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Exhibit 4.3
A. M. CASTLE & CO.
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SECOND AMENDMENT TO
NOTE AGREEMENT
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Dated as of November 22, 2002
$20,000,000 RESET RATE SENIOR SECURED NOTES DUE 2008
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As of November 22, 2002
To each of the Current Holders
Named in Annex 1 hereto
Ladies and Gentlemen:
A. M. CASTLE & CO., a Maryland corporation (together with any successors
and assigns, the "Company"), hereby agrees with each of you as follows:
1. PRIOR ISSUANCE OF NOTES, ETC.
The Company issued and sold (i) twenty million dollars ($20,000,000) in
aggregate principal amount of its 6.49% Senior Notes due April 15, 2008 (the
"Existing Notes," and, as amended by this Agreement and as may be further
amended, restated or otherwise modified from time to time, the "Notes) pursuant
to a Note Agreement, dated as of April 1, 1996, between the Company and
Nationwide Life Insurance Company (the "Original Note Agreement). The Original
Note Agreement was amended by the First Amendment and Waiver to Note Agreement
dated as of December 1, 1998 (the Original Note Agreement, as amended by the
foregoing and as in effect immediately prior to giving effect to the amendments
provided for by this Agreement, is referred to herein as the "Existing Note
Agreement" and, as may be amended pursuant to this Agreement and as may be
further amended, restated or otherwise modified from time to time, the "Note
Agreement"). The register kept by the Company for the registration and transfer
of the Notes indicates that each of the Persons named in Annex 1 hereto
(collectively, the "Current Holders") is currently a holder of the aggregate
principal amount of the Notes indicated in such Annex.
2. REQUEST FOR CONSENT TO AMENDMENTS
The Company requests that each of the Current Holders consent to the
amendments (collectively, the "Amendments") to the Existing Note Agreement
provided for by this Agreement.
3. WARRANTIES AND REPRESENTATIONS
To induce the Current Holders to enter into this Agreement and to consent
to the Amendments, the Company warrants and represents to each of the Current
Holders as follows (it being agreed, however, that nothing in this Section 3
shall affect any of the warranties and representations previously made by the
Company in or pursuant to the Existing Note Agreement, and that all of such
other warranties and representations, as well as the warranties and
representations in this Section 3, shall survive the effectiveness of the
Amendments):
3.1. No Material Adverse Change.
Except for matters publicly disclosed in the Company's most recent reports
to the Commission under the Exchange Act, since December 31, 2001, there has
been no change in the business operations, profits, financial condition,
properties or business prospects of the Company except changes that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2. Corporate Authority; Authorization.
The Company is a corporation duly organized and existing in good standing
under the laws of the State of Maryland and has the requisite corporate power
and authority to execute and deliver this Agreement and to perform its
obligations under the Note Agreement. This Agreement has been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or other similar laws affecting the enforceability of
creditors' rights generally, and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3.3. Full Disclosure.
Neither the financial statements and other certificates previously provided
to each of the Current Holders pursuant to the provisions of the Existing Note
Agreement nor the statements made in this Agreement nor any other written
statements furnished to each of the Current Holders by or on behalf of the
Company in connection with the proposal and negotiation of the transactions
contemplated hereby (other than pro forma financial information or financial or
other projections or any forward-looking statements), or disclosed in the
Company's report on Form 10-Q filed with the Commission on November 14, 2002 or
report on Form 10-K filed with the Commission on March 14, 2002, taken as a
whole, contained any untrue statement of a material fact or omitted a material
fact necessary to make the statements contained therein and herein not
misleading, in each case as of the time such financial statements or
certificates were provided or such statements were made or furnished. There is
no fact known to the Company relating to any event or circumstance that has
occurred or arisen since the Closing Date that the Company has not disclosed to
each of the Current Holders in writing or disclosed in the Company's report on
Form 10-Q filed with the Commission on November 14, 2002 or report on Form 10-K
filed with the Commission on March 14, 2002, that has had or, so far as the
Company can now reasonably foresee, could reasonably be expected to have, a
Material Adverse Effect. All pro forma financial information, financial or other
projections and forward-looking statements delivered to the Current Holders has
been prepared in good faith by the Company based on reasonable assumptions.
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3.4. Ownership of Subsidiaries.
(a) Annex 2 contains a complete and correct description of the
Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization and the percentage of shares
of each class of its capital stock or similar equity interests outstanding
owned by the Company and each other Subsidiary. The Subsidiary Side Letter
contains a complete and correct description of the Company's Subsidiaries,
showing, as to each Subsidiary, the book value of its assets as of
September 30, 2002 and its contribution to Consolidated EBITDA for the four
quarter period ended on September 30, 2002.
(b) Each Subsidiary identified in Annex 2 is a corporation or other
legal entity duly organized, validly existing and, except as set forth in
Annex 2, in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or other legal
entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.
3.5. Title to Properties.
The Company and its Subsidiaries have good and sufficient title to or the
legal right to use their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet of the Company delivered pursuant to the provisions
of Section 6.6 of the Existing Note Agreement (except as sold or otherwise
disposed of in the ordinary course of business) or purported to have been
acquired by the Company or any Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each case free and
clear from Liens not permitted by the Note Agreement.
3.6. Solvency.
The fair value of the business and assets of each of the Company and each
Subsidiary, exceeds, as of the Effective Date, the amount that will be required
to pay the probable liabilities of such Person (including subordinated,
contingent, unmatured and unliquidated liabilities), on existing debts as they
may become absolute and matured. No such Person, after the Effective Date, will
be engaged in any business or transaction, or be about to engage in any business
or transaction, for which such Person has unreasonably small assets or capital,
and no such Person has incurred, or has any intent to, incur debts that would be
beyond such Person's ability to pay as they mature.
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3.7. Intent.
Neither the Company nor any Subsidiary is entering into this Agreement with
any intent to hinder, delay, or defraud either current creditors or future
creditors of the Company or any Subsidiary.
3.8. No Defaults.
No event has occurred and no condition exists that, upon the execution and
delivery of this Agreement and the effectiveness of the Amendments, would
constitute a Default or an Event of Default.
3.9. Financial Statements.
The quarterly and annual financial statements most recently delivered to
each of the Current Holders pursuant to Section 6.6 of the Existing Note
Agreement have been prepared in accordance with GAAP consistently applied and
present fairly, in all material respects, the consolidated financial position of
the Company and its consolidated subsidiaries as of such dates and the results
of their operations and cash flows for the periods specified therein.
3.10. Litigation; Observance of Agreements.
(a) Other than as disclosed in the footnotes to the financial
statements in the Company's most recent report on Form 10-Q and Form 10-K
filed with the Commission on November 14 2002 and March 14, 2002, there are
no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including, without limitation, Environmental Laws) of
any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
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3.11. Charter Instruments; Other Agreements.
Neither the Company nor any Subsidiary is in violation in any respect of
any term of any charter instrument or bylaw. Upon the execution and delivery
hereof and the effectiveness of the Amendments as provided herein, neither the
Company nor any Subsidiary is in violation or default in any material respect of
any term in any agreement or other instrument to which it is a party or by which
it or any of its material property may be bound or affected. The execution,
delivery and performance by the Company of this Agreement will not conflict with
or result in the breach of any of the terms, conditions or provisions of any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or violate any provision
of any statute or other rule or regulation of any Government Authority
applicable to the Company or any Subsidiary.
3.12. Taxes.
The Company and the Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and the Subsidiaries in respect of federal, state or
other taxes for all fiscal periods are adequate. The federal income tax
liabilities of the Company and the Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1997.
3.13. Certain Laws.
The execution and delivery of this Agreement by the Company:
(a) is not subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as
amended, the Transportation Acts, as amended, or the Federal Power Act, as
amended, and
(b) does not violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.
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3.14. Guarantee Representations.
All of the representations and warranties of the Company and each Guarantor
set forth in the Guarantee Agreement are true and correct.
3.15. Debt; Liens.
Annex 3(a) to this Agreement correctly describes all Debt of the Company
and its Subsidiaries as of the date hereof. Annex 3(b) to this Agreement
correctly describes all outstanding Liens securing Debt in an amount greater
than $1,000,000 and all other material Liens on property of the Company or its
Subsidiaries as of the date hereof. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Subsidiary listed on
Annex 3(a) hereto and no event or condition exists with respect to any Debt of
the Company or any Subsidiary listed on Annex 3(a) that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to
cause such Debt to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
3.16. Transaction is Legal andAuthorized; Obligations are Enforceable.
(a) Transaction is Legal and Authorized. Each of the execution and
delivery of this Agreement and the Guarantee Agreement by the Company and
each Guarantor and compliance by the Company and each of the Guarantors
with all of their respective obligations thereunder:
(i) is within the corporate powers of the Company and each
Guarantor, as the case may be;
(ii) is legal and, except as set forth on Annex 4, does not
conflict with, result in any material breach in any of the provisions
of, constitute a material default under, or result in the creation of
any Lien upon any material property of the Company or any Guarantor
under the provisions of, any agreement, charter instrument, bylaw or
other instrument to which it is a party or by which it or any of its
property may be bound; and
(iii) does not give rise to a right or option of any other Person
under any agreement or other instrument, which right or option could
reasonably be expected to have a Material Adverse Effect.
(b) Obligations are Enforceable. Each of this Agreement and the
Guarantee Agreement have been duly authorized by all necessary action on
the part of the Company and each of the Guarantors, as the case may be, and
has been executed and delivered by one or more duly authorized officers of
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the Company and each of the Guarantors party thereto, and each constitutes
a legal, valid and binding obligation of the Company and each of the
Guarantors party thereto, enforceable in accordance with its terms, except
that such enforceability may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
3.17. Governmental Consent.
Neither the nature of the Company or any Guarantor thereof, or of any of
their respective businesses or properties, nor any relationship between the
Company or any such Guarantor and any other Person, nor any circumstance in
connection with the execution and delivery of this Agreement or the Guarantee
Agreement is such as to require a consent, approval or authorization of, or
filing, registration or qualification with, any Governmental Authority on the
part of the Company or any Guarantor as a condition to the execution and
delivery of this Agreement or the Guarantee Agreement.
4. AMENDMENTS; WAIVERS; ACKNOWLEDGMENTS.
4.1. Amendments to Existing Note Agreement and Existing Notes.
(a) Subject to the provisions of Section 4.2, the Existing Note
Agreement is hereby amended in the manner specified in Exhibit A to this
Agreement.
(b) Subject to the provisions of Section 4.2, the Existing Notes are
hereby amended in the manner specified in Exhibit B1 to this Agreement.
