A.M. CASTLE & CO. 8-K [cas-8k_050417.htm]

 

Exhibit 10.1

 

THIRD AMENDMENT

TO CREDIT AND GUARANTY AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AND GUARANTY AGREEMENT (this “Third Amendment”)
is dated as of May 4, 2017 and entered into by and among A.M. CASTLE & CO., a
corporation organized under the laws of the state of Maryland (the “Company”)
and TOTAL PLASTICS INC., a corporation organized under the laws of the state of
Michigan (“TPI”; and together with the Company, each, a “Borrower” and
collectively, the “Borrowers”), A.M. CASTLE & CO. (CANADA) INC., a corporation
existing under the laws of the province of British Columbia, Canada (“Castle
Canada”), HY-ALLOY STEELS COMPANY, a corporation organized under the laws of the
state of Delaware (“HY-Alloy”), KEYSTONE SERVICE, INC., a corporation organized
under the laws of the state of Indiana (“Keystone Service”) and KEYSTONE TUBE
COMPANY, LLC, a limited liability company organized under the laws of the state
of Delaware (“Keystone”; and together with Castle Canada, HY-Alloy, Keystone
Service and each other Subsidiary (as defined in the Agreement that is defined
below) of the Company party hereto from time to time as a guarantor, a
“Guarantor” and collectively, the “Guarantors”), the Lenders party to the
Agreement from time to time, CANTOR FITZGERALD SECURITIES (“Cantor Fitzgerald”,
as Administrative Agent (in such capacity, the “Administrative Agent”) and
Collateral Agent (in such capacity, the “Collateral Agent”), and is made with
reference to that certain Credit and Guaranty Agreement dated as of December 8,
2016 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”), by and between the Borrowers, the
Guarantors, the Lenders, the Administrative Agent, and the Collateral Agent.
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Agreement.

RECITALS

WHEREAS, the Borrowers, the Lenders, the Guarantors, the Administrative Agent,
and the Collateral Agent entered into the Agreement on or about December 8,
2016;

WHEREAS, the Agreement contemplates that the next Delayed Draw Term Loan
Commitment in the amount of $12,500,000.00 will be available to the Borrowers on
or after June 12, 2017;

WHEREAS, given the Borrowers’ liquidity needs, the Lenders are willing to
advance the availability date of such Delayed Draw Term Loan Commitment to May
10, 2017 or thereafter;

WHEREAS, the Agreement imposes certain mandatory prepayment provisions on the
Borrowers;

WHEREAS, the Lenders are willing to waive such mandatory prepayment provisions
as to the contemplated receipt of certain funds by the Borrowers; and

WHEREAS, the Borrowers, the Guarantors, the Lenders, the Administrative Agent
and the Collateral Agent desire to amend the Agreement accordingly as set forth
below on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the Borrowers, the Guarantors, the Lenders, the
Administrative Agent, and the Collateral Agent hereby agree as follows:

 

 

 

 

Section 1.

AMENDMENTS TO THE AGREEMENT

1.1       

Amendments to Section 2.2(a): Delayed Draw Term Loans

A.       

Section 2.2(a) (Delayed Draw Term Loan Commitments) of the Agreement is hereby
amended in its entirety to read as follows:

Delayed Draw Term Loan Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make the Delayed Draw Term Loans to the
Borrowers in an aggregate amount up to but not exceeding such Lender’s Delayed
Draw Term Loan Commitment; provided, that (i) the Borrowers shall not be
entitled to issue more than two Delayed Draw Funding Notices in total in respect
of the Delayed Draw Term Loan Commitments, (ii) $24,500,000 of the Delayed Draw
Term Loan Commitment will be available to the Borrowers on or after December 12,
2016, (iii) $12,500,000 of the Delayed Draw Term Loan Commitment will be
available to the Borrowers on or after May 10, 2017, and (iv) after giving
effect to the making of any Delayed Draw Term Loans, in no event shall the Total
Utilization of the Delayed Draw Term Loan Commitments exceed the Delayed Draw
Term Loan Commitments then in effect. Any amount borrowed pursuant to this
Section 2.2(a) and subsequently repaid or prepaid may not be reborrowed. The
portion of each Lender’s Delayed Draw Term Loan Commitment funded after giving
making a Delayed Draw Term Loan shall terminate immediately and without further
action after giving effect to the funding by such Lender on such date. The
Lenders agree that: (i) the solvency requirement in Section 4.20 below shall not
apply for purposes of the Delayed Draw Term Loan Commitment that will be
available to the Borrowers pursuant to subclause (iii) above; and (ii) execution
of the Restructuring Support Agreement dated as of April 6, 2017 by the
Borrowers and the Guarantors does not constitute a Material Adverse Effect.

