<PAGE>
As filed with the Securities and Exchange Commission on May 14, 1999
Registration No. 333-76541
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT
NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
Under
the Securities Act of 1933
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National Steel Corporation
(Exact name of Registrant as specified in its charter)
Delaware 3312 25-0687210
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
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4100 Edison Lakes Parkway
Mishawaka, Indiana 46545-3440
(219) 273-7000
(Address, including zip code, and telephone number, including area code, of
registrants' principal executive offices)
---------------
Glenn H. Gage
Senior Vice President and Chief Financial Officer
4100 Edison Lakes Parkway
Mishawaka, Indiana 46545-3440
(219) 273-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
With copies to:
Ronald J. Werhnyak, Esq. Gary P. Cullen, Esq.
Vice President, General Counsel and Skadden, Arps, Slate, Meagher & Flom
Secretary (Illinois)
National Steel Corporation 333 W. Wacker Drive
4100 Edison Lakes Parkway Chicago, Illinois 60606
Mishawaka, Indiana 46545-3440 (312) 407-0700
(219) 273-7000
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Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT COMPLETION, DATED MAY 14, 1999
PROSPECTUS
[LOGO OF NATIONAL STEEL APPEARS HERE]
National Steel Corporation
Offer to Exchange Our
First Mortgage Bonds, 9 7/8% Series D due 2009
for any or all of our
First Mortgage Bonds, 9 7/8% Series A due 2009
and
First Mortgage Bonds, 9 7/8% Series C due 2009
--------
The exchange offer will expire at 5:00 p.m. New York time, on ,
1999 unless extended.
--------
Terms of the exchange offer:
. We will exchange all original bonds that are validly tendered and not
withdrawn prior to the expiration of the exchange offer.
. You may withdraw tendered original bonds at any time prior to the expiration
of the exchange offer.
. We believe that the exchange of original bonds will not be a taxable exchange
for United States federal income tax purposes, but you should see the section
entitled "Certain Federal Income Tax Considerations" on page 56 for more
information.
. The terms of the exchange bonds to be issued are substantially identical to
the terms of the original bonds, except for certain transfer restrictions and
registration rights relating to the original bonds.
. We will not receive any proceeds from the exchange offer.
--------
Investing in the exchange bonds involves risks. See "Risk Factors" beginning
on page 7 for a discussion of the risks that you should consider prior to
tendering your original bonds for exchange.
--------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
--------
May , 1999.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
PROSPECTUS SUMMARY 1
The Exchange Offer...................................................... 1
Summary Description of Exchange Bonds................................... 2
Summary of Our Business................................................. 4
Summary Historical Consolidated Financial and Other Data................ 5
RISK FACTORS.............................................................. 7
Risk Factors Relating to the Exchange Offer............................. 7
If you do not exchange your bonds in the exchange offer, you may not
be able to ever sell them............................................ 7
You cannot be sure that an active trading market will develop for
these bonds.......................................................... 7
Risk Factors Relating to the bonds...................................... 7
Not all of our property secures the bonds............................. 7
The value of the mortgaged property has not been independently
determined and cannot be guaranteed in the event of a liquidation.... 7
You may be limited in your rights to claim the mortgaged property by
bankruptcy law....................................................... 8
We may be inadequately insured to protect the value of the mortgaged
property............................................................. 8
You may not be able to direct the trustee to exercise the rights and
remedies under the indenture in the event of a default............... 8
Risk Factors Relating to National Steel................................. 9
We rely heavily on the automotive industry to purchase our products... 9
Our labor agreements expire this year, and we may not be able to
renegotiate new agreements on favorable terms........................ 9
We have substantial debt obligations, especially our pension and other
postretirement benefits obligations, which may impair our ability to
repay the bonds and our liquidity.................................... 9
The bonds are subordinate to the creditors of our subsidiaries........ 10
The restrictive covenants in our debt agreements may limit our
corporate activities................................................. 10
Our business requires substantial capital investment and maintenance
requirements which we may be unable to meet.......................... 10
We rely on certain pieces of steelmaking equipment which may not be
easily or readily replaced in the event of damage or maintenance..... 10
NKK has the ability to exercise control over our business............. 11
We are subject to stringent environmental regulation.................. 11
Our systems may not be completely Year 2000 compliant................. 12
Risk Factors Relating to the Steel Industry............................. 12
The steel industry is cyclical which may make our operating results
fluctuate............................................................ 12
There is excess world capacity in the steel industry which has
depressed prices..................................................... 12
Recent economic instability in a number of foreign economies has
resulted in increased steel exports to the United States at depressed
prices causing downward pricing pressure for our products............ 12
We compete with other producers of steel and steel substitutes which
may adversely effect demand for our products......................... 13
The forward looking statements we make in this prospectus may not be
realized............................................................. 13
USE OF PROCEEDS........................................................... 14
CAPITALIZATION............................................................ 14
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA................. 15
THE EXCHANGE OFFER........................................................ 17
Terms of the exchange offer; period for tendering original bonds........ 17
Procedures for tendering original bonds................................. 18
</TABLE>
i
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<TABLE>
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PAGE
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<S> <C>
Signature requirements.................................................. 18
Our interpretations are binding on you.................................. 19
Representation you make by tendering.................................... 19
Acceptance of original bonds for exchange; delivery of exchange bonds... 20
Book-entry transfer..................................................... 20
Guaranteed delivery procedures.......................................... 21
Withdrawal rights....................................................... 21
Conditions to the exchange offer........................................ 22
Exchange agent.......................................................... 22
Fees and expenses....................................................... 22
Transfer taxes.......................................................... 22
Holders, other than affiliates, may offer or sell the exchange bonds.... 22
DESCRIPTION OF OTHER INDEBTEDNESS......................................... 23
Receivables Facility.................................................... 23
Inventory Facilities.................................................... 24
Old Bonds............................................................... 24
USWA Lien............................................................... 24
Other Indebtedness and Operating Leases................................. 24
DESCRIPTION OF THE EXCHANGE BONDS......................................... 25
Principal, maturity and interest........................................ 25
Transfer and exchange................................................... 26
Ranking................................................................. 26
Mortgaged Property...................................................... 26
We may issue more bonds................................................. 26
Optional Redemption..................................................... 27
Sinking Fund............................................................ 27
Repurchase at the Option of Holders Upon a Change of Control............ 27
Certain Covenants....................................................... 28
Merger, Consolidation and Sale of Property.............................. 37
SEC Reports............................................................. 37
Events of Default....................................................... 37
Amendments and Waivers.................................................. 39
Defeasance.............................................................. 40
Book-Entry System....................................................... 40
Second Mortgage......................................................... 42
Certain Bankruptcy Limitations.......................................... 42
Governing Law........................................................... 43
The Trustee, Paying Agent and Registrar for the Bonds................... 43
Registration Rights..................................................... 43
Certain Definitions..................................................... 44
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS................................. 56
United States Holders and United States Alien Holders................... 57
United States Federal Income Tax Consequences to United States Holders.. 57
United States Federal Income Tax Consequences to United States Alien
Holders................................................................ 58
PLAN OF DISTRIBUTION...................................................... 60
LEGAL MATTERS............................................................. 61
EXPERTS................................................................... 61
AVAILABLE INFORMATION..................................................... 61
INFORMATION INCORPORATED BY REFERENCE..................................... 61
</TABLE>
ii
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus contains specific terms of the Series D bonds that we are offering.
Other important information regarding our business, results of operations and
financial condition is incorporated by reference from other documents filed
with the SEC. You are encouraged to read this prospectus and to refer to the
documents incorporated by reference.
The Exchange Offer
On March 8, 1999, we completed the private offering of $225.0 million of our
First Mortgage Bonds, 9 7/8% Series A due 2009. On March 31, 1999, we completed
the private offering of $75.0 million of our First Mortgage Bonds, 9 7/8%
Series C due 2009. We entered into a registration rights agreement with the
placement agents in each private offering in which we agreed to complete this
exchange offer. You should read the discussion under the headings "--Summary
Description of the Exchange Bonds" and "Description of the Bonds" for more
information about the registered exchange bonds. We refer to the original bonds
and the exchange bonds as "the bonds" in this prospectus.
We believe that the exchange bonds to be issued in the exchange offer may be
resold by you without compliance with the registration and prospectus delivery
provisions of the Securities Act, unless you are an affiliate of National Steel
or an underwriter or a broker dealer. You should read the discussion under the
heading "The Exchange Offer" for further information regarding the exchange
offer and resale of the exchange bonds.
Registration rights These agreements entitle holders of original
agreements.................... bonds to exchange their bonds for registered
bonds with identical economic terms.
The exchange offer............ We are offering to exchange up to $300.0
million of the exchange bonds for up to $225.0
million of the original Series A bonds and up
to $75.0 million of the original Series C
bonds. Original bonds may only be exchanged in
increments of $1,000. The economic terms of the
exchange bonds are identical to the original
bonds except that the principal amount of the
exchange bonds may be up to $300.0 million.
Tenders; expiration date; The exchange offer will expire at 5:00 p.m.,
withdrawal.................... New York City time, on , 1999, unless
we extend it. If you decide to exchange your
original bonds for exchange bonds, you must
acknowledge that you are not engaging in, and
do not intend to engage in, a distribution of
the exchange bonds. You may withdraw your
tender of original bonds at any time before
, 1999. If we decide for any reason
not to accept your original bonds for exchange,
we will return them to you promptly and without
expense after the exchange offer expires or
terminates.
Conditions to the exchange We are not required to accept any original
offer......................... bonds in exchange for exchange bonds. We may
terminate or amend the exchange offer if we
determine that the exchange offer violates
applicable law or any applicable interpretation
of the SEC.
1
<PAGE>
Federal tax considerations.... We believe that the exchange of original bonds
for exchange bonds in the exchange offer will
not result in any gain or loss to you for
federal income tax purposes.
Use of proceeds............... We will receive no proceeds from the exchange
offer.
Exchange agent................ The Chase Manhattan Bank is the exchange agent
for the exchange offer. The address and
telephone number of the exchange agent are set
forth under the heading "The Exchange Offer--
Exchange agent."
Summary Description of Exchange Bonds
The terms of the exchange bonds are identical to the original bonds in all
material respects except:
. the transfer restrictions and registration rights relating to the
original bonds do not apply to the exchange bonds;
. if we do not complete the exchange offer by September 6, 1999, the
interest rate on such original bonds will increase by 0.25% for each 90
day period, with a maximum total increase of 1.00%, until we complete it;
and
. the exchange bonds are part of a single series of up to $300.0 million.
Bonds offered................. Up to $300.0 million total principal amount of
First Mortgage Bonds, 9 7/8% Series D due 2009,
which have been registered under the Securities
Act.
Maturity date................. March 1, 2009.
Interest payment dates........ March 1 and September 1 of each year, beginning
on September 1, 1999.
Sinking fund.................. None.
Collateral.................... The bonds will be secured by a lien on our
Great Lakes, Granite City and Midwest
facilities, subject to some exceptions, and
some of our ore properties and related mining
facilities. The bonds rank equally with all
other mortgage bonds issued under the indenture
in their rights in the mortgaged property.
There is $375.0 million in total principal
amount of mortgage bonds outstanding under the
indenture.
Ranking....................... The bonds rank equally with our other senior
obligations. While the bonds also rank equally
with our unsecured indebtedness, holders of the
bonds, our First Mortgage Bonds, 8.375% Series
due 2006 and any additional series of bonds
that may be issued under the indenture in the
future may seek repayment out of the sale of
the mortgaged property.
At December 31, 1998, assuming the original
bonds were issued at that time, we would have
had total debt, including secured debt, pension
and other postretirement employee benefits
liabilities, of approximately $1,315 million,
excluding the unamortized portion of our
postretirement employee benefits transition
obligation of approximately $373 million at
2
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December 31, 1998. Of this amount, our
subsidiaries' total indebtedness of
approximately $30.6 million is senior to the
bonds. The $623.0 million of secured debt or
other secured obligations included in our total
debt ranks equally to the bonds and $375.0
million of this debt is secured by the
mortgaged property.
In addition, as of the same date, we and our
subsidiaries would have had approximately $79
million of outstanding secured letters of
credit and approximately $257 million of
available borrowing capacity under three
revolving credit facilities that are secured by
certain inventory and receivables. All of this
indebtedness ranks equally with the bonds,
except the credit facilities have priority as
to the inventory or receivables that secure
them.
Optional redemption........... We may redeem any of the bonds beginning on
March 1, 2004. The initial redemption price is
104.938% of their principal amount, plus
accrued interest. The redemption price will
decline each year after 2004 and will be 100%
of their principal amount, plus accrued
interest on March 1, 2007.
In addition, before March 1, 2002, we may
redeem up to 35% of the total principal amount
of the bonds at 109.875% of their principal
amount, plus accrued interest, with the
proceeds of a public equity offering. However,
at least 65% of the total principal amount of
the bonds originally issued must remain
outstanding after the redemption.
Change of control............. Upon a change of control, we must offer to
purchase the bonds for 101% of their principal
amount, plus accrued interest. However, we may
not have sufficient funds to repurchase the
bonds or we may be prohibited from doing so by
our other debt.
Certain covenants............. The indenture contains covenants that limit our
ability and that of our subsidiaries to:
.incur additional debt;
. pay dividends, prepay subordinated
indebtedness, repurchase capital stock and
make investments;
.create liens on mortgaged property;
.issue or sell capital stock of subsidiaries;
.sell or dispose of our property;
.restrict distributions from subsidiaries;
.engage in transactions with affiliates;
.engage in different lines of business; or
. in the case of National Steel, merge,
consolidate or sell all or substantially all
of our property.
These limitations are subject to a number of
important qualifications and exceptions.
3
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Summary of Our Business
We are the fourth largest integrated steel producer in the United States. We
manufacture and sell a wide variety of flat rolled carbon steel products. Our
products include:
. hot rolled steel,
. cold rolled steel,
. galvanized steel,
. tin and
. chrome plated steel.
Our annual effective raw steelmaking capacity is approximately 6.8 million
net tons, all of which is continuously cast. Our annual hot rolled band
production capacity is approximately 8.0 million tons. We target sales of high
value-added applications of flat rolled carbon steel to the automotive,
construction and container markets. In 1998, the automotive market accounted
for 29.5% of our sales, the construction market accounted for 26.6% of our
sales, and 11.3% of our sales were to the container market.
We operate three principal facilities:
. Granite City--an integrated steel plant located near St. Louis,
. Great Lakes--an integrated steel plant located near Detroit and
. Midwest--a finishing facility located near Chicago.
We also own and operate National Steel Pellet Company, an iron ore mine and
pelletizing facility in Keewatin, Minnesota. Our pellet facility has a current
annual pelletizing capacity of approximately 5.3 million gross tons and
reserves in excess of 350.0 million gross tons.
Granite City. Granite City is a fully integrated steelmaking facility with
annual hot rolled band production capacity of approximately 3.6 million tons.
Granite City also operates 800,000 tons of higher value-added processing
capacity, including three hot dip galvanizing lines. Granite City ships (1) hot
rolled, (2) hot dipped galvanized and Galvalume(R), (3) grain bin and (4) high
strength, low alloy steels. The construction market accounted for approximately
50% of the facility's 1998 sales. Approximately 10% of Granite City's hot band
production is transferred to Midwest for further value-added processing.
Great Lakes. Great Lakes is a fully integrated steelmaking facility with
annual hot rolled band production capacity of approximately 4.4 million tons.
Higher value-added processing capacity includes 1.2 million tons of cold
rolling and 400,000 tons of electrolytic galvanizing. Great Lakes ships (1) hot
rolled, (2) cold rolled, (3) galvanized and (4) high strength, low alloy
steels. Great Lakes primarily serves the automotive industry, which accounted
for approximately 70% of the facility's direct 1998 sales. Approximately 45% of
the facility's hot rolled band production is transferred to Midwest and to
joint venture coating operations for further value-added processing. We have
entered into a contract for the construction of a new 450,000 ton hot dip
galvanizing facility at Great Lakes. The new facility is scheduled to begin
operations in the first half of 2000 and will serve the automotive industry.
Midwest. Midwest finishes hot rolled bands produced at Great Lakes and
Granite City for use in the automotive, construction and container markets.
Facilities at Midwest have 2.0 million tons of cold rolling capacity,
approximately 1.0 million tons of galvanizing capacity and 600,000 tons of tin
mill capacity.
NKK Alliance. We have a strong alliance with our principal stockholder, NKK
Corporation. NKK is the second largest steel company in Japan and the ninth
largest in the world as measured by production. Since 1984, we have had access
to a wide range of NKK's steelmaking, processing and applications technology.
4
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Recent Developments
In the first quarter of 1999, we generated net sales of $657.9 million, a
7.1% decrease from the first quarter of 1998 due to a 29,000 ton decrease in
shipments and a $25 per ton decline in average selling prices, both of which
were primarily caused by high levels of low-priced imported steel and service
center inventories. We reported a net loss in the period of $24.1 million, or
$.58 per diluted common share down from our net income in the first quarter of
1998 of $5.9 million, or $.14 per diluted common share. We were able to hold
onto the cost reductions we achieved in the fourth quarter of 1998 and to
improve our product mix by continuing to focus on our cost reduction
initiatives and customer-focused strategies designed to improve operating
performance. However, the downward pricing pressure more than offset such
gains.
During the first quarter, we purchased the remaining outstanding 44% equity
interest in ProCoil Corporation, a steel processing facility which blanks,
slits and cuts steel coils to desired lengths to serve the automotive industry
and is also providing laser welding services. We purchased this remaining
equity interest for $7.7 million. This acquisition was in line with our overall
customer service initiatives for the automotive market.
Summary Historical Consolidated Financial and Other Data
The following table presents our summary consolidated financial information
and other operating information for the periods indicated. The financial
information for the five years ended December 31, 1998 is derived from our
audited financial statements. The following financial information and operating
data should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and the consolidated
financial statements and related notes, for each of the years ended
December 31, 1996 through 1998 and the other information included in our Annual
Report on Form 10-K.
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1994 1995 1996 1997 1998
------- ------- ------- ------- -------
Statement of Operations: (dollars in millions)
<S> <C> <C> <C> <C> <C>
Net sales.................... $2,700 $2,954 $2,954 $3,140 $2,848
Gross margin................. 221 279 192 331 222
Income from operations....... 113 129 65 191 96
Financing costs, net......... 56 39 36 15 11
Net income................... 185 108 54 214 84
Net income applicable to
common stock................ 174 97 43 203 84
Other Data:
Shipments (net tons, in
thousands).................. 5,208 5,564 5,895 6,144 5,587
Raw steel production (net
tons, in thousands)......... 5,763 6,081 6,557 6,527 6,087
Effective capacity
utilization................. 96.1% 96.5% 93.7% 96.0% 92.2%
Number of employees at period
end......................... 9,711 9,474 9,579 9,417 9,230
Man hours per net ton
shipped..................... 3.71 3.41 3.24 3.06 3.31
Net cash provided by
operating activities........ $ 317 $ 265 $ 159 $ 332 $ 32
Net cash provided by (used
in) investing activities.... (136) (215) (121) 168 (166)
Net cash used in financing
activities.................. (24) (84) (57) (297) (40)
Depreciation................. $ 142 $ 146 $ 144 $ 135 $ 129
Capital investments.......... 138 215 129 152 171
EBITDA (1)................... 255 275 209 326 225
Adjusted EBITDA (2).......... 258 308 237 353 226
Ratio of earnings to fixed
charges (3)................. 3.0x 2.2x 1.5x 5.2x 3.0x
EBITDA to gross interest
charges..................... 4.2x 5.4x 4.8x 9.6x 8.5x
Adjusted EBITDA to gross
interest charges............ 4.2 6.0 5.5 10.4 8.5
Total debt to EBITDA......... 2.8 2.0 2.4 1.1 1.4
Total debt to Adjusted
EBITDA...................... 2.7 1.7 2.1 1.0 1.4
</TABLE>
5
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<TABLE>
<CAPTION>
December 31,
--------------------------------------
1994 1995 1996 1997 1998
Balance Sheet Data: ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and investments. $ 162 $ 128 $ 109 $ 338 $ 138
Working capital........................ 252 250 279 367 333
Net property, plant & equipment........ 1,394 1,469 1,456 1,229 1,271
Total assets........................... 2,500 2,669 2,558 2,453 2,484
Total debt............................. 707 538 508 343 323
Total pension and OPEB liabilities (4). 457 592 519 614 692
Redeemable preferred stock--Series B... 67 65 64 -- --
Stockholders' equity................... 401 600 645 837 850
</TABLE>
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(1) EBITDA represents income from operations plus depreciation. EBITDA should
not be construed as a substitute for income from operations, net income or
cash flows from operating activities for the purpose of analyzing our
operating performance, financial position and cash flows. We have presented
EBITDA because it is commonly used by certain investors to analyze and
compare companies on the basis of operating performance and to determine a
company's ability to service debt. This definition of EBITDA differs from
the definition of EBITDA applicable to the covenants for the bonds and may
not be comparable to EBITDA as defined by other companies.
(2) Adjusted EBITDA includes the add back of the amortization of our OPEB
transition obligation, which results in a non-cash charge of approximately
$27 million per year, and unusual charges (credits).
(3) The ratio of earnings to fixed charges is determined by dividing earnings
by fixed charges. Earnings is the sum of: (a) income before income taxes,
extraordinary items and cumulative effect of accounting change, (b)
amortization of capitalized interest less interest capitalized in the
current year, and (c) fixed charges. Fixed charges include interest both
expensed and capitalized during the year and a portion of rent expense
representative of interest.
(4) This amount excludes the unamortized portion of our other pension and
employee benefits transition obligation, which was approximately $373
million at December 31, 1998.
6
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RISK FACTORS
You should carefully consider all of the information in this prospectus,
including the following risk factors and warnings, before deciding to exchange
your original bonds for exchange bonds. Except for the first risk factor below,
the risk factors generally apply to the original bonds as well as to the
exchange bonds.
Risk Factors Relating to the Exchange Offer
If you do not exchange your bonds in the exchange offer, you may not be able to
ever sell them.
It may be difficult for you to sell bonds that are not exchanged in the
exchange offer. Those bonds may not be offered or sold unless they are
registered or there are exemptions from the registration requirements under the
Securities Act and applicable state securities laws.
If you do not tender your bonds or if we do not accept some of your bonds,
those bonds will continue to be subject to the transfer and exchange
restrictions in:
. the indenture,
. the legend on the original bonds, and
. the offering memorandum relating to the original bonds.
The restrictions on transfer of the original bonds arise because we issued
the original bonds pursuant to an exemption from the registration requirements
of the Securities Act and applicable state securities laws. In general, you may
only offer or sell the original bonds if they are registered under the
Securities Act and applicable state securities laws, or offered and sold
pursuant to an exemption from such requirements. We do not intend to register
the original bonds under the Securities Act. To the extent original bonds are
tendered and accepted in the exchange offer, the trading market, if any, for
the original bonds would be adversely affected.
Holders of Series A bonds may elect to exchange their original bonds for
Series B bonds, which are also registered under the Securities Act, instead of
exchange bonds. The aggregate principal amount of Series B bonds is limited to
$225.0 million. It is uncertain if any of the Series A bonds will be exchanged
for Series B bonds and, as a result, the market for the Series B bonds may be
substantially less liquid then the exchange bonds.
You cannot be sure that an active trading market will develop for these bonds.
The exchange bonds are being offered to the holders of the original bonds
only. The original bonds, and the exchange bonds when issued, will be eligible
for trading on the PORTAL Market. However, there is no public market for the
exchange bonds. The placement agents have informed us that they currently
intend to make a market in the exchange bonds, but they are not required to do
so and may stop their market making at any time. The exchange bonds could trade
at prices that may be higher or lower than the initial offering price of the
original bonds. The liquidity of the trading market in these bonds, and the
market price quoted for these bonds, may be adversely affected by changes in
the overall market for similar securities, existing interest rates and by our
operating results.
Risk Factors Relating to the Bonds
Not all of our property secures the bonds.
The mortgaged property securing the bonds does not include some significant
assets, including inventory and receivables and other plant assets and
processing lines at our three facilities. We do not own some assets that
service our facilities, including the coke battery at Great Lakes, that are
therefore, not subject to the lien. A complete description of the assets that
are subject to the lien and those that are excluded can be found under the
caption "Description of the Bonds--Mortgaged Property."
The value of the mortgaged property has not been independently determined and
cannot be guaranteed in the event of a liquidation.
7
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The proceeds of any sale of the mortgaged property following an event of
default may not be sufficient to satisfy the amounts due on the bonds issued
under the indenture. If the proceeds of any sale of the mortgaged property are
insufficient to repay all amounts due on any of the bonds outstanding under the
indenture, the holders of the bonds would have only an unsecured claim against
the remaining assets of National Steel for any amount not repaid by such sale.
Factors which could affect the value of the mortgaged property in the event of
a liquidation include:
. market and economic conditions;
. some assets necessary to operate our steelmaking or finishing facilities
are not mortgaged property;
. some of the mortgaged property is illiquid and has no readily
ascertainable market value; and
. liens, rights and easements granted to third parties encumber assets
located on property owned by us or constitute subordinate liens on the
mortgaged property, and such third parties have or may exercise rights
and remedies that could diminish the value of the mortgaged property and
the ability of the trustee or the holders of the bonds to foreclose on
such mortgaged property.
In addition, the indenture permits the release of mortgaged property without
the substitution of additional collateral if the value of the remaining
collateral is sufficient to secure the bonds.
You may be limited in your rights to claim the mortgaged property by bankruptcy
law.
The right of the trustee to repossess and dispose of the mortgaged property
if an event of default occurs is likely to be significantly impaired by
applicable bankruptcy law if a bankruptcy case were to be commenced by or
against National Steel prior to, or after, the trustee having repossessed and
disposed of the mortgaged property. Under the bankruptcy code, a secured
creditor such as the trustee may be prohibited from repossessing or disposing
of its security from a debtor in a bankruptcy case, and any action allowed to
be taken by the trustee to recover its security may be significantly delayed.
During any such delay the value of the mortgaged property may be diminished.
We may be inadequately insured to protect the value of the mortgaged property.
We must properly insure the mortgaged property against loss or damage by fire
or other hazards to the extent typically insured by corporations operating
similar properties. The proceeds of insurance from each loss in excess of one
million dollars will be made payable to the trustee. However, we may suffer
losses which are either uninsurable or not economically insurable. And, the
amounts for which we are insured or the proceeds of such insurance may not
compensate us fully for our losses. If we have a total or partial loss of any
of the mortgaged property, the insurance proceeds received may not be
sufficient to satisfy all bonds outstanding. We may also be unable to replace
the mortgaged property, or to replace it without significant delay, because of
the large size and extended period necessary to manufacture such equipment.
Additionally, we are not required to, and we do not currently, maintain any
title insurance with regard to our title to any of the real property or
improvements which constitute mortgaged property. If a loss occurs arising from
a title defect with respect to any mortgaged property, we may not be able to
replace such mortgaged property with collateral of equal value.
You may not be able to direct the trustee to exercise the rights and remedies
under the indenture in the event of a default.
The holders of a majority in total principal amount of all series of
outstanding bonds under the indenture have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee. The outstanding
bonds may not constitute a majority of the outstanding principal amount of all
bonds of all series. In such case, the holders of the bonds will not have any
ability to direct the trustee independently of any other series of bonds.
Further, the holders of other series of bonds may have sufficient voting power
to direct the actions of the trustee or cause the acceleration of the bonds
without your consent.
8
<PAGE>
Risk Factors Relating to National Steel
We rely heavily on the automotive industry to purchase our products.
Our sales are heavily concentrated in the automotive industry. Demand for our
steel products is affected by, among other things, the strength or weakness of
the domestic automotive industry. The North American automotive industry has
historically experienced significant fluctuations in demand, based on such
factors as:
. general economic conditions,
. interest rates,
. consumer confidence, and
. significant fluctuations in production due to strikes, lock-outs,
work stoppages or other production interruptions in the automotive
industry.
Any material reduction in the sale of automobiles could have a material
adverse impact on our results of operations.
We also have a concentrated customer base within the automotive industry.
Combined direct sales to Chrysler Corporation, Ford Motor Company and General
Motors Corporation accounted for 21.2% of net sales in 1998, 14.6% in 1997, and
16.3% in 1996. We may not continue to sell to these companies at these historic
levels, which could have a material adverse effect on our business.
Our labor agreements expire this year, and we may not be able to renegotiate
new agreements on favorable terms.
Our 1993 labor agreement with the United Steel Workers of America, covering
approximately 7,500 employees, or approximately 82% of our total employees,
expires on July 31, 1999. If we are unable to negotiate a new agreement when
the existing agreement expires, our operations could be impacted by a strike or
work stoppage. Our negotiations with the USWA may be more difficult because the
USWA's labor agreements with other domestic integrated steel producers also
expire on July 31, 1999. In addition, work stoppages may occur in the future in
connection with contract negotiations or otherwise. A prolonged general work
stoppage would have an adverse effect on our results of operations and
financial condition. Also, our profitability could be adversely affected if
increased costs associated with any future contract are not recoverable through
productivity improvements or price increases.
We have substantial debt obligations, especially our pension and other
postretirement benefits obligations, which may impair our ability to repay the
bonds and our liquidity.
We have substantial financial obligations related to our employee
postretirement benefit plans for pensions, other postretirement employee
benefit liabilities (also known as OPEB liabilities) and other obligations,
including debt. As of December 31, 1998, after giving pro forma effect to the
offerings, the total consolidated debt including secured debt, pension and OPEB
liabilities would have been approximately $1,315 million, excluding the
unamortized portion of our OPEB transition obligation, which was approximately
$373 million at December 31, 1998. Our substantial debt and corresponding
required payments may adversely affect our ability to:
. make capital investments,
. take advantage of business opportunities, including making joint venture
investments, or
. obtain additional financing.
At December 31, 1998, our liabilities for pensions were approximately $284
million and for OPEB were approximately $408 million, excluding the unamortized
portion of National Steel's OPEB transition obligation. We amortize our OPEB
transition obligation over a 20 year period resulting in a non-cash charge of
9
<PAGE>
approximately $27 million per year. The recording of these charges could have a
material adverse effect on our financial condition and results of operations
because of the resulting increase in recorded liabilities, decrease in
stockholders' equity and increases in required contributions to the pension
fund. Our obligations could increase substantially if:
. the actual retirement of active employees is significantly earlier than
projected because of plant closings or for other reasons,
. the plans are modified after August 1999 because of contractual changes
with the USWA,
. events occur differently than assumed, or
. assumptions change as a result of such events or otherwise.
The bonds are subordinate to the creditors of our subsidiaries.
The bonds are effectively subordinated to all creditors of our subsidiaries
to the extent of the assets of each such subsidiary, including the Pension
Benefit Guaranty Corporation, trade creditors, unsecured creditors and
preferred stockholders, if any. The amount of subsidiary indebtedness could be
substantial and could impair your ability to recover your investment from us.
The bonds contain no limitations on our subsidiaries' ability to incur trade
credit or other obligations. Further, our subsidiaries may become jointly and
severally liable for our pension liabilities. The indenture does not limit such
liabilities, and under some circumstances the amount of such pension
liabilities for which our subsidiaries are liable could be substantial.
The restrictive covenants in our debt agreements may limit our corporate
activities.
We are subject to operating and financial restrictions based on the terms of
the receivables facility, inventory facilities, the indenture and the other
agreements governing our indebtedness. These restrictions could limit our
ability to plan for or react to market conditions or meet extraordinary capital
needs or otherwise restrict our corporate activities. Such restrictions limit
our ability and that of our subsidiaries to:
. incur additional indebtedness,
. create liens,
. sell assets, or
. engage in mergers or acquisitions.
Our business requires substantial capital investment and maintenance
requirements which we may be unable to meet.
Our integrated steel operations are capital intensive. In order to maintain
production capacity, reduce costs, improve productivity, upgrade selected
facilities to meet competitive requirements and maintain compliance with
environmental laws and regulations, including the Clean Air Act of 1990, we are
required to make substantial capital investments. We anticipate making capital
investments of approximately $300 million in the year ended December 31, 1999.
We may not have adequate funds to make all capital investments deemed necessary
or the amount of future capital investments may not be adequate to preserve our
competitive position or to comply with environmental regulations.
We rely on certain pieces of steelmaking equipment which may not be easily or
readily replaced in the event of damage or maintenance.
We depend upon critical pieces of steelmaking equipment, such as our blast
furnaces and continuous casters. These pieces of equipment on occasion may be
out of service due to routine scheduled maintenance or
10
<PAGE>
as the result of equipment failures or casualties, including explosions, fire
and severe weather conditions. Interruptions in our production capabilities
could result in fluctuations in quarterly sales and income. Using purchased
steel to offset lost production may adversely affect our profitability if we
must purchase at higher prices than our cost.
Although we have experienced no equipment failures or scheduled maintenance
outages resulting in the complete shutdown of a major portion of our
steelmaking production for a significant period of time, a material shutdown
could occur in the future.
NKK has the ability to exercise control over our business.
Approximately 70% of the combined voting power of our outstanding capital
stock is held indirectly by NKK, Japan's second largest steel company. As a
result, NKK has the ability to exercise control over our business by virtue of
its ability to elect all the members of our board of directors and its majority
voting power for actions requiring stockholder approval. If NKK no longer owned
a majority of the combined voting power of our outstanding capital stock, or,
in some cases, a majority economic interest in us, an event of default would
occur under some of our joint venture and financing arrangements. We may be
unable to replace or renegotiate these arrangements in such event.
In connection with our relationship with NKK, NKK has provided financial
assistance to us in the form of investments, loans and introductions to
Japanese financial institutions and trading companies. NKK may not continue to
provide financial support in the future or continue to do so at historical
levels.
There is the potential for conflicts of interest between our two companies.
NKK may not make available to us corporate opportunities discovered by NKK
which would benefit us. Our certificate of incorporation expressly provides
that NKK would not be liable to us if they do not make such opportunities
available to us.
We are subject to stringent environmental regulation.
We are subject to numerous laws and regulations relating to the protection of
human health and the environment. Because these environmental laws and
regulations are quite stringent and are generally becoming more stringent, we
have expended, and expect to expend in the future, substantial amounts for
compliance with these laws and regulations. Due to the possibility of future
changes in circumstances or regulatory requirements, the amount and timing of
environmental expenditures could vary from those currently anticipated and
could adversely effect our financial results. In addition, any of the following
occurrences could also negatively impact our operating performance:
. we may be required to remediate or reclaim any contamination that may be
present at sites at which we have been conducting operations for over 60
years under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and similar state statutes;
. we and some of our subsidiaries are involved as potentially responsible
parties at a number of off-site CERCLA and other environmental cleanup
proceedings and as these matters progress or we become aware of
additional matters, we may be required to accrue substantial charges and
charges in excess of those previously accrued;
. we will need to make substantial capital expenditures in connection with
matters relating to environmental compliance, estimated to be $63.0
million in each of 1999 and 2000; and
. we will need to make capital expenditures relating to environmental
control, estimated to be $8.0 million in 1999 and $20.3 million in 2000.
These costs for environmental compliance may place us at a competitive
disadvantage with respect to foreign steel producers and domestic mini mills as
well as manufacturers of steel substitutes, which are subject to less stringent
environmental requirements.
11
<PAGE>
Our systems may not be completely Year 2000 compliant.
As is the case with most other companies using computers in their operations,
we are continuing to address the Year 2000 problem this year. This problem
results from the past practice of using only two digits in computer software to
designate the calendar year with the assumption being the first two digits
would be "19." If not corrected, this practice may result in incorrect results
when computer software programs perform arithmetic operations, comparisons or
data field sorting involving years later than 1999.
We are currently engaged in a comprehensive project to upgrade our computer
software in our information technology, manufacturing and facilities systems to
programs which will be Year 2000 compliant. We expect to be able to modify or
replace our affected systems in a manner that will minimize any detrimental
effects on our operations. To date, we have spent approximately $9.3 million on
Year 2000 projects. We estimate that we will spend an additional $10.6 million
to complete our Year 2000 compliance effort. We cannot be sure that the actual
costs required to become Year 2000 compliant will not exceed our estimates. We
also cannot be sure that our customers, vendors, suppliers and other third
parties conducting business with us will be Year 2000 compliant. If National
Steel and/or our customers, vendors, suppliers or other third parties
conducting business with us fail to complete the Year 2000 compliance work it
could have a material adverse effect on our operations.
Risk Factors Relating to the Steel Industry
The steel industry is cyclical which may make our operating results fluctuate.
The domestic steel industry is highly cyclical in nature due to the
cyclicality of the automotive and construction industries, the principal
markets it serves, as well as to changes in total industry demand. Our results
of operations are substantially affected by small variations in the realized
prices of our products. Such realized prices are significantly influenced by
prevailing prices for steel and demand for particular products.
There is excess world capacity in the steel industry which has depressed
prices.
There is excess world capacity for many of our products. This has resulted in
intense competition and lower prices for our products, which we expect will
continue in the foreseeable future. Currently, the economic slowdown in a
number of areas of the world, including Russia, Eastern Europe, Brazil, Japan
and The Republic of Korea, as well as favorable exchange rates, has caused a
substantial increase in steel exports to the United States at depressed prices.
In addition, overcapacity has been perpetuated by the continued operation,
modernization and upgrading of marginal domestic facilities through bankruptcy
reorganization proceedings and by the sale of marginal domestic facilities to
new owners, which operate such facilities with lower cost structures. Also,
some foreign steel producers are owned, controlled or subsidized by foreign
governments. Decisions by these foreign producers to continue marginal
facilities may be influenced to a greater degree by political and economic
policy considerations than by prevailing market conditions and may further
contribute to excess world capacity.
Recent economic instability in a number of foreign economies has resulted in
increased steel exports to the United States at depressed prices, causing
downward pricing pressure for our products.
A number of foreign economies, particularly those in Asia, Eastern Europe and
Latin America, have experienced difficulties in recent months. These
difficulties have included one or several of the following factors: (1) decline
in the value of the local currency versus the U.S. dollar, (2) decline in gross
domestic product, (3) decline in corporate earnings, (4) political turmoil and
(5) stock market volatility. The slowdown in these foreign economies has
resulted in significantly lower global demand for steel products and caused an
increase in steel exports to the United States at depressed prices.
Consequently, to the extent that such economic difficulties continue, there
could be continued downward pricing pressures for our products that could have
a material adverse effect on our results of operations and financial condition.
12
<PAGE>
In 1998, we joined a number of other U.S. steel producers in filing certain
unfair trade petitions before the Department of Commerce and the International
Trade Commission. These unfair trade petitions were filed against foreign steel
companies in Brazil, Japan and Russia, alleging widespread dumping of imported
steel products and, in the case of Brazil, substantial subsidization of those
products. We joined as a petitioner in these cases, except the case involving
Japan. Over the past few months the ITC and the Commerce Department have each
made preliminary determinations favorable to domestic producers. These
determinations found reasonable indications of "dumping" of foreign steel
products in the U.S. market, threatening domestic producers. If these
preliminary findings are affirmed by final dumping or countervailing duty
determinations, then the foreign producers will be subject to additional
duties. This would make their products more expensive and would enable domestic
producers to more effectively compete with such foreign products. If these
findings are not made, then the current situation of excess capacity and
intense downward price pressure for steel products could continue which would
have an adverse effect on our operations.
We compete with other producers of steel and steel substitutes which may
adversely effect demand for our products.
We directly compete with domestic and foreign flat rolled carbon steel
producers and producers of plastics, aluminum and other materials which can be
used in place of flat rolled carbon steel in manufactured products. Mini-mills
provide significant competition in hot rolled and cold rolled products, which
represented 52.8% of our total shipments in 1998. If this competition continues
it could negatively impact our results of operation. Mini-mills are relatively
efficient, low-cost producers, have lower employment and environmental costs
and target regional markets. Technological advances have also enabled them to
produce a wider range of products that were historically only provided by
traditional steel producers. Some companies have announced plans for, or have
indicated that they are currently considering, additional mini-mill plants for
sheet products in the United States.
The forward looking statements we make in this prospectus may not be realized.
Statements we make in this prospectus or documents that are incorporated by
reference that are not historical facts constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward looking statements, by their nature, involve risk and uncertainty. A
variety of factors could cause business conditions and our actual results and
experience to differ materially from those expected by us or expressed in our
forward looking statements. These factors include, but are not limited to, the
following:
. changes in market prices and market demand for our products;
. changes in the costs or availability of the raw materials and other
supplies used by us in the manufacture of our products;
. equipment failures or outages at our steelmaking and processing
facilities;
. loss of customers;
. changes in the levels of our operating costs and expenses;
. collective bargaining agreement negotiations, strikes, labor stoppages or
other labor difficulties;
. actions by our competitors;
. changes in industry capacity;
. changes in economic conditions in the United States and other major
international economies, including rates of economic growth and
inflation;
. worldwide changes in trade, monetary or fiscal policies, including
changes in interest rates;
. changes in legal and regulatory requirements; and
. the effects of extreme weather conditions.
13
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the exchange of the original bonds for
the exchange bonds.
CAPITALIZATION
The following table presents our historical capitalization as of December 31,
1998 and, as adjusted, to give effect to the Series A and Series C offerings.
This table should be read in conjunction with the Consolidated Financial
Statements and related notes.
<TABLE>
<CAPTION>
As of December
31, 1998
----------------
As
Actual Adjusted
------ --------
(dollars in
millions)
<S> <C> <C>
Cash and cash equivalents..................................... $ 138 $ 436
====== ======
Long-term debt:
First mortgage bonds, 8.375% series due 2006................ $ 75 $ 75
Other loans, 7.726% to 10.336% due 2000 to 2007............. 187 187
Bonds offered hereby........................................ -- 300
Capitalized lease obligations and other..................... 61 61
------ ------
Total long-term debt.......................................... 323 623
Total pension benefit liabilities............................. 284 284
Total postretirement benefits other than pensions(1).......... 408 408
Stockholders' equity:
Common stock, additional paid-in-capital, and retained
earnings................................................... 909 909
Minimum pension liability................................... (51) (51)
Treasury stock.............................................. (8) (8)
------ ------
Total stockholders' equity................................ 850 850
------ ------
Total capitalization...................................... $1,865 $2,165
====== ======
</TABLE>
- --------
(1) This amount excludes the unamortized portion of our OPEB transition
obligation, which was approximately $373 million at December 31, 1998.
14
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA
The following table presents our selected consolidated financial information
and other operating data for the periods indicated. The financial information
for the five years ended December 31, 1998 is derived from our audited
financial statements. The following financial information and operating data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and the consolidated financial
statements for each of the years ended December 31, 1996 through 1998 and the
other information in our Annual Report on Form 10-K.
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Statement of Operations:
Net sales.............................. $2,700 $2,954 $2,954 $3,140 $2,848
Cost of products sold.................. 2,337 2,529 2,618 2,674 2,497
Depreciation........................... 142 146 144 135 129
------ ------ ------ ------ ------
Gross margin.......................... 221 279 192 331 222
Selling, general and administrative
expense............................... 138 154 137 141 154
Equity (income) of affiliates.......... (5) (9) (10) (1) (1)
Unusual charges (credits).............. (25) 5 -- -- (27)
------ ------ ------ ------ ------
Income from operations................. 113 129 65 191 96
Interest income........................ (5) (12) (7) (19) (16)
Interest expense....................... 61 51 43 34 27
Net gain on disposal of non-core assets
and other related activities.......... -- -- (3) (59) (3)
Proceeds from settlement of a lawsuit.. (111) -- -- -- --
------ ------ ------ ------ ------
Total other (income) expense........... (55) 39 33 (44) 8
------ ------ ------ ------ ------
Income before income taxes,
extraordinary items and cumulative
effect of accounting change........... 169 90 32 235 88
------ ------ ------ ------ ------
Income taxes (credit).................. (16) (12) (11) 16 4
------ ------ ------ ------ ------
Income before extraordinary items and
cumulative effect of accounting
change................................ 185 102 43 219 84
Extraordinary items, net............... -- 6 -- (5) --
Cumulative effect of accounting change. -- -- 11 -- --
------ ------ ------ ------ ------
Net income ............................ 185 108 54 214 84
Preferred stock dividends.............. 11 11 11 11 --
------ ------ ------ ------ ------
Net income applicable to common stock.. $ 174 $ 97 $ 43 $ 203 $ 84
====== ====== ====== ====== ======
Diluted earnings per share:
Income before extraordinary items and
cumulative effect of accounting
change................................ $ 4.70 $ 2.10 $ 0.74 $ 4.76 $ 1.94
Net income applicable to common stock.. $ 4.70 $ 2.22 $ 0.99 $ 4.64 $ 1.94
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Other Data:
Shipments (net tons, in thousands)..... 5,208 5,564 5,895 6,144 5,587
Raw steel production (net tons, in
thousands)............................ 5,763 6,081 6,557 6,527 6,087
Effective capacity utilization......... 96.1% 96.5% 93.7% 96.0% 92.2%
Number of employees at period end...... 9,711 9,474 9,579 9,417 9,230
Man hours per net ton shipped.......... 3.71 3.41 3.24 3.06 3.31
Net cash provided by operating
activities............................ $ 317 $ 265 $ 159 $ 332 $ 32
Net cash provided by (used in)
investing activities.................. (136) (215) (121) 168 (166)
Net cash used in financing activities.. (24) (84) (57) (297) (40)
Capital investments.................... $ 138 $ 215 $ 129 $ 152 $ 171
EBITDA (1)............................. 255 275 209 326 225
Adjusted EBITDA (2).................... 258 308 237 353 226
Ratio of earnings to fixed charges (3). 3.0x 2.2x 1.5x 5.2x 3.0x
EBITDA to gross interest charges....... 4.2x 5.4x 4.8x 9.6x 8.5x
Adjusted EBITDA to gross interest
charges............................... 4.2 6.0 5.5 10.4 8.5
Total debt to EBITDA................... 2.8 2.0 2.4 1.1 1.4
Total debt to Adjusted EBITDA.......... 2.7 1.7 2.1 1.0 1.4
<CAPTION>
December 31,
--------------------------------------
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash, cash equivalents and investments. $ 162 $ 128 $ 109 $ 338 $ 138
Working capital........................ 252 250 279 367 333
Net property, plant & equipment........ 1,394 1,469 1,456 1,229 1,271
Total assets........................... 2,500 2,669 2,558 2,453 2,484
Total debt............................. 707 538 508 343 323
Total pension and OPEB liabilities (4). 457 592 519 614 692
Redeemable preferred stock--Series B... 67 65 64 -- --
Stockholders' equity................... 401 600 645 837 850
</TABLE>
- --------
(1) EBITDA represents income from operations plus depreciation. EBITDA should
not be construed as a substitute for income from operations, net income or
cash flows from operating activities for the purpose of analyzing our
operating performance, financial position and cash flows. We have presented
EBITDA because it is commonly used by certain investors to analyze and
compare companies on the basis of operating performance and to determine a
company's ability to service debt. This definition of EBITDA differs from
the definition of EBITDA applicable to the covenants for the bonds and may
not be comparable to EBITDA as defined by other companies.
(2) Adjusted EBITDA includes the add back of the amortization of our OPEB
transition obligation, which results in a non-cash charge of approximately
$27 million per year, and unusual charges (credits).
(3) The ratio of earnings to fixed charges is determined by dividing earnings
by fixed charges. Earnings is the sum of: (a) income before income taxes,
extraordinary items and cumulative effect of accounting change, (b)
amortization of capitalized interest less interest capitalized in the
current year, and (c) fixed charges. Fixed charges include interest both
expensed and capitalized during the year and a portion of rent expense
representative of interest.
(4) This amount excludes the unamortized portion of our other pension and
employee benefits transition obligation, which was approximately $373
million at December 31, 1998.
16
<PAGE>
THE EXCHANGE OFFER
Terms of the exchange offer; period for tendering original bonds
Subject to the terms and conditions described in this prospectus and in the
accompanying letter of transmittal, we will accept for exchange original bonds
that are properly tendered on or before the expiration date and not withdrawn
as permitted below. As used in this prospectus, expiration date means 5:00
p.m., New York City time, on , 1999, or such later date and time to
which we, in our sole discretion, extend the exchange offer.
The form and terms of the bonds being issued in the exchange offer are the
same as the form and terms of the original bonds except that:
. the bonds being issued in the exchange offer will not be subject to
increased interest related to completing an exchange offer;
. the bonds being issued in the exchange offer will have been registered
under the Securities Act so that their transfer will not be restricted
pursuant to the Securities Act;
. the bonds being issued in the exchange offer will not contain the
registration rights contained in the original bonds; and
. following the exchange offer, there may be up to $300.0 million aggregate
principal amount of Series D bonds outstanding.
Holders of Series A bonds may elect to exchange their bonds for Series B
bonds instead of Series D bonds. The aggregate principal amount of Series B
bonds issued will not exceed $225.0 million. We cannot predict whether any of
the holders of Series A bonds will make such election and, therefore, the
aggregate principal amount of such series may be substantially less than $225.0
million following the exchange offer.
This prospectus and the letter of transmittal are first being sent on or
about , 1999, to all holders of original bonds known to us. Our
obligation to accept original bonds for exchange pursuant to the exchange offer
is subject to certain conditions as set forth below under "--Conditions to the
exchange offer."
Bonds tendered in the exchange offer must be in denominations of principal
amount of $1,000 and any whole number multiple of $1,000.
We expressly reserve the right, at any time or from time to time, to extend
the period of time during which the exchange offer is open. This would delay
acceptance for exchange of any original bonds. We may do so by giving oral or
written notice of such extension to the holders of original bonds as described
below. During any such extension, all original bonds previously tendered will
remain subject to the exchange offer and may be accepted for exchange by us. We
will return, at no expense to the holder, any original bonds not accepted for
exchange as promptly as practicable after the expiration or termination of the
exchange offer.
If any of the events specified in "--Conditions to the exchange offer" should
occur, we may amend or terminate the exchange offer, and not accept for
exchange any original bonds not previously accepted for exchange. We will give
oral or written notice of any extension, amendment, nonacceptance or
termination to holders of original bonds as promptly as practicable. In the
case of an extension, we will issue a press release or other public
announcement no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date.
Following completion of the exchange offer, we may begin one or more
additional exchange offers to those holders of original bonds who did not
exchange their original bonds for exchange bonds on terms which may differ from
those contained in the registration rights agreement. We may use this
prospectus, as amended or supplemented from time to time, in connection with
additional exchange offers. Such additional exchange offers will take place
from time to time until all outstanding original bonds have been exchanged for
exchange bonds.
17
<PAGE>
Procedures for tendering original bonds
The tendering of original bonds by the holder, and our mutual acceptance of
the original bonds, will constitute a binding agreement between us and the
holder on the terms and subject to the conditions described in this prospectus
and in the accompanying letter of transmittal. Except as set forth below, to
tender in the exchange offer, a holder must transmit to The Chase Manhattan
Bank, the exchange agent, at the address set forth under "--Exchange agent" on
or before the expiration date either:
. a properly completed and duly executed letter of transmittal, including
all other documents required by such letter of transmittal, or
. if the original bonds are tendered pursuant to the book-entry procedures
set forth below, an agent's message instead of a letter of transmittal.
In addition, on or prior to the expiration date, either:
. the exchange agent must receive the certificates for the original bonds
along with the letter of transmittal; or
. the exchange agent must receive a timely confirmation of a book-entry
transfer of such original bonds into the exchange agent's account at The
Depository Trust Company (DTC) according to the procedure for book-entry
transfer described below, along with a letter of transmittal or an
agent's message instead of a letter of transmittal; or
. the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted by DTC and received by
the exchange agent and forming a part of the book-entry confirmation, which
states that DTC has received an express acknowledgment from the tendering
holder that such holder has received and agrees to be bound by the letter of
transmittal and that we may enforce the letter of transmittal against the
holder.
The method of delivery of original bonds, letters of transmittal or agent's
messages and all other required documents is at the election and risk of the
holders. If delivery is by mail, we recommend registered mail, properly
insured, with return receipt requested. In all cases, you should allow
sufficient time to guarantee timely delivery. Do not send letters of
transmittal, agent's messages or bonds to us.
Signature requirements
Signatures on a letter of transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the bonds surrendered for exchange are
tendered:
. by a registered holder of original bonds who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal, or
. for the account of an eligible institution.
An "eligible institution" is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantor must be an eligible institution. If
original bonds are registered in the name of a person other than a signer of
the letter of transmittal, the original bonds surrendered for exchange must be
endorsed, or be accompanied, by a written instrument or instruments of transfer
or exchange, in satisfactory form as determined by us in our sole discretion,
duly executed by the registered holder with the holder's signature guaranteed
by an eligible institution.
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<PAGE>
If a person or persons other than the registered holder or holders of
original bonds signs the letter of transmittal, such original bonds must be
endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the original bonds.
If trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity sign the letter of transmittal or any original bonds or powers of
attorney, those persons should indicate their capacity when signing, and must
submit proper evidence satisfactory to us of their authority to sign unless we
waive this requirement.
Our interpretations are binding on you
We will determine all questions as to the validity, form, eligibility,
including time of receipt, and acceptance of original bonds tendered for
exchange in our sole discretion. Our determination will be final and binding.
We reserve the absolute right to:
. reject any and all tenders of any original bond not properly tendered,
. refuse acceptance of any original bond if, in our judgment or the
judgment of our counsel, acceptance of the original bond might be
unlawful, and
. Waive any defects or irregularities or conditions of the exchange offer
as to any original bond either before or after the expiration date. This
includes the right to waive the ineligibility of any holder who seeks to
tender original bonds in the exchange offer.
Our interpretation of the terms and conditions of the exchange offer as to
any particular original bonds either before or after the expiration date,
including the letter of transmittal and the instructions to it, will be final
and binding on all parties. Holders must cure any defects or irregularities in
connection with tenders of original bonds for exchange within such reasonable
period of time as we will determine, unless we waive such defects or
irregularities. Neither we, the exchange agent, nor any other person shall have
the duty to notify anyone of any defect or irregularity regarding any tender of
original bonds for exchange, nor shall any of us incur any liability for
failing to notify any person.
Representation you make by tendering
By tendering your original bonds, you represent to us that, among other
things,
. the person receiving the exchange bonds in the exchange offer is
obtaining them in the ordinary course of its business, whether or not
such person is the holder, and
. neither you nor such other person receiving the exchange bonds has any
arrangement or understanding with any person to participate in the
distribution of the exchange bonds issued in the exchange offer, and
. if you are not a broker-dealer, that you are not engaged in, or intend to
be engaged in, a distribution of exchange bonds.
If you or any person receiving the exchange bonds is an "affiliate," as
defined under Rule 405 of the Securities Act of 1933, of National Steel, or is
engaged in or intends to engage in or has an arrangement or understanding with
any person to participate in a distribution of the exchange bonds to be
acquired pursuant to the exchange offer, you or any such other person receiving
the bonds may not rely on the applicable interpretations of the staff of the
SEC. In this event you or any such other person must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction.
Each broker-dealer that receives exchange bonds for its own account in
exchange for original bonds, where such original bonds were acquired by it as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
the exchange bonds. See
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<PAGE>
"Plan of Distribution." The letter of transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" under the Securities Act.
Acceptance of original bonds for exchange; delivery of exchange bonds
Upon satisfaction or waiver of all of the conditions to the exchange offer,
we will accept, promptly after the expiration date, all original bonds properly
tendered and will issue the exchange bonds promptly after acceptance of the
original bonds. For purposes of the exchange offer, we will be deemed to have
accepted properly tendered original bonds for exchange when, as and if we have
given oral or written notice to the exchange agent, with written confirmation
of any oral notice to be given promptly thereafter.
For each original bond accepted for exchange, the original bond holder will
receive an exchange bond having a principal amount of maturity equal to that of
the surrendered bond. Interest on the exchange bonds will accrue from March 8,
1999, the original issue date of the original bonds. If the exchange offer is
not consummated by September 6, 1999, the interest rate on the original bonds,
from and including such date until but excluding the date of completion of the
exchange offer, will increase by 0.25% every 90 days until a maximum total
1.00% is reached. We will pay such interest, if any, on original bonds in
exchange for which exchange bonds were issued to the persons who, at the close
of business on February 15 or August 15 immediately preceding the interest
payment date, are registered holders of such original bonds if such record date
occurs prior to such exchange, or are registered holders of the exchange bonds
if such record date occurs on or after the date of such exchange, even if bonds
are cancelled after the record date and on or before the interest payment date.
In all cases, we will issue exchange bonds in the exchange offer for original
bonds that are accepted for exchange only after the exchange agent timely
receives either:
. certificates for such original bonds or a timely book-entry confirmation
of such original bonds into the exchange agent's account at DTC, and
. a properly completed and duly executed letter of transmittal or, in the
case of a book-entry confirmation, an agent's message, and all other
required documents.
If tendered original bonds are not accepted for any reason set forth in the
terms and conditions of the exchange offer or if a holder submits original
bonds for a greater principal amount than the holder desired to exchange, we
will return such unaccepted or non-exchanged original bonds without expense to
the tendering holder as promptly as practicable after the expiration or
termination of the exchange offer. In the case of original bonds tendered by
book-entry transfer into the exchange agent's account at DTC, such unaccepted
or non-exchanged original bonds will be credited to an account maintained with
DTC as promptly as practicable after the expiration or termination of the
exchange offer.
Book-entry transfer
The exchange agent will request to establish an account for the original
bonds at DTC for the exchange offer within two business days after the date of
this prospectus. Any financial institution that is a participant in DTC's
systems may make book-entry delivery of original bonds by causing DTC to
transfer such original bonds into the exchange agent's account at DTC in
accordance with DTC's procedures for transfer in accordance with DTC's
Automated Tender Offer Procedures ("ATOP"). However, although delivery of
original bonds may be effected through book-entry transfer at DTC, unless such
delivery is effected through the DTC ATOP procedures, the letter of transmittal
or facsimile thereof, with any required signature guarantees, or an agent's
message in lieu of such letter of transmittal, and any other required
documents, must, in any case, be transmitted to and received by the exchange
agent at one of the addresses set forth below under "--Exchange agent" on or
prior to the expiration date or the guaranteed delivery procedures described
below must be complied with.
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<PAGE>
Guaranteed delivery procedures
If a registered holder of the original bonds desires to tender such original
bonds and the original bonds are not immediately available, or time will not
permit such holder's original bonds or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if:
. the tender is made through an eligible institution;
. before the expiration date, the exchange agent receives from such
eligible institution a properly completed and duly executed letter of
transmittal, or a facsimile thereof, (unless effected through the DTC
ATOP system, in which case it is not necessary to submit the letter of
transmittal) and notice of guaranteed delivery, substantially in the form
provided by us, by telegram, telex, facsimile transmission, mail or hand
delivery, setting forth the name and address of the holder of original
bonds and the amount of original bonds tendered. Such communication must
state that the tender is being made thereby and guarantee that within
three New York Stock Exchange, Inc. trading days after the date of
execution of the notice of guaranteed delivery, the certificates for all
physically tendered original bonds, in proper form for transfer, or a
book-entry confirmation, as the case may be, and any other documents
required by the letter of transmittal will be deposited by the eligible
institution with the exchange agent; and
. the exchange agent receives the certificates for all physically tendered
original bonds, in proper form for transfer, or a book-entry
confirmation, as the case may be, and all other documents required by the
letter of transmittal, within three New York Stock Exchange, Inc. trading
days after the date of execution of the notice of guaranteed delivery.
Withdrawal rights
You may withdraw tenders of original bonds at any time before the expiration
date.
For a withdrawal to be effective, you must send a written notice of
withdrawal to the exchange agent at one of the addresses set forth below under
"--Exchange agent." Any such notice of withdrawal must:
. specify the name of the person having tendered the original bonds to be
withdrawn,
. identify the original bonds to be withdrawn, including the principal
amount of such original bonds, and
. if you have transmitted certificates for original bonds, specify the name
in which such original bonds are registered, if different from that of
the withdrawing holder.
If certificates for original bonds have been delivered or otherwise
identified to the exchange agent, then, before the release of such
certificates, the withdrawing holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an eligible institution unless such holder is an
eligible institution.
If original bonds have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn original bonds
and otherwise comply with the procedures of such facility.
We will determine all questions as to the validity, form and eligibility,
including time of receipt, of such notices. Our determination will be final and
binding on all parties.
Any original bonds so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the exchange offer. Any original bonds
which have been tendered for exchange but which are not exchanged for any
reason will be returned to the holder without cost to such holder. In the case
of original bonds tendered by book-entry transfer into the exchange agent's
account at DTC pursuant to the book-entry transfer procedures described above,
such original bonds will be credited to an account maintained with DTC for the
original bonds. Any return or credit will occur as soon as practicable after
withdrawal, rejection of
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<PAGE>
tender or termination of the exchange offer. Properly withdrawn original bonds
may be retendered by following one of the procedures described under "--
Procedures for tendering original bonds" above at any time on or before the
expiration date.
Conditions to the exchange offer
We are not required to accept for exchange, or to issue exchange bonds in
exchange for, any original bonds. We may terminate or amend the exchange offer
if, at any time before the acceptance of such original bonds for exchange or
the exchange of the exchange bonds for such original bonds, we determine in our
sole and absolute discretion, that the exchange offer violates applicable law
or any applicable interpretation of the staff of the SEC.
Exchange agent
The Chase Manhattan Bank has been appointed as the exchange agent for the
exchange offer. All executed letters of transmittal should be directed to the
exchange agent at one of the addresses set forth below. Questions and requests
for assistance, requests for additional copies of this prospectus or of the
letter of transmittal and requests for notices of guaranteed delivery should be
directed to the exchange agent addressed as follows:
Delivery to: The Chase Manhattan Bank, Exchange Agent
By Hand/Overnight Delivery: Registered or Certified Mail:
55 Water Street--Room 55 Water Street--Room 234
234 North Building
North Building New York, New York 10041
New York, New York
10041
By Facsimile: (212) 638-7380/7381
Confirm by Telephone: (212) 638-0828
Delivery of the letter of transmittal to an address other than as set forth
above or transmission of instructions via facsimile other than as set forth
above is not valid delivery of such letter of transmittal.
Fees and expenses
We will not pay any brokers, dealers, or others soliciting acceptances of the
exchange offer.
We will pay the estimated cash expenses to be incurred in connection with the
exchange offer, which are estimated to total $7,000.
Transfer taxes
Holders who tender their original bonds for exchange will not be obligated to
pay any transfer taxes in connection with the exchange. However, holders who
instruct us to register exchange bonds in the name of, or request that original
bonds not tendered or not accepted in the exchange offer be returned to, a
person other than the registered tendering holder will be responsible for the
paying of any applicable transfer tax.
Holders, other than affiliates, may offer or sell the exchange bonds
Based on interpretations by the SEC staff, as set forth in no-action letters
issued to third parties, we believe that exchange bonds issued in the exchange
offer for original bonds may be offered for resale, resold or otherwise
transferred by the holders of such exchange bonds, other than any such holder
that is an "affiliate" of National Steel within the meaning of Rule 405 under
the Securities Act. Such exchange bonds may be offered for resale, resold or
otherwise transferred without compliance with the registration and prospectus
delivery requirements of the Securities Act if:
. such exchange bonds issued in the exchange offer are acquired in the
ordinary course of such holder's business, and
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<PAGE>
. such holders have no arrangement or understanding with any person to
participate in the distribution of such exchange bonds issued in the
exchange offer.
Each holder, other than a broker-dealer, must acknowledge that it is not
engaged in, and does not intend to engage in, a distribution of exchange bonds
and has no arrangement or understanding to participate in a distribution of
exchange bonds.
However, we do not intend to request the SEC to consider, and the SEC has not
considered, the exchange offer in the context of a no-action letter. We cannot
guarantee that the SEC staff would make a similar determination with respect to
the exchange offer as in other circumstances.
If any holder is an "affiliate" of ours, as defined in Rule 405 under the
Securities Act of 1933, is engaged in or intends to engage in or has any
arrangement or understanding with respect to the distribution of the exchange
bonds to be acquired pursuant to the exchange offer such holder:
. could not rely on the applicable interpretations of the SEC staff, and
. must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer that receives exchange bonds for its own account in
exchange for original bonds, where such original bonds were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such exchange bonds.
In addition, to comply with state securities laws, the exchange bonds may not
be offered or sold in any state unless they have been registered or qualified
for sale in such state or an exemption from registration or qualification is
available and is complied with. The offer and sale of the exchange bonds to
"qualified institutional buyers," as that term is defined under Rule 144A of
the Securities Act, is generally exempt from registration or qualification
under the state securities laws. We currently do not intend to register or
qualify the sale of the exchange bonds in any state where an exemption from
registration or qualification is required and not available.
DESCRIPTION OF OTHER INDEBTEDNESS
Receivables Facility
The Receivables Purchase Agreement is an agreement dated as of May 16, 1994
among National Steel Funding Corporation ("Funding"), a bankruptcy-remote,
special purchase subsidiary of National Steel, the lenders party thereto and
J.P. Morgan Delaware, as Structuring and Collateral Agent. Under the
receivables purchase agreement we may cause letters of credit to be issued and
receive revolving loans until September 30, 2002, subject to extension, unless
earlier terminated. Letters of credit in a total face amount, together with
unreimbursed drawings, may be issued for up to $150.0 million. Revolving loans
in a total principal amount, together with the total amount of letter of credit
obligations at such time, may be made for up to $200.0 million. The maximum
amount which may be issued for either letters of credit or revolving loans may
be a lesser amount equal to the then current base amount. The base amount is an
amount equal to net eligible receivables, less a reserve of not less than the
greater of either 17% or a dynamic reserve percentage calculated based on
historic losses and dilution.
Funding borrows on the revolving loans or causes letters of credit to be
issued to purchase accounts receivable from National Steel pursuant to a
purchase and sale agreement entered into by Funding and us at the same time as
the receivables purchase agreement. Additional amounts needed to finance
Funding's purchases of accounts receivables from us are obtained through loans
made to Funding by us, equity contributions by us and retained earnings of
Funding. Under the purchase and sale agreement, we have limited obligations to
indemnify Funding if the accounts receivable did not satisfy some of the
eligibility criteria when sold and in other limited cases not relating to the
collectability of receivables sold. The sales of receivables to Funding are
intended to be true sales, and Funding, and not us or our other subsidiaries,
owns the receivables.
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<PAGE>
Funding has granted to the receivables lenders a security interest in the
accounts receivable purchased by Funding and all of Funding's related rights
and its various bank accounts.
The receivables purchase agreement contains customary covenants by Funding,
including covenants that, among other things:
(1) limit Funding's ability to engage in any activities except as
necessary to perform its obligations under the receivables purchase
agreement and related documents,
(2) limit Funding's ability to incur or suffer to exist indebtedness,
contingent obligations and liens,
(3) limit Funding's ability to enter into leases, make or own
Investments, or make capital expenditures, and
(4) limit Funding's ability to amend or waive any provision of other
agreements and conduct business with affiliates.
Termination events include customary events of default, impairment of the
receivables lenders' rights to pledged collateral, change of control of
Funding, and failure of Funding to maintain stockholder's equity of at least
$40.0 million. Upon the occurrence of a termination event the receivables
lenders may terminate the commitments, accelerate the revolving loans or
require cash collateralization of letters of credit. A termination event will
also occur if we are in default with respect to debt obligations in excess of
$5.0 million.
Inventory Facilities
We are also party to two revolving credit facilities, all of the lenders
under which are Japanese banks. These inventory facilities together total
$150.0 million and are available for revolving loans and letters of credit. The
$100.0 million facility expires on May 31, 2000 and the $50.0 million facility
expires on July 18, 1999 provided that it will be automatically renewed through
May 31, 2000 unless we are given prior notice by the lender. The inventory
facilities are secured by a lien on our steel and raw materials inventory.
Interest rates and letter of credit fees with respect to the $100.0 million
facility increase if NKK ceases to hold greater than 50% of the combined voting
power of all of our stock. The inventory facilities require that we maintain a
specified minimum stockholder's equity and a ratio of cash flow from operations
to net financing costs of not less than 1.5 to 1. Events of default include,
among other things, a default with respect to our other indebtedness in excess
of $10.0 million.
Old Bonds
We have outstanding $75.0 million in total principal amount of our 8.375%
First Mortgage Bonds Series due 2006. These old bonds bear interest at 8.375%
per year. These bonds were issued under the indenture. They are secured by
substantially all of the property which secures the original and exchange
bonds.
We may redeem these bonds at a redemption price of 101.005% of the total
principal amount outstanding. This redemption price will decrease to 100% of
the total principal amount in 2001.
USWA Lien
Pursuant to the 1993 settlement agreement, we have agreed to grant a second
mortgage on the Great Lakes facility to secure payment of certain retiree
health benefits to salaried and hourly employees and retirees. This security
interest is subordinate to the security interest granted to the holders of the
bonds.
Other Indebtedness and Operating Leases
Our vacuum degassing facility and pickle line at Great Lakes and a continuous
caster facility at Granite City are each subject to mortgages, securing total
indebtedness incurred to construct these facilities. The debt related to these
facilities currently totals $187.3 million.
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These mortgages contain customary default provisions and also provide that
the failure of NKK to own at least a majority of the combined voting power of
all classes of our stock also constitutes an event of default.
The No. 2 caster and related ladle metallurgy station and electrolytic
galvanizing line at Great Lakes as well as a portion of the coke oven battery
at Granite City are owned by third parties and leased to us pursuant to
leveraged operating leases. The present value of all such lease obligations as
of December 31, 1998 was approximately $190 million. A 1,000 foot Great Lakes
ore boat, the M/V George A. Stinson, is indirectly leased to us through an
unrelated corporation through a single investor lease. Most of the other mobile
equipment we use is leased pursuant to operating leases.
DESCRIPTION OF THE BONDS
We will issue the exchange bonds, under the provisions of the Indenture of
Mortgage and Deed of Trust dated May 1, 1952 from National Steel and Great
Lakes Steel Corporation, a former wholly owned subsidiary which in 1966 was
merged into National Steel, to City Bank Farmers Trust Company and Ralph E.
Morton, as trustees, as supplemented by all supplemental instruments, including
the Eleventh Supplemental Indenture dated as of March 31, 1999, between
National Steel and The Chase Manhattan Bank and Frank J. Grippo as trustees.
The terms of the bonds include those stated in the indenture and those made
part of the indenture by reference to the Trust Indenture Act of 1939. For
purposes of this section, references to "National Steel" or "we," "us" or "our"
means only National Steel Corporation and not our subsidiaries.
The following description is a summary of the material provisions of the
indenture. It does not restate it in its entirety. We urge you to read the
indenture because it, and not this description, defines your rights as holders
of these bonds. Some of the terms used in this description are defined under
the heading "Certain Definitions."
Principal, maturity and interest
The original bonds are, and the exchange bonds will be:
(1) our senior obligations;
(2) secured by a first mortgage lien on most of our facilities, our ore
properties and related mining facilities and stock of some of our
Subsidiaries; and
(3) equal in right of payment to all of our other Senior Debt.
As of the date of the eleventh supplemental indenture, all of our
Subsidiaries are Restricted Subsidiaries. However, under the circumstances
described below under the subheading "Certain Covenants--Designation of
Restricted and Unrestricted Subsidiaries," we will be permitted to designate
other of our Subsidiaries as Unrestricted Subsidiaries. Unrestricted
Subsidiaries will not be subject to many of the restrictive covenants in the
indenture.
The bonds mature on March 1, 2009. The trustee authenticated and delivered
two separates series of original bonds for original issue in a total principal
amount of $225.0 million on March 8, 1999 and $75.0 million on March 31, 1999.
The exchange bonds will be treated as a continuation of the original bonds but
will constitute a single series of up to $300.0 million principal amount. We
cannot predict what amount, if any of either series of original bonds will be
exchanged for exchange bonds.
The bonds bear interest at a rate of 9 7/8% per year. Interest is payable
semiannually on March 1 and September 1 of each year, beginning on September 1,
1999. Interest is payable to the persons who are registered holders of the
bonds at the close of business on the February 15 or August 15, immediately
preceding the interest payment date.
We will make all payments of principal, premium, if any, and interest on the
bonds in immediately available funds. The bonds will be exchangeable and
transferable at our office or agency, one of which will be maintained for such
purpose in New York City, which initially will be the corporate trust office of
the trustee.
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Transfer and exchange
The bonds will be issued only in fully registered form without coupons, in
denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange of bonds, except for
any tax or other governmental charge that may be imposed in connection with a
transfer.
Ranking
The bonds are senior secured obligations. They rank equally in right of
payment with our other senior obligations. As of December 31, 1998, after
giving effect to the issuance of the bonds, the total principal amount of our
outstanding indebtedness would be approximately $623 million, all of which
constitutes senior obligations. While unsecured indebtedness ranks equally with
the bonds in right of payment, the holders of the bonds and all other bonds
issued under the indenture may, to the exclusion of unsecured creditors, seek
repayment for the sale of the Mortgaged Property in the event of a Default.
The bonds are effectively subordinated to all creditors to the extent of the
assets of such subsidiaries, including the PBGC, trade creditors and unsecured
creditors, and preferred stockholders, if any, of our Subsidiaries. These
creditors will be entitled to receive payment in full of their obligations
before holders of the bonds may be paid from cash generated by our
Subsidiaries, in the event of a distribution of assets to our creditors due to
dissolution, liquidation, bankruptcy or other similar events. As of December
31, 1998, the total outstanding indebtedness of our Subsidiaries totaled
approximately $30.6 million. Although our Subsidiaries are restricted from
Incurring indebtedness by the bonds, the amount of indebtedness which is
permitted could be substantial. Our Subsidiaries are not restricted from
Incurring trade credit or other obligations. Under some circumstances, our
Subsidiaries may become jointly and severally liable for our pension
liabilities. The amount of these pension liabilities could be substantial and
they may be secured.
Mortgaged Property
The bonds are secured by the lien of the indenture equally with all other
bonds issued under the indenture. This lien is a first lien on: (1) our plants
at Granite City, Great Lakes and Midwest, with some exceptions, (2) some of our
ore properties and related mining facilities and (3) all of the outstanding
Capital Stock of the Hanna Furnace Corporation, NS Land Company and National
Mines Corporation.
The Mortgaged Property does not include, among other things:
(1) inventory and accounts receivable and related books and records, most
of which will be pledged to secure the obligations under the inventory
facilities and receivables facility,
(2) our interest in Double G, DNN and other joint ventures and
Subsidiaries,
(3) a continuous caster and related ladle metallurgy facility servicing
Great Lakes,
(4) an electrolytic galvanizing line servicing Great Lakes,
(5) a portion of the coke battery servicing Granite City,
(6) a vacuum degassing facility and pickle line which service Great
Lakes, and
(7) a continuous caster servicing Granite City.
We use other assets to service our facilities, including the coke battery
which services Great Lakes, that we do not own and, therefore, these assets are
not subject to the lien of the indenture.
We may issue more bonds
We may issue more bonds of other series from time to time under the
indenture. The total principal amount of these bonds is limited to:
(1) 66 2/3% of the net bondable value of our property additions,
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(2) 66 2/3% of our cost or fair value, whichever is less, of bondable
obligations,
(3) 66 2/3% of our cost or fair value, whichever is less, of bondable
stock,
(4) the total principal amount of refundable Bonds, and
(5) the amount of cash deposited with the trustee.
We may not issue additional bonds on the basis of bondable obligations,
bondable stock or refundable bonds originally issued on the basis of bondable
obligations or bondable stock, if, as a result, more than 25% of all the bonds
then outstanding under the indenture would be bonds issued on such bases.
The original bonds were issued under the provisions of the indenture relating
to the issuance of bonds for property additions and refundable Bonds. As of
February 28, 1999, approximately $21 million in principal amount of bonds was
issuable under the various provisions of the indenture, after deducting the
$300.0 million principal amount of original bonds.
We have agreed under our settlement with the USWA that, as long as the 1993
Settlement Agreement is in existence, we will not issue additional bonds in
excess of 90% of the amount of bonds that could otherwise be issued under the
indenture.
Optional Redemption
On or after March 1, 2004, we may redeem all or part of the bonds upon not
less than 30 nor more than 60 days' prior notice. The redemption prices,
expressed as percentages of principal amount, are set forth below, plus accrued
interest, to the applicable redemption date, if redeemed during the 12-month
period beginning on March 1 of the years set forth below:
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2004..................................................... 104.938%
2005..................................................... 103.292%
2006..................................................... 101.646%
2007 and thereafter...................................... 100.000%
</TABLE>
At any time before March 1, 2002, we may redeem up to a maximum of 35% of the
total principal amount of the bonds with the proceeds of one or more public
equity offerings. If we redeem bonds in this manner, we will pay a redemption
price equal to 109.875% of the principal amount of the bonds, plus accrued
interest; provided that:
(1)at least 65% of the original total principal amount of the bonds remains
outstanding,
(2)the redemption is made within 90 days of the public equity offering, and
(3)notice of the redemption is mailed not less than 30 nor more than 60
days before the redemption.
Sinking Fund
There are no sinking fund payments for the bonds.
Repurchase at the Option of Holders Upon a Change of Control
We are required to commence, within 30 days of the occurrence of a Change of
Control, an offer to repurchase the bonds at a purchase price equal to 101% of
the principal amount, plus accrued interest. We must send a notice of the
Change of Control offer to repurchase at least once to the Dow Jones News
Service or similar business news service in the United States. We must also
mail to the trustee and to each holder of bonds, at such holder's address
appearing in the bond register, a notice describing the transaction which
constitutes the Change of Control, and our offer to repurchase the bonds.
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The definition of Change of Control includes a phrase relating to the sale,
assignment, lease, conveyance, disposition or transfer of "all or substantially
all" of our assets. Although there is a developing body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of bonds to require us to repurchase such bonds as a result of a sale,
assignment, lease, conveyance, disposition or transfer of less than all of our
the assets may be uncertain.
Our receivables facility and inventory facilities prohibit some events that
constitute a Change of Control under the indenture. If such events occur, there
would also occur a liquidation event or an event of default under these
agreements. Any future Debt may contain prohibitions of these events or require
such Debt to be repurchased upon a Change of Control. Also, if the holders of
bonds require us to repurchase bonds we could be in Default under existing or
future Debt, even if the Change of Control itself does not cause a Default, due
to the financial effect of such repurchase.
In addition, we may not have sufficient funds available to make any required
repurchases. Our failure to repurchase the bonds in connection with a Change of
Control would result in a Default under the indenture which could, in turn,
constitute a Default under our existing or future Debt. Our obligation to make
an offer to repurchase the bonds as a result of a Change of Control may be
waived or modified at any time prior to the occurrence of such Change of
Control with the written consent of the holders of a majority in principal
amount of the bonds.
Certain Covenants
Covenant Suspension. For so long as we reach and maintain Investment Grade
Status, we and our Restricted Subsidiaries are released from our obligations to
comply with all of the covenants described below, except for the covenants
described under:
(1) "Limation on Liens"
(2) "Limitation on Sale and Leaseback Transactions,"
(3) "Limitation on Pledged Subsidiaries to Incur Indebtedness or Issue
Capital Stock,"
(4) "Limitation on Sale of Capital Stock and Indebtedness of Pledged
Subsidiaries,"
(5) "Limitation on Sale of Mortgaged Property,"
(6) "Designation of Restricted and Unrestricted Subsidiaries" (other than
clause (x) of the third paragraph (and such clause (x) as referred to in
the second paragraph) thereunder),
(7) "Merger, Consolidation and Sale of Property" (other than clauses (5)
and (6) of the first and second paragraphs thereunder), and
(8) "Repurchase at the Option of Holders Upon a Change of Control."
If we later cease to have an Investment Grade Rating from either or both of
the Rating Agencies, the following restrictive covenants will once again apply
to us and our Restricted Subsidiaries.
Limitation on Debt and Restricted Subsidiary Preferred Stock. We may not, and
may not permit any Restricted Subsidiary to, directly or indirectly, Incur any
Debt, which includes preferred stock of Restricted Subsidiaries; provided,
however, that:
(1) we and our Restricted Subsidiaries may Incur Debt if (a) after giving
effect to the application of the proceeds of such Debt, no Default or Event
of Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and (b) after giving effect to the Incurrence of
such Debt and the application of the proceeds thereof, the Consolidated
Interest Coverage Ratio would be greater than 2.50 to 1.00, and
(2) we and our Restricted Subsidiaries may also Incur Permitted Debt.
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Permitted Debt includes the following:
(1) the bonds;
(2) our Debt or that of any Restricted Subsidiary under the Credit
Facilities, provided that the total principal amount of all such Debt at
any one time outstanding may not exceed the greater of:
(a) $350.0 million less the total amount of all required payments of
principal applied to reduce the maximum amount available to be borrowed
as a result of an Asset Sale and as described below in "--Limitation on
Sale of Assets other than Mortgaged Property," and
(b) the sum of (x) 60% of the book value of our inventory and that of
the Restricted Subsidiaries and (y) 85% of the book value of our
accounts receivable and those of the Restricted Subsidiaries, in each
case as of the most recently ended quarter prior to such Incurrence for
which financial statements have been provided to the holders of bonds;
(3) Capital Expenditure Debt of National Steel or any Restricted
Subsidiary, provided that (a) the total principal amount of such Debt does
not exceed the Fair Market Value on the date of the Incurrence of the
Property acquired, constructed or leased and (b) the total principal amount
of all such Capital Expenditure Debt Incurred and then outstanding,
together with all permitted refinancing Debt Incurred and then outstanding
in respect of such Capital Expenditure Debt previously Incurred, does not
exceed $175.0 million;
(4) Debt of National Steel owing to and held by any Wholly Owned
Subsidiary and Debt, including preferred stock, of a Restricted Subsidiary
owing to and held by National Steel or any Wholly Owned Subsidiary;
provided, however, that any subsequent issue or transfer of Capital Stock
or other event that results in any such Wholly Owned Subsidiary ceasing to
be a Wholly Owned Subsidiary or any subsequent transfer of any such Debt,
except to National Steel or a Wholly Owned Subsidiary, will be deemed to be
the Incurrence of such Debt by National Steel or such Restricted
Subsidiary;
(5) Debt of a Restricted Subsidiary Incurred and outstanding on or prior
to the date on which such Restricted Subsidiary was acquired by us or
otherwise became a Restricted Subsidiary, other than Debt Incurred in our
acquisition of the Subsidiary; provided that at the time such Restricted
Subsidiary was acquired or otherwise became a Restricted Subsidiary and
after giving pro forma effect to the Incurrence of such Debt, we would have
been able to Incur $1.00 of additional Debt pursuant to clause (1) of the
immediately preceding paragraph;
(6) Debt under Interest Rate Agreements entered into by us or a
Restricted Subsidiary for the purpose of limiting interest rate risk in the
ordinary course of our financial management and not for speculative
purposes; provided that the obligations under such agreements are directly
related to payment obligations on Debt otherwise permitted by the terms of
this covenant;
(7) Debt under Currency Exchange Protection Agreements entered into by us
or a Restricted Subsidiary for the purpose of limiting currency exchange
rate risk in the ordinary course of our financial management and not for
speculative purposes;
(8) Debt under Commodity Price Protection Agreements entered into by us
or a Restricted Subsidiary in the ordinary course of our financial
management, including cost control, and not for speculative purposes;
(9) Debt in connection with one or more standby letters of credit or
performance bonds issued by National Steel or a Restricted Subsidiary in
the ordinary course of business or pursuant to self-insurance obligations
and not in connection with the borrowing of money or the obtaining of
advances or credit;
(10) Debt outstanding on the Series A Issue Date not otherwise described
in clauses (1) through (9) above;
(11) Debt of National Steel or any Restricted Subsidiary, other than Debt
permitted by the immediately preceding paragraph or the other clauses of
this paragraph, in a total principal amount outstanding at any one time not
to exceed $75.0 million; and
(12) Permitted Refinancing Debt Incurred in respect of Debt Incurred:
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(a) pursuant to the Consolidated Interest Coverage Ratio test
described in clause (1) of the immediately preceding paragraph,
(b) the bonds,
(c) Capital Expenditure Debt, subject to the limitations described in
clause 3 of this paragraph,
(d) the acquisition of a Restricted Subsidiary, subject to the
requirement that $1.00 of additional Debt may be Incurred without
causing an Event of Default, and
(e) other Debt outstanding on the Series A Issue Date.
Limitation on Pledged Subsidiaries to Incur Indebtedness or Issue Capital
Stock. As long as bonds are outstanding, we may not permit any Wholly Owned
Subsidiary whose stock is pledged under the indenture to:
(1) Incur any indebtedness, except owed to us, and its extension, renewal
or refunding and except current liabilities other than for borrowed money,
and
(2) issue any Capital Stock except to us.
However, a Wholly Owned Subsidiary may acquire Property subject to an
existing lien or create a lien on it at the time of its acquisition up to 66
2/3% of the cost of such Property, subject to some limitations. We may not
assign any indebtedness of a pledged Wholly Owned Subsidiary, except to the
trustee or, after assignment to the trustee, unless all indebtedness and
Capital Stock of the Wholly Owned Subsidiary has been or at the same time is
sold or disposed of.