4.2. Effectiveness of Amendments and Waivers.
The Amendments contemplated by Section 4.1(a) and 4.1(b) shall become
effective (the date of such effectiveness herein referred to as the "Effective
Date"), if at all, at such time as the Company and each Current Holder shall
have consented in writing to such Amendments by executing and delivering the
applicable counterparts of this Agreement. It is understood that any Current
Holder may withhold its consent for any reason or for no reason, and that,
without limitation of the foregoing, any Current Holder hereby makes the
granting of its consent contingent upon its receipt of each of the following:
(a) a certificate of the Secretary or Assistant Secretary of the Company
certifying as to resolutions of its Board of Directors and other constitutive
documents which authorize and permit the Company to execute and deliver this
Agreement and to consummate the transactions contemplated hereby;
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(b) closing opinions from (i) Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, special
counsel to the Company, (ii) ▇▇▇▇▇▇▇ ▇▇▇▇▇, special Maryland counsel to the
Company, and (iii) ▇▇▇▇▇ ▇▇▇▇▇, Corporate Counsel of the Company, dated as of
the Effective Date, covering the matters set forth on Exhibit C to this
Agreement. This Section 4.2(b) shall constitute direction by the Company and
each Guarantor to such counsel to deliver such closing opinions to the Current
Holders;
(c) confirmation from your special counsel that its fees and disbursements
reflected on a statement delivered in connection with the execution and delivery
of this Agreement pursuant to Section 7 have been paid in full;
(d) if required by applicable regulations, a Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau reflecting the amendment to the
interest rate on the Notes contemplated by this Agreement;
(e) a Guarantee Agreement, dated as of November 22, 2002 (as may be
amended, restated or otherwise modified from time to time, the "Guarantee
Agreement"), duly executed by each Guarantor in substantially the form of
Exhibit D to this Agreement, and (ii) a certificate of the Secretary or
Assistant Secretary of each such Guarantor certifying as to the resolutions of
their Board of Directors and other constitutive documents which authorize and
permit such Guarantors to execute and deliver the Guarantee Agreement and to
consummate the transactions contemplated hereby;
(f) the Company shall have received at least $10,000,000 in gross proceeds
from the issuance and sale of its convertible preferred stock (in one or more
transactions) substantially in accordance with the economic terms set forth on
the term sheet dated as of October 24, 2002;
(g) copies of one or more agreements reasonably satisfactory to such
Current Holder providing for amendments to certain covenants of the Company
contained in agreements of the Company with The Bank of Nova Scotia, Bank of
America, N.A. and The Northern Trust Company; and
(h) the Subsidiary Side Letter.
4.3. No Other Amendments; Confirmation.
Except as expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this Agreement, (b) the terms of this
Agreement shall not operate as a waiver by you of, or otherwise prejudice any of
your rights, remedies or powers under, the Existing Note Agreement, the Existing
Notes or any other instrument or agreement executed in connection therewith or
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under any applicable law, and (c) the terms and provisions of the Existing Note
Agreement, the Existing Notes and each other instrument or agreement executed in
connection therewith shall continue in full force and effect.
5. COLLATERAL COVENANT
(a) The Company hereby agrees and covenants that it will, and will cause
each Significant Subsidiary to, on or before December 23, 2002, enter into, or
cause to be delivered, such agreements, documents or instruments of any kind
(including, without limitation, security agreements, mortgages, deeds of trust,
UCC financing statements and opinions of nationally recognized counsel as to the
enforceability, Lien perfection, no conflicts with agreements and other
customary matters), acceptable in all respects to the Required Holders, to grant
Liens in favor of a Collateral Agent on all personal property of the Company and
Significant Subsidiaries whether now held or hereafter acquired by the Company
or any such Significant Subsidiary (other than Excluded Receivables and Excluded
Collateral), in each case to secure the obligations of the Company and each
Guarantor under the Note Agreement, the Notes and the Guarantee Agreement;
provided, that the Company's obligation to grant such Liens on or before
December 23, 2002 shall be conditioned upon the execution by the holders of
Notes and the Other Senior Creditors of an Acceptable Intercreditor Agreement.
The Company further agrees and covenants that it will, and will cause each
Significant Subsidiary to, as soon as reasonably practicable after the Effective
Date and in any event on or before February 15, 2003, enter into, or cause to be
delivered, such agreements, documents or instruments of any kind (including,
without limitation, security agreements, mortgages, deeds of trust, UCC
financing statements and opinions of nationally recognized counsel as to the
enforceability, Lien perfection, no conflicts with agreements and other
customary matters) acceptable in all respects to the Required Holders, to grant
Liens in favor of the Collateral Agent on all real property owned by the Company
or any Significant Subsidiary, whether now held or hereafter acquired by the
Company or any such Significant Subsidiary (other than Excluded Collateral), in
each case to secure the Obligations of the Company and each Guarantor under the
Agreement and the Guarantee Agreement; provided, that the Company's obligation
to grant such Liens by February 15, 2003 shall be conditioned upon the execution
by the holders of the Notes and the Other Senior Creditors of an Acceptable
Intercreditor Agreement. Such collateral may be shared on a pari passu basis
with the Other Senior Creditors pursuant to an Acceptable Intercreditor
Agreement. Notwithstanding anything to the contrary in this Agreement or the
Note Agreement, the failure to comply with this Section 5(a) despite the
exercise by the Company of all commercially reasonable efforts to effect such
compliance shall not constitute a Default or Event of Default under this
Agreement or the Note Agreement and the sole and exclusive remedy for any breach
of this Section 5(a) shall be the adjustments set forth in the definitions of
"Applicable Base," "First Year Ratio" and "Second Year Ratio" as they relate to
Section 7.1 or 7.2 of the Note Agreement, as applicable.
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(b) Each of the holders of the Notes agrees (i) to use commercially
reasonable efforts to negotiate the terms of, and, contemporaneously with the
grant of such Liens to enter into, an Acceptable Intercreditor Agreement with a
bank or trust company to act as Collateral Agent and each of the Other Senior
Creditors (which Acceptable Intercreditor Agreement will provide that the
Collateral Agent may enter into an intercreditor agreement with the lender(s) or
purchaser(s) under any Receivables Purchase Agreement); and (ii) that at such
time the Company enters into an Acceptable Revolving Credit Facility to replace
the Existing Receivables Purchase Agreement (or any replacement thereof) and the
Company's unsecured debt obligations are Investment Grade, it will promptly take
such action requested by the Company to instruct the Collateral Agent to release
the Liens granted pursuant to the Security Documents as of the time such
Acceptable Revolving Credit Facility is entered into and becomes effective.
6. DEFINED TERMS
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the Existing Note Agreement as contemplated to be amended by
the Amendments.
7. EXPENSES
Whether or not any of the Amendments becomes effective, the Company will
promptly (and in any event within thirty (30) days of receiving any statement or
invoice therefor) pay all fees, expenses and costs relating to this Agreement,
including, but not limited to, (a) the cost of reproducing this Agreement and
the other documents delivered in connection herewith and (b) the reasonable fees
and disbursements of the Current Holders' special counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
LLP, incurred in connection with the preparation, negotiation and delivery of
this Agreement. This Section 7 shall not be construed to limit the Company's
obligations under Section 11.1 of the Note Agreement.
8. MISCELLANEOUS
8.1. Part of Note Agreement, Future References, etc.
The Agreement shall be construed in connection with and as a part of each
of the Existing Note Agreement and the Existing Notes and, except as expressly
amended by this Agreement, all terms, conditions and covenants contained in the
Existing Note Agreement, the Existing Notes and the other documents executed
and/or delivered in connection therewith are hereby ratified and shall be and
remain in full force and effect. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Agreement may refer to the Note Agreement without making specific reference
to this Agreement, but nevertheless all such references shall include this
Agreement unless the context otherwise requires.
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8.2. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS, UNITED STATES OF AMERICA,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
8.3. Duplicate Originals, Execution in Counterpart.
Two (2) or more duplicate originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and shall become effective at the time provided in Section 4.2
hereof, and each set of counterparts that, collectively, show execution by the
Company and each consenting Current Holder shall constitute one duplicate
original.
8.4. Binding Effect.
This Agreement shall be binding upon and shall inure to the benefit of the
Company and you and your respective successors and assigns.
[Remainder of page intentionally left blank. Next page is signature page.]
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If this Agreement is satisfactory to you, please so indicate by signing the
applicable acceptance on a counterpart hereof and returning such counterpart to
the Company, whereupon this Agreement shall become binding among the Company and
you in accordance with its terms.
Very truly yours,
A. M. CASTLE & CO.
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President and
Chief Executive Officer
[Signature Page to Second Amendment to Note Agreement]
Accepted:
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Fixed Income Securities
[Signature Page to Second Amendment to Note Agreement]
The undersigned Guarantors of the company hereby acknowledge and agree to the
terms and provisions contained herein and consent to the Company's execution
hereof:
KEYSTONE TUBE COMPANY, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
TOTAL PLASTICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
PARAMONT MACHINE COMPANY LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
ADVANCED FABRICATING TECHNOLOGY, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
[Signature Page to Second Amendment to Note Agreement]
▇▇▇▇▇▇ STEEL PLATE CO.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
METAL MART, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
DATAMET, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
[Signature Page to Second Amendment to Note Agreement]
EXHIBIT A
1. Section 1.1 of the Existing Note Agreement is hereby amended by deleting
the phrase "rate of 6.49% per annum" and substituting "Reset Rate" in lieu
thereof.
2. Section 1.1 of the Existing Note Agreement is hereby amended by deleting
the phrase "8.49%" and substituting "Reset Rate plus two percent (2%) per annum"
in lieu thereof.
3. The definition of "Net Working Capital" appearing in Section 5.1 of the
Existing Note Agreement is hereby amended and restated in its entirety to read
as follows:
"Net Working Capital - the sum of (i) the consolidated current
assets of the Company and its Subsidiaries determined in
accordance with GAAP and (ii) 75% of the LIFO Reserve, less
the consolidated current liabilities (excluding Current Debt
and Current Maturities of Funded Debt) of the Company and its
Subsidiaries determined in accordance with GAAP."
4. The definition of "Debt" appearing in Section 5.1 of the Existing Note
Agreement is hereby amended and restated in its entirety to read as follows:
"Debt - All Indebtedness (excluding obligations with respect
to bankers' acceptances and trade acceptance financings to the
extent such obligations, in the aggregate, are less than
$5,000,000, but including any such obligations, in the
aggregate, in excess of such amount) of the Company or any
Subsidiary, but excluding the aggregate outstanding investment
or claim held by purchasers, assignees or other transferees of
Receivables of the Company and its Subsidiaries in connection
with Securitization Transactions."
5. The definition of "Indebtedness appearing in Section 5.1 of the Existing
Note Agreement is hereby amended and restated in its entirety to read as
follows:
"Indebtedness - means for any Person, without
duplication, all (i) obligations for borrowed money or to pay
the deferred purchase price of property or assets (except
trade account payables), (ii) obligations secured by any Lien
upon property or assets owned by such Person, whether or not
such Person has assumed or become liable for the payment of
such obligations, (iii) obligations created or arising under
any conditional sale or other title retention agreement with
respect to property acquired, notwithstanding the fact that
the rights and remedies of the seller, lender or lessor under
such agreement in the event of default are limited to
repossession or sale of property, (iv) Capitalized Lease
Obligations, and (v) Guaranties of obligations of others of
the character referred to in the foregoing clauses (i) through
(iv), but excluding from Indebtedness the aggregate
outstanding investment or claim held by purchasers, assignees
or other transferees of Receivables of the Company and its
Subsidiaries in connection with Securitization Transactions."