1.2       

Amendments to Section 2.10: Mandatory Prepayments

A.       

Section 2.10(f) (Extraordinary Receipts) of the Agreement is hereby amended in
its entirety to read as follows:

Extraordinary Receipts. No later than the third Business Day following the date
of receipt by the Company or any of its Subsidiaries of any Extraordinary
Receipts or tax refunds in an amount greater than $500,000 either individually
or in aggregate in any financial year, the Company shall prepay the Loans
together with all amounts owing in accordance with Section 2.12(b), which
amounts, including any Exit Fee, will be payable solely from the proceeds of
such Extraordinary Receipts or tax refunds in an aggregate amount equal to such
Extraordinary Receipts or tax refunds; provided, that notwithstanding the
foregoing, neither the Company nor any of its Subsidiaries shall be required to
prepay the Loan from any net cash proceeds received by the Company pursuant to
the release of any letter of credit cash collateral account related to its
Janesville, Wisconsin location.

Section 2.

CONDITIONS TO EFFECTIVENESS

Section 1 of this Third Amendment shall become effective only upon (a) execution
of this Third Amendment by each of the parties hereto and (b) written consent
hereto by each Lender.

Section 3.

REPRESENTATIONS AND WARRANTIES

A.       

Credit Party Representations and Warranties. Each of the Credit Parties
represents and warrants as follows:

(i)       

Authorization. The execution, delivery and performance by each Credit Party of
this Third Amendment and the incurrence of all obligations hereunder, are within
such Credit Party’s corporate powers and have been duly authorized by all
necessary corporate action.

(ii)       

No Conflict. The execution, delivery and performance by each Credit Party of
this Third Amendment do not (i) violate such Credit Party’s certificate of
formation or operating agreement, or (ii) violate any law or regulation or any
order, judgment or decree of any court or governmental agency body binding on
such Credit Party, or (iii) result in a breach of or a default under, or result
in or require the imposition of a Lien pursuant to any contract. 

 

 

 

(iii)       

Governmental Consents. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Credit Parties
of this Third Amendment.

(iv)       

Validity. This Third Amendment and the Agreement as amended hereby are legal,
valid, and binding obligations of each Credit Party, enforceable against each
Credit Party in accordance with each such document’s terms, except as
enforcement may be limited by applicable laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.

Section 4.

MISCELLANEOUS

A.       

Reference to and Effect on the Agreement and the Other Credit Documents.

(i)       

Except as specifically amended by this Third Amendment, the Agreement and the
other Credit Documents shall remain in full force and effect and are hereby
ratified and confirmed.

(ii)       

The execution, delivery and performance of this Third Amendment shall not,
except as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of the Lenders under the
Agreement or any of the other Credit Documents.

B.       

Fees and Expenses. The Borrowers acknowledge that all costs, fees and expenses
as described in Section 10.2 of the Agreement incurred by any Agent and the
Lenders with respect to this Third Amendment and the documents and transactions
contemplated hereby shall be for the account of the Borrowers.

C.       

Instruction to the Agents. Each of the Lenders signatory hereto (constituting
all of the Lenders) directs the Administrative Agent and the Collateral Agent to
execute and deliver this Third Amendment and authorize the Administrative Agent
and the Collateral Agent to take action as agent on its behalf and to exercise
such powers and discretion under the Agreement and the other Credit Documents as
are delegated to the Administrative Agent and the Collateral Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto.  The Loan Parties and Lenders agree that the indemnifications provided
in Sections 9.4, 9.7 and 10.3 of the Agreement apply to the foregoing
instruction and the execution and delivery of this Third Amendment.

D.       