Limitation on Restricted Payments. We may not make, and may not permit any
Restricted Subsidiary to make, directly or indirectly, any Restricted Payment
if at the time of, and after giving effect to, such proposed Restricted
Payment:
(1) a Default or Event of Default has occurred and is continuing,
(2) we could not Incur at least $1.00 of additional Debt pursuant to the
covenant described under "Limitation on Debt and Restricted Subsidiary
Preferred Stock" or
(3) the total amount of such Restricted Payment and all other Restricted
Payments declared or made since the Series A Issue Date, measured by cash
amount paid or Fair Market Value if a non-cash payment, would exceed an
amount equal to the sum of:
(a) 50% of the total amount of Consolidated Net Income accrued during
the period, treated as one accounting period, from and after the first
day of the fiscal quarter following the end of the most recent fiscal
quarter ended immediately prior to the Series A Issue Date to the end
of the most recent fiscal quarter ending at least 45 days prior to the
date of such Restricted Payment, or if the total amount of Consolidated
Net Income for such period shall be a deficit, minus 100% of such
deficit;
(b) Capital Stock Sale Proceeds;
(c) the amount by which our Debt, other than Subordinated Obligations
issued or sold prior to the Series A Issue Date, is reduced on our
balance sheet upon the conversion or exchange, other than by a
Subsidiary, subsequent to the Series A Issue Date of any of our Debt
convertible or exchangeable for our Capital Stock, other than
Disqualified Stock, less the amount of any cash or other Property
distributed by us or any Restricted Subsidiary upon such conversion or
exchange; and
(d) to the extent not otherwise included in our Consolidated Net
Income, an amount equal to (x) the net reduction in Investments in any
person, other than reductions in Permitted Investments, resulting from
the payment in cash of interest on Debt, dividends, repayments of loans
or advances, or other transfers of assets, in each case to us or any
Restricted Subsidiary after the Series A Issue Date from such person
and (y) the portion, proportionate to our equity interest in such
Subsidiary, of the Fair Market Value of the net assets of any
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however, that in the case
of (x) or (y) the sum shall not exceed the amount of Investments
previously made, and treated as a Restricted Payment, by us or any
Restricted Subsidiary in such person or Unrestricted Subsidiary.
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<PAGE>
Notwithstanding the preceding limitation, we may:
(a) pay dividends on our Capital Stock within 60 days of their
declaration if, on such date, such dividends could have been paid in
compliance with the indenture; provided, however, that at the time of
payment of such dividend, no other Default or Event of Default has occurred
and is continuing or would result; provided further, however, that such
dividend will be included in the calculation of the amount of Restricted
Payments;
(b) purchase, repurchase, redeem, legally defease, acquire or retire for
value our Capital Stock or Subordinated Obligations in exchange for, or out
of the proceeds of the substantially concurrent sale of, our Capital Stock,
other than Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary or an employee stock ownership plan or trust established by
National Steel or any of our Subsidiaries for the benefit of our employees;
provided, however, that (1) such payment will be excluded in the
calculation of the amount of Restricted Payments and (2) the net cash
proceeds from such exchange or sale will be excluded from the calculation
of the amount of Capital Stock Sale Proceeds;
(c) purchase, repurchase, redeem, legally defease, acquire or retire for
value any Subordinated Obligations in exchange for, or out of the proceeds
of the substantially concurrent sale of, Permitted Refinancing Debt;
provided, however, that such payment will be excluded in the calculation of
the amount of Restricted Payments;
(d) expend up to $5.0 million in any fiscal year to repurchase our common
stock (1) to distribute to current or former employees, officers and
directors of National Steel and our Subsidiaries, including upon the
exercise of stock options, (2) from such current or former employees,
officers or directors or (3) otherwise in order to distribute as employee
compensation; provided, however, that at the time of, and after giving pro
forma effect to, any such expenditure no other Default or Event of Default
has occurred and is continuing; provided further, however, that such
repurchase will be excluded in the calculation of the amount of Restricted
Payments;
(e) repurchase up to 700,000 shares of our common stock pursuant to the
stock repurchase approved by our board of directors on August 26, 1998;
provided, however, that at the time of, and after giving effect to, any
such expenditure no other Default or Event of Default has occurred and is
continuing; provided further, however, that such repurchase will be
included in the calculation of the amount of Restricted Payments; and
(f) expend up to $50.0 million for Restricted Payments in addition to
amounts permitted by clauses (a) through (e) above; provided, however, that
at the time of, and after giving effect to, any such expenditure, no other
Default or Event of Default has occurred and is continuing; provided
further, however, that such expenditures will be included in the
calculation of the amount of Restricted Payments.
Limitation on Liens. If we create any mortgage on, or pledge of, the then
Mortgaged Property or any part of it, it must be subordinate to the prior lien
of the indenture for the security of all bonds issued under the indenture
whether currently outstanding or issued in the future. The lien of the
indenture may be subordinate to permitted liens, including:
(1) undetermined or inchoate liens incidental to construction of current
operations,
(2) tax liens for the then current year,
(3) the liens of taxes, assessments or governmental charges not at the
time delinquent or which are being contested in good faith and
(4) liens based on workmen's compensation which are not due and payable
or which are being contested in good faith.
Limitation on Sale of Capital Stock and Indebtedness of Pledged Subsidiaries.
We will not sell or otherwise dispose of any indebtedness or Capital Stock of
any Wholly Owned Subsidiary whose Capital Stock is pledged under the indenture,
unless all indebtedness and Capital Stock of such Wholly Owned Subsidiary has
been or is at the same time sold or disposed of.
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<PAGE>
Limitation on Sale of Mortgaged Property. We will not sell or otherwise
dispose of less than substantially all, of the Mortgaged Property except,
subject to exceptions, upon its release as provided in the indenture. We will
not consolidate or merge with or into, or transfer or convey all or
substantially all the Mortgaged Property as an entirety to, any other
corporation or permit any other corporation to merge into us, except as
provided in the indenture.
We may, subject to the limitations described above under "Limitation of Sale
of Capital Stock and Indebtedness of Pledged Subsidiaries," from time to time
sell, exchange or otherwise dispose of Mortgaged Property, other than shares of
stock, and such Mortgaged Property shall be released from the lien of the
indenture upon receipt by the trustee of:
(1) A certified resolution requesting such release.
(2) An engineer's certificate stating in substance:
(a) A description in reasonable detail of the Property to be
released;
(b) A description in reasonable detail of the consideration for
the Property to be released, which may consist of cash and/or
purchase money obligations given in payment of the purchase price of
the Property to be released;
(c) The then fair value of the Property to be released, which may
not more than the amount of the consideration received or to be
received from the sale, exchange or other disposition of the
Property to be released; and
(d) That such release will not impair the security under the
indenture in contravention of the provisions of the indenture and is
desirable in the proper conduct of our business, or is otherwise in
our best interests.
If the fair value of such Property to be released, and of all other Property
or securities released from the lien of the indenture since the beginning of
the then current calendar year, is ten percent (10%) or more of the total
principal amount of all the outstanding bonds under the indenture, the
certificate must be made by an independent engineer. However, the certificate
need not be made by an independent engineer if the fair value of the Property
to be released is less than $25,000 or less than one percent (1%) of the total
principal amount of all the outstanding bonds.
(c) If the consideration for the Property to be released includes
purchase money obligations, an officers' certificate stating that such
obligations were given in payment of part of the purchase price of the
Property to be released and are secured by a purchase money mortgage on the
Property to be released maturing not more than ten years after the date of
deposit with the trustee. Such purchase money obligations may not exceed in
principal amount (1) 66 2/3% of the fair value of the Property covered by
such purchase money mortgage and (2) together with the total principal
amount of all such obligations received for Property released and held by
the trustee, ten percent of the total principal amount of all bonds then
outstanding.
(d) We must deposit with the trustee any cash or purchase money
obligations stated in the engineer's certificate to be consideration for
the Property to be released. We may elect to reduce the cash required to be
deposited by an amount equivalent to the amount of cash which could at the
time be withdrawn pursuant to the indenture on the same conditions as
additional bonds are issued, described above under "Issuance of Additional
Bonds;" provided that the amount of cash required to be deposited may not
be reduced by the amount of cash that could at the time be withdrawn on the
basis of bondable obligations or bondable stock, and that the amount of
cash to be deposited may not be reduced by the amount of cash which could
at the time be withdrawn on the basis of bondable stock.
(e) In addition, subject to the limitations stated above under
"Limitation on Sale of Capital Stock and Indebtedness of Pledged
Subsidiaries," we may sell, exchange or otherwise dispose of any Mortgaged
Property, other than shares of stock or other securities or indebtedness of
any corporation pledged under the indenture or any of our rights and
interests with respect to the contract between the Corporation and
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<PAGE>
Iron Ore Company of Canada as described in the indenture. The trustee must
release this Mortgaged Property from the lien of the indenture, without
compliance with any of the provisions described in clauses (a) through (d)
above and without the deposit of cash with the trustee, upon receipt by the
trustee of:
(1). A request evidenced by an officer's certificate; and
(2). An engineer's certificate, stating in substance:
(a) A description in reasonable detail of the Property to be
released;
(b) A description in reasonable detail of the consideration, if
any, for the Property to be released;
(c) The then fair value of the Property to be released, which fair
value may not exceed $100,000;
(d) That neither (A) the total fair value of all Property released
under this paragraph (e) in the calendar year in which the Property
described in the certificate is to be released nor (B) the total
consideration received by us for all Property so released for such
calendar year, exceeds $250,000; and
(e) That such Property is not useful or necessary in the conduct of
our business and that such release will not impair the security under
the indenture in contravention of the provisions of the indenture and
is desirable in the proper conduct of our business or is otherwise in
our best interests. No Property may be released under this provision in
any calendar year after either (A) the total fair value of all Property
released under this provision for such calendar year, or (B) the total
consideration received for such Property for such calendar year,
exceeds $250,000.
Limitation on Sale of Assets other than Mortgaged Property. We may not, and
may not permit any Restricted Subsidiary to, directly or indirectly, complete
any Asset Sale, which does not include sales or other dispositions of Mortgaged
Property made in compliance with the covenant described above under the heading
"Limitation on Sale of Mortgaged Property," unless (1) consideration received
at the time of such Asset Sale or, in the case of a lease that is an Asset
Sale, is to be received over the term of such lease, is at least equal to the
Fair Market Value of the Property sold; (2) at least 75% of the consideration
paid in such Asset Sale is in the form of cash, Cash Equivalents, additional
assets or the assumption by the purchaser of liabilities of National Steel or
any Restricted Subsidiary, other than liabilities that are by their terms
subordinated to the bonds, as a result of which National Steel and the
Restricted Subsidiaries are no longer obligated for such liabilities; and (3)
we deliver an officers' certificate to the trustee certifying compliance with
clauses (1) and (2).
The Net Available Cash from Asset Sales may be applied, to the extent we or
such Restricted Subsidiary elects, or is required by the terms of any Debt:
(a) to prepay, repay, legally defease or purchase our Senior Debt or Debt
of any other Restricted Subsidiary, excluding, in any such case, Debt owed
to National Steel or an affiliate;
(b) to permanently fund our pension or OPEB obligations; or
(c) to reinvest in additional assets, including by means of an Investment
in additional assets by a Restricted Subsidiary with Net Available Cash
received by National Steel or another Restricted Subsidiary, or to commit
to reinvest in additional assets, such commitments to include amounts
anticipated to be expended pursuant to our capital Investment plan.
We must file an officer's certificate with the trustee stating that the total
amount of the Net Available Cash from such Asset Sale, after giving effect to
the prior application of any portion pursuant to clause (a) or (b) of this
paragraph, is less than the total amount contemplated to be expended pursuant
to such capital Investment
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<PAGE>
plan within 24 months of the completion of such Asset Sale. However, in
connection with any prepayment, repayment, legal defeasance or purchase of Debt
pursuant to clause (a) above, we, or our Restricted Subsidiary, must retire
such Debt and cause any related loan commitment to be permanently reduced by an
equal amount.
Any Net Available Cash from an Asset Sale not applied in accordance with the
preceding provisions within twelve months after its receipt or not committed to
be reinvested and actually reinvested within twenty-four months after its
receipt, shall constitute "excess proceeds." When the total amount of excess
proceeds exceeds $5.0 million, including income earned on such excess proceeds,
we must make an offer to purchase the bonds. This prepayment offer must be:
(1) in the amount of the excess proceeds,
(2) made on a pro rata basis according to principal amount,
(3) made at a purchase price equal to 100% of the principal amount, plus
accrued interest to the Purchase Date and
(4) made in accordance with the procedures provided in the eleventh
supplemental indenture.
If any portion of Net Available Cash remains after such application and after
all holders of bonds have been given the opportunity to tender their bonds, we
or such Restricted Subsidiary may use any remaining amount for any purpose
permitted by the indenture and the amount of excess proceeds will be reset to
zero.
The prepayment offer must be made within five business days after we become
obligated to make it. We must mail a written notice to holders, accompanied by
information regarding us and our Subsidiaries as we in good faith believe will
enable such holders to make an informed decision regarding our prepayment
offer. We must state the purchase price and the purchase date, which must be,
unless otherwise required by applicable law, a business day no earlier than 30
days nor later than 60 days from the date the notice is mailed. We will comply
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of bonds
pursuant to the prepayment offer.
Limitation on Restrictions on Distributions from Restricted Subsidiaries. We
may not, and may not permit any Restricted Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist any restriction on the
right of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on or in respect of its
Capital Stock, or pay any Debt or other obligation owed, to National Steel
or any other Restricted Subsidiary,
(2) make any loans or advances to National Steel or any other Restricted
Subsidiary,
(3) transfer any of its Property to National Steel or any other
Restricted Subsidiary or
(4) Guarantee any Debt of National Steel or any other Restricted
Subsidiary.
These limitations will not apply to restrictions :
(1) in effect on the Series A Issue Date,
(2) relating to Debt of a Restricted Subsidiary and existing at the time
it became a Restricted Subsidiary if such restriction was not created in
connection with or in anticipation of the transaction in which it became a
Restricted Subsidiary or was acquired,
(3) which result from the refinancing of Debt Incurred pursuant to an
agreement referred to in the immediately preceding clauses (1) or (2),
provided that such restriction is no less favorable to the holders of bonds
than those under such agreement,
(4) on Funding or any other bankruptcy-remote special-purpose Subsidiary
or any Restricted Subsidiary that purchases or sells accounts receivable or
inventory pursuant to the Credit Facilities,
(5) arising out of or agreed to in a joint venture agreement entered into
by us or a Restricted Subsidiary in the ordinary course of business that do
not, individually or in total, (a) detract from the value
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<PAGE>
of our Property or assets or those of any Restricted Subsidiary in any
material manner or (b) materially adversely affect our ability to make
principal or interest payments on the bonds, and
(6) with respect to clause (3) only, to restrictions:
(A) relating to Debt that is permitted to be Incurred and secured
pursuant to the covenants described under "Limitation on Debt and
Restricted Subsidiary Preferred Stock" and "Limitation on Liens" that
limit the right of the debtor to dispose of the Property securing such
Debt,
(B) encumbering Property at the time such Property was acquired by us
or any Restricted Subsidiary, so long as such restriction relates
solely to the Property acquired and was not created in connection with
or in anticipation of such acquisition,
(C) which result from the refinancing of Debt Incurred pursuant to an
agreement referred to in clauses (A) or (B),
(D) resulting from customary provisions restricting subletting or
assignment of leases or customary provisions in other agreements that
restrict assignment of such agreements or rights, or
(E) customary restrictions contained in Asset Sale agreements
limiting the transfer of such Property pending the closing of such
sale.
Limitation on Transactions with Affiliates. We may not, and may not permit
any Restricted Subsidiary to, directly or indirectly, conduct any business or
enter into or suffer to exist any transaction or transactions, including the
purchase, sale, transfer, assignment, lease, conveyance or exchange of any
Property or the rendering of any service, with, or for the benefit of, any
affiliate of National Steel, unless:
(1) the terms of such affiliate transaction are (a) set forth in writing
and (b) no less favorable than those that could be obtained in a comparable
arm's-length transaction with a non-affiliate,
(2) if such affiliate transaction involves total payments or value in
excess of $10.0 million, the board of directors, including a majority of
its disinterested members, approves the affiliate transaction and in its
good faith judgment believes that such affiliate transaction complies with
clause (1) and
(3) if such affiliate transaction involves total payments or value in
excess of $20.0 million, we obtain a written opinion from an Independent
Financial Advisor to the effect that such affiliate transaction is fair,
from a financial point of view, to National Steel or such Restricted
Subsidiary.
Notwithstanding the foregoing limitation, National Steel or any Restricted
Subsidiary may enter into or suffer to exist the following:
(1) any transaction or series of transactions between us and one or more
Restricted Subsidiaries or between Restricted Subsidiaries, provided that
no more than 5% of the total voting power of the voting stock of any such
Restricted Subsidiary is owned by an affiliate other than a Restricted
Subsidiary;
(2) any Restricted Payment permitted to be made pursuant to the covenant
described under "Limitation on Restricted Payments;"
(3) any issuance of securities or other payments, awards or grants in
securities or otherwise pursuant to, or the funding of, employment
arrangements, pension or other benefit plans, stock options and stock
ownership plans and other compensatory arrangements approved by the board
of directors;
(4) the payment of reasonable fees to directors of National Steel or such
Restricted Subsidiary who are not employees of them;
(5) loans and advances to employees made in the ordinary course of
business and consistent with past practices, provided that such outstanding
loans and advances do not exceed $5.0 million in total at any one time;
(6) any payments for the purchase of steel products from NKK or any of
its affiliates or the provision of services by NKK or any of its
affiliates, including the construction by NKK or an affiliate of NKK of the
new hot dip galvanizing facility at the Great Lakes Division; provided,
that, in each case, the terms of
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such payments are determined on an arm's length basis and are approved by
the disinterested members of the board of directors; and
(7) any affiliate transactions between National Steel or any Restricted
Subsidiary and one or more Affiliate Joint Ventures that (a) are on terms
no less favorable than those that could be obtained in a comparable arm's
length transaction with a non-affiliate of National Steel and (b) if such
affiliate transactions involve total payments or value in excess of $10.0
million, the board of directors, including a majority of its disinterested
members, approves such affiliate transaction and in its good faith judgment
believes that it complies with this provision.
Limitation on Sale and Leaseback Transactions. We may not, and may not permit
any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction
with respect to any Property unless:
(1) we would be entitled to (a) Incur Debt in an amount equal to the
Attributable Debt with respect to such Sale and Leaseback Transaction
pursuant to the covenant described under "Limitation on Debt and Restricted
Subsidiary Preferred Stock" and (b) create a Lien on the Property securing
such Attributable Debt pursuant to the covenant described under "Limitation
on Liens" and
(2) such Sale and Leaseback Transaction is effected in compliance with
the covenant described under "Limitation on Sale of Assets other than
Mortgaged Property" or the covenant described under "Limitation on Sale of
Mortgaged Property," as applicable.
Designation of Restricted and Unrestricted Subsidiaries. National Steel's
board of directors may designate any Subsidiary to be an Unrestricted
Subsidiary if:
(1) such Subsidiary does not own any Capital Stock or Debt of, or own or
hold any Lien on any Property of, National Steel or any other Restricted
Subsidiary,
(2) such Subsidiary is not obligated under any Debt, Lien or other
obligation that, if in Default, would result in a Default on any of our
Debt or Debt of any Restricted Subsidiary, and
(3) either (a) such Subsidiary has total assets of $1,000 or less or (b)
such designation is effective immediately upon such entity becoming our
Subsidiary or a Subsidiary of any Restricted Subsidiary.
Unless designated as an Unrestricted Subsidiary, any person that becomes a
Subsidiary of National Steel or of any Wholly Owned Subsidiary will be
classified as a Restricted Subsidiary, provided that (x) we could Incur at
least $1.00 of additional Debt pursuant to the covenant described under
"Limitation on Debt and Restricted Subsidiary Preferred Stock" and (y) no
Default or Event of Default has occurred and is continuing or would result
after giving effect to such classification. Any person that does not meet the
preceding requirements will be automatically classified as an Unrestricted
Subsidiary. Except as provided in the first sentence of this paragraph, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.
The board of directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving effect to such designation,
(x) we could Incur at least $1.00 of additional Debt pursuant to the covenant
described under "Limitation on Debt and Restricted Subsidiary Preferred Stock"
and (y) no Default or Event of Default has occurred and is continuing or would
result.
Limitation on Lines of Business. We may not, nor may any of our Restricted
Subsidiaries, directly or indirectly, engage to any substantial extent in any
line or lines of business activity other than those businesses, and reasonably
related businesses, that we were engaged in as of the Series A Issue Date.
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Merger, Consolidation and Sale of Property
We will not merge, consolidate or amalgamate with or into any other person,
other than a merger of a Wholly Owned Subsidiary into us, or sell, transfer,
assign, lease, convey or otherwise dispose of all or substantially all our
Property in any one transaction or series of transactions unless:
(1) National Steel is the surviving person or the surviving person, if
other than National Steel, formed by, or to which such sale or other
disposition is made, is a corporation organized and existing under the laws
of the United States of America, any State or the District of Columbia;
(2) the surviving person, if other than National Steel, expressly
assumes, in accordance with the provisions of the indenture, the due and
punctual payment of the principal of, and premium, if any, and interest on,
all the bonds, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions to be
performed by National Steel and confirms in writing the lien of the
indenture, including the after-acquired Property clauses;
(3) in the case of a sale, transfer, assignment, lease, conveyance or
other disposition of all or substantially all of our Property, such
Property has been transferred as an entirety or virtually as an entirety to
one person;
(4) immediately before and after giving effect to such transaction or
transactions and treating, for purposes of this clause (4) and clauses (5)
and (6) below, any Debt which becomes, or is anticipated to become, an
obligation of the surviving person or any Restricted Subsidiary as a result
of such transaction or transactions as having been Incurred at the time of
such transaction or series of transactions, no Default or Event of Default
shall have occurred and be continuing;
(5) immediately after giving effect to such transaction or series of
transactions, National Steel or the surviving person would be able to Incur
at least $1.00 of additional Debt under the covenant described under
"Certain Covenants--Limitation on Debt and Restricted Subsidiary Preferred
Stock;"
(6) immediately after giving effect to such transaction or series of
transactions, the surviving person has a Consolidated Net Worth in an
amount which is not less than the Consolidated Net Worth of National Steel
immediately prior to such transaction or series of transactions; and
(7) National Steel delivers, or causes to be delivered, to the trustee an
officers' certificate and an opinion of counsel, each stating that such
transaction and any supplemental indenture with respect to it comply with
this covenant and that all conditions precedent relating to such
transaction have been satisfied.
SEC Reports
Whether or not we are then required to file reports with the SEC, we will
file all such reports and other information as would be required by Sections 13
and 15(d) of the Exchange Act if we were subject to the Exchange Act. We also
must supply, within 15 days after the required filing time of such reports and
other information, to the trustee and each holder or to the trustee to be
forwarded to each holder, without cost to the holder, copies of such reports
and other information. If the SEC does not permit the filing of such reports
and other information, we will supply copies of such reports and other
information to any holder of bonds upon their written request.
Events of Default
Events of Default. The following events are defined as "Events of Default" in
the indenture and apply to all bonds issued under the indenture:
(1) default in payment of any installment of interest on any bond issued
under the indenture continued for ninety days;
(2) default in payment of any principal on any bond issued under the
indenture when due;
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(3) default in meeting any sinking fund requirement on any bond issued
under the indenture;
(4) default for ninety days after written notice in the observance or
performance of any other covenant or agreement in the indenture; or
(5) specific events of bankruptcy or insolvency.
The trustee of the holders of 25% in principal amount of all bonds issued
under the indenture may declare the principal of all such bonds to be
immediately due and payable upon an event of default. However, the holders of a
majority in principal amount of all such bonds may waive the Default and
rescind any declaration if the Default is cured. The trustee is required to
take steps to enforce payment of the bonds and the lien of the indenture upon
the written request of the holders of at least than a majority in principal
amount of all the bonds issued under the indenture upon any event of default.
Supplemental Indenture Events of Default. In addition to the Events of
Default described in the preceding paragraph, the original and exchange bonds
have additional Events of Default which apply only to them. The following
events are, under the terms of the tenth and eleventh supplemental indentures,
referred to as "Supplemental Indenture Events of Default":
(1) Default in the payment of any interest on the bonds when it becomes
due and payable continued for a period of 30 days;
(2) Default in the payment of any principal or premium, if any, on any of
the bonds when it becomes due and payable under the eleventh supplemental
indenture;
(3) failure to comply with the covenant described above under "Merger,
Consolidation and Sale of Property;"
(4) failure to comply with any other covenant or agreement in the bonds
or in the indenture, other than a failure which is the subject of the
foregoing clause (1), (2) or (3), which continues for 30 days after written
notice is given to us as provided below;
(5) a Default under any Debt by us or any Restricted Subsidiary which
results in acceleration of the maturity of such Debt, or failure to pay any
such Debt at maturity, in an total amount greater than $10.0 million (the
"cross acceleration provisions");
(6) if any judgment or judgments for the payment of money in a total
amount in excess of $10.0 million is rendered against us or any Restricted
Subsidiary and is not waived, satisfied or discharged for any period of 60
consecutive days during which a stay of enforcement is not in effect; and
(7) specific events involving bankruptcy, insolvency or reorganization of
us or any Significant Subsidiary.
The trustee may withhold notice to the holders of the bonds of any Eleventh
Supplemental Indenture Default, except payment Defaults, if it is considered to
be in the best interest of the holders of the bonds to do so.
A Supplemental Indenture Default under clause (4) is not a Supplemental
Indenture Event of Default until the trustee or the holders of not less than
25% in outstanding principal amount of the bonds outstanding under the tenth or
eleventh supplemental indenture, as applicable, notify us of the Supplemental
Indenture Default and we do not cure it within the time period specified. Such
notice must specify the Supplemental Indenture Default, demand that it be
remedied and state that such notice is a "Notice of Default." We must notify
the trustee within 30 days after the occurrence of a Default or an Event of
Default.
If a Supplemental Indenture Event of Default continues, other than as a
result of bankruptcy, insolvency or reorganization, the trustee or the
registered holders of not less than 25% in total outstanding principal amount
of all bonds outstanding under the tenth or eleventh supplemental indenture, as
applicable, may declare the principal and accrued but unpaid interest of the
bonds immediately due and payable. If a Supplemental Indenture Event of Default
results from bankruptcy, insolvency or reorganization of us or any Significant
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Subsidiary, the bonds shall be due and payable immediately without any
declaration or other act on the part of the trustee or the holders of the
bonds.
Subject to the right of the holders of 25% in principal amount of all bonds
issued under the tenth or eleventh supplemental indenture, as applicable, to
accelerate the maturity of all of such bonds as described above, the holders of
a majority in total outstanding principal amount of the bonds may rescind any
acceleration if it would not conflict with any judgment or decree and if all
existing Supplemental Indenture Events of Default are cured. No such rescission
shall affect any subsequent Supplemental Indenture Default or impair any rights
related to such subsequent Default.
Subject to the provisions of the indenture relating to the duties of the
trustee, the trustee does not have to exercise any of its rights or powers in
the event of a Default unless holders of all bonds agree to reasonably
indemnify the trustee. If they do so agree, the holders of a majority in total
principal amount of all bonds issued under the indenture then outstanding have
the right to direct the time, method and place of conducting any proceeding for
any available remedy or exercising any trust or power conferred on the trustee
with respect to all the bonds. The original or exchange bonds outstanding at
any time may not constitute a majority of the outstanding principal amount of
all bonds of all series. Thus, holders of these bonds may not have any ability
to direct the trustee independently of any other series of bonds. Further,
holders of series of bonds other than these bonds may have sufficient voting
power to direct the actions of the trustee or cause the acceleration of the
bonds without the consent of the holders of these bonds.
A holder may not pursue any remedy with respect to the indenture or the bonds
issued under the indenture, or take any action for the appointment of a
receiver or trustee, unless:
(1) the holder has given the trustee written notice of a continuing Event
of Default,
(2) the registered holders of at least 25% in total principal amount of
all the bonds issued under the indenture or the applicable supplemental
indenture then outstanding have made written request,
(3) the holder or holders offer the trustee reasonable indemnity against
any costs, liability or expense,
(4) the trustee has not received from the registered holders of a
majority in total outstanding principal amount of all the bonds issued
under the indenture a direction inconsistent with such request, and
(5) the trustee has failed to institute such proceeding within 30 days.
These limitations do not apply to a suit instituted by a holder of any bonds
issued under the indenture for enforcement of payment on such bond on or after
the due dates expressed in such bond.
Amendments and Waivers
The indenture may be modified only with the consent of the holders of 66 2/3%
of the principal amount of all bonds issued under the indenture. However, no
modification may be made to:
(1) alter the dates fixed for the payment on all the bonds, or otherwise
modify the terms of payment,
(2) alter the amount of principal of, or rate of interest or premium on,
any of the bonds,
(3) affect the rights of the holders of less than all the bonds of any
series,
(4) affect the rights of the holders of less than all the series of bonds
except with the consent of the holders of not less than 66 2/3% in
principal amount of the bonds of each of the series so affected, or
(5) reduce the percentage of bondholder consent required for any
modification.
In addition, the tenth and eleventh supplemental indentures may not be
amended without the consent of the registered holders of a majority of total
outstanding principal amount of the bonds under the applicable supplemental
indenture. They may also waive any past Default or compliance with any
provisions of the applicable supplemental indenture, except a Default in the
payment of principal, premium or interest and certain covenants and provisions
of the tenth or eleventh supplemental indenture which cannot be amended without
the consent of each holder of an outstanding bond.
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However, the tenth and eleventh supplemental indentures may not, without the
consent of each holder of an outstanding bond, be amended to:
(1) reduce the amount of bonds whose holders must consent to an amendment
or waiver,
(2) reduce the rate of or extend the time for payment of interest on any
bond,
(3) reduce the principal of or extend the stated maturity of any bond,
(4) make any bond payable in money other than that stated in the bond,
(5) impair the right of any holder of the bonds to receive payment on
such holder's bonds on or after the due dates or to institute suit for the
enforcement of any payment on such holder's bonds,
(6) subordinate the bonds to any other obligation of National Steel,
(7) reduce the premium payable upon the redemption or repurchase of any
bond as described under "Optional Redemption" or "Repurchase at the Option
of Holders Upon a Change of Control," or
(8) at any time after a Change of Control has occurred, change the time
at which the related Change of Control offer must be made or at which the
bonds must be repurchased.
Defeasance
We may cancel the indenture and discharge the lien if we pay, or make
provision for the payment of, the principal, interest and premium, if any, on
all the bonds issued under the indenture at the times and in the manner
provided for in the indenture.
Any moneys deposited with the trustee for the payment or redemption of all
the bonds under the indenture and coupons, and remaining unclaimed by the
bondholders for six years after the date of maturity or the date fixed for
redemption of such bonds, shall be repaid to us and thereafter such bondholders
will be limited to a claim against us for payment.
Book-Entry System
The exchange bonds will initially be issued in the form of one or more
registered new bonds in global form without interest coupons registered in the
name of The Depository Trust Company or its nominee.
Upon the issuance of a global bond, DTC or its nominee will credit the
accounts of persons holding through it with the respective principal amounts of
the bonds represented by such global bond exchanged in the exchange offer.
Ownership of beneficial interests in a global bond will be limited to persons
that have accounts with DTC who are "participants," or persons that may hold
interests through participants. Any person acquiring an interest in a global
bond through an offshore transaction in reliance on Regulation S under the
Securities Act may hold such interest through Cedel or Euroclear. Ownership of
beneficial interests in a global bond will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by
DTC, with respect to participants' interests, and such participants, with
respect to the owners of beneficial interests in such global bond other than
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. These
limits and laws may impair the ability to transfer beneficial interests in a
global bond.
Payment of principal of and interest on bonds represented by a global bond
will be made in immediately available funds to DTC or its nominee, as the case
may be, as the sole registered owner and the sole holder of the bonds
represented thereby for all purposes under the indenture. We have been advised
by DTC that upon receipt of any payment of principal of or interest on any
global bond, DTC will immediately credit, on its book-entry registration and
transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal or face
amount of such global bond as shown on the records of DTC. Payments by
participants to owners of beneficial interests in a global bond held through
such participants will be governed by standing instructions and customary
practices as is now the case with securities held for customer accounts
registered in "street name" and will be the sole responsibility of such
participants.
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A global bond may not be transferred except as a whole by DTC or a nominee of
DTC to a nominee of DTC or to DTC. A global bond is exchangeable for
certificated bonds only if:
(1) DTC notifies us that it is unwilling or unable to continue as a
depositary for such global bond or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act,
(2) we, in our discretion at any time determine not to have all the bonds
represented by such global bond or
(3) there shall have occurred and be continuing a Default or an Event of
Default with respect to the bonds represented by such global bond.
Any global bond that is exchangeable for certificated bonds pursuant to the
preceding sentence will be exchanged for certificated bonds in authorized
denominations and registered in such names as DTC or any successor depositary
holding such global bond may direct. Except as provided for in this paragraph,
a global bond is not exchangeable, except for a global bond of like
denomination to be registered in the name of DTC or any successor depositary or
its nominee.
In the event that a global bond becomes exchangeable for certificated bonds,
(1) certificated bonds will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof, (2) payment of principal
of, and premium, if any, and interest on, the certificated bonds will be
payable, and the transfer of the certificated bonds will be registerable, at
our office or agency maintained for such purposes and (3) no service charge
will be made for any registration of transfer or exchange of the certificated
bonds, although we may require payment of a sum sufficient to cover any tax or
governmental charge imposed in connection with the exchange.
So long as DTC or any successor depositary for a global bond, or any nominee,
is the registered owner of such global bond, DTC or such successor or nominee,
will be considered the sole owner or holder of the bonds represented by such
global bond for all purposes under the indenture and the bonds. Except as set
forth above, owners of beneficial interests in a global bond will not be
entitled to have the bonds represented by such global bond registered in their
names, will not receive or be entitled to receive physical delivery of
certificated bonds in definitive form and will not be considered to be the
owners or holders of any bonds under such global bond. Accordingly, each person
owning a beneficial interest in a global bond must rely on the procedures of
DTC or any successor depositary, and, if not a participant, on the procedures
of the participant through which such person owns its interest, to exercise any
rights of a holder under the indenture.
We expect that under existing industry practices, in the event that we
request any action of holders or that an owner of a beneficial interest in a
global bond desires to give or take any action which a holder is entitled to
give or take under the indenture, DTC or any successor depositary would
authorize the participants holding the relevant beneficial interest to give or
take such action and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
DTC has advised us that it is:
(1)a limited-purpose trust company organized under the Banking Law of the
State of New York,
(2)a member of the Federal Reserve System,
(3)a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and
(4)a "clearing agency" registered under the Exchange Act.
DTC was created to hold the securities of its participants and to facilitate
the clearance and settlement of securities transactions among its participants
in such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and
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certain other organizations some of whom, or their representatives, own DTC.
Access to DTC's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in global securities among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither we nor the trustee will
have any responsibility for the performance by DTC or its participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
Second Mortgage
Under the terms of our collective bargaining agreement with the USWA,
effective August 1, 1993, we have agreed to grant a second mortgage to Mellon
Bank N.A., Trustee for National Steel Corporation Represented Retirees Benefit
Trust, an unincorporated voluntary employees' beneficiary association organized
under the laws of Pennsylvania. The second mortgage will cover all of the
current and future real estate and improvements located at Great Lakes that are
encumbered by the indenture for the purpose of securing our benefit liabilities
and those of our Subsidiaries for collectively bargained retiree health care
and insurance benefits for all of represented employees regardless of
particular union representation. The benefits liabilities to be secured exclude
retired employees covered under labor agreements with the United Mine Workers
of America and retired employees of the Delray Connecting Railroad Corporation.
We have calculated the benefit liabilities for such employees to be $406
million as of December 31, 1998. The rights to be granted pursuant to the
second mortgage will be subordinate and subject to the rights of the trustee
under the indenture as amended, modified and supplemented, including
amendments, modifications and supplements executed after the date that the
second mortgage is entered into. Under certain conditions, the second mortgage
will provide that it will be released and satisfied by the second mortgagee
trustee.
The second mortgage will be subject, in both lien and payment, to the
indenture, as amended or supplemented, and any additional bonds that may be
issued. In the event of any conflict between the terms of the second mortgage
and the terms of the indenture, the terms of the indenture will control.
The second mortgagee trustee, at one or more times at our request, will
consent, waive and agree, and will be deemed to have consented, waived and
agreed on the same basis and to the same extent that any form of consent,
waiver or agreement is granted by the trustee. The second mortgagee trust will
forebear from taking any action not taken by the trustee. Such undertakings by
the second mortgagee trustee will be declared to be a condition to the creation
of any rights in second mortgagee trust pursuant to the second mortgage. The
second mortgagee trustee will be required upon receipt of our written request
to release from the lien of the second mortgage any portion or all of the
Mortgaged Property that is released from the lien of the indenture.
Furthermore, we will not be restricted by the second mortgage from conveying
interests in the Mortgaged Property free of the lien of the second mortgage or
be required to obtain the consent of second mortgagee trustee in any case where
such conveyance free of the lien of the indenture is permitted by the terms of
the indenture and the consent of the trustee is not required.
In the event of a liquidation or foreclosure by the trustee, in any action
involving such liquidation or foreclosure, we will agree to use our best
efforts to support the enforcement of an appropriate equitable remedy for the
benefit of the second mortgagee Trust, including, but not limited to, a
marshaling of all of our assets.
Certain Bankruptcy Limitations
The right of the trustee to repossess and dispose of the Mortgaged Property,
or otherwise to exercise rights or remedies against the Mortgaged Property,
upon the occurrence of an Event of Default is likely to be significantly
impaired by applicable bankruptcy law if a bankruptcy proceeding were to be
begun by or against National Steel prior to the date when, or possibly even
after, the trustee has taken any such action. Under
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bankruptcy law, secured creditors such as the trustee on behalf of the holders
are prohibited from repossessing their security from a debtor in a bankruptcy
case, or from disposing of security repossessed from such debtor, without
bankruptcy court approval.
Bankruptcy law also permits the debtor to continue to keep and use collateral
even though the debtor is in default under the applicable debt instruments,
provided generally that the secured creditor is given "adequate protection."
The meaning of the term "adequate protection" may vary according to
circumstances, but it is intended in general to protect the value of the
secured creditor's interest in the collateral. Adequate protection may include
cash payments or the granting of additional security if the court determines it
appropriate for any diminution in the value of the collateral as a result of
the stay of repossession or disposition or any use of the collateral by the
debtor during the pendency of the bankruptcy case. Because of the lack of a
precise definition of the term "adequate protection" and the broad
discretionary powers of a bankruptcy court, it is impossible to predict how
long payments under the bonds could be delayed following commencement of a
bankruptcy case, whether or when the trustee could repossess or dispose of the
Mortgaged Property or whether or to what extent holders would be compensated
for any delay in payment or loss of value of the Mortgaged Property through the
requirement of "adequate protection."
In the event that the bankruptcy court determines the value of the Mortgaged
Property is not sufficient to repay all amounts due on the bonds, the holders
would hold "undersecured claims." Applicable federal bankruptcy laws do not
permit the payment and/or accrual of interest, costs and attorney's fees for
"undersecured claims" during the pendency of a debtor's bankruptcy case.
Governing Law
The indenture and the bonds are governed by the internal laws of the State of
New York without reference to principles of conflicts of law.
The Trustee, Paying Agent and Registrar for the Bonds
The Chase Manhattan Bank is the trustee under the indenture and has been
appointed by National Steel as registrar and paying agent with regard to the
bonds.
During the continuance of an Event of Default, the trustee will perform only
such duties as are specifically set forth in the indenture. During the
existence of an Event of Default, the trustee will exercise such of the rights
and powers vested in it under the indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise under the
circumstances in the conduct of such person's own affairs.
Registration Rights
National Steel entered into the registration rights agreements with the
placement agents, for the benefit of the holders of original bonds. Under these
agreements, we agreed to use our best efforts, at our cost, to file and cause
to become effective a registration statement with respect to a registered offer
to exchange original bonds for exchange bonds with terms identical to the
original bonds, except that the exchange bonds will not bear legends
restricting their transfer. The registration statement, of which this
prospectus is part, constitutes a registration statement for purposes of the
registration rights agreements. Upon the registration statement being declared
effective, we will offer the exchange bonds in return for surrender of the
exchange bonds. The exchange offer will remain open for not less than 30 days
after the date notice of the exchange offer is mailed to holders of the
original bonds. For each original bond surrendered to us under the exchange
offer, the holder of such original bond will receive an exchange bond of equal
principal amount. Interest on each exchange bond will accrue from the last
interest payment date on which interest was paid on the original bonds so
surrendered or, if no interest has been paid on such original bond, from March
8, 1999. If the applicable interpretations of the staff of the SEC do not
permit us to effect the exchange offer, or under certain other circumstances,
we will, at our cost, use our best efforts:
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(1) to cause to become effective a shelf registration statement with
respect to resales of the original bonds, and
(2) to keep such shelf registration statement effective until the
expiration of the time period referred to in Rule 144(k) under the
Securities Act after March 31, 1999, or such shorter period that will
terminate when all original bonds covered by the shelf registration
statement have been sold pursuant to the shelf registration statement.
We will, in the event of such a shelf registration, provide to each holder
copies of the prospectus, notify each holder of original bonds when the shelf
registration statement for the original bonds has become effective and take
other actions as are required to permit resales of the original bonds. A holder
that sells its old bonds pursuant to the shelf registration statement
generally:
(1) will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers,
(2) will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales, and
(3) will be bound by the provisions of the registrations rights agreement
that are applicable to such a holder, including indemnification
obligations.
If the exchange offer is not consummated and a shelf registration statement
is not declared effective on or before September 6, 1999, the annual interest
rate borne by the original bonds will be increased by 0.25% per 90 day period,
until reaching a maximum increase of 1.00%, until the exchange offer is
consummated or the shelf registration statement is declared effective.
If we effect the exchange offer, we will be entitled to close the exchange
offer 30 days after the commencement of it, provided that we have accepted all
original bonds previously validly surrendered in accordance with the terms of
the exchange offer. Original bonds not tendered in the exchange offer will bear
interest at 9 7/8% per year and be subject to all of the terms and conditions
specified in the indenture and to the transfer restrictions set forth in the
legend on the certificate for such original bonds.
This summary of provisions of the registration rights agreements does not
restate the agreements in their entirety. We urge you to read the applicable
registration rights agreement, a copy of which is filed as an exhibit to the
registration statement of which this prospectus is a part.
Certain Definitions
Set forth below is a summary of defined terms used in the indenture. You
should refer to the indenture for the full definition of all terms as well as
any other capitalized terms used herein for which no definition is provided.
"Additional Assets" means (1) any Property other than cash, Cash Equivalents
or securities to be owned by National Steel or any Restricted Subsidiary; or
(2) Capital Stock of a person that becomes a Restricted Subsidiary as a result
of the acquisition of such Capital Stock by National Steel or another
Restricted Subsidiary from any person other than National Steel or an
affiliate.
"Affiliate" of any specified person means (1) any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person or (2) any other person who is a director or
officer of (a) such specified person, (b) any Subsidiary of such specified
person or (c) any person described in clause (1) above.
For the purposes of this definition, "control" when used with respect to any
person means the power to direct the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise. The terms "controlling" and "controlled" have consistent
meanings.
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For purposes of the covenants described under "Certain Covenants--Limitation
on Transactions with Affiliates," "Limitation on Sale of Assets other than
Mortgaged Property" and the definition of the term "additional assets" only,
"affiliate" also means any beneficial owner of shares representing 5% or more
of the total voting power of the voting stock on a fully diluted basis of
National Steel or of rights or warrants to purchase such voting stock whether
or not currently exercisable and any person who would be an affiliate of any
such beneficial owner.
"Affiliate Joint Venture" means a person, other than one of our Subsidiaries,
in which we or any Restricted Subsidiary has an Investment and which is an
affiliate only because we or such Restricted Subsidiary has the ability to
control such person, and for no other reason.
"Asset Sale" means any sale, lease, transfer, issuance or other disposition,
or series of such transactions, by National Steel or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction, each referred to for the purposes of this definition as a
disposition, of:
(1) any shares of Capital Stock of a Restricted Subsidiary other than
directors' qualifying shares;
(2) all or substantially all the assets of any division or line of
business of National Steel or any Restricted Subsidiary; or
(3) any other assets of National Steel or any Restricted Subsidiary
outside of the ordinary course of business of either;
other than:
(a) in the case of preceding clauses (1), (2) and (3), any disposition by
a Restricted Subsidiary to National Steel or by National Steel or a
Restricted Subsidiary to a Wholly Owned Subsidiary,
(b) and in the case of the preceding clauses (1) and (2):
(A) any disposition of accounts receivable or inventory by or to
National Steel or any Restricted Subsidiary to or from funding or any
other bankruptcy-remote, special-purpose Subsidiary in connection with
the Incurrence of Debt by such Subsidiary under the Credit Facilities,
or
(B) any disposition of Property having, together with other Property
disposed of pursuant to such clauses during the same fiscal year, a
total Fair Market Value of less than $25.0 million,
(c) in the case of clause (3) above, any disposition made in compliance
with the first paragraph of the covenant described under "Merger,
Consolidation and Sale of Property" and a disposition of obsolete assets in
the ordinary course of business, and
(d) in the case of clauses (1), (2) and (3) above, but only for purposes
of the covenant described under the heading "Limitation on Sale of Assets
other than Mortgaged Property", dispositions of Mortgaged Property made in
compliance with the covenant described under the heading "Limitation on
Sale of Mortgaged Property."
"Attributable Debt" in a Sale and Leaseback Transaction means, at any date of
determination:
(1) if it is a Capital Lease Obligation, the amount of Debt represented
by it according to the definition of the term "Capital Lease Obligation;"
and
(2) in all other instances, the present value, discounted at the actual
rate of interest implicit in such transaction, compounded annually, of the
total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction,
including any period for which such lease has been extended.
"Average Life" means, as of any date of determination, with respect to any
Debt or preferred stock, the quotient obtained by dividing (1) the sum of the
product of the numbers of years, rounded to the nearest one-twelfth, from the
date of determination to the dates of each successive scheduled principal
payment of such Debt or redemption or similar payment with respect to such
preferred stock multiplied by the amount of such payment by (2) the sum of all
such payments.
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"bondable obligations" means obligations acquired by National Steel
subsequent to December 31, 1951, (1) issued by a Wholly Owned Subsidiary, all
of whose stock is pledged under the indenture, and (2) secured by a direct
first lien, subject only to permitted liens, on Property acquired by such
Wholly Owned Subsidiary since December 31, 1951, which would have constituted
property additions if acquired by National Steel. The obligation may be for a
total principal amount up to 100% of the net amount of such Property.
"bondable stock" means:
(1) shares of Capital Stock purchased or otherwise acquired by National
Steel subsequent to May 1, 1952, issued by a Wholly Owned Subsidiary whose
outstanding Capital Stock is or will be subject to the lien of the
indenture, which is engaged in a business in which we may then be engaged
or in an affiliated business or one useful to such business and which does
not have outstanding any indebtedness except indebtedness to us and current
liabilities, other than for money borrowed, Incurred in the ordinary course
of business and payable not more than one year from the date of their
creation;
(2) shares of Capital Stock of Iron Ore Company of Canada acquired and
paid for by National Steel subsequent to December 31, 1951, and
(3) shares of stock of any other corporation, including evidences of
indebtedness, not exceeding in principal amount our share, based on our
stock interest, of the indebtedness of such corporation issued to its
stockholders, acquired and paid for by us subsequent to May 1, 1952,
provided:
(a) all the shares of stock of such corporation owned by National
Steel are, or will be, subject to the lien of the indenture,
(b) the company's principal assets consist of mining Property,
(c) we have the right to a share of the products mined or extracted
from such mining Property, and
(d) we assign our right to the trustee.
"Capital Expenditure Debt" means Debt Incurred by any person to finance a
capital expenditure so long as (1) such capital expenditure is or should be
included as an addition to "Property, Plant and Equipment" in accordance with
GAAP and (2) such Debt is Incurred within 180 days of the date such capital
expenditure is made.
"Capital Lease Obligations" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP. The amount of Debt represented by such obligation will be the capitalized
amount of such obligations determined in accordance with GAAP. The stated
maturity will be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty. For purposes of "Certain
Covenants--Limitation on Liens," a Capital Lease Obligation will be deemed
secured by a Lien on the Property being leased.
"Capital Stock" means any shares or other equivalents of corporate stock,
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in any person, including
preferred stock, but excluding any Debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the total net cash proceeds received by
us from the issuance or sale, other than to a Subsidiary or an employee stock
ownership plan or trust established by us or any of our Subsidiaries for the
benefit of our employees, by us of any class of our Capital Stock, other than
Disqualified Stock, after the Series A Issue Date.
"Cash Equivalents" means
(1) any evidence of Debt with a maturity of 360 days or less issued or
directly and fully Guaranteed or insured by the United States of America or any
agency or instrumentality, provided that the full faith and credit of the
United States of America is pledged in support,
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(2) certificates of deposit, Eurodollar time deposits, bankers' acceptances
and other similar unsubordinated Debt instruments with a maturity of 360 days
or less and overnight bank deposits of any bank, trust company, investment bank
or other financial institution, including any branch, that is organized or
regulated under the laws of the United States of America or any state, and
which has capital, surplus and undivided profits totaling in excess of US$1.0
billion and has outstanding unsecured Debt which is rated "A3" or higher by
Moody's or "A-" or higher by S&P; provided that up to $25.0 million of the
total amount of the Investments of the type described in this clause (2) may be
with banks or their branches of the type described above with outstanding
unsecured Debt that has an Investment Grade Rating or higher,
(3) commercial paper with a maturity of 360 days or less issued by a
corporation that is not an affiliate of National Steel and is organized under
the laws of any state of the United States or the District of Columbia and
rated at least A-2 by S&P or at least P-2 by Moody's,
(4) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (1) and (2) above
entered into with a bank, trust company, investment bank or other financial
institution meeting the qualifications described in clause (2) above, or
(5) funds (including, without limitation, any fund for which the trustee or
any affiliate of the trustee serves as an administrator, shareholder servicing
agent and/or custodian or subcustodian), invested exclusively in cash and
Investments of the types described in clauses (1) through (4) above.
"Change of Control" means the occurrence of any of the following events:
(1) if any "person" or "group" as such terms are used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provisions,
including any group acting for the purpose of acquiring, holding,
voting or disposing of securities within the meaning of Rule 13d-
5(b)(1) under the Exchange Act, other than Permitted Holders, becomes
the "beneficial owner" as defined in Rule 13d-3 under the Exchange
Act, except that a person will be deemed to have "beneficial
ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after
the passage of time, directly or indirectly, of 30% or more of the
total voting power of all classes of the voting stock of National
Steel; or
(2) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the
assets of National Steel and the Restricted Subsidiaries, considered
as a whole (other than a disposition of such assets as an entirety or
virtually as an entirety to a Wholly Owned Subsidiary) has occurred,
or National Steel merges, consolidates or amalgamates with or into any
other person or any other person merges, consolidates or amalgamates
with or into us, in any such event pursuant to a transaction in which
our outstanding voting stock is reclassified into or exchanged for
cash, securities or other Property, other than any such transaction
where: (a) our outstanding voting stock is reclassified into or
exchanged for voting stock of the surviving corporation and (b) the
holders of our voting stock immediately prior to such transaction own,
directly or indirectly, not less than a majority of the voting stock
of the surviving corporation immediately after such transaction and in
substantially the same proportion as before the transaction; or
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors, together
with any new directors whose election or appointment by such board or
whose nomination for election by the shareholders was approved by a
vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute a majority of the board of directors then in
office; or
(4) the shareholders shall have approved any plan of liquidation or
dissolution of National Steel.
"Commodity Price Protection Agreement" means any forward contract, commodity
swap agreement, commodity option agreement or other similar agreement or
arrangement designed to protect a person against fluctuations in commodity
prices.
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"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (1) the total amount of EBITDA for the period of
the most recent four consecutive fiscal quarters ending at least 45 days prior
to such determination date to (2) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that:
(a) if National Steel or any Restricted Subsidiary has Incurred any Debt
since the beginning of such period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio is an Incurrence of Debt, or both, Consolidated Interest
Expense for such period will be calculated after giving effect on a pro
forma basis to such Debt as if such Debt had been Incurred, and the
discharge of any other Debt repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Debt as if such discharge had
occurred, on the first day of such period;
(b) if since the beginning of such period National Steel or any
Restricted Subsidiary has made any Asset Sale or if the transaction giving
rise to the need to calculate the Consolidated Interest Coverage Ratio is
an Asset Sale, or both, EBITDA for such period will be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets which
are the subject of such Asset Sale for such period, or increased by an
amount equal to the EBITDA (if negative) directly attributable thereto for
such period, in either case as if the Asset Sale had occurred on the first
day of such period and Consolidated Interest Expense for such period will
be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Debt of National Steel or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to
National Steel and its continuing Restricted Subsidiaries in connection
with such Asset Sale for such period, as if such Asset Sale had occurred on
the first day of such period, or, if the Capital Stock of any Restricted
Subsidiary is sold, by an amount equal to the Consolidated Interest Expense
for such period directly attributable to the Debt of such Restricted
Subsidiary to the extent National Steel and its continuing Restricted
Subsidiaries are no longer liable for such Debt after such sale;
(c) if since the beginning of such period National Steel or any
Restricted Subsidiary by merger or otherwise has made an Investment in any
Restricted Subsidiary or any person which becomes a Restricted Subsidiary
or an acquisition of Property, including any acquisition of Property
occurring in connection with a transaction causing a calculation to be
made, which constitutes all or substantially all of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period will be
calculated after giving it pro forma effect, including the Incurrence of
any Debt, as if such Investment or acquisition occurred on the first day of
such period; and
(d) if since the beginning of such period any person that subsequently
became a Restricted Subsidiary or was merged with or into National Steel or
any Restricted Subsidiary since the beginning of such period has made any
Asset Sale, Investment or acquisition of Property that would have required
an adjustment pursuant to clause (b) or (c) above if made by National Steel
or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period will be calculated after giving pro forma
effect thereto as if such Asset Sale, Investment or acquisition occurred on
the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to
an acquisition of Property, the amount of income or earnings relating to it and
the amount of Consolidated Interest Expense associated with any Debt Incurred
in connection with it, the pro forma calculations will be determined in good
faith by a responsible financial or accounting officer and as further
contemplated by the definition of the term "pro forma." If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Debt will be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period, taking into
account any Interest Rate Agreement applicable to such Debt if such Interest
Rate Agreement has a remaining term in excess of 12 months.
"Consolidated Interest Expense" means, for any period, the total interest
expense of National Steel and our consolidated Restricted Subsidiaries, plus,
to the extent not included in such total interest expense, and to
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the extent Incurred by us and our Restricted Subsidiaries:
(1) interest expense attributable to capital leases;
(2) amortization of Debt discount and Debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing;
(6) net costs associated with Hedging Obligations under Interest Rate
Agreements, including amortization of fees;
(7) Redeemable Dividends;
(8) preferred stock dividends on all preferred stock of Restricted
Subsidiaries held by persons other than National Steel or a Wholly Owned
Subsidiary; and
(9) interest accruing on any Debt of any other person to the extent such
Debt is Guaranteed by National Steel or any Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net income (loss) of
National Steel and our consolidated Subsidiaries; provided, however, that there
will not be included in such Consolidated Net Income:
(1) any net income (loss) of any person other than National Steel if such
person is not a Restricted Subsidiary, except that (a) subject to the
exclusion contained in clause (4) below, our equity in the net income of
any such person for such period will be included in such Consolidated Net
Income up to the total amount of cash distributed by such person during
such period to us or a Restricted Subsidiary as a dividend or other
distribution, subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (3) below,
and (b) our equity in a net loss of any such person, other than an
Unrestricted Subsidiary, for such period shall be included in determining
such Consolidated Net Income;
(2) any net income (loss) of any person acquired by National Steel or any
of our consolidated Subsidiaries in a pooling of interests transaction for
any period prior to the date of such acquisition;
(3) any net income (loss) of any Restricted Subsidiary to the extent that
such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions,
directly or indirectly, to us, except that (a) subject to the exclusion
contained in clause (4) below, our equity in the net income of any such
Restricted Subsidiary for such period will be included in such Consolidated
Net Income up to the total amount of cash distributed by such Restricted
Subsidiary during such period to us or another Restricted Subsidiary as a
dividend or other distribution, subject, in the case of a dividend or other
distribution to another Restricted Subsidiary, to the limitation contained
in this clause, and (b) our equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such
Consolidated Net Income;
(4) any gain (but not loss) realized upon the sale or other disposition
of any Property of National Steel or any of its consolidated Subsidiaries,
including pursuant to any Sale and Leaseback Transaction, which is not sold
or otherwise disposed of in the ordinary course of business; and
(5) any extraordinary gain or loss.
"Consolidated Net Worth" means the total of the amounts shown on our
consolidated balance sheet as of the end of the most recent fiscal quarter
ending at least 45 days prior to the taking of any action for the purpose of
which the determination is being made, as (1) the par or stated value of all of
our outstanding Capital Stock plus (2) paid-in capital or capital surplus
relating to such Capital Stock plus (3) any retained earnings or earned surplus
less (a) any accumulated deficit, (b) any amounts attributable to Disqualified
Stock and (c) any adjustments for pension liabilities.
"Credit Facilities" means the receivables purchase agreement and the
inventory facilities, in each case together with any extensions, revisions,
refinancings or replacements of them by a lender or syndicate of lenders,
including through the sale of accounts receivable or inventory to such lender
or lenders or to
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Funding or any other bankruptcy-remote special-purpose Subsidiary that
purchases such accounts receivable or inventory.
"Currency Exchange Protection Agreement" means any foreign exchange contract,
currency swap agreement, currency option or other similar agreement or
arrangement designed to protect a person against fluctuations in currency
exchange rates.
"Debt" means, with respect to any person on any date of determination
(without duplication):
(1) the principal of and premium (if any) in respect of (a) Debt of such
person for money borrowed and (b) Debt evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such person is
responsible or liable;
(2) all Capital Lease Obligations of such person and all Attributable
Debt in respect of Sale and Leaseback Transactions entered into by such
person;
(3) all obligations of such person issued or assumed as the deferred
purchase price of Property, all conditional sale obligations of such person
and all obligations of such person under any title retention agreement,
excluding trade accounts payable arising in the ordinary course of
business;
(4) all obligations of such person for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction,
other than obligations with respect to letters of credit securing
obligations, other than obligations described in (1) through (3) above,
entered into in the ordinary course of business of such person to the
extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth business day
following receipt by such person of a demand for reimbursement following
payment on the letter of credit;
(5) the amount of all obligations of such person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such person, any preferred stock,
excluding any accrued dividends;
(6) all obligations of the type referred to in clauses (1) through (5) of
other persons and all dividends of other persons for the payment of which,
in either case, such person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6) of
other persons secured by any Lien on any Property or asset of such person,
whether or not such obligation is assumed by such person, the amount of
such obligation being deemed to be the lesser of the value of such Property
or assets or the amount of the obligation so secured;
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such person; and
(9) to the extent not otherwise included in this definition, any
financing of accounts receivable or inventory of such person (whether or
not treated as a sale or Debt for accounting purposes); provided that such
accounts receivable or inventory shall be deemed to be on the consolidated
balance sheet of National Steel for purposes of clause (2)(b) of the
definition of "Permitted Debt". The amount of Debt of any person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means, with respect to any person, redeemable stock of
such person as to which the maturity, mandatory redemption, redemption at the
option of the holder thereof, conversion or exchange occurs, or may occur, on
or prior to the first anniversary of the stated maturity of the bonds;
provided, however, that redeemable stock of such person that would not
otherwise be characterized as Disqualified Stock under this definition shall
not constitute Disqualified Stock if such redeemable stock is convertible or
exchangeable into Debt solely at the option of the issuer thereof.
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"EBITDA" means, for any period, for National Steel and its consolidated
Restricted Subsidiaries, an amount equal to:
(1) the sum of Consolidated Net Income for such period, plus the
following to the extent reducing Consolidated Net Income for such period:
(a) the provision for taxes for such period based on income or
profits or utilized in computing net loss,
(b) Consolidated Interest Expense,
(c) depreciation and amortization of fixed and intangible assets and
(d) any other non-cash items (other than any such non-cash item to
the extent that it represents an accrual of or reserve for cash
expenditures in any future period, except amortization of any SFAS 106
transition obligation of National Steel), minus
(2) all non-cash items increasing Consolidated Net Income for such period
(other than any such non-cash item to the extent that it will result in the
receipt of cash payments in any future period).
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, a Restricted Subsidiary
shall be added to Consolidated Net Income to compute EBITDA only to the extent
and in the same proportion that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to us
by such Restricted Subsidiary without prior approval that has not been
obtained, pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Event of Default" means any "Event of Default" under the indenture or any
Supplemental Indenture Event of Default.
"Fair Market Value" means, with respect to any Property, the price or, in the
case of a lease, the rent which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller or lessor and a willing
buyer or lessee, neither of whom is under undue pressure or compulsion to
complete the transaction. Fair Market Value will be determined, except as
otherwise provided, (1) if such Property has a Fair Market Value equal to or
less than $10.0 million, by any officer or (2) if such Property has a Fair
Market Value in excess of $10.0 million, by a majority of the board of
directors and evidenced by a board resolution, dated within 30 days of the
relevant transaction, delivered to the trustee.
"GAAP" means United States generally accepted accounting principles as in
effect on the Series A Issue Date, including those set forth (1) in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) in the statements and
pronouncements of the Financial Accounting Standards Board, (3) in such other
statements by such other entity as approved by a significant segment of the
accounting profession and (4) the rules and regulations of the SEC governing
the inclusion of financial statements, including pro forma financial
statements, in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any person
directly or indirectly Guaranteeing any Debt of any other person and any
obligation, direct or indirect, contingent or otherwise, of such person (1) to
purchase or pay, or advance or supply funds for the purchase or payment of,
such Debt of such other person whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise or (2) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
person Guaranteeing any obligation.
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"Hedging Obligation" of any person means any obligation of such person
pursuant to any Interest Rate Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or any other similar agreement
or arrangement.
"Incur" means, with respect to any Debt or other obligation of any person, to
create, issue, Incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such Debt
or obligation on the balance sheet of such person and "Incurrence" and
"Incurred" shall have consistent meanings; provided, however, that a change in
GAAP that results in an obligation of such person that exists at such time, and
is not theretofore classified as Debt, becoming Debt shall not be deemed an
Incurrence of such Debt; provided further, however, that solely for purposes of
determining compliance with "--Certain Covenants--Limitation on Debt and
Restricted Subsidiary Preferred Stock," amortization of Debt discount shall not
be deemed to be the Incurrence of Debt, provided that in the case of Debt sold
at a discount, the amount of such Debt Incurred shall at all times be the total
principal amount at stated maturity.
"Independent Financial Advisor" means, an investment banking firm of national
standing or any third party appraiser of national standing, provided that such
firm or appraiser is not an affiliate of National Steel.
"Interest Rate Agreement" means, for any person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"Investment" by any person means any direct or indirect loan, other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such person, advance or other
extension of credit or capital contribution by means of transfers of cash or
other Property to others or payments for Property or services for the account
or use of others, or otherwise to, or Incurrence of a Guarantee of any
obligation of, or purchase or acquisition of Capital Stock, notes, bonds,
debentures or other securities or evidence of Debt issued by, any other person.
In determining the amount of any Investment made by transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such Investment.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or the
equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"Investment Grade Status" shall be deemed to have been reached on the date
that the bonds have an Investment Grade Rating from both Rating Agencies.
"Lien" means, with respect to any Property of any person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property, including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction, but excluding any operating lease (except Sale and
Leaseback Transactions) entered into in the ordinary course of such person's
business.
"Net Available Cash" from any Asset Sale means cash payments received
therefrom, including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received, but excluding any other consideration received in the
form of assumption by the acquiring person of Debt or other obligations
relating to the Property that is the subject of such Asset Sale or received in
any other noncash form, in each case net of:
(1) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale,
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(2) all payments made on any Debt which is secured by any Property
subject to such Asset Sale, in accordance with the terms of any Lien upon
or other security agreement of any kind with respect to such Property, or
which must by its terms, or in order to obtain a necessary consent to such
Asset Sale, or by applicable law, be repaid out of the proceeds from such
Asset Sale,
(3) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale and
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with the GAAP, against any liabilities associated
with the Property disposed in such Asset Sale and retained by National
Steel or any Restricted Subsidiary after such Asset Sale.
"Net Cash Proceeds" means, with respect to any issuance or sale of Capital
Stock, the cash proceeds of such issuance or sale, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Permitted Investments" means any Investment by National Steel or any
Restricted Subsidiary in any of the following:
(1)Cash Equivalents;
(2)National Steel or any Restricted Subsidiary;
(3) another person, if as a result of such Investment (a) such other person
becomes a Restricted Subsidiary or (b) such other person is merged or
consolidated with or into, or transfers or conveys all or substantially
all of its assets to, National Steel or a Restricted Subsidiary;
(4) loans or advances made to employees or directors of National Steel or
any Restricted Subsidiary in the ordinary course of business in an
total amount not to exceed US$1 million at any one time outstanding;
(5)Hedging Obligations which constitute permitted Debt;
(6) Investments consisting of non-cash consideration received in the form
of securities, bonds or similar obligations in connection with an Asset
Sale permitted by the covenant described under "Limitation on Sale of
Assets other than Mortgaged Property," or the covenant described under
"Limitation on Sale of Mortgaged Property," as applicable, provided
that the total amount of such non-cash consideration received in
connection with any such Asset Sale shall not exceed the amount
permitted under the covenant described under the "Limitation on Sale of
Assets other than Mortgaged Property" or the covenant described under
"Limitation on Sale of Mortgaged Property," as applicable;
(7) the purchase by National Steel or any Restricted Subsidiary in one or
more transactions of all or any portion of NKK's ownership interest in
DNN; and
(8) Investments in joint ventures engaged in the steel business or other
businesses reasonably related thereto in an total amount not to exceed
$20.0 million.
"Permitted Holders" means NKK U.S.A. Corporation and its affiliates.
"Permitted Refinancing Debt" means any Debt that refinances any other Debt,
including any successive refinancings, so long as:
(1) such Debt is in a total principal amount, or a total issue price, not
in excess of the sum of (a) the total principal amount or total
accreted value, then outstanding of the Debt being refinanced and (b)
an amount necessary to pay any fees and expenses, including premiums
and defeasance costs, related to such refinancing,
(2) the Average Life of such Debt is equal to or greater than the Average
Life of the Debt being refinanced,
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(3) the stated maturity of such Debt is no earlier than the stated maturity
of the Debt being refinanced and
(4) the new Debt shall not be senior in right of payment to the Debt that
is being refinanced;
provided, however, that Permitted Refinancing Debt will not include (a) Debt of
a Subsidiary that refinances Debt of National Steel or (b) Debt of National
Steel or a Restricted Subsidiary that refinances Debt of an Unrestricted
Subsidiary.
"Property" means, with respect to any person, any interest of such person in
any kind of Property or asset, whether real, personal or mixed, or tangible or
intangible, including Capital Stock in, and other securities of, any other
person. For purposes of any calculation required pursuant to the indenture, the
value of any Property shall be its Fair Market Value.
"property additions" includes any Property, including mining Property,
located within the continental United States which is:
(1) used or useful in our business,
(2) purchased, constructed or otherwise acquired subsequent to December 31,
1951,
(3) properly chargeable to plant account, and
(4) not subject to a prior lien, other than permitted liens.
Property additions do not include, among other things, (a) any Property not
subject to the lien of the indenture, (b) any good will or going concern value,
or (c) any plant or Property, other than mining Property, in which National
Steel has only a leasehold interest or, unless the same is movable physical
personal Property, any improvement or additions of, upon, or to any plant or
Property in which National Steel owns a leasehold interest.
"Rating Agencies" mean Moody's Investors Service, Inc. and Standard & Poor's
Rating Service.
"Redeemable Dividend" means, for any dividend with respect to redeemable
stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such redeemable stock.
"Redeemable Stock" means, with respect to any person, any Capital Stock that
by its terms, or by the terms of any security into which it is convertible or
for which it is exchangeable, or otherwise (1) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (2) is or may
become redeemable or repurchasable at the option of the holder thereof, in
whole or in part, or (3) is convertible or exchangeable for Debt or
Disqualified Stock.
"refundable Bonds" means, at any particular time, any bonds issued under the
indenture which were issued and paid at maturity or redeemed or purchased
otherwise than out of funds in the trust estate and surrendered to the trustee,
or otherwise surrendered to the trustee and which were not made the basis for
the authentication and delivery of additional bonds or the withdrawal of cash
or the reduction of the amount of cash required to be paid into the trust
estate, or paid or redeemed or purchased pursuant to, or used in anticipation
of, sinking fund requirements.
"Restricted Payment" means:
(1) any dividend or distribution whether made in cash, securities or
other Property declared or paid on or with respect to any shares of Capital
Stock of National Steel or any Restricted Subsidiary, including any payment
in connection with any merger or consolidation with or into National Steel
or any Restricted Subsidiary, except for any dividend or distribution which
is made solely to National Steel or a Restricted Subsidiary and, if such
Restricted Subsidiary is not a Wholly Owned Subsidiary, to the other
shareholders of such Restricted Subsidiary on a proportionate basis or any
dividend or distribution payable solely in shares of Capital Stock, other
than Redeemable Stock, of National Steel;
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(2) any payment made by National Steel or any Restricted Subsidiary to
purchase, redeem, repurchase, acquire or retire for value any Capital Stock
of National Steel or any Restricted Subsidiary, other than (a) Capital
Stock of a Wholly Owned Restricted Subsidiary or (b) from all holders of
Capital Stock of a non-Wholly Owned Restricted Subsidiary on a pro rata
basis;
(3) any payment made by National Steel or any Restricted Subsidiary to
purchase, redeem, repurchase, defease or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled sinking fund or mandatory
redemption payment, any Subordinated Obligation, other than the purchase,
repurchase, or other acquisition of any Subordinated Obligation purchased
in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date
of acquisition, or
(4) any Investment other than any Permitted Investment in any person,
including, without limitation, any Unrestricted Subsidiary.
"Restricted Subsidiary" means (1) any Subsidiary after the Series A Issue
Date unless such Subsidiary shall have been designated an Unrestricted
Subsidiary as permitted or required pursuant to "Certain Covenants--Designation
of Restricted and Unrestricted Subsidiaries" and (2) an Unrestricted Subsidiary
which is redesignated as a Restricted Subsidiary as permitted pursuant to
"Certain Covenants--Designation of Restricted and Unrestricted Subsidiaries."
"Sale and Leaseback Transaction" means any arrangement relating to Property
now owned or hereafter acquired whereby National Steel or a Restricted
Subsidiary transfers such Property to another person and then leases it from
such person, other than any such arrangement with respect to Property acquired
or placed into service by National Steel or any Restricted Subsidiary after the
Series A Issue Date to the extent entered into within 365 days after the date
of such acquisition or placement into service and not constituting a Capital
Lease Obligation.
"Senior Debt" of National Steel means:
(1) all obligations consisting of the principal, premium, if any, and
accrued interest in respect of (a) Debt for borrowed money and (b) Debt
evidenced by bonds, debentures, notes or other similar instruments
permitted under the indenture for the payment of which we are responsible
or liable;
(2) all Capital Expenditure Debt;
(3) all obligations (a) for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction or (b)
under Hedging Obligations; and
(4) all obligations of other persons of the type referred to in clauses
(1) and (2) for the payment of which we are responsible or liable as
Guarantor; provided, however, that Senior Debt shall not include (a) Debt
that is by its terms subordinate in right of payment to the bonds; (b) any
Debt Incurred in violation of the provisions of the indenture; (c) accounts
payable or any other obligations to trade creditors created or assumed in
the ordinary course of business in connection with the obtaining of
materials or services, including Guarantees thereof or instruments
evidencing such liabilities; (d) any liability for Federal, state, local or
other taxes owed or owing; (e) any obligation to any Subsidiary; or (f) any
obligations with respect to any Capital Stock.
"Series A Issue Date" means the date on which the Series A bonds were
initially issued, which was March 8, 1999.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of National Steel within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Subordinated Obligation" means any Debt of National Steel whether
outstanding on the Series A Issue Date or thereafter Incurred which is
subordinate or junior in right of payment to the bonds pursuant to a written
agreement to that effect.
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"Subsidiary" means, in respect of any specified person, any corporation,
company, partnership, joint venture, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests, including partnership interests, entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (1) such person, (2) such person and one or more Subsidiaries of
such person or (3) one or more Subsidiaries of such person.
"Supplemental Indenture Default" means any event which is, or after notice or
passage of time or both would be, a Supplemental Indenture Event of Default.
"Supplemental Indenture Event of Default" has the meaning set forth under
"Events of Default".
"Unrestricted Subsidiary" means (1) any Subsidiary in existence on the Series
A Issue Date that is not a Restricted Subsidiary; (2) any Subsidiary of an
Unrestricted Subsidiary; and (3) any Subsidiary that is designated after the
Series A Issue Date as an Unrestricted Subsidiary as permitted pursuant to the
covenant described under "Certain Covenants--Designation of Restricted and
Unrestricted Subsidiaries" and not thereafter redesignated as a Restricted
Subsidiary as permitted pursuant thereto.
"Wholly Owned Subsidiary" means, at any time, a corporation all the stock of
which, except directors' qualifying shares, where necessary, is at such time
owned, directly or indirectly, by National Steel or by one or more Wholly Owned
Subsidiaries or by National Steel and one or more Wholly Owned Subsidiaries.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes material United States federal income tax
considerations associated with the exchange of the original bonds for the
exchange bonds. This summary is based on the Internal Revenue Code of 1986, as
amended, administrative pronouncements and rulings, judicial decisions and
Treasury Regulations, changes to any of which subsequent to the date of this
prospectus may affect the tax consequences described (possibly on a retroactive
basis). This summary is limited to investors who hold and will hold the bonds
as capital assets within the meaning of Section 1221 of the tax code and does
not address holders that may be subject to special tax rules including, but not
limited to:
. financial institutions,
. insurance companies,
. dealers in securities,
. tax-exempt organizations,
. persons holding bonds as a hedge or as part of a straddle, or
. holders whose "functional currency" is not the U.S. dollar.
This summary is for general information only and does not address all aspects
of federal income taxation that may be relevant to holders of the bonds in
light of their particular circumstances. It does not address any tax
consequences arising under the laws of any state, local or foreign taxing
jurisdiction. Holders should consult their own tax advisors as to the
particular tax consequences of the exchange of original bonds for exchange
bonds and the ownership and disposition of the bonds, including the
applicability and effect of any United States federal, state, local and foreign
income and other tax laws.
As used herein, the term "United States holder" means a beneficial owner of a
bond that is for United States federal income tax purposes:
. a citizen or resident of the United States,
. a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof,
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. an estate or trust described in Section 7701(a)(30) of the tax code, or
. a person whose worldwide income or gain is otherwise subject to United
States federal income taxation regardless of its source.
As used herein, the term "United States alien holder" means an owner of a bond
that is not a United States holder.
United States Holders and United States Alien Holders
There will be no United States federal income tax consequences to any one
exchanging an original bond for an exchange bond pursuant to the exchange
offer. Such holder will have the same adjusted basis and holding period in the
exchange bond as it had in the original bond immediately before the exchange.
United States Federal Income Tax Consequences to United States Holders
Payments of Interest
Interest on a bond will be taxable to a United States holder as ordinary
income at the time it is received or accrued, depending on the United States
holder's method of accounting for tax purposes.
Sale, Exchange or Retirement of the Bonds
Upon the sale, exchange or retirement of a bond, a United States holder will
generally recognize capital gain or loss equal to the difference between the
amount realized not including any amounts attributable to accrued interest and
the United States holder's tax basis in the bond. A United States holder's tax
basis in a bond generally will be its cost. Such capital gain or loss will be
long-term if the United States holder had held the bond more than one year.
As described above, an exchange of original bonds for exchange bonds pursuant
to the exchange offer will not be treated as an exchange for United States
federal income tax purposes. Accordingly, holders who exchange their original
bonds for exchange bonds will not recognize income, gain or loss for United
States federal income tax purposes.
Market Discount
United States holders, other than original purchasers of the original bonds
in the offering, should be aware that the sale of the bonds may be affected by
the market discount provisions of the tax code.
The market discount rules generally provide that if a United States holder of
a bond
. purchased the bond, after the original offering, at a "market discount"
(i.e., at an amount less than the adjusted issue price of the bond as
determined on the date of such purchase) exceeding a statutorily-defined
de minimis amount, and
. thereafter recognizes gain upon a disposition, including a partial
redemption, of the exchange bond received in exchange for an original
bond,
the lesser of such gain or the portion of the market discount that accrued
while the exchange bond and original bond were held by such United States
holder will be treated as ordinary interest income at the time of disposition.
The rules also provide that a United States holder who acquires a bond at a
market discount may be required to defer a portion of any interest expense that
may otherwise be deductible on any indebtedness Incurred or maintained to
purchase or carry the bond until the United States holder disposes of such bond
in a taxable transaction. If a holder of such a bond elects to include market
discount in income currently, both of the preceding rules would not apply.
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United States Federal Income Tax Consequences to United States Alien Holders
Under present United States federal law and subject to the discussion below
concerning backup withholding:
(a) payments of principal and interest on the bonds by National Steel or
any paying agent to any United States alien holder will not be subject to
United States federal withholding tax, provided that, in the case of
interest, (1) such holder does not own, actually or constructively, 10% or
more of the total combined voting power of all classes of stock of National
Steel entitled to vote, is not a controlled foreign corporation related,
directly or indirectly, to National Steel through stock ownership, is not a
bank receiving interest described in Section 881(c)(3)(A) of the tax code,
and is not a foreign tax-exempt organization or a foreign private
foundation, and (2) the statement requirement set forth in Section 871(h)
or Section 881(c) of the tax code has been satisfied with respect to the
beneficial owner, as discussed below; and
(b) a United States alien holder of a bond will not be subject to United
States federal income tax on gain realized on the sale, exchange or other
disposition of such bond, unless (1) such holder is an individual who is
present in the United States for 183 days or more in the taxable year of
disposition, and either (A) such individual has a "tax home" (as defined in
tax code Section 911(d)(3)) in the United States (unless such gain is
attributable to a fixed place of business in a foreign country maintained
by such individual and has been subject to foreign tax of at least 10%) or
(B) the gain is attributable to an office or other fixed place of business
maintained by such individual in the United States or (2) such gain is
effectively connected with the conduct by such holder of a trade or
business in the United States or, if a tax treaty applies, the gain is
attributable to a United States permanent establishment of the United
States alien holder.
Sections 871(h) and 881(c) of the tax code require that, in order to qualify
for the portfolio interest exemption from withholding tax described in clause
(a) above, either the beneficial owner of the bond, or a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business and that is holding
the bond on behalf of such beneficial owner, must file a statement with the
withholding agent to the effect that the beneficial owner of the bond is not a
United States person. Such requirement will be fulfilled if the beneficial
owner of a bond certifies on IRS Form W-8 or a substantially similar substitute
form, under penalties of perjury, that it is not a United States person and
provides its name and address, and any financial institution holding the bond
on behalf of the beneficial owner files a statement with the withholding agent
to the effect that it has received such a statement from the holder (and
furnishes the withholding agent with a copy thereof).
With respect to bonds held by a foreign partnership, under current law, the
Form W-8 may be provided by the foreign partnership. However, for interest
(including original issue discount) and disposition proceeds paid with respect
to a bond after December 31, 1999, unless the foreign partnership has entered
into a withholding agreement with the IRS, a foreign partnership will be
required, in addition to providing a partnership withholding certificate on IRS
Form W-8, to attach an appropriate certification by each partner. Prospective
investors, including foreign partnerships and their partners, should consult
their tax advisors regarding possible additional reporting requirements.
A United States alien holder that does not qualify for exemption from
withholding generally will be subject to withholding of U.S. federal income tax
at the rate of 30% (or lower applicable treaty rate) on payments of interest on
the bonds.
If a United States alien holder of a bond is engaged in a trade or business
in the United States and, if interest on the bond (or gain realized on its
sale, exchange or other disposition) is effectively connected with the conduct
of such trade or business, the United States alien holder will be exempt from
the withholding tax discussed in the preceding paragraph. Unless a tax treaty
provides otherwise, such United States alien holders will generally be subject
to regular United States income tax on interest and on any gain realized on the
sale,
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exchange or other disposition of a bond in the same manner as if it were a
United States holder. See "United States Federal Income Tax Consequences to
United States Holders" above. Such a holder will be required to provide to
National Steel a properly executed IRS Form 4224 (or after December 31, 1999 an
IRS Form W-8) in order to claim an exemption from withholding tax. In addition,
if such United States alien holder is a foreign corporation, it may be subject
to a branch profits tax equal to 30% (or such lower rate provided by an
applicable treaty) of its effectively connected earnings and profits for the
taxable year, subject to certain adjustments. For purposes of the branch
profits tax, interest on and any gain recognized on the sale, exchange or other
disposition of a bond will be included in the effectively connected earnings
and profits of such United States alien holder if such interest or gain, as the
case may be, is effectively connected with the conduct by the United States
alien holder of a trade or business in the United States.
Backup Withholding and Information Reporting
In general, backup withholding at a rate of 31% will not apply to payments of
principal or interest made outside the United States by National Steel or any
paying agent thereof on a bond if the certifications required by Sections
871(h) and 881(c) of the tax code are received, provided that National Steel or
such paying agent, as the case may be, does not have actual knowledge that the
payee is a United States person.
Under current Treasury Regulations, payments on the sale, exchange or other
disposition of a bond made to or through a foreign office of a broker generally
will not be subject to backup withholding, absent actual knowledge that the
payee is a United States person. However, if such broker is: (1) a United
States person, or (2) a controlled foreign corporation for United States
federal income tax purposes or a foreign person 50% or more of whose gross
income is effectively connected with a United States trade or business for a
specified three-year period, or in the case of payments made after December 31,
1999, a foreign partnership with certain connections to the United States,
information reporting will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a United States person
and certain other conditions are met or the beneficial owner otherwise
establishes an exemption. Payments to or through the United States office of a
broker will be subject to backup withholding and information reporting unless
the holder certifies, under penalties of perjury, that it is not a United
States person or otherwise establishes an exemption.
United States alien holders of bonds should consult their tax advisors
regarding the application of information reporting and backup withholding in
their particular situations, the availability of an exemption therefrom, and
the procedure for obtaining such an exemption, if available. Backup withholding
is not an additional tax. Any amounts withheld from a payment to a United
States alien holder under the backup withholding rules will be allowed as a
credit against such holder's United States federal income tax liability and may
entitle such holder to a refund, provided that the required information is
furnished to the IRS.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives exchange bonds for its own account pursuant
to the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such exchange bonds. This prospectus, as it may
be amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of exchange bonds received in exchange for original
bonds where such original bonds were acquired as a result of market-making
activities or other trading activities. We have agreed that for a period of one
year after the expiration date, we will make this prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale.
We will not receive any proceeds from any sale of exchange bonds by broker-
dealers. Exchange bonds received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time:
. in one or more transactions in the over-the-counter market,
. in negotiated transactions,
. through the writing of options on the exchange bonds, or
. a combination of such methods of resale.
Such bonds may be sold:
. at market prices prevailing at the time of resale,
. at prices related to such prevailing market prices, or
. at negotiated prices.
Any such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer or the purchasers of any such exchange bonds.
Any broker-dealer that resells exchange bonds that were received by it for
its own account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange bonds may be deemed to be an
"underwriter" within the meaning of the Securities Act. Any profit on any such
resale of exchange bonds and any commissions or concessions received by any of
them may be deemed to be underwriting compensation under the Securities Act.
The letter of transmittal states that by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of one year after the expiration date, we will promptly send
additional copies of the prospectus and any amendment or supplement to the
prospectus to any broker-dealer requesting these copies in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the bonds, including any broker-dealers, against
certain liabilities, including liabilities under the Securities Act.
Following consummation of the exchange offer, we may, in our sole discretion,
commence one or more additional exchange offers to holders of original bonds
who did not exchange their original bonds for exchange bonds in the exchange
offer on terms which may differ from those contained in the registration rights
agreement. We may use this prospectus, as it may be amended of supplemented
from time to time, in connection with any such additional exchange offers. Such
additional exchange offers will take place from time to time until all
outstanding original bonds have been exchanged for exchange bonds.
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LEGAL MATTERS
The validity of the bonds offered hereby will be passed upon for National
Steel by Skadden, Arps, Slate, Meagher & Flom (Illinois).
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual report on form 10-K
for the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement. Our financial statements and schedule are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Exchange Act, and in
accordance with that act, we file reports, proxy statements and other
information with the SEC. You may inspect and copy such reports, proxy
statements and other information at the Public Reference Section of the SEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's
regional offices at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies may be obtained at prescribed rates. You may obtain
information on the operation of the SEC's Public Reference Room by calling the
SEC at 1-800-SEC-0330. The SEC also maintains a web site that contains reports,
proxy and information statements and other information regarding registrants
that file documents with the SEC, including National Steel, and the address is
http://www.sec.gov. Our common stock is listed on the New York Stock Exchange.
Our periodic reports and proxy statements filed under the Exchange Act as well
as other information about us can be requested at the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference the information filed by
National Steel with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and
information that we later file with the SEC will automatically update and
supersede this information. We incorporate by reference into this prospectus
the following documents or information filed with the SEC:
(1) Our Annual Report on Form 10-K for the fiscal year ended December 31,
1998;
(2) Our Proxy Statement for the 1999 Annual Meeting of Stockholders; and
(3) All documents filed by us pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of the Registration Statement of
which this prospectus is a part and before the effectiveness of such
Registration Statement and prior to the termination of the exchange offer
made by this prospectus.