6. The definition of "Receivables Purchase Agreement" appearing in Section
5.1 of the Existing Note Agreement is hereby amended and restated in its
entirety to read as follows:
Receivables Purchase Agreement - means the Existing
Receivables Purchase Agreement and any other similar agreement
pursuant to which any one or more of the Company or any
Subsidiary sells its accounts receivable as a means of
providing it working capital for its business operations.
7. The definition of "Consolidated Total Assets" appearing in Section 5.1
of the Existing Note Agreement is hereby amended and restated in its entirety to
read as follows:
"Consolidated Total Assets - means, at any time, all assets of
the Company and its Subsidiaries which would be reflected on a
consolidated balance sheet of such Persons at such time
prepared in accordance with GAAP."
8. The following definitions are hereby added to Section 5.1 of the
Existing Note Agreement in their proper alphabetical order:
"Applicable Base - means (a) prior to February 15, 2003,
$100,000,000 and (b) on or after February 15, 2003 either (i)
$100,000,000 if the Notes are Secured or (ii) $115,901,000 if
the Notes are not Secured.
"Acceptable Intercreditor Agreement - means an intercreditor
and collateral agency agreement, in form and substance
reasonably satisfactory to the Required Holders of the Notes,
by and among an independent bank or trust company selected by
the Company and reasonably satisfactory to the Required
Holders but not affiliated with any of such holders or the
Exhibit A-2
Other Senior Creditors, the Institutional Holders which are or
may become a party to this Agreement, the Other Senior
Creditors and the Company which shall provide, among other
things, that any future Indebtedness of the Company owing to
one or more of the Other Senior Creditors or the Institutional
Holders party hereto which is incurred in compliance with
Section 7.2 hereof, may be secured on an equal and ratable
basis by the Liens which are granted pursuant to the terms of
the Security Documents.
Acceptable Revolving Credit Facility - means a loan agreement
or similar facility pursuant to which a lender or lenders
provides revolving loans to the Company or any Subsidiary for
the primary purpose of financing such Person's ongoing
business operations so long as such agreement or facility (a)
is not secured by Liens on the property of the Company or any
Subsidiary and (b) provides for interest rates, fees and other
pricing terms similar to those generally available to
borrowers whose unsecured long term debt is rated Investment
Grade. For the avoidance of doubt, no Receivables Purchase
Agreement shall constitute a Revolving Loan Facility.
A. M. Castle Canada - means A. M. Castle & Co. (Canada), Inc.
and any successor thereto.
Collateral Agent - means an independent bank or trust company
selected by the Company and reasonably satisfactory to the
Required Holders but not affiliated with any of such holders
or the Other Senior Creditors acting as collateral agent or
trustee for the benefit of the holders of the Notes and the
Other Senior Creditors pursuant to the provisions of the
Security Documents.
Consolidated EBITDA - means, for any period, the sum of (a)
Consolidated Net Income for such period; plus (b) to the
extent, and only to the extent, that such aggregate amount was
deducted in the computation of such Consolidated Net Income,
the aggregate amount of (i) income tax expense of the Company
and its Subsidiaries for such period, plus (ii) charges for
depreciation, amortization and other non-cash charges of the
Company and its Subsidiaries for such period, plus (iii)
Interest Charges for such period.
Exhibit A-3
Current Debt - means, at any time and with respect to any
Person, all Indebtedness of such Person outstanding at such
time other than Funded Debt of such Person.
Current Maturities of Funded Debt - means (without
duplication), at any time and with respect to any item of
Funded Debt, the portion of such Funded Debt outstanding at
such time which by the terms of such Funded Debt or the terms
of any instrument or agreement relating thereto is (a) due on
demand or within 365 days from such time (whether by sinking
fund, other required prepayment or final payment at maturity)
and (b)(i) is not directly or indirectly renewable, extendible
or refundable at the option of the obligor under an agreement
or firm commitment in effect at such time to a date 365 days
or more from such time or (ii) if so renewable, extendible or
refundable at the option of the obligor, the obligor shall
have agreed that it will not renew, extend or refund to a date
365 days or more from such time.
Effective Date - means the "Effective Date" as defined in the
Second Amendment.
Excluded Collateral - means (i) any property (whether
currently existing or subsequently acquired) subject to a Lien
permitted under Section 7.4 of this Agreement, to the extent
the agreement creating such Lien prohibits additional Liens on
such property; (ii) cash sufficient to secure the Company's
(or any of its Subsidiaries') obligations to pay its workmen's
compensation benefits, including obligations to any Person
providing surety, insurance, letters of credit or other credit
support so long as such cash does not secure any other
obligation for any other purpose; (iii) all property purchased
with proceeds of the note issued pursuant to the Loan
Agreement dated as of November 1, 1994 between the Company and
the City of Hammond, Indiana; (iv) all properties and assets
of A. M. Castle Canada, and any successor holder of such
assets; (v) other property with a deminumus fair market value
that, individually or in the aggregate with all other such
property, is not material to the continued business operations
of the Company or any Subsidiary which owns such property; and
(vi) any leasehold interest in any real property leased by the
Company or any Subsidiary the termination of which would not
result in a Material Adverse Effect.
Exhibit A-4
Excluded Receivables - means, at any time, outstanding
Receivables and Related Security arising out of the ordinary
course of business of the Company or its Subsidiaries which
shall have been sold to generate funds for working capital
purposes pursuant to the provisions of a Receivables Purchase
Agreement which makes funds available to the Company or any
Subsidiary in an aggregate amount not exceeding $65,000,000 at
any time and covering Receivables not exceeding, in the
aggregate, $90,000,000 at any time.
Existing Receivables Purchase Agreement - means that certain
Receivables Purchase Agreement dated as of September 27, 2001
among Castle Funding Corp. as seller, the Company as servicer,
Market Street Funding Corporation as issuer and PNC Bank,
National Association as administrator (as in effect on the
Effective Date).
Financial Covenant - means any covenant (or substantially
equivalent default provision) which requires the Company to
attain or maintain a prescribed level of financial condition,
financial achievement or results of operations or cash flow or
prohibits the Company from taking specified actions (such as
incurring Debt, selling assets, making distributions or making
investments) unless it will be in compliance with such a
prescribed level immediately thereafter, including, without
limitation, covenants of the type contained in Section 7 of
this Agreement.
First Year Ratio - means (a) prior to February 15, 2003, .65
to 1.0; and (b) on or after February 15, 2003 either (i) .65
to 1.0 if the Notes are Secured or (ii) .55 to 1.0 if the
Notes are not Secured.
Funded Debt - means with respect to any Person, all Debt which
would, in accordance with GAAP, be required to be classified
as a long term liability on the balance sheet of such Person
prepared in accordance with GAAP, and without limiting the
generality of the foregoing shall also include, without
limitation (i) any Indebtedness which by its terms or by the
terms of any instrument or agreement relating thereto matures,
or which is otherwise payable or unpaid, more than 365 days
from the date of creation thereof, (ii) any Indebtedness
outstanding under a revolving credit or similar agreement
providing for borrowings (and renewals and extensions thereof)
which would, in accordance with GAAP, be required to be
Exhibit A-5
classified as a long term liability of such Person, and (iii)
any Guaranties of such Person with respect to Funded Debt of
another Person.
Governmental Authority - means (a) the government of (i) the
United States of America or any State or other political
subdivision thereof, or (ii) any jurisdiction in which the
Company or any Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any properties of
the Company or any Subsidiary, or (b) any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, any such government.
Guarantee Agreement - means that certain Guarantee Agreement
entered into by each of the Guarantors, substantially in the
form of Exhibit C to the Second Amendment, as amended,
restated or otherwise modified from time to time.
Guarantors - means any Subsidiary that is a party to the
Guarantee Agreement as of the Effective Date and each other
Person which delivers a Guarantee Agreement or a joinder
agreement to the Guarantee Agreement pursuant to Section 6.13
hereof, together with the respective successors and assigns of
each of the foregoing entities unless and until released in
accordance with the terms of this Agreement or the Guarantee
Agreement.
Interest Charges - means, with respect to any period, the sum
(without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to
be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in
accordance with GAAP): (a) all interest in respect of Debt of
the Company and its Subsidiaries (including, without
limitation, imputed interest on Capitalized Lease Obligations)
deducted in determining Consolidated Net Income for such
period, together with all interest capitalized or deferred
during such period and not deducted in determining
Consolidated Net Income for such period, and (b) all debt
discount and expense amortized or required to be amortized in
the determination of Consolidated Net Income for such period.
Investment Grade - means in respect of any obligation that
such obligation (i) has a rating of Baa3 or greater by ▇▇▇▇▇'▇
Investor Service or a rating BBB- or greater by Standard &
Exhibit A-6
Poor's; or (ii) has a rating of NAIC 1 or NAIC 2 from the
National Association of Insurance Commissioners; or (iii) in
the judgment of the Required Holders and the Other Senior
Creditors, has a credit quality equal to or better than one
which would be afforded either of the ratings described in
clause (i) or clause (ii) of this definition.
Keystone Guarantee - means that certain Guarantee Agreement,
dated as of November 22, 2002, by the Company in favor of Bank
of America, N.A. pursuant to which the Company guarantees (i)
the payment to Bank of America by the City of ▇▇▇▇▇▇▇, Indiana
(the "Keystone Issuer") of all principal, interest and any
other amounts payable by the Keystone Issuer in respect of the
Keystone Issuer's Economic Development Revenue Bonds, Series
1998 (Keystone Services, Inc. Project), and (ii) the payment
and performance by Keystone Service, Inc. of all of its
covenants, agreements, obligations and liabilities under that
certain Loan Agreement, dated as of April 1, 1998, between the
Keystone Issuer and Keystone Service, Inc.
▇▇▇▇▇▇ Steel Letter of Credit Agreement - means the
Application and Agreement for Standby Letter of Credit, dated
March 15, 2002, as amended, pursuant to which Bank of America
issued its Irrevocable Standby Letter of Credit No. 7409195 in
the stated amount of $5,000,000.
Material - means material in relation to the business,
operations, affairs, financial condition, assets, properties
or prospects of the Company and its Subsidiaries taken as a
whole.
Mecklenburg Guaranty - means that certain Guarantee Agreement,
dated as of November 22, 2002, by the Company in favor of Bank
of America, N.A. pursuant to which the Company guarantees the
payment to Bank of America by The Mecklenburg County
Industrial Facilities and Pollution Control Financing
Authority (the "Mecklenburg Issuer") of all principal,
interest and any other amounts payable by the Mecklenburg
Issuer in respect to the Mecklenburg Issuer's Tax-Exempt
Industrial Revenue Bonds (A. M. Castle & Co. Project) Series
1996.
