon acceleration or in connection with bankruptcy or insolvency proceedings with respect to any of the Credit Parties) of the Term Loans shall be subject to an exit fee of 2.00% (the “Exit Fees”) which shall be due and owing upon (i) an acceleration of the term loans (including in connection with any bankruptcy or insolvency proceedings with respect to any of the Credit Parties) or (ii) final and full repayment or prepayment of the Term Loans; provided, that the aggregate Exit Fees that shall be due and owing to the Lenders upon the repayment or prepayment of the Term Loans in connection with a Permitted Sale shall be reduced (but not, in any case, to less than $0) by an amount equal to the aggregate of the Immediate Exercise Values with respect to such Permitted Sale realized by the holders of Warrants. 

 

 

 

EXHIBIT B TO COMMITMENT LETTER

CONDITIONS PRECEDENT TO INITIAL BORROWING[1]

Except as otherwise set forth below, the initial borrowing under the Facilities shall be subject to the following additional conditions precedent (which shall be satisfied or waived prior to or substantially concurrent with the Transaction):

1.       Since December 31, 2015 there shall have been no undisclosed Material Adverse Change. A “Material Adverse Change” means a material adverse change on (a) the business, operations, assets (including the cancellation, repudiation or other cessation of contracts affecting the future performance of the business), financial condition or results of operations of the Borrowers and their respective Guarantors, taken as a whole, (b) the rights and remedies available to the Agent and the Lenders, taken as a whole, under the credit documentation for the Facilities or (c) the ability of the Credit Parties, taken as a whole, to fully and timely perform their payment obligations under the credit documentation for the Facilities.

2.       The Financial Institutions shall have received a pro forma consolidated balance sheet and a related pro forma consolidated statement of income of the Borrowers and their respective subsidiaries (based on the financial statements of the Company referred to in paragraph 3 below) as of and for the nine-month period ending on September 30, 2016, prepared after giving effect to the Transaction as if the Transaction had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other statement of income), which reflect adjustments applied in accordance with Regulation S-X of the Securities Act of 1933, as amended.

3.       The Financial Institutions shall have received (a) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company and its subsidiaries as of December 31, 2015 and (b) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company and its subsidiaries as of September 30, 2016, in each case prepared in accordance with GAAP.

4.       On the Closing Date, after giving effect to the Transaction, none of the Borrowers or any of its subsidiaries shall have any third party debt for borrowed money other than (i) the Facilities, the (ii) Existing Secured Notes, (iii) the Company’s existing 5.25% senior secured convertible notes due 2019, (iv) $41,000 of the Company’s existing 7.00% convertible notes due December 15, 2017, (v) other indebtedness permitted to be incurred or outstanding on or prior to the Closing Date pursuant to the credit documentation for the Facilities (including, without limitation, up to $12 million in aggregate principal amount of foreign facilities recently executed by foreign subsidiaries of the Borrowers, provided that such foreign facilities are either unsecured or secured

 

 

[1]All capitalized terms used but not defined herein shall have the meanings assigned thereto in the Commitment Letter to which this Exhibit B is attached or in Exhibit A thereto.
 
 

 

only by the accounts receivable and inventory of such foreign subsidiary) and (vi) other indebtedness approved by the Financial Institutions in their reasonable discretion.

5.       All fees required to be paid on the Closing Date pursuant to the Commitment Letter and reasonable and documented out-of-pocket expenses required to be paid on the Closing Date pursuant to the Commitment Letter with respect to expenses, to the extent invoiced at least three business days prior to the Closing Date, shall, upon the initial borrowing under the Facilities, have been paid (which amounts may be offset against the proceeds of the Facilities) (for the avoidance of doubt, such fees and expenses shall include the fees, disbursements and other charges of counsel and fees and out-of-pocket expenses of Ducera Partners LLC).

6.       On the Closing Date, (i) the Company shall have previously delivered a timely irrevocable redemption notice with respect to the Redemption, (ii) the Redemption (or the irrevocable transfer to the trustee under the Existing Secured Notes of all funds required to effect the Redemption in full) shall have occurred or shall occur substantially concurrently with the funding of the Initial Term Loan and (iii) the intercreditor agreement governing the relative rights and priorities in the Collateral between the Credit Parties’ first lien secured lenders and the Existing Secured Notes shall have been amended to permit the Term Loans to bear interest as set forth on Annex A and to make such other modifications to such agreement as are reasonably necessary to effect the Transaction.

7.       On the Closing Date, (i) amounts outstanding pursuant to the Company’s Existing Credit Agreement shall have been repaid in full (including cash collateralization or back-up letters of credit for any undrawn letters of credit, in accordance with the terms of the Existing Credit Agreement), (ii) commitments pursuant thereto shall have been terminated and (iii) liens granted to the collateral agent pursuant thereto shall have been released in full.

8.       The Financial Institutions (a) shall have received a schedule that provides for (i) a description in sufficient detail of existing indebtedness of the Borrowers, Guarantors and non-Credit Parties and (ii) a description in sufficient detail of intercompany indebtedness among the Company and its subsidiaries and (b) all such indebtedness described in clauses (a)(i) and (ii) above shall be satisfactory to the Financial Institutions.

9.       The Financial Institutions shall have received a report in form and substance satisfactory to the Financial Institutions from Ducera Partners LLC in respect of (i) the accrued liability composition of the Company and its subsidiaries, (ii) all intercompany notes and other intercompany receivables, (iii) the accounts payable aging profile, specifically for invoices payable within 20 days, (iv) the accounts receivable aging profile, (v) the profile of critical vendors of the Company and its subsidiaries, (vi) inventory held by the Company and its subsidiaries and (vii) the liquidity of the Company and its subsidiaries, as demonstrated by weekly cash flow reports.

 
 

 

 

10.        The Financial Institutions shall have received a copy of a group structure chart in respect of the Company and its subsidiaries which shall include details of the percentage of share ownership and jurisdiction of incorporation of each subsidiary.

11.        The Financial Institutions shall have received a schedule of all real property owned by the Company and its subsidiaries which shall include the estimated fair market value of each such property.

12.       The Company and its subsidiaries shall, after giving pro forma effect to the Transaction, comply with the minimum liquidity and minimum net working capital covenants set forth in the Credit Documentation, and the Financial Institutions shall have received a certificate of the Chief Financial Officer of the Company setting forth in reasonable detail calculations demonstrating such compliance.