Any statement contained in this prospectus or in a document incorporated or
deemed to be incorporated by reference in this prospectus will be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in the prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference in this
prospectus modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
This prospectus incorporates by reference documents that are not presented in
or delivered with it. You may obtain copies of such documents without charge,
other than exhibits to such documents that are not specifically incorporated by
reference herein, by making written or oral request to: Director, Investor
Relations, National Steel Corporation, 4100 Edison Lakes Parkway, Mishawaka,
Indiana 46545-3440, telephone (219) 273-7158. In order to assure timely
delivery, you should make such request no later than , 1999, which is five
business days before the expiration date of the exchange offer.
61
<PAGE>
- --------------------------------------------------------------------------------
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$300,000,000
National Steel Corporation
Exchange Offer
First Mortgage Bonds, 9 7/8% Series D due 2009
[NATIONAL STEEL LOGO]
--------
PROSPECTUS
May , 1999
--------
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") empowers a
corporation, subject to certain limitations, to indemnify its directors and
officers against expenses (including attorneys' fees, judgments, fines and
certain settlements) actually and reasonably incurred by them in connection
with any suit or proceeding to which they are a party so long as they acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to a criminal action or
proceeding, so long as they had no reasonable cause to believe their conduct to
have been unlawful. The
By-laws of the Company provide that the Company shall indemnify its directors
and such of its officers, employees and agents as the board of directors may
determine from time to time, to the fullest extent permitted by the DGCL.
Section 102 of the DGCL and Article Tenth of the Company's Restated
Certificate of Incorporation permit the Company to limit a director's liability
to the Company or its stockholders for monetary damages for breaches of
fiduciary duty except with respect to liability for breaches of the duty of
loyalty, acts or omissions not in good faith or involving intentional
misconduct, or knowing violation of the law, and the unlawful purchase or
redemption of stock or payment of unlawful dividends or the receipt of improper
personal benefits cannot be eliminated or limited in this manner.
The DGCL authorizes the purchase of indemnification insurance by the Company.
The Company currently maintains a policy insuring, subject to certain
exceptions, its directors and officers against liabilities which may be
incurred by such persons acting in such capacities.
In addition, the board of directors of the Company has entered into
indemnification agreements with the directors and certain officers of the
Company. Rights of directors and officers under such indemnification agreements
are not exclusive of other rights they may have under the Company's Restated
Certificate of Incorporation, the Company's By-laws or Delaware law.
The Purchase Agreement and the Registration Rights Agreement included as
exhibits to this Registration Statement provide for indemnification of
directors and officers of the Company against certain liabilities.
II-1
<PAGE>
Item 21. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
*1-A Purchase Agreement, dated as of March 3, 1999, between the Company
and Salomon Smith Barney Inc. and J.P. Morgan Securities, Inc.
(collectively the "Series A Purchasers").
*1-B Purchase Agreement, dated as of March 27, 1999, between the
Company and Salomon Smith Barney Inc. (the "Series C Purchaser").
2-A Assets Purchase Agreement between Weirton Steel Corporation and
the Company, dated as of April 29, 1983, together with collateral
agreements incident to such Assets Purchase Agreement, filed as
Exhibit 2-A to the annual report of the Company on Form 10-K for
the year ended December 31, 1995, is incorporated herein by
reference.
2-B Stock Purchase Agreement by and among NKK Corporation, National
Intergroup, Inc. and the Company, dated August 22, 1984, together
with certain collateral agreements incident to such Stock Purchase
Agreement and certain schedules to such agreements, filed as
Exhibit 2-B to the annual report of the Company on Form 10-K for
the year ended December 31, 1995, is incorporated herein by
reference.
2-C Stock Purchase and Recapitalization Agreement by and among
National Intergroup, Inc., NII Capital Corporation, NKK
Corporation, NKK U.S.A. Corporation and the Company, dated as of
June 26, 1990, filed as Exhibit 2-C to the annual report of the
Company on Form 10-K for the year ended December 31, 1995, is
incorporated herein by reference.
2-D Amendment to Stock Purchase and Recapitalization Agreement by and
among, National Intergroup, Inc., NII Capital Corporation, NKK
Corporation, NKK U.S.A. Corporation and the Company, dated July
31, 1991 filed as Exhibit 2-D to the annual report of the Company
on Form 10-K for the year ended December 31, 1997 is incorporated
herein by reference.
2-E Stock Purchase Agreement dated as of January 31, 1997 among the
Company, North Limited, NS Holdings Corporation, Bethlehem Steel
Corporation and Bethlehem Steel International Corporation filed as
Exhibit 2-A to the quarterly report of the Company on Form 10-Q
for the quarter ended June 30, 1997, is incorporated herein by
reference.
2-F Asset Purchase Agreement dated as of June 6, 1997 between EES Coke
Battery Company, Inc. and the Company, filed as Exhibit 2.1 to the
Report on Form 8-K of the Company dated June 12, 1997, is
incorporated herein by reference.
2-G Coal Inventory Purchase Agreement dated as of June 6, 1997 between
DTE Coal Services, Inc. and the Company, filed as Exhibit 2.2 to
the Report on Form 8-K of the Company dated June 12, 1997, is
incorporated herein by reference.
3-A The Sixth Restated Certificate of Incorporation of the Company,
filed as Exhibit 3.1 to the Company's Registration Statement on
Form S-1, Registration No. 33-57952, is incorporated herein by
reference.
3-B Form of Amended and Restated By-laws of the Company filed as
Exhibit 3-B to the annual report of the Company on Form 10-K for
the year ended December 31, 1996, is incorporated herein by
reference.
4-A Indenture of Mortgage and Deed of Trust, dated May 1, 1952,
between the Company and Great Lakes Steel Corporation and City
Bank Farmers Trust Company and Ralph E. Morton, as Trustee (the
"Original Indenture"), filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (Registration No. 2-9639) is
incorporated herein by reference.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
4-B Second Supplemental Indenture, dated as of January 1, 1957,
between the Company and City Bank Farmers Trust Company and
Francis M. Pitt, as Trustees, filed as Exhibit 2-C to the
Company's Registration Statement on Form S-9 (Registration No. 2-
15070) is incorporated herein by reference.
4-C Fourth Supplemental Indenture, dated as of December 1, 1960,
between the Company and First National City Trust Company and
Francis M. Pitt, as Trustees, filed as Exhibit 4(b)(5) to the
Registration Statement of M. A. Hanna Company on Form S-1
(Registration No. 2-19169) is incorporated herein by reference.
*4-D Fifth Supplemental Indenture dated as of May 1, 1962 between the
Company, First National City Trust Company, as Trustee, and First
National City Bank, as Successor Trustee.
4-E Eighth Supplemental Indenture, dated as of September 19, 1973,
between the Company and First National City Bank and E. J.
Jaworski, as Trustee, filed as Exhibit 2-I to the Company's
Registration Statement on Form S-7 (Registration No. 2-56823) is
incorporated herein by reference.
4-F Ninth Supplemental Indenture, dated as of August 1, 1976, between
the Company and Citibank, N.A., and E.J. Jaworski, as Trustees,
filed as Exhibit 2-J to the company's Registration Statement on
Form S-7 (Registration No. 2-5622916) is incorporated herein by
reference.
*4-G Tenth Supplemental Indenture, dated as of March 8, 1999, between
the Company and The Chase Manhattan Bank and Frank J. Grippo, as
Trustees.
*4-H Eleventh Supplemental Indenture, dated as of March 31, 1999,
between the Company and The Chase Manhattan Bank and Frank J.
Grippo (together with the Original Indenture and all instruments
supplemental, the "Indenture"), as Trustees.
*4-I Registration Rights Agreement, dated as of March 8, 1999, between
the Company and the Series A Purchasers.
*4-J Registration Rights Agreement, dated as of March 31, 1999, between
the Company and the Series C Purchaser.
4-K NSC Stock Transfer Agreement between National Intergroup, Inc.,
the Company, NKK Corporation and NII Capital Corporation dated
December 24, 1985, filed as Exhibit 4-A to the annual report of
the Company on Form 10-K for the year ended December 31, 1995, is
incorporated herein by reference.
4-L The Company is a party to certain long-term debt agreements where
the amount involved does not exceed 10% of the Company's total
assets. The Company agrees to furnish a copy of any such agreement
to the Commission upon request.
*5 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois).
10-A Amended and Restated Lease Agreement between the Company and
Wilmington Trust Company, dated as of December 20, 1985, relating
to the Electrolytic Galvanizing Line, filed as Exhibit 10-A to the
annual report of the Company on Form 10-K for the year ended
December 31, 1995, is incorporated herein by reference.
10-B Lease Agreement between The Connecticut National Bank as Owner
Trustee and Lessor and National Acquisition Corporation as Lessee
dated as of September 1, 1987 for the Ladle Metallurgy and Caster
Facility located at Ecorse, Michigan, filed as Exhibit 10-B to the
annual report of the Company on Form 10-K for the year ended
December 31, 1995, is incorporated herein by reference.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
10-C Lease Supplement No. 1 dated as of September 1, 1987 between The
Connecticut National Bank as Owner Trustee and National
Acquisition Corporation as the Lessee for the Ladle Metallurgy and
Caster Facility located at Ecorse, Michigan, filed as Exhibit 10-C
to the annual report of the Company on Form 10-K for the year
ended December 31, 1995, is incorporated herein by reference.
10-D Lease Supplement No. 2 dated as of November 18, 1987 between The
Connecticut National Bank as Owner Trustee and National
Acquisition Corporation as Lessee for the Ladle Metallurgy and
Caster Facility located at Ecorse, Michigan, filed as Exhibit 10-D
to the annual report of the Company on Form 10-K for the year
ended December 31, 1995, is incorporated herein by reference.
10-E Purchase Agreement dated as of March 25, 1988 relating to the
Stinson Motor Vessel among Skar-Ore Steamship Corporation,
Wilmington Trust Company, General Foods Credit Investors No. 1
Corporation, Stinson, Inc. and the Company, and Time Charter
between Stinson, Inc. and the Company, filed as Exhibit 10-E to
the annual report of the Company on Form 10-K for the year ended
December 31, 1995, is incorporated herein by reference.
10-F Purchase and Sale Agreement, dated as of May 16, 1994 between the
Company and National Steel Funding Corporation, filed as Exhibit
10-A to Amendment No. 1 to the quarterly report of the Company on
Form 10-Q/A for the quarter ended June 30, 1994, is incorporated
herein by reference.
10-G Form of Indemnification Agreement filed as Exhibit 10-R to the
Annual Report of the Company on Form 10-K for the year ended
December 31, 1996 is incorporated herein by reference.
10-H Shareholders' Agreement, dated as of September 18, 1990, among DNN
Galvanizing Corporation, 904153 Ontario Inc., National Ontario
Corporation and Galvatek America Corporation, filed as Exhibit
10.27 to the Company's Registration Statement on Form S-1,
Registration No. 33-57952, is incorporated herein by reference.
10-I Partnership Agreement, dated as of September 18, 1990, among
Dofasco, Inc., National Ontario II, Limited, Galvatek Ontario
Corporation and DNN Galvanizing Corporation, filed as Exhibit
10.28 to the Company's Registration Statement on Form S-1,
Registration No. 33-57952, is incorporated herein by reference.
10-J Amendment No. 1 to the Partnership Agreement, dated as of
September 18, 1990, among Dofasco, Inc., National Ontario II,
Limited, Galvatek Ontario Corporation and DNN Galvanizing
Corporation, filed as Exhibit 10.29 to the Company's Registration
Statement on Form S-1, Registration No. 33-57952, is incorporated
herein by reference.
10-K Receivables Purchase Agreement, dated as of May 16, 1994, among
the Company, National Steel Funding Corporation and certain
financial institutions named therein, filed as Exhibit 10-A to
Amendment No. 2 to the quarterly report of the Company on Form
10-Q/A for the quarter ended June 30, 1994, is incorporated herein
by reference.
10-L Amendment Number One to the Receivables Purchase Agreement, dated
as of May 31, 1995, among the Company, National Steel Funding
Corporation and certain financial institutions named therein,
filed as Exhibit 10-A to the quarterly report of the Company on
Form 10-Q for the quarter ended June 30, 1995, is incorporated
herein by reference.
10-M Amendment No. 2 and Consent to the Receivables Purchase Agreement,
dated as of
July 18, 1996, among the Company. National Steel Funding
Corporation and certain financial institutions named therein,
filed as Exhibit 10-A to the quarterly report of the Company on
Form 10-Q for the quarter ended September 30, 1996, is
incorporated herein by reference.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
*10-N Amended and Restated Receivables Purchase Agreement, dated as of
September 30, 1997, among the Company, National Steel Funding
Corporation and certain financial institutions named therein.
10-O Agreement for the Transfer of Employees by and between NKK
Corporation and the Company, dated as of May 1, 1995, filed as
Exhibit 10-CC to the annual report of the Company on Form 10-K for
the year ended December 31, 1995, is incorporated herein by
reference.
10-P Amendment No. 1 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation filed as Exhibit 10-NN to
the annual report of the Company on Form 10-K for the year ended
December 31, 1996, is incorporated herein by reference.
10-Q Amendment No. 2 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation filed as Exhibit 10-Q to
the annual report on Form 10-K for the year ended December 31,
1997 is incorporated herein by reference.
10-R Amendment No. 3 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation, filed as Exhibit 10-R to
the annual report on Form 10-K for the year ended December 31,
1998 is incorporated herein by reference.
10-S Agreement dated as of November 25, 1997 among the Company, Avatex
Corporation, NKK Corporation and NKK U.S.A. Corporation filed as
Exhibit 10-R to the Annual Report of the Company on Form 10-K for
the year ended December 31, 1997 is incorporated herein by
reference.
10-T 1993 National Steel Corporation Long-Term Incentive Plan, filed as
Exhibit 10.1 to the Company's Registration Statement on Form S-1,
Registration No. 33-57952, is incorporated herein by reference.
10-U 1993 National Steel Corporation Non-Employee Directors' Stock
Option Plan, filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-1, Registration
No. 33-57952, is incorporated herein by reference.
10-V Amendment Number One to the 1993 National Steel Corporation Non-
Employee Directors' Stock Option Plan, filed as Exhibit 10-A to
the quarterly report of the Company on Form 10-Q for the quarter
ended June 30, 1997, is incorporated herein by reference.
10-W Amendment Number Two to the 1993 National Steel Corporation Non-
Employee Directors' Stock Option Plan filed as Exhibit 10-V to the
Annual Report of the Company on Form 10-K for the year ended
December 31, 1997 is incorporated herein by reference.
10-X National Steel Corporation Management Incentive Compensation Plan
dated January 30, 1989, filed as Exhibit 10.3 to the Company's
Registration Statement on Form S-1, Registration No. 33-57952, is
incorporated herein by reference.
10-Y Employment contract dated April 30, 1996 between the Company and
David L. Peterson, filed as Exhibit 10-D to the quarterly report
of the Company on Form 10-Q for the quarter ended June 30, 1996,
is incorporated herein by reference.
10-Z Supplement to Employment contract dated July 30, 1996 between the
Company and David L. Peterson, filed as Exhibit 10-C to the
quarterly report of the Company on Form 10-Q for the quarter ended
September 30, 1996, is incorporated herein by reference.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
10-AA Amendment dated August 1, 1998 to Employment Contract between the
Company and David L. Peterson, filed as Exhibit 10-D to the
quarterly report of the Company for the quarter ended September
30, 1998 is incorporated herein by reference.
10-BB Amended and Restated Employment Agreement dated as of February 1,
1998 between the Company and Robert G. Pheanis filed as Exhibit
10-CC to the Annual Report of the Company on Form 10-K for the
year ended December 31, 1997 is incorporated herein by reference.
10-CC Employment contract dated May 1, 1996 between the Company and John
A. Maczuzak, filed as Exhibit 10-G to the quarterly report of the
Company on Form 10-Q for the quarter ended June 30, 1996, is
incorporated herein by reference.
10-DD Employment Contract dated as of August 1, 1998 between the Company
and Glenn H. Gage, filed as Exhibit 10-A to the quarterly report
of the Company on Form 10-Q for the quarter ended September 30,
1998 is incorporated herein by reference.
10-EE Employment Contract dated as of August 1, 1998 between the Company
and John F. Kaloski, filed as Exhibit 10-B to the quarterly report
of the Company on Form 10-Q for the quarter ended September 30,
1998 is incorporated herein by reference.
10-FF Agreement dated January 28, 1999 between the Company and John F.
Kaloski, filed as Exhibit 10-FF to the annual report of the
Company on Form 10-K for the year ended December 31, 1998 is
incorporated herein by reference.
10-GG Employment Contract dated as of September 1, 1998 between the
Company and Yutaka Tanaka, filed as Exhibit 10-C to the quarterly
report of the Company on Form 10-Q for the quarter ended September
30, 1998 is incorporated herein by reference.
10-HH Employment contract dated December 11, 1996 between the Company
and Osamu Sawaragi filed as Exhibit 10-MM to the annual report of
the Company on Form 10-K for the year ended December 31, 1996 is
incorporated herein by reference.
10-II No. 1 Continuous Galvanizing Line Turnkey Engineering and
Construction Contract dated October 23, 1998 between the Company
and NKK Steel Engineering, Inc., filed as Exhibit 10-II to the
annual report of the Company on Form 10-K for the year ended
December 31, 1998 is incorporated herein by reference.
*10-JJ Amendment No. 1, dated March 19, 1999, to No. 1 Continuous
Galvanizing Line Turnkey Engineering and Construction Contract
dated October 23, 1998 between the Company and NKK Steel
Engineering, Inc.
**12 Statement re Computation of Ratios.
**21 List of Subsidiaries of the Company.
*23-A Consent of Ernst & Young LLP.
*23-B Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois) (Filed
as part of Exhibit 5 hereto).
24 Powers of Attorney, included on the signature page of this
Registration Statement.
**25-A Statement of Eligibility and Qualification on Form T-1 under the
Trust Indenture Act of 1939 (the "Trust Indenture Act") of The
Chase Manhattan Bank, as Trustee under the Indenture.
**25-B Statement of Eligibility on Form T-2 under the Trust Indenture Act
of Frank J. Grippo, as Individual Trustee under the Indenture.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- -------------------
<C> <S>
27 Financial Data Schedule, filed as Exhibit 27 to the annual report
of the Company on Form 10-K for the year ended December 31, 1998,
is incorporated herein by reference.
*99-A Form of Letter of Transmittal.
*99-B Form of Notice of Guaranteed Delivery.
*99-C Form of Letter to Brokers.
*99-D Form of Letter to Clients.
*99-E Guidelines for certification of taxpayer identification number on
substitute Form W-9.
</TABLE>
- --------
*Filed herewith.
**Previously filed.
II-7
<PAGE>
Item 22. Undertakings.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(c) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the total,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the total, the changes in
volume and price represent no more than a 20% change in the maximum
total offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(d) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company has duly caused this Registration Statement on Form S-4 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Mishawaka, State of Indiana, on May 14, 1999.
National Steel Corporation
/s/ John A. Maczuzak
By: _________________________________
John A. Maczuzak
President and Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 14, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C> <C>
/s/ Yutaka Tanaka* Director, Chairman of the
____________________________________ Board and Chief Executive
Yutaka Tanaka Officer
/s/ Charles A. Bowsher* Director
____________________________________
Charles A. Bowsher
/s/ Edsel D. Dunford* Director
____________________________________
Edsel D. Dunford
/s/ Mitsuoki Hino* Director
____________________________________
Mitsuoki Hino
/s/ Frank J. Lucchino* Director
____________________________________
Frank J. Lucchino
/s/ Bruce K. MacLaury* Director
____________________________________
Bruce K. MacLaury
/s/ Mineo Shimura* Director
____________________________________
Mineo Shimura
/s/ Hisashi Tanaka* Director
____________________________________
Hisashi Tanaka
/s/ Sotaro Wakabayashi* Director
____________________________________
Sotaro Wakabayashi
/s/ Glenn H. Gage Senior Vice President and
____________________________________ Chief Financial Officer
Glenn H. Gage
/s/ Kirk A. Sobecki Corporate Controller
____________________________________
Kirk A. Sobecki
</TABLE>
/s/ Glenn H. Gage
*By: _____________________
Glenn H. Gage
Attorney in Fact
II-9
<PAGE>
EXHIBIT INDEX
Except for those exhibits which are incorporated by reference, as indicated
below, all exhibits are being filed along with this Registration Statement.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
*1-A Purchase Agreement, dated as of March 3, 1999, between the Company and
Salomon Smith Barney Inc. and J.P. Morgan Securities, Inc.
(collectively the "Series A Purchasers")
*1-B Purchase Agreement, dated as of March 27, 1999, between the Company
and Salomon Smith Barney Inc. (the "Series C Purchaser")
2-A Assets Purchase Agreement between Weirton Steel Corporation and the
Company, dated as of April 29, 1983, together with collateral
agreements incident to such Assets Purchase Agreement, filed as
Exhibit 2-A to the annual report of the Company on Form 10-K for the
year ended December 31, 1995, is incorporated herein by reference.
2-B Stock Purchase Agreement by and among NKK Corporation, National
Intergroup, Inc. and the Company, dated August 22, 1984, together with
certain collateral agreements incident to such Stock Purchase
Agreement and certain schedules to such agreements, filed as Exhibit
2-B to the annual report of the Company on Form 10-K for the year
ended December 31, 1995, is incorporated herein by reference.
2-C Stock Purchase and Recapitalization Agreement by and among National
Intergroup, Inc., NII Capital Corporation, NKK Corporation, NKK U.S.A.
Corporation and the Company, dated as of June 26, 1990, filed as
Exhibit 2-C to the annual report of the Company on Form 10-K for the
year ended December 31, 1995, is incorporated herein by reference.
2-D Amendment to Stock Purchase and Recapitalization Agreement by and
among, National Intergroup, Inc., NII Capital Corporation, NKK
Corporation, NKK U.S.A. Corporation and the Company, dated July 31,
1991 filed as Exhibit 2-D to the annual report of the Company on Form
10-K for the year ended December 31, 1997 is incorporated herein by
reference.
2-E Stock Purchase Agreement dated as of January 31, 1997 among the
Company, North Limited, NS Holdings Corporation, Bethlehem Steel
Corporation and Bethlehem Steel International Corporation filed as
Exhibit 2-A to the quarterly report of the Company on Form 10-Q for
the quarter ended June 30, 1997, is incorporated herein by reference.
2-F Asset Purchase Agreement dated as of June 6, 1997 between EES Coke
Battery Company, Inc. and the Company, filed as Exhibit 2.1 to the
Report on Form 8-K of the Company dated June 12, 1997, is incorporated
herein by reference.
2-G Coal Inventory Purchase Agreement dated as of June 6, 1997 between DTE
Coal Services, Inc. and the Company, filed as Exhibit 2.2 to the
Report on Form 8-K of the Company dated June 12, 1997, is incorporated
herein by reference.
3-A The Sixth Restated Certificate of Incorporation of the Company, filed
as Exhibit 3.1 to the Company's Registration Statement on Form S-1,
Registration No. 33-57952, is incorporated herein by reference.
3-B Form of Amended and Restated By-laws of the Company filed as Exhibit
3-B to the annual report of the Company on Form 10-K for the year
ended December 31, 1996, is incorporated herein by reference.
4-A Indenture of Mortgage and Deed of Trust, dated May 1, 1952, between
the Company and Great Lakes Steel Corporation and City Bank Farmers
Trust Company and Ralph E. Morton, as Trustee (the "Original
Indenture"), filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-1 (Registration No. 2-9639) is incorporated herein
by reference.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
4-B Second Supplemental Indenture, dated as of January 1, 1957, between
the Company and City Bank Farmers Trust Company and Francis M. Pitt,
as Trustees, filed as Exhibit 2-C to the Company's Registration
Statement on Form S-9 (Registration No. 2-15070) is incorporated
herein by reference.
4-C Fourth Supplemental Indenture, dated as of December 1, 1960, between
the Company and First National City Trust Company and Francis M. Pitt,
as Trustees, filed as Exhibit 4(b)(5) to the Registration Statement of
M. A. Hanna Company on Form S-1 (Registration No. 2-19169) is
incorporated herein by reference.
*4-D Fifth Supplemental Indenture dated as of May 1, 1962 between the
Company, First National City Trust Company, as Trustee, and First
National City Bank, as Successor Trustee.
4-E Eighth Supplemental Indenture, dated as of September 19, 1973, between
the Company and First National City Bank and E. J. Jaworski, as
Trustee, filed as Exhibit 2-I to the Company's Registration Statement
on Form S-7 (Registration No. 2-56823) is incorporated herein by
reference.
4-F Ninth Supplemental Indenture, dated as of August 1, 1976, between the
Company and Citibank, N.A., and E.J. Jaworski, as Trustees, filed as
Exhibit 2-J to the company's Registration Statement on Form S-7
(Registration No. 2-5622916) is incorporated herein by reference.
*4-G Tenth Supplemental Indenture, dated as of March 8, 1999, between the
Company and The Chase Manhattan Bank and Frank J. Grippo, as Trustees.
*4-H Eleventh Supplemental Indenture, dated as of March 31, 1999, between
the Company and The Chase Manhattan Bank and Frank J. Grippo (together
with the Original Indenture and all instruments supplemental, the
"Indenture"), as Trustees.
*4-I Registration Rights Agreement, dated as of March 8, 1999, between the
Company and the Series A Purchasers.
*4-J Registration Rights Agreement, dated as of March 31, 1999, between the
Company and the Series C Purchaser.
4-K NSC Stock Transfer Agreement between National Intergroup, Inc., the
Company, NKK Corporation and NII Capital Corporation dated December
24, 1985, filed as Exhibit 4-A to the annual report of the Company on
Form 10-K for the year ended December 31, 1995, is incorporated herein
by reference.
4-L The Company is a party to certain long-term debt agreements where the
amount involved does not exceed 10% of the Company's total assets. The
Company agrees to furnish a copy of any such agreement to the
Commission upon request.
*5 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois).
10-A Amended and Restated Lease Agreement between the Company and
Wilmington Trust Company, dated as of December 20, 1985, relating to
the Electrolytic Galvanizing Line, filed as Exhibit 10-A to the annual
report of the Company on Form 10-K for the year ended December 31,
1995, is incorporated herein by reference.
10-B Lease Agreement between The Connecticut National Bank as Owner Trustee
and Lessor and National Acquisition Corporation as Lessee dated as of
September 1, 1987 for the Ladle Metallurgy and Caster Facility located
at Ecorse, Michigan, filed as Exhibit 10-B to the annual report of the
Company on Form 10-K for the year ended December 31, 1995, is
incorporated herein by reference.
10-C Lease Supplement No. 1 dated as of September 1, 1987 between The
Connecticut National Bank as Owner Trustee and National Acquisition
Corporation as the Lessee for the Ladle Metallurgy and Caster Facility
located at Ecorse, Michigan, filed as Exhibit 10-C to the annual
report of the Company on Form 10-K for the year ended December 31,
1995, is incorporated herein by reference.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
10-D Lease Supplement No. 2 dated as of November 18, 1987 between The
Connecticut National Bank as Owner Trustee and National Acquisition
Corporation as Lessee for the Ladle Metallurgy and Caster Facility
located at Ecorse, Michigan, filed as Exhibit 10-D to the annual
report of the Company on Form 10-K for the year ended December 31,
1995, is incorporated herein by reference.
10-E Purchase Agreement dated as of March 25, 1988 relating to the Stinson
Motor Vessel among
Skar-Ore Steamship Corporation, Wilmington Trust Company, General
Foods Credit Investors No. 1 Corporation, Stinson, Inc. and the
Company, and Time Charter between Stinson, Inc. and the Company, filed
as Exhibit 10-E to the annual report of the Company on Form 10-K for
the year ended December 31, 1995, is incorporated herein by reference.
10-F Purchase and Sale Agreement, dated as of May 16, 1994 between the
Company and National Steel Funding Corporation, filed as Exhibit 10-A
to Amendment No. 1 to the quarterly report of the Company on Form 10-
Q/A for the quarter ended June 30, 1994, is incorporated herein by
reference.
10-G Form of Indemnification Agreement filed as Exhibit 10-R to the Annual
Report of the Company on Form 10-K for the year ended December 31,
1996 is incorporated herein by reference.
10-H Shareholders' Agreement, dated as of September 18, 1990, among DNN
Galvanizing Corporation, 904153 Ontario Inc., National Ontario
Corporation and Galvatek America Corporation, filed as Exhibit 10.27
to the Company's Registration Statement on Form S-1, Registration No.
33-57952, is incorporated herein by reference.
10-I Partnership Agreement, dated as of September 18, 1990, among Dofasco,
Inc., National Ontario II, Limited, Galvatek Ontario Corporation and
DNN Galvanizing Corporation, filed as Exhibit 10.28 to the Company's
Registration Statement on Form S-1, Registration No. 33-57952, is
incorporated herein by reference.
10-J Amendment No. 1 to the Partnership Agreement, dated as of September
18, 1990, among Dofasco, Inc., National Ontario II, Limited, Galvatek
Ontario Corporation and DNN Galvanizing Corporation, filed as Exhibit
10.29 to the Company's Registration Statement on Form S-1,
Registration No.
33-57952, is incorporated herein by reference.
10-K Receivables Purchase Agreement, date as of May 16, 1994, among the
Company, National Steel Funding Corporation and certain financial
institutions named therein, filed as Exhibit 10-A to Amendment No. 2
to the quarterly report of the Company on Form 10-Q/A for the quarter
ended June 30, 1994, is incorporated herein by reference.
10-L Amendment Number One to the Receivables Purchase Agreement, dated as
of May 31, 1995, among the Company, National Steel Funding Corporation
and certain financial institutions named therein, filed as Exhibit 10-
A to the quarterly report of the Company on Form 10-Q for the quarter
ended June 30, 1995, is incorporated herein by reference.
10-M Amendment No. 2 and Consent to the Receivables Purchase Agreement,
dated as of July 18, 1996, among the Company, National Steel Funding
Corporation and certain financial institution named therein, filed as
Exhibit 10-A to the quarterly report of the Company on Form 10-Q for
the quarter ended September 30, 1996, is incorporated herein by
reference.
*10-N Amended and Restated Receivables Purchase Agreement, dated as of
September 30, 1997, among the Company, National Steel Funding
Corporation and certain financial institutions named therein.
10-O Agreement for the Transfer of Employees by and between NKK Corporation
and the Company, dated as of May 1, 1995, filed as Exhibit 10-CC to
the annual report of the Company on Form 10-K for the year ended
December 31, 1995, is incorporated herein by reference.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
10-P Amendment No. 1 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation filed as Exhibit 10-NN to the
annual report of the Company on Form 10-K for the year ended December
31, 1996, is incorporated herein by reference.
10-Q Amendment No. 2 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation filed as Exhibit 10-Q to the
annual report on Form 10-K for the year ended December 31, 1997 is
incorporated herein by reference.
10-R Amendment No. 3 to Agreement for the Transfer of Employees by and
between the Company and NKK Corporation, filed as Exhibit 10-R to the
annual report on Form 10-K for the year ended December 31, 1998 is
incorporated herein by reference.
10-S Agreement dated as of November 25, 1997 among the Company, Avatex
Corporation, NKK Corporation and NKK U.S.A. Corporation filed as
Exhibit 10-R to the Annual Report of the Company on Form 10-K for the
year ended December 31, 1997 is incorporated herein by reference.
10-T 1993 National Steel Corporation Long-Term Incentive Plan, filed as
Exhibit 10.1 to the Company's Registration Statement on Form S-1,
Registration No. 33-57952, is incorporated herein by reference.
10-U 1993 National Steel Corporation Non-Employee Directors' Stock Option
Plan, filed as Exhibit 10.2 to the Company's Registration Statement on
Form S-1, Registration No. 33-57952, is incorporated herein by
reference.
10-V Amendment Number One to the 1993 National Steel Corporation Non-
Employee Directors' Stock Option Plan, filed as Exhibit 10-A to the
quarterly report of the Company on Form 10-Q for the quarter ended
June 30, 1997, is incorporated herein by reference.
10-W Amendment Number Two to the 1993 National Steel Corporation Non-
Employee Directors' Stock Option Plan filed as Exhibit 10-V to the
Annual Report of the Company on Form 10-K for the year ended December
31, 1997 is incorporated herein by reference.
10-X National Steel Corporation Management Incentive Compensation Plan
dated January 30, 1989, filed as Exhibit 10.3 to the Company's
Registration Statement on Form S-1, Registration No. 33-57952, is
incorporated herein by reference.
10-Y Employment contract dated April 30, 1996 between the Company and David
L. Peterson, filed as Exhibit 10-D to the quarterly report of the
Company on Form 10-Q for the quarter ended June 30, 1996, is
incorporated herein by reference.
10-Z Supplement to Employment contract dated July 30, 1996 between the
Company and David L. Peterson, filed as Exhibit 10-C to the quarterly
report of the Company on Form 10-Q for the quarter ended September 30,
1996, is incorporated herein by reference.
10-AA Amendment dated August 1, 1998 to Employment Contract between the
Company and David L. Peterson, filed as Exhibit 10-D to the quarterly
report of the Company for the quarter ended September 30, 1998 is
incorporated herein by reference.
10-BB Amended and Restated Employment Agreement dated as of February 1, 1998
between the Company and Robert G. Pheanis filed as Exhibit 10-CC to
the Annual Report of the Company on Form 10-K for the year ended
December 31, 1997 is incorporated herein by reference.
10-CC Employment contract dated May 1, 1996 between the Company and John A.
Maczuzak, filed as Exhibit 10-G to the quarterly report of the Company
on Form 10-Q for the quarter ended June 30, 1996, is incorporated
herein by reference.
10-DD Employment Contract dated as of August 1, 1998 between the Company and
Glenn H. Gage, filed as Exhibit 10-A to the quarterly report of the
Company on Form 10-Q for the quarter ended September 30, 1998 is
incorporated herein by reference.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
10-EE Employment Contract dated as of August 1, 1998 between the Company and
John F. Kaloski, filed as Exhibit 10-B to the quarterly report of the
Company on Form 10-Q for the quarter ended September 30, 1998 is
incorporated herein by reference.
10-FF Agreement dated January 28, 1999 between the Company and John F.
Kaloski, filed as Exhibit
10-FF to the annual report of the Company on Form 10-K for the year
ended December 31, 1998 is incorporated herein by reference.
10-GG Employment Contract dated as of September 1, 1998 between the Company
and Yutaka Tanaka, filed as Exhibit 10-C to the quarterly report of
the Company on Form 10-Q for the quarter ended September 30, 1998 is
incorporated herein by reference.
10-HH Employment contract dated December 11, 1996 between the Company and
Osamu Sawaragi filed as Exhibit 10-MM to the annual report of the
Company on Form 10-K for the year ended December 31, 1996 is
incorporated herein by reference.
10-II No. 1 Continuous Galvanizing Line Turnkey Engineering and Construction
Contract dated October 23, 1998 between the Company and NKK Steel
Engineering, Inc., filed as Exhibit 10-II to the annual report of the
Company on Form 10-K for the year ended December 31, 1998 is
incorporated herein by reference.
*10-JJ Amendment No. 1, dated March 19, 1999, to No. 1 Continuous Galvanizing
Line Turnkey Engineering and Construction Contract dated October 23,
1998 between the Company and NKK Steel Engineering, Inc.
**12 Statement re Computation of Ratios.
**21 List of Subsidiaries of the Company.
*23-A Consent of Ernst & Young LLP.
*23-B Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois) (Filed as
part of Exhibit 5 hereto).
24 Powers of Attorney, included on the signature page of this
registration statement.
25-A Statement of Eligibility and Qualification on Form T-1 under the Trust
Indenture Act of 1939 (the "Trust Indenture Act") of The Chase
Manhattan Bank, as Trustee under the Indenture, filed herewith.
**25-B Statement of Eligibility and Qualification on Form T-2 under the Trust
Indenture Act of Frank J. Grippo, as Individual Trustee under the
Indenture.
27 Financial Data Schedule, filed as Exhibit 27 to the annual report of
the Company on Form 10-K for the year ended December 31, 1998, is
incorporated by reference.
*99-A Form of Letter of Transmittal.
*99-B Form of Notice of Guaranteed Delivery.
*99-C Form of Letter to Brokers.
*99-D Form of Letter to Clients.
*99-E Guidelines for certification of taxpayer identification number on
substitute Form W-9.
</TABLE>
- --------
*Filed herewith.
**Previously filed.
5
<PAGE>
EXHIBIT 1-A
NATIONAL STEEL CORPORATION
$225,000,000
FIRST MORTGAGE BONDS, 9 7/8% SERIES DUE 2009
Purchase Agreement
New York, New York
March 3, 1999
SALOMON SMITH BARNEY INC.
J.P. MORGAN SECURITIES INC.
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
National Steel Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several parties named in Schedule I hereto
(the "INITIAL PURCHASERS") $225,000,000 principal amount of its First Mortgage
Bonds, 9 7/8% Series due 2009 (the "SECURITIES"). The Securities are to be
issued under the Indenture of Mortgage and Deed of Trust dated May 1, 1952 (the
"ORIGINAL INDENTURE") from the Company and Great Lakes Steel Corporation, a
former wholly-owned subsidiary of the Company which in 1966 was merged into the
Company, to City Bank Farmers Trust Company and Ralph E. Morton, as Trustees, as
supplemented by all instruments supplemental thereto, including a proposed Tenth
Supplemental Indenture to be dated as of March 8, 1999 (the TENTH SUPPLEMENTAL
INDENTURE"), among the Company and The Chase Manhattan Bank (the "TRUSTEE") and
Frank J. Grippo, as Trustees. The Original Indenture and all instruments
supplemental thereto are herein together sometimes referred to as the
"Indenture". The Securities have the benefit of the Registration Rights
Agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated as of March 8,
1999, between the Company and the Initial Purchasers, pursuant to which the
Company has agreed to register the Securities under the Securities Act subject
to the terms and conditions therein specified. The term Initial Purchasers
<PAGE>
shall mean either the singular or plural as the context requires. The use of the
neuter in this Agreement shall include the feminine and masculine wherever
appropriate. Certain terms used herein are defined in Section 17 herein.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act in reliance upon
exemptions from the registration requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated February 16, 1999 (including any
information incorporated by reference therein) (the "PRELIMINARY MEMORANDUM"),
and a final offering memorandum, dated March 3, 1999 (including any information
incorporated by reference therein)(the "FINAL MEMORANDUM"). Each of the
Preliminary Memorandum and the Final Memorandum sets forth certain information
concerning the Company and the Securities. The Company hereby confirms that it
has authorized the use of the Preliminary Memorandum and the Final Memorandum in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, all references herein to the Final Memorandum are
to the Final Memorandum at the date and time that this Agreement is executed and
delivered by the parties hereto (the "EXECUTION TIME") and are not meant to
include any amendment or supplement thereto subsequent to the Execution Time and
any references herein to the terms "AMEND", "AMENDMENT" or "SUPPLEMENT" with
respect to the Final Memorandum shall be deemed to refer to and include any
information filed under the Exchange Act, subsequent to the Execution Time which
is incorporated by reference therein.
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company represents and warrants to
------------------------------
each of the Initial Purchasers as set forth below in this Section 1.
(a) At the Execution Time and on the Closing Date, the Final
Memorandum, does not (and any amendment or supplement thereto, at the date
thereof and at the Closing Date, will not), contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation or warranty as to the information contained in or omitted
from the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers
2
<PAGE>
specifically for inclusion therein, it being understood that the only such
information is that described in Section 8 hereof.
(b) Each document filed pursuant to the Exchange Act and incorporated
by reference in the Final Memorandum, when it was filed with the
Commission, as amended at or prior to the Closing Date, conformed in all
material respects to the requirements of the Exchange Act and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Final
Memorandum when such documents are filed with the Commission, will conform
in all material respects to the requirements of the Exchange Act, and will
not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) The consolidated financial statements, and the related notes
thereto, included or incorporated by reference in the Final Memorandum
present fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
their operations and the changes in their consolidated cash flows for the
periods specified; and said consolidated financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis except as otherwise specified therein or in
the reports related thereto, and the supporting schedules included or
incorporated by reference in the Final Memorandum present fairly the
information required to be stated therein.
(d) Since the respective dates as of which information is given in
the Final Memorandum, there has not been any material adverse change in or
affecting the business, prospects, financial position or results of
operations of the Company and its subsidiaries (which term shall, for
purposes of this Agreement, be limited to entities in which the Company has
a majority interest) taken as a whole, otherwise than as set forth or
contemplated in the Final Memorandum and, except as set forth or
contemplated in the Final Memorandum neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or not
in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole.
3
<PAGE>
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Final Memorandum, and has been
duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) The Company has no "significant subsidiaries" within the meaning
of Rule 1-02 of Regulation S-X promulgated by the Commission.
(g) This Agreement has been duly authorized, executed and delivered
by the Company; the Indenture has been duly authorized and, assuming due
authorization, execution and delivery thereof by the Trustee, when executed
and delivered by the Company, will constitute a legal, valid and binding
instrument enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity; and the
Registration Rights Agreement has been duly authorized and, when executed
and delivered by the Company, will constitute the legal, valid, binding and
enforceable instrument of the Company, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
general principles of equity and except as rights to indemnification and
contribution under the Registration Rights Agreement by be limited under
applicable law.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity, and will be entitled to the
benefits of the Indenture and the Registration Rights Agreement pursuant to
which such Securities are to be issued. The Indenture creates a valid lien
on and first priority perfected security interest in the Mortgaged Property
and, on the Closing Date, will secure the payment of the Securities in
accordance with the terms thereof and, except as permitted by the
Indenture, at the Closing Date, the Mortgaged Property will be free and
clear of all liens, encumbrances, charges, claims and security interests.
On
4
<PAGE>
the Closing Date, no filings, recordings or other action will be required
in order to perfect the liens created by the Indenture except for the
filings or recordings which on or before the Closing Date will have been
duly made (or, to the extent acceptable to the Initial Purchasers in their
sole discretion, which will be made promptly after the Closing Date) with
respect to the Mortgaged Property with appropriate state and local filing
offices.
(i) Neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them or any of their respective properties is bound,
except for violations and defaults which individually and in the aggregate
are not material to the Company and its subsidiaries taken as a whole;
neither the execution and delivery of the Indenture, this Agreement or the
Registration Rights Agreement, the issue and sale of the Securities nor the
performance by the Company of its obligations under this Agreement, the
Indenture or the Registration Rights Agreement nor the consummation of the
transactions contemplated herein or therein will conflict with or result in
a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will any such action result in any
violation of the provisions of the Certificate of Incorporation or the By-
Laws of the Company or any violation by the Company of any applicable law
or statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its subsidiaries or
any of their respective properties, except for conflicts, breaches,
defaults and violations which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole; and no
consent, approval, authorization, order, registration or qualification of
or with any court or governmental agency or body is required for the issue
and sale of the Securities by the Company or the consummation by the
Company of the transactions contemplated by this Agreement, the Indenture
or the Registration Rights Agreement, except such consents, approvals,
authorizations, registrations or qualifications (i) as will be obtained
under the Securities Act and the Trust Indenture Act, (ii) as may be
required under state securities or Blue Sky Laws in connection with the
purchase and distribution of the Securities by the Initial Purchasers in
the
5
<PAGE>
manner contemplated herein and in the Final Memorandum and the Registration
Rights Agreement, and (iii) the absence of which individually and in the
aggregate both are not material to the Company and its subsidiaries taken
as a whole and would not have a material adverse effect on the sale or
ownership of the Securities.
(j) Other than as set forth or contemplated in the Final Memorandum,
there are no legal or governmental proceedings pending or, to the knowledge
of the Company, threatened to which the Company or any of its subsidiaries
is or may be a party or to which any property of the Company or any of its
subsidiaries is or may be the subject which is reasonably likely to have a
material adverse effect on the business, financial position or results of
operations of the Company and its subsidiaries, taken as a whole, or on the
ability of the Company to perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement or the Securities, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others; and there
are no statutes or regulations, the effect of which would be required by
the Securities Act to be described in a prospectus relating to a registered
offering of Securities, or contracts or other documents of a character
which would be required to be described in a prospectus relating to a
registered offering of Securities, in each case which is not so described
in the Final Memorandum in all material respects.
(k) Other than as set forth in the Final Memorandum the Company and
its subsidiaries are (i) in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
Laws described in clause (i), failure to receive required permits, licenses
or other approvals described in clause (ii) or failure to comply with the
terms and conditions of such permits, licenses or approvals described in
clause (iii) would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(l) Other than as set forth or contemplated in the Final Memorandum,
the Company has reasonably concluded that the costs and
6
<PAGE>
liabilities associated with the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(m) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license
and use its properties and assets and to conduct its business in the manner
described in the Final Memorandum except to the extent that the failure to
obtain or file would not have a material adverse effect on the Company and
its subsidiaries taken as a whole.
(n) The Company and its subsidiaries have good title to all items of
real property and personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are referred to
in the Final Memorandum or such as would not individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, existing and, subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect relating to
creditors' rights generally and general principles of equity, enforceable
leases with such exceptions as would not individually or in the aggregate
have a material adverse effect on the Company and its subsidiaries taken as
a whole.
(o) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers and stockholders of the Company or any of its subsidiaries on the
other hand, which would be required by the Securities Act to be described
in a Prospectus relating to a registered Offering of Securities which is
not so described in the Final Memorandum in all material respects.
(p) The Company has not taken nor will it take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the offering of the Securities.
7
<PAGE>
(q) None of the Company, any of its Affiliates or any person acting
on its or their behalf, has (i) sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) that is currently or will be integrated with the sale of
the Securities in a manner that would require the registration of the
Securities under the Securities Act or (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(r) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(s) None of the Company, any of its Affiliates, or any person acting
on its or their behalf, has engaged in any directed selling efforts with
respect to the Securities, and each of them has complied with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have
the meanings given to them by Regulation S.
(t) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(u) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(v) Except as contemplated by the Registration Rights Agreement, it
is not necessary in connection with the offer, sale and delivery of the
Securities in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
-----------------
upon the representations and warranties herein set forth, the Company agrees to
sell to the Initial Purchasers, and each Initial Purchaser agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 99.226% of the
principal amount thereof less a discount of 2.5% of the principal amount
thereof, the principal amount of Securities set forth opposite each Initial
Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall
--------------------
be made at 10:00 A.M., New York City time, on March 8, 1999, or such
8
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later date (not later than March 11, 1999) as the Initial Purchasers shall
designate, which date and time may be postponed by agreement between the Initial
Purchasers and the Company or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "CLOSING
DATE"). Delivery of the Securities shall be made to the Initial Purchasers
against payment by the several Initial Purchasers of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to a U.S. dollar account in New York previously designated by the Company or
such other manner of payment as may be designated by the Company and agreed to
by the Initial Purchasers not less than two business days prior to the Closing
Date. Delivery of the Securities shall be made at the office of Davis Polk &
Wardwell ("COUNSEL FOR THE INITIAL PURCHASERS"), 450 Lexington Avenue, New York,
New York. Delivery of certificates for the Securities shall be made through the
facilities of The Depository Trust Company unless the Initial Purchasers shall
otherwise instruct not less than three full business days in advance of the
Closing Date.
The Company agrees to have the certificates for the Securities available
for inspection by the Initial Purchasers in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
4. Offering by Initial Purchasers. Each Initial Purchaser (i)
------------------------------
acknowledges that the Securities have not been registered under the Securities
Act and may not be offered or sold except pursuant to Rule 144A under the
Securities Act, Regulation S or another exemption from the registration
requirements of the Securities Act or pursuant to an effective registration
statement under the Securities Act and (ii) severally and not jointly,
represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) in accordance
with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States, except pursuant to a registered public
offering as provided in the Registration Rights Agreement.
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<PAGE>
(c) It has (i) not offered or sold, and will not offer or sell, in
the United Kingdom, by means of any document, any Securities other than to
persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or as agent (except in circumstances which do not
constitute an offer to the public within the meaning of the Companies Act
1985 of Great Britain), (ii) complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) only issued or passed on,
and will only issue or pass on, in the United Kingdom any document received
by it in connection with the issue of Securities to a person who is of the
kind described in Article 9(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1988, as amended, or is a
person to whom the document may otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with each Initial Purchaser that:
----------
(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated
by reference therein, provided, however, that, prior to the completion of
the distribution of the Securities by the Initial Purchasers (as determined
by the Initial Purchasers), the Company will not file any document under
the Exchange Act that is incorporated by reference in the Final Memorandum
unless, prior to such proposed filing, the Company has furnished the
Initial Purchasers with a copy of such document for their review and has
given reasonable consideration to any comments or objections of the Initial
Purchasers prior to the filing of such document. The Company will promptly
advise the Initial Purchasers when any document filed under the Exchange
Act that is incorporated by reference in the Final Memorandum shall have
been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers, any event occurs as a result of which
the Final Memorandum, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material fact
10
<PAGE>
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Memorandum to comply with applicable law, the
Company promptly (i) will notify the Initial Purchasers of any such event;
(ii) subject to the requirements of paragraph (b) of this Section 5, will
prepare an amendment or supplement that will correct such statement or
omission or effect such compliance; and (iii) will supply any supplemented
or amended Final Memorandum to the Initial Purchasers and Counsel for the
Initial Purchasers without charge in such quantities as you may reasonably
request.
(d) Until such time as the Exchange Offer is complete, the Company
will not, nor will it permit any of its respective Affiliates to, resell
any Securities that constitute "restricted securities" under Rule 144A that
have been acquired by any of them.
(e) Except in accordance with the Registration Rights Agreement,
neither the Company, any of its or respective Affiliates, nor any person
acting on its or their behalf, will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the Securities Act.
(f) None of the Company, any of its Affiliates, or any person acting
on its or their behalf will engage in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Securities in the United States, except pursuant
to a registered public offering as provided in the Registration Rights
Agreement.
(g) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, during any period in which it is not subject to and in compliance
with Section 13 or 15(d) of the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as designated
by such holder) of such restricted securities, upon the request of such
holder or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to be
for the benefit of the holders, and the prospective purchasers designated
by such holders, from time to time of such restricted securities.
11
<PAGE>
(h) None of the Company, any of its Affiliates, or any person acting
on its or their behalf will engage in any directed selling efforts with
respect to the Securities, except pursuant to a registered public offering,
and each of them will comply with the offering restrictions requirement of
Regulation S. Terms used in this paragraph have the meanings given to them
by Regulation S.
(i) The Company will cooperate with the Initial Purchasers and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(j) The Company will not, until 180 days following the Closing Date,
without the prior written consent of Salomon Smith Barney Inc., offer, sell
or contract to sell, grant any other option to purchase or otherwise
dispose of, directly or indirectly, or announce the offering of, or file a
registration statement for, any debt securities issued or guaranteed by the
Company (other than as required under the Registration Rights Agreement).
The Company will not at any time offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any securities under circumstances
where such offer, sale, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act or the safe harbor of
Regulation S thereunder to cease to be applicable to the offer and sale of
the Securities as contemplated by this Agreement and the Final Memorandum.
(k) The Company hereby agrees to permit the Securities to be
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.
relating to trading in The PORTAL Market.
(l) The Company hereby agrees to apply the net proceeds from the sale
of the Securities as set forth in the Final Memorandum under the heading
"Use of Proceeds".
(m) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the costs and expenses incurred by the Company in
the preparation, printing and distribution of the Indenture and the
Registration Rights Agreement and the issuance of the Securities; (ii) the
fees and expenses of the Trustee; (iii) the preparation, printing or
reproduction of the Preliminary Memorandum and Final Memorandum and each
amendment or supplement to either of them; (iv) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Preliminary
12
<PAGE>
Memorandum and Final Memorandum, and all amendments or supplements to
either of them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (v) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (vi) the
printing (or reproduction) and delivery of all agreements or documents
printed (or reproduced) and delivered to the Initial Purchasers and the
prospective purchasers in connection with the offering of the Securities;
(vii) any registration or qualification of the Securities for offer and
sale under the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for the Initial
Purchasers relating to such registration and qualification); (viii)
admitting the Securities for trading in the PORTAL Market; (ix) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (x) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company; and (xi) all other costs and expenses incurred by the
Company in the performance of its obligations hereunder.
6. Conditions to the Obligations of the Initial Purchasers. The
-------------------------------------------------------
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time, and the Closing Date, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel for the
Company, shall have furnished to the Representatives its written opinion,
dated the Closing Date, in the form of Exhibit B hereto.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of the State of New York, upon the opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, (B) as to matters involving the
application of laws other than the laws of the United States and the State of
New York and the General Corporation Law of the State of Delaware, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (reasonably satisfactory to Initial Purchasers'
counsel) of other counsel reasonably acceptable to the Initial Purchasers'
counsel, familiar with the applicable laws; and (C) as to matters of fact, to
the extent such counsel deems proper, on certificates of responsible officers of
the Company, accountants and engineers and certificates or other written
statements of officials
13
<PAGE>
of jurisdictions having custody of documents respecting the corporate existence
or good standing of the Company. For purposes of rendering such opinions,
compliance with financial covenants contained in any indenture, mortgage, deed
of trust, loan agreement or other material agreement or instrument relating to
the Company or any of its subsidiaries shall be deemed to be a question of fact.
With respect to the matters to be covered in subparagraph (viii) above, counsel
may state that (A) they are not passing upon the adequacy of the derivation or
compilation from Company financial statements or financial records of any
financial or statistical data and (B) their opinion and belief is based upon
their participation in the preparation of the Final Memorandum and any amendment
or supplement thereto and review and discussion of the contents thereof but is
without independent check or verification except as specified.
All references in this Section 6 to the Final Memorandum shall be deemed to
include any amendment or supplement thereto at the Closing Date.
(b) Yukevich, Murchetti, Liekar & Zangrilli special counsel for the
Company, shall have furnished to the Initial Purchasers their written
opinion, dated the Closing Date, in the form of Exhibit C hereto.
In rendering such opinions, such counsel may (A) rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and (B) state that they are not
passing upon the adequacy or accuracy of the derivation or compilation from
Company financial statements or financial records of any financial or
statistical data.
(c) The Initial Purchasers shall have received from Davis Polk &
Wardwell, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Initial Purchasers, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
14
<PAGE>
have carefully examined the Final Memorandum, any amendment or supplement
to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst & Young LLP
shall have furnished to the Initial Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchasers.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (e)
of this Section 6, or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole judgment of the Initial Purchasers, so material and adverse as
to make it impractical to market the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
15
<PAGE>
(g) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of the Securities or any of the Company's other
debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act) or (ii) any notice given of any intended or potential decrease in any
such rating or that such organization has under surveillance or review
(other than any such notice with positive implications of a possible
upgrading) its rating of the Securities or any of the Company's other debt
securities.
(h) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(i) The Company shall have furnished to the Trustee a certified
resolution in accordance with Section 3.03(a) of the Original Indenture.
(j) The Company shall have furnished to the Trustee an officer's
certificate, as to all conditions precedent relating to authentication of
the Securities being satisfied and no defaults existing under the
Indenture, in accordance with Section 3.03(b) and Section 16.01(a) of the
Original Indenture.
(k) The Company shall have requested and caused Douglas, Alexa,
Koppen & Hurley, Sorling, Northrup, Hanna, Cullen and Cochran, Ltd. and
Clark Hill PLC, special counsel for the Company to furnish the Trustee and
the Initial Purchasers their opinion, dated the Closing Date, to the effect
set forth in Section 3.03(c), Section 3.05(e), Section 3.05(f) and Section
16.01(b) of the Original Indenture.
(l) The Company shall have furnished to the Trustee the Tenth
Supplemental Indenture.
(m) The Company shall have furnished to the Trustee an officers'
certificate with respect to (i) the net bondable value of property
additions in accordance with Section 3.05(a) of the Original Indenture and
(ii) the value of available refundable Bonds in accordance with Section
3.09(a) of the Original Indenture.
(n) The Company shall have furnished to the Trustee an engineer's
certificate in accordance with Section 3.05(b) of the Original Indenture.
16
<PAGE>
(o) The Company shall have furnished to the Trustee an independent
accountant's certificate in accordance with Section 3.05(d) and Section
16.01(c) of the Original Indenture.
(p) The Company shall have furnished to the Initial Purchasers an
insurance certificate of its independent consultant substantially in the
form delivered annually under Section 4.06 of the Indenture.
(q) At or before the Closing Date (i) evidence (including without
limitation, the results of lien and title searches) reasonably satisfactory
to the Initial Purchasers of the absence of any liens other than permitted
liens on any of the Mortgaged Property shall have been furnished to the
Initial Purchasers, and (ii) such evidence of the completion of all
recordings and filings of the Indenture, and of the execution, delivery,
recording and or filing of such other documents, as may be necessary or, in
the reasonable opinion of the Initial Purchasers, desirable to create or
perfect the liens created, or purported or intended to be created, by the
Indenture shall have been furnished to the Initial Purchasers.
(r) On or prior to the Closing Date the Company shall have furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and Counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 13 will be delivered
at the office of Counsel for the Initial Purchasers, at 450 Lexington Avenue,
New York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
-------------------------
herein is not consummated because of any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply
17
<PAGE>
with any provision hereof, in each case other than by reason of a default by any
of the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Salomon Smith Barney, Inc. upon demand for all reasonable out-
of-pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, each director, officer,
employee and agent of any Initial Purchaser and each other person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several (including, without limitation,
the reasonable legal fees and other reasonable expenses incurred in connection
with any suit, action or proceeding or any claim asserted), to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum, the Final
Memorandum (or in any supplement or amendment thereto), or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of either Initial Purchasers specifically for
inclusion therein, it being understood that the only such information is that
described in Section 8(b). This indemnity agreement will be in addition to any
liability that the Company may otherwise have. Such indemnity with respect to
the Preliminary Memorandum shall not inure to the benefit of either Initial
Purchaser (or any of the directors, officers, employees and agents of such
Initial Purchaser) from whom the person asserting any such loss, claim, damage
or liability purchased the Securities that are the subject thereof if such
person did not receive a copy of the Final Memorandum as amended or supplemented
at or prior to the confirmation of the sale of such Securities to such person in
any case where the untrue statement or omission of a material fact
18
<PAGE>
contained in such Preliminary Memorandum was corrected in the Final Memorandum
as amended or supplemented and the sale to the person asserting any such loss,
claim, damage or liability was an initial resale of such Securities by such
Initial Purchaser.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless each of the Company, its directors and
officers, and each other person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the same extent as the foregoing indemnity from the
Company to the Initial Purchasers, but only with reference to written
information relating to such Initial Purchasers furnished to the Company by
or on behalf of the Initial Purchasers specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment thereof
or supplement thereto). This indemnity agreement will be in addition to any
liability that the Initial Purchasers may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page, the first paragraph on page 3 and the penultimate paragraph
under the heading "Plan of Distribution" in the Preliminary Memorandum and
the Final Memorandum constitute the only information furnished in writing
by or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment thereof or
supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
7,8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7,8, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses; and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b) above.
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
19
<PAGE>
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. It is understood and
agreed, however, that the indemnifying party shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate counsel for
all such indemnified parties (and any local counsel) and that all such fees
and expenses shall be reimbursed as they are incurred. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify any indemnified party from and against any loss or liability by
reason of such settlement or judgment except as otherwise provided herein.
An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding. An indemnifying party shall not be liable for any settlement of
an action or claim without its written consent.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 7,8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason except by virtue of the last sentence of
Section 7(a), the Company and the Initial Purchasers agree to contribute to
the aggregate losses, claims, damages and liabilities (including legal or
20
<PAGE>
other expenses reasonably incurred in connection with investigating or
defending same) (collectively "LOSSES") to which the Company or either of
the Initial Purchasers may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand or
the Initial Purchasers on the other, as applicable, from the offering of
the Securities; provided, however, that in no case shall any Initial
Purchaser (except as may be provided in any agreement among the Initial
Purchasers relating to the offering of the Securities) be responsible for
any amount in excess of the purchase discount or commission applicable to
the Securities purchased by such Initial Purchaser hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Initial Purchasers shall contribute in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand or the
Initial Purchasers on the other hand, as applicable, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering of the
Securities (before deducting expenses), and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions, in each case as set forth on the cover page of
the Final Memorandum. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the Company on the one hand, or the Initial Purchasers on the
other, the intent of the parties and their relative knowledge, information
and opportunity to correct or prevent such untrue statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 8(d) are several in
proportion to their respective purchase obligations and not joint. For
purposes of this Section 7,8, each person who controls an Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and each director, officer, employee and such agent of an
Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange
21
<PAGE>
Act and each officer and director of the Company shall have the same rights
to contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (d).
The indemnity and contribution agreements contained in this Section 8 are
in addition to any liability which the indemnifying parties may otherwise have
to the indemnified parties referred to above. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser or any person
controlling any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of and payment for any of the Securities.
9. Default by an Initial Purchaser. If any of the Initial Purchasers
-------------------------------
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchaser shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Securities, and if
such non-defaulting Initial Purchaser does not purchase all the Securities, this
Agreement will terminate without liability to the non-defaulting Initial
Purchaser or the Company. In the event of a default by an Initial Purchaser as
set forth in this Section 9, the Closing Date shall be postponed for such
period, not exceeding seven days, as the non-defaulting Initial Purchaser shall
determine in order that the required changes in the Final Memorandum or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve a defaulting Initial Purchaser of its liability, if any,
to the Company or the non-defaulting Initial Purchaser for damages occasioned by
its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in any of the Company's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Initial Purchasers, impracticable or inadvisable
to proceed with the offering or delivery
22
<PAGE>
of the Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers, the Company or
any of the officers, directors or controlling persons referred to in Section 7,
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections and 7, 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to the Initial Purchasers, will be mailed,
delivered or sent by fax and confirmed to them, care of Salomon Smith Barney
Inc., General Counsel (fax no.: (212) 816-7912) and confirmed to the General
Counsel, Salomon Smith Barney Inc. at 388 Greenwich Street, New York, New York
10013 Attention: General Counsel; or, if sent to the Company will be mailed,
delivered or faxed to (219) 273-7609 and confirmed to it at 4100 Edison Lakes
Parkway, Mishawaka, Indiana 46545-3440 Attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS THEREOF).
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
--------
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
-----------
shall have the meanings indicated.
23
<PAGE>
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
24
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement among the
Company and the Initial Purchasers.
Very truly yours,
NATIONAL STEEL CORPORATION
By: /s/ William E. McDonough
------------------------------
Name: William E. McDonough
Title: Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
J.P. MORGAN SECURITIES INC.
By: SALOMON SMITH BARNEY INC.
By: /s/ David R. Dowdle
____________________________
Name: David R. Dowdle
Title: Associate
25
<PAGE>
SCHEDULE I
PRINCIPAL
AMOUNT OF SECURITIES
INITIAL PURCHASERS TO BE PURCHASED
- ------------------ --------------------
Salomon Smith Barney Inc................ $ 157,500,000
J.P. Morgan Securities Inc.............. 67,500,000
--------------------
Total............................ $ 225,000,000
<PAGE>
EXHIBIT 1-B
NATIONAL STEEL CORPORATION
$75,000,000
FIRST MORTGAGE BONDS, 9 7/8% SERIES C DUE 2009
Purchase Agreement
New York, New York
March 24, 1999
SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
National Steel Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Salomon Smith Barney Inc. hereto
(the "INITIAL PURCHASER") $75,000,000 principal amount of its First Mortgage
Bonds, 9 7/8% Series C due 2009 (the "SECURITIES"). The Securities are to be
issued under the Indenture of Mortgage and Deed of Trust dated May 1, 1952 (the
"ORIGINAL INDENTURE") from the Company and Great Lakes Steel Corporation, a
former wholly-owned subsidiary of the Company which in 1966 was merged into the
Company, to City Bank Farmers Trust Company and Ralph E. Morton, as Trustees, as
supplemented by all instruments supplemental thereto, including a proposed
Eleventh Supplemental Indenture to be dated as of March 31, 1999 (the "ELEVENTH
SUPPLEMENTAL INDENTURE"), among the Company and The Chase Manhattan Bank (the
"TRUSTEE") and Frank J. Grippo, as Trustees. The Original Indenture and all
instruments supplemental thereto are herein together sometimes referred to as
the "Indenture". The Securities have the benefit of the Registration Rights
Agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated as of March 31,
1999, between the Company and the Initial Purchaser, pursuant to which the
Company has agreed to register the Securities under the Securities Act subject
to the terms and conditions therein specified. The use of the neuter in this
Agreement shall include the feminine and masculine wherever appropriate. Certain
terms used herein are defined in Section 17 herein.
<PAGE>
The sale of the Securities to the Initial Purchaser will be made without
registration of the Securities under the Securities Act in reliance upon
exemptions from the registration requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared a
final offering memorandum, dated March 24, 1999 (including any information
incorporated by reference therein, the "FINAL MEMORANDUM"). The Final Memorandum
sets forth certain information concerning the Company and the Securities. The
Company hereby confirms that it has authorized the use of the the Final
Memorandum in connection with the offer and sale of the Securities by the
Initial Purchaser. Unless stated to the contrary, all references herein to the
Final Memorandum are to the Final Memorandum at the date and time that this
Agreement is executed and delivered by the parties hereto (the "EXECUTION TIME")
and are not meant to include any amendment or supplement thereto subsequent to
the Execution Time and any references herein to the terms "amend", "amendment"
or "supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Exchange Act, subsequent to the
Execution Time which is incorporated by reference therein.
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company represents and warrants to
------------------------------
the Initial Purchaser as set forth below in this Section 1.
(a) At the Execution Time and on the Closing Date, the Final
Memorandum does not (and any amendment or supplement thereto, at the date
thereof and at the Closing Date, will not) contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representation or warranty as to the information contained in or omitted
from the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchaser specifically for
inclusion therein, it being understood that the only such information is
that described in Section 8(b) hereof.
(b) Each document filed pursuant to the Exchange Act and incorporated
by reference in the Final Memorandum, when it was filed with the
Commission, as amended at or prior to the Closing Date, conformed in all
material respects to the requirements of the Exchange Act
2
<PAGE>
and none of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
any further documents so filed and incorporated by reference in the Final
Memorandum when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act, and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(c) The consolidated financial statements, and the related notes thereto,
included or incorporated by reference in the Final Memorandum present fairly the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the changes in
their consolidated cash flows for the periods specified; and said consolidated
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis except as otherwise
specified therein or in the reports related thereto, and the supporting
schedules included or incorporated by reference in the Final Memorandum present
fairly the information required to be stated therein.
(d) Since the respective dates as of which information is given in the
Final Memorandum, there has not been any material adverse change in or affecting
the business, prospects, financial position or results of operations of the
Company and its subsidiaries (which term shall, for purposes of this Agreement,
be limited to entities in which the Company has a majority interest) taken as a
whole, otherwise than as set forth or contemplated in the Final Memorandum and,
except as set forth or contemplated in the Final Memorandum neither the Company
nor any of its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the Company and
its subsidiaries taken as a whole.
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation,
with corporate power and authority to own its properties and conduct its
business as described in the Final Memorandum, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good
3
<PAGE>
standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(f) The Company has no "significant subsidiaries" within the meaning of
Rule 1-02 of Regulation S-X promulgated by the Commission.
(g) This Agreement has been duly authorized, executed and delivered by the
Company; the Indenture has been duly authorized and, assuming due authorization,
execution and delivery thereof by the Trustee, when executed and delivered by
the Company, will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity; and the Registration Rights Agreement has been
duly authorized and, when executed and delivered by the Company, will constitute
the legal, valid, binding and enforceable instrument of the Company, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity and except as rights to
indemnification and contribution under the Registration Rights Agreement may be
limited under applicable law.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchaser in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement pursuant to which such Securities are to be
issued. The Indenture creates a valid lien on and first priority perfected
security interest in the Mortgaged Property and, on the Closing Date, will
secure the payment of the Securities in accordance with the terms thereof and,
except as permitted by the Indenture, at the Closing Date, the Mortgaged
Property will be free and clear of all liens, encumbrances, charges, claims and
security interests. On the Closing Date, no filings, recordings or other action
will be required in order to perfect the liens created by the Indenture except
for the filings or recordings which on or before the Closing Date will have been
duly made (or, to the extent acceptable to the Initial Purchaser in its sole
discretion, which will be made promptly after the Closing Date) with respect to
the Mortgaged Property with appropriate state and local filing offices.
4
<PAGE>
(i) Neither the Company nor any of its subsidiaries is, or with the giving
of notice or lapse of time or both would be, in violation of or in default
under, its Certificate of Incorporation or By-Laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them or
any of their respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the Company and its
subsidiaries taken as a whole; neither the execution and delivery of the
Indenture, this Agreement or the Registration Rights Agreement, the issue and
sale of the Securities nor the performance by the Company of its obligations
under this Agreement, the Indenture or the Registration Rights Agreement nor the
consummation of the transactions contemplated herein or therein will conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will any such action result in any violation of the provisions of
the Certificate of Incorporation or the By-Laws of the Company or any violation
by the Company of any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Company, its subsidiaries or any of their respective properties, except for
conflicts, breaches, defaults and violations which individually and in the
aggregate are not material to the Company and its subsidiaries taken as a whole;
and no consent, approval, authorization, order, registration or qualification of
or with any court or governmental agency or body is required for the issue and
sale of the Securities by the Company or the consummation by the Company of the
transactions contemplated by this Agreement, the Indenture or the Registration
Rights Agreement, except such consents, approvals, authorizations, registrations
or qualifications (i) as will be obtained under the Securities Act and the Trust
Indenture Act, (ii) as may be required under state securities or Blue Sky Laws
in connection with the purchase and distribution of the Securities by the
Initial Purchaser in the manner contemplated herein and in the Final Memorandum
and the Registration Rights Agreement, and (iii) the absence of which
individually and in the aggregate both are not material to the Company and its
subsidiaries taken as a whole and would not have a material adverse effect on
the sale or ownership of the Securities.
(j) Other than as set forth or contemplated in the Final Memorandum, there
are no legal or governmental proceedings pending or,
5
<PAGE>
to the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject which is reasonably likely to have
a material adverse effect on the business, financial position or results of
operations of the Company and its subsidiaries, taken as a whole, or on the
ability of the Company to perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement or the Securities, and, to the best
of the Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and there are no statutes
or regulations, the effect of which would be required by the Securities Act to
be described in a prospectus relating to a registered offering of Securities, or
contracts or other documents of a character which would be required to be
described in a prospectus relating to a registered offering of Securities, in
each case which is not so described in the Final Memorandum in all material
respects.
(k) Other than as set forth in the Final Memorandum the Company and its
subsidiaries are (i) in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws described in
clause (i), failure to receive required permits, licenses or other approvals
described in clause (ii) or failure to comply with the terms and conditions of
such permits, licenses or approvals described in clause (iii) would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(l) Other than as set forth or contemplated in the Final Memorandum, the
Company has reasonably concluded that the costs and liabilities associated with
the effect of Environmental Laws on the business, operations and properties of
the Company and its subsidiaries (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties) would not, individually or in the aggregate, have a material
adverse effect on the Company and its subsidiaries taken as a whole.
6
<PAGE>
(m) Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Final Memorandum except to
the extent that the failure to obtain or file would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(n) The Company and its subsidiaries have good title to all items of real
property and personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are referred to in the Final
Memorandum or such as would not individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole; and any
real property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, existing and, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect
relating to creditors' rights generally and general principles of equity,
enforceable leases with such exceptions as would not individually or in the
aggregate have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(o) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers
and stockholders of the Company or any of its subsidiaries on the other hand,
which would be required by the Securities Act to be described in a Prospectus
relating to a registered Offering of Securities which is not so described in the
Final Memorandum in all material respects.
(p) The Company has not taken nor will it take, directly or indirectly,
any action prohibited by Regulation M under the Exchange Act in connection with
the offering of the Securities.
(q) None of the Company, any of its Affiliates or any person acting on its
or their behalf, has (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) that is currently or will be integrated with the sale of the Securities in
a manner that would require the registration of the Securities under the
Securities Act or (ii) engaged in any form of general solicitation
7
<PAGE>
or general advertising (within the meaning of Regulation D) in connection
with any offer or sale of the Securities in the United States.
(r) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(s) None of the Company, any of its Affiliates, or any person acting
on its or their behalf, has engaged in any directed selling efforts with
respect to the Securities, and each of them has complied with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have
the meanings given to them by Regulation S.
(t) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(u) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(v) Except as contemplated by the Registration Rights Agreement, it is
not necessary in connection with the offer, sale and delivery of the
Securities in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act.
2 . Purchase and Sale. Subject to the terms and conditions and in reliance
-----------------
upon the representations and warranties herein set forth, the Company agrees to
sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from
the Company, at a purchase price of 102 1/4% of the principal amount thereof
less a discount of 2% of the principal amount thereof,plus an amount equal to
accured interest on the Securities from March 8, 1999 to the date of delivery,
the Securities.
3. Delivery and Payment. Delivery of and payment for the Securities shall
--------------------
be made at 10:00 A.M., New York City time, on March 31, 1999, or such later date
(not later than April 2, 1999) as the Initial Purchaser shall designate, which
date and time may be postponed by agreement between the Initial Purchaser and
the Company or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "CLOSING DATE"). Delivery
of the Securities shall be made to the Initial Purchaser against payment by the
several Initial Purchaser of the purchase price thereof to or upon the order of
the Company by wire transfer payable in same-day funds to a U.S. dollar account
in New York previously
8
<PAGE>
designated by the Company or such other manner of payment as may be designated
by the Company and agreed to by the Initial Purchaser not less than two
business days prior to the Closing Date. Delivery of the Securities shall be
made at the office of Davis Polk & Wardwell ("COUNSEL FOR THE INITIAL
PURCHASER"), 450 Lexington Avenue, New York, New York. Delivery of certificates
for the Securities shall be made through the facilities of The Depository Trust
Company unless the Initial Purchaser shall otherwise instruct not less than
three full business days in advance of the Closing Date.
The Company agrees to have the certificates for the Securities available
for inspection by the Initial Purchaser in New York, New York, not later than
1:00 PM on the business day prior to the Closing Date.
4. Offering by Initial Purchasers. The Initial Purchaser (i)
------------------------------
acknowledges that the Securities have not been registered under the Securities
Act and may not be offered or sold except pursuant to Rule 144A under the
Securities Act, Regulation S or another exemption from the registration
requirements of the Securities Act or pursuant to an effective registration
statement under the Securities Act and (ii) represents and warrants to and
agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A or (ii) in accordance
with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D) in the United States, except pursuant to a registered public
offering as provided in the Registration Rights Agreement.
(c) It has (i) not offered or sold, and will not offer or sell, in the
United Kingdom, by means of any document, any Securities other than to
persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or as agent (except in circumstances which do not
constitute an offer to the public within the meaning of the Companies Act
1985 of Great Britain), (ii) complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom with
respect to anything done by it in relation to the Securities in, from or
9
<PAGE>
otherwise involving the United Kingdom, and (iii) only issued or passed on, and
will only issue or pass on, in the United Kingdom any document received by it in
connection with the issue of Securities to a person who is of the kind described
in Article 9(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1988, as amended, or is a person to whom the document may
otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with each Initial Purchaser that:
----------
(a) The Company will furnish to each Initial Purchaser and to Counsel for
the Initial Purchaser, without charge, during the period referred to in
paragraph (c) below, as many copies of the Final Memorandum and any amendments
and supplements thereto as it may reasonably request.
(b) The Company will not amend or supplement the Final Memorandum, other
than by filing documents under the Exchange Act that are incorporated by
reference therein, provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchaser (as determined by the
Initial Purchaser), the Company will not file any document under the Exchange
Act that is incorporated by reference in the Final Memorandum unless, prior to
such proposed filing, the Company has furnished the Initial Purchaser with a
copy of such document for its review and has given reasonable consideration to
any comments or objections of the Initial Purchaser prior to the filing of such
document. The Company will promptly advise the Initial Purchaser when any
document filed under the Exchange Act that is incorporated by reference in the
Final Memorandum shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the Securities
by the Initial Purchaser, any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company promptly (i) will
notify the Initial Purchaser of any such event; (ii) subject to the
requirements of paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final Memorandum
to the Initial Purchaser and
10
<PAGE>
Counsel for the Initial Purchaser without charge in such quantities as you may
reasonably request.
(d) Until such time as the Exchange Offer is complete, the Company will
not, nor will it permit any of its respective Affiliates to, resell any
Securities that constitute "restricted securities" under Rule 144A that have
been acquired by any of them.
(e) Except in accordance with the Registration Rights Agreement, neither
the Company, any of its or respective Affiliates, nor any person acting on its
or their behalf, will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
(f) None of the Company, any of its Affiliates, or any person acting on
its or their behalf will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States, except pursuant to a registered
public offering as provided in the Registration Rights Agreement.
(g) So long as any of the Securities are "restricted securities" within
the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during
any period in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, provide to each holder of such restricted securities
and to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective purchaser,
any information required to be provided by Rule 144A(d)(4) under the Securities
Act. This covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of such
restricted securities.
(h) None of the Company, any of its Affiliates, or any person acting on
its or their behalf will engage in any directed selling efforts with respect to
the Securities, except pursuant to a registered public offering, and each of
them will comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by Regulation S.
11
<PAGE>
(i) The Company will cooperate with the Initial Purchaser and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(j) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Initial Purchaser, offer, sell or
contract to sell, grant any other option to purchase or otherwise dispose of,
directly or indirectly, or announce the offering of, or file a registration
statement for, any debt securities issued or guaranteed by the Company (other
than as required under the Registration Rights Agreement). The Company will not
at any time offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale, contract
or disposition would cause the exemption afforded by Section 4(2) of the
Securities Act or the safe harbor of Regulation S thereunder to cease to be
applicable to the offer and sale of the Securities as contemplated by this
Agreement and the Final Memorandum.
(k) The Company hereby agrees to permit the Securities to be designated
PORTAL eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. relating to trading in The
PORTAL Market.
(l) The Company hereby agrees to apply the net proceeds from the sale of
the Securities as set forth in the Final Memorandum under the heading "Use of
Proceeds".
(m) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the costs and expenses incurred by the Company in the
preparation, printing and distribution of the Indenture and the Registration
Rights Agreement and the issuance of the Securities; (ii) the fees and expenses
of the Trustee; (iii) the preparation, printing or reproduction of the
Preliminary Memorandum and Final Memorandum and each amendment or supplement to
either of them; (iv) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Final Memorandum, and all amendments or supplements to it, as may,
in each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (v) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (vi) the printing (or reproduction) and delivery of all agreements
or documents printed (or reproduced) and delivered to the Initial Purchaser and
the prospective
12
<PAGE>
purchasers in connection with the offering of the Securities; (vii) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of Counsel for the Initial
Purchaser relating to such registration and qualification); (viii)
admitting the Securities for trading in the PORTAL Market; (ix) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers
of the Securities; (x) the fees and expenses of the Company's accountants
and the fees and expenses of counsel (including local and special counsel)
for the Company; and (xi) all other costs and expenses incurred by the
Company in the performance of its obligations hereunder.
(n) The Company agrees that the Registration Rights Agreement shall
provide that the Company shall offer to exchange the Securities and the
$225 million principal amount of the Company's First Mortgage Bonds, 9 7/8%
Series A due 2009 issued March 8, 1999, for new first mortgage bonds
registered under the Securities Act that will have the same terms as the
Securities and will be treated as a single series under the Indenture with
the same CUSIP number.
6. Conditions to the Obligation of the Initial Purchaser. The obligation
-----------------------------------------------------
of the Initial Purchaser to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein at the Execution Time, and the Closing Date, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel for the
Company, shall have furnished to the Representatives its written opinion,
dated the Closing Date, in the form of Exhibit B hereto.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws of the State of New York, upon the opinion of
Skadden, Arps, Slate, Meagher & Flom LLP, (B) as to matters involving the
application of laws other than the laws of the United States and the State of
New York and the General Corporation Law of the State of Delaware, to the extent
such counsel deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (reasonably satisfactory to Counsel for the
Initial Purchaser) of other counsel reasonably acceptable to the Counsel for the
Initial Purchaser, familiar with the applicable laws; and (C) as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, accountants and engineers and certificates or other
written statements of officials of jurisdictions having custody of documents
respecting the corporate
13
<PAGE>
existence or good standing of the Company. For purposes of rendering such
opinions, compliance with financial covenants contained in any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument relating to the Company or any of its subsidiaries shall be deemed to
be a question of fact. With respect to the matters to be covered in subparagraph
(viii) above, counsel may state that (A) they are not passing upon the adequacy
of the derivation or compilation from Company financial statements or financial
records of any financial or statistical data and (B) their opinion and belief is
based upon their participation in the preparation of the Final Memorandum and
any amendment or supplement thereto and review and discussion of the contents
thereof but is without independent check or verification except as specified.
All references in this Section 6 to the Final Memorandum shall be deemed to
include any amendment or supplement thereto at the Closing Date.
(b) Yukevich, Murchetti, Liekar & Zangrilli special counsel for the
Company, shall have furnished to the Initial Purchaser their written
opinion, dated the Closing Date, in the form of Exhibit C hereto.
In rendering such opinions, such counsel may (A) rely as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and (B) state that they are not
passing upon the adequacy or accuracy of the derivation or compilation from
Company financial statements or financial records of any financial or
statistical data.
(c) The Initial Purchaser shall have received from Davis Polk &
Wardwell, Counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date and addressed to the Initial Purchaser, with respect
to the issuance and sale of the Securities, the Indenture, the Registration
Rights Agreement, the Final Memorandum (as amended or supplemented at the
Closing Date) and other related matters as the Initial Purchaser may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Initial Purchaser a
certificate of the Company, signed by the Chairman of the Board, the
President, Chief Financial Officer or any Vice President and the principal
accounting officer or treasurer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully examined the
14
<PAGE>
Final Memorandum, any amendment or supplement to the Final Memorandum and this
Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst & Young LLP
shall have furnished to the Initial Purchaser a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchaser.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change
or decrease specified in the letter or letters referred to in paragraph (e)
of this Section 6, or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Final Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above, is,
in the sole judgment of the Initial Purchaser, so material and adverse as
to make it impractical to market the Securities as contemplated by the
Final Memorandum (exclusive of any amendment or supplement thereto).
15
<PAGE>
(g) Subsequent to the Execution Time, there shall not have been (i)
any decrease in the rating of the Securities or any of the Company's other
debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities
Act) or (ii) any notice given of any intended or potential decrease in any
such rating or that such organization has under surveillance or review
(other than any such notice with positive implications of a possible
upgrading) its rating of the Securities or any of the Company's other debt
securities.
(h) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD, and
the Securities shall be eligible for clearance and settlement through The
Depositary Trust Company.
(i) The Company shall have furnished to the Trustee a certified
resolution in accordance with Section 3.03(a) of the Original Indenture.
(j) The Company shall have furnished to the Trustee an officer's
certificate, as to all conditions precedent relating to authentication of
the Securities being satisfied and no defaults existing under the
Indenture, in accordance with Section 3.03(b) and Section 16.01(a) of the
Original Indenture.
(k) The Company shall have requested and caused Douglas, Alexa, Koppen
& Hurley, Sorling, Northrup, Hanna, Cullen and Cochran, Ltd. and Clark Hill
PLC, special counsel for the Company to furnish the Trustee and the Initial
Purchaser their opinion, dated the Closing Date, to the effect set forth in
Section 3.03(c), Section 3.05(e), Section 3.05(f) and Section 16.01(b) of
the Original Indenture.
(l) The Company shall have furnished to the Trustee the Eleventh
Supplemental Indenture.
(m) The Company shall have furnished to the Trustee an officers'
certificate with respect to the net bondable value of property additions in
accordance with Section 3.05(a) of the Original Indenture.
(n) The Company shall have furnished to the Trustee an engineer's
certificate in accordance with Section 3.05(b) of the Original Indenture.
16
<PAGE>
(o) The Company shall have furnished to the Trustee an independent
accountant's certificate in accordance with Section 3.05(d) and Section
16.01(c) of the Original Indenture.
(p) The Company shall have furnished to the Initial Purchaser an
insurance certificate of its independent consultant substantially in the
form delivered annually under Section 4.06 of the Indenture.
(q) At or before the Closing Date, (i) evidence (including without
limitation, the results of lien and title searches) reasonably satisfactory
to the Initial Purchaser of the absence of any liens other than permitted
liens on any of the Mortgaged Property shall have been furnished to the
Initial Purchaser, and (ii) such evidence of the completion of all
recordings and filings of the Indenture, and of the execution, delivery,
recording and or filing of such other documents, as may be necessary or, in
the reasonable opinion of the Initial Purchaser, desirable to create or
perfect the liens created, or purported or intended to be created, by the
Indenture shall have been furnished to the Initial Purchaser.
(r) On or prior to the Closing Date, the Company shall have furnished
to the Initial Purchaser such further certificates and documents as the
Initial Purchaser shall reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchaser and Counsel for the Initial Purchaser,
this Agreement and all obligations of the Initial Purchaser hereunder may be
canceled at, or at any time prior to, the Closing Date by the Initial Purchaser.
Notice of such cancellation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be delivered
at the office of Counsel for the Initial Purchaser, at 450 Lexington Avenue, New
York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for
-------------------------
herein is not consummated because of any condition to the obligations of the
Initial Purchaser set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof, in each case other than by reason of a default by the
17
<PAGE>
Initial Purchaser, the Company will reimburse the Initial Purchaser upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by it in connection with
the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless the Initial Purchaser, each director, officer,
employee and agent of the Initial Purchaser and each other person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several (including, without limitation,
the reasonable legal fees and other reasonable expenses incurred in connection
with any suit, action or proceeding or any claim asserted), to which they or any
of them may become subject under the Securities Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Final Memorandum (or in any
supplement or amendment thereto), or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for inclusion
therein, it being understood that the only such information is that described in
Section 8(b). This indemnity agreement will be in addition to any liability that
the Company may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold harmless each
of the Company, its directors and officers, and each other person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Initial Purchaser, but only
with reference to written information relating to the Initial Purchaser
furnished to the Company by or on behalf of the Initial Purchaser
specifically for inclusion in the Final Memorandum (or in any amendment
thereof or supplement thereto). This indemnity agreement will be in
18
<PAGE>
addition to any liability that the Initial Purchaser may otherwise have.