Other Senior Creditors - means the following parties or their
permitted successor and/or assigns: (i) Bank of America N.A.,
(ii) Nationwide Life Insurance Company, (iii) The Northern
Exhibit A-7
Trust Company and (iv) any other holders of Debt of the
Company incurred after the Effective Date in compliance with
Section 7.2 hereof.
Other Senior Debt - Debt of the Company and/or its
Subsidiaries (i) owed to the Bank of America N.A. pursuant to
the terms of a Reimbursement Agreement, dated as of June 1,
1994 by the Company in favor of NBD Bank, N.A., as assigned
and amended pursuant to an Assignment and Amendment of
Reimbursement Agreement, dated as of June 12, 2001, by and
among the Company, Bank One, N.A. (successor to NBD Bank,
N.A.) and Bank of America, N.A., as further amended pursuant
to the Second Amendment to Reimbursement Agreement dated as of
November 22, 2002, (ii) owed to Bank of America, N.A. pursuant
to the terms of a Reimbursement Agreement dated as of November
1, 1994 by the Company in favor of NBD Bank, N.A., as assigned
an amended pursuant to the terms of an Assignment and
Amendment of Reimbursement Agreement, dated as of November 1,
2001, by and among the Company, Bank One, N.A. and Bank of
America, N.A. and further amended pursuant to the terms of a
Second Amendment to Reimbursement Agreement, dated as of
November 1, 2001 and a Third Amendment to Reimbursement
Agreement dated as of November 22, 2002, (iii) owed to Bank of
America, N.A. pursuant to the terms of the Keystone Guarantee,
(iv) owed to Bank of America, N.A. pursuant to the terms of
the Mecklenburg Guaranty, (v) owed to Bank of America, N.A. as
reimbursement for payments under the terms of the ▇▇▇▇▇▇ Steel
Letter of Credit Agreement, as amended, (vi) owed pursuant to
a Note Agreement dated as of March 1, 1998 among the Company
and Allstate Insurance Company, The Northwestern Mutual Life
Insurance Company, Massachusetts Mutual Life Insurance
Company, Mutual of Omaha Insurance Company and United of Omaha
Life Insurance Company as amended by First Amendment and
Waiver to Note Agreement dated hereof December 1, 1998 and a
Second Amendment to Note Agreement dated as of November 22,
2002; (vii) owed pursuant to a Trade Acceptance Purchase
Agreement dated as of August 13, 2001 between the Company and
The Northern Trust Company in an aggregate amount not in
excess of $10,000,000, as amended by the First Amendment
thereto dated as of April 29, 2002, the Second Amendment
thereto dated as of June 30, 2002 and the Third Amendment
thereto dated as of November 22, 2002, (viii) owed pursuant to
a Note Agreement dated as of May 15, 1997 among the Company,
Massachusetts Mutual Life Insurance Company and United of
Exhibit A-8
Omaha Life Insurance Company as amended by First Amendment and
Waiver to Note Agreement dated as of December 1, 1998 and a
Second Amendment to Note Agreement dated as of November 22,
2002, and (ix) Debt of the Company incurred after the
Effective Date in compliance with Section 7.2 hereof.
Receivable - means a payment owing to a Person (whether
constituting an account, chattel paper, document, instrument,
letter-of-credit right, letter of credit, investment property
or general intangible) arising from the provision of
merchandise, goods or services by such Person, including the
right to payment of any interest or finance charges and other
obligations owing to such Person with respect thereto.
Related Security - means with respect to any Receivable: (a)
all supporting obligations, security interests or Liens and
property subject thereto from time to time securing or
purporting to secure the payment of such Receivable by the
Person obligated thereon (b) all guaranties, indemnities and
warranties, insurance policies, financing statements and other
agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable, (c)
all right, title and interest of the Company or any Subsidiary
in and to any goods (including returned, repossessed or
foreclosed goods) the sale of which gave rise to such
Receivable; provided, that Related Security will not include
returned goods only to the extent that all amounts required to
be paid pursuant to the transactions involving the transfer of
such Receivable in respect of such goods have been paid, (d)
all collections with respect to any of the foregoing, (e) all
records with respect to any of the foregoing, and (f) all
proceeds of such Receivable or with respect to any of the
foregoing.
Required Holders - means, at any time, the holders of at least
51% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company, any Subsidiary
or any Affiliate).
Reset Rate - means an annual interest rate equal to 8.49%,
provided, however, that in the event the Company shall have
replaced the Existing Receivables Purchase Agreement (or any
replacement thereof) in its entirety with a Revolving Loan
Facility satisfactory to the Required Holders AND so long as
neither the Company nor any Subsidiary is a party to any other
Receivables Purchase Agreement, then upon execution of such
Exhibit A-9
Revolving Loan Facility (and so long as neither the Company
nor any Subsidiary is a party to a Receivables Purchase
Agreement), the Reset Rate means an annual interest rate equal
to 6.99%
Revolving Loan Facility - means a loan agreement or similar
facility pursuant to which a lender or lenders provides
revolving loans to the Company or any Subsidiary for the
primary purpose of financing such Person's ongoing business
operations, whether such agreement or facility is secured or
unsecured. For the avoidance of doubt, no Receivables Purchase
Agreement shall constitute a Revolving Loan Facility.
Second Amendment - means the Second Amendment to the Note
Agreement dated as of November 22, 2002 amending this
Agreement.
Second Year Ratio - means on or after December 31, 2003 either
(i) .60 to 1.0 if the Notes are Secured, or (ii) .55 to 1.0 if
the Notes are not Secured.
Secured - means the Notes are secured by Liens on property
representing (in the aggregate) 95% of the book value
(measured as of the Effective Date) of all the real and
personal property of the Company and Significant Subsidiaries
required to be secured (excluding from such calculation,
property that the Required Holders or any Other Senior
Creditor in good faith has determined to be unsuitable as
collateral for environmental concerns) pursuant to the terms
and conditions of Section 5 of the Second Amendment including,
without limitation, any condition that an Acceptable
Intercreditor Agreement be executed prior to the grant of any
Liens or security interests.
Securitization Transactions - means one or more transactions
involving the transfer by the Company or any of its
Subsidiaries of Receivables and Related Security including,
without limitation, the sale or granting of a Lien in such
Receivables and Related Security, (not including a Revolving
Loan Facility) to an SPV as a contribution to the capital of
such SPV or for consideration in the form of cash or advances
under a subordinated note due from such SPV, provided such
transactions are entered into in good faith to provide working
capital to the Company and its Subsidiaries, and provided
further that the aggregate outstanding amount of the
obligations incurred under all such transactions by all such
Exhibit A-10
Persons that would be characterized as principal if such
transaction or transactions were structured as a secured
lending facility rather than as purchase transaction or
transactions does not exceed $65,000,000 in the aggregate at
any one time outstanding, and provided, further that the
aggregate amount of Receivables and Related Security sold,
pledged or otherwise transferred to the SPV does not exceed
$90,000,000 in the aggregate at any one time outstanding.
Security Documents - means each of the security agreements,
mortgages, deeds of trust, collateral assignments and other
similar documents granting Liens to secure, directly or
indirectly, the obligations of the Company under this
Agreement or the Notes or any of the Guarantors under the
Guarantee Agreement.
Senior Financial Officer - means the chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
Significant Subsidiary - means all Subsidiaries of the Company
other than: (i) A. M. Castle Canada, (ii) any SPV and (iii)
any Subsidiary of the Company which is not required to be a
Guarantor pursuant to the provisions of the first sentence of
Section 6.13 of this Agreement so long as such Subsidiary
described in the foregoing has not guaranteed any Debt of the
Company or any other Subsidiary (other than the Debt
outstanding under this Agreement and the Other Senior Debt).
SPV - means an entity in which the Company or any of its
Subsidiaries owns an equity interest and a substantial
economic interest created and maintained for the sole purpose
of purchasing or otherwise acquiring interests in Receivables
and Related Security from the Company or any of its
Subsidiaries.
Subsidiary Side Letter - means a letter from the Company dated
as of the Effective Date to the holders of the Notes setting
forth a description of the Company's Subsidiaries showing, as
to each Subsidiary, the book value of its assets as of
September 30, 2002 and its contribution to Consolidated EBITDA
for the fourth quarter period ended on September 30, 2002.
9. Section 6.6 of the Existing Note Agreement is hereby amended by adding
the following new paragraph (j) at the end of Section 6.6:
"(j) To the extent not otherwise provided herein, all
information required to be delivered by the Company or any of
its Subsidiaries to the Other Senior Creditors pursuant to
Exhibit A-11
the terms of any one or more agreements between or among any
one or more of them and the Company or any Subsidiary at the
same time and in the same manner as delivered to such
Persons."
10. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.12 to read as follows:
"6.12 Maintenance of Most Favored Lender Status. The Company
hereby acknowledges and agrees that if the Company or any
Subsidiary shall enter into or be a party to a Revolving Loan
Facility which contains for the benefit of any lender or
other Person any Financial Covenants or events of default in
respect thereof that are more favorable to such lender than
the Financial Covenants and Events of Default in respect of
such Financial Covenants contained in this Agreement then,
and in each and any such event, the Financial Covenants and
Events of Default in this Agreement shall be and shall be
deemed to be, notwithstanding Section 9.1 and without any
further action on the part of the Company or any other Person
being necessary or required, amended to permanently afford
(until so amended or waived pursuant to Section 9.1) the
holders of the Notes the same benefits and rights as so
afforded to any such lender or Person (such deemed amendment
may be the addition of one or more new Financial Covenants
and Events of Default with respect thereto addressing matters
not addressed by the then existing Financial Covenants and
Events of Default with respect thereto set forth herein, as
well as modifications to such Financial Covenants and Events
of Default with respect thereto that are more favorable to
such lender or Person). The Company will promptly deliver to
each holder of Notes a copy of each Revolving Loan Facility
entered into after the Effective Date. Without limiting the
effectiveness of the first sentence of this Section 6.12, the
Company agrees, no later than forty-five (45) days following
the date the Company or any Subsidiary shall have granted any
such lender or Person any such benefits or rights, to enter
into such documentation as the Required Holders may
reasonably request to evidence the amendments provided for in
this Section 6.12."
Exhibit A-12
11. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.13:
"6.13 Subsequent Guarantors. The Company covenants that at
all times the assets of the Company and all Guarantors shall
constitute at least 95% of Consolidated Total Assets
(excluding for purposes of this calculation, the assets of A.