13.        One or more parties who have entered into commitments with the Company to provide the portion of the Facilities not committed to by the Financial Institutions party to the Commitment Letter shall have implemented such documentation by executing and delivering the Credit Documentation and shall fund their applicable portion of the Initial Term Loan. 

Notwithstanding anything in this Exhibit B, the Commitment Letter, the Term Sheet or any other letter agreement or other undertaking concerning the financing of the Transaction to the contrary, (a) the only representations (and related defaults) the making or accuracy of which shall be a condition to the availability of the Facilities on the Closing Date shall be the Specified Representations (as defined below) made by the Borrowers in the definitive credit documentation for the Facilities, and (b) the terms of the definitive credit documentation for the Facilities shall be such that they do not impair the availability of the Facilities on the Closing Date if the conditions set forth in this Exhibit B, in the “Conditions Precedent” section of the Commitment Letter and in the Term Sheet under the paragraph titled “Initial Conditions” are satisfied or waived (it being understood that, to the extent any security interest in the intended Collateral or any deliverable related to the perfection of security interests in the intended Collateral (other than any Collateral the security interest in which may be perfected by the filing of a UCC financing statement or, in the case of a Canadian Credit Party, by the filing of a PPSA statement or the possession of the stock certificates of the Borrower), is not or cannot be provided and/or perfected on the Closing Date (1) without undue burden or expense or (2) after your use of commercially reasonable efforts to do so, then the provision and/or perfection of such security interest(s) or deliverable shall not constitute a condition precedent to the availability of the Facilities on the Closing Date but shall be required to be delivered after the Closing Date pursuant to arrangements and timing to be mutually agreed by the Agent and the Borrowers). “Specified Representations” means the representations of the Borrowers in the definitive credit documentation with respect to the Facilities relating to incorporation, corporate power and authority to enter into the definitive documentation relating to the Facilities, due authorization and execution of the definitive documentation relating to the Facilities, no conflict of the definitive documentation relating to the Facilities with the Borrowers’ organizational documents, delivery and enforceability of such financing documentation, Closing Date solvency on a

 
 

 

consolidated basis after giving effect to the Transaction and the other transactions contemplated hereby, Federal Reserve margin regulations, the Investment Company Act, PATRIOT Act, FCPA, OFAC, laws against sanctioned persons and the creation, validity and perfection of the security interest granted in the intended Collateral to be perfected (except as provided above).

EX-99.2 3 a74567_x992.htm PURCHASE AGREEMENT

EXHIBIT 99.2

 

Raging Capital Master Fund, Ltd.

Ten Princeton Avenue

P.O. Box 228

Rocky Hill, New Jersey 08553

 

November 4, 2016

 

 

W.B. & Co.

30 North LaSalle Street, Suite 1232

Chicago, Illinois 60602-2504
Attention: Jonathan Mellin

 

Re:       Shares of Common Stock of A. M. Castle & Co.

 

Dear Jon:

 

This letter is being delivered in connection with the purchase from Raging Capital Master Fund, Ltd. (“Seller”) by W.B. & Co. (“Purchaser”) of 4,630,795 shares of common stock, par value $0.01 (the “Securities”), of A. M. Castle & Co. (the “Company”) at a purchase price of $0.10 per share.

1.               Subject to the terms and conditions of this letter agreement, at the Closing (as defined below) Seller will sell, assign, transfer and convey to Purchaser, and Purchaser will purchase, the Securities for an aggregate purchase price of $463,079.50 (the “Purchase Price”). The purchase and sale of the Securities shall take place remotely via the exchange of documents and signatures, at 4:00 p.m., Eastern Time, on November 4, 2016 (which time and place are designated as the “Closing”). At the Closing, Seller shall initiate the electronic delivery of the Securities to Purchaser to the account listed on Exhibit A attached hereto and, Purchaser will deliver the Purchase Price to Seller by a wire transfer of immediately available funds in an amount equal to the Purchase Price to the bank account listed on Exhibit A attached hereto. In addition at Closing the Seller shall deliver to the Company and the Purchaser the executed resignation letters (in the forms attached hereto as Exhibit B) of Messrs. Traub and Burger and the Seller shall deliver to the Company the executed Settlement Agreement relating to its right to appoint successor directors to the Company’s Board of Directors (in the form attached hereto as Exhibit C).

2. Seller hereby represents and warrants to Purchaser as of the date hereof and as of the Closing as follows: (i) Seller is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) Seller has all requisite power and authority to execute and deliver this letter agreement and to consummate the transactions described herein, (iii) the execution and delivery by Seller of this letter agreement and the performance by Seller of its obligations hereunder have been duly authorized by all requisite action on the part of Seller and no other proceedings on the part of Seller are necessary to authorize the execution and delivery of this letter agreement and the consummation of the transactions contemplated hereby, (iv) this letter agreement has been duly executed and delivered by Seller and assuming due

 
 

 

authorization, execution and delivery of this letter agreement by Purchaser constitutes a valid and legally binding obligation of Seller, enforceable against Seller in accordance with its terms except (x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (y) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, (v) Seller owns, beneficially and/or of record, the Securities and has good, valid and marketable title to the Securities, free and clear of any and all covenants, conditions, restrictions, voting trust arrangements, proxies, liens, charges, encumbrances, options and adverse claims or rights whatsoever (“Liens”), except for restrictions on transfer arising under applicable federal and state securities laws, (vi) (a) the Internal Revenue Service (“IRS”) Form W-9 or (b) IRS Form W-8BEN-E, IRS Form W-8BEN or other applicable IRS Form W-8 (including any IRS forms, documents or schedules required to be attached thereto) delivered to the Purchaser prior to the date of this letter agreement was properly completed and executed by Seller, (vii) at the Closing, Seller will deliver to Purchaser good, valid and marketable title to the Securities, free and clear of all Liens, except for restrictions on transfer arising under applicable federal and state securities laws, (viii) the execution and delivery of this letter agreement and the performance by Seller of its obligations hereunder will not (x) violate or breach any provision of Seller’s organizational or governing documents, (y) violate or breach any statute, law, rule or regulation applicable to Seller or order applicable to Seller or by which Seller or any of its properties may be bound or (z) breach, or result in a default under, any contract to which Seller is a party or by which Seller or any of its properties may be bound except in the case of clauses (y) and (z), where such violations, breaches and defaults would not affect Seller’s ability to execute, deliver and perform its obligations under this letter agreement in any material respect and (ix) there is no action, lawsuit, arbitration, claim or proceeding pending or, to the knowledge of Seller, threatened against Seller that would reasonably be expected to impede the consummation of the transactions described herein.