The Company acknowledges that the statements set forth in the last
paragraph of the cover page, the first paragraph on page 3 and the
penultimate paragraph under the heading "Plan of Distribution" in the Final
Memorandum constitute the only information furnished in writing by or on
behalf of the Initial Purchaser for inclusion in the Final Memorandum (or
in any amendment thereof or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses; and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest; (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party; (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after
notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. It is
19
<PAGE>
understood and agreed, however, that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate counsel for all such indemnified parties (and any local
counsel) and that all such fees and expenses shall be reimbursed as they
are incurred. The indemnifying party shall not be liable for any settlement
of any claim, action, suit or proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify any
indemnified party from and against any loss or liability by reason of such
settlement or judgment except as otherwise provided herein. An indemnifying
party will not, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchaser
agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "LOSSES") to
which the Company or the Initial Purchaser may be subject in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand or the Initial Purchaser on the other, as
applicable, from the offering of the Securities; provided, however, that in
no case shall the Initial Purchaser be responsible for any amount in excess
of the purchase discount or commission applicable to the Securities
purchased by the Initial Purchaser hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the
Company and the Initial Purchaser shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand or the Initial Purchaser on
the other hand, as applicable, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed
to be equal to the total net proceeds from the offering of the Securities
(before deducting expenses), and benefits received by the Initial Purchaser
shall be deemed to be equal to the total purchase discounts and
commissions, in each case
20
<PAGE>
as set forth on the cover page of the Final Memorandum. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company on the one hand, or
the Initial Purchaser on the other, the intent of the parties and their
relative knowledge, information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Initial Purchaser agree
that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person who controls the Initial Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and each director, officer, employee and such agent of the Initial
Purchaser shall have the same rights to contribution as the Initial
Purchaser, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this
paragraph (d).
The indemnity and contribution agreements contained in this Section 8 are
in addition to any liability which the indemnifying parties may otherwise have
to the indemnified parties referred to above. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties of
the Company set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchaser or any person
controlling the Initial Purchaser or by or on behalf of the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of and payment for any of the Securities.
9. Default by the Initial Purchaser. If the Initial Purchaser shall fail
--------------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, this
Agreement will terminate without liability to the Company. Nothing contained in
this Agreement shall relieve the Initial Purchaser, if it is defaulting
hereunder, of its liability, if any, to the Company for damages occasioned by
its default hereunder.
21
<PAGE>
10. Termination. This Agreement shall be subject to termination in
-----------
absolute discretion of the Initial Purchaser, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in any of the Company's securities shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Initial Purchaser, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company, or its officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser, the Company or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
-------
only on receipt, and, if sent to the Initial Purchaser, will be mailed,
delivered or sent by fax and confirmed to Salomon Smith Barney Inc., General
Counsel (fax no.: (212) 816-7912) and confirmed to the General Counsel, Salomon
Smith Barney Inc. at 388 Greenwich Street, New York, New York 10013 Attention:
General Counsel; or, if sent to the Company will be mailed, delivered or faxed
to (219) 273-7609 and confirmed to it at 4100 Edison Lakes Parkway, Mishawaka,
Indiana 46545-3440 attention: General Counsel.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT
OF LAW PROVISIONS THEREOF).
22
<PAGE>
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
--------
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
-----------
shall have the meanings indicated.
"Affiliate" shall have the meaning specified in Rule 501(b) of Regulation
D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
23
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement among the
Company and the Initial Purchaser.
Very truly yours,
NATIONAL STEEL CORPORATION
By /s/ William E. McDonough
---------------------------
Name: William E. McDonough
Title: Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By________________________
Name:
Title:
24
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement among the
Company and the Initial Purchaser.
Very truly yours,
NATIONAL STEEL CORPORATION
By________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON SMITH BARNEY INC.
By /s/ David R. Dowdle
-----------------------
Name: David R. Dowdle
Title: Associate
24
<PAGE>
Exhibit 4.D
[CONFORMED COPY]
================================================================================
FIFTH SUPPLEMENTAL INDENTURE
BETWEEN
NATIONAL STEEL CORPORATION,
FIRST NATIONAL CITY TRUST COMPANY
AND
FIRST NATIONAL CITY BANK
Dated as of May 1, 1962
------------------
Resignation of First National City Trust Company, as Trustee, and
Appointment of First National City Bank, as Successor Trustee
------------------
Supplemental to Indenture of Mortgage and Deed of Trust
Dated May 1, 1952
================================================================================
<PAGE>
THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of May 1, 1962, between
NATIONAL STEEL CORPORATION, a corporation duly organized and existing under and
by virtue of the laws of the State of Delaware (hereinafter called the
"Company"), FIRST NATIONAL CITY TRUST COMPANY (formerly City Bank Farmers Trust
Company), a national banking association incorporated and existing under and by
virtue of the laws of the United States of America, and FIRST NATIONAL CITY
BANK, a national banking association incorporated and existing under and by
virtue of the laws of the United States of America;
WHEREAS, the Company heretofore executed and delivered to City Bank
Farmers Trust Company and Ralph E. Morton, as Trustees, its Indenture of
Mortgage and Deed of Trust dated May 1, 1952; and
WHEREAS, said Indenture of Mortgage and Deed of Trust has been
heretofore amended and supplemented by a FIRST Supplemental Indenture dated as
of November 1, 1956, a Second Supplemental Indenture dated as of January 1,
1957, a Third Supplemental Indenture dated as of June 1, 1959 and a Fourth
Supplemental Indenture dated as of December 1, 1960 (the Indenture of Mortgage
and Deed of Trust as so amended and supplemented by such Supplemental Indentures
or otherwise being hereinafter called the "Indenture"); and
WHEREAS, the Indenture provides in Section 14.05 of Article Fourteen
that the Trustee thereunder may resign and be discharged from the trust created
by the Indenture by giving written notice thereof to the Company specifying the
date when such resignation shall take effect, and by publishing such notice in
the manner provided in such Section 14.05; and the Indenture provides that such
resignation shall take effect on the date specified in such notice unless
previously a successor Trustee shall have been appointed in the manner provided
in such Section 14.05 and in Section 14.06 of such Article Fourteen; and
WHEREAS, First National City Trust Company, pursuant to the provisions
of such Section 14.05, has given written notice to the Company of its
resignation as Trustee under the Indenture, such resignation to take effect on
the earlier of June 1, 1962 and the date of the appointment of a successor to it
as Trustee under the Indenture and notice of such resignation has been published
in accordance with the provisions of the Indenture; and
WHEREAS, the Indenture provides in said Section 14.05 that in case the
Trustee thereunder shall resign, and until the appointment of a successor by the
holders of a majority in principal amount of the bonds issued under the
Indenture and at the time
<PAGE>
outstanding, a successor Trustee shall be appointed by the Company, and no
successor has been so appointed by the bondholders; and
WHEREAS, the Company desires to appoint First National City Bank as
successor Trustee and First National City Bank is willing to accept such
appointment; and
WHEREAS, First National City Bank represents that it is eligible under
Section 14.05 of Article Fourteen of the Indenture and is not disqualified under
any of the provisions of Section 14.04 of Article Fourteen of the Indenture to
be appointed successor Trustee thereunder;
NOW, THEREFORE, in consideration of the premises, THIS SUPPLEMENTAL
INDENTURE
W I T N E S S E T H :
FIRST. The Company, in the exercise of the authority vested in it
pursuant to Section 14.05 of Article Fourteen of the Indenture, and by order of
its Board of Directors, hereby appoints First National City Bank to be the
successor Trustee thereunder, with all the estates, properties, rights, powers
and trusts of First National City Trust Company as predecessor in the trust
under the Indenture, such appointment to be effective on the date hereof.
SECOND. First National City Bank hereby accepts its appointment as
successor Trustee under the Indenture, effective on the date hereof, and assumes
the duties of the Trustee thereunder, subject to all the terms and provisions
therein contained.
THIRD. First National City Trust Company, as Trustee under the
Indenture, hereby conveys, assigns, transfers, sets over and confirms to such
successor Trustee, and to its successors in such trust and its and their
assigns, all the estates, properties, rights, powers, duties, trusts, title and
interest vested in First National City Trust Company as such Trustee under the
Indenture.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be executed in their respective corporate names by their respective
officers thereunto duly authorized and their respective corporate seals to be
hereto attached and to be duly attested, all as of the day and year FIRST above
written.
NATIONAL STEEL CORPORATION,
By PAUL E. SHROADS
PAUL E. SHROADS, Vice-President
Attest:
GEORGE A. STINSON
GEORGE A. STINSON, Secretary
[CORPORATE SEAL]
Signed, sealed and delivered by
NATIONAL STEEL CORPORATION
in the presence of:
WILLIAM S. SCHWOEBEL
WILLIAM S. SCHWOEBEL
JOHN E. LAUGHLIN, JR.
JOHN E. LAUGHLIN, JR.
As Witnesses
FIRST NATIONAL CITY TRUST
COMPANY,
By J. E. ROBERTSON
J. E. ROBERTSON, Vice President
Attest:
J. N. KRUSE
J. N. KRUSE, Assistant Cashier
[CORPORATE SEAL]
Signed, sealed and delivered by
FIRST NATIONAL CITY TRUST COMPANY
in the presence of:
J. F. NASH
J. F. NASH
A. HALL
A. HALL
As Witnesses
3
<PAGE>
FIRST NATIONAL CITY BANK,
By E. F. MITCHELL
E. F. MITCHELL, Vice President
[CORPORATE SEAL]
Attest:
D. NEIL
D. NEIL, Assistant Cashier
Signed, sealed and delivered by
FIRST NATIONAL CITY BANK
in the presence of:
J. F. NASH
J. F. NASH
A. HALL
A. HALL
As Witnesses
4
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
) ss.:
COUNTY OF ALLEGHENY )
I, ROBERT M. GUISER, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and f or said County in said
Commonwealth, hereby certify, that on this 1st day of May, 1962:
[INDIANA]
Before me personally appeared National Steel Corporation by PAUL E. SHROADS
and GEORGE A. STINSON, its Vice President and Secretary, respectively, and
acknowledged the execution of the foregoing instrument;
[MICHIGAN]
Before me appeared PAUL E. SHROADS, to me personally known, who, being by
me duly sworn, did say that he is a Vice President of National Steel
Corporation, one of the corporations named in the foregoing instrument, and that
the seal affixed to said instrument is the corporate seal of said corporation,
and that said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and the said PAUL E. SHROADS acknowledged
the said instrument to be the free act and deed of said corporation;
[MINNESOTA]
Before me appeared PAUL E. SHROADS and GEORGE A. STINSON, to me personally
known, who being by me duly sworn, did say that they are respectively a Vice
President and the Secretary of National Steel Corporation, that the seal affixed
to the foregoing instrument is the corporate seal of said corporation, and that
the instrument was executed on behalf of the corporation by authority of its
Board of Directors, and the said PAUL E. SHROADS and GEORGE A. STINSON
acknowledged said instrument to be the free act and deed of the corporation;
[OHIO]
Personally appeared PAUL E. SHROADS and GEORGE A. STINSON, known to me to
be the persons who, as a Vice President and the Secretary, respectively, of
National Steel Corporation, one of the corporations which executed the foregoing
instrument, signed the same, and acknowledged to me that they did so sign said
5
<PAGE>
instrument in the name and on behalf of said corporation as such officers,
respectively; that the same is their free act and deed as such officers,
respectively, and the free and corporate act and deed of said corporation; that
they were duly authorized thereunto by its Board of Directors; and that the seal
affixed to said instrument is the corporate seal of said corporation;
[WEST VIRGINIA]
PAUL E. SHROADS and GEORGE A. STINSON who signed the writing above dated as
of May 1, 1962, for National Steel Corporation, have this day in my said county,
before me acknowledged the said writing to be the act and deed of said
corporation; and
[WISCONSIN]
Personally came before me PAUL E. SHROADS, a Vice President, and GEORGE A.
STINSON, the Secretary of National Steel Corporation, to me known to be the
persons who executed the foregoing instrument, and to me known to be such Vice
President and Secretary of said corporation, and acknowledged that they executed
the foregoing instrument as such officers as the deed of said corporation, by
its authority.
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year FIRST above written.
My Commission expires: Dec. 9, 1962
ROBERT M. GUISER,
[NOTARIAL SEAL] ROBERT M. GUISER, Notary Public
Pittsburgh, Allegheny County, Pa.
My Commission Expires
Dec. 9, 1962
6
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
I, MAURICE E. FRANZONI, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 1st day of May, 1962:
[INDIANA]
Before me personally appeared First National City Trust Company by J. E.
ROBERTSON and J. N. KRUSE, a Vice President and an Assistant Cashier,
respectively, and acknowledged the execution of the foregoing instrument;
[NEW YORK]
Before me personally came J. E. ROBERTSON, to me known, who, being by me
duly sworn, did depose and say that he resides at 3510 Avenue H, Brooklyn 10,
New York; that he is a Vice President of First National City Trust Company, one
of the corporations described in and which executed the above instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority;
[MICHIGAN]
Before me appeared J. E. ROBERTSON, to me personally known, who, being by
me duly sworn, did say that he is a Vice President of First National City Trust
Company, one of the corporations named in the foregoing instrument, and that the
seal affixed to said instrument is the corporate seal of said corporation, and
that said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and the said J. E. ROBERTSON acknowledged
the said instrument to be the free act and deed of said corporation;
[MINNESOTA]
Before me appeared J. E. ROBERTSON and J. N. KRUSE, to me personally known,
who, being by me duly sworn, did say that they are, respectively, a Vice
President and an Assistant Cashier of First National City Trust Company, that
the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that the
7
<PAGE>
instrument was executed on behalf of the corporation by authority of its Board
of Directors, and the said J. E. ROBERTSON and J. N. KRUSE acknowledged said
instrument to be the free act and deed of the corporation;
[OHIO]
Personally appeared J. E. ROBERTSON and J. N. KRUSE, known to me to be the
persons who, as a Vice President and an Assistant Cashier, respectively, of
First National City Trust Company, one of the corporations which executed the
foregoing instrument, signed the same, and acknowledged to me that they did so
sign said instrument in the name and on behalf of said corporation as such
officers, respectively; that the same is their free act and deed as such
officers, respectively, and the free and corporate act and deed of said
corporation; that they were duly authorized thereunto by its Board of Directors;
and that the seal affixed to said instrument is the corporate seal of said
corporation;
[WEST VIRGINIA]
J. E. ROBERTSON and J. N. KRUSE who signed the writing above dated as of
May 1, 1962, for First National City Trust Company, have this day in my said
county, before me acknowledged the said writing to be the act and deed of said
corporation; and
[WISCONSIN]
Personally came before me J. E. ROBERTSON, a Vice President, and J. N.
KRUSE, an Assistant Cashier of First National City Trust Company, to me known to
be the persons who executed the foregoing instrument, and to me known to be such
Vice President and an Assistant Cashier of said corporation, and acknowledged
that they executed the foregoing instrument as such officers as the deed of said
corporation, by its authority.
8
<PAGE>
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
My Commission expires: March 30, 1963
[NOTARIAL SEAL] MAURICE E. FRANZONI
MAURICE E. FRANZONI
[Certificate of County Clerk, Notary Public, State of New York
New York County, New York] No. 52-1304250
Qualified in Suffolk County
Cert. Filed in N. Y. County
Term Expires March 30, 1963
9
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK, )
I, MAURICE E. FRANZONI, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 1st day of May, 1962:
[INDIANA]
Before me personally appeared FIRST NATIONAL CITY BANK by E. F. MITCHELL
and D. NEIL, a Vice President and an Assistant Cashier, respectively, and
acknowledged the execution of the foregoing instrument;
[NEW YORK]
Before me personally came E. F. MITCHELL, to me known, who being by me duly
sworn, did depose and say that he resides at 6515 Boulevard East, West New York,
New Jersey; that he is a Vice President of First National City Bank, one of the
corporations described in and which executed the above instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that he signed his name thereto by like authority;
[MICHIGAN]
Before me appeared E. F. MITCHELL, to me personally known, who, being by me
duly sworn, did say that he is a Vice President of First National City Bank, one
of the corporations named in the foregoing instrument, and that the seal affixed
to said instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors, and the said E. F. MITCHELL acknowledged the said
instrument to be the free act and deed of said corporation;
[MINNESOTA]
Before me appeared E. F. MITCHELL and D. NEIL, to me personally known, who,
being by me duly sworn, did say that they are respectively a Vice President and
an Assistant Cashier of First National City Bank, that the seal affixed to the
foregoing instrument is the corporate seal of said corporation, and that the
instrument was
10
<PAGE>
executed on behalf of the corporation by authority of its Board of Directors,
and the said E. F. MITCHELL and D. NEIL acknowledged said instrument to be the
free act and deed of the corporation;
[OHIO]
Personally appeared E. F. MITCHELL and D. NEIL, known to me to be the
persons who, as a Vice President and an Assistant Cashier, respectively, of
First National City Bank, one of the corporations which executed the foregoing
instrument, signed the same, and acknowledged to me that they did so sign said
instrument in the name and on behalf of said corporation as such officers,
respectively; that the same is their free act and deed as such officers,
respectively, and is the free and corporate act and deed of said corporation;
that they were duly authorized thereunto by its Board of Directors; and that the
seal affixed to said instrument is the corporate seal of said corporation;
[WEST VIRGINIA]
E. F. MITCHELL and D. NEIL who signed the writing above dated as of May 1,
1962, for First National City Bank, have this day in my said county, before me
acknowledged the said writing to be the act and deed of said corporation; and
[WISCONSIN]
Personally came before me E. F. MITCHELL, a Vice President, and D. NEIL, an
Assistant Cashier of First National City Bank, to me known to be the persons who
executed the foregoing instrument, and to me known to be such a Vice President
and an Assistant Cashier of said corporation, and acknowledged that they
executed the foregoing instrument as such officers as the deed of said
corporation, by its authority.
11
<PAGE>
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
My Commission expires: March 30, 1963
MAURICE E. FRANZONI
MAURICE E. FRANZONI
Notary Public, State of New York
No. 52-1304250
Qualified in Suffolk County
Cert. Filed in N. Y. County
Term Expires March 30, 1963
[NOTARIAL SEAL]
12
<PAGE>
[MICHIGAN CHATTEL MORTGAGE CERTIFICATE PURSUANT TO
MICHIGAN STATUTES ANNOTATED (S) 26.929]
COMMONWEALTH OF PENNSYLVANIA, )
) ss.:
COUNTY OF ALLEGHENY, )
On this 1st day of May, 1962, before me appeared PAUL E. SHROADS, to me
personally known, who, being duly sworn, deposes and says that he is a Vice
President of National Steel Corporation, named as one of the corporations in the
foregoing instrument; that he makes this affidavit for said Corporation; that he
has knowledge of the facts; and that the consideration of said instrument was
actual and adequate; and that the same was given in good faith for the purposes
therein set forth.
My Commission expires: Dec. 9, 1962
PAUL E. SHROADS
PAUL E. SHROADS, Vice President
[NOTARIAL SEAL]
[Certificate of Prothonotary,
Allegheny County, Pennsylvania]
Subscribed and sworn to before me
this 1st day of May, 1962.
ROBERT M. GUISER
ROBERT M. GUISER, Notary Public
Pittsburgh, Allegheny County, Pa.
My Commission Expires
Dec. 9, 1962
13
<PAGE>
EXHIBIT 4.G
================================================================================
NATIONAL STEEL CORPORATION
AND
THE CHASE MANHATTAN BANK
and
FRANK J. GRIPPO, As Trustees
_____________
Tenth Supplemental Indenture
Dated as of March 8, 1999
To
INDENTURE OF MORTGAGE AND DEED OF TRUST
Dated May 1, 1952
_____________
First Mortgage Bonds, 9 7/8% Series Due 2009
================================================================================
<PAGE>
TABLE OF CONTENTS*
_____________
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions................................................. 10
Section 1.02. Other Definitions........................................... 33
Section 1.03. Incorporation by Reference of Trust Indenture Act........... 34
Section 1.04. Rules of Construction....................................... 34
ARTICLE 2
2009 Bonds Forms
Section 2.01. Forms Generally............................................. 35
Section 2.02. Form of Trustee's Certificate of Authentication............. 36
Section 2.03. Restrictive Legends......................................... 36
Section 2.04. Form of Certificate to Be Delivered upon
Termination of Restricted Period.......................... 39
ARTICLE 3
The 2009 Series Bonds
Section 3.01. Maturity; Payment........................................... 40
Section 3.02. Denominations............................................... 41
Section 3.03. Execution. Authentication, Delivery and Dating.............. 41
Section 3.04. Temporary 2009 Series Bonds................................. 42
Section 3.05. Registration, Registration of Transfer and
Exchange.................................................. 43
Section 3.06. Payment of Interest, Interest Rights Preserved.............. 44
Section 3.07. Persons Deemed Owners....................................... 46
Section 3.08. Cancellation................................................ 46
Section 3.09. Computation of Interest..................................... 47
Section 3.10. Book Entry Provisions for Global Bonds...................... 47
Section 3.11. Transfer Provisions......................................... 48
Section 3.12. Form of Regulation S Certificate............................ 57
Section 3.13. Form of Rule 144A Certificate............................... 60
</TABLE>
__________________
. This Table of Contents has been inserted for purposes of convenience and
ready reference. It does not constitute a part of the Tenth Supplemental
Indenture.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 3.14. CUSIP Numbers............................................... 61
Section 3.15. Notice to Holders; Waiver................................... 61
ARTICLE 4
Particular Covenants of the Corporation
Section 4.01. Payment of Securities....................................... 62
Section 4.02. SEC Reports................................................. 62
Section 4.03. Limitation on Lines of Business............................. 63
Section 4.04. Covenant Suspension......................................... 63
Section 4.05. Limitation on Debt and Restricted Subsidiary
Preferred Stock........................................... 63
Section 4.06. Limitation on Restricted Payments........................... 63
Section 4.07. Limitation on Pledged Subsidiaries to Incur
Indebtedness or Issue Capital Stock....................... 66
Section 4.08. Limitation on Sale of Mortgaged Property.................... 67
Section 4.09. Change of Control........................................... 68
Section 4.10. Limitation on Sale of Assets Other Than
Mortgaged Property........................................ 70
Section 4.11. Limitation on Restrictions on Distributions from
Restricted Subsidiaries................................... 74
Section 4.12. Limitation on Transactions with Affiliates.................. 75
Section 4.13. Limitation on Sale and Leaseback Transactions............... 77
Section 4.14. Designation of Restricted and Unrestricted
Subsidiaries.............................................. 77
Section 4.15. Compliance Certificate...................................... 78
Section 4.16. Further Instruments and Acts................................ 78
ARTICLE 5
Successor Corporation
Section 5.01. When Corporation May Merge or Transfer Assets............... 78
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default........................................... 80
Section 6.02. Acceleration................................................ 82
Section 6.03. Other Remedies.............................................. 82
Section 6.04. Waiver of Defaults.......................................... 83
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 7
Redemption of 2009 Series Bonds
Section 7.01. Optional Redemption of 2009 Series Bonds;
Premiums Payable.......................................... 83
Section 7.02. Surrender of Partially-redeemed 2009 Series
Bonds..................................................... 84
Section 7.03. Regarding Issue, Transfer and Exchange of
2009 Series Bonds to be Redeemed.......................... 84
Section 7.04. Notices to Trustee.......................................... 84
Section 7.05. Notice of Redemption........................................ 84
Section 7.06. Effect of Notice of Redemption.............................. 85
ARTICLE 8
Miscellaneous
Section 8.01. Acceptance of Trusts........................................ 85
Section 8.02. Benefits Restricted to Parties and Holders of
Bonds..................................................... 86
Section 8.03. Execution in Counterparts................................... 86
Section 8.04. Original Indenture and Supplements Construed
as One Instrument......................................... 86
Section 8.05. Amount Advanced under Indenture............................. 86
Section 8.06. With Consent of Holders..................................... 86
Section 8.07. Governing Law............................................... 87
Section 8.08. Compliance with Trust Indenture Act......................... 87
Section 8.09. Recitals.................................................... 87
</TABLE>
iii
<PAGE>
THIS TENTH SUPPLEMENTAL INDENTURE (hereinafter called "THIS SUPPLEMENTAL
INDENTURE"), dated as of March 8, 1999 made by and among NATIONAL STEEL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware (hereinafter called the "CORPORATION"), THE CHASE MANHATTAN BANK, a New
York corporation (hereinafter called the "TRUSTEE") and FRANK J. GRIPPO
(hereinafter called the "INDIVIDUAL TRUSTEE"), as Trustees under the Indenture
hereinafter referred to (the Trustee and the Individual Trustee being
hereinafter collectively called the "TRUSTEES").
WHEREAS, under date of May 1, 1952, the Corporation and Great Lakes Steel
Corporation, then a wholly-owned subsidiary of the Corporation which was
subsequently merged into the Corporation, entered into an Indenture of Mortgage
and Deed of Trust (hereinafter called the "ORIGINAL INDENTURE") with City Bank
Farmers Trust Company, as Trustee, and Ralph E. Morton, as Individual Trustee;
and
WHEREAS, the Original Indenture has heretofore been amended and
supplemented by a First Supplemental Indenture dated as of November 1, 1956, a
Second Supplemental Indenture dated as of January 1, 1957, a Third Supplemental
Indenture dated as of June 1, 1959, a Fourth Supplemental Indenture dated as of
December 1, 1960, a Fifth Supplemental Indenture dated as of May 1, 1962, a
Sixth Supplemental Indenture dated as of December 1, 1970, a Seventh
Supplemental Indenture dated as of September 19, 1973, an Eighth Supplemental
Indenture dated as of September 19, 1973, and a Ninth Supplemental Indenture
dated as of August 1, 1976; and
WHEREAS, The Chase Manhattan Bank is now the duly appointed successor
Trustee under the Original Indenture and all instruments supplemental thereto
(hereinafter together called the "INDENTURE") and FRANK J. GRIPPO is now the
duly appointed successor Individual Trustee under the Indenture; and
WHEREAS, there have heretofore been authenticated and delivered pursuant to
the Original Indenture First Mortgage Bonds, 3 1/8% Series Due 1982, there have
heretofore been authenticated and delivered pursuant to the Original Indenture
and said First Supplemental Indenture First Mortgage Bonds, 3 7/8% Series Due
1986, there have heretofore been authenticated and delivered pursuant to the
Original Indenture, as theretofore supplemented, and said Third Supplemental
Indenture First Mortgage Bonds, 4 5/8% Series Due 1989, there have heretofore
been authenticated and delivered pursuant to the Original Indenture, as
theretofore supplemented, and said Sixth Supplemental Indenture First Mortgage
Bonds, 8% Series Due 1995, there have heretofore been authenticated and
delivered pursuant to the Original Indenture, as theretofore supplemented, and
said Seventh Supplemental Indenture First Mortgage Bonds, 4 7/8% Series Due
<PAGE>
1987 and First Mortgage Bonds, 5.30% Series Due 1990, and there have heretofore
been authenticated and delivered pursuant to the Original Indenture, as
theretofore supplemented, and said Ninth Supplemental Indenture First Mortgage
Bonds, 8 3/8% Series Due 2006; and
WHEREAS, the Corporation has determined to issue, pursuant to the Original
Indenture, and this Supplemental Indenture, two series of Bonds to be designated
the "First Mortgage Bonds, 9 7/8% Series A due 2009" (hereinafter called the
"INITIAL 2009 SERIES BONDS") and the "First Mortgage Bonds, 9 7/8% Series B due
2009 (hereinafter called the "EXCHANGE 2009 SERIES BONDS" and, together with the
2009 Series A Bonds, the "2009 SERIES BONDS"), in the aggregate principal amount
of $225,000,000, all as hereinafter more fully provided; and
WHEREAS, the fully registered 2009 Series Bonds and the Trustee's
Authentication Certificate to be endorsed on all the 2009 Series Bonds are to be
substantially in the following forms, with necessary or appropriate variations,
omissions and insertions, as permitted or required by the Original Indenture and
this Supplemental Indenture:
[FORM OF FACE OF 2009 SERIES BOND]
NATIONAL STEEL CORPORATION
First Mortgage Bond, 9 7/8% Series [A/B] Due 2009
Cusip No............
$............. No..............
NATIONAL STEEL CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (hereinafter called the "CORPORA TION", which term
shall include any successor corporation to the extent provided in the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to or registered assigns, the principal sum of Dollars on
March 1, 2009, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for public and private debts, and to
pay interest thereon in like coin or currency, semiannually on March 1 and
September 1 of each year, at the rate of 9 7/8% per annum, from the March 1 or
September 1, as the case may be, next preceding the date of this Bond to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case
2
<PAGE>
from the date of this Bond, or unless no interest has been paid on the First
Mortgage Bonds, 9 7/8% Series [A/B] Due 2009 (hereinafter called the "2009
SERIES BONDS"), in which case from March 8, 1999, until payment of said
principal sum has been made or duly provided for. Notwithstanding the foregoing,
when there is no existing default in the payment of interest on the 2009 Series
Bonds, if the date hereof is after a regular record date (which shall be the
close of business on February 15 or August 15, as the case may be, next
preceding an interest payment date) and before the next succeeding interest
payment date, this Bond shall bear interest from such interest payment date;
provided, however, that if the Corporation shall default in the payment of
interest due on such interest payment date, then this Bond shall bear interest
from the next preceding interest payment date to which interest has been paid,
or, if no interest has been paid on the 2009 Series Bonds, from March 8, 1999.
The interest so payable, and punctually paid or duly provided for, on any
interest payment date will, as provided in said Indenture, be paid to the person
in whose name this Bond (or one or more predecessor Bonds) is registered on the
regular record date for such interest payment date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Both the principal of,
premium, if any, and interest on, this Bond are payable at the office or agency
of the Corporation in the Borough of Manhattan, The City of New York, New York;
provided, that interest may be paid, at the option of the Corporation, by check
mailed to the person entitled thereto at his address last appearing on the Bond
register or by wire transfer to an account maintained by the payee located in
the United States provided that appropriate written wire transfer instructions
have been provided at least two Business Days prior to the relevant record date.
[The Holder of this Bond is entitled to the benefits of the Registration
Rights Agreement, dated as of March 8, 1999 (the "Registration Rights
Agreement"), among the Corporation and the Initial Purchasers named therein. In
the event that either (a) an Exchange Offer Registration Statement (as such term
is defined in the Registration Rights Agreement) is not filed with the SEC on or
prior to the 60th day following the date of the Tenth Supplemental Indenture,
(b) such Exchange Offer Registration Statement has not been declared effective
on or prior to the 150th day following the date of the Tenth Supplemental
Indenture, (c) the Exchange Offer (as such term is defined in the Registration
Rights Agreement) is not consummated or, if required, a Shelf Registration
Statement (as such term is defined in the Registration Rights Agreement) with
respect to the Bond is not declared effective on or prior to the 180th day
following the date of the Indenture or Tenth Supplemental Indenture or (d) the
Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable (each such event referred to in clauses (a)
through (d) above, a "Registration Default") then the per annum interest rate
borne by this Bond shall be increased by 0.25 percent per annum for the first
90-day period following the
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Registration Default. The per annum interest rate borne by this Bond will
increase by an additional 0.25 percent per annum for each subsequent 90-day
period following such Registration Default to a maximum of 1.00 percent per
annum until such Registration Default has been cured. Upon (w) the filing of the
Exchange Offer Registration Statement after the 60-day period described in
clause (a) above, (x) the effectiveness of the Exchange Offer Registration
Statement after the 150-day period described in clause (b) above or (y) the
consummation of the Exchange Offer or the effectiveness of a Shelf Registration
Statement, as the case may be, after the 180-day period described in clause (c)
above, or (z) the cure of any Registration Default described in clause (d)
above, the interest rate borne by the Bond from the date of such filing,
effectiveness or consummation, as the case may be, will be reduced to the
original interest rate set forth in the title of this Bond above if the
Corporation is otherwise in compliance with this paragraph; provided, however,
that, if after such reduction in interest rate, a different event specified in
clause (a), (b), (c) or (d) above occurs, the interest rate may again be
increased and thereafter reduced pursuant to the foregoing provisions.]/**/
Reference is made to the further provisions of this Bond set forth on the
reverse hereof, which shall have the same effect as though fully set forth at
this place.
This Bond shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until The Chase Manhattan Bank, the
Trustee under the Indenture, or a successor Trustee thereto under the Indenture,
shall have signed the form of certificate hereon.
IN WITNESS WHEREOF, National Steel Corporation has caused this Bond to be
duly executed under its corporate seal.
Dated:
NATIONAL STEEL CORPORATION
By:_______________________
Name:
Title:
Attest:
_______________________
Title:
_______________________
/**/ To be inserted in the case of a Bond that has not been registered under
the Securities Act.
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[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE]
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Bonds, of the series designated therein, described in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as Trustee,
By:_______________________
Authorized Officer
[FORM OF REVERSE OF 2009 SERIES BOND]
NATIONAL STEEL CORPORATION
First Mortgage Bond, 9 7\8% Series [A/B] Due 2009
This Bond is one of the Bonds of the Corporation (hereinafter called the
"BONDS") all duly authorized or from time to time to be duly authorized and not
otherwise limited in aggregate principal amount, all issued and to be issued in
one or more series from time to time under and (except as otherwise provided in
the Indenture hereinafter mentioned) equally secured by an Indenture of Mortgage
and Deed of Trust dated May 1, 1952, executed by the Corporation, as Mortgagor,
and by Great Lakes Steel Corporation, a former wholly-owned subsidiary of the
Corporation which was merged into the Corporation, as Co-Mortgagor, to City Bank
Farmers Trust Company, as Trustee and Ralph E. Morton, as Individual Trustee,
under which The Chase Manhattan Bank is now successor Trustee and FRANK J.
GRIPPO is now successor Individual Trustee (said Trustee and said Individual
Trustee from time to time being herein together called the "TRUSTEES"), to which
Indenture of Mortgage and Deed of Trust and all instruments supplemental thereto
(hereinafter together sometimes referred to as the "INDENTURE") reference is
hereby made for a description of the properties mortgaged and pledged, the
nature and extent of the security, the rights of the holders of the Bonds in
respect of the security, the rights, duties and immunities of the Trustees and
the rights and obligations of the Corporation in respect of the Bonds, and the
terms and conditions upon which the Bonds are, and are to be, secured. The
Bonds of different series may be for various principal sums, may mature at
different times, may bear interest at different rates and may otherwise
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vary as in the Indenture provided. This Bond is issued pursuant to the Tenth
Supplemental Indenture dated as of March 8, 1999, executed by the Corporation
and the Trustees (the "TENTH SUPPLEMENTAL INDENTURE"), and is the series of
Bonds described in said Tenth Supplemental Indenture and designated as the
"First Mortgage Bonds, 9 7\8% Series [A/B] Due 2009" of the Corporation
(hereinafter called the "2009 SERIES BONDS"), limited in aggregate principal
amount to $225,000,000 at any one time outstanding, except as otherwise provided
in the Original Indenture with respect to Bonds of such Series issued in
exchange and substitution for Bonds of such Series as have been mutilated,
destroyed, lost or stolen or as otherwise provided in the Tenth Supplemental
Indenture. The terms of the 2009 Series Bonds include those stated in the
Indenture and those made or deemed to be part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as amended a nd
------
as in effect on the date of the Indenture (the "TIA"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The 2009 Series Bonds are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of those terms.
The provisions of the Indenture may be modified or amended by a
supplemental indenture to the extent and in the manner provided in the
Indenture, with the consent and approval of the holders of at least 66 2/3% in
aggregate principal amount of the Bonds at the time outstanding under the
Indenture; provided that no such modification or amendment shall be made so as
to (a) alter the date fixed in any of the Bonds or coupons for the payment of
the principal of, or any installment of interest on, such Bonds, or otherwise
modify the terms of payment of the principal at maturity of, or interest on, the
Bonds or impose any conditions with respect to such payment or affect the right
of any Bondholder to institute suit for the enforcement of any such payment on
or after the respective due dates expressed in the Bonds or in such coupons
appertaining thereto, all of which shall always be unconditional, (b) alter the
amount of principal of, or the rate of interest or premium payable on, any of
the Bonds, (c) affect the rights of the holders of less than all the Bonds of
any series then outstanding, (d) affect the rights of the holders of one or
more, but less than all, series of Bonds then outstanding, except with the
consent of the holders of not less than 66 2/3% in aggregate principal amount of
the Bonds of each of the series so affected then outstanding, or (e) reduce the
percentage of the principal amount of Bonds, or of the Bonds of any series, the
consent of the holders of which shall be required for the authorization of any
such modification or amendment.
Except as set forth in the next paragraph, the 2009 Series Bonds may not be
redeemed prior to March 1, 2004. Thereafter, the 2009 Series Bonds will be
redeemable at the option of the Corporation, in whole or in part, on not less
than 30 nor more than 60 days' prior notice mailed to each Holder of 2009 Series
Bond
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being redeemed and otherwise in accordance with the procedures set forth in
the Indenture, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on or after March 1 of the years set forth below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- ---- ----------------
<S> <C>
2004.......................... 104.938%
2005.......................... 103.292%
2006.......................... 101.646%
2007 and thereafter........... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time and from time to time prior to
March 1, 2002, the Corporation may redeem up to a maximum of 35% of the original
aggregate principal amount of the 2009 Series Bonds with the proceeds of one or
more Public Equity Offerings, at a redemption price equal to 109.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that after giving effect to any such redemption, at least 65%
of the original aggregate principal amount of the 2009 Series Bonds remains
outstanding. Any such redemption shall be made within 90 days of such Public
Equity Offering upon not less than 30 nor more than 60 days' notice mailed to
each Holder of 2009 Series Bond being redeemed and otherwise in accordance with
the procedures set forth in the Indenture.
Upon a Change of Control, any Holder of 2009 Series Bonds will have the
right, subject to certain conditions specified in the Indenture, to cause the
Corporation to repurchase all or any part of the 2009 Series Bonds of such
Holder at a purchase price equal to 101% of the principal amount of the 2009
Series Bonds to be repurchased plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date that
is on or prior to the date of purchase) as provided in, and subject to the terms
of, the Indenture.
This Bond is transferable by the registered owner hereof or by his duly
authorized attorney at the agency of the Corporation in the Borough of
Manhattan, The City of New York, New York, upon surrender of this Bond for
cancellation, accompanied by a written instrument of transfer in a form approved
by the Corporation or the Trustee, duly executed by the registered owner of this
Bond, and thereupon one or more new registered 2009 Series Bonds for the same
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aggregate principal amount will be issued in the name of the transferee or
transferees in exchange herefor, as provided in the Indenture.
2009 Series Bonds are issuable only as fully registered Bonds without
coupons in the denominations of $1,000 and integral multiples thereof. In the
manner provided in the Indenture, 2009 Series Bonds may be exchanged for a like
aggregate principal amount of 2009 Series Bonds of other authorized
denominations.
No service charge will be made for any such transfer or exchange, but the
Corporation may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on, this Bond, or for any claim based hereon or on the
Indenture, against any incorporator, or against any shareholder, director or
officer, past, present or future, of the Corporation or of any predecessor or
successor corporation, as such, either directly or through the Corporation or
any such predecessor or successor corporation, whether by virtue of any
constitutional provision, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability, whether at common law,
in equity, by any constitutional provision, statute or otherwise, of
incorporators, shareholders, directors, or officers being released by every
holder hereof by the acceptance of this Bond and as part of the consideration
for the issue hereof, and being likewise released by the terms of the Indenture.
The Indenture may be canceled and the lien thereof discharged if the
Corporation shall pay, or make provision for the payment of, the principal,
interest and premium, if any, on all the Bonds at the times and in the manner
stipulated in the Indenture.
Any moneys deposited with the Trustee by the Corporation for the payment or
redemption of 2009 Series Bonds, and remaining unclaimed by the Holders for six
years after the date of maturity or the date fixed for redemption of such Bonds
upon written request and subject to applicable abandoned property laws, shall be
repaid to the Corporation and thereafter such Holders shall be limited to a
claim against the Corporation.
In case an event of default, as defined in the Indenture, shall occur, the
principal of all the Bonds at any such time outstanding under the Indenture may
be declared or may become due and payable, upon the conditions and in the manner
and with the effect provided in the Indenture. The Indenture provides that in
certain events, such default and its consequences may be waived and such
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<PAGE>
declaration may be rescinded by the holders of a majority in principal amount of
the Bonds outstanding.
In addition, in case a Tenth Supplemental Indenture Event of Default (as
defined in the Tenth Supplemental Indenture), shall occur, the principal of all
the 2009 Series Bonds at any such time outstanding under the Indenture may be
declared or may become due and payable, upon the conditions and in the manner
and with the effect provided in the Tenth Supplemental Indenture. The Tenth
Supplemental Indenture provides that in certain events, such default and its
consequences may be waived and such declaration may be rescinded by the holders
of a majority in principal amount of the 2009 Series Bonds outstanding.
THIS 2009 SERIES BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The person in whose name this Bond shall be registered shall be deemed and
regarded as the absolute owner hereof for all purposes, and payment of or on
account of the principal of, premium, if any, and interest on this Bond shall be
made only to such registered owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon this Bond to the extent of
the sum or sums so paid.
The Corporation will furnish to any Holder of 2009 Series Bonds upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this 2009 Series Bond.
___________
And
WHEREAS, all acts and proceedings required by law duly to authorize the
execution and delivery of this Supplemental Indenture have been done and taken
and the execution and delivery of this Supplemental Indenture have been in all
respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
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That the Corporation, in consideration of the premises, and of the purchase
and acceptance of the 2009 Series Bonds by the registered owners thereof, and of
the sum of one dollar to the Corporation duly paid by the Trustees at or before
the ensealing and delivery of these presents, and for other valuable
considerations, the receipt whereof is hereby acknowledged, has entered into
this Supplemental Indenture with the Trustees to create the 2009 Series Bonds,
to establish the forms thereof and to declare the terms and conditions upon and
subject to which they are to be issued:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions.
"ADDITIONAL ASSETS" means (a) any Property (other than cash, Cash
Equivalents or securities) to be owned by the Corporation or any Restricted
Subsidiary; or (b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Corporation or another Restricted Subsidiary from any Person other than the
Corporation or an Affiliate of the Corporation.
"AFFILIATE" of any specified Person means (a) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (b) any other Person who is a director or
officer of (i) such specified Person, (ii) any Subsidiary of such specified
Person or (iii) any Person described in clause (a) above. For the purposes of
this definition, "CONTROL" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing. For purposes of the covenants contained in Section 4.10, Section
4.12 and the definition of the term "ADDITIONAL ASSETS" only, "AFFILIATE" shall
also mean any beneficial owner of shares representing 5% or more (on a fully
diluted basis) of the total voting power of the Voting Stock of the Corporation
and/or of rights or warrants to purchase Voting Stock representing 5% or more
(on a fully diluted basis) of the total voting power of the Voting Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
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"AFFILIATE JOINT VENTURE" means a Person, other than a Subsidiary of the
Corporation, in which the Corporation or any Restricted Subsidiary has an
Investment and which is an Affiliate of the Corporation only because the
Corporation or such Restricted Subsidiary has the ability to control such
Person, and for no other reason.
"ASSET SALE" means any sale, lease, transfer, issuance or other disposition
(or series of related sales, leases, transfers, issuances or dispositions) by
the Corporation or any Restricted Subsidiary, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "DISPOSITION"), of (a) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares), (b)
all or substantially all the assets of any division or line of business of the
Corporation or any Restricted Subsidiary or (c) any other assets of the
Corporation or any Restricted Subsidiary outside of the ordinary course of
business of the Corporation or such Restricted Subsidiary (other than (i) in the
case of clauses (a), (b) and (c) above, any disposition by a Restricted
Subsidiary to the Corporation or by the Corporation or a Restricted Subsidiary
to a Wholly Owned Subsidiary, (ii) in the case of clauses (b) and (c) above, (x)
any disposition of accounts receivable or inventory by or to the Corporation or
any Restricted Subsidiary to or from NSFC or any other bankruptcy-remote,
special-purpose Subsidiary of the Corporation in connection with the Incurrence
of Debt by such Subsidiary under the Credit Facilities or (y) any disposition of
Property having, together with other Property disposed of pursuant to such
clauses during the same fiscal year, an aggregate Fair Market Value of less than
$25 million, (iii) in the case of clause (c) above, (x) any disposition effected
in compliance with Section 5.01(a) and (y) a disposition of obsolete assets in
the ordinary course of business and (iv) in the case of clauses (a), (b) and (c)
above, but only for the purposes of Section 4.10, dispositions of Mortgaged
Property made in compliance with Section 4.08.
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction means,
at any date of determination, (a) if such Sale and Leaseback Transaction is a
Capital Lease Obligation, the amount of Debt represented thereby according to
the definition of the term "Capital Lease Obligation" and (b) in all other
instances, the present value (discounted at the actual rate of interest implicit
in such transaction, compounded annually) of the total obligations of the lessee
for rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction (including any period for which such lease has been
extended).
"AVERAGE LIFE" means, as of any date of determination, with respect to any
Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of the
product of the numbers of years (rounded to the nearest one-twelfth of one year)
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from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation or any
committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Corporation to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification.
"BUSINESS DAY", when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the 2009 Series Bonds,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"CAPITAL EXPENDITURE DEBT" means Debt Incurred by any Person to finance a
capital expenditure so long as (a) such capital expenditure is or should be
included as an addition to "Property, Plant and Equipment" in accordance with
GAAP and (b) such Debt is Incurred within 180 days of the date such capital
expenditure is made.
"CAPITAL LEASE OBLIGATION" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.07, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of corporate stock, partnership interests or
any other participations, rights, warrants, options or other interests in the
nature of an equity interest in such Person, including Preferred Stock, but
excluding any debt security convertible or exchangeable into such equity
interest.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate Net Cash Proceeds
received by the Corporation from the issuance or sale (other than to a
Subsidiary
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of the Corporation or an employee stock ownership plan or trust established by
the Corporation or any of its Subsidiaries for the benefit of their employees)
by the Corporation of any class of its Capital Stock (other than Disqualified
Stock) after the Issue Date.
"CASH EQUIVALENTS" means (a) any evidence of Debt with a maturity of 360
days or less issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof), (b) certificates of deposit, Eurodollar time deposits, bankers'
acceptances and other similar unsubordinated debt instruments with a maturity of
360 days or less and overnight bank deposits of any bank, trust company,
investment bank or other financial institution (including any branch thereof)
that is organized or regulated under the laws of the United States of America or
any state thereof, and which bank, trust company, investment bank or other
financial institution has capital, surplus and undivided profits aggregating in
excess of US$1.0 billion and has outstanding unsecured debt which is rated "A3"
or higher by Moody's or "A-" or higher by S&P; provided that up to $25 million
of the aggregate amount of investments of the type described in this clause (b)
may be with banks (or branches thereof) of the type described above with
outstanding unsecured debt that has an Investment Grade Rating or higher, (c)
commercial paper with a maturity of 360 days or less issued by a corporation
that is not an Affiliate of the Corporation and is organized under the laws of
any state of the United States or the District of Columbia and rated at least A-
2 by S&P or at least P-2 by Moody's, (d) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
clauses (a) and (b) above entered into with a bank, trust company, investment
bank or other financial institution meeting the qualifications described in
clause (b) above or (e) funds (including, without limitation, any fund for which
the Trustee or any affiliate of the Trustee serves as an administrator,
shareholder servicing agent and/or custodian or subcustodian) invested
exclusively in cash and investments of the type described in clauses (a) through
(d) above.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
(a) if any "person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provisions to
either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than Permitted Holders,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act, except that a Person will be deemed
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to have "beneficial ownership" of all shares that any such Person has the
right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 30% or more of the
total voting power of all classes of the Voting Stock of the Corporation;
or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Corporation and the Restricted Subsidiaries, considered as a whole
(other than a disposition of such assets as an entirety or virtually as an
entirety to a Wholly Owned Subsidiary) shall have occurred, or the
Corporation merges, consolidates or amalgamates with or into any other
Person or any other Person merges, consolidates or amalgamates with or into
the Corporation, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Corporation is reclassified into or
exchanged for cash, securities or other Property, other than any such
transaction where (i) the outstanding Voting Stock of the Corporation is
reclassified into or exchanged for Voting Stock of the surviving
corporation and (ii) the Holders of the Voting Stock of the Corporation
immediately prior to such transaction own, directly or indirectly, not less
than a majority of the Voting Stock of the surviving corporation
immediately after such transaction and in substantially the same proportion
as before the transaction; or
(c) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by such Board or whose
nomination for election by the shareholders of the Corporation was approved
by a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors then in office; or
(d) the shareholders of the Corporation shall have approved any plan
of liquidation or dissolution of the Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of a Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
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"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of determination,
the aggregate amount of liabilities of the Corporation and its consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (a) all intercompany
items between the Corporation and any Restricted Subsidiary or between
Restricted Subsidiaries and (b) all current maturities of long-term Debt.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) the aggregate amount of EBITDA for the period of
the most recent four consecutive fiscal quarters ending at least 45 days prior
to such determination date to (b) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (i) if the Corporation or any
Restricted Subsidiary has Incurred any Debt since the beginning of such period
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio is an Incurrence of Debt, or
both, Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Debt as if such Debt had been
Incurred on the first day of such period and the discharge of any other Debt
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Debt as if such discharge had occurred on the first day of such period, (ii)
if since the beginning of such period the Corporation or any Restricted
Subsidiary shall have made any Asset Sale or if the transaction giving rise to
the need to calculate the Consolidated Interest Coverage Ratio is an Asset Sale,
or both, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are the subject
of such Asset Sale for such period, or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period, in either
case as if such Asset Sale had occurred on the first day of such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any Debt of
the Corporation or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Corporation and its continuing
Restricted Subsidiaries in connection with such Asset Sale for such period, as
if such Asset Sale had occurred on the first day of such period (or, if the
Capital Stock of any Restricted Subsidiary is sold, by an amount equal to the
Consolidated Interest Expense for such period directly attributable to the Debt
of such Restricted Subsidiary to the extent the Corporation and its continuing
Restricted Subsidiaries are no longer liable for such Debt after such sale),
(iii) if since the beginning of such period the Corporation or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of Property, including any acquisition of Property occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and
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Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including the Incurrence of any Debt) as if such
Investment or acquisition occurred on the first day of such period and (iv) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Corporation or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Sale, Investment or acquisition of Property that would have required an
adjustment pursuant to clause (ii) or (iii) above if made by the Corporation or
a Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Sale, Investment or acquisition occurred on the first
day of such period. For purposes of this definition, whenever pro forma effect
is to be given to an acquisition of Property, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Debt incurred in connection therewith, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting Officer and as
further contemplated by the definition of the term "PRO FORMA". If any Debt
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Debt shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Debt if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total interest
expense of the Corporation and its consolidated Restricted Subsidiaries, plus,
to the extent not included in such total interest expense, and to the extent
Incurred by the Corporation or its Restricted Subsidiaries, (a) interest expense
attributable to capital leases, (b) amortization of debt discount and debt
issuance cost, (c) capitalized interest, (d) non-cash interest expenses, (e)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (f) net costs associated with
Hedging Obligations under Interest Rate Agreements (including amortization of
fees), (g) Redeemable Dividends, (h) Preferred Stock dividends in respect of all
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Corporation or a Wholly Owned Subsidiary, and (i) interest accruing on any Debt
of any other Person to the extent such Debt is Guaranteed by the Corporation or
any Restricted Subsidiary.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss) of
the Corporation and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income (a) any net income (loss)
of any Person (other than the Corporation) if such Person is not a Restricted
Subsidiary, except that (i) subject to the exclusion contained in clause (d)
below,
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the Corporation's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash distributed by such Person during such period to the Corporation
or a Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (c) below) and (ii) the Corporation's equity in
a net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income, (b) any
net income (loss) of any Person acquired by the Corporation or any of its
consolidated Subsidiaries in a pooling of interests transaction for any period
prior to the date of such acquisition, (c) any net income (loss) of any
Restricted Subsidiary to the extent that such Restricted Subsidiary is subject
to restrictions, directly or indirectly, on the payment of dividends or the
making of distributions, directly or indirectly, to the Corporation, except that
(i) subject to the exclusion contained in clause (d) below, the Corporation's
equity in the net income of any such Restricted Subsidiary for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Restricted Subsidiary during such period to the Corporation
or another Restricted Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to another Restricted
Subsidiary, to the limitation contained in this clause) and (ii) the
Corporation's equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income, (d) any
gain (but not loss) realized upon the sale or other disposition of any Property
of the Corporation or any of its consolidated Subsidiaries (including pursuant
to any Sale and Leaseback Transaction) which is not sold or otherwise disposed
of in the ordinary course of business and (e) any extraordinary gain or loss.
"CONSOLIDATED NET TANGIBLE ASSETS" means, as of any date of determination,
the sum of the amounts that would appear on a consolidated balance sheet of the
Corporation and its consolidated Restricted Subsidiaries as the total assets
(less accumulated depreciation, depletion and amortization, allowances for
doubtful receivables, adjustments for pension liabilities, other applicable
reserves and other properly deductible items) of the Corporation and its
Restricted Subsidiaries, after giving effect to purchase accounting and after
deducting therefrom Consolidated Current Liabilities and, to the extent
otherwise included, the amounts of (without duplication): (a) the excess of cost
over fair market value of assets or businesses acquired; (b) any revaluation or
other write-up in book value of assets subsequent to the last day of the fiscal
quarter of the Corporation immediately preceding the Issue Date as a result of a
change in the method of valuation in accordance with GAAP; (c) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
17
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developmental expenses and other intangible items; (d) minority interests in
consolidated Subsidiaries held by Persons other than the Corporation or any
Restricted Subsidiary; (e) treasury stock; (f) cash or securities set aside and
held in a sinking or other analogous fund established for the purpose of
redemption or other retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and (g) Investments in and
assets of Unrestricted Subsidiaries.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
consolidated balance sheet of the Corporation and its Restricted Subsidiaries as
of the end of the most recent fiscal quarter of the Corporation ending at least
45 days prior to the taking of any action for the purpose of which the
determination is being made, as (a) the par or stated value of all outstanding
Capital Stock of the Corporation plus (b) paid-in capital or capital surplus
relating to such Capital Stock plus (c) any retained earnings or earned surplus
less (i) any accumulated deficit, (ii) any amounts attributable to Disqualified
Stock and (iii) any adjustments for pension liabilities.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this Tenth Supplemental
Indenture is located at 450 West 33rd Street, New York, NY 10001.
"CORPORATION" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.
"CORPORATION REQUEST" or "CORPORATION ORDER" means a written request or
order signed in the name of the Corporation by its Chairman, its President, any
Vice President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"CREDIT FACILITIES" means the Receivables Purchase Agreement and the
Inventory Facilities, in each case together with any extensions, revisions,
refinancings or replacements thereof by a lender or syndicate of lenders
(including through the sale of accounts receivable or inventory to such lender
or lenders or to NSFC or any other bankruptcy-remote, special-purpose Subsidiary
of the Corporation that purchases such accounts receivable or inventory).
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a Person, any
foreign exchange contract, currency swap agreement, currency option
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or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (a) the principal in respect of (i) debt of such Person
for money borrowed and (ii) debt evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable; (b) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale and Leaseback Transactions entered into by such Person;
(c) all obligations of such Person issued or assumed as the deferred purchase
price of Property, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but excluding
Trade Accounts Payable arising in the ordinary course of business); (d) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (a) through (c) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the tenth Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit); (e) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); (f) all obligations of the type referred to in clauses (a) through
(e) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee; (g) all obligations of the type referred to in clauses (a) through
(f) of other Persons secured by any Lien on any Property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such Property or assets
or the amount of the obligation so secured; (h) to the extent not otherwise
included in this definition, Hedging Obligations of such Person; and (i) to the
extent not otherwise included in this definition, any financing of accounts
receivable or inventory of such Person (whether or not treated as a sale or debt
for accounting purposes); provided that such accounts receivable or inventory
shall be deemed to be on the consolidated balance sheet of the Corporation for
purposes of clause (b)(ii) of the definition of "PERMITTED DEBT". The amount of
Debt of any Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability, upon
the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date.
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"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees and
successors.
"DISQUALIFIED STOCK" means, with respect to any Person, Redeemable Stock of
such Person as to which the maturity, mandatory redemption, redemption at the
option of the holder thereof, conversion or exchange occurs, or may occur, on or
prior to the first anniversary of the Stated Maturity of the 2009 Series Bonds;
provided, however, that Redeemable Stock of such Person that would not otherwise
be characterized as Disqualified Stock under this definition shall not
constitute Disqualified Stock if such Redeemable Stock is convertible or
exchangeable into Debt solely at the option of the issuer thereof.
"EBITDA" means, for any period, an amount equal to, for the Corporation and
its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net Income
for such period, plus the following to the extent reducing Consolidated Net
Income for such period: (i) the provision for taxes for such period based on
income or profits or utilized in computing net loss, (ii) Consolidated Interest
Expense, (iii) depreciation and amortization of fixed and intangible assets and
(iv) any other non-cash items (other than any such non-cash item to the extent
that it represents an accrual of or reserve for cash expenditures in any future
period, except amortization of any SFAS 106 transaction obligation of the
Corporation), minus (b) all non-cash items increasing Consolidated Net Income
for such period (other than any such non-cash item to the extent that it will
result in the receipt of cash payments in any future period). Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Corporation by
such Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the offer by the Corporation to the Holders of the
Initial 2009 Series Bonds to exchange all of the Initial 2009 Series Bonds for
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Exchange 2009 Series bonds, as provided for in the Registration Rights
Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"EXCHANGE 2009 SERIES BONDS" refers to the First Mortgage Bonds, 9 7/8%
Series B due 2009 containing terms substantially identical to the Initial 2009
Series Bonds (except that (i) such Exchange 2009 Series Bonds shall not contain
terms with respect to transfer restrictions and shall be registered under the
Securities Act, and (ii) certain provisions relating to an increase in the
stated rate of interest thereon shall be eliminated) that are issued and
exchanged for the Initial 2009 Series Bonds in accordance with the Exchange
Offer, as provided for in the Registration Rights Agreement and this
Supplemental Indenture.
"FAIR MARKET VALUE" means, with respect to any Property, the price (or, in
the case of a lease, the rent) which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller (or lessor) and a willing
buyer (or lessee), neither of whom is under undue pressure or compulsion to
complete the transaction. Fair Market Value will be determined, except as
otherwise provided, (a) if such Property has a Fair Market Value equal to or
less than $10,000,000, by any Officer of the Corporation or (b) if such Property
has a Fair Market Value in excess of $10,000,000, by a majority of the Board of
Directors and evidenced by a Board Resolution, dated within 30 days of the
relevant transaction, delivered to the Trustee.
"GAAP" means United States generally accepted accounting principles as in
effect on the Issue Date, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and (d)
the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements,
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or by agreements to keep-well, to purchase assets, goods, securities or
services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "GUARANTEE" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "GUARANTEE" used as a
verb has a corresponding meaning. The term "GUARANTOR" shall mean any Person
Guaranteeing any obligation.
"HEDGING OBLIGATION" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
"HOLDER"or "BONDHOLDER" means the Person in whose name a Bond is
registered on the Bond Register.
"INCUR" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such Debt or
obligation on the balance sheet of such Person (and "Incurrence"and "Incurred"
shall have meanings correlative to the foregoing); provided, however, that a
change in GAAP that results in an obligation of such Person that exists at such
time, and is not theretofore classified as Debt, becoming Debt shall not be
deemed an Incurrence of such Debt; provided further, however, that solely for
purposes of determining compliance with Section 4.05, amortization of debt
discount shall not be deemed to be the Incurrence of Debt, provided that in the
case of Debt sold at a discount, the amount of such Debt Incurred shall at all
times be the aggregate principal amount at Stated Maturity.
"INDENTURE" means the Original Indenture as amended or supplemented from
time to time, as defined in the recitals hereto.
"INDEPENDENT FINANCIAL ADVISOR" means an investment banking firm of
national standing or any third party appraiser of national standing, provided
that such firm or appraiser is not an Affiliate of the Corporation.
"INITIAL 2009 SERIES BONDS" has the meaning specified in the recitals to
this Supplemental Indenture.
"INTEREST PAYMENT DATE" means March 1 and September 1 of each year,
commencing September 1, 1999.
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"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"INVENTORY FACILITIES" means (i) the $100 million Inventory Credit
Agreement, dated as of July 18, 1996, among the Corporation, the Long-Term
Credit Bank of Japan Ltd, New York Branch, as Administrative Agent and the Long-
Term Credit Bank of Japan Ltd., New York Branch, as Structuring Agent and
Collateral Agent and (2) the $50 million Credit Agreement, dated as of July 18,
1996, between the Corporation and The Fuji Bank and Trust Company.
"INVESTMENT" by any Person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. In determining
the amount of any Investment made by transfer of any Property other than cash,
such Property shall be valued at its Fair Market Value at the time of such
Investment.
"INVESTMENT GRADE RATING" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"INVESTMENT GRADE STATUS" shall be deemed to have been reached on the date
that the 2009 Series Bonds have an Investment Grade Rating from both Rating
Agencies.
"ISSUE DATE" means the date on which the 2009 Series Bonds are initially
issued.
"LIEN" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction, but excluding any operating lease (except Sale and
Leaseback Transactions) entered into in the ordinary course of such Person's
business).
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"MOODY'S" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.
"MORTGAGED PROPERTY" means any Property of the Corporation or any of its
Subsidiaries that is subjected to, or is intended to be subjected to, the lien
of the Indenture.
"NET AVAILABLE CASH" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other non-
cash form), in each case net of (a) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale, (b) all payments made on any Debt
which is secured by any Property subject to such Asset Sale, in accordance with
the terms of any Lien upon or other security agreement of any kind with respect
to such Property, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the proceeds
from such Asset Sale, (c) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale and (d) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the Property disposed in such Asset Sale and retained by the Corporation or
any Restricted Subsidiary after such Asset Sale.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of Capital
Stock, the cash proceeds of such issuance or sale, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NKK" means NKK U.S.A. Corporation and its Affiliates.
"NON-MORTGAGED PROPERTY" means Property of the Corporation or any of its
Subsidiaries other than Mortgaged Property.
"NSFC" means National Steel Funding Corp., a Delaware corporation, and its
successors.
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"OFFICER" means the President, the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer or the Comptroller or the Chief
Financial Officer or any Vice President of the Corporation.
"OFFICERS' CERTIFICATE" means a certificate signed by the President or a
Vice President and the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer or the Comptroller or an Assistant Comptroller of the
Corporation.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Corporation.
"PERMITTED DEBT" means:
(a) Debt of the Corporation evidenced by the 2009 Series Bonds;
(b) Debt of the Corporation or any Restricted Subsidiary under the
Credit Facilities; provided that the aggregate principal amount of all such
Debt under the Credit Facilities at any one time outstanding shall not
exceed the greater of (i) $350 million less the sum of the aggregate amount
of all required payments of principal applied to reduce the aggregate
amount available to be borrowed under the Credit Facilities including
pursuant to Section 4.10, and (ii) the sum of the amounts equal to (x) 60%
of the book value of the inventory of the Corporation and the Restricted
Subsidiaries and (y) 85% of the book value of the accounts receivable of
the Corporation and the Restricted Subsidiaries, in each case as of the
most recently ended quarter of the Corporation prior to such Incurrence for
which financial statements of the Corporation have been provided to the
Holders of 2009 Series Bonds;
(c) Capital Expenditure Debt of the Corporation or any Restricted
Subsidiary; provided that (i) the aggregate principal amount of such Debt
does not exceed the Fair Market Value (on the date of the Incurrence
thereof) of the Property acquired, constructed or leased and (ii) the
aggregate principal amount of all Debt Incurred and then outstanding
pursuant to this clause (c), together with all Permitted Refinancing Debt
Incurred and then outstanding in respect of Debt previously Incurred
pursuant to this clause (c), does not exceed $175 million;
(d) Debt of the Corporation owing to and held by any Wholly Owned
Subsidiary and Debt (including Preferred Stock) of a Restricted
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Subsidiary owing to and held by the Corporation or any Wholly Owned
Subsidiary; provided, however, that any subsequent issue or transfer of
Capital Stock or other event that results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of any such Debt (except to the Corporation or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Debt by the Corporation or such Restricted Subsidiary;
(e) Debt of a Restricted Subsidiary Incurred and outstanding on or
prior to the date on which such Restricted Subsidiary was acquired by the
Corporation or otherwise became a Restricted Subsidiary (other than Debt
Incurred as consideration in, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary of the Corporation or was otherwise acquired by the
Corporation); provided that at the time such Restricted Subsidiary was
acquired by the Corporation or otherwise became a Restricted Subsidiary and
after giving pro forma effect to the Incurrence of such Debt, the
Corporation would have been able to Incur $1.00 of additional Debt pursuant
to Section 4.05(a);
(f) Debt under Interest Rate Agreements entered into by the
Corporation or a Restricted Subsidiary for the purpose of limiting interest
rate risk in the ordinary course of the financial management of the
Corporation or such Restricted Subsidiary and not for speculative purposes;
provided that the obligations under such agreements are directly related to
payment obligations on Debt otherwise permitted by Section 4.05;
(g) Debt under Currency Exchange Protection Agreements entered into
by the Corporation or a Restricted Subsidiary for the purpose of limiting
currency exchange rate risk in the ordinary course of the financial
management of the Corporation or such Restricted Subsidiary and not for
speculative purposes;
(h) Debt under Commodity Price Protection Agreements entered into by
the Corporation or a Restricted Subsidiary in the ordinary course of the
financial management (including cost control) of the Corporation or such
Restricted Subsidiary and not for speculative purposes;
(i) Debt in connection with one or more standby letters of credit or
performance bonds issued by the Corporation or a Restricted Subsidiary in
the ordinary course of business or pursuant to self-insurance obligations
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and not in connection with the borrowing of money or the obtaining of
advances or credit;
(j) Debt outstanding on the Issue Date not otherwise described in
clauses (a) through (i) above;
(k) Debt of the Corporation or any Restricted Subsidiary (other than
Debt permitted by Section 4.05(a) or the other clauses of this definition)
in an aggregate principal amount outstanding at any one time not to exceed
$75,000,000; an d
(l) Permitted Refinancing Debt Incurred in respect of Debt Incurred
pursuant to Section 4.05(a) and clauses (a), (c), (e) and (j) above,
subject, in the case of clause (c) above, to the limitations set forth in
the respective proviso thereto.
"PERMITTED INVESTMENTS" means any Investment by the Corporation or any
Restricted Subsidiary in any of the following:
(a) Cash Equivalents;
(b) the Corporation or any Restricted Subsidiary;
(c) another Person, if as a result of such Investment (i) such other
Person becomes a Restricted Subsidiary or (ii) such other Person is merged
or consolidated with or into, or transfers or conveys all or substantially
all of its assets to, the Corporation or a Restricted Subsidiary;
(d) loans or advances made to employees or directors of the
Corporation or any Restricted Subsidiary in the ordinary course of business
in an aggregate amount not to exceed US$1 million at any one time
outstanding;
(e) Hedging Obligations which constitute Permitted Debt;
(f) Investments consisting of non-cash consideration received in the
form of securities, Notes or similar obligations in connection with an
Asset Sale permitted by Section 4.08 and Section 4.10, as applicable,
provided that the aggregate amount of such non-cash consideration received
in connection with any such Asset Sale shall not exceed the amount
permitted under Section 4.08 and Section 4.10 or the terms of the Original
Indenture, as applicable;
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(g) the purchase by the Company or any Restricted Subsidiary in one
or more transactions of all or any portion of NKK's ownership interest in
DNN Galvanizing Limited Partnership; and
(h) Investments in joint ventures engaged in the steel business or
other businesses reasonably related thereto in an aggregate amount not to
exceed $20 million.
"PERMITTED HOLDERS" means NKK U.S.A. Corporation and its Affiliates.
"PERMITTED REFINANCING DEBT" means any Debt that Refinances any other Debt,
including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced; provided, however, that Permitted Refinancing
Debt shall not include (a) Debt of a Subsidiary that Refinances Debt of the
Corporation or (b) Debt of the Corporation or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.
"PERSON" means any individual, corporation, company (including any limited
liability or joint-stock company), partnership, joint venture, association,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PLACE OF PAYMENT" means the place or places where the principal of (and
premium, if any, on) and interest on the 2009 Series Bonds are payable as
specified as contemplated by Section 3.01 hereof and Section 4.04 of the
Original Indenture.
"PREDECESSOR 2009 SERIES BOND" of any particular 2009 Series Bond means
every previous 2009 Series Bond evidencing all or a portion of the same debt as
that evidenced by such particular 2009 Series Bond; and, for the purposes of
this definition, any 2009 Series Bond authenticated and delivered in compliance
with Section 3.03 of the Original Indenture in exchange for or in lieu of a
mutilated, destroyed , lost or stolen 2009 Series Bond shall be deemed to
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evidence the same debt as the mutilated, destroyed, lost or stolen 2009 Series
Bond.
"PREFERRED STOCK" means any Capital Stock of a Person, however designated,
which entitles the Holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of any other class of
Capital Stock issued by such Person.
"PRINCIPAL" of any Debt (including the 2009 Series Bonds) means the
principal amount of such Debt plus the premium, if any, on such Debt.
"PROPERTY" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required pursuant to the Indenture, the
value of any Property shall be its Fair Market Value.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of common
stock of the Corporation pursuant to an effective registration statement under
the Securities Act.
"RATING AGENCIES" mean Moody's and S&P.
"RECEIVABLES PURCHASE AGREEMENT" means the Receivables Purchase Agreement
dated as of May 18, 1994, as amended through the Issue Date, among NSFC, Morgan
Guaranty Trust Company of New York (as successor to J.P. Morgan Delaware), as
structuring and collateral agent and facility agent, and various financial
institutions parties thereto as lenders and issuing banks.
"REDEEMABLE DIVIDEND" means, for any dividend with respect to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"REDEEMABLE STOCK" means, with respect to any Person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (a) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (b) is or may
become redeemable or repurchasable at the option of the holder thereof, in whole
or in part, or (c) is convertible or exchangeable for Debt or Disqualified
Stock.
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"REFINANCE" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Debt, in
exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of March 8,1999, among the Corporation and the Holders of Initial 2009
Series Bonds.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Corporation which covers any of the 2009 Series Bonds pursuant to the provisions
of the Registration Rights Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective amendments.
"RESTRICTED PAYMENT" means (a) any dividend or distribution (whether made
in cash, securities or other Property) declared or paid on or with respect to
any shares of Capital Stock of the Corporation or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Corporation or any Restricted Subsidiary), except for any dividend or
distribution which is made solely to the Corporation or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a pro rata basis) or any
dividend or distribution payable solely in shares of Capital Stock (other than
Redeemable Stock) of the Corporation; (b) any payment made by the Corporation or
any Restricted Subsidiary to purchase, redeem, repurchase, acquire or retire for
value any Capital Stock of the Corporation or any Restricted Subsidiary (other
than (I) Capital Stock of a Wholly Owned Restricted Subsidiary or (II) from all
holders of Capital Stock of a non-wholly owned Restricted Subsidiary on a pro
rata basis); (c) any payment made by the Corporation or any Restricted
Subsidiary to purchase, redeem, repurchase, defease or otherwise acquire or
retire for value, prior to any scheduled maturity, scheduled sinking fund or
mandatory redemption payment, any Subordinated Obligation (other than the
purchase, repurchase, or other acquisition of any Subordinated Obligation
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition); or (d) any Investment (other than any Permitted Investment) in any
Person (including, without limitation, any Unrestricted Subsidiary).
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Corporation in
existence on or after the Issue Date unless such Subsidiary shall have been
designated an Unrestricted Subsidiary as permitted or required pursuant to
Section 4.14 and (b) an Unrestricted Subsidiary which is redesignated as a
Restricted Subsidiary as permitted pursuant to Section 4.14.
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"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement relating to Property
now owned or hereafter acquired whereby the Corporation or a Restricted
Subsidiary transfers such Property to another Person and the Corporation or a
Restricted Subsidiary leases it from such Person, other than any such
arrangement with respect to Property acquired or placed into service by the
Corporation or any Restricted Subsidiary after the Issue Date to the extent
entered into within 365 days after the date of such acquisition or placement
into service and not constituting a Capital Lease Obligation.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECURED DEBT" means any Debt of the Corporation or any Restricted
Subsidiary secured by a Lien.
"SENIOR DEBT" of the Corporation means (a) all obligations consisting of
the principal, and accrued and unpaid interest in respect of (i) Debt of the
Corporation for borrowed money and (ii) Debt of the Corporation evidenced by
notes, debentures, bonds or other similar instruments permitted under the
Indenture for the payment of which the Corporation is responsible or liable; (b)
all Capital Expenditure Debt of the Corporation; (c) all obligations of the
Corporation (i) for the reimbursement of any obligor on any letter of credit,
bankers' acceptance or similar credit transaction or (ii) under Hedging
Obligations; and (d) all obligations of other Persons of the type referred to in
clauses (a) and (b) for the payment of which the Corporation is responsible or
liable as Guarantor; provided, however, that Senior Debt of the Corporation
shall not include (A) Debt of the Corporation that is by its terms subordinate
in right of payment to the 2009 Series Bonds; (B) any Debt Incurred in violation
of the provisions of the Indenture; (C) accounts payable or any other
obligations of the Corporation to trade creditors created or assumed by the
Corporation in the ordinary course of business in connection with the obtaining
of materials or services (including Guarantees thereof or instruments evidencing
such liabilities); (D) any liability for Federal, state, local or other taxes
owed or owing by the Corporation; (E) any obligation of the Corporation to any
Subsidiary; or (F) any obligations with respect to any Capital Stock.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Corporation pursuant to the provisions of the Registration Rights
Agreement.
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"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Corporation within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the 2009
Series Bonds means a date fixed by the Trustee pursuant to Section 3.06.
"STATED MATURITY" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"SUBORDINATED OBLIGATION" means any Debt of the Corporation (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the 2009 Series Bonds or the Guaranty pursuant to
a written agreement to that effect.
"SUBSIDIARY" means, in respect of any specified Person, any corporation,
company, partnership, joint venture, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of
such Person or (iii) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as amended and in effect on the date of this Indenture except as required by
Section 8.08 hereof; provided that in the event the Trust Indenture Act of 1939
is amended after such date, "TRUST INDENTURE ACT" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939, as so amended.
"2009 SERIES BONDS" has the meaning stated in the first recital of this
Supplemental Indenture.
"UNITED STATES" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Corporation in
existence on the Issue Date that is not a Restricted Subsidiary; (b) any
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Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the
Corporation that is designated after the Issue Date as an Unrestricted
Subsidiary as permitted pursuant to Section 4.14 and not thereafter redesignated
as a Restricted Subsidiary as permitted pursuant thereto.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"VOTING STOCK" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a corporation all the stock
of which (except directors' qualifying shares, where necessary) is at such time
owned, directly or indirectly, by the Corporation or by one or more Wholly Owned
Subsidiaries.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
<S> <C>
"Affiliate Transaction"................................... 4.12
"Bankruptcy Law".......................................... 6.01
"Bond Registrar".......................................... 3.05
"Change of Control Offer"................................. 4.09(a)
"Change of Control Purchase Price"........................ 4.09(a)
"Change of Control Payment Date".......................... 4.09(b)
"Custodian"............................................... 6.01
"Excess Proceeds"......................................... 4.10(c)
"Offer Amount"............................................ 4.10(d)(ii)
"Offer Period"............................................ 4.10(d)(ii)
"Offshore Bond Exchange Date"............................. 2.03
"Offshore Physical Bond".................................. 2.01
"Prepayment Offer"........................................ 4.10(c)
"Prepayment Offer Notice"............................... 4.10(d)(1)
"Private Placement Legend"................................ 2.03
"Purchase Date"......................................... 4.10(d)(1)
"Tenth Supplemental Indenture Event of Default"........... 6.01
"Surviving Person"........................................ 5.01(a)
</TABLE>
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Unless otherwise defined herein, terms defined in Article One of the
Original Indenture shall have the same meanings when used herein. All the terms
and provisions of this Supplemental Indenture shall be and be deemed to be a
part of the terms and provisions of the Indenture for any and all purposes.
Section 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the 2009 Series Bonds.
"indenture security holder" means a Bondholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Corporation, and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.0. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
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(6) unsecured Debt shall not be deemed to be subordinate or junior to
secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
2009 Bonds Forms
Section 2.01. Forms Generally.
The Initial 2009 Series Bonds shall be known and designated as the "FIRST
MORTGAGE BONDS, 9 7\8% SERIES A DUE 2009" and the Exchange 2009 Series
Bonds shall be known and designated as the "FIRST MORTGAGE BONDS, 9 7\8%
SERIES B DUE 2009", in each case, of the Corporation. The 2009 Series Bonds and
the Trustee's certificate of authentication shall be in substantially the forms
set forth in the recitals to the supplement of this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such 2009 Series
Bonds, as evidenced by their execution of the 2009 Series Bonds. Any portion of
the text of any 2009 Series Bond may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the 2009 Series Bond. Each Bond
shall be dated the date of its authentication.
The definitive 2009 Series Bonds shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Corporation executing such 2009 Series Bonds,
as evidenced by their execution of such 2009 Series Bonds.
Initial 2009 Series Bonds offered and sold in reliance on Rule 144A
promulgated under the Securities Act of 1933, as amended ("RULE 144A"), may be
issued in the form of one or more permanent global Notes substantially in the
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form set forth in the recitals to this Supplemental Indenture (the "U.S. GLOBAL
BOND") deposited with The Chase Manhattan Bank, as custodian for the Depositary
or its nominee, duly executed by the Corporation and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the U.S.
Global Bond may from time to time be increased or decreased by adjustments made
on the records of The Chase Manhattan Bank, as custodian for the Depositary or
its nominee, as hereinafter provided.
Initial 2009 Series Bonds offered and sold in offshore transactions in
reliance on Regulation S promulgated under the Securities Act of 1933, as
amended ("REGULATION S"), shall be issued in the form of a single permanent
global bond in substantially the form set forth in the recitals to this
Supplemental Indenture (the "OFFSHORE GLOBAL BOND") deposited with The Chase
Manhattan Bank, as custodian for the Depositary or its nominee, duly executed by
the Corporation and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount at maturity of the Offshore Global Bond may from time
to time be increased or decreased by adjustments made in the records of the The
Chase Manhattan Bank, as custodian for the Depositary or its nominee, as herein
provided.
Bonds issued pursuant to Section 3.05 in exchange for or upon transfer of
beneficial interests in the U.S. Global Bond ("U.S. PHYSICAL BONDS") or the
Offshore Global Bond (the "OFFSHORE PHYSICAL BONDS") shall be in the form of
permanent certificated Bonds substantially in the form set forth in the recitals
to this Supplemental Indenture.
The Offshore Physical Bonds and U.S. Physical Bonds are sometimes
collectively herein referred to as the "PHYSICAL BONDS". The U.S. Global Bond
and the Offshore Global Bond are sometimes collectively referred to as the
"GLOBAL BONDS".
Section 2.02. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
form set forth in the recitals to this Indenture.
Section 2.03. Restrictive Legends.
Unless and until (i) an Initial 2009 Series Bond is sold pursuant to an
effective Shelf Registration Statement or (ii) an Initial 2009 Series Bond is
exchanged for an Exchange 2009 Series Bond in an Exchange Offer pursuant to an
effective Exchange Offer Registration Statement, in each case pursuant to the
Registration Rights Agreement, (A) each U.S. Global Bond and U.S. Physical
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Bond shall bear the following legend set forth below (the "PRIVATE PLACEMENT
LEGEND") on the face thereof and (B) the Offshore Physical Bonds and Offshore
Global Bond shall bear the Private Placement Legend on the face thereof until at
least 41 days after the date hereof (the "OFFSHORE BOND EXCHANGE DATE") and
receipt by the Corporation and the Trustee of a certificate substantially in the
form provided in Section 2.04:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF (OR OF A PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE RESALE PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THE SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY), (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AN OTHER INFORMATION
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AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS
SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A OR (2) A NON-UNITED STATES PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (o)(2) OR RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
Each Global Bond, whether or not an Initial 2009 Series Bond, shall also
bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY IN WHOLE, BUT NOT IN PART SHALL BE
LIMITED TO TRANSFERS, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.11 AND 3.12 OF THE TENTH SUPPLEMENTAL INDENTURE.
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Section 2.04. Form of Certificate to Be Delivered upon Termination of
Restricted Period.
[Date]
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Corporate Trust Administration
Re: NATIONAL STEEL CORPORATION (the "Corporation")
First Mortgage Bonds, 9 7/8% Series A due 2009 of the
-----------------------------------------------------
Corporation (the "2009 Series Bonds")
------------------------------------
Ladies and Gentlemen:
This letter relates to $ _________ principal amount of 2009 Series Bonds
represented by a offshore global bond certificate (the "Offshore Global Bond").
Pursuant to Section 2.04 of the Indenture dated as of March 8, 1999 relating to
the 2009 Series Bonds (the "Indenture"), we hereby certify that (1) we are the
beneficial owner of such principal amount of 2009 Series Bonds represented by
the Offshore Global Bond and (2) we are a non-U.S. Person to whom the 2009
Series Bonds could be transferred in accordance with Rule 904 of Regulation S
promulgated under the Securities Act of 1933, as amended ("Regulation S").
Accordingly, you are hereby requested to issue an Offshore Physical Bond
representing the undersigned's interest in the principal amount of 2009 Series
Bonds represented by the Offshore Global Bond, all in the manner provided by the
Indenture.
You and the Corporation are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to
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the matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_______________________________
Authorized Signature
ARTICLE 3
The 2009 Series Bonds
Section 3.01. Maturity; Payment.
The Stated Maturity of the 2009 Series Bonds shall be March 1, 2009, and
they shall bear interest at the rate of 9 7\8% per annum from March 8,
1999, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, payable on September 1, 1999 and semi-annually
thereafter on March 1 and September 1 in each year, until the principal thereof
is paid in full and to the Person in whose name the 2009 Series Bond (or any
predecessor 2009 Series Bond) is registered at the close of business on the
February 15 or August 15 next preceding such Interest Payment Date (each a
"REGULAR RECORD DATE").
The principal of (and premium, if any) and interest on the 2009 Series
Bonds shall be payable at the office or agency of the Corporation maintained for
such purpose in The City of New York, or at such other office or agency of the
Corporation as may be maintained for such purpose; provided, however, that, at
the option of the Corporation, interest may be paid (a) by check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Bond Register or (b) by wire transfer to an account maintained by the payee
located in the United States provided that appropriate written wire instructions
have been provided at least two Business Days prior to the relevant record date.
Holders shall have the right to require the Corporation to purchase their
2009 Series Bonds, in whole or in part, in the event of a Change of Control
pursuant to Section 4.09.
The 2009 Series Bonds shall be redeemable as provided in Article 7 and in
the 2009 Series Bonds.
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Section 3.02. Denominations.
The 2009 Series Bonds shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 3.03. Execution. Authentication, Delivery and Dating.
The 2009 Series Bonds shall be executed on behalf of the Corporation in
accordance with Section 2.12 of the Original Indenture. Notwithstanding any
provision of Section 2.12 of the Original Indenture to the contrary, the
signature of any of these officers on the 2009 Series Bonds may be the manual or
facsimile signatures of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the 2009 Series Bonds.
2009 Series Bonds bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such 2009 Series
Bonds or did not hold such offices at the date of such 2009 Series Bonds.
On Corporation Order, the Trustee shall, pursuant to Section 3.05 and
Section 3.09 of the Original Indenture, authenticate for original issue Initial
2009 Series Bonds in an aggregate principal amount not to exceed $225,000,000;
provided, that the Trustee shall also authenticate, pursuant to Section 3.05 and
Section 3.09 of the Original Indenture, for original issue Exchange 2009 Series
Bonds in an aggregate principal amount not to exceed $225,000,000; provided
further that such Exchange 2009 Series Bonds shall be issuable only upon the
valid surrender for cancellation of Initial 2009 Series Bonds of a like
aggregate principal amount in accordance with an Exchange Offer pursuant to the
Registration Rights Agreement. In each case, the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Corporation
that it may reasonably request in connection with such authentication of Initial
2009 Series Bonds and Exchange 2009 Series Bonds in accordance with Section 3.05
and Section 3.09 of the Original Indenture. Such order shall specify the amount
of Initial 2009 Series Bonds or Exchange 2009 Series Bonds to be authenticated
and the date on which the original issue of Initial 2009 Series Bonds or
Exchange 2009 Series Bonds is to be authenticated.
Each 2009 Series Bond shall be dated the date of its authentication.