M. Castle Canada and any SPV) and the Company and the
Guarantors shall have contributed at least 95% of
Consolidated EBITDA (excluding for purposes of this
calculation, the EBITDA of A. M. Castle Canada and any SPV)
for the four quarters then most recently ended. To the extent
necessary to permit the Company to comply with the foregoing
the Company will cause one or more Significant Subsidiaries
to become Guarantors and the Company will cause each such
Subsidiary to deliver to the holders of the Notes (a) a
joinder agreement to the Guarantee Agreement, which joinder
agreement is to be in the form of Exhibit A to the Guarantee
Agreement; (b) an opinion of counsel for such Person with
respect to the Guarantee Agreement and such joinder agreement
which is in form and substance reasonably acceptable to the
Required Holders; and (c) all applicable Security Documents
and any other documents as may be necessary or appropriate to
permit the Company to be in compliance with its obligations
set forth in Section 6.14. The Guarantors shall be permitted
to guaranty all Other Senior Debt."
12. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.14:
"6.14 Collateral Covenant. At any time on or after the
Effective Date (as such term is defined in the Second
Amendment), at the Company's expense:
(a) The Company will, and will cause each Guarantor
to, execute and deliver, within forty-five (45) days after
any request therefor by the Required Holders, all further
instruments and documents and take all further action that
may be necessary, in order to give effect to, and to aid in
the exercise and enforcement of the Liens, rights and
remedies of the holders of the Notes and the Collateral Agent
under, the Note Agreement, the Notes, the Security Documents
and each other instrument and agreement executed in
connection with any of the foregoing.
(b) The Company will, and will cause each Guarantor
to, take any and all steps, and execute and deliver one or
more Security Documents to insure that all property of the
Company and its Significant Subsidiaries (other than Excluded
Exhibit A-13
Receivables and Excluded Collateral) will be subject to Liens
in favor of the Collateral Agent pursuant to one or more
Security Documents in form reasonably satisfactory to the
Required Holders."
13. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.15:
"6.15 Receivables Purchase Agreement. At such time as any
Receivables Purchase Agreement is replaced with a Revolving
Loan Facility satisfactory to the Required Holders, neither
the Company nor any of its Subsidiaries or SPVs will enter
into, or be a party to, any Receivables Purchase Agreement."
14. Section 7.1 of the Existing Note Agreement is hereby amended and
restated in its entirety to read as follows:
"7.1 Adjusted Consolidated Net Worth. The Company will not
permit its Adjusted Consolidated Net Worth (calculated on the
last day of each fiscal quarter) to be less than the
Applicable Base plus the cumulative sum of 40% of
Consolidated Net Income (but only if a positive number) for
(i) each completed fiscal year of the Company ending after
December 31, 2001, and (ii) the period from the beginning of
the then current fiscal year through the end of the then most
recently ended fiscal quarter which shall have been completed
(if any shall have been completed) in such then current
fiscal year; provided, that at any time the Company or any
Subsidiary incurs additional Indebtedness, immediately
following and after giving effect to the incurrence of such
additional Indebtedness, the Adjusted Consolidated Net Worth
shall not be less than the minimum Adjusted Consolidated Net
Worth that would have been permitted as of the last day of
the then most recently ended fiscal quarter."
15. Section 7.2 of the Existing Note Agreement is hereby amended and
restated in its entirety to read as follows:
"7.2 Consolidated Debt. The Company will not permit the ratio
(calculated on the last day of each fiscal quarter) of
Consolidated Debt to Consolidated Total Capitalization to
exceed the applicable ratio set forth opposite such quarter
end in the table below; provided, that at any time the
Company or any Subsidiary incurs additional Indebtedness,
immediately following and after giving effect to the
Exhibit A-14
incurrence of such additional Indebtedness, the ration of
Consolidated Debt to Consolidated Total Capitalization shall
not exceed the applicable ratio as of the then most recently
ended fiscal quarter:
------------------------------------ ------------------------
Each Fiscal Quarter End The applicable ratio is:
------------------------------------ ------------------------
Before December 31, 2003 First Year Ratio
------------------------------------ ------------------------
On or after December 31, 2003 and Second Year Ratio
prior to March 31, 2004
------------------------------------ ------------------------
On or after March 31, 2004 .55 to 1.0"
------------------------------------ ------------------------
16. Section 7.4 of the Existing Note Agreement is hereby amended by
deleting paragraph (i) and adding new paragraphs (i), (j) and (k) to follow
paragraph (h):
"(i) Liens in favor of the Collateral Agent to
secure the Notes and the Other Senior Debt as provided in the
Security Documents and an Acceptable Intercreditor Agreement;
and
(j) Liens attaching solely to the property and
assets of A. M. Castle Canada to secure Debt of A. M. Castle
Canada and no other Debt; and
(k) Liens not otherwise permitted by paragraphs (a)
through (j) of this Section 7.4 created, assumed or incurred
subsequent to the Closing Date to secure Indebtedness,
provided that at the time of creating, assuming or incurring
such additional Indebtedness and after giving effect thereto
and to the application of the proceeds therefrom the sum
(without duplication) of the aggregate principal amount of
outstanding Consolidated Indebtedness secured by Liens
permitted by this Section 7.4(k) does not exceed 10% of
Adjusted Consolidated Net Worth."
17. section 7.5 of the Existing Note Agreement is hereby amended by (i)
adding the phrase "(other than A. M. Castle Canada)" after the word "Subsidiary"
in the second line and (ii) deleting the "." at the end of clause (b),
substituting a ";" in lieu thereof and adding the following new language:
"provided, however, that if any Subsidiary merges into any
other Person in compliance with the terms hereof or conveys
or transfers all or any part of its assets in compliance with
the terms hereof and following such conveyance or transfer
Exhibit A-15
such Subsidiary no longer constitutes a Significant
Subsidiary, then the Required Holders, pursuant to the terms
of the Acceptable Intercreditor Agreement, will promptly take
all necessary action to cause such Guarantor to be released
from the Guarantee Agreement as of the time of such sale,
conveyance or transfer."
18. Section 7.6 of the Existing Note Agreement is hereby amended by (i)
inserting the phrase "(other than A. M. Castle Canada)" after the word
"Subsidiary" in the first sentence and (ii) adding the following new paragraph
at the end of the section to read as follows:
"If the Company or any Significant Subsidiary gives notice
that it intends to sell, lease, transfer or otherwise dispose
of any assets in compliance with the terms of this Section
7.6, the holders of the Notes, pursuant to the terms of the
Acceptable Intercreditor Agreement, will promptly take such
action reasonably requested by the Company to instruct the
Collateral Agent to release such assets from the Liens
granted pursuant to the Security Documents as of the time of
any sale, lease, transfer or other disposition made in
compliance with the terms of said Section 7.6."
19. Section 7.7 of the Existing Note Agreement is hereby amended by (i)
adding the phrase "(other than A. M. Castle Canada)" after the word "Subsidiary"
in the first sentence and (ii) deleting the "." at the end of clause (c),
substituting a ";" in lieu thereof and adding the following new paragraph:
"provided, however, that if the Company gives notice that it
intends to sell, transfer or otherwise dispose of the capital
stock of a Guarantor in compliance with the terms of this
Section 7.7, the holders of the Notes will promptly take all
necessary action to cause such Guarantor to be released from
the Guarantee Agreement and shall instruct the Collateral
Agent to release the assets of such Guarantor from the Liens
granted pursuant to the Security Documents, in each case, as
of the time of any sale, transfer or other disposition made
in compliance with the terms of said Section 7.7."
20. Section 7.9 of the Existing Note Agreement is hereby amended by adding
the phrase "and (iii) other than the sale of equity securities to an Affiliate
on November 22, 2002" at the end thereof.
Exhibit A-16
21. Section 8.1 of the Existing Note Agreement is hereby amended by
deleting the "." at the end of paragraph (h); subparagraph (vii) thereof and
inserting ";" in lieu thereof and adding new paragraphs (i), (j), (k) and (l),
to follow paragraph (h) (vii):
"(i) except as otherwise specifically permitted and provided
for in this Note Agreement, including, without limitation,
Section 6.13, Section 7.6, Section 7.7 and paragraph 5(b) of the
Second Amendment to this Agreement (i) the obligations of any
Guarantor contained in the Guarantee Agreement or any of the
Security Documents shall cease to be in full force and effect or
shall be declared by a court or Governmental Authority of
competent jurisdiction to be void, voidable or unenforceable
against any such Guarantor; (ii) the Company or any Guarantor
shall contest the validity or enforceability of the Guarantee
Agreement or any of the Security Documents against any such
Guarantor, or (iii) the Company or any Guarantor shall deny that
such Guarantor has any further liability or obligation under the
Guarantee Agreement or any of the Security Documents;
(j) any representation or warranty made in writing by or on
behalf of the Company or any Guarantor or by any officer of the
Company or any Guarantor in any amendment to this Agreement
(including, without limitation, the Second Amendment), the
Guarantee Agreement or any Security Document or in any writing
furnished in connection therewith or pursuant to the terms
thereof proves to have been false or incorrect in any material
respect on the date as of which made;
(k) except as otherwise specifically permitted and provided
for in this Note Agreement, including, without limitation,
Section 6.13, Section 7.6, Section 7.7 and paragraph 5(b) of the
Second Amendment to this Agreement (i) any Security Document
shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared by any court or
Governmental Authority of competent jurisdiction to be void,
voidable or unenforceable against the grantor thereunder; (ii)
the validity or enforceability of any Security Document against
the grantor thereof shall be contested by such grantor; or (iii)
the Company or any Guarantor shall default in the performance or
observance of any covenant or provisions under the Guarantee
Agreement or any Security Document; or
(l) the Company or any Subsidiary shall enter into a
Receivables Purchase Agreement after the termination of the
Existing Receivables Purchase Agreement (or any replacement
thereof) and its replacement with a Revolving Credit Facility
satisfactory to the Required Holders."
Exhibit A-17
EXHIBIT B1
AMENDMENTS TO EXISTING NOTES
The Existing Notes outstanding on the Effective Date are hereby, without
any further action required on the part of any other Person, deemed to be
automatically amended to conform to and have the terms provided in Attachment I
hereto (except that the principal amount and the payee of each Note shall remain
unchanged). Any Note issued on or after the Effective Date shall be in the form
of Attachment I hereto.
Exhibit B1-1
ATTACHMENT 1
A. M. CASTLE & CO.
RESET RATE SENIOR SECURED NOTE
Due April 15, 2008
_______________
Registered Note No. R-____ __________________
$_________________________
A. M. CASTLE & CO., a Maryland corporation (the "Company"), for value
received, promises to pay to ______________ or registered assigns, on April 15,
2008, the principal amount of _________________ ($__________) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the principal amount from time to time remaining unpaid hereon at the Reset Rate
specified in the Note Agreement referred to below from the date hereof until
maturity, payable in arrears on April 15 and October 15, in each year,
commencing October 15, 1996, and at maturity, and to pay interest on any overdue
principal, on any overdue Make-Whole Amount and (to the extent legally
enforceable) on any overdue installment of interest at a per annum rate equal to
the greater of (a) 10.49% and (b) the sum of the reference rate announced by
Bank of America NT&SA from time to time as its "prime rate" for United States
domestic loans in United States dollars, plus 2%, until paid. Payments of the
principal of, the Make-Whole Amount, if any, and the interest on this Note shall
be made in lawful money of the United States of America in the manner and at the
principal office of the Company.