3.               Seller acknowledges that Purchaser, certain of Purchaser’s affiliates (within the meaning of Rule 405 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), (“Affiliates”)), and Purchaser’s and such Affiliates’ directors, officers, partners, stockholders, members, investors, employees, attorneys, agents, representatives, as applicable, and successors and assigns thereto (collectively, the “Purchaser Related Parties”) (a) are existing stockholders of the Company and collectively have a representative on the Company’s board of directors and that the Purchaser Related Parties now possesses and/or may have access to and may hereafter possess and/or have access to certain non-public information concerning the Company and its Affiliates and/or the Securities (the “Non-Public Information”) that may or may not be known by Seller which may constitute material information with respect to the foregoing, and (b) the Purchaser Related Parties are relying on this letter agreement and would not enter into a transaction to purchase the Securities from Seller absent this letter agreement.  Seller agrees to sell the Seller’s Securities to Purchaser notwithstanding that it is aware that such Non-Public Information exists and that Purchaser has not disclosed all Non-Public Information to it.  Seller acknowledges that it is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D promulgated under the Securities Act and a sophisticated seller with respect to the purchase and sale of securities such as the Securities and that Purchaser has no obligations to Seller to disclose such Non-Public Information and that if the Non-Public Information were fully disclosed to Seller, the Non-Public

 
 

 

Information could foreseeably affect Seller’s willingness to enter into this letter agreement and the price that Seller would be willing to accept to sell the Securities. Moreover, such Non-Public Information may indicate that the value of the Securities is substantially lower or higher than the Purchase Price. Additionally, Seller acknowledges that it has adequate information concerning the Securities, and the business and financial condition of the Company and its affiliates, to make an informed decision regarding the sale of the Securities, and has independently and without reliance upon Purchaser, and based upon such information as the Seller has deemed appropriate, made its own analysis and decision to sell the Securities to Purchaser. Seller is experienced, sophisticated and knowledgeable in the trading of securities and other instruments of private and public companies and understands the disadvantage to which it may be subject on account of any disparity of the access to, and possession of, such Non-Public Information between Seller and Purchaser. Seller has conducted an independent evaluation of the Securities to determine whether to enter into this letter agreement and, notwithstanding the absence of access by Seller to the Non-Public Information known by Purchaser, Seller is desirous of entering into this letter agreement and consummating the transactions contemplated hereby. Seller, because of, among other things, its business and financial experience, is capable of evaluating the merits and risks of the transactions contemplated by this letter agreement and of protecting its own interests in connection with this letter agreement.

4.               Purchaser hereby represents and warrants to Seller as of the date hereof and as of the Closing as follows: (i) Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (ii) Purchaser has all requisite power and authority to execute and deliver this letter agreement and to consummate the transactions described herein, (iii) the execution and delivery by Purchaser of this letter agreement and the performance by Purchaser of its obligations hereunder have been duly authorized by all requisite action on the part of Purchaser and no other proceedings on the part of Purchaser are necessary to authorize the execution and delivery of this letter agreement and the consummation of the transactions contemplated hereby, (iv) this letter agreement has been duly executed and delivered by Purchaser and assuming due authorization, execution and delivery of this letter agreement by Seller constitutes a valid and legally binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms except (x) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (y) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (v) the execution and delivery of this letter agreement and the performance by Purchaser of its obligations hereunder will not (x) violate or breach any provision of Purchaser’s organizational or governing documents, (y) violate or breach any statute, law, rule or regulation applicable to Purchaser or order applicable to Purchaser or by which Purchaser or any of its properties may be bound or (z) breach, or result in a default under, any contract to which Purchaser is a party or by which Purchaser or any of its properties may be bound, except in the case of clauses (y) and (z), where such violations, breaches or defaults would not affect Purchaser’s ability to execute, deliver and perform its obligations under this letter agreement in any material respect and (vi) there is no action, lawsuit, arbitration, claim or proceeding pending or, to the knowledge of Purchaser, threatened against Purchaser that would reasonably be expected to impede the consummation of the transactions described herein.

 
 

 

5.               Purchaser acknowledges that certain of the Seller’s Affiliates serve on the Company’s Board of Directors (the “Seller Related Parties”) and that (a) Seller and the Seller Related Parties now possess and may hereafter possess Non-Public Information that may or may not be known by Purchaser which may constitute material information with respect to the foregoing, and (b) the Seller is relying on this letter agreement and would not enter into a transaction to sell the Securities to Purchaser absent this letter agreement.  Purchaser agrees to purchase the Seller’s Securities from Seller notwithstanding that it is aware that such Non-Public Information exists and that Seller may not have disclosed all Non-Public Information to it.  Purchaser acknowledges that it is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) (7) or (8) of Regulation D promulgated under the Securities Act. Purchaser acknowledges that it is a sophisticated purchaser with respect to the purchase and sale of securities such as the Securities and that Seller has no obligations to Purchaser to disclose such Non-Public Information and that if the Non-Public Information were fully disclosed to Purchaser, the Non-Public Information could foreseeably affect Purchaser’s willingness to enter into this letter agreement and the price that Purchaser would be willing to pay to purchase the Securities. Moreover, such Non-Public Information may indicate that the value of the Securities is substantially lower or higher than the Purchase Price. Additionally, Purchaser acknowledges that it has adequate information concerning the Securities, and the business and financial condition of the Company and its affiliates, to make an informed decision regarding the purchase of the Securities, and has independently and without reliance upon Seller, and based upon such information as the Purchaser has deemed appropriate, made its own analysis and decision to purchase the Securities from Seller. Purchaser is experienced, sophisticated and knowledgeable in the trading of securities and other instruments of private and public companies and understands the disadvantage to which it may be subject on account of any disparity of the access to, and possession of, such Non-Public Information between Purchaser and Seller. Purchaser has conducted an independent evaluation of the Securities to determine whether to enter into this letter agreement and, notwithstanding the absence of access by Purchaser to the Non-Public Information known by Seller, Purchaser is desirous of entering into this letter agreement and consummating the transactions contemplated hereby. Purchaser, because of, among other things, its business and financial experience, is capable of evaluating the merits and risks of the transactions contemplated by this letter agreement and of protecting its own interests in connection with this letter agreement.

6.               Effective concurrently with the Closing, Kenneth H. Traub and Richard N. Burger shall resign as directors of the Company, as evidenced by conditional resignation letters to be executed by Messrs. Traub and Burger and delivered to the Company and Purchaser simultaneously with the execution of this letter agreement.