No 2009 Series Bond shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such 2009
Series Bond a certificate of authentication substantially in the form provided
for herein
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duly executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any 2009 Series Bond shall be conclusive evidence, and the
only evidence, that such 2009 Series Bond has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any 2009 Series Bond shall have been
authenticated and delivered hereunder but never issued and sold by the
Corporation, and the Corporation shall deliver such 2009 Series Bond to the
Trustee for cancellation as provided in Section 3.08 together with a written
statement by an Officer (which need not be accompanied by an Opinion of Counsel)
stating that such 2009 Series Bond has never been issued and sold by the
Corporation, for all purposes of this Indenture such 2009 Series Bond shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
In case the Corporation, pursuant to Article 5, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Corporation shall have been merged, or
the Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article 5, any of the 2009 Series Bonds
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other 2009 Series Bonds executed in the
name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the 2009 Series Bonds
surrendered for such exchange and of like principal amount; and the Trustee,
upon Corporation Request of the successor Person and an Officers' Certificate
and an opinion of counsel as to such exchange conforming with this paragraph,
shall authenticate and deliver 2009 Series Bonds as specified in such request
for the purpose of such exchange. If 2009 Series Bonds shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section 3.03 in exchange or substitution for or upon registration of
transfer of any 2009 Series Bonds, such successor Person, at the option of the
Holders but without expense to them, shall provide for the exchange of all 2009
Series Bonds at the time Outstanding for 2009 Series Bonds authenticated and
delivered in such new name.
Section 3.04. Temporary 2009 Series Bonds.
Pending the preparation of definitive 2009 Series Bonds, the Corporation
may execute, and upon Corporation Order the Trustee shall authenticate in
accordance with Section 3.05 and 3.09 of the Original Indenture and deliver,
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temporary 2009 Series Bonds which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive 2009 Series Bonds in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations as conclusively the officers executing such 2009 Series
Bonds may determine, as conclusively evidenced by their execution of such 2009
Series Bonds.
If temporary 2009 Series Bonds are issued, the Corporation will cause
definitive 2009 Series Bonds to be prepared without unreasonable delay. After
the preparation of definitive 2009 Series Bonds, the temporary 2009 Series Bonds
shall be exchangeable for definitive 2009 Series Bonds, upon surrender of the
temporary 2009 Series Bonds at the office or agency of the Corporation in a
Place of Payment, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary 2009 Series Bonds, the Corporation shall execute
and, upon Corporation Order, the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary 2009 Series Bonds shall in all
respects be entitled to the same benefits under this Indenture as definitive
2009 Series Bonds.
Section 3.05. Registration, Registration of Transfer and Exchange.
The Corporation shall cause to be kept at the Corporate Trust Office of the
Trustee a register for the 2009 Series Bonds (the register maintained in the
Corporate Trust Office of the Trustee and in any other office or agency of the
Corporation in a Place of Payment being herein sometimes collectively referred
to as the "BOND REGISTER") in which, subject to such reasonable regulations as
it may prescribe, the Corporation shall provide for the registration of 2009
Series Bonds and of transfers of 2009 Series Bonds. The Bond Register shall be
in written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Bond Register shall be
open to inspection by the Trustee. The Trustee is hereby initially appointed as
note registrar (the "BOND REGISTRAR") for the purpose of registering 2009 Series
Bonds and transfers of 2009 Series Bonds as herein provided.
Upon surrender for registration of transfer of any 2009 Series Bond at the
office or agency in a Place of Payment, the Corporation shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee, one or more new 2009 Series Bonds, of any authorized denominations
and of a like aggregate principal amount and tenor.
At the option of the Holder, 2009 Series Bonds may be exchanged for other
2009 Series Bonds, of any authorized denomination and of a like aggregate
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principal amount, upon surrender of the 2009 Series Bonds to be exchanged at
such office or agency. Whenever any 2009 Series Bonds are so surrendered for
exchange, the Corporation shall execute, and the Trustee shall authenticate and
deliver, the 2009 Series Bonds which the Holder making the exchange is entitled
to receive; provided that no exchange of Initial 2009 Series Bonds for Exchange
2009 Series Bonds shall occur until an Exchange Offer Registration Statement
shall have been declared effective by the SEC, the Trustee shall have received
an Officers' Certificate confirming that the Exchange Offer Registration
Statement has been declared effective by the SEC and the Initial 2009 Series
Bonds to be exchanged for the Exchange 2009 Series Bonds shall be canceled by
the Trustee.
All 2009 Series Bonds issued upon any registration of transfer or exchange
of 2009 Series Bonds shall be the valid obligations of the Corporation,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the 2009 Series Bonds surrendered upon such registration of
transfer or exchange.
Every 2009 Series Bond presented or surrendered for registration of
transfer or for exchange shall (if so required by the Corporation or the Bond
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Corporation or the Bond Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of 2009 Series Bonds, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of 2009 Series Bonds,
other than exchanges pursuant to (i) the Exchange Offer or (ii) exchanges
pursuant to this Section 3.05 not involving any transfer.
The Corporation shall not be required (i) to issue, register the transfer
of or exchange 2009 Series Bonds during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of 2009
Series Bonds and ending at the close of business on the day of the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any 2009 Series Bond so selected for redemption in whole or in part,
except the unredeemed portion of any 2009 Series Bond being redeemed in part, or
(iii) to issue, register the transfer of or exchange any 2009 Series Bond which
has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such 2009 Series Bond not to be so repaid.
Section 3.06. Payment of Interest, Interest Rights Preserved. Interest on
any 2009 Series Bond which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name such
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2009 Series Bond (or one or more Predecessor 2009 Series Bonds) is registered at
the close of business on the Regular Record Date for such interest at the Place
of Payment provided, however, that each installment of interest on any 2009
Series Bond may at the Corporation's option be paid by (i) mailing a check for
such interest, payable to or upon the written order of the Person entitled
thereto pursuant to Section 3.07, to the address of such Person as it appears on
the Bond Register or (ii) wire transfer to an account maintained by the payee
located in the United States.
Any interest on any 2009 Series Bond which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such defaulted interest and, if
applicable, interest on such defaulted interest (to the extent lawful) at the
rate specified in the 2009 Series Bonds (such defaulted interest and, if
applicable, interest thereon herein collectively called "DEFAULTED INTEREST")
may be paid by the Corporation, at its election in each case, as provided in
clause (1) or (2) below:
(1) The Corporation may elect to make payment of any Defaulted
Interest to the Persons in whose names the 2009 Series Bonds (or their
respective Predecessor 2009 Series Bonds) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Corporation
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each 2009 Series Bond and the date of the proposed
payment, and at the same time the Corporation shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Corporation of such
Special Record Date and, in the name and at the expense of the Corporation,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided in
Section 3.15, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose name the 2009 Series Bonds
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(or their respective Predecessor 2009 Series Bonds) are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Corporation may make payment of any Defaulted Interest on the
2009 Series Bonds in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such 2009 Series Bonds may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Corporation to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.05, each
2009 Series Bond delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other 2009 Series Bond shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other 2009 Series Bond.
Section 3.07. Persons Deemed Owners.
Prior to due presentment of a 2009 Series Bond for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name such 2009 Series Bond is registered
as the owner of such 2009 Series Bond for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Sections 3.05 and 3.06)
interest on such 2009 Series Bond and for all other purposes whatsoever, whether
or not such 2009 Series Bond be overdue, and none of the Corporation, the
Trustee or any agent of the Corporation or the Trustee shall be affected by
notice to the contrary.
Section 3.08. Cancellation.
All 2009 Series Bonds surrendered for payment, redemption, repayment at the
option of the Holder, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee. All 2009
Series Bonds so delivered to the Trustee shall be promptly canceled by it. The
Corporation may at any time deliver to the Trustee for cancellation any 2009
Series Bonds previously authenticated and delivered hereunder which the
Corporation may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any 2009 Series Bonds previously authenticated hereunder which the Corporation
has not issued and sold, and all 2009 Series Bonds so delivered shall be
promptly canceled by the Trustee. If the Corporation shall so acquire any of the
2009 Series Bonds, however, such acquisition shall not operate as a redemption
or satisfaction
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of the indebtedness represented by such 2009 Series Bonds unless and until the
same are surrendered to the Trustee for cancellation. No 2009 Series Bonds shall
be authenticated in lieu of or in exchange for any 2009 Series Bonds canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled 2009 Series Bonds held by the Trustee shall be disposed of by the
Trustee in accordance with its customary procedures unless by Corporation Order
the Corporation shall direct that canceled 2009 Series Bonds be returned to it.
Section 3.09. Computation of Interest.
Interest on the 2009 Series Bonds shall be computed on the basis of a 360-
day year of twelve 30-day months.
Section 3.1. Book Entry Provisions for Global Bonds.
(a) Each Global Bond initially shall (i) be registered in the name of the
Depositary for such Global Bonds or the nominee of such Depositary, (ii) be
delivered to The Chase Manhattan Bank as custodian for such Depositary and (iii)
bear legends as set forth in Section 2.03.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have
no rights under this Indenture with respect to any Global Bond, and the
Depositary may be treated by the Corporation, the Trustee and any agent of the
Corporation or the Trustee as the absolute owner of such Global Bond for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Corporation, the Trustee or any agent of the Corporation or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a beneficial owner of any 2009 Series Bond. The registered holder of a
Global Bond may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the 2009
Series Bonds.
(b) Interests of beneficial owners in a Global Bond may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.11. Transfers of a Global Bond shall be limited to
transfers of such Global Bond in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) as otherwise set forth in
Section 3.11 and (ii) U.S. Physical Bonds or Offshore Physical Bonds shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the U.S. Global Bond or the Offshore Global Bond, respectively, in the
following circumstances: (x) the Depositary notifies the Corporation that it is
unwilling or
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unable to continue as Depositary for the applicable Global Bond or the
Depositary ceases to be a "CLEARING AGENCY" registered under the Exchange Act
and a successor depositary is not appointed by the Corporation within 90 days or
(y) an Event of Default has occurred and is continuing and Holders of more than
25 % in aggregate principal amount of the Bonds at the time Outstanding
represented by the Global Bonds advise the Trustee through the Depositary in
writing that the continuation of a book-entry system through the Depositary with
respect to the Global Bonds is no longer required. In connection with a transfer
of an entire Global Bond to beneficial owners pursuant to clause (ii) of this
paragraph (b), the applicable Global Bond shall be deemed to be surrendered to
the Trustee for cancellation, and the Corporation shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the applicable Global
Bond, an equal aggregate principal amount at maturity of U.S. Physical Bonds (in
the case of the U.S. Global Bond) or Offshore Physical Bonds (in the case of the
Offshore Global Bond), as the case may be, of authorized denominations.
(c) Any beneficial interest in one of the Global Bonds that is transferred
to a person who takes delivery in the form of an interest in the other Global
Bond will, upon transfer, cease to be an interest in such Global Bond and become
an interest in the other Global Bond and, accordingly, will thereafter be
subject to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Bond for as long as it remains such an
interest.
(d) Any U.S. Physical Bond delivered in exchange for an interest in the
U.S. Global Bond pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.11, bear the Private Placement Legend.
Section 3.11. Transfer Provisions.
Unless and until (i) an Initial 2009 Series Bond is sold pursuant to an
effective Registration Statement, or (ii) an Initial 2009 Series Bond is
exchanged for an Exchange 2009 Series Bond in the Exchange Offer pursuant to an
effective Registration Statement, in each case, pursuant to the Registration
Rights Agreement, the following provisions shall apply:
(a) General. The provisions of this Section 3.11 shall apply to all
transfers involving any Physical Bond and any beneficial interest in any Global
Bond.
(b) Certain Definitions. As used in this Section 3.11 only, "DELIVERY" of
a certificate by a transferee or transferor means the delivery to the Bond
Registrar by such transferee or transferor of the applicable certificate duly
completed;
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"HOLDING" includes both possession of a Physical Bond and ownership of a
beneficial interest in a Global Bond, as the context requires; "TRANSFERRING" a
Global Bond means transferring that portion of the principal amount of the
transferor's beneficial interest therein that the transferor has notified the
Bond Registrar that it has agreed to transfer; and "TRANSFERRING" a Physical
Bond means transferring that portion of the principal amount thereof that the
transferor has notified the Bond Registrar that it has agreed to transfer.
As used in this Indenture, "REGULATION S CERTIFICATE" means a certificate
substantially in the form set forth in Section 3.12; "RULE 144A CERTIFICATE"
means a certificate substantially in the form set forth in Section 3.13; and
"NON-REGISTRATION OPINION AND SUPPORTING EVIDENCE" means a written opinion of
counsel reasonably acceptable to the Corporation and to the Trustee to the
effect that, and such other certification or information as the Corporation may
reasonably require to confirm that, the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
(c) Deemed Delivery of a Rule 144A Certificate in Certain Circumstances. A
Rule 144A Certificate, if not actually delivered, will be deemed delivered if
(A) (i) the transferor advises the Corporation and the Trustee in writing that
the relevant offer and sale were made in accordance with the provisions of Rule
144A (or, in the case of a transfer of a Physical Bond, the transferor checks
the box provided on the Physical Bond to that effect) and (ii) the transferee
advises the Corporation and the Trustee in writing that (x) it and, if
applicable, each account for which it is acting in connection with the relevant
transfer, is a qualified institutional buyer within the meaning of Rule 144A,
(y) it is aware that the transfer of 2009 Series Bonds to it is being made in
reliance on the exemption from the provisions of Section 5 of the Securities Act
provided by Rule 144A, and (z) prior to the proposed date of transfer it has
been given the opportunity to obtain from the Corporation the information
referred to in Rule 144A(d)(4), and has either declined such opportunity or has
received such information (or, in the case of a transfer of a Physical Bond, the
transferee signs the certification provided on the Physical Bond to that
effect); or (B) the transferor holds the U.S. Global Bond and is transferring to
a transferee that will take delivery in the form of the U.S. Global Bond.
(d) Procedures and Requirements.
(i) If the proposed transfer occurs prior to the Offshore Bond
Exchange Date, and the proposed transferor holds:
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(A) a U.S. Physical Bond which is surrendered to the Bond Registrar, and
the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee requests delivery in the form of Physical
Bonds, then the Bond Registrar shall (x) register such transfer in the name
of such transferee and record the date thereof in its books and records,
(y) cancel such surrendered U.S. Physical Bond and (z) deliver a new U.S.
Physical Bond to such transferee duly registered in the name of such
transferee in principal amount equal to the principal amount being
transferred of such surrendered U.S. Physical Bond.
(2) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial interest in the
U.S. Global Bond, then the Bond Registrar shall (x) cancel such surrendered
U.S. Physical Bond, (y) record an increase in the principal amount of the
U.S. Global Bond equal to the principal amount being transferred of such
surrendered U.S. Physical Bond and (z) notify the Depositary in accordance
with the procedures of the Depositary of such transfer.
(3) delivers a Regulation S Certificate and the proposed transferee
is or is acting through an Agent Member and requests that the proposed
transferee receive a beneficial interest in the Offshore Global Bond, then
the Bond Registrar shall (x) cancel such surrendered U.S. Physical Bond,
(y) record an increase in the principal amount of the Offshore Global Bond
equal to the principal amount being transferred of such surrendered U.S.
Physical Bond and (z) notify the Depositary in accordance with the
procedures of the Depositary of such transfer.
In the case described in Section 3.11(e)(i)(A)(1), the Bond Registrar shall
deliver to the transferor a new U.S. Physical Bond in principal amount equal to
the principal amount not being transferred of such surrendered U.S. Physical
Bond.
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(B) a beneficial interest in the U.S. Global Bond, and the proposed
transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee requests delivery in the form of Physical
Bonds, then the Bond Registrar shall (w) register such transfer in the name
of such transferee and record the date thereof in its books and records,
(x) record a decrease in the principal amount of the U.S. Global Bond in an
amount equal to the beneficial interest therein being transferred, (y)
deliver a new U.S. Physical Bond to such transferee duly registered in the
name of such transferee in principal amount equal to the amount of such
decrease and (z) notify the Depositary in accordance with the procedures of
the Depositary of such transfer.
(2) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial interest in the
U.S. Global Bond, then the transfer shall be effected in accordance with
the procedures of the Depositary therefor.
(3) delivers a Regulation S Certificate and the proposed transferee
is or is acting through an Agent Member and requests that the proposed
transferee receive a beneficial interest in the Offshore Global Bond, then
the Bond Registrar shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and records, (x) record
a decrease in the principal amount of the U.S. Global Bond in an amount
equal to the beneficial interest therein being transferred, (y) record an
increase in the principal amount of the Offshore Global Bond equal to the
amount of such decrease and (z) notify the Depositary in accordance with
the procedures of the Depositary of such transfer.
(C) a beneficial interest in the Offshore Global Bond, and the proposed
transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee requests
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delivery in the form of Physical Bonds, then the Bond Registrar shall
(w) register such transfer in the name of such transferee and record
the date thereof in its books and records, (x) record a decrease in
the principal amount of the Offshore Global Bond in an amount equal to
the beneficial interest therein being transferred, (y) deliver a new
U.S. Physical Bond to such transferee duly registered in the name of
such transferee in principal amount equal to the amount of such
decrease and (z) notify the Depositary in accordance with the
procedures of the Depositary of such transfer.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through an
Agent Member and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Bond, then the Bond Registrar
shall (x) record a decrease in the principal amount of the Offshore
Global Bond in an amount equal to the beneficial interest therein
being transferred, (y) record an increase in the principal amount of
the U.S. Global Bond equal to the amount of such decrease and (z)
notify the Depositary in accordance with the procedures of the
Depositary of such transfer.
(3) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent Member and requests that
the proposed transferee receive a beneficial interest in the Offshore
Global Bond, then the transfer shall be effected in accordance with
the procedures of the Depositary therefor; provided, however, that
until the Offshore Bond Exchange Date occurs, beneficial interests in
the Offshore Global Bond may be held only in or through accounts
maintained at the Depositary by Euroclear Clearance System
("EUROCLEAR") or Cedel Bank S.A. ("CEDEL") (or by Agent Members acting
for the account thereof), and no person shall be entitled to effect
any transfer or exchange that would result in any such interest being
held otherwise than in or through such an account.
(ii) If the proposed transfer occurs on or after the Offshore Bond Exchange
Date and the proposed transferor holds:
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(A) a U.S. Physical Bond which is surrendered to the Bond Registrar, and
the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee requests delivery in the form of Physical
Bonds, then the procedures set forth in Section 3.11(e)(i)(A)(1) shall
apply.
(2) delivers (or is deemed to have delivered) a Rule 144A Certificate
and the proposed transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial interest in the
Offshore Global Bond, then the procedures set forth in Section
3.11(e)(i)(A)(2) shall apply.
(3) delivers a Regulation S Certificate, then the Bond Registrar
shall cancel such surrendered U.S. Physical Bond and at the direction of
the transferee, either:
(x) register such transfer in the name of such transferee, record
the date thereof in its books and records and deliver a new Offshore
Physical Bond to such transferee in principal amount equal to the
principal amount being transferred of such surrendered U.S. Physical
Bond, or
(y) if the proposed transferee is or is acting through an Agent
Member, record an increase in the principal amount of the Offshore
Global Bond equal to the principal amount being transferred of such
surrendered U.S. Physical Bond and notify the Depositary in accordance
with the procedures of the Depositary of such transfer.
In any of the cases described in this Section 3.11(e)(ii)(A)(1) or (3)(x), the
Bond Registrar shall deliver to the transferor a new U.S. Physical Bond in
principal amount equal to the principal amount not being transferred of such
surrendered U.S. Physical Bond.
(B) a beneficial interest in the U.S. Global Bond, and the proposed
transferee or transferor, as applicable:
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(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the procedures set forth in Section
3.11(e)(i)(B)(1) shall apply.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the U.S. Global Bond, then the
procedures set forth in Section 3.11(e)(i)(B)(2) shall apply.
(3) delivers a Regulation S Certificate, then the Bond
Registrar shall (x) record a decrease in the principal amount of
the U.S. Global Bond in an amount equal to the beneficial
interest therein being transferred, (y) notify the Depositary in
accordance with the procedures of the Depositary of such transfer
and (z) at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Bond to such transferee
in principal amount equal to the amount of such decrease,
or
(y) if the proposed transferee is or is acting through
an Agent Member, record an increase in the principal amount
of the Offshore Global Bond equal to the amount of such
decrease.
(C) an Offshore Physical Bond which is surrendered to the Bond
Registrar, and the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests delivery in the form of the U.S.
Global Bond, then the Bond Registrar shall (x) cancel such
surrendered Offshore Physical Bond, (y) record an increase in the
principal amount of the U.S. Global Bond equal to the principal
amount being transferred of such surrendered Offshore Physical
Bond and
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(z) notify the Depositary in accordance with the procedures of
the Depositary of such transfer.
(2) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the Bond
Registrar shall (x) cancel such surrendered Offshore Physical
Bond, (y) record an increase in the principal amount of the
Offshore Global Bond equal to the principal amount being
transferred of such surrendered Offshore Physical Bond and (z)
notify the Depositary in accordance with the procedures of the
Depositary of such transfer.
(3) does not make a request covered by Section
3.11(e)(ii)(C)(1) or Section 3.11(e)(ii)(C)(2), then the Bond
Registrar shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(y) cancel such surrendered Offshore Physical Bond and (z)
deliver a new Offshore Physical Bond to such transferee duly
registered in the name of such transferee in principal amount
equal to the principal amount being transferred of such
surrendered Offshore Physical Bond.
In any of the cases described in this Section 3.11(e)(ii)(C), the Bond
Registrar shall deliver to the transferor a new U.S. Physical Bond in
principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Bond.
(D) a beneficial interest in the Offshore Global Bond, and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through an
Agent Member and requests delivery in the form of the U.S. Global
Bond, then the Bond Registrar shall (x) record a decrease in the
principal amount of the Offshore Global Bond in an amount equal to the
beneficial interest therein being transferred, (y) record an increase
in the principal amount of the U.S. Global Bond equal to the amount of
such decrease and (z) notify the Depositary in accordance with the
procedures of the Depositary of such transfer.
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(2) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the
transfer shall be effected in accordance with the procedures of
the Depositary therefor.
(3) does not make a request covered by Section
3.11(e)(ii)(D)(1) or Section 3.11(e)(ii)(D)(2), then the Bond
Registrar shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(x) record a decrease in the principal amount of the Offshore
Global Bond in an amount equal to the beneficial interest therein
being transferred, (y) deliver a new Offshore Physical Bond to
such transferee duly registered in the name of such transferee in
principal amount equal to the amount of such decrease and (z)
notify the Depositary in accordance with the procedures of the
Depositary of such transfer.
(e) Execution, Authentication and Delivery of Physical Bonds. In any case
in which the Bond Registrar is required to deliver a Physical Bond to a
transferee, the Corporation shall execute, and the Trustee shall authenticate,
in accordance with Section 3.05 and Section 3.09 of the Original Indenture, and
deliver, such Physical Bond.
(f) Certain Additional Terms Applicable to Physical Bonds. (i) Any
transferee entitled to receive a Physical Bond may request that the principal
amount thereof be evidenced by one or more Physical Bonds in any authorized
denomination or denominations and the Bond Registrar shall comply with such
request if all other transfer restrictions are satisfied.
(ii) In the event that a transferor transfers less than the entire
principal amount of a Physical Bond surrendered for transfer, following the
transfer the Bond Registrar shall deliver to the transferor a new Physical
Bond of the same type in principal amount equal to the untransferred
portion of the surrendered Physical Bond.
(g) Transfers Not Covered by Section 3.11(e). The Bond Registrar shall
effect and record, upon receipt of a written request from the Corporation so to
do, a transfer not otherwise permitted by Section 3.11(e), such recording to be
done in accordance with the otherwise applicable provisions of Section 3.11(e),
upon the
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furnishing by the proposed transferor or transferee of a Non-Registration
Opinion and Supporting Evidence.
(h) General. By its acceptance of any 2009 Series Bond bearing the Private
Placement Legend, each Holder of such 2009 Series Bond acknowledges the
restrictions on transfer of such 2009 Series Bond set forth in this Indenture
and in the Private Placement Legend and agrees that it will transfer such 2009
Series Bond only as provided in the Indenture. The Bond Registrar shall not
register a transfer of any 2009 Series Bond unless such transfer complies with
the restrictions with respect thereto set forth in this Indenture. The Bond
Registrar shall not be required to determine (but may rely upon a determination
made by the Corporation) the sufficiency of any such certifications, legal
opinions or other information.
Section 3.12. Form of Regulation S Certificate.
REGULATION S CERTIFICATE
To: The Chase Manhattan Bank,
as Trustee (the "Trustee")
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Trustee Administration
Re: Tenth Supplemental Indenture (the "Indenture") dated as of March 8,
1999 between National Steel Corporation (the "Corporation") and the
------------------------------------------------------
Trustee
-------
Ladies and Gentlemen:
This Certificate relates to our proposed transfer of $_____ principal
amount of bonds issued under the Indenture and to be designated the "First
Mortgage Bonds, 9 7/8% Series A due 2009" (hereinafter called the "2009 Series
Bonds"). Terms are used in this Certificate as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"). We hereby certify as
follows:
1. The offer of the 2009 Series Bonds was not made to a person in
the United States (unless such person or the account held by it for which
it is acting is excluded from the definition of "U.S. person" pursuant to
Rule 902(k) of Regulation S under the circumstances described in Rule
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902(k)(2) of Regulation S) or specifically targeted at an identifiable
group of U.S. citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
3. Neither we, any of our affiliates, nor any person acting on our or
their behalf has made any directed selling efforts in the United States.
4. The proposed transfer of 2009 Series Bonds is not part of a plan or
scheme to evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the 2009 Series Bonds, and the
proposed transfer takes place before the Offshore 2009 Series Bond Exchange
Date referred to in the Indenture, or we are an officer or director of the
Corporation or a distributor, we certify that the proposed transfer is
being made in accordance with the provisions of Rule 904 of Regulation S.
You and the Corporation are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Seller]
By:___________________________
Name:
Title:
Address:
Date of this Certificate: _________, 199__
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Signature Guarantee: _______________________________
Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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Section 3.13 Form of Rule 144A Certificate.
RULE 144A CERTIFICATE
To: The Chase Manhattan Bank, as Trustee (the "Trustee")
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Trustee Administration
Re: Tenth Supplemental Indenture (the "Indenture") dated as of March 8, 1999
between National Steel Corporation (the "Corporation") and the Trustee
--------------------------------------------------------------
Ladies and Gentlemen:
This Certificate relates to our proposed purchase of $_____ principal
amount of bonds issued under the Indenture and to be designated the "First
Mortgage Bonds, 9 7/8% Series A due 2009" (hereinafter called the "2009 Series
Bonds"). We and, if applicable, each account for which we are acting, are
"qualified institutional buyers" within the meaning of Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act"). We are
aware that the transfer of 2009 Series Bonds to us is being made in reliance on
the exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A. Prior to the date of this Certificate we have been given the
opportunity to obtain from the Corporation the information referred to in Rule
144A(d)(4), and have either declined such opportunity or have received such
information.
You and the Corporation are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: _____________ __, 199__
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Signature Guarantee: _______________________________
Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Section 3.14. CUSIP Numbers. The Corporation in issuing the 2009 Series
Bonds may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the 2009 Series Bonds
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the 2009 Series Bonds, and
any such redemption shall not be affected by any defect in or omission of such
numbers. The Corporation will promptly notify the Trustee of any change in the
CUSIP numbers.
Section 3.15. Notice to Holders; Waiver. Where this Supplemental Indenture
provides for notice of any event to Holders of 2009 Series Bonds by the
Corporation or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
In case, by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impractical to mail notice
of any event to Holders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be sufficient giving of such
notice for every purpose hereunder.
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Where this Supplemental Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
ARTICLE 4
Particular Covenants of the Corporation
Each of the following covenants contained in this Article 4 shall remain in
effect, subject to Section 4.04, for so long as any of the 2009 Series Bonds are
outstanding:
Section 4.01. Payment of Securities. The Corporation shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the 2009 Series Bonds and in this Supplemental Indenture. Principal
and interest shall be considered paid on the date due if on such date the
Trustee holds in accordance with this Supplemental Indenture money sufficient to
pay all principal and interest then due and the Trustee is not prohibited from
paying such money to the holders of the 2009 Series Bonds on that date pursuant
to the terms of this Supplemental Indenture.
The Corporation shall pay interest on overdue principal at the rate
specified therefor in the 2009 Series Bonds, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
Section 4.02. SEC Reports. Notwithstanding that the Corporation may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Corporation shall file with, or furnish to, the SEC
such annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and reports to
be so filed at the times specified for the filing of such information, documents
and reports under such Sections (the "REQUIRED FILING TIMES"); provided,
however, that the Corporation shall not be so obligated to file such
information, documents and reports with the SEC if the SEC does not permit such
filings. The Corporation shall also in any event (a) within 15 days of each
Required Filing Time, provide the Trustee and the Holders of 2009 Series Bonds
with copies of such information, documents and reports and (b) if the SEC does
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not permit the filing of such information, documents and reports, promptly upon
written request by a prospective Holder of 2009 Series Bonds supply copies of
such information, documents and reports to such prospective Holder of 2009
Series Bonds.
Section 4.03. Limitation on Lines of Business. Neither the Corporation nor
any of its Restricted Subsidiaries shall directly or indirectly engage to any
substantial extent in any line or lines of business activity other than the
business of the Corporation and its Restricted Subsidiaries on the Issue Date
(and any business reasonably related thereto).
Section 4.04. Covenant Suspension. If and for so long as the Corporation
reaches and maintains Investment Grade Status, the Corporation and the
Restricted Subsidiaries shall be released from their obligations to comply with
Sections 4.03, 4.05, 4.06, 4.10, 4.11, 4.12, 5.01(a)(v) and (vi), and clause (x)
of the second paragraph (and such clause (x) as referred to in the first
paragraph) of Section 4.14. The Corporation shall notify the Trustee in writing
when it reaches Investment Grade Status and when it ceases to have Investment
Grade Status.
Section 4.05. Limitation on Debt and Restricted Subsidiary Preferred Stock.
The Corporation shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, Incur any Debt (which includes, in the case of
Restricted Subsidiaries, Preferred Stock); provided however that (a) the
Corporation and Restricted Subsidiaries may Incur Debt if (i) after giving pro
forma effect to the application of the proceeds thereof, no Default or Event of
Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and (ii) after giving effect to the Incurrence of such
Debt and the application of the proceeds thereof, the Consolidated Interest
Coverage Ratio would be greater than 2.50 to 1.00 and, (b) the Corporation and
its Restricted Subsidiaries may incur debt if such Debt is Permitted Debt.
Section 4.06. Limitation on Restricted Payments.
(a) The Corporation shall not make, and shall not permit any Restricted
Subsidiary to make, directly or indirectly, any Restricted Payment if at the
time of, and after giving pro forma effect to, such proposed Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing;
(ii) the Corporation could not Incur at least $1.00 of additional Debt
pursuant to Section 4.05 (a); or
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(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of
any Restricted Payment, if made other than in cash, to be based upon Fair
Market Value) would exceed an amount equal to the sum of:
(A) 50% of the aggregate amount of Consolidated Net Income
accrued during the period (treated as one accounting period) from and
after the first day of the fiscal quarter following the end of the
most recent fiscal quarter ended immediately prior to the Issue Date
to the end of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or if the aggregate
amount of Consolidated Net Income for such period shall be a deficit,
minus 100% of such deficit);
(B) Capital Stock Sale Proceeds;
(C) the amount by which Debt (other than Subordinated
Obligations issued or sold prior to the Issue Date) of the Corporation
is reduced on the Corporation's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Corporation) subsequent to
the Issue Date of any Debt of the Corporation convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the
Corporation (less the amount of any cash or other Property distributed
by the Corporation or any Restricted Subsidiary upon such conversion
or exchange); and
(D) to the extent not otherwise included in the Consolidated Net
Income of the Corporation, an amount equal to the sum of (x) the net
reduction in Investments in any Person (other than reductions in
Permitted Investments) resulting from the payment in cash of interest
on Debt, dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Corporation or any Restricted
Subsidiary after the Issue Date from such Person and (y) the portion
(proportionate to the Corporation's equity interest in such
Subsidiary) of the Fair Market Value of the net assets of any
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary; provided, however, that in the
case of (x) or (y) above the foregoing sum shall not exceed the amount
of Investments previously made (and treated as a Restricted Payment)
by the Corporation or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.
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(b) Notwithstanding the foregoing limitation, the Corporation may:
(i) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could have
been paid in compliance with this Indenture; provided, however, that at the
time of such payment of such dividend, no other Default or Event of Default
shall have occurred and be continuing (or would result therefrom); provided
further, however, that such dividend shall be included in the calculation
of the amount of Restricted Payments;
(ii) purchase, repurchase, redeem, legally defease, acquire or retire
for value Capital Stock of the Corporation or Subordinated Obligations in
exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Corporation (other than Disqualified Stock and
other than Capital Stock issued or sold to a Subsidiary of the Corporation
or an employee stock ownership plan or trust established by the Corporation
or any of its Subsidiaries for the benefit of their employees); provided,
however, that (A) such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such
exchange or sale shall be excluded from the calculation of the amount of
Capital Stock Sale Proceeds;
(iii) purchase, repurchase, redeem, legally defease, acquire or retire
for value any Subordinated Obligations in exchange for, or out of the
proceeds of the substantially concurrent sale of, Permitted Refinancing
Debt; provided, however, that such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the calculation
of the amount of Restricted Payments;
(iv) expend up to $5,000,000 in any fiscal year of the Corporation to
repurchase common stock of the Corporation (i) to distribute to current or
former employees, officers and directors of the Corporation and its
Subsidiaries, including upon the exercise of stock options granted to such
employees, officers and directors, (ii) from such current or former
employees, officers or directors or (iii) otherwise in order to distribute
as employee compensation; provided, however, that at the time of, and after
giving pro forma effect to, any such expenditure, no other Default or Event
of Default shall have occurred and be continuing; provided further,
however, that such repurchase shall be excluded in the calculation of the
amount of Restricted Payments;
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(v) to repurchase up to 700,000 shares of common stock of the
Corporation pursuant to the stock repurchase approved by the Board of
Directors of the Corporation on August 26, 1998; provided, however, that at
the time of, and after giving pro forma effect to, any such expenditure, no
other Default or Event of Default shall have occurred and be continuing;
provided further, however, that such repurchase shall be included in the
calculation of the amount of Restricted Payments; and
(vi) expend up to $50 million for Restricted Payments in addition to
amounts permitted pursuant to clauses (i) through (v) above; provided,
however, that at the time of, and after giving pro forma effect to, any
such expenditure, no other Default or Event of Default shall have occurred
and be continuing; provided further, however, that such expenditures shall
be included in the calculation of the amount of Restricted Payments.
Section 4.07. Limitation on Pledged Subsidiaries to Incur Indebtedness or
Issue Capital Stock. The Corporation will not:
(a) permit any Wholly-Owned Subsidiary the stock of which is at the time
pledged under the Indenture to incur any indebtedness, direct or contingent,
except:
(i) current liabilities (other than for money borrowed) incurred in
the ordinary and regular conduct of business and payable within one year
after the date of the incurring thereof; and
(ii) indebtedness to the Corporation, and the extension, renewal or
refunding thereof from time to time; or
(b) permit any Wholly-Owned Subsidiary the stock of which is at the time
pledged under the Indenture to issue any capital stock (other than directors'
qualifying shares, where necessary) except to the Corporation.
Nothing contained in this Supplemental Indenture shall prevent any such
Wholly-Owned Subsidiary from acquiring property subject to any mortgage or other
lien to which the property is subject at the time of the acquisition, or from
creating any mortgage upon, or pledge of, any property hereafter acquired, at
the time of acquisition thereof, in order to secure payment of the purchase
price thereof or in order to secure any loan incurred for the purpose of
financing such acquisition, provided that the Corporation shall deposit with the
Trustee to be held as part of the trust estate cash equal to:
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(i) the aggregate principal amount of additional Bonds, if any,
issued upon the basis of the stock of such subsidiary, and
(ii) the amount of cash, if any, withdrawn upon the basis of the
stock of such Wholly-Owned Subsidiary pursuant to Sections 9.01 and 9.03 of
the Original Indenture;
and provided, further, that the principal amount of the indebtedness
secured by any such mortgage, lien or pledge shall not exceed 66 2/3% of the
cost to such Wholly-Owned Subsidiary of the property subject to such mortgage,
lien or pledge; or prevent the renewal or extension of any indebtedness secured
by any lien permitted by this paragraph; or prevent the refunding of any such
indebtedness by a new loan not exceeding the amount of the indebtedness refunded
and secured by the property which secured such refunded indebtedness. If such
property shall thereafter be subjected to the lien of the Indenture pursuant to
any provision thereof, the existence of such mortgage, lien or pledge shall not
constitute a breach of any covenant hereunder.
The Corporation will not assign any indebtedness of a Wholly-Owned
Subsidiary the stock of which is pledged under the Indenture, except to the
Trustees or, after such assignment to the Trustees, except as provided in the
following sentence. The Corporation will not sell or otherwise dispose of any
indebtedness or capital stock of any such Wholly-Owned Subsidiary pledged under
the Indenture unless prior to such sale or other disposition, or at the same
time, all other indebtedness and capital stock of such Wholly-Owned Subsidiary
owned directly or indirectly by the Corporation and its other subsidiaries is
sold or otherwise disposed of.
Section 4.08. Limitation on Sale of Mortgaged Property. The Corporation
will not sell or otherwise dispose of a part (less than substantially all) of
the Mortgaged Property except as provided in Section 7.04, 8.01 or 8.02 of the
Original Indenture or upon the release thereof as provided in Section 8.03 or
8.04 of the Indenture, or consolidate or merge with or into, or transfer or
convey all or substantially all the Mortgaged Property, as an entirety to, any
other Person, or permit any other Person to merge into it, except as provided in
Article 13 of the Original Indenture.
Notwithstanding the provisions of Section 8.03 of the Original Indenture
but subject to the provisions of Section 4.16 thereof, the Corporation from time
to time may sell, exchange or otherwise dispose of any property constituting
Mortgaged Property other than shares of stock or other securities or
indebtedness of any corporation pledged hereunder and the Trustees shall release
the same from the lien of this Indenture without compliance with any of the
provisions of said
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Section 8.03 and without the deposit of cash with the Trustees, but only subject
to certain exceptions described below upon receipt by the Trustee of:
(a) A request evidenced by an Officers' Certificate; and
(b) An engineer's certificate, stating in substance:
(i) A description in reasonable detail of the property to be
released;
(ii) A description in reasonable detail of the consideration, if
any, for the property to be released;
(iii) The then fair value, in the opinion of the signer, of the
property to be released, which fair value shall in no event exceed
$100,000;
(iv) That neither (i) the aggregate fair value of all property
released under this Section 4.08 in the calendar year in which the
property described in the certificate is to be released nor (ii) the
aggregate consideration received by the Corporation for all property
so released for such calendar year, exceeds $250,000; and
(v) That, in the opinion of the signer, such property is not
useful or necessary in the conduct of the business of the Corporation
and that such release will not impair the security under the Indenture
in contravention of the provisions of the Indenture and is desirable
in the proper conduct of the business of the Corporation or is
otherwise in the best interests of the Corporation.
No property shall be released under the provisions described in this
Section 4.08 in any calendar year after either (i) aggregate fair value of all
property released under the provisions described in this Section 4.08 for such
calendar year, or (ii) the aggregate consideration received by the Corporation
for such property for such calendar year, exceeds $250,000.
Section 4.09. Change of Control. (a) Upon the occurrence of a Change of
Control, each Holder of 2009 Series Bonds shall have the right to require the
Corporation to repurchase all or any part of such Holder's 2009 Series Bonds
pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at a
purchase price (the "CHANGE OF CONTROL PURCHASE PRICE") equal to 101% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the purchase date (subject to the right of Holders of record on the relevant
record date
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to receive interest due on the relevant interest payment date that is on or
prior to the purchase date).
(b) Within 30 days following any Change of Control, the Corporation shall
(a) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Jones News Service or similar business news service in the United States
and (b) send, by first-class mail, with a copy to the Trustee, to each Holder of
2009 Series Bonds, at such Holder's address appearing in the Bond Register, a
notice stating: (i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.09 and that all 2009
Series Bonds timely tendered will be accepted for payment; (ii) the Change of
Control Purchase Price and the purchase date, which shall be, subject to any
contrary requirements of applicable law, a Business Day no earlier than 30 days
nor later than 60 days from the date such notice is mailed (the "CHANGE OF
CONTROL PAYMENT DATE"); (iii) that any 2009 Series Bonds (or portion thereof)
accepted for payment (and duly paid on the Change of Control Payment Date)
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (iv) that any 2009 Series Bonds (or portions
thereof) not tendered will continue to accrue interest; (v) the circumstances
and relevant facts regarding such Change of Control (including information with
respect to pro forma historical income, cash flow and capitalization after
giving effect to the Change of Control); and (vi) the procedures that Holders of
2009 Series Bonds must follow in order to tender their 2009 Series Bonds (or
portions thereof) for payment, and the procedures that Holders of 2009 Series
Bonds must follow in order to withdraw an election to tender 2009 Series Bonds
(or portions thereof) for payment.
(c) Holders electing to have a 2009 Series Bond purchased will be required
to surrender the 2009 Series Bond, with an appropriate form (which may include
the form on the reverse thereof) duly and properly completed, to the Corporation
or its agent at the address specified in the notice at least three Business Days
prior to the Change of Control Payment Date. Holders will be entitled to
withdraw their election if the Trustee or the Corporation receives not later
than one Business Day prior to the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the 2009 Series Bond which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election to have
such 2009 Series Bonds purchased. Holders whose 2009 Series Bond are purchased
only in part shall be issued new 2009 Series Bonds equal in principal amount to
the unpurchased portion of the 2009 Series Bonds surrendered.
(d) On or prior to the Change of Control Payment Date, the Corporation
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
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Corporation or any of its Wholly Owned Subsidiaries is acting as the Paying
Agent, segregate and hold in trust) in cash an amount equal to the Change of
Control Purchase Price payable to the Holders entitled thereto, to be held for
payment in accordance with the provisions of this Section. On the Change of
Control Payment Date, the Corporation shall deliver to the Trustee the 2009
Series Bonds or portions thereof which have been properly tendered to and are to
be accepted by the Corporation for payment. The Trustee or the Paying Agent
shall, on the Change of Control Payment Date, mail or deliver payment to each
tendering Holder of the Change of Control Purchase Price. In the event that the
aggregate Change of Control Purchase Price is less than the amount delivered by
the Corporation to the Trustee or the Paying Agent, the Trustee or the Paying
Agent, as the case may be, shall deliver the excess to the Corporation
immediately after the Change of Control Payment Date.
(e) At the time the Corporation delivers 2009 Series Bonds to the Trustee
which are to be accepted for purchase, the Corporation shall also deliver an
Officers' Certificate stating that such 2009 Series Bonds are to be accepted by
the Trustee pursuant to and in accordance with the terms of this Section.
(f) The Corporation will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of 2009 Series Bonds pursuant
to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section, the
Corporation will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section by virtue
of such compliance.
Section 4.10. Limitation on Sale of Assets Other Than Mortgaged Property.
(a) The Corporation shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale, which term for purposes
of this Section 4.10, shall exclude sales or other dispositions of Mortgaged
Property made in compliance with the terms of the Original Indenture and Section
4.08, unless (i) the Corporation or such Restricted Subsidiary receives
consideration at the time of such Asset Sale (or, in the case of a lease that is
an Asset Sale, the Corporation or such Restricted Subsidiary is to receive over
the term of such lease) consideration at least equal to the fair value of the
Property subject to such Asset Sale; (ii) at least 75% of the consideration paid
to the Corporation or such Restricted Subsidiary in connection with such Asset
Sale is in the form of cash, Cash Equivalents, Additional Assets or the
assumption by the purchaser of liabilities of the Corporation or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
2009 Series Bonds) as a result of which the Corporation and the Restricted
Subsidiaries are no longer obligated
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with respect to such liabilities; and (iii) the Corporation delivers an
Officers' Certificate to the Trustee certifying that such Asset Sale complies
with the foregoing clauses (i) and (ii).
(b) The Net Available Cash (or any portion thereof) from Asset Sales may
be applied by the Corporation or a Restricted Subsidiary, to the extent the
Corporation or such Restricted Subsidiary elects (or is required by the terms of
any Debt): (i) to prepay, repay, legally defease or purchase Senior Debt of the
Corporation or Debt of any Restricted Subsidiary (excluding, in any such case,
Debt owed to the Corporation or an Affiliate of the Corporation); (ii) to
permanently fund pension or other post-retirement employee benefit obligations
("OPEB") obligations of the Corporation; or (iii) to reinvest in Additional
Assets (including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Corporation or another
Restricted Subsidiary) or to commit to reinvest in Additional Assets (such
commitments to include amounts anticipated to be expended pursuant to the
Corporation's capital investment plan (x) as adopted by the Board of Directors
and (y) evidenced by the filing of an Officers' certificate with the Trustee
stating that the total amount of the Net Available Cash from such Asset Sale,
after giving effect to the prior application of any portion thereof pursuant to
clause (i) or (ii) of this paragraph (b), is less than the aggregate amount
contemplated to be expended pursuant to such capital investment plan within 24
months of the consummation of such Asset Sale)); provided, however, that in
connection with any prepayment, repayment, legal defeasance or purchase of Debt
pursuant to clause (i) above, the Corporation or such other Restricted
Subsidiary shall retire such Debt and shall cause the related loan commitment
(if any) to be permanently reduced by an amount equal to the principal amount so
prepaid, repaid, legally defeased or purchased.
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within twelve months from the date of the receipt
of such Net Available Cash (or committed to be reinvested in Additional Assets
pursuant to clause (iii) of the preceding paragraph within twelve months from
the date of the receipt of such Net Available Cash and not actually reinvested
in Additional Assets pursuant to such investment commitment within twenty-four
months from the date of the receipt of such Net Available Cash) shall constitute
"EXCESS PROCEEDS."
When the aggregate amount of Excess Proceeds exceeds $5,000,000 (taking
into account income earned on such Excess Proceeds, if any), the Corporation
will be required to make an offer to purchase (the "PREPAYMENT OFFER") the 2009
Series Bonds which offer shall be in the amount of the Excess Proceeds, on a pro
rata basis according to principal amount, at a purchase price
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equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the Purchase Date (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date that is on or prior to the purchase date) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
this Supplemental Indenture. To the extent that any portion of the amount of Net
Available Cash remains after compliance with the preceding sentence and provided
that all Holders of 2009 Series Bonds have been given the opportunity to tender
their 2009 Series Bonds for purchase as described in Section 4.10(d), the
Corporation or such Restricted Subsidiary may use such remaining amount for any
purpose permitted by this Indenture and the amount of Excess Proceeds will be
reset to zero.
(d) (i) Within five Business Days after the Corporation is obligated to
make a Prepayment Offer as described in Section 4.10(c), the Corporation will
send a written notice, by first-class mail, to the Trustee and the Holders of
2009 Series Bonds (the "PREPAYMENT OFFER NOTICE"), accompanied by such
information regarding the Corporation and its Subsidiaries as the Corporation in
good faith believes will enable such Holders to make an informed decision with
respect to such Prepayment Offer (which at a minimum shall include the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Corporation, the most recent subsequently filed
Quarterly Report on Form 10-Q of the Corporation and any Current Report on Form
8-K of the Corporation filed subsequent to such Quarterly Report, other than
Current Reports describing Asset Sales otherwise described in the offering
materials, or corresponding successor reports (or, during any time that the
Corporation is not subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, corresponding reports prepared pursuant to Section 4.02), a
description of material developments in the Corporation's business subsequent to
the date of the latest of such reports and if material, appropriate pro forma
financial information). The Prepayment Offer Notice shall state, that a
Prepayment Offer is being made pursuant to this Section 4.10 and that all 2009
Series Bonds timely tendered will be accepted for payment (subject to
proration), that any 2009 Series Bonds (or any portion thereof) accepted for
payment (and duly paid on the Purchase Date) pursuant to the Prepayment Offer
shall cease to accrue interest after the Purchase Date, the purchase price and
purchase date, which shall be a Business Day no earlier than 30 days nor later
than 60 days from the date the Prepayment Offer Notice is mailed (the "PURCHASE
DATE"), the aggregate principal amount of 2009 Series Bonds eligible to be
purchased, that any 2009 Series Bonds (or portions thereof) not tendered will
continue to accrue interest and the procedures that Holders of 2009 Series
Bonds must follow in order to tender their 2009 Series Bonds (or portions
thereof) for payment and the
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procedures that Holders of 2009 Series Bonds must follow in order to withdraw an
election to tender 2009 Series Bonds (or portions thereof) for payment.
(ii) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the
Corporation shall deliver to the Trustee an Officers' Certificate as to (A)
the amount of the Prepayment Offer (the "OFFER AMOUNT"), (B) the allocation
of the Net Available Cash from the Asset Sales pursuant to which such
Prepayment Offer is being made and (C) the compliance of such allocation
with the provisions of Section 4.10(b). On such date, the Corporation shall
also irrevocably deposit with the Trustee or with the Paying Agent (or, if
the Corporation or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) in Cash Equivalents, maturing on the last day
prior to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to be
held for payment in accordance with the provisions of this Section. Upon
the expiration of the period for which the Prepayment Offer remains open
(the "OFFER PERIOD"), the Corporation shall deliver to the Trustee for
cancellation the 2009 Series Bonds or portions thereof which have been
properly tendered to and are to be accepted by the Corporation. The Trustee
or the Paying Agent shall, on the Purchase Date, mail or deliver payment to
each tendering Holder in the amount of the purchase price. In the event
that the aggregate purchase price of the 2009 Series Bonds delivered by the
Corporation to the Trustee is less than the Offer Amount, the Trustee or
the Paying Agent shall deliver the excess to the Corporation immediately
after the expiration of the Offer Period for application in accordance with
this Section.
(iii) Holders electing to have a 2009 Series Bond purchased shall be
required to surrender the 2009 Series Bond, with an appropriate form (which
may include the form on the reverse thereof) duly and properly completed,
to the Corporation or its agent at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Corporation
receives not later than one Business Day prior to the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the 2009 Series Bond which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such 2009 Series Bond purchased. If at the
expiration of the Offer Period the aggregate principal amount of 2009
Series Bonds surrendered by Holders exceeds the Offer Amount, the
Corporation shall select the 2009 Series Bonds to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
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Corporation so that only 2009 Series Bonds in denominations of $1,000, or
integral multiples thereof, shall be purchased). Holders whose 2009 Series
Bonds are purchased only in part shall be issued new 2009 Series Bonds
equal in principal amount to the unpurchased portion of the 2009 Series
Bonds surrendered.
(iv) At the time the Corporation delivers 2009 Series Bonds to the
Trustee which are to be accepted for purchase, the Corporation shall also
deliver an Officers' Certificate stating that such 2009 Series Bonds are to
be accepted by the Trustee pursuant to and in accordance with the terms of
this Section. A 2009 Series Bond shall be deemed to have been accepted for
purchase at the time the Trustee or the Paying Agent mails or delivers
payment therefor to the surrendering Holder.
(e) The Corporation will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of 2009 Series Bonds pursuant
to this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Corporation will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section by virtue thereof.
Section 4.11. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Corporation shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distributions on or
in respect of its Capital Stock, or pay any Debt or other obligation owed, to
the Corporation or any other Restricted Subsidiary, (b) make any loans or
advances to the Corporation or any other Restricted Subsidiary, (c) transfer any
of its Property to the Corporation or any other Restricted Subsidiary or (d)
guarantee any Debt of the Corporation or any other Restricted Subsidiary. The
foregoing limitations will not apply (i) with respect to clauses (a), (b), (c)
and (d), to restrictions (A) in effect on the Issue Date, (B) relating to Debt
of a Restricted Subsidiary and existing at the time it became a Restricted
Subsidiary if such restriction was not created in connection with or in
anticipation of the transaction or series of transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Corporation, (C) which result from the Refinancing of Debt Incurred pursuant to
an agreement referred to in the immediately preceding clause (i)(A) or (B) above
or in clause (ii)(A) or (B) below, provided that such restriction is no less
favorable to the Holders of 2009 Series Bonds than those under the agreement
evidencing the Debt so Refinanced, (D) on Sales Finance or any other bankruptcy-
remote special-purpose
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Subsidiary of the Corporation that purchases or sells accounts receivable or
inventory pursuant to the Credit Facilities or (E) arising or agreed to in a
joint venture agreement, entered into by the Corporation or a Restricted
Subsidiary in the ordinary course of business that do not (as determined by the
Corporation and certified in a resolution of the Board of Directors or a
certificate of the chief financial or chief accounting officer of the
Corporation delivered to the Trustee prior to or promptly following such
encumbrance or restriction becoming effective), individually or in the
aggregate, (1) detract from the value of property or assets of the Corporation
or any Restricted Subsidiary in any manner material to the Corporation or any
Restricted Subsidiary or (2) materially adversely affect the Corporation's
ability to make principal or interest payments on the 2009 Series Bonds and (ii)
with respect to clause (c) only, to restrictions (A) relating to Debt that is
permitted to be Incurred and secured pursuant to Section 4.05 and Section 4.12
of the Original Indenture that limit the right of the debtor to dispose of the
Property securing such Debt, (B) encumbering Property at the time such Property
was acquired by the Corporation or any Restricted Subsidiary, so long as such
restriction relates solely to the Property so acquired and was not created in
connection with or in anticipation of such acquisition, (C) resulting from
customary provisions restricting subletting or assignment of leases or customary
provisions in other agreements that restrict assignment of such agreements or
rights thereunder or (D) customary restrictions contained in asset sale
agreements limiting the transfer of such Property pending the closing of such
sale.
Section 4.12. Limitation on Transactions with Affiliates. (a) The
Corporation shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, assignment, lease, conveyance or exchange of any Property or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Corporation (an "AFFILIATE TRANSACTION"), unless (i) the terms of such Affiliate
Transaction are (A) set forth in writing and (B) no less favorable to the
Corporation or such Restricted Subsidiary, as the case may be, than those that
could be obtained in a comparable arm's-length transaction with a Person that is
not an Affiliate of the Corporation, (ii) if such Affiliate Transaction involves
aggregate payments or value in excess of $10,000,000, the Board of Directors
(including a majority of the disinterested members of the Board of Directors)
approves such Affiliate Transaction and, in its good faith judgment, believes
that such Affiliate Transaction complies with clause (i) of this paragraph as
evidenced by a Board Resolution promptly delivered to the Trustee and (iii) if
such Affiliate Transaction involves aggregate payments or value in excess of
$20,000,000, the Corporation obtains a written opinion from an Independent
Financial Advisor to the effect that such Affiliate Transaction is fair, from a
financial point of view, to the Corporation or such Restricted Subsidiary, as
the case may be.
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(b) Notwithstanding the foregoing limitation, the Corporation or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between the
Corporation and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries; provided that no more than 5% of the total voting
power of the Voting Stock (on a fully diluted basis) of any such Restricted
Subsidiary is owned by an Affiliate of the Corporation (other than a
Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made pursuant to Section
4.06;
(iii) any issuance of securities, or other payments, awards or grants
in securities or otherwise pursuant to, or the funding of, employment
arrangements, pension or other benefit plans, stock options and stock
ownership plans and other compensatory arrangements approved by the Board
of Directors;
(iv) the payment of reasonable fees to directors of the Corporation
or such Restricted Subsidiary who are not employees of the Corporation or
any Restricted Subsidiary;
(v) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Corporation or such
Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $5,000,000 in the aggregate at any one time
outstanding; and
(vi) any payments for the purchase of steel products from NKK or any
of its Affiliates or the provision of services by NKK or any of its
Affiliates, including the construction by NKK or an Affiliate of the new
hot dip galvanizing facility at the Great Lakes Division; provided, that,
in each case, the terms of such payments are determined on an arm's length
basis and are approved by the disinterested members of the Board of
Directors of the Corporation; and
(vii) any Affiliate Transactions between the Corporation or any
Restricted Subsidiary and one or more Affiliate Joint Ventures that (x) are
on terms no less favorable to the Corporation or such Restricted
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate
of the Corporation and (y) if such Affiliate Transactions involve aggregate
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payments or value in excess of $10 million, the Board of Directors
(including a majority of the disinterested members of the Board of
Directors) approves such Affiliate Transaction, and in its good faith
judgment believes that such Affiliate Transaction complies with clause (x)
of this paragraph (vii).
Section 4.13. Limitation on Sale and Leaseback Transactions. The
Corporation shall not, and shall not permit any Restricted Subsidiary to, enter
into any Sale and Leaseback Transaction with respect to any Property unless (a)
the Corporation or such Restricted Subsidiary would be entitled to (i) Incur
Debt in an amount equal to the Attributable Debt with respect to such Sale and
Leaseback Transaction pursuant to Section 4.05 and (ii) create a Lien on such
Property securing such Attributable Debt, and (b) such Sale and Leaseback
Transaction is effected in compliance with Section 4.10.
Section 4.14. Designation of Restricted and Unrestricted Subsidiaries. The
Board of Directors may designate any Subsidiary of the Corporation to be an
Unrestricted Subsidiary if (a) the Subsidiary to be so designated does not own
any Capital Stock or Debt of, or own or hold any Lien on any Property of, the
Corporation or any other Restricted Subsidiary (b) the Subsidiary to be so
designated is not obligated under any Debt, Lien or other obligation that, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Debt of the Corporation or of any Restricted Subsidiary and (c)
either (i) the Subsidiary to be so designated has total assets of $1,000 or less
or (ii) such designation is effective immediately upon such entity becoming a
Subsidiary of the Corporation or any Restricted Subsidiary. Unless so
designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary
of the Corporation or of any Wholly Owned Subsidiary will be classified as a
Restricted Subsidiary, provided that the requirements set forth in clauses (x)
and (y) of the immediately following paragraph would be satisfied after giving
pro forma effect to such classification. Any Person not permitted by the terms
of the immediately preceding sentence to be classified as a Restricted
Subsidiary shall be automatically classified as an Unrestricted Subsidiary.
Except as provided in the first sentence of this paragraph, no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Corporation could Incur at least $1.00 of additional Debt
pursuant to Section 4.05 and (y) no Default or Event of Default shall have
occurred and be continuing or would result therefrom.
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Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Corporation in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Corporation's fiscal year, within 90 days
after the end of such fiscal year).
Section 4.15. Compliance Certificate. The Corporation shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Corporation an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Corporation they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Corporation is taking or proposes to
take with respect thereto. The Corporation also shall comply with TIA (S)
314(a)(4).
Section 4.16. Further Instruments and Acts. Upon request of the Trustee,
the Corporation will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Corporation
Section 5.01. When Corporation May Merge or Transfer Assets. (a) The
Corporation shall not merge, consolidate or amalgamate with or into any other
Person (other than a merger of a Wholly Owned Subsidiary into the Corporation)
or sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless: (i) the Corporation shall be the surviving Person (the "SURVIVING
PERSON") or the Surviving Person (if other than the Corporation) formed by such
merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made shall be a Person organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia; (ii) the Surviving Person (if other than the
Corporation) expressly assumes, by supplemental indenture in form satisfactory
to the Trustee, executed and delivered to the Trustee by such Surviving Person,
the due and punctual payment of the principal of and interest on all the 2009
Series Bonds, according to their tenor, and the due and punctual
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performance and observance of all the covenants and conditions of this Indenture
to be performed by the Corporation and confirms in writing the lien of the
Indenture, including the after-acquired property clauses thereof, on the
Property subject to the Indenture; (iii) in the case of a sale, transfer,
assignment, lease, conveyance or other disposition of all or substantially all
the Corporation's Property, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person; (iv) immediately before and
after giving effect to such transaction or series of transactions on a pro forma
basis (and treating, for purposes of this clause (iv) and clauses (v) and (vi)
below, any Debt which becomes, or is anticipated to become, an obligation of the
Surviving Person or any Restricted Subsidiary as a result of such transaction or
series of transactions as having been Incurred by the Surviving Person or such
Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing; (v) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Corporation or the Surviving Person, as
the case may be, would be able to Incur at least $1.00 of additional Debt under
Section 4.05; (vi) immediately after giving effect to such transaction or series
of transactions on a pro forma basis, the Surviving Person shall have a
Consolidated Net Worth in an amount which is not less than the Consolidated Net
Worth of the Corporation immediately prior to such transaction or series of
transactions; and (vii) the Corporation shall deliver, or cause to be delivered,
to the Trustee, in form reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such transaction and
any supplemental indenture in respect thereto comply with this Section 5.01 and
that all conditions precedent herein provided for relating to such transaction
have been satisfied.
(b) The Surviving Person will succeed to, and be substituted for, and may
exercise every right and power of the Corporation under this Indenture, but the
predecessor Corporation in the case of a sale, transfer, assignment, lease,
conveyance or other disposition, shall not be released from the obligation to
pay the principal of and interest on the 2009 Series Bonds.
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ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default. The following events shall be "TENTH
SUPPLEMENTAL INDENTURE EVENTS OF DEFAULT" specific to the 2009 Series Bonds and
in addition to the Events of Default set forth in the Original Indenture:
(a) the Corporation defaults in any payment of interest on any 2009
Series Bond when the same becomes due and payable, and such default
continues for a period of 30 days;
(b) the Corporation defaults in the payment of the principal of any
2009 Series Bond when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
acceleration or otherwise;
(c) the Corporation fails to comply with Article 5;
(d) the Corporation fails to comply with any of its agreements or
covenants in the 2009 Series Bonds or this Indenture (other than those
referred to in clause (a), (b) or (c) above) and such failure continues for
30 days after notice is given to the Corporation as specified below;
(e) a default by the Corporation or any Restricted Subsidiary under
any Debt of the Corporation or any Restricted Subsidiary which results in
the acceleration of the maturity of such Debt, or failure to pay any such
Debt at maturity, in an aggregate amount greater than $10,000,000 or its
foreign currency equivalent at the time;
(f) the Corporation or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(iv) makes a general assignment for the benefit of its
creditors;
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or takes any comparable action under any foreign laws relating to
insolvency;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Corporation or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Corporation or any Significant
Subsidiary or for any substantial part of its property;
(iii) orders the winding up or liquidation of the Corporation or
any Significant Subsidiary; or
(iv) is for any similar relief granted under any foreign laws;
and in each such case the order or decree remains unstayed and in
effect for 60 days; or
(h) any judgment or judgements for the payment of money in an
aggregate amount in excess of $10,000,000 or its foreign currency
equivalent at the time is entered against the Corporation or any Restricted
Subsidiary, and shall not be waived, satisfied or discharged for any period
of 60 consecutive days during which a stay of enforcement shall not be in
effect.
The foregoing will constitute Tenth Supplemental Indenture Events of
Default whatever the reason for any such Tenth Supplemental Indenture Event of
Default and whether it is voluntary or involuntary or is effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body.
The term "BANKRUPTCY LAW" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Tenth Supplemental Indenture Event of Default under clause (d) is not a
Tenth Supplemental Indenture Event of Default until the Trustee or the Holders
of at least 25% in aggregate principal amount of the 2009 Series Bonds then
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outstanding notify the Corporation (and, in the case of such notice by Holders,
the Trustee) of the Tenth Supplemental Indenture Event of Default and the
Corporation does not cure such Tenth Supplemental Indenture Event of Default
within the time specified after receipt of such notice. Such notice must
specify the Tenth Supplemental Indenture Event of Default, demand that it be
remedied and state that such notice is a "NOTICE OF DEFAULT".
The Corporation shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become a
Tenth Supplemental Indenture Event of Default, its status and what action the
Corporation is taking or proposes to take with respect thereto.
Section 6.02. Acceleration. The 2009 Series Bonds may be declared due and
payable, upon these conditions and in the manner and with the effect provided in
Section 10.01 of the Original Indenture. In addition, if a Tenth Supplemental
Indenture Event of Default (other than an Event of Default specified in Section
6.01(f) or 6.01(g)) occurs and is continuing, the Trustee by notice to the
Corporation, or the Holders of at least 25% in aggregate principal amount of the
2009 Series Bonds then outstanding by notice to the Corporation and the Trustee,
may declare the principal amount of all the 2009 Series Bonds then outstanding
plus accrued but unpaid interest to the date of acceleration to be immediately
due and payable. In case a Tenth Supplemental Indenture Event of Default
specified in Section 6.01(f) or 6.01(g) shall occur, such amount with respect to
all the 2009 Series Bonds shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the Holders of the 2009
Series Bonds. Subject to the rights of the holders of 25% in principal amount of
all Bonds to accelerate the maturity of all of the Bonds as provided by Section
10.01 of the Original Indenture, the Holders of a majority in aggregate
principal amount of the outstanding 2009 Series Bonds may by written notice to
the Trustee and the Corporation rescind any declaration of acceleration if the
rescission would not conflict with any judgment or decree, and if all existing
Tenth Supplemental Events of Default have been cured or waived except nonpayment
of principal or interest that has become due solely because of the acceleration.
No such rescission shall affect any subsequent Tenth Supplemental Indenture
Event of Default or impair any right consequent thereto.
Section 6.03. Other Remedies. If a Tenth Supplemental Indenture Event of
Default occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal of or interest on the 2009 Series Bonds or to
enforce the performance of any provision of the 2009 Series Bonds or the
Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of
the 2009 Series Bonds or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Bondholder in exercising any right or
remedy accruing upon a Tenth Supplemental Indenture Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Tenth Supplemental Indenture Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Defaults. The Holders of a majority in aggregate
principal amount of the 2009 Series Bonds by written notice to the Trustee may
waive an existing Tenth Supplemental Indenture Event of Default and its
consequences, except a Tenth Supplemental Indenture Event of Default in the
payment of the principal of or interest on a 2009 Series Bond or a Tenth
Supplemental Indenture Event of Default in respect of a provision that under
Section 8.07 cannot be amended without the consent of each Bondholder affected.
When a Tenth Supplemental Indenture Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Tenth
Supplemental Indenture Event of Default or impair any consequent right.
ARTICLE 7
Redemption of 2009 Series Bonds
Section 7.01. Optional Redemption of 2009 Series Bonds; Premiums Payable.
Except as set forth in the following paragraph, the 2009 Series Bonds will not
be redeemable at the option of the Corporation prior to March 1, 2004.
Thereafter, the 2009 Series Bonds will be redeemable at the option of the
Corporation, in whole or in part, on not less than 30 nor more than 60 days'
prior notice, upon payment of the redemption prices specified in the form of
definitive 2009 Series Bond hereinbefore set forth for redemption, together with
accrued interest (if any) to the date fixed for redemption.
At any time and from time to time prior to March 1, 2002 the Corporation
may redeem up to a maximum of 35% of the original aggregate principal amount of
the 2009 Series Bonds with the proceeds of one or more Public Equity Offerings
within 90 days after receipt of such proceeds, upon payment of a redemption
price equal to 109.875% of the principal amount thereof, together with accrued
interest, if any, to the date fixed for redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that after giving effect to
any such redemption, at least 65% of the original aggregate principal amount of
the
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2009 Series Bonds remains outstanding. Any such redemption should be made on a
pro rate basis among all holders of 2009 Series Bonds.
Section 7.02. Surrender of Partially-redeemed 2009 Series Bonds. In the
event of the partial redemption of any of the 2009 Series Bonds the Trustee
shall not make any notation thereon as to the payment of a portion of the
principal amount of such partially-redeemed Bonds, but in accordance with
Section 5.01 of the Original Indenture such Bonds may be surrendered in exchange
for 2009 Series Bonds of authorized denominations for the unredeemed balance of
the principal amount of such partially-redeemed Bonds.
Section 7.03. Regarding Issue, Transfer and Exchange of 2009 Series Bonds
to be Redeemed. The Corporation shall not be required (i) to issue, transfer or
exchange any 2009 Series Bonds during a period beginning at the opening of
business 15 days next preceding any selection of 2009 Series Bonds to be
redeemed or thereafter until after the mailing of a notice of redemption of 2009
Series Bonds selected for redemption and ending at the close of business on the
day of such mailing, or (ii) to transfer or exchange any 2009 Series Bonds so
selected for redemption in whole or in part.
Section 7.04. Notices to Trustee. If the Corporation elects to redeem 2009
Series Bonds pursuant to this Article, it shall notify the Trustee in writing of
the redemption date, the principal amount of 2009 Series Bonds to be redeemed
and that such redemption is being made pursuant to the 2009 Series Bonds.
The Corporation shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Corporation to the effect that
such redemption will comply with the conditions herein.
Section 7.05. Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of 2009 Series Bonds, the Corporation shall
mail a notice of redemption by first-class mail to each Holder of 2009 Series
Bonds to be redeemed.
The notice shall identify the 2009 Series Bonds to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price;
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(iii) the name and address of the Place of Payment;
(iv) that 2009 Series Bonds called for redemption must be surrendered
at the Place of Payment to collect the redemption price;
(v) if fewer than all the outstanding 2009 Series Bonds are to be
redeemed, the identification and principal amounts of the particular 2009
Series Bonds to be redeemed;
(vi) that, unless the Corporation defaults in making such redemption
payment or the Trustee or paying agent is prohibited from making such
payment pursuant to the terms of the Indenture, interest on 2009 Series
Bonds (or portion thereof) called for redemption ceases to accrue on and
after the redemption date; and
(vii) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the 2009
Series Bonds.
At the Corporation's request, the Trustee shall give the notice of
redemption in the Corporation's name and at the Corporation's expense. In such
event, the Corporation shall provide the Trustee with the information required
by this Section.
Section 7.06. Effect of Notice of Redemption. Once notice of redemption is
mailed, 2009 Series Bonds called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
at the Place of Payment, such 2009 Series Bonds shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date that is on or prior to
the date of redemption). Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
ARTICLE 8
Miscellaneous
Section 8.01. Acceptance of Trusts. The Trustees accept the trust created
by this Supplemental Indenture and agree to execute the same, but only on the
terms and conditions set forth in the Indenture, including the terms and
provisions
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defining and limiting the liabilities and responsibilities of the Trustees. The
Trustees make no representations and shall have no responsibility as to the
validity of this Supplemental Indenture or the Bonds issued hereunder or the due
execution thereof by the Corporation.
Section 8.02. Benefits Restricted to Parties and Holders of Bonds. Nothing
in this Supplemental Indenture, expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, other than the parties
hereto, and the holders of 2009 Series Bonds, any right, remedy or claim under
or by reason of this Supplemental Indenture or any covenant, condition or
stipulation hereof; all the covenants, stipulations, promises and agreements in
this Supplemental Indenture contained are and shall be for the sole and
exclusive benefit of the parties hereto and their successors and the holders of
such Bonds.
Section 8.03. Execution in Counterparts. This Supplemental Indenture may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original and all of such counterparts shall together constitute
a single instrument.
Section 8.04. Original Indenture and Supplements Construed as One
Instrument. The Original Indenture as heretofore supplemented and as
supplemented by this Supplemental Indenture is in all respects ratified and
confirmed; and the Original Indenture as heretofore supplemented and as
supplemented by this Supplemental Indenture shall be read, taken and construed
together as one instrument.
Section 8.05. Amount Advanced under Indenture. The amount which at the
time of the execution and delivery of this Supplemental Indenture has been
advanced or accrued and remains outstanding under the Original Indenture and all
instruments supplemental thereto, to and including this Supplemental Indenture,
is $300,000,000.
Section 8.06. With Consent of Holders. For so long as the 2009 Series
Bonds are outstanding, the Company may not amend this Supplemental Indenture or
the 2009 Series Bonds without the written consent of the Holders of at least a
majority in aggregate principal amount of the 2009 Series Bonds. Further,
without the consent of each holder of 2009 Series Bonds affected thereby, an
amendment may not:
(1) reduce the amount of 2009 Series Bonds whose Holders must consent
to an amendment or waiver;
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<PAGE>
(2) reduce the rate of or change the time for payment of interest on
any 2009 Series Bonds;
(3) reduce the principal of or extend the Stated Maturity of any 2009
Series Bonds;
(4) reduce the amount payable upon the redemption or repurchase of any
2009 Series Bonds under Article 7 or Section 4.09 or 4.10 or change the
time at which any 2009 Series Bonds may be redeemed in accordance with
Article 7;
(5) make any 2009 Series Bonds payable in a currency other than that
stated in the 2009 Series Bonds;
(6) subordinate the 2009 Series Bonds to any other obligation of the
Corporation; or
(7) at any time after a Change of Control or Asset Sale has occurred,
change the time at which the Change of Control Offer or Prepayment Offer
relating thereto must be made or at which the 2009 Series Bonds must be
repurchased pursuant to such Change of Control Offer or Prepayment Offer.
Section 8.07. Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE 2009
SERIES BONDS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
Section 8.08. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the 2009 Series Bonds shall comply with the TIA as then in effect.
Section 8.09. Recitals. The recitals contained herein shall be taken as
the statements of the Company, and the Trustees assume no responsibility for
their correctness. The Trustees make no representations as to the validity or
sufficiency of this Tenth Supplemental Indenture.
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IN WITNESS WHEREOF, said National Steel Corporation has caused this
Supplemental Indenture to be executed on its behalf by one of its Senior Vice
Presidents and its Treasurer; said The Chase Manhattan Bank has caused this
Supplemental Indenture to be executed on its behalf as Trustee under the
Indenture by one of its Senior Trust Officers and its corporate seal to be
hereto affixed and said seal and this Supplemental Indenture to be attested by
one of its Trust Officers; and said Frank J. Grippo, as Individual Trustee under
the Indenture, has executed this Supplemental Indenture under seal; all as of
March 8, 1999.
NATIONAL STEEL CORPORATION
By: /s/ Glenn H. Gage
---------------------------------
Name: Glenn H. Gage
Title: Senior Vice President
and Chief Financial Officer
By: /s/ William E. McDonough
---------------------------------
Name: William E. McDonough
Title: Treasurer
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[CORPORATE SEAL]
The Chase Manhattan Bank, as Trustee
By: /s/ L. O'Brien
--------------------------------
Name: L. O'Brien
Title: VICE PRESIDENT
Attest:
/s/ N. Rodriguez
- -------------------------
Name: Natalia Rodriguez
Title: Trust Officer
Signed, sealed and delivered by
The Chase Manhattan Bank
in the presence of:
/s/ Eric S. Butler
- ------------------------
Eric S. Butler
Administrator
/s/ Melissa Oldsmith /s/ Frank J. Grippo
- ----------------------------- -----------------------------
As Witness FRANK J. GRIPPO
As Individual Trustee
Signed, sealed and delivered by
Frank J. Grippo
in the presence of:
/s/ Eric S. Butler
- ------------------------
Administrator
/s/ Melissa Oldsmith
- -------------------------
As Witnesses
91
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
I, Miguel Flores, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 8th day of March, 1999:
MICHIGAN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by Glenn H. Gage of National Steel Corporation, a Delaware corporation, on
behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
Before me, a Notary Public, this 8 day of March, 1999, personally appeared
National Steel Corporation, a Delaware corporation, by Glenn H. Gage, Senior
Vice President and Chief Financial Officer, and acknowledged the execution of
the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 9, 1999, by Glenn H.
Gage as Senior Vice President and Chief Financial Officer of National Steel
Corporation, a Delaware corporation.
[Notary Seal]
ILLINOIS
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by Glenn H. Gage, Senior Vice President and Chief Financial Officer of
National Steel Corporation, a Delaware corporation, on behalf of the
corporation.
[SEAL]
2
<PAGE>
MINNESOTA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 8, 1999, by Glenn H.
Gage as Senior Vice President and Chief Financial Officer of National Steel
Corporation, a Delaware corporation.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Jose Miguel Flores
-----------------------------
Notary Public
[Notary Seal]
3
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
I, Jose Miguel Flores, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 8th day of March, 1999:
MICHIGAN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by William E. McDonough of National Steel Corporation, a Delaware
corporation, on behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
Before me, a Notary Public, this 8 day of March, 1999, personally appeared
National Steel Corporation, a Delaware corporation, by William E. McDonough,
Treasurer, and acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 9, 1999, by William E.
McDonough as Treasurer of National Steel Corporation, a Delaware corporation.
[Notary Seal]
ILLINOIS
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by William E. McDonough, Treasurer of National Steel Corporation, a
Delaware corporation, on behalf of the corporation.
[SEAL]
2
<PAGE>
MINNESOTA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 8, 1999, by William E.
McDonough as Treasurer of National Steel Corporation, a Delaware corporation.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Jose Miguel Flores
-----------------------------
Notary Public
[Notary Seal]
3
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
I, Emily Fayan, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 8th day of March, 1999:
MICHIGAN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by L. O'Brien of The Chase Manhattan Bank, a New York corporation, on
behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
Before me, a Notary Public, this 8 day of March, 1999, personally appeared
The Chase Manhattan Bank, a New York corporation, by L. O'Brien, Vice President,
and acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 9, 1999, by L. O'Brien
as Vice President of The Chase Manhattan Bank, a New York corporation.
[Notary Seal]
ILLINOIS
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by L. O'Brien, Vice President of The Chase Manhattan Bank, a New York
corporation, on behalf of the corporation.
[SEAL]
2
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
I, Emily Fayan, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 8th day of March, 1999:
MICHIGAN
STATE OF ___________ ) ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by Frank J. Grippo.
[Notary Seal]
INDIANA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
Before me, a Notary Public, this 8 day of March, 1999, Frank J. Grippo,
acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 8, 1999, by Frank J.
Grippo.
[Notary Seal]
ILLINOIS
STATE OF ___________ )
ss.:
COUNTY OF___________ )
The foregoing instrument was acknowledged before me this 8 day of March,
1999 by Frank J. Grippo.
[Notary Seal]
2
<PAGE>
MINNESOTA
STATE OF ___________ )
ss.:
COUNTY OF___________ )
This instrument was acknowledged before me on March 8, 1999, by Frank J.
Grippo.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Emily Fayan
-----------------------------
Notary Public
[Notary Seal]
3
<PAGE>
EXHIBIT 4.H
================================================================================
NATIONAL STEEL CORPORATION
AND
THE CHASE MANHATTAN BANK
and
FRANK J. GRIPPO, As Trustees
________________
Eleventh Supplemental Indenture
Dated as of March 31, 1999
To
INDENTURE OF MORTGAGE AND DEED OF TRUST
Dated May 1, 1952
________________
First Mortgage Bonds, 9 7/8% Series C and D Due 2009
================================================================================
<PAGE>
TABLE OF CONTENTS*
__________________
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions................................................. 10
SECTION 1.02. Other Definitions........................................... 33
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........... 34
SECTION 1.04. Rules of Construction....................................... 34
ARTICLE 2
2009 Bonds Forms
Section 2.01. Forms Generally............................................. 35
Section 2.02. Form of Trustee's Certificate of Authentication............. 36
Section 2.03. Restrictive Legends......................................... 36
Section 2.04. Form of Certificate to Be Delivered upon Termination of
Restricted Period.................................................. 39
ARTICLE 3
The 2009 Series Bonds
Section 3.01. Maturity; Payment........................................... 40
Section 3.02. Denominations............................................... 41
Section 3.03. Execution. Authentication, Delivery and Dating.............. 41
Section 3.04. Temporary 2009 Series Bonds................................. 42
Section 3.05. Registration, Registration of Transfer and Exchange......... 43
Section 3.06. Payment of Interest, Interest Rights Preserved.............. 45
Section 3.07. Persons Deemed Owners....................................... 46
Section 3.08. Cancellation................................................ 46
Section 3.09. Computation of Interest..................................... 47
Section 3.10. Book Entry Provisions for Global Bonds...................... 47
Section 3.11. Transfer Provisions......................................... 48
Section 3.12. Form of Regulation S Certificate............................ 57
Section 3.13. Form of Rule 144A Certificate............................... 60
Section 3.14. CUSIP Numbers............................................... 61
Section 3.15. Notice to Holders; Waiver................................... 61
</TABLE>
________________
* This Table of Contents has been inserted for purposes of convenience and
ready reference. It does not constitute a part of the Eleventh Supplemental
Indenture.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 4
Particular Covenants of the Corporation
Section 4.01. Payment of Securities....................................... 62
Section 4.02. SEC Reports................................................. 62
Section 4.03. Limitation on Lines of Business............................. 63
Section 4.04. Covenant Suspension......................................... 63
Section 4.05. Limitation on Debt and Restricted Subsidiary Preferred
Stock.............................................................. 63
Section 4.06. Limitation on Restricted Payments........................... 63
Section 4.07. Limitation on Pledged Subsidiaries to Incur Indebtedness
Or Issue Capital Stock............................................. 66
Section 4.08. Limitation on Sale of Mortgaged Property.................... 67
Section 4.09. Change of Control........................................... 68
Section 4.10. Limitation on Sale of Assets Other Than Mortgaged
Property........................................................... 70
Section 4.11. Limitation on Restrictions on Distributions from Restricted
Subsidiaries....................................................... 74
Section 4.12. Limitation on Transactions with Affiliates.................. 75
Section 4.13. Limitation on Sale and Leaseback Transactions............... 77
Section 4.14. Designation of Restricted and Unrestricted Subsidiaries..... 77
Section 4.15. Compliance Certificate...................................... 78
Section 4.16. Further Instruments and Acts................................ 78
ARTICLE 5
Successor Corporation
Section 5.01. When Corporation May Merge or Transfer Assets............... 78
ARTICLE 6
Defaults And Remedies
Section 6.01. Events of Default........................................... 80
Section 6.02. Acceleration................................................ 82
Section 6.03. Other Remedies.............................................. 82
Section 6.04. Waiver of Defaults.......................................... 83
</TABLE>
ii
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<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 7
Redemption Of 2009 Series Bonds
Section 7.01. Optional Redemption of 2009 Series Bonds; Premiums
Payable........................................................... 83
Section 7.02. Surrender of Partially-redeemed 2009 Series Bonds.......... 84
Section 7.03. Regarding Issue, Transfer and Exchange of 2009 Series
Bonds to be Redeemed.............................................. 84
Section 7.04. Notices to Trustee......................................... 84
Section 7.05. Notice of Redemption....................................... 84
Section 7.06. Effect of Notice of Redemption............................. 85
ARTICLE 8
Miscellaneous
Section 8.01. Acceptance of Trusts....................................... 86
Section 8.02. Benefits Restricted to Parties and Holders of Bonds........ 86
Section 8.03. Execution in Counterparts.................................. 86
Section 8.04. Original Indenture and Supplements Construed as One
Instrument........................................................ 86
Section 8.05. Amount Advanced under Indenture............................ 86
Section 8.06. With Consent of Holders.................................... 86
Section 8.07. Governing Law.............................................. 87
Section 8.08. Compliance with Trust Indenture Act........................ 87
Section 8.09. Recitals................................................... 87
</TABLE>
iii
<PAGE>
THIS ELEVENTH SUPPLEMENTAL INDENTURE (hereinafter called "THIS SUPPLEMENTAL
INDENTURE"), dated as of March 31, 1999 made by and among NATIONAL STEEL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware (hereinafter called the "CORPORATION"), THE CHASE MANHATTAN BANK, a New
York corporation (hereinafter called the "TRUSTEE") and FRANK J. GRIPPO
(hereinafter called the "INDIVIDUAL TRUSTEE"), as Trustees under the Indenture
hereinafter referred to (the Trustee and the Individual Trustee being
hereinafter collectively called the "TRUSTEES").
WHEREAS, under date of May 1, 1952, the Corporation and Great Lakes Steel
Corporation, then a wholly-owned subsidiary of the Corporation which was
subsequently merged into the Corporation, entered into an Indenture of Mortgage
and Deed of Trust (hereinafter called the "ORIGINAL INDENTURE") with City Bank
Farmers Trust Company, as Trustee, and Ralph E. Morton, as Individual Trustee;
and
WHEREAS, the Original Indenture has heretofore been amended and
supplemented by a First Supplemental Indenture dated as of November 1, 1956, a
Second Supplemental Indenture dated as of January 1, 1957, a Third Supplemental
Indenture dated as of June 1, 1959, a Fourth Supplemental Indenture dated as of
December 1, 1960, a Fifth Supplemental Indenture dated as of May 1, 1962, a
Sixth Supplemental Indenture dated as of December 1, 1970, a Seventh
Supplemental Indenture dated as of September 19, 1973, an Eighth Supplemental
Indenture dated as of September 19, 1973, a Ninth Supplemental Indenture dated
as of August 1, 1976, and a Tenth Supplemental Indenture dated as of March 8,
1999; and
WHEREAS, The Chase Manhattan Bank is now the duly appointed successor
Trustee under the Original Indenture and all instruments supplemental thereto
(hereinafter together called the "INDENTURE") and FRANK J. GRIPPO is now the
duly appointed successor Individual Trustee under the Indenture; and
WHEREAS, there have heretofore been authenticated and delivered pursuant to
the Original Indenture First Mortgage Bonds, 3 1/8% Series Due 1982, there have
heretofore been authenticated and delivered pursuant to the Original Indenture
and said First Supplemental Indenture First Mortgage Bonds, 3 7/8% Series Due
1986, there have heretofore been authenticated and delivered pursuant to the
Original Indenture, as theretofore supplemented, and said Third Supplemental
Indenture First Mortgage Bonds, 4 5/8% Series Due 1989, there have heretofore
been authenticated and delivered pursuant to the Original Indenture, as
theretofore supplemented, and said Sixth Supplemental Indenture First Mortgage
Bonds, 8% Series Due 1995, there have heretofore been authenticated and
<PAGE>
delivered pursuant to the Original Indenture, as theretofore supplemented, and
said Seventh Supplemental Indenture First Mortgage Bonds, 4 7/8% Series Due 1987
and First Mortgage Bonds, 5.30% Series Due 1990, there have heretofore been
authenticated and delivered pursuant to the Original Indenture, as theretofore
supplemented, and said Ninth Supplemental Indenture First Mortgage Bonds, 83/8%
Series Due 2006, and there have heretofore been authenticated and delivered
pursuant to the Original Indenture, as theretofore supplemented, and said Tenth
Supplemental Indenture First Mortgage Bonds, 9 7/8% Series A Due 2009; and
WHEREAS, the Corporation has determined to issue, pursuant to the Original
Indenture, and this Supplemental Indenture, two series of Bonds to be designated
the "First Mortgage Bonds, 9 7/8% Series C due 2009" in the aggregate principal
amount of $75,000,000 (hereinafter called the "INITIAL 2009 SERIES BONDS") and
the "First Mortgage Bonds, 9 7/8% Series D due 2009" in the initial aggregate
principal amount of up to $300,000,000, (hereinafter called the "EXCHANGE 2009
SERIES BONDS" and, together with the 2009 Series C Bonds, the "2009 SERIES
BONDS"), all as hereinafter more fully provided; and
WHEREAS, the fully registered 2009 Series Bonds and the Trustee's
Authentication Certificate to be endorsed on all the 2009 Series Bonds are to be
substantially in the following forms, with necessary or appropriate variations,
omissions and insertions, as permitted or required by the Original Indenture and
this Supplemental Indenture:
[FORM OF FACE OF 2009 SERIES BOND]
NATIONAL STEEL CORPORATION
First Mortgage Bond, 9 7/8% Series [C/D] Due 2009
Cusip No.........................
