13D Filing: Corre Partners Management, LLC and AM Castle & Co (CASLQ)

its commercially reasonable effort to have each such registration statement declared effective by the SEC as soon as reasonably practicable, but in no event later than the date which is the earlier of (x) 90 calendar days after the earlier of the filing date of such registration statement and 30 days after the Issuer’s receipt of the notice triggering such filing obligation and (y) the fifth business day after the date the Issuer is notified (orally or in writing, whichever is earlier) by the SEC that such registration statement will not be reviewed or will not be subject to further review.

The term “Registrable Securities” means the Initial Registrable Securities and the Additional Registrable Securities; provided, however, Registrable Securities shall cease to constitute Registrable Securities to the extent such securities may be sold pursuant to Rule 144 promulgated under the Securities Act (or any similar provision then in force) without regard to volume or manner of sale limitations and constitute less than 2.5% of the outstanding Common Stock on an as-converted basis and on an aggregate basis.

Underwritten Public Offering. Pursuant to the Registration Rights Agreement, among other things, any Investor holding Registrable Securities whose resale is covered by an effective registration statement filed pursuant to the Registration Rights Agreement may request that the Issuer perform its obligations under the Registration Rights Agreement in the form of a firm commitment underwritten public offering. The Issuer, however, will not be obligated to conduct an underwritten public offering unless the aggregate proceeds reasonably anticipated to be generated, net of underwriting discounts and commissions, equals or exceeds $10 million or unless such Underwritten Offering includes all of the Registrable Securities then owned by the requesting Investors.

The Registration Rights Agreement includes customary indemnification provisions.

The foregoing summary of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Registration Rights Agreement filed herewith as Exhibit 3, which is incorporated herein by reference.

On the Effective Date and pursuant to the Plan, the Issuer issued to the Reporting Persons $24,232,320 aggregate principal amount of Convertible Notes, in respect of claims under the 2018 Notes and the 2019 Notes and for cash pursuant to a commitment agreement, dated as of June 16, 2017 (as amended, the “Commitment Agreement”), by and among the Issuer, the Reporting Persons and certain other creditors of the Issuer.  The Convertible Notes are convertible at the election of the holder at any time into shares of Common Stock, cash or a combination of Common Stock and cash, at the option of the Issuer. The Convertible Notes held by the Reporting Persons are initially convertible into 6,430,446 shares of Common Stock. The Reporting Persons disclaim beneficial ownership of any shares of Common Stock that they might receive upon conversion of the Convertible Notes.

Pursuant to the Plan, on the Effective Date, the Issuer entered into an Indenture (the “Convertible Notes Indenture”) with Wilmington Savings Fund Society, FSB (“WSFS, FSB”), as trustee and collateral agent (“Indenture Agent”) and, pursuant thereto, issued the Convertible Notes.

The Convertible Notes are five year senior obligations of the Issuer and certain of its subsidiaries, secured by a lien on all or substantially all of the assets of the Issuer, its domestic subsidiaries and certain of its foreign subsidiaries, which lien the Indenture Agent has agreed will be junior to the lien of the agent for the Issuer’s senior credit agreement.

The Convertible Notes are convertible into shares of the Issuer’s common stock at any time at the initial conversion rate of 0.2654 shares of Common Stock per $1.00 principal amount of Convertible Notes, which rate is subject to adjustment as set forth in the Convertible Notes Indenture.  The value of shares of Common Stock for purposes of the settlement of the conversion right will be calculated as provided in the Convertible Notes Indenture, using a 20 trading day observation period. Upon conversion, the Issuer will pay and/or deliver, as the case may be, cash, shares of the Issuer’s common stock or a combination of cash and shares of the Issuer’s common stock, at the Issuer’s election, together with cash in lieu of fractional shares.

Convertible Notes that are deemed, in accordance with the Convertible Notes Indenture, to have been converted in connection with a “Fundamental Change” (as defined in the Convertible Notes Indenture) are convertible, for each $1.00 principal amount of the Convertible Notes, into that number of shares of Common Stock equal to the greater of (a) $1.00 divided by the then applicable conversion price and (b) $1.00 divided by the stock price with respect to such Fundamental Change, subject to other provisions of the Convertible Notes Indenture.