7.               Seller shall have executed the Settlement Agreement, in the form attached hereto as Exhibit C.

8.               Seller does for itself and its respective successors and/or assigns, hereby to the maximum extent permitted by law irrevocably forever releases, discharges and waives any and all claims, rights, causes of action, suits, obligations, debts, demands, liabilities, controversies, costs, expenses, fees, or damages of any kind (including, but not limited to, any and all claims alleging violations of federal or state securities laws, common-law fraud or deceit, breach of fiduciary duty, negligence or otherwise), whether directly, derivatively, representatively or in

 
 

 

any other capacity, against the Company and the Purchaser Related Parties, arising on or prior to the date hereof, which are based upon, arise from or in any way relate to or involve, directly or indirectly, Purchaser’s failure to disclose all or any portion of the Non-Public Information known by it to Seller in connection with the transfer of the Securities by Seller to Purchaser. Seller also agrees that it shall not institute or maintain any cause of action, suit, complaint or other proceeding against the Company or any of the Purchaser Related Parties as a result of such Purchaser Related Parties’ failure to disclose fully such Non-Public Information to Seller or otherwise in connection with this letter agreement. Seller also represents that it has not assigned any claim or possible claim against the Company or the Purchaser Related Parties that relates to the Non-Public Information, it fully intends to release all claims against the Company and the Purchaser Related Parties that related to the Non-Public Information as set forth above and it has been advised by, and has consulted with counsel with respect to the execution and delivery of this letter agreement and has been fully apprised of the consequences of the waivers, releases and discharges set forth herein.

9.               Purchaser does for itself and its respective successors and/or assigns, hereby to the maximum extent permitted by law irrevocably forever releases, discharges and waives any and all claims, rights, causes of action, suits, obligations, debts, demands, liabilities, controversies, costs, expenses, fees, or damages of any kind (including, but not limited to, any and all claims alleging violations of federal or state securities laws, common-law fraud or deceit, breach of fiduciary duty, negligence or otherwise), whether directly, derivatively, representatively or in any other capacity, against the Seller or any of its respective affiliates, including, without limitation, any and all of their present and/or past directors, officers, members, partners, employees, fiduciaries, agents or accounts under management, and their respective successors and assigns (collectively, the “Seller Released Parties”), arising on or prior to the date hereof, which are based upon, arise from or in any way relate to or involve, directly or indirectly, Seller’s failure to disclose all or any portion of the Non-Public Information known by it to Purchaser in connection with the transfer of the Securities by Seller to Purchaser. Purchaser also agrees that it shall not institute or maintain any cause of action, suit, complaint or other proceeding against any of the Seller Released Parties as a result of such Seller Released Parties’ failure to disclose fully such Non-Public Information to Purchaser or otherwise in connection with this letter agreement. Purchaser also represents that it has not assigned any claim or possible claim against the Seller Released Parties that relates to the Non-Public Information, it full intends to release all claims against the Seller Released Parties that related to the Non-Public Information as set forth above and it has been advised by, and has consulted with counsel with respect to the execution and delivery of this letter agreement and has been fully apprised of the consequences of the waivers, releases and discharges set forth herein.

10.            Each of Seller and Purchaser agrees that this letter agreement, including, without limitation, the representations, warranties, agreements, waivers, releases, acceptances and acknowledgments contained herein, shall be binding upon and inure to the benefit of Purchaser and Seller and their respective successors and assigns, and shall survive the execution and delivery of this letter agreement and the consummation of the sale of Seller’s Securities to Purchaser.  

11.            This letter agreement constitutes the entire agreement between the parties, supersedes any prior agreements and understandings, written or oral, between the parties with

 
 

 

respect to the subject matter of the agreement, and contains the only representations or warranties on which the parties are entitled to rely.

12.            This letter agreement may be executed in counterparts. 

13.            This letter agreement shall be construed in accordance with the laws of the State of New York and the parties agree to and accept the exclusive jurisdiction of the courts of appropriate jurisdiction sitting in the Borough of Manhattan, City of New York, New York with respect to any action relating to this letter agreement.


Please indicate your acknowledgment and agreement to the foregoing by signing below where indicated.

 

SELLER:

 

Raging Capital Master Fund, Ltd.
 
By: Raging Capital Management, LLC
Investment Manager
 
By: /s/ Frederick C. Wasch
  Name: Frederick C. Wasch
  Title: Chief Financial Officer
       

 

 

 

ACKNOWLEDGED AND AGREED

AS OF THE DATE FIRST WRITTEN ABOVE:

 

PURCHASER:
 
W.B. & Co.
 
By:

/s/ Jonathan B. Mellin

  Name: Jonathan B. Mellin
  Title: General Partner

 

 

 

 

 

 
 

Exhibit A

 

Purchase Account Information

 

 

 

 

 

 

 

 

 

Seller Wire Transfer Instructions

 

 

 

 

 

 

 

 
 

 

Exhibit B

 

Conditional Resignation Letters

 

 
 

 

Kenneth H. Traub

c/o Raging Capital Management, LLC
Ten Princeton Avenue

P.O. Box 228

Rocky Hill, New Jersey 08553

 

November 4, 2016

 

Board of Directors

A. M. Castle & Co.

1420 Kensington Road, Suite 220

Oak Brook, Illinois 60523

 

Re: Resignation

 

Ladies and Gentlemen:

 

Reference is made to that certain letter agreement, dated even date herewith (the “Agreement”), by and between W.B. & Co. (“Purchaser”) and Raging Capital Master Fund, Ltd. (“Seller”) in connection with the sale by Seller to Purchaser of 4,630,795 shares of common stock of A. M. Castle & Co. (the “Company”). Capitalized terms used, but not defined, herein shall have the same meaning as those defined in the Agreement.

 

Effective concurrently with the Closing, I hereby resign from my position as a director of the Company and from any and all committees of the Board of Directors on which I serve. My resignation is not being submitted as a result of any disagreement with the Company on any matters relating to the Company’s operations, policies or practices.

 

Sincerely,

 

 

 

_________________________

Kenneth H. Traub

 

 

 
 

 

Richard N. Burger

850 Gloucester Crossing

Lake Forest, Illinois 60045

 

November 4, 2016

 

Board of Directors

A. M. Castle & Co.

1420 Kensington Road, Suite 220

Oak Brook, Illinois 60523

 

Re: Resignation

 

Ladies and Gentlemen:

 

Reference is made to that certain letter agreement, dated even date herewith (the “Agreement”), by and between W.B. & Co. (“Purchaser”) and Raging Capital Master Fund, Ltd. (“Seller”) in connection with the sale by Seller to Purchaser of 4,630,795 shares of common stock of A. M. Castle & Co. (the “Company”). Capitalized terms used, but not defined, herein shall have the same meaning as those defined in the Agreement.