$.............. No................
NATIONAL STEEL CORPORATION, a corporation organized and existing under the
laws of the State of Delaware (hereinafter called the "CORPORATION", which term
shall include any successor corporation to the extent provided in the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to or registered
assigns, the principal sum of
Dollars on March 1, 2009, in such coin or currency of the United States of
America as at the time of
2
<PAGE>
payment shall be legal tender for public and private debts, and to pay interest
thereon from March 8, 1999 in like coin or currency, semiannually on March 1 and
September 1 of each year, at the rate of 9 7/8% per annum, from the March 1 or
September 1, as the case may be, next preceding the date of this Bond to which
interest has been paid, unless the date hereof is a date to which interest has
been paid, in which case from the date of this Bond, or unless no interest has
been paid on the First Mortgage Bonds, 9 7/8% Series [C/D] Due 2009 (hereinafter
called the "2009 SERIES BONDS"), in which case from March 8, 1999, until payment
of said principal sum has been made or duly provided for. Notwithstanding the
foregoing, when there is no existing default in the payment of interest on the
2009 Series Bonds, if the date hereof is after a regular record date (which
shall be the close of business on February 15 or August 15, as the case may be,
next preceding an interest payment date) and before the next succeeding interest
payment date, this Bond shall bear interest from such interest payment date;
provided, however, that if the Corporation shall default in the payment of
interest due on such interest payment date, then this Bond shall bear interest
from the next preceding interest payment date to which interest has been paid,
or, if no interest has been paid on the 2009 Series Bonds, from March 8, 1999.
The interest so payable, and punctually paid or duly provided for, on any
interest payment date will, as provided in said Indenture, be paid to the person
in whose name this Bond (or one or more predecessor Bonds) is registered on the
regular record date for such interest payment date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Both the principal of,
premium, if any, and interest on, this Bond are payable at the office or agency
of the Corporation in the Borough of Manhattan, The City of New York, New York;
provided, that interest may be paid, at the option of the Corporation, by check
mailed to the person entitled thereto at his address last appearing on the Bond
register or by wire transfer to an account maintained by the payee located in
the United States provided that appropriate written wire transfer instructions
have been provided at least two Business Days prior to the relevant record date.
[The Holder of this Bond is entitled to the benefits of the Registration
Rights Agreement, dated as of March 31, 1999 (the "Registration Rights
Agreement"), among the Corporation and the Initial Purchasers named therein. In
the event that either (a) an Exchange Offer Registration Statement (as such term
is defined in the Registration Rights Agreement) is not filed with the SEC on or
prior to the 60th day following the date of the Tenth Supplemental Indenture (as
defined in the Eleventh Supplemental Indenture), (b) such Exchange Offer
Registration Statement has not been declared effective on or prior to the 150th
day following the date of the Tenth Supplemental Indenture, (c) the Exchange
Offer (as such term is defined in the Registration Rights Agreement) is not
consummated or, if required, a Shelf Registration Statement (as such term is
defined in the Registration Rights Agreement) with respect to the Bond is not
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declared effective on or prior to the 180th day following the date of the Tenth
Supplemental Indenture or (d) the Exchange Offer Registration Statement is
declared effective but thereafter ceases to be effective or usable (each such
event referred to in clauses (a) through (d) above, a "Registration Default")
then the per annum interest rate borne by this Bond shall be increased by 0.25
percent per annum for the first 90-day period following the Registration
Default. The per annum interest rate borne by this Bond will increase by an
additional 0.25 percent per annum for each subsequent 90-day period following
such Registration Default to a maximum of 1.00 percent per annum until such
Registration Default has been cured. Upon (w) the filing of the Exchange Offer
Registration Statement after the 60-day period described in clause (a) above,
(x) the effectiveness of the Exchange Offer Registration Statement after the
150-day period described in clause (b) above or (y) the consummation of the
Exchange Offer or the effectiveness of a Shelf Registration Statement, as the
case may be, after the 180-day period described in clause (c) above, or (z) the
cure of any Registration Default described in clause (d) above, the interest
rate borne by the Bond from the date of such filing, effectiveness or
consummation, as the case may be, will be reduced to the original interest rate
set forth in the title of this Bond above if the Corporation is otherwise in
compliance with this paragraph; provided, however, that, if after such reduction
in interest rate, a different event specified in clause (a), (b), (c) or (d)
above occurs, the interest rate may again be increased and thereafter reduced
pursuant to the foregoing provisions.]**
Reference is made to the further provisions of this Bond set forth on the
reverse hereof, which shall have the same effect as though fully set forth at
this place.
This Bond shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until The Chase Manhattan Bank, the
Trustee under the Indenture, or a successor Trustee thereto under the Indenture,
shall have signed the form of certificate hereon.
IN WITNESS WHEREOF, National Steel Corporation has caused this Bond to be
duly executed under its corporate seal.
Dated:
NATIONAL STEEL CORPORATION
___________________
** To be inserted in the case of a Bond that has not been registered
under the Securities Act.
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By: _________________________________
Name:
Title:
Attest:
______________________________________
Title:
[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE]
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Bonds, of the series designated therein, described
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, as
Trustee,
By: _________________________________
Authorized Officer
[FORM OF REVERSE OF 2009 SERIES BOND]
NATIONAL STEEL CORPORATION
First Mortgage Bond, 9 7/8% Series [C/D] Due 2009
This Bond is one of the Bonds of the Corporation (hereinafter called the
"BONDS") all duly authorized or from time to time to be duly authorized and not
otherwise limited in aggregate principal amount, all issued and to be issued in
one or more series from time to time under and (except as otherwise provided in
the Indenture hereinafter mentioned) equally secured by an Indenture of Mortgage
and Deed of Trust dated May 1, 1952, executed by the Corporation, as Mortgagor,
and by Great Lakes Steel Corporation, a former wholly-owned subsidiary of the
Corporation which was merged into the Corporation, as Co-Mortgagor, to City Bank
Farmers Trust Company, as Trustee and Ralph E. Morton, as Individual Trustee,
under which The Chase Manhattan Bank is now successor Trustee and FRANK J.
GRIPPO is now successor Individual Trustee (said Trustee and said Individual
Trustee from time to time being herein together called the "TRUSTEES"), to which
Indenture of Mortgage and Deed of Trust and all instruments
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supplemental thereto (hereinafter together sometimes referred to as the
"INDENTURE") reference is hereby made for a description of the properties
mortgaged and pledged, the nature and extent of the security, the rights of the
holders of the Bonds in respect of the security, the rights, duties and
immunities of the Trustees and the rights and obligations of the Corporation in
respect of the Bonds, and the terms and conditions upon which the Bonds are, and
are to be, secured. The Bonds of different series may be for various principal
sums, may mature at different times, may bear interest at different rates and
may otherwise vary as in the Indenture provided. This Bond is issued pursuant to
the Eleventh Supplemental Indenture dated as of March 31, 1999, executed by the
Corporation and the Trustees (the "ELEVENTH SUPPLEMENTAL INDENTURE"), and is the
series of Bonds described in said Eleventh Supplemental Indenture and designated
as the "First Mortgage Bonds, 9 7/8% Series [C/D] Due 2009" of the
Corporation (hereinafter called the "2009 SERIES BONDS"), limited in aggregate
principal amount to [$75,000,000/$300,000,000] at any one time outstanding,
except as otherwise provided in the Original Indenture with respect to Bonds of
such Series issued in exchange and substitution for Bonds of such Series as have
been mutilated, destroyed, lost or stolen or as otherwise provided in the
Eleventh Supplemental Indenture. The terms of the 2009 Series Bonds include
those stated in the Indenture and those made or deemed to be part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
------
77aaa-77bbbb) as amended and as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The 2009 Series Bonds are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
those terms.
The provisions of the Indenture may be modified or amended by a
supplemental indenture to the extent and in the manner provided in the
Indenture, with the consent and approval of the holders of at least 66 2/3% in
aggregate principal amount of the Bonds at the time outstanding under the
Indenture; provided that no such modification or amendment shall be made so as
to (a) alter the date fixed in any of the Bonds or coupons for the payment of
the principal of, or any installment of interest on, such Bonds, or otherwise
modify the terms of payment of the principal at maturity of, or interest on, the
Bonds or impose any conditions with respect to such payment or affect the right
of any Bondholder to institute suit for the enforcement of any such payment on
or after the respective due dates expressed in the Bonds or in such coupons
appertaining thereto, all of which shall always be unconditional, (b) alter the
amount of principal of, or the rate of interest or premium payable on, any of
the Bonds, (c) affect the rights of the holders of less than all the Bonds of
any series then outstanding, (d) affect the rights of the holders of one or
more, but less than all, series of Bonds then outstanding, except with the
consent of the holders of not less than 66 2/3% in aggregate principal amount of
the Bonds of each of the series so affected then
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outstanding, or (e) reduce the percentage of the principal amount of Bonds, or
of the Bonds of any series, the consent of the holders of which shall be
required for the authorization of any such modification or amendment.
Except as set forth in the next paragraph, the 2009 Series Bonds may not be
redeemed prior to March 1, 2004. Thereafter, the 2009 Series Bonds will be
redeemable at the option of the Corporation, in whole or in part, on not less
than 30 nor more than 60 days' prior notice mailed to each Holder of 2009 Series
Bond being redeemed and otherwise in accordance with the procedures set forth in
the Indenture, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on or after March 1 of the years set forth below:
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- ---- ----------------
<S> <C>
2004........................................ 104.938%
2005........................................ 103.292%
2006........................................ 101.646%
2007 and thereafter......................... 100.000%
</TABLE>
Notwithstanding the foregoing, at any time and from time to time prior to
March 1, 2002, the Corporation may redeem up to a maximum of 35% of the original
aggregate principal amount of the 2009 Series Bonds with the proceeds of one or
more Public Equity Offerings, at a redemption price equal to 109.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that after giving effect to any such redemption, at least 65%
of the original aggregate principal amount of the 2009 Series Bonds remains
outstanding. Any such redemption shall be made within 90 days of such Public
Equity Offering upon not less than 30 nor more than 60 days' notice mailed to
each Holder of 2009 Series Bond being redeemed and otherwise in accordance with
the procedures set forth in the Indenture.
Upon a Change of Control, any Holder of 2009 Series Bonds will have the
right, subject to certain conditions specified in the Indenture, to cause the
Corporation to repurchase all or any part of the 2009 Series Bonds of such
Holder at a purchase price equal to 101% of the principal amount of the 2009
Series Bonds to be repurchased plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
record date to
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receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
This Bond is transferable by the registered owner hereof or by his duly
authorized attorney at the agency of the Corporation in the Borough of
Manhattan, The City of New York, New York, upon surrender of this Bond for
cancellation, accompanied by a written instrument of transfer in a form approved
by the Corporation or the Trustee, duly executed by the registered owner of this
Bond, and thereupon one or more new registered 2009 Series Bonds for the same
aggregate principal amount will be issued in the name of the transferee or
transferees in exchange herefor, as provided in the Indenture.
2009 Series Bonds are issuable only as fully registered Bonds without
coupons in the denominations of $1,000 and integral multiples thereof. In the
manner provided in the Indenture, 2009 Series Bonds may be exchanged for a like
aggregate principal amount of 2009 Series Bonds of other authorized
denominations.
No service charge will be made for any such transfer or exchange, but the
Corporation may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on, this Bond, or for any claim based hereon or on the
Indenture, against any incorporator, or against any shareholder, director or
officer, past, present or future, of the Corporation or of any predecessor or
successor corporation, as such, either directly or through the Corporation or
any such predecessor or successor corporation, whether by virtue of any
constitutional provision, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability, whether at common law,
in equity, by any constitutional provision, statute or otherwise, of
incorporators, shareholders, directors, or officers being released by every
holder hereof by the acceptance of this Bond and as part of the consideration
for the issue hereof, and being likewise released by the terms of the Indenture.
The Indenture may be canceled and the lien thereof discharged if the
Corporation shall pay, or make provision for the payment of, the principal,
interest and premium, if any, on all the Bonds at the times and in the manner
stipulated in the Indenture.
Any moneys deposited with the Trustee by the Corporation for the payment or
redemption of 2009 Series Bonds, and remaining unclaimed by the Holders for six
years after the date of maturity or the date fixed for redemption of
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<PAGE>
such Bonds upon written request and subject to applicable abandoned property
laws, shall be repaid to the Corporation and thereafter such Holders shall be
limited to a claim against the Corporation.
In case an event of default, as defined in the Indenture, shall occur, the
principal of all the Bonds at any such time outstanding under the Indenture may
be declared or may become due and payable, upon the conditions and in the manner
and with the effect provided in the Indenture. The Indenture provides that in
certain events, such default and its consequences may be waived and such
declaration may be rescinded by the holders of a majority in principal amount of
the Bonds outstanding.
In addition, in case an Eleventh Supplemental Indenture Event of Default
(as defined in the Eleventh Supplemental Indenture), shall occur, the principal
of all the 2009 Series Bonds at any such time outstanding under the Indenture
may be declared or may become due and payable, upon the conditions and in the
manner and with the effect provided in the Eleventh Supplemental Indenture. The
Eleventh Supplemental Indenture provides that in certain events, such default
and its consequences may be waived and such declaration may be rescinded by the
holders of a majority in principal amount of the 2009 Series Bonds outstanding.
THIS 2009 SERIES BOND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The person in whose name this Bond shall be registered shall be deemed and
regarded as the absolute owner hereof for all purposes, and payment of or on
account of the principal of, premium, if any, and interest on this Bond shall be
made only to such registered owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon this Bond to the extent of
the sum or sums so paid.
The Corporation will furnish to any Holder of 2009 Series Bonds upon
written request and without charge to the Holder a copy of the Indenture which
has in it the text of this 2009 Series Bond.
___________________
And
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<PAGE>
WHEREAS, all acts and proceedings required by law duly to authorize the
execution and delivery of this Supplemental Indenture have been done and taken
and the execution and delivery of this Supplemental Indenture have been in all
respects duly authorized;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
That the Corporation, in consideration of the premises, and of the purchase
and acceptance of the 2009 Series Bonds by the registered owners thereof, and of
the sum of one dollar to the Corporation duly paid by the Trustees at or before
the ensealing and delivery of these presents, and for other valuable
considerations, the receipt whereof is hereby acknowledged, has entered into
this Supplemental Indenture with the Trustees to create the 2009 Series Bonds,
to establish the forms thereof and to declare the terms and conditions upon and
subject to which they are to be issued:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.0. Definitions.
"ADDITIONAL ASSETS" means (a) any Property (other than cash, Cash
Equivalents or securities) to be owned by the Corporation or any Restricted
Subsidiary; or (b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Corporation or another Restricted Subsidiary from any Person other than the
Corporation or an Affiliate of the Corporation.
"AFFILIATE" of any specified Person means (a) any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person or (b) any other Person who is a director or
officer of (i) such specified Person, (ii) any Subsidiary of such specified
Person or (iii) any Person described in clause (a) above. For the purposes of
this definition, "CONTROL" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing. For purposes of the covenants contained in Section 4.10, Section
4.12 and the definition of the term "ADDITIONAL ASSETS" only, "AFFILIATE" shall
also mean any
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beneficial owner of shares representing 5% or more (on a fully diluted basis) of
the total voting power of the Voting Stock of the Corporation and/or of rights
or warrants to purchase Voting Stock representing 5% or more (on a fully diluted
basis) of the total voting power of the Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"AFFILIATE JOINT VENTURE" means a Person, other than a Subsidiary of the
Corporation, in which the Corporation or any Restricted Subsidiary has an
Investment and which is an Affiliate of the Corporation only because the
Corporation or such Restricted Subsidiary has the ability to control such
Person, and for no other reason.
"ASSET SALE" means any sale, lease, transfer, issuance or other disposition
(or series of related sales, leases, transfers, issuances or dispositions) by
the Corporation or any Restricted Subsidiary, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "DISPOSITION"), of (a) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares), (b)
all or substantially all the assets of any division or line of business of the
Corporation or any Restricted Subsidiary or (c) any other assets of the
Corporation or any Restricted Subsidiary outside of the ordinary course of
business of the Corporation or such Restricted Subsidiary (other than (i) in the
case of clauses (a), (b) and (c) above, any disposition by a Restricted
Subsidiary to the Corporation or by the Corporation or a Restricted Subsidiary
to a Wholly Owned Subsidiary, (ii) in the case of clauses (b) and (c) above, (x)
any disposition of accounts receivable or inventory by or to the Corporation or
any Restricted Subsidiary to or from NSFC or any other bankruptcy-remote,
special-purpose Subsidiary of the Corporation in connection with the Incurrence
of Debt by such Subsidiary under the Credit Facilities or (y) any disposition of
Property having, together with other Property disposed of pursuant to such
clauses during the same fiscal year, an aggregate Fair Market Value of less than
$25 million, (iii) in the case of clause (c) above, (x) any disposition effected
in compliance with Section 5.01(a) and (y) a disposition of obsolete assets in
the ordinary course of business and (iv) in the case of clauses (a), (b) and (c)
above, but only for the purposes of Section 4.10, dispositions of Mortgaged
Property made in compliance with Section 4.08.
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction means,
at any date of determination, (a) if such Sale and Leaseback Transaction is a
Capital Lease Obligation, the amount of Debt represented thereby according to
the definition of the term "Capital Lease Obligation" and (b) in all other
instances, the present value (discounted at the actual rate of interest implicit
in such transaction, compounded annually) of the total obligations of the lessee
for rental
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payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended).
"AVERAGE LIFE" means, as of any date of determination, with respect to any
Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of the
product of the numbers of years (rounded to the nearest one-twelfth of one year)
from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation or any
committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Corporation to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification.
"BUSINESS DAY", when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the 2009 Series Bonds,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"CAPITAL EXPENDITURE DEBT" means Debt Incurred by any Person to finance a
capital expenditure so long as (a) such capital expenditure is or should be
included as an addition to "Property, Plant and Equipment" in accordance with
GAAP and (b) such Debt is Incurred within 180 days of the date such capital
expenditure is made.
"CAPITAL LEASE OBLIGATION" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.07, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
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"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of corporate stock, partnership interests or
any other participations, rights, warrants, options or other interests in the
nature of an equity interest in such Person, including Preferred Stock, but
excluding any debt security convertible or exchangeable into such equity
interest.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate Net Cash Proceeds
received by the Corporation from the issuance or sale (other than to a
Subsidiary of the Corporation or an employee stock ownership plan or trust
established by the Corporation or any of its Subsidiaries for the benefit of
their employees) by the Corporation of any class of its Capital Stock (other
than Disqualified Stock) after March 8, 1999.
"CASH EQUIVALENTS" means (a) any evidence of Debt with a maturity of 360
days or less issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof), (b) certificates of deposit, Eurodollar time deposits, bankers'
acceptances and other similar unsubordinated debt instruments with a maturity of
360 days or less and overnight bank deposits of any bank, trust company,
investment bank or other financial institution (including any branch thereof)
that is organized or regulated under the laws of the United States of America or
any state thereof, and which bank, trust company, investment bank or other
financial institution has capital, surplus and undivided profits aggregating in
excess of US$1.0 billion and has outstanding unsecured debt which is rated "A3"
or higher by Moody's or "A-" or higher by S&P; provided that up to $25 million
of the aggregate amount of investments of the type described in this clause (b)
may be with banks (or branches thereof) of the type described above with
outstanding unsecured debt that has an Investment Grade Rating or higher, (c)
commercial paper with a maturity of 360 days or less issued by a corporation
that is not an Affiliate of the Corporation and is organized under the laws of
any state of the United States or the District of Columbia and rated at least A-
2 by S&P or at least P-2 by Moody's, (d) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
clauses (a) and (b) above entered into with a bank, trust company, investment
bank or other financial institution meeting the qualifications described in
clause (b) above or (e) funds (including, without limitation, any fund for which
the Trustee or any affiliate of the Trustee serves as an administrator,
shareholder servicing agent and/or custodian or subcustodian) invested
exclusively in cash and investments of the type described in clauses (a) through
(d) above.
"CHANGE OF CONTROL" means the occurrence of any of the following events:
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(a) if any "person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provisions to
either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than Permitted Holders,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act, except that a Person will be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of 30% or more of the total voting power of all
classes of the Voting Stock of the Corporation; or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Corporation and the Restricted Subsidiaries, considered as a whole
(other than a disposition of such assets as an entirety or virtually as an
entirety to a Wholly Owned Subsidiary) shall have occurred, or the
Corporation merges, consolidates or amalgamates with or into any other
Person or any other Person merges, consolidates or amalgamates with or into
the Corporation, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Corporation is reclassified into or
exchanged for cash, securities or other Property, other than any such
transaction where (i) the outstanding Voting Stock of the Corporation is
reclassified into or exchanged for Voting Stock of the surviving
corporation and (ii) the Holders of the Voting Stock of the Corporation
immediately prior to such transaction own, directly or indirectly, not less
than a majority of the Voting Stock of the surviving corporation
immediately after such transaction and in substantially the same proportion
as before the transaction; or
(c) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election or appointment by such Board or whose
nomination for election by the shareholders of the Corporation was approved
by a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors then in office; or
(d) the shareholders of the Corporation shall have approved any plan
of liquidation or dissolution of the Corporation.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMODITY PRICE PROTECTION AGREEMENT" means, in respect of a Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of determination,
the aggregate amount of liabilities of the Corporation and its consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (a) all intercompany
items between the Corporation and any Restricted Subsidiary or between
Restricted Subsidiaries and (b) all current maturities of long-term Debt.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) the aggregate amount of EBITDA for the period of
the most recent four consecutive fiscal quarters ending at least 45 days prior
to such determination date to (b) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (i) if the Corporation or any
Restricted Subsidiary has Incurred any Debt since the beginning of such period
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio is an Incurrence of Debt, or
both, Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Debt as if such Debt had been
Incurred on the first day of such period and the discharge of any other Debt
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Debt as if such discharge had occurred on the first day of such period, (ii)
if since the beginning of such period the Corporation or any Restricted
Subsidiary shall have made any Asset Sale or if the transaction giving rise to
the need to calculate the Consolidated Interest Coverage Ratio is an Asset Sale,
or both, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are the subject
of such Asset Sale for such period, or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period, in either
case as if such Asset Sale had occurred on the first day of such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any Debt of
the Corporation or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Corporation and its continuing
Restricted Subsidiaries in connection with such Asset Sale for such period, as
if such Asset Sale had occurred on the first day of such period (or, if the
Capital Stock of any Restricted Subsidiary is sold, by an amount equal to the
Consolidated Interest Expense for such period directly attributable to the Debt
of such Restricted Subsidiary to the extent the Corporation and its continuing
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Restricted Subsidiaries are no longer liable for such Debt after such sale),
(iii) if since the beginning of such period the Corporation or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of Property, including any acquisition of Property occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Debt) as if
such Investment or acquisition occurred on the first day of such period and (iv)
if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Corporation or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Sale, Investment or acquisition of Property that would have required an
adjustment pursuant to clause (ii) or (iii) above if made by the Corporation or
a Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Sale, Investment or acquisition occurred on the first
day of such period. For purposes of this definition, whenever pro forma effect
is to be given to an acquisition of Property, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Debt incurred in connection therewith, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting Officer and as
further contemplated by the definition of the term "PRO FORMA". If any Debt
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Debt shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Debt if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total interest
expense of the Corporation and its consolidated Restricted Subsidiaries, plus,
to the extent not included in such total interest expense, and to the extent
Incurred by the Corporation or its Restricted Subsidiaries, (a) interest expense
attributable to capital leases, (b) amortization of debt discount and debt
issuance cost, (c) capitalized interest, (d) non-cash interest expenses, (e)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (f) net costs associated with
Hedging Obligations under Interest Rate Agreements (including amortization of
fees), (g) Redeemable Dividends, (h) Preferred Stock dividends in respect of all
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Corporation or a Wholly Owned Subsidiary, and (i) interest accruing on any Debt
of any other Person to
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the extent such Debt is Guaranteed by the Corporation or any Restricted
Subsidiary.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss) of
the Corporation and its consolidated Subsidiaries; provided, however, that there
shall not be included in such Consolidated Net Income (a) any net income (loss)
of any Person (other than the Corporation) if such Person is not a Restricted
Subsidiary, except that (i) subject to the exclusion contained in clause (d)
below, the Corporation's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash distributed by such Person during such period to the Corporation
or a Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (c) below) and (ii) the Corporation's equity in
a net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income, (b) any
net income (loss) of any Person acquired by the Corporation or any of its
consolidated Subsidiaries in a pooling of interests transaction for any period
prior to the date of such acquisition, (c) any net income (loss) of any
Restricted Subsidiary to the extent that such Restricted Subsidiary is subject
to restrictions, directly or indirectly, on the payment of dividends or the
making of distributions, directly or indirectly, to the Corporation, except that
(i) subject to the exclusion contained in clause (d) below, the Corporation's
equity in the net income of any such Restricted Subsidiary for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Restricted Subsidiary during such period to the Corporation
or another Restricted Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to another Restricted
Subsidiary, to the limitation contained in this clause) and (ii) the
Corporation's equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income, (d) any
gain (but not loss) realized upon the sale or other disposition of any Property
of the Corporation or any of its consolidated Subsidiaries (including pursuant
to any Sale and Leaseback Transaction) which is not sold or otherwise disposed
of in the ordinary course of business and (e) any extraordinary gain or loss.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
consolidated balance sheet of the Corporation and its Restricted Subsidiaries as
of the end of the most recent fiscal quarter of the Corporation ending at least
45 days prior to the taking of any action for the purpose of which the
determination is being made, as (a) the par or stated value of all outstanding
Capital Stock of the Corporation plus (b) paid-in capital or capital surplus
relating to such Capital Stock plus (c) any retained earnings or earned surplus
less (i) any accumulated
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deficit, (ii) any amounts attributable to Disqualified Stock and (iii) any
adjustments for pension liabilities.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this Eleventh
Supplemental Indenture is located at 450 West 33rd Street, New York, NY 10001.
"CORPORATION" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision contained
herein and required by the TIA, each other obligor on the indenture securities.
"CORPORATION REQUEST" or "CORPORATION ORDER" means a written request or
order signed in the name of the Corporation by its Chairman, its President, any
Vice President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"CREDIT FACILITIES" means the Receivables Purchase Agreement and the
Inventory Facilities, in each case together with any extensions, revisions,
refinancings or replacements thereof by a lender or syndicate of lenders
(including through the sale of accounts receivable or inventory to such lender
or lenders or to NSFC or any other bankruptcy-remote, special-purpose Subsidiary
of the Corporation that purchases such accounts receivable or inventory).
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a Person, any
foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (a) the principal in respect of (i) debt of such Person
for money borrowed and (ii) debt evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable; (b) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale and Leaseback Transactions entered into by such Person;
(c) all obligations of such Person issued or assumed as the deferred purchase
price of Property, all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement (but excluding
Trade Accounts Payable arising in the ordinary course of business); (d) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in
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(a) through (c) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth Business
Day following receipt by such Person of a demand for reimbursement following
payment on the letter of credit); (e) the amount of all obligations of such
Person with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of such Person, any
Preferred Stock (but excluding, in each case, any accrued dividends); (f) all
obligations of the type referred to in clauses (a) through (e) of other Persons
and all dividends of other Persons for the payment of which, in either case,
such Person is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including by means of any Guarantee; (g) all obligations
of the type referred to in clauses (a) through (f) of other Persons secured by
any Lien on any Property or asset of such Person (whether or not such obligation
is assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such Property or assets or the amount of the obligation
so secured; (h) to the extent not otherwise included in this definition, Hedging
Obligations of such Person; and (i) to the extent not otherwise included in this
definition, any financing of accounts receivable or inventory of such Person
(whether or not treated as a sale or debt for accounting purposes); provided
that such accounts receivable or inventory shall be deemed to be on the
consolidated balance sheet of the Corporation for purposes of clause (b)(ii) of
the definition of "PERMITTED DEBT". The amount of Debt of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date.
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEPOSITARY" means The Depository Trust Company, its nominees and
successors.
"DISQUALIFIED STOCK" means, with respect to any Person, Redeemable Stock of
such Person as to which the maturity, mandatory redemption, redemption at the
option of the holder thereof, conversion or exchange occurs, or may occur, on or
prior to the first anniversary of the Stated Maturity of the 2009 Series Bonds;
provided, however, that Redeemable Stock of such Person that would not otherwise
be characterized as Disqualified Stock under this definition shall not
constitute Disqualified Stock if such Redeemable Stock is convertible or
exchangeable into Debt solely at the option of the issuer thereof.
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"EBITDA" means, for any period, an amount equal to, for the Corporation and
its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net Income
for such period, plus the following to the extent reducing Consolidated Net
Income for such period: (i) the provision for taxes for such period based on
income or profits or utilized in computing net loss, (ii) Consolidated Interest
Expense, (iii) depreciation and amortization of fixed and intangible assets and
(iv) any other non-cash items (other than any such non-cash item to the extent
that it represents an accrual of or reserve for cash expenditures in any future
period, except amortization of any SFAS 106 transaction obligation of the
Corporation), minus (b) all non-cash items increasing Consolidated Net Income
for such period (other than any such non-cash item to the extent that it will
result in the receipt of cash payments in any future period). Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Corporation by
such Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the offer by the Corporation to the Holders of the
Initial 2009 Series Bonds and the Series A 2009 Bonds to exchange all of the
Initial 2009 Series Bonds and the Series A 2009 Bonds for Exchange 2009 Series
Bonds, as provided for in the Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"EXCHANGE 2009 SERIES BONDS" refers to the First Mortgage Bonds, 9 7/8%
Series D due 2009 containing terms substantially identical to the Initial 2009
Series Bonds and the Series A 2009 Bonds (except that (i) such Exchange 2009
Series Bonds shall not contain terms with respect to transfer restrictions and
shall be registered under the Securities Act, and (ii) certain provisions
relating to an increase in the stated rate of interest thereon shall be
eliminated) that are issued and exchanged for the Initial 2009 Series Bonds and
the Series A 2009 Bonds in accordance with the Exchange Offer, as provided for
in the Registration Rights Agreement and this Supplemental Indenture.
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"FAIR MARKET VALUE" means, with respect to any Property, the price (or, in
the case of a lease, the rent) which could be negotiated in an arm's-length free
market transaction, for cash, between a willing seller (or lessor) and a willing
buyer (or lessee), neither of whom is under undue pressure or compulsion to
complete the transaction. Fair Market Value will be determined, except as
otherwise provided, (a) if such Property has a Fair Market Value equal to or
less than $10,000,000, by any Officer of the Corporation or (b) if such Property
has a Fair Market Value in excess of $10,000,000, by a majority of the Board of
Directors and evidenced by a Board Resolution, dated within 30 days of the
relevant transaction, delivered to the Trustee.
"GAAP" means United States generally accepted accounting principles as in
effect on March 8, 1999, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and (d)
the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "GUARANTEE" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "GUARANTEE"
used as a verb has a corresponding meaning. The term "GUARANTOR" shall mean any
Person Guaranteeing any obligation.
"HEDGING OBLIGATION" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement,
Commodity Price Protection Agreement or any other similar agreement or
arrangement.
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"HOLDER" or "BONDHOLDER" means the Person in whose name a Bond is
registered on the Bond Register.
"INCUR" means, with respect to any Debt or other obligation of any Person,
to create, issue, incur (by merger, conversion, exchange or otherwise), extend,
assume, Guarantee or become liable in respect of such Debt or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such Debt or
obligation on the balance sheet of such Person (and "Incurrence" and "Incurred"
shall have meanings correlative to the foregoing); provided, however, that a
change in GAAP that results in an obligation of such Person that exists at such
time, and is not theretofore classified as Debt, becoming Debt shall not be
deemed an Incurrence of such Debt; provided further, however, that solely for
purposes of determining compliance with Section 4.05, amortization of debt
discount shall not be deemed to be the Incurrence of Debt, provided that in the
case of Debt sold at a discount, the amount of such Debt Incurred shall at all
times be the aggregate principal amount at Stated Maturity.
"INDENTURE" means the Original Indenture as amended or supplemented from
time to time, as defined in the recitals hereto.
"INDEPENDENT FINANCIAL ADVISOR" means an investment banking firm of
national standing or any third party appraiser of national standing, provided
that such firm or appraiser is not an Affiliate of the Corporation.
"INITIAL 2009 SERIES BONDS" has the meaning specified in the recitals to
this Supplemental Indenture.
"INTEREST PAYMENT DATE" means March 1 and September 1 of each year,
commencing September 1, 1999.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement designed to protect against fluctuations in interest rates.
"INVENTORY FACILITIES means (i) the $100 million Inventory Credit
Agreement, dated as of July 18, 1996, among the Corporation, the Long-Term
Credit Bank of Japan Ltd, New York Branch, as Administrative Agent and the Long-
Term Credit Bank of Japan Ltd., New York Branch, as Structuring Agent and
Collateral Agent and (2) the $50 million Credit Agreement, dated as of July 18,
1996, between the Corporation and The Fuji Bank and Trust Company.
"INVESTMENT" by any Person means any direct or indirect loan (other than
advances to customers in the ordinary course of business that are recorded as
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accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. In
determining the amount of any Investment made by transfer of any Property other
than cash, such Property shall be valued at its Fair Market Value at the time of
such Investment.
"INVESTMENT GRADE RATING" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"INVESTMENT GRADE STATUS" shall be deemed to have been reached on the date
that the 2009 Series Bonds have an Investment Grade Rating from both Rating
Agencies.
"ISSUE DATE" means the date on which the 2009 Series Bonds are initially
issued.
"LIEN" means, with respect to any Property of any Person, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such Property (including any Capital Lease
Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction, but excluding any operating lease (except Sale and
Leaseback Transactions) entered into in the ordinary course of such Person's
business).
"MOODY'S" means Moody's Investors Service, Inc. or any successor to the
rating agency business thereof.
"MORTGAGED PROPERTY" means any Property of the Corporation or any of its
Subsidiaries that is subjected to, or is intended to be subjected to, the lien
of the Indenture.
"NET AVAILABLE CASH" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other non-
cash
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form), in each case net of (a) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale, (b) all payments made on any Debt
which is secured by any Property subject to such Asset Sale, in accordance with
the terms of any Lien upon or other security agreement of any kind with respect
to such Property, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the proceeds
from such Asset Sale, (c) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale and (d) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the Property disposed in such Asset Sale and retained by the Corporation or
any Restricted Subsidiary after such Asset Sale.
"NET CASH PROCEEDS" means, with respect to any issuance or sale of Capital
Stock, the cash proceeds of such issuance or sale, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NKK" means NKK U.S.A. Corporation and its Affiliates.
"NON-MORTGAGED PROPERTY" means Property of the Corporation or any of its
Subsidiaries other than Mortgaged Property.
"NSFC" means National Steel Funding Corp., a Delaware corporation, and its
successors.
"OFFICER" means the President, the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer or the Comptroller or the Chief
Financial Officer or any Vice President of the Corporation.
"OFFICERS' CERTIFICATE" means a certificate signed by the President or a
Vice President and the Secretary or an Assistant Secretary or the Treasurer or
an Assistant Treasurer or the Comptroller or an Assistant Comptroller of the
Corporation.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Corporation.
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"PERMITTED DEBT" means:
(a) Debt of the Corporation evidenced by the 2009 Series Bonds and the
Series A 2009 Bonds;
(b) Debt of the Corporation or any Restricted Subsidiary under the
Credit Facilities; provided that the aggregate principal amount of all such
Debt under the Credit Facilities at any one time outstanding shall not
exceed the greater of (i) $350 million less the sum of the aggregate amount
of all required payments of principal applied to reduce the aggregate
amount available to be borrowed under the Credit Facilities including
pursuant to Section 4.10, and (ii) the sum of the amounts equal to (x) 60%
of the book value of the inventory of the Corporation and the Restricted
Subsidiaries and (y) 85% of the book value of the accounts receivable of
the Corporation and the Restricted Subsidiaries, in each case as of the
most recently ended quarter of the Corporation prior to such Incurrence for
which financial statements of the Corporation have been provided to the
Holders of 2009 Series Bonds;
(c) Capital Expenditure Debt of the Corporation or any Restricted
Subsidiary; provided that (i) the aggregate principal amount of such Debt
does not exceed the Fair Market Value (on the date of the Incurrence
thereof) of the Property acquired, constructed or leased and (ii) the
aggregate principal amount of all Debt Incurred and then outstanding
pursuant to this clause (c), together with all Permitted Refinancing Debt
Incurred and then outstanding in respect of Debt previously Incurred
pursuant to this clause (c), does not exceed $175 million;
(d) Debt of the Corporation owing to and held by any Wholly Owned
Subsidiary and Debt (including Preferred Stock) of a Restricted Subsidiary
owing to and held by the Corporation or any Wholly Owned Subsidiary;
provided, however, that any subsequent issue or transfer of Capital Stock
or other event that results in any such Wholly Owned Subsidiary ceasing to
be a Wholly Owned Subsidiary or any subsequent transfer of any such Debt
(except to the Corporation or a Wholly Owned Subsidiary) shall be deemed,
in each case, to constitute the Incurrence of such Debt by the Corporation
or such Restricted Subsidiary;
(e) Debt of a Restricted Subsidiary Incurred and outstanding on or
prior to the date on which such Restricted Subsidiary was acquired by the
Corporation or otherwise became a Restricted Subsidiary (other than Debt
Incurred as consideration in, or to provide all or any portion of the
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funds or credit support utilized to consummate, the transaction or series of
transactions pursuant to which such Restricted Subsidiary became a Subsidiary of
the Corporation or was otherwise acquired by the Corporation); provided that at
the time such Restricted Subsidiary was acquired by the Corporation or otherwise
became a Restricted Subsidiary and after giving pro forma effect to the
Incurrence of such Debt, the Corporation would have been able to Incur $1.00 of
additional Debt pursuant to Section 4.05(a);
(f) Debt under Interest Rate Agreements entered into by the Corporation or
a Restricted Subsidiary for the purpose of limiting interest rate risk in the
ordinary course of the financial management of the Corporation or such
Restricted Subsidiary and not for speculative purposes; provided that the
obligations under such agreements are directly related to payment obligations on
Debt otherwise permitted by Section 4.05;
(g) Debt under Currency Exchange Protection Agreements entered into by the
Corporation or a Restricted Subsidiary for the purpose of limiting currency
exchange rate risk in the ordinary course of the financial management of the
Corporation or such Restricted Subsidiary and not for speculative purposes;
(h) Debt under Commodity Price Protection Agreements entered into by the
Corporation or a Restricted Subsidiary in the ordinary course of the financial
management (including cost control) of the Corporation or such Restricted
Subsidiary and not for speculative purposes;
(i) Debt in connection with one or more standby letters of credit or
performance bonds issued by the Corporation or a Restricted Subsidiary in the
ordinary course of business or pursuant to self-insurance obligations and not in
connection with the borrowing of money or the obtaining of advances or credit;
(j) Debt outstanding on March 8, 1999 not otherwise described in clauses
(a) through (i) above;
(k) Debt of the Corporation or any Restricted Subsidiary (other than Debt
permitted by Section 4.05(a) or the other clauses of this definition) in an
aggregate principal amount outstanding at any one time not to exceed
$75,000,000; and
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(l) Permitted Refinancing Debt Incurred in respect of Debt Incurred
pursuant to Section 4.05(a) and clauses (a), (c), (e) and (j) above,
subject, in the case of clause (c) above, to the limitations set forth in
the respective proviso thereto.
"PERMITTED INVESTMENTS" means any Investment by the Corporation or any
Restricted Subsidiary in any of the following:
(a) Cash Equivalents;
(b) the Corporation or any Restricted Subsidiary;
(c) another Person, if as a result of such Investment (i) such other
Person becomes a Restricted Subsidiary or (ii) such other Person is merged
or consolidated with or into, or transfers or conveys all or substantially
all of its assets to, the Corporation or a Restricted Subsidiary;
(d) loans or advances made to employees or directors of the
Corporation or any Restricted Subsidiary in the ordinary course of business
in an aggregate amount not to exceed US$1 million at any one time
outstanding;
(e) Hedging Obligations which constitute Permitted Debt;
(f) Investments consisting of non-cash consideration received in the
form of securities, Notes or similar obligations in connection with an
Asset Sale permitted by Section 4.08 and Section 4.10, as applicable,
provided that the aggregate amount of such non-cash consideration received
in connection with any such Asset Sale shall not exceed the amount
permitted under Section 4.08 and Section 4.10 or the terms of the Original
Indenture, as applicable;
(g) the purchase by the Company or any Restricted Subsidiary in one or
more transactions of all or any portion of NKK's ownership interest in DNN
Galvanizing Limited Partnership; and
(h) Investments in joint ventures engaged in the steel business or
other businesses reasonably related thereto in an aggregate amount not to
exceed $20 million.
"PERMITTED HOLDERS" means NKK U.S.A. Corporation and its Affiliates.
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"PERMITTED REFINANCING DEBT" means any Debt that Refinances any other Debt,
including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced; provided, however, that Permitted Refinancing
Debt shall not include (a) Debt of a Subsidiary that Refinances Debt of the
Corporation or (b) Debt of the Corporation or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.
"PERSON" means any individual, corporation, company (including any limited
liability or joint-stock company), partnership, joint venture, association,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"PLACE OF PAYMENT" means the place or places where the principal of (and
premium, if any, on) and interest on the 2009 Series Bonds are payable as
specified as contemplated by Section 3.01 hereof and Section 4.04 of the
Original Indenture.
"PREDECESSOR 2009 SERIES BOND" of any particular 2009 Series Bond means
every previous 2009 Series Bond evidencing all or a portion of the same debt as
that evidenced by such particular 2009 Series Bond; and, for the purposes of
this definition, any 2009 Series Bond authenticated and delivered in compliance
with Section 3.03 of the Original Indenture in exchange for or in lieu of a
mutilated, destroyed , lost or stolen 2009 Series Bond shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen 2009 Series
Bond.
"PREFERRED STOCK" means any Capital Stock of a Person, however designated,
which entitles the Holder thereof to a preference with respect to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of any other class of
Capital Stock issued by such Person.
"PRINCIPAL" of any Debt (including the 2009 Series Bonds) means the
principal amount of such Debt plus the premium, if any, on such Debt.
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"PROPERTY" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock in, and other securities of, any other
Person. For purposes of any calculation required pursuant to the Indenture, the
value of any Property shall be its Fair Market Value.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of common
stock of the Corporation pursuant to an effective registration statement under
the Securities Act.
"RATING AGENCIES" mean Moody's and S&P.
"RECEIVABLES PURCHASE AGREEMENT" means the Receivables Purchase Agreement
dated as of May 18, 1994, as amended through March 8, 1999, among NSFC, Morgan
Guaranty Trust Company of New York (as successor to J.P. Morgan Delaware), as
structuring and collateral agent and facility agent, and various financial
institutions parties thereto as lenders and issuing banks.
"REDEEMABLE DIVIDEND" means, for any dividend with respect to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"REDEEMABLE STOCK" means, with respect to any Person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (a) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (b) is or may
become redeemable or repurchasable at the option of the holder thereof, in whole
or in part, or (c) is convertible or exchangeable for Debt or Disqualified
Stock.
"REFINANCE" means, in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Debt, in
exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of March 31, 1999, between the Corporation and the Initial Purchaser.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Corporation which covers any of the 2009 Series Bonds pursuant to the provisions
of the Registration Rights Agreement, and all amendments and supplements to any
such Registration Statement, including post-effective amendments.
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"RESTRICTED PAYMENT" means (a) any dividend or distribution (whether made
in cash, securities or other Property) declared or paid on or with respect to
any shares of Capital Stock of the Corporation or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Corporation or any Restricted Subsidiary), except for any dividend or
distribution which is made solely to the Corporation or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a pro rata basis) or any
dividend or distribution payable solely in shares of Capital Stock (other than
Redeemable Stock) of the Corporation; (b) any payment made by the Corporation or
any Restricted Subsidiary to purchase, redeem, repurchase, acquire or retire for
value any Capital Stock of the Corporation or any Restricted Subsidiary (other
than (I) Capital Stock of a Wholly Owned Restricted Subsidiary or (II) from all
holders of Capital Stock of a non-wholly owned Restricted Subsidiary on a pro
rata basis); (c) any payment made by the Corporation or any Restricted
Subsidiary to purchase, redeem, repurchase, defease or otherwise acquire or
retire for value, prior to any scheduled maturity, scheduled sinking fund or
mandatory redemption payment, any Subordinated Obligation (other than the
purchase, repurchase, or other acquisition of any Subordinated Obligation
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition); or (d) any Investment (other than any Permitted Investment) in any
Person (including, without limitation, any Unrestricted Subsidiary).
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Corporation in
existence on or after March 8, 1999 unless such Subsidiary shall have been
designated an Unrestricted Subsidiary as permitted or required pursuant to
Section 4.14 and (b) an Unrestricted Subsidiary which is redesignated as a
Restricted Subsidiary as permitted pursuant to Section 4.14.
"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement relating to Property
now owned or hereafter acquired whereby the Corporation or a Restricted
Subsidiary transfers such Property to another Person and the Corporation or a
Restricted Subsidiary leases it from such Person, other than any such
arrangement with respect to Property acquired or placed into service by the
Corporation or any Restricted Subsidiary after March 8, 1999 to the extent
entered into within 365 days after the date of such acquisition or placement
into service and not constituting a Capital Lease Obligation.
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"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECURED DEBT" means any Debt of the Corporation or any Restricted
Subsidiary secured by a Lien.
"SENIOR DEBT" of the Corporation means (a) all obligations consisting of
the principal, and accrued and unpaid interest in respect of (i) Debt of the
Corporation for borrowed money and (ii) Debt of the Corporation evidenced by
notes, debentures, bonds or other similar instruments permitted under the
Indenture for the payment of which the Corporation is responsible or liable; (b)
all Capital Expenditure Debt of the Corporation; (c) all obligations of the
Corporation (i) for the reimbursement of any obligor on any letter of credit,
bankers' acceptance or similar credit transaction or (ii) under Hedging
Obligations; and (d) all obligations of other Persons of the type referred to in
clauses (a) and (b) for the payment of which the Corporation is responsible or
liable as Guarantor; provided, however, that Senior Debt of the Corporation
shall not include (A) Debt of the Corporation that is by its terms subordinate
in right of payment to the 2009 Series Bonds; (B) any Debt Incurred in violation
of the provisions of the Indenture; (C) accounts payable or any other
obligations of the Corporation to trade creditors created or assumed by the
Corporation in the ordinary course of business in connection with the obtaining
of materials or services (including Guarantees thereof or instruments evidencing
such liabilities); (D) any liability for Federal, state, local or other taxes
owed or owing by the Corporation; (E) any obligation of the Corporation to any
Subsidiary; or (F) any obligations with respect to any Capital Stock.
"SERIES A 2009 BONDS" refers to the First Mortgage Bonds, 9 7/8% Series A
due 2009 issued pursuant to the Original Indenture, as theretofore supplemented,
and the Tenth Supplemental Indenture.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Corporation pursuant to the provisions of the Registration Rights
Agreement.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Corporation within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the 2009
Series Bonds means a date fixed by the Trustee pursuant to Section 3.06.
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"STATED MATURITY" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"SUBORDINATED OBLIGATION" means any Debt of the Corporation (whether
outstanding on March 8, 1999 or thereafter Incurred) which is subordinate or
junior in right of payment to the 2009 Series Bonds or the Guaranty pursuant to
a written agreement to that effect.
"SUBSIDIARY" means, in respect of any specified Person, any corporation,
company, partnership, joint venture, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of
such Person or (iii) one or more Subsidiaries of such Person.
"TENTH SUPPLEMENTAL INDENTURE" refers to the Tenth Supplemental Indenture
dated as of March 8, 1999 between the Corporation and the Trustees supplementing
the Original Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as amended and in effect on the date of this Indenture except as required by
Section 8.08 hereof; provided that in the event the Trust Indenture Act of 1939
is amended after such date, "TRUST INDENTURE ACT" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939, as so amended.
"2009 SERIES BONDS" has the meaning stated in the first recital of this
Supplemental Indenture.
"UNITED STATES" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Corporation in
existence on March 8, 1999 that is not a Restricted Subsidiary; (b) any
Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the
Corporation that is designated after March 8, 1999 as an Unrestricted Subsidiary
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as permitted pursuant to Section 4.14 and not thereafter redesignated as a
Restricted Subsidiary as permitted pursuant thereto.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"VOTING STOCK" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a corporation all the stock
of which (except directors' qualifying shares, where necessary) is at such time
owned, directly or indirectly, by the Corporation or by one or more Wholly Owned
Subsidiaries.
Section 1.02. Other Definitions.
Term Defined in Section
"Affiliate Transaction".............................. 4.12
"Bankruptcy Law"..................................... 6.01
"Bond Registrar"..................................... 3.05
"Change of Control Offer"............................ 4.09(a)
"Change of Control Purchase Price"................... 4.09(a)
"Change of Control Payment Date"..................... 4.09(b)
"Custodian".......................................... 6.01
"Eleventh Supplemental Indenture Event of Default"... 6.01
"Excess Proceeds".................................... 4.10(c)
"Offer Amount"....................................... 4.10(d)(ii)
"Offer Period"....................................... 4.10(d)(ii)
"Offshore Bond Exchange Date"........................ 2.03
"Offshore Physical Bond"............................. 2.01
"Prepayment Offer"................................... 4.10(c)
"Prepayment Offer Notice"............................ 4.10(d)(1)
"Private Placement Legend"........................... 2.03
"Purchase Date"...................................... 4.10(d)(1)
"Surviving Person"................................... 5.01(a)
Unless otherwise defined herein, terms defined in Article One of the
Original Indenture shall have the same meanings when used herein. All the terms
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and provisions of this Supplemental Indenture shall be and be deemed to be a
part of the terms and provisions of the Indenture for any and all purposes.
Section 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the 2009 Series Bonds.
"indenture security holder" means a Bondholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Corporation, and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
secured Debt merely by virtue of its nature as unsecured Debt;
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(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
2009 Bonds Forms
Section 2.01. Forms Generally.
The Initial 2009 Series Bonds shall be known and designated as the "FIRST
MORTGAGE BONDS, 9 7/8% SERIES C DUE 2009," and the Exchange 2009 Series Bonds
shall be known and designated as the "FIRST MORTGAGE BONDS, 9 7/8% SERIES D DUE
2009," in each case, of the Corporation. The 2009 Series Bonds and the Trustee's
certificate of authentication shall be in substantially the forms set forth in
the recitals to the supplement of this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such 2009 Series
Bonds, as evidenced by their execution of the 2009 Series Bonds. Any portion of
the text of any 2009 Series Bond may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the 2009 Series Bond. Each Bond
shall be dated the date of its authentication.
The definitive 2009 Series Bonds shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Corporation executing such 2009 Series Bonds,
as evidenced by their execution of such 2009 Series Bonds.
Initial 2009 Series Bonds offered and sold in reliance on Rule 144A
promulgated under the Securities Act of 1933, as amended ("RULE 144A"), may be
issued in the form of one or more permanent global Notes substantially in the
form set forth in the recitals to this Supplemental Indenture (the "U.S. GLOBAL
BOND") deposited with The Chase Manhattan Bank, as custodian for the Depositary
or its nominee, duly executed by the Corporation and authenticated by
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the Trustee as hereinafter provided. The aggregate principal amount of the U.S.
Global Bond may from time to time be increased or decreased by adjustments made
on the records of The Chase Manhattan Bank, as custodian for the Depositary or
its nominee, as hereinafter provided.
Initial 2009 Series Bonds offered and sold in offshore transactions in
reliance on Regulation S promulgated under the Securities Act of 1933, as
amended ("REGULATION S"), shall be issued in the form of a single permanent
global bond in substantially the form set forth in the recitals to this
Supplemental Indenture (the "OFFSHORE GLOBAL BOND") deposited with The Chase
Manhattan Bank, as custodian for the Depositary or its nominee, duly executed by
the Corporation and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount at maturity of the Offshore Global Bond may from time
to time be increased or decreased by adjustments made in the records of the The
Chase Manhattan Bank, as custodian for the Depositary or its nominee, as herein
provided.
Bonds issued pursuant to Section 3.05 in exchange for or upon transfer of
beneficial interests in the U.S. Global Bond ("U.S. PHYSICAL BONDS") or the
Offshore Global Bond (the "OFFSHORE PHYSICAL BONDS") shall be in the form of
permanent certificated Bonds substantially in the form set forth in the recitals
to this Supplemental Indenture.
The Offshore Physical Bonds and U.S. Physical Bonds are sometimes
collectively herein referred to as the "PHYSICAL BONDS". The U.S. Global Bond
and the Offshore Global Bond are sometimes collectively referred to as the
"GLOBAL BONDS".
Section 2.02. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially the
form set forth in the recitals to this Indenture.
Section 2.03. Restrictive Legends.
Unless and until (i) an Initial 2009 Series Bond is sold pursuant to an
effective Shelf Registration Statement or (ii) an Initial 2009 Series Bond is
exchanged for an Exchange 2009 Series Bond in an Exchange Offer pursuant to an
effective Exchange Offer Registration Statement, in each case pursuant to the
Registration Rights Agreement, (A) each U.S. Global Bond and U.S. Physical Bond
shall bear the following legend set forth below (the "PRIVATE PLACEMENT LEGEND")
on the face thereof and (B) the Offshore Physical Bonds and Offshore Global Bond
shall bear the Private Placement Legend on the face thereof until at
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least 41 days after the date hereof (the "OFFSHORE BOND EXCHANGE DATE") and
receipt by the Corporation and the Trustee of a certificate substantially in the
form provided in Section 2.04:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
ANNIVERSARY OF THE ISSUANCE HEREOF (OR OF A PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER
THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE RESALE PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THE SECURITY), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY), (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AN OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH
THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
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PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A OR (2) A NON-UNITED STATES PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (o)(2) OR RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
Each Global Bond, whether or not an Initial 2009 Series Bond, shall also
bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY IN WHOLE, BUT NOT IN PART, SHALL BE
LIMITED TO TRANSFERS TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 3.11 AND 3.12 OF THE ELEVENTH SUPPLEMENTAL INDENTURE.
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Section 2.04. Form of Certificate to Be Delivered upon Termination of
Restricted Period.
[Date]
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Corporate Trust Administration
Re: NATIONAL STEEL CORPORATION (the "Corporation")
First Mortgage Bonds, 9 7/8% Series C due 2009 of the Corporation
-----------------------------------------------------------------
(the "2009 Series Bonds")
-------------------------
Ladies and Gentlemen:
This letter relates to $ _________ principal amount of 2009 Series Bonds
represented by a offshore global bond certificate (the "Offshore Global Bond").
Pursuant to Section 2.04 of the Eleventh Supplemental Indenture dated as of
March 31, 1999 relating to the 2009 Series Bonds (the "Indenture"), we hereby
certify that (1) we are the beneficial owner of such principal amount of 2009
Series Bonds represented by the Offshore Global Bond and (2) we are a non-U.S.
Person to whom the 2009 Series Bonds could be transferred in accordance with
Rule 904 of Regulation S promulgated under the Securities Act of 1933, as
amended ("Regulation S"). Accordingly, you are hereby requested to issue an
Offshore Physical Bond representing the undersigned's interest in the principal
amount of 2009 Series Bonds represented by the Offshore Global Bond, all in the
manner provided by the Indenture.
You and the Corporation are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to
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the matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_______________________________
Authorized Signature
ARTICLE 3
The 2009 Series Bonds
Section 3.01. Maturity; Payment.
The Stated Maturity of the 2009 Series Bonds shall be March 1, 2009, and
they shall bear interest at the rate of 9 7/8% per annum from March 8, 1999, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, payable on September 1, 1999 and semi-annually thereafter on
March 1 and September 1 in each year, until the principal thereof is paid in
full and to the Person in whose name the 2009 Series Bond (or any predecessor
2009 Series Bond) is registered at the close of business on the February 15 or
August 15 next preceding such Interest Payment Date (each a "REGULAR RECORD
DATE").
The principal of (and premium, if any) and interest on the 2009 Series
Bonds shall be payable at the office or agency of the Corporation maintained for
such purpose in The City of New York, or at such other office or agency of the
Corporation as may be maintained for such purpose; provided, however, that, at
the option of the Corporation, interest may be paid (a) by check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Bond Register or (b) by wire transfer to an account maintained by the payee
located in the United States provided that appropriate written wire instructions
have been provided at least two Business Days prior to the relevant record date.
Holders shall have the right to require the Corporation to purchase their
2009 Series Bonds, in whole or in part, in the event of a Change of Control
pursuant to Section 4.09.
The 2009 Series Bonds shall be redeemable as provided in Article 7 and in
the 2009 Series Bonds.
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Section 3.02. Denominations.
The 2009 Series Bonds shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 3.03. Execution. Authentication, Delivery and Dating.
The 2009 Series Bonds shall be executed on behalf of the Corporation in
accordance with Section 2.12 of the Original Indenture. Notwithstanding any
provision of Section 2.12 of the Original Indenture to the contrary, the
signature of any of these officers on the 2009 Series Bonds may be the manual or
facsimile signatures of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the 2009 Series Bonds.
2009 Series Bonds bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such 2009 Series
Bonds or did not hold such offices at the date of such 2009 Series Bonds.
On Corporation Order, the Trustee shall, pursuant to Section 3.05 of the
Original Indenture, authenticate for original issue Initial 2009 Series Bonds in
an aggregate principal amount not to exceed $75,000,000. The Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Corporation that it may reasonably request in connection with such
authentication of Initial 2009 Series Bonds in accordance with Section 3.05 of
the Original Indenture. Such order shall specify the amount of Initial 2009
Series Bonds to be authenticated and the date on which the original issue of
Initial 2009 Series Bonds is to be authenticated.
On Corporation Order, the Trustee shall authenticate for original issue
Exchange 2009 Series Bonds in an initial aggregate principal amount not to
exceed $300,000,000; provided that such Exchange 2009 Series Bonds shall be
issuable only upon the valid surrender for cancellation of Initial 2009 Series
Bonds and Series A 2009 Bonds of a like aggregate principal amount in
accordance with an Exchange Offer pursuant to the Registration Rights Agreement;
provided further that subject to compliance with the Indenture, the Corporation
may issue additional bonds under the Indenture having the same terms in all
respects as previously authenticated Exchange 2009 Series Bonds ( or in all
respects except for the payment of interest on Exchange 2009 Series Bonds (i)
scheduled and paid prior to the date of issuance of such additional bonds or (ii
payable on the first interest payment date for the Exchange 2009 Series Bonds
following such date of issuance), and the Exchange 2009 Series Bonds issued
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pursuant to the Exchange Offer and such additional bonds shall constitute a
series under the Indenture. The Trustee shall be entitled to receive an
Officers' Certificate and an Opinion of Counsel of the Corporation that it may
reasonably request in connection with such authentication of Exchange 2009
Series Bonds. Such order shall specify the amount of Exchange 2009 Series Bonds
to be authenticated and the date on which the original issue of Exchange 2009
Series Bonds is to be authenticated.
Each 2009 Series Bond shall be dated the date of its authentication.
No 2009 Series Bond shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such 2009
Series Bond a certificate of authentication substantially in the form provided
for herein duly executed by the Trustee by manual signature of an authorized
signatory, and such certificate upon any 2009 Series Bond shall be conclusive
evidence, and the only evidence, that such 2009 Series Bond has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture. Notwithstanding the foregoing, if any 2009 Series Bond shall have
been authenticated and delivered hereunder but never issued and sold by the
Corporation, and the Corporation shall deliver such 2009 Series Bond to the
Trustee for cancellation as provided in Section 3.08 together with a written
statement by an Officer (which need not be accompanied by an Opinion of Counsel)
stating that such 2009 Series Bond has never been issued and sold by the
Corporation, for all purposes of this Indenture such 2009 Series Bond shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
In case the Corporation, pursuant to Article 5, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Corporation shall have been merged, or
the Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article 5, any of the 2009 Series Bonds
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other 2009 Series Bonds executed in the
name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the 2009 Series Bonds
surrendered for such exchange and of like principal amount; and the Trustee,
upon Corporation Request of the successor Person and an Officers' Certificate
and an opinion of counsel as to such exchange conforming with this paragraph,
shall authenticate and deliver 2009 Series Bonds
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as specified in such request for the purpose of such exchange. If 2009 Series
Bonds shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section 3.03 in exchange or substitution for
or upon registration of transfer of any 2009 Series Bonds, such successor
Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all 2009 Series Bonds at the time Outstanding for 2009
Series Bonds authenticated and delivered in such new name.
Section 3.04. Temporary 2009 Series Bonds.
Pending the preparation of definitive 2009 Series Bonds, the Corporation
may execute, and upon Corporation Order the Trustee shall authenticate in
accordance with Section 3.05 of the Original Indenture and deliver, temporary
2009 Series Bonds which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive 2009 Series Bonds in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
conclusively the officers executing such 2009 Series Bonds may determine, as
conclusively evidenced by their execution of such 2009 Series Bonds.
If temporary 2009 Series Bonds are issued, the Corporation will cause
definitive 2009 Series Bonds to be prepared without unreasonable delay. After
the preparation of definitive 2009 Series Bonds, the temporary 2009 Series Bonds
shall be exchangeable for definitive 2009 Series Bonds, upon surrender of the
temporary 2009 Series Bonds at the office or agency of the Corporation in a
Place of Payment, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary 2009 Series Bonds, the Corporation shall execute
and, upon Corporation Order, the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive 2009 Series Bonds of
authorized denominations. Until so exchanged the temporary 2009 Series Bonds
shall in all respects be entitled to the same benefits under this Indenture as
definitive 2009 Series Bonds.
Section 3.05. Registration, Registration of Transfer and Exchange.
The Corporation shall cause to be kept at the Corporate Trust Office of the
Trustee a register for the 2009 Series Bonds (the register maintained in the
Corporate Trust Office of the Trustee and in any other office or agency of the
Corporation in a Place of Payment being herein sometimes collectively referred
to as the "BOND REGISTER") in which, subject to such reasonable regulations as
it may prescribe, the Corporation shall provide for the registration of 2009
Series Bonds and of transfers of 2009 Series Bonds. The Bond Register shall be
in written form or any other form capable of being converted into written form
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within a reasonable time. At all reasonable times, the Bond Register shall be
open to inspection by the Trustee. The Trustee is hereby initially appointed as
bond registrar (the "BOND REGISTRAR") for the purpose of registering 2009 Series
Bonds and transfers of 2009 Series Bonds as herein provided.
Upon surrender for registration of transfer of any 2009 Series Bond at the
office or agency in a Place of Payment, the Corporation shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee, one or more new 2009 Series Bonds, of any authorized denominations
and of a like aggregate principal amount and tenor.
At the option of the Holder, 2009 Series Bonds may be exchanged for other
2009 Series Bonds, of any authorized denomination and of a like aggregate
principal amount, upon surrender of the 2009 Series Bonds to be exchanged at
such office or agency. Whenever any 2009 Series Bonds are so surrendered for
exchange, the Corporation shall execute, and the Trustee shall authenticate and
deliver, the 2009 Series Bonds which the Holder making the exchange is entitled
to receive; provided that no exchange of Initial 2009 Series Bonds or Series A
2009 Bonds for Exchange 2009 Series Bonds shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the SEC, the
Trustee shall have received an Officers' Certificate confirming that the
Exchange Offer Registration Statement has been declared effective by the SEC and
the Initial 2009 Series Bonds and the Series A 2009 Bonds to be exchanged for
the Exchange 2009 Series Bonds shall be canceled by the Trustee.
All 2009 Series Bonds issued upon any registration of transfer or exchange
of 2009 Series Bonds shall be the valid obligations of the Corporation,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the 2009 Series Bonds or the Series A 2009 Bonds surrendered upon
such registration of transfer or exchange.
Every 2009 Series Bond and Series A 2009 Bond presented or surrendered for
registration of transfer or for exchange shall (if so required by the
Corporation or the Bond Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer, in form satisfactory to the Corporation or the
Bond Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of 2009 Series Bonds, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of 2009 Series Bonds,
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other than exchanges pursuant to (i) the Exchange Offer or (ii) exchanges
pursuant to this Section 3.05 not involving any transfer.
The Corporation shall not be required (i) to issue, register the transfer
of or exchange 2009 Series Bonds during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of 2009
Series Bonds and ending at the close of business on the day of the mailing of
the relevant notice of redemption, or (ii) to register the transfer of or
exchange any 2009 Series Bond so selected for redemption in whole or in part,
except the unredeemed portion of any 2009 Series Bond being redeemed in part, or
(iii) to issue, register the transfer of or exchange any 2009 Series Bond which
has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such 2009 Series Bond not to be so repaid.
Section 3.06. Payment of Interest, Interest Rights Preserved. Interest on
any 2009 Series Bond which is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name such
2009 Series Bond (or one or more Predecessor 2009 Series Bonds) is registered at
the close of business on the Regular Record Date for such interest at the Place
of Payment provided, however, that each installment of interest on any 2009
Series Bond may at the Corporation's option be paid by (i) mailing a check for
such interest, payable to or upon the written order of the Person entitled
thereto pursuant to Section 3.07, to the address of such Person as it appears on
the Bond Register or (ii) wire transfer to an account maintained by the payee
located in the United States.
Any interest on any 2009 Series Bond which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such defaulted interest and, if
applicable, interest on such defaulted interest (to the extent lawful) at the
rate specified in the 2009 Series Bonds (such defaulted interest and, if
applicable, interest thereon herein collectively called "DEFAULTED INTEREST")
may be paid by the Corporation, at its election in each case, as provided in
clause (1) or (2) below:
(1) The Corporation may elect to make payment of any Defaulted
Interest to the Persons in whose names the 2009 Series Bonds (or their
respective Predecessor 2009 Series Bonds) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Corporation
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each 2009 Series Bond and the date of the proposed
payment, and at the same time the Corporation shall deposit with
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the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Corporation of such
Special Record Date and, in the name and at the expense of the Corporation,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided in
Section 3.15, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose name the 2009 Series Bonds (or their
respective Predecessor 2009 Series Bonds) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Corporation may make payment of any Defaulted Interest on the
2009 Series Bonds in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such 2009 Series Bonds may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Corporation to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.05, each
2009 Series Bond delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other 2009 Series Bond or Series A 2009
Bond shall carry the rights to interest accrued and unpaid, and to accrue, which
were carried by such other 2009 Series Bond or Series A 2009 Bond.
Section 3.07. Persons Deemed Owners.
Prior to due presentment of a 2009 Series Bond for registration of
transfer, the Corporation, the Trustee and any agent of the Corporation or the
Trustee may treat the Person in whose name such 2009 Series Bond is registered
as the owner of such 2009 Series Bond for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Sections 3.05 and 3.06)
interest on such 2009 Series Bond and for all other purposes whatsoever, whether
or not such 2009
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Series Bond be overdue, and none of the Corporation, the Trustee or any agent of
the Corporation or the Trustee shall be affected by notice to the contrary.
Section 3.08. Cancellation.
All 2009 Series Bonds surrendered for payment, redemption, repayment at the
option of the Holder, registration of transfer or exchange, and all Series A
2009 Series Bonds surrendered for exchange pursuant to the Exchange Offer,
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee. All 2009 Series Bonds and Series A 2009 Series Bonds so delivered to
the Trustee shall be promptly canceled by it. The Corporation may at any time
deliver to the Trustee for cancellation any 2009 Series Bonds previously
authenticated and delivered hereunder which the Corporation may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any 2009 Series Bonds previously
authenticated hereunder which the Corporation has not issued and sold, and all
2009 Series Bonds so delivered shall be promptly canceled by the Trustee. If the
Corporation shall so acquire any of the 2009 Series Bonds, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such 2009 Series Bonds unless and until the same are
surrendered to the Trustee for cancellation. No 2009 Series Bonds shall be
authenticated in lieu of or in exchange for any 2009 Series Bonds canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled 2009 Series Bonds held by the Trustee shall be disposed of by the
Trustee in accordance with its customary procedures unless by Corporation Order
the Corporation shall direct that canceled 2009 Series Bonds be returned to it.
Section 3.09. Computation of Interest.
Interest on the 2009 Series Bonds shall be computed on the basis of a 360-
day year of twelve 30-day months.
Section 3.10. Book Entry Provisions for Global Bonds.
(a) Each Global Bond initially shall (i) be registered in the name of the
Depositary for such Global Bonds or the nominee of such Depositary, (ii) be
delivered to The Chase Manhattan Bank as custodian for such Depositary and (iii)
bear legends as set forth in Section 2.03.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have
no rights under this Indenture with respect to any Global Bond, and the
Depositary may be treated by the Corporation, the Trustee and any agent of the
Corporation or the Trustee as the absolute owner of such Global Bond for all
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purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Corporation, the Trustee or any agent of the Corporation or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a beneficial owner of any 2009 Series Bond. The registered holder of a
Global Bond may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the 2009
Series Bonds.
(b) Interests of beneficial owners in a Global Bond may be transferred in
accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 3.11. Transfers of a Global Bond shall be limited to
transfers of such Global Bond in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) as otherwise set forth in
Section 3.11 and (ii) U.S. Physical Bonds or Offshore Physical Bonds shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the U.S. Global Bond or the Offshore Global Bond, respectively, in the
following circumstances: (x) the Depositary notifies the Corporation that it is
unwilling or unable to continue as Depositary for the applicable Global Bond or
the Depositary ceases to be a "CLEARING AGENCY" registered under the Exchange
Act and a successor depositary is not appointed by the Corporation within 90
days or (y) an Event of Default has occurred and is continuing and Holders of
more than 25 % in aggregate principal amount of the Bonds at the time
Outstanding represented by the Global Bonds advise the Trustee through the
Depositary in writing that the continuation of a book-entry system through the
Depositary with respect to the Global Bonds is no longer required. In connection
with a transfer of an entire Global Bond to beneficial owners pursuant to clause
(ii) of this paragraph (b), the applicable Global Bond shall be deemed to be
surrendered to the Trustee for cancellation, and the Corporation shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in the
applicable Global Bond, an equal aggregate principal amount at maturity of U.S.
Physical Bonds (in the case of the U.S. Global Bond) or Offshore Physical Bonds
(in the case of the Offshore Global Bond), as the case may be, of authorized
denominations.
(c) Any beneficial interest in one of the Global Bonds that is transferred
to a person who takes delivery in the form of an interest in the other Global
Bond will, upon transfer, cease to be an interest in such Global Bond and become
an interest in the other Global Bond and, accordingly, will thereafter be
subject to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Bond for as long as it remains such an
interest.
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(d) Any U.S. Physical Bond delivered in exchange for an interest in the
U.S. Global Bond pursuant to paragraph (b) of this Section shall, except as
otherwise provided in Section 3.11, bear the Private Placement Legend.
Section 3.11. Transfer Provisions.
Unless and until (i) an Initial 2009 Series Bond is sold pursuant to an
effective Registration Statement, or (ii) an Initial 2009 Series Bond is
exchanged for an Exchange 2009 Series Bond in the Exchange Offer pursuant to an
effective Registration Statement, in each case, pursuant to the Registration
Rights Agreement, the following provisions shall apply:
(a) General. The provisions of this Section 3.11 shall apply to all
transfers involving any Physical Bond and any beneficial interest in any Global
Bond.
(b) Certain Definitions. As used in this Section 3.11 only, "DELIVERY" of
a certificate by a transferee or transferor means the delivery to the Bond
Registrar by such transferee or transferor of the applicable certificate duly
completed; "HOLDING" includes both possession of a Physical Bond and ownership
of a beneficial interest in a Global Bond, as the context requires;
"TRANSFERRING" a Global Bond means transferring that portion of the principal
amount of the transferor's beneficial interest therein that the transferor has
notified the Bond Registrar that it has agreed to transfer; and "TRANSFERRING" a
Physical Bond means transferring that portion of the principal amount thereof
that the transferor has notified the Bond Registrar that it has agreed to
transfer.
As used in this Indenture, "REGULATION S CERTIFICATE" means a certificate
substantially in the form set forth in Section 3.12; "RULE 144A CERTIFICATE"
means a certificate substantially in the form set forth in Section 3.13; and
"NON-REGISTRATION OPINION AND SUPPORTING EVIDENCE" means a written opinion of
counsel reasonably acceptable to the Corporation and to the Trustee to the
effect that, and such other certification or information as the Corporation may
reasonably require to confirm that, the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
(c) Deemed Delivery of a Rule 144A Certificate in Certain Circumstances. A
Rule 144A Certificate, if not actually delivered, will be deemed delivered if
(A) (i) the transferor advises the Corporation and the Trustee in writing that
the relevant offer and sale were made in accordance with the provisions of Rule
144A (or, in the case of a transfer of a Physical Bond, the transferor checks
the box provided on the Physical Bond to that effect) and (ii) the
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transferee advises the Corporation and the Trustee in writing that (x) it and,
if applicable, each account for which it is acting in connection with the
relevant transfer, is a qualified institutional buyer within the meaning of Rule
144A, (y) it is aware that the transfer of 2009 Series Bonds to it is being made
in reliance on the exemption from the provisions of Section 5 of the Securities
Act provided by Rule 144A, and (z) prior to the proposed date of transfer it has
been given the opportunity to obtain from the Corporation the information
referred to in Rule 144A(d)(4), and has either declined such opportunity or has
received such information (or, in the case of a transfer of a Physical Bond, the
transferee signs the certification provided on the Physical Bond to that
effect); or (B) the transferor holds the U.S. Global Bond and is transferring to
a transferee that will take delivery in the form of the U.S. Global Bond.
(d) Procedures and Requirements.
(i) If the proposed transfer occurs prior to the Offshore Bond
Exchange Date, and the proposed transferor holds:
(A) a U.S. Physical Bond which is surrendered to the Bond
Registrar, and the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the Bond Registrar shall (x)
register such transfer in the name of such transferee and record
the date thereof in its books and records, (y) cancel such
surrendered U.S. Physical Bond and (z) deliver a new U.S.
Physical Bond to such transferee duly registered in the name of
such transferee in principal amount equal to the principal amount
being transferred of such surrendered U.S. Physical Bond.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the U.S. Global Bond, then the Bond
Registrar shall (x) cancel such surrendered U.S. Physical Bond,
(y) record an increase in the principal amount of the U.S. Global
Bond equal to the principal amount being transferred of such
surrendered U.S. Physical Bond and (z) notify the Depositary in
accordance with the procedures of the Depositary of such
transfer.
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(3) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Bond, then the Bond Registrar shall (x) cancel
such surrendered U.S. Physical Bond, (y) record an increase in
the principal amount of the Offshore Global Bond equal to the
principal amount being transferred of such surrendered U.S.
Physical Bond and (z) notify the Depositary in accordance with
the procedures of the Depositary of such transfer.
In the case described in Section 3.11(e)(i)(A)(1), the Bond Registrar shall
deliver to the transferor a new U.S. Physical Bond in principal amount
equal to the principal amount not being transferred of such surrendered
U.S. Physical Bond.
(B) a beneficial interest in the U.S. Global Bond, and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the Bond Registrar shall (w)
register such transfer in the name of such transferee and record
the date thereof in its books and records, (x) record a decrease
in the principal amount of the U.S. Global Bond in an amount
equal to the beneficial interest therein being transferred, (y)
deliver a new U.S. Physical Bond to such transferee duly
registered in the name of such transferee in principal amount
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary of
such transfer.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the U.S. Global Bond, then the transfer
shall be effected in accordance with the procedures of the
Depositary therefor.
(3) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent
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Member and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the Bond
Registrar shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(x) record a decrease in the principal amount of the U.S. Global
Bond in an amount equal to the beneficial interest therein being
transferred, (y) record an increase in the principal amount of
the Offshore Global Bond equal to the amount of such decrease and
(z) notify the Depositary in accordance with the procedures of
the Depositary of such transfer.
(C) a beneficial interest in the Offshore Global Bond, and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the Bond Registrar shall (w)
register such transfer in the name of such transferee and record
the date thereof in its books and records, (x) record a decrease
in the principal amount of the Offshore Global Bond in an amount
equal to the beneficial interest therein being transferred, (y)
deliver a new U.S. Physical Bond to such transferee duly
registered in the name of such transferee in principal amount
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary of
such transfer.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the U.S. Global Bond, then the Bond
Registrar shall (x) record a decrease in the principal amount of
the Offshore Global Bond in an amount equal to the beneficial
interest therein being transferred, (y) record an increase in the
principal amount of the U.S. Global Bond equal to the amount of
such decrease and (z) notify the Depositary in accordance with
the procedures of the Depositary of such transfer.
(3) delivers a Regulation S Certificate and the proposed
transferee is or is acting through an Agent
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Member and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the
transfer shall be effected in accordance with the procedures of
the Depositary therefor; provided, however, that until the
Offshore Bond Exchange Date occurs, beneficial interests in the
Offshore Global Bond may be held only in or through accounts
maintained at the Depositary by Euroclear Clearance System
("EUROCLEAR") or Cedel Bank S.A. ("CEDEL") (or by Agent Members
acting for the account thereof), and no person shall be entitled
to effect any transfer or exchange that would result in any such
interest being held otherwise than in or through such an account.
(ii) If the proposed transfer occurs on or after the Offshore Bond
Exchange Date and the proposed transferor holds:
(A) a U.S. Physical Bond which is surrendered to the Bond
Registrar, and the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the procedures set forth in Section
3.11(e)(i)(A)(1) shall apply.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the Offshore Global Bond, then the
procedures set forth in Section 3.11(e)(i)(A)(2) shall apply.
(3) delivers a Regulation S Certificate, then the Bond
Registrar shall cancel such surrendered U.S. Physical Bond and at
the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Bond to such transferee
in principal amount equal to the principal amount being
transferred of such surrendered U.S. Physical Bond, or
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(y) if the proposed transferee is or is acting through
an Agent Member, record an increase in the principal amount
of the Offshore Global Bond equal to the principal amount
being transferred of such surrendered U.S. Physical Bond and
notify the Depositary in accordance with the procedures of
the Depositary of such transfer.
In any of the cases described in this Section 3.11(e)(ii)(A)(1) or (3)(x), the
Bond Registrar shall deliver to the transferor a new U.S. Physical Bond in
principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Bond.
(B) a beneficial interest in the U.S. Global Bond, and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee requests delivery in the
form of Physical Bonds, then the procedures set forth in Section
3.11(e)(i)(B)(1) shall apply.
(2) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests that the proposed transferee receive
a beneficial interest in the U.S. Global Bond, then the
procedures set forth in Section 3.11(e)(i)(B)(2) shall apply.
(3) delivers a Regulation S Certificate, then the Bond
Registrar shall (x) record a decrease in the principal amount of
the U.S. Global Bond in an amount equal to the beneficial
interest therein being transferred, (y) notify the Depositary in
accordance with the procedures of the Depositary of such transfer
and (z) at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Bond to such transferee
in principal amount equal to the amount of such decrease, or
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(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the principal
amount of the Offshore Global Bond equal to the amount of
such decrease.
(C) an Offshore Physical Bond which is surrendered to the Bond
Registrar, and the proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests delivery in the form of the U.S.
Global Bond, then the Bond Registrar shall (x) cancel such
surrendered Offshore Physical Bond, (y) record an increase in the
principal amount of the U.S. Global Bond equal to the principal
amount being transferred of such surrendered Offshore Physical
Bond and (z) notify the Depositary in accordance with the
procedures of the Depositary of such transfer.
(2) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the Bond
Registrar shall (x) cancel such surrendered Offshore Physical
Bond, (y) record an increase in the principal amount of the
Offshore Global Bond equal to the principal amount being
transferred of such surrendered Offshore Physical Bond and (z)
notify the Depositary in accordance with the procedures of the
Depositary of such transfer.
(3) does not make a request covered by Section
3.11(e)(ii)(C)(1) or Section 3.11(e)(ii)(C)(2), then the Bond
Registrar shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(y) cancel such surrendered Offshore Physical Bond and (z)
deliver a new Offshore Physical Bond to such transferee duly
registered in the name of such transferee in principal amount
equal to the principal amount being transferred of such
surrendered Offshore Physical Bond.
In any of the cases described in this Section 3.11(e)(ii)(C), the Bond
Registrar shall deliver to the transferor a new U.S. Physical Bond in
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principal amount equal to the principal amount not being transferred of
such surrendered U.S. Physical Bond.
(D) a beneficial interest in the Offshore Global Bond, and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule 144A
Certificate and the proposed transferee is or is acting through
an Agent Member and requests delivery in the form of the U.S.
Global Bond, then the Bond Registrar shall (x) record a decrease
in the principal amount of the Offshore Global Bond in an amount
equal to the beneficial interest therein being transferred, (y)
record an increase in the principal amount of the U.S. Global
Bond equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the Depositary of
such transfer.
(2) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Bond, then the
transfer shall be effected in accordance with the procedures of
the Depositary therefor.
(3) does not make a request covered by Section
3.11(e)(ii)(D)(1) or Section 3.11(e)(ii)(D)(2), then the Bond
Registrar shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(x) record a decrease in the principal amount of the Offshore
Global Bond in an amount equal to the beneficial interest therein
being transferred, (y) deliver a new Offshore Physical Bond to
such transferee duly registered in the name of such transferee in
principal amount equal to the amount of such decrease and (z)
notify the Depositary in accordance with the procedures of the
Depositary of such transfer.
(e) Execution, Authentication and Delivery of Physical Bonds. In any case
in which the Bond Registrar is required to deliver a Physical Bond to a
transferee, the Corporation shall execute, and the Trustee shall authenticate
and deliver, such Physical Bond.
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(f) Certain Additional Terms Applicable to Physical Bonds. (i) Any
transferee entitled to receive a Physical Bond may request that the principal
amount thereof be evidenced by one or more Physical Bonds in any authorized
denomination or denominations and the Bond Registrar shall comply with such
request if all other transfer restrictions are satisfied.
(ii) In the event that a transferor transfers less than the entire
principal amount of a Physical Bond surrendered for transfer, following the
transfer the Bond Registrar shall deliver to the transferor a new Physical
Bond of the same type in principal amount equal to the untransferred
portion of the surrendered Physical Bond.
(g) Transfers Not Covered by Section 3.11(e). The Bond Registrar shall
effect and record, upon receipt of a written request from the Corporation so to
do, a transfer not otherwise permitted by Section 3.11(e), such recording to be
done in accordance with the otherwise applicable provisions of Section 3.11(e),
upon the furnishing by the proposed transferor or transferee of a Non-
Registration Opinion and Supporting Evidence.
(h) General. By its acceptance of any 2009 Series Bond bearing the Private
Placement Legend, each Holder of such 2009 Series Bond acknowledges the
restrictions on transfer of such 2009 Series Bond set forth in this Indenture
and in the Private Placement Legend and agrees that it will transfer such 2009
Series Bond only as provided in the Indenture. The Bond Registrar shall not
register a transfer of any 2009 Series Bond unless such transfer complies with
the restrictions with respect thereto set forth in this Indenture. The Bond
Registrar shall not be required to determine (but may rely upon a determination
made by the Corporation) the sufficiency of any such certifications, legal
opinions or other information.
Section 3.12. Form of Regulation S Certificate.
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REGULATION S CERTIFICATE
To: The Chase Manhattan Bank,
as Trustee (the "Trustee")
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Trustee Administration
Re: Eleventh Supplemental Indenture (the "Indenture") dated as of March 31,
1999, among National Steel Corporation (the "Corporation") and the
Trustees
Ladies and Gentlemen:
This Certificate relates to our proposed transfer of $_____ principal
amount of bonds issued under the Indenture and to be designated the "First
Mortgage Bonds, 97/8% Series C due 2009" (hereinafter called the "2009 Series
Bonds"). Terms are used in this Certificate as defined in Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"). We hereby certify as
follows:
1. The offer of the 2009 Series Bonds was not made to a person in
the United States (unless such person or the account held by it for which
it is acting is excluded from the definition of "U.S. person" pursuant to
Rule 902(k) of Regulation S under the circumstances described in Rule
902(k)(2) of Regulation S) or specifically targeted at an identifiable
group of U.S. citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer
was outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
3. Neither we, any of our affiliates, nor any person acting on our
or their behalf has made any directed selling efforts in the United States.
4. The proposed transfer of 2009 Series Bonds is not part of a plan
or scheme to evade the registration requirements of the Securities Act.