Headings. Section headings in this Third Amendment are included for convenience
of reference only and shall not be given any substantive effect.

E.       

Applicable Law. THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAW PRINCIPLES THAT WOULD REQUIRE APPLICATION OF ANOTHER LAW.

F.       

Counterparts; Effectiveness. This Third Amendment may be executed in any number
of counterparts and by different parties hereto in separate 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 agreement.

[Remainder of page intentionally left blank] 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

  BORROWERS:       A.M. CASTLE & CO.       By: /s/ Patrick R. Anderson    
Name:  Patrick R. Anderson     Title:  Executive Vice President, Chief Financial
Officer & Treasurer       TOTAL PLASTICS INC.       By: /s/ Patrick R. Anderson
    Name:  Patrick R. Anderson     Title:  Vice President & Treasurer      
GUARANTORS:       A.M. CASTLE & CO. (CANADA) INC.   By: /s/ Patrick R. Anderson
    Name:  Patrick R. Anderson     Title:  Vice President, Chief Financial
Officer & Treasurer       HY-ALLOY STEELS COMPANY       By: /s/ Patrick R.
Anderson     Name:  Patrick R. Anderson     Title:  Treasurer       KEYSTONE
SERVICE, INC.       By: /s/ Patrick R. Anderson     Name:  Patrick R. Anderson  
  Title:  Treasurer       KEYSTONE TUBE COMPANY, LLC       By: /s/ Patrick R.
Anderson     Name:  Patrick R. Anderson     Title:  Treasurer

 

 

 

 

  HIGHBRIDGE INTERNATIONAL LLC   as Lender       By: HIGHBRIDGE CAPITAL
MANAGEMENT, LLC,     as Trading Manager       By: /s/ Jonathan Segal     Name:
Jonathan Segal     Title: Managing Director       HIGHBRIDGE TACTICAL CREDIT &
CONVERTIBLES MASTER FUND, L.P.,   as Lender       By: HIGHBRIDGE CAPITAL
MANAGEMENT, LLC,     as Trading Manager       By: /s/ Jonathan Segal     Name:
Jonathan Segal     Title: Managing Director

 

 

 

 

  WHITEBOX ASYMMETRIC PARTNERS, L.P.,   as Lender           By: /s/ Mark
Strefling     Name: Mark Strefling     Title: Chief Operating Officer & General
Counsel           WHITEBOX CREDIT PARTNERS, L.P.,   as Lender           By: /s/
Mark Strefling     Name: Mark Strefling     Title: Chief Operating Officer &
General Counsel           WHITEBOX MULTI-STRATEGY PARTNERS, L.P.,   as Lender  
        By: /s/ Mark Strefling     Name: Mark Strefling     Title: Chief
Operating Officer & General Counsel           WHITEBOX INSTITUTIONAL PARTNERS,
L.P.,   as Lender           By: /s/ Mark Strefling     Name: Mark Strefling    
Title: Chief Operating Officer & General Counsel

 

 

 

 

  CORRE OPPORTUNITIES QUALIFIED MASTER FUND, LP,   as Lender           By: /s/
Eric Soderlund     Name: Eric Soderlund     Title: Authorized Signatory        
  CORRE OPPORTUNITIES FUND, LP,   as Lender           By: /s/ Eric Soderlund    
Name: Eric Soderlund     Title: Authorized Signatory           CORRE
OPPORTUNITIES II MASTER FUND, LP,   as Lender           By: /s/ Eric Soderlund  
  Name: Eric Soderlund     Title: Authorized Signatory

 

 

 

 

  WFF CAYMAN II LTD.,   as Lender       By: WOLVERINE ASSET MANAGEMENT, LLC, its
investment manager           By: /s/ Kenneth L. Nadel     Name: Kenneth L. Nadel
    Title: Chief Operating Officer

 

 

 

SGF, LLC

  as Lender           By: /s/ Jonathan B. Mellin     Name: Jonathan B. Mellin  
Title: Member

 

 

 

  CANTOR FITZGERALD SECURITIES,   as Administrative Agent and Collateral Agent  
        By: /s/ Shawn P. Matthews     Name: Shawn P. Matthews     Title: Chief
Executive Officer