 

Effective concurrently with the Closing, I hereby resign from my position as a director of the Company and from any and all committees of the Board of Directors on which I serve. My resignation is not being submitted as a result of any disagreement with the Company on any matters relating to the Company’s operations, policies or practices.

 

Sincerely,

 

 

 

_________________________

Richard N. Burger

 

 

 

 

 

 
 

 

Exhibit C

 

Settlement Agreement

 

 

 
 

 

SETTLEMENT AGREEMENT

 

This SETTLEMENT AGREEMENT (the “Agreement”) is made as of November 4, 2016 by and among A. M. Castle & Co., a corporation organized and existing under the laws of the State of Maryland (the “Company”), the persons and entities listed on Schedule A hereto (collectively, the “Raging Capital Group” and each individually a “Member”) and Steven W. Scheinkman, Kenneth H. Traub, Allan J. Young and Richard N. Burger only with respect to the provisions of this Agreement applicable to Messrs. Scheinkman, Traub, Young and Burger as indicated on the signature page hereto.

In consideration of the covenants and promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

AGREEMENT

 

1.               Certain Definitions. Unless the context otherwise requires, the following terms, for all purposes of this Agreement, shall have the meanings specified in this Section 1:

13D Group” means any group of persons formed for the purpose of acquiring, holding, voting or disposing of Voting Stock (or any securities convertible, exchangeable for or otherwise exercisable to acquire such Voting Stock) which would be required under Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder, to file a statement on Schedule 13D pursuant to Rule 13d-l(a) or Schedule 13G pursuant to Rule 13d-1(c) with the SEC as a “person” within the meaning of Section 13(d)(3) of the Exchange Act if such group Beneficially Owned Voting Stock representing more than 5% of any class of Voting Stock then outstanding.

 

2018 Annual Meeting” means the Company’s 2018 Annual Meeting of Stockholders, including any adjournment, postponement or continuation thereof.

 

Affiliate” shall have the meaning set forth in Rule 12b-2 of the rules and regulations promulgated under the Exchange Act; provided, however, that for purposes of this Agreement the members of the Raging Capital Group and their Affiliates, on the one hand, and the Company and its Affiliates, on the other, shall not be deemed to be “Affiliates” of one another.

 

Beneficially Own,” “Beneficial Owner” or “Beneficial Ownership” shall have the meaning (or the correlative meaning, as applicable) set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act; provided that, for purposes of Sections 3.2(a) and (b) and Section 4.1(a) below, “Beneficially Own” and “Beneficial Ownership” shall include securities that are beneficially owned, directly or indirectly, by the Raging Capital Group, as a Receiving Party; provided, however, that the number of shares of Common Stock that a person is deemed to beneficially own pursuant to this proviso in connection with a particular Derivatives Contract shall not exceed the number of Notional Common Shares with respect to such Derivatives Contract.

 

Board” means the Board of Directors of the Company.

 

Company Released Parties” shall have the meaning set forth in Section 5.2(a).

 
 

 

 

 

Common Stock” means shares of common stock of the Company, par value $0.01 per share.

 

Convertible Notes” means the Company’s 7% Convertible Senior Notes due 2017.

 

Derivatives Contract” means a contract between two parties (the “Receiving Party” and the “Counterparty”) that is designed to produce economic benefits and risks to the Receiving Party that correspond substantially to the ownership by the Receiving Party of a number of shares of Common Stock specified or referenced in such contract (the number corresponding to such economic benefits and risks, the “Notional Common Shares”), regardless of whether (a) obligations under such contract are required or permitted to be settled through the delivery of cash, shares of Common Stock or other property or (b) such contract conveys any voting rights in shares of Common Stock, without regard to any short or similar position under the same or any other Derivative Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority shall not be deemed to be Derivatives Contracts.

 

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

Extraordinary Transaction” shall have the meaning set forth in Section 4.1(c) below.

 

Maryland Courts” shall have the meaning set forth in Section 5.1 below.

 

Member” shall have the meaning set forth in the preamble.

 

Net Long Position” means such Common Stock Beneficially Owned, directly or indirectly, that constitute such person’s net long position as defined in Rule 14e-4 under the Exchange Act; provided that, for the avoidance of doubt, “Net Long Position” shall not include any shares as to which such person has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers to another person, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares.

 

New Convertible Notes” means the Company’s 5.25% Convertible Senior Notes due 2019.

 

Raging Capital Designees” means Kenneth H. Traub, Allan J. Young, and Richard N. Burger.

 

Raging Capital Released Parties” shall have the meaning set forth in Section 5.2(b).

 

Representatives” means the directors, officers, employees and independent contractors, agents or advisors (including attorneys, accountants, financial advisors, and investment bankers) of the specified party or any of its Subsidiaries.

 
 

 

 

 

SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the Exchange Act.

 

Senior Notes” means the Company’s 12.75% Senior Secured Notes due 2018.

 

Standstill Period” means the period beginning on the date hereof and ending on the date that is one day after the 2018 Annual Meeting.

 

Subsidiaries” means each corporation, limited liability company, partnership, association, joint venture or other business entity of which any party or any of its Affiliates owns, directly or indirectly, more than 50% of the stock or other equity interest entitled to vote generally in the election of the members of the board of directors or similar governing body.

 

Third Party” shall have the meaning set forth in Section 4.1(j) below.

 

Voting Stock” shall mean shares of the Common Stock and any other securities of the Company having the power to vote in the election of members of the Board.

 

W.B. & Co. Transaction” shall mean that certain transaction pursuant to which W.B. & Co. will purchase 4,630,795 shares of Common Stock from Raging Capital Master Fund, Ltd.

 

2.               Delivery of Resignations; W.B. & Co. Transaction. On or prior to the date hereof, the Company shall have received executed conditional resignation letters of Kenneth H. Traub and Richard N. Burger in which they agree to resign as directors of the Company and each of the committees on which they serve concurrent with the closing of the W.B. & Co. Transaction, in the form specified in the documentation underlying the W.B. & Co. Transaction. The Company hereby consents to the W.B. & Co. Transaction.