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5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the 2009 Series Bonds, and the
proposed transfer takes place before the Offshore 2009 Series Bond Exchange
Date referred to in the Indenture, or we are an officer or director of the
Corporation or a distributor, we certify that the proposed transfer is
being made in accordance with the provisions of Rule 904 of Regulation S.
You and the Corporation are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Seller]
By:________________________
Name:
Title:
Address:
Date of this Certificate: _________, 199__
Signature Guarantee: _______________________________
Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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Section 3.13. Form of Rule 144A Certificate.
RULE 144A CERTIFICATE
To: The Chase Manhattan Bank, as Trustee (the "Trustee")
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trust Trustee Administration
Re: Eleventh Supplemental Indenture (the "Indenture") dated as of March 31,
1999 among National Steel Corporation (the "Corporation") and the
Trustees
Ladies and Gentlemen:
This Certificate relates to our proposed purchase of $_____ principal
amount of bonds issued under the Indenture and to be designated the "First
Mortgage Bonds, 9 7/8% Series C due 2009" (hereinafter called the "2009 Series
Bonds"). We and, if applicable, each account for which we are acting, are
"qualified institutional buyers" within the meaning of Rule 144A ("Rule 144A")
under the Securities Act of 1933, as amended (the "Securities Act"). We are
aware that the transfer of 2009 Series Bonds to us is being made in reliance on
the exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A. Prior to the date of this Certificate we have been given the
opportunity to obtain from the Corporation the information referred to in Rule
144A(d)(4), and have either declined such opportunity or have received such
information.
You and the Corporation are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:____________________
Name:
Title:
Address:
Date of this Certificate: _____________ __, 199__
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Signature Guarantee: _______________________________
Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Section 3.14. CUSIP Numbers. The Corporation in issuing the 2009 Series
Bonds may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the 2009 Series Bonds
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the 2009 Series Bonds, and
any such redemption shall not be affected by any defect in or omission of such
numbers. The Corporation will promptly notify the Trustee of any change in the
CUSIP numbers.
Section 3.15. Notice to Holders; Waiver. Where this Supplemental Indenture
provides for notice of any event to Holders of 2009 Series Bonds by the
Corporation or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
In case, by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impractical to mail notice
of any event to Holders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be sufficient giving of such
notice for every purpose hereunder.
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Where this Supplemental Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
ARTICLE 4
PARTICULAR COVENANTS OF THE CORPORATION
Each of the following covenants contained in this Article 4 shall remain in
effect, subject to Section 4.04, for so long as any of the 2009 Series Bonds are
outstanding:
Section 4.01. Payment of Securities. The Corporation shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the 2009 Series Bonds and in this Supplemental Indenture. Principal
and interest shall be considered paid on the date due if on such date the
Trustee holds in accordance with this Supplemental Indenture money sufficient to
pay all principal and interest then due and the Trustee is not prohibited from
paying such money to the holders of the 2009 Series Bonds on that date pursuant
to the terms of this Supplemental Indenture.
The Corporation shall pay interest on overdue principal at the rate
specified therefor in the 2009 Series Bonds, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
Section 4.02. SEC Reports. Notwithstanding that the Corporation may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Corporation shall file with, or furnish to, the SEC
such annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and reports to
be so filed at the times specified for the filing of such information, documents
and reports under such Sections (the "REQUIRED FILING TIMES"); provided,
however, that the Corporation shall not be so obligated to file such
information, documents and reports with the SEC if the SEC does not permit such
filings. The Corporation shall also in any event (a) within 15 days of each
Required Filing Time, provide the Trustee and the Holders of 2009 Series Bonds
with copies of such information, documents and reports and (b) if the SEC does
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not permit the filing of such information, documents and reports, promptly upon
written request by a prospective Holder of 2009 Series Bonds supply copies of
such information, documents and reports to such prospective Holder of 2009
Series Bonds.
Section 4.03. Limitation on Lines of Business. Neither the Corporation
nor any of its Restricted Subsidiaries shall directly or indirectly engage to
any substantial extent in any line or lines of business activity other than the
business of the Corporation and its Restricted Subsidiaries on March 8, 1999
(and any business reasonably related thereto).
Section 4.04 Covenant Suspension. If and for so long as the Corporation
reaches and maintains Investment Grade Status, the Corporation and the
Restricted Subsidiaries shall be released from their obligations to comply with
Sections 4.03, 4.05, 4.06, 4.10, 4.11, 4.12, 5.01(a)(v) and (vi), and clause (x)
of the second paragraph (and such clause (x) as referred to in the first
paragraph) of Section 4.14. The Corporation shall notify the Trustee in writing
when it reaches Investment Grade Status and when it ceases to have Investment
Grade Status.
Section 4.05 Limitation on Debt and Restricted Subsidiary Preferred Stock.
The Corporation shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, Incur any Debt (which includes, in the case of
Restricted Subsidiaries, Preferred Stock); provided however that (a) the
Corporation and Restricted Subsidiaries may Incur Debt if (i) after giving pro
forma effect to the application of the proceeds thereof, no Default or Event of
Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and (ii) after giving effect to the Incurrence of such
Debt and the application of the proceeds thereof, the Consolidated Interest
Coverage Ratio would be greater than 2.50 to 1.00 and, (b) the Corporation and
its Restricted Subsidiaries may incur debt if such Debt is Permitted Debt.
Section 4.06 Limitation on Restricted Payments.
(a) The Corporation shall not make, and shall not permit any Restricted
Subsidiary to make, directly or indirectly, any Restricted Payment if at the
time of, and after giving pro forma effect to, such proposed Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing;
(ii) the Corporation could not Incur at least $1.00 of additional Debt
pursuant to Section 4.05 (a); or
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(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since March 8, 1999 (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value) would exceed an amount equal to the sum of:
(A) 50% of the aggregate amount of Consolidated Net Income
accrued during the period (treated as one accounting period) from and after
the first day of the fiscal quarter following the end of the most recent
fiscal quarter ended immediately prior to March 8, 1999 to the end of the
most recent fiscal quarter ending at least 45 days prior to the date of
such Restricted Payment (or if the aggregate amount of Consolidated Net
Income for such period shall be a deficit, minus 100% of such deficit);
(B) Capital Stock Sale Proceeds;
(C) the amount by which Debt (other than Subordinated
Obligations issued or sold prior to March 8, 1999) of the Corporation is
reduced on the Corporation's balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Corporation) subsequent to March 8, 1999
of any Debt of the Corporation convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Corporation (less the amount
of any cash or other Property distributed by the Corporation or any
Restricted Subsidiary upon such conversion or exchange); and
(D) to the extent not otherwise included in the Consolidated Net
Income of the Corporation, an amount equal to the sum of (x) the net
reduction in Investments in any Person (other than reductions in Permitted
Investments) resulting from the payment in cash of interest on Debt,
dividends, repayments of loans or advances, or other transfers of assets,
in each case to the Corporation or any Restricted Subsidiary after March 8,
1999 from such Person and (y) the portion (proportionate to the
Corporation's equity interest in such Subsidiary) of the Fair Market Value
of the net assets of any Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided,
however, that in the case of (x) or (y) above the foregoing sum shall not
exceed the amount of Investments previously made (and treated as a
Restricted Payment) by the Corporation or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
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(b) Notwithstanding the foregoing limitation, the Corporation may:
(i) pay dividends on its Capital Stock within 60 days of the declaration
thereof if, on said declaration date, such dividends could have been paid in
compliance with this Indenture; provided, however, that at the time of such
payment of such dividend, no other Default or Event of Default shall have
occurred and be continuing (or would result therefrom); provided further,
however, that such dividend shall be included in the calculation of the amount
of Restricted Payments;
(ii) purchase, repurchase, redeem, legally defease, acquire or retire for
value Capital Stock of the Corporation or Subordinated Obligations in exchange
for, or out of the proceeds of the substantially concurrent sale of, Capital
Stock of the Corporation (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Corporation or an employee stock
ownership plan or trust established by the Corporation or any of its
Subsidiaries for the benefit of their employees); provided, however, that (A)
such purchase, repurchase, redemption, legal defeasance, acquisition or
retirement shall be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such exchange or sale shall be
excluded from the calculation of the amount of Capital Stock Sale Proceeds;
(iii) purchase, repurchase, redeem, legally defease, acquire or retire for
value any Subordinated Obligations in exchange for, or out of the proceeds of
the substantially concurrent sale of, Permitted Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the amount of
Restricted Payments;
(iv) expend up to $5,000,000 in any fiscal year of the Corporation to
repurchase common stock of the Corporation (i) to distribute to current or
former employees, officers and directors of the Corporation and its
Subsidiaries, including upon the exercise of stock options granted to such
employees, officers and directors, (ii) from such current or former employees,
officers or directors or (iii) otherwise in order to distribute as employee
compensation; provided, however, that at the time of, and after giving pro forma
effect to, any such expenditure, no other Default or Event of Default shall have
occurred and be continuing; provided further, however, that such repurchase
shall be excluded in the calculation of the amount of Restricted Payments;
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(v) to repurchase up to 700,000 shares of common stock of the
Corporation pursuant to the stock repurchase approved by the Board of
Directors of the Corporation on August 26, 1998; provided, however, that at
the time of, and after giving pro forma effect to, any such expenditure, no
other Default or Event of Default shall have occurred and be continuing;
provided further, however, that such repurchase shall be included in the
calculation of the amount of Restricted Payments; and
(vi) expend up to $50 million for Restricted Payments in addition to
amounts permitted pursuant to clauses (i) through (v) above; provided,
however, that at the time of, and after giving pro forma effect to, any
such expenditure, no other Default or Event of Default shall have occurred
and be continuing; provided further, however, that such expenditures shall
be included in the calculation of the amount of Restricted Payments.
Section 4.07. Limitation on Pledged Subsidiaries to Incur Indebtedness or
Issue Capital Stock. The Corporation will not:
(a) permit any Wholly-Owned Subsidiary the stock of which is at the time
pledged under the Indenture to incur any indebtedness, direct or contingent,
except:
(i) current liabilities (other than for money borrowed) incurred in
the ordinary and regular conduct of business and payable within one year
after the date of the incurring thereof; and
(ii) indebtedness to the Corporation, and the extension, renewal or
refunding thereof from time to time; or
(b) permit any Wholly-Owned Subsidiary the stock of which is at the time
pledged under the Indenture to issue any capital stock (other than directors'
qualifying shares, where necessary) except to the Corporation.
Nothing contained in this Supplemental Indenture shall prevent any such
Wholly-Owned Subsidiary from acquiring property subject to any mortgage or other
lien to which the property is subject at the time of the acquisition, or from
creating any mortgage upon, or pledge of, any property hereafter acquired, at
the time of acquisition thereof, in order to secure payment of the purchase
price thereof or in order to secure any loan incurred for the purpose of
financing such acquisition, provided that the Corporation shall deposit with the
Trustee to be held as part of the trust estate cash equal to:
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(i) the aggregate principal amount of additional Bonds, if any,
issued upon the basis of the stock of such subsidiary, and
(ii) the amount of cash, if any, withdrawn upon the basis of the stock
of such Wholly-Owned Subsidiary pursuant to Sections 9.01 and 9.03 of the
Original Indenture;
and provided, further, that the principal amount of the indebtedness
secured by any such mortgage, lien or pledge shall not exceed 66 2/3% of the
cost to such Wholly-Owned Subsidiary of the property subject to such mortgage,
lien or pledge; or prevent the renewal or extension of any indebtedness secured
by any lien permitted by this paragraph; or prevent the refunding of any such
indebtedness by a new loan not exceeding the amount of the indebtedness refunded
and secured by the property which secured such refunded indebtedness. If such
property shall thereafter be subjected to the lien of the Indenture pursuant to
any provision thereof, the existence of such mortgage, lien or pledge shall not
constitute a breach of any covenant hereunder.
The Corporation will not assign any indebtedness of a Wholly-Owned
Subsidiary the stock of which is pledged under the Indenture, except to the
Trustees or, after such assignment to the Trustees, except as provided in the
following sentence. The Corporation will not sell or otherwise dispose of any
indebtedness or capital stock of any such Wholly-Owned Subsidiary pledged under
the Indenture unless prior to such sale or other disposition, or at the same
time, all other indebtedness and capital stock of such Wholly-Owned Subsidiary
owned directly or indirectly by the Corporation and its other subsidiaries is
sold or otherwise disposed of.
Section 4.08. Limitation on Sale of Mortgaged Property. The Corporation
will not sell or otherwise dispose of a part (less than substantially all) of
the Mortgaged Property except as provided in Section 7.04, 8.01 or 8.02 of the
Original Indenture or upon the release thereof as provided in Section 8.03 or
8.04 of the Indenture, or consolidate or merge with or into, or transfer or
convey all or substantially all the Mortgaged Property, as an entirety to, any
other Person, or permit any other Person to merge into it, except as provided in
Article 13 of the Original Indenture.
Notwithstanding the provisions of Section 8.03 of the Original Indenture
but subject to the provisions of Section 4.16 thereof, the Corporation from time
to time may sell, exchange or otherwise dispose of any property constituting
Mortgaged Property other than shares of stock or other securities or
indebtedness of any corporation pledged hereunder and the Trustees shall release
the same from the lien of this Indenture without compliance with any of the
provisions of said
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Section 8.03 and without the deposit of cash with the Trustees, but only subject
to certain exceptions described below upon receipt by the Trustee of:
(a) A request evidenced by an Officers' Certificate; and
(b) An engineer's certificate, stating in substance:
(i) A description in reasonable detail of the property to be
released;
(ii) A description in reasonable detail of the consideration, if
any, for the property to be released;
(iii) The then fair value, in the opinion of the signer, of the
property to be released, which fair value shall in no event exceed
$100,000;
(iv) That neither (i) the aggregate fair value of all property
released under this Section 4.08 in the calendar year in which the
property described in the certificate is to be released nor (ii) the
aggregate consideration received by the Corporation for all property
so released for such calendar year, exceeds $250,000; and
(v) That, in the opinion of the signer, such property is not
useful or necessary in the conduct of the business of the Corporation
and that such release will not impair the security under the Indenture
in contravention of the provisions of the Indenture and is desirable
in the proper conduct of the business of the Corporation or is
otherwise in the best interests of the Corporation.
No property shall be released under the provisions described in this
Section 4.08 in any calendar year after either (i) aggregate fair value of all
property released under the provisions described in this Section 4.08 for such
calendar year, or (ii) the aggregate consideration received by the Corporation
for such property for such calendar year, exceeds $250,000.
Section 4.0. Change of Control. (a) Upon the occurrence of a Change of
Control, each Holder of 2009 Series Bonds shall have the right to require the
Corporation to repurchase all or any part of such Holder's 2009 Series Bonds
pursuant to the offer described below (the "CHANGE OF CONTROL OFFER") at a
purchase price (the "CHANGE OF CONTROL PURCHASE PRICE") equal to 101% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the purchase date (subject to the right of Holders of record on the relevant
record date
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to receive interest due on the relevant interest payment date that is on or
prior to the purchase date).
(b) Within 30 days following any Change of Control, the Corporation shall
(a) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Jones News Service or similar business news service in the United States
and (b) send, by first-class mail, with a copy to the Trustee, to each Holder of
2009 Series Bonds, at such Holder's address appearing in the Bond Register, a
notice stating: (i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.09 and that all 2009
Series Bonds timely tendered will be accepted for payment; (ii) the Change of
Control Purchase Price and the purchase date, which shall be, subject to any
contrary requirements of applicable law, a Business Day no earlier than 30 days
nor later than 60 days from the date such notice is mailed (the "CHANGE OF
CONTROL PAYMENT DATE"); (iii) that any 2009 Series Bonds (or portion thereof)
accepted for payment (and duly paid on the Change of Control Payment Date)
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (iv) that any 2009 Series Bonds (or portions
thereof) not tendered will continue to accrue interest; (v) the circumstances
and relevant facts regarding such Change of Control (including information with
respect to pro forma historical income, cash flow and capitalization after
giving effect to the Change of Control); and (vi) the procedures that Holders of
2009 Series Bonds must follow in order to tender their 2009 Series Bonds (or
portions thereof) for payment, and the procedures that Holders of 2009 Series
Bonds must follow in order to withdraw an election to tender 2009 Series Bonds
(or portions thereof) for payment.
(c) Holders electing to have a 2009 Series Bond purchased will be required
to surrender the 2009 Series Bond, with an appropriate form (which may include
the form on the reverse thereof) duly and properly completed, to the Corporation
or its agent at the address specified in the notice at least three Business Days
prior to the Change of Control Payment Date. Holders will be entitled to
withdraw their election if the Trustee or the Corporation receives not later
than one Business Day prior to the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the 2009 Series Bond which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election to have
such 2009 Series Bonds purchased. Holders whose 2009 Series Bond are purchased
only in part shall be issued new 2009 Series Bonds equal in principal amount to
the unpurchased portion of the 2009 Series Bonds surrendered.
(d) On or prior to the Change of Control Payment Date, the Corporation
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
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Corporation or any of its Wholly Owned Subsidiaries is acting as the Paying
Agent, segregate and hold in trust) in cash an amount equal to the Change of
Control Purchase Price payable to the Holders entitled thereto, to be held for
payment in accordance with the provisions of this Section. On the Change of
Control Payment Date, the Corporation shall deliver to the Trustee the 2009
Series Bonds or portions thereof which have been properly tendered to and are to
be accepted by the Corporation for payment. The Trustee or the Paying Agent
shall, on the Change of Control Payment Date, mail or deliver payment to each
tendering Holder of the Change of Control Purchase Price. In the event that the
aggregate Change of Control Purchase Price is less than the amount delivered by
the Corporation to the Trustee or the Paying Agent, the Trustee or the Paying
Agent, as the case may be, shall deliver the excess to the Corporation
immediately after the Change of Control Payment Date.
(e) At the time the Corporation delivers 2009 Series Bonds to the Trustee
which are to be accepted for purchase, the Corporation shall also deliver an
Officers' Certificate stating that such 2009 Series Bonds are to be accepted by
the Trustee pursuant to and in accordance with the terms of this Section.
(f) The Corporation will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of 2009 Series Bonds pursuant
to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section, the
Corporation will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section by virtue
of such compliance.
Section 4.10. Limitation on Sale of Assets Other Than Mortgaged Property.
(a) The Corporation shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Sale, which term for purposes
of this Section 4.10, shall exclude sales or other dispositions of Mortgaged
Property made in compliance with the terms of the Original Indenture and Section
4.08, unless (i) the Corporation or such Restricted Subsidiary receives
consideration at the time of such Asset Sale (or, in the case of a lease that is
an Asset Sale, the Corporation or such Restricted Subsidiary is to receive over
the term of such lease) consideration at least equal to the fair value of the
Property subject to such Asset Sale; (ii) at least 75% of the consideration paid
to the Corporation or such Restricted Subsidiary in connection with such Asset
Sale is in the form of cash, Cash Equivalents, Additional Assets or the
assumption by the purchaser of liabilities of the Corporation or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
2009 Series Bonds) as a result of which the Corporation and the Restricted
Subsidiaries are no longer obligated
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with respect to such liabilities; and (iii) the Corporation delivers an
Officers' Certificate to the Trustee certifying that such Asset Sale complies
with the foregoing clauses (i) and (ii).
(b) The Net Available Cash (or any portion thereof) from Asset Sales may
be applied by the Corporation or a Restricted Subsidiary, to the extent the
Corporation or such Restricted Subsidiary elects (or is required by the terms of
any Debt): (i) to prepay, repay, legally defease or purchase Senior Debt of the
Corporation or Debt of any Restricted Subsidiary (excluding, in any such case,
Debt owed to the Corporation or an Affiliate of the Corporation); (ii) to
permanently fund pension or other post-retirement employee benefit obligations
("OPEB") obligations of the Corporation; or (iii) to reinvest in Additional
Assets (including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Corporation or another
Restricted Subsidiary) or to commit to reinvest in Additional Assets (such
commitments to include amounts anticipated to be expended pursuant to the
Corporation's capital investment plan (x) as adopted by the Board of Directors
and (y) evidenced by the filing of an Officers' certificate with the Trustee
stating that the total amount of the Net Available Cash from such Asset Sale,
after giving effect to the prior application of any portion thereof pursuant to
clause (i) or (ii) of this paragraph (b), is less than the aggregate amount
contemplated to be expended pursuant to such capital investment plan within 24
months of the consummation of such Asset Sale)); provided, however, that in
connection with any prepayment, repayment, legal defeasance or purchase of Debt
pursuant to clause (i) above, the Corporation or such other Restricted
Subsidiary shall retire such Debt and shall cause the related loan commitment
(if any) to be permanently reduced by an amount equal to the principal amount so
prepaid, repaid, legally defeased or purchased.
(c) Any Net Available Cash from an Asset Sale not applied in accordance
with the preceding paragraph within twelve months from the date of the receipt
of such Net Available Cash (or committed to be reinvested in Additional Assets
pursuant to clause (iii) of the preceding paragraph within twelve months from
the date of the receipt of such Net Available Cash and not actually reinvested
in Additional Assets pursuant to such investment commitment within twenty-four
months from the date of the receipt of such Net Available Cash) shall constitute
"EXCESS PROCEEDS."
When the aggregate amount of Excess Proceeds exceeds $5,000,000 (taking
into account income earned on such Excess Proceeds, if any), the Corporation
will be required to make an offer to purchase (the "PREPAYMENT OFFER") the 2009
Series Bonds which offer shall be in the amount of the Excess Proceeds, on a pro
rata basis according to principal amount, at a purchase price
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equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the Purchase Date (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date that is on or prior to the purchase date) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
this Supplemental Indenture. To the extent that any portion of the amount of Net
Available Cash remains after compliance with the preceding sentence and provided
that all Holders of 2009 Series Bonds have been given the opportunity to tender
their 2009 Series Bonds for purchase as described in Section 4.10(d), the
Corporation or such Restricted Subsidiary may use such remaining amount for any
purpose permitted by this Indenture and the amount of Excess Proceeds will be
reset to zero.
(d) (i) Within five Business Days after the Corporation is obligated to
make a Prepayment Offer as described in Section 4.10(c), the Corporation will
send a written notice, by first-class mail, to the Trustee and the Holders of
2009 Series Bonds (the "PREPAYMENT OFFER NOTICE"), accompanied by such
information regarding the Corporation and its Subsidiaries as the Corporation in
good faith believes will enable such Holders to make an informed decision with
respect to such Prepayment Offer (which at a minimum shall include the most
recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Corporation, the most recent subsequently filed
Quarterly Report on Form 10-Q of the Corporation and any Current Report on Form
8-K of the Corporation filed subsequent to such Quarterly Report, other than
Current Reports describing Asset Sales otherwise described in the offering
materials, or corresponding successor reports (or, during any time that the
Corporation is not subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, corresponding reports prepared pursuant to Section 4.02), a
description of material developments in the Corporation's business subsequent to
the date of the latest of such reports and if material, appropriate pro forma
financial information). The Prepayment Offer Notice shall state, that a
Prepayment Offer is being made pursuant to this Section 4.10 and that all 2009
Series Bonds timely tendered will be accepted for payment (subject to
proration), that any 2009 Series Bonds (or any portion thereof) accepted for
payment (and duly paid on the Purchase Date) pursuant to the Prepayment Offer
shall cease to accrue interest after the Purchase Date, the purchase price and
purchase date, which shall be a Business Day no earlier than 30 days nor later
than 60 days from the date the Prepayment Offer Notice is mailed (the "PURCHASE
DATE"), the aggregate principal amount of 2009 Series Bonds eligible to be
purchased, that any 2009 Series Bonds (or portions thereof) not tendered will
continue to accrue interest and the procedures that Holders of 2009 Series
Bonds must follow in order to tender their 2009 Series Bonds (or portions
thereof) for payment and the
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procedures that Holders of 2009 Series Bonds must follow in order to withdraw an
election to tender 2009 Series Bonds (or portions thereof) for payment.
(ii) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the
Corporation shall deliver to the Trustee an Officers' Certificate as to (A)
the amount of the Prepayment Offer (the "OFFER AMOUNT"), (B) the allocation
of the Net Available Cash from the Asset Sales pursuant to which such
Prepayment Offer is being made and (C) the compliance of such allocation
with the provisions of Section 4.10(b). On such date, the Corporation shall
also irrevocably deposit with the Trustee or with the Paying Agent (or, if
the Corporation or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) in Cash Equivalents, maturing on the last day
prior to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to be
held for payment in accordance with the provisions of this Section. Upon
the expiration of the period for which the Prepayment Offer remains open
(the "OFFER PERIOD"), the Corporation shall deliver to the Trustee for
cancellation the 2009 Series Bonds or portions thereof which have been
properly tendered to and are to be accepted by the Corporation. The Trustee
or the Paying Agent shall, on the Purchase Date, mail or deliver payment to
each tendering Holder in the amount of the purchase price. In the event
that the aggregate purchase price of the 2009 Series Bonds delivered by the
Corporation to the Trustee is less than the Offer Amount, the Trustee or
the Paying Agent shall deliver the excess to the Corporation immediately
after the expiration of the Offer Period for application in accordance with
this Section.
(iii) Holders electing to have a 2009 Series Bond purchased shall be
required to surrender the 2009 Series Bond, with an appropriate form (which
may include the form on the reverse thereof) duly and properly completed,
to the Corporation or its agent at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Corporation
receives not later than one Business Day prior to the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the 2009 Series Bond which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such 2009 Series Bond purchased. If at the
expiration of the Offer Period the aggregate principal amount of 2009
Series Bonds surrendered by Holders exceeds the Offer Amount, the
Corporation shall select the 2009 Series Bonds to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
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Corporation so that only 2009 Series Bonds in denominations of $1,000, or
integral multiples thereof, shall be purchased). Holders whose 2009 Series
Bonds are purchased only in part shall be issued new 2009 Series Bonds
equal in principal amount to the unpurchased portion of the 2009 Series
Bonds surrendered.
(iv) At the time the Corporation delivers 2009 Series Bonds to the
Trustee which are to be accepted for purchase, the Corporation shall also
deliver an Officers' Certificate stating that such 2009 Series Bonds are to
be accepted by the Trustee pursuant to and in accordance with the terms of
this Section. A 2009 Series Bond shall be deemed to have been accepted for
purchase at the time the Trustee or the Paying Agent mails or delivers
payment therefor to the surrendering Holder.
(e) The Corporation will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of 2009 Series Bonds pursuant
to this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Corporation will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section by virtue thereof.
Section 4.1. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Corporation shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distributions on or
in respect of its Capital Stock, or pay any Debt or other obligation owed, to
the Corporation or any other Restricted Subsidiary, (b) make any loans or
advances to the Corporation or any other Restricted Subsidiary, (c) transfer any
of its Property to the Corporation or any other Restricted Subsidiary or (d)
guarantee any Debt of the Corporation or any other Restricted Subsidiary. The
foregoing limitations will not apply (i) with respect to clauses (a), (b), (c)
and (d), to restrictions (A) in effect on March 8, 1999, (B) relating to Debt of
a Restricted Subsidiary and existing at the time it became a Restricted
Subsidiary if such restriction was not created in connection with or in
anticipation of the transaction or series of transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Corporation, (C) which result from the Refinancing of Debt Incurred pursuant to
an agreement referred to in the immediately preceding clause (i)(A) or (B) above
or in clause (ii)(A) or (B) below, provided that such restriction is no less
favorable to the Holders of 2009 Series Bonds than those under the agreement
evidencing the Debt so Refinanced, (D) on Sales Finance or any other bankruptcy-
remote special-purpose
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Subsidiary of the Corporation that purchases or sells accounts receivable or
inventory pursuant to the Credit Facilities or (E) arising or agreed to in a
joint venture agreement, entered into by the Corporation or a Restricted
Subsidiary in the ordinary course of business that do not (as determined by the
Corporation and certified in a resolution of the Board of Directors or a
certificate of the chief financial or chief accounting officer of the
Corporation delivered to the Trustee prior to or promptly following such
encumbrance or restriction becoming effective), individually or in the
aggregate, (1) detract from the value of property or assets of the Corporation
or any Restricted Subsidiary in any manner material to the Corporation or any
Restricted Subsidiary or (2) materially adversely affect the Corporation's
ability to make principal or interest payments on the 2009 Series Bonds and (ii)
with respect to clause (c) only, to restrictions (A) relating to Debt that is
permitted to be Incurred and secured pursuant to Section 4.05 and Section 4.12
of the Original Indenture that limit the right of the debtor to dispose of the
Property securing such Debt, (B) encumbering Property at the time such Property
was acquired by the Corporation or any Restricted Subsidiary, so long as such
restriction relates solely to the Property so acquired and was not created in
connection with or in anticipation of such acquisition, (C) resulting from
customary provisions restricting subletting or assignment of leases or customary
provisions in other agreements that restrict assignment of such agreements or
rights thereunder or (D) customary restrictions contained in asset sale
agreements limiting the transfer of such Property pending the closing of such
sale.
Section 4.12. Limitation on Transactions with Affiliates. (a) The
Corporation shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, assignment, lease, conveyance or exchange of any Property or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Corporation (an "AFFILIATE TRANSACTION"), unless (i) the terms of such Affiliate
Transaction are (A) set forth in writing and (B) no less favorable to the
Corporation or such Restricted Subsidiary, as the case may be, than those that
could be obtained in a comparable arm's-length transaction with a Person that is
not an Affiliate of the Corporation, (ii) if such Affiliate Transaction involves
aggregate payments or value in excess of $10,000,000, the Board of Directors
(including a majority of the disinterested members of the Board of Directors)
approves such Affiliate Transaction and, in its good faith judgment, believes
that such Affiliate Transaction complies with clause (i) of this paragraph as
evidenced by a Board Resolution promptly delivered to the Trustee and (iii) if
such Affiliate Transaction involves aggregate payments or value in excess of
$20,000,000, the Corporation obtains a written opinion from an Independent
Financial Advisor to the effect that such Affiliate Transaction is fair, from a
financial point of view, to the Corporation or such Restricted Subsidiary, as
the case may be.
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(b) Notwithstanding the foregoing limitation, the Corporation or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between the
Corporation and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries; provided that no more than 5% of the total voting
power of the Voting Stock (on a fully diluted basis) of any such Restricted
Subsidiary is owned by an Affiliate of the Corporation (other than a
Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made pursuant to
Section 4.06;
(iii) any issuance of securities, or other payments, awards or
grants in securities or otherwise pursuant to, or the funding of,
employment arrangements, pension or other benefit plans, stock options and
stock ownership plans and other compensatory arrangements approved by the
Board of Directors;
(iv) the payment of reasonable fees to directors of the Corporation
or such Restricted Subsidiary who are not employees of the Corporation or
any Restricted Subsidiary;
(v) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Corporation or such
Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $5,000,000 in the aggregate at any one time
outstanding; and
(vi) any payments for the purchase of steel products from NKK or
any of its Affiliates or the provision of services by NKK or any of its
Affiliates, including the construction by NKK or an Affiliate of the new
hot dip galvanizing facility at the Great Lakes Division; provided, that,
in each case, the terms of such payments are determined on an arm's length
basis and are approved by the disinterested members of the Board of
Directors of the Corporation; and
(vii) any Affiliate Transactions between the Corporation or any
Restricted Subsidiary and one or more Affiliate Joint Ventures that (x) are
on terms no less favorable to the Corporation or such Restricted
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate
of the Corporation and (y) if such Affiliate Transactions involve aggregate
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payments or value in excess of $10 million, the Board of Directors
(including a majority of the disinterested members of the Board of
Directors) approves such Affiliate Transaction, and in its good faith
judgment believes that such Affiliate Transaction complies with clause (x)
of this paragraph (vii).
Section 4.13. Limitation on Sale and Leaseback Transactions. The
Corporation shall not, and shall not permit any Restricted Subsidiary to, enter
into any Sale and Leaseback Transaction with respect to any Property unless (a)
the Corporation or such Restricted Subsidiary would be entitled to (i) Incur
Debt in an amount equal to the Attributable Debt with respect to such Sale and
Leaseback Transaction pursuant to Section 4.05 and (ii) create a Lien on such
Property securing such Attributable Debt, and (b) such Sale and Leaseback
Transaction is effected in compliance with Section 4.10.
Section 4.14. Designation of Restricted and Unrestricted Subsidiaries. The
Board of Directors may designate any Subsidiary of the Corporation to be an
Unrestricted Subsidiary if (a) the Subsidiary to be so designated does not own
any Capital Stock or Debt of, or own or hold any Lien on any Property of, the
Corporation or any other Restricted Subsidiary (b) the Subsidiary to be so
designated is not obligated under any Debt, Lien or other obligation that, if in
default, would result (with the passage of time or notice or otherwise) in a
default on any Debt of the Corporation or of any Restricted Subsidiary and (c)
either (i) the Subsidiary to be so designated has total assets of $1,000 or less
or (ii such designation is effective immediately upon such entity becoming a
Subsidiary of the Corporation or any Restricted Subsidiary. Unless so
designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary
of the Corporation or of any Wholly Owned Subsidiary will be classified as a
Restricted Subsidiary, provided that the requirements set forth in clauses (x)
and (y) of the immediately following paragraph would be satisfied after giving
pro forma effect to such classification. Any Person not permitted by the terms
of the immediately preceding sentence to be classified as a Restricted
Subsidiary shall be automatically classified as an Unrestricted Subsidiary.
Except as provided in the first sentence of this paragraph, no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Corporation could Incur at least $1.00 of additional Debt
pursuant to Section 4.05 and (y) no Default or Event of Default shall have
occurred and be continuing or would result therefrom.
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Any such designation or redesignation by the Board of Directors will be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Corporation in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Corporation's fiscal year, within 90 days
after the end of such fiscal year).
Section 4.15. Compliance Certificate. The Corporation shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Corporation an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Corporation they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Corporation is taking or proposes to
take with respect thereto. The Corporation also shall comply with TIA (S)
314(a)(4).
Section 4.16. Further Instruments and Acts. Upon request of the Trustee,
the Corporation will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Corporation
Section 5.01. When Corporation May Merge or Transfer Assets. (a) The
Corporation shall not merge, consolidate or amalgamate with or into any other
Person (other than a merger of a Wholly Owned Subsidiary into the Corporation)
or sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all its Property in any one transaction or series of transactions
unless: (i) the Corporation shall be the surviving Person (the "SURVIVING
PERSON") or the Surviving Person (if other than the Corporation) formed by such
merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made shall be a Person organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia; (ii) the Surviving Person (if other than the
Corporation) expressly assumes, by supplemental indenture in form satisfactory
to the Trustee, executed and delivered to the Trustee by such Surviving Person,
the due and punctual
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payment of the principal of and interest on all the 2009 Series Bonds, according
to their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed by the Corporation
and confirms in writing the lien of the Indenture, including the after-acquired
property clauses thereof, on the Property subject to the Indenture; (iii) in the
case of a sale, transfer, assignment, lease, conveyance or other disposition of
all or substantially all the Corporation's Property, such Property shall have
been transferred as an entirety or virtually as an entirety to one Person; (iv)
immediately before and after giving effect to such transaction or series of
transactions on a pro forma basis (and treating, for purposes of this clause
(iv) and clauses (v) and (vi) below, any Debt which becomes, or is anticipated
to become, an obligation of the Surviving Person or any Restricted Subsidiary as
a result of such transaction or series of transactions as having been Incurred
by the Surviving Person or such Restricted Subsidiary at the time of such
transaction or series of transactions), no Default or Event of Default shall
have occurred and be continuing; (v) immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the Corporation or
the Surviving Person, as the case may be, would be able to Incur at least $1.00
of additional Debt under Section 4.05; (vi) immediately after giving effect to
such transaction or series of transactions on a pro forma basis, the Surviving
Person shall have a Consolidated Net Worth in an amount which is not less than
the Consolidated Net Worth of the Corporation immediately prior to such
transaction or series of transactions; and (vii) the Corporation shall deliver,
or cause to be delivered, to the Trustee, in form reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such transaction and any supplemental indenture in respect thereto comply with
this Section 5.01 and that all conditions precedent herein provided for relating
to such transaction have been satisfied.
(b) The Surviving Person will succeed to, and be substituted for, and may
exercise every right and power of the Corporation under this Indenture, but the
predecessor Corporation in the case of a sale, transfer, assignment, lease,
conveyance or other disposition, shall not be released from the obligation to
pay the principal of and interest on the 2009 Series Bonds.
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ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default. The following events shall be "ELEVENTH
SUPPLEMENTAL INDENTURE EVENTS OF DEFAULT" specific to the 2009 Series Bonds and
in addition to the Events of Default set forth in the Original Indenture:
(a) the Corporation defaults in any payment of interest on any 2009
Series Bond when the same becomes due and payable, and such default
continues for a period of 30 days;
(b) the Corporation defaults in the payment of the principal of any
2009 Series Bond when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
acceleration or otherwise;
(c) the Corporation fails to comply with Article 5;
(d) the Corporation fails to comply with any of its agreements or
covenants in the 2009 Series Bonds or this Indenture (other than those
referred to in clause (a), (b) or (c) above) and such failure continues for
30 days after notice is given to the Corporation as specified below;
(e) a default by the Corporation or any Restricted Subsidiary under
any Debt of the Corporation or any Restricted Subsidiary which results in
the acceleration of the maturity of such Debt, or failure to pay any such
Debt at maturity, in an aggregate amount greater than $10,000,000 or its
foreign currency equivalent at the time;
(f) the Corporation or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in
an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
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(iv) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Corporation or any Significant
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Corporation or any Significant
Subsidiary or for any substantial part of its property;
(iii) orders the winding up or liquidation of the Corporation or
any Significant Subsidiary; or
(iv) is for any similar relief granted under any foreign laws;
and in each such case the order or decree remains unstayed and in effect
for 60 days; or
(h) any judgment or judgements for the payment of money in an
aggregate amount in excess of $10,000,000 or its foreign currency
equivalent at the time is entered against the Corporation or any Restricted
Subsidiary, and shall not be waived, satisfied or discharged for any period
of 60 consecutive days during which a stay of enforcement shall not be in
effect.
The foregoing will constitute Eleventh Supplemental Indenture Events of
Default whatever the reason for any such Eleventh Supplemental Indenture Event
of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The term "BANKRUPTCY LAW" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
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An Eleventh Supplemental Indenture Event of Default under clause (d) is not
an Eleventh Supplemental Indenture Event of Default until the Trustee or the
Holders of at least 25% in aggregate principal amount of the 2009 Series Bonds
then outstanding notify the Corporation (and, in the case of such notice by
Holders, the Trustee) of the Eleventh Supplemental Indenture Event of Default
and the Corporation does not cure such Eleventh Supplemental Indenture Event of
Default within the time specified after receipt of such notice. Such notice
must specify the Eleventh Supplemental Indenture Event of Default, demand that
it be remedied and state that such notice is a "NOTICE OF DEFAULT".
The Corporation shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice or the lapse of time would become an
Eleventh Supplemental Indenture Event of Default, its status and what action the
Corporation is taking or proposes to take with respect thereto.
Section 6.02. Acceleration. The 2009 Series Bonds may be declared due and
payable, upon these conditions and in the manner and with the effect provided in
Section 10.01 of the Original Indenture. In addition, if an Eleventh
Supplemental Indenture Event of Default (other than an Event of Default
specified in Section 6.01(f) or 6.01(g)) occurs and is continuing, the Trustee
by notice to the Corporation, or the Holders of at least 25% in aggregate
principal amount of the 2009 Series Bonds then outstanding by notice to the
Corporation and the Trustee, may declare the principal amount of all the 2009
Series Bonds then outstanding plus accrued but unpaid interest to the date of
acceleration to be immediately due and payable. In case an Eleventh
Supplemental Indenture Event of Default specified in Section 6.01(f) or 6.01(g)
shall occur, such amount with respect to all the 2009 Series Bonds shall be due
and payable immediately without any declaration or other act on the part of the
Trustee or the Holders of the 2009 Series Bonds. Subject to the rights of the
holders of 25% in principal amount of all Bonds to accelerate the maturity of
all of the Bonds as provided by Section 10.01 of the Original Indenture, the
Holders of a majority in aggregate principal amount of the outstanding 2009
Series Bonds may by written notice to the Trustee and the Corporation rescind
any declaration of acceleration if the rescission would not conflict with any
judgment or decree, and if all existing Eleventh Supplemental Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration. No such rescission shall affect
any subsequent Eleventh Supplemental Indenture Event of Default or impair any
right consequent thereto.
Section 6.03. Other Remedies. If an Eleventh Supplemental Indenture Event
of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal of or interest on the 2009 Series Bonds
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or to enforce the performance of any provision of the 2009 Series Bonds or the
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the 2009 Series Bonds or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Bondholder in exercising any right or
remedy accruing upon an Eleventh Supplemental Indenture Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Eleventh Supplemental Indenture Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
Section 6.04. Waiver of Defaults. The Holders of a majority in aggregate
principal amount of the 2009 Series Bonds by written notice to the Trustee may
waive an existing Eleventh Supplemental Indenture Event of Default and its
consequences, except an Eleventh Supplemental Indenture Event of Default in the
payment of the principal of or interest on a 2009 Series Bond or an Eleventh
Supplemental Indenture Event of Default in respect of a provision that under
Section 8.07 cannot be amended without the consent of each Bondholder affected.
When an Eleventh Supplemental Indenture Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Eleventh
Supplemental Indenture Event of Default or impair any consequent right.
ARTICLE 7
Redemption of 2009 Series Bonds
Section 7.01. Optional Redemption of 2009 Series Bonds; Premiums Payable.
Except as set forth in the following paragraph, the 2009 Series Bonds will not
be redeemable at the option of the Corporation prior to March 1, 2004.
Thereafter, the 2009 Series Bonds will be redeemable at the option of the
Corporation, in whole or in part, on not less than 30 nor more than 60 days'
prior notice, upon payment of the redemption prices specified in the form of
definitive 2009 Series Bond hereinbefore set forth for redemption, together with
accrued interest (if any) to the date fixed for redemption.
At any time and from time to time prior to March 1, 2002 the Corporation
may redeem up to a maximum of 35% of the original aggregate principal amount of
the 2009 Series Bonds with the proceeds of one or more Public Equity Offerings
within 90 days after receipt of such proceeds, upon payment of a redemption
price equal to 109.875% of the principal amount thereof, together
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with accrued interest, if any, to the date fixed for redemption (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that after giving
effect to any such redemption, at least 65% of the original aggregate principal
amount of the 2009 Series Bonds remains outstanding. Any such redemption should
be made on a pro rate basis among all holders of 2009 Series Bonds.
Section 7.02. Surrender of Partially-redeemed 2009 Series Bonds. In the
event of the partial redemption of any of the 2009 Series Bonds the Trustee
shall not make any notation thereon as to the payment of a portion of the
principal amount of such partially-redeemed Bonds, but in accordance with
Section 5.01 of the Original Indenture such Bonds may be surrendered in exchange
for 2009 Series Bonds of authorized denominations for the unredeemed balance of
the principal amount of such partially-redeemed Bonds.
Section 7.03. Regarding Issue, Transfer and Exchange of 2009 Series Bonds
to be Redeemed. The Corporation shall not be required (i) to issue, transfer or
exchange any 2009 Series Bonds during a period beginning at the opening of
business 15 days next preceding any selection of 2009 Series Bonds to be
redeemed or thereafter until after the mailing of a notice of redemption of 2009
Series Bonds selected for redemption and ending at the close of business on the
day of such mailing, or (ii) to transfer or exchange any 2009 Series Bonds so
selected for redemption in whole or in part.
Section 7.04. Notices to Trustee. If the Corporation elects to redeem 2009
Series Bonds pursuant to this Article, it shall notify the Trustee in writing of
the redemption date, the principal amount of 2009 Series Bonds to be redeemed
and that such redemption is being made pursuant to the 2009 Series Bonds.
The Corporation shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Corporation to the effect that
such redemption will comply with the conditions herein.
Section 7.05. Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of 2009 Series Bonds, the Corporation shall
mail a notice of redemption by first-class mail to each Holder of 2009 Series
Bonds to be redeemed.
The notice shall identify the 2009 Series Bonds to be redeemed and shall
state:
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(i) the redemption date;
(ii) the redemption price;
(iii) the name and address of the Place of Payment;
(iv) that 2009 Series Bonds called for redemption must be surrendered
at the Place of Payment to collect the redemption price;
(v) if fewer than all the outstanding 2009 Series Bonds are to be
redeemed, the identification and principal amounts of the particular 2009
Series Bonds to be redeemed;
(vi) that, unless the Corporation defaults in making such redemption
payment or the Trustee or paying agent is prohibited from making such
payment pursuant to the terms of the Indenture, interest on 2009 Series
Bonds (or portion thereof) called for redemption ceases to accrue on and
after the redemption date; and
(vii) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the 2009
Series Bonds.
At the Corporation's request, the Trustee shall give the notice of
redemption in the Corporation's name and at the Corporation's expense. In such
event, the Corporation shall provide the Trustee with the information required
by this Section.
Section 7.06. Effect of Notice of Redemption. Once notice of redemption is
mailed, 2009 Series Bonds called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
at the Place of Payment, such 2009 Series Bonds shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date that is on or prior to
the date of redemption). Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
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<PAGE>
ARTICLE 8
Miscellaneous
Section 8.01. Acceptance of Trusts. The Trustees accept the trust created
by this Supplemental Indenture and agree to execute the same, but only on the
terms and conditions set forth in the Indenture, including the terms and
provisions defining and limiting the liabilities and responsibilities of the
Trustees. The Trustees make no representations and shall have no responsibility
as to the validity of this Supplemental Indenture or the Bonds issued hereunder
or the due execution thereof by the Corporation.
Section 8.02. Benefits Restricted to Parties and Holders of Bonds. Nothing
in this Supplemental Indenture, expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, other than the parties
hereto, and the holders of 2009 Series Bonds, any right, remedy or claim under
or by reason of this Supplemental Indenture or any covenant, condition or
stipulation hereof; all the covenants, stipulations, promises and agreements in
this Supplemental Indenture contained are and shall be for the sole and
exclusive benefit of the parties hereto and their successors and the holders of
such Bonds.
Section 8.03. Execution in Counterparts. This Supplemental Indenture may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original and all of such counterparts shall together constitute
a single instrument.
Section 8.04. Original Indenture and Supplements Construed as One
Instrument. The Original Indenture as heretofore supplemented and as
supplemented by this Supplemental Indenture is in all respects ratified and
confirmed; and the Original Indenture as heretofore supplemented and as
supplemented by this Supplemental Indenture shall be read, taken and construed
together as one instrument.
Section 8.05. Amount Advanced under Indenture. The amount which at the
time of the execution and delivery of this Supplemental Indenture has been
advanced or accrued and remains outstanding under the Original Indenture and all
instruments supplemental thereto, to and including this Supplemental Indenture,
is $375,000,000.
Section 8.06. With Consent of Holders. For so long as the 2009 Series
Bonds are outstanding, the Company may not amend this Supplemental Indenture or
the 2009 Series Bonds without the written consent of the Holders of at least a
majority in aggregate principal amount of the 2009 Series Bonds. Further,
without
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<PAGE>
the consent of each holder of 2009 Series Bonds affected thereby, an amendment
may not:
(1) reduce the percentage of 2009 Series Bonds whose Holders must
consent to an amendment or waiver;
(2) reduce the rate of or change the time for payment of interest on
any 2009 Series Bonds;
(3) reduce the principal of or extend the Stated Maturity of any 2009
Series Bonds;
(4) reduce the amount payable upon the redemption or repurchase of
any 2009 Series Bonds under Article 7 or Section 4.09 or 4.10 or change the
time at which any 2009 Series Bonds may be redeemed in accordance with
Article 7;
(5) make any 2009 Series Bonds payable in a currency other than that
stated in the 2009 Series Bonds;
(6) subordinate the 2009 Series Bonds to any other obligation of the
Corporation; or
(7) at any time after a Change of Control or Asset Sale has occurred,
change the time at which the Change of Control Offer or Prepayment Offer
relating thereto must be made or at which the 2009 Series Bonds must be
repurchased pursuant to such Change of Control Offer or Prepayment Offer.
Section 8.07. Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE 2009
SERIES BONDS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
Section 8.08. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the 2009 Series Bonds shall comply with the TIA as then in effect.
Section 8.09. Recitals. The recitals contained herein shall be taken as
the statements of the Company, and the Trustees assume no responsibility for
their correctness. The Trustees make no representations as to the validity or
sufficiency of this Eleventh Supplemental Indenture.
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<PAGE>
IN WITNESS WHEREOF, said National Steel Corporation has caused this
Supplemental Indenture to be executed on its behalf by one of its Senior Vice
Presidents and its Treasurer; said The Chase Manhattan Bank has caused this
Supplemental Indenture to be executed on its behalf as Trustee under the
Indenture by one of its Senior Trust Officers and its corporate seal to be
hereto affixed and said seal and this Supplemental Indenture to be attested by
one of its Trust Officers; and said Frank J. Grippo, as Individual Trustee under
the Indenture, has executed this Supplemental Indenture under seal; all as of
March 31, 1999.
NATIONAL STEEL CORPORATION
By: /s/ Glenn H. Gage
---------------------------------
Name: Glenn H. Gage
Title: Senior Vice President and
Chief Financial Officer
By: /s/ William E. McDonough
----------------------------------
Name: William E. McDonough
Title:Treasurer
88
<PAGE>
[CORPORATE SEAL]
The Chase Manhattan Bank, as Trustee
By: /s/ L. O'Brien
---------------------------------
Name: L. O'BRIEN
Title: Vice President
Attest:
/s/ Natalia Rodriguez
- ------------------------------
Name: NATALIA RODRIGUEZ
Title: TRUST OFFICER
Signed, sealed and delivered by
The Chase Manhattan Bank
in the presence of:
/s/ Eric S. Butler
- ------------------------------
ERIC S. BUTLER
ADMINISTRATOR
/s/ Natalie B Pesce
- ------------------------------
As Witnesses
NATALIE B. PESCE
ADMINISTRATOR
/s/ Frank J. Grippo
---------------------------------
FRANK J. GRIPPO
As Individual Trustee
Signed, sealed and delivered by
Frank J. Grippo
in the presence of:
/s/ Eric S. Butler
- ------------------------------
ERIC S. BUTLER
ADMINISTRATOR
/s/ Natalie B. Pesce
- ------------------------------
As Witnesses
NATALIE B. PESCE
ADMINISTRATOR
89
<PAGE>
STATE OF Indiana )
)ss:
COUNTY OF St. Joseph )
I, Angela M. Starzyaski, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 29th day of March, 1999:
MICHIGAN
STATE OF _______________ )
ss.:
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by Glenn H. Gage of National Steel Corporation, a Delaware corporation, on
behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF _______________ )
ss.:
COUNTY OF ______________ )
Before me, a Notary Public, this 31 day of March, 1999, personally appeared
National Steel Corporation, a Delaware corporation, by Glenn H. Gage, Senior
Vice President and Chief Financial Officer, and acknowledged the execution of
the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF _______________ )
ss.:
COUNTY OF ______________ )
This instrument was acknowledged before me on March 31, 1999, by Glenn H.
Gage as Senior Vice President and Chief Financial Officer of National Steel
Corporation, a Delaware corporation.
[Notary Seal]
ILLINOIS
STATE OF _______________ )
ss.:
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by Glenn H. Gage, Senior Vice President and Chief Financial Officer of
National Steel Corporation, a Delaware corporation, on behalf of the
corporation.
[SEAL]
<PAGE>
MINNESOTA
STATE OF ____________ )
ss.:
COUNTY OF ___________ )
This instrument was acknowledged before me on March 31, 1999 by Glenn H.
Gage as Senior Vice President and Chief Financial Officer of National Steel
Corporation, a Delaware corporation.
[Notary Seal]
In WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Angela M. Starzynski
-------------------------------
Notary Public
[Notary Seal] Angela M. Starzynski
-------------------------------
Notary Public, State of Indiana
No.____________________________
Qualified in St. Joseph County
Commission Expires Jan. 28, 2000
My County of Residence: St. Joseph
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
I, Jose Miguel Flores, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 31st day of March, 1999:
MICHIGAN
STATE OF ____________ )
ss.:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this 31st day of March,
1999 by William E. McDonough of National Steel Corporation, a Delaware
corporation, on behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF ____________ )
ss.:
COUNTY OF __________ )
Before me, a Notary Public, this 31st day of March, 1999, personally
appeared National Steel Corporation, a Delaware corporation, by William E.
McDonough, Treasurer, and acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ______________ )
ss.:
COUNTY OF ____________ )
This instrument was acknowledged before me on March 31, 1999, by William E.
McDonough as Treasurer of National Steel Corporation, a Delaware corporation.
[Notary Seal]
ILLINOIS
STATE OF __________ )
ss.:
COUNTY OF _________ )
This foregoing instrument was acknowledged before me this 31st day of
March, 1999 by William E. McDonough, Treasurer of National Steel Corporation, a
Delaware corporation, on behalf of the corporation.
[SEAL]
<PAGE>
MINNESOTA
STATE OF __________ )
ss.:
COUNTY OF _________ )
This instrument was acknowledged before me on March 31, 1999 by William E.
McDonough as Treasurer of National Steel Corporation, a Delaware corporation.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Jose Miguel Flores
----------------------
Notary Public
[Notary Seal] JOSE MIGUEL FLORES
NOTARY PUBLIC, State of New York
No. 01 FL6013568
Qualified in Kings County
Commission Expires Sept. 01, 2001
<PAGE>
STATE OF NEW YORK )
)ss:
COUNTY OF NEW YORK )
I, _______________, the undersigned officer, a notary public duly
qualified, commissioned, sworn and acting in and for said County in said State,
hereby certify, that on this 31th day of March, 1999:
MICHIGAN
STATE OF ___________ )
ss:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by L. O' Brien of The Chase Manhatten Bank, a New York corporation, on
behalf of the corporation.
[Notary Seal]
INDIANA
STATE OF ___________ )
)ss:
COUNTY OF __________ )
Before me, a Notary Public, this 31 day of March, 1999, personally appeared
The Chase Manhatten Bank, a New york corporation, by L. O Brien, Vice President,
and acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF __________ )
ss.:
COUNTY OF _________ )
This instrument was acknowledged before me on March 31, 1999, by L. O'Brien
as Vice President of The Chase Manhattan Bank, a New York corporation.
[Notary Seal]
ILLINOIS
STATE OF ___________ )
ss.:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by L. O'Brien, Vice President of The Chase Manhattan Bank, a New York
corporation, on behalf of the corporation.
[SEAL]
<PAGE>
MINNESOTA
STATE OF ___________ )
ss.:
COUNTY OF __________ )
This instrument was acknowledged before me on March 31, 1999 by L. O'Brien
as Vice President of The Chase Manhattan Bank, a New York corporation.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Emily Fayan
--------------------------
Notary Public
[Notary Seal] EMILY FAYAN
Notary Public, State of New York
No. 24-4737006
Qualified in Kings County
Certificate Filed in New York County
Commission Expires December 31, 1999
<PAGE>
STATE OF NEW YORK ______________ )
) ss:
COUNTY OF NEW YORK _____________ )
I, EMILY FAYAN, the undersigned officer, a notary public duly qualified,
commissioned, sworn and acting in and for said County in said State, hereby
certify, that on this 31th day of March, 1999:
MICHIGAN
STATE OF _____________ )
ss.:
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by Frank J. Grippo.
[Notary Seal]
INDIANA
STATE OF _____________ )
ss.:
COUNTY OF ____________ )
Before me, a Notary Public, this 31 day of March, 1999, Frank J. Grippo,
acknowledged the execution of the annexed instrument.
[Notary Seal]
<PAGE>
WISCONSIN
STATE OF ____________ )
ss.:
COUNTY OF ___________ )
This instrument was acknowledged before me on March 31, 1999 by Frank J.
Grippo.
[Notary Seal]
ILLINOIS
STATE OF __________ )
ss.:
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this 31 day of March,
1999 by Frank J. Grippo.
[Notary Seal]
<PAGE>
MINNESOTA
STATE OF___________ )
ss.:
COUNTY OF__________ )
This instrument was acknowledged before me on March 31, 1999 by Frank J.
Grippo.
[Notary Seal]
IN WITNESS WHEREOF I have hereunto set my hand and official seal of office
the day and year first above written.
/s/ Emily Fayan
----------------------------
Notary Public
[Notary Seal]
<PAGE>
EXHIBIT 4-I
NATIONAL STEEL CORPORATION
$ 225,000,000
FIRST MORTGAGE BONDS, 9 7/8% SERIES DUE 2009
REGISTRATION RIGHTS AGREEMENT
New York, New York
March 8, 1999
SALOMON SMITH BARNEY INC.
J.P. MORGAN SECURITIES INC.
As Representatives of the Initial Purchasers
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
National Steel Corporation, a corporation organized under the laws of
Delaware (the "Company"), proposes to issue and sell to certain purchasers (the
"Initial Purchasers"), upon the terms set forth in a purchase agreement of even
date herewith (the "Purchase Agreement"), its $225,000,000 First Mortgage Bonds,
9 7/8% Series A Due 2009 (the "Securities") relating to the initial placement of
the Securities (the "Initial Placement"). To induce the Initial Purchasers to
enter into the Purchase Agreement and to satisfy a condition of your obligations
thereunder, the Company agrees with you for your benefit and the benefit of the
holders from time to time of the Securities (including the Initial Purchasers)
(each a "Holder" and, together, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified Person shall mean (a) any other Person that,
directly or indirectly through one or more intermediaries, is in control of, is
controlled by, or is under common control with, such specified Person or (b) any
<PAGE>
other Person who is a director or officer of (i) such specified Person, (ii) any
Subsidiary of such specified Person or (iii) any Person described in clause (a)
above. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise; and the terms
"controlling" and "controlled" shall have meanings correlative to the foregoing.
"Broker-Dealer" shall mean any broker or dealer registered as such under
the Exchange Act.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" shall mean the one-year period
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" shall mean a registration statement
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments thereto, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Exchanging Dealer" shall mean any Holder (which may include any Initial
Purchaser) that is a Broker-Dealer and elects to exchange for New Securities any
Securities that it acquired for its own account as a result of market-making
activities or other trading activities (but not directly from the Company or any
Affiliate of the Company) for New Securities.
"Final Memorandum" shall have the meaning set forth in the Purchase
Agreement.
"Holder" shall have the meaning set forth in the preamble hereto.
2
<PAGE>
"Indenture" shall mean the Indenture relating to the Securities, dated as
of February ____, Frank J. Grippo, as trustees, as the same may be amended from
time to time in accordance with the terms thereof.
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchasers" shall have the meaning set forth in the preamble
hereto.
"Losses" shall have the meaning set forth in Section 6(d) hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" shall mean the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering.
"New Securities" shall mean debt securities of the Company identical in all
material respects to the Securities (except that the interest rate step-up
provisions and the transfer restrictions shall be modified or eliminated, as
appropriate) and to be issued under the Indenture or the New Securities
Indenture.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the New Securities covered by such
Registration Statement, and all amendments and supplements thereto and all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
hereto.
"Registered Exchange Offer" shall mean the proposed offer of the Company to
issue and deliver to the Holders of the Securities that are not prohibited by
any law or policy of the Commission from participating in such offer, in
exchange for the Securities, a like aggregate principal amount of the New
Securities.
3
<PAGE>
"Registration Statement" shall mean any Exchange Offer Registration
Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, any amendments
and supplements to such registration statement, including post-effective
amendments (in each case including the Prospectus contained therein), all
exhibits thereto and all material incorporated by reference therein.
"Securities" shall have the meaning set forth in the preamble hereto.
"Shelf Registration" shall mean a registration effected pursuant to Section
3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Subsidiary" means, in respect of any specified Person, any corporation,
partnership, joint venture, association or other business entity of which more
than 50% of the total voting power of shares or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
"Underwriter" shall mean any underwriter of Securities in connection with
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer. (a) The Company shall prepare and, not
later than 60 days following the date of the original issuance of the Securities
(or if such 60th day is not a Business Day, the next succeeding Business Day),
shall file with the Commission the Exchange Offer Registration Statement with
respect to the Registered Exchange Offer. The Company shall cause the Exchange
Offer
4
<PAGE>
Registration Statement to become effective under the Act within 150 days of the
date of the original issuance of the Securities (or if such 150th day is not a
Business Day, the next succeeding Business Day).
(b) Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for New Securities (assuming that such Holder is not an
Affiliate of the Company, acquires the New Securities in the ordinary course of
such Holder's business, has no arrangements with any Person to participate in
the distribution of the New Securities and is not prohibited by any law or
policy of the Commission from participating in the Registered Exchange Offer) to
trade such New Securities from and after their receipt without any limitations
or restrictions under the Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.
(c) In connection with the Registered Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act, supplemented and amended as
required, under the Act to ensure that it is available for sales of New
Securities by Exchanging Dealers during the Exchange Offer Registration
Period;
(iv) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan in New York
City, which may be the Trustee, the New Securities Trustee or an Affiliate
of either of them;
(v) prior to effectiveness of the Exchange Offer Registration
Statement, provide a letter to the Commission (A) stating that the Company
is conducting the Registered Exchange Offer in reliance on the position of
the Commission in Exxon Capital Holdings Corporation (pub.
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<PAGE>
avail. May 13, 1988) and, Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991); and (B) including a representation that the Company has not entered
into any arrangement or understanding with any Person to distribute the New
Securities to be received in the Registered Exchange Offer and that, to the
best of the Company's information and belief, each Holder participating in
the Registered Exchange Offer is acquiring the New Securities in the
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the New Securities; and
(vi) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(i) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation in accordance with
Section 4(s) all Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to
each Holder of Securities a principal amount of New Securities equal to the
principal amount of the Securities of such Holder so accepted for exchange.
(e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Registered Exchange Offer to participate in a
distribution of the New Securities (x) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the Commission in
Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital
Holdings Corporation (pub. avail. May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993 and similar no-
action letters; and (y) must comply with the registration and prospectus
delivery requirements of the Act in connection with any secondary resale
transaction and must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K under the Act if the resales are of New
Securities obtained by such Holder in exchange for Securities acquired by such
Holder directly from the Company or one of its Affiliates. Accordingly, each
Holder participating in the Registered Exchange Offer shall be required to
represent to the Company that, at the time of the commencement of the Registered
Exchange Offer:
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<PAGE>
(i) any New Securities received by such Holder will be acquired
in the ordinary course of business;
(ii) such Holder will have no arrangement or understanding with
any Person to participate in the distribution of the Securities or the New
Securities within the meaning of the Act; and
(iii) such Holder is not an Affiliate of the Company.
(f) If any Initial Purchaser determines that it is not eligible to
participate in the Registered Exchange Offer with respect to the exchange of
Securities constituting any portion of an unsold allotment, at the request of
such Initial Purchaser, the Company shall issue and deliver to such Initial
Purchaser or the Person purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from such Initial
Purchaser, in exchange for such Securities, a like principal amount of New
Securities. The Company shall use its reasonable best efforts to cause the
CUSIP Service Bureau to issue the same CUSIP number for such New Securities as
for New Securities issued pursuant to the Registered Exchange Offer.
3. Shelf Registration. (a) If (i) due to any change in law or
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof; or (ii) for
any other reason the Exchange Offer Registration Statement is not declared
effective within 150 days after the date of the original issuance of the
Securities or the Registered Exchange Offer is not consummated within 180 days
after the date of the original issuance of the Securities; (iii) the Initial
Purchasers so request with respect to Securities that are not eligible to be
exchanged for New Securities in the Registered Exchange Offer and that are held
by it following consummation of the Registered Exchange Offer; (iv) any Holder
(other than an Initial Purchaser) is not eligible to participate in the
Registered Exchange Offer and so notifies the Company as soon as practicable,
but in any event not later than 30 days following the consummation of the
Registered Exchange Offer; or (v) in the case of any Initial Purchaser that
participates in the Registered Exchange Offer or acquires New Securities
pursuant to Section 2(f) hereof, such Initial Purchaser does not receive freely
tradeable New Securities in exchange for Securities constituting any portion of
an unsold allotment (it being understood that (x) the requirement that an
Initial Purchaser deliver a Prospectus containing the information required by
Item 507 or 508 of Regulation S-K under the Act in connection with sales of New
Securities acquired in exchange for such Securities shall result in such New
Securities being not "freely tradeable"; and (y) the requirement that an
Exchanging Dealer deliver a Prospectus in connection with sales of New
7
<PAGE>
Securities acquired in the Registered Exchange Offer in exchange for Securities
acquired as a result of market-making activities or other trading activities
shall not result in such New Securities being not "freely tradeable"), the
Company shall effect a Shelf Registration Statement in accordance with
subsection (b) below.
(b)(i) The Company shall as promptly as practicable (but in no event more
than 60 days after so required or requested pursuant to this Section 3), file
with the Commission and thereafter shall use its best efforts to cause to be
declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the Securities or the New Securities, as applicable, by the
Holders thereof from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement;
provided, however, that no Holder (other than an Initial Purchaser) shall be
entitled to have the Securities held by it covered by such Shelf Registration
Statement unless such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder; and provided further,
that with respect to New Securities received by an Initial Purchaser in exchange
for Securities constituting any portion of an unsold allotment, the Company may,
if permitted by current interpretations by the Commission's staff, file a post-
effective amendment to the Exchange Offer Registration Statement containing the
information required by Item 507 or 508 of Regulation S-K, as applicable, in
satisfaction of its obligations under this subsection with respect thereto, and
any such Exchange Offer Registration Statement, as so amended, shall be referred
to herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.
(ii) The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to
be usable by Holders for a period of two years from the date the Shelf
Registration Statement is declared effective by the Commission or such shorter
period that will terminate when all the Securities or New Securities, as
applicable, covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being called
the "Shelf Registration Period"). The Company shall be deemed not to have used
its best efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders
of Securities covered thereby not being able to offer and sell such Securities
during that period, unless (A) such action is required by applicable law; or (B)
such action is taken by the Company in good faith and for valid business reasons
(not including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, so long as the Company promptly thereafter
complies with the requirements of Section 4(k) hereof, if applicable.
8
<PAGE>
(iii) The Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement or such amendment or supplement, (A) to
comply in all material respects with the applicable requirements of the
Securities Act and the rules and regulations of the Commission; and (B) not to
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
4. Additional Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.
(a) The Company shall:
(i) furnish to you, and provide a reasonable opportunity to review
and comment upon, prior to the filing thereof with the Commission, a copy
of any Exchange Offer Registration Statement and any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if
any, to the Prospectus included therein and shall give reasonable
consideration to any comments that you reasonably propose;
(ii) include the information set forth in Annex A hereto on the
facing page of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a section
setting forth details of the Exchange Offer, in Annex C hereto in the
underwriting or plan of distribution section of the Prospectus contained in
the Exchange Offer Registration Statement, and in Annex D hereto in the
letter of transmittal delivered pursuant to the Registered Exchange Offer;
provided, however, that the Company may make such changes as it considers
reasonably necessary to comply with the "Plain English" rules of the SEC;
(iii) if requested by an Initial Purchaser, include the information
required by Item 507 or 508 of Regulation S-K, as applicable, in the
Prospectus contained in the Exchange Offer Registration Statement; and
(iv) in the case of a Shelf Registration Statement, include the
names of the Holders that propose to sell Securities pursuant to the Shelf
Registration Statement as selling security holders.
9
<PAGE>
(b) The Company shall ensure that (other than with respect to information
required to be provided by the selling Holders:
(i) any Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto
complies in all material respects with the Act and the rules and
regulations thereunder; and
(ii) any Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(c) The Company shall advise you and the Holders of Securities covered by
any Shelf Registration Statement, and any Exchanging Dealer under the Exchange
Offer Registration Statement that has provided in writing to the Company a
telephone or facsimile number and address for notices, and, if requested by you
or any such Holder or Exchanging Dealer, shall confirm such advice in writing
(which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an
instruction to suspend the use of the Prospectus until the Company shall have
remedied the basis for such suspension):
(i) when a Registration Statement and any amendment thereto has been
filed with the Commission and when the Registration Statement or any post-
effective amendment thereto has become effective;
(ii) of any request by the Commission for any amendment or supplement
to the Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included therein
for sale in any jurisdiction or the initiation of any proceeding for such
purpose; and
(v) of the happening of any event that requires any change in the
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material
fact required to be stated therein or necessary to make the statements
10
<PAGE>
therein (in the case of the Prospectus, in the light of the circumstances
under which they were made) not misleading.
(d) The Company shall use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement or the qualification of the securities therein for sale in any
jurisdiction at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities covered by any
Shelf Registration Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendment thereto, including all
material incorporated therein by reference, and, if the Holder so requests in
writing, all exhibits thereto (including exhibits incorporated by reference
therein).
(f) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Securities covered by any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request. The Company consents to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of securities in connection with the offering and sale of the securities
covered by the Prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement.
(g) The Company shall furnish to each Exchanging Dealer which so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including all material incorporated by
reference therein, and, if the Exchanging Dealer so requests in writing, all
exhibits thereto (including exhibits incorporated by reference therein).
(h) The Company shall promptly deliver to each Initial Purchaser, each
Exchanging Dealer and each other Person required to deliver a Prospectus during
the Exchange Offer Registration Period, without charge, as many copies of the
Prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as any such Person may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any Initial Purchaser, any Exchanging Dealer and any such other
Person that may be required to deliver a Prospectus following the Registered
Exchange Offer in connection with the offering and sale of the New Securities
covered by the Prospectus, or any amendment or supplement thereto, included in
the Exchange Offer Registration Statement.
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<PAGE>
(i) Prior to the Registered Exchange Offer or any other offering of
Securities pursuant to any Registration Statement, the Company shall arrange, if
necessary, for the qualification of the Securities or the New Securities for
sale under the laws of such jurisdictions as any Holder shall reasonably request
and will maintain such qualification in effect so long as required; provided
that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
Initial Placement, the Registered Exchange Offer or any offering pursuant to a
Shelf Registration Statement, in any such jurisdiction where it is not then so
subject.
(j) The Company shall cooperate with the Holders of Securities to
facilitate the timely preparation and delivery of certificates representing New
Securities or Securities to be issued or sold pursuant to any Registration
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request.
(k) Upon the occurrence of any event contemplated by subsections (c)(ii)
through (v) above, the Company shall promptly prepare a post-effective amendment
to the applicable Registration Statement or an amendment or supplement to the
related Prospectus or file any other required document so that, as thereafter
delivered to Initial Purchasers of the securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading. In such
circumstances, the period of effectiveness of the Exchange Offer Registration
Statement provided for in Section 2 and the Shelf Registration Statement
provided for in Section 3(b) shall each be extended by the number of days from
and including the date of the giving of a notice of suspension pursuant to
Section 4(c) to and including the date when the Initial Purchasers, the Holders
of the Securities and any known Exchanging Dealer shall have received such
amended or supplemented Prospectus pursuant to this Section.
(l) Not later than the effective date of any Registration Statement, the
Company shall provide a CUSIP number for the Securities or the New Securities,
as the case may be, registered under such Registration Statement and provide the
Trustee with printed certificates for such Securities or New Securities, in a
form eligible for deposit with The Depository Trust Company.
(m) The Company shall comply with all applicable rules and regulations of
the Commission and shall make generally available to its security holders as
soon as practicable after the effective date of the applicable Registration
12
<PAGE>
Statement an earnings statement satisfying the provisions of Section 11(a) of
the Act.
(n) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a timely manner.
(o) The Company may require each Holder of securities to be sold pursuant
to any Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such securities as the Company may
from time to time reasonably require for inclusion in such Registration
Statement. The Company may exclude from such Shelf Registration Statement the
Securities of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(p) In the case of any Shelf Registration Statement, the Company shall
enter into such agreements and take all other appropriate actions (including if
requested an underwriting agreement in customary form) in order to expedite or
facilitate the registration or the disposition of the Securities, and in
connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less favorable than
those set forth in Section 6 (or such other provisions and procedures acceptable
to the Majority Holders and the Managing Underwriters, if any, with respect to
all parties to be indemnified pursuant to Section 6).
(q) In the case of any Shelf Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Holders of
Securities to be registered thereunder, any underwriter participating in
any disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such underwriter
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or any
such underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; provided, however, that the Company may require that such
persons execute a confidentiality agreement (which shall include customary
exceptions) prior to the receipt of any such information;
(iii) make such representations and warranties to the Holders
of Securities registered thereunder and the underwriters, if any, in form,
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<PAGE>
substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to
the Managing Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each selling Holder of Securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section 4(k) and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
shall be performed at (A) the effectiveness of such Registration Statement and
each post-effective amendment thereto; and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(r) In the case of any Exchange Offer Registration Statement, the Company
shall:
(i) make reasonably available for inspection by such Initial
Purchaser, and any attorney, accountant or other agent retained by such
Initial Purchaser, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
14
<PAGE>
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by such Initial
Purchaser or any such attorney, accountant or agent in connection with any
such Registration Statement as is customary for similar due diligence
examinations; provided, however, that the Company may require that such
persons execute a confidentiality agreement (which shall include customary
exceptions) prior to the receipt of any such information;
(iii) make such representations and warranties to such Initial
Purchaser, in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to
such Initial Purchaser and its counsel, addressed to such Initial
Purchaser, covering such matters as are customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Initial Purchaser or its counsel;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to such Initial Purchaser, in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with primary underwritten offerings, or if requested
by such Initial Purchaser or its counsel in lieu of a "cold comfort"
letter, an agreed-upon procedures letter under Statement on Auditing
Standards No. 35, covering matters requested by such Initial Purchaser or
its counsel; and
(vi) deliver such documents and certificates as may be reasonably
requested by such Initial Purchaser or its counsel, including those to
evidence compliance with Section 4(k) and with conditions customarily
contained in underwriting agreements.
The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of
this Section shall be performed at the close of the Registered Exchange Offer
and the effective date of any post-effective amendment to the Exchange Offer
Registration Statement.
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<PAGE>
(s) If a Registered Exchange Offer is to be consummated, upon delivery of
the Securities by Holders to the Company (or to such other Person as directed by
the Company) in exchange for the New Securities, the Company shall mark, or
caused to be marked, on the Securities so exchanged that such Securities are
being canceled in exchange for the New Securities. In no event shall the
Securities be marked as paid or otherwise satisfied.
(t) The Company will use its reasonable best efforts if the Securities
have been rated prior to the initial sale of such Securities, to confirm such
ratings will apply to the Securities or the New Securities, as the case may be,
covered by a Registration Statement.
(u) In the event that any Broker-Dealer shall underwrite any Securities or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc.) thereof,
whether as a Holder of such Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist such
Broker-Dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by:
(i) if such Rules or By-Laws shall so require, engaging a "qualified
independent underwriter" (as defined in such Rules) to participate in the
preparation of the Registration Statement, to exercise usual standards of
due diligence with respect thereto and, if any portion of the offering
contemplated by such Registration Statement is an underwritten offering or
is made through a placement or sales agent, to recommend the yield of such
Securities;
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 6 hereof;
and
(iii) providing such information to such Broker-Dealer as may be
required in order for such Broker-Dealer to comply with the requirements of
such Rules.
(iv) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Securities or the New
Securities, as the case may be, covered by a Registration Statement.
5. Registration Expenses. The Company shall bear all expenses incurred in
connection with the performance of its obligations under Sections 2, 3
16
<PAGE>
and 4 hereof and, in the event of any Shelf Registration Statement, will
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchasers for the reasonable fees and
disbursements of counsel acting in connection therewith.
6. Indemnification and Contribution. The Company agrees to indemnify and
hold harmless each Holder of Securities or New Securities, as the case may be,
covered by any Registration Statement (including each Initial Purchaser and,
with respect to any Prospectus delivery as contemplated in Section 4(h) hereof,
each Exchanging Dealer), the directors, officers, employees and agents of each
such Holder and each Person who controls any such Holder within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several (including, without
limitation, the reasonable legal fees and other reasonable expenses incurred in
connection with any suit, action or proceeding or any claim asserted), to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement as
originally filed or in any amendment thereof, or in any preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute as provided in Section
6(d) to Losses of any underwriter of Securities or New Securities, as the case
may be, registered under a Shelf Registration Statement, their directors,
officers, employees or agents and each Person who controls such underwriter on
substantially the same basis as that of the indemnification of the Initial
Purchasers
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<PAGE>
and the selling Holders provided in this Section 6(a) and shall, if requested by
any Holder, enter into an underwriting agreement reflecting such agreement, as
provided in Section 4(p) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees
to indemnify and hold harmless the Company, its directors and officers and each
other Person who controls the Company within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6 or
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the
18
<PAGE>
indemnifying party; (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action;
or (iv) the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. It is understood and
agreed, however, that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate counsel for all such
indemnified parties (and any local counsel) and that all such fees and expenses
shall be reimbursed as they are incurred. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify any indemnified party
from and against any loss or liability by reason of such settlement or judgment
except as otherwise provided herein. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party shall have a joint
and several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and the Registration Statement which resulted in such Losses; provided, however,
that in no case shall any Initial Purchaser or any subsequent Holder of any
Security or New Security be responsible, in the aggregate, for any amount in
excess of the purchase discount or commission applicable to such Security, or in
the case of a New Security, applicable to the Security that was exchangeable
into such New Security, as set forth on the cover page of the Final Memorandum,
nor shall any underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by
such underwriter under the Registration Statement which resulted in such Losses.
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion
19
<PAGE>
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the sum of (x)
the total net proceeds from the Initial Placement (before deducting expenses) as
set forth on the cover page of the Final Memorandum and (y) the total amount of
additional interest which the Company was not required to pay as a result of
registering the securities covered by the Registration Statement which resulted
in such Losses. Benefits received by the Initial Purchasers shall be deemed to
be equal to the total purchase discounts and commissions as set forth on the
cover page of the Final Memorandum, and benefits received by any other Holders
shall be deemed to be equal to the value of receiving Securities or New
Securities, as applicable, registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. Relative fault shall
be determined by reference to, among other things, whether any alleged untrue
statement or omission relates to information provided by the indemnifying party,
on the one hand, or by the indemnified party, on the other hand, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The parties agree that
it would not be just and equitable if contribution were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 6, each Person who controls a Holder within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act and each director,
officer, employee and such agent of such Holder shall have the same rights to
contribution as such Holder, and each Person who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, each
officer and director of the Company shall have the same rights to contribution
as the Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
(e) The indemnity and contribution agreements contained in this Section 6
are in addition to any liability which the indemnifying parties may otherwise
have to the indemnified parties referred to above. The indemnity and
contribution agreements contained in this Section 6 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any
20
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investigation made by or on behalf of any indemnified party or any person
controlling any indemnified party or by or on behalf of the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of or exchange of any of the Securities for any of the New
Securities.
7. Underwritten Registrations. (a) If any of the Securities or New
Securities, as the case may be, covered by any Shelf Registration Statement are
to be sold in an underwritten offering, the Managing Underwriters shall be
selected by the Majority Holders.
(b) No Person may participate in any underwritten offering pursuant to any
Shelf Registration Statement, unless such Person (i) agrees to sell such
Person's Securities or New Securities, as the case may be, on the basis
reasonably provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements; and (ii completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
8. No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
9. Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders (or, after the consummation of any Registered Exchange Offer in
accordance with Section 2 hereof, of New Securities); provided that, with
respect to any matter that directly or indirectly affects the rights of any
Initial Purchaser hereunder, the Company shall obtain the written consent of
each such Initial Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to departure from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Securities or New Securities, as the case may be, are
being sold pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Securities or New Securities, as the case
may be, being sold rather than registered under such Registration Statement.
21
<PAGE>
10. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such holder to
the Company in accordance with the provisions of this Section, which address
initially is, with respect to each Holder, the address of such Holder maintained
by the Registrar under the Indenture, with a copy in like manner to Salomon
Smith Barney Inc;
(b) if to you, initially at the respective addresses set forth in the
Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the Purchase
Agreement.
All such notices and communications shall be deemed to have been duly given
when received.
The Initial Purchasers or the Company by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including,
without the need for an express assignment or any consent by the Company
thereto, subsequent Holders of Securities and the New Securities. The Company
hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and the New Securities, and any such Holder may specifically enforce
the provisions of this Agreement as if an original party hereto.
12. Counterparts. This agreement may be in signed counterparts, each of
which shall an original and all of which together shall constitute one and the
same agreement.
13. Headings. The headings used herein are for convenience only and shall
not affect the construction hereof.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York.
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<PAGE>
15. Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
16. Securities Held by the Company, etc. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Securities or New
Securities is required hereunder, Securities or New Securities, as applicable,
held by the Company or its Affiliates (other than subsequent Holders of
Securities or New Securities if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities or New
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
23
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a building agreement among the
Company and the several Initial Purchasers.
Very truly yours,
NATIONAL STEEL CORPORATION
By: /s/ Glen H. Gage
--------------------------------
Name: Glen H. Gage
Title: Senior Vice President
Chief Financial Officer
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
SALOMON SMITH BARNEY INC.
By: /s/ Rick Dowdle
---------------------------
Name: Rick Dowdle
Title: Associate
J.P. MORGAN SECURITIES INC.
By: /s/
---------------------------
Name:
Title:
24
<PAGE>
ANNEX A
Each Broker-Dealer that receives New Securities for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a Broker-Dealer in connection with resales of New
Securities received in exchange for Securities where such Securities were
acquired by such Broker-Dealer as a result of market-making activities or other
trading activities. The Company has agreed that, starting on the Expiration
Date (as defined herein) and ending on the close of business one year after the
Expiration Date, it will make this Prospectus available to any Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution".
25
<PAGE>
ANNEX B
Each Broker-Dealer that receives New Securities for its own account in exchange
for Securities, where such Securities were acquired by such Broker-Dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Securities. See "Plan of Distribution".
26
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each Broker-Dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business one
year after the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any Broker-Dealer for use in connection with any such
resale. In addition, until __________, 199__, all dealers effecting
transactions in the New Securities may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New Securities
by brokers-dealers. New Securities received by Broker-Dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-
Dealer that resales New Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such New Securities may be deemed to be an "underwriter" within
the meaning of the Securities Act and any profit of any such resale of New
Securities and any commissions or concessions received by any such Persons may
be deemed to be underwriting compensation under the Securities Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Broker-Dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holder of the Securities) other than commissions or concessions of any brokers
or
27
<PAGE>
dealers and will indemnify the holders of the Securities (including any Broker-
Dealers) against certain liabilities, including liabilities under the Securities
Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
28
<PAGE>
ANNEX D
Rider A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ____________________________________
Address: ____________________________________
____________________________________
Rider B
If the undersigned is not a Broker-Dealer, the undersigned represents that it
acquired the New Securities in the ordinary course of its business, it is not
engaged in, and does not intend to engage in, a distribution of New Securities
and it has not arrangements or understandings with any Person to participate in
a distribution of the New Securities. If the undersigned is a Broker-Dealer
that will receive New Securities for its own account in exchange for Securities,
it represents that the Securities to be exchange for New Securities were
acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus in connection with
any resale of such New Securities; however, by so acknowledging and by
delivering a prospectus, the undersigned will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act.
29
<PAGE>
EXHIBIT 4-J
NATIONAL STEEL CORPORATION
$ 75,000,000
FIRST MORTGAGE BONDS, 9 7/8% SERIES C DUE 2009
REGISTRATION RIGHTS AGREEMENT
New York, New York
March 31, 1999
Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
National Steel Corporation, a corporation organized under the laws of
Delaware (the "Company"), proposes to issue and sell to the purchaser (the
"Initial Purchaser") $75,000,000 of its First Mortgage Bonds, 9 7/8% Series C
Due 2009 (the "Securities"), upon the terms set forth in a purchase agreement
dated March 24, 1999 (the "Purchase Agreement") relating to the initial
placement of the Securities (the "Initial Placement"). To induce the Initial
Purchaser to enter into the Purchase Agreement and to satisfy a condition of
your obligations thereunder, the Company agrees with you for your benefit and
the benefit of the holders from time to time of the Securities (including the
Initial Purchaser) and the Series A Bonds (as defined below) (each, a "Holder"
and, together, the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
"Affiliate" of any specified Person (as defined in the Indenture) shall
mean (a) any other Person that, directly or indirectly through one or more
intermediaries, is in control of, is controlled by, or is under common control
with, such specified Person or (b) any other Person who is a director or officer
of (i) such specified Person, (ii) any Subsidiary of such specified Person or
(iii) any
<PAGE>
Person described in clause (a) above. For purposes of this definition, control
of a Person shall mean the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Broker-Dealer" shall mean any broker or dealer registered as such under
the Exchange Act.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" shall mean the one-year period
following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" shall mean a registration statement
of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, all amendments and supplements to such registration
statement, including post-effective amendments thereto, in each case including
the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Exchanging Dealer" shall mean any Holder (which may include the Initial
Purchaser) that is a Broker-Dealer and elects to exchange for New Securities any
Securities or Series A Bonds that it acquired for its own account as a result of
market-making activities or other trading activities (but not directly from the
Company or any Affiliate of the Company) for New Securities.
"Final Memorandum" shall have the meaning set forth in the Purchase
Agreement.
"Holder" shall have the meaning set forth in the preamble hereto.
2
<PAGE>
"Indenture" shall mean the Indenture of Mortgage and Deed of Trust dated
May 1, 1952 from the Company and Great Lakes Steel Corporation, a former wholly-
owned subsidiary of the Company which in 1966 was merged into the Company, to
City Bank Farmers Trust Company and Ralph E. Morton, as Trustees, as
supplemented by all instruments supplemental thereto, including a proposed
Eleventh Supplemental Indenture to be dated as of March 31, 1999, among the
Company and The Chase Manhattan Bank and Frank J. Grippo, as Trustees.
"Initial Placement" shall have the meaning set forth in the preamble
hereto.
"Initial Purchaser" shall have the meaning set forth in the preamble
hereto.