This Note is issued under and pursuant to the terms and provisions of the
Note Agreement, dated as of April 1, 1996, entered into by the Company with the
Purchasers named in Schedule I thereto (as may be amended from time to time, the
"Note Agreement"), and this Note and any holder hereof are entitled to all of
the benefits provided for by such Note Agreement or referred to therein.
Reference is made to the Note Agreement for a statement of such benefits and for
the terms governing this Note. Capitalized terms used herein shall have the
meanings ascribed to them in the Note Agreement unless provided otherwise
herein.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or its attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. The Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon all in the events, on the terms and in the manner as provided in
the Note Agreement. Such prepayments include certain required prepayments on
Exhibit B1-2
April 15 of each year beginning April 15, 2001 through April 15, 2007,
inclusive, with the remaining principal payable on March 1, 2008, and certain
optional prepayments with a Make-Whole Amount.
Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, Make-Whole Amount, if any, and interest due and payable hereon,
all costs of collecting this Note, including attorneys' fees and expenses.
This Note and the Note Agreement are governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Illinois.
A. M. CASTLE & CO.
By:______________________________
Title:
Exhibit B1-3
EXHIBIT D
[Form of Guarantee]
This GUARANTEE AGREEMENT (as the same may hereafter be amended,
supplemented or otherwise modified, this "Guarantee"), dated as of November 22,
2002, is by Datamet, Inc., an Illinois Corporation, Keystone Tube Company, LLC,
a Delaware limited liability company, Total Plastics, Inc., a Michigan
corporation, Paramont Machine Company, LLC, a Delaware limited liability
company, Advanced Fabricating Technology, LLC, a Delaware limited liability
company, ▇▇▇▇▇▇ Steel Plate Co., a Delaware corporation and Metal Mart, LLC, a
Delaware limited liability company (each of whom, together with each other
Person which from time to time becomes a Guarantor pursuant to Section 5 hereof,
is referred to herein, individually, as a "Guarantor" and, collectively, as the
"Guarantors"), in favor of Nationwide Life Insurance Company (together with its
successors and assigns including, without limitation, future holders of the
Notes (defined below), herein collectively referred to as the "Noteholders").
RECITALS:
WHEREAS, each of the Guarantors is a direct or indirect Subsidiary of A. M.
Castle & Co., a Maryland corporation (together with its successors and assigns,
the "Company");
WHEREAS, the Guarantors' obligations under this Guarantee (and the
Guarantors' obligations under guarantees to the Other Senior Creditors) shall be
secured by Liens granted on certain property of the Guarantors pursuant to the
terms of certain of the security documents to be entered into by the Guarantors
(collectively, the "Security Documents");
WHEREAS, the Company entered into a Note Agreement, dated as of April 1,
1996 (as amended by the First Amendment (as defined below), and as may be
further as amended, modified, restated or replaced from time to time, the "Note
Agreement"), with the purchasers identified on Schedule 1 thereto (the
"Purchasers"), pursuant to which the Company, among other things, issued to the
Purchasers $20,000,000 of its 6.49% Senior Notes due April 15, 2008 (the
"Notes").
WHEREAS, the Noteholders agreed to the amendments to the Note Agreement and
the Notes as set forth in that certain First Amendment to Note Agreement, dated
of even date herewith (the "First Amendment") conditioned upon, among other
things, the execution and delivery by the Guarantors of this Guarantee;
WHEREAS, each Guarantor will receive substantial direct and indirect
economic, financial and other benefits as a result of the amendments set forth
in the First Amendment.
Exhibit D-1
NOW THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby agrees as follows:
1. DEFINITIONS.
All capitalized terms used herein and not defined herein have the
respective meanings given them in the Note Agreement.
2. GUARANTEE.
2.1. Guarantee of Payment and Performance. Each Guarantor hereby
absolutely, unconditionally and irrevocably, on a joint and several basis with
each other Guarantor, guarantees to the Noteholders:
(a) the full and punctual payment by the Company of the principal of,
and interest and Make-Whole Amount, if any, on, the Notes at any time
outstanding and the due and punctual payment of all other amounts payable,
and all other indebtedness owing, by the Company to the Noteholders under
the Note Agreement, the Notes, the Security Documents to be entered into by
the Guarantors and each of the other instruments and agreements executed or
to be executed in connection with the foregoing (collectively, the
"Financing Documents") in each case when and as the same shall become due
and payable, whether at maturity, pursuant to mandatory or optional
prepayment, by acceleration or otherwise, all in accordance with the terms
and provisions of this Guarantee, the Note Agreement, the Notes and the
other Financing Documents, including, without limitation, overdue interest,
post-petition interest, indemnification payments and all of such
obligations which would become due but for the operation of the automatic
stay pursuant to Section 362(a) of the United States Bankruptcy Code and
the operation of Sections 502(b) and 506(b) of the United States Bankruptcy
Code; and
(b) the full and punctual performance by the Company of all duties,
agreements, covenants and obligations of the Company contained in the Note
Agreement, the Notes and the other Financing Documents,
and the full and prompt payment, on demand, of all reasonable costs and expenses
incurred by (x) the Noteholders in connection with the negotiation, preparation,
execution and delivery of this Guarantee and (y) any one or more of the
Noteholders or any trustee or agent acting on behalf of the Noteholders in
enforcing any of their respective rights and remedies under this Guarantee, the
Note Agreement, the Notes or any of the other Financing Documents, including,
but not limited to, all reasonable attorney's fees and expenses (whether or not
there is litigation), court costs and all costs in connection with any
proceedings under the United States Bankruptcy Code (collectively, the
"Guarantied Obligations"), provided that the Guarantor shall not be liable for
the reasonable fees and expenses of more than one separate firm of attorneys
representing the Noteholders.
Exhibit D-2
2.2. Nature of Guarantee. This is a continuing, absolute and unconditional
Guarantee of payment and performance and not merely of collection, and shall
continue in full force and effect until such time as the Guarantied Obligations
have been fully and irrevocably paid.
2.3. Binding Nature of Certain Adjudications. Each Guarantor shall be
conclusively bound by the final adjudication in any action or proceeding, legal
or otherwise to which the Company is a party, involving any controversy arising
under, in connection with, or in any way related to, any of the Guarantied
Obligations, and by a final judgment, award or decree entered therein.
2.4. No Duty to Pursue Others. Upon any default with respect to the
Guarantied Obligations, the Note Agreement or the Notes, and after the
expiration of any notice or cure periods, any one or more of the Noteholders or
any trustee or agent acting on the Noteholders' behalf may proceed to enforce
its rights and remedies directly against any one or more of the Guarantors
without first proceeding against the Company or any other Person liable for the
Guarantied Obligations or any security for the Guarantied Obligations.
2.5. No Release of Guarantors. Each Guarantor's liability under this
Guarantee shall not be limited, diminished or extinguished by, and each
Guarantor shall not be entitled to raise as a defense, any:
(a) invalidity, irregularity or unenforceability of the Guarantied
Obligations or of such Guarantor's obligations hereunder;
(b) failure of such Guarantor to be given notice of default by the
Company;
(c) reorganization, merger or consolidation of the Company or any
Guarantor into or with any other Person;
(d) waiver of the Company's defaults or extensions of due dates for
payments or other accommodations, indulgences or forbearance granted to the
Company;
(e) release of or non-perfection with respect to part or all of any
security for the Guarantied Obligations or the Notes;
(f) taking or accepting of any other security, collateral or guaranty
of payment of any or all of the Guarantied Obligations or the Notes;
(g) release of or settlement or compromise with any one or more
Persons who constitute guarantors or the release of or settlement or
compromise with any one or more Persons who are otherwise liable for the
payment or performance of all or any portion of the Guarantied Obligations
or the Notes and who are not primary obligors thereon;
(h) any loss or impairment of any right of any Guarantor for
subrogation, reimbursement or contributions;
Exhibit D-3
(i) assignment or other transfer by the Noteholders (or any
trustee or agent acting on the behalf of the Noteholders, as the
case may be) of any part of the Guarantied Obligations or the
Notes, or any collateral or security securing any portion of the
Guarantied Obligations or the Notes;
(j) illegality or impossibility of performance on the part
of the Company or the Guarantors under the Note Agreement, the
Notes or this Guarantee; or
(k) other acts or omissions of the Noteholders which, in the
absence of this Section, would operate so as to impair, diminish
or extinguish any Guarantor's liability under this Guarantee.
2.6. Certain Waivers.
(a) Waiver of Notice. Each Guarantor hereby waives notice of (i)
acceptance of this Guarantee, (ii) any amendment, extension or other
modification of the Note Agreement, the Notes and/or any of the other
Financing Documents, (iii) any loans or advances made by any one or more of
the Noteholders to the Company, (iv) the occurrence of a Default or Event
of Default under the Note Agreement or the Notes, (v) any transfer or other
disposition of the Guarantied Obligations or the Notes pursuant to Section
10 of the Note Agreement, and (vi) any other action at any time taken or
omitted by the Noteholders or by any trustee or agent acting on behalf of
any one or more Noteholder, and generally, all demands and notices of every
kind in connection with this Guarantee, the Note Agreement, the Notes and
the other Financing Documents, except as provided herein and in the Note
Agreement.
(b) Certain Other Waivers. Each Guarantor hereby waives (i) diligence,
presentment, demand for payment, protest or notice, whether of nonpayment,
dishonor, protest or otherwise, (ii) all setoffs, counterclaims and claims
of recoupment against, the Guarantied Obligations or the Notes that may be
available to the Company or any other guarantor of the Guarantied
Obligations or the Notes (it being understood that the waivers set forth
anywhere in this Guarantee shall not preclude any action by such Guarantor,
after payment in full of its obligations hereunder, to recover for any
tortious action which resulted in injury to such Guarantor), (iii) any
defense based upon or in any way related to any claim that any election of
remedies by any one or more of the Noteholders (or by any trustee or agent
acting on behalf of the Noteholders) impaired, reduced, released or
otherwise extinguished any rights such Guarantor might otherwise have had
against the Company or any security, (iv) any claim based upon or in any
way related to any of the matters referred to in Section 2.5, and (v) any
claim that this Guarantee should be strictly construed against the
Noteholders.
2.7. Bankruptcy; Other Matters. In the event that, pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law,
or any judgment, order or decision thereunder, or for any other reason any
Noteholder must rescind or restore any payment received by such Noteholder in
connection with the Guarantied Obligations, the Note Agreement, the Notes or any
Exhibit D-4
other Financing Documents, or the Company ceases to be liable to any Noteholder
for any of the Notes (other than by the full and irrevocable payment in full
thereof), then any prior release or discharge from this Guarantee shall be
without effect and this Guarantee and the obligations of Guarantor hereunder
shall remain in full force and effect.