3.               Representations and Warranties and Covenants.

3.1            Each of the parties hereto represents and warrants to the other parties that:

(a)             such party has all requisite corporate or other authority and power necessary to execute and deliver this Agreement and to consummate the transactions contemplated hereby;

(b)            the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all required corporate or other action on the part of such party and no other proceedings on the part of such party are necessary to authorize the execution and delivery of this Agreement or to consummate the transactions contemplated hereby;

(c)             this Agreement has been duly and validly executed and delivered by such party and constitutes the valid and binding obligation of such party enforceable against such party in accordance with its terms; and

 
 

 

 

(d)            this Agreement will not result in a violation of any terms or provisions of any agreements to which such person is a party or by which such party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such party.

3.2            Each Member jointly represents and warrants that as of immediately prior to the closing of the W.B. & Co. Transaction (a) the Raging Capital Group and the Raging Capital Designees Beneficially Own an aggregate of (i) 4,757,663 shares of Common Stock (excluding shares of Common Stock underlying New Convertible Notes Beneficially Owned by the Raging Capital Group), (ii) $27,500,000 principal amount of Senior Notes and (iii) $2,940,000 principal amount of New Convertible Notes, (b) except for such ownership, no member of the Raging Capital Group, individually or in the aggregate with all other members of the Raging Capital Group and its Affiliates, nor the Raging Capital Designees have any other Beneficial Ownership of any Common Stock or other debt or equity securities of the Company and (c) the Raging Capital Group, collectively with its Affiliates, and the Raging Capital Designees have an aggregate Net Long Position of 4,757,663 shares of Common Stock (excluding shares of Common Stock underlying New Convertible Notes Beneficially Owned by the Raging Capital Group).

3.3            During the Standstill Period, neither the Company and its officers, directors or Affiliates, on the one hand, nor any of the Members and their respective officers, directors or Affiliates or the Raging Capital Designees or their Affiliates, on the other hand, shall directly or indirectly make or issue or cause to be made or issued any disclosure, announcement, or statement (including (i) the filing of any document or report with the SEC or any other governmental agency unless required by law or the rules of any securities exchange on which the Common Stock is listed or traded, and (ii) any disclosure to any journalist, member of the media, securities analyst, or creditor or equity holder of the Company) concerning the other party or any of its respective past, present or future directors, director nominees, officers, members, employees, advisors or other Affiliates, which disparages such other party or any of such other party’s respective past, present, or future directors, director nominees, officers, members, employees, advisors or other Affiliates. The restrictions in this Section 3.3 shall not apply in any compelled testimony or production of information, either by legal process, subpoena or as part of a response to a request for information from any governmental authority with jurisdiction over the party from whom information is sought to the extent legally required; provided, that the recipient of such legal process, subpoena, or request shall promptly notify the other parties hereto of the receipt of such legal process, subpoena or request so that such other parties may seek an appropriate protective order or other remedy and the recipient shall reasonably cooperate in connection therewith.

4.               Covenants of the Raging Capital Group and the Raging Capital Designees.

4.1            Standstill. During the Standstill Period, the Raging Capital Group, each Member, each Raging Capital Designee and each of their respective Affiliates shall not, without the prior written consent of the Company:

(a)             own, acquire, announce an intention to acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise, (i) Beneficial

 
 

 

Ownership of any Common Stock (excluding (x) 18,888 shares of Common Stock Beneficially Owned by Kenneth H. Traub as of the date of this Agreement, (y) 18,667 shares of Common Stock Beneficially Owned by Allan J. Young as of the date of this Agreement and (z) shares of Common Stock underlying New Convertible Notes Beneficially Owned by the Raging Capital Group as of the date of this Agreement) or (ii) Beneficial Ownership of any Senior Notes, Convertible Notes, New Convertible Notes or any other interests in the Company’s indebtedness, now in existence or which may be created in the future (excluding $27,500,000 principal amount of Senior Notes and $2,940,000 principal amount of New Convertible Notes Beneficially Owned by the Raging Capital Group as of the date of this Agreement);

(b)            make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” to vote (as such terms are used in the rules of the SEC), or seek to advise or influence any person with respect to the voting of, any Voting Stock of the Company;

(c)             separately or in conjunction with any other person in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent, submit a recommendation of, suggestion to evaluate or pursue, or any proposal for, offer of, or comment on (with or without conditions) (including to the Board) any Extraordinary Transaction. “Extraordinary Transaction” means any of the following involving the Company or any of its Subsidiaries or its or their securities or a material amount of the assets or businesses of the Company or any of its Subsidiaries: any tender offer or exchange offer, merger, acquisition, divestiture, business combination, reorganization, restructuring, recapitalization, sale or acquisition of material assets, change in publicly-traded status or exchange, liquidation or dissolution;

(d)            seek, propose, or make any statement with respect to, or solicit, negotiate with, or provide any information to any person with respect to any Extraordinary Transaction, change in the structure or composition of the Board, the executive officers of the Company, or the capital structure of the Company;

(e)             form, join or in any way participate in a 13D Group;

(f)             present at any annual meeting or any special meeting of the Company’s stockholders or through action by written consent any proposal for consideration for action by stockholders or propose any nominee for election to the Board or seek the removal of any member of the Board;

(g)            grant any proxy, consent or other authority to vote with respect to any matter pertaining to the Company (other than to the named proxies included in the Company’s proxy card for an annual meeting or a special meeting) or deposit any shares of the Voting Stock (or any securities convertible, exchangeable for, or otherwise exercisable to acquire such Voting Stock) held by the Raging Capital Group, the Raging Capital Designees or their Affiliates in a voting trust or subject them to a voting agreement or other arrangement of similar effect;

(h)            make or issue, or cause to be made or issued, any public disclosure, statement or announcement (including the filing or furnishing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media,

 
 

 

securities analyst, or creditor or equity holder of the Company) (x) in support of any solicitation described in clause (b) above, or (y) negatively commenting upon the Company, including the Company’s corporate strategy, business, corporate activities, Board or management (and including making any statements critical of the Company’s business, strategic direction or execution, capital structure or compensation practices);

(i)              institute, solicit, assist or join, as a party, any litigation, arbitration or other proceeding against or involving the Company or any of its current or former directors or officers (including derivative actions) other than to enforce the provisions of this Agreement;