"Losses" shall have the meaning set forth in Section 6(d) hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
principal amount of securities registered under a Registration Statement.
"Managing Underwriters" shall mean the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering.
"New Securities" shall mean debt securities of the Company of a single
series identical in all material respects to the Securities and the Series A
Bonds (except that the interest rate step-up provisions and the transfer
restrictions shall be modified or eliminated, as appropriate) and to be issued
under the Indenture.
"Prospectus" shall mean the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities, the Series A Bonds or the New
Securities covered by such Registration Statement, and all amendments and
supplements thereto and all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
hereto.
"Registered Exchange Offer" shall mean the proposed offer of the Company to
issue and deliver to the Holders of the Securities and the Series A Bonds that
are not prohibited by any law or policy of the Commission from
3
<PAGE>
participating in such offer, in exchange for the Securities and the Series A
Bonds, a like aggregate principal amount of the New Securities.
"Registration Statement" shall mean any Exchange Offer Registration
Statement that covers any of the Securities, the Series A Bonds or the New
Securities or Shelf Registration Statement that covers any of the Securities,
the Series A Bonds or the New Securities pursuant to the provisions of this
Agreement, any amendments and supplements to such registration statement,
including post-effective amendments (in each case including the Prospectus
contained therein), all exhibits thereto and all material incorporated by
reference therein.
"Securities" shall have the meaning set forth in the preamble hereto.
"Series A Bonds" refers to the Company's First Mortgage Bonds, 9 7/8%
Series A
Due 2009 limited in aggregate principal amount to $225,000,000 issued on March
8, 1999 under the Indenture.
"Shelf Registration" shall mean a registration effected pursuant to Section
3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Subsidiary" means, in respect of any specified Person, any corporation,
partnership, joint venture, association or other business entity of which more
than 50% of the total voting power of shares or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"Trustee" shall mean the trustee with respect to the Securities under the
Indenture.
4
<PAGE>
"Underwriter" shall mean any underwriter of Securities in connection with
an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer. (a) The Company shall prepare and, not
later than 60 days following the date of the original issuance of the Series A
Bonds (or if such 60th day is not a Business Day, the next succeeding Business
Day), shall file with the Commission the Exchange Offer Registration Statement
with respect to the Registered Exchange Offer. The Company shall cause the
Exchange Offer Registration Statement to become effective under the Act within
150 days of the date of the original issuance of the Series A Bonds (or if such
150th day is not a Business Day, the next succeeding Business Day).
(b) Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities or Series A Bonds for New Securities (assuming that such
Holder is not an Affiliate of the Company, acquires the New Securities in the
ordinary course of such Holder's business, has no arrangements with any Person
to participate in the distribution of the New Securities and is not prohibited
by any law or policy of the Commission from participating in the Registered
Exchange Offer) to trade such New Securities from and after their receipt
without any limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than 30
days after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act, supplemented and amended as
required, under the Act to ensure that it is available for sales of New
Securities by Exchanging Dealers during the Exchange Offer Registration
Period;
5
<PAGE>
(iv) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan in New York City, which
may be the Trustee, the Trustee or an Affiliate of either of them;
(v) prior to effectiveness of the Exchange Offer Registration
Statement, provide a letter to the Commission (A) stating that the Company
is conducting the Registered Exchange Offer in reliance on the position of
the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13,
1988) and, Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B)
including a representation that the Company has not entered into any
arrangement or understanding with any Person to distribute the New
Securities to be received in the Registered Exchange Offer and that, to the
best of the Company's information and belief, each Holder participating in
the Registered Exchange Offer is acquiring the New Securities in the
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the New Securities; and
(vi) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company shall:
(i) accept for exchange all Securities and/or Series A Bonds
tendered and not validly withdrawn pursuant to the Registered Exchange
Offer;
(ii) deliver to the Trustee for cancellation in accordance with
Section 4(s) all Securities and/or Series A Bonds so accepted for exchange;
and
(iii) cause the Trustee promptly to authenticate and deliver to each
holder of Securities and/or Series A Bonds a principal amount of New
Securities equal to the principal amount of the Securities and/or Series A
Bonds of such holder so accepted for exchange.
(e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and
any such Holder using the Registered Exchange Offer to participate in a
distribution of the New Securities (x) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the Commission in
Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital
Holdings Corporation (pub. avail. May 13, 1988), as interpreted in the
6
<PAGE>
Commission's letter to Shearman & Sterling dated July 2, 1993 and similar no-
action letters; and (y) must comply with the registration and prospectus
delivery requirements of the Act in connection with any secondary resale
transaction and must be covered by an effective registration statement
containing the selling security holder information required by Item 507 or 508,
as applicable, of Regulation S-K under the Act if the resales are of New
Securities obtained by such Holder in exchange for Securities or Series A Bonds
acquired by such Holder directly from the Company or one of its Affiliates.
Accordingly, each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that, at the time of the commencement of
the Registered Exchange Offer:
(i) any New Securities received by such Holder will be acquired in
the ordinary course of business;
(ii) such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Securities, the Series A
Bonds or the New Securities within the meaning of the Act; and
(iii) such Holder is not an Affiliate of the Company.
(f) If the Initial Purchaser determines that it is not eligible to
participate in the Registered Exchange Offer with respect to the exchange of
Securities and Series A Bonds constituting any portion of an unsold allotment,
at the request of the Initial Purchaser, the Company shall issue and deliver to
the Initial Purchaser or the Person purchasing New Securities registered under a
Shelf Registration Statement as contemplated by Section 3 hereof from the
Initial Purchaser, in exchange for such Securities or Series A Bonds, a like
principal amount of New Securities. The Company shall use its reasonable best
efforts to cause the CUSIP Service Bureau to issue the same CUSIP number for
such New Securities as for New Securities issued pursuant to the Registered
Exchange Offer.
3. Shelf Registration. (a) If (i) due to any change in law or
applicable interpretations thereof by the Commission's staff, the Company
determines upon advice of its outside counsel that it is not permitted to effect
the Registered Exchange Offer as contemplated by Section 2 hereof; or (ii) for
any other reason the Exchange Offer Registration Statement is not declared
effective within 150 days after the date of the original issuance of the Series
A Bonds or the Registered Exchange Offer is not consummated within 180 days
after the date of the original issuance of the Series A Bonds; (iii) the Initial
Purchaser so requests with respect to Securities that are not eligible to be
exchanged for New Securities in the Registered Exchange Offer and that are held
by it following consummation of the Registered Exchange Offer; (iv) any Holder
(other than the Initial Purchaser) is
7
<PAGE>
not eligible to participate in the Registered Exchange Offer and so notifies the
Company as soon as practicable, but in any event not later than 30 days
following the consummation of the Registered Exchange Offer; or (v) in the case
the Initial Purchaser participates in the Registered Exchange Offer or acquires
New Securities pursuant to Section 2(f) hereof, the Initial Purchaser does not
receive freely tradeable New Securities in exchange for Securities or Series A
Bonds constituting any portion of an unsold allotment (it being understood that
(x) the requirement that the Initial Purchaser deliver a Prospectus containing
the information required by Item 507 or 508 of Regulation S-K under the Act in
connection with sales of New Securities acquired in exchange for such Securities
or Series A Bonds shall result in such New Securities being not "freely
tradeable"; and (y) the requirement that an Exchanging Dealer deliver a
Prospectus in connection with sales of New Securities acquired in the Registered
Exchange Offer in exchange for Securities or Series A Bonds acquired as a result
of market-making activities or other trading activities shall not result in such
New Securities being not "freely tradeable"), the Company shall effect a Shelf
Registration Statement in accordance with subsection (b) below.
(b)(i) The Company shall as promptly as practicable (but in no event more
than 60 days after so required or requested pursuant to this Section 3), file
with the Commission and thereafter shall use its best efforts to cause to be
declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the Securities, the Series A Bonds or the New Securities, as
applicable, by the Holders thereof from time to time in accordance with the
methods of distribution elected by such Holders and set forth in such Shelf
Registration Statement; provided, however, that no Holder (other than the
Initial Purchaser) shall be entitled to have the Securities or Series A Bonds
held by it covered by such Shelf Registration Statement unless such Holder
agrees in writing to be bound by all of the provisions of this Agreement
applicable to such Holder; and provided further, that with respect to New
Securities received by the Initial Purchaser in exchange for Securities or
Series A Bonds constituting any portion of an unsold allotment, the Company may,
if permitted by current interpretations by the Commission's staff, file a post-
effective amendment to the Exchange Offer Registration Statement containing the
information required by Item 507 or 508 of Regulation S-K, as applicable, in
satisfaction of its obligations under this subsection with respect thereto, and
any such Exchange Offer Registration Statement, as so amended, shall be referred
to herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.
(ii) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the Prospectus forming part thereof to
be usable by Holders for a period of two years from the date the Shelf
Registration
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Statement is declared effective by the Commission or such shorter period that
will terminate when all the Securities, the Series A Bonds or New Securities, as
applicable, covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being called
the "Shelf Registration Period"). The Company shall be deemed not to have used
its best efforts to keep the Shelf Registration Statement effective during the
requisite period if it voluntarily takes any action that would result in Holders
of Securities or Series A Bonds covered thereby not being able to offer and sell
such Securities during that period, unless (A) such action is required by
applicable law; or (B) such action is taken by the Company in good faith and for
valid business reasons (not including avoidance of the Company's obligations
hereunder), including the acquisition or divestiture of assets, so long as the
Company promptly thereafter complies with the requirements of Section 4(k)
hereof, if applicable.
(iii) The Company shall cause the Shelf Registration Statement and the
related Prospectus and any amendment or supplement thereto, as of the effective
date of the Shelf Registration Statement or such amendment or supplement, (A) to
comply in all material respects with the applicable requirements of the Act and
the rules and regulations of the Commission; and (B) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
4. Additional Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply.
(a) The Company shall:
(i) furnish to you, and provide a reasonable opportunity to review
and comment upon, prior to the filing thereof with the Commission, a copy
of any Exchange Offer Registration Statement and any Shelf Registration
Statement, and each amendment thereof and each amendment or supplement, if
any, to the Prospectus included therein and shall give reasonable
consideration to any comments that you reasonably propose;
(ii) include the information set forth in Annex A hereto on the
facing page of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a section
setting forth details of the Exchange Offer, in Annex C hereto in the
underwriting or plan of distribution section of the Prospectus contained
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in the Exchange Offer Registration Statement, and in Annex D hereto in the
letter of transmittal delivered pursuant to the Registered Exchange Offer;
provided, however, that the Company may make such changes as it considers
reasonably necessary to comply with the "Plain English" rules of the SEC;
(iii) if requested by the Initial Purchaser, include the information
required by Item 507 or 508, as applicable, of Regulation S-K under the Act
in the Prospectus contained in the Exchange Offer Registration Statement;
and
(iv) in the case of a Shelf Registration Statement, include the
names of the Holders that propose to sell Securities and/or Series A Bonds
pursuant to the Shelf Registration Statement as selling security holders.
(b) The Company shall ensure that (other than with respect to information
required to be provided by the selling Holders):
(i) any Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement thereto
complies in all material respects with the Act and the rules and
regulations thereunder; and
(ii) any Registration Statement and any amendment thereto does not,
when it becomes effective, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(c) The Company shall advise you and the Holders of Securities or Series A
Bonds covered by any Shelf Registration Statement, and any Exchanging Dealer
under the Exchange Offer Registration Statement that has provided in writing to
the Company a telephone or facsimile number and address for notices, and, if
requested by you or any such Holder or Exchanging Dealer, shall confirm such
advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the Prospectus until the
Company shall have remedied the basis for such suspension):
(i) when a Registration Statement and any amendment thereto has been
filed with the Commission and when the Registration Statement or any post-
effective amendment thereto has become effective;
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(ii) of any request by the Commission for any amendment or supplement
to the Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the securities included therein
for sale in any jurisdiction or the initiation of any proceeding for such
purpose; and
(v) of the happening of any event that requires any change in the
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material
fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in the light of the circumstances
under which they were made) not misleading.
(d) The Company shall use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Registration
Statement or the qualification of the securities included therein for sale in
any jurisdiction at the earliest possible time.
(e) The Company shall furnish to each Holder of Securities or Series A
Bonds covered by any Shelf Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including all material incorporated therein by reference, and, if the
Holder so requests in writing, all exhibits thereto (including exhibits
incorporated by reference therein).
(f) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Securities or Series A Bonds covered by any Shelf Registration
Statement, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration Statement and any
amendment or supplement thereto as such Holder may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of securities in connection with the
offering and sale of the securities covered by the Prospectus, or any amendment
or supplement thereto, included in the Shelf Registration Statement.
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<PAGE>
(g) The Company shall furnish to each Exchanging Dealer which so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including all material incorporated by
reference therein, and, if the Exchanging Dealer so requests in writing, all
exhibits thereto (including exhibits incorporated by reference therein).
(h) The Company shall promptly deliver to the Initial Purchaser, each
Exchanging Dealer and each other Person required to deliver a Prospectus during
the Exchange Offer Registration Period, without charge, as many copies of the
Prospectus included in such Exchange Offer Registration Statement and any
amendment or supplement thereto as any such Person may reasonably request. The
Company consents to the use of the Prospectus or any amendment or supplement
thereto by the Initial Purchaser, any Exchanging Dealer and any such other
Person that may be required to deliver a Prospectus following the Registered
Exchange Offer in connection with the offering and sale of the New Securities
covered by the Prospectus, or any amendment or supplement thereto, included in
the Exchange Offer Registration Statement.
(i) Prior to the Registered Exchange Offer or any other offering of
Securities, Series A Bonds or New Securities pursuant to any Registration
Statement, the Company shall arrange, if necessary, for the qualification of the
Securities, the New Securities or Series A Bonds for sale under the laws of such
jurisdictions as any Holder shall reasonably request and will maintain such
qualification in effect so long as required; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not then so qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the Initial Placement, the
Registered Exchange Offer or any offering pursuant to a Shelf Registration
Statement, in any such jurisdiction where it is not then so subject.
(j) The Company shall cooperate with the Holders of Securities and the
Series A Bonds to facilitate the timely preparation and delivery of certificates
representing New Securities, Series A Bonds or Securities to be issued or sold
pursuant to any Registration Statement free of any restrictive legends and in
such denominations and registered in such names as Holders may request.
(k) Upon the occurrence of any event contemplated by subsections (c)(ii)
through (v) above, the Company shall promptly prepare a post-effective amendment
to the applicable Registration Statement or an amendment or supplement to the
related Prospectus or file any other required document so that, as thereafter
delivered to purchasers of the securities included therein, the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
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<PAGE>
circumstances under which they were made, not misleading. In such circumstances,
the period of effectiveness of the Exchange Offer Registration Statement
provided for in Section 2 and the Shelf Registration Statement provided for in
Section 3(b) shall each be extended by the number of days from and including the
date of the giving of a notice of suspension pursuant to Section 4(c) to and
including the date when the Initial Purchaser, the Holders of the Securities and
the Series A Bonds and any known Exchanging Dealer shall have received such
amended or supplemented Prospectus pursuant to this Section.
(l) Not later than the effective date of any Registration Statement, the
Company shall provide a CUSIP number for the Securities, Series A Bonds or the
New Securities, as the case may be, registered under such Registration Statement
and provide the Trustee with printed certificates for such Securities, Series A
Bonds or New Securities, in a form eligible for deposit with The Depository
Trust Company.
(m) The Company shall comply with all applicable rules and regulations of
the Commission and shall make generally available to its security holders as
soon as practicable after the effective date of the applicable Registration
Statement an earnings statement satisfying the provisions of Section 11(a) of
the Act.
(n) The Company shall cause the Indenture to be qualified under the Trust
Indenture Act (as defined in the Purchase Agreement) in a timely manner.
(o) The Company may require each Holder of Securities and Series A Bonds
to be sold pursuant to any Shelf Registration Statement to furnish the Company
such information regarding the Holder and the distribution of such securities as
the Company may from time to time reasonably require for inclusion in such
Registration Statement. The Company may exclude from such Shelf Registration
Statement the Securities and Series A Bonds of any Holder that unreasonably
fails to furnish such information within a reasonable time after receiving such
request.
(p) In the case of any Shelf Registration Statement, the Company shall
enter into such agreements and take all other appropriate actions (including if
requested an underwriting agreement in customary form) in order to expedite or
facilitate the registration or the disposition of the Securities and Series A
Bonds, and in connection therewith, if an underwriting agreement is entered
into, cause the same to contain indemnification provisions and procedures no
less favorable than those set forth in Section 6 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing Underwriters, if
any, with respect to all parties to be indemnified pursuant to Section 6).
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(q) In the case of any Shelf Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Holders of
Securities and Series A Bonds to be registered thereunder, any underwriter
participating in any disposition pursuant to such Registration Statement,
and any attorney, accountant or other agent retained by the Holders or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or any
such underwriter, attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; provided, however, that the Company may require that such
persons execute a confidentiality agreement (which shall include customary
exceptions) prior to the receipt of any such information;
(iii) make such representations and warranties to the Holders of
Securities and Series A Bonds registered thereunder and the underwriters,
if any, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to
the Managing Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement), addressed to each selling Holder of Securities or
Series A Bonds registered thereunder and the underwriters, if any, in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten offerings;
and
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<PAGE>
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section 4(k) and with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
The actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
shall be performed at (A) the effectiveness of such Registration Statement and
each post-effective amendment thereto; and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.
(r) In the case of any Exchange Offer Registration Statement, the Company
shall:
(i) make reasonably available for inspection by the Initial
Purchaser, and any attorney, accountant or other agent retained by the
Initial Purchaser, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and employees to supply
all relevant information reasonably requested by the Initial Purchaser or
any such attorney, accountant or agent in connection with any such
Registration Statement as is customary for similar due diligence
examinations; provided, however, that the Company may require that such
persons execute a confidentiality agreement (which shall include customary
exceptions) prior to the receipt of any such information;
(iii) make such representations and warranties to the Initial
Purchaser, in form, substance and scope as are customarily made by issuers
to underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Purchase Agreement;
(iv) obtain opinions of counsel to the Company (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to
the Initial Purchaser and its counsel, addressed to the Initial Purchaser,
covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by the Initial Purchaser or its counsel;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any
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<PAGE>
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to the Initial
Purchaser, in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with primary underwritten
offerings, or if requested by the Initial Purchaser or its counsel in lieu
of a "cold comfort" letter, an agreed-upon procedures letter under
Statement on Auditing Standards No. 35, covering matters requested by the
Initial Purchaser or its counsel; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Initial Purchaser or its counsel, including those to
evidence compliance with Section 4(k) and with conditions customarily
contained in underwriting agreements.
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section shall be performed at the close of the Registered Exchange Offer
and the effective date of any post-effective amendment to the Exchange Offer
Registration Statement.
(s) If a Registered Exchange Offer is to be consummated, upon delivery of
the Securities and the Series A Bonds by Holders to the Company (or to such
other Person as directed by the Company) in exchange for the New Securities, the
Company shall mark, or caused to be marked, on the Securities and the Series A
Bonds so exchanged that such Securities and Series A Bonds are being canceled in
exchange for the New Securities. In no event shall the Securities or Series A
Bonds be marked as paid or otherwise satisfied.
(t) The Company will use its reasonable best efforts if the Securities
have been rated prior to the initial sale of such Securities, to confirm such
ratings will apply to the Securities or the New Securities, as the case may be,
covered by a Registration Statement.
(u) In the event that any Broker-Dealer shall underwrite any Securities or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Rules of Fair Practice and the
By-Laws of the National Association of Securities Dealers, Inc.) thereof,
whether as a Holder of such Securities or as an underwriter, a placement or
sales agent or a broker or dealer in respect thereof, or otherwise, assist such
Broker-Dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by:
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(i) if such Rules or By-Laws shall so require, engaging a
"qualified independent underwriter" (as defined in such Rules) to
participate in the preparation of the Registration Statement, to exercise
usual standards of due diligence with respect thereto and, if any portion
of the offering contemplated by such Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield of such Securities;
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 6 hereof;
and
(iii) providing such information to such Broker-Dealer as may be
required in order for such Broker-Dealer to comply with the requirements of
such Rules.
(iv) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Securities or the New
Securities, as the case may be, covered by a Registration Statement.
5. Registration Expenses. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 2, 3 and 4
hereof and, in the event of any Shelf Registration Statement, will reimburse the
Holders for the reasonable fees and disbursements of one firm or counsel
designated by the Majority Holders to act as counsel for the Holders in
connection therewith, and, in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchaser for the reasonable fees and
disbursements of counsel acting in connection therewith.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each holder of Securities, Series A Bonds or New
Securities, as the case may be, covered by any Registration Statement (including
the Initial Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer), the directors,
officers, employees and agents of each such Holder and each Person who controls
any such Holder within the meaning of either Section 15 of the Act or Section 20
of the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several (including, without limitation, the reasonable legal fees and
other reasonable expenses incurred in connection with any suit, action or
proceeding or any claim asserted), to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement
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or alleged untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof, or in any preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any holder
of Securities, Series A Bonds or New Securities specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
The Company also agrees to indemnify or contribute as provided in Section
6(d) to Losses of any underwriter of Securities or New Securities, as the case
may be, registered under a Shelf Registration Statement, their directors,
officers, employees or agents and each Person who controls such underwriter on
substantially the same basis as that of the indemnification of the Initial
Purchaser and the selling Holders provided in this Section 6(a) and shall, if
requested by any Holder, enter into an underwriting agreement reflecting such
agreement, as provided in Section 4(p) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Initial Purchaser and, with respect to any Prospectus delivery
as contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees
to indemnify and hold harmless the Company, its directors and officers and each
other Person who controls the Company within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6 or
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
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but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. It
is understood and agreed, however, that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate counsel
for all such indemnified parties (and any local counsel) and that all such fees
and expenses shall be reimbursed as they are incurred. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify any
indemnified party from and against any loss or liability by reason of such
settlement or judgment except as otherwise provided herein. An indemnifying
party will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an
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unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, then each applicable indemnifying party shall have a joint
and several obligation to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and the Registration Statement which resulted in such Losses; provided, however,
that in no case shall the Initial Purchaser or any subsequent Holder of any
Security or New Security be responsible, in the aggregate, for any amount in
excess of the purchase discount or commission applicable to such Security, or in
the case of a New Security, applicable to the Security that was exchangeable
into such New Security, as set forth on the cover page of the Final Memorandum,
nor shall any underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities purchased by
such underwriter under the Registration Statement which resulted in such Losses.
If the allocation provided by the immediately preceding sentence is unavailable
for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Final Memorandum and (y) the total amount of additional interest which the
Company was not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such Losses. Benefits
received by the Initial Purchaser shall be deemed to be equal to the total
purchase discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Securities or New Securities, as applicable,
registered under the Act. Benefits received by any underwriter shall be deemed
to be equal to the total underwriting discounts and commissions, as set forth on
the cover page of the Prospectus forming a part of the Registration Statement
which resulted in such Losses. Relative fault shall be determined by reference
to, among other things, whether any alleged untrue statement or omission relates
to information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, the intent of the parties and their
relative
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knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation (even if the
Holders were treated as one entity for such purpose) or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6, each Person who
controls a Holder within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act and each director, officer, employee and such agent of
such Holder shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, each officer and director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
(e) The indemnity and contribution agreements contained in this Section 6
are in addition to any liability which the indemnifying parties may otherwise
have to the indemnified parties referred to above. The indemnity and
contribution agreements contained in this Section 6 and the representations and
warranties of the Company set forth in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any indemnified party or any
person controlling any indemnified party or by or on behalf of the Company, its
officers or directors or any other person controlling the Company and (iii)
acceptance of or exchange of any of the Securities or the Series A Bonds for any
of the New Securities.
7. Underwritten Registrations. (a) If any of the Securities, the Series
A Bonds or New Securities, as the case may be, covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the Managing Underwriters
shall be selected by the Majority Holders.
(b) No Person may participate in any underwritten offering pursuant to any
Shelf Registration Statement, unless such Person (i) agrees to sell such
Person's Securities, Series A Bonds or New Securities, as the case may be, on
the basis reasonably provided in any underwriting arrangements approved by the
Persons entitled hereunder to approve such arrangements; and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
21
<PAGE>
8. No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
9. Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of the
Majority Holders (or, after the consummation of any Registered Exchange Offer in
accordance with Section 2 hereof, of New Securities); provided that, with
respect to any matter that directly or indirectly affects the rights of the
Initial Purchaser hereunder, the Company shall obtain the written consent of the
Initial Purchaser against which such amendment, qualification, supplement,
waiver or consent is to be effective. Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions hereof
with respect to a matter that relates exclusively to the rights of Holders whose
Securities, Series A Bonds or New Securities, as the case may be, are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by the Majority Holders,
determined on the basis of Securities or New Securities, as the case may be,
being sold rather than registered under such Registration Statement.
10. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery:
(a) if to a Holder, at the most current address given by such holder to
the Company in accordance with the provisions of this Section, which address
initially is, with respect to each Holder, the address of such Holder maintained
by the Registrar under the Indenture, with a copy in like manner to Salomon
Smith Barney Inc;
(b) if to you, initially at the respective addresses set forth in the
Purchase Agreement; and
(c) if to the Company, initially at its address set forth in the Purchase
Agreement.
All such notices and communications shall be deemed to have been duly given
when received.
22
<PAGE>
The Initial Purchaser or the Company by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
11. Successors. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including,
without the need for an express assignment or any consent by the Company
thereto, subsequent Holders of Securities, the Series A Bonds and the New
Securities. The Company hereby agrees to extend the benefits of this Agreement
to any Holder of Securities and the New Securities, and any such Holder may
specifically enforce the provisions of this Agreement as if an original party
hereto.
12. Counterparts. This agreement may be in signed counterparts, each of
which shall be an original and all of which together shall constitute one and
the same agreement.
13. Headings. The headings used herein are for convenience only and shall
not affect the construction hereof.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York.
15. Severability. In the event that any one of more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
16. Securities Held by the Company, etc. Whenever the consent or approval
of Holders of a specified percentage of principal amount of Securities, Series A
Bonds or New Securities is required hereunder, Securities, Series A Bonds or New
Securities, as applicable, held by the Company or its Affiliates (other than
subsequent Holders of Securities or New Securities if such subsequent Holders
are deemed to be Affiliates solely by reason of their holdings of such
Securities or New Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
23
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a building agreement among the
Company and the Initial Purchaser.
Very truly yours,
NATIONAL STEEL CORPORATION
By: /s/ Glenn H. Gage
--------------------------------------
Name: GLENN H. GAGE
Title: Senior Vice President,
Chief Financial Officer
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
SALOMON SMITH BARNEY INC.
By: /s/ David R. Dowdle
------------------------------
Name: David R. Dowdle
Title: Associate
24
<PAGE>
ANNEX A
Each Broker-Dealer that receives New Securities for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Act. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a Broker-Dealer in connection with resales of New
Securities received in exchange for Securities or Series A Bonds where such
Securities or Series A Bonds were acquired by such Broker-Dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date (as defined herein) and ending on the
close of business one year after the Expiration Date, it will make this
Prospectus available to any Broker-Dealer for use in connection with any such
resale. See "Plan of Distribution".
25
<PAGE>
ANNEX B
Each Broker-Dealer that receives New Securities for its own account in exchange
for Securities or Series A Bonds, where such Securities or Series A Bonds were
acquired by such Broker-Dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Securities. See "Plan of Distribution."
26
<PAGE>
ANNEX C
PLAN OF DISTRIBUTION
Each Broker-Dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Broker-Dealer in connection with resales of New Securities received in
exchange for Securities or Series A Bonds where such Securities or Series A
Bonds were acquired as a result of market-making activities or other trading
activities. The Company has agreed that, starting on the Expiration Date and
ending on the close of business one year after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any Broker-Dealer for
use in connection with any such resale. In addition, until __________, 199__,
all dealers effecting transactions in the New Securities may be required to
deliver a prospectus.
The Company will not receive any proceeds from any sale of New Securities
by brokers-dealers. New Securities received by Broker-Dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Securities or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
Broker-Dealer and/or the purchasers of any such New Securities. Any Broker-
Dealer that resells New Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of such New Securities may be deemed to be an "underwriter" within
the meaning of the Act and any profit of any such resale of New Securities and
any commissions or concessions received by any such Persons may be deemed to be
underwriting compensation under the Act. The Letter of Transmittal states that
by acknowledging that it will deliver and by delivering a prospectus, a Broker-
Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Broker-Dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer (including the expenses of one counsel for the
holders of the Securities and the Series A Bonds) other than commissions or
27
<PAGE>
concessions of any brokers or dealers and will indemnify the holders of the
Securities and the Series A Bonds (including any Broker-Dealers) against certain
liabilities, including liabilities under the Securities Act.
[If applicable, add information required by Regulation S-K Items 507 and/or
508.]
28
<PAGE>
ANNEX D
Rider A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ____________________________
Address: ____________________________
____________________________
Rider B
If the undersigned is not a Broker-Dealer, the undersigned represents that it
acquired the New Securities in the ordinary course of its business, it is not
engaged in, and does not intend to engage in, a distribution of New Securities
and it has not entered into arrangements or understandings with any Person to
participate in a distribution of the New Securities. If the undersigned is a
Broker-Dealer that will receive New Securities for its own account in exchange
for Securities, it represents that the Securities and the Series A Bonds to be
exchanged for New Securities were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver a
prospectus in connection with any resale of such New Securities; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Act.
29
<PAGE>
EXHIBIT 5
May 14, 1999
National Steel Corporation
4100 Edison Lakes Parkway
Mishawaka, Indiana 46545-3440
Re: National Steel Corporation Registration Statement
on Form S-4 (No. 333-76541)
-------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to National Steel Corporation, a
Delaware corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-4 (No. 333-76541), as filed by the Company with
the Securities and Exchange Commission (the "Commission") on April 19, 1999, as
amended by Amendment No. 1 thereto filed by the Company with the Commission on
May 14, 1999 (collectively, the "Registration Statement"). The Registration
Statement relates to the registration under the Securities Act of 1933, as
amended (the "Act"), of up to $300,000,000 aggregate principal amount of the
Company's First Mortgage Bonds, 9-7/8% Series D due 2009 (the "Series D Bonds")
and up to $225,000,000 aggregate principal amount of the Company's First
Mortgage Bonds, 9-7/8% Series B due 2009 (the "Series B Bonds" and, together
with the Series D Bonds, the "Exchange Bonds"); provided, however, that in no
event will the aggregate principal amount of Exchange Bonds issued exceed
$300,000,000.
The Exchange Bonds are to be offered in exchange (the "Exchange
Offer") for up to $225,000,000 aggregate principal amount of the Company's
currently outstanding First Mortgage Bonds, 9-7/8% Series A due 2009 (the
"Series A Bonds") and up to $75,000,000 aggregate principal amount of the
Company's currently outstanding First Mortgage Bonds, 9-7/8% Series C due 2009
(the "Series C Bonds" and, together with the Series A Bonds, the "Original
Bonds"), as more fully described in the Registration Statement. The Series B
Bonds, if issued, will be issued pursuant to
<PAGE>
National Steel Corporation
May 14, 1999
Page 2
the Tenth Supplemental Indenture, dated as of March 8, 1999 (the "Tenth
Supplemental Indenture"), and the Series D Bonds will be issued pursuant to the
Eleventh Supplemental Indenture, dated as of March 31, 1999 (the "Eleventh
Supplemental Indenture"), in each case by and among the Company and The Chase
Manhattan Bank and Frank J. Grippo, as trustees. Each of the Tenth Supplemental
Indenture and the Eleventh Supplemental Indenture constitutes a supplemental
indenture to the Indenture of Mortgage and Deed of Trust, dated as of May 1,
1952, by and among the Company and Great Lakes Steel Corporation, a former
wholly-owned subsidiary of the Company, and City Bank Farmers Trust Company and
Ralph E. Morton, as trustees, as supplemented to date (including the Tenth
Supplemental Indenture and the Eleventh Supplemental Indenture) (the
"Indenture"). Holders of the Series A Bonds have the option to exchange such
bonds for an equivalent principal amount of either Series B Bonds or Series D
Bonds.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act.
In our examination we have assumed the genuineness of all signatures
including endorsements, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified, conformed or
photostatic copies, and the authenticity of the originals of such copies. As to
any facts material to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of the Company and
its officers and other representatives and of public officials.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following: (i) the Registration Statement;
(ii) the Tenth Supplemental Indenture, included as Exhibit G to the Registration
Statement; (iii) the Eleventh Supplemental Indenture, included as Exhibit H to
the Registration Statement; (iv) the Indenture, included as Exhibits 4-A through
4-F to the Registration Statement, in addition to all instruments supplemental
thereto not filed as exhibits to the Registration Statement; (v) the form of
each of the Series B Bonds and Series D Bonds and a specimen of the certificates
representing each of such bonds; (vi) the Registration Rights Agreement, dated
as of March 8, 1999, between the Company and the Initial Purchasers defined
therein and the Registration Rights Agreement, dated as of March 31, 1999,
between the Company and the Initial Purchaser defined therein (collectively, the
"Registration Rights Agreements"); (vii) the Certificate of Incorporation and
the By-Laws of the Company, as presently in effect; (viii) certain resolutions
adopted by the
<PAGE>
National Steel Corporation
May 14, 1999
Page 3
Board of Directors of the Company relating to the issuance and exchange of the
Exchange Bonds for the Original Bonds and related matters, and (ix) such other
documents as we have deemed necessary or appropriate as a basis for the opinions
set forth below.
We are admitted to the practice of law in the State of Illinois and we
express no opinion as to the laws of any jurisdiction other than (i) the
Applicable Laws of the State of New York and (ii) the General Corporation Law of
the State of Delaware (the "DGCL"). We have relied, with your consent, as to
matters of New York law on the opinion of Skadden, Arps, Slate, Meagher & Flom
LLP.
"Applicable Laws" shall mean those laws, rules, regulations which, in
our experience, are normally applicable to transactions of the type contemplated
by the Exchange Offer, without our having made any special investigation as to
the applicability of any specific law, rule or regulation, and which are not
the subject of a specific opinion herein referring expressly to a particular law
or laws.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that: when (i) the Registration Statement becomes effective and assuming
that (a) the Indenture as constituted prior to the inclusion of the Tenth
Supplemental Indenture and the Eleventh Supplemental Indenture was duly
qualified under the then applicable Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
applicable to an indenture qualified thereunder, and (b) the Tenth Supplemental
Indenture and the Eleventh Supplemental Indenture have been qualified under the
Trust Indenture Act, and (ii) the Exchange Bonds have been duly executed and
authenticated in accordance with the terms of the Indenture and delivered in the
Exchange Offer in exchange for the Original Bonds in accordance with the terms
and conditions of the Registration Rights Agreements, the issuance of the
Exchange Bonds will have been duly authorized, and the Exchange Bonds will be
valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms
pursuant to the Applicable Laws of the State of New York.
<PAGE>
National Steel Corporation
May 14, 1999
Page 4
Our opinion is subject to the following assumptions and
qualifications:
(a) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting creditors' rights generally and by principles of equity (regardless of
whether enforceability is sought in equity or at law);
(b) we have assumed that the Indenture constitutes the valid and
binding obligation of each party to such Indenture (other than the Company) and
is enforceable against such other party in accordance with its terms;
(c) we express no opinion as to the enforceability of the waiver
provisions contained in the Indenture;
(d) the execution and delivery by the Company and performance of any
of its obligations under the Indenture did not and will not conflict with,
contravene, violate or constitute a default under (i) the Certificate of
Incorporation or the By-Laws of the Company, (ii) any lease, indenture,
instrument or other agreement to which the Company or its property is subject,
(iii) any rule, law or regulation to which the Company is subject (other than
Applicable Laws of the State of New York and the DGCL) or (iv) any judicial or
administrative order or decree of any governmental authority; and
(e) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body was required to
authorize or was or is required in connection with the execution, delivery or
performance by the Company of the Indenture.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate, Meagher
& Flom (Illinois)
<PAGE>
EXHIBIT 10-N
EXECUTION COPY
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (the "Amendment and
Restatement") dated as of September 30, 1997 among MORGAN GUARANTY TRUST COMPANY
OF NEW YORK ("Morgan Guaranty"), in its capacity as Administrative Agent,
NATIONAL STEEL FUNDING CORPORATION, a Delaware corporation ("NFSC"), NATIONAL
STEEL CORPORATION, a Delaware corporation ("NSC"), the financial institutions
party thereto, as buyers (the "Buyers"), the Letter of Credit Issuing Banks
party thereto, the Reserve L/C Bank and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as structuring and collateral agent (the "Receivables Collateral Agent").
W I T N E S S E T H :
WHEREAS, the parties referred to above have heretofore entered into a
Receivables Purchase Agreement dated as of May 16, 1994 (as amended by Amendment
No. 1 thereto dated as of May 31, 1995 and Amendment No. 2 and Consent thereto
dated as of July 18, 1996, the "Agreement"), and
WHEREAS, the parties hereto desire to amend the Agreement as set forth
herein and to restate the Agreement in its entirety to read as set forth in the
Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each capitalized term used herein which is defined in the Agreement
shall have the meaning assigned to such term in the Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Agreement shall from and after the effective date hereof refer
to the Agreement as amended and restated hereby.
SECTION 2. Amendments to Definitions. Section 1.01 of the Agreement is
amended as follows:
<PAGE>
(a) The definition of "Collateral Agent" is amended by replacing "J.P.
Morgan Delaware" with "Morgan Guaranty".
(b) The definition of "Commitment Fee" is amended by replacing ".1875%"
with ".15%".
(c) The definition of "Euro-Dollar Rate" is amended by replacing ".50%"
with ".375%" and by replacing "2.50%" with "2.375%".
(d) The definition of "Expiry Date" is amended by replacing "May 16, 2001"
with the date "September 30, 2002".
(e) The definition of "Fixed CD Rate" is amended by replacing ".625%" with
".50%" and by replacing "2.625%" with "2.50%".
(f) The definition of "Issuing Bank Letter of Credit Fee" is amended by
replacing ".25%" with ".15%".
(g) The definition of "J.P. Morgan Delaware" is hereby deleted.
(h) The definition of "Letter of Credit Participation Fee" is amended by
replacing ".50%" with ".375%".
(i) The definition of "Reserve L/C Fee" is amended by replacing ".625%"
with ".50%".
(j) The definition of "Reserve Letter of Credit" is amended by replacing
"J.P. Morgan Delaware" with "Morgan Guaranty".
SECTION 3. Amendment to Section 2.04 of the Agreement. Section 2.04(a) of
the Agreement is amended by replacing "A-1+" with "A-1" in the twenty-first line
thereof.
SECTION 4. Amendment to Section 2.07 of the Agreement. Section
2.07(a)(iii) of the Agreement is amended by replacing "March 15, 1994" with
"August 11, 1997".
SECTION 5. Amendment to Section 7.02 of the Agreement. Section 7.02 of
the Agreement is amended by deleting the references to "J.P. Morgan Delaware".
SECTION 6. Amendment to Schedule 1 of the Agreement. Schedule 1 of the
Agreement is amended to read in its entirety as set forth in Exhibit A attached
hereto.
2
<PAGE>
SECTION 7. Representations and Warranties. NSFC hereby represents and
warrants that as of the effective date hereof (after giving effect hereto):
(a) no Termination Event or Potential Termination Event has occurred and
is continuing; and
(b) each representation or warranty of NSFC set forth in the Agreement
after giving effect to this Amendment and Restatement is true and correct.
SECTION 8. Governing Law. This Amendment and Restatement shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 9. Counterparts; Effectiveness. This Amendment and Restatement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment and Restatement shall become effective as of the date
hereof if each of the following conditions shall have been satisfied on or
before October 10, 1997:
(i) receipt by the Administrative Agent of duly executed
counterparts hereof signed by each of the parties hereto (or, in the case
of any party as to which an executed counterpart shall not have been
received, the Administrative Agent shall have received telegraphic, telex
or other written confirmation from such party of execution of a counterpart
hereof by such party);
(ii) evidence satisfactory to the Collateral Agent that a rating of
AAA or higher assigned to the Buyer's Certificates shall have been
reaffirmed by S&P; and
(iii) NSC shall have paid to the Administrative Agent for the account
of J.P. Morgan Securities, Inc. the arrangement, syndication and advisory
fee set forth in the letter dated August 11, 1997.
The Administrative Agent shall promptly notify the parties hereto of the
effectiveness of this Amendment and Restatement, and such notice shall be
conclusive and binding on all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have cause this Amendment and Restatement
to be duly executed as of the date first above written.
NATIONAL STEEL FUNDING
CORPORATION
By: ___________________________________
Name:
Title:
NATIONAL STEEL CORPORATION,
as Servicer
By: ___________________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Administrative Agent, Structuring
and Collateral Agent, Reserve L/C Bank
and Letter of Credit Issuing Bank
By: ___________________________________
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Letter of Credit Issuing Bank
By: ___________________________________
Name:
Title:
4
<PAGE>
BANK OF TOKYO-MITSUBISHI, LTD.,
as Letter of Credit Issuing Bank
By: ___________________________________
Name:
Title:
COMERICA BANK, as Letter of Credit
Issuing Bank
By: ___________________________________
Name:
Title:
5
<PAGE>
COMMITMENTS: BUYERS:
$30,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: _____________________________
Name:
Title:
$30,000,000 THE FUJI BANK AND TRUST COMPANY
By: _____________________________
Name:
Title:
$25,000,000 COMERICA BANK
By: _____________________________
Name:
Title:
$25,000,000 BANK OF TOKYO-MITSUBISHI, LTD.
By: _____________________________
Name:
Title:
$20,000,000 THE LONG-TERM CREDIT BANK
OF JAPAN LTD.
By: _____________________________
Name:
Title:
6
<PAGE>
$15,000,000 THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By: _____________________________
Name:
Title:
$15,000,000 THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By: _____________________________
Name:
Title:
$15,000,000 NBD BANK
By: _____________________________
Name:
Title:
$15,000,000 THE YASUDA TRUST AND BANKING CO.,
LTD.
By: _____________________________
Name:
Title:
$10,000,000 MELLON BANK, N.A.
By: _____________________________
Name:
Title:
TOTAL
COMMITMENTS: $200,000,000
7
<PAGE>
Exhibit A
Schedule 1
Special Obligors and Concentration Limits
-----------------------------------------
Obligor Rating
- ------- ------
A-1 A-2 A-3 Unrated
--- --- --- -------
Ford Motor Company 15% 8% 7% 4%
General Motors Corporation 15% 12% 8% 4%
Chrysler Motors Corporation 15% 12% 8% 4%
Silgan Containers Corporation 10% 8% 7% 7%
Ball Heekin Corporation 10% 8% 7% 6%
The rating referred to above at any time is the rating then assigned by S&P to
the short-term unsecured debt of the Obligor.
8
<PAGE>
Exhibit 10-JJ
AMENDMENT NO. 1 TO
NO. 1 CONTINUOUS GALVANIZING LINE
TURNKEY ENGINEERING AND
CONSTRUCTION CONTRACT
This Amendment No. 1 ("AMENDMENT") made this 19th day of March, 1999 by and
between National Steel Corporation, Great Lakes Division, a Delaware corporation
with its office at 4100 Edison Lakes Parkway, Mishawaka, Indiana 46545
("NATIONAL") and NKK Steel Engineering, Inc., a Delaware corporation with its
office at 910 Sheraton Drive, Suite 400, Mars, Pennsylvania 16046-9414
("CONTRACTOR").
RECITALS
A. NATIONAL and CONTRACTOR are parties to the No. 1 Continuous Galvanizing
Line Turnkey Engineering and Construction Contract dated as of October 23, 1998
("AGREEMENT").
B. NATIONAL and CONTRACTOR have agreed that CONTRACTOR will perform certain
additional WORK pursuant to the AGREEMENT.
C. The purpose of this AMENDMENT is to document the terms and conditions
under which this additional WORK will be performed.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Definitions. All capitalized terms, which are not otherwise defined herein,
shall have the meanings given to them in the AGREEMENT.
2. Additional WORK. CONTRACTOR agrees the WORK to be performed by
CONTRACTOR pursuant to the AGREEMENT shall include the following additional
items which were quoted by CONTRACTOR as "options" in its document dated October
19, 1998 entitled "National Steel No. 1 CGL--Option Price":
a. Additional track rail for terminal;
b. Additional track rail for furnace;
c. Welder monitoring system;
d. ITV for GJC;
e. Pyrometer for RTF;
f. CRT size from 17" to 21" (quantity: 5 sets);
<PAGE>
g. One additional HMI in entry pulpit;
h. One additional PC in entry pulpit
i. Space for side trimmer per drawing 2 and CONTRACTOR
revision to 6400 mm clearance.
The detailed scope of work for the items described in a--i above has been set
forth in an amendment to the AS-SOLD SPECIFICATION which has been mutually
agreed to by NATIONAL and CONTRACTOR.
3. Amendment of Section 5.1. The first sentence of Section 5.1 of the
AGREEMENT is hereby amended and restated in its entirety as follows:
"The total amount due CONTRACTOR for full and complete performance by
CONTRACTOR of all the WORK, compliance with all of the terms and conditions
of this CONTRACT, and for CONTRACTOR's payment of all of its obligations
incurred in or applicable to performance of the WORK shall be One Hundred
Thirty Nine Million Seven Hundred Eleven Thousand Six Hundred Sixty Five
Dollars ($139,711,665)."
4. Amendment of Section 20. Section 20 of the AGREEMENT is hereby amended by
adding the following as a new Section 20.7:
"20.7 All references to the terms "SUBCONTRACTOR," "SUBCONTRACTORS" or
"material suppliers" in Sections 20.1, 20.3, 20.5 and 20.6 shall apply, for
purposes of those sections only, to those SUBCONTRACTORS or material
suppliers whose total price for goods, services or other work for or on
behalf of NATIONAL or CONTRACTOR, exceeds, or is reasonably anticipated to
exceed, $250,000."
5. Amendment of Section 21.3. Section 21.3 of the AGREEMENT is hereby amended
and restated in its entirety as follows:
"21.3 Ownership of DRAWINGS and Other TECHNICAL DATA. NATIONAL and
CONTRACTOR shall each own all drawings, plans, documents, writings, and all
other sources of technical information (but not including computer
software, which is covered by Section 22.1 below) in any form, tangible or
intangible (herein called "TECHNICAL DATA") relating to the subject matter
of this CONTRACT which was transferred, provided or exhibited to NATIONAL,
its employees or agents, in the course of performance of this CONTRACT and
which is necessary or useful in the operation of the facilities, equipment,
apparatus and/or processes which are the subject matter of this CONTRACT;
provided, however, that (i) NATIONAL shall have the right to use the
TECHNICAL DATA solely in connection with the GOODS supplied hereunder or
in connection with any other aspect of NATIONAL's internal business
operations related to the PLANT; and (ii) CONTRACTOR and each SUBCONTRACTOR
shall have the unqualified free right to possess and shall be permitted to
make use of TECHNICAL DATA supplied or developed by it (as opposed to
TECHNICAL DATA supplied or developed by NATIONAL) in connection with the
WORK. Any exceptions to the above-described ownership rights of NATIONAL
must
2
<PAGE>
be agreed to in writing by NATIONAL and made an exhibit to this
CONTRACT and must provide for the unqualified free right of NATIONAL to
possess and use the TECHNICAL DATA in all of its PLANT operations."
6. Amendment of Section 22.1. Section 22.1 of the AGREEMENT is hereby amended
and restated in its entirety as follows:
"22.1 License to Use Software. CONTRACTOR agrees, represents and
warrants that if any equipment or other GOODS covered by the CONTRACT
include computer software or require the use of computer software to
enable NATIONAL to use the GOODS, NATIONAL shall have the unrestricted,
irrevocable, perpetual, paid-up right and license to use such computer
software solely in connection with the GOODS or in connection with any
other aspect of NATIONAL's internal business operations related to the
PLANT. If requested in writing by CONTRACTOR, NATIONAL will protect any
such computer software from disclosure to third parties to the same extent
it protects its own confidential information, but the failure by NATIONAL
to do so shall not cause the revocation of, or otherwise affect,
NATIONAL's right to use such computer software. CONTRACTOR agrees to
indemnify and defend NATIONAL from and against any claims of third parties
relating to NATIONAL's rights under this Section 22."
7. Amendment of Section 51. Section 51 of the AGREEMENT is hereby amended by
adding the following language at the end of such Section:
"In the event that any SUBCONTRACTOR desires any proprietary information
supplied by it to NATIONAL, either directly or indirectly through
CONTRACTOR, to be deemed CONFIDENTIAL INFORMATION hereunder, CONTRACTOR
shall in good faith discuss the contents of such information with NATIONAL
on a case-by-case basis, and such proprietary information shall be added to
Exhibit U as CONFIDENTIAL INFORMATION, unless NATIONAL reasonably objects
to the treatment of such proprietary information as CONFIDENTIAL
INFORMATION hereunder. It is the intent of the preceding sentence to limit
as much proprietary information from SUBCONTRACTORS as possible as being
deemed to be CONFIDENTIAL INFORMATION, and CONTRACTOR agrees to work with
its SUBCONTRACTORS to that end.
8. Amendment of Exhibit B. The page in Exhibit B of the AGREEMENT which is
captioned "NKK Steel Engineering, Inc. Schedule of Field Service Rates" is
hereby deleted in its entirety and replaced with the new page with the same
caption which is attached hereto.
9. Amendment of Exhibit C. Exhibit C of the AGREEMENT is hereby deleted in its
entirety and replaced with the new Exhibit C dated October 29, 1998 which is
attached hereto.
10. Amendment of Exhibit Q. Exhibit Q of the AGREEMENT is hereby deleted in its
entirety and replaced with the new Exhibit Q dated October 29, 1998 which is
attached hereto.
11. Amendment of Exhibit R. Exhibit R of the AGREEMENT is hereby deleted in its
entirety and replaced with the new Exhibit R dated October 29, 1998 which is
attached hereto.
3
<PAGE>
12. No Other Changes. Except as specifically provided for in this AMENDMENT,
the terms and conditions of the AGREEMENT and other CONTRACT DOCUMENTS shall
remain unchanged and in full force and effect. Without limiting the generality
of the foregoing, NATIONAL and CONTRACTOR hereby expressly acknowledge and agree
that the additional WORK described above shall not extend, alter or otherwise
affect any of the schedules for completion of the WORK set forth in the
AGREEMENT or other CONTRACT DOCUMENTS.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first set forth above.
NATIONAL STEEL CORPORATION
By:
Title:
NKK STEEL ENGINEERING, INC.
By:
Title:
4
<PAGE>
EXHIBIT 23-A
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under caption "Experts" in Amendment No.
1 to the Registration Statement (Form S-4) and related Prospectus of National
Steel Corporation for the registration of 300,000,000 National Steel Corporation
First Mortgage Bond 9-7/8% Series D due 2009 and to the incorporation by
reference therein of our report dated January 28, 1999, with respect to the
consolidated financial statements and schedule of National Steel Corporation
included in its Annual Report (Form 10-K) filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Indianapolis, Indiana
May 14, 1999
<PAGE>
EXHIBIT 99.A
LETTER OF TRANSMITTAL
To Tender for Exchange
First Mortgage Bonds, 9 7/8% Series A due 2009 and/or
First Mortgage Bonds, 9 7/8% Series C due 2009
of
National Steel Corporation
Pursuant to the Prospectus dated , 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1999, UNLESS EXTENDED.
To: The Chase Manhattan Bank, as Exchange Agent
By Registered or By Overnight Courier: By Hand:
Certified Mail: The Chase Manhattan Bank The Chase Manhattan Bank
The Chase Manhattan Bank 55 Water Street--Room 234 55 Water Street--Room 234
55 Water Street--Room 234 North Building North Building
North Building New York, New York 10041 New York, New York 10041
New York, New York 10041
By Facsimile:
(212) 638-7380
(212) 638-7381
Confirm by telephone:
(212) 638-0828
Attn: Carlos Esteves
Delivery of this instrument to an address other than as set forth above or
transmission of instructions via a facsimile number other than the one listed
above will not constitute a valid delivery. The instructions accompanying this
Letter of Transmittal should be read carefully before this Letter of
Transmittal is completed.
The undersigned acknowledges that he or she has received the Prospectus,
dated , 1999 (the "Prospectus"), of National Steel Corporation (the
"Company") and this Letter of Transmittal (the "Letter of Transmittal"), which
together constitute the Company's offer (the "Exchange Offer") to exchange its
First Mortgage Bonds, 9 7/8% Series D due 2009 (the "Exchange Bonds") for an
equal principal amount of its First Mortgage Bonds, 9 7/8% Series A due 2009
and/or First Mortgage Bonds, 9 7/8% Series C due 2009 (collectively, "Original
Bonds") and, together with the Exchange Bonds, the "Bonds"). The terms of the
Exchange Bonds are identical in all material respects to the Original Bonds,
except that the Exchange Bonds have been registered under the Securities Act of
1933, as amended (the "Securities Act"), and, therefore, will not bear legends
restricting their transfer and will not contain certain provisions relating to
an increase in the interest rate which were included in the Original Bonds
under certain circumstances relating to the timing of the Exchange Offer. The
term "Expiration Date" shall mean 5:00 p.m., New York City time, on ,
1999, unless the Company, in its sole discretion, extends the Exchange Offer,
in which case the term shall mean the latest date and time to which the
Exchange Offer is extended. Capitalized terms used but not defined herein have
the meaning given to them in the Prospectus.
The Letter of Transmittal is to be used by Holders of Original Bonds if
certificates are to be forwarded herewith. Holders of Original Bonds whose
certificates are not immediately available, or who are unable to deliver their
certificates and all other documents required by this Letter of Transmittal to
the Exchange Agent on or prior to the Expiration Date, must tender their
Original Bonds according to the guaranteed delivery procedures set forth in
"The Exchange Offer--Guaranteed delivery procedures" section of the Prospectus.
See Instruction 1.
<PAGE>
The term "Holder" with respect to the Exchange Offer means any person in
whose name Original Bonds are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered holder. The undersigned has completed, executed and delivered this
Letter of Transmittal to indicate the action the undersigned desires to take
with respect to the Exchange Offer. Holders who wish to tender their Original
Bonds must complete this Letter of Transmittal in its entirety; provided,
however, that a Letter of Transmittal need not be submitted with respect to
Original Bonds tendered in accordance with the Depository Trust Company's
Automated Tender Offer Procedures ("ATOP").
The undersigned acknowledges that if it is a broker-dealer holding Original
Bonds acquired for its own account as a result of market-making activities or
other trading activities (other than Original Bonds acquired directly from the
Company), such Holder may be deemed to be an "Underwriter" within the meaning
of the Securities Act and, therefore, must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of Exchange
Bonds received in respect of such Original Bonds pursuant to the Exchange
Offer. Notwithstanding the foregoing, the undersigned shall not be deemed to
admit that it is an "Underwriter" within the meaning of such term under the
Securities Act.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE LETTER OF TRANSMITTAL
DESCRIPTION OF FIRST MORTGAGE BONDS, 9 7/8% SERIES A DUE 2009
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggregate Principal Amount
Principal Tendered (must
Names and Address(es) of Amount be in integral
Registered Holder(s) Certificate Represented by multiples
(please fill in, if blank) Number(s) Certificate(s) of $1,000)*
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total
- -----------------------------------------------------------------------------------------------
</TABLE>
*Unless indicated in the column labeled "Principal Amount Tendered," any
tendering Holder of First Mortgage Bonds, 9 7/8% Series A due 2009 will be
deemed to have tendered the entire aggregate principal amount represented by
the column labeled "Aggregate Principal Amount Represented by
Certificate(s)."
If the space provided above is inadequate, list the certificate numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
The minimum permitted tender is $1,000 in principal amount. All other tenders
must be integral multiples of $1,000.
DESCRIPTION OF FIRST MORTGAGE BONDS, 9 7/8% SERIES C DUE 2009
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Aggregate Principal Amount
Principal Tendered (must
Names and Address(es) of Amount be in integral
Registered Holder(s) Certificate Represented by multiples
(please fill in, if blank) Number(s) Certificate(s) of $1,000)*
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Total
- -----------------------------------------------------------------------------------------------
</TABLE>
*Unless indicated in the column labeled "Principal Amount Tendered," any
tendering Holder of First Mortgage Bonds, 9 7/8% Series C due 2009 will be
deemed to have tendered the entire aggregate principal amount represented by
the column labeled "Aggregate Principal Amount Represented by
Certificate(s)."
If the space provided above is inadequate, list the certificate numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
The minimum permitted tender is $1,000 in principal amount. All other tenders
must be integral multiples of $1,000.
2
<PAGE>
[_]CHECK HERE IF THE UNDERSIGNED IS ELECTING TO TENDER FIRST MORTGAGE BONDS, 9
7/8% SERIES A DUE 2009 FOR FIRST MORTGAGE BONDS, 9 7/8% SERIES B DUE 2009.
IF ALL OUTSTANDING SERIES A BONDS ARE TENDERED FOR SERIES B BONDS, THERE
WILL BE $225,000,000 AGGREGATE PRINCIPAL AMOUNT OF SERIES B BONDS
OUTSTANDING FOLLOWING THE CONSUMMATION OF THE EXCHANGE OFFER.
[_]CHECK HERE IF TENDERED ORIGINAL BONDS ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING (SEE INSTRUCTION 1):
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
----------------------------------------------------------------------
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6)
To be completed ONLY if To be completed ONLY if
certificates for Original Bonds in certificates for Original Bonds in
a principal amount not tendered, a principal amount not tendered,
or Exchange Bonds issued in or Exchange Bonds issued in
exchange for Original Bonds exchange for Original Bonds
accepted for exchange, are to be accepted for exchange, are to be
issued in the name of someone sent to someone other than the
other than the undersigned. undersigned, or to the undersigned
at an address other than that
shown above.
Issue certificate(s) to:
Name: _____________________________ Deliver certificate(s) to:
(Please Print)
Name: _____________________________
Address: __________________________ (Please Print)
----------------------------------- Address: __________________________
(Include Zip Code)
-----------------------------------
----------------------------------- (Include Zip Code)
(Tax Identification or Social
Security No.)
3
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company the principal amount of Original Bonds indicated
above. Subject to and effective upon the acceptance for exchange of the
principal amount of Original Bonds tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Original Bonds
tendered hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent its agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as the agent of the Company) with respect to the
tendered Original Bonds with full power of substitution to (i) deliver
certificates for such Original Bonds, or transfer ownership of such Original
Bonds on the account books at the Depository Trust Company ("DTC"), together,
in any such case, with all accompanying evidences of transfer and authenticity
to, or upon the order of, the Company and (ii) present such Original Bonds for
transfer on the books of the Company and receive all benefits and otherwise
exercise all rights of beneficial ownership of such Original Bonds, all in
accordance with the terms of the Exchange Offer. The power of attorney granted
in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that he or she has full power
and authority to tender, sell, assign and transfer the Original Bonds tendered
hereby and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim, when the same are acquired by the Company. The
undersigned and any beneficial owner of Original Bonds hereby further represent
that any Exchange Bonds acquired in exchange for Original Bonds tendered hereby
will have been acquired in the ordinary course of business of the undersigned
and any such beneficial owner of Original Bonds receiving such Exchange Bonds,
that neither the Holder nor any such beneficial owner is participating in,
intends to participate in or has an arrangement or understanding with any
person to participate in the distribution of such Exchange Bonds and that
neither the Holder nor any such beneficial owner is an "affiliate," as defined
in Rule 405 under the Securities Act, of the Company. The undersigned and each
beneficial owner acknowledge and agree that any person participating in the
Exchange Offer for the purpose of distributing the Exchange Bonds must comply
with the registration and prospectus delivery requirements of the Securities
Act in connection with any secondary resale transactions of the Exchange Bonds
acquired by such person and may not rely on the position of the Staff of the
Securities and Exchange Commission set forth in the no-action letters discussed
in the Prospectus under the caption "The Exchange Offer." If the undersigned is
not a broker-dealer, the undersigned represents that it is not engaged in, and
does not intend to engage in, a public distribution of Exchange Bonds. The
undersigned and each beneficial owner will, upon request, execute and deliver
any additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the assignment, transfer and purchase of the
Original Bonds tendered hereby.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Original Bonds when, as and if the Company has given
oral or written notice thereof to the Exchange Agent.
If any tendered Original Bonds are not accepted for exchange pursuant to the
Exchange Offer for any reason, certificates for any such unaccepted Original
Bonds will be returned (or, in the case of Original Bonds tendered by book-
entry at DTC, credited to the account at DTC from which such tender
originated), without expense, to the undersigned at the address shown below or
at a different address as may be indicated herein under "Special Delivery
Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned understands that tenders of Original Bonds pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
tendering original bonds" in the Prospectus and in the instructions hereto will
constitute a binding agreement between the undersigned and the Company upon the
4
<PAGE>
terms and subject to the conditions of the Exchange Offer, subject only to
withdrawal of such tenders on the terms set forth in the Prospectus under the
caption "The Exchange Offer--Withdrawal rights."
Unless otherwise indicated under "Special Registration Instructions," please
issue the certificates representing the Exchange Bonds issued in exchange for
the Original Bonds accepted for exchange and any certificates for Original
Bonds not tendered or not exchanged, (or, in the case of Original Bonds
tendered by book-entry transfer at DTC, credit to the account at DTC) in the
name(s) of the undersigned. Similarly, unless otherwise indicated under
"Special Delivery Instructions," please send the certificates representing the
Exchange Bonds issued in exchange for the Original Bonds accepted for exchange
and any certificates for Original Bonds not tendered or not exchanged (and
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s) (or, in the case of Original Bonds
tendered by book-entry transfer at DTC, credit to the account at DTC in the
undersigned's name). In the event that both "Special Registration Instructions"
and "Special Delivery Instructions" are completed, please issue the
certificates representing the Exchange Bonds issued in exchange for the
Original Bonds accepted for exchange in the name(s) of, and return any
certificates for Original Bonds not tendered or not exchanged to, (or, in the
case of Original Bonds tendered by book-entry transfer at DTC, credit to the
account(s) at DTC in the name(s) of) the person(s) so indicated. The
undersigned understands that the Company has no obligation pursuant to the
"Special Registration Instructions" and "Special Delivery Instructions" to
transfer any Original Bonds from the name of the registered Holder(s) thereof
if the Company does not accept for exchange any of the Original Bonds so
tendered.
5
<PAGE>
Holders who wish to tender their Original Bonds and whose Original Bonds are
not immediately available or who cannot deliver their certificates and all
other documents required by this Letter of Transmittal to the Exchange Agent
prior to the Expiration Date, may tender their Original Bonds according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed delivery procedures." See Instruction 1
regarding the completion of this Letter of Transmittal printed below.
PLEASE SIGN HERE WHETHER OR NOT
ORIGINAL BONDS ARE BEING PHYSICALLY TENDERED HEREBY
X Date:____________________
--------------------------------------------------
X Date:____________________
--------------------------------------------------
Signature(s) of Registered Holder(s) or Authorized Signatory
Area Code and Telephone Number: _____________________________________________
The above lines must be signed by the registered holder(s) as their
name(s) appear(s) on the Original Bonds or by person(s) authorized to become
registered holder(s) by a properly completed bond power from the registered
holder(s), a copy of which must be transmitted with this Letter of
Transmittal. If the Original Bonds to which this Letter of Transmittal
relate are held of record by two or more joint holders, then all such
holders must sign this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative
capacity, then such person must (i) set forth his or her full title below
and (ii) unless waived by the Company, submit evidence satisfactory to the
Company of such person's authority so to act. See Instruction 4 regarding
the completion of this Letter of Transmittal printed below.
Name(s): ____________________________________________________________________
(Please Print)
-----------------------------------------------------------------------------
Capacity: ___________________________________________________________________
Address: ____________________________________________________________________
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution:
(If required by Instruction 4)
-----------------------------------------------------------------------------
(Authorized Signature)
-----------------------------------------------------------------------------
(Title)
-----------------------------------------------------------------------------
(Name of Firm)
Date: ___________________
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Original Bonds; Guaranteed
Delivery Procedures. The tendered Original Bonds as well as a properly
completed and duly executed copy of this Letter of Transmittal or facsimile
hereof and any other documents required by this Letter of Transmittal must be
received by the Exchange Agent at its address set forth herein prior to 5:00
p.m., New York City time, on the Expiration Date. The method of delivery of the
tendered Original Bonds, this Letter of Transmittal and all other required
documents to the Exchange Agent is at the election and risk of the Holder and,
except as otherwise provided below, the delivery will be deemed made only when
actually received by the Exchange Agent. Instead of delivery by mail, it is
recommended that the Holder use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. No Letter
of Transmittal or Original Bonds should be sent to the Company.
A Letter of transmittal need not be submitted with respect to Original Bonds
tendered in accordance with DTC's Automated Tender Offer Procedures ("ATOP").
Holders who wish to tender their Original Bonds and (i) whose Original Bonds
are not immediately available or (ii) who cannot deliver their Original Bonds,
this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date must tender their Original Bonds
according to the guaranteed delivery procedures set forth in the Prospectus.
Pursuant to such procedure: (a) such tender must be made by or through an
Eligible Institution (defined below); (b) prior to the Expiration Date, the
Exchange Agent must have received from the Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address of the
Holder, the certificate number or numbers of such Original Bonds and the
principal amount of Original Bonds tendered, stating that the tender is being
made thereby and guaranteeing that, within three New York Stock Exchange
trading days after the Expiration Date, this Letter of Transmittal (or
facsimile hereof) together with the certificate(s) representing the Original
Bonds (or a book-entry confirmation with respect to all Original Bonds tendered
by book-entry at DTC by the ATOP procedures) and any other required documents
will be deposited by the Eligible Institution with the Exchange Agent; and (c)
such properly completed and executed Letter of Transmittal (or facsimile
hereof), as well as the certificate(s) representing all tendered Original Bonds
in proper form for transfer (or a book-entry confirmation with respect to all
Original Bonds tendered by book-entry at DTC by the ATOP procedures) and all
other documents required by this Letter of Transmittal must be received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date, all as provided in the Prospectus under the caption "The
Exchange Offer--Guaranteed delivery procedures." Any Holder who wishes to
tender his or her Original Bonds pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration
Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will
be sent to Holders who wish to tender their Original Bonds according to the
guaranteed delivery procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Original Bonds, and withdrawal of tendered
Original Bonds will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Original Bonds not properly tendered or any
Original Bonds the Company's acceptance of which would, in the opinion of
counsel for the Company, be unlawful. The Company also reserves the right to
waive any irregularities or conditions of tender as to particular Original
Bonds. The Company's interpretation of the terms and conditions of the Exchange
Offer (including the instructions in this Letter of Transmittal) shall be firm
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Original Bonds must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or
irregularities with respect to tenders of Original Bonds, nor shall any of them
incur any liability for failure to give such
7
<PAGE>
notification. Tenders of Original Bonds will not be deemed to have been made
until such defects or irregularities have been cured or waived. Any Original
Bonds received by the Exchange Agent that are not properly tendered and as to
which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
2. Tender by Holder. Only a Holder of Original Bonds may tender such Original
Bonds in the Exchange Offer. Any beneficial owner of Original Bonds who is not
the registered holder and who wishes to tender should arrange with such
registered holder to execute and deliver this Letter of Transmittal on such
owner's behalf or must, prior to completing and executing this Letter of
Transmittal and delivering his or her Original Bonds, either make appropriate
arrangements to register ownership of the Original Bonds in such owner's name
or obtain a properly completed bond power from the registered holder.
3. Partial Tenders (Not applicable to Holders who tender by book-entry
transfer). Tenders of Original Bonds will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any Original
Bonds is tendered, the tendering Holder should fill in the principal amount
tendered in the fourth column of the box entitled "Description of First
Mortgage Bonds, 9 7/8% Series A due 2009" or "Description of First Mortgage
Bonds, 9 7/8% Series C due 2009" above. The entire principal amount of any
Original Bonds delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all
Original Bonds is not tendered, then Original Bonds for the principal amount of
Original Bonds not tendered and a certificate or certificates representing
Exchange Bonds issued in exchange for any Original Bonds accepted will be sent
to the Holder at his or her registered address, unless a different address is
provided in the appropriate box on this Letter of Transmittal, promptly after
the Original Bonds are accepted for exchange.
4. Signatures on the Letter of Transmittal; Bond Powers and Endorsements;
Guarantee of Signatures. If this Letter of Transmittal (or facsimile hereof) is
signed by the registered holder(s) of the Original Bonds tendered hereby, the
signature must correspond with the name(s) as written on the face of the
Original Bonds without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder or holders of Original Bonds tendered and the certificate or
certificates for Exchange Bonds issued in exchange therefor is to be issued (or
any untendered principal amount of Original Bonds is to be reissued) to the
registered holder and neither the "Special Delivery Instructions" nor the
"Special Registration Instructions" has been completed, then such holder need
not and should not endorse any tendered Original Bonds, nor provide a separate
bond power. In any other case, such holder must either properly endorse the
Original Bonds tendered or transmit a properly completed separate bond power
with this Letter of Transmittal with the signatures on the endorsement or bond
power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered holder or holders of any Original Bonds listed, such
Original Bonds must be endorsed or accompanied by appropriate bond powers in
each case signed as the name of the registered holder or holders appears on the
Original Bonds.
If this Letter of Transmittal (or facsimile hereof) or any Original Bonds or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Original Bonds or signatures on bond powers required by this
Instruction 4 must be guaranteed by an Eligible Institution which is a member
of (a) the Securities Transfer Agents Medallion Program, (b) the New York Stock
Exchange Medallion Signature Program or (c) the Stock Exchange Medallion
Program.
8
<PAGE>
Except as otherwise provided below, all signatures on this Letter of
Transmittal must be guaranteed by a firm that is a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc., a commercial bank or trust company having an office or correspondent in
the United States or an "eligible guarantor institution" within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an
"Eligible Institution"). Signatures on this Letter of Transmittal need not be
guaranteed if (a) this Letter of Transmittal is signed by the registered
holder(s) of the Original Bonds tendered herewith and such holder(s) have not
completed the box set forth herein entitled "Special Registration Instructions"
or the box entitled "Special Delivery Instructions" or (b) such Original Bonds
are tendered for the account of an Eligible Institution.
5. Special Registration and Delivery Instructions. Tendering Holders should
indicate, in the applicable box or boxes, the name and address to which
Exchange Bonds or substitute Original Bonds for principal amounts not tendered
or not accepted for exchange are to be issued or sent, if different from the
name and address of the person signing this Letter of Transmittal. In the case
of issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
6. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Original Bonds pursuant to the Exchange Offer.
If, however, certificates representing Exchange Bonds or Original Bonds for
principal amounts not tendered or accepted for exchange are to be delivered to,
or are to be registered in the name of, any person other than the registered
holder of the Original Bonds tendered hereby, or if tendered Original Bonds are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Original Bonds pursuant to the Exchange Offer, then the amount of
any such transfer taxes (whether imposed on the registered holder or on any
other persons) will be payable by the tendering Holder. If satisfactory
evidence of payment of such taxes or exemption therefrom is not submitted with
this Letter of Transmittal, the amount of such transfer taxes will be billed
directly to such tendering Holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Original Bonds listed in this Letter
of Transmittal.
7. Waiver of Conditions. The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions in the Exchange
Offer in the case of any Original Bonds tendered.
8. Mutilated, Lost, Stolen or Destroyed Original Bonds. Any tendering Holder
whose Original Bonds have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instructions.
9. Requests for Assistance or Additional Copies. Questions and requests for
assistance and requests for additional copies of the Prospectus or this Letter
of Transmittal may be directed to the Exchange Agent at the address specified
in the Prospectus. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
9
<PAGE>
EXHIBIT 99.B
NATIONAL STEEL CORPORATION
Notice of Guaranteed Delivery
of
First Mortgage Bonds, 9 7/8% Series A due 2009
and/or
First Mortgage Bonds, 9 7/8% Series C due 2009
As set forth in the Prospectus, dated , 1999 (as the same may be
amended from time to time, the "Prospectus"), of National Steel Corporation
(the "Company") under the caption "The Exchange Offer--Guaranteed delivery
procedures," this form or one substantially equivalent hereto must be used to
accept the Company's offer (the "Exchange Offer") to exchange its First
Mortgage Bonds, 9 7/8% Series D due 2009 (the "Exchange Bonds"), which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), for an equal principal amount of its First Mortgage Bonds, 9 7/8% Series
A due 2009 and/or First Mortgage Bonds, 9 7/8% Series C due 2009 (collectively
the "Original Bonds") if (i) certificates representing the Original Bonds to be
exchanged are not lost but are not immediately available or (ii) time will not
permit all required documents to reach the Exchange Agent prior to the
Expiration Date. This form may be delivered by an Eligible Institution by mail
or hand delivery or transmitted, via facsimile, to the Exchange Agent at its
address set forth below not later than 5:00 p.m., New York City Time, on
, 1999. All capitalized terms used herein but not defined herein shall
have the meanings ascribed to them in the Prospectus.
The Exchange Agent is:
THE CHASE MANHATTAN BANK
By Registered or By Overnight Courier: By Hand:
Certified Mail: The Chase Manhattan Bank The Chase Manhattan Bank
The Chase Manhattan Bank 55 Water Street--Room 234 55 Water Street--Room
55 Water Street--Room North Building 234
234 New York, New York 10041 North Building
North Building New York, New York 10041
New York, New York 10041
By Facsimile:
(212) 638-7380
(212) 638-7381
Confirm by telephone:
(212) 638-0828
DELIVERY, OR TRANSMISSION VIA FACSIMILE, OF THIS INSTRUMENT TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tender(s) for exchange to the Company, upon the terms
and subject to the conditions set forth in the Prospectus and Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Original Bonds set forth below pursuant to the guaranteed delivery procedures
set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed
delivery procedures."
The undersigned understands and acknowledges that the Exchange Offer will
expire at 5:00 p.m., New York City time, on , 1999, unless extended
by the Company. With respect to the Exchange Offer, "Expiration Date" means
such time and date, or if the Exchange Offer is extended, the latest time and
date to which the Exchange Offer is so extended by the Company.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned
and every obligation of the undersigned under this Notice of Guaranteed
Delivery shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
<PAGE>
Principal Amount of Original Bonds
Exchanged: $ ________________________
SIGNATURES
Certificate Nos. of Original Bonds
(if available)
-----------------------------------
Signature of Owner
-------------------------------------
-----------------------------------
Signature of Owner (if more than -------------------------------------
one)
Total $ _____________________________
Dated:
IF ORIGINAL BONDS WILL BE DELIVERED
Name(s): __________________________ BY BOOK-ENTRY TRANSFER, PROVIDE THE
DEPOSITORY TRUST COMPANY ("DTC") AC-
COUNT NO.:
----------------------------
(Please Print)
Account No.: ________________________
Address: __________________________
-----------------------------
-----------------------------
(Include Zip Code)
Area Code and
Telephone No. _____________________
Capacity (full title), if signing
in a
representative capacity____________
Taxpayer Identification or
Social Security No.: ______________
GUARANTEE OF DELIVERY
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or is a commercial bank or trust company having an office or
correspondent in the United States, or is otherwise an "eligible guaranteed
institution" within the meaning of Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended, guarantees deposit with the Exchange Agent of the
Letter of Transmittal (or facsimile thereof), together with the Original Bonds
tendered hereby in proper form for transfer (or confirmation of the book-entry
transfer of such Original Bonds into the Exchange Agent's account at the Book-
Entry Transfer Facility described in the Prospectus under the caption "The
Exchange Offer--Guaranteed delivery procedures" and in the Letter of
Transmittal) and any other required document, all by 5.00 p.m., New York City
time, on the third New York Stock Exchange trading day following the
Expiration Date.
Name of Firm: _______________________ -------------------------------------
Authorized Signature
Address: ____________________________
Name: _______________________________
- -------------------------------------
Title: ______________________________
Area Code and Telephone No.: ________
Date: _______________________________
NOTE: DO NOT SEND ORIGINAL BONDS WITH THIS FORM. ACTUAL SURRENDER OF
ORIGINAL BONDS MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, THE LETTER OF
TRANSMITTAL.
2
<PAGE>
EXHIBIT 99.C
National Steel Corporation
Offer to Exchange its
First Mortgage Bonds, 9 7/8% Series D due 2009
for any and all of its outstanding
First Mortgage Bonds, 9 7/8% Series A due 2009 and/or
First Mortgage Bonds, 9 7/8% Series C due 2009
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1999 UNLESS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees: May , 1999
National Steel Corporation, a Delaware corporation, (the "Company") is
offering upon the terms and conditions set forth in the Prospectus, dated
, 1999 (as the same may be amended from time to time, the
"Prospectus"), and in the related Letter of Transmittal enclosed herewith, to
exchange (the "Exchange Offer") its First Morgtage Bonds, 9 7/8% Series D due
2009 (the "Exchange Bonds") for an equal principal amount of its First Morgtage
Bonds, 9 7/8% Series A due 2009 and/or its First Morgtage Bonds, 9 7/8% Series
C due 2009 (collectively, the "Original Bonds" and, together with the Exchange
Bonds, the "Bonds"). As set forth in the Prospectus, the terms of the Exchange
Bonds are identical in all material respects to the Original Bonds, except for
certain transfer restrictions relating to the Original Bonds and except that
the Exchange Bonds will not contain certain provisions relating to an increase
in the interest rate which were included in the Original Bonds under certain
circumstances relating to the timing of the Exchange Offer. Original Bonds may
only be tendered in integral multiples of $1,000.
THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "THE EXCHANGE
OFFER--CONDITIONS TO THE EXCHANGE OFFER" IN THE PROSPECTUS.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Prospectus, dated , 1999.
2. The Letter of Transmittal to exchange Bonds for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to exchange Bonds.
3. A form of letter which may be sent to your clients for whose accounts
you hold Original Bonds registered in your name or in the name of your
nominee, with space provided for obtaining such client's instructions with
regard to the Exchange Offer.
4. A Notice of Guaranteed Delivery.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to The Chase Manhattan Bank, the Exchange
Agent.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1999, UNLESS EXTENDED. PLEASE FURNISH COPIES
OF THE ENCLOSED MATERIALS TO THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD ORIGINAL
BONDS REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS
POSSIBLE.
<PAGE>
In all cases, exchanges of Original Bonds accepted for exchange pursuant to
the Exchange Offer will be made only after timely receipt by the Exchange Agent
of (a) certificates representing such Original Bonds (or, if Original Bonds are
to be delivered by book-entry transfer with the Depository Trust Company
("DTC"), confirmation in accordance with DTC's Automated Tender Offer
Procedures ("ATOP")), (b) the Letter of Transmittal (or facsimile thereof)
properly completed and duly executed with any required signature guarantees,
and (c) any other documents required by the Letter of Transmittal. A Letter of
Transmittal need not be submitted with respect to Original Bonds tendered in
accordance with DTC's ATOP procedures.
If holders of Original Bonds wish to tender, but it is impracticable for them
to forward their certificates for Original Bonds prior to the expiration of the
Exchange Offer or to comply with the book-entry transfer procedures on a timely
basis, a tender may be offered by following the guaranteed delivery procedure
described in the Prospectus under "The Exchange Offer--Guaranteed delivery
procedures."
The Exchange Offer is not being made to (nor will tenders be accepted from or
on behalf of) holders of Original Bonds residing in any jurisdiction in which
the making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction.
The Company will not pay any fees or commissions to brokers, dealers or other
persons for soliciting exchanges of Bonds pursuant to the Exchange Offer. The
Company will, however, upon request, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Company will pay or cause to be paid any transfer taxes
payable on the transfer of Bonds to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Questions and requests for assistance with respect to the Exchange Offer or
for copies of the Prospectus and Letter of Transmittal may be directed to the
Exchange Agent at its address set forth in the Prospectus or at (212) 638-0828.
Very truly yours,
National Steel Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, OR ANY AFFILIATE THEREOF, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
EXHIBIT 99.D
National Steel Corporation
Offer to Exchange its
First Mortgage Bonds, 9 7/8% Series D due 2009
for any and all of its outstanding
First Mortgage Bonds, 9 7/8% Series A due 2009 and/or itsFirst Mortgage Bonds,
9 7/8% Series C due 2009
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1999 (THE "INITIAL EXPIRATION DATE"), UNLESS EXTENDED.
To Our Clients:
Enclosed for your consideration is a Prospectus, dated , 1999 (as the
same may be amended from time to time, the "Prospectus"), and a Letter of
Transmittal (the "Letter of Transmittal") relating to the offer by National
Steel Corporation (the "Company") to exchange (the "Exchange Offer") its First
Mortgage Bonds, 9 7/8% Series D due 2009 (the "Exchange Bonds") for an equal
principal amount of its First Mortgage Bonds, 9 7/8% Series A due 2009 and/or
First Mortgage Bonds, 9 7/8% Series C due 2009 (collectively, the "Original
Bonds") upon the terms and conditions set forth in the Prospectus and in the
related Letter of Transmittal. As set forth in the Prospectus, the terms of the
Exchange Bonds are identical in all material respects to the Original Bonds,
except for certain transfer restrictions relating to the Original Bonds and
except that the Exchange Bonds will not contain certain provisions relating to
an increase in the interest rate which were included in the Original Bonds
under certain circumstances relating to the timing of the Exchange Offer. The
Exchange Offer is subject to certain customary conditions. See "The Exchange
Offer" in the Prospectus. Original Bonds may be tendered only in integral
multiples of $1,000.
The material is being forwarded to you as the beneficial owner of Original
Bonds carried by us for your account or benefit but not registered in your
name. An exchange of any Original Bonds may only be made by us as the
registered Holder and pursuant to your instructions. Therefore, the Company
urges beneficial owners of Original Bonds registered in the name of a broker,
dealer, commercial bank, trust company or other nominee to contact such Holder
promptly if they wish to exchange Original Bonds in the Exchange Offer.
Accordingly, we request instructions as to whether you wish us to exchange
any or all such Original Bonds held by us for your account or benefit, pursuant
to the terms and conditions set forth in the Prospectus and Letter of
Transmittal. We urge you to read carefully the Prospectus and Letter of
Transmittal before instructing us to exchange your Original Bonds.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to exchange Original Bonds on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer expires at 5:00 pm., New
York City time, on , 1999, unless extended. With respect to the
Exchange Offer, "Expiration Date" means the Initial Expiration Date, or if the
Exchange Offer is extended, the latest time and date to which the Exchange
Offer is so extended by the Company. Tender of Original Bonds may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for the exchange of $1,000 principal amount of
the Exchange Bonds for each $1,000 principal amount of the Original Bonds,
of which $300,000,000 aggregate principal amount of the Original Bonds was
outstanding as of , 1999. The terms of the Exchange Bonds are
identical in all material respects to the Original Bonds, except for (1)
the transfer restrictions and registration rights relating to the Original
Bonds do not apply to the Exchange Bonds, (2) the Exchange Bonds will not
contain certain provisions relating to an increase in the interest rate
which were included in
<PAGE>
the Original Bonds under certain circumstances relating to the timing of
the Exchange Offer and (3) the Exchange Bonds are part of a single series
of up to $300,000,000.
2. THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "THE EXCHANGE
OFFER--CONDITIONS TO THE EXCHANGE OFFER" IN THE PROSPECTUS.
3. The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New
York City time, on , 1999, unless extended.
4. The Company has agreed to pay the expenses of the Exchange Offer.
5. Any transfer taxes incident to the transfer of Bonds from the
tendering Holder to the Company will be paid by the Company, except as
provided in the Prospectus and the Letter of Transmittal.
The Exchange Offer is not being made to, nor will exchanges be accepted from
or on behalf of, holders of Original Bonds residing in any jurisdiction in
which the making of the Exchange Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction.
If you wish us to exchange any or all of your Original Bonds held by us for
your account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by you to exchange Original Bonds held by us and registered in
your name for your account or benefit.
2
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer of National Steel
Corporation.
This will instruct you to exchange the aggregate principal amount of Original
Bonds indicated below (or, if no aggregate principal amount is indicated below,
all Original Bonds) held by you for the account or benefit of the undersigned,
pursuant to the terms of and conditions set forth in the Prospectus and the
Letter of Transmittal.
Aggregate Principal Amount of Original Bonds to be exchanged
$ *
[_]Check here if the undersigned is instructing you to exchange First Mortgage
Bonds, 9 7/8% Series A due 2009 held by you for the account or benefit of
the undersigned for First Mortgage Bonds, 9 7/8% Series B due 2009. The
maximum aggregate principal amount of Series B Bonds that will be
outstanding following the consummation of the Exchange Offer will be
$225,000,000.
*I (we) understand that if I (we) -------------------------------------
sign these instruction forms without -------------------------------------
indicating an aggregate principal Signature(s)
amount of Original Bonds in the -------------------------------------
space above, all Original Bonds held -------------------------------------
by you for my (our) account will be -------------------------------------
exchanged. -------------------------------------
(Please print name(s) and address
here)
Dated: ______________________________
-------------------------------------
(Area Code and Telephone Number)
-------------------------------------
(Taxpayer Identification or Social
Security Number)
- --------
* Unless otherwise indicated, it will be assumed that all of your Original
Bonds are to be exchanged.
3
<PAGE>
EXHIBIT 99E
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- --------------------------------------- ---------------------------------------
<TABLE>
<CAPTION>
Give the
For this type of account: SOCIAL SECURITY
number of--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one of
the
individuals(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if
joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
<CAPTION>
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of --
--------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
---------------------------------------
- ---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
.A corporation.
.A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not pro-
vided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends un-
der section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. IRS uses the numbers for identification pur-
poses. Payers must be given the numbers whether or not recipients are required
to file tax returns. Beginning January 1, 1993, payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain penal-
ties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