2.8. Payments by Guarantors. If all or any part of the Guarantied
Obligations or the Notes are not paid when due, whether at maturity, by reason
of acceleration, or otherwise, and remain unpaid until the expiration of any
applicable grace or cure period, or otherwise upon the occurrence and
continuance of any Event of Default, the Guarantors shall, immediately upon
demand by any Noteholder (or any trustee or agent acting on behalf of the
Noteholders), and without presentment, protest, notice of protest, notice of
nonpayment, notice of intention to accelerate or acceleration or any other
notice whatsoever, pay in immediately available funds, the amount due on the
Guarantied Obligations for distribution to such Noteholder. All obligations of
the Guarantors under this Guarantee shall be performable and payable to each
Noteholder at its offices at the addresses set forth in Schedule A of the Note
Agreement.
2.9. Failure to Pay Guarantied Obligations. If any Guarantor fails to pay
the Guarantied Obligations as required by this Guarantee, then each of the
Guarantors, as the principal obligor and not as a guarantor only, shall jointly
and severally pay, on demand, all out-of-pocket costs and expenses incurred or
expended by any one or more of the Noteholders (and any trustee or agent acting
on behalf of the Noteholders) in connection with the enforcement of, and the
preservation of the Noteholders' rights under and with respect to, this
Guarantee, including, but not limited to, all reasonable attorney's fees and
expenses (whether or not there is litigation), court costs and all costs
incurred in connection with any proceedings under the United States Bankruptcy
Code, provided that the Guarantor shall not be liable for the reasonable fees
and expenses of more than one separate firm of attorneys representing the
Noteholders. Until paid, all such amounts recoverable under this Section 2.9
shall bear interest from the time when such amounts become due until payment in
full thereof at the rate for overdue principal set forth in the Note Agreement.
2.10. Subordination of Affiliate Obligations. Each of the Guarantors agrees
that all Affiliate Obligations (as defined below), interest thereon, and all
other amounts due with respect thereto, are hereby subordinated as to time of
payment and in all other respects to all the Guarantied Obligations. Each
Guarantor agrees that at all times during the existence of an Event of Default,
such Guarantor shall not be entitled to enforce or receive any payment in
respect thereof until all sums then due and owing to any one or more of the
Noteholders in respect of the Guarantied Obligations shall have been paid in
full. If any payment shall have been made to any Guarantor by the Company or
such indebted Person on any such Affiliate Obligation during any time that an
Event of Default exists and there are Guarantied Obligations outstanding, such
Guarantor shall collect and receive all such payments as trustee for the
Noteholders, to the extent of all amounts owing with respect to this Guarantee,
and such amounts shall be immediately paid over to the Noteholders (or any
trustee or agent acting on behalf of the Noteholders), without affecting in any
manner the liability of the Guarantors under the other provisions of this
Guarantee. For purposes of this Section 2.10, "Affiliate Obligation" means any
indebtedness of any kind of the Company, or any Person obligated in respect of
the Guarantied Obligations to Guarantor.
Exhibit D-5
2.11. Postponement of Subrogation Rights. No Guarantor will exercise any
Subrogation Rights (as defined below) which it may acquire with respect to this
Guarantee, until the prior and indefeasible payment, in full and in cash, of all
Guarantied Obligations. Any amount paid to a Guarantor by or on behalf of the
Company or any other guarantor of the Guarantied Obligations on account of any
such Subrogation Rights prior to the payment in full of all Guarantied
Obligations shall immediately be paid over to the Noteholders and credited and
applied against the Guarantied Obligations whether matured or unmatured, in
accordance with the terms of the Note Agreement. In furtherance of the
foregoing, for so long as any Guarantied Obligations remain outstanding, no
Guarantor shall take any action or commence any proceeding against the Company
or any other guarantor of the Guarantied Obligation, (or any of their respective
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Guarantee to the Noteholders and each Guarantor hereby forbears realizing any
benefit of and any right to participate in any security which may be held by the
Noteholders or any agent or trustee acting on their behalf. For purposes of this
Section 2.11, "Subrogation Right" means any right of contribution, subrogation,
reimbursement, indemnity, or repayment, and any other "claim", as that term is
defined in the United States Bankruptcy Code, which any Guarantor might now have
or hereafter acquire against the Company or any other guarantor of the
Guarantied Obligations that arises from the existence or performance of such
Guarantor's obligations under this Guarantee, and any right to participate in
any security for the Guarantied Obligations.
2.12. Notices in Respect of Payments. If any Guarantor shall pay to any
holder of the Notes from time to time any amount in respect of the Guarantied
Obligations, such Guarantor shall, within five (5) Business Days after making
such payment, provide notice of such payment to each other holder of the Notes
at such time.
2.13. Limitation on Guarantied Obligations. Notwithstanding anything in
Section 2.1 or elsewhere in this Guarantee or any other Financing Document to
the contrary, the obligations of the Guarantors under this Guarantee shall at
each point in time be limited to an aggregate amount equal to the greatest
amount that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable law (including, without limitation, to the extent, and only to the
extent, applicable to the Guarantors, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code and any comparable provisions of the law of any other
jurisdiction, any capital preservation law of any jurisdiction and any other law
of any jurisdiction that at such time limits the enforceability of the
obligations of the Guarantors under this Guarantee). This Section 2.13 is
intended solely to preserve the rights of the Noteholders hereunder to the
maximum extent permitted by applicable law, and neither the Guarantors nor any
other Person shall have any rights under this Section 2.13 that it would not
otherwise have under applicable law.
2.14. Separate Action; Other Enforcement Rights. Each of the rights and
remedies granted under this Guarantee to any Noteholder in respect of the Notes
held by such Noteholder may be exercised by such Noteholder without notice by
such Noteholder to, or the consent of or any other action by, any other holder
of the Notes from time to time. Any one or more of the Noteholders may proceed
to protect and enforce this Guarantee by suit or suits or proceedings in equity,
at law or in bankruptcy, and whether for the specific performance of any
Exhibit D-6
covenant or agreement contained herein or in execution or aid of any power
herein granted or for the recovery of judgment for the obligations hereby
guaranteed or for the enforcement of any other proper legal or equitable remedy
available under applicable law.
2.15. Security. The Guarantied Obligations and the obligations of each
Guarantor set forth herein will be secured pursuant to certain of the Security
Documents to which such Guarantor is a party and each agent or trustee acting on
behalf of the Noteholders, shall be entitled to all of the rights, remedies and
benefits of the Security Documents to which such Guarantor is a party.
3. REPRESENTATIONS AND WARRANTIES.
Each Guarantor hereby represents and warrants to the Noteholders that:
3.1. Organization and Existence. The Guarantor is duly organized and
existing in good standing under the laws of its jurisdiction of organization, is
duly qualified to do business and is in good standing where the nature or extent
of its businesses or properties requires it to be qualified to do business
except where the failure to so qualify will not have a material adverse effect
on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents. The Guarantor has
the power and authority to own its properties and carry on its business as now
being conducted.
3.2. Authorization. The Guarantor is duly authorized to execute and perform
this Guarantee and this Guarantee has been properly authorized by all requisite
action of such Guarantor. No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority or any other Person, is
required in connection with the execution, delivery or performance of this
Guarantee, except for those already duly obtained.
3.3. Due Execution. This Guarantee has been executed on behalf of such
Guarantor by a Person duly authorized to do so.
3.4. Enforceability. This Guarantee constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against such Guarantor in
accordance with its terms, except to the extent that the enforceability thereof
against such Guarantor may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditor's rights generally or by equitable
principles of general application (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Exhibit D-7
3.5. Legal Restraints. The execution of this Guarantee by the Guarantor and
the performance by such Guarantor of its obligations under this Guarantee, will
not (i) violate or constitute a default under the certificate or articles of
incorporation, bylaws or other organizational documents of such Guarantor as
applicable, (ii) except as contemplated by the Security Documents and the
granting of Liens to secure Other Senior Debt, result in any Lien being imposed
on any of such Guarantor's property, or (iii) violate or constitute a default
under any agreement to which the Guarantor is a party or any law, ordinance,
governmental rule or regulation to which it is subject, except where such
violation or default could not reasonably be expected to have a material adverse
effect on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents.
3.6. No Material Proceedings. There are no proceedings, actions or
investigations pending or, to the knowledge of the Guarantor, threatened against
such Guarantor that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a material adverse effect
on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents.
3.7. Compliance with Laws. The Guarantor is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject, except
for such failures to comply that, in the aggregate for all such failures, could
not reasonably be expected to have a material adverse effect on the business,
operations, profits, financial condition, properties or business prospects of
such Guarantor or on its ability to perform its obligations hereunder and under
the other Financing Documents.
3.8. Other Names. Except for the trade names set forth in Schedule 3.8, the
Guarantor has not used, and does not use, any name other than the full name
which identifies such Guarantor in this Guarantee.
3.9. No Defaults. The Guarantor has not breached or violated, or is not in
default under, any agreement to which it is a party, and is not in default with
respect to any of its obligations, except for such breaches, violations and
defaults that, in the aggregate for all such breaches, violations and defaults,
could not reasonably be expected to have a material adverse effect on the
business, operations, profits, financial condition, properties or business
prospects of such Guarantor or on its ability to perform its obligations
hereunder and under the other Financing Documents.
3.10. Independent Credit Evaluation. The Guarantor has independently, and
without reliance on any information supplied by any one or more of the
Noteholders, taken, and will continue to take, whatever steps such Guarantor
deems necessary to evaluate the financial condition and affairs of the Company,
and the Noteholders shall have no duty to advise the Guarantor of information at
any time known to the Noteholders regarding such financial condition or affairs.
3.11. No Representation By Agent. None of the Noteholders nor any trustee
or agent acting on their behalf has made any representation, warranty or
statement to the Guarantor to induce such Guarantor to execute this Guarantee.
Exhibit D-8
3.12. Survival. All representations and warranties made by the Guarantor
herein shall survive the execution hereof and may be relied upon by the
Noteholders as being true and accurate until the Guarantied Obligations are
fully and irrevocably paid.
4. COVENANTS.
4.1 Corporate Existence; Scope of Business; Compliance with Law;
Preservation of Enforceability. Each Guarantor covenants that from the date
hereof and until the Guarantied Obligations and the Notes are fully and
irrevocably paid, such Guarantor shall
(a) preserve and maintain its existence in good standing and its right
to transact business in those states in which it is now or hereafter doing
business and obtain and maintain all licenses, except where the failure to
obtain and maintain such licenses that, in the aggregate for all such
failures, could not reasonably be expected to have a material adverse
effect on the business, operations, profits, financial condition,
properties or business prospects of such Guarantor or on its ability to
perform its obligations hereunder and under the other Financing Documents;
(b) comply, with all applicable laws, ordinances, governmental rules
and regulations to which it is subject, except where such failure to comply
could not reasonably be expected to have a material adverse effect on the
business, operations, profits, financial condition, properties or business
prospects of such Guarantor; or on its ability to perform its obligations
hereunder and under the other Financing Documents; and
(c) take all action and obtain all consents and governmental approvals
required so that its obligations under this Guarantee will at all times be
legal, valid and binding and enforceable in accordance with the terms
hereof.