(j)              other than in Rule 144 open market broker sale transactions where the identity of the purchaser is not known or in underwritten widely dispersed public offerings, sell, offer or agree to sell shares of Common Stock (or securities convertible into Common Stock) or transfer any rights decoupled from the underlying Common Stock to any person or entity not a party to this Agreement (a “Third Party”) that would result in such Third Party, together with its affiliates, owning, controlling or otherwise having any beneficial or other ownership interest in the aggregate of 5% or more of the shares of the Common Stock outstanding at such time or would increase the beneficial or other ownership interest of any Third Party who, together with its affiliates, has a beneficial or other ownership interest in the aggregate of 5% or more of the shares of the Common Stock outstanding at such time (excluding the W.B. & Co. Transaction), except in each case in a transaction approved by the Board;

(k)            engage in any short sale of shares of Common Stock or any hedging, swap or derivatives transaction the effect of which directly reduces in any material respect the economic risk of ownership of the Company’s securities;

(l)              seek to call, request the call of or join with any other stockholder in a request to call, a special meeting of the Company’s stockholders, or make a request for a list of the Company’s stockholders or for any books and records of the Company;

(m)          control, influence or seek to control or influence the Board;

(n)            request the Company or any of its Representatives, directly or indirectly, to amend or waive any provision of this Section 4.1; or

(o)            direct, instruct, assist or encourage any of their respective Subsidiaries, Representatives or Affiliates to take any such action.

4.2            Voting.

(a)             During the Standstill Period, each Member and each Raging Capital Designee shall, and shall cause each of their Affiliates to cause all shares of Common Stock to which they are entitled to vote at any annual meeting or any special meeting of the Company’s stockholders to be present at such meeting for quorum purposes and to vote all of such shares, with respect to each proposal, in accordance with the recommendation of the Board. No Member or Raging Capital Designee shall make, and each Member and each Raging Capital Designee shall cause each of their Affiliates not to make, any objection to any proposal recommended by the Board for purposes of a vote at any annual or special meeting of the Company.

 
 

 

 

(b)            Each Member and each Raging Capital Designee shall, and shall cause each of their Affiliates to cause all Notes to which they are entitled to vote or grant consent, approval or other authorization, to vote or grant consent, approval or other authorization with respect to all of such Notes in favor of all amendments to or modifications of the Notes that are necessary or desirable to facilitate the Company’s last-out, first-lien financing, and the full refinancing of its senior secured asset-based revolving credit facility on terms that are consistent with those that are currently under negotiation between the Company and various lenders and debt-holders, except to the extent such amendments or modifications would have a material adverse effect on such Member or Raging Capital Designee or a holder of the Notes; provided, that, as a condition to the foregoing voting requirement, the Raging Capital Group shall have been given the opportunity to participate in such financing or refinancing on a pari passu basis with the other participants in such transaction.

5.               Miscellaneous.

5.1            Confidentiality. Each Member and each Raging Capital Designee acknowledges that certain information concerning the business and affairs of the Company (“Confidential Information”) has been and may be disclosed to the Raging Capital Group and each Raging Capital Designee by the Company or its Subsidiaries, or by the Company’s or its Subsidiaries’ Representatives. Each Member and each Raging Capital Designee agrees that the Confidential Information shall be kept confidential and that the Members and their Representatives shall not disclose any of the Confidential Information in any manner whatsoever without the specific prior written consent of the Company unless disclosure is required by applicable laws or regulations or pursuant to legal, judicial or regulatory proceedings; provided, however, that the Members, the Raging Capital Designees and their Representatives shall promptly notify the Company (to the extent legally permissible) of any such required disclosure so that the Company may seek (at its sole expense) an appropriate protective order or other remedy and the Members, the Raging Capital Designees and their Representatives shall reasonably cooperate with the Company in connection therewith; provided, however, that the term “Confidential Information” shall not include information that (a) was in or enters the public domain, or was or becomes generally available to the public, other than as a result of the disclosure by any Member, any Raging Capital Designee or any Representative thereof in violation of the terms of this Agreement or any other agreement imposing an obligation on such Member, Raging Capital Designee or Representative to keep such information confidential, or (b) was independently developed or acquired by any Member, any Raging Capital Designee or any Representative thereof without violating any of the obligations of any Member, any Raging Capital Designee, the Raging Capital Group or their Representatives under this Agreement or any other confidentiality agreement, or under any other contractual, legal, fiduciary or binding obligation of any Member, and Raging Capital Designee or any Representative thereof and without use of any Confidential Information. Each Member and each Raging Capital Designee will undertake reasonable precautions to safeguard and protect the confidentiality of the Confidential Information, to accept responsibility for any breach of this Section 5.1 by any Representatives of any Members or Raging Capital Designees, including taking all reasonable measures (including but not limited to court proceedings) to restrain Representatives from prohibited or unauthorized disclosures or uses of the Confidential Information. Each Member and each Raging Capital Designee acknowledges that the U.S. securities laws prohibit any person who has received from an issuer material, non-public information concerning such issuer from purchasing or selling securities of

 
 

 

such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

5.2            Release.

(a)             Each Member and each Raging Capital Designee does for itself, himself and its or his respective successors, assigns, heirs, past and present stockholders, subsidiaries, members, managers, directors, officers, employees, agents, and other representatives hereby to the maximum extent permitted by law irrevocably forever release, discharge and waive any and all claims, rights, causes of action, suits, obligations, debts, demands, liabilities, controversies, costs, expenses, fees, or damages of any kind (including, but not limited to, any and all claims alleging violations of federal or state securities laws, common-law fraud or deceit, breach of fiduciary duty, negligence or otherwise), whether directly, derivatively, representatively or in any other capacity, in law or equity, whether known or unknown, suspected or unsuspected, unanticipated as well as anticipated, against the Company or any of its Affiliates, including, without limitation, any and all of its or their present and/or past directors, officers, members, partners, employees, shareholders, creditors, fiduciaries, agents, and their respective successors and assigns (collectively, the “Company Released Parties”) with respect to or arising out of any event, fact, condition, act, omission or circumstance existing on or prior to the date of this Agreement. Each Member and each Raging Capital Designee also represents that it has not assigned any claim or possible claim against the Company Released Parties, it fully intends to release all claims against the Company Released Parties and it has been advised by, and has consulted with counsel with respect to the execution and delivery of this letter agreement and has been fully apprised of the consequences of the waivers, releases and discharges set forth herein.

(b)            The Company does for itself and its respective successors, assigns, heirs, past and present stockholders, subsidiaries, members, managers, directors, officers, employees, agents, and other representatives hereby to the maximum extent permitted by law irrevocably forever release, discharge and waive any and all claims, rights, causes of action, suits, obligations, debts, demands, liabilities, controversies, costs, expenses, fees, or damages of any kind (including, but not limited to, any and all claims alleging violations of federal or state securities laws, common-law fraud or deceit, breach of fiduciary duty, negligence or otherwise), whether directly, derivatively, representatively or in any other capacity, in law or equity, whether known or unknown, suspected or unsuspected, unanticipated as well as anticipated, against any Member or Raging Capital Designee, including, without limitation, any and all of its or their present and/or past directors, officers, members, partners, employees, shareholders, creditors, fiduciaries, agents, and their respective successors and assigns (collectively, the “Raging Capital Released Parties”) with respect to or arising out of any event, fact, condition, act, omission or circumstance existing on or prior to the date of this Agreement. The Company also represents that it has not assigned any claim or possible claim against the Raging Capital Released Parties, it fully intends to release all claims against the Raging Capital Released Parties and it has been advised by, and has consulted with counsel with respect to the execution and delivery of this letter agreement and has been fully apprised of the consequences of the waivers, releases and discharges set forth herein.

5.3            Governing Law; Jurisdiction. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Maryland without

 
 

 

giving effect to the principles of conflicts of laws. The parties agree that any state or federal court located in the State of Maryland (“Maryland Courts”) shall have exclusive jurisdiction with respect to all actions and proceedings arising out of or relating to this Agreement. Each party hereby (i) consents to submit itself to the personal jurisdiction of the Maryland Courts in the event any dispute among the parties arises out of or relates to this Agreement, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other requests for leave from any such court, (iii) agrees that it shall not bring any action relating to this Agreement in any other court and irrevocably waives the right to trial by jury in the event of any such dispute and (iv) irrevocably consents to service of process by delivery of notice complying with Section 5.6.

5.4            Successors and Assigns; Third Party Beneficiaries. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No party shall assign this Agreement or any rights or obligations hereunder without, with respect to any Member of the Raging Capital Group and the Raging Capital Designees, the prior written consent of the Company, and with respect to the Company, the prior written consent of the Raging Capital Group. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons, except as explicitly provided herein.

5.5            Entire Agreement; Amendment. This Agreement, including the schedules and exhibits hereto, constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof. Any previous agreements, including, but not limited to the Settlement Agreement dated March 17, 2015, and the Settlement Agreement dated May 27, 2016, in each case, as amended or supplemented, among the parties relative to the specific subject matter hereof are superseded by this Agreement and shall be of no further force or effect. Neither this Agreement nor any provision hereof may be amended, changed, waived, discharged or terminated other than by a written instrument signed by all of the parties hereto.

5.6            Notices, etc. All notices and other communications required or permitted hereunder shall be effective upon receipt by email to all persons whose email addresses are set forth below, with a copy also sent by express overnight delivery service, to the party to be notified, at the respective addresses set forth below, or at such other address which may hereinafter be designated in writing:

If to the Raging Capital Group or the Raging Capital Designees:

 

Raging Capital Management, LLC
Ten Princeton Avenue
P.O. Box 228
Rocky Hill, New Jersey 08553
Attention: Frederick C. Wasch
Email: fred@ragingcapital.com

 

 
 

 

 

with a copy to:

 

Olshan Frome Wolosky LLP
1325 Avenue of the Americas
New York, New York 10019
Attention: Steve Wolosky, Esq.
Email: swolosky@olshanlaw.com

 

 

If to the Company, to:

 

A. M. Castle & Co.
1420 Kensington Road
Suite 220
Oak Brook, Illinois 60523
Attention: Marec E. Edgar, Corporate Secretary
Email: corporatesecretary@amcastle.com

 

 

with a copy to:

 

McDermott Will & Emery LLP
227 West Monroe Street
Chicago, Illinois 60606-5096
Attention: Eric Orsic, Esq.
Email: eorsic@mwe.com

 

5.7            Severability. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

5.8            Titles and Subtitles. The titles of the Articles and Sections of this Agreement are for convenience of reference only and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any of its provisions.

5.9            Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties (including by means of electronic delivery of facsimile or .pdf signatures).

5.10         Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement, or any waiver of any

 
 

 

provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing, and all remedies, either under this Agreement, by law or otherwise, shall be cumulative and not alternative.

5.11         Consents. Any permission, consent, or approval of any kind or character under this Agreement shall be in writing and shall be effective only to the extent specifically set forth in such writing.

5.12         SPECIFIC PERFORMANCE. THE PARTIES HERETO AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH ITS SPECIFIC INTENT OR WERE OTHERWISE BREACHED. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS, WITHOUT BOND, TO PREVENT OR CURE BREACHES OF THE PROVISIONS OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY MAY BE ENTITLED BY LAW OR EQUITY, AND ANY PARTY SUED FOR BREACH OF THIS AGREEMENT EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN DAMAGES WOULD BE ADEQUATE.

5.13         Construction of Agreement. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regard to events of drafting or preparation. The term “including” shall in all instances be deemed to mean “including without limitation.”

5.14         Section References. Unless otherwise stated, any reference contained herein to a Section or subsection refers to the provisions of this Agreement.

5.15         Variations of Pronouns. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require.

5.16         Expenses. All fees and expenses incurred by each of the parties hereto in connection with the matters contemplated by this Agreement shall be borne by such party.

[Remainder of Page Intentionally Left Blank]

 
 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first written above.

  A. M. CASTLE & CO.
   
   
  By:

  Name: Marec E. Edgar
  Title: Executive Vice President, General Counsel, Secretary & Chief Administrative Officer
       

 

 

 
 

 

RAGING CAPITAL MASTER FUND, LTD.
 
By: Raging Capital Management, LLC Investment Manager
 
 
By:

Name: William C. Martin
Title: Chairman, Chief Investment Officer and Managing Member
 
 
RAGING CAPITAL MANAGEMENT, LLC
 
By:

Name: William C. Martin
Title: Chairman, Chief Investment Officer and Managing Member
 
 

William C. Martin
       

 

 
 

 

 

Steven W. Scheinkman, solely with respect to Sections 3.1 and 5

 

 

Kenneth H. Traub, as a Raging Capital Designee, solely with respect to Sections 3.1, 3.3, 4 and 5

 

 

Allan J. Young, as a Raging Capital Designee, solely with respect to Sections 3.1, 3.3, 4 and 5
 

 

Richard N. Burger, as a Raging Capital Designee, solely with respect to Sections 3.1, 3.3, 4 and 5
 
 
 
 
 

SCHEDULE A

RAGING CAPITAL GROUP

Raging Capital Master Fund, Ltd.

Raging Capital Management, LLC

William C. Martin