Exhibit D-9
5. ADDITIONAL GUARANTORS.
In accordance with Section 6.13 of the Note Agreement, additional Persons
may from time to time after the date of this Guarantee become Guarantors under
this Guarantee by executing and delivering to the Noteholders a joinder
agreement (a "Joinder Agreement") to this Guarantee in substantially the form
attached as Exhibit A to this Guarantee. Effective from and after the date of
the execution and delivery by any Person to the Noteholders of a Joinder
Agreement, such Person shall be, and shall be deemed for all purposes to be, a
Guarantor under this Guarantee with the same force and effect, and subject to
the same agreements, representations, guarantees, indemnities, liabilities and
obligations, as if such Person were, effective as of such date, an original
signatory to this Guarantee as a Guarantor. The execution and delivery of a
Joinder Agreement by any Person shall not require the consent of any other
Guarantor and all of the Guarantied Obligations of each Guarantor under this
Guarantee shall remain in force and effect notwithstanding the addition of any
additional Guarantor to this Guarantee.
6. SUCCESSORS AND ASSIGNS.
This Guarantee shall bind the successors, assignees, trustees, and
administrators of the Guarantor and shall inure to the benefit of each of the
Noteholders, and each of its successors, transferees, participants and
assignees.
7. CONTINUANCE OF GUARANTEE.
Each Guarantor is liable under this Guarantee for the full amount of the
Guarantied Obligations. Any holder of the Notes from time to time may release,
settle with or compromise with any one or more Persons who are otherwise liable
for the payment or performance of all or any portion of the Guarantied
Obligations without impairing, diminishing or releasing the rights of any other
holders of the Notes hereunder against any Guarantor or any other Person liable
for the Guarantied Obligations. This Guarantee shall continue in full force and
effect and shall bind Guarantor notwithstanding the death or release of any
other Person who is otherwise liable for the payment or performance of all or
any portion of the Guarantied Obligations.
8. AMENDMENTS AND WAIVERS.
No amendment to, waiver of, or departure from full compliance with any
provision of this Guarantee, or consent to any departure by any Guarantor
herefrom, shall be effective unless it is in writing and signed by authorized
officers of each Guarantor directly affected thereby and the Noteholders;
provided, however, that any such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No failure by any
Noteholder to exercise, and no delay by any Noteholder in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by any Noteholder of any right, remedy,
power or privilege hereunder preclude any other exercise thereof, or the
exercise of any other right, remedy, power or privilege.
Exhibit D-10
9. RIGHTS CUMULATIVE.
Each of the rights and remedies of the Noteholders under this Guarantee
shall be in addition to all of their other rights and remedies under applicable
law, and nothing in this Guarantee shall be construed as limiting any such
rights or remedies.
10. SERVICE OF PROCESS.
EACH GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO IT AT ITS ADDRESS SET FORTH IN ANNEX 1
HERETO. SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED AS OF THE DATE THAT SUCH
GUARANTOR SIGNS THE RETURN RECEIPT. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF THE NOTEHOLDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
11. WAIVER OF JURY TRIAL.
EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTEE.
12. SEVERABILITY.
Any provision of this Guarantee which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or nonauthorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction unless
the ineffectiveness of such provision would result in such a material change as
to cause completion of the transactions contemplated hereby to be unreasonable.
13. GOVERNING LAW.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
14. SECTION HEADINGS.
Section headings are for convenience only and shall not affect the
interpretation of this Guarantee.
Exhibit D-11
15. LIMITATION OF LIABILITY.
THE NOTEHOLDERS SHALL NOT HAVE ANY LIABILITY WITH RESPECT TO, AND EACH OF
THE GUARANTORS HEREBY WAIVES, RELEASES AND AGREES NOT TO ▇▇▇ FOR, (a) ANY LOSS
OR DAMAGE SUSTAINED BY ANY GUARANTOR THAT MAY OCCUR AS A RESULT OF, IN
CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, ANY ACT OR FAILURE TO ACT
REFERRED TO IN SECTION 2.5 OR (b) ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
SUFFERED BY ANY GUARANTOR IN CONNECTION WITH ANY CLAIM RELATED TO THIS
GUARANTEE.
16. ENTIRE AGREEMENT.
This Guarantee embodies the entire agreement among Guarantors and the
Noteholders relating to the subject matter hereof and supersedes all prior
agreements, representations and understandings, if any, relating to the subject
matter hereof.
17. COMMUNICATIONS.
All notices and other communications to the Noteholders or Guarantors
hereunder shall be in writing, shall be delivered in the manner and with the
effect, as provided by the Note Agreement, and shall be addressed to the
Guarantors as set forth in Annex 1 hereto and to the Noteholders as set forth in
the Note Agreement.
18. DUPLICATE ORIGINALS.
Two or more duplicate counterpart originals hereof may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. Delivery of any executed signature page
to this Guarantee by any Guarantor by facsimile transmission shall be as
effective as delivery of a manually executed copy of this Guarantee by such
Guarantor.
19. NOTICES.
Nothing in this Guarantee shall void or abrogate any obligation of the
Company, any Guarantor or any Noteholder to give any notice specifically
required to be given by such Person in any provision of any Financing Document.
20. TERMINATION.
Subject to Section 2.7, this Guarantee shall terminate and have no further
force or effect upon payment in full of the Guarantied Obligations.
[Remainder of page intentionally left blank. Next page is signature page.]
Exhibit D-12
IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
KEYSTONE TUBE COMPANY, LLC
By:_____________________________
Name:
Title:
TOTAL PLASTICS, INC.
By:_____________________________
Name:
Title:
PARAMONT MACHINE COMPANY LLC
By:_____________________________
Name:
Title:
ADVANCED FABRICATING TECHNOLOGY, LLC
By:_____________________________
Name:
Title:
▇▇▇▇▇▇ STEEL PLATE CO.
By:_____________________________
Name:
Title:
Annex 1-1
METAL MART, LLC
By:_____________________________
Name:
Title:
DATAMET, INC.
By:_____________________________
Name:
Title:
Annex 1-2
EXHIBIT A
[FORM OF JOINDER AGREEMENT]
JOINDER AGREEMENT NO. ___ TO GUARANTEE AGREEMENT
Re: A. M. CASTLE & CO.
This Joinder Agreement is made as of ________________, in favor of the
Noteholders (as such terms are defined in the Castle Guaranty, as hereinafter
defined).
A. Reference is made to the Guarantee Agreement made as of November 22, 2002 (as
such Guaranty may be supplemented, amended, restated or consolidated from time
to time, the "Castle Guaranty") by certain Persons in favor of the holders from
time to time of the Notes (as defined in the Castle Guaranty), under which such
Persons have guaranteed to the Noteholders the due payment and performance by A.
M. Castle & Co. ("Castle") of all its present and future indebtedness,
liabilities and obligations to the Noteholders in connection with the Note
Agreement.
B. Capitalized terms used but not otherwise defined in this Joinder Agreement
have the respective meanings given to such terms in the Castle Guaranty,
including the definitions of terms incorporated in the Castle Guaranty by
reference to other agreements.
C. Section 5 of the Castle Guaranty provides that additional Persons may from
time to time after the date of the Castle Guaranty become Guarantors under the
Castle Guaranty by executing and delivering to the Noteholders a supplemental
agreement to the Castle Guaranty in the form of this Joinder Agreement.
For valuable consideration, each of the undersigned (each a "New Guarantor")
severally (and not jointly, or jointly and severally) agrees as follows:
1. Each of the New Guarantors has received a copy of, and has reviewed, the
Castle Guaranty and the Note Agreement in existence on the date of this Joinder
Agreement and is executing and delivering this Joinder Agreement to the
Noteholders pursuant to Section 5 of the Castle Guaranty.
2. Effective from and after the date this Joinder Agreement is executed and
delivered to the Noteholders by any one of the New Guarantors (and irrespective
of whether this Joinder Agreement has been executed and delivered by any other
Person), such New Guarantor is, and shall be deemed for all purposes to be, a
Guarantor under the Castle Guaranty with the same force and effect, and subject
to the same agreements, representations, guarantees, indemnities, liabilities
and obligations, as if such New Guarantor was, effective as of the date of this
Joinder Agreement, an original signatory to the Castle Guaranty as a Guarantor.
In furtherance of the foregoing, each of the New Guarantors jointly and
severally guarantees to the Noteholders in accordance with the provisions of the
Castle Guaranty the due and punctual payment and performance in full of each of
the Guarantied Obligations as each such Guarantied Obligation becomes due from
Exhibit A-1
time to time (whether because of maturity, default, demand, acceleration or
otherwise) and understands, agrees and confirms that the Noteholders may enforce
the Castle Guaranty and this Joinder Agreement against such New Guarantor for
the benefit of the Noteholders up to the full amount of the Guarantied
Obligations without proceeding against any other Guarantor, Castle, any other
Person or any collateral securing the Guarantied Obligations. The terms and
provisions of the Castle Guaranty are incorporated by reference in this Joinder
Agreement.
3. Upon this Joinder Agreement bearing the signature of any Person claiming
to have authority to bind any New Guarantor coming into the hands of the
Noteholders, and irrespective of whether this Joinder Agreement or the Castle
Guaranty has been executed by any other Person, this Joinder Agreement will be
deemed to be finally and irrevocably executed and delivered by, and be effective
and binding on, and enforceable against, such New Guarantor free from any
promise or condition affecting or limiting the liabilities of such New Guarantor
and such New Guarantor shall be, and shall be deemed for all purposes to be, a
Guarantor under the Castle Guaranty. No statement, representation, agreement or
promise by any officer, employee or agent of any one or more of the Noteholders,
forms any part of this Joinder Agreement or the Castle Guaranty or has induced
the making of this Joinder Agreement or the Castle Guaranty by any of the New
Guarantors or in any way affects any of the obligations or liabilities of any of
the New Guarantors in respect of the Guarantied Obligations.
4. This Joinder Agreement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Joinder Agreement. Delivery of an
executed signature page to this Joinder Agreement by any New Guarantor by
facsimile transmission shall be as effective as delivery of a manually executed
copy of this Joinder Agreement by such New Guarantor.
5. This Joinder Agreement is a contract made under, and will for all purposes
be governed by and interpreted and enforced according to, the internal laws of
the State of Illinois excluding any conflict of laws rule or principle which
might refer these matters to the laws of another jurisdiction.
6. This Joinder Agreement and the Castle Guaranty shall be binding upon each
of the New Guarantors and the successors of each of the New Guarantors. None of
the New Guarantors may assign any of its obligations or liabilities in respect
of the Guarantied Obligations.
IN WITNESS OF WHICH this Joinder Agreement has been duly executed and
delivered by each of the New Guarantors as of the date indicated on the first
page of this Joinder Agreement.
[NEW GUARANTOR]
By: _______________________
Name:
Title:
Exhibit